Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
Speaker 2: with Lisa Bromwitz and Amrie Hordern. Join us each day
Speaker 2: for insight from the best in markets, economics, and geopolitics
Speaker 2: from our global headquarters in New York City. We are
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Speaker 2: anywhere else you listen, and as always on the Bloomberg
Speaker 2: Terminal and the Bloomberg Business App. Amanda liner with black
Speaker 2: Rocks saying uncertainty around the path of monetary policy in
Speaker 2: twenty twenty five is alevated. While not our current base case,
Speaker 2: a reacceleration of inflationary pressures materializing from potential fiscal and
Speaker 2: or trade related policies following the US selection could cause
Speaker 2: the Fed's terminal rate to land higher. Amanda joins us
Speaker 2: now for more. Amanda, good morning, it's good to see
Speaker 2: you morning. Thank you for having This was only a
Speaker 2: few months ago we were talking about a FED getting
Speaker 2: ahead of the curve to winsl the labor market, and
Speaker 2: maybe they needed to get accommodative. And now we're back
Speaker 2: to a word that you use in your work, which
Speaker 2: is normalizing, except normal might be a whole lot closer
Speaker 2: to where we are than we thought a month ago.
Speaker 3: Right, And I think that distinction between normalizing and easing
Speaker 3: is really important. We would not be surprised for the
Speaker 3: Fed Fund's terminal rate to land somewhere around four, but again,
Speaker 3: the drivers of that are really important. If that is
Speaker 3: because growth is holding up really well, that is something
Speaker 3: that the credit market can really digest. If that is
Speaker 3: because inflation is reaccelerating and there's a lot yet to
Speaker 3: be seen on the policies that are coming down the pike,
Speaker 3: we have some clarity, but the path is very wide
Speaker 3: in terms of potential outcomes. That would be a much
Speaker 3: less supportive outcome for credit, especially if it's coupled with
Speaker 3: slower growth. I think the bigger risk for corporate credit
Speaker 3: is what we're characterizing as a disorderly sell off and
Speaker 3: treasury yields. If we have a gradual backup in treasury
Speaker 3: yields again because of good growth, that is actually a
Speaker 3: tailwind for credit because it brings in yield based buying.
Speaker 3: If it's disorderly, feel spooky.
Speaker 2: Then it's coming.
Speaker 3: Back to the fall of twenty twenty three when I
Speaker 3: think that one gives investors some pause.
Speaker 2: Can you define this so ly and how olderly things
Speaker 2: are at the moment.
Speaker 3: When we chat with market participants, that four point sixty
Speaker 3: level is really the area which they become concerned. I
Speaker 3: think if you start to see the velocity of that
Speaker 3: backup really be swift. So I'm talking about gaps of
Speaker 3: fifteen twenty basis points in a day for a consecutive
Speaker 3: period of time, and again not driven by positive growth surprises,
Speaker 3: but more driven by some downside risks on the policy
Speaker 3: side or on or upside risks on the inflation side.
Speaker 3: That's I think where we would start to be a
Speaker 3: bit concerned, because then if you're a yield based investor,
Speaker 3: you may think you may come to the conclusion that
Speaker 3: it just waits to deploy capital into corporate credit, and
Speaker 3: that yield based demand has been incredibly strong in the
Speaker 3: context of all of this kind of path dependency. As
Speaker 3: you know, credit spreads have made new cycle tights, and
Speaker 3: so that spread of that tug of war between spreads
Speaker 3: and yields is very much still in place.
Speaker 4: John asked the key question, right, what caustitutes disorderly move
Speaker 4: in yields at a time where fifteen to twenty basis
Speaker 4: point moves are something we have seen. This isn't abnormal,
Speaker 4: and there's a question of whether they have to see
Speaker 4: for a longer period of time. I mean, let's say
Speaker 4: Howard Lutnik gets chosen as Treasury Secretary and people view
Speaker 4: this as really an endorsement of stronger tariffs at the
Speaker 4: outset before some of the other tax cuts or other
Speaker 4: pro growth types of implementations. Do you foresee that type
Speaker 4: of disorderly move in treasure yields.
Speaker 3: That sequencing really does matter, I think, leaving some of
Speaker 3: the candidates to the side, if you have a situation
Speaker 3: where you have upward pressure on inflation, and I think
Speaker 3: what really concerns us is not so much the targeted
Speaker 3: tariffs but the across the board tariffs that could spike retaliation,
Speaker 3: because then you're moving from a discussion of the one
Speaker 3: time price level of argument that's been floated, which I'm
Speaker 3: not necessarily sure I agree with is not that disruptive
Speaker 3: to the market, But if you have kind of retaliatory
Speaker 3: tariffs back and forth, then you actually have pressures feeding
Speaker 3: on themselves on the inflationary front, and I think it
Speaker 3: becomes much less certain. We kind of take a step
Speaker 3: back and say, Okay, well, where do we go from here.
Speaker 3: We like building and floating rate exposure to portfolios. We
Speaker 3: like financials. They would not be exposed to the same
Speaker 3: degree on tariffs because they're more of a services based sector.
Speaker 3: We like domestic facing companies actually, so ironically and somewhat counterintuitively,
Speaker 3: that may bode better for high yield and leverage loans
Speaker 3: because they tend to be more US focused as opposed
Speaker 3: to multinationals. So, and financials are really important. Financials are
Speaker 3: thirty three percent of the IG index, and they're still
Speaker 3: trading wide to non financials, and so if we think
Speaker 3: that they can tighten, that can actually pull index level
Speaker 3: spreads even tighter than where they are now.
Speaker 4: There's a larger question, and John and Amory we're focusing
Speaker 4: on this last week about at a certain point, if
Speaker 4: you see the companies out there as being a pretty
Speaker 4: good shape from the US and continuing to be so,
Speaker 4: could you see spreads and narrow to such degrees and
Speaker 4: even investment grade companies trade within treasury yields.
Speaker 3: Yeah, so I think you had a conversation last week
Speaker 3: on this with Brian Weinstein.
Speaker 5: Which I thought was great.
Speaker 3: Look, I think there is scope for spreads to move tighter.
Speaker 3: I do not see a world we're on masks. Triple
Speaker 3: B corporates are trading tight to the sovereign, but you
Speaker 3: do have some double A and a few triple A
Speaker 3: companies still left outstanding in the corporate credits sphere that
Speaker 3: are trading really close. I mean the spreads to treasuries
Speaker 3: are in the single digits for some of those bonds
Speaker 3: at the moment, depending on where they're priced to. I
Speaker 3: think the net net here of everything is that corporate
Speaker 3: credit is in a pretty good place. It all boils
Speaker 3: down to growth. If we have a supportive growth backdrop,
Speaker 3: I would say manageable terror for risk, and then I
Speaker 3: would say the continuation of yield based support plus some
Speaker 3: favorable technicals. That's a recipe where credit can stay in
Speaker 3: its current tight range or even move slightly tighter. I
Speaker 3: think waiting for a significant catalyst for spread widening in
Speaker 3: credit would really involve a combination of persistent upward pressure
Speaker 3: on inflation, a slowdown in growth, and again that disorderly
Speaker 3: sell off, which it does feel like the volatility of
Speaker 3: the bond market has been elevated relative to what we've
Speaker 3: been used to in past cycles.
Speaker 2: But I think it.
Speaker 3: Would really be that kind of four to sixty range
Speaker 3: where folks get concerned up to the five percent range
Speaker 3: that would catch our attention.
Speaker 1: Man, I'm just talking about this disorderly bond sell off.
Speaker 1: I'm thinking about how disorderly treasury pick has come to be.
Speaker 1: And if you talk about the real impact of terrorists.
Speaker 1: What I'm hearing from source that Peter Navarro is really
Speaker 1: in the mix this trade skeptic at ANYC And Howard Latink,
Speaker 1: who's come on and talked about the fact that you
Speaker 1: should use tariffs, is more of a yes man to
Speaker 1: Donald Trump. The real tariff man would be someone like
Speaker 1: Robert Leittheiser, who already worked for him. What would a Lightheiser,
Speaker 1: a Treasury, Peter Navarro, a NEC mean for this bond market.
Speaker 3: Well, again, leaving the specific individuals aside, I think the
Speaker 3: issue that we have to come to grips with is
Speaker 3: what does this mean for kind of upward ongoing upward
Speaker 3: pressure on inflation? And really the worst case scenario for
Speaker 3: credit is kind of an across the board tariff that
Speaker 3: is also coupled with retaliatory tariffs that provides kind of
Speaker 3: upward pressure on inflation that corporates can't manage, right And
Speaker 3: I think that's the key, is that if corporates are
Speaker 3: feeling that they have significant cost input pressures that they
Speaker 3: are not able to manage through, then you get to
Speaker 3: this situation where right now corporates have just been hoarding late,
Speaker 3: hoarding labor and they haven't been laying off. If you
Speaker 3: get to a point where corporates need to use the
Speaker 3: layoff tool to protect their margins, that's where I think
Speaker 3: we really start to get concerned, because that's when you
Speaker 3: could have the weakness and the consumer extend beyond the
Speaker 3: lower income segment.
Speaker 1: Is the fact that the transition when it comes to
Speaker 1: the top post for financial markets already seems chaotic and
Speaker 1: it is messy. Based off every phone call I had
Speaker 1: over the weekend, is that already a market negative?
Speaker 3: I don't think so. I think what we're really bracing
Speaker 3: for is for this to play out over the next
Speaker 3: couple of months. I mean, even heading into the election,
Speaker 3: we were not expecting ultimate clarity. Once we knew the
Speaker 3: outcome of the White House, the Senate, and the House.
Speaker 3: We know that this is I mean, you've been saying
Speaker 3: it personnelis policy, right, So we've been watching for these appointments.
Speaker 3: I think we're expecting this to be a longer term trend.
Speaker 3: The FED has even said as much that they're not
Speaker 3: even reacting to policies once they're implemented. They're actually more
Speaker 3: poised to react to policies once you see the economic impact,
Speaker 3: which will take some time. So I think this is
Speaker 3: going to be a drawn out event, actually into twenty
Speaker 3: twenty five.
Speaker 4: That's I'm glad that you brought the FED into this
Speaker 4: because that's been the other big shift over the past
Speaker 4: week is rhetoric out of FED officials has been talking
Speaker 4: about how they can afford to wait, they don't have
Speaker 4: to cut rates as quickly. How much is that a
Speaker 4: game changer on certain levels that there isn't the same
Speaker 4: kind of Duvish bias that there might have been, say
Speaker 4: a couple weeks ago.
Speaker 3: So I was a little surprised at the market action
Speaker 3: last week because a lot of what Chapal said he
Speaker 3: also said during the November seventh press conference in terms
Speaker 3: of we may slow at the pace, We're not in
Speaker 3: a rush. I think our base case is really that
Speaker 3: there will be a cut in December, a twenty five
Speaker 3: basis point cut in December, as you noted, though at
Speaker 3: the start the path becomes much more tricky into twenty
Speaker 3: twenty five. It all boils down, though, Lisa, to kind
Speaker 3: of what you're alluding to, which if they're not cutting
Speaker 3: because growth is above trend, which we still are tracking
Speaker 3: above trend, that is a backdrop that corporate credit and
Speaker 3: I think risk assets broadly can manage if they are
Speaker 3: not cutting because they are concerned to Emory's point about
Speaker 3: upward pressure on inflation or disruptions and supply chains, that
Speaker 3: sort of thing that would cause inflationary pressures. That's another issue.
Speaker 3: But they are also focused on growth. I think it's
Speaker 3: not a foregune conclusion that tariffs could cause them to
Speaker 3: not cut or even hike, because there could be a
Speaker 3: growth impact that they're.
Speaker 2: Focused on us. We could see some major changes. Amander,
Speaker 2: is good to see you appreciate your time, Amanda landam
Speaker 2: there a plank rop? So here's the lake says this
Speaker 2: morning the eyes of Wall Street on a battle Royale
Speaker 2: playing gout in Palm Beach, Florida. The race to become
Speaker 2: the next Treasury Secretary between Scott Besson and Howard Lutnik
Speaker 2: reaching burning point over the weekend. President elect Donald Trump
Speaker 2: said to be losing patients with infighting, leaving staff to
Speaker 2: widen their search. Alternatives now including apolloist Mark Robin and
Speaker 2: former Thaed Governor Kevin Walsh. Henry of Trace of Vada
Speaker 2: Partners joined us now for more so, Henrietta, the big
Speaker 2: question where is this one going?
Speaker 5: Well, I think the most important decision really is about
Speaker 5: what happens with Robert Leiheiser. As you guys have been mentioning,
Speaker 5: I think there's very limited amounts that the Treasury sear
Speaker 5: Jerry is going to do in terms of writing tax
Speaker 5: built with Congress. This isn't the first time around when
Speaker 5: we're crafting it out of thin air. That tax bill
Speaker 5: is going to be written by the Said of Finance
Speaker 5: Committee staff, that Chairman of Mike Crapo and the House
Speaker 5: Place and Means Committee and their staff, and the Treasury
Speaker 5: Secretary is going to be influential to the street. But
Speaker 5: in terms of these massive pieces of legislation, it's terriffs
Speaker 5: and taxes, And I'm really more concentrated on where Bob
Speaker 5: Lightheiser is going to go than whether it's Scott Bessant
Speaker 5: or somebody else at Treasury right now.
Speaker 1: Well, Henrietta, according to my sources, Robert Leithheiser is still
Speaker 1: in the mix as well as Senator Haggerty. When it
Speaker 1: comes to Treasury. What would a Robert Litthheiser at the
Speaker 1: helm of Treasury mean?
Speaker 5: You know what I'm wondering is whether he's going to
Speaker 5: do something in the trades are Universe. That seems to
Speaker 5: be the main theme of the Trump cabinet picked so far,
Speaker 5: whether it's the Government Efficiency Initiative, which has sort of
Speaker 5: an Efficiencies Are Crypto zar, or Bob Litthheiser in a
Speaker 5: role that's more like a tradezar. He doesn't even need
Speaker 5: to be at Treasury. I think it's pretty unlikely that
Speaker 5: he would land at Treasury. I think the President elect
Speaker 5: is enjoying this process of having a big fight for
Speaker 5: the transition. We definitely saw this last time around as well,
Speaker 5: so I don't think it should come as a surprise.
Speaker 5: But sort of a ROVINGSAR that has authority over USTR,
Speaker 5: the Department of Commerce and Treasury is going to be
Speaker 5: much more important, in my opinion than Treasure Secretary itself.
Speaker 1: When you read the tea leaves though, and you see
Speaker 1: that potentially, and sources are telling me that the team
Speaker 1: is trying to maybe give this off ramp to Howard Lutnik,
Speaker 1: offer him a fancy, first world class ambassadorship potentially, then
Speaker 1: that would lead the way for either Scott Besson to
Speaker 1: come up and get the NOD or they're going to
Speaker 1: expand the search because this is just becoming a little
Speaker 1: bit too messy between these two men. How do you
Speaker 1: read the tea leaves right now? And do you think
Speaker 1: there's going to be a timeline when we can get
Speaker 1: this NOD?
Speaker 5: Yeah, I think the Trump transition folks and people that
Speaker 5: I've spoken to who are working with them, they're trying
Speaker 5: to get as many names as possible. Specifically, we know
Speaker 5: that they're trying to get CEOs, somebody with it comes
Speaker 5: with quite a bit of stature to come and fill
Speaker 5: that role. Already, they have not been able to find
Speaker 5: that particular human and yet and so we're still in
Speaker 5: the realm of the Scott Bessett Howard Lutnick component. I
Speaker 5: think best probably for the most part has been out
Speaker 5: on the street the most meeting with you know, being
Speaker 5: bulch racket hedge banks and hedge funds talking about a
Speaker 5: very sort of slow, phased in five percent a month
Speaker 5: increase entire freights. Those are the kind of things that
Speaker 5: I think, when the details come out, will spook folks.
Speaker 5: When it comes to the transition, you know, the president
Speaker 5: elect has actually moved very quickly. I would expect the
Speaker 5: Treasury secretary to be somebody that's confirmed within the first
Speaker 5: two weeks, let's say, in January. So they want to
Speaker 5: get somebody that's actually able to get through, not a
Speaker 5: Matt Gates like candidate who's going to run into some
Speaker 5: serious ethical problems.
Speaker 1: Right when it comes to the Senate, obviously we think
Speaker 1: maybe the Treasury post could sail through. But you said
Speaker 1: the President elect was moving quickly, Why is it taking
Speaker 1: him so long when it comes to Treasury. This is
Speaker 1: one area we's not moving quickly, even though he ran
Speaker 1: on economic agenda.
Speaker 5: Right and there's not just a clear loyalist that he's
Speaker 5: planning to place. Some of the others, whether it's a
Speaker 5: Tulsa Gabbard or an r K Junior roadvertally on the
Speaker 5: campaign trail in this situation, the folks that would have
Speaker 5: been in that role have already said that they do
Speaker 5: not want to take on the position. When you hear
Speaker 5: things like, you know, going through the ethics component and
Speaker 5: the background check is preclusive, which I believe Scott Besson
Speaker 5: said a couple of weeks ago, it gives you an
Speaker 5: understanding of just how difficult it is to make the
Speaker 5: decision for these folks to go through the ringer with
Speaker 5: the FBI, with background checks, with the you know, disarming
Speaker 5: of their funds, and really understanding where that needs to
Speaker 5: go is. I think there's a lot of personal decisions
Speaker 5: that go into Treasury and this role that are maybe
Speaker 5: a little bit higher bar than the attorney general pick,
Speaker 5: for example, dry.
Speaker 4: Eda, How much do you see this as a test
Speaker 4: almost of how important the market response will be to
Speaker 4: Trump policies is sort of the ultimate check.
Speaker 5: Well, I think the street is very hearkened by the
Speaker 5: fact that they feel like they're playing a role in this.
Speaker 5: I mean, every single meeting I go to, investors think
Speaker 5: that the stock market, whether it's going for down, has
Speaker 5: the real leache on the president. I don't think that
Speaker 5: that's true. Just to put it bluntly, but it's definitely
Speaker 5: a view on the street that they have a say
Speaker 5: in what the Trump administration does and specifically how Donald
Speaker 5: Trump responds. So they're very optimistic, for example, in the
Speaker 5: bond markets that should his tax bill and tariffs go
Speaker 5: into effect in the same year. My expectation tariffs will
Speaker 5: go on in the first four or five months, and
Speaker 5: the tax bill be passed in December July at the earliest,
Speaker 5: you're going to get these massive both inflationary and deficit
Speaker 5: finance pictures. And what I hear often is the bond
Speaker 5: market's going to send a message and stop that. That's
Speaker 5: just not the way that DC typically works. They are
Speaker 5: much more concentrated on quarter over quter GDP growth on
Speaker 5: employment rates. The President elect has tweeted quite a bit
Speaker 5: about the stock market, but that's never led him to
Speaker 5: not impose tariffs. As we all remember from twenty eighteen
Speaker 5: to twenty nineteen.
Speaker 4: That said Henrieta, We did hear from Mike Johnson House
Speaker 4: speaker that there was going to be some sort of
Speaker 4: offset to any tax cuts. We heard from french Hill
Speaker 4: when he was on with US a couple of weeks
Speaker 4: ago that he's really going to be careful about not
Speaker 4: necessarily expanding the budget too much. Why do you think
Speaker 4: that ultimately that the market does not play the role
Speaker 4: that it thinks it does.
Speaker 6: Well.
Speaker 5: First of all, it's not what Congress is watching you.
Speaker 5: A tax bill is in existence for four or five,
Speaker 5: six years seven in the case of the last package,
Speaker 5: that's not, you know, designed to boost the market on
Speaker 5: a day over day basis. President elect Trump is going
Speaker 5: to be at the very beginning of his term, which
Speaker 5: is four years, not every single day matters. It's just
Speaker 5: sort of a fundamental misunderstanding of how DC watches the
Speaker 5: US economy. I'm the stock market in general, and while
Speaker 5: I think President elects Trump tweets about it, as I mentioned,
Speaker 5: it's very different than writing and crafting legislative policy that
Speaker 5: will increase the deficit by at least two trillion dollars
Speaker 5: next year, whether the bond market responds or not, that's
Speaker 5: what it's going to take. That's what it costs. So
Speaker 5: when you talk about the Government Efficiency Initiative, what I
Speaker 5: hear as a former budget staffer is really exactly the
Speaker 5: wish list that we get from an administration. On the
Speaker 5: first Monday in February. You get the budget every year.
Speaker 5: It's very optimistic and wishful thinking.
Speaker 6: It includes a lot of.
Speaker 5: Offsets to offset the cost of the spending that you
Speaker 5: want to roll out, but ultimately very little of that
Speaker 5: actually gets effectuated. So when I hear the President and
Speaker 5: Elon Musk and Beckmrmaswam we talk about government efficiency, what
Speaker 5: I hear is this is the thing that we'd like
Speaker 5: to do in a perfect world. It will not actually happen,
Speaker 5: but it's part of the conversation that's necessary to mitigate
Speaker 5: the appearance of deficit increases on the magnitude of two
Speaker 5: trillion dollars, if not more, just to pass the existing
Speaker 5: tax rate.
Speaker 2: We'll see Henrietta. It's good to see you, Henritta Trace
Speaker 2: their a Vada partners. So here's the latest. Big retailers,
Speaker 2: including Target and Walmart, recording garnings this week ahead of
Speaker 2: a shortened holiday shopping season. K Max Shane of Goldman
Speaker 2: Sanks writing, Target customer is our residient, you're on a budget,
Speaker 2: while Walmart is opposition to continue driving solid earnings. Kate,
Speaker 2: join just now for more. Kate, welcome to the program.
Speaker 2: I want to talk about trade. Just to begin with
Speaker 2: how battle hardened are these companies from the trade war
Speaker 2: of a few years ago, and how well prepared are
Speaker 2: they for more the same?
Speaker 6: Yes, I think frankly, the more discretionary goods you have
Speaker 6: and more that you're importing from Asia, the harder it
Speaker 6: is to manage. And so specifically to Target and Walmart,
Speaker 6: about a third of what Target cells is domestically sourced,
Speaker 6: so not subject to tariffs, and for Walmart it's about
Speaker 6: two thirds of what they source is domestically produced and
Speaker 6: not exposed to tariffs, So there is still quite a
Speaker 6: bit there in terms of exposure. The last time we
Speaker 6: did see tariffs happen, both Walmart and Target did take
Speaker 6: prices up. Frankly, most retailers did, and that's probably what
Speaker 6: will happen this go around as well.
Speaker 4: Kate, I have to ask, especially ahead of Walm coming
Speaker 4: out tomorrow with earnings, is Walmart still a retail company.
Speaker 6: It's a good question. Yes, it absolutely is. But I
Speaker 6: think a lot of success that they have seen more
Speaker 6: recently has been with what they call their second P
Speaker 6: and L, or their alternative revenue streams, which is them
Speaker 6: building out a media business, a fulfillment business, their marketplace
Speaker 6: data ventures and they describe it as an ecosystem all
Speaker 6: in which to better serve the customer with. But there
Speaker 6: certainly is a lot more tech and a lot more
Speaker 6: to understand from an e commerce tech standpoint than there's
Speaker 6: ever been before.
Speaker 4: The reason why I ask Kate is because we also
Speaker 4: get TJ Max and Target, and I wonder if those
Speaker 4: are really the cleaner reads on just consumer appetite, the
Speaker 4: consumer pushback with price increases, those kinds of consumer discretionary
Speaker 4: trends that people often look to in the likes of
Speaker 4: previously Anyway, Walmart.
Speaker 6: Yes, well, you still get the true read of what
Speaker 6: sales are doing and comp store sales trends, which they
Speaker 6: report every quarter. And we do get color from Target
Speaker 6: and Walmart about what sales are doing on the consumable
Speaker 6: side and what sales are doing on the discretionary side.
Speaker 6: And for all the success Walmart has had this year
Speaker 6: in terms of growing and taking share, their discretionary still
Speaker 6: remains somewhat flat and has not been growing similarly to targets.
Speaker 1: Kate, do you still see and I know we talked
Speaker 1: about this when you joined us in September, when this
Speaker 1: was really one of the storylines in the consumer sector.
Speaker 1: Do you still see individuals on the higher income cohort
Speaker 1: trading down this idea of being more choiceful.
Speaker 6: We definitely see consumers still being choiceful. Absolutely, the trade
Speaker 6: down hasn't necessarily happened to a degree. I think the
Speaker 6: story the consumer is they're pretty, they're employed, and they
Speaker 6: do have cash. And the Goldman view is that the
Speaker 6: consumer will stay healthy into twenty twenty five based on
Speaker 6: how strong the labor market is. I think where we're
Speaker 6: seeing a little bit of weakness might be at the
Speaker 6: lower income consumer, just as they continue to deal with
Speaker 6: higher prices. Prices are still higher than they were a
Speaker 6: few years ago. But at the mid and higher upper
Speaker 6: income levels, you are still seeing good demand. It's just
Speaker 6: again using that word.
Speaker 1: Choicefall before we get to twenty twenty five to the
Speaker 1: holiday season, and I just have to ask, why does
Speaker 1: Black Friday now feel like an entire week? It was
Speaker 1: supposed to be just one day.
Speaker 6: Yes, it absolutely does feel longer. I would even argue
Speaker 6: it feels like the whole month of November has turned
Speaker 6: into Black Friday, and we are contending this year with
Speaker 6: five less shopping days. We have a Thanksgiving that is
Speaker 6: the latest point in the month that it can be,
Speaker 6: and there's five less shopping days as a result of that,
Speaker 6: so you're even seeing differences year over year in terms
Speaker 6: of when you're seeing Black Friday ads and Black Friday deals.
Speaker 6: But it's all in the name of course, to engage
Speaker 6: engage customers.
Speaker 4: Has there been any signs yet because I already see
Speaker 4: the Christmas trees up, I already see the wreaths, I
Speaker 4: already see you know, get your holiday deals. So it's
Speaker 4: basically two months Black Friday Black two months. I'm just
Speaker 4: wondering whether we have any early signs of what the
Speaker 4: appetite has been like for the holiday season.
Speaker 6: We don't quite yet, and that's why I think earnings
Speaker 6: are so important this week for Target and Walmart, because
Speaker 6: they will have a read into the first couple of
Speaker 6: weeks of November, and hopefully they will comment there about
Speaker 6: how sales are going or how they are relative to
Speaker 6: what we saw in October. So we'll definitely get a
Speaker 6: better read on that when we speak with them this week.
Speaker 6: I think data has showed traffic data at the retailers
Speaker 6: has showed some acceleration into the end of October early November,
Speaker 6: so it does look like you're seeing growth in traffic,
Speaker 6: which is a good sign. But again, we'll get it
Speaker 6: straight from the company's mouth.
Speaker 2: This week tree went up this weekend. I knew it would,
Speaker 2: I knew that was aimed.
Speaker 4: May it was completely it was personal. Really yeah, fully dressed.
Speaker 2: Or Pandora first one of the season. Nice, all ready
Speaker 2: to go?
Speaker 5: I did.
Speaker 4: I walked by a Whole Foods and I saw all
Speaker 4: the trees outside, and I saw that the prices were
Speaker 4: the same this year as they were last year. I
Speaker 4: thought that was interesting, and I thought Jonathan Farrowe is
Speaker 4: right now is putting up his tree.
Speaker 2: I'll spare you this conversation. Kay, thanks for joining us
Speaker 2: this morning. We appreciate it. Kaye Ma Chain there of
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