WEBVTT - Bloomberg Surveillance: Equities Outlook for 2024 (Podcast) 0:00:05.120 --> 0:00:08.480 This is the Bloomberg Surveillance Podcast. I'm Tom Keene, along 0:00:08.520 --> 0:00:12.360 with Jonathan Farrell and Lisa Abramowitz. Join us each day 0:00:12.400 --> 0:00:16.880 for insight from the best and economics, geopolitics, finance and investment. 0:00:17.280 --> 0:00:22.119 Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and 0:00:22.320 --> 0:00:26.600 anywhere you get your podcasts, and always on Bloomberg dot Com, 0:00:26.640 --> 0:00:29.880 the Bloomberg Terminal, and the Bloomberg Business App. 0:00:30.000 --> 0:00:32.600 We begin the program with Lori Cavasina, head of US 0:00:32.640 --> 0:00:35.720 ecority Strategy at RBC Capital Markets. Lori, good morning. We 0:00:35.760 --> 0:00:38.519 hope you all had a wonderful Thanksgiving. I want to 0:00:38.560 --> 0:00:41.120 kick off with your call fifty one hundred for five 0:00:41.159 --> 0:00:43.520 thousand rather year rent on the s and P five 0:00:43.600 --> 0:00:46.960 hundred for next year Deutsche Bank going one further, a 0:00:47.040 --> 0:00:49.240 fifty one hundred, Lurie talk to us about the path 0:00:49.479 --> 0:00:50.040 to five k. 0:00:51.600 --> 0:00:53.800 Well, thanks for having me as always, and look, you 0:00:53.800 --> 0:00:56.240 know we purposefully did not put out you know, we 0:00:56.320 --> 0:00:59.360 see a near term pullback and a resurgence. I think 0:00:59.400 --> 0:01:01.320 a lot of people got caught in that trap in 0:01:01.360 --> 0:01:03.760 twenty twenty three calling for a near term pullback in 0:01:03.760 --> 0:01:06.360 the first quarter that didn't end up happening. I do 0:01:06.400 --> 0:01:09.479 think we'll be watching our sentiment indicator very closely. It's 0:01:09.520 --> 0:01:11.480 been the best star in the sky to navigate the 0:01:11.520 --> 0:01:13.760 equity market this year, but it's also round tripped a 0:01:13.800 --> 0:01:15.760 couple of times. It started out giving you a screaming 0:01:15.800 --> 0:01:17.560 by signal because of deep pessimism. 0:01:18.080 --> 0:01:19.240 Return to that post. 0:01:19.280 --> 0:01:21.479 SBB gave a sales signal in August and then gave 0:01:21.480 --> 0:01:23.080 a by signal again in November. 0:01:23.440 --> 0:01:25.039 So I think we're going to have to just be 0:01:25.160 --> 0:01:26.080 very tactical in that. 0:01:26.280 --> 0:01:28.400 You know, I have been telling people November is very 0:01:28.400 --> 0:01:30.959 consistently a strong month, but December is a little bit 0:01:30.959 --> 0:01:32.800 more hit or miss. So we'll see if we end 0:01:32.880 --> 0:01:35.720 up getting the Santa or Grinch in December. But I 0:01:35.760 --> 0:01:37.880 do think the path for equities is higher next year, 0:01:37.880 --> 0:01:39.080 and if we do have a bit of a short 0:01:39.160 --> 0:01:41.399 term pullback either in December to start the year, I 0:01:41.440 --> 0:01:42.560 expect it to be temporary. 0:01:42.760 --> 0:01:46.039 Llurie Goldman Sachs had a note thanks zero Edge for 0:01:46.120 --> 0:01:48.880 this on sales girls looking out two years twenty three, 0:01:49.000 --> 0:01:52.040 twenty four to twenty five and the difference between them 0:01:52.080 --> 0:01:57.520 magnificent seven with eleven percent sales grows versus the SPX 0:01:57.560 --> 0:02:02.000 four ninety three of three percent sales growth. Why would 0:02:02.000 --> 0:02:04.640 anybody sell the magnificent seven right now? 0:02:06.040 --> 0:02:07.560 I think it's a great question, Tom. 0:02:07.600 --> 0:02:09.560 When we look at our indicators and we look at 0:02:09.560 --> 0:02:12.400 the megacap growth trade broadly, it looks crowded. If you 0:02:12.400 --> 0:02:15.520 look at the weekly CFTC data on Nasdaq one hundred 0:02:15.560 --> 0:02:18.720 futures positioning, we're basically close to peak valuation and growth 0:02:18.760 --> 0:02:20.560 relative to value. If you look at the rustle one 0:02:20.560 --> 0:02:22.800 thousand on a weighted PE multiple, which is going to 0:02:22.840 --> 0:02:25.840 be very heavily influenced by that magnificent seven. And if 0:02:25.840 --> 0:02:29.200 you look at earning's momentum, we're still seeing better earnings 0:02:29.240 --> 0:02:31.639 revision trends and growth and value, but value is starting 0:02:31.639 --> 0:02:33.760 to catch up a little bit, so we are seeing 0:02:33.800 --> 0:02:35.919 that leadership on the earning side fade a little bit. 0:02:35.960 --> 0:02:36.480 All of that. 0:02:36.440 --> 0:02:38.720 Tells me that there should be a pause in growth 0:02:38.800 --> 0:02:40.119 leadership at some point. 0:02:40.240 --> 0:02:41.840 But I think one of the reasons people. 0:02:41.600 --> 0:02:45.200 Can't really permanently quit these growth stocks is kind of 0:02:45.240 --> 0:02:47.920 hitting on exactly what you said, the idea that there 0:02:47.960 --> 0:02:50.840 will be superior growth there over the intermediate term. And 0:02:50.840 --> 0:02:53.760 if you look at GDP forecasts for next year one 0:02:53.760 --> 0:02:56.520 percent in real terms anticipated by the street one point 0:02:56.560 --> 0:02:59.720 eighty percent in twenty twenty five. When we're in a 0:02:59.720 --> 0:03:03.560 sub two percent GDP environment, growth stocks usually do outperform 0:03:03.600 --> 0:03:06.040 because economic growth is perceived to be scarce. 0:03:06.639 --> 0:03:08.240 So I do think there is a real tension. 0:03:08.280 --> 0:03:10.240 You know, we still like the tech sector even though 0:03:10.280 --> 0:03:13.280 we have these shorter term tactical concerns on growth, had 0:03:13.320 --> 0:03:15.760 those tactical concerns on growth frankly for a while, and 0:03:15.800 --> 0:03:18.240 they've yet to really materialize in a big way. And 0:03:18.280 --> 0:03:20.680 I do feel like you may need to see a 0:03:20.720 --> 0:03:24.400 real ratcheting up of GDP expectations before you can really 0:03:24.440 --> 0:03:26.760 see growth loose some of that leadership dominance. 0:03:26.840 --> 0:03:29.120 When you talk about sentiment and how really that's been 0:03:29.160 --> 0:03:32.040 the loadstone for you, it's figuring out where is investor 0:03:32.080 --> 0:03:33.240 sentiment em betting against it? 0:03:33.280 --> 0:03:33.920 Am I correct? 0:03:35.240 --> 0:03:35.840 Basically? 0:03:35.920 --> 0:03:38.080 You know, one of the things I've learned over my career, Lisa, 0:03:38.240 --> 0:03:41.200 is that when everybody is really really pessimistic, that's usually 0:03:41.200 --> 0:03:43.280 a fantastic time to buy. If you look at when 0:03:43.320 --> 0:03:47.040 the AAII net bullishness indicator is, you know, sort of 0:03:47.040 --> 0:03:49.760 one standard deviation or two standard deviations below the long 0:03:49.840 --> 0:03:52.080 term average. I forget the exact stat, but it's in 0:03:52.080 --> 0:03:53.920 the eighties in terms of the percent of time that 0:03:53.960 --> 0:03:56.720 you're up twelve months later. And you see similar stats 0:03:56.720 --> 0:03:58.520 if you look on the flip side when people are 0:03:58.560 --> 0:04:02.360 overly enthusiastic. Now, if you're above one standard deviation on 0:04:02.520 --> 0:04:05.080 extreme optimism, you still tend to see like a five 0:04:05.120 --> 0:04:07.200 percent gain over the next twelve months. So it's not 0:04:07.240 --> 0:04:10.160 necessarily a washout, but it does tell you that you 0:04:10.280 --> 0:04:11.960 tend to see consolidation. 0:04:12.120 --> 0:04:13.720 You do tend to see some. 0:04:13.760 --> 0:04:16.080 Choppier markets, And I think that's why it's so important, 0:04:16.120 --> 0:04:19.640 Lisa to really prioritize data over narratives. I know a 0:04:19.640 --> 0:04:21.680 lot of strategists like to tell a great story and 0:04:21.680 --> 0:04:23.400 then they go out and put together their charts to 0:04:23.440 --> 0:04:25.960 try to fit whatever narrative they're pushing out there. But 0:04:26.000 --> 0:04:28.119 I really think that you have to stick to the data, 0:04:28.160 --> 0:04:31.039 and things like that centiment indicator will keep you into 0:04:31.120 --> 0:04:35.560 falling into consensus traps. Again, everybody just sort of gloms 0:04:35.600 --> 0:04:37.599 onto the same narrative and things get too extreme. 0:04:37.680 --> 0:04:39.680 Well, the narrative that we've been hearing again and again 0:04:39.760 --> 0:04:42.200 is five thousand on the SMP going into next year 0:04:42.240 --> 0:04:45.320 at least, if not more, And there has been a 0:04:45.360 --> 0:04:48.720 sort of boom and optimism that we've seen. Does that 0:04:48.800 --> 0:04:51.320 mean it's time to start taking some chips off the 0:04:51.360 --> 0:04:53.880 table and to be a little bit less optimistic or 0:04:53.920 --> 0:04:56.080 does this mean that finally you might see some of 0:04:56.120 --> 0:04:59.599 that cash at record levels going into the equity market. 0:05:00.680 --> 0:05:03.120 Well, it's interestingly so you know, everybody wants to sort 0:05:03.160 --> 0:05:05.120 of talk about this idea, and this is maybe on 0:05:05.160 --> 0:05:07.080 the more barish side of the table that bonds look 0:05:07.120 --> 0:05:09.520 more attractive than stocks and the earning shield has collapsed 0:05:09.520 --> 0:05:11.960 relative to the bond yield, and all that is true, 0:05:12.000 --> 0:05:13.960 But if you actually go back, there have been periods 0:05:13.960 --> 0:05:16.960 in history when equity investors or investors in general have 0:05:17.000 --> 0:05:19.680 taken up both their equity allocations and their bond allocations 0:05:19.720 --> 0:05:20.440 at the same time. 0:05:20.880 --> 0:05:22.880 So I don't think it's unheard of for both to do. 0:05:23.000 --> 0:05:24.960 Well, you know, five thousand, it's starting to be a 0:05:25.040 --> 0:05:27.040 number we're hearing a lot. I think we were maybe 0:05:27.040 --> 0:05:28.880 the second person on the cell side that had it 0:05:28.920 --> 0:05:30.600 when we put ours out, but you are starting to 0:05:30.640 --> 0:05:31.080 hear about it. 0:05:31.120 --> 0:05:34.080 And I think ten percent is usually a reasonable place. 0:05:33.800 --> 0:05:36.599 That a lot of strategists start, we do have one 0:05:36.640 --> 0:05:38.760 model that can take us up to fifty three hundred, 0:05:38.800 --> 0:05:41.279 and that's looking at our valuation work and earning's work. 0:05:41.480 --> 0:05:43.640 And I will tell you, Lisa, like and as I 0:05:43.680 --> 0:05:45.840 was putting the report together, you always think about kind 0:05:45.839 --> 0:05:47.520 of where did you go wrong in the past year. 0:05:48.200 --> 0:05:48.800 I was more. 0:05:48.640 --> 0:05:51.640 Optimistic than most, but not optimistic in the end. And 0:05:51.800 --> 0:05:53.400 that valuation model. 0:05:53.120 --> 0:05:55.120 Was the one thing that was telling me all year 0:05:55.160 --> 0:05:57.200 to look for forty seven hundred, forty eight hundred on 0:05:57.200 --> 0:05:59.120 the S and P it's pointing to forty seven hundred on. 0:05:59.120 --> 0:05:59.640 The end of the year. 0:05:59.640 --> 0:06:02.080 Now twenty twenty three one point it was saying forty 0:06:02.120 --> 0:06:05.159 eight forty nine. So I do think you have to 0:06:05.200 --> 0:06:06.880 have a little bit of humility when you look at 0:06:06.920 --> 0:06:07.640 these forecasts. 0:06:07.640 --> 0:06:09.760 We look at a bunch of different models. We take 0:06:09.800 --> 0:06:10.240 the median. 0:06:10.360 --> 0:06:12.839 Some are more constructive, some are less. But I do 0:06:12.880 --> 0:06:14.880 think we do have to pay attention to that bowl 0:06:14.960 --> 0:06:17.280 case setting into next year, because so it's really. 0:06:17.080 --> 0:06:17.920 What works this year? 0:06:18.000 --> 0:06:18.880 Does that mean a banner? 0:06:19.000 --> 0:06:20.919 Kelvistin says fifty three hundred. 0:06:21.040 --> 0:06:23.200 I'd like we could go there quite I think we 0:06:23.200 --> 0:06:25.359 stick with five K. I just wanted to jump in 0:06:25.400 --> 0:06:28.000 when you were putting this together. Surely five K was 0:06:28.040 --> 0:06:30.359 something like twenty percent upside of the time. 0:06:31.839 --> 0:06:36.239 So you know, John, I started back in October pricing 0:06:36.240 --> 0:06:38.440 the models, and we actually published a report in October 0:06:38.480 --> 0:06:40.240 where we said we're not going to do our target yet, 0:06:40.279 --> 0:06:42.880 but here's what all the models are showing. And back 0:06:42.880 --> 0:06:44.840 then we were getting, you know, more a little bit 0:06:44.839 --> 0:06:46.760 of a more subdued number because we had a lower 0:06:46.800 --> 0:06:50.679 starting point, so we did price everything. As of mid November, 0:06:50.680 --> 0:06:52.240 I think a lot of our models we froze as 0:06:52.279 --> 0:06:54.360 November fifteenth, November. 0:06:53.839 --> 0:06:55.760 Sixteenth, so we really are. 0:06:55.720 --> 0:06:57.839 Kind of getting sort of a true ten percent from 0:06:57.880 --> 0:07:00.599 current conditions as of mid November. Basically, when I do this, John, 0:07:00.640 --> 0:07:02.080 I go into a black hole for a few days, 0:07:02.120 --> 0:07:04.120 don't answer my phone, don't answer email, and don't talk 0:07:04.120 --> 0:07:06.120 to anybody, and update all at once. 0:07:06.160 --> 0:07:09.080 So well, welcome Bocasta the black hole, Laurie. We're happy 0:07:09.120 --> 0:07:17.320 to see you, Lori Cavasena. Obviously, Capital Markets, there's no one. 0:07:17.200 --> 0:07:18.360 Better to speak to on this. 0:07:18.440 --> 0:07:20.360 As if you stand at the four corners of fifty 0:07:20.400 --> 0:07:23.520 seventh Street and Fifth Avenue, the Dana Telsea is a 0:07:23.640 --> 0:07:27.200 child gazing upon Berg Dorth Goodman and across the street 0:07:27.240 --> 0:07:30.200 to Tiffany's and where Louis Vuton is now when there's 0:07:30.240 --> 0:07:33.720 some other unpronounceable I can't afford store on the other corner. 0:07:33.760 --> 0:07:37.040 Telsea joins us now CEO, chief Research officer of her 0:07:37.080 --> 0:07:41.000 Telsey Advisory Group. You got this right. A lot of 0:07:41.040 --> 0:07:44.800 people got this wrong. How did you expect this optimism 0:07:44.840 --> 0:07:46.000 that we come out of the season. 0:07:46.440 --> 0:07:48.200 Well, thank you very much for having me, and hope 0:07:48.200 --> 0:07:50.840 you guys had a great holiday. Here's I think overall, 0:07:51.160 --> 0:07:53.320 keep in mind we did have a barrage of earnings 0:07:53.360 --> 0:07:57.360 reports all talking about the cautious consumer inventory levels are lean. 0:07:57.800 --> 0:08:01.920 Promotions were in place thirty to forty That isn't outstanding, 0:08:01.920 --> 0:08:04.680 that isn't going off the rails. In terms of level 0:08:04.680 --> 0:08:07.720 of promotions, they were definitely clean. What you saw in 0:08:07.800 --> 0:08:11.440 terms of traffic, look at the Lululemons, the bathroom, body works. 0:08:11.760 --> 0:08:14.840 Macy's had more traffic than what you had at Nordstrom, 0:08:15.080 --> 0:08:17.640 and off prices like TJX had a ton of traffic. 0:08:17.920 --> 0:08:21.520 And the teen retailers picked up the reason why, value 0:08:21.520 --> 0:08:24.440 and innovation. If you add value and you had innovation, 0:08:24.680 --> 0:08:27.440 the consumer was coming So look at Uggs and Hoka 0:08:27.520 --> 0:08:29.800 where there was innovation. You look at the value on 0:08:29.880 --> 0:08:32.400 the pricing. It meant something. But we have a long 0:08:32.440 --> 0:08:35.880 season coming up now. Christmas is on a Monday. Watch 0:08:35.920 --> 0:08:39.719 that weekend before Christmas. Because procrastinators, it's their choice of 0:08:39.760 --> 0:08:40.640 when they want to spend. 0:08:40.920 --> 0:08:43.400 Just let's build them that this idea of watch what 0:08:43.480 --> 0:08:45.679 happens later in the season. Are you saying that you 0:08:45.720 --> 0:08:49.040 suspect people brought forward their shopping much more than they 0:08:49.080 --> 0:08:51.920 had in the past because they are being cautious. So 0:08:52.360 --> 0:08:55.720 the numbers are inflated to represent that more than just 0:08:55.800 --> 0:08:57.080 excessive spending altogether. 0:08:57.200 --> 0:08:57.719 Yes, I think. 0:08:57.760 --> 0:08:59.920 You look at the savings rate which has come down, 0:09:00.080 --> 0:09:02.240 You take a look at delinquencies which have gone up, 0:09:02.559 --> 0:09:05.120 and you look at what's happened with the pattern of promotions. 0:09:05.360 --> 0:09:08.640 It began in October, So with Amazon Prime Day in 0:09:08.640 --> 0:09:11.640 October their second Prime Day, you had a pull forward 0:09:11.640 --> 0:09:14.559 of what the promos were, and of course online is 0:09:14.600 --> 0:09:16.960 going to be strong. Stores are no longer open on 0:09:17.000 --> 0:09:20.080 Thanksgiving Day? So what did people do? They shop with 0:09:20.120 --> 0:09:21.680 their phone? Mobile mattered? 0:09:22.000 --> 0:09:24.920 Well, this really raises this question. Is it the modality 0:09:25.320 --> 0:09:28.000 of shopping that matters? Right now or is it the 0:09:28.120 --> 0:09:31.440 type of product mix that matters right now? And I'm curious, 0:09:31.520 --> 0:09:34.120 can you parse that up? Is it just online shopping 0:09:34.200 --> 0:09:37.240 or is it the products that people are getting online. 0:09:37.320 --> 0:09:39.800 It's the products that people are getting, and don't throw 0:09:39.840 --> 0:09:43.240 out the stores. The stores matter, the engagement that people have, 0:09:43.320 --> 0:09:47.360 the social interaction. So many companies in twenty twenty three 0:09:47.559 --> 0:09:50.040 came out with new store formats. You look at on 0:09:50.280 --> 0:09:53.679 mall and off mall, they both won and even outlets 0:09:53.679 --> 0:09:54.120 are strong. 0:09:54.240 --> 0:09:56.560 And that measure for value. 0:09:56.200 --> 0:09:59.320 Where's the best total return of twelve months? You and 0:09:59.360 --> 0:10:01.839 Joe Feldman they're not on speaking terms on this, but 0:10:02.240 --> 0:10:05.720 the basic idea of which kind of retail and which 0:10:05.720 --> 0:10:07.040 individual stock is the. 0:10:06.960 --> 0:10:09.680 Best possibility off price I think is going to win 0:10:09.760 --> 0:10:11.000 over the next twelve months. 0:10:11.040 --> 0:10:14.480 TJ Max, would you off price? 0:10:14.800 --> 0:10:15.280 Off price? 0:10:15.440 --> 0:10:19.880 Not luxury, different world, it's off price. It's the TJ 0:10:20.000 --> 0:10:22.400 max Is of the world, the Burlington's and the Ross stores. 0:10:22.640 --> 0:10:25.000 Why they're getting the benefit of a trade down. Look 0:10:25.000 --> 0:10:27.480 at what you just saw in their results last week 0:10:27.679 --> 0:10:30.040 when they each delivered same store sales of at least 0:10:30.080 --> 0:10:33.280 five percent, when you typically these are three percent same 0:10:33.320 --> 0:10:36.240 store sales increases. They're getting the benefit of the trade down. 0:10:36.280 --> 0:10:40.960 There's been a heritage of Tjmax executing what's the secret 0:10:41.120 --> 0:10:42.360 sauce that makes. 0:10:42.120 --> 0:10:42.680 Them do that? 0:10:43.360 --> 0:10:46.040 The experience of their buyers. They know how to buy, 0:10:46.080 --> 0:10:49.240 They have their relationships with brands. Brands like being in 0:10:49.280 --> 0:10:52.480 their stores and they sell through and don't forget their locations. 0:10:53.440 --> 0:10:56.600 The description that you're painting of the American consumer is 0:10:56.640 --> 0:10:59.439 not that positive. It's one that is trading down. As 0:10:59.440 --> 0:11:01.520 you said, it's one that has caution that might not 0:11:01.679 --> 0:11:06.680 show up in force before that Monday Christmas. So where 0:11:06.720 --> 0:11:08.520 are we in this cycle, right? I mean, is this 0:11:08.559 --> 0:11:10.480 a matter of people running out of money or is 0:11:10.480 --> 0:11:12.880 it just them saying, well, we've been spending a lot recently. 0:11:12.920 --> 0:11:15.360 We probably should be a little more prudent. 0:11:15.480 --> 0:11:17.960 They had more money two years ago with the stimulus 0:11:18.000 --> 0:11:21.240 package during the pandemic. The load to middle income consumer 0:11:21.400 --> 0:11:25.160 is battered right now by higher interest rates. Even though 0:11:25.200 --> 0:11:28.160 inflation's moderating, it's still a higher price than it was 0:11:28.200 --> 0:11:30.320 in the past. And even you take a look at 0:11:30.320 --> 0:11:33.600 the luxury consumer, you need the feel good factor. With 0:11:33.720 --> 0:11:37.240 the geopolitical issues going on, the macro headwinds out there 0:11:37.520 --> 0:11:40.840 and the volatility the stock market, it makes it more challenging. 0:11:41.160 --> 0:11:42.679 So that's why experience. 0:11:42.760 --> 0:11:45.240 Look at the tailor swift concerts over the summer, what 0:11:45.320 --> 0:11:46.680 people are willing to spend on. 0:11:47.080 --> 0:11:49.600 Give them something innovative, they'll be there. 0:11:49.800 --> 0:11:51.520 So what does it say about the trajectory of the 0:11:51.520 --> 0:11:53.839 consumer and how people are going to be spending. Is 0:11:53.880 --> 0:11:56.000 it the beginning of more pain or is this basically 0:11:56.080 --> 0:11:56.600 the bulk of it. 0:11:57.080 --> 0:11:59.520 I think this is in the middle of the pain 0:11:59.559 --> 0:12:03.040 that we're I think the focus on essentials is right there. 0:12:03.360 --> 0:12:06.000 I think you need newness in order to drive demand. 0:12:06.360 --> 0:12:09.440 And even though the labor market continues to remain very good, 0:12:09.920 --> 0:12:12.560 the watchwords are out there and saying what's it going 0:12:12.600 --> 0:12:15.480 to look like? And inventory is cleaner, so you don't 0:12:15.559 --> 0:12:17.640 need to promote as deeply as you had in the past. 0:12:17.920 --> 0:12:18.640 Look at what's. 0:12:18.440 --> 0:12:22.080 Happening with the department stores. They're ordering more cautiously, and 0:12:22.280 --> 0:12:24.800 why are they ordering cautiously if they don't feel the 0:12:24.840 --> 0:12:27.800 demand is going to be there. They'd rather sell at 0:12:28.360 --> 0:12:32.400 full price than markdowns. And your most profitable markdown is 0:12:32.440 --> 0:12:34.720 your lowest markdown, not your greatest markdown. 0:12:34.960 --> 0:12:37.760 Toughest job in retail this year is a guy named 0:12:37.800 --> 0:12:43.079 Sabata Dico at Gucci absolute toughest, toughest job. Dana Telsey 0:12:43.360 --> 0:12:45.520 on what Gucci's going to do right off that corner 0:12:45.600 --> 0:12:47.160 of Fifth Avenue and fifty seventh. 0:12:47.559 --> 0:12:50.440 I think they're going more basic than they've ever been before. 0:12:50.440 --> 0:12:53.520 Absolutely, they're going away from what the idiocy was for 0:12:53.559 --> 0:12:54.079 three years. 0:12:54.160 --> 0:12:56.960 Yeah, the mismatching of the three years is all about 0:12:57.040 --> 0:13:00.200 matching now and it's about safe. They're going back back 0:13:00.280 --> 0:13:04.319 to their archives and seeing what can they reinvent and updated. 0:13:04.360 --> 0:13:06.400 Proof that we want that. Is there a proof that 0:13:06.400 --> 0:13:07.720 will sell to the Chinese? 0:13:08.240 --> 0:13:10.319 I think there's some proof it will sell to the Chinese, 0:13:10.360 --> 0:13:12.760 But we're not seeing the Chinese travel yet. We need 0:13:12.760 --> 0:13:15.839 them traveling to really drive demand. And don't forget you're 0:13:15.840 --> 0:13:17.720 seeing the local Europeans slow down. 0:13:17.760 --> 0:13:19.719 Also, what do you make of the buy now, Pay 0:13:19.800 --> 0:13:22.040 Later and we were hearing that it's actually picking up. 0:13:22.240 --> 0:13:22.800 Do you buy that? 0:13:22.800 --> 0:13:25.480 Do you think that this is a positive sign for 0:13:25.840 --> 0:13:27.960 the retail world or is it a negative sign that 0:13:28.000 --> 0:13:30.640 people are just basically turning to leverage. 0:13:30.800 --> 0:13:32.320 People are turning towards leverage. 0:13:32.360 --> 0:13:35.160 When buy Now, Pay Later first came out, it was 0:13:35.400 --> 0:13:39.160 a huge event. A huge development because it got younger 0:13:39.200 --> 0:13:42.440 people and frankly the millennials to spend. I think now 0:13:42.480 --> 0:13:44.760 that it's been around for a few years, if they 0:13:44.800 --> 0:13:48.520 can't pay on time, they're willing to delay and frankly 0:13:48.600 --> 0:13:50.840 be able to extend what their payment terms are. 0:13:51.080 --> 0:13:53.160 Is it changing charge cards? I mean, is buy now, 0:13:53.200 --> 0:13:55.560 pay later changing the charge card business? 0:13:55.600 --> 0:13:58.880 Not what we've seen. It didn't take off tremendously. It 0:13:58.920 --> 0:14:02.200 took off with a certain graphic and those are the millennials. 0:14:01.800 --> 0:14:02.640 Single best buke go. 0:14:03.320 --> 0:14:04.800 I think that it's going to be TJX. 0:14:04.920 --> 0:14:06.840 I think TJX is going to be the winner for 0:14:07.160 --> 0:14:08.400 Holiday in twenty twenty four. 0:14:08.760 --> 0:14:11.079 Dana, thank you for the brief. Dana Telsey with Telsey 0:14:11.160 --> 0:14:24.480 Advisory Group. Here we have seen far too much of him. 0:14:24.520 --> 0:14:27.920 He is an expert on turmoil, war and terrorism. Aaron 0:14:28.040 --> 0:14:32.120 David Miller with a continued brief, Senior Fellow Carnegie Endowment 0:14:32.200 --> 0:14:35.160 for International Piece. Aaron, just let me just cut to 0:14:35.240 --> 0:14:38.800 the chase. If we get out to a point of negotiation. 0:14:38.800 --> 0:14:42.160 From where you sit, is there a hamas to negotiate with? 0:14:42.360 --> 0:14:47.280 Now there is, and the cutteries and the Americans are 0:14:47.480 --> 0:14:52.640 validating Hamas's effectiveness. The three of you are better analysts 0:14:52.640 --> 0:14:56.200 than I am, because you've i think, identified the core questions. 0:14:56.880 --> 0:14:57.920 There's growing daylight. 0:14:58.040 --> 0:15:00.160 The world is mad at Joe Biden, even though I 0:15:00.200 --> 0:15:01.320 think frank his own. 0:15:01.200 --> 0:15:02.120 Party's mad at him. 0:15:02.400 --> 0:15:05.080 There's a degree twenty five years at Department of State, 0:15:05.120 --> 0:15:09.160 I've never seen, never the degree of dissension and vocal 0:15:09.200 --> 0:15:15.480 opposition to an administration's policy from inside the foreign policy 0:15:15.680 --> 0:15:20.240 and national security space. On one resignation, but an extraordinary 0:15:20.240 --> 0:15:23.320 amount of noise. I think the President Frankly handled this 0:15:23.400 --> 0:15:27.320 pretty effectively. The Israeli Lebanese border is relatively quiet. The 0:15:27.400 --> 0:15:31.240 fears of escalation into a regional war which could produce 0:15:31.520 --> 0:15:35.520 plunging financial markets and rising up prices. So far that's 0:15:35.520 --> 0:15:38.280 been avoided, And you're right to focus on ostages, but 0:15:38.400 --> 0:15:41.360 I think the deal is very clear. I'd be stunned, frankly, 0:15:41.560 --> 0:15:47.120 if this humanitarian past collapsed. Hamas is trading hostages for time. 0:15:47.680 --> 0:15:52.320 They're hoping that the hostage families inside of Israel will 0:15:52.360 --> 0:15:58.040 continue to pressure the government in order to redeem all 0:15:58.120 --> 0:16:02.880 of the hostages that have not been The Arabs are angry, 0:16:03.040 --> 0:16:05.200 and THEWS earliers are going to face probably in the 0:16:05.240 --> 0:16:11.400 next week. If the ten hostages for a day of quiet, 0:16:11.440 --> 0:16:14.560 which is the offer on the table, If Amas accepts 0:16:14.560 --> 0:16:19.000 that doesn't add requests for more Palestinian prisoners, you could 0:16:19.000 --> 0:16:20.119 get another week. 0:16:19.880 --> 0:16:20.320 Out of this. 0:16:20.800 --> 0:16:22.760 But at some point the Israelis are going to want 0:16:22.760 --> 0:16:25.040 to resume in their ground campaign, and at that point, 0:16:25.120 --> 0:16:29.600 I think you're going to see growing awkwardness and uncomfortableness, 0:16:29.800 --> 0:16:32.800 maybe even tension in the US Israeli relationship. 0:16:32.920 --> 0:16:35.960 There's daylight between President Biden and some of his own 0:16:36.280 --> 0:16:39.320 members within his party, within his team that he has 0:16:39.360 --> 0:16:44.160 surrounding him. But he also reportedly has expressed concern about 0:16:44.160 --> 0:16:47.520 the collateral damage, about the civilians who have gotten killed, 0:16:47.520 --> 0:16:51.920 the incredible number, more than people had originally expected. How 0:16:52.000 --> 0:16:54.760 much is that going to lead to pressure in a 0:16:54.840 --> 0:16:58.640 new way that Benjamin not to Yahoo, who is not 0:16:58.720 --> 0:17:01.040 exactly popular at home, we'll have to listen to. 0:17:03.080 --> 0:17:04.399 I think that's the core question. 0:17:04.800 --> 0:17:10.120 President persona alone among modern presidents, he considers himself part 0:17:10.200 --> 0:17:16.200 of the Israeli story and is preternaturally his emotional support 0:17:16.240 --> 0:17:19.960 for Israel literally is impressed on his DNA. 0:17:20.280 --> 0:17:21.080 The politics. 0:17:21.119 --> 0:17:24.240 As you point out, he has to be concerned about 0:17:24.320 --> 0:17:27.760 rising the rising type opposition the Democratic Party, but the Republicans, 0:17:28.200 --> 0:17:30.159 who have emerged as the sort of Israel right or 0:17:30.160 --> 0:17:34.520 wrong party, are also waiting for him to pressure the 0:17:34.600 --> 0:17:37.679 Israelis so that they can pressure Joe Biden. And finally, 0:17:37.720 --> 0:17:40.480 there's I think the president's realization that he doesn't have 0:17:40.600 --> 0:17:44.160 many good answers to the two or three critical questions 0:17:44.200 --> 0:17:47.800 that the Israelis are facing with. How do you prosecute 0:17:48.040 --> 0:17:52.080 a ward to eradicate Hamas without an exponential rise in 0:17:52.119 --> 0:17:55.679 Palestinian desks? How do you surge humanitarian assistance into a 0:17:55.720 --> 0:17:57.880 war zone? And finally, what do you do about the 0:17:57.920 --> 0:18:02.520 proverbial day after its weeks and months after? So I 0:18:02.560 --> 0:18:05.879 think part of the reason he's reluctant to press the 0:18:06.000 --> 0:18:09.240 Israeli's hard so far is because he doesn't have better 0:18:09.280 --> 0:18:11.760 answers for them these core questions. 0:18:11.880 --> 0:18:14.359 Aaron David Miller a student of this, with your books 0:18:14.440 --> 0:18:16.960 back thirty years, don't go out thirty years for but 0:18:17.000 --> 0:18:19.440 I'm going to give you five years or ten years forward. 0:18:20.160 --> 0:18:24.040 Is our relationship with Israel irrevocably changed? 0:18:25.880 --> 0:18:27.119 A fascinating question. 0:18:27.320 --> 0:18:33.240 The headline would suggest that generational changes in voter constituency 0:18:33.600 --> 0:18:40.800 in Congress. The growing divergence between United States and the 0:18:40.880 --> 0:18:45.040 values proposition that Israel is a liberal democracy more or 0:18:45.119 --> 0:18:48.199