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SpaceX Sends Civilians Into Space · Bloomberg Intelligence

• 0:00
  Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
• 0:04
  Speaker 1: my co host Matt Miller. Every business day, we bring
• 0:06
  Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
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  Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
• 0:15
  Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
• 0:18
  Speaker 1: at Bloomberg dot com slash podcast. You know, we had
• 0:22
  Speaker 1: a rocket go into space last night, and I always
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  Speaker 1: love that kind of stuff. I'm gonna sucker for that.
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  Speaker 1: I grew up with the Apollo program and all that
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  Speaker 1: kind of stuff. My mom, who is she's older than you, though, Paul,
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  Speaker 1: but she gets terry when she watches it. There's this
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  Speaker 1: big nostall jobund it and I think, I know, I
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  Speaker 1: think there's value, but anyway, it's it's it's very cool.
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  Speaker 1: But this is completely commercial flight, so very cool. Ed Ludlow,
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  Speaker 1: he's our West Coast correspondent. He covers rockets and all
• 0:47
  Speaker 1: that kind of stuff. I don't know what he does
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  Speaker 1: for a living, but apparently he's in Cape Canaveral, Florida. Ed.
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  Speaker 1: What can you tell us about this flight? I'm talking
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  Speaker 1: this is really a commercial flight. There's no astronauts or anything. Yeah,
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  Speaker 1: this is an all civilian crew. Um. The mission commander
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  Speaker 1: is a chap called Jarediazingman, who's the CEO of a
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  Speaker 1: thin tech company shift for payments, and he's a billionaire,
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  Speaker 1: so you know, we're kind of continuing this theme. He's
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  Speaker 1: funding the mission. But the other three crew members are
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  Speaker 1: genuine civilians, you know, they're not professional astronauts, and they're
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  Speaker 1: currently orbiting Earth at altitude of three hundred and sixty miles.
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  Speaker 1: You know, that's further than the International Space Station, is
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  Speaker 1: further than the Hubble telescope even and it's actually the
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  Speaker 1: furthest that SpaceX has ever sent. It's Dragon spacecraft. So
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  Speaker 1: this is kind of a real landmark mission for not
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  Speaker 1: just commercial space flight, but human spaceflight. You know, you
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  Speaker 1: don't have to be a decorated astronaut with a with
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  Speaker 1: an Air Force back history to make it. You can
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  Speaker 1: go to space now being an everyday joe. So let's
• 1:53
  Speaker 1: talk about the everyday joe. And when will this officially
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  Speaker 1: really start to ramp up and is it monthly, quarterly, weekly?
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  Speaker 1: What can we expect that's the top question. You know,
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  Speaker 1: SpaceX are really supplied and strained Benji Reid, who's one
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  Speaker 1: of the directors of the company, spoke to me about
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  Speaker 1: this the day before the launch, but that you know,
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  Speaker 1: they have around four to six flights potentially in um.
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  Speaker 1: But the demand is there, they say, you know, there
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  Speaker 1: is a list of willing, paying customers. I think there's
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  Speaker 1: still massive question marks about the economics of this. You know,
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  Speaker 1: on this occasion, you have one billionaire. Okay, guys, he's
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  Speaker 1: a modest billionaire, just a couple of billions, but he's
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  Speaker 1: paying for it with his checkbook. And and that's really
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  Speaker 1: the question that SpaceX has not been able to answer.
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  Speaker 1: In fact, they haven't answered me. I've asked going forward,
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  Speaker 1: who pays for this? You know, does it rely on philanthropy?
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  Speaker 1: Does it rely on SpaceX kind of discounting trip? Is
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  Speaker 1: this done through lotteries? You know, things like that, And
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  Speaker 1: we really don't know for now. It does really seem
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  Speaker 1: like a rich man's sport. What are these four passengers,
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  Speaker 1: I guess, I guess I don't call them astronauts. What
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  Speaker 1: are these passengers doing up there for three days? Yeah? Well,
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  Speaker 1: what I always say is this that they Dragon Capsule
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  Speaker 1: is Philly autonomous. You know, it's in orbit, but you know,
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  Speaker 1: largely it powers itself and can be controlled from ground
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  Speaker 1: control by SpaceX. But if something goes wrong, they have
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  Speaker 1: had five to six months of intense training, two different
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  Speaker 1: scenarios to react and deal with that. But you know,
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  Speaker 1: largely they're up there to the experience. I don't know
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  Speaker 1: if you guys remember the image, but when they send
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  Speaker 1: Dragon up to the International Space Station, the nose cone
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  Speaker 1: opens up, and that is this the zone that docks
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  Speaker 1: with I S. S. But they don't need to dot
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  Speaker 1: with BASS. So when the nose cone opened this time around,
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  Speaker 1: it revealed this beautifully curved, thick glass window, so they'll
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  Speaker 1: be taking time to look out of it, look back
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  Speaker 1: down at Earth, look out into space. One of the passengers,
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  Speaker 1: or one of the civilian astronauts, is somebody called Haley
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  Speaker 1: after No. She is a cancer survivor who went on
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  Speaker 1: to be a physicians assistant at St. Jude, who are
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  Speaker 1: actually this mission is raising money for St. Jude. The
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  Speaker 1: aim is two million, but she is technically the medical
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  Speaker 1: officer on this trip, and she'll be doing biological physiological
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  Speaker 1: experiments on her crewmates while they're in orbit for three days.
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  Speaker 1: You know, they'll be moving around the cabin. And and
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  Speaker 1: as you know, I've been telling people, Chris Ambroski, who
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  Speaker 1: is the mission specialist, he won his seat because his
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  Speaker 1: buddy won the seat in a lottery or a wrap
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  Speaker 1: or lottery. He didn't want to go, so he gave
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  Speaker 1: his his seat to Chris. And Chris has taken a
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  Speaker 1: ukulele with him, so he'll be discovering what it's like
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  Speaker 1: to play a string instrument in space and rootcap for
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  Speaker 1: us here there. And you know the inner workings of
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  Speaker 1: the top three you mentioned Virgin Clactic and SpaceX and
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  Speaker 1: Blue Origin and the inherent maybe friendly competition though if
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  Speaker 1: one succeeds, then we all can succeed. Where are we
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  Speaker 1: in wanting to be the first, wanting to be the best,
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  Speaker 1: but also knowing that multiple players in this market in
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  Speaker 1: the end actually could be better. Yeah, I think you
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  Speaker 1: know the main voice in all of this is NASA. Right.
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  Speaker 1: SpaceX is success today was born out of the commercial
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  Speaker 1: crew program, which NASHA put in place a decade ago
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  Speaker 1: because simply the public sector funded space programs weren't working.
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  Speaker 1: You know, the Shuttle program ultimately was shut down. And
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  Speaker 1: NASA's view on this is that competition is good, and
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  Speaker 1: the private sector is good. They had no involvement in
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  Speaker 1: this mission, They did not fund it, they did not
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  Speaker 1: take part in the training or the risk assessment. But
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  Speaker 1: they think that it's a really substantive step forward. So
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  Speaker 1: that's one part of it. But to be completely frank,
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  Speaker 1: SpaceX is so ahead of the game compared with the
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  Speaker 1: rest of the players. Um, you know, basically SpaceX sends
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  Speaker 1: two thirds of all payloads sent from all of it
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  Speaker 1: that includes everyone, private sector, government payloads. You know, they
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  Speaker 1: dominate that industry, not because they have some kind of monopoly,
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  Speaker 1: but because they simply are just the best at it.
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  Speaker 1: You know, they have they can fly with such regularity
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  Speaker 1: because their technology is the best. And the final thing
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  Speaker 1: I would say is that it's unequivocal across the investment community,
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  Speaker 1: NASA aerospace engineers. This mission is such a much bigger
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  Speaker 1: deal than what we saw from Bezos and Branson. It
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  Speaker 1: is an order of magnitude more difficult and risky. What
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  Speaker 1: they have done real quickly, how did they get back?
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  Speaker 1: Did they splash down in the ocean? Allah the Apollo astronauts,
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  Speaker 1: how did they get back? Yeah, exactly. So there are
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  Speaker 1: several target zones off the coast of Florida. It's completely
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  Speaker 1: weather dependent the timing and exact location, but the dragon
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  Speaker 1: capsule can orient itself so that the Earth's gravitational pool
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  Speaker 1: brings it back down through as atmosphere. The flat bottom
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  Speaker 1: slows it down with air resistance, and then it uses
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  Speaker 1: a series of parachutes and by the time it does
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  Speaker 1: splash down is just a few miles an hour. Nice
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  Speaker 1: and gentle Edla Low, thank you so much for joining us.
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  Speaker 1: Nice and gentle Ed La West Coast corresponding for Bloomberg News.
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  Speaker 1: He is down in Cape Canaveral bringing us live reporting
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  Speaker 1: on this really really cool space mission SpaceX. And I
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  Speaker 1: like how Ed framed aft force order of magnitude more
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  Speaker 1: difficult than and then what we saw from just recently
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  Speaker 1: from Richard Branson and uh and uh Jeff Bezos. Yeah, no,
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  Speaker 1: Ed is great. He he knows the stuff inside it
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  Speaker 1: out and always brings us some perspective along with some humor. Well,
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  Speaker 1: we have read on the screen, but it's been an
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  Speaker 1: odd week, you know, one day up, the next day down,
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  Speaker 1: the next day up. So no real direction here at
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  Speaker 1: least uh for this week. As people come back and
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  Speaker 1: kind of get focused on this market in September. Let's
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  Speaker 1: bring in David coudla Uh. He is founder, CEO, and
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  Speaker 1: chief investment strategists at main Staate Capital. We have about
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  Speaker 1: three point eight billion dollars under management. David, thanks so
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  Speaker 1: much for joining us here. You know, market feels a
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  Speaker 1: little directction lists here. Where do you think the next
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  Speaker 1: five to move is a lot of folks feel like
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  Speaker 1: it's to the downside. Good morning, Paul. Yeah, it definitely
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  Speaker 1: seems like the market is uh just uh mandering, meandering sideways.
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  Speaker 1: We've had seven of the last nine days have been
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  Speaker 1: negative days for the index, but Pete de trough intra
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  Speaker 1: day that's only a little over two percent declined. So
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  Speaker 1: it's not the extreme volatility that some mighty expect in
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  Speaker 1: September October or we've been waiting for for so long.
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  Speaker 1: H this has been a very non volatile year for
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  Speaker 1: the market, indexes, for stocks in general. I think that
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  Speaker 1: though that as we worked through this, I think the
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  Speaker 1: direction for the market through year end is higher um
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  Speaker 1: and higher by as much as another four or five six.
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  Speaker 1: And is that based on fundamentals or fomo? Well, certainly
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  Speaker 1: fomo has been uh an important factor and in this
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  Speaker 1: boolmarket all the way through certainly, um, you know by
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  Speaker 1: this time last year as we came off the bear
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  Speaker 1: market lows in March. But you know, when we when
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  Speaker 1: we look at where we're at in the cycle, uh,
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  Speaker 1: and there is questions about the economy, there's questions about what.
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  Speaker 1: You know, we've had downward revisions by the Fed, Atlanta
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  Speaker 1: Fed and their GDP forecast, by a lot of the
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  Speaker 1: big banks in their GDP forecasts. But we've still got
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  Speaker 1: an economy that's growing. We've got the risk of inflation.
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  Speaker 1: But our latest number, uh, the inflation was down a
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  Speaker 1: little bit. Import prices came in down three tenths of
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  Speaker 1: a percent. That's the lowest in a year, or the
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  Speaker 1: first decline in a year. So we're importing less inflation.
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  Speaker 1: So uh, you know that when we when we net
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  Speaker 1: that all out, though, I believe that we we still
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  Speaker 1: have hired for the market to go based on fundamentals,
• 9:59
  Speaker 1: based on also our belief, not the consensus belief, but
• 10:03
  Speaker 1: our belief that FED tightening or FED tapering is not
• 10:08
  Speaker 1: coming as soon as as many might expect. Because it
• 10:12
  Speaker 1: seems like, you know, again we did get some hawkish
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  Speaker 1: views on tapering from the FED recently. Yet the as
• 10:19
  Speaker 1: you know, as you just mentioned, the markets only off
• 10:21
  Speaker 1: a couple of percent from it's high. So if you're
• 10:23
  Speaker 1: a bull, you could take that as a pretty decent sign.
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  Speaker 1: Is that how you think about it? Yeah, And the
• 10:30
  Speaker 1: other thing that we're maybe at a non consensus view
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  Speaker 1: on also is the UH where we are with COVID
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  Speaker 1: UH and where we're going. You know, we I've probably
• 10:42
  Speaker 1: heard five times over the last five weeks that that
• 10:45
  Speaker 1: the delta variant has peaked, but yet we've got the
• 10:48
  Speaker 1: news UH here this week that the state of Iowa
• 10:52
  Speaker 1: is rationing hospital beds. Who would have thought at this
• 10:57
  Speaker 1: point in the pandemic any where in the US we'd
• 11:01
  Speaker 1: be rationing hospital beds deciding who's going to get treatment
• 11:05
  Speaker 1: or not. So, you know, the way we look at
• 11:07
  Speaker 1: it is we're only another variant away from that having
• 11:10
  Speaker 1: even further economic impacts, impacts on the supply chain, and
• 11:15
  Speaker 1: you know, those are things that the FED will consider
• 11:18
  Speaker 1: and when they do or don't taper, and there's just
• 11:20
  Speaker 1: so much so with the amount of liquidity that's out
• 11:23
  Speaker 1: there billion a month, there's so much liquidity. I think
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  Speaker 1: that's why we haven't seen any significant downstrokes, downside volatility
• 11:33
  Speaker 1: of the market, and the trend continues to be higher.
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  Speaker 1: I am curious what queues you're taking from the bond
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  Speaker 1: market with spread still so tight relative to historical standards? Again,
• 11:46
  Speaker 1: does that sound like fundamentals or is this excess yield taking? Well,
• 11:53
  Speaker 1: you know, the question is what kind of signals can
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  Speaker 1: we take from the bond market at all these days? Uh?
• 11:59
  Speaker 1: You know, how can we have a tenure yield tenure
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  Speaker 1: treasury yield trading around one point when inflation is at
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  Speaker 1: five point three or five point four percent? Use the
• 12:11
  Speaker 1: tailor role, use any role. Um We've talked about a lot.
• 12:16
  Speaker 1: Uh you know that doesn't that doesn't make sense. Uh.
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  Speaker 1: So you know, bond yields are so much influenced by
• 12:23
  Speaker 1: uh the artificial factor, the intervention of the ft. We
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  Speaker 1: think it's more telling of what the fet is doing
• 12:31
  Speaker 1: than what it can give us in terms of good
• 12:33
  Speaker 1: signals about the economy. Valuation, where are we are you concerned?
• 12:40
  Speaker 1: Valuations are stretched, but they're stretched in a low interest
• 12:44
  Speaker 1: rate environment. As I said, the tenure trading down around
• 12:48
  Speaker 1: one point three percent, So we think we can still
• 12:52
  Speaker 1: have multiple expansion in the US. But you know, one
• 12:55
  Speaker 1: thing that we're looking at is is uh is. We're
• 12:58
  Speaker 1: looking abroad because what we've seen now is if we
• 13:01
  Speaker 1: look at the M s c I All Country Index,
• 13:06
  Speaker 1: x US basically has developed countries. We're um that index
• 13:13
  Speaker 1: is trading at a thirty point five pc discount to
• 13:16
  Speaker 1: the S and P five hundred. That's the highest ever.
• 13:19
  Speaker 1: So we're also looking abroad to foreign opportunities in Europe,
• 13:24
  Speaker 1: in Japan to both diversify our portfolio for overall risk
• 13:29
  Speaker 1: mitigation and as a tactical opportunity for our performance going forward. Interesting.
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  Speaker 1: All right, David, thank you so much for joining us again.
• 13:36
  Speaker 1: We always appreciate getting your thoughts. David Coudla, founder, CEO,
• 13:40
  Speaker 1: and chief investment strategist of Mainstay Compital Management. Interesting takeaway,
• 13:45
  Speaker 1: they're kind of looking at the outside the US for
• 13:47
  Speaker 1: opportunities and seeing evaluation play there. Let's talk crypto here.
• 13:53
  Speaker 1: I guess one of the issues for a lot of
• 13:56
  Speaker 1: folks that I talked to, you know, just kind of
• 13:58
  Speaker 1: cocktail conversation, is I hear all about this crypto stuff bitcoin,
• 14:02
  Speaker 1: How do I get exposure to it? How do I
• 14:04
  Speaker 1: invest in it? Let's check in with Ian Billina founder
• 14:07
  Speaker 1: and CEO of Token Metrics uh In. You're also the
• 14:11
  Speaker 1: author of the book Crypto Investing Guide, How to invest
• 14:13
  Speaker 1: in Bitcoin, Defy n f T S and more so Ian.
• 14:18
  Speaker 1: When people come up to you at a cocktail party
• 14:19
  Speaker 1: and say, how do I invest in crypto? I feel
• 14:23
  Speaker 1: like I should have some percentage of my portfolio in crypto.
• 14:27
  Speaker 1: What's your go to response? I'll throw all thanks for
• 14:31
  Speaker 1: having me good to responses. Because it is a new
• 14:37
  Speaker 1: asset class, it is riskier than other asset classes. However
• 14:41
  Speaker 1: that there is an opportunity for more upsite. What I
• 14:44
  Speaker 1: typically till that is, start by investor with what you're
• 14:47
  Speaker 1: willing to lose, whether that's one percent of your net worth,
• 14:50
  Speaker 1: whether that's five percent of your net worth, but whatever
• 14:52
  Speaker 1: you invested to crypto, make sure you're willing to lose
• 14:55
  Speaker 1: this because um outside but there's also lots of downside
• 14:59
  Speaker 1: with crypto investing, and just then that's why we haven't
• 15:04
  Speaker 1: book published recently. As you mentioned, see if we can,
• 15:08
  Speaker 1: and I think we're we've got a kind of a
• 15:10
  Speaker 1: choppy line there, so we're gonna see if we can
• 15:11
  Speaker 1: improve that. Uh And if we can, we'll come back
• 15:14
  Speaker 1: to you I'm just looking at bitcoin here. Today XPT
• 15:18
  Speaker 1: is the symbol forty seven thousand, three and sixty eight
• 15:22
  Speaker 1: dollars or three seventy dollars per token off about one
• 15:25
  Speaker 1: point one percent today dig up to fifty two tho uh.
• 15:29
  Speaker 1: And it's got a support tailor, I mean for the
• 15:31
  Speaker 1: technical folks out there for bitcoin of about thirty thousand
• 15:34
  Speaker 1: dollars per token that's been tested several times, but it
• 15:37
  Speaker 1: bounced really nicely off of that thirty thousand the last
• 15:40
  Speaker 1: time I got up to dollars per token. Yeah, and
• 15:43
  Speaker 1: there's been a lot of interesting conversations. We spoke with
• 15:45
  Speaker 1: Eric Balcunas are pretty expert yesterday Bloomberg Intelligence, and he
• 15:51
  Speaker 1: twice now was pretty strongly put his money on a
• 15:55
  Speaker 1: bitcoin or a crypto et F by around mid October
• 15:59
  Speaker 1: or so, that sec Gary Gensler, and I'm not going
• 16:02
  Speaker 1: to get into all the craziness that Eric valtun Is
• 16:05
  Speaker 1: can do so well, but the Securities Act of thirty
• 16:08
  Speaker 1: four versus forty, and Eric was saying, Gary Gensler prefers one,
• 16:12
  Speaker 1: and so this way they can get through the e
• 16:14
  Speaker 1: t F this way, and you know, that could be
• 16:16
  Speaker 1: a huge catalyst for this market as well. Eric was saying, Yeah,
• 16:21
  Speaker 1: that's gonna be really interesting. We have in Billina back,
• 16:23
  Speaker 1: founder and CEO of Token Metrics, So and again you
• 16:26
  Speaker 1: kind of start off by saying, how do you invest
• 16:27
  Speaker 1: in this and you do it carefully. How important do
• 16:31
  Speaker 1: you think getting an e t F, a bitcoin et
• 16:34
  Speaker 1: F or crypto e t F will be to the
• 16:36
  Speaker 1: growth of this market. I think it will be huge
• 16:40
  Speaker 1: because it will be an avenue for people to slowly
• 16:42
  Speaker 1: passively invest in to crypto assets. And I think it
• 16:45
  Speaker 1: would be really the welcoming of institutional investors and people
• 16:49
  Speaker 1: with the full one case the pension funds being able
• 16:52
  Speaker 1: to investen to crypto without having to become experts in crypto.
• 16:56
  Speaker 1: Can you talk to us about institutional investors when they
• 17:00
  Speaker 1: come in. Does it help legitimize the market? You've had
• 17:04
  Speaker 1: Steve Cohen, I think, say that he's getting in because
• 17:06
  Speaker 1: his son told him all about it. Ray Dalio said
• 17:10
  Speaker 1: that cash is trash and he's sort of dipping around
• 17:12
  Speaker 1: lightly in crypto. Do all of those headlines help legitimize
• 17:17
  Speaker 1: the market. Yes, absolutely, because see if I look at
• 17:20
  Speaker 1: institutional investors for guidance in terms of where it go
• 17:23
  Speaker 1: for new asset classes. So when they see smart money
• 17:26
  Speaker 1: entering the space because a validation, because people comfort that
• 17:31
  Speaker 1: crypto assets are here to start a long term of
• 17:33
  Speaker 1: smart money is entering the space. Alright, So again Ian,
• 17:37
  Speaker 1: you know, we have actually on the Bloomberg terminal c
• 17:39
  Speaker 1: r yp is a functions kind of the monitor for
• 17:43
  Speaker 1: all things crypto and what trades out there right now,
• 17:46
  Speaker 1: it seems to be you know, one of the it's bitcoin,
• 17:48
  Speaker 1: it's ethereum. Is that kind of where people should be
• 17:52
  Speaker 1: focused on at this point as they wait for potentially
• 17:54
  Speaker 1: in et f Yes, but what's really been taking off
• 17:59
  Speaker 1: recently you have been layer one protocols essentially new block
• 18:03
  Speaker 1: change similar to etherium and bitcoin, but with different use cases.
• 18:07
  Speaker 1: So as of recently, projects like Avalanche, Salona, algorand all
• 18:12
  Speaker 1: these different projects, I've been getting lots of interest from
• 18:14
  Speaker 1: smart money from instance, from our institutions, and these could
• 18:18
  Speaker 1: be a possible ahead versus bitcoin and ethereum, although there's
• 18:21
  Speaker 1: still pretty nascent as as technologies. What did El Salvador
• 18:26
  Speaker 1: a few weeks ago the first country to adopt this
• 18:29
  Speaker 1: as sort of a legitimate currency, if you will, What
• 18:32
  Speaker 1: did that teach us? If anything? It taught us that
• 18:36
  Speaker 1: it's possible, it's possible for a country, a government, a
• 18:40
  Speaker 1: central bank too to bring in bitcoin, a new, a
• 18:44
  Speaker 1: new particular currency into its economy. And it's really now
• 18:47
  Speaker 1: building out the model for other countries to follow. So,
• 18:50
  Speaker 1: for example, parag lines in other countries are looking to
• 18:52
  Speaker 1: possibly replicate what what what has been done by El Salvador.
• 18:56
  Speaker 1: But even with the volatility, mean, did they show us
• 18:58
  Speaker 1: it really like a currency is the right way instead
• 19:01
  Speaker 1: of a store of value, even with all the volatility.
• 19:05
  Speaker 1: I think why now is still an experiment. Uh, A
• 19:08
  Speaker 1: lot of means to be seen in terms of what
• 19:10
  Speaker 1: happens next. UM. For example, I was speaking to to
• 19:13
  Speaker 1: the minister of finance of a country in Africa and
• 19:16
  Speaker 1: they're saying they're funny challenging to bring in the currency
• 19:18
  Speaker 1: to Represa Entrency. However, there would be open to bringing
• 19:22
  Speaker 1: in digital assets and seeing how they um are taken
• 19:26
  Speaker 1: on by the country while still having control. So I
• 19:29
  Speaker 1: think right now other countries are seeing what's going on
• 19:31
  Speaker 1: over there and trying to learn and see if that
• 19:33
  Speaker 1: can be replicated in their own economies. All right, and
• 19:36
  Speaker 1: thank you so much for joining us there. Ian Billina,
• 19:38
  Speaker 1: founder and CEO of Token Metrics, kind of getting a
• 19:41
  Speaker 1: update on kind of this crypto market. Again, a lot
• 19:43
  Speaker 1: of folks are thinking about how they should get some exposure,
• 19:46
  Speaker 1: and Ian suggesting, you know, very small percentage, one or
• 19:49
  Speaker 1: two percent. Perhaps your portfolio be prepared to lose that
• 19:52
  Speaker 1: all given the volatility that we're seeing in these early
• 19:55
  Speaker 1: stages of crypto. But again, a lot of interest out
• 19:58
  Speaker 1: there and a lot of folks are really waiting for
• 20:00
  Speaker 1: that e t F to come, So we will certainly
• 20:03
  Speaker 1: stay on top of this story. More to come. This
• 20:05
  Speaker 1: is Bloomberg. Some pretty good retail sales numbers we got
• 20:12
  Speaker 1: this morning. Let's break them down with Angie Slonki uh,
• 20:15
  Speaker 1: National director US Retail for Collier's joining us on the
• 20:18
  Speaker 1: phone from San Francisco. Angie, thanks so much for joining, sir,
• 20:21
  Speaker 1: love to just get your thoughts here. Uh, you know
• 20:23
  Speaker 1: your knee deep in all things retail. What did you
• 20:25
  Speaker 1: take away from this morning's numbers? Oh it was I
• 20:29
  Speaker 1: was more than thrilled. I have to say. The retail
• 20:31
  Speaker 1: positivity and the momentum that we've seen from the beginning
• 20:35
  Speaker 1: of the year has been great, but we are starting
• 20:37
  Speaker 1: to normalize. One thing to know every person is spending
• 20:41
  Speaker 1: an additional two sixty dollars as of last month, so
• 20:45
  Speaker 1: quite a bit of spend. So I'm excited to see
• 20:48
  Speaker 1: these trends. Is the spend sustainable? We all know that
• 20:53
  Speaker 1: the data show us the consumer most consumers got more
• 20:58
  Speaker 1: wealthy in the pandemic. You think about the savings, So
• 21:02
  Speaker 1: is that sustainable going forward? I don't think it will.
• 21:06
  Speaker 1: We'll start to see some sort of normalization towards the
• 21:09
  Speaker 1: end of the year, although positive. Um, as we we
• 21:12
  Speaker 1: hit the end of exit, we'll start to see a normalization.
• 21:17
  Speaker 1: I think what will happen is things will start to
• 21:19
  Speaker 1: reset and it will start to flatten out. I think
• 21:23
  Speaker 1: our biggest concern right now in terms of retail is
• 21:27
  Speaker 1: the slow down in terms of global manufacturing, and that
• 21:31
  Speaker 1: will hurt us. So we're already seeing challenges in retail
• 21:36
  Speaker 1: where retailers are starting to face a lack of merchandise
• 21:39
  Speaker 1: in stores. So of course that will automatically also take
• 21:44
  Speaker 1: place online as well. So and you here in New
• 21:48
  Speaker 1: York City, Bloomberg HQ here on Elecington Avenue, uh all
• 21:53
  Speaker 1: the retail shops between fifty eight and fifty ninth Street
• 21:57
  Speaker 1: on Lexington with the exception of one small little Swiss
• 22:00
  Speaker 1: chocolate store, they're all empty. And we were talking some
• 22:04
  Speaker 1: big box retailers. Give us a sense of how you
• 22:06
  Speaker 1: think physical retailing will come back here as we get
• 22:10
  Speaker 1: to the other side of this pandemic. Definitely. You know,
• 22:14
  Speaker 1: we've actually it was interesting to um, we've done some
• 22:17
  Speaker 1: research in house. What we've actually seen from a big
• 22:20
  Speaker 1: box perspective is actual growth, but growth in secondary markets.
• 22:25
  Speaker 1: UM in the suburbs. As we've all been hearing in
• 22:28
  Speaker 1: the reports lately, they work from home mindset continues to
• 22:33
  Speaker 1: you know, pretty pretty much be stable, and therefore a
• 22:36
  Speaker 1: lot of these big box operators are looking at, you know,
• 22:41
  Speaker 1: identifying locations pretty much outside of some of the denser
• 22:45
  Speaker 1: city So the recovery will come back to Lexington, to
• 22:49
  Speaker 1: you know, Union Square, San Francisco. It's just going to
• 22:52
  Speaker 1: be a slower recovery. Yeah. Interesting. We certainly are hoping,
• 22:56
  Speaker 1: at least for our neighborhood here that that is the case.
• 23:01
  Speaker 1: Talk to us about some of the seasonality that we
• 23:04
  Speaker 1: might see in these numbers. A lot of this was
• 23:07
  Speaker 1: anticipation of back to school. I was speaking with the
• 23:10
  Speaker 1: executive director of the Port of Long beach yesterday saying
• 23:13
  Speaker 1: that you have to start shopping now for Christmas because
• 23:16
  Speaker 1: your fifty ships off the coast and we can't stalk
• 23:20
  Speaker 1: shelves fast enough. How were the shelves on back to school?
• 23:24
  Speaker 1: How do you see that plane out during the holiday
• 23:27
  Speaker 1: season coming up? Yeah, that's the real challenge, UM. And
• 23:31
  Speaker 1: we're already hearing from many of our retailers that we
• 23:34
  Speaker 1: work with that these the supply chain, the merchandise that's
• 23:38
  Speaker 1: still sitting out UM is delaying product delivery and it
• 23:43
  Speaker 1: is being delayed anywhere from three to four to five months,
• 23:48
  Speaker 1: which is causing you know, this kind of pent up demand.
• 23:51
  Speaker 1: But yet this frustration from the customer's point of view.
• 23:55
  Speaker 1: So their challenge with oh my goodness, how how early
• 23:58
  Speaker 1: do I need to buy from my holiday shopping? UM?
• 24:02
  Speaker 1: I just read this, which is really fascinating to me.
• 24:04
  Speaker 1: Apparently the disruption and supply chain UM as it relates
• 24:08
  Speaker 1: to artificial Christmas trees is causing pricing to skyrocket up
• 24:13
  Speaker 1: by So we're seeing this across every level of merchandise,
• 24:19
  Speaker 1: whether it's shoes, apparel, you name it, furniture. The delays
• 24:25
  Speaker 1: are just exponential and are people going to sit back
• 24:27
  Speaker 1: and wait. This is they're they're forced to at this
• 24:30
  Speaker 1: point about the labor Aie, it seems like every restaurant
• 24:35
  Speaker 1: you walk by or go into says we need workers. Um,
• 24:39
  Speaker 1: how are the restaurants dealing with the labor shortage. It's
• 24:42
  Speaker 1: really challenging. Their limiting their menus, they're shortening their hours
• 24:47
  Speaker 1: and due to the purely because of labor issues. They're
• 24:51
  Speaker 1: also you know, at this point, some of the smaller
• 24:54
  Speaker 1: restaurant groups that are more I would not you know,
• 24:57
  Speaker 1: not your nationals or regionals or st writing to not
• 25:00
  Speaker 1: only increase their hourly wages beyond the minimum wage, but
• 25:07
  Speaker 1: also giving bonuses in order to attract um. We're also
• 25:11
  Speaker 1: starting to see people tap into high schools and asking,
• 25:15
  Speaker 1: you know, the sixteen year olds to see how they
• 25:18
  Speaker 1: can intern slash learn a new skill set in order
• 25:23
  Speaker 1: to help the labor issues out we're faced in pretty
• 25:27
  Speaker 1: much most markets. Yeah, we're seeing that across the Boarder
• 25:30
  Speaker 1: hearing that across the board as well from a lot
• 25:32
  Speaker 1: of industries. Angie Solanki, National director US Retail for Colleige Or,
• 25:37
  Speaker 1: thank you so much for joining us, Thanks for listening
• 25:39
  Speaker 1: to the Bloomberg Markets podcast. You can subscribe and listen
• 25:43
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• 25:47
  Speaker 1: I'm Matt Miller. I'm on Twitter at Matt Miller three.
• 25:52
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