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Stocks at Records; Labor Chief Acosta to Quit · Bloomberg Intelligence

• 0:02
  Speaker 1: Welcome to the Bloomberg Penel Podcast. I'm Paul Swinge. You,
• 0:05
  Speaker 1: along with my co host Lisa Brahma Waits, each day
• 0:07
  Speaker 1: we bring you the most noteworthy and useful interviews for
• 0:10
  Speaker 1: you and your money, whether at the grocery store or
• 0:12
  Speaker 1: the trading floor. Find a Bloomberg penl podcast on Apple
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  Speaker 1: Podcast or wherever you listen to podcasts, as well as
• 0:17
  Speaker 1: at Bloomberg dot com. So let's get to the headlines
• 0:23
  Speaker 1: that crossed just moments agost Labor Secretary Alex Acosta resigning
• 0:28
  Speaker 1: within the week after coming under severe criticism over his
• 0:32
  Speaker 1: handling of the Jeffrey Epstein case. Uh he appleaded guilty
• 0:36
  Speaker 1: in two thousand and eight and got thirteen months in jail.
• 0:40
  Speaker 1: Now he is being prosecuted again. Jeffrey Epstein, the financier
• 0:43
  Speaker 1: by the Southern District of New York joining us now.
• 0:46
  Speaker 1: Craig Gordon Bloomberg washed. Bloomberg's Washington bureau chief, Craig, what
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  Speaker 1: do we know so far about why Secretary Acosta is
• 0:52
  Speaker 1: resigning now? I mean, look, we have Bloomberg News had
• 0:56
  Speaker 1: reported a few days ago that several people around Donald
• 0:59
  Speaker 1: Trump did not think a Costa would survive the week. Um.
• 1:02
  Speaker 1: Obviously he's caught up very heavily in this Jeffrey Epstein
• 1:06
  Speaker 1: case because it was the U. S. Attorney down there
• 1:08
  Speaker 1: in Miami when they kind of pretty a pretty generous
• 1:10
  Speaker 1: plea deal with Jeffrey Epstein on very similar charges related
• 1:14
  Speaker 1: to underage girls and that sort of thing. So I
• 1:17
  Speaker 1: think our feeling here in the Bluebird Washington Bureau was
• 1:19
  Speaker 1: that a Costa was always on borrow time. People know,
• 1:22
  Speaker 1: he went out yesterday and tried to give a kind
• 1:24
  Speaker 1: of a defense of his um, of his handling of
• 1:27
  Speaker 1: that case, saying, you know, he didn't have available to
• 1:30
  Speaker 1: him all the evidence that the New York prosecutors had
• 1:32
  Speaker 1: available to them. I think there's some question of whether
• 1:34
  Speaker 1: that's true or not, honestly, but um, but there was
• 1:37
  Speaker 1: also were also some reports of Trump had asked him
• 1:39
  Speaker 1: to go out and kind of make a last stand. Um.
• 1:41
  Speaker 1: I don't think he. He you know, did a lot
• 1:44
  Speaker 1: to help his case yesterday, and then you know the
• 1:46
  Speaker 1: ax fell this morning. Do we know who's going to
• 1:48
  Speaker 1: replace him? Uh, there's an acting Labor Secretary that will
• 1:51
  Speaker 1: step in, um now, and I'm sure Trump will look
• 1:54
  Speaker 1: to to fill the job, you know, for Republican administration.
• 1:57
  Speaker 1: It's actually a pretty important job. It involves a lot
• 1:59
  Speaker 1: of regulatory issues in terms of businesses, and we all
• 2:03
  Speaker 1: know Trump as a fairly pro business, antiregulation sort of president.
• 2:06
  Speaker 1: So obviously there will be a move to put someone
• 2:09
  Speaker 1: in there with with that um, with those sort of
• 2:11
  Speaker 1: bona fides. The thing that apparently angered Trump along the way,
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  Speaker 1: even before the Jeffrey Epstein case rey surface, was that
• 2:18
  Speaker 1: some of the state ag s attorney attorneys general had
• 2:21
  Speaker 1: been thought a Costa was kind of slow walking, uh
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  Speaker 1: an antiregulation you know, Bill that was kind of sitting
• 2:26
  Speaker 1: on his desk. So we think, you know, again, our
• 2:29
  Speaker 1: reporting shows that alex A. Costa was already a little
• 2:32
  Speaker 1: bit in Trump's dog house. Trump today said some nice
• 2:34
  Speaker 1: things about him are reporting suggested to the contrary, And
• 2:37
  Speaker 1: then when the Epstein thing came along, it was hard
• 2:39
  Speaker 1: to imagine he could survive that. Again, it's easy and
• 2:42
  Speaker 1: with hindsight to look back at his handling of the case,
• 2:45
  Speaker 1: I don't think the Costa was able to answer some
• 2:46
  Speaker 1: pretty key questions about why a guy who did all
• 2:49
  Speaker 1: the things the accused of doing essentially got a thirteen
• 2:51
  Speaker 1: month sentence and got to basically leave jail every day
• 2:54
  Speaker 1: and go work at his house. So for most people,
• 2:56
  Speaker 1: even if you don't, you don't have to have a
• 2:57
  Speaker 1: lot of gree to kind of question that. And I
• 3:00
  Speaker 1: think a Coasta it would have been really hard for
• 3:01
  Speaker 1: him to keep dig out from under this. Washington were
• 3:04
  Speaker 1: Chief Craig Gordon, thank you so much for the update.
• 3:21
  Speaker 1: The US equities climbing to new highs, leaving many fund
• 3:25
  Speaker 1: managers but a rather sick feeling in their stomachs. On
• 3:27
  Speaker 1: one hand, uh, you know, valuations are incredibly high. On
• 3:31
  Speaker 1: the other hand, however, there doesn't seem to be any
• 3:35
  Speaker 1: pressure to push them down. Joining me now, Bruce Biddle's
• 3:38
  Speaker 1: chief investment strategist, Bared Bruce, thank you for being with me.
• 3:42
  Speaker 1: I'm trying to figure out what could potentially stop this
• 3:45
  Speaker 1: rally that has left the SMP, the NASDAC, and the
• 3:48
  Speaker 1: Dow all at new records. Well at least so you're exact.
• 3:52
  Speaker 1: You're right. The market continues to press higher, and there's
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  Speaker 1: the pervasive lack of selling is really really amazing, and
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  Speaker 1: I think a lot of that has to do with
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  Speaker 1: the fact that, um the US economy continues to do
• 4:05
  Speaker 1: well even though it is slowing UM. And then you
• 4:09
  Speaker 1: have the fellow Reserve Board UM indicating that they'll cut
• 4:12
  Speaker 1: interest rate twenty five basis points perhaps at the end
• 4:16
  Speaker 1: of July as an insurance policy to keep it going
• 4:19
  Speaker 1: so UM. And there's been a lot of discussion about
• 4:23
  Speaker 1: shortfall and earnings, of course, but you have to suspect
• 4:27
  Speaker 1: that a lot of that's really built into the market.
• 4:30
  Speaker 1: And i'd say, furthermore, the markets not based on on
• 4:35
  Speaker 1: second quarter earnings and markets looking for third and fourth
• 4:38
  Speaker 1: quarter and maybe even into so UM. I think what's
• 4:42
  Speaker 1: happening here is you've got a decent economy, and you've
• 4:45
  Speaker 1: got our friendly Federal Reserve Board, and you've got the
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  Speaker 1: best economy in the world, and so it's it's being
• 4:51
  Speaker 1: reflected in the stock market. Yeah, I can't see why
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  Speaker 1: you couldn't suspect the market can continue to go higher. Now,
• 4:59
  Speaker 1: with that said, we're already up over for the year
• 5:03
  Speaker 1: in the big averages. UM. My suspicion is that we're
• 5:08
  Speaker 1: a touch over board here of course as a result
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  Speaker 1: of that, and the third quarter typically is a difficult
• 5:15
  Speaker 1: quarter seasonally for the market, and I wouldn't be surprised
• 5:19
  Speaker 1: if we had some sort of consolidation, even a pullback
• 5:22
  Speaker 1: in the third quarter. Now, if that should occur, I
• 5:25
  Speaker 1: think that would set us up for what we've for
• 5:27
  Speaker 1: a mirror image this year what we saw last year,
• 5:30
  Speaker 1: in other words, a good rally in November and December
• 5:34
  Speaker 1: to finish out the year. So how much is the
• 5:37
  Speaker 1: rally and equities dependent on the federals or of cutting
• 5:40
  Speaker 1: rates at least two times before your end? Well, I
• 5:44
  Speaker 1: suspect a lot, because I mean the markets turned around
• 5:48
  Speaker 1: in January of this year based on the feeders, are
• 5:52
  Speaker 1: board moving a hundred and eight degrees away from you know,
• 5:55
  Speaker 1: tightening policy. So um, and I think that's continuing into
• 6:00
  Speaker 1: this year, and perhaps we'll go into as well. But UM,
• 6:05
  Speaker 1: a lot of the market this year and and and
• 6:07
  Speaker 1: the reason for that is, Um, it's not the rate
• 6:10
  Speaker 1: cuts so much that drives the market. It's the psychology
• 6:14
  Speaker 1: of the rate cut. It builds confidence among investors and
• 6:19
  Speaker 1: in terms of the economy, it builds confidence in terms
• 6:22
  Speaker 1: of the consumer. So UM. The rate cuts by themselves
• 6:25
  Speaker 1: are not the magic ointment, but I think it's a
• 6:28
  Speaker 1: confidence that they they instill in the investor that causes
• 6:32
  Speaker 1: these markets that do much better so so, given those comments,
• 6:35
  Speaker 1: do you favor consumer stocks more than others just because
• 6:39
  Speaker 1: this potentially the rate cuts give a boost disproportionately to
• 6:42
  Speaker 1: the consumer. Well, for most of this year, we favored
• 6:46
  Speaker 1: defensive sectors simply because we felt the economy was slowing
• 6:50
  Speaker 1: and that's where the earnings visibility would be and that's
• 6:53
  Speaker 1: where a larger dividend pay us are and that that's
• 6:57
  Speaker 1: been true so far. They continue to be very strong
• 7:00
  Speaker 1: in this environment. But if the economy is going to
• 7:03
  Speaker 1: improve later this year, it should certainly show up in
• 7:07
  Speaker 1: two areas. One would be consumer discretionary sector. UM, that
• 7:11
  Speaker 1: should do much better. And if you look at some
• 7:14
  Speaker 1: of these retail stocks on the big box retailers, they're
• 7:17
  Speaker 1: making new highs here this week. So the consumer discretionary
• 7:22
  Speaker 1: certainty is a place to go. And I would think
• 7:24
  Speaker 1: the industrials would also be another area that has lagged
• 7:28
  Speaker 1: but UM, but I think it will do much better
• 7:31
  Speaker 1: as the year progresses. On the flip side, are you
• 7:33
  Speaker 1: cashing out of utilities and reads and other haven beds
• 7:36
  Speaker 1: that have been bit up tremendously now? Not really, because
• 7:39
  Speaker 1: we think that the best portfolio configuration right now is
• 7:43
  Speaker 1: is a diversified one. And the reason we say that
• 7:46
  Speaker 1: is there are still certain unknowns out there. Um the
• 7:50
  Speaker 1: fate is concerned about the global economy, and we think
• 7:53
  Speaker 1: rightfully so if that would continue to deteriorate, it could
• 7:57
  Speaker 1: cause our economy to slowly and further, So we don't
• 8:00
  Speaker 1: want to put too much emphasis on economic growth yet.
• 8:05
  Speaker 1: And and and also the unknowns however, the trade war
• 8:09
  Speaker 1: with China and perhaps even Europe. So I think there's
• 8:13
  Speaker 1: a real reason to have a diversified portfolio. You might
• 8:16
  Speaker 1: even consider having a small portion of your principle and
• 8:20
  Speaker 1: gold stocks which they're broken out, and perhaps that's reflecting
• 8:23
  Speaker 1: the instability in the global economy as well. I suspected
• 8:26
  Speaker 1: you were going to mention gold. And I actually wonder
• 8:28
  Speaker 1: when you say diversified, whether investors are as diversified as
• 8:32
  Speaker 1: they have been traditionally by holding a sixty forties sixty
• 8:35
  Speaker 1: stocks forty bonds type of allocation. Given the fact that
• 8:39
  Speaker 1: bond yields have dropped as stock prices have risen, that
• 8:44
  Speaker 1: could reverse. The stock prices could drop as bond yields arise,
• 8:48
  Speaker 1: and then you have no diversification. Is that a concern
• 8:51
  Speaker 1: of yours? Yes, it is a concern of mine, and
• 8:54
  Speaker 1: particularly since passive investing now has become so popular and
• 8:59
  Speaker 1: a low lot of that means that a lot of
• 9:02
  Speaker 1: investors are concentrated in the same issues, the ones that
• 9:05
  Speaker 1: have been out performing, the ones that are in most
• 9:07
  Speaker 1: of the e t f s that have outperformed. So UM,
• 9:11
  Speaker 1: I think it's UM would be prudent here to So
• 9:14
  Speaker 1: we look over a portfolio and looked at diversified more
• 9:17
  Speaker 1: than you think you might be. And when you talk
• 9:18
  Speaker 1: about diversifying, you talk about gold. A lot of other
• 9:21
  Speaker 1: people have talked about alternative assets, things like real estate
• 9:25
  Speaker 1: UH sort of tangibles and private debt, private equity, UH,
• 9:29
  Speaker 1: infrastructure funds. These are the types of areas people have gone.
• 9:32
  Speaker 1: Do you think that that is advisable for people to
• 9:36
  Speaker 1: just even consider, well, for the average investor, I've saying
• 9:40
  Speaker 1: no because of the liquidity factor. I think at this juncture,
• 9:45
  Speaker 1: when you look at valuations in the US and you
• 9:48
  Speaker 1: look at valuations overseas, the overseas valuations are much more attractive.
• 9:52
  Speaker 1: And so we talked about diversification, we also talk about
• 9:57
  Speaker 1: moving outside the US in terms of equity. So you
• 10:01
  Speaker 1: think that that's the way to diversify is international. Is
• 10:04
  Speaker 1: there any particular region that you think is the best bet. Well,
• 10:08
  Speaker 1: you know, Europe is so um so out of favor
• 10:11
  Speaker 1: here and evaluations are are particularly attractive there. And I'd
• 10:15
  Speaker 1: say also emerging markets. I mean, they haven't done really
• 10:18
  Speaker 1: much despite a lot of um support from analysts, and
• 10:23
  Speaker 1: yet they haven't done a whole lot yet. But I
• 10:25
  Speaker 1: think there's a possibility that the US continues to do well,
• 10:28
  Speaker 1: that our weaken some and interest rates remain low, that
• 10:31
  Speaker 1: emerging markets could be another place to go as well.
• 10:34
  Speaker 1: Briss Biddles, thank you so much for being with me today.
• 10:36
  Speaker 1: Bruce Biddles, chef investment strategist at Bird, talking about the
• 10:40
  Speaker 1: conundrum right now do you buy or to not to
• 10:43
  Speaker 1: buy US equities at all time highs and given the
• 10:46
  Speaker 1: fact that the Federal Reserve m President Trump seemed uh
• 10:49
  Speaker 1: to want to support valuations even at a time when
• 10:52
  Speaker 1: the credit cycle feels long in the tooth. Is it
• 10:55
  Speaker 1: that's another uh, that's another point of debate right now,
• 11:15
  Speaker 1: Let's turn our focus to US economic data. This morning,
• 11:18
  Speaker 1: we got another measure of US inflation that came in
• 11:22
  Speaker 1: better than expected. Carra Kadanna, our chief US economist, here
• 11:26
  Speaker 1: at Bloomberg Economics, joins me here in New York. So
• 11:30
  Speaker 1: this is the Producer Price Index. It came in, uh
• 11:34
  Speaker 1: faster than expected in June. How much can we say
• 11:38
  Speaker 1: from this and what we heard with this or what
• 11:40
  Speaker 1: we saw with the cp I coming in also higher
• 11:43
  Speaker 1: than expected? Are we seeing more inflation that people realize? Well,
• 11:47
  Speaker 1: I think we're giving vindication that the soft patch on
• 11:50
  Speaker 1: the inflation front earlier this year was indeed temporary, transitory
• 11:54
  Speaker 1: epick youre upward choice. Powell would say transitory. Yes, Je
• 11:58
  Speaker 1: Palan Jenna Yellen like that were transitory. Uh. They initially
• 12:03
  Speaker 1: characterized it that way, and then the soft patch went
• 12:05
  Speaker 1: on for longer than they anticipated, and so they started
• 12:08
  Speaker 1: to get a cold feet on that notion and head
• 12:12
  Speaker 1: backed away from that rhetoric. And finally, just as they
• 12:14
  Speaker 1: were ready to throw in the towel on this and
• 12:17
  Speaker 1: j Pal even in his testimony Wednesday and Thursday, highlighted
• 12:22
  Speaker 1: that maybe this transitory patch was uh not so transitory. Uh,
• 12:26
  Speaker 1: then suddenly we get the CPI report when we do
• 12:29
  Speaker 1: see things bouncing back. Although again we shouldn't have panicked
• 12:32
  Speaker 1: when we saw the soft patch earlier this year, because
• 12:35
  Speaker 1: there were some one off items, things like the classification
• 12:39
  Speaker 1: of apparel prices, so the way they collected the data changed,
• 12:42
  Speaker 1: and maybe it was part of the story. There Also
• 12:45
  Speaker 1: some of the strength we saw yesterday UH seemed to
• 12:48
  Speaker 1: be yet one off categories. And this was something that
• 12:51
  Speaker 1: Tom Barkin from the Richmond Fed illustrated. UH. Inflation will
• 12:55
  Speaker 1: look more convincing to the Fed that it has rebounded
• 12:59
  Speaker 1: if you see it in service categories driven by labor
• 13:02
  Speaker 1: costs and wage pressures. That's not what we saw yesterday.
• 13:05
  Speaker 1: We saw service CPI kind of continuing to trend sideways.
• 13:10
  Speaker 1: So then where are we seeing the games? Well, what
• 13:12
  Speaker 1: we saw in yesterday's cp I was really a bounce
• 13:16
  Speaker 1: back in goods prices, and goods prices had been really
• 13:20
  Speaker 1: taking it on the chin do in large part to
• 13:24
  Speaker 1: global over capacity and also the strength of the dollar. Right,
• 13:27
  Speaker 1: a strong dollar pushes down import prices. Import prices have
• 13:31
  Speaker 1: been in decline. That's weighing on goods in the CPI
• 13:34
  Speaker 1: basket UH, and we saw a little bit of respite
• 13:37
  Speaker 1: on that front yesterday. Now, if the dollar continues to
• 13:40
  Speaker 1: come off as the Fed is moving towards easier policy,
• 13:45
  Speaker 1: which that's a big if at this point, but that
• 13:47
  Speaker 1: certainly has been the trend over the last couple of weeks, right, uh,
• 13:51
  Speaker 1: And so what if the dollar does weaken moderately as
• 13:55
  Speaker 1: a FED is easing at the end of this month,
• 13:57
  Speaker 1: and then my team thinks one more time at the
• 14:00
  Speaker 1: end of this year at the December FOMC meeting, then
• 14:03
  Speaker 1: that will put a little bit of upward pressure under
• 14:05
  Speaker 1: input prices goods, and it will push core inflation closer
• 14:09
  Speaker 1: to the FED subjective. Okay, how much is what we're
• 14:12
  Speaker 1: seeing in terms of producer prices increasing just simply due
• 14:16
  Speaker 1: to the tariffs. Well, there's a tariff impact there to
• 14:20
  Speaker 1: some degree, but we have to be very cautious in
• 14:24
  Speaker 1: blaming all price increases everywhere due to tariff and not
• 14:29
  Speaker 1: not to say blaming, but the fact that you're seeing
• 14:32
  Speaker 1: the increase in stuff in the goods of stuff rather
• 14:36
  Speaker 1: than the prices that people are willing to pay for
• 14:39
  Speaker 1: a service. It seems like perhaps that asymmetry is tied
• 14:44
  Speaker 1: directly to some of the trade tensions and the resulting levies.
• 14:47
  Speaker 1: You know, with with the changes to trade policy earlier
• 14:50
  Speaker 1: this year, you are still seeing that those price pressures
• 14:53
  Speaker 1: kind of coming down the pipeline. So you know, for instance,
• 14:55
  Speaker 1: in the c p I, we could see UH furniture
• 14:58
  Speaker 1: and household furnishings is one category which really seems to
• 15:01
  Speaker 1: be accelerating. That obviously would be very clearly tied into
• 15:05
  Speaker 1: UH tariff policy and whatnot, but that doesn't entirely explain
• 15:10
  Speaker 1: what's happening here. We have an economy that was operating
• 15:14
  Speaker 1: well above its potential growth rate last year, continues to
• 15:17
  Speaker 1: be above that potential growth rate in n and that
• 15:21
  Speaker 1: in and of itself generates inflation. I guess that without
• 15:24
  Speaker 1: wage pressure, this is not good inflation. Right, I'm going
• 15:27
  Speaker 1: to stop you without wage pressure, because if we look
• 15:30
  Speaker 1: at the Employment cost Index, average general yearnings, many of
• 15:34
  Speaker 1: the metrics of wage inflation UH that we watch for
• 15:39
  Speaker 1: the economy, they're all very close to post recession highs.
• 15:42
  Speaker 1: So yes, they've been a little bit cool in recent
• 15:45
  Speaker 1: months and kind of migrating sideways rather than accelerating to
• 15:48
  Speaker 1: new record highs, but nonetheless they are still close to
• 15:51
  Speaker 1: record highs. So we're seeing the hottest labor cost pressures
• 15:54
  Speaker 1: in twenty nineteen that we have in any year of
• 15:58
  Speaker 1: this cycle. So that mitigates some of the prices on
• 16:01
  Speaker 1: goods that have been increasing. People are getting higher paychecks,
• 16:04
  Speaker 1: they're just not accelerating perhaps as fast, and that's why
• 16:07
  Speaker 1: some of these price increases can be sustained. If forekers
• 16:10
  Speaker 1: are getting higher paychecks, they have more buying power and
• 16:12
  Speaker 1: they're more likely to tolerate those price increases that come
• 16:16
  Speaker 1: down the pipeline. Carra Kadonna, Are you willing to tolerate
• 16:19
  Speaker 1: higher prices for diapers? And I consider those essentials absolutely
• 16:26
  Speaker 1: for your child? Caaka Donna Chief you as economist for
• 16:29
  Speaker 1: Bloomberg Economics, always of pleasure. We love having you. Thank
• 16:32
  Speaker 1: you for being here. Amazon calls it a holiday. The
• 16:49
  Speaker 1: rest of us call it a big sale. Amazon Prime
• 16:51
  Speaker 1: Day coming up on Monday and Tuesday. Joining us now
• 16:54
  Speaker 1: to talk about what we can expect. What Amazon is
• 16:56
  Speaker 1: going to try to push the most for people to buy. Answer,
• 17:00
  Speaker 1: Soaper joins us now Bloomberg Technology Reporters. So, Spenser, just
• 17:03
  Speaker 1: give us a sense of how Amazon is viewing this
• 17:06
  Speaker 1: Prime Day. Is this Prime Day different from all other
• 17:09
  Speaker 1: Prime Days? No? And that's really what's new about it
• 17:13
  Speaker 1: this year. Um, so that we're now in its fifth year. Uh.
• 17:17
  Speaker 1: They started it, uh, you know as a way to
• 17:20
  Speaker 1: kind of entice um new Prime members to join, encourage
• 17:24
  Speaker 1: existing Prime members to renew their memberships. That's really what
• 17:28
  Speaker 1: this is all about, is getting people to join Prime
• 17:30
  Speaker 1: because you know, if you're a Prime member, it converts
• 17:33
  Speaker 1: you from a you know, an occasional Amazon shopper into
• 17:36
  Speaker 1: a devoted shopper. And Prime members spend you know, between
• 17:39
  Speaker 1: two and three times as much on the site as
• 17:41
  Speaker 1: non Prime members. So forget how much they're selling, what
• 17:44
  Speaker 1: the deals are today, all of that's not really important.
• 17:47
  Speaker 1: The biggest thing for Amazon is how many new members
• 17:49
  Speaker 1: sign up. That's what the days always about and what
• 17:52
  Speaker 1: it's what it's still about. This year. Has Amazon reached
• 17:55
  Speaker 1: saturation point where the new potential subscribers is kind of
• 17:59
  Speaker 1: kind of live did Yeah, that's the problem is in
• 18:02
  Speaker 1: the US and it's core, you know, it's primary market
• 18:04
  Speaker 1: of the US. It's definitely showing signs of reaching saturation
• 18:07
  Speaker 1: that Prime member growth is slowing. Um. One interesting thing
• 18:11
  Speaker 1: that we saw as they're offering uh, millennials in India,
• 18:15
  Speaker 1: which is a big international focus for them, half price
• 18:19
  Speaker 1: on Prime memberships, so they're really you know, there's definitely
• 18:22
  Speaker 1: a you know, we're focused on kind of all the
• 18:24
  Speaker 1: US marketing and the deals and that sort of thing.
• 18:26
  Speaker 1: But really, for Amazon to keep growing Prime memberships, it
• 18:29
  Speaker 1: has to it has to look globally, and that's what
• 18:31
  Speaker 1: it's doing with this half priced membership option in India.
• 18:35
  Speaker 1: You know, it's interesting this Amazon Prime Day comes at
• 18:37
  Speaker 1: an increasing politicized environment for Amazon. In particular, Amazon warehouse
• 18:43
  Speaker 1: workers have been protesting in Minnesota. Amazon I would suppose
• 18:48
  Speaker 1: that it is a response to that, coming out with
• 18:50
  Speaker 1: this big retraining plan saying, look, we are going to
• 18:54
  Speaker 1: take people who are at low wage earning jobs and
• 18:57
  Speaker 1: try to retrain them into higher paying ones. How is
• 19:01
  Speaker 1: Amazon trying to position itself ahead of the elections right
• 19:05
  Speaker 1: now in light of some of these pressures. Well, I mean,
• 19:08
  Speaker 1: I don't know if they're positioning themselves in front of anything.
• 19:11
  Speaker 1: They seem to be reacting to everything, like the the
• 19:13
  Speaker 1: fifteen dollar an hour pledge that came last year followed
• 19:17
  Speaker 1: a lot of criticism from presidential hopeful uh Bernie Sanders
• 19:21
  Speaker 1: and Elizabeth Warren, and there were you know, states were
• 19:24
  Speaker 1: reporting that uh, you know, they're that Amazon employees were
• 19:29
  Speaker 1: among their biggest groups of food stamp recipients and people
• 19:33
  Speaker 1: needing assistance for basic needs like healthcare and stuff. So
• 19:36
  Speaker 1: they really had to kind of react to to those
• 19:38
  Speaker 1: negative headlines. Um and now with the training, one of
• 19:43
  Speaker 1: my colleagues are a newcomer did something today just looking
• 19:47
  Speaker 1: at the train. You know, it's really not that much
• 19:51
  Speaker 1: that Amazon is spending when when you break down the numbers,
• 19:53
  Speaker 1: it's a big figure seven hundred million because Amazon so big,
• 19:56
  Speaker 1: but when you look at the per employee and spending,
• 19:59
  Speaker 1: it's actually less than lot of companies pay per year
• 20:01
  Speaker 1: to train their people. So um. Even that it's Amazon
• 20:05
  Speaker 1: just kind of dressing up, uh, some numbers around its
• 20:07
  Speaker 1: size as opposed to actually doing anything differently. You know,
• 20:10
  Speaker 1: Spencer is one thing for people to pick it, uh
• 20:14
  Speaker 1: pick it against Amazon. It's another thing for them to
• 20:16
  Speaker 1: stop buying things on the platform. Is there any evidence
• 20:19
  Speaker 1: that Amazon has lost business as a result of some
• 20:22
  Speaker 1: of these political issues, Uh, not not that I can see.
• 20:27
  Speaker 1: I mean, if anything, it's it's just that they're a
• 20:29
  Speaker 1: victim of their success. They've gotten so big that growth
• 20:32
  Speaker 1: is slowing. You know, e commerce is it's primary business,
• 20:35
  Speaker 1: it's its oldest business, and it's most mature business, and
• 20:38
  Speaker 1: that's where the revenue growth is slowing down, you know,
• 20:41
  Speaker 1: whether whether the these political protests and things are moving
• 20:44
  Speaker 1: the needle much on that, I you know, I'm really
• 20:48
  Speaker 1: not sure. But Amazon is also generally reactive to customer feedback.
• 20:53
  Speaker 1: So if there's a you know, flood of emails to
• 20:56
  Speaker 1: Jeff Bezos about like, hey, I hear your workers are
• 20:58
  Speaker 1: getting food stamps and I don't get that's the kind
• 21:00
  Speaker 1: of thing that's going to trigger the fifteen dollar an
• 21:02
  Speaker 1: hour wage pledge and and that sort of thing. So
• 21:05
  Speaker 1: I'm sure it's influencing their decision making, but whether it's
• 21:08
  Speaker 1: denting there you know, actual um revenue, I just don't know, Spencer.
• 21:13
  Speaker 1: I'm just curious. Lastly, whether Amazon is going to push
• 21:17
  Speaker 1: its own products more than other products on Amazon Prime Day,
• 21:22
  Speaker 1: in other words, sort of rank them higher in its
• 21:24
  Speaker 1: algorithms so that people buy Amazon sourced products that will
• 21:29
  Speaker 1: be interesting to watch. I mean, they always put an
• 21:30
  Speaker 1: emphasis on their gadgets, right in the past couple of years,
• 21:33
  Speaker 1: they've really pushed the you know, the the echo speakers,
• 21:36
  Speaker 1: you know that operate on the Alexive voice activated platform.
• 21:39
  Speaker 1: That's something that Amazon is really pushing, and they've made
• 21:42
  Speaker 1: that a focus of Prime Day. The past couple of years,
• 21:44
  Speaker 1: so that's not that's not new. And I think what
• 21:47
  Speaker 1: you're asking is more like their private label products, like
• 21:50
  Speaker 1: you know, you're you're looking for a you know, oh,
• 21:52
  Speaker 1: can I get a deal on Johnson and Johnson baby shampoo?
• 21:55
  Speaker 1: Am I going to see some Amazon alternative? And uh?
• 21:59
  Speaker 1: And you very likely see that and you may not
• 22:00
  Speaker 1: even know that it's an Amazon brand because it could
• 22:02
  Speaker 1: have some funky name like Solimo or something that you're
• 22:06
  Speaker 1: just you know, they've they've they've launched hundreds of the
• 22:09
  Speaker 1: of these things. So um, yeah, I think there's a
• 22:12
  Speaker 1: you know, there's definitely a good chance you're you're seeing
• 22:14
  Speaker 1: those things in your search results or just be be mindful.
• 22:17
  Speaker 1: And I think Amazon is just hoping that people aren't
• 22:19
  Speaker 1: so brand beholding and if they can save, you know,
• 22:22
  Speaker 1: save a couple of bucks, they might give a give
• 22:24
  Speaker 1: something else a chance, and then if then then maybe
• 22:26
  Speaker 1: they end up being loyal to to a new Amazon brand.
• 22:29
  Speaker 1: Spencer Sober, thank you so much for being with us.
• 22:31
  Speaker 1: Spencer Sober is blue Bloomberg Technology reporter. Amazon shares up
• 22:35
  Speaker 1: about a half a percentage point today for the year,
• 22:38
  Speaker 1: up thirty four per cent a real boom for this
• 22:42
  Speaker 1: big tech company in a year when tech has continued
• 22:46
  Speaker 1: to drive US equity gains higher. Thanks for listening to
• 22:50
  Speaker 1: the Bloomberg Penl podcast. You can subscribe and listen to
• 22:52
  Speaker 1: interviews at Apple Podcasts or whatever podcast platform you prefer.
• 22:56
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• 22:59
  Speaker 1: bram Woid's I'm on Twitter at Lisa Abramo. It's one
• 23:02
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• 23:04
  Speaker 1: Bloomberg Radio.