Latest / Bloomberg Intelligence / BI Weekend: Nvidia, Macy’s Earnings, Trump Family’s Money Making Machine

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BI Weekend: Nvidia, Macy’s Earnings, Trump Family’s Money Making Machine · Bloomberg Intelligence

0:02
Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is Bloomberg Intelligence
0:11
Speaker 1: with Alex Steel and Paul Sweeney.
0:13
Speaker 2: The real our performance has been in US corporate high yield.
0:17
Speaker 3: Are the companies lean enough? Have they trimmed all the fats?
0:19
Speaker 2: The semiconductor business is a really cyclical business.
0:22
Speaker 1: Breaking market headlines and corporate news from across the globe.
0:26
Speaker 3: Do investors like the M and A that we've seen?
0:29
Speaker 2: These are two big time blue chip companies.
0:32
Speaker 3: Window between the peak and cunt changing super fast.
0:36
Speaker 1: Bloomberg Intelligence with Alex Steele and Paul Sweeney on Bloomberg Radio.
0:42
Speaker 2: On Today's Bloomberg Intelligence Show, we dig inside the big
0:44
Speaker 2: business stories impacting Wall Street and the global markets.
0:47
Speaker 3: Each and every week we provide in depth research and
0:49
Speaker 3: data on some of the two thousand companies and one
0:51
Speaker 3: hundred and thirty industries our analysts cover worldwide.
0:53
Speaker 2: Today, we'll look at how Donald Trump's empire has landed
0:56
Speaker 2: billions of dollars since his last presidential campaign kicked off.
0:59
Speaker 3: Plus we'll discuss how sales of the department store chain
1:02
Speaker 3: may sees are being impacted by tariffs.
1:04
Speaker 2: But first we begin with big tech and the world's
1:06
Speaker 2: most valuable chip maker Nvidio.
1:08
Speaker 3: This week, the company gave an upbeat revenue forecast for
1:10
Speaker 3: the current quarter, even as a slowdown in China. Wait
1:12
Speaker 3: on first quarter results for more on why.
1:15
Speaker 2: We were joined by Kunjan Sabani, Bloomberg Intelligence senior semi
1:18
Speaker 2: conductor analysts.
1:19
Speaker 3: We first asked Kujon for his take on Nvidia's most
1:22
Speaker 3: recent quarter.
1:23
Speaker 4: Yeah two big tickeabase. The GB two hundred ram continues
1:26
Speaker 4: to be stronger than we expected or people an dissipated.
1:31
Speaker 4: We believe based on of our math, the GB two
1:34
Speaker 4: hundred came in three billion above expectations both in one
1:38
Speaker 4: Q and physical two Q, which is what helped them
1:41
Speaker 4: beat the numbers despite the significant China had been which
1:45
Speaker 4: was eight billion for two Q. The second key point
1:48
Speaker 4: was if you take out the China write down, grossmagin
1:50
Speaker 4: actually came in better than antissipated, again suggesting the GB
1:54
Speaker 4: two hundred yeelds and cost optimization are running better than
1:58
Speaker 4: anticipated and we expect margins to continue to rise through
2:02
Speaker 4: the year, exiting year at mid seventy percent, which we
2:05
Speaker 4: believe was the very key a lot of key important
2:08
Speaker 4: factor for the long time long term investors in the company.
2:11
Speaker 3: Yeah that's what you're mentioning yesterday, that making sure that
2:14
Speaker 3: we can do that. Namidia can deliver the mid seventies
2:17
Speaker 3: for margins at the end of the year. So are
2:19
Speaker 3: you what are your outstanding concerns slash questions when it
2:22
Speaker 3: comes to Nvidia, Well, the.
2:25
Speaker 4: Number one is we really hope to hear the new
2:27
Speaker 4: China variant and get clarity on it, which didn't happen.
2:31
Speaker 4: There have been some rumors flying around that that might
2:33
Speaker 4: soon happen, both from Nvidia and AMD, but as we
2:36
Speaker 4: would like to get it officially the specs you know
2:39
Speaker 4: what kind of asps and what sort of applications it
2:42
Speaker 4: will be targeting to as soon as possible to put
2:46
Speaker 4: those concerns at bed. The other key thing, which right
2:50
Speaker 4: now they did help reduce the risk, which is slow
2:55
Speaker 4: down from the hyperscas in cloud we don't see that risk.
2:58
Speaker 4: But as we get into fiscal cue with the August
3:01
Speaker 4: time frame, this is when hyperscalers and clouds really think
3:04
Speaker 4: about their CAPEX budgets for next year. That will be
3:07
Speaker 4: another key milestone for them.
3:09
Speaker 2: The revenue it gets from China, I know percent, I'm
3:13
Speaker 2: not sure what it is. I know it's been declining,
3:16
Speaker 2: could that go to zero? And if so, can the
3:18
Speaker 2: stock still work if that were to go to zero.
3:22
Speaker 4: So at this point, the revenue from China within data
3:25
Speaker 4: center is almost zero, right and estimates don't include anything
3:30
Speaker 4: back from that for at least for this year, so
3:32
Speaker 4: that's almost gone to zero. There is definitely China revenues
3:34
Speaker 4: coming from their gaming segment and their auto segment, but
3:38
Speaker 4: the data center, which is the real meat of it,
3:40
Speaker 4: which was expected to They were expected to sell about
3:43
Speaker 4: fifteen billion of it just this year from the H twenty,
3:46
Speaker 4: which has almost gone to zero. So until the new
3:49
Speaker 4: compliant chip does not come out and they start selling,
3:52
Speaker 4: it's essentially down to zero.
3:54
Speaker 3: Right now, we're talking about how important Middle Eastern clients
3:58
Speaker 3: were to in video for example, and the kind of
3:59
Speaker 3: cap that they're spending. What other growth areas or regions
4:04
Speaker 3: do you think are going to really start delivering?
4:08
Speaker 4: Yeah, so a couple of key regions we are keeping
4:10
Speaker 4: an eye out. Just like you mentioned Middle East. There
4:12
Speaker 4: are a lot of so many entites, so just don't
4:15
Speaker 4: think of Middle East, think of India, Japan and a
4:18
Speaker 4: lot of other countries. Because right now having self regional
4:22
Speaker 4: AI models, having regional AI localized data centers is national
4:29
Speaker 4: priority for a lot of emerging and big countries. So
4:32
Speaker 4: all of these regions are going have already announced, planned
4:35
Speaker 4: and big budgets based on the respective GDPs to spend on.
4:38
Speaker 4: So and media will be a big beneficiary of that.
4:41
Speaker 4: US the Middle East is just a key example. Like
4:44
Speaker 4: I said, you have other regions, especially India and Japan
4:47
Speaker 4: investing heavily here as well. The second key driver outside
4:51
Speaker 4: of the top four CSPs are going to the enterprises.
4:54
Speaker 5: Now.
4:54
Speaker 4: One big example is Xai. They have announced significant big projects.
4:57
Speaker 4: The other second example is the Target Project. So we
5:00
Speaker 4: anticipate a lot more such projects at the enterprise level
5:03
Speaker 4: coming in where they will start to pitch in to
5:07
Speaker 4: robust billions of dollars of growth for NVIDIAU.
5:10
Speaker 2: John, what's the competitive landscape these days Nvidia versus who Yes,
5:15
Speaker 2: The answer is yes.
5:18
Speaker 4: But just for theoretical purposes. The second biggest competitor in
5:21
Speaker 4: the GPU landscape is a MD But the bigger threat
5:24
Speaker 4: to US is the ACIK providers like the broadcoms in Marvel.
5:28
Speaker 4: Because in terms, when you look at the TAM sizing
5:31
Speaker 4: right now, the AMD's market is what the revenue they're
5:33
Speaker 4: generating is still significantly small versus the ACIK market is
5:37
Speaker 4: expected to grow faster, and that they are not a
5:40
Speaker 4: direct competitor, that you don't replace out in Nvidia GPU,
5:45
Speaker 4: that they are not emerging GPU, but they still take
5:47
Speaker 4: away the wallets share at the same large customers, So
5:50
Speaker 4: they could start deploying their own A six and not
5:53
Speaker 4: rely as much on the n Media GPUs. That's a
5:55
Speaker 4: long term risk.
5:56
Speaker 2: Our Thanks to Kunjan Sabani, Bloomberg Intelligence Senior Semiconductor Analyst.
6:00
Speaker 3: Each week we take a look at research from Bloomberg
6:02
Speaker 3: NEF previously known as New Energy Finance.
6:05
Speaker 2: They're the team at Bloomberg that tracks and analyzes the
6:08
Speaker 2: energy transition from commodities to power, transport, industries, buildings, and
6:12
Speaker 2: agricultural sectors.
6:13
Speaker 3: This week, we looked at the final version of the
6:15
Speaker 3: tax and spending bill passed by House Republicans and how
6:18
Speaker 3: it represents a nightmare scenario for clean energy advocates and
6:21
Speaker 3: defenders of the Inflation Reduction Act.
6:24
Speaker 2: For more, we were joined by Derek Flekel, BNEF Lead
6:27
Speaker 2: US policy analyst.
6:28
Speaker 3: We first asked Derek just how bad this tax bill
6:32
Speaker 3: from the House is for clean energy.
6:34
Speaker 6: Well, it's pretty bad, to be honest. Depending on which
6:36
Speaker 6: market you're looking at, you might see more or less
6:39
Speaker 6: severe restrictions if you look at home batteries, home electricity credits,
6:45
Speaker 6: home solar that gets repealed outright at the end of
6:47
Speaker 6: twenty twenty five, and if you look at utility scale stuff.
6:52
Speaker 6: There was already some pretty severe restrictions in an earlier
6:55
Speaker 6: version of this bill introduced by the Ways and Means Committee,
6:58
Speaker 6: nearly unworkable restrictions on any kind of Chinese linked intellectual
7:02
Speaker 6: property or supplies, as well as earlier phase outs and
7:07
Speaker 6: a variety of other complicated barriers to usage. Now, this
7:11
Speaker 6: final version of the bill that the House is put
7:13
Speaker 6: out has made that even more restrictive, in part by
7:16
Speaker 6: saying that only projects that begin construction within sixty days
7:20
Speaker 6: after the bill's final signature by the President would be
7:22
Speaker 6: able to qualify at all. So that would really restrict
7:25
Speaker 6: it to a handful of things already in the pipeline.
7:27
Speaker 3: What it did seem to do, though, is give a
7:29
Speaker 3: lot of leeway well maybe a lot too strong a word,
7:32
Speaker 3: but leeway to commercial solar, for example, but not residential solar.
7:37
Speaker 3: How does that make sense?
7:39
Speaker 6: Well, the amount of leeway is a little bit relative,
7:41
Speaker 6: and I would say, firstly, the political logic is essentially
7:44
Speaker 6: around the culture war element. The idea is, if you're
7:47
Speaker 6: putting solar panels on your roof and deducting that form
7:49
Speaker 6: your taxes to probably higher income, you're an elite, so
7:51
Speaker 6: to speak. And so there's probably a desire to reduce
7:55
Speaker 6: that element in terms of the sort of regional power.
7:59
Speaker 6: And that's really good for Republican districts.
8:02
Speaker 7: A lot of them have relatively cheap land.
8:04
Speaker 6: It's a pretty big source of tax revenue and potentially
8:06
Speaker 6: construction jobs. So there's an attempt to keep those at
8:09
Speaker 6: least nominally alive. But in practice, the restriction of the
8:13
Speaker 6: regulations on these credits make them unusable for all but
8:17
Speaker 6: a few projects. This is an attempt to balance between
8:20
Speaker 6: about twelve to twenty Republicans who really wanted to keep
8:23
Speaker 6: those credits alive and practical to use and a faction
8:27
Speaker 6: that really wanted to cut spending by any means necessary
8:30
Speaker 6: and saw the IRA credits as a great place to
8:32
Speaker 6: go for that. So in practice it looks a little
8:35
Speaker 6: bit less restrictive, but the sheer web of complications and
8:38
Speaker 6: limitations means that a very very small number of utility
8:42
Speaker 6: scale projects would actually get that.
8:44
Speaker 2: Derek Tomkin is famous for saying that companies adapt, corporations adapt,
8:50
Speaker 2: industries adapt, people adapt. Can the clean energy industry, again
8:55
Speaker 2: broadly defined, can it adapt and deal and grow and
8:59
Speaker 2: in make the estments in this environment?
9:02
Speaker 7: I think that's going to be a very big challenge.
9:04
Speaker 6: Certainly, there have been opportunities to try and final alternatives
9:07
Speaker 6: to Chinese intellectual property and suppliers from Korea and Japan.
9:11
Speaker 6: There's progress on building factories out in the US, but
9:13
Speaker 6: the level of uncertainty surrounding this bill is pretty high.
9:18
Speaker 6: Even if it gets finalized in something like its current form,
9:21
Speaker 6: you might need to wait for up to two years
9:23
Speaker 6: to see final regulations on some of these foreign empty restrictions,
9:28
Speaker 6: and that's pretty chilling to investment.
9:30
Speaker 7: Ultimately, we do see our.
9:33
Speaker 6: Model for if the credits were fully repealed beginning at
9:35
Speaker 6: the end of twenty twenty five, still found that about
9:37
Speaker 6: eighty three percent of renewable projects at the utility scale
9:42
Speaker 6: but still get built, at least across solar winded storage.
9:44
Speaker 6: But that wasn't that was a pre tariff projection. We
9:48
Speaker 6: still are sort of thinking how those will fit together
9:51
Speaker 6: since the tariff rates are ever changing. But fundamentally, I
9:54
Speaker 6: think there will be a lot of challenges adapting to this.
9:57
Speaker 6: There's certainly markets where there's still regulatory pushes for renewables,
10:00
Speaker 6: there's still the fastest thing to install or the cheapest,
10:04
Speaker 6: but ultimately the level of adaptation is going to be
10:07
Speaker 6: fairly challenging, and fairly women had given some of the
10:11
Speaker 6: severity of these subsidy based.
10:12
Speaker 3: Restrictions, which is just so striking too, because this affects
10:16
Speaker 3: sort of the supply part and the demand part, like
10:19
Speaker 3: it hits on both angles. I was talking to the
10:21
Speaker 3: former CEO of Sonova, which it had its own problems
10:24
Speaker 3: including not being able to pay debt, looking at bankruptcy, etc.
10:27
Speaker 3: Before any of this happened, and I asked him, I
10:30
Speaker 3: was like, can these sell our companies stay in business?
10:31
Speaker 3: Are they going to go bankrupt? And he's like bankrupt,
10:33
Speaker 3: Like there's no way that they can survive. Is that
10:35
Speaker 3: what we're going to be looking for.
10:37
Speaker 7: I think we're going to be looking at a few
10:39
Speaker 7: different things.
10:39
Speaker 6: First of all, a lot of Chinese assets are joined investments,
10:44
Speaker 6: like there's one with in energy and LAUNG solar in Ohio,
10:47
Speaker 6: you might see changes in ownership there, so maybe a
10:49
Speaker 6: bit of a consolidation. Obviously, there's a reason that for
10:52
Speaker 6: solar stock went up. It's fairly insulated from some of
10:55
Speaker 6: these restrictions. But at the same time, like you're going
10:58
Speaker 6: to see in a wave of consolidation, and that does
11:00
Speaker 6: mean you see some losers and some people falling out
11:02
Speaker 6: of the market, and particularly segments that are tied to
11:05
Speaker 6: more price sensitive sectors. When a residential solar you might
11:09
Speaker 6: see a bigger hit to those areas as well.
11:12
Speaker 2: Derek, I know you're at the bn EF summit in Munich.
11:16
Speaker 2: What's the view from Europe as to what's happening to
11:18
Speaker 2: the the Green Energy initiative in the US.
11:23
Speaker 6: Everybody was a little bit curious about where that's going
11:25
Speaker 6: to stand, what's going to be permanent. Europe is often
11:29
Speaker 6: thinking is this maybe our moment to have more investment
11:33
Speaker 6: here because we have a bit more consistent policy through
11:35
Speaker 6: the carbon price. But it's also dealing with its own challenges.
11:38
Speaker 6: There's been a big focus on shifting to defense and
11:40
Speaker 6: energy security rather than the energy transition per se. Sometimes
11:43
Speaker 6: those go together, say by creating local battery storage reducing
11:48
Speaker 6: reliance on Russian gas.
11:49
Speaker 7: At the same time, you see.
11:50
Speaker 6: A lot of both political and economic pressure to continue
11:53
Speaker 6: using gas through a mix perhaps of US liquefied natural
11:56
Speaker 6: gas as well as imported gas. Where As for investments
12:02
Speaker 6: in the US that a lot of manufacturers have made
12:04
Speaker 6: when the economic concentives of the Irara seem much more stable,
12:07
Speaker 6: they're certainly questioning what will remain At the end of
12:11
Speaker 6: the day. As I said, you're going to see shifts
12:12
Speaker 6: and ownship. You're going to see consolidation, and depending on
12:15
Speaker 6: the fiscal picture in Europe and the degree that you
12:17
Speaker 6: can fit the energy transition into that energy security framework,
12:20
Speaker 6: you could see a bit of a shift over there.
12:22
Speaker 2: Our thanks to Derek flickl b NEF, lead US policy analyst.
12:26
Speaker 3: Coming up, we're going to break down how Meta CEO
12:28
Speaker 3: Mark Zuckerberg is trying to win over President Donald Trump
12:30
Speaker 3: but may not have a lot to show for those efforts.
12:33
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13:04
Speaker 3: We recently focused on a Bloomberg Big Take story titled
13:07
Speaker 3: the Trump Family's Money Making Machine. You can find it
13:10
Speaker 3: on Bloomberg dot Com and The Terminal.
13:12
Speaker 2: The story looks at all the ways Donald Trump and
13:14
Speaker 2: his family have enriched themselves since his most recent presidential
13:17
Speaker 2: campaign began.
13:18
Speaker 3: For more, we were joined by Max Abelson, Bloomberg News
13:20
Speaker 3: Finance reporter, and any mass Up, Bloomberg Wealth reporter.
13:24
Speaker 2: We first asked Max about what Trump's money making machine is.
13:27
Speaker 5: If we were able to put it into one word
13:30
Speaker 5: or one line, we really would have. Unfortunately, it does
13:32
Speaker 5: take like four thousand words to describe because the machine
13:36
Speaker 5: is really really big. I think the way what we
13:39
Speaker 5: ended up deciding is that no modern American president has
13:43
Speaker 5: ever positioned his family to make this much money while
13:47
Speaker 5: in the White House.
13:48
Speaker 2: And you can't you can't.
13:50
Speaker 5: Oversimplify it either as a supporter or is a critic.
13:53
Speaker 5: You can't say, oh, what he's doing is crypto, or oh,
13:56
Speaker 5: what he's doing is licensing his name, or oh what
13:58
Speaker 5: he's doing is going overseas or what what what the
14:00
Speaker 5: family is doing is making corporate connections?
14:03
Speaker 2: That it really is.
14:04
Speaker 5: We ended up thinking about this as basically an atlas,
14:07
Speaker 5: an atlas to what the Trump family is doing. To
14:11
Speaker 5: take it seriously and to really focus on the facts
14:14
Speaker 5: and on the numbers and on the places. It was
14:18
Speaker 5: real work and I was actually, dare I say, even
14:21
Speaker 5: fun to work with Anyon.
14:22
Speaker 2: I'm trying to figure it out. Hey, l So Annie,
14:24
Speaker 2: I mean, is this I guess part of the question
14:27
Speaker 2: is depending on Hey, look at it. Is this legal?
14:30
Speaker 7: Is it ethical?
14:31
Speaker 2: What are the folks in Washington saying?
14:34
Speaker 3: Well?
14:35
Speaker 5: So.
14:35
Speaker 8: One of the challenges of working on the story was
14:38
Speaker 8: that almost week by week there would be new details
14:43
Speaker 8: to add. And I think what Max and I found
14:46
Speaker 8: was that to go through each of these different categories.
14:50
Speaker 8: We covered real estate, we covered crypto, We covered this
14:54
Speaker 8: kind of grab bag of other ventures that the Trump
14:57
Speaker 8: family has become involved in. You have to go really
15:01
Speaker 8: deep into each one, and there's a high velocity of
15:06
Speaker 8: new deals coming now from the ethical standpoint, what the
15:11
Speaker 8: Trump family has decided to do is they've issued an
15:15
Speaker 8: ethics plan for Trump's second term, as they did in
15:18
Speaker 8: his first term. The way that they've handled it is
15:21
Speaker 8: by putting President Trump's assets in a trust which is
15:24
Speaker 8: overseen by his son, Donald Trump Junior. But there are
15:28
Speaker 8: some differences in the ethics plan of Trump's first term
15:32
Speaker 8: and his second term this time around. As we note
15:35
Speaker 8: in the story, the ban on new foreign deals that
15:40
Speaker 8: existed last time is no longer in place, and you
15:43
Speaker 8: can see the new deals popping up all the time.
15:47
Speaker 5: I found it very liberating actually to in our work
15:50
Speaker 5: rather than putting ourselves in a position where we wanted
15:53
Speaker 5: to say Trump is the most amazing president and everything
15:56
Speaker 5: he does is amazing, or being a position where we
15:58
Speaker 5: have to say Trump is the worst president and everything
16:00
Speaker 5: he does is illegal. What we tried to do is
16:02
Speaker 5: just to understand, peace by piece, the way the family
16:05
Speaker 5: is making money, and it was helpful to just use
16:08
Speaker 5: Trump's own words and own plan. Last time around, in
16:11
Speaker 5: the first administration, he was unwilling for the family to
16:14
Speaker 5: do new deals around the world. This time the family
16:20
Speaker 5: is embracing deals around the world. And by their own account,
16:24
Speaker 5: what they're not allowing is deals with foreign governments. And
16:27
Speaker 5: when Andy and I look closely, what we found is
16:30
Speaker 5: that there are some deals, especially in Oman, especially in
16:34
Speaker 5: Cutter that really test the edge of that agreement. They
16:38
Speaker 5: are with arms of governments. Now it may not necessarily
16:41
Speaker 5: be the Trump organization doing these deals. Sometimes their entities
16:44
Speaker 5: kind of in between. There's this one developer called dar Global.
16:47
Speaker 5: So what we're hoping listeners out there will do is
16:50
Speaker 5: read our story because we really tried to vary carefully
16:53
Speaker 5: without doing anything but the facts, just really tried to
16:56
Speaker 5: understand everything about this money making machine.
17:00
Speaker 3: How much of this money making machine are real deals
17:04
Speaker 3: based on properties and hotels, and how much of it
17:07
Speaker 3: are like NFTs and capitalizing more on the celebrity that
17:12
Speaker 3: is President Trump.
17:13
Speaker 8: Everyone kind of knows that Trump real estate Empire has
17:18
Speaker 8: in many ways moved for a long time, been moving
17:21
Speaker 8: toward licensing the Trump brand for hotels and developments. That's
17:26
Speaker 8: a big that's a big part of what they do now.
17:28
Speaker 8: But what's new or in the second term, is you
17:31
Speaker 8: see his sons Eric Trump and Donald Trump Junior joining
17:36
Speaker 8: the boards of companies both private and public, and lending
17:41
Speaker 8: the name in a way to those companies, and what
17:44
Speaker 8: tends to happen when they join, either in an executive
17:48
Speaker 8: role or as advisors is, at least in the case
17:51
Speaker 8: of public companies, sometimes the share price of those companies
17:55
Speaker 8: will go flying. So it shows the celebrity to your
17:59
Speaker 8: point and name that they bring into the business world,
18:03
Speaker 8: into all these different ventures, including in crypto, but in
18:07
Speaker 8: other realms too, like prediction markets.
18:10
Speaker 5: And to be fair, what Donald Trump Junior will say,
18:12
Speaker 5: and what he said to us is I'm a private citizen.
18:15
Speaker 5: I've been a businessman all my life. It's ridiculous to
18:17
Speaker 5: expect me to stop doing what I do just because
18:19
Speaker 5: my dad is president.
18:21
Speaker 2: And that what Donald Trump will say.
18:22
Speaker 5: A White House pokes versus said to us is you know,
18:25
Speaker 5: I'm transparent and I handed over this multi billion dollar
18:28
Speaker 5: empire to serve our country. The White House described at
18:31
Speaker 5: President Trump as making a great sacrifice. I think it's
18:35
Speaker 5: really helpful though, to just look at the numbers, and
18:37
Speaker 5: I just want to quickly mention what we found is
18:39
Speaker 5: that the Trump name is powering more than ten billion
18:43
Speaker 5: dollars of real estate projects since the re election campaign began.
18:46
Speaker 5: A multi billion dollar valuation for the social media company,
18:50
Speaker 5: A money losing social media company that just went public.
18:52
Speaker 5: I mean, you forget it went public last year, plus
18:55
Speaker 5: the money from crypto, plus the money from corporate connections,
18:58
Speaker 5: I think it's worth taking your time to kind of
19:00
Speaker 5: wrap your arms around it, because it really is sort of,
19:02
Speaker 5: I guess, unlike anything I've ever reported on.
19:04
Speaker 3: All right, thanks to Max Abelson and Bloomberg News Finance
19:07
Speaker 3: reporter and Annie Massa Bloomberg Wealth reporter. This week we
19:10
Speaker 3: looked at another Bloomberg Big Take story titled Zuckerberg's bet
19:14
Speaker 3: on Maga has Yet to Bear Fruit. You can find
19:16
Speaker 3: it on Bloomberg dot Com and The Terminal.
19:18
Speaker 2: The story looks at how Meta CEO Mark Zuckerberg has
19:21
Speaker 2: done everything he can do to win over President Donald Trump,
19:24
Speaker 2: but it's not yet clear he has much to show
19:26
Speaker 2: for it.
19:27
Speaker 3: From where we were joined by one of the story's
19:28
Speaker 3: co authors, Kurt Wagner, Bloomberg News Tech reporter, and we
19:31
Speaker 3: first asked Kurt what Mark Zuckerberg's strategy has been to
19:34
Speaker 3: get on President Trump's good side.
19:36
Speaker 9: We noticed this starting in January, actually slightly before the inauguration.
19:41
Speaker 9: In January, Mark Zuckerberg showed up at mar Alago for
19:43
Speaker 9: a dinner with Trump, which was something that was notable
19:47
Speaker 9: not just because of who Mark Zuckerberg is, but because
19:49
Speaker 9: of the contentious relationship that they have had for years,
19:52
Speaker 9: ever since Facebook and Instagram banned Donald Trump after the
19:56
Speaker 9: January sixth riots at the Capitol. And so he goes
19:59
Speaker 9: to mar aw Lago, he shows up at the inauguration,
20:02
Speaker 9: he starts making frequent trips to the White House to
20:04
Speaker 9: meet with Trump and other officials in the administration. And
20:07
Speaker 9: so we just sort of set out to figure out
20:09
Speaker 9: what is this strategy here? Right on the one hand,
20:12
Speaker 9: it seems somewhat obvious everyone you know, wants to be
20:15
Speaker 9: close to that center of power in DC and build
20:18
Speaker 9: those relationships. But given the history between these two men,
20:21
Speaker 9: it was very notable, like is this a shift in
20:24
Speaker 9: Mark Zuckerberg's personal politics or is this just him simply
20:28
Speaker 9: trying to play this political game. And I think through
20:30
Speaker 9: the reporting and interviews that we did, I think what
20:34
Speaker 9: we sort of came to see was this picture of
20:36
Speaker 9: a CEO who's less tied to his own specific, you know,
20:41
Speaker 9: political ideals and more a sense of self preservation.
20:45
Speaker 10: Right.
20:45
Speaker 9: He's someone who out to try and make sure that
20:48
Speaker 9: he and his company survive. And that's what this is
20:50
Speaker 9: all about.
20:51
Speaker 3: Which was so striking in your piece, because what came
20:54
Speaker 3: up for me is that no one seems to like
20:56
Speaker 3: Mark Zuckerberg, whether you're a Democrat or a public and
20:59
Speaker 3: everyone seems to ignore him and not like him. So
21:02
Speaker 3: to your point, it's really about the political showmanship.
21:06
Speaker 9: I think he's an easy person for people to point to,
21:10
Speaker 9: right We've seen this for years in Congress, Like when
21:13
Speaker 9: things go poorly, it's it's easy to point to Facebook.
21:16
Speaker 9: It's easy to point to Mark Zuckerberg. What happens in
21:19
Speaker 9: the world, what happens in society usually happens on their products,
21:22
Speaker 9: on their platform. So they end up sort of, in
21:25
Speaker 9: some ways they totally deserve a lot of this blame.
21:28
Speaker 9: In some ways they don't, but they get it anyway.
21:30
Speaker 9: And I think Mark Zuckerberg, you know, has been a
21:33
Speaker 9: uniting person in DC in that both sides of the
21:36
Speaker 9: political ais'll dislike him historically, and so on the one hand,
21:41
Speaker 9: you can understand, you know, why he would want to
21:44
Speaker 9: try and forge this relationship with President Trump. On the
21:47
Speaker 9: other hand, it's it's unclear if it's working and I
21:51
Speaker 9: think that we have sort of to this point not
21:54
Speaker 9: seen the returns on those efforts from him. There's a
21:58
Speaker 9: bunch of stuff that that meta is still facing in
22:00
Speaker 9: terms of regulation and politics that are that are hard
22:03
Speaker 9: for the company, and I'm not sure that he's quite
22:05
Speaker 9: gotten the return that he wanted.
22:06
Speaker 2: Yet he bought a mansion in Washington, d C. He
22:09
Speaker 2: being Mark Zuckerberg. What's that about.
22:11
Speaker 9: Yeah, twenty three million dollars, you know, as we all
22:15
Speaker 9: do by I believe, like a fourth home. I think
22:19
Speaker 9: the idea there is that he's just going to simply
22:22
Speaker 9: be in DC a lot more, especially over these next
22:24
Speaker 9: four years. I think it's certainly a signal to not
22:28
Speaker 9: only the administration but others on on Capitol Hill that hey,
22:31
Speaker 9: I'm going to be a regular presence here and and
22:34
Speaker 9: you're going to see me around. I want to be involved.
22:36
Speaker 9: It's a change of posture for him for the you know,
22:40
Speaker 9: the prior four years, or at least the prior two years,
22:43
Speaker 9: he had really sort of handed the policy and politics
22:46
Speaker 9: part of the business over to Nick Clegg, who was
22:49
Speaker 9: the former Deputy Prime Minister of the UK. But Clegg
22:52
Speaker 9: announced that he's leaving shortly after the election, and I
22:56
Speaker 9: think Mark Zuckerberg has sort of picked up that baton
22:58
Speaker 9: and he sort of said, you know, I need to
23:00
Speaker 9: be the person to do this. Donald Trump doesn't want
23:02
Speaker 9: to deal with a number two or a number three
23:04
Speaker 9: at any company, right, President Trump wants to deal with
23:06
Speaker 9: the CEO. And I think Mark Zuckerberg knows that, which
23:09
Speaker 9: is why he's showing up in DC himself as often
23:11
Speaker 9: as he is.
23:11
Speaker 3: What you also talk about in the piece is just
23:13
Speaker 3: the contrast between Elon Musk and Mark Zuckerberg, like two entrepreneurs,
23:17
Speaker 3: incredibly brilliant starting different companies, and just how politically their
23:21
Speaker 3: paths have diverged.
23:23
Speaker 9: Yeah, we had the section and the story about how
23:27
Speaker 9: it was described as as sort of Elon envy on
23:29
Speaker 9: Mark Zuckerberg's part, So you can kind of imagine he's
23:34
Speaker 9: for years kind of getting grilled, as we talked about
23:36
Speaker 9: by politicians on both sides. He did spend a lot
23:39
Speaker 9: of time, at least a few years ago, apologizing, right, hey,
23:42
Speaker 9: we need to do better, We're going to do better,
23:43
Speaker 9: kind of like trying to appease everybody to no success.
23:47
Speaker 9: And meanwhile, you look out if you're Mark Zuckerberg and
23:50
Speaker 9: you see what Elon Musk is doing, and he's pretty
23:53
Speaker 9: much just doing whatever he wants, you know, Consequences be damned,
23:57
Speaker 9: And I think they're developed the sense of like, why
24:00
Speaker 9: am I out here apologizing? And why am I out
24:02
Speaker 9: here trying to please everybody and play down the middle
24:05
Speaker 9: and all this stuff when you know he's out there
24:08
Speaker 9: he being Elon picking aside donating you know, hundreds of
24:11
Speaker 9: millions of dollars to the Trump campaign, literally campaigning for
24:14
Speaker 9: the president while running a social network, and there seems
24:17
Speaker 9: to be no repercussions. And so I think over time
24:20
Speaker 9: he developed, like I said, this, like Elon envy, this
24:22
Speaker 9: sense that maybe I'm doing it wrong and he's doing
24:25
Speaker 9: it right. And I think we've seen some of that
24:27
Speaker 9: sort of show up in the way we see Mark
24:29
Speaker 9: Zuckerberg last you know, six to twelve months. He's a
24:32
Speaker 9: lot less. He's an unapologetic guy as far as how
24:35
Speaker 9: he used to be. And I think I think Elon
24:38
Speaker 9: has a lot to do with.
24:38
Speaker 1: That o right.
24:39
Speaker 2: Thanks to Kurt Wagner, Bloomberg News tech reporter, coming up.
24:42
Speaker 3: In the program will break down why the sporting goods
24:44
Speaker 3: retailer Dick Sporting Goods is maintaining his annual sales and
24:47
Speaker 3: profit forecast.
24:48
Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
24:50
Speaker 2: depth research and data on two thousand companies and one
24:53
Speaker 2: hundred and thirty industries. You can access Bloomberg Intelligence via
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Speaker 2: b I go on the terminal.
24:57
Speaker 3: I'm Paul Sweeney and am Malex Steel, and this is bloom.
25:07
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25:11
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25:21
Speaker 2: This week, the department store chain Macy's posted better than
25:24
Speaker 2: expected quarterly sales and maintain its sales outlook for the
25:27
Speaker 2: current year. This comes to spite new tariffs and moderation
25:30
Speaker 2: in consumer spending.
25:31
Speaker 3: Meantime, the clothing retailer Abercrombie and Fitch raised it's full
25:34
Speaker 3: your outlook, showing confidence in its ability to navigate the
25:37
Speaker 3: changing tear of landscape.
25:38
Speaker 2: For more on these companies, we were joined by Mary
25:40
Speaker 2: Ross Gilbert Bloomberg Intelligence, senior equity analysts covering retail.
25:43
Speaker 3: We first asked Mary for her key takeaways. On Macy's
25:45
Speaker 3: most recent quarter.
25:47
Speaker 11: I think the green shoots here is that Macy's is
25:50
Speaker 11: showing some traction here with their refresh strategy. When you
25:55
Speaker 11: look at their one hundred and twenty five stores that
25:57
Speaker 11: they've refreshed, and they've expanded that to include some additional stores.
26:00
Speaker 11: Their comp sales were down about two percent. About one
26:03
Speaker 11: point nine is the figure that they're using. And you know, look,
26:08
Speaker 11: Dillard's outperformed because they were down one percent, so they're
26:11
Speaker 11: getting better. But where they really need to improve is
26:14
Speaker 11: on the service levels. Where you also saw strength here
26:19
Speaker 11: is really on the luxury side, and that's Bloomingdale's. Bloomingdale's
26:22
Speaker 11: was up three point eight percent and Blue Mercury, which
26:25
Speaker 11: is their beauty specialty beauty growth concept, and that was
26:29
Speaker 11: up one and a half percent. So that's where you're
26:31
Speaker 11: really seeing strength. But it's such a small piece of
26:33
Speaker 11: the business. It's really all about the Nacy's name plate,
26:37
Speaker 11: and we still need to see better traction there, but
26:39
Speaker 11: it's getting better and better. And with regard to the
26:43
Speaker 11: tariff hits, it's going to be about twenty to forty
26:45
Speaker 11: basis points, so very manageable. They directly source about you know,
26:50
Speaker 11: we estimate that their private label business is about thirteen
26:54
Speaker 11: to fourteen percent. That's on a consolidated basis of sales,
26:58
Speaker 11: and so there sourcing about twenty seven percent from China directly.
27:04
Speaker 11: So they have a number of initiatives that are helping
27:06
Speaker 11: them to offset the full effect of tariffs, which you'll
27:09
Speaker 11: see the biggest hit in the second quarter, but for
27:11
Speaker 11: the full year, it's very manageable, you know, in that
27:14
Speaker 11: twenty to forty basis point impact.
27:17
Speaker 2: Mary for Macy's, are they comfortable with their store footprint
27:22
Speaker 2: these days?
27:23
Speaker 11: So, Paul, they're reducing their store footprint with the Macy's
27:27
Speaker 11: name plate, with some of the stores that they're closing.
27:30
Speaker 11: They've already closed sixty four. The total that they plan
27:33
Speaker 11: to close is one hundred and fifty. So they sort
27:36
Speaker 11: of feel like the go forward store base is about
27:38
Speaker 11: three hundred and fifty stores. But right now there's a
27:42
Speaker 11: little bit of a pause, you know, just because of
27:44
Speaker 11: the real estate market and some of the store closures
27:46
Speaker 11: that they have planned for this year. But yes, no,
27:49
Speaker 11: they need to take that store base down.
27:52
Speaker 4: All right.
27:52
Speaker 3: Let's go to the other one on the highlight here
27:55
Speaker 3: Abercromme and Fisch I'm kind of floored by this. Like
27:58
Speaker 3: we saw it with Urban, it with the American Eagle, Like
28:01
Speaker 3: these specialty stores, they seem to be somewhat cyclical in nature,
28:05
Speaker 3: and they're crushing it right now.
28:07
Speaker 11: Yeah, I mean, you can say Abercrombie is crushing it.
28:10
Speaker 11: They kind of are. But I mean, if you look
28:11
Speaker 11: at the namesake brand, the Abercrombie and Fitch brand, that
28:15
Speaker 11: was actually down ten percent on a comp sales basis,
28:18
Speaker 11: but in all fairness, they were going against a twenty
28:21
Speaker 11: nine percent increase in the prior year. First quarter in
28:25
Speaker 11: a way you'd say, look, that's no excuse. And certainly
28:28
Speaker 11: they were impacted in the quarter by lower average unit retail.
28:32
Speaker 11: That was because they had some carryover inventory from the
28:34
Speaker 11: winter season, and also it looks like they had a
28:37
Speaker 11: little bit of a miss on their bridle, you know,
28:41
Speaker 11: the wedding business. But where they did have some strength
28:44
Speaker 11: was in swim They really chased after it. So they've
28:47
Speaker 11: really got a good sort of summer shop going, and
28:50
Speaker 11: they expect that Abercrombie will inflect back to positive in
28:53
Speaker 11: the second half of the year. Where you really saw
28:56
Speaker 11: the strength was Hollister. So Hollister turned in a nice
29:00
Speaker 11: twenty three percent comp sales gain, and that was on
29:03
Speaker 11: top of a double digit gain last year, So they're
29:06
Speaker 11: really hitting it out of the ballpark, you know with
29:09
Speaker 11: the team gen Z retail customer there.
29:12
Speaker 2: Hey, Mary, what are the Macy's and the Amber Crombies
29:15
Speaker 2: of the world. What are they saying about the consumer
29:17
Speaker 2: right now?
29:18
Speaker 11: Yeah, so Macy's is taking a very cautious perspective on
29:21
Speaker 11: the consumer. We think the consumer is pretty resilient. I mean,
29:25
Speaker 11: clearly at the higher end they're more resilient than at
29:28
Speaker 11: the lower end, and there's some caution in there, but generally,
29:32
Speaker 11: I would say, you know, when we have employment levels,
29:35
Speaker 11: you know, in that sort of unemployment levels in that
29:38
Speaker 11: sort of four percent range, that's really full employment. And
29:41
Speaker 11: when you're employed, you feel good about spending money. So
29:44
Speaker 11: we really think it's holding up. We think there's retailers
29:47
Speaker 11: are taking a cautious conservative approach hoping to be able
29:51
Speaker 11: to beat and we think they probably can, particularly as
29:54
Speaker 11: we get into the back half of the year and
29:56
Speaker 11: they're able to delay more of the tariff impact as well.
30:00
Speaker 2: Our thanks to Mary Ross Gilbert Bloomberg Intelligence senior equity
30:02
Speaker 2: analysts covering.
30:03
Speaker 3: Retail We move next to news from the sporting goods
30:05
Speaker 3: retailer Dick's Sporting Goods.
30:07
Speaker 2: This week, the company said it maintained it's annual sales
30:09
Speaker 2: and profit FORCAS and this can be viewed us a
30:11
Speaker 2: sign of strength as the retailer prepares to require the
30:14
Speaker 2: struggling footwear chain Footlocker.
30:16
Speaker 4: For more.
30:16
Speaker 3: We were joined by Lindsay Dutch, Bloomberg Intelligence Consumer Hardline
30:19
Speaker 3: Senior analyst.
30:20
Speaker 2: We first asked Lindsay for her key takeaways from quarterly
30:23
Speaker 2: results at dick Sporting Goods.
30:25
Speaker 12: Yes, so the numbers Dix did pre announce when they
30:27
Speaker 12: announced their footlocker deal a couple of weeks ago, and
30:30
Speaker 12: numbers were in line with their pre announcement. But the
30:33
Speaker 12: key focus was that guidance what they left where they
30:37
Speaker 12: said it at the beginning of the year, and it
30:39
Speaker 12: really tells us, you know, combined with the strong first
30:42
Speaker 12: quarter results, that demand is holding very strong for this
30:45
Speaker 12: company and we should continue to see growth in coming
30:48
Speaker 12: quarters and tariffs with the rising costs, there should be
30:52
Speaker 12: manageable for the rest of the year.
30:54
Speaker 3: What changed because I feel like before earning season, we
30:56
Speaker 3: thought this was going to be just like total disaster
30:59
Speaker 3: for retailers came to tariffs, it is something fundamentally changed,
31:02
Speaker 3: or do we just not give them enough credit?
31:04
Speaker 12: So I think Dix might not be a barometer for
31:07
Speaker 12: retailers across the board. I think they're uniquely positioned in
31:11
Speaker 12: a couple of ways. One is that their consumer base
31:14
Speaker 12: is a higher income consumer. That consumer has been holding
31:18
Speaker 12: up pretty well, and we haven't seen a change, you know,
31:22
Speaker 12: in the spending patterns for them yet. The other piece
31:25
Speaker 12: I would say is, you know, Dix has done a
31:27
Speaker 12: really great job improving their assortment, and because they carry
31:33
Speaker 12: you know, premium brands, they are in a very good
31:37
Speaker 12: position to pass through these higher costs to that consumer.
31:41
Speaker 12: And we expect that more affluent consumer to continue to
31:44
Speaker 12: spend a Nike even if it's five percent higher in
31:48
Speaker 12: terms of the shoe that you're picking. So it is manageable,
31:52
Speaker 12: you know, for Dix, and you know that might not
31:54
Speaker 12: be the case across the board, but they are positioned
31:58
Speaker 12: to do so.
31:59
Speaker 2: Linda guessing that my sneakers are not stitched in pure
32:02
Speaker 2: at Illinois, So what are they saying about tariffs and
32:06
Speaker 2: the impact on their margins?
32:09
Speaker 12: Right, So we haven't gotten a lot of specific details,
32:13
Speaker 12: but in the guidance that they are still expecting about
32:16
Speaker 12: seventy five basis points of gross margin expansion this year,
32:21
Speaker 12: so that expectation of growing margin is still in place.
32:26
Speaker 12: Like I said, I think that they're looking to pass
32:29
Speaker 12: those higher costs on to consumers. So that's sort of
32:32
Speaker 12: a margin neutral impact. And the way they're getting the
32:36
Speaker 12: expansion on the margin line is, you know, Dix has
32:39
Speaker 12: really pulled back on promotions. They don't really offer blanket discounts.
32:43
Speaker 12: You never see twenty percent off the entire site, not
32:46
Speaker 12: even on Black Friday. They just don't do that anymore.
32:49
Speaker 12: And they haven't really done that since the pandemic, you know,
32:52
Speaker 12: once they saw that consumers really are interested in sports
32:56
Speaker 12: fitness at leisure, they will pay the full price and
33:00
Speaker 12: they could plan to continue to sell through on the
33:03
Speaker 12: full price for the rest of the year.
33:07
Speaker 3: What other stocks in your coverage are holding up surprisingly well.
33:12
Speaker 12: Yeah, so that's a great question, Alex. So we had
33:14
Speaker 12: william Sonoma report last week and they too held their
33:18
Speaker 12: guidance flat. Very similar backdrop for them, again, it's a
33:23
Speaker 12: higher income consumer. They are seeing demand you know, for
33:27
Speaker 12: the price point of their goods, especially in the Williams
33:29
Speaker 12: Sonoma home brand that's performed very well. They're also making
33:34
Speaker 12: inroads with kids and their teen pottery barn brand, so
33:39
Speaker 12: that another one, you know, very similar to Dix. You know,
33:41
Speaker 12: both kind of entered the year with strong demand momentum,
33:45
Speaker 12: and we saw that demand continue into the first quarter
33:48
Speaker 12: and it looks like it could continue to extend this year,
33:52
Speaker 12: all right.
33:52
Speaker 3: Thanks to Lindsay Dutch, Bloomberg Intelligence Consumer Hardline Senior Analyst.
33:56
Speaker 2: We moved next to the auto sector this week. The
33:58
Speaker 2: automaker stilentis appointed and it's America's head Antonio Filosa, as
34:02
Speaker 2: its chief executive.
34:03
Speaker 3: Officer, and this comes after former boss Carlos Saveras was
34:07
Speaker 3: forced out over a slumping sales and profit.
34:09
Speaker 2: For more, we were joined by Steve Man Bloomberg Intelligence
34:12
Speaker 2: Global Autos and Industrials Research Channels. We first asked Steve
34:15
Speaker 2: to break down this week's news.
34:17
Speaker 10: Well, the old CEO resigned. Part of it is because,
34:21
Speaker 10: you know, earnings were pretty bad and it may not
34:25
Speaker 10: be one hundred percent of his fault. The market was
34:27
Speaker 10: the auto market was weakening. So we have a new CEO.
34:31
Speaker 10: He does have a lot of experience in the auto industry.
34:33
Speaker 10: He's been with Stalentis since nineteen ninety nine, so it's
34:38
Speaker 10: been a while. Like you said, the last dint he
34:40
Speaker 10: was was in managing the North American business for a
34:44
Speaker 10: few months, and prior to that he was at Cheap
34:48
Speaker 10: But you know, it took a number of months for
34:50
Speaker 10: them to identify someone new. But I think the market
34:53
Speaker 10: is just pretty surprised that they went with somebody internal
34:56
Speaker 10: and not somebody external.
34:58
Speaker 3: So what do we learn about that? Because so many
35:01
Speaker 3: of the problems that are hitting carmakers are in some
35:03
Speaker 3: ways completely out of their control. Yes, in terms of trade,
35:06
Speaker 3: supply chains, sort of the war on evs here in
35:09
Speaker 3: the US, right, So do we learn that, Like, hey,
35:12
Speaker 3: we don't think it's very fixable, so we're not gonna
35:13
Speaker 3: worry about something from the outside or is it like, look,
35:16
Speaker 3: the US is in turmoil. We need someone who knows
35:18
Speaker 3: that market. Like, what do we learn?
35:19
Speaker 10: So there's you know, they are they do have issues
35:22
Speaker 10: that's not in their control, but there's a lot of
35:24
Speaker 10: issues that they are in control. So you know, quality
35:28
Speaker 10: is an issue. You know, I think a lot of
35:31
Speaker 10: American buyers thinks Jeep has kind of fallen off in
35:35
Speaker 10: the quality side. The new CEO, Antonio actually managed Jeep
35:39
Speaker 10: for about two years, so you know, I think, you know,
35:43
Speaker 10: the investor will take that as probably a negative. And
35:48
Speaker 10: then the other issues is morale. You know, over the
35:51
Speaker 10: past few years, sales have been weakening, They've been closing
35:55
Speaker 10: a lot of plants as a result. Dealers are not
35:59
Speaker 10: very happy with some pricing issues since COVID. So there's
36:05
Speaker 10: a lot of issues that you know, the new CEO
36:07
Speaker 10: will have to kind of address and hopefully you can
36:10
Speaker 10: turn out a.
36:11
Speaker 2: Rep all right, So for the big three US automakers
36:13
Speaker 2: in general, what is the consensus on tariffs and how
36:17
Speaker 2: much it will impact their business?
36:20
Speaker 10: Well, interestingly, Trump has been giving a lot of reprieves
36:23
Speaker 10: and reliefs to you know, various countries and regions and
36:27
Speaker 10: a certain sector, but he hasn't really done much for
36:31
Speaker 10: the auto industry. There was some relief, a two year relief,
36:35
Speaker 10: but I think he's you know, going full full ahead
36:38
Speaker 10: with these auto tariffs and a lot of companies still
36:41
Speaker 10: don't know where the impact, how big of the impact is.
36:44
Speaker 10: GM actually announced they're going to be a four to
36:47
Speaker 10: five billion impact this year. Toyota said, you know, over
36:53
Speaker 10: between May and March and April the impact was one
36:57
Speaker 10: point three to one point five billion. So given these
37:00
Speaker 10: numbers is going to be huge.
37:03
Speaker 3: What about EV's. Is it possible that EV's in the
37:06
Speaker 3: US go the way that EV's went one hundred years ago.
37:11
Speaker 3: It could, It could, That's not immaterial.
37:14
Speaker 10: I think, you know, there's a number of issues that's
37:17
Speaker 10: facing the EV market. Infrastructure is a big one. It's
37:22
Speaker 10: just not as convenient as people would like it to be.
37:26
Speaker 10: The other thing is the cost. You know, I still
37:30
Speaker 10: think that you know, EV has a place in the marketplace.
37:34
Speaker 10: It's not going to be fifty percent market share by
37:38
Speaker 10: twenty thirty. We think it's more like half of that
37:41
Speaker 10: twenty to twenty five percent. And then look there is
37:45
Speaker 10: a risk to lower number because of the tariffs and affordability.
37:49
Speaker 10: A lot of these some of these EV's are actually
37:51
Speaker 10: made in Mexico, so if you slap on tariffs, that
37:54
Speaker 10: makes it less affordable for consumers.
37:57
Speaker 3: Our thanks to Steve Man, Bloomberg Intelligence, Global autos in
37:59
Speaker 3: a dust research analyst.
38:01
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