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Markets, Hiring, And Retail Spending · 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
• 0:11
  Speaker 1: with essential market moving news. Find the Bloomberg Markets podcast
• 0:15
  Speaker 1: called Apple Podcasts or wherever you listen to podcasts, and
• 0:18
  Speaker 1: at Bloomberg dot com slash podcast. We're gonna get into
• 0:22
  Speaker 1: it now. At Dave Harden, the founder and president of
• 0:25
  Speaker 1: Summit Global Investments, we're gonna look at his market outlook
• 0:28
  Speaker 1: for two inflation, FED tapering. Dave, thank you for joining us.
• 0:32
  Speaker 1: When we think about how are you positioning yourself? Well,
• 0:37
  Speaker 1: thank you for having to me. Glad to be on
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  Speaker 1: again today. UM, I think you want to be positioned
• 0:42
  Speaker 1: for choppy and more volt markets ahead. We've got a
• 0:45
  Speaker 1: lot with the FED. Everybody's talked about their combination going
• 0:48
  Speaker 1: away and what's going to have. We also have Congress
• 0:50
  Speaker 1: actively involved, COVID nineteens, you have political events. I think
• 0:53
  Speaker 1: it's a lot more choppy in the next year. Yield hire,
• 0:58
  Speaker 1: I think it's positive, but just not as big of
• 1:00
  Speaker 1: a return over the whole year as one would expect.
• 1:03
  Speaker 1: There's going to be periods though we're it's up a
• 1:05
  Speaker 1: lot and down a lot. I think we're gonna have
• 1:07
  Speaker 1: some choppy trading. So what do I do there? Do
• 1:10
  Speaker 1: I stick with maybe the big top line growth stories tech,
• 1:14
  Speaker 1: for example, healthcare, or do I go a little bit
• 1:16
  Speaker 1: more cyclical and try to play what should be some
• 1:19
  Speaker 1: type of reopening or continued reopening next year. I think
• 1:24
  Speaker 1: that's a really good question, Paul. I think one of
• 1:26
  Speaker 1: the things this creates is a higher awareness for the
• 1:29
  Speaker 1: desire for risk management. And the more you, as an
• 1:32
  Speaker 1: investor understand your risk management that's inside your portfolio, it's essential.
• 1:37
  Speaker 1: The better you understand it, the better your portfolio perform
• 1:40
  Speaker 1: as you hope. So I think the biggest thing you
• 1:42
  Speaker 1: need to do is understand the risks within your protfolio. Now,
• 1:45
  Speaker 1: saying that, I do think you want to have a
• 1:48
  Speaker 1: more value tilt, and probably a bigger company tilt over
• 1:52
  Speaker 1: over overall, but small companies will probably in my estimation,
• 1:57
  Speaker 1: outperform large companies as a whole. But I think the
• 2:00
  Speaker 1: core of your portfolio needs to be in some of
• 2:03
  Speaker 1: these companies you really really trust. Um so companies that
• 2:06
  Speaker 1: I've been talking about more more recently, and I know
• 2:09
  Speaker 1: it's up over a hundred percent year today. Is Ford.
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  Speaker 1: Um Ford I think is a really really good company.
• 2:14
  Speaker 1: It's a great play. They have a ton of momentum
• 2:17
  Speaker 1: in the number of buys that they have and sells
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  Speaker 1: companies selling cars um and and a great opportunity with
• 2:24
  Speaker 1: electric vehicles. They haven't even gotten started yet, just the
• 2:26
  Speaker 1: f one fifty. Their Mustang is really not even the Mustang,
• 2:29
  Speaker 1: so they I think they have a lot of opportunity
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  Speaker 1: to grow there. Less eccentric than Elon, but really good
• 2:36
  Speaker 1: management and forward So that's one of the core holdings
• 2:38
  Speaker 1: I would look. So you mentioned this small cap idea.
• 2:42
  Speaker 1: We're going to speak to Liz Young later. She loves
• 2:44
  Speaker 1: them to How does inflation, though, throw a wrench in
• 2:49
  Speaker 1: the ability for smaller companies to navigate a choppy environment
• 2:52
  Speaker 1: next year? It's going to be difficult, and so you
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  Speaker 1: want to look I think if you're going into small cap,
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  Speaker 1: you want to look for company needs that have the
• 3:00
  Speaker 1: opportunity either to combat inflation with their growth, so that's
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  Speaker 1: really really important, or they have some type of unique
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  Speaker 1: technology that I think or a position in their um
• 3:12
  Speaker 1: peer group that really makes a difference. So the other
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  Speaker 1: thing that I think that's really important is I don't
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  Speaker 1: think you want to have all the risk on the table.
• 3:20
  Speaker 1: And in other words, if you looked at the beta
• 3:21
  Speaker 1: of your small cap portfolio to the Russell to or
• 3:24
  Speaker 1: the S and P six, your beta I think needs
• 3:27
  Speaker 1: to be a little bit smaller. Our small cap beta
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  Speaker 1: is about point eight right now. It's about fi year
• 3:33
  Speaker 1: to day versus the Russell to about ten. So I
• 3:35
  Speaker 1: think you can do a lot better with um less
• 3:39
  Speaker 1: volatile companies, but stay in that small cap space. David,
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  Speaker 1: how do you think about valuation here? There's a lot
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  Speaker 1: of folks that are concerned about evaluation. But on the
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  Speaker 1: other hand, people saye g. But that given where interest
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  Speaker 1: rates are, don't worry. Earnings have been very good over
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  Speaker 1: the past several quarters, but likely to slow. How do
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  Speaker 1: you think about evaluation in this market? Now? Well, there's
• 4:00
  Speaker 1: no doubt it's high. Right you look at any type
• 4:03
  Speaker 1: of chart you want to look at across the market,
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  Speaker 1: valuation is extremely high. It's a very narrow market, and
• 4:09
  Speaker 1: so that is concerning. The problem is is I think, well,
• 4:12
  Speaker 1: not the problem, but the opportunity is is that valuations
• 4:16
  Speaker 1: never really created a burst of the bubble so I
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  Speaker 1: don't think you worry about valuation. You more worry about
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  Speaker 1: what are the downside risks with my individual names in
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  Speaker 1: my portfolio and what causes the bubble to burst. So
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  Speaker 1: I would set valuation aside a little bit and look
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  Speaker 1: at the FED, look at the COVID, which I think
• 4:36
  Speaker 1: you know we've talked about a million times over, and
• 4:38
  Speaker 1: look at what events are going on with Congress and
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  Speaker 1: how that's going to affect the downside risk of my nature.
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  Speaker 1: Is there a paradigm shift, a move away from chasing
• 4:47
  Speaker 1: yield into protecting your capital? I think there there There
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  Speaker 1: has to be for at least a portion of everyone's portfolio,
• 4:54
  Speaker 1: so yields are higher. Um, you can't just chasing yield
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  Speaker 1: is not going to give you the actually I think
• 5:00
  Speaker 1: that you need, and so you need to look at
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  Speaker 1: how does your portfolio fit together and what is the
• 5:07
  Speaker 1: potential risk to your portfolio losing money? And if you
• 5:10
  Speaker 1: do it that way and you start talking about risk,
• 5:12
  Speaker 1: I think your profolio is going to perform as you
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  Speaker 1: want um throughout the year. All right, David, thank you
• 5:18
  Speaker 1: so much for joining us. Really appreciate getting your thoughts
• 5:21
  Speaker 1: and perspective. David Harden, founder, president of Summit Global Investments.
• 5:31
  Speaker 1: One of the interesting economic fallouts from this pandemic has
• 5:35
  Speaker 1: been a large number of people have simply left the workforce,
• 5:39
  Speaker 1: maybe four to five million of them here in the US.
• 5:42
  Speaker 1: And of course we see the help on it signs
• 5:44
  Speaker 1: in just about every restaurant and retail establishment, but it's
• 5:47
  Speaker 1: also impacting larger companies like Micron Technology has a hundred
• 5:51
  Speaker 1: billion dollar market capp chip company. April Arnston joins us.
• 5:55
  Speaker 1: She's a chief people officer at Micron Technology. April talked
• 5:59
  Speaker 1: to us about the labor market for again, a big
• 6:02
  Speaker 1: tech company like Micron Technologies, what are you guys dealing with? Hi,
• 6:07
  Speaker 1: good morning, Thanks for having me. Yeah. So, while the
• 6:11
  Speaker 1: labor shortage is real, you know, we also believe it
• 6:15
  Speaker 1: presents opportunities that can create retention challenges for sure, but
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  Speaker 1: we've also found that it has created hiring opportunities and
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  Speaker 1: it it really hasn't stalled our efforts, that hasn't stalled
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  Speaker 1: our innovation efforts, that hasn't stalled our diversity efforts. In fact,
• 6:31
  Speaker 1: we believe that our focus on things like the ei UM,
• 6:36
  Speaker 1: things like our company success and our innovation, it's given
• 6:39
  Speaker 1: us a competitive advantage in the talent marketplace. People are
• 6:44
  Speaker 1: rethinking where they want to work. They want fulfilling work,
• 6:47
  Speaker 1: they want flexibility, and they want companies to share their values.
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  Speaker 1: So now is the time for companies to really double
• 6:55
  Speaker 1: down on those efforts and UM make sure that they
• 6:59
  Speaker 1: are seeing keen about what they offer to employees, both
• 7:04
  Speaker 1: in terms of the work and the environment that they create,
• 7:09
  Speaker 1: so that people can find a purpose in the work
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  Speaker 1: and they feel valued and they feel like they're contributing
• 7:15
  Speaker 1: to success. You know, I'm curious about the most compelling ways,
• 7:19
  Speaker 1: the most compelling examples of how the workplace is really changing. Yeah,
• 7:27
  Speaker 1: you know, at Micron, I think there's a few things that,
• 7:30
  Speaker 1: you know, we are looking at to make sure that
• 7:33
  Speaker 1: we provide a modern work experience. I think number one
• 7:38
  Speaker 1: I just mentioned people want a place where they feel fulfilled,
• 7:42
  Speaker 1: UM that they are doing work that impacts UM, impacts
• 7:47
  Speaker 1: greater society, and impacts their community. They want flexibility. They
• 7:53
  Speaker 1: want to work UM the way they want to work
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  Speaker 1: and the way that they best work, whether that's working
• 7:58
  Speaker 1: from home or or whether that's you know, leveraging technology
• 8:03
  Speaker 1: to be engaged in different ways. They also want you know,
• 8:06
  Speaker 1: they want to be socially connected, so when they come
• 8:09
  Speaker 1: to work, you know, we're finding that people still want
• 8:12
  Speaker 1: to connect and when they come to work, they want
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  Speaker 1: a unique experience. They want to still be able to
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  Speaker 1: connect with our colleagues UM and and work in an
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  Speaker 1: environment where you know, they feel like they're they're making
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  Speaker 1: a difference and and they want to feel respected and valued.
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  Speaker 1: And this is why Micron's d I efforts are so
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  Speaker 1: incredibly important UM to make sure that we're providing a
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  Speaker 1: culture of inclusion where people feel like they can thrive.
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  Speaker 1: We believe it's the right thing to do, and talent
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  Speaker 1: is demanding it. April, how do how are you guys
• 8:45
  Speaker 1: what thinking about this? You know work from home phenomena
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  Speaker 1: that's really just gained so much momentum during this pandemic
• 8:52
  Speaker 1: and many employees saying I'm just not coming back. What's
• 8:56
  Speaker 1: your policy right now and how do you think it
• 8:58
  Speaker 1: might evolve? Yeah, So from Micron, we UM we're your manufacturer,
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  Speaker 1: so we design, develop, and manufacture memory and storage products.
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  Speaker 1: So as you can imagine, we have a pretty diverse workforce.
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  Speaker 1: We do have a population that has to be working
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  Speaker 1: at a physical Micron location to manufacture our products. Uh.
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  Speaker 1: We have a population of technical folks, research and development
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  Speaker 1: team members who have to occasionally access the site. They
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  Speaker 1: have to be in labs, they have to be testing
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  Speaker 1: the product. They can do some of their work remotely,
• 9:34
  Speaker 1: but by and large they need to be on site.
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  Speaker 1: And then we have a third population at Micron where
• 9:39
  Speaker 1: a lot of their work can be done flexibly. So
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  Speaker 1: we've devised the strategy that really addresses all three populations
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  Speaker 1: and allows the most flexibility for those different populations. You
• 9:50
  Speaker 1: do have to base it on the role on the work, UM,
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  Speaker 1: and that's exactly what we've done. And and as I've mentioned,
• 9:57
  Speaker 1: you know, certainly there is a population, although I would
• 10:00
  Speaker 1: say it's a smaller population that wants to work fully
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  Speaker 1: remote UM and and not come to a site. What
• 10:07
  Speaker 1: we're finding, UM is that people do want to be connected.
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  Speaker 1: They just want flexibility and how they do it and
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  Speaker 1: when they do it and where they do it. But
• 10:17
  Speaker 1: we are finding people still crave those social connections and
• 10:21
  Speaker 1: coming to work for part of the time in some
• 10:24
  Speaker 1: sort of hybrid arrangement for the roles that allow for
• 10:27
  Speaker 1: that is seeming to be the recipe for success. I'm
• 10:30
  Speaker 1: wondering if the skills are changing that are needed for
• 10:33
  Speaker 1: this workforce of the future. When you look at the
• 10:37
  Speaker 1: candidates in front of you for jobs, which are bound
• 10:40
  Speaker 1: to be the most successful. Yeah, I would to answer
• 10:45
  Speaker 1: your question directly to skills are absolutely changing. Uh, as
• 10:49
  Speaker 1: you know, as we look at candidates, the ones that
• 10:52
  Speaker 1: will be successful are the ones. Of course, you know,
• 10:55
  Speaker 1: technical capability is important, but what's even more important is
• 10:59
  Speaker 1: the ability to learn. Because we're not even able to
• 11:02
  Speaker 1: predict what skills someone might need, and three and five
• 11:05
  Speaker 1: years down the road, we know that the skills required
• 11:08
  Speaker 1: are changing so rapidly. We need to have the ability
• 11:12
  Speaker 1: to learn our our team members, our workforce has to
• 11:14
  Speaker 1: be able to pivot and be agile and adapt so
• 11:17
  Speaker 1: we can capitalize on market opportunities as they emerge. So
• 11:21
  Speaker 1: the ability to learn, the ability to collaborate and connect
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  Speaker 1: with people so critically important. And this is again where diversity,
• 11:30
  Speaker 1: equality and exclusion UM. Making sure that your team members
• 11:34
  Speaker 1: are working together, collaboratively, respecting each other, leveraging each other's
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  Speaker 1: strength UM to really innovate in in an incredible way.
• 11:44
  Speaker 1: It's really really important and why it's the foundation for Micron.
• 11:49
  Speaker 1: So I would say learning UM continuous learning critically important,
• 11:53
  Speaker 1: ability to communicate, collaborate very very important. And then of
• 11:58
  Speaker 1: course at MICROME, we need a strong pipeline of STEM
• 12:03
  Speaker 1: talent and we need students in the pipeline ready to
• 12:09
  Speaker 1: take on these tough challenges. So we have invested quite
• 12:13
  Speaker 1: a bit in that STEM pipeline. At micron UM, we're
• 12:17
  Speaker 1: committed to growing the pipeline of underrepresented talent and making
• 12:21
  Speaker 1: STEM education investments around the world. In fact, in f
• 12:25
  Speaker 1: y twenty one, Micron Foundation distributed more than seven million
• 12:29
  Speaker 1: dollars and grants targeting equitable access to STEM education and
• 12:33
  Speaker 1: basic human needs. So those types of investments to prepare
• 12:38
  Speaker 1: the workforce of the future are incredibly important. April, thank
• 12:42
  Speaker 1: you so much for joining us. Really fascinating stuff. There
• 12:45
  Speaker 1: is a corporate American global economies deal with some labor
• 12:49
  Speaker 1: shortages and certainly some skilled labor shortages across the board
• 12:52
  Speaker 1: as well for some of those tech companies. April Arts
• 12:55
  Speaker 1: and Chief People Officer Micron Technology. It's a Simil Trades
• 12:58
  Speaker 1: on the NAZAC MU. It's got about a hundred billion
• 13:01
  Speaker 1: dollar market cap. I'm wondering, you know, you gotta wonder, Paul,
• 13:10
  Speaker 1: how much the retail bidder is going to be the
• 13:12
  Speaker 1: marginal buyer in this market. Yeah, exactly, And it seems
• 13:17
  Speaker 1: like that, you know, we've seen in this pandemic and
• 13:19
  Speaker 1: with the meme stocks in particular, retailers with a lot
• 13:22
  Speaker 1: of these zero fee apps really jumping into the market
• 13:26
  Speaker 1: absolutely spend money on clothes or spend money on the
• 13:28
  Speaker 1: stock market. We're gonna talk now to David Luke's he's
• 13:31
  Speaker 1: the Site Center's president at CEO. He's going to talk
• 13:34
  Speaker 1: about holiday spending, retail supply, chain, bottlenecks. David, thank you
• 13:38
  Speaker 1: for joining us. Once we get past this holiday shopping season.
• 13:43
  Speaker 1: Is the buyer going to be there for these retailers.
• 13:48
  Speaker 1: It sure looks like it. I mean, they've showed up
• 13:50
  Speaker 1: quite a bit in the past couple of months. But
• 13:52
  Speaker 1: I guess you know, as you're saying, it's always nice
• 13:54
  Speaker 1: to look at the foot traffic and the holiday season,
• 13:57
  Speaker 1: but that that doesn't really tell you what happens to
• 13:59
  Speaker 1: the next ten years. I think what we're really seeing
• 14:02
  Speaker 1: is that the way people are shopping is a lot
• 14:04
  Speaker 1: different than it used to be. Uh and a lot
• 14:06
  Speaker 1: of retailers are making bets on what that future looks like,
• 14:09
  Speaker 1: all right, so David, that's kind of where I wanted
• 14:11
  Speaker 1: to go. As we've talked to, you know, retailers over
• 14:14
  Speaker 1: the years, there's been this obviously, this argument that the
• 14:17
  Speaker 1: United States is overstored, need to take out a lot
• 14:20
  Speaker 1: of stores out of the inventory. And and you at
• 14:23
  Speaker 1: site centers, you're a reat that focuses on these properties.
• 14:28
  Speaker 1: What's your view, Well, if you look at the data
• 14:32
  Speaker 1: and what's what's so nice about the sectors Now, we've
• 14:34
  Speaker 1: got very good mobile phone data that goes back five
• 14:37
  Speaker 1: or six years, and what you're seeing coming out of
• 14:40
  Speaker 1: the pandemic is that customer visits are up. In other words,
• 14:44
  Speaker 1: people are going to shopping centers more times per week.
• 14:47
  Speaker 1: But what's really interesting is they're spending less time there.
• 14:50
  Speaker 1: And so if you kind of stay back and say, well,
• 14:52
  Speaker 1: how how is that possible or why is that happening?
• 14:54
  Speaker 1: And I think the reasons are pretty clear. There's more
• 14:58
  Speaker 1: people in the suburbs, they have more money, and because
• 15:00
  Speaker 1: of this ongoing hybrid work, they're just around shopping the
• 15:04
  Speaker 1: centers more frequently. So they're using convenience trips to drive
• 15:07
  Speaker 1: a lot of sales. And the retailers are banking on this.
• 15:10
  Speaker 1: I mean, the the amount of leasing right now is
• 15:12
  Speaker 1: so much higher than it's been in twenty years. Retailers
• 15:16
  Speaker 1: are banking on the fact that these suburbs are going
• 15:18
  Speaker 1: to have people that are more approximate to properties long term,
• 15:21
  Speaker 1: and it's generate sales. Incredible. I grew up in Paramus,
• 15:24
  Speaker 1: New Jersey, which is, you know, the mall center of America,
• 15:27
  Speaker 1: and yeah, you know, I wonder here, how is this changing?
• 15:30
  Speaker 1: How are the suburbs really changing across the country. Which
• 15:35
  Speaker 1: areas are seeing the most traffic. Well, I think remember
• 15:40
  Speaker 1: in retail from a landlord perspective, there's two food groups.
• 15:44
  Speaker 1: There's fashion malls and then there's convenience properties. And the
• 15:48
  Speaker 1: fashion malls are more destination trips. Right. You go there
• 15:50
  Speaker 1: and you're looking for luxury goods and you might have
• 15:52
  Speaker 1: it might be a social event. It's not a social
• 15:54
  Speaker 1: event to go to a Walgreens or a grocery store. Um,
• 15:57
  Speaker 1: but that's what's generating a lot of the sales. Are
• 15:59
  Speaker 1: these big box chains, these national chains where you know,
• 16:03
  Speaker 1: seventy of the property is parking. So the convenience aspect
• 16:07
  Speaker 1: has become really really important. And I think in the suburbs.
• 16:11
  Speaker 1: You're seeing so much demand for housing. Um it's very
• 16:14
  Speaker 1: difficult to entitle and get land permits to build new
• 16:18
  Speaker 1: shopping centers, and so there's a very little construction for
• 16:20
  Speaker 1: the last ten years. And all of a sudden, the
• 16:23
  Speaker 1: retailers are saying, wait a minute, the customers are in
• 16:25
  Speaker 1: the suburbs three four, five days a week. They're making
• 16:28
  Speaker 1: trips throughout every weekday, which we can see. I mean
• 16:32
  Speaker 1: the new business lunch is that five guys in the suburbs.
• 16:34
  Speaker 1: It's not, as you know, a steakhouse in the city.
• 16:37
  Speaker 1: So um so. So you're seeing a lot of this
• 16:39
  Speaker 1: demand that just didn't exist a couple of years ago.
• 16:42
  Speaker 1: The same thing with dentists and doctors right there leaving
• 16:44
  Speaker 1: the cities. They're moving to the suburbs, and that's that's
• 16:47
  Speaker 1: sponsoring a lot of leasing demand. Hey David, real quick,
• 16:50
  Speaker 1: thirty seconds, just a question from one of our listeners.
• 16:52
  Speaker 1: M and a activity in a strip center space picked
• 16:54
  Speaker 1: up this year. You're expected to continue next year? Yeah?
• 16:58
  Speaker 1: Did there? You know there there were two companies that merge,
• 17:01
  Speaker 1: so we lost two reads in our sector, and then
• 17:03
  Speaker 1: there were two companies that I p owed. Um so
• 17:05
  Speaker 1: there were two new entrants. The reality is the private
• 17:08
  Speaker 1: market values on assets are higher than the public market pricing.
• 17:12
  Speaker 1: And whenever that happens, you know, you do have to
• 17:14
  Speaker 1: wonder if if either further m and A or take
• 17:18
  Speaker 1: private start to occur. So, if I had to bet,
• 17:20
  Speaker 1: I would say there's probably fewer publicly traded reads in
• 17:24
  Speaker 1: the next couple of years than there are now, just
• 17:27
  Speaker 1: because there's so much private capital looking for real estate.
• 17:30
  Speaker 1: All Right, David, thank you so much for joining us.
• 17:31
  Speaker 1: Really appreciate you taking the time. David Luke's chief investment
• 17:35
  Speaker 1: Officer and president of Site Centers ny SC listed stock
• 17:39
  Speaker 1: s I t C is the ticker there. Let's talk
• 17:46
  Speaker 1: retail sales. We only got a few more days shopping
• 17:49
  Speaker 1: days until Christmas, but I'm gonna talk about how you
• 17:52
  Speaker 1: actually pay for the stuff you buy. It used to
• 17:54
  Speaker 1: be cash, then credit debit cards. Now I just use
• 17:58
  Speaker 1: my phone. It's really changing. Um let's talk to video.
• 18:02
  Speaker 1: Peter's CEO of mar Ghetta Video. Thanks so much for
• 18:06
  Speaker 1: joining us here. Tell us what your company does, how
• 18:08
  Speaker 1: you fit into that supply chain of global retail. Thanks
• 18:14
  Speaker 1: for having me. Marcatta is the first modern card issuing platform,
• 18:17
  Speaker 1: we enable any disruptive company to build a payments card
• 18:21
  Speaker 1: of their choice. And so the specific example that you
• 18:25
  Speaker 1: shared is in the Buying Out pay leaders space. Many
• 18:28
  Speaker 1: of the leaders in the Buying Now paid leader space
• 18:30
  Speaker 1: use Marcatta to instantly issue a virtual card for their
• 18:35
  Speaker 1: customers while they're in the shopping checkout experience to pay
• 18:38
  Speaker 1: for their purchase over time. But you can think about
• 18:41
  Speaker 1: this card experience being used in non demand delivery by
• 18:44
  Speaker 1: crypto providers so that they can monetize their crypto holding.
• 18:48
  Speaker 1: It's used in digital banking, it's using industries across the world.
• 18:52
  Speaker 1: But very excited to talk to you a little bit
• 18:54
  Speaker 1: more about how it's impacting shopping this season for our consumers.
• 18:58
  Speaker 1: I'm glad you went there. I am so interested in
• 19:01
  Speaker 1: this by now pay later theme. You know, you do
• 19:04
  Speaker 1: have some companies that let you buy now, pay later
• 19:08
  Speaker 1: with your credit card, And I'm wondering if there are
• 19:12
  Speaker 1: any concerns here about customers really adding up their debtloads
• 19:17
  Speaker 1: here into the holiday season. You know, I think consumers
• 19:22
  Speaker 1: should always be very mindful about managing their cash flow,
• 19:26
  Speaker 1: about managing all of the financial obligations that they are
• 19:30
  Speaker 1: taking on across channels. That said, I think that by
• 19:33
  Speaker 1: Now pay Later is experiencing the same frenzy that we
• 19:36
  Speaker 1: saw on the credit card market a few decades ago
• 19:39
  Speaker 1: when people ask the question of gosh, is this discally
• 19:41
  Speaker 1: responsible for consumers to be buying on credit? And what
• 19:45
  Speaker 1: we're seeing decades later is that absolutely. It gives consumers
• 19:49
  Speaker 1: the flexibility and the optionality to pay on their own time,
• 19:54
  Speaker 1: using all of the options at their disposal. And what
• 19:57
  Speaker 1: by now pay Later does is give consumer is the
• 20:00
  Speaker 1: option to pay in installments over time, while the merchant
• 20:04
  Speaker 1: pays for that benefit to the buy now, pay later
• 20:07
  Speaker 1: providers because they now are able to attract a broader
• 20:10
  Speaker 1: swap of customers and to make that checkout experience as
• 20:14
  Speaker 1: seamless as possible. It's it's just another payment option. It
• 20:18
  Speaker 1: acts very differently from debit and credit, and consumers are
• 20:21
  Speaker 1: demanding it more now than ever. So how payment trends?
• 20:26
  Speaker 1: How are they trending these days? Video are people using
• 20:30
  Speaker 1: primarily credit cards, cash, buy now, pay later, crypto? How
• 20:36
  Speaker 1: the how are the trends right now? This is a
• 20:40
  Speaker 1: very rapidly changing space, and I think the COVID pandemic
• 20:45
  Speaker 1: has been probably the biggest accelerant in payments transformation. So
• 20:49
  Speaker 1: what we are seeing is that the use of cash
• 20:52
  Speaker 1: has dropped off dramatically, as you'd expect. It's a question
• 20:56
  Speaker 1: of safety and hygiene, but also just convenience that people
• 20:59
  Speaker 1: just don't want to deal with grubby cash. We are
• 21:02
  Speaker 1: seeing digital payment skyrocket and we are particularly seeing the
• 21:06
  Speaker 1: use of buying out paid leader grow by triple digits. Now,
• 21:09
  Speaker 1: a lot of experts thought this was a one time phenomenon,
• 21:13
  Speaker 1: it was a novelty of payments that would quickly fade.
• 21:16
  Speaker 1: And while we saw buy now pay Leader grow by
• 21:18
  Speaker 1: two hundred and fifty eight percent on Black Friday last year,
• 21:22
  Speaker 1: it continued to grow at triple digits this year too.
• 21:25
  Speaker 1: So this year on Black Friday, we saw buying our
• 21:27
  Speaker 1: pay leader volume and grow by a hundred and five percent,
• 21:30
  Speaker 1: and so it continues to be a huge way with
• 21:34
  Speaker 1: how consumers are demanding to pay. I'm wondering what other
• 21:37
  Speaker 1: changes you are seeing in terms of where people are shopping,
• 21:41
  Speaker 1: how they're paying for it. You work with so many
• 21:44
  Speaker 1: companies in the space that you probably have the cutting
• 21:48
  Speaker 1: edge here. So there are a few things that we're seeing.
• 21:52
  Speaker 1: Um One is that while Black Friday continues to be
• 21:56
  Speaker 1: a top shopping day. Another trend that we are seeing
• 21:58
  Speaker 1: is that Cyber Mondays started to drop off in its significance.
• 22:02
  Speaker 1: So usually what we saw was that Cyber Monday had
• 22:06
  Speaker 1: a pop of about seventy two when compared to Black
• 22:09
  Speaker 1: Friday about two years ago. That has dropped down by
• 22:12
  Speaker 1: about twenty points to roughly fifty five percent this year,
• 22:16
  Speaker 1: telling us that consumers are now spreading out their purchases,
• 22:19
  Speaker 1: not limiting it just to Cyber Monday. And also companies
• 22:23
  Speaker 1: are probably giving their promotions also the holiday season rather
• 22:27
  Speaker 1: than saving it just for Cyber Monday. The other trend
• 22:30
  Speaker 1: that we're seeing is that people are demanding for shopping
• 22:34
  Speaker 1: to be very seamless and a digital experience, and so
• 22:38
  Speaker 1: one of the customers that we have, Klarna, has built
• 22:41
  Speaker 1: a wonderful shopping app which allows you to shop hundreds
• 22:44
  Speaker 1: of merchants through their app, so you get customized rewards
• 22:47
  Speaker 1: all the while while you know by now and paying later.
• 22:51
  Speaker 1: Another phenomenon that work yeah sorry, go oh no, go
• 22:54
  Speaker 1: and continue please. Another phenomenon that we are seeing is
• 23:00
  Speaker 1: at the use of crypto obviously has been skyrocketing and
• 23:03
  Speaker 1: people aren't just investing in crypto for the sake of
• 23:07
  Speaker 1: the novelty, but they actually wanted to use it in
• 23:09
  Speaker 1: their day to day in lives. And so when you
• 23:11
  Speaker 1: look at company bl coin Base, they are building cards
• 23:14
  Speaker 1: on marketas platforms so that their customers can with the
• 23:17
  Speaker 1: swipe of their card, monetize their crypto holdings and pay
• 23:20
  Speaker 1: for a coffee at Strawbucks. So crypto is very much
• 23:23
  Speaker 1: entering mainstream life and not just being a novelty investment product. Interesting.
• 23:28
  Speaker 1: I guess that they had to come and here it
• 23:30
  Speaker 1: is video Peter's chief operating officer for Marquetta. Again, it's
• 23:34
  Speaker 1: a nastack listed company. Credit card issuing company under the
• 23:38
  Speaker 1: symbol m QUE became public this year. Dollars to share
• 23:42
  Speaker 1: now trade just about the eighteen dollars to share, So
• 23:46
  Speaker 1: take a look for that digital payments, retail. It's all changing.
• 23:52
  Speaker 1: Thanks for listening to the Bloomberg Markets podcast. You can
• 23:55
  Speaker 1: subscribe and listen to interviews of Apple podcasts or whatever
• 23:59
  Speaker 1: podcast platform you prefer. I'm Matt Miller, I'm on Twitter
• 24:03
  Speaker 1: at Matt Miller V three and I'm false Sweeney I'm
• 24:06
  Speaker 1: on Twitter at pt Sweeney. Before the podcast, you can
• 24:09
  Speaker 1: always catch us worldwide at Bloomberg Radio.