November 14, 2025 • 37 mins
Watch Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Hosts: Paul Sweeney and Scarlet Fu
On this podcast:
- Geetha Ranganathan, Bloomberg Intelligence Analyst on US Media, recaps Walt Disney earnings.
- Mary Ross Gilbert, Bloomberg Intelligence, Senior Equity Analyst, Covering Retail, discusses her research on “Gen-Z, Millennials to Cut Holiday Spending; Clothing May Hold Up.”
- Sam Fazeli, Bloomberg Intelligence, Director of Research for Global Industries and Senior Pharmaceuticals Analyst, discusses Novo Nordisk pulling out of a bidding war with Pfizer for Metsera.
- Jennifer Bartashus, Bloomberg Intelligence Senior Analyst, Retail Staples & Packaged Food, discusses earnings from Tyson Foods.
- Emily Mason, Bloomberg Fintech and Crypto Reporter, discusses earnings from Circle Internet Group.
- Matthew Palazola, Bloomberg Intelligence, Senior Analyst, P&C Insurance, discusses the path ahead for Berkshire Hathaway CEO Warren Buffet.
- Justin Teresi, Bloomberg Intelligence Antitrust Litigation & Policy Analyst, discusses his research on a recent deal between Visa and Mastercard.
Bloomberg Intelligence, the research arm of Bloomberg L.P., has more than 400 professionals who provide in-depth analysis on more than 2,000 companies and 135 industries while considering strategic, equity and credit perspectives. BI also provides interactive data from over 500 independent contributors. It is available exclusively for Bloomberg Terminal subscribers.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Bloomberg Audio, Studios, podcasts, radio news. This is Bloomberg Intelligence
with Scarletfoo and Paul Sweeney.
Speaker 2 (00:13):
How do you think the FED is looking at tariffs?
The uncertainty of teriffs.
Speaker 3 (00:17):
Let's take a look at the sectors and how.
Speaker 2 (00:19):
They performed a lot of investors getting whip saled every
day by news events, breaking market.
Speaker 1 (00:23):
Headlines and corporate news from across the globe.
Speaker 3 (00:26):
Could we see a market disruption of market events?
Speaker 2 (00:29):
So people just too exuberant out there?
Speaker 3 (00:31):
You see some so called low quality stocks driving this
short term rally.
Speaker 1 (00:34):
Bloomberg Intelligence with Scarletfoo and Paul Sweeney on Bloomberg Radio, YouTube,
and Bloomberg Originals.
Speaker 2 (00:42):
On today's Bloomberg Intelligence Show, we dig inside the big
business stories impacting Wall Street and the global markets.
Speaker 3 (00:47):
Each and every week, we provide in depth research and
data on some of the two thousand companies and one
hundred and thirty industries are analysts cover worldwide.
Speaker 2 (00:54):
Today, we'll look at how Pfizer won a bidding war
against the Danish drugmaker Novo Nordisk for an obesity startup.
Speaker 3 (01:00):
Plus, we'll break down how Visa and MasterCard reached a
deal with retailers after twenty years of litigation.
Speaker 2 (01:05):
But first we begin with earnings from the media and
entertainment giant Walt Disney.
Speaker 3 (01:08):
This week, Disney reported fourth quarter sales that fell short
of Wall Street estimates. The company also said expenses from
a slate of big budget movies, including a new Avatar picture,
will weigh on results for the coming quarter.
Speaker 2 (01:19):
For more, we were joined by Githa rang Anathan, Bloomberg
Intelligence Senior media analyst.
Speaker 3 (01:23):
We first asked Etha for her take on Disney's most
recent earnings report.
Speaker 4 (01:27):
It came off as a little bit of a lackluster report.
I mean everything. If you look at the fundamental drivers
of the company, which is really the parks business brings
in about sixty percent of profits, things seem to be
going pretty strong there. We saw a thirteen percent jump
in operating profit for the fiscal fourth quarter. Again, the
guidance for twenty twenty six seems pretty good as well.
(01:48):
But really, you know, Disney really has this very very
tough balancing act. So on the one hand, they have
the parks business, they have the streaming business, which is
doing really well from a profitability standpoint, but to drag
it down, you have the linear TV networks, and then
you have the hit and misnature of you know, the
boy in the Hollywood studio business. So you know, they
have to contend with all of those different moving parts,
(02:09):
and I think that the dragged down from the TV
networks and the studios is kind of weighing a lot
on the narrative.
Speaker 2 (02:14):
He can talk to us about some of their bundling
of all their streaming services, particularly that ESPN app, that
really they put a lot of their real valuable sports
programming on that ESPN app. How are the early results
from in terms of subscriber growth?
Speaker 4 (02:28):
So they didn't give us any hard number there, Paul,
in terms of the number of subscribers that they got
on the ESPN Ultimate product, which is priced at you know,
twenty nine to ninety nine a month. But they did
talk about, you know, in general, that the traction has
been pretty good. They talked about the whole bundling strategy
because that is where Disney really wins. I mean, if
we've seen some of the numbers, you know, from Disney,
(02:49):
we know that forty percent of new subscribers actually take
the Disney bundle, and this is really going to be
the strategy for them going forward. Right. You get people
in with the bundle, and that's how you kind of
stem chin you're able to take price increases. So it's
really going to be the main driver for earnings growth
for them going forward. And that's exactly what they indicated, Paul.
Speaker 3 (03:11):
I can't remember who said this, but it's so true
that the history of media is about bundling and unbundling.
We went through this period where everyone cut the cord
and everyone unbundled, and now we're back to bundling again.
Although it's you know, in these discrete groups where Disney
might bundle Disney Plus an ESPN Plus together and then
if you are a T mobile subscriber, you might get
some other options.
Speaker 2 (03:29):
And here, but here's my point. That's fine. Is the
consumer better off? And my answer is absolutely not.
Speaker 3 (03:35):
It's too confusing. It's way too confusing, Gita when it
comes to bundling. How much more can they do? Though,
I mean, I see what you're saying about how it's
paying off right now, but I mean, can they continue
to innovate on their bundling or is have we reached
the limits of it?
Speaker 4 (03:50):
I don't think we've reached the limits at all. Scarletts.
So I think what they're ultimately what they're ultimately aiming
for with their ESPN product, and you know, they just
introduced the streaming product of months ago. I think ultimately
they wanted to kind of become the premier sports destinations.
So you know, ultimately, I wouldn't be surprised if you
see a Fox or an NBC or you know, even
maybe an Amazon kind of feeding in all of their
(04:13):
apps so that you go to this one stop shop
for you know, ESPN and you're able to see all
different kinds of sports content. Because you're absolutely right, there's
way too much of fragmentation becoming a great source of
friction for you know, the average consumer. And so I
think they're going to seek out a lot more different
bundling opportunities. We're already seeing them kind of do something
with ESPN Ultimate and Fox One, which is Fox's streaming
(04:36):
product that they also just introduced a few months ago.
So they're going to look to partner with different media
platforms across the ecosystem, and I think that is going
to be a source of, you know, a great upside
opportunity for them. Eventually.
Speaker 3 (04:49):
Is everyone willing to play ball on something like that, Kita.
Or is there someone who's going to say, you know what,
you can't get me in here, and I own or
I have the rights over X number of NFL games.
Speaker 4 (04:59):
Actually that that's what we're seeing right now. There is
the standoff going going on between Disney and YouTube TV,
and it's really all again, it's just a you know,
game of chicken here. So you know, when it comes
to sports content, I have to say Disney has the
upper hand a little bit. So if you just kind
of look at sports viewing in the United States, Disney
(05:20):
has about forty percent of sports viewing just with you know,
Markie rights tied to all major leagues, you know, college football, NFL, NBA, MLB,
they have it all. So I think it becomes a
little harder to say no to them. But again, never
say never.
Speaker 2 (05:34):
All right, Keith, I'm reluctant to ask this question, but
I feel like I have to. What's the latest on
Bob Iger's succession plan.
Speaker 4 (05:41):
Yeah, this is the big thing that we're all looking
at in fiscal twenty twenty six. So James Gorman, who's
kind of heading up this whole succession planning committee Paul
has said that you know the board will be out
with the decision by the end of March, so Bob
Eiger's contract comes to an end by the end of
twenty twenty six, so hopefully we do have some kind
(06:03):
of clarity on that. Right now, it's really looking like
it's going to be internal candidates. I mean, there was
some rumors and buzz about whether they were looking externally,
but I think they're going to kind of keep it
internal our.
Speaker 2 (06:13):
Thanks to GEITHA. Rongorath and Bloomberg Intelligence Senior Media analyst.
Speaker 3 (06:17):
We move next to the retail space, and with the
holiday shopping season now upon us, it is the most
important time of the year for these retailers.
Speaker 2 (06:23):
For more on what we can expect in this sector,
I was joined by Mary Ross Gilbert Bloomberg Intelligence senior
equity anamals covering retail. First, ask Mary how the holiday
season is shaping up and what companies are saying.
Speaker 5 (06:34):
If you look at how the holiday shopping is shaping up,
I think it looks I think it looks very positive.
So I think we are going to see an increase
and particularly for apparel retailers, that's usually like the largest
category that consumers. If you look at those that have
been pulled by all the holiday service surveys that have
(06:54):
been conducted, including the National Retail Federation, then they have
over eight hundred over eight eighty two hundred respondents in
their surveys, and the other ones are pretty sizable, you know,
relatively speaking, around five thousand. So they're showing that there's
definitely a higher percentage of shoppers wanting at peril and
(07:16):
accessories for gifts. So that should be good news for apparel.
But gen Z is planning to cut back on their
overall holidays spending by that, you know, by twenty three percent.
Millennials just one percent.
Speaker 2 (07:32):
Wow, So the gen Z these are the younger folks,
maybe tougher time finding a job maybe, you know, student
debt is that kind of the driver there.
Speaker 5 (07:42):
I think that could be part of it. Yeah, it
could be the job market situation that might be happening
there because these are really like the seventeen to twenty
eight year olds. So we have been hearing some you know,
talk about some of these latest graduates, you know, having
it finding a job. I think it's just probably going
to take longer because generally unemployment is still very low.
(08:06):
But we're seeing resilience. If you look at the data
so far with Bloomberg Second measure for apparel retailers and
department stores and off Price, we're seeing good sales coming
in for the third quarter, and they'll start reporting their
numbers in the next few weeks. So I think we're
off to a good start, and I think Black Friday
(08:26):
sales are already happening. Macy's US out with fifty percent
off on their private label brand product and they expect
to have other drops every week. Wow, So everyone's focused
on starting now yep, with promotions.
Speaker 2 (08:41):
So Mary, you know, economists talk about a K shaped
economy out there, some consumers, maybe the ones that own
assets like stocks and bonds in real estate doing more
than good and kind of everybody else struggling a little bit,
particularly with inflation. How does that get reflected in retail sales?
Does it mean you just kind of if you're an investor,
(09:02):
look at on Amazon Target where I can get some
some some deals.
Speaker 5 (09:07):
Yeah, and that's actually what's happening, and that's why you
see let's say, pretty robust sales overall coming out of
off Price, you know, so think of TJ Max, Ross
stores and Burlington stores, and Burlington's at the very low end.
If you look at credit card delinquencies or you know,
those rates, and a lot of these companies that we're
(09:28):
tracking represent the credit cardholders for like department stores and
for some select apparel brands such as Gap et cetera.
And when you look at that data, delinquencies are actually
lower this year versus a year ago, but not for
the very low income, which kind of speaks to what
you're talking about and inflation. Actually those are up in
(09:52):
the teams, you know, for the very low income consumer,
So think like under fifty K.
Speaker 2 (09:58):
How about e commerce, Mary, I know the pandemic folks
are saying kind of pulled forward maybe four or five
years of share shift from bricks and mortar to a
digital what's the e commerce growth story look like these days?
Speaker 5 (10:13):
You know, econ growth is looking strong when we look
at the data, like I said, for the third quarter
that we're seeing from Bloomberg second measure, it's showing actually
online sales were stronger at the department stores except for
Coals Coals online businesses, I mean not their online business,
but actually their credit customer is shopping less, like in
(10:37):
the double digits less, so that's kind of an issue
for them, but generally we're seeing stronger pool with online
sales there. Now, there is also a delineation between the
type of consumer. If it's gen Z, they tend to
prefer shopping more in store, and we see that with
Abercrombie and Fitch's Hollister brand, so they are about seventy
(11:00):
percent of their sales are generated online. And then it's
the inverse when you look at their namesake brand, Abercrombie,
because that consumer is those are millennials, and millennials prefer
to shop online, so sixty percent of their sales are
being generated online versus in store.
Speaker 3 (11:19):
That was Mary Ross Gilbert Bloomberg Intelligence, senior equity analyst
who covers retail. Coming up, we'll take a look at
why Tyson Foods says it expects flat profits for twenty
twenty six.
Speaker 2 (11:28):
You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
depth research and data on two thousand companies in one
hundred and thirty industries.
Speaker 3 (11:35):
You can access Bloomberg Intelligence via Bigo on the terminal.
I'm Scarlet Foo.
Speaker 2 (11:39):
And I'm Paul Sweeney. This is Bloomberg.
Speaker 1 (11:46):
This is Bloomberg Intelligence with Scarletfoo and Paul Sweeney on
Bloomberg Radio.
Speaker 2 (11:53):
We move now to some news in the pharmaceutical space.
Speaker 3 (11:55):
This week, Pfizer won the bidding war against the Danish
drugmaker Novo Nordisk for the obesity start up.
Speaker 2 (12:00):
Met Sarah.
Speaker 3 (12:00):
It's a bid to catch up to rival drug makers
after failing to compete with its own weight loss medications
for moret We were joined.
Speaker 2 (12:07):
By Sam Fazelli, Bloomberg Intelligence, director of Research for Global
Industries and senior pharmaceuticals analyst.
Speaker 3 (12:12):
We began by asking Sam to tell us why Fiser
one this deal.
Speaker 6 (12:16):
Nova's deal had the risk of not being able to
pass due to competition competition issues FTC issues, and it
sounds like the FTC had had given metzera call saying look,
if you go with that, there is a risky won't close.
So do whatever you think is the right thing for
your shareholders. And they did. In the end, the files
it did a bit spit.
Speaker 3 (12:34):
Right, So Novo Nordisk one in a way in that
Pfizer is paying up more. Does that actually work in
Nova Nordisks favor or does it? Is it still as
desperate as it was before to look for some new
catalysts in the obesity market.
Speaker 6 (12:50):
I mean, I'm not going to call Novo desperate. I
think they have assets in there. I think they wanted
to add some more options to the their their sales
reps bags over time, So I wouldn't call them desperate.
But they're obviously by going after this, they did say
that we need more assets in our bag. So and
(13:11):
Lily wasn't in the game. So it just gives them.
That gives you that flavor that they are and I
think the market's telling you that. Look at the divergence
of the share price performance of Lily versus never noticed
that there's the market favoring the drugs that Lily's got
on the market, and to compete they needed to get
some more. So I think this is not the end
(13:33):
for Novo at all in this place. There's lots of
other interesting Obviously, the assets coming up with different mechanisms.
That's the thing that I think the company is now
going to have to think about rather than trying to
go after the same mechanism all the time.
Speaker 2 (13:46):
So, Sam, all these big big cap pharmaceutical companies that
you've covered for decades, I kind of always thought they
were big, diversified portfolios of lots of different drugs and therapeutics.
And you know, but wait, when I look at your
stocks year, it seems like there's halves and have nots.
If you have obesity exposure, the stocks are up, and
if you don't, they're down. Is that kind of how
(14:09):
your world's evolved into over the last several years.
Speaker 6 (14:12):
I would just give you one little caveat to the
Astrosenica Sosenica. I think it's doing fine. And then they
have an obesity asset, but it's not their major game.
Their big plays in oncology. Cardiovascular is coming is there
and they're adding it to it. So, yes, obesity has
been the talk of this past twenty twenty five. I
(14:34):
think you will still be the talk of twenty twenty six.
But there's a lot more going on in fharma, neuroscience,
diseases of the brain, diseases of mental health are getting
much more attention. Cardiovascular aside from obesity, is getting quite
a lot of attention in heart to treat hype atension,
et cetera. I have to tell you, I don't think
there's an area, perhaps antibiotics set aside that is not
(14:57):
getting a significant amount of progress across some former company
somewhere is.
Speaker 3 (15:03):
What happened with Metsarah, Novo, Nordisk Andfiser, an unabashed victory
for Eli Lilly. I mean, does it just kind of
keep on moving forward or does any of this kind
of hurt Eli Lilly's market position?
Speaker 6 (15:14):
No. I mean, at the end of the day, there'll
be multiple players in this space as that are now
too at least, and I think Eli Lily is currently
very well placed with the assets that they have to compete,
and they're showing that they're competing very very effectively and
in some cases winning market share from Nova not disc our.
Speaker 2 (15:32):
Thanks to Sam Fazelli, Bloomberg Intelligence Director of Research for
Global Industries and senior pharmaceuticals.
Speaker 3 (15:37):
Analyst, we moved to news from the multinational food company
Tyson Foods.
Speaker 6 (15:41):
This week.
Speaker 2 (15:41):
Tyson said it expects flat profits for twenty twenty six.
This comes as a company's chicken segment continues to help
offset its beef losses.
Speaker 3 (15:48):
So we had to check in with Jen Bartashi's Bloomberg
Intelligence senior analysts for retail, staples and packaged food.
Speaker 2 (15:54):
First, they asked Jen for her take on Tyson foods
guidance for twenty twenty six.
Speaker 6 (15:58):
Nova's deal had the risk of not being able to
pass due to competition competition issue with FTC issues, and
it sounds like the FTC had had given Metzera call saying, look,
if you go with that, there is a risky won't close,
So do whatever you think is the right thing for
your shareholders. And they did in the end, and fires
it did up its bit.
Speaker 3 (16:16):
Right, So Novo Nordisk one in a way in that
Pfizer is paying up more. Does that actually work in
Nova nordisks favor or does it? Is it still as
desperate as it was before to look for some new
catalysts in the obesity marketing.
Speaker 6 (16:31):
I mean, I'm not going to call Novo desperate. I
think they have assets in there. I think they wanted
to add some more options to the their sales reps
bags over time, So I wouldn't call them desperate. But
they're obviously by going after this, they did say that
we need more assets in our bag. So and Lily
wasn't in the game. So it just gives them. That
(16:53):
gives you that flavor that they are and I think
the market's telling you that. Look at the divergence of
the press performance of Lily Versus never noticed that there's
the market favoring the drugs that Lily has got on
the market, and to compete they needed to get some more.
So I think this is not the end for Novo
at all. In this place. There's lots of other interesting
(17:15):
OBCD acids coming up with different mechanisms. That's the thing
that I think the company is now going to have
to think about rather than trying to go after the
same mechanism all the time.
Speaker 2 (17:25):
Sam, all these big cap pharmaceutical companies that you've covered
for decades, I kind of always thought they were big
diversified portfolios of lots of different drugs and therapeutics and
you know, but boy, when I look at your stocks
this year, it seems like there's halves and have nots.
If you have obesity exposure, the stocks are up, and
if you don't, they're down. Is that kind of how
(17:46):
your world's evolved into over the last several years.
Speaker 6 (17:49):
I would just give you one little caveat to that. ASA. So, Senica,
I think it's doing fine. And then they have an
OBCD asset, but it's not their major game. They're they're
they're big plays in oncology. Cardiovascular is there and they're
adding it to it. So, yes, obesity has been the
talk of this past twenty twenty five. I think you'll
(18:11):
still be the talk of twenty twenty six. But there's
a lot more going on in pharma, neuroscience. Diseases of
the brain, diseases of mental health are getting much more attention.
Cardiovascular aside from obesity, is getting quite a lot of
attention in heart to treat hype potension, et cetera. I
have to tell you, I don't think there's an area,
(18:31):
perhaps antibiotics set aside, that is not getting a significant
amount of progress across some farmer company somewhere.
Speaker 3 (18:40):
Is what happened with Matsarah, noad, Artisk Andfiser an unabashed
victory for Eli Lilly. I mean, does it just kind
of keep on moving forward or does any of this
kind of hurt Eli Lilly's market position.
Speaker 6 (18:52):
No. I mean, at the end of the day, there'll
be multiple players in this space as that are now
too at least, and I think Eli Lily is currently
very well placed with the assets that they have to compete,
and they're showing that they're competing very very effectively and
in some cases winning market share from Romer.
Speaker 3 (19:09):
Notice our thanks to Jen Bartashis Bloomberg Intelligence senior analysts
covering retail staples and packaged foods.
Speaker 2 (19:15):
We move now to quarterly earnings from the global fintech
company Circle Internet Group.
Speaker 3 (19:19):
This week, shares of the company fell on concern that
declining interest rates will weigh on future returns, and this
overshadowed better than expected third quarter sales and earnings.
Speaker 2 (19:28):
For more. We were joined by Emily Mason, Bloomberg Fintech
and crypto reporter.
Speaker 3 (19:31):
We began by asking Emily why lower interest rates from
the Federal Reserve would be a concern for a company
like Circle.
Speaker 7 (19:37):
So Circle issues USDC and that's a stable quin peg
to the US dollar and they maintain that peg by
holding reserves in cash and short term treasuries. They keep
the yield from the treasuries and that's kind of how
they make money and that's where most of their revenue
comes from. So if interest rates go down, you know,
that shows up in earnings and that causes some concern
(19:58):
for investors and analysts.
Speaker 2 (20:00):
What have their recent results been like.
Speaker 7 (20:01):
I mean, this is their second time reporting since going public.
They benefited heavily from all the hype around stable coin,
especially before the Genius Act was passed, and their stock
performed really well. It's kind of been down since their
summer highs, and that's kind of because of the concern
from the interest revenue, but also because of some of
the distribution partners that they have they pay. They have
(20:23):
revenue sharing agreements with coinbase, for example, who helps distribute
their coin.
Speaker 3 (20:28):
So if this company for now is kind of a
proxy for a money market fund because it's earning's track
short term treasury yields, it must need to do more
to diversify its revenue streams. What is it looking at?
Speaker 7 (20:41):
Yeah, that's what they're doing. And then if you talk
to Jeremy Alaiir, who's the CEO, he'll kind of say
that lower interest rates are actually good for the company
because it means that there's higher velocity of money, there's
more investment, and then people want faster moving money like
stable coins, and they also might want to use products
like their Circle Payments network, which recently is experimenting with
like a staplecoin payouts product, which like helps people can
(21:03):
helps people to pay out globally with USDC, and they're
trying to move more USDC volume onto their own platform
instead of working with distribution partners like coinbase, and that
kind of could help them as well. But they see
the lower interest rates as a positive thing. And also
the USD circulating supply is increasing very heavily as they
add new partners, so that also kind of could potentially
(21:24):
offset the lower interest rates.
Speaker 2 (21:26):
Emily, your beat is fintech and crypto reporter, two things
that didn't exist even just a handfull of years ago.
Talk to us about broadly the kind of the intersection
of the growing crypto market and applications like fintech.
Speaker 7 (21:44):
Yeah, I mean, I think what's kind of the most
interesting right now is like fintech when it came onto
the scene was sort of like building very sleek interfaces
on top of his existing financial infrastructure, and then crypto's
pitch is much more sort of like rebuilding the financial
infrastructure with things like blockchains, and now the conversation is
kind of about bringing the traditional world and the traditional
(22:06):
financial institute infrastructure together with crypto rails and circles. Really
kind of sitting at the center of that and trying
to bring stave a coin and like integrate that with
how traditional markets work, and that involves the coming together
on both sides, Like traditional firms kind of have to
upgrade and make their systems interoperable with cryptotechnology, and then
(22:27):
crypto firms also have to kind of move into a
regulated environment. And that's been something that Jeremy Alaier has
talked about for a long time, like he really thinks
that crypto needs to be regulated and Circle that's been
a big part of their narrative is like we are
kind of like the suits in the room, and we're
going to be regulated and that's how we're going to
go about doing business.
Speaker 3 (22:43):
You're kind of the most tradify of the DeFi world.
In other words, if we want to get technical, this
is going to be a dumb question, Emily, But we've
seen how bigcoin and the rest of the cryptocurrencies had
a pretty rough October. They're struggling to regain momentum. All
these digital coins are not the same as stupid coins.
But is that shift in sentiment and conviction on Bitcoin
(23:05):
and all coins, especially from institutions, affecting demand it off
for stable coins or are those two just not linked.
Speaker 7 (23:11):
I mean, stable coin is used a lot of the times,
like anytime there's a lot of trading happening in crypto
like and in crypto tokens like stable coin's kind of
benefit because they're used to like move in and out
of those markets. The stable coin the whole point is
that it's like a stable currency. It's pegged to the dollar,
it's one for one, so the price of it really
shouldn't be impacted at all by like crypto market movements.
Speaker 8 (23:32):
But it does.
Speaker 3 (23:32):
It does demand affect it or does sorry, does the
spillover involve like demand waning for stable corn or increasing
for stable coin.
Speaker 7 (23:41):
I think where like the demand growth for stable coin
is going to come from is like it moving out
of a tool just for crypto trading. It's going to
be like people in countries where the local currency is
volatile wanting to hold stable coin, or people wanting to
actually use it for payments or like stable coin payouts.
Like if you're a US based company and you're employing
a bunch of people around the word world who want
to hold a stable currency like the dollar, the stablecoin
(24:03):
is the best way to access it, then you can
pay them that way. Like that's where growth from. That's
where demand for stable coin is going to come from.
I don't think it's like super tied to the trading necessarily,
Like people use staplecoin to get in and out of
crypto market, so you know they might see more volume
of trading activity is high, but their journeys are kind
of becoming less linked o.
Speaker 2 (24:26):
Right thanks to Emily Mason, Bloomberg Fintech and Crypto.
Speaker 3 (24:28):
Reporter coming up, It's the end of an era at
Berkshire Hathway, we'll break down why. CEO and billionaire investor
Warren Buffett says he is quote going quiet.
Speaker 2 (24:36):
You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
depth research and data on two thousand companies in one
hundred and thirty industries.
Speaker 3 (24:42):
You can access Bloomberg Intelligence via big on the terminal.
Speaker 2 (24:45):
I'm Scarlet Foo and I'm Paul Sweeney, and this is Bloomberg.
Speaker 1 (24:56):
This is Bloomberg Intelligence with Scarlet Foo and to Paul
Sweeney on Bloomberg Radio.
Speaker 2 (25:03):
The move next to news at Berkshire Hathaway.
Speaker 3 (25:05):
Berkshire Hathaway CEO and billionaire investor Warren Buffett said he
is quote going quiet, marking the end of an era.
Buffett also announced his plan to donate more than one
point three billion dollars to four family foundations, with plans
to quote step up.
Speaker 2 (25:18):
The pace for more. I was joined by Matthew Palozola,
Bloomberg Intelligence senior analyst covering the insurance business. I first
asked Matthew his thoughts on Buffett's latest announcement.
Speaker 9 (25:27):
We've known it, I mean this, so we knew this
letter was coming out. He does this every year around Thanksgiving.
We also knew he was stepping down as CEO, so
not huge surprise in this letter. I think the going
quiet thing was kind of to everyone a little bit
by surprise. I think maybe the thought was, hey, he's
going to he's stepping back a CEO, but maybe he'll
(25:50):
kind of be out there in the public and he's
still chairman, so maybe we'd still hear more from him.
A little while ago he said he wasn't going to
speak at the meeting, and now he's going to kind
of focus on his philanthropic work. And he's also a
ninety five years old, he's maybe a little tired.
Speaker 2 (26:03):
Yeah, exactly. And he's going to donate more than one
point three billion dollars to four family foundations and plans
to quote step up the pace of his Childable giving
to his kids' foundations while he's still alive. So that
seems to be the point of life. He is any
reason to think that the business strategies the operations of
Hathaway may change now that he has kind of stepped
(26:25):
back on another step, I guess, so, I don't.
Speaker 9 (26:26):
Think so right away. So he is always praising his successor,
greg Abel, talking about how he maintains the ethos of Berkshire,
and they'll be doing the same thing. I think Abel
walks a fine line now where I think over the
next couple of years he will want to put his
own stamp and make a name for himself, but also
not stray too far from what has led to this
(26:50):
massive value creation of Berkshire. So I don't think anything
dramatic happens in the near term. You know, we talked
about this. I think in the past the amount of
capital they're sitting on and Able is a good capital allocator,
at least according to Buffett. Ye, maybe something happens there
special dividend or something like that. You know, no guarantees
on any of that stuff, but I could see able
(27:11):
wanting to put that kind of stamp on the company.
Speaker 2 (27:13):
Because again what we learned I guess from the last
quarterly released was the cash is now three hundred and
eighty two billion dollars. You know, it's a number that's
you know, most portfolio matters. What would know where to
start get boggles of mine. I think even in the
letter he had mentioned, uh, there's just not a lot
of things that move the needle for them. So they
bought a twelve billion dollar company in Alleghany a couple
(27:34):
of years ago, doesn't really move the needle that much.
Help the insurance businesses grow a little bit, but overall
for the company, not dramatic. They bought this eleven billion
dollar chemical business from Occidental. You know these are these
are ten and twelve billion dollar deals, but they're just
not moving the needle for the company. So there's not
not a ton they can do too dramatically. Historically, why
(27:55):
is Warren and the company what's been their thought about
returning cash this sh shareholders?
Speaker 9 (28:00):
The thought has been, we don't want to do that,
right even said, you know, Berkshire shareholders have foregone dividends
for a reinvestment in America. Something that I forgot the
exact line, and that was Buffets.
Speaker 4 (28:12):
Uh.
Speaker 9 (28:13):
He likes collecting dividends, he doesn't like paying them. I
think he always thought we are the best allocators of this.
So if you're if you're a owner of Berkshire shares,
would you rather have some money or would you rather
have warm Buffett invest that money for you? I think
over the past couple of years, again, they've had so
much money that it's been tough for them to invest
it in effective ways. But that's that's been the philosophy.
Speaker 2 (28:34):
Yeah, because I mean it's I guess my response would
be I can put it in cash too and get
similar rates of return to you. And I guess that
when it's ten twenty fifty hundred million dollars line around,
not that big of account argument.
Speaker 9 (28:48):
Now, it's you know, you know, it's significant, and it
helped their earnings over the past couple of years. Just
getting four percent on that was a dramatic tailwind to
their earnings. So you know, it didn't do much for
the stock. After Buffett said he was leaving, that's been
the thing that's weighed on it more than anything else.
But an you'll see short term rates going down, so
(29:11):
that tail wind diminishing. I mean, I think there is
a school of thought that Berkshire, you know, not the
same without Buffett, but just maybe not as good at
almost all of their things. That's one school of thought.
I could see other ones where you know, still able,
maybe takes a different direction. So that's another maybe catalyst
(29:32):
for the shares. But you know, it's it's a kind
of darker time for Burshure.
Speaker 2 (29:36):
And what's Warren's ownership stake in the company.
Speaker 6 (29:40):
So I don't know this of my head.
Speaker 9 (29:41):
I don't remember controlling, Yeah, oh for sure.
Speaker 2 (29:44):
And you're not gonna have an activist investor come in
here and say this is just a poor allocation.
Speaker 9 (29:48):
Though it would be impossible. He owns too much in
the The A shares I believe are ten thousand votes
to a B share, he owns most of them. He
will he's going to step up the amount he's giving away,
but he still owns too much for anyone else to
step in. And should he die in his will, he
would I think it's over ten years. His ownership goes
(30:12):
to these foundations run by his children, who I can't
imagine would you let them kind of immediately fall into
the hands of some sort of actives investor. I think
he'd set a time frame of over ten years that
he'd want that stuff divested. But he does want to
divest it. He doesn't want them to just hold on
to it.
Speaker 3 (30:29):
Our thanks to Matthew Polozola, Bloomberg Intelligence Senior analyst covering insurance.
Speaker 2 (30:33):
We move next to the credit card space.
Speaker 3 (30:35):
This week Visa MasterCard. We should deal with retailers after
twenty years of litigation, so for more we'd brought in
Justin Teresi, Bloomberg Intelligence antitrust litigation and policy analyst.
Speaker 2 (30:44):
We first asked Justin to break down Visa MasterCard case.
Speaker 8 (30:48):
This case has been going on for about twenty years now.
I started before I went to law school, which was
a long time ago. There are salt and pepper in
my hair, so we're talking about a really, really ancient case.
But basically with a lot of folks don't know is
when you have those really valuable premium cards, right the
airline miles cards or the cash back cards, there's a
fee associated with those, and it's the merchants who are
(31:09):
eating that fee, typically around three or four percent, depending
on the varying swipe fee when you use it at
a register. So merchants, no surprise, they're upset about that, right.
So Visa, you know, big litigation here, the accusation being
that they fix those fees and that you know, the
merchants are basically the ones eating the costs there. So
big deal announced between Visa, master Card and merchants would
(31:29):
make a little bit more flexibility on the part of
merchants here. They could basically say, hey, we're going to
take the lower tier version of a Visa or a
master Card, but we're maybe not going to accept airline
miles cards or cash back cards. And then alternatively, they
also might have the option of passing those fees onto you,
the consumer at the register if they do take them.
So some big changes here and how things are shaping up.
Speaker 2 (31:51):
Well, I've noticed in the last couple of three years
they are doing that. Yeah, I mean almost every merchant
I go to now, I don't know if it's just
a state of New Jersey thing, but they're saying, hey,
here's a cash price, here's the credit card price.
Speaker 8 (32:01):
Yeah, Paul, this is actually a really interesting issue here
because state by state there's a lot of differences in
how this actually plays out in New York, and I
see this too when I go to my dry cleaner.
It's like, oh, maybe that's four percent more if I'm
going to use my credit card here. That's actually illegal
in New York right now to do that, But the
enforcement seems to be lacking that this is a new
law pass in twenty twenty four. There has to be
(32:22):
an upfront kind of price on a tag if they're
going to pass a surch charge onto the consumer. In
New York, Massachusetts, Connecticut, you can't serve charge at all.
So if this settlement goes through, you know, that's a
big question mark.
Speaker 3 (32:34):
Too interesting that you say that the surcharge is illegal
in New York, because what I've seen is the dry
cleaner will say, we'll give you a discount if you
pay in cash. Here's the regular price, but you get
the discount if you pay cash. So it's no longer
a surcharge. Justin You said that this has been a
case that's been you know, around for twenty some odd years. Yes,
this settlement, is it just going to get caught up
a more legal lightmire.
Speaker 8 (32:55):
You know, it really could. So. Last year there was
a first attempt to this This is the second try now, right,
And the big issue that blew up the deal last
year is that the smaller merchants kind of pushed for
the terms that they set in the first place, and
big folks like Walmart, et cetera kind of got ice
out from the discussions on that. It seems like that
might have happened again here. The National Retail Federation was
out saying, wait a minute, what kind of business practice
(33:17):
would this be for us to say, hey, we're going
to take these cards and not those cards. And they're
also criticizing the feed concessions that were part of this
deal too for the next five years or so. So
I think there's still a lot of questions here. There's
probably enough changes from last year's deal to get it
over the finish line, but there's a big period here
with objectors who are going to be weighing, you know,
what they think of the deal. And honestly, the judge
(33:39):
last year she said, look, you guys can do a
lot more than you're offering to do in this deal.
So is this enough? That's going to be a huge
question moving into an approval hearing.
Speaker 2 (33:48):
What are the dollars dollar amounts we're talking about here.
Speaker 8 (33:51):
Yeah, you know, so it's quadrupled according to the National
Retail Federation since two thousand and nine. But if you
said MasterCard, they've got eighty percent of this market for
the card fees, right, One hundred eleven billion dollars last
year alone collected in these wipe fees according to the NRF,
So really massive, massive. But you know, these companies are
also diversifying their streams, right, They're looking into digital wallets
(34:13):
and other payment platforms too. So there's a lot more
on the table now than there was when this was
first brought back in two thousand and five.
Speaker 3 (34:19):
And to be clear, this is Visa and MasterCard and merchants.
What about American Express? Where does it sit here?
Speaker 8 (34:25):
Yeah, so that's another great question. American Express basically settled
a version of this lassit or one a version of
this lawsuit years ago. Their card acceptance terms are a
little bit different. Search charging doesn't really allowed with those
when it's not applied to all card types, right, But
that begs the question if you start allowing surcharging through
card holder through acceptance agreements for Visa MasterCard, does AMEX
(34:47):
now have to allow us for charging on its card.
So that's another big question mark. If this deal goes through,
it really has the potential to impact everything, not just
Visa MasterCard, Paul.
Speaker 3 (34:56):
I remember when MX used to be accepted everywhere, and
then after a while it was like, oh, we'll take
Visa master Card, but not American Express yes, because it
was always for the merchants.
Speaker 2 (35:04):
Too expensive, too expensive. Okay, yeah, I haven't. I can't
remember the last time I used my AMEX card, literally can't.
It's there in your pocket, though it's in my pocket.
Speaker 4 (35:11):
Okay.
Speaker 3 (35:12):
See that's the thing. I mean, what does this mean
for companies that have corporate cards justin.
Speaker 8 (35:17):
So that's one of the different brackets here too. So
the way the settlement works is that it's going to
divide cards into three different types, so it be commercial cards,
standard customer cards, and then premium customer cards. I think
the commercial and standard cards you know you want that
corporate business. I think those two really are of the
less concerned. It's those premium cards I think, with the
rewards that really are on the line here in terms
(35:39):
of whether or not they continue to have that universal
acceptance everywhere.
Speaker 2 (35:43):
So there's so.
Speaker 3 (35:44):
Many businesses built around how to gamify your points.
Speaker 2 (35:47):
Oh yeah, I love it. You do that question.
Speaker 8 (35:50):
I absolutely love it. I mean every day it's like, oh,
these ANX offers, you know, what can I get here
for this discount.
Speaker 3 (35:56):
Paper and redsheet tracking?
Speaker 8 (35:57):
But I really should, honestly, I mean it's that good,
I think.
Speaker 3 (36:00):
So Paul's like, I cannot get into this, but the kids.
Speaker 2 (36:04):
Are because I mean I've noticed it that they really
are good at gaming the system and to the point where,
you know, I'm going to Barcelona for the weekend on points,
you know, right exactly.
Speaker 3 (36:14):
And these premium credit cards are almost like coupon books
in any ways, right, because they offer you know, like
fifty dollars a quarter at well, actually it's seventy five
dollars a quarter at Lululemon for instance, right, the Cammic's
Platinum card, and then people try to buy gift card
and stack them and use them like a year later.
Speaker 6 (36:30):
Pall's laughing.
Speaker 8 (36:31):
I mean, that'solutely true. And they carry those really high
annual fees. But I always think to myself, look how
much I'm getting back for this, and that waghs the
fees sometimes at least in my mind.
Speaker 3 (36:39):
So there you go, what are what are Visa MasterCards
saying about this?
Speaker 8 (36:44):
So they are they signed onto this deal, they reach
this agreement. I think they're pretty happy with the terms
of it because you know, they kind of lets them
walk away. The issuing banks like JP, Morgan, Bank of America,
all of them are also defendants. They get to walk
away from this litigation. The overhang would be removed, right,
So it's really the merchants. Are all of the merchants
going to sign on and what do those objections look
(37:04):
like in the coming months to the court?
Speaker 3 (37:06):
Our thanks to Justin Teresa, Bloomberg Intelligence, antitrust litigation and
policy analyst.
Speaker 2 (37:10):
That's this week's edition of Bloomberg Intelligence on Bloomberg Radio,
providing in depth research and data on two thousand companies
in one hundred and thirty industries.
Speaker 3 (37:17):
And remember you can access Bloomberg Intelligence via Bigo on
the terminal.
Speaker 2 (37:21):
I'm Scarlett Foo and I'm Paul Sweeney. Stay with us.
Today's top stories and global business headlines are coming up
right now.
Bloomberg Audio, Studios, podcasts, radio news. This is Bloomberg Intelligence
with Scarletfoo and Paul Sweeney.
Speaker 2 (00:13):
How do you think the FED is looking at tariffs?
The uncertainty of teriffs.
Speaker 3 (00:17):
Let's take a look at the sectors and how.
Speaker 2 (00:19):
They performed a lot of investors getting whip saled every
day by news events, breaking market.
Speaker 1 (00:23):
Headlines and corporate news from across the globe.
Speaker 3 (00:26):
Could we see a market disruption of market events?
Speaker 2 (00:29):
So people just too exuberant out there?
Speaker 3 (00:31):
You see some so called low quality stocks driving this
short term rally.
Speaker 1 (00:34):
Bloomberg Intelligence with Scarletfoo and Paul Sweeney on Bloomberg Radio, YouTube,
and Bloomberg Originals.
Speaker 2 (00:42):
On today's Bloomberg Intelligence Show, we dig inside the big
business stories impacting Wall Street and the global markets.
Speaker 3 (00:47):
Each and every week, we provide in depth research and
data on some of the two thousand companies and one
hundred and thirty industries are analysts cover worldwide.
Speaker 2 (00:54):
Today, we'll look at how Pfizer won a bidding war
against the Danish drugmaker Novo Nordisk for an obesity startup.
Speaker 3 (01:00):
Plus, we'll break down how Visa and MasterCard reached a
deal with retailers after twenty years of litigation.
Speaker 2 (01:05):
But first we begin with earnings from the media and
entertainment giant Walt Disney.
Speaker 3 (01:08):
This week, Disney reported fourth quarter sales that fell short
of Wall Street estimates. The company also said expenses from
a slate of big budget movies, including a new Avatar picture,
will weigh on results for the coming quarter.
Speaker 2 (01:19):
For more, we were joined by Githa rang Anathan, Bloomberg
Intelligence Senior media analyst.
Speaker 3 (01:23):
We first asked Etha for her take on Disney's most
recent earnings report.
Speaker 4 (01:27):
It came off as a little bit of a lackluster report.
I mean everything. If you look at the fundamental drivers
of the company, which is really the parks business brings
in about sixty percent of profits, things seem to be
going pretty strong there. We saw a thirteen percent jump
in operating profit for the fiscal fourth quarter. Again, the
guidance for twenty twenty six seems pretty good as well.
(01:48):
But really, you know, Disney really has this very very
tough balancing act. So on the one hand, they have
the parks business, they have the streaming business, which is
doing really well from a profitability standpoint, but to drag
it down, you have the linear TV networks, and then
you have the hit and misnature of you know, the
boy in the Hollywood studio business. So you know, they
have to contend with all of those different moving parts,
(02:09):
and I think that the dragged down from the TV
networks and the studios is kind of weighing a lot
on the narrative.
Speaker 2 (02:14):
He can talk to us about some of their bundling
of all their streaming services, particularly that ESPN app, that
really they put a lot of their real valuable sports
programming on that ESPN app. How are the early results
from in terms of subscriber growth?
Speaker 4 (02:28):
So they didn't give us any hard number there, Paul,
in terms of the number of subscribers that they got
on the ESPN Ultimate product, which is priced at you know,
twenty nine to ninety nine a month. But they did
talk about, you know, in general, that the traction has
been pretty good. They talked about the whole bundling strategy
because that is where Disney really wins. I mean, if
we've seen some of the numbers, you know, from Disney,
(02:49):
we know that forty percent of new subscribers actually take
the Disney bundle, and this is really going to be
the strategy for them going forward. Right. You get people
in with the bundle, and that's how you kind of
stem chin you're able to take price increases. So it's
really going to be the main driver for earnings growth
for them going forward. And that's exactly what they indicated, Paul.
Speaker 3 (03:11):
I can't remember who said this, but it's so true
that the history of media is about bundling and unbundling.
We went through this period where everyone cut the cord
and everyone unbundled, and now we're back to bundling again.
Although it's you know, in these discrete groups where Disney
might bundle Disney Plus an ESPN Plus together and then
if you are a T mobile subscriber, you might get
some other options.
Speaker 2 (03:29):
And here, but here's my point. That's fine. Is the
consumer better off? And my answer is absolutely not.
Speaker 3 (03:35):
It's too confusing. It's way too confusing, Gita when it
comes to bundling. How much more can they do? Though,
I mean, I see what you're saying about how it's
paying off right now, but I mean, can they continue
to innovate on their bundling or is have we reached
the limits of it?
Speaker 4 (03:50):
I don't think we've reached the limits at all. Scarletts.
So I think what they're ultimately what they're ultimately aiming
for with their ESPN product, and you know, they just
introduced the streaming product of months ago. I think ultimately
they wanted to kind of become the premier sports destinations.
So you know, ultimately, I wouldn't be surprised if you
see a Fox or an NBC or you know, even
maybe an Amazon kind of feeding in all of their
(04:13):
apps so that you go to this one stop shop
for you know, ESPN and you're able to see all
different kinds of sports content. Because you're absolutely right, there's
way too much of fragmentation becoming a great source of
friction for you know, the average consumer. And so I
think they're going to seek out a lot more different
bundling opportunities. We're already seeing them kind of do something
with ESPN Ultimate and Fox One, which is Fox's streaming
(04:36):
product that they also just introduced a few months ago.
So they're going to look to partner with different media
platforms across the ecosystem, and I think that is going
to be a source of, you know, a great upside
opportunity for them. Eventually.
Speaker 3 (04:49):
Is everyone willing to play ball on something like that, Kita.
Or is there someone who's going to say, you know what,
you can't get me in here, and I own or
I have the rights over X number of NFL games.
Speaker 4 (04:59):
Actually that that's what we're seeing right now. There is
the standoff going going on between Disney and YouTube TV,
and it's really all again, it's just a you know,
game of chicken here. So you know, when it comes
to sports content, I have to say Disney has the
upper hand a little bit. So if you just kind
of look at sports viewing in the United States, Disney
(05:20):
has about forty percent of sports viewing just with you know,
Markie rights tied to all major leagues, you know, college football, NFL, NBA, MLB,
they have it all. So I think it becomes a
little harder to say no to them. But again, never
say never.
Speaker 2 (05:34):
All right, Keith, I'm reluctant to ask this question, but
I feel like I have to. What's the latest on
Bob Iger's succession plan.
Speaker 4 (05:41):
Yeah, this is the big thing that we're all looking
at in fiscal twenty twenty six. So James Gorman, who's
kind of heading up this whole succession planning committee Paul
has said that you know the board will be out
with the decision by the end of March, so Bob
Eiger's contract comes to an end by the end of
twenty twenty six, so hopefully we do have some kind
(06:03):
of clarity on that. Right now, it's really looking like
it's going to be internal candidates. I mean, there was
some rumors and buzz about whether they were looking externally,
but I think they're going to kind of keep it
internal our.
Speaker 2 (06:13):
Thanks to GEITHA. Rongorath and Bloomberg Intelligence Senior Media analyst.
Speaker 3 (06:17):
We move next to the retail space, and with the
holiday shopping season now upon us, it is the most
important time of the year for these retailers.
Speaker 2 (06:23):
For more on what we can expect in this sector,
I was joined by Mary Ross Gilbert Bloomberg Intelligence senior
equity anamals covering retail. First, ask Mary how the holiday
season is shaping up and what companies are saying.
Speaker 5 (06:34):
If you look at how the holiday shopping is shaping up,
I think it looks I think it looks very positive.
So I think we are going to see an increase
and particularly for apparel retailers, that's usually like the largest
category that consumers. If you look at those that have
been pulled by all the holiday service surveys that have
(06:54):
been conducted, including the National Retail Federation, then they have
over eight hundred over eight eighty two hundred respondents in
their surveys, and the other ones are pretty sizable, you know,
relatively speaking, around five thousand. So they're showing that there's
definitely a higher percentage of shoppers wanting at peril and
(07:16):
accessories for gifts. So that should be good news for apparel.
But gen Z is planning to cut back on their
overall holidays spending by that, you know, by twenty three percent.
Millennials just one percent.
Speaker 2 (07:32):
Wow, So the gen Z these are the younger folks,
maybe tougher time finding a job maybe, you know, student
debt is that kind of the driver there.
Speaker 5 (07:42):
I think that could be part of it. Yeah, it
could be the job market situation that might be happening
there because these are really like the seventeen to twenty
eight year olds. So we have been hearing some you know,
talk about some of these latest graduates, you know, having
it finding a job. I think it's just probably going
to take longer because generally unemployment is still very low.
(08:06):
But we're seeing resilience. If you look at the data
so far with Bloomberg Second measure for apparel retailers and
department stores and off Price, we're seeing good sales coming
in for the third quarter, and they'll start reporting their
numbers in the next few weeks. So I think we're
off to a good start, and I think Black Friday
(08:26):
sales are already happening. Macy's US out with fifty percent
off on their private label brand product and they expect
to have other drops every week. Wow, So everyone's focused
on starting now yep, with promotions.
Speaker 2 (08:41):
So Mary, you know, economists talk about a K shaped
economy out there, some consumers, maybe the ones that own
assets like stocks and bonds in real estate doing more
than good and kind of everybody else struggling a little bit,
particularly with inflation. How does that get reflected in retail sales?
Does it mean you just kind of if you're an investor,
(09:02):
look at on Amazon Target where I can get some
some some deals.
Speaker 5 (09:07):
Yeah, and that's actually what's happening, and that's why you
see let's say, pretty robust sales overall coming out of
off Price, you know, so think of TJ Max, Ross
stores and Burlington stores, and Burlington's at the very low end.
If you look at credit card delinquencies or you know,
those rates, and a lot of these companies that we're
(09:28):
tracking represent the credit cardholders for like department stores and
for some select apparel brands such as Gap et cetera.
And when you look at that data, delinquencies are actually
lower this year versus a year ago, but not for
the very low income, which kind of speaks to what
you're talking about and inflation. Actually those are up in
(09:52):
the teams, you know, for the very low income consumer,
So think like under fifty K.
Speaker 2 (09:58):
How about e commerce, Mary, I know the pandemic folks
are saying kind of pulled forward maybe four or five
years of share shift from bricks and mortar to a
digital what's the e commerce growth story look like these days?
Speaker 5 (10:13):
You know, econ growth is looking strong when we look
at the data, like I said, for the third quarter
that we're seeing from Bloomberg second measure, it's showing actually
online sales were stronger at the department stores except for
Coals Coals online businesses, I mean not their online business,
but actually their credit customer is shopping less, like in
(10:37):
the double digits less, so that's kind of an issue
for them, but generally we're seeing stronger pool with online
sales there. Now, there is also a delineation between the
type of consumer. If it's gen Z, they tend to
prefer shopping more in store, and we see that with
Abercrombie and Fitch's Hollister brand, so they are about seventy
(11:00):
percent of their sales are generated online. And then it's
the inverse when you look at their namesake brand, Abercrombie,
because that consumer is those are millennials, and millennials prefer
to shop online, so sixty percent of their sales are
being generated online versus in store.
Speaker 3 (11:19):
That was Mary Ross Gilbert Bloomberg Intelligence, senior equity analyst
who covers retail. Coming up, we'll take a look at
why Tyson Foods says it expects flat profits for twenty
twenty six.
Speaker 2 (11:28):
You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
depth research and data on two thousand companies in one
hundred and thirty industries.
Speaker 3 (11:35):
You can access Bloomberg Intelligence via Bigo on the terminal.
I'm Scarlet Foo.
Speaker 2 (11:39):
And I'm Paul Sweeney. This is Bloomberg.
Speaker 1 (11:46):
This is Bloomberg Intelligence with Scarletfoo and Paul Sweeney on
Bloomberg Radio.
Speaker 2 (11:53):
We move now to some news in the pharmaceutical space.
Speaker 3 (11:55):
This week, Pfizer won the bidding war against the Danish
drugmaker Novo Nordisk for the obesity start up.
Speaker 2 (12:00):
Met Sarah.
Speaker 3 (12:00):
It's a bid to catch up to rival drug makers
after failing to compete with its own weight loss medications
for moret We were joined.
Speaker 2 (12:07):
By Sam Fazelli, Bloomberg Intelligence, director of Research for Global
Industries and senior pharmaceuticals analyst.
Speaker 3 (12:12):
We began by asking Sam to tell us why Fiser
one this deal.
Speaker 6 (12:16):
Nova's deal had the risk of not being able to
pass due to competition competition issues FTC issues, and it
sounds like the FTC had had given metzera call saying look,
if you go with that, there is a risky won't close.
So do whatever you think is the right thing for
your shareholders. And they did. In the end, the files
it did a bit spit.
Speaker 3 (12:34):
Right, So Novo Nordisk one in a way in that
Pfizer is paying up more. Does that actually work in
Nova Nordisks favor or does it? Is it still as
desperate as it was before to look for some new
catalysts in the obesity market.
Speaker 6 (12:50):
I mean, I'm not going to call Novo desperate. I
think they have assets in there. I think they wanted
to add some more options to the their their sales
reps bags over time, So I wouldn't call them desperate.
But they're obviously by going after this, they did say
that we need more assets in our bag. So and
(13:11):
Lily wasn't in the game. So it just gives them.
That gives you that flavor that they are and I
think the market's telling you that. Look at the divergence
of the share price performance of Lily versus never noticed
that there's the market favoring the drugs that Lily's got
on the market, and to compete they needed to get
some more. So I think this is not the end
(13:33):
for Novo at all in this place. There's lots of
other interesting Obviously, the assets coming up with different mechanisms.
That's the thing that I think the company is now
going to have to think about rather than trying to
go after the same mechanism all the time.
Speaker 2 (13:46):
So, Sam, all these big big cap pharmaceutical companies that
you've covered for decades, I kind of always thought they
were big, diversified portfolios of lots of different drugs and therapeutics.
And you know, but wait, when I look at your
stocks year, it seems like there's halves and have nots.
If you have obesity exposure, the stocks are up, and
if you don't, they're down. Is that kind of how
(14:09):
your world's evolved into over the last several years.
Speaker 6 (14:12):
I would just give you one little caveat to the
Astrosenica Sosenica. I think it's doing fine. And then they
have an obesity asset, but it's not their major game.
Their big plays in oncology. Cardiovascular is coming is there
and they're adding it to it. So, yes, obesity has
been the talk of this past twenty twenty five. I
(14:34):
think you will still be the talk of twenty twenty six.
But there's a lot more going on in fharma, neuroscience,
diseases of the brain, diseases of mental health are getting
much more attention. Cardiovascular aside from obesity, is getting quite
a lot of attention in heart to treat hype atension,
et cetera. I have to tell you, I don't think
there's an area, perhaps antibiotics set aside that is not
(14:57):
getting a significant amount of progress across some former company
somewhere is.
Speaker 3 (15:03):
What happened with Metsarah, Novo, Nordisk Andfiser, an unabashed victory
for Eli Lilly. I mean, does it just kind of
keep on moving forward or does any of this kind
of hurt Eli Lilly's market position?
Speaker 6 (15:14):
No. I mean, at the end of the day, there'll
be multiple players in this space as that are now
too at least, and I think Eli Lily is currently
very well placed with the assets that they have to compete,
and they're showing that they're competing very very effectively and
in some cases winning market share from Nova not disc our.
Speaker 2 (15:32):
Thanks to Sam Fazelli, Bloomberg Intelligence Director of Research for
Global Industries and senior pharmaceuticals.
Speaker 3 (15:37):
Analyst, we moved to news from the multinational food company
Tyson Foods.
Speaker 6 (15:41):
This week.
Speaker 2 (15:41):
Tyson said it expects flat profits for twenty twenty six.
This comes as a company's chicken segment continues to help
offset its beef losses.
Speaker 3 (15:48):
So we had to check in with Jen Bartashi's Bloomberg
Intelligence senior analysts for retail, staples and packaged food.
Speaker 2 (15:54):
First, they asked Jen for her take on Tyson foods
guidance for twenty twenty six.
Speaker 6 (15:58):
Nova's deal had the risk of not being able to
pass due to competition competition issue with FTC issues, and
it sounds like the FTC had had given Metzera call saying, look,
if you go with that, there is a risky won't close,
So do whatever you think is the right thing for
your shareholders. And they did in the end, and fires
it did up its bit.
Speaker 3 (16:16):
Right, So Novo Nordisk one in a way in that
Pfizer is paying up more. Does that actually work in
Nova nordisks favor or does it? Is it still as
desperate as it was before to look for some new
catalysts in the obesity marketing.
Speaker 6 (16:31):
I mean, I'm not going to call Novo desperate. I
think they have assets in there. I think they wanted
to add some more options to the their sales reps
bags over time, So I wouldn't call them desperate. But
they're obviously by going after this, they did say that
we need more assets in our bag. So and Lily
wasn't in the game. So it just gives them. That
(16:53):
gives you that flavor that they are and I think
the market's telling you that. Look at the divergence of
the press performance of Lily Versus never noticed that there's
the market favoring the drugs that Lily has got on
the market, and to compete they needed to get some more.
So I think this is not the end for Novo
at all. In this place. There's lots of other interesting
(17:15):
OBCD acids coming up with different mechanisms. That's the thing
that I think the company is now going to have
to think about rather than trying to go after the
same mechanism all the time.
Speaker 2 (17:25):
Sam, all these big cap pharmaceutical companies that you've covered
for decades, I kind of always thought they were big
diversified portfolios of lots of different drugs and therapeutics and
you know, but boy, when I look at your stocks
this year, it seems like there's halves and have nots.
If you have obesity exposure, the stocks are up, and
if you don't, they're down. Is that kind of how
(17:46):
your world's evolved into over the last several years.
Speaker 6 (17:49):
I would just give you one little caveat to that. ASA. So, Senica,
I think it's doing fine. And then they have an
OBCD asset, but it's not their major game. They're they're
they're big plays in oncology. Cardiovascular is there and they're
adding it to it. So, yes, obesity has been the
talk of this past twenty twenty five. I think you'll
(18:11):
still be the talk of twenty twenty six. But there's
a lot more going on in pharma, neuroscience. Diseases of
the brain, diseases of mental health are getting much more attention.
Cardiovascular aside from obesity, is getting quite a lot of
attention in heart to treat hype potension, et cetera. I
have to tell you, I don't think there's an area,
(18:31):
perhaps antibiotics set aside, that is not getting a significant
amount of progress across some farmer company somewhere.
Speaker 3 (18:40):
Is what happened with Matsarah, noad, Artisk Andfiser an unabashed
victory for Eli Lilly. I mean, does it just kind
of keep on moving forward or does any of this
kind of hurt Eli Lilly's market position.
Speaker 6 (18:52):
No. I mean, at the end of the day, there'll
be multiple players in this space as that are now
too at least, and I think Eli Lily is currently
very well placed with the assets that they have to compete,
and they're showing that they're competing very very effectively and
in some cases winning market share from Romer.
Speaker 3 (19:09):
Notice our thanks to Jen Bartashis Bloomberg Intelligence senior analysts
covering retail staples and packaged foods.
Speaker 2 (19:15):
We move now to quarterly earnings from the global fintech
company Circle Internet Group.
Speaker 3 (19:19):
This week, shares of the company fell on concern that
declining interest rates will weigh on future returns, and this
overshadowed better than expected third quarter sales and earnings.
Speaker 2 (19:28):
For more. We were joined by Emily Mason, Bloomberg Fintech
and crypto reporter.
Speaker 3 (19:31):
We began by asking Emily why lower interest rates from
the Federal Reserve would be a concern for a company
like Circle.
Speaker 7 (19:37):
So Circle issues USDC and that's a stable quin peg
to the US dollar and they maintain that peg by
holding reserves in cash and short term treasuries. They keep
the yield from the treasuries and that's kind of how
they make money and that's where most of their revenue
comes from. So if interest rates go down, you know,
that shows up in earnings and that causes some concern
(19:58):
for investors and analysts.
Speaker 2 (20:00):
What have their recent results been like.
Speaker 7 (20:01):
I mean, this is their second time reporting since going public.
They benefited heavily from all the hype around stable coin,
especially before the Genius Act was passed, and their stock
performed really well. It's kind of been down since their
summer highs, and that's kind of because of the concern
from the interest revenue, but also because of some of
the distribution partners that they have they pay. They have
(20:23):
revenue sharing agreements with coinbase, for example, who helps distribute
their coin.
Speaker 3 (20:28):
So if this company for now is kind of a
proxy for a money market fund because it's earning's track
short term treasury yields, it must need to do more
to diversify its revenue streams. What is it looking at?
Speaker 7 (20:41):
Yeah, that's what they're doing. And then if you talk
to Jeremy Alaiir, who's the CEO, he'll kind of say
that lower interest rates are actually good for the company
because it means that there's higher velocity of money, there's
more investment, and then people want faster moving money like
stable coins, and they also might want to use products
like their Circle Payments network, which recently is experimenting with
like a staplecoin payouts product, which like helps people can
(21:03):
helps people to pay out globally with USDC, and they're
trying to move more USDC volume onto their own platform
instead of working with distribution partners like coinbase, and that
kind of could help them as well. But they see
the lower interest rates as a positive thing. And also
the USD circulating supply is increasing very heavily as they
add new partners, so that also kind of could potentially
(21:24):
offset the lower interest rates.
Speaker 2 (21:26):
Emily, your beat is fintech and crypto reporter, two things
that didn't exist even just a handfull of years ago.
Talk to us about broadly the kind of the intersection
of the growing crypto market and applications like fintech.
Speaker 7 (21:44):
Yeah, I mean, I think what's kind of the most
interesting right now is like fintech when it came onto
the scene was sort of like building very sleek interfaces
on top of his existing financial infrastructure, and then crypto's
pitch is much more sort of like rebuilding the financial
infrastructure with things like blockchains, and now the conversation is
kind of about bringing the traditional world and the traditional
(22:06):
financial institute infrastructure together with crypto rails and circles. Really
kind of sitting at the center of that and trying
to bring stave a coin and like integrate that with
how traditional markets work, and that involves the coming together
on both sides, Like traditional firms kind of have to
upgrade and make their systems interoperable with cryptotechnology, and then
(22:27):
crypto firms also have to kind of move into a
regulated environment. And that's been something that Jeremy Alaier has
talked about for a long time, like he really thinks
that crypto needs to be regulated and Circle that's been
a big part of their narrative is like we are
kind of like the suits in the room, and we're
going to be regulated and that's how we're going to
go about doing business.
Speaker 3 (22:43):
You're kind of the most tradify of the DeFi world.
In other words, if we want to get technical, this
is going to be a dumb question, Emily, But we've
seen how bigcoin and the rest of the cryptocurrencies had
a pretty rough October. They're struggling to regain momentum. All
these digital coins are not the same as stupid coins.
But is that shift in sentiment and conviction on Bitcoin
(23:05):
and all coins, especially from institutions, affecting demand it off
for stable coins or are those two just not linked.
Speaker 7 (23:11):
I mean, stable coin is used a lot of the times,
like anytime there's a lot of trading happening in crypto
like and in crypto tokens like stable coin's kind of
benefit because they're used to like move in and out
of those markets. The stable coin the whole point is
that it's like a stable currency. It's pegged to the dollar,
it's one for one, so the price of it really
shouldn't be impacted at all by like crypto market movements.
Speaker 8 (23:32):
But it does.
Speaker 3 (23:32):
It does demand affect it or does sorry, does the
spillover involve like demand waning for stable corn or increasing
for stable coin.
Speaker 7 (23:41):
I think where like the demand growth for stable coin
is going to come from is like it moving out
of a tool just for crypto trading. It's going to
be like people in countries where the local currency is
volatile wanting to hold stable coin, or people wanting to
actually use it for payments or like stable coin payouts.
Like if you're a US based company and you're employing
a bunch of people around the word world who want
to hold a stable currency like the dollar, the stablecoin
(24:03):
is the best way to access it, then you can
pay them that way. Like that's where growth from. That's
where demand for stable coin is going to come from.
I don't think it's like super tied to the trading necessarily,
Like people use staplecoin to get in and out of
crypto market, so you know they might see more volume
of trading activity is high, but their journeys are kind
of becoming less linked o.
Speaker 2 (24:26):
Right thanks to Emily Mason, Bloomberg Fintech and Crypto.
Speaker 3 (24:28):
Reporter coming up, It's the end of an era at
Berkshire Hathway, we'll break down why. CEO and billionaire investor
Warren Buffett says he is quote going quiet.
Speaker 2 (24:36):
You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
depth research and data on two thousand companies in one
hundred and thirty industries.
Speaker 3 (24:42):
You can access Bloomberg Intelligence via big on the terminal.
Speaker 2 (24:45):
I'm Scarlet Foo and I'm Paul Sweeney, and this is Bloomberg.
Speaker 1 (24:56):
This is Bloomberg Intelligence with Scarlet Foo and to Paul
Sweeney on Bloomberg Radio.
Speaker 2 (25:03):
The move next to news at Berkshire Hathaway.
Speaker 3 (25:05):
Berkshire Hathaway CEO and billionaire investor Warren Buffett said he
is quote going quiet, marking the end of an era.
Buffett also announced his plan to donate more than one
point three billion dollars to four family foundations, with plans
to quote step up.
Speaker 2 (25:18):
The pace for more. I was joined by Matthew Palozola,
Bloomberg Intelligence senior analyst covering the insurance business. I first
asked Matthew his thoughts on Buffett's latest announcement.
Speaker 9 (25:27):
We've known it, I mean this, so we knew this
letter was coming out. He does this every year around Thanksgiving.
We also knew he was stepping down as CEO, so
not huge surprise in this letter. I think the going
quiet thing was kind of to everyone a little bit
by surprise. I think maybe the thought was, hey, he's
going to he's stepping back a CEO, but maybe he'll
(25:50):
kind of be out there in the public and he's
still chairman, so maybe we'd still hear more from him.
A little while ago he said he wasn't going to
speak at the meeting, and now he's going to kind
of focus on his philanthropic work. And he's also a
ninety five years old, he's maybe a little tired.
Speaker 2 (26:03):
Yeah, exactly. And he's going to donate more than one
point three billion dollars to four family foundations and plans
to quote step up the pace of his Childable giving
to his kids' foundations while he's still alive. So that
seems to be the point of life. He is any
reason to think that the business strategies the operations of
Hathaway may change now that he has kind of stepped
(26:25):
back on another step, I guess, so, I don't.
Speaker 9 (26:26):
Think so right away. So he is always praising his successor,
greg Abel, talking about how he maintains the ethos of Berkshire,
and they'll be doing the same thing. I think Abel
walks a fine line now where I think over the
next couple of years he will want to put his
own stamp and make a name for himself, but also
not stray too far from what has led to this
(26:50):
massive value creation of Berkshire. So I don't think anything
dramatic happens in the near term. You know, we talked
about this. I think in the past the amount of
capital they're sitting on and Able is a good capital allocator,
at least according to Buffett. Ye, maybe something happens there
special dividend or something like that. You know, no guarantees
on any of that stuff, but I could see able
(27:11):
wanting to put that kind of stamp on the company.
Speaker 2 (27:13):
Because again what we learned I guess from the last
quarterly released was the cash is now three hundred and
eighty two billion dollars. You know, it's a number that's
you know, most portfolio matters. What would know where to
start get boggles of mine. I think even in the
letter he had mentioned, uh, there's just not a lot
of things that move the needle for them. So they
bought a twelve billion dollar company in Alleghany a couple
(27:34):
of years ago, doesn't really move the needle that much.
Help the insurance businesses grow a little bit, but overall
for the company, not dramatic. They bought this eleven billion
dollar chemical business from Occidental. You know these are these
are ten and twelve billion dollar deals, but they're just
not moving the needle for the company. So there's not
not a ton they can do too dramatically. Historically, why
(27:55):
is Warren and the company what's been their thought about
returning cash this sh shareholders?
Speaker 9 (28:00):
The thought has been, we don't want to do that,
right even said, you know, Berkshire shareholders have foregone dividends
for a reinvestment in America. Something that I forgot the
exact line, and that was Buffets.
Speaker 4 (28:12):
Uh.
Speaker 9 (28:13):
He likes collecting dividends, he doesn't like paying them. I
think he always thought we are the best allocators of this.
So if you're if you're a owner of Berkshire shares,
would you rather have some money or would you rather
have warm Buffett invest that money for you? I think
over the past couple of years, again, they've had so
much money that it's been tough for them to invest
it in effective ways. But that's that's been the philosophy.
Speaker 2 (28:34):
Yeah, because I mean it's I guess my response would
be I can put it in cash too and get
similar rates of return to you. And I guess that
when it's ten twenty fifty hundred million dollars line around,
not that big of account argument.
Speaker 9 (28:48):
Now, it's you know, you know, it's significant, and it
helped their earnings over the past couple of years. Just
getting four percent on that was a dramatic tailwind to
their earnings. So you know, it didn't do much for
the stock. After Buffett said he was leaving, that's been
the thing that's weighed on it more than anything else.
But an you'll see short term rates going down, so
(29:11):
that tail wind diminishing. I mean, I think there is
a school of thought that Berkshire, you know, not the
same without Buffett, but just maybe not as good at
almost all of their things. That's one school of thought.
I could see other ones where you know, still able,
maybe takes a different direction. So that's another maybe catalyst
(29:32):
for the shares. But you know, it's it's a kind
of darker time for Burshure.
Speaker 2 (29:36):
And what's Warren's ownership stake in the company.
Speaker 6 (29:40):
So I don't know this of my head.
Speaker 9 (29:41):
I don't remember controlling, Yeah, oh for sure.
Speaker 2 (29:44):
And you're not gonna have an activist investor come in
here and say this is just a poor allocation.
Speaker 9 (29:48):
Though it would be impossible. He owns too much in
the The A shares I believe are ten thousand votes
to a B share, he owns most of them. He
will he's going to step up the amount he's giving away,
but he still owns too much for anyone else to
step in. And should he die in his will, he
would I think it's over ten years. His ownership goes
(30:12):
to these foundations run by his children, who I can't
imagine would you let them kind of immediately fall into
the hands of some sort of actives investor. I think
he'd set a time frame of over ten years that
he'd want that stuff divested. But he does want to
divest it. He doesn't want them to just hold on
to it.
Speaker 3 (30:29):
Our thanks to Matthew Polozola, Bloomberg Intelligence Senior analyst covering insurance.
Speaker 2 (30:33):
We move next to the credit card space.
Speaker 3 (30:35):
This week Visa MasterCard. We should deal with retailers after
twenty years of litigation, so for more we'd brought in
Justin Teresi, Bloomberg Intelligence antitrust litigation and policy analyst.
Speaker 2 (30:44):
We first asked Justin to break down Visa MasterCard case.
Speaker 8 (30:48):
This case has been going on for about twenty years now.
I started before I went to law school, which was
a long time ago. There are salt and pepper in
my hair, so we're talking about a really, really ancient case.
But basically with a lot of folks don't know is
when you have those really valuable premium cards, right the
airline miles cards or the cash back cards, there's a
fee associated with those, and it's the merchants who are
(31:09):
eating that fee, typically around three or four percent, depending
on the varying swipe fee when you use it at
a register. So merchants, no surprise, they're upset about that, right.
So Visa, you know, big litigation here, the accusation being
that they fix those fees and that you know, the
merchants are basically the ones eating the costs there. So
big deal announced between Visa, master Card and merchants would
(31:29):
make a little bit more flexibility on the part of
merchants here. They could basically say, hey, we're going to
take the lower tier version of a Visa or a
master Card, but we're maybe not going to accept airline
miles cards or cash back cards. And then alternatively, they
also might have the option of passing those fees onto you,
the consumer at the register if they do take them.
So some big changes here and how things are shaping up.
Speaker 2 (31:51):
Well, I've noticed in the last couple of three years
they are doing that. Yeah, I mean almost every merchant
I go to now, I don't know if it's just
a state of New Jersey thing, but they're saying, hey,
here's a cash price, here's the credit card price.
Speaker 8 (32:01):
Yeah, Paul, this is actually a really interesting issue here
because state by state there's a lot of differences in
how this actually plays out in New York, and I
see this too when I go to my dry cleaner.
It's like, oh, maybe that's four percent more if I'm
going to use my credit card here. That's actually illegal
in New York right now to do that, But the
enforcement seems to be lacking that this is a new
law pass in twenty twenty four. There has to be
(32:22):
an upfront kind of price on a tag if they're
going to pass a surch charge onto the consumer. In
New York, Massachusetts, Connecticut, you can't serve charge at all.
So if this settlement goes through, you know, that's a
big question mark.
Speaker 3 (32:34):
Too interesting that you say that the surcharge is illegal
in New York, because what I've seen is the dry
cleaner will say, we'll give you a discount if you
pay in cash. Here's the regular price, but you get
the discount if you pay cash. So it's no longer
a surcharge. Justin You said that this has been a
case that's been you know, around for twenty some odd years. Yes,
this settlement, is it just going to get caught up
a more legal lightmire.
Speaker 8 (32:55):
You know, it really could. So. Last year there was
a first attempt to this This is the second try now, right,
And the big issue that blew up the deal last
year is that the smaller merchants kind of pushed for
the terms that they set in the first place, and
big folks like Walmart, et cetera kind of got ice
out from the discussions on that. It seems like that
might have happened again here. The National Retail Federation was
out saying, wait a minute, what kind of business practice
(33:17):
would this be for us to say, hey, we're going
to take these cards and not those cards. And they're
also criticizing the feed concessions that were part of this
deal too for the next five years or so. So
I think there's still a lot of questions here. There's
probably enough changes from last year's deal to get it
over the finish line, but there's a big period here
with objectors who are going to be weighing, you know,
what they think of the deal. And honestly, the judge
(33:39):
last year she said, look, you guys can do a
lot more than you're offering to do in this deal.
So is this enough? That's going to be a huge
question moving into an approval hearing.
Speaker 2 (33:48):
What are the dollars dollar amounts we're talking about here.
Speaker 8 (33:51):
Yeah, you know, so it's quadrupled according to the National
Retail Federation since two thousand and nine. But if you
said MasterCard, they've got eighty percent of this market for
the card fees, right, One hundred eleven billion dollars last
year alone collected in these wipe fees according to the NRF,
So really massive, massive. But you know, these companies are
also diversifying their streams, right, They're looking into digital wallets
(34:13):
and other payment platforms too. So there's a lot more
on the table now than there was when this was
first brought back in two thousand and five.
Speaker 3 (34:19):
And to be clear, this is Visa and MasterCard and merchants.
What about American Express? Where does it sit here?
Speaker 8 (34:25):
Yeah, so that's another great question. American Express basically settled
a version of this lassit or one a version of
this lawsuit years ago. Their card acceptance terms are a
little bit different. Search charging doesn't really allowed with those
when it's not applied to all card types, right, But
that begs the question if you start allowing surcharging through
card holder through acceptance agreements for Visa MasterCard, does AMEX
(34:47):
now have to allow us for charging on its card.
So that's another big question mark. If this deal goes through,
it really has the potential to impact everything, not just
Visa MasterCard, Paul.
Speaker 3 (34:56):
I remember when MX used to be accepted everywhere, and
then after a while it was like, oh, we'll take
Visa master Card, but not American Express yes, because it
was always for the merchants.
Speaker 2 (35:04):
Too expensive, too expensive. Okay, yeah, I haven't. I can't
remember the last time I used my AMEX card, literally can't.
It's there in your pocket, though it's in my pocket.
Speaker 4 (35:11):
Okay.
Speaker 3 (35:12):
See that's the thing. I mean, what does this mean
for companies that have corporate cards justin.
Speaker 8 (35:17):
So that's one of the different brackets here too. So
the way the settlement works is that it's going to
divide cards into three different types, so it be commercial cards,
standard customer cards, and then premium customer cards. I think
the commercial and standard cards you know you want that
corporate business. I think those two really are of the
less concerned. It's those premium cards I think, with the
rewards that really are on the line here in terms
(35:39):
of whether or not they continue to have that universal
acceptance everywhere.
Speaker 2 (35:43):
So there's so.
Speaker 3 (35:44):
Many businesses built around how to gamify your points.
Speaker 2 (35:47):
Oh yeah, I love it. You do that question.
Speaker 8 (35:50):
I absolutely love it. I mean every day it's like, oh,
these ANX offers, you know, what can I get here
for this discount.
Speaker 3 (35:56):
Paper and redsheet tracking?
Speaker 8 (35:57):
But I really should, honestly, I mean it's that good,
I think.
Speaker 3 (36:00):
So Paul's like, I cannot get into this, but the kids.
Speaker 2 (36:04):
Are because I mean I've noticed it that they really
are good at gaming the system and to the point where,
you know, I'm going to Barcelona for the weekend on points,
you know, right exactly.
Speaker 3 (36:14):
And these premium credit cards are almost like coupon books
in any ways, right, because they offer you know, like
fifty dollars a quarter at well, actually it's seventy five
dollars a quarter at Lululemon for instance, right, the Cammic's
Platinum card, and then people try to buy gift card
and stack them and use them like a year later.
Speaker 6 (36:30):
Pall's laughing.
Speaker 8 (36:31):
I mean, that'solutely true. And they carry those really high
annual fees. But I always think to myself, look how
much I'm getting back for this, and that waghs the
fees sometimes at least in my mind.
Speaker 3 (36:39):
So there you go, what are what are Visa MasterCards
saying about this?
Speaker 8 (36:44):
So they are they signed onto this deal, they reach
this agreement. I think they're pretty happy with the terms
of it because you know, they kind of lets them
walk away. The issuing banks like JP, Morgan, Bank of America,
all of them are also defendants. They get to walk
away from this litigation. The overhang would be removed, right,
So it's really the merchants. Are all of the merchants
going to sign on and what do those objections look
(37:04):
like in the coming months to the court?
Speaker 3 (37:06):
Our thanks to Justin Teresa, Bloomberg Intelligence, antitrust litigation and
policy analyst.
Speaker 2 (37:10):
That's this week's edition of Bloomberg Intelligence on Bloomberg Radio,
providing in depth research and data on two thousand companies
in one hundred and thirty industries.
Speaker 3 (37:17):
And remember you can access Bloomberg Intelligence via Bigo on
the terminal.
Speaker 2 (37:21):
I'm Scarlett Foo and I'm Paul Sweeney. Stay with us.
Today's top stories and global business headlines are coming up
right now.
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