May 23, 2025 • 38 mins
Watch Alix and Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Hosts: Paul Sweeney and Alix Steel
On this podcast:
- Jennifer Bartashus, Bloomberg Intelligence Senior Analyst, Retail Staples & Packaged Food, discusses Target earnings.
- Amar Vasdev, BNEF Lead Levelized Cost Expert, discusses why it is now cheaper to build new solar than continue running old fossil plants in some parts of the world.
- Drew Reading, Bloomberg Intelligence U.S Homebuilding Analyst, discusses Home Depot earnings.
- Mary Ross Gilbert, Bloomberg Intelligence, Senior Equity Analyst, Covering Retail, discusses TJX Earnings.
- Anna Edney, Bloomberg National Health Care Reporter, discusses the Bloomberg Big Take story: “Possible Cancer, Health Risks Lurk in Popular OTC Drug.”
- Mark Gurman, Bloomberg News Managing Editor for Global Consumer Tech, discusses the Bloomberg Big Take story: “Apple Is Spending Billions and Still Hasn't Managed to Crack AI.”
- Simone Foxman, Reporter for Bloomberg News Equality Team, discusses DEI at U.S companies.
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 Alex Steel and Paul Sweeney.
Speaker 2 (00:14):
The real app performance has been in US corporate high yield.
Speaker 3 (00:17):
Are the companies lean enough? Have they trimmed all the fats?
Speaker 2 (00:19):
The semiconductor business is a really cyclical.
Speaker 1 (00:22):
Business, breaking market headlines and corporate news from across the globe.
Speaker 3 (00:26):
Do investors like the M and A that we've seen?
Speaker 2 (00:29):
These are two big time blue chip companies.
Speaker 3 (00:32):
Window between the peak and cunt changing super fast.
Speaker 1 (00:36):
Bloomberg Intelligence with Alex Steele and Paul Sweeney on Bloomberg Radio.
Speaker 2 (00:42):
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 our analysts cover worldwide.
Speaker 2 (00:54):
Today, well look at why home improvement has been resilient
at the retailer.
Speaker 3 (00:57):
Home depot, and we'll discuss why the tech giant Apple
still hasn't managed to crack AI.
Speaker 2 (01:01):
But first we begin with earnings from the retailer Targets.
Speaker 3 (01:04):
This week, Target reported sales that dropped in the first quarter,
and the company also cut at sales forecast for the year.
Speaker 2 (01:09):
Target sited inclining consumer spending along with the impact of
tariffs and boycotts.
Speaker 3 (01:13):
Target shares fell after the report and raise some questions
over the company's ability to recapture growth after two years
of choppy results.
Speaker 2 (01:19):
For more, we were joined by Jennifer Bartashi's Bloomberg Intelligence
senior analyst Retail, Stables and packaged Food.
Speaker 3 (01:25):
We first asked Jennifer if she was surprised by the results.
Speaker 4 (01:28):
None of this really was a surprise. It's really about
the degree to which it was a surprise. So sales
came in softer than expected, profit was a little softer
than expected, And it's just I think people are waiting
for Target to say how they're going to fix it.
And you know, they came out talking about a new office,
you know, to accelerate their plans. But I think people
(01:49):
are just waiting for something tangible that they can really
hold the company accountable for to reignite growth in the
in what they're trying to do.
Speaker 2 (01:57):
What does Target need to do specifically, because it seems
like I don't know it just every time I've walk
into a Target, it's lots of people doing stuff. The
shelves are in good shape. What do they need to
do well?
Speaker 4 (02:07):
A lot of it is continuing what they've started, which
is improving their merchandise mix. You know, Target does best
when their assortment is new, it's fresh, it's relevant to people,
and they've made good strides in that area. But those
types of changes take time for consumers to see and
to start to embrace, and it's just a hard environment
(02:27):
where people are still being a little bit conservative for
those changes to really create some momentum in the business.
Speaker 3 (02:34):
So where are they with the pricing stuff in terms
of their inventory, in terms of tariffs, in terms of
where they source their material.
Speaker 4 (02:42):
Yeah, so from a pricing perspective, you know, when people
look at value, price is one of the first things
they look at. They're fairly priced competitive, and we've seen
an uptick in the number of promotions that they're doing,
so you know, buy forty dollars of these kinds of
essentials and get a five dollars gift card. They're doing
a lot more of that kind of promotion to pull
people in. But one of the issues is that they
(03:04):
talk today about inventory and having to you know, adjust
and right size their inventory. And that's a little bit
concerning because that's been a topic that has It's not
new for Target, It's come up a couple of times
in the past few years. And so the fact that
they are expecting, you know, some inventory adjustments and markdowns
to weigh on margins and profit you know, for the
(03:26):
next quarter, is a little bit concerning that they still
haven't quite figured out how they're going to navigate that, Jen.
Speaker 2 (03:32):
I know Walmart said on there recently that they would
pass along probably some of their terror related cost increases
to consumers, and then President Trump came out pretty publicly
against that. What is Target saying about their ability to
take whatever price increases cost increases may come about through tariffs,
either in their margin or passing it along to consumers.
Speaker 4 (03:54):
Yeah, it's a definitely a good topic, Paul, And you
know what they said was that price increases would be
the last resort, but they didn't count them out. Instead,
they focused on the tactics that he needs to try
to mitigate some of the some of the pressure from tariffs.
They're the same levers that every company is pulling. It's
using your scale, it's working with your suppliers, it's trying
(04:15):
to negotiate better you know, you know, better sourcing and
better prices on the on the purchasing side. So you know,
Target is certainly able to offset some of the some
of the cost of tariffs, but it would be surprising
if they can offset all of it. And and ultimately
they're most likely going to have to be some selective
price increases that get pushed through.
Speaker 3 (04:35):
Oh what are there? What's their inventory like in terms
of that part and how that filters into their pricing.
Speaker 4 (04:42):
Yeah, so inventory has actually been getting a little bit
better in terms of on shelf availability and tracking through
the supply chain. It's just I think because they skew
so much more to discretionary. If there's like, for example,
in first quarter, we had some very unseasonably cold weather
that impact apparel sales, That impacts a lot of those things.
(05:02):
So you know that that increases markdowns. Hopefully that's a
transitory type of thing. But they are talking about getting
their inventory right sized as they head into back to
school and the holiday season.
Speaker 2 (05:13):
And Jen the stock seems cheap to me? Is it
cheap on a historical basis? Or how are people thinking
about valuation?
Speaker 4 (05:21):
Yeah, it's it's definitely, you know, at a discount from
it from a historical, you know, valuation perspective. But I
think part of the part of the reason that it
is where it is is that for a long time,
what has differentiated Target was their private label selection, their
own brands things that the quality of those brands where
people could get value and style at a really compelling price.
(05:43):
In the last couple of years, a lot of their competitors,
whether you're talking about Walmart or Cohal's or or or
companies like that, have invested in their private label. They've
improved the quality, They've they've become a little bit more
fashion forward, and that's that erodes the differentiation that it
has always enjoyed and part of what has catapulted their
success in recent years. So until Target gets that newness
(06:08):
and that assortment readjusted again to be a leader and
a differentiator, you may see that kind of valuation discount
persist our.
Speaker 2 (06:17):
Thanks to Jen Bartashi's Bloomberg Intelligence Senior Retail Analyst.
Speaker 3 (06:20):
Each week we look at research from Bloomberg n EF
previously known as New Energy Finance. They're the team at
Bloomberg the tracks and analyzes the energy transition from commodities
to power, transport, industries, buildings, and agricultural sectors.
Speaker 2 (06:32):
This week we looked at how the cost of clean
energy technologies has changed. Solar and wind have been the
most competitive source of new power for a few years.
Speaker 3 (06:40):
Now and for more. We are joined by Amar vasdev
v an EF, a lead levelized cost expert. We first
asked AMR to break down his research and what his
team actually does.
Speaker 5 (06:50):
Effectively. We collect cost data on recently finance power projects
and we sum that up into a metric that we
call the levetized cost of electricity. And in short, what
that is is it tells us what the long term
off take price is that project developer needs to hit
their IRR, recoup all of their costs and of course
(07:11):
pay back the pay the taxes.
Speaker 2 (07:14):
So, Amara, here's what I don't think people understand, and
I did not understand it until recently, that renewables are
the cheapest source to meet new demand almost everywhere. Talk
to us about that.
Speaker 5 (07:27):
Yeah, So the cost reductions in renewable technology, so specifically
wind and solar, have been quite remarkable over the last
decade or so. And so when we look at those
projects that were financed last year and we estimate those costs.
We find that either wind or soda is out competing
(07:47):
either coal or gas in markets that are equivalent to
two thirds of global power generation, so that includes China,
includes most of Europe as well.
Speaker 3 (07:58):
But we take into a the intermittent power issue for
wind and solar and how does that change the cause
profile Like it might be cheaper to build a wind
a wind farm than a billion nuclear plant, but the
intermittent power of it all is an issue.
Speaker 5 (08:12):
Yeah, that is definitely right. It is a it is
a problem with renewables that is often cited. But there
are supporting technologies for supporting a grid that is dominated
by wind and soda, and that would be battery storage
(08:34):
for example. And so if we look last year alone,
the cost of the typical projects fell by one third
and out to twenty thirty five, we estimate that the
cost of battery storage projects for by fifty percent. So
there are supporting technologies that pair with wind and soda,
(08:56):
and we also model we look at these, we break
them down, and we look at the view out of
twenty fifty how different power markets are likely to change.
And just to put that in context, when we take
that system view, we see that there are really strong
long term fundamentals for renewables. So today wind and soda
(09:19):
around eight percent of generation and that increases to sixty
percent in our modeling by twenty fifty. And at the
same time, the flip side of that is with fossil
few assets, so coal and gas plants today they're at
sixty percent. By twenty to fifty they go down to
twenty five percent. And what they do is they kind
of operate in a space where they support wind and
(09:41):
soda as well as battery storage.
Speaker 2 (09:44):
So thinking just in the near term, what do high
tariffs and maybe possible cuts to tax credits, what does
that mean for this transition? Does it slow it down materially? Possibly?
Speaker 5 (09:57):
Yeah, it is a really interesting question, and it's as
you know, it's moving very quickly. So our team in
the US are really attracting this very very closely. And
what we can say is that the policy and tariff
uncertainty is posing a challenge for business confidence. It kind
(10:17):
of impacts the willingness and investor appetite. But we do
see that there is resilient demand that deployment stays resilient
over the next ten years or so, because we do
see increased electricity demand from AI needs from manufacturing as well,
(10:38):
and what tends to be the cheapest source of electricity
is wind and soda, so there is resilient deployment. We
did model a scenario where if tax if tax credits
were cut, the amount of wind and soda being added
over the next ten years would reduce by around seven
(11:00):
teen percent or so. So there is there is a
material impact. But if we're adding new power to the
if we're adding new supply to the grid, then it
would tend to come from wind and sola.
Speaker 3 (11:12):
What about geothermal? The administration is definitely positive on geothermal.
In speaking with the Energy Secretary here, he speaks a
lot about that as well as clean coal. What's the
cost profile like for geothermal?
Speaker 5 (11:25):
Yeah, it's hard for me to comment on that. I
think the configuration of geothermal changes significantly, but there have
been developments recently, and I suppose with the pairing with
the kind of coupling with oil and gas experience with geothermal,
there's a lot of overlap there on the specific costs.
Speaker 2 (11:43):
I couldn't comment on our Thanks to amar a Vestev
b n EF lead levelized cost Expert.
Speaker 3 (11:49):
Coming up, We're going to look at why cancer risks
are being linked to a popular over the counter drug.
Speaker 2 (11:53):
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. You can access Bloomberg Intelligence via
Bidell on the terminal.
Speaker 3 (12:02):
From Whole Sweeting and a Malex Steel and this is Bloomberg.
Speaker 1 (12:09):
You're listening to the Bloomberg Intelligence podcast. Catch us live
weekdays at ten am Eastern on Apple, Cocklay and Android
Auto with the Bloomberg Business App. Listen on demand wherever
you get your podcasts, or watch us live on YouTube.
Speaker 3 (12:24):
We move next to news from the world's largest home
improvement retailer, Home Depot.
Speaker 2 (12:28):
This week, Home Depot maintained its guidance for their fiscal
year as US sales ticked up.
Speaker 3 (12:32):
The company said consumers are deferring larger projects due to
the raid environment, but are still taking on smaller home projects.
Speaker 2 (12:38):
For more. We were joined by Drew Redding, Bloomberg Intelligence
US home building analysts.
Speaker 3 (12:42):
We first asked Drew for his take on my home
improvement has been so resilient at home Depot.
Speaker 6 (12:47):
One of the reasons why Home Improvement and Hope Depot
have been so resilient is because a large portion of
the industry has to do with that maintenance and repair
oriented work. So I think that's where they're seeing a
lot of the lift now. It's homeowners are taking care
of the things that they need to just to maintain
their home. This really isn't no, it's been a couple
of quarters now where we've heard from them that big
(13:07):
ticket discretionary categories have been relatively weaker. So think about
things like kitchenry models, bathroom models, flooring projects. These are
things that tend to be financed by the consumer, and
with rates as high as they are right now, it's
just become a little bit prohibitive for them to undertake
those projects. So I think in order to see more
robust growth out of these categories, which is really the
(13:29):
missing piece of the story, we need to see rates
start to come back down a little bit.
Speaker 2 (13:34):
How about tires. Is that impacting the costs of their
goods like getting lumber from Canada, for example.
Speaker 6 (13:41):
So we think Home Depot's pretty well positioned from a
tariff perspective. They source about fifty percent of the products
they sell from inside the US, and you know, like
a lot of other retailers, over the last decade, they've
done a great job in diversifying their supply chain. They
actually said that over the next twelve months, no single
country outside of the US is going to account for
(14:01):
more than ten percent of their product purchases. So the
fact that they're diversifying their supply chain should help with costs.
At the same time, given their scale the largest home
improvement retailer, they'll have the ability to push back on
some of their suppliers in terms of cost. Now, what
they said is that they're looking to generally maintain their prices,
(14:21):
so I think people took that as a positive. You
have to remember Home Depot sales about thirty thousand to
forty thousand products in their store. So when they talk
about pricing, they take a portfolio approach. So you may
not see them raise the price on a particular item
that was tariffed, but they look at the elasticities of
their various products and they'll take prices they need to
where they can, gotcha.
Speaker 3 (14:43):
So they're going to manage that margin. So they're not
going to sacrifice margin then.
Speaker 6 (14:49):
So they actually guided to an operating margin pretty much
in line with what they were looking for at the
end of last quarter. There are a couple puts in takes.
They're doing better on shrinks, so they're managing their re
tell theft a little better, which is always a positive.
So they're also you know, getting some more leverage from productivity.
So you know, I think pricing is going to be
(15:10):
a component of it, but they also have other levers
within the business that are going to help to maintain
their margins, you know, where they expected them.
Speaker 2 (15:17):
Just what's home Depot do with the number of stores?
Have they added stores? Are they fully kind of where
they want to be? What's the store count story?
Speaker 6 (15:26):
Yeah, So interestingly, Home Depot over the last year has
actually returned to store growth, which is something we haven't
seen from them in a very long time. They kind
of have had the established footprint in the US, but
as the business has grown so much, as they've grown
their pro business, they've started to add new stores in
markets where you know, populations are growing or where they
want to kind of take some of the pressure off
(15:48):
the existing store base to look to drive some additional productivity.
So this year they're adding about thirteen new stores. They're
going to do that. I think their their plan was
about eighty over a five year period, So the next
couple of years they'll continue to add.
Speaker 2 (16:01):
To you to our thanks, did you're writing, Bloomberg Intelligence,
US homebuilding analyst.
Speaker 3 (16:05):
We move next to earnings from the off price retailer TJX.
Speaker 2 (16:08):
TJX reported a gross margin shortfall for its first quarter
and issued for your guidance that fell short expectations.
Speaker 3 (16:15):
However, the company said it's global network of vendors and
flexibility on prices will help it manage future tariff pressures.
Speaker 2 (16:21):
For more, we were joined by Mary Ross Gilbert, Bloomberg Intelligence,
senior equity analysts covering retail.
Speaker 3 (16:26):
We first asked Mary for her key takeaways from tjx
as results.
Speaker 7 (16:29):
So, when I look at the results, they beat for
the quarter. They beat on the top line, you know,
for total sales, and they came in line on comp
sales comp sales being up three percent, and that was
at the high end of their guidance. The real issue,
I think is the forward guidance. So when you look
at the second quarter, analysts were looking for EPs of
(16:51):
about a dollar four and the top end of their guidance,
it's ninety seven cents to a dollar, and so I
think there's a disappointment there. But frankly, this management team
really executes. They tend to provide conservative guidance, So we
really view this as whatever guidance they put out there,
we see upside to it. They certainly have seen a
(17:14):
strong start to the second quarter concerns around tariffs. They're
saying that they can mostly mitigate most of the impact
when it comes to directly sourced merchandise. And then with
regard to indirectly sourced merchandise, this is where they're buying overstocks.
They'll be able to negotiate. They see plenty of availability
(17:37):
and so they see a lot of opportunity in terms
of the buying there, and they'll make sure that they
always maintain that gap, and that gap being twenty to
sixty percent versus what you'd see a department in specialty store.
Speaker 3 (17:50):
Oh I know, yes, I was telling these guys that
I feel like I'm single handedly keeping home Goods in business,
having to furnish a house.
Speaker 2 (17:58):
Who is the TJX consumer other than Alex Deal and
Lisa MATTEI, who I know? Who is that consumer? Who
is that customer and what's the company saying about their
their customer.
Speaker 7 (18:08):
So Paul gg Max's customer, you know, Marmax and Home Goods,
it spans from low income all the way up to
high income. So within the Marmax you know, which is
where you have TJ Max and Marshall's, they carry brands
as high as Gucci, Fendy, Chloe, you name it, and
(18:29):
we see a lot of that merchandise there. They have
stores where you can walk in and you'll see these
high end handbags and glass cases, just like you would
in a department store where it's really tethered, and so
they have that as well. But then they also have
you know, more moderate brands like a Tommy hillfigure and
a Calvin Klein or Juicy Couture, even you know, at
(18:51):
a lower end there.
Speaker 8 (18:53):
So they're able to attract.
Speaker 7 (18:55):
All income levels and they know how to merchandise stores
appropriately all around the country and actually all around the world,
because we're seeing strength in all of their markets. And
you raised a good point, Alex. I think you talked
about home goods, and you're absolutely right. Home goods actually
led the comps. They were up four percent and so
(19:18):
when you look at the comps that were at Marmax,
they were up two percent, so they definitely saw strength
and home goods our.
Speaker 2 (19:25):
Thanks to Mary Ross, Gilbert Bloomberg Intelligence senior equitanaals covering retail.
Speaker 3 (19:29):
This week, we focused on the Bloomberg Big Take story
titled Possible Cancer Health risks are lurking in a popular
OTC drug and you can find it on Bloomberg dot
com and in the terminal.
Speaker 2 (19:39):
The story looks at the dangers of a widely available
drug for urinary tract infections that has never been formally
approved by the US government, and it's not the only one.
Speaker 3 (19:48):
For more. We were joined by the story's author, Anna Edney,
Bloomberg National healthcare reporter, and we first asked Anna to
walk us through some of the over the counter drugs
discussed in the story.
Speaker 9 (19:56):
Probably the most popular one, I think a lot of
our listeners will recognize as Azo. It's an over the
counter drugs, so you can go into most any store
you know, Target, Walmart, anything like that, and and purchase it.
You don't need a prescription. Your a stat is another brand,
but all of these stores also make their own generic version,
(20:21):
so it's something that is supposed to treat the pain
with your airy tract infections. A lot of people seem
to think it goes beyond that and it's actually curing
their infections. So one of the issues being that, you know,
people might need antibiotics, but instead they're they're using this.
Speaker 3 (20:41):
Now, what's the drug in it that is causing some
of the issues and how do we know?
Speaker 9 (20:47):
Yeah, so this is the active ingredient in all of
these drugs. It's what the generics will go by. It's
called naso purdine. I may still be butchering that name,
but it's an unapproved drug, which was really interesting to
me and something sort of new to me even though
I've covered these issues for a long time that I
(21:09):
came across. What it means is the FDA has never
formally approved this drug, so, you know, while millions of
women are using it for decades that there's never been
a true vetting of, you know, how this drug interacts
with our bodies. One of the things that a National
(21:30):
Cancer Institute's study found, this was back in nineteen seventy eight,
is that it caused tumors to form in rats and mice.
That's never been looked at in humans because it's never
been this drug has never gone through clinical trials or
anything like that.
Speaker 3 (21:47):
That is just that statement is so insane, And Paul,
just me, I'll explain to you a little bit here.
So if you have a UTI, it comes on really fast.
And if you order to get medication from your doctor aginecologists,
you have to go in so they can test it.
And if you're in pain and you know what it
is because as you've had it before, you just go
to the store, pick it up and you feel better
in twenty four hours. Like that's why these drugs are
(22:08):
so popular and easy to access.
Speaker 2 (22:10):
And what I learned and a story, and they're not
FDA approved. They are essentially grandfathered in. So if I'm
walking down the aisle looking at you know, over the
counter drugs, do I have any way of knowing what's
been FDA approved and maybe what hasn't been.
Speaker 9 (22:26):
Yeah, I think that's a really good question. And there
were multiple, you know, quotes out there from congressional testimony
and other places where FDA staff members were talking about
there's you know, there are many such grandfathered in kind
of drugs, but the agency did not give me a list,
wouldn't even tell me how many might be out there,
(22:50):
But there is potentially you know this is this takes
a little sleuth thing. It's not that easy to do
in the drug store aisle. But there's a website that
the National Institute of Health runs called Daily Med and
people can search by drug there. I wouldn't say it's
like the misuser friendly looking piece, but if you look
for azo or you're a stat or Finazo, Piaroty in
(23:12):
any of those, what will come up as kind of
a disclaimer saying, you know, this hasn't been vetted by
the Food and Drug Administration, its safety is not known,
and that kind of gives you an indication. You can
dive deeper into that data and you can actually see
that it's unapproved, but just for the lay person at
least with that disclaimer, that would give you a good
idea at the top.
Speaker 3 (23:31):
So what happens then.
Speaker 8 (23:33):
I think that's a good question.
Speaker 9 (23:34):
So the FDA is they have a system where they're
supposed to have vetted these kind of very old drugs
and given them what's called a monograph. This is the
agency's instruction book. Here's how this drug should be made,
Here's how the dosing, what it should be, here's how
it should be manufactured. They have not done that for
(23:54):
FINASO piaroting. So it's possible that, you know, with this
increased attention, that they could decide to look into that.
There's you know, they asked in two thousand and three
whether this drug should actually be prescription only, just given
the risks and that people don't often follow directions on
(24:15):
OTC drugs. You know, you're only supposed to take this
for two days, and you're not supposed to take it
all the time. There are companies, particularly online retailers, that
are really pushing this drug on women and girls, kind
of just to have on hand all the time.
Speaker 2 (24:30):
Our thanks to an Ednie Bloomberg national healthcare reporter.
Speaker 3 (24:34):
Coming up on the program, we're going to look at
how diversity, equity and Inclusion DEI efforts have changed at
US companies.
Speaker 2 (24:40):
You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
depth research and data on two thousand companies and one
hundred and thirty industries. You can access Bloomberg Intelligence via
bi go on the terminal.
Speaker 3 (24:49):
I'm Paul Sweeney and a Malex Steel, and this is Bloomberg.
Speaker 1 (25:00):
You're listening to the Bloomberg Intelligence podcast. Catch us live
weekdays at ten am Eastern on Applecarclay, and Android Auto
with the Bloomberg Business App. Listen on demand wherever you
get your podcasts, or watch us live on YouTube.
Speaker 3 (25:14):
This week, we focus on a Bloomberg Big Take story
titled Apple Spending Billions and still has it managed to
crack AI? You can find it on Bloomberg dot Com
and the Terminal.
Speaker 2 (25:23):
The story looks at Apple's continued failures to get artificial
intelligence right, and it discusses how this threatens everything from
the iPhone's dominance to plans for robots and other products.
Speaker 3 (25:32):
For more, We are joined by the stories author Mark German,
Bloomberg News Managing editor for Global Consumer Tech.
Speaker 2 (25:37):
First, ask Mark about what's going on at Coopertino as
it relates to AI.
Speaker 10 (25:42):
Well, philosophical differences, mismanagement and the biggest thing is they
were blindsided when generative AI with chat, GPT and GitHub
launched back in twenty twenty two. November twenty twenty two.
I'm told Apple Intelligence wasn't even an idea back then. Why, well,
they missed the boat.
Speaker 3 (26:00):
But how I mean? I mean, I don't understand.
Speaker 10 (26:03):
Yeah, well, clearly there was philosophical disagreement, in philosophical disinterest
in the topic of artificial intelligence. I write about how
Craig freederighi, Apple's senior VP of software engineering, doesn't really
believe in these multi billion dollar projects. He tends to
try to shut down or steer away from projects of
that sort, and AI is something of that nature. AI
(26:24):
is quite a bit messy. They're known for the very
intricate and well designed user experiences. AI sometimes with hallucinations
can take away from that. But I think they didn't
think it was going to be as big of a
thing as it became today. A lot of it fell
on deaf years years ago, I'm told. But really, this
is a company that's known for updating their operating systems
once a year. It's known as a company that focuses
(26:47):
on the minutia, and they missed the big picture here
with artificial intelligence, and it really is a shame. You know,
the big picture here isn't the AI capabilities of its
devices today. The big picture today is the AI capability
of future hardware. If you don't have the core technology,
the AI ready to go at a deep level, how
are you going to develop products like humanoid robots, smart glasses,
(27:11):
watches in AirPods with depth sens and cameras for AI purposes.
Can't do any of that if you don't have that technology.
So they need to seriously turn this thing around quickly
or they're going to be in big trouble. This is
as core technology as the touchscreen.
Speaker 8 (27:28):
Wow.
Speaker 2 (27:29):
I mean, first of all, how many words is this story?
Speaker 9 (27:31):
Dude?
Speaker 10 (27:31):
Six thousand?
Speaker 9 (27:32):
Yeah?
Speaker 2 (27:32):
This is a long, well that story, folks. So if
you wouldn't get smart on AI and Apple, you got
to read the story. It's in the Bloomberg Business Week,
It's on the terminal. I'm sure it's everywhere else as well.
Speaker 6 (27:43):
Mark.
Speaker 2 (27:43):
What can they do if I'm an investor? That's the
only question I have for Tim Cook. Can you guys
catch up and get some of that AI pixie dusk
in your stock?
Speaker 10 (27:53):
Yes, they need to make acquisitions and they need to
up the percentage of that R and D budget tied
to AI. They need to up that percentage. They need
to allocate more of their hires to AI as well.
So they need to go big or go home on this.
Speaker 2 (28:07):
And I think do they know that? Do you think?
Speaker 6 (28:09):
Yeah?
Speaker 10 (28:10):
Of course they know that.
Speaker 3 (28:10):
Okay, how do they go big?
Speaker 10 (28:13):
You got to spend more money. AI is really one
of the only things that you can buy your way
into when it comes to this technology, right, you can
buy your way into it. You just need to throw
billions and billions at AI training. They need to make
probably some tweaks to their privacy policy. Right, they have
so many devices, They have more devices than anyone else
as a single brand of a hardware company, of any
(28:34):
company in the entire world, in the history of the world.
But they don't leverage that because of their privacy stands.
So maybe make some tweaks there to be able to
collect some more data, maybe figure out a way to
convince people to give up some of their data for
this purpose. And I think that could go a long
way for them. So spending money collecting more data.
Speaker 2 (28:52):
Is there somebody out there that they could buy, should buy,
that would leapfrog them?
Speaker 3 (28:56):
Do you think they hate doing that though?
Speaker 2 (28:57):
Right?
Speaker 10 (28:58):
Well, the problem is this philosophical discussed. I would say
to making these large acquisitions if I told you, I mean,
you know this is true, so maybe you're not a
good example. But if I said to someone who didn't
know the company as well as you too. Would you
believe me if I told you that Apple's biggest acquisition
in the history of the company was three billion dollars?
Speaker 3 (29:16):
I actually believe that.
Speaker 2 (29:17):
Well, you believe that.
Speaker 10 (29:18):
Because you know that, But I think if you ask
people who didn't know that, that would be completely unbelievable.
Speaker 6 (29:23):
Yep.
Speaker 10 (29:23):
They make these small acquisitions, and in addition to not
wanting to spend big bucks on a company, they're really
poor at integrating companies. The Beats integration, integrating all those
engineers into the company, Disaster Intel, they bought the modem
unit for a billion dollars back in nineteen Disaster. What
is it going to feel as an AI person at
(29:44):
Apple today if you're bringing if the company buys your
replacement to bring them in, It's not going to be fun.
There's enough turf wars as it is at Apple.
Speaker 3 (29:53):
So if they do then have to do it internally,
they've still not done well at that.
Speaker 10 (29:58):
They've got to do both. They got to make the
equ position, They got to just deal with that. They
got to make their biggest acquisition ever, and it has
to be for AI, maybe multiple acquisitions. They have to
turn things up a notch internally as well. They're going
to be making changes. I mean, there's so many philosophical disagreements.
The biggest is about chatbots. When it comes to AI.
They are allergic to AI chatbots. They don't like the technology.
(30:20):
They don't think open ai has staying power. So you're yes,
I know.
Speaker 3 (30:24):
I made a face when he said that. You're going to.
Speaker 10 (30:27):
See deeper integrations with other companies. You're going to see
Google Gemini integration. I think next year you'll see Perplexity integration,
maybe some Anthropic integration, maybe some Microsoft integration. But they're
going to keep pushing and this is going to be
a multi year thing. The biggest problems they were caught
off guvernment's happened, so they had no head start on this.
They're coming way from behind.
Speaker 2 (30:47):
Well yeah, it's amazing. It's amazing now that some people
would say, hey, they're rarely first phones. Oh boy, when
they decide to get into phones, they do it.
Speaker 10 (30:56):
That's the big difference. They were not first and they're
the worst, all right.
Speaker 3 (31:00):
Thanks to Mark German and Bloomberg News Managing editor for
Global Consumer Tech.
Speaker 2 (31:04):
This week we focused on a story on the Bloomberg
terminal and Bloomberg dot Com entitled Despite Backlash, DEI Hasn't
Disappeared at US companies.
Speaker 3 (31:12):
It discusses how Walmart and other large US companies have
made modest changes to their diversity, equity and inclusion efforts,
but most programs retained intact with minor adjustments.
Speaker 2 (31:22):
From where we were joined by the story's author, Simone Foxman,
reporter for the Bloomberg News Equality Team. We first asked
Simone to break down what she's learned recently about DEI
at US companies.
Speaker 11 (31:32):
Well, Frankly, I've been talking to senior executives at large
companies their corporate advisors ever since Trump's executive orders came
out on January twenty first, and the message I've been
hearing is no, Frankly, many of the programs that were
part of diversity, equity and inclusion, many of which had
frankly been around since long before the acronym even existed,
(31:54):
they're still there. They've had some tweaks, maybe, and we
can talk about exactly what those are, but they companies
still believe that these underlying programs the ones that will
help them recruit diverse talent as well as keep employees happy.
Speaker 8 (32:09):
These are largely there.
Speaker 11 (32:11):
And so even at companies that have sort of tried
to send a message to their to perhapshaps the Trump administration,
perhaps conservative activists, they're sending a very different message to
their employees and investors.
Speaker 8 (32:23):
Well.
Speaker 2 (32:23):
I think what got a lot of people's attention, including myself,
was when Walmart came out and said they were going
to scale back DEA. I mean, it'sok, a monster employer
all over the country. What did you find at Walmart? Oh?
Speaker 8 (32:35):
I mean, even when that announcement came out.
Speaker 11 (32:36):
Which was just before Black Friday, if you looked into
the actual depth of what they were talking about, sunsetting
the term DEI in favor of belonging.
Speaker 9 (32:47):
Ok.
Speaker 8 (32:47):
You know these aren't why.
Speaker 11 (32:50):
The huge enormous things a racial equity training that they
had had in conjunction with a racial equity institute. It
hadn't been offered since the spring of that year, and
that was something that they said, Okay, we're not.
Speaker 8 (33:03):
Going to have this anymore.
Speaker 11 (33:05):
In fact, you know, Walmart still mentioning in its job
postings that they want associates who are committed to diversity,
equity inclusion. Spokesman told us that they're trying to phase
out that language in posts, and some people call different names, but.
Speaker 3 (33:19):
At what are the names? Like, what are the kind
of things that people are now sort of spinning out there?
Speaker 11 (33:24):
I mean it depends company by company. At Walmart, supplier
diversity became supplier inclusion, for example, and there were some
small tweaks to their supplier diversity program not just focusing
on race and gender in terms of trying to find
diverse suppliers.
Speaker 8 (33:39):
But they're absolutely.
Speaker 11 (33:40):
Still highlighting brands that are owned by women, Hispanic people,
black people, it's lgbt Q, i A plus people.
Speaker 8 (33:50):
These in fact all have landing pages. So it clearly
speaks to the idea that consumers want this.
Speaker 11 (33:56):
They're they're looking for brands, or Walmart believes they're looking
for these brands. So maybe that's not somewhere where they
really pull back, you know, Does that satisfy the Trump administration,
conservative activists, et cetera.
Speaker 8 (34:11):
Maybe maybe not. I will say one thing as well that.
Speaker 11 (34:15):
Was very controversial. We're sort of demographic targets. For example,
we want to double the number of women in senior
management roles by twenty twenty six. That target that, you know,
very specific target. Lawyers are advising companies that this sounds
a little bit too much like a quota, so don't
have that anymore, or if I guess the lawyers are saying,
(34:37):
don't have that, you know at best, you know companies
are not having that publicly because that is a little
bit on that legal gray area not sorted out by
the court, but something even a voluntary target that lawyers
say you might want to stay away from that.
Speaker 2 (34:52):
But I sort remember, you know, talking about internships, mentor
programs that help marginalize groups, and maybe you know talking
about hiring and historically black colleges and universities. Is that
under pressure or is that going to be changing?
Speaker 11 (35:06):
So those are actually two different things. One, mentorships and
internship programs have now been opened to everyone, and this
is sort of another thing that was recommended by lawyers.
Came especially after the Students for Fair Admissions at Harvard
decision HBCU scholarships. However, if you know recruiting from a
(35:30):
specific HBCU historically black college and university, these are actually
still getting a lot of interest from companies because there
are something that.
Speaker 8 (35:39):
Is extremely legally above board.
Speaker 11 (35:42):
Anyone can apply to go to an HBCU and a
company can choose to hire or to have a scholarship
or internship program specifically targeted towards an HBCU, and because
anyone can go there, that that means they're definitely not,
you know, discriminating on race from a legal perspective, and frankly,
you know, among conservative groups, this is a little bit
(36:04):
of a bone.
Speaker 8 (36:06):
It's a little bit of a.
Speaker 11 (36:07):
Kind of subjective controversy because these are you know, HPCU
programs are the ones that feel.
Speaker 8 (36:13):
Like DEI at its very.
Speaker 11 (36:16):
Heart, and frankly, they were the way to try and
increase the pipeline of black managers and black engineers and
technologists and et cetera. So we'll see if there's more
at tax on those specific programs going forward. At at
the moment, that seems to be a legal area where
you know, many companies are doing.
Speaker 3 (36:36):
Do you get the sense from any companies that there
is a worry about going too far in the other direction,
like stripping out certain things that actually need to be
thought of and done.
Speaker 11 (36:46):
One hundred percent absolutely, And you know, when you talk
to a senior executive at an accounting firm was telling
me they just need accountants. They cannot get accountants unless
they are going to places where people have not been
exposed to accounting to try and encourage them to work
for them.
Speaker 8 (37:05):
They don't want to make young people unhappy.
Speaker 5 (37:07):
You know.
Speaker 11 (37:07):
These are affinity groups. Employee resource groups still exist in part.
Maybe they're scrutiny of their spending, but they still exist
a lot because this is stuff that makes people happy
to come to work, and companies are very afraid because
the actual employment law has not changed substantially. They are
very afraid that they are going to see your traditional
(37:28):
discrimination suits filed by women, people of color, LGBTQ, people,
people with disabilities a right.
Speaker 3 (37:35):
Thanks to Simone Foxman, reporter for the Bloomberg News Equality Team.
Speaker 1 (37:39):
This is the Bloomberg Intelligence podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live each weekday,
ten am to noon Eastern on Bloomberg dot Com, the
iHeartRadio app, tune In, and the Bloomberg Business app. You
can also watch us live every weekday on YouTube and
always on the blue Burg terminal
Speaker 6 (38:04):
M
Bloomberg Audio Studios, podcasts, radio news. This is Bloomberg Intelligence
with Alex Steel and Paul Sweeney.
Speaker 2 (00:14):
The real app performance has been in US corporate high yield.
Speaker 3 (00:17):
Are the companies lean enough? Have they trimmed all the fats?
Speaker 2 (00:19):
The semiconductor business is a really cyclical.
Speaker 1 (00:22):
Business, breaking market headlines and corporate news from across the globe.
Speaker 3 (00:26):
Do investors like the M and A that we've seen?
Speaker 2 (00:29):
These are two big time blue chip companies.
Speaker 3 (00:32):
Window between the peak and cunt changing super fast.
Speaker 1 (00:36):
Bloomberg Intelligence with Alex Steele and Paul Sweeney on Bloomberg Radio.
Speaker 2 (00:42):
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 our analysts cover worldwide.
Speaker 2 (00:54):
Today, well look at why home improvement has been resilient
at the retailer.
Speaker 3 (00:57):
Home depot, and we'll discuss why the tech giant Apple
still hasn't managed to crack AI.
Speaker 2 (01:01):
But first we begin with earnings from the retailer Targets.
Speaker 3 (01:04):
This week, Target reported sales that dropped in the first quarter,
and the company also cut at sales forecast for the year.
Speaker 2 (01:09):
Target sited inclining consumer spending along with the impact of
tariffs and boycotts.
Speaker 3 (01:13):
Target shares fell after the report and raise some questions
over the company's ability to recapture growth after two years
of choppy results.
Speaker 2 (01:19):
For more, we were joined by Jennifer Bartashi's Bloomberg Intelligence
senior analyst Retail, Stables and packaged Food.
Speaker 3 (01:25):
We first asked Jennifer if she was surprised by the results.
Speaker 4 (01:28):
None of this really was a surprise. It's really about
the degree to which it was a surprise. So sales
came in softer than expected, profit was a little softer
than expected, And it's just I think people are waiting
for Target to say how they're going to fix it.
And you know, they came out talking about a new office,
you know, to accelerate their plans. But I think people
(01:49):
are just waiting for something tangible that they can really
hold the company accountable for to reignite growth in the
in what they're trying to do.
Speaker 2 (01:57):
What does Target need to do specifically, because it seems
like I don't know it just every time I've walk
into a Target, it's lots of people doing stuff. The
shelves are in good shape. What do they need to
do well?
Speaker 4 (02:07):
A lot of it is continuing what they've started, which
is improving their merchandise mix. You know, Target does best
when their assortment is new, it's fresh, it's relevant to people,
and they've made good strides in that area. But those
types of changes take time for consumers to see and
to start to embrace, and it's just a hard environment
(02:27):
where people are still being a little bit conservative for
those changes to really create some momentum in the business.
Speaker 3 (02:34):
So where are they with the pricing stuff in terms
of their inventory, in terms of tariffs, in terms of
where they source their material.
Speaker 4 (02:42):
Yeah, so from a pricing perspective, you know, when people
look at value, price is one of the first things
they look at. They're fairly priced competitive, and we've seen
an uptick in the number of promotions that they're doing,
so you know, buy forty dollars of these kinds of
essentials and get a five dollars gift card. They're doing
a lot more of that kind of promotion to pull
people in. But one of the issues is that they
(03:04):
talk today about inventory and having to you know, adjust
and right size their inventory. And that's a little bit
concerning because that's been a topic that has It's not
new for Target, It's come up a couple of times
in the past few years. And so the fact that
they are expecting, you know, some inventory adjustments and markdowns
to weigh on margins and profit you know, for the
(03:26):
next quarter, is a little bit concerning that they still
haven't quite figured out how they're going to navigate that, Jen.
Speaker 2 (03:32):
I know Walmart said on there recently that they would
pass along probably some of their terror related cost increases
to consumers, and then President Trump came out pretty publicly
against that. What is Target saying about their ability to
take whatever price increases cost increases may come about through tariffs,
either in their margin or passing it along to consumers.
Speaker 4 (03:54):
Yeah, it's a definitely a good topic, Paul, And you
know what they said was that price increases would be
the last resort, but they didn't count them out. Instead,
they focused on the tactics that he needs to try
to mitigate some of the some of the pressure from tariffs.
They're the same levers that every company is pulling. It's
using your scale, it's working with your suppliers, it's trying
(04:15):
to negotiate better you know, you know, better sourcing and
better prices on the on the purchasing side. So you know,
Target is certainly able to offset some of the some
of the cost of tariffs, but it would be surprising
if they can offset all of it. And and ultimately
they're most likely going to have to be some selective
price increases that get pushed through.
Speaker 3 (04:35):
Oh what are there? What's their inventory like in terms
of that part and how that filters into their pricing.
Speaker 4 (04:42):
Yeah, so inventory has actually been getting a little bit
better in terms of on shelf availability and tracking through
the supply chain. It's just I think because they skew
so much more to discretionary. If there's like, for example,
in first quarter, we had some very unseasonably cold weather
that impact apparel sales, That impacts a lot of those things.
(05:02):
So you know that that increases markdowns. Hopefully that's a
transitory type of thing. But they are talking about getting
their inventory right sized as they head into back to
school and the holiday season.
Speaker 2 (05:13):
And Jen the stock seems cheap to me? Is it
cheap on a historical basis? Or how are people thinking
about valuation?
Speaker 4 (05:21):
Yeah, it's it's definitely, you know, at a discount from
it from a historical, you know, valuation perspective. But I
think part of the part of the reason that it
is where it is is that for a long time,
what has differentiated Target was their private label selection, their
own brands things that the quality of those brands where
people could get value and style at a really compelling price.
(05:43):
In the last couple of years, a lot of their competitors,
whether you're talking about Walmart or Cohal's or or or
companies like that, have invested in their private label. They've
improved the quality, They've they've become a little bit more
fashion forward, and that's that erodes the differentiation that it
has always enjoyed and part of what has catapulted their
success in recent years. So until Target gets that newness
(06:08):
and that assortment readjusted again to be a leader and
a differentiator, you may see that kind of valuation discount
persist our.
Speaker 2 (06:17):
Thanks to Jen Bartashi's Bloomberg Intelligence Senior Retail Analyst.
Speaker 3 (06:20):
Each week we look at research from Bloomberg n EF
previously known as New Energy Finance. They're the team at
Bloomberg the tracks and analyzes the energy transition from commodities
to power, transport, industries, buildings, and agricultural sectors.
Speaker 2 (06:32):
This week we looked at how the cost of clean
energy technologies has changed. Solar and wind have been the
most competitive source of new power for a few years.
Speaker 3 (06:40):
Now and for more. We are joined by Amar vasdev
v an EF, a lead levelized cost expert. We first
asked AMR to break down his research and what his
team actually does.
Speaker 5 (06:50):
Effectively. We collect cost data on recently finance power projects
and we sum that up into a metric that we
call the levetized cost of electricity. And in short, what
that is is it tells us what the long term
off take price is that project developer needs to hit
their IRR, recoup all of their costs and of course
(07:11):
pay back the pay the taxes.
Speaker 2 (07:14):
So, Amara, here's what I don't think people understand, and
I did not understand it until recently, that renewables are
the cheapest source to meet new demand almost everywhere. Talk
to us about that.
Speaker 5 (07:27):
Yeah, So the cost reductions in renewable technology, so specifically
wind and solar, have been quite remarkable over the last
decade or so. And so when we look at those
projects that were financed last year and we estimate those costs.
We find that either wind or soda is out competing
(07:47):
either coal or gas in markets that are equivalent to
two thirds of global power generation, so that includes China,
includes most of Europe as well.
Speaker 3 (07:58):
But we take into a the intermittent power issue for
wind and solar and how does that change the cause
profile Like it might be cheaper to build a wind
a wind farm than a billion nuclear plant, but the
intermittent power of it all is an issue.
Speaker 5 (08:12):
Yeah, that is definitely right. It is a it is
a problem with renewables that is often cited. But there
are supporting technologies for supporting a grid that is dominated
by wind and soda, and that would be battery storage
(08:34):
for example. And so if we look last year alone,
the cost of the typical projects fell by one third
and out to twenty thirty five, we estimate that the
cost of battery storage projects for by fifty percent. So
there are supporting technologies that pair with wind and soda,
(08:56):
and we also model we look at these, we break
them down, and we look at the view out of
twenty fifty how different power markets are likely to change.
And just to put that in context, when we take
that system view, we see that there are really strong
long term fundamentals for renewables. So today wind and soda
(09:19):
around eight percent of generation and that increases to sixty
percent in our modeling by twenty fifty. And at the
same time, the flip side of that is with fossil
few assets, so coal and gas plants today they're at
sixty percent. By twenty to fifty they go down to
twenty five percent. And what they do is they kind
of operate in a space where they support wind and
(09:41):
soda as well as battery storage.
Speaker 2 (09:44):
So thinking just in the near term, what do high
tariffs and maybe possible cuts to tax credits, what does
that mean for this transition? Does it slow it down materially? Possibly?
Speaker 5 (09:57):
Yeah, it is a really interesting question, and it's as
you know, it's moving very quickly. So our team in
the US are really attracting this very very closely. And
what we can say is that the policy and tariff
uncertainty is posing a challenge for business confidence. It kind
(10:17):
of impacts the willingness and investor appetite. But we do
see that there is resilient demand that deployment stays resilient
over the next ten years or so, because we do
see increased electricity demand from AI needs from manufacturing as well,
(10:38):
and what tends to be the cheapest source of electricity
is wind and soda, so there is resilient deployment. We
did model a scenario where if tax if tax credits
were cut, the amount of wind and soda being added
over the next ten years would reduce by around seven
(11:00):
teen percent or so. So there is there is a
material impact. But if we're adding new power to the
if we're adding new supply to the grid, then it
would tend to come from wind and sola.
Speaker 3 (11:12):
What about geothermal? The administration is definitely positive on geothermal.
In speaking with the Energy Secretary here, he speaks a
lot about that as well as clean coal. What's the
cost profile like for geothermal?
Speaker 5 (11:25):
Yeah, it's hard for me to comment on that. I
think the configuration of geothermal changes significantly, but there have
been developments recently, and I suppose with the pairing with
the kind of coupling with oil and gas experience with geothermal,
there's a lot of overlap there on the specific costs.
Speaker 2 (11:43):
I couldn't comment on our Thanks to amar a Vestev
b n EF lead levelized cost Expert.
Speaker 3 (11:49):
Coming up, We're going to look at why cancer risks
are being linked to a popular over the counter drug.
Speaker 2 (11:53):
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. You can access Bloomberg Intelligence via
Bidell on the terminal.
Speaker 3 (12:02):
From Whole Sweeting and a Malex Steel and this is Bloomberg.
Speaker 1 (12:09):
You're listening to the Bloomberg Intelligence podcast. Catch us live
weekdays at ten am Eastern on Apple, Cocklay and Android
Auto with the Bloomberg Business App. Listen on demand wherever
you get your podcasts, or watch us live on YouTube.
Speaker 3 (12:24):
We move next to news from the world's largest home
improvement retailer, Home Depot.
Speaker 2 (12:28):
This week, Home Depot maintained its guidance for their fiscal
year as US sales ticked up.
Speaker 3 (12:32):
The company said consumers are deferring larger projects due to
the raid environment, but are still taking on smaller home projects.
Speaker 2 (12:38):
For more. We were joined by Drew Redding, Bloomberg Intelligence
US home building analysts.
Speaker 3 (12:42):
We first asked Drew for his take on my home
improvement has been so resilient at home Depot.
Speaker 6 (12:47):
One of the reasons why Home Improvement and Hope Depot
have been so resilient is because a large portion of
the industry has to do with that maintenance and repair
oriented work. So I think that's where they're seeing a
lot of the lift now. It's homeowners are taking care
of the things that they need to just to maintain
their home. This really isn't no, it's been a couple
of quarters now where we've heard from them that big
(13:07):
ticket discretionary categories have been relatively weaker. So think about
things like kitchenry models, bathroom models, flooring projects. These are
things that tend to be financed by the consumer, and
with rates as high as they are right now, it's
just become a little bit prohibitive for them to undertake
those projects. So I think in order to see more
robust growth out of these categories, which is really the
(13:29):
missing piece of the story, we need to see rates
start to come back down a little bit.
Speaker 2 (13:34):
How about tires. Is that impacting the costs of their
goods like getting lumber from Canada, for example.
Speaker 6 (13:41):
So we think Home Depot's pretty well positioned from a
tariff perspective. They source about fifty percent of the products
they sell from inside the US, and you know, like
a lot of other retailers, over the last decade, they've
done a great job in diversifying their supply chain. They
actually said that over the next twelve months, no single
country outside of the US is going to account for
(14:01):
more than ten percent of their product purchases. So the
fact that they're diversifying their supply chain should help with costs.
At the same time, given their scale the largest home
improvement retailer, they'll have the ability to push back on
some of their suppliers in terms of cost. Now, what
they said is that they're looking to generally maintain their prices,
(14:21):
so I think people took that as a positive. You
have to remember Home Depot sales about thirty thousand to
forty thousand products in their store. So when they talk
about pricing, they take a portfolio approach. So you may
not see them raise the price on a particular item
that was tariffed, but they look at the elasticities of
their various products and they'll take prices they need to
where they can, gotcha.
Speaker 3 (14:43):
So they're going to manage that margin. So they're not
going to sacrifice margin then.
Speaker 6 (14:49):
So they actually guided to an operating margin pretty much
in line with what they were looking for at the
end of last quarter. There are a couple puts in takes.
They're doing better on shrinks, so they're managing their re
tell theft a little better, which is always a positive.
So they're also you know, getting some more leverage from productivity.
So you know, I think pricing is going to be
(15:10):
a component of it, but they also have other levers
within the business that are going to help to maintain
their margins, you know, where they expected them.
Speaker 2 (15:17):
Just what's home Depot do with the number of stores?
Have they added stores? Are they fully kind of where
they want to be? What's the store count story?
Speaker 6 (15:26):
Yeah, So interestingly, Home Depot over the last year has
actually returned to store growth, which is something we haven't
seen from them in a very long time. They kind
of have had the established footprint in the US, but
as the business has grown so much, as they've grown
their pro business, they've started to add new stores in
markets where you know, populations are growing or where they
want to kind of take some of the pressure off
(15:48):
the existing store base to look to drive some additional productivity.
So this year they're adding about thirteen new stores. They're
going to do that. I think their their plan was
about eighty over a five year period, So the next
couple of years they'll continue to add.
Speaker 2 (16:01):
To you to our thanks, did you're writing, Bloomberg Intelligence,
US homebuilding analyst.
Speaker 3 (16:05):
We move next to earnings from the off price retailer TJX.
Speaker 2 (16:08):
TJX reported a gross margin shortfall for its first quarter
and issued for your guidance that fell short expectations.
Speaker 3 (16:15):
However, the company said it's global network of vendors and
flexibility on prices will help it manage future tariff pressures.
Speaker 2 (16:21):
For more, we were joined by Mary Ross Gilbert, Bloomberg Intelligence,
senior equity analysts covering retail.
Speaker 3 (16:26):
We first asked Mary for her key takeaways from tjx
as results.
Speaker 7 (16:29):
So, when I look at the results, they beat for
the quarter. They beat on the top line, you know,
for total sales, and they came in line on comp
sales comp sales being up three percent, and that was
at the high end of their guidance. The real issue,
I think is the forward guidance. So when you look
at the second quarter, analysts were looking for EPs of
(16:51):
about a dollar four and the top end of their guidance,
it's ninety seven cents to a dollar, and so I
think there's a disappointment there. But frankly, this management team
really executes. They tend to provide conservative guidance, So we
really view this as whatever guidance they put out there,
we see upside to it. They certainly have seen a
(17:14):
strong start to the second quarter concerns around tariffs. They're
saying that they can mostly mitigate most of the impact
when it comes to directly sourced merchandise. And then with
regard to indirectly sourced merchandise, this is where they're buying overstocks.
They'll be able to negotiate. They see plenty of availability
(17:37):
and so they see a lot of opportunity in terms
of the buying there, and they'll make sure that they
always maintain that gap, and that gap being twenty to
sixty percent versus what you'd see a department in specialty store.
Speaker 3 (17:50):
Oh I know, yes, I was telling these guys that
I feel like I'm single handedly keeping home Goods in business,
having to furnish a house.
Speaker 2 (17:58):
Who is the TJX consumer other than Alex Deal and
Lisa MATTEI, who I know? Who is that consumer? Who
is that customer and what's the company saying about their
their customer.
Speaker 7 (18:08):
So Paul gg Max's customer, you know, Marmax and Home Goods,
it spans from low income all the way up to
high income. So within the Marmax you know, which is
where you have TJ Max and Marshall's, they carry brands
as high as Gucci, Fendy, Chloe, you name it, and
(18:29):
we see a lot of that merchandise there. They have
stores where you can walk in and you'll see these
high end handbags and glass cases, just like you would
in a department store where it's really tethered, and so
they have that as well. But then they also have
you know, more moderate brands like a Tommy hillfigure and
a Calvin Klein or Juicy Couture, even you know, at
(18:51):
a lower end there.
Speaker 8 (18:53):
So they're able to attract.
Speaker 7 (18:55):
All income levels and they know how to merchandise stores
appropriately all around the country and actually all around the world,
because we're seeing strength in all of their markets. And
you raised a good point, Alex. I think you talked
about home goods, and you're absolutely right. Home goods actually
led the comps. They were up four percent and so
(19:18):
when you look at the comps that were at Marmax,
they were up two percent, so they definitely saw strength
and home goods our.
Speaker 2 (19:25):
Thanks to Mary Ross, Gilbert Bloomberg Intelligence senior equitanaals covering retail.
Speaker 3 (19:29):
This week, we focused on the Bloomberg Big Take story
titled Possible Cancer Health risks are lurking in a popular
OTC drug and you can find it on Bloomberg dot
com and in the terminal.
Speaker 2 (19:39):
The story looks at the dangers of a widely available
drug for urinary tract infections that has never been formally
approved by the US government, and it's not the only one.
Speaker 3 (19:48):
For more. We were joined by the story's author, Anna Edney,
Bloomberg National healthcare reporter, and we first asked Anna to
walk us through some of the over the counter drugs
discussed in the story.
Speaker 9 (19:56):
Probably the most popular one, I think a lot of
our listeners will recognize as Azo. It's an over the
counter drugs, so you can go into most any store
you know, Target, Walmart, anything like that, and and purchase it.
You don't need a prescription. Your a stat is another brand,
but all of these stores also make their own generic version,
(20:21):
so it's something that is supposed to treat the pain
with your airy tract infections. A lot of people seem
to think it goes beyond that and it's actually curing
their infections. So one of the issues being that, you know,
people might need antibiotics, but instead they're they're using this.
Speaker 3 (20:41):
Now, what's the drug in it that is causing some
of the issues and how do we know?
Speaker 9 (20:47):
Yeah, so this is the active ingredient in all of
these drugs. It's what the generics will go by. It's
called naso purdine. I may still be butchering that name,
but it's an unapproved drug, which was really interesting to
me and something sort of new to me even though
I've covered these issues for a long time that I
(21:09):
came across. What it means is the FDA has never
formally approved this drug, so, you know, while millions of
women are using it for decades that there's never been
a true vetting of, you know, how this drug interacts
with our bodies. One of the things that a National
(21:30):
Cancer Institute's study found, this was back in nineteen seventy eight,
is that it caused tumors to form in rats and mice.
That's never been looked at in humans because it's never
been this drug has never gone through clinical trials or
anything like that.
Speaker 3 (21:47):
That is just that statement is so insane, And Paul,
just me, I'll explain to you a little bit here.
So if you have a UTI, it comes on really fast.
And if you order to get medication from your doctor aginecologists,
you have to go in so they can test it.
And if you're in pain and you know what it
is because as you've had it before, you just go
to the store, pick it up and you feel better
in twenty four hours. Like that's why these drugs are
(22:08):
so popular and easy to access.
Speaker 2 (22:10):
And what I learned and a story, and they're not
FDA approved. They are essentially grandfathered in. So if I'm
walking down the aisle looking at you know, over the
counter drugs, do I have any way of knowing what's
been FDA approved and maybe what hasn't been.
Speaker 9 (22:26):
Yeah, I think that's a really good question. And there
were multiple, you know, quotes out there from congressional testimony
and other places where FDA staff members were talking about
there's you know, there are many such grandfathered in kind
of drugs, but the agency did not give me a list,
wouldn't even tell me how many might be out there,
(22:50):
But there is potentially you know this is this takes
a little sleuth thing. It's not that easy to do
in the drug store aisle. But there's a website that
the National Institute of Health runs called Daily Med and
people can search by drug there. I wouldn't say it's
like the misuser friendly looking piece, but if you look
for azo or you're a stat or Finazo, Piaroty in
(23:12):
any of those, what will come up as kind of
a disclaimer saying, you know, this hasn't been vetted by
the Food and Drug Administration, its safety is not known,
and that kind of gives you an indication. You can
dive deeper into that data and you can actually see
that it's unapproved, but just for the lay person at
least with that disclaimer, that would give you a good
idea at the top.
Speaker 3 (23:31):
So what happens then.
Speaker 8 (23:33):
I think that's a good question.
Speaker 9 (23:34):
So the FDA is they have a system where they're
supposed to have vetted these kind of very old drugs
and given them what's called a monograph. This is the
agency's instruction book. Here's how this drug should be made,
Here's how the dosing, what it should be, here's how
it should be manufactured. They have not done that for
(23:54):
FINASO piaroting. So it's possible that, you know, with this
increased attention, that they could decide to look into that.
There's you know, they asked in two thousand and three
whether this drug should actually be prescription only, just given
the risks and that people don't often follow directions on
(24:15):
OTC drugs. You know, you're only supposed to take this
for two days, and you're not supposed to take it
all the time. There are companies, particularly online retailers, that
are really pushing this drug on women and girls, kind
of just to have on hand all the time.
Speaker 2 (24:30):
Our thanks to an Ednie Bloomberg national healthcare reporter.
Speaker 3 (24:34):
Coming up on the program, we're going to look at
how diversity, equity and Inclusion DEI efforts have changed at
US companies.
Speaker 2 (24:40):
You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
depth research and data on two thousand companies and one
hundred and thirty industries. You can access Bloomberg Intelligence via
bi go on the terminal.
Speaker 3 (24:49):
I'm Paul Sweeney and a Malex Steel, and this is Bloomberg.
Speaker 1 (25:00):
You're listening to the Bloomberg Intelligence podcast. Catch us live
weekdays at ten am Eastern on Applecarclay, and Android Auto
with the Bloomberg Business App. Listen on demand wherever you
get your podcasts, or watch us live on YouTube.
Speaker 3 (25:14):
This week, we focus on a Bloomberg Big Take story
titled Apple Spending Billions and still has it managed to
crack AI? You can find it on Bloomberg dot Com
and the Terminal.
Speaker 2 (25:23):
The story looks at Apple's continued failures to get artificial
intelligence right, and it discusses how this threatens everything from
the iPhone's dominance to plans for robots and other products.
Speaker 3 (25:32):
For more, We are joined by the stories author Mark German,
Bloomberg News Managing editor for Global Consumer Tech.
Speaker 2 (25:37):
First, ask Mark about what's going on at Coopertino as
it relates to AI.
Speaker 10 (25:42):
Well, philosophical differences, mismanagement and the biggest thing is they
were blindsided when generative AI with chat, GPT and GitHub
launched back in twenty twenty two. November twenty twenty two.
I'm told Apple Intelligence wasn't even an idea back then. Why, well,
they missed the boat.
Speaker 3 (26:00):
But how I mean? I mean, I don't understand.
Speaker 10 (26:03):
Yeah, well, clearly there was philosophical disagreement, in philosophical disinterest
in the topic of artificial intelligence. I write about how
Craig freederighi, Apple's senior VP of software engineering, doesn't really
believe in these multi billion dollar projects. He tends to
try to shut down or steer away from projects of
that sort, and AI is something of that nature. AI
(26:24):
is quite a bit messy. They're known for the very
intricate and well designed user experiences. AI sometimes with hallucinations
can take away from that. But I think they didn't
think it was going to be as big of a
thing as it became today. A lot of it fell
on deaf years years ago, I'm told. But really, this
is a company that's known for updating their operating systems
once a year. It's known as a company that focuses
(26:47):
on the minutia, and they missed the big picture here
with artificial intelligence, and it really is a shame. You know,
the big picture here isn't the AI capabilities of its
devices today. The big picture today is the AI capability
of future hardware. If you don't have the core technology,
the AI ready to go at a deep level, how
are you going to develop products like humanoid robots, smart glasses,
(27:11):
watches in AirPods with depth sens and cameras for AI purposes.
Can't do any of that if you don't have that technology.
So they need to seriously turn this thing around quickly
or they're going to be in big trouble. This is
as core technology as the touchscreen.
Speaker 8 (27:28):
Wow.
Speaker 2 (27:29):
I mean, first of all, how many words is this story?
Speaker 9 (27:31):
Dude?
Speaker 10 (27:31):
Six thousand?
Speaker 9 (27:32):
Yeah?
Speaker 2 (27:32):
This is a long, well that story, folks. So if
you wouldn't get smart on AI and Apple, you got
to read the story. It's in the Bloomberg Business Week,
It's on the terminal. I'm sure it's everywhere else as well.
Speaker 6 (27:43):
Mark.
Speaker 2 (27:43):
What can they do if I'm an investor? That's the
only question I have for Tim Cook. Can you guys
catch up and get some of that AI pixie dusk
in your stock?
Speaker 10 (27:53):
Yes, they need to make acquisitions and they need to
up the percentage of that R and D budget tied
to AI. They need to up that percentage. They need
to allocate more of their hires to AI as well.
So they need to go big or go home on this.
Speaker 2 (28:07):
And I think do they know that? Do you think?
Speaker 6 (28:09):
Yeah?
Speaker 10 (28:10):
Of course they know that.
Speaker 3 (28:10):
Okay, how do they go big?
Speaker 10 (28:13):
You got to spend more money. AI is really one
of the only things that you can buy your way
into when it comes to this technology, right, you can
buy your way into it. You just need to throw
billions and billions at AI training. They need to make
probably some tweaks to their privacy policy. Right, they have
so many devices, They have more devices than anyone else
as a single brand of a hardware company, of any
(28:34):
company in the entire world, in the history of the world.
But they don't leverage that because of their privacy stands.
So maybe make some tweaks there to be able to
collect some more data, maybe figure out a way to
convince people to give up some of their data for
this purpose. And I think that could go a long
way for them. So spending money collecting more data.
Speaker 2 (28:52):
Is there somebody out there that they could buy, should buy,
that would leapfrog them?
Speaker 3 (28:56):
Do you think they hate doing that though?
Speaker 2 (28:57):
Right?
Speaker 10 (28:58):
Well, the problem is this philosophical discussed. I would say
to making these large acquisitions if I told you, I mean,
you know this is true, so maybe you're not a
good example. But if I said to someone who didn't
know the company as well as you too. Would you
believe me if I told you that Apple's biggest acquisition
in the history of the company was three billion dollars?
Speaker 3 (29:16):
I actually believe that.
Speaker 2 (29:17):
Well, you believe that.
Speaker 10 (29:18):
Because you know that, But I think if you ask
people who didn't know that, that would be completely unbelievable.
Speaker 6 (29:23):
Yep.
Speaker 10 (29:23):
They make these small acquisitions, and in addition to not
wanting to spend big bucks on a company, they're really
poor at integrating companies. The Beats integration, integrating all those
engineers into the company, Disaster Intel, they bought the modem
unit for a billion dollars back in nineteen Disaster. What
is it going to feel as an AI person at
(29:44):
Apple today if you're bringing if the company buys your
replacement to bring them in, It's not going to be fun.
There's enough turf wars as it is at Apple.
Speaker 3 (29:53):
So if they do then have to do it internally,
they've still not done well at that.
Speaker 10 (29:58):
They've got to do both. They got to make the
equ position, They got to just deal with that. They
got to make their biggest acquisition ever, and it has
to be for AI, maybe multiple acquisitions. They have to
turn things up a notch internally as well. They're going
to be making changes. I mean, there's so many philosophical disagreements.
The biggest is about chatbots. When it comes to AI.
They are allergic to AI chatbots. They don't like the technology.
(30:20):
They don't think open ai has staying power. So you're yes,
I know.
Speaker 3 (30:24):
I made a face when he said that. You're going to.
Speaker 10 (30:27):
See deeper integrations with other companies. You're going to see
Google Gemini integration. I think next year you'll see Perplexity integration,
maybe some Anthropic integration, maybe some Microsoft integration. But they're
going to keep pushing and this is going to be
a multi year thing. The biggest problems they were caught
off guvernment's happened, so they had no head start on this.
They're coming way from behind.
Speaker 2 (30:47):
Well yeah, it's amazing. It's amazing now that some people
would say, hey, they're rarely first phones. Oh boy, when
they decide to get into phones, they do it.
Speaker 10 (30:56):
That's the big difference. They were not first and they're
the worst, all right.
Speaker 3 (31:00):
Thanks to Mark German and Bloomberg News Managing editor for
Global Consumer Tech.
Speaker 2 (31:04):
This week we focused on a story on the Bloomberg
terminal and Bloomberg dot Com entitled Despite Backlash, DEI Hasn't
Disappeared at US companies.
Speaker 3 (31:12):
It discusses how Walmart and other large US companies have
made modest changes to their diversity, equity and inclusion efforts,
but most programs retained intact with minor adjustments.
Speaker 2 (31:22):
From where we were joined by the story's author, Simone Foxman,
reporter for the Bloomberg News Equality Team. We first asked
Simone to break down what she's learned recently about DEI
at US companies.
Speaker 11 (31:32):
Well, Frankly, I've been talking to senior executives at large
companies their corporate advisors ever since Trump's executive orders came
out on January twenty first, and the message I've been
hearing is no, Frankly, many of the programs that were
part of diversity, equity and inclusion, many of which had
frankly been around since long before the acronym even existed,
(31:54):
they're still there. They've had some tweaks, maybe, and we
can talk about exactly what those are, but they companies
still believe that these underlying programs the ones that will
help them recruit diverse talent as well as keep employees happy.
Speaker 8 (32:09):
These are largely there.
Speaker 11 (32:11):
And so even at companies that have sort of tried
to send a message to their to perhapshaps the Trump administration,
perhaps conservative activists, they're sending a very different message to
their employees and investors.
Speaker 8 (32:23):
Well.
Speaker 2 (32:23):
I think what got a lot of people's attention, including myself,
was when Walmart came out and said they were going
to scale back DEA. I mean, it'sok, a monster employer
all over the country. What did you find at Walmart? Oh?
Speaker 8 (32:35):
I mean, even when that announcement came out.
Speaker 11 (32:36):
Which was just before Black Friday, if you looked into
the actual depth of what they were talking about, sunsetting
the term DEI in favor of belonging.
Speaker 9 (32:47):
Ok.
Speaker 8 (32:47):
You know these aren't why.
Speaker 11 (32:50):
The huge enormous things a racial equity training that they
had had in conjunction with a racial equity institute. It
hadn't been offered since the spring of that year, and
that was something that they said, Okay, we're not.
Speaker 8 (33:03):
Going to have this anymore.
Speaker 11 (33:05):
In fact, you know, Walmart still mentioning in its job
postings that they want associates who are committed to diversity,
equity inclusion. Spokesman told us that they're trying to phase
out that language in posts, and some people call different names, but.
Speaker 3 (33:19):
At what are the names? Like, what are the kind
of things that people are now sort of spinning out there?
Speaker 11 (33:24):
I mean it depends company by company. At Walmart, supplier
diversity became supplier inclusion, for example, and there were some
small tweaks to their supplier diversity program not just focusing
on race and gender in terms of trying to find
diverse suppliers.
Speaker 8 (33:39):
But they're absolutely.
Speaker 11 (33:40):
Still highlighting brands that are owned by women, Hispanic people,
black people, it's lgbt Q, i A plus people.
Speaker 8 (33:50):
These in fact all have landing pages. So it clearly
speaks to the idea that consumers want this.
Speaker 11 (33:56):
They're they're looking for brands, or Walmart believes they're looking
for these brands. So maybe that's not somewhere where they
really pull back, you know, Does that satisfy the Trump administration,
conservative activists, et cetera.
Speaker 8 (34:11):
Maybe maybe not. I will say one thing as well that.
Speaker 11 (34:15):
Was very controversial. We're sort of demographic targets. For example,
we want to double the number of women in senior
management roles by twenty twenty six. That target that, you know,
very specific target. Lawyers are advising companies that this sounds
a little bit too much like a quota, so don't
have that anymore, or if I guess the lawyers are saying,
(34:37):
don't have that, you know at best, you know companies
are not having that publicly because that is a little
bit on that legal gray area not sorted out by
the court, but something even a voluntary target that lawyers
say you might want to stay away from that.
Speaker 2 (34:52):
But I sort remember, you know, talking about internships, mentor
programs that help marginalize groups, and maybe you know talking
about hiring and historically black colleges and universities. Is that
under pressure or is that going to be changing?
Speaker 11 (35:06):
So those are actually two different things. One, mentorships and
internship programs have now been opened to everyone, and this
is sort of another thing that was recommended by lawyers.
Came especially after the Students for Fair Admissions at Harvard
decision HBCU scholarships. However, if you know recruiting from a
(35:30):
specific HBCU historically black college and university, these are actually
still getting a lot of interest from companies because there
are something that.
Speaker 8 (35:39):
Is extremely legally above board.
Speaker 11 (35:42):
Anyone can apply to go to an HBCU and a
company can choose to hire or to have a scholarship
or internship program specifically targeted towards an HBCU, and because
anyone can go there, that that means they're definitely not,
you know, discriminating on race from a legal perspective, and frankly,
you know, among conservative groups, this is a little bit
(36:04):
of a bone.
Speaker 8 (36:06):
It's a little bit of a.
Speaker 11 (36:07):
Kind of subjective controversy because these are you know, HPCU
programs are the ones that feel.
Speaker 8 (36:13):
Like DEI at its very.
Speaker 11 (36:16):
Heart, and frankly, they were the way to try and
increase the pipeline of black managers and black engineers and
technologists and et cetera. So we'll see if there's more
at tax on those specific programs going forward. At at
the moment, that seems to be a legal area where
you know, many companies are doing.
Speaker 3 (36:36):
Do you get the sense from any companies that there
is a worry about going too far in the other direction,
like stripping out certain things that actually need to be
thought of and done.
Speaker 11 (36:46):
One hundred percent absolutely, And you know, when you talk
to a senior executive at an accounting firm was telling
me they just need accountants. They cannot get accountants unless
they are going to places where people have not been
exposed to accounting to try and encourage them to work
for them.
Speaker 8 (37:05):
They don't want to make young people unhappy.
Speaker 5 (37:07):
You know.
Speaker 11 (37:07):
These are affinity groups. Employee resource groups still exist in part.
Maybe they're scrutiny of their spending, but they still exist
a lot because this is stuff that makes people happy
to come to work, and companies are very afraid because
the actual employment law has not changed substantially. They are
very afraid that they are going to see your traditional
(37:28):
discrimination suits filed by women, people of color, LGBTQ, people,
people with disabilities a right.
Speaker 3 (37:35):
Thanks to Simone Foxman, reporter for the Bloomberg News Equality Team.
Speaker 1 (37:39):
This is the Bloomberg Intelligence podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live each weekday,
ten am to noon Eastern on Bloomberg dot Com, the
iHeartRadio app, tune In, and the Bloomberg Business app. You
can also watch us live every weekday on YouTube and
always on the blue Burg terminal
Speaker 6 (38:04):
M
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The Burden
The Burden is a documentary series that takes listeners into the hidden places where justice is done (and undone). It dives deep into the lives of heroes and villains. And it focuses a spotlight on those who triumph even when the odds are against them. Season 5 - The Burden: Death & Deceit in Alliance On April Fools Day 1999, 26-year-old Yvonne Layne was found murdered in her Alliance, Ohio home. David Thorne, her ex-boyfriend and father of one of her children, was instantly a suspect. Another young man admitted to the murder, and David breathed a sigh of relief, until the confessed murderer fingered David; “He paid me to do it.” David was sentenced to life without parole. Two decades later, Pulitzer winner and podcast host, Maggie Freleng (Bone Valley Season 3: Graves County, Wrongful Conviction, Suave) launched a “live” investigation into David's conviction alongside Jason Baldwin (himself wrongfully convicted as a member of the West Memphis Three). Maggie had come to believe that the entire investigation of David was botched by the tiny local police department, or worse, covered up the real killer. Was Maggie correct? Was David’s claim of innocence credible? In Death and Deceit in Alliance, Maggie recounts the case that launched her career, and ultimately, “broke” her.” The results will shock the listener and reduce Maggie to tears and self-doubt. This is not your typical wrongful conviction story. In fact, it turns the genre on its head. It asks the question: What if our champions are foolish? Season 4 - The Burden: Get the Money and Run “Trying to murder my father, this was the thing that put me on the path.” That’s Joe Loya and that path was bank robbery. Bank, bank, bank, bank, bank. In season 4 of The Burden: Get the Money and Run, we hear from Joe who was once the most prolific bank robber in Southern California, and beyond. He used disguises, body doubles, proxies. He leaped over counters, grabbed the money and ran. Even as the FBI was closing in. It was a showdown between a daring bank robber, and a patient FBI agent. Joe was no ordinary bank robber. He was bright, articulate, charismatic, and driven by a dark rage that he summoned up at will. In seven episodes, Joe tells all: the what, the how… and the why. Including why he tried to murder his father. Season 3 - The Burden: Avenger Miriam Lewin is one of Argentina’s leading journalists today. At 19 years old, she was kidnapped off the streets of Buenos Aires for her political activism and thrown into a concentration camp. Thousands of her fellow inmates were executed, tossed alive from a cargo plane into the ocean. Miriam, along with a handful of others, will survive the camp. Then as a journalist, she will wage a decades long campaign to bring her tormentors to justice. Avenger is about one woman’s triumphant battle against unbelievable odds to survive torture, claim justice for the crimes done against her and others like her, and change the future of her country. Season 2 - The Burden: Empire on Blood Empire on Blood is set in the Bronx, NY, in the early 90s, when two young drug dealers ruled an intersection known as “The Corner on Blood.” The boss, Calvin Buari, lived large. He and a protege swore they would build an empire on blood. Then the relationship frayed and the protege accused Calvin of a double homicide which he claimed he didn’t do. But did he? Award-winning journalist Steve Fishman spent seven years to answer that question. This is the story of one man’s last chance to overturn his life sentence. He may prevail, but someone’s gotta pay. The Burden: Empire on Blood is the director’s cut of the true crime classic which reached #1 on the charts when it was first released half a dozen years ago. Season 1 - The Burden In the 1990s, Detective Louis N. Scarcella was legendary. In a city overrun by violent crime, he cracked the toughest cases and put away the worst criminals. “The Hulk” was his nickname. Then the story changed. Scarcella ran into a group of convicted murderers who all say they are innocent. They turned themselves into jailhouse-lawyers and in prison founded a lway firm. When they realized Scarcella helped put many of them away, they set their sights on taking him down. And with the help of a NY Times reporter they have a chance. For years, Scarcella insisted he did nothing wrong. But that’s all he’d say. Until we tracked Scarcella to a sauna in a Russian bathhouse, where he started to talk..and talk and talk. “The guilty have gone free,” he whispered. And then agreed to take us into the belly of the beast. Welcome to The Burden.