October 17, 2024 • 41 mins
Watch Alix and Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Mari Shor, Senior Equity Analyst at Columbia Threadneedle Investments, joins to break down U.S Retail Sales. Mandeep Singh, Bloomberg Intelligence Senior Tech Industry Analyst, talks TSMC earnings. David Kudla, Founder, CEO, and Chief Investment Strategist at Mainstay Capital Management, discusses his outlook for the markets. Paul Gulberg, Bloomberg Intelligence Senior Equity Analyst, discusses Blackstone earnings. Josh Zegen, Managing Principal, Co-Founder at Madison Realty Capital, and Abigail Doolittle, Bloomberg News Chief Markets Correspondent, discuss the state of commercial real estate. James Thornton, CEO of Intrepid Travel, joins to discuss outlook for corporate travel and efforts to limit the carbon footprint of traveling.
Hosts: Paul Sweeney and Norah Mulinda
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:08):
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Speaker 3 (00:22):
Get back to the markets here.
Speaker 4 (00:24):
The big economic news of the day was the retail sales,
and they generally came out I think across the board
stronger than expected. The headline zero point four percent, consensus
was zero point three for growth and zero point one
percent last period, so big pick up there. When you
look at the control group, perhaps even more impressive zero
(00:44):
point seven percent gain versus zero point three percent forecast
and last month was zero point three percent, So again
pretty strong across the board. Let's see what it means
to some of the folks who really follow the retail
business closely, as does our next guest, Mary Shore, Senior
Equity anams A Columbia thread Needle, joining us from Boston
via Zoom. So, Mary, just to my untrained eye, these
(01:05):
retail sales numbers look pretty good. What do you think
and what are you seeing in the retail space these days?
Speaker 5 (01:11):
Yes?
Speaker 6 (01:11):
Thanks, for having me back. I think you're right.
Speaker 7 (01:14):
The strong September retail sales print confirms that the consumer
is in good shape amidst a relatively strong jobs and
income backdrop. To your point, there may have been some
benefit this month from pre hurricane stock up behavior, but
overall the growth remains very healthy, as we've been talking
(01:35):
about for some time now.
Speaker 6 (01:37):
However, when you.
Speaker 7 (01:37):
Dig deeper, you continue to see pockets of strength and weakness.
Speaker 6 (01:42):
So areas of strength.
Speaker 7 (01:44):
That I would highlight would be food, health and wellness,
clothing and value, which I think is really incorporated in
that general merchandise category. And then some areas of weakness
to call out would be autos and some of the
bigger ticket categories that we're strong during the pandemic, like
furniture and electronics. So when I look at the data,
(02:07):
I think it shows the consumers in good shape, and
it really is a continuation of a lot of the
trends that we've discussed in prior episodes.
Speaker 8 (02:17):
It's interesting. I mean, obviously this data does show that
the consumer is in a good spot, but of course
people are still complaining of this intensely high inflation. How
do you think that this really fits into the broader
economy and as we think about things moving forward, well,
I think.
Speaker 7 (02:34):
It's exactly what we're seeing in the data. We're very
high level, we see low single digit growth, But then again,
when you dig a little deeper, you see services growing
faster than goods, and within goods, you see needs growing
faster than once. And so to your point, the inflation
that we've seen in food and housing in particular really
(02:56):
continues to weigh on consumer discretionary spend on goods, and
I think that is a real key reason for some
of the continued weakness in some of those bigger ticket
categories that I just highlighted.
Speaker 3 (03:10):
Mary, what are the retailers that you cover?
Speaker 4 (03:11):
What are they saying about the holiday Christmas season coming
up such a big part of their annual sales?
Speaker 7 (03:21):
Yes, I think you know, as always they're cautiously optimistic.
You know, they're optimistic by nature, but given the macro backdrop,
I think everyone is planning their business very conservatively. They
were being disciplined on inventory. I expect promotions to be
very well controlled for that reason. But overall, I do
(03:44):
think it will be a strong holiday. What we've seen
this year is that during key events, the consumer does
come out and shop, so I think, you know, we
will see real strength over Black Friday and the week
before Christmas, and probably a lull in between those two
shopping periods as we've seen in the past. So overall,
I would expect a strong season, but still a little
(04:07):
lumpy when you're looking week by week.
Speaker 8 (04:10):
So Mary, talk to me about the sentiment as we're
thinking about things heading into this election. Of course, we're
less than a month away. How are consumers thinking about
this and businesses as well?
Speaker 7 (04:22):
Right well, I think whether it's the election or the
direction of gas prices, what most of the companies that
I talk to say is it's really the uncertainty which
is more paralyzing for the consumer. So I would definitely
expect some noise, you know, right heading into the election.
But either way, I think that the results of the
(04:45):
election will provide that certainty to the consumer and probably
boost consumer sentiment going forward. I think what it means
for the companies could be more mixed, Like if Trump
does continue talking about his tariff policy, then you know,
that could be an overhang on some of the retailers
(05:06):
that import from overseas.
Speaker 6 (05:09):
But I think overall, just the results of the election.
Speaker 7 (05:13):
In gaining that uncertainty will be a positive thing for
consumer sentiment going forward.
Speaker 4 (05:19):
All right, this Christmas shopping season, how promotional will the
retailers be? I know that goes right to their profit margin,
but how do you think that's going to shake out?
Speaker 7 (05:29):
Yeah, you know, we talk a lot about promotions versus markdowns.
You know, the retailers know they have to be promotional
to drive traffic, and so I think you should expect
to see controlled promotions. So what I mean by that is,
you know, promotions more in say the thirty percent range,
and given that inventory is well controlled, I think the
(05:50):
retailers will try to stick to that plan for as
long as possible. I would not expect to see promotions
in like the seventy percent range and markdowns, and that's
typically what you see when the sales are a lot
weaker than planned or the inventory is a lot heavier
than planned. And I don't really expect either of those
(06:11):
things this holiday. So you'll still see those headline promotions,
but you have to remember that the retailers have planned
for those they bought into them, and so there's really
no negative margin implication from some of those headlines.
Speaker 8 (06:28):
Well, we think historically and then moving into this year,
how do consumers really think about the holidays when we're
thinking in this season, is it everyone's just going to
throw everything on their credit card because we have the
holiday cheer? Or do you think they're really going to
be targeting those companies that are those stores that are
offering promotions specifically.
Speaker 6 (06:46):
It's a great question.
Speaker 7 (06:47):
I mean, I think we do see the consumer come
out and spend around key events, and you know, especially
in a year that could be tough, you're feeling the
pinch of inflation, every consumer wants to bring a little
cheer around the holidays. So I do expect that they
will be out in the market. Having said that, I
think they're still going to be very discerning, very focused
(07:11):
on value, and I would expect a lot of the
value players, as I mentioned in that general merchandise category
to be the key beneficiary.
Speaker 3 (07:20):
All Right, Mari, thank you so much for joining us.
Speaker 4 (07:21):
Mary Sure Senior ecuadanams a Columbia Thread Needle Investments up
in Boston, always helping us out talking about retail sales.
Speaker 2 (07:29):
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Speaker 3 (07:47):
Let's switch gears.
Speaker 4 (07:48):
Let's get back to the markets here technology in the
play here yesterday, I think it was me who said
I think I've seen the top of AI.
Speaker 3 (07:56):
I think some of these chip.
Speaker 4 (07:58):
Companies are going to roll over and blah blah blah blah.
Well then Taiwan Semiconductor comes out with a better than
forecasted outlook. So once again I was proven wrong, particularly
it relates to technology.
Speaker 3 (08:10):
I don't know what's going on.
Speaker 4 (08:10):
How do you feel about that? How do I feel
about that? It lasted all of like twenty four hours?
My great call there, Man Deep Sing he's the extra,
He's the one we go to. Man Deep Sying, he's
the tech ANAMST for Bloomberg Intelligence. So Mandy talks about
Taiwan Semi Contector. A lot of our listeners, a lot
of reviewers not really familiar with it. Tell us about
what this company does and kind of what they announced recently.
Speaker 9 (08:30):
I mean, basically, they are the manufacturing factory for all
your AI chips, all the chips that go into smartphones,
and basically they are at the leading edge of manufacturing.
When people talk about you know chips, the most powerful
AI chips with the most transistors, they are the ones
who are manufacturing it. And look, I think it was
(08:53):
quite a contrast between the ASML print and the TSMC print,
and what it shows you is the AI side continues
to be strong. In fact, they called out smartphones being
as strong in market as well uh in the print.
So clearly the top two segments for them are working
quite well and they have more demand than they can manufacture.
(09:17):
These chips for Nvidia and Apple, those are their you know,
top customers, and they're raising their capex guide. So one
of the concerns was will TSMC raise their capex guide
given what we heard from a SML, Well, guess what,
they are raising their capex guide. So a SML's woes
were really driven by Intel pairing back and Samsung pairing back.
(09:39):
But when it comes to TSMC, they continue to be strong,
all right.
Speaker 4 (09:43):
So Taimewan Semiconductor does a trade in US or eighty
rs in US.
Speaker 3 (09:46):
The ADRs are the ADRs trade in.
Speaker 4 (09:48):
US t SM as your tickle put InChI. Bloomberg Terminal
stock is up eleven percent today, up one hundred percent
year to date. This isn't a penny stock. This has
a market cap of over one trillion dollars. My ignorance
level on this is out of control. I mean, I
just didn't know they were that big.
Speaker 8 (10:06):
I know, when we're compute, the number's two big.
Speaker 3 (10:07):
No, it's too big.
Speaker 4 (10:08):
That's why we need man deep sink. So anyway, big
company folks. Giving a positive outlook on the chip business
really important for overall tech discussion about AI.
Speaker 8 (10:16):
So talk to us about the outlook right now? What
are expectations when we think about the tech sector more broadly?
I know earnings people have a pretty low bar, so
if companies are doing well, it'll be a really great,
you know, great news coming out of that. How is
the tech sector when we're looking at AI specifically, what
are expectations right now? I know the bar tends to
be relatively high.
Speaker 9 (10:35):
I mean, I don't know if the bar is low
at this point, given what we saw with THEML ASML
was the case of expectations being too high and they
guide it to that. And now they come out, you know,
this quarter and say we are taking down bookings by
fifty percent. So clearly expectations were high. It was the
management who said it, and now they took back their guide.
(10:56):
In the case of if I think in Video or
some of the other bellveather for AI, look, we've been
hearing that the demand for their latest chip continues to
be strong. The TSMC print is another validation that you know,
they are ramping up the AI side. It's almost mid
teens of their revenue. This was almost a zero billion,
(11:17):
a zero a dollar revenue for TSMC a few quarters back.
So in just the span of three four quarters, it's
mid teens of their revenue. That just goes to show
along with the margin expansion, the gross margin growing to
fifty eight percent. I mean, all this is positive for
AI and you know for bell Weathers like Nvidia at
(11:39):
the same time, this will drive up the expectations even further.
So you know, the bar keeps getting higher, and at
some point I think you will have missus like what
we saw with the SML, but probably not that soon
for the likes of Invidia.
Speaker 4 (11:55):
So thirty secondsleft, who are the top two or three
or four buyers of these chips. Is it the Microsoft's
and the Googles of the world.
Speaker 9 (12:05):
I mean, in the case of TSMC, the top buyer
is still Apple. Okay, so that validates that smartphone to
refresh that everyone is waiting for that segment. Did well.
The inventory is building up, and then Nvidia and and
Nvidia continues to become a bigger buyer of tsmcs. And
then you have got AMD and some others. But pretty
much every fabulous design company, whether it's AMD, Qualcomm and VideA,
(12:29):
goes to TSMC for you know, manufacturing their chips because
they have a leading node monopoly. I mean, everyone else
is way behind when it comes to.
Speaker 4 (12:38):
Son Go to Taiwan and see Taiwan and see them
make chips.
Speaker 9 (12:42):
Yeah, you should visit one of their factories, the one
in Arizona though.
Speaker 3 (12:46):
Yeah, they're gonna do one in Arizona. Yeah, okay, that's
cool too. All right, Mandy, thank you very much again.
Speaker 4 (12:51):
As always, he is our absolute goat to persons for
all things technology. Senior Technology aannels. He runs all of
our tech practice at Bloomberg Intelligence, and we appreciate getting
his time because he's only a floor away.
Speaker 3 (13:02):
It's not like a big ass. We love that, and
you walk.
Speaker 4 (13:04):
Up the stairs and talk to us on Bloomberg Radio,
man Deep singing.
Speaker 2 (13:07):
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Speaker 4 (13:23):
I don't know, did retail sales today nor better than expected?
Maybe maybe the FED doesn't have to cut in November.
And if they don't, is that okay? I don't know
the markets are creating car here. It looks like it's
kind of okay. Let's talk to somebody who's actually has
a professional here on this whole thing.
Speaker 3 (13:39):
David Kodluck. He's a founder, he's a chief executive officer.
Speaker 4 (13:42):
And he's a chief investment strategist. I think that means
he's the boss.
Speaker 8 (13:45):
It sounds like it.
Speaker 4 (13:46):
That's right, mainstay a capital management from one of my
favorite little towns out there in the Midwest, Troy, Michigan.
Speaker 3 (13:52):
I've been to Troy, Michigan. Cool little town, David.
Speaker 4 (13:56):
So you get a retail sales number today that's better
and expected, you get some still a pretty strong labor market.
Is this a FED that has to cut and if
they don't have to cut in November.
Speaker 3 (14:06):
Is that okay?
Speaker 10 (14:08):
Good morning, Paul and Nora. I think it's a FED
that will continue to cut. They'll continue to ease because
monetary policy is more restrictive than it needs to be.
Speaker 11 (14:19):
Inflation has come down there.
Speaker 10 (14:21):
I know there's fears that we could see a resurgence
of inflation here yet this year into next year, but
inflation has come down and is drifting towards target. Certainly
it is in Europe the ECB cut last night. The
key here is that when we look at the economy
and say, I think it's you know, what's interesting is
(14:42):
do they need to cut for a recession? No, those
that have been calling for a recession for the last
two years have been dead.
Speaker 11 (14:49):
We're wrong.
Speaker 10 (14:50):
We've kind of mocked this by my phrase the recession
is always six months away. That have actually been saying
for two and a half years now. And yeah, retail
sales came in above expectations, four tenths a month over
month versus three tenths.
Speaker 11 (15:02):
We've got strong.
Speaker 10 (15:04):
GDP Atlanta gb GDP now forecast above three percent, uh,
labors hanging in there, and so we've I always I
always am careful to use the word goldilocks economy, but
we sure, you know, if there's if there's such a
thing as a Goldilocks economy, we're sure close to it
right now. And the Fed does have the ability to
(15:25):
continue to ease as other central banks are around the world,
just because you know, we we don't uh, we're in
that sweet spot where they can make monetary policy a
little less restrictive.
Speaker 8 (15:39):
So tell me, David, which economic data is most paramount
right now. I know we've always had our eyes on inflation,
but it seems as though attention is really shifting toward
employment data as being more important right now. What's your
look your out look on that?
Speaker 11 (15:53):
Yeah, that, Nora and I agree.
Speaker 10 (15:55):
It's really it's this, when we look at employment or
labor versus inflation. You know, where are we and we
see inflation drifting down? We think that's becoming a more
non existent problem. We keep getting mixed data on labor.
You know, there was some screwy numbers in the back
(16:15):
months that had to be revised. But you know, if
we if we we want to keep an eye on labor.
We want to keep an eye on the consumer being
two thirds of our economy, so we need labor to
stay strong enough but not too strong and not get
weak enough that they're cutting, you know, for the reasons
(16:36):
we don't want, which is the fear of a recession.
And we think the you know that the fears of
a recession, you know, they're just there's anecdotal data there.
You know, what's happening with car loan delinquencies, personal debt,
credit card debt.
Speaker 11 (16:51):
There's that anecdotal data.
Speaker 10 (16:53):
But when we look at GDP, we look at labor,
we look at inflation, we look at retail salesman. You know,
we've we've got when we look at the macro numbers,
we've got an economy that keeps chugging along, and correspondingly,
a stock market that keeps chugging along.
Speaker 11 (17:08):
Again.
Speaker 10 (17:08):
The people that have called for a bear market anytime
over the last two years, they weren't early. They were
just wrong, dead wrong. And you know, we're still constructive
on stocks. It always looks prudent, right, It always looks
prudent or smart to say a recession is right around
the corner, or bear markets right around the corner. But
it's key to these people that have been saying this
for so long they're dead just been wrong.
Speaker 8 (17:30):
So David, how are you advising your clients now versus
maybe this time last year?
Speaker 10 (17:37):
We're you know, all that said, we're always concerned about
when when the next shoe will drop or you know,
when when the first shoe will drop or the next
shoe will drop.
Speaker 11 (17:46):
We are concerned about that.
Speaker 10 (17:47):
So that's why we're keeping an eye on the data
that were talking about here on does it is inflation
on a glide path down to the.
Speaker 11 (17:56):
Fence target we believe it is.
Speaker 10 (17:58):
Is you know, uh, do we still have though a
robust economy or we headed towards recession?
Speaker 11 (18:04):
We don't think so. So Uh.
Speaker 10 (18:06):
We continue to be very constructive on the markets. We're
over overweight equities. We've changed our term structure on our
bond holding somewhat. We were last year in the first
part of this year on the shortest end of the curve,
just capturing yield, uh, rather than any kind of interest
rate player anything else. Because duration has worked against you, uh,
(18:28):
we think there's an opportunity over the next year that
duration will help you. You can get that capital appreciation
combined with the yield on your stocks, clip the coupon
and enjoy some capital appreciation. But I think my strongest
recommendation is, uh, you know, these all the naysayers, all
the doomsayers, the pundits that are you know, collapses eminet. Look,
(18:52):
they've been wrong, and so we're very constructive on the markets.
We're bullish on the market's near term. We have an
election coming that we'll get out of the way, so
that removes some uncertainty. And we're heading into the seasonal
period that's strong for stocks from November through April. So
you know, there's a lot of economic seasonality and other
(19:14):
factors that are good tailwinds for equities right now.
Speaker 4 (19:18):
David, you mentioned the election nineteen days I think coming
up or very close here.
Speaker 3 (19:23):
What do you tell your clients about it?
Speaker 4 (19:24):
I mean, is there any way to election proof of
portfolio or don't worry about it?
Speaker 10 (19:30):
Well, unfortunately, and not our clients, because we educate our
clients about this a lot every election cycle. Don't election
proof it by going to cash. That's the worst mistake
that investors make because look at this, look at this
election like others, how polarizing, you know, between the two candidates.
(19:51):
You know, if so and so gets elected, we're going
to heck in a handbasket in the same thing for
the other candidate.
Speaker 11 (19:59):
And there's all this.
Speaker 10 (20:00):
The reality of it is is the biggest factor for
the market is uncertainty. Markets had uncertainty that will be
determined here in three weeks. So the key is don't
go to cash, stay invested in the market and as
we see who it looks like will be what administration
will be in office here in a few months, that's
where that's where we want to be tactically moving our
(20:23):
portfolios to worst mistake is to go to cash. And look,
this year is a perfect example. We have the best
election year through today for the markets that we've had
since the nineteen thirties. That's how good this year is.
It is not the time to be to go to cash,
to wait on the sidelines until you see how it
comes out. Right, So it's looking at where what do
(20:44):
you expect with the candidate that will win, tactically allocating
your portfolio.
Speaker 11 (20:48):
For that and stay invested.
Speaker 4 (20:50):
Yep, excellent stuff as always David Coodley, he's a founder,
chief executive officer in Chief Investment strategist at Mainstay Capital Management,
and David and his team are ranked in the top
ten on Baron's Top one hundred Independent Financial Advisors in
twenty twenty four. So we appreciate getting a few minutes
at this time.
Speaker 2 (21:07):
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Speaker 3 (21:25):
Let's go to a really good story I today. I
mean Blackstone.
Speaker 4 (21:28):
You know they got like aa jillion dollars under management
to Stock. They put up some good numbers recently, just today,
stock up five percent today, up twenty eight percent.
Speaker 3 (21:37):
Year to date, fifty two week high.
Speaker 4 (21:39):
Some phenomenal performance coming out of the good folks at Blackstone.
I want to break it down, and we do that
with Paul Goldberg. He's Bloomberg Intelligence senior equity analyst. Paul,
what is Blackstone and why and how are they executing
so well? Just tell us what Blackstone is in your mind,
and then what are they doing so well? Hi?
Speaker 3 (21:57):
Paul?
Speaker 12 (21:58):
Thank you for having me. Blackstone called themselves a juggernaut
this morning, and they called in a press release themselves
as sort of being a benchmark for the alternatives industry.
They are in private equity, private credit, really one of
the big private real estate investors. So all these businesses are,
some of them doing really well, some of them are
(22:20):
recovering from the kind of a lull in the last
two years, and it's growing. They reached to one point
one trillion dollars. So that's the largest alternative manager out there.
Speaker 8 (22:32):
Let's talk a bit of real estate. Of course, I
view them as a bell whether I'm actually a US
real estate stocks reporter, I'm curious how are people viewing
Blackstone and a lot of its deals recently. Are we
seeing more activity happening in that sector specifically?
Speaker 12 (22:48):
There it is, and they very specifically alluded to it.
They made a few very large ten billion plus deals
this year. They see in the bottom and the real
estate cycle. They also, I've seen private is being a
bit more aeriosyncratic than the public markets. So it doesn't
move necessarily in tend them. But as long as they
see the bottom, as long as they are seeing a
(23:10):
lower interest rate, trajectory that should be supportive in the
real estate space. The other thing is their real estate
is quite unique, right, So when we talk about real
estate and especially commercial, a lot of people think about
offices and these kinds of things. For them, it's mostly
data centers, infrastructure kind of real estate, multifamily, so different business.
And in the data centers they have over seventy billion
(23:33):
dollars of their one point one trillion just sitting in
those data centers.
Speaker 4 (23:38):
And I like to just take a look when I
look at Blackstone. Stephen Schwartzman, the just the total Wall
Street mobilis seventy seven years of age, co founder of Blackstone.
He's got a net worth today fifty one point eight
billion dollars.
Speaker 11 (23:50):
That's puts them on.
Speaker 4 (23:51):
Number twenty four in the Bloomberg's Rich List. Credit to
talk to us about the credit business. Private credit business
got about thirty seconds in upon.
Speaker 12 (24:00):
Us all about the credit. This quarter was led by
credit forty billion of inflows, twenty of them going into
the credit. All the upside in fees and performance it
was going through the credit and the growth of expectations
a lot of it just in the credit as well,
So very consistent with what we're hearing throughout the year
and other managers as well.
Speaker 3 (24:20):
Paul, great stuff, Thank you so much for joining us.
Speaker 4 (24:22):
Paul Goldberg, Senior equityannas Bloomberg Intelligence giving us the latest
on Blackstone.
Speaker 3 (24:27):
B X is the ticker symbol, folks, so check it out.
Check out that chart. Just amazing.
Speaker 4 (24:32):
Bloomberg News is out the reporting here. Blackstone's credit arm
is now its top business fueling profits.
Speaker 3 (24:37):
They're in private equity, private credit, real estate.
Speaker 4 (24:40):
So as Paul Goldberg was just saying, they are the
biggest alternative asset manager out there. Just extraordinary. That's Blackstone
and then there's black Rock. I mean, if these two
were together like they were back in the day, I
mean extraordinary. So just amazing. The private equity business continues,
an alternative asset management business continues to be just one of,
(25:03):
if not the best business on global Wall Street, and
the Black Zone folks are at the top of that.
Speaker 2 (25:10):
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Speaker 4 (25:27):
Bloma Limits sitting and for Alex steel on Paul Swiney
live here in our Bloomberg Interrectied Brooker Studio, and we're
streaming the video thing live on YouTube YouTube dot Com
search Bloomberg Podcast. One of the topics that Alex and
I and the folks here a Bloomberg intelligence like to
really keep a close eye on is commercial real estate
and its recovery from the pandemic. And our good friend
Abigail Duottle, she's been very good at helping us hook
(25:48):
up with some really smart people industry. Abigail doo Little
joints us here today, chief market correspondent for Bloomberg News,
and today she brings us Josh Ziegan, managing Princil, co
founder at Madison Realty Capital. They're on BLO and Briginner
Act the Broker Studio. Josh, we appreciate you coming in here. Abigail,
Thanks once again, Josh.
Speaker 3 (26:05):
Commercial real estate.
Speaker 4 (26:06):
I think what I've learned is I don't ask the
dumb question which I usually do, which hey, how's commercial
real estate doing? Because there are so many different pieces
of it. Where do you guys at Madison Real team
focus and then how's your business?
Speaker 5 (26:17):
So we're focused on the real estate credit space. We
started the company about twenty years ago. We've about twenty
one billion of AUM and all ends of real estate credit.
A lot of our business is focused on where the
banks have not focused and we're dislocated post global financial
crisis and even more so today post banking crisis that
happened in twenty twenty three. So we've been providing capital,
(26:38):
whether it's construction lending, transitional lending. We buy performing non
performing loans, and today the market is a lot better
than when I was on in the spring. There's definitely
a sense of the want to do deals. The investment
sales market has picked up given the rate drop that
happened in September. A lot we're waiting on the sidelines
just to see that happen. So mentally, there's this sense
(27:00):
that things are starting to improve and capital markets are
in a better place, albeit the banking sector has not
come back in a big way.
Speaker 13 (27:08):
So you joined us in May, and at that time,
I would say were one of the more bearish commercial
real estate. I guess that we've been fortunate enough to
interview and I view you relative to some of the
other folks as really close to the banks or really
close to the money. You were talking a lot about
the banks and you said that we were in the
early innings of this thing working out. How much has
it changed since then with the FED cutting by fifty
(27:30):
basis points.
Speaker 5 (27:31):
Well, I think what we've seen is in the spring,
there was very very little activity investment sale market, and
one of the problems was money was not going back
to investors through that because no transactions were happening. So
with rates dropping, I think what happened was that created
some solutions for barwers who needed to delever, and that
is in the form of preferred equities, some structured equity
(27:53):
coming into deals. Today there's not only that solution available,
but there's also commonect equity and you're starting to see
more sales. Albeit the office sector is really struggling still.
There's no liquidity in the office sector, and when you
are seeing transaction that happen, capital is just tied up
in the system because a lot of the sellers are
holding financing banks are rolling over their debt. It's not
(28:14):
just money back to investors, so that's tying up a
lot of capital in the system.
Speaker 8 (28:18):
I cover US real estate from the equity side, A
cover homebuilders and then also commercial real estate. I'm curious
you mentioned office. I was recently working on a story
that spoke about how we're seeing a bit of an
uptake on Park Avenue. It's not as bad as it
once was. As we think about vacancies, what areas are
you seeing flourishing or doing better than they were before
In the office space.
Speaker 5 (28:38):
Well, I think you're seeing sort of the haves and
have nots in office. It's the best in a class
office and then there's everyone else. And unfortunately, that best
of a class office is very limited in New York City. Yeah,
there's more buildings than a place like Austin, Texas or
some other places, but it's limited. What I have seen
in the office sector is much more leasing demand. So
while the leasing demand and absorption is happening a much
(29:00):
greater way, it still is challenging from a cap rate perspective.
So you may have a one hundred percent office, one
hundred percent lease office building, or ninety percent lease office building,
but that cap rate as compared to twenty twenty one
is very, very different, and so that's a change in
valuation that investors are not able to stomach and in
many cases can't get out of these deals today.
Speaker 4 (29:20):
Hey, Josh, just kind of before the pandemic. In mike
Town in Jersey, they constructed a multi very nice, high end,
multi multi unit residential thing and a big sign out front,
financed by the local bank. If I go to build
that same property today, is that look a bank going
to be there for me?
Speaker 5 (29:38):
So it's a good question. So that bank generally is
not there, and why because banks have a liquidity mismatch.
They were committing long for a construction loan like that
and borrowing short with deposits. So banks have been scrutinized
even more so today from a regulatory standpoint. And so
it was really bad post global financial crisis and became
even greater from a regulatory standpoint post March twenty twenty three.
(30:01):
So we're filling that void. We are doing a lot
of construction lending, which is today a lot lower from
a loan to cost standpoint than we had to provide
in twenty twenty one before this banking crisis. So we're
providing whole loans to that same Jersey developer to build
a multifamily, and the good news for multifamily as specific
in New Jersey and across the country is we have
(30:22):
seen cap rates titan since the spring when I was
on the show, by fifty to one hundred basis points,
and a lot of that's a function of debt. I mean,
when you look at debt with rates down today, long
term rates are down and short term rates are down
to some extent. One of the problems with construction lending
and higher value add lending is you're borrowing short and
so that's an issue. There still is not necessarily the
(30:44):
appetite to build because of the cost of short term debt.
Speaker 9 (30:48):
You know.
Speaker 13 (30:48):
So picking up on Paul's question and picking up on
what you just talked about with regulation, some of my
sources have said that because it's an election, you're the
regulators have actually been relatively lax and trust what you
just said. But the idea, I guess my question is
do you think that the regulation could even become tighter
next year? And then at that point are we going
to see more svbs? In other words, are we going
(31:09):
to see some of these regional banks? Is they are
more pain there in terms of blowing up our consolidation.
Speaker 5 (31:13):
I think it's a more politically oriented question in terms
of the election, really who wins here, But no matter what,
I so there's.
Speaker 13 (31:20):
A difference who wins.
Speaker 5 (31:22):
I think directionally you will see more consolidation, and a
lot of that has to do with banks are upside
down in terms of having long term loans that are
at very low rates, and those aren't rolling off so
quick and they're matched with liquidity that the bank has
to pay the positor a lot more than they did
in twenty twenty one when the loans were made. So
I think you will see more consolidation in the banking sector.
(31:44):
And oh so, I think you will see more consolidation.
You start to see more of that already in this year,
but you'll see more in years to come.
Speaker 13 (31:53):
Well, I just really want to pick up on that
election thing though, because I haven't heard anybody say that
it matters who wins. So were you making the point
that if the former president Donald Trump wins, or if
for or the current VP Harris if she wins, there's
going to be a difference in regulation. And if there is,
what does it look like.
Speaker 5 (32:10):
I mean, I can't speak to specifics, but there's a
view that will be well, there'll be more regulatory pressure
from regulators in a democratic significantly more can't comment really,
you know, I don't know, but more you'll be more,
all right, Josh, thanks so much for journey.
Speaker 3 (32:25):
Us really appreciate it.
Speaker 4 (32:26):
Jos Ziegen, Managing Principle, A co founder and Madison Realty
Capital in Abco Dolittle, Chief Markets correspondent for Bloomberg News
in our Bloomberg and aarct approp Pro studio, just kind
of get the laid down on the real estate business.
Speaker 2 (32:40):
You're listening to the Bloomberg Intelligence Podcast. Catch us live
weekdays at ten am Eastern on applecar Play and Androyd
Auto with the Bloomberg Business at You can also listen
live on Amazon Alexa from our flagship New York station
Just Say Alexa playing Bloomberg eleven thirty.
Speaker 4 (32:58):
Normal, Linda sitting in front Alex deal on Paul Sweeney.
You're live here in our Bloomberg and an Actor Broker
studio or streaming live on YouTube as well, So go
check us out there. Just got back from a little
one day corporate travel gig. Alex and I went down
to the Hilton Head Island or down to Kiwa for
a client event.
Speaker 3 (33:16):
Travel one. Fine, that's great.
Speaker 8 (33:18):
You were in United, right, what's you were on United?
Speaker 3 (33:20):
Down on Delta back on United? So both good?
Speaker 2 (33:23):
Oh?
Speaker 11 (33:23):
Good?
Speaker 3 (33:24):
Packed?
Speaker 4 (33:24):
I don't know the place was packed. I think people
are back out there traveling again. Here and my thing
on travel, I only travel. Somebody pays me to travel
as you should.
Speaker 3 (33:33):
I'm just like I like that philosophy.
Speaker 4 (33:35):
Exist anyway, I've been pretty much everywhere you need to go.
I think James Thornton joins us. He's a CEO of
Intrepid Travel, joining us from London via Zoom. James talk
to us about I love to get your perspective, just
kind of as you look at maybe business travel. What
are most companies doing in terms of business travel these
days versus pre pandemic?
Speaker 3 (33:55):
Are we back to those levels? Will we get back
to those levels? Where are we?
Speaker 1 (34:01):
Yeah, we're definitely back to the levels, Paul. I think
there was a misconception during the pandemic that the business
travel environment wouldn't recover and we'd all be stuck on
zoom and be meeting remotely. But we're seeing that airplanes
are full. Business travel, corporate travel clients are up.
Speaker 2 (34:17):
Year on year.
Speaker 1 (34:18):
Nothing beats being together face to face. So yeah, business
travel is back and people are flying around a meeting again.
Speaker 8 (34:24):
So of course everyone likes to keep in mind the
idea of limiting our carbon footprint. I'm curious, how are
business companies, How are they thinking about this when we
think about business travel, our companies being mindful or is
ESG a buzzword that's been left in the past. How
are we thinking about that now in twenty twenty four.
Speaker 1 (34:44):
Yeah, look, I think companies are becoming increasingly mindful about
their carbon outputs, particularly when it comes to their staff travel,
but also in the sense of the way in which
customers are thinking about their right in theies too. At
Intrepid Travel, we've reached launched carbon and labeled carbon labeling
program on five hundred of our itineries around the world,
(35:06):
and we display a number about the CO two emissions
that come from our trips. Is a bit like a
food label if you like, so customers can calculate how
much carbon emissions per traveler come from their trip applications.
So customer things be more interested in the carbon outputs
of their traveling experiences.
Speaker 4 (35:24):
You know you mentioned I just completed I did a
one on a tour of Ireland. Fantastic by the way,
and the Irish love me of course being from there.
But on the questionnaire afterwards, like how is the trip?
And it was awesome, off the charts, and then they
asked about the carbon footprint and I said, I could
not care less. Can you please just let me have
a vacation and just enjoy myself. But James, I think
(35:47):
I'm into my minority. I think travelers more and more
are thinking about the carbon footprint of the plane they take,
the cruise ship they take. How does the industry adapt
to that?
Speaker 5 (36:01):
Yeah?
Speaker 1 (36:02):
Absolutely, Paul. Look, I think there's two really important points here. One,
it's critically important that people have great holiday experiences. You know,
it's vitally important. We all go on holiday to relax,
to enjoy ourselves, to have fun, to try the local
food and enjoy a well aired break. But at the
same point, we also want, as much as possible make
sure that we're having a lighter impact upon the environment,
(36:22):
and we're trying to benefit local communities as much as
we possibly can. And that's why business is like in
Prepid are putting carbon labeling onto our itineries so that
customers can make more informed decision making choices. Absolutely, they
want to have a great trip, but they also want
to be aware about limiting the impact on the environment.
Speaker 8 (36:41):
And how are we thinking about this on an international scale.
I'm thinking about Paul talking about this trip to Ireland,
and I wonder if the US are we behind in
some of these efforts to really limit that carbon footprint.
How are you seeing this internationally?
Speaker 1 (36:56):
Yeah, look, I think Europe is certainly leading the way,
both from a legislate but also consumer points of view,
But I would say that the US is all stay
catching up, and we're certainly seeing demand from customers that
want to travel in a more sustainable, immersive way. Of course,
they want to get out and they want to see
the iconic sites, but they also want to try and
make sure that their tourism dollars are staying within the
(37:17):
local communities. And that's why we're seeing a real desire
for people to travel on intrepid style of sustainable experience
rich travel using different types of local transport, you staying
in different types of local accommodation and really getting under
the skin of a destination and hopefully having some amazing
holiday experiences.
Speaker 3 (37:35):
So what are we seeing.
Speaker 4 (37:36):
Here, James about some of those experiential trips as you mentioned,
and we saw that coming out of the pandemic. People,
I guess during the pandemic they buy stuff and goods,
but coming out of it, they wanted experiences. So they're
not just going to the typical like what I would
do is.
Speaker 3 (37:52):
Just go to a golf resort or beach resort.
Speaker 4 (37:54):
They're doing different things. What are some of the more
popular tours that you guys do.
Speaker 5 (37:59):
Yeah.
Speaker 1 (37:59):
Absolutely, I think we're living in the experiences of economy. Well,
people are desperate to get out, having been caught up
at home during the course of the pandemic and travel
being taken away as a right for people. They want
to give back out and they want to see the
iconic destinations. So we're seeing really big demand for destinations
like a Japan for example. You know, great immersive destination
where you can get out and you can have great
(38:20):
food experiences, but it's a bit more challenging to travel
around independently by yourself, and that's why using reliable tour
operators like Intrepid is a great way to get out
and see a destination. We're seeing Europe boom, particularly in
the shoulder seasons, getting out of that kind of peak
travel period of July and August when it's hot and
it's stuffy and it's crowded. Seeing a lot of demand
into Europe, particularly around those shoulder seasons of April May
(38:43):
and also September October. It's a little bit cooler and
the crowds are a little.
Speaker 8 (38:46):
Bit less, So James. From a legislative perspective, how are
companies being held accountable? Of course there's a lot of
business travel. We may fly out for one day and
come back. There's a lot of things that are going
on in that making that decision. All are businesses being
held accountable for this?
Speaker 1 (39:03):
Yeah, at the moment they're not, Nora, I think businesses
are they going to start to be held accountable for
what they say. What we're not seeing quite yet is
businesses being accountable for what they do. And so we're
certainly seeing, particularly driven out of Europe legislation to ensure
that companies are not greenwashing and they're advertising, and we
(39:24):
think companies being picked up when they are making big,
bold claims around being good for the environment, but people
are jumping on planes. So not only is it about
what people say in their advertising. Soon, we're going to
see legislation come in terms of the actual actions of
which companies are taking. And that's why I think it's
important that all companies are trying to take proactive steps
in terms of measuring their emissions, ideally offsetting their emissions,
(39:47):
but ultimately moving towards trying to decarbonize their activities, no
matter what industry they might be in.
Speaker 3 (39:54):
James, thanks so much for joining us.
Speaker 4 (39:55):
I really appreciate getting some of your thoughts there. James
Thornton needs the CEO of Intrepid Travel, joining us via
that zoom thing from London. Yeah, it took this my
first when I went to Ireland. There's so many things
you want to see. I've never taken like a tour before.
Maybe I'm getting to an age or that's kind of
what you do. I don't know, but there's so many
things you want to see in like a place like
Ireland that you have to do it that way, and
(40:16):
we did. We saw everything, so I feel good about
it and I'd recommend it.
Speaker 8 (40:19):
I was in Dublin back in April. Okay, first I'm
going to Ireland. Didn't get to do the massive tour
that I would have loved to do, but it's such
a beautiful place it is.
Speaker 3 (40:28):
It was good.
Speaker 4 (40:28):
So we did, like Dublin up the Belfast over to
darry so got the Northern Ireland experience too, and it
is different from the Republic of Ireland still today. Then
you come back down back into the Republic of Ireland
into Westport and then Limericks so very cool. So hold
the north half of the island. We'll do the southern
half and again saw a couple of Sweeney as a
matter of fact, went the mass at our family church
(40:51):
in Belfast back from back in the day.
Speaker 3 (40:53):
So that was pretty cool. Ireland, good, good times.
Speaker 2 (40:56):
This is the Bloomberg Intelligence Podcast bull on Apples, Spotify
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Speaker 2 (00:08):
You're listening to the Bloomberg Intelligence Podcast. Catch us live
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Auto with the Bloomberg Business App. Listen on demand wherever
you get your podcasts, or watch us live on YouTube.
Speaker 3 (00:22):
Get back to the markets here.
Speaker 4 (00:24):
The big economic news of the day was the retail sales,
and they generally came out I think across the board
stronger than expected. The headline zero point four percent, consensus
was zero point three for growth and zero point one
percent last period, so big pick up there. When you
look at the control group, perhaps even more impressive zero
(00:44):
point seven percent gain versus zero point three percent forecast
and last month was zero point three percent, So again
pretty strong across the board. Let's see what it means
to some of the folks who really follow the retail
business closely, as does our next guest, Mary Shore, Senior
Equity anams A Columbia thread Needle, joining us from Boston
via Zoom. So, Mary, just to my untrained eye, these
(01:05):
retail sales numbers look pretty good. What do you think
and what are you seeing in the retail space these days?
Speaker 5 (01:11):
Yes?
Speaker 6 (01:11):
Thanks, for having me back. I think you're right.
Speaker 7 (01:14):
The strong September retail sales print confirms that the consumer
is in good shape amidst a relatively strong jobs and
income backdrop. To your point, there may have been some
benefit this month from pre hurricane stock up behavior, but
overall the growth remains very healthy, as we've been talking
(01:35):
about for some time now.
Speaker 6 (01:37):
However, when you.
Speaker 7 (01:37):
Dig deeper, you continue to see pockets of strength and weakness.
Speaker 6 (01:42):
So areas of strength.
Speaker 7 (01:44):
That I would highlight would be food, health and wellness,
clothing and value, which I think is really incorporated in
that general merchandise category. And then some areas of weakness
to call out would be autos and some of the
bigger ticket categories that we're strong during the pandemic, like
furniture and electronics. So when I look at the data,
(02:07):
I think it shows the consumers in good shape, and
it really is a continuation of a lot of the
trends that we've discussed in prior episodes.
Speaker 8 (02:17):
It's interesting. I mean, obviously this data does show that
the consumer is in a good spot, but of course
people are still complaining of this intensely high inflation. How
do you think that this really fits into the broader
economy and as we think about things moving forward, well,
I think.
Speaker 7 (02:34):
It's exactly what we're seeing in the data. We're very
high level, we see low single digit growth, But then again,
when you dig a little deeper, you see services growing
faster than goods, and within goods, you see needs growing
faster than once. And so to your point, the inflation
that we've seen in food and housing in particular really
(02:56):
continues to weigh on consumer discretionary spend on goods, and
I think that is a real key reason for some
of the continued weakness in some of those bigger ticket
categories that I just highlighted.
Speaker 3 (03:10):
Mary, what are the retailers that you cover?
Speaker 4 (03:11):
What are they saying about the holiday Christmas season coming
up such a big part of their annual sales?
Speaker 7 (03:21):
Yes, I think you know, as always they're cautiously optimistic.
You know, they're optimistic by nature, but given the macro backdrop,
I think everyone is planning their business very conservatively. They
were being disciplined on inventory. I expect promotions to be
very well controlled for that reason. But overall, I do
(03:44):
think it will be a strong holiday. What we've seen
this year is that during key events, the consumer does
come out and shop, so I think, you know, we
will see real strength over Black Friday and the week
before Christmas, and probably a lull in between those two
shopping periods as we've seen in the past. So overall,
I would expect a strong season, but still a little
(04:07):
lumpy when you're looking week by week.
Speaker 8 (04:10):
So Mary, talk to me about the sentiment as we're
thinking about things heading into this election. Of course, we're
less than a month away. How are consumers thinking about
this and businesses as well?
Speaker 7 (04:22):
Right well, I think whether it's the election or the
direction of gas prices, what most of the companies that
I talk to say is it's really the uncertainty which
is more paralyzing for the consumer. So I would definitely
expect some noise, you know, right heading into the election.
But either way, I think that the results of the
(04:45):
election will provide that certainty to the consumer and probably
boost consumer sentiment going forward. I think what it means
for the companies could be more mixed, Like if Trump
does continue talking about his tariff policy, then you know,
that could be an overhang on some of the retailers
(05:06):
that import from overseas.
Speaker 6 (05:09):
But I think overall, just the results of the election.
Speaker 7 (05:13):
In gaining that uncertainty will be a positive thing for
consumer sentiment going forward.
Speaker 4 (05:19):
All right, this Christmas shopping season, how promotional will the
retailers be? I know that goes right to their profit margin,
but how do you think that's going to shake out?
Speaker 7 (05:29):
Yeah, you know, we talk a lot about promotions versus markdowns.
You know, the retailers know they have to be promotional
to drive traffic, and so I think you should expect
to see controlled promotions. So what I mean by that is,
you know, promotions more in say the thirty percent range,
and given that inventory is well controlled, I think the
(05:50):
retailers will try to stick to that plan for as
long as possible. I would not expect to see promotions
in like the seventy percent range and markdowns, and that's
typically what you see when the sales are a lot
weaker than planned or the inventory is a lot heavier
than planned. And I don't really expect either of those
(06:11):
things this holiday. So you'll still see those headline promotions,
but you have to remember that the retailers have planned
for those they bought into them, and so there's really
no negative margin implication from some of those headlines.
Speaker 8 (06:28):
Well, we think historically and then moving into this year,
how do consumers really think about the holidays when we're
thinking in this season, is it everyone's just going to
throw everything on their credit card because we have the
holiday cheer? Or do you think they're really going to
be targeting those companies that are those stores that are
offering promotions specifically.
Speaker 6 (06:46):
It's a great question.
Speaker 7 (06:47):
I mean, I think we do see the consumer come
out and spend around key events, and you know, especially
in a year that could be tough, you're feeling the
pinch of inflation, every consumer wants to bring a little
cheer around the holidays. So I do expect that they
will be out in the market. Having said that, I
think they're still going to be very discerning, very focused
(07:11):
on value, and I would expect a lot of the
value players, as I mentioned in that general merchandise category
to be the key beneficiary.
Speaker 3 (07:20):
All Right, Mari, thank you so much for joining us.
Speaker 4 (07:21):
Mary Sure Senior ecuadanams a Columbia Thread Needle Investments up
in Boston, always helping us out talking about retail sales.
Speaker 2 (07:29):
You're listening to the Bloomberg Intelligence Podcast. Catch us live
weekdays at ten am Eastern on Applecar Play and Android
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Speaker 3 (07:47):
Let's switch gears.
Speaker 4 (07:48):
Let's get back to the markets here technology in the
play here yesterday, I think it was me who said
I think I've seen the top of AI.
Speaker 3 (07:56):
I think some of these chip.
Speaker 4 (07:58):
Companies are going to roll over and blah blah blah blah.
Well then Taiwan Semiconductor comes out with a better than
forecasted outlook. So once again I was proven wrong, particularly
it relates to technology.
Speaker 3 (08:10):
I don't know what's going on.
Speaker 4 (08:10):
How do you feel about that? How do I feel
about that? It lasted all of like twenty four hours?
My great call there, Man Deep Sing he's the extra,
He's the one we go to. Man Deep Sying, he's
the tech ANAMST for Bloomberg Intelligence. So Mandy talks about
Taiwan Semi Contector. A lot of our listeners, a lot
of reviewers not really familiar with it. Tell us about
what this company does and kind of what they announced recently.
Speaker 9 (08:30):
I mean, basically, they are the manufacturing factory for all
your AI chips, all the chips that go into smartphones,
and basically they are at the leading edge of manufacturing.
When people talk about you know chips, the most powerful
AI chips with the most transistors, they are the ones
who are manufacturing it. And look, I think it was
(08:53):
quite a contrast between the ASML print and the TSMC print,
and what it shows you is the AI side continues
to be strong. In fact, they called out smartphones being
as strong in market as well uh in the print.
So clearly the top two segments for them are working
quite well and they have more demand than they can manufacture.
(09:17):
These chips for Nvidia and Apple, those are their you know,
top customers, and they're raising their capex guide. So one
of the concerns was will TSMC raise their capex guide
given what we heard from a SML, Well, guess what,
they are raising their capex guide. So a SML's woes
were really driven by Intel pairing back and Samsung pairing back.
(09:39):
But when it comes to TSMC, they continue to be strong,
all right.
Speaker 4 (09:43):
So Taimewan Semiconductor does a trade in US or eighty
rs in US.
Speaker 3 (09:46):
The ADRs are the ADRs trade in.
Speaker 4 (09:48):
US t SM as your tickle put InChI. Bloomberg Terminal
stock is up eleven percent today, up one hundred percent
year to date. This isn't a penny stock. This has
a market cap of over one trillion dollars. My ignorance
level on this is out of control. I mean, I
just didn't know they were that big.
Speaker 8 (10:06):
I know, when we're compute, the number's two big.
Speaker 3 (10:07):
No, it's too big.
Speaker 4 (10:08):
That's why we need man deep sink. So anyway, big
company folks. Giving a positive outlook on the chip business
really important for overall tech discussion about AI.
Speaker 8 (10:16):
So talk to us about the outlook right now? What
are expectations when we think about the tech sector more broadly?
I know earnings people have a pretty low bar, so
if companies are doing well, it'll be a really great,
you know, great news coming out of that. How is
the tech sector when we're looking at AI specifically, what
are expectations right now? I know the bar tends to
be relatively high.
Speaker 9 (10:35):
I mean, I don't know if the bar is low
at this point, given what we saw with THEML ASML
was the case of expectations being too high and they
guide it to that. And now they come out, you know,
this quarter and say we are taking down bookings by
fifty percent. So clearly expectations were high. It was the
management who said it, and now they took back their guide.
(10:56):
In the case of if I think in Video or
some of the other bellveather for AI, look, we've been
hearing that the demand for their latest chip continues to
be strong. The TSMC print is another validation that you know,
they are ramping up the AI side. It's almost mid
teens of their revenue. This was almost a zero billion,
(11:17):
a zero a dollar revenue for TSMC a few quarters back.
So in just the span of three four quarters, it's
mid teens of their revenue. That just goes to show
along with the margin expansion, the gross margin growing to
fifty eight percent. I mean, all this is positive for
AI and you know for bell Weathers like Nvidia at
(11:39):
the same time, this will drive up the expectations even further.
So you know, the bar keeps getting higher, and at
some point I think you will have missus like what
we saw with the SML, but probably not that soon
for the likes of Invidia.
Speaker 4 (11:55):
So thirty secondsleft, who are the top two or three
or four buyers of these chips. Is it the Microsoft's
and the Googles of the world.
Speaker 9 (12:05):
I mean, in the case of TSMC, the top buyer
is still Apple. Okay, so that validates that smartphone to
refresh that everyone is waiting for that segment. Did well.
The inventory is building up, and then Nvidia and and
Nvidia continues to become a bigger buyer of tsmcs. And
then you have got AMD and some others. But pretty
much every fabulous design company, whether it's AMD, Qualcomm and VideA,
(12:29):
goes to TSMC for you know, manufacturing their chips because
they have a leading node monopoly. I mean, everyone else
is way behind when it comes to.
Speaker 4 (12:38):
Son Go to Taiwan and see Taiwan and see them
make chips.
Speaker 9 (12:42):
Yeah, you should visit one of their factories, the one
in Arizona though.
Speaker 3 (12:46):
Yeah, they're gonna do one in Arizona. Yeah, okay, that's
cool too. All right, Mandy, thank you very much again.
Speaker 4 (12:51):
As always, he is our absolute goat to persons for
all things technology. Senior Technology aannels. He runs all of
our tech practice at Bloomberg Intelligence, and we appreciate getting
his time because he's only a floor away.
Speaker 3 (13:02):
It's not like a big ass. We love that, and
you walk.
Speaker 4 (13:04):
Up the stairs and talk to us on Bloomberg Radio,
man Deep singing.
Speaker 2 (13:07):
There, you're listening to the Bloomberg Intelligence Podcast. Catch us
live weekdays at ten am Eastern on Apple car Playing
and broud Otto with the Bloomberg Business app. Listen on
demand wherever you get your podcasts, or watch us live
on YouTube.
Speaker 4 (13:23):
I don't know, did retail sales today nor better than expected?
Maybe maybe the FED doesn't have to cut in November.
And if they don't, is that okay? I don't know
the markets are creating car here. It looks like it's
kind of okay. Let's talk to somebody who's actually has
a professional here on this whole thing.
Speaker 3 (13:39):
David Kodluck. He's a founder, he's a chief executive officer.
Speaker 4 (13:42):
And he's a chief investment strategist. I think that means
he's the boss.
Speaker 8 (13:45):
It sounds like it.
Speaker 4 (13:46):
That's right, mainstay a capital management from one of my
favorite little towns out there in the Midwest, Troy, Michigan.
Speaker 3 (13:52):
I've been to Troy, Michigan. Cool little town, David.
Speaker 4 (13:56):
So you get a retail sales number today that's better
and expected, you get some still a pretty strong labor market.
Is this a FED that has to cut and if
they don't have to cut in November.
Speaker 3 (14:06):
Is that okay?
Speaker 10 (14:08):
Good morning, Paul and Nora. I think it's a FED
that will continue to cut. They'll continue to ease because
monetary policy is more restrictive than it needs to be.
Speaker 11 (14:19):
Inflation has come down there.
Speaker 10 (14:21):
I know there's fears that we could see a resurgence
of inflation here yet this year into next year, but
inflation has come down and is drifting towards target. Certainly
it is in Europe the ECB cut last night. The
key here is that when we look at the economy
and say, I think it's you know, what's interesting is
(14:42):
do they need to cut for a recession? No, those
that have been calling for a recession for the last
two years have been dead.
Speaker 11 (14:49):
We're wrong.
Speaker 10 (14:50):
We've kind of mocked this by my phrase the recession
is always six months away. That have actually been saying
for two and a half years now. And yeah, retail
sales came in above expectations, four tenths a month over
month versus three tenths.
Speaker 11 (15:02):
We've got strong.
Speaker 10 (15:04):
GDP Atlanta gb GDP now forecast above three percent, uh,
labors hanging in there, and so we've I always I
always am careful to use the word goldilocks economy, but
we sure, you know, if there's if there's such a
thing as a Goldilocks economy, we're sure close to it
right now. And the Fed does have the ability to
(15:25):
continue to ease as other central banks are around the world,
just because you know, we we don't uh, we're in
that sweet spot where they can make monetary policy a
little less restrictive.
Speaker 8 (15:39):
So tell me, David, which economic data is most paramount
right now. I know we've always had our eyes on inflation,
but it seems as though attention is really shifting toward
employment data as being more important right now. What's your
look your out look on that?
Speaker 11 (15:53):
Yeah, that, Nora and I agree.
Speaker 10 (15:55):
It's really it's this, when we look at employment or
labor versus inflation. You know, where are we and we
see inflation drifting down? We think that's becoming a more
non existent problem. We keep getting mixed data on labor.
You know, there was some screwy numbers in the back
(16:15):
months that had to be revised. But you know, if
we if we we want to keep an eye on labor.
We want to keep an eye on the consumer being
two thirds of our economy, so we need labor to
stay strong enough but not too strong and not get
weak enough that they're cutting, you know, for the reasons
(16:36):
we don't want, which is the fear of a recession.
And we think the you know that the fears of
a recession, you know, they're just there's anecdotal data there.
You know, what's happening with car loan delinquencies, personal debt,
credit card debt.
Speaker 11 (16:51):
There's that anecdotal data.
Speaker 10 (16:53):
But when we look at GDP, we look at labor,
we look at inflation, we look at retail salesman. You know,
we've we've got when we look at the macro numbers,
we've got an economy that keeps chugging along, and correspondingly,
a stock market that keeps chugging along.
Speaker 11 (17:08):
Again.
Speaker 10 (17:08):
The people that have called for a bear market anytime
over the last two years, they weren't early. They were
just wrong, dead wrong. And you know, we're still constructive
on stocks. It always looks prudent, right, It always looks
prudent or smart to say a recession is right around
the corner, or bear markets right around the corner. But
it's key to these people that have been saying this
for so long they're dead just been wrong.
Speaker 8 (17:30):
So David, how are you advising your clients now versus
maybe this time last year?
Speaker 10 (17:37):
We're you know, all that said, we're always concerned about
when when the next shoe will drop or you know,
when when the first shoe will drop or the next
shoe will drop.
Speaker 11 (17:46):
We are concerned about that.
Speaker 10 (17:47):
So that's why we're keeping an eye on the data
that were talking about here on does it is inflation
on a glide path down to the.
Speaker 11 (17:56):
Fence target we believe it is.
Speaker 10 (17:58):
Is you know, uh, do we still have though a
robust economy or we headed towards recession?
Speaker 11 (18:04):
We don't think so. So Uh.
Speaker 10 (18:06):
We continue to be very constructive on the markets. We're
over overweight equities. We've changed our term structure on our
bond holding somewhat. We were last year in the first
part of this year on the shortest end of the curve,
just capturing yield, uh, rather than any kind of interest
rate player anything else. Because duration has worked against you, uh,
(18:28):
we think there's an opportunity over the next year that
duration will help you. You can get that capital appreciation
combined with the yield on your stocks, clip the coupon
and enjoy some capital appreciation. But I think my strongest
recommendation is, uh, you know, these all the naysayers, all
the doomsayers, the pundits that are you know, collapses eminet. Look,
(18:52):
they've been wrong, and so we're very constructive on the markets.
We're bullish on the market's near term. We have an
election coming that we'll get out of the way, so
that removes some uncertainty. And we're heading into the seasonal
period that's strong for stocks from November through April. So
you know, there's a lot of economic seasonality and other
(19:14):
factors that are good tailwinds for equities right now.
Speaker 4 (19:18):
David, you mentioned the election nineteen days I think coming
up or very close here.
Speaker 3 (19:23):
What do you tell your clients about it?
Speaker 4 (19:24):
I mean, is there any way to election proof of
portfolio or don't worry about it?
Speaker 10 (19:30):
Well, unfortunately, and not our clients, because we educate our
clients about this a lot every election cycle. Don't election
proof it by going to cash. That's the worst mistake
that investors make because look at this, look at this
election like others, how polarizing, you know, between the two candidates.
(19:51):
You know, if so and so gets elected, we're going
to heck in a handbasket in the same thing for
the other candidate.
Speaker 11 (19:59):
And there's all this.
Speaker 10 (20:00):
The reality of it is is the biggest factor for
the market is uncertainty. Markets had uncertainty that will be
determined here in three weeks. So the key is don't
go to cash, stay invested in the market and as
we see who it looks like will be what administration
will be in office here in a few months, that's
where that's where we want to be tactically moving our
(20:23):
portfolios to worst mistake is to go to cash. And look,
this year is a perfect example. We have the best
election year through today for the markets that we've had
since the nineteen thirties. That's how good this year is.
It is not the time to be to go to cash,
to wait on the sidelines until you see how it
comes out. Right, So it's looking at where what do
(20:44):
you expect with the candidate that will win, tactically allocating
your portfolio.
Speaker 11 (20:48):
For that and stay invested.
Speaker 4 (20:50):
Yep, excellent stuff as always David Coodley, he's a founder,
chief executive officer in Chief Investment strategist at Mainstay Capital Management,
and David and his team are ranked in the top
ten on Baron's Top one hundred Independent Financial Advisors in
twenty twenty four. So we appreciate getting a few minutes
at this time.
Speaker 2 (21:07):
You're listening to the Bloomberg Intelligence Podcast. Catch us live
weekdays at ten am Eastern on applecar Play and Android
Auto with the Bloomberg Business App. You can also listen
live on Amazon Alexa from our flagship New York station,
Just Say Alexa playing Bloomberg eleven thirty.
Speaker 3 (21:25):
Let's go to a really good story I today. I
mean Blackstone.
Speaker 4 (21:28):
You know they got like aa jillion dollars under management
to Stock. They put up some good numbers recently, just today,
stock up five percent today, up twenty eight percent.
Speaker 3 (21:37):
Year to date, fifty two week high.
Speaker 4 (21:39):
Some phenomenal performance coming out of the good folks at Blackstone.
I want to break it down, and we do that
with Paul Goldberg. He's Bloomberg Intelligence senior equity analyst. Paul,
what is Blackstone and why and how are they executing
so well? Just tell us what Blackstone is in your mind,
and then what are they doing so well? Hi?
Speaker 3 (21:57):
Paul?
Speaker 12 (21:58):
Thank you for having me. Blackstone called themselves a juggernaut
this morning, and they called in a press release themselves
as sort of being a benchmark for the alternatives industry.
They are in private equity, private credit, really one of
the big private real estate investors. So all these businesses are,
some of them doing really well, some of them are
(22:20):
recovering from the kind of a lull in the last
two years, and it's growing. They reached to one point
one trillion dollars. So that's the largest alternative manager out there.
Speaker 8 (22:32):
Let's talk a bit of real estate. Of course, I
view them as a bell whether I'm actually a US
real estate stocks reporter, I'm curious how are people viewing
Blackstone and a lot of its deals recently. Are we
seeing more activity happening in that sector specifically?
Speaker 12 (22:48):
There it is, and they very specifically alluded to it.
They made a few very large ten billion plus deals
this year. They see in the bottom and the real
estate cycle. They also, I've seen private is being a
bit more aeriosyncratic than the public markets. So it doesn't
move necessarily in tend them. But as long as they
see the bottom, as long as they are seeing a
(23:10):
lower interest rate, trajectory that should be supportive in the
real estate space. The other thing is their real estate
is quite unique, right, So when we talk about real
estate and especially commercial, a lot of people think about
offices and these kinds of things. For them, it's mostly
data centers, infrastructure kind of real estate, multifamily, so different business.
And in the data centers they have over seventy billion
(23:33):
dollars of their one point one trillion just sitting in
those data centers.
Speaker 4 (23:38):
And I like to just take a look when I
look at Blackstone. Stephen Schwartzman, the just the total Wall
Street mobilis seventy seven years of age, co founder of Blackstone.
He's got a net worth today fifty one point eight
billion dollars.
Speaker 11 (23:50):
That's puts them on.
Speaker 4 (23:51):
Number twenty four in the Bloomberg's Rich List. Credit to
talk to us about the credit business. Private credit business
got about thirty seconds in upon.
Speaker 12 (24:00):
Us all about the credit. This quarter was led by
credit forty billion of inflows, twenty of them going into
the credit. All the upside in fees and performance it
was going through the credit and the growth of expectations
a lot of it just in the credit as well,
So very consistent with what we're hearing throughout the year
and other managers as well.
Speaker 3 (24:20):
Paul, great stuff, Thank you so much for joining us.
Speaker 4 (24:22):
Paul Goldberg, Senior equityannas Bloomberg Intelligence giving us the latest
on Blackstone.
Speaker 3 (24:27):
B X is the ticker symbol, folks, so check it out.
Check out that chart. Just amazing.
Speaker 4 (24:32):
Bloomberg News is out the reporting here. Blackstone's credit arm
is now its top business fueling profits.
Speaker 3 (24:37):
They're in private equity, private credit, real estate.
Speaker 4 (24:40):
So as Paul Goldberg was just saying, they are the
biggest alternative asset manager out there. Just extraordinary. That's Blackstone
and then there's black Rock. I mean, if these two
were together like they were back in the day, I
mean extraordinary. So just amazing. The private equity business continues,
an alternative asset management business continues to be just one of,
(25:03):
if not the best business on global Wall Street, and
the Black Zone folks are at the top of that.
Speaker 2 (25:10):
You're listening to the Bloomberg Intelligence Podcast. Catch us live
weekdays at ten am Eastern on applecar Play and Android
Auto with the Bloomberg Business app. You can also listen
live on Amazon Alexa from our flagship New York station.
Just say, Alexa playing Bloomberg eleven thirty.
Speaker 4 (25:27):
Bloma Limits sitting and for Alex steel on Paul Swiney
live here in our Bloomberg Interrectied Brooker Studio, and we're
streaming the video thing live on YouTube YouTube dot Com
search Bloomberg Podcast. One of the topics that Alex and
I and the folks here a Bloomberg intelligence like to
really keep a close eye on is commercial real estate
and its recovery from the pandemic. And our good friend
Abigail Duottle, she's been very good at helping us hook
(25:48):
up with some really smart people industry. Abigail doo Little
joints us here today, chief market correspondent for Bloomberg News,
and today she brings us Josh Ziegan, managing Princil, co
founder at Madison Realty Capital. They're on BLO and Briginner
Act the Broker Studio. Josh, we appreciate you coming in here. Abigail,
Thanks once again, Josh.
Speaker 3 (26:05):
Commercial real estate.
Speaker 4 (26:06):
I think what I've learned is I don't ask the
dumb question which I usually do, which hey, how's commercial
real estate doing? Because there are so many different pieces
of it. Where do you guys at Madison Real team
focus and then how's your business?
Speaker 5 (26:17):
So we're focused on the real estate credit space. We
started the company about twenty years ago. We've about twenty
one billion of AUM and all ends of real estate credit.
A lot of our business is focused on where the
banks have not focused and we're dislocated post global financial
crisis and even more so today post banking crisis that
happened in twenty twenty three. So we've been providing capital,
(26:38):
whether it's construction lending, transitional lending. We buy performing non
performing loans, and today the market is a lot better
than when I was on in the spring. There's definitely
a sense of the want to do deals. The investment
sales market has picked up given the rate drop that
happened in September. A lot we're waiting on the sidelines
just to see that happen. So mentally, there's this sense
(27:00):
that things are starting to improve and capital markets are
in a better place, albeit the banking sector has not
come back in a big way.
Speaker 13 (27:08):
So you joined us in May, and at that time,
I would say were one of the more bearish commercial
real estate. I guess that we've been fortunate enough to
interview and I view you relative to some of the
other folks as really close to the banks or really
close to the money. You were talking a lot about
the banks and you said that we were in the
early innings of this thing working out. How much has
it changed since then with the FED cutting by fifty
(27:30):
basis points.
Speaker 5 (27:31):
Well, I think what we've seen is in the spring,
there was very very little activity investment sale market, and
one of the problems was money was not going back
to investors through that because no transactions were happening. So
with rates dropping, I think what happened was that created
some solutions for barwers who needed to delever, and that
is in the form of preferred equities, some structured equity
(27:53):
coming into deals. Today there's not only that solution available,
but there's also commonect equity and you're starting to see
more sales. Albeit the office sector is really struggling still.
There's no liquidity in the office sector, and when you
are seeing transaction that happen, capital is just tied up
in the system because a lot of the sellers are
holding financing banks are rolling over their debt. It's not
(28:14):
just money back to investors, so that's tying up a
lot of capital in the system.
Speaker 8 (28:18):
I cover US real estate from the equity side, A
cover homebuilders and then also commercial real estate. I'm curious
you mentioned office. I was recently working on a story
that spoke about how we're seeing a bit of an
uptake on Park Avenue. It's not as bad as it
once was. As we think about vacancies, what areas are
you seeing flourishing or doing better than they were before
In the office space.
Speaker 5 (28:38):
Well, I think you're seeing sort of the haves and
have nots in office. It's the best in a class
office and then there's everyone else. And unfortunately, that best
of a class office is very limited in New York City. Yeah,
there's more buildings than a place like Austin, Texas or
some other places, but it's limited. What I have seen
in the office sector is much more leasing demand. So
while the leasing demand and absorption is happening a much
(29:00):
greater way, it still is challenging from a cap rate perspective.
So you may have a one hundred percent office, one
hundred percent lease office building, or ninety percent lease office building,
but that cap rate as compared to twenty twenty one
is very, very different, and so that's a change in
valuation that investors are not able to stomach and in
many cases can't get out of these deals today.
Speaker 4 (29:20):
Hey, Josh, just kind of before the pandemic. In mike
Town in Jersey, they constructed a multi very nice, high end,
multi multi unit residential thing and a big sign out front,
financed by the local bank. If I go to build
that same property today, is that look a bank going
to be there for me?
Speaker 5 (29:38):
So it's a good question. So that bank generally is
not there, and why because banks have a liquidity mismatch.
They were committing long for a construction loan like that
and borrowing short with deposits. So banks have been scrutinized
even more so today from a regulatory standpoint. And so
it was really bad post global financial crisis and became
even greater from a regulatory standpoint post March twenty twenty three.
(30:01):
So we're filling that void. We are doing a lot
of construction lending, which is today a lot lower from
a loan to cost standpoint than we had to provide
in twenty twenty one before this banking crisis. So we're
providing whole loans to that same Jersey developer to build
a multifamily, and the good news for multifamily as specific
in New Jersey and across the country is we have
(30:22):
seen cap rates titan since the spring when I was
on the show, by fifty to one hundred basis points,
and a lot of that's a function of debt. I mean,
when you look at debt with rates down today, long
term rates are down and short term rates are down
to some extent. One of the problems with construction lending
and higher value add lending is you're borrowing short and
so that's an issue. There still is not necessarily the
(30:44):
appetite to build because of the cost of short term debt.
Speaker 9 (30:48):
You know.
Speaker 13 (30:48):
So picking up on Paul's question and picking up on
what you just talked about with regulation, some of my
sources have said that because it's an election, you're the
regulators have actually been relatively lax and trust what you
just said. But the idea, I guess my question is
do you think that the regulation could even become tighter
next year? And then at that point are we going
to see more svbs? In other words, are we going
(31:09):
to see some of these regional banks? Is they are
more pain there in terms of blowing up our consolidation.
Speaker 5 (31:13):
I think it's a more politically oriented question in terms
of the election, really who wins here, But no matter what,
I so there's.
Speaker 13 (31:20):
A difference who wins.
Speaker 5 (31:22):
I think directionally you will see more consolidation, and a
lot of that has to do with banks are upside
down in terms of having long term loans that are
at very low rates, and those aren't rolling off so
quick and they're matched with liquidity that the bank has
to pay the positor a lot more than they did
in twenty twenty one when the loans were made. So
I think you will see more consolidation in the banking sector.
(31:44):
And oh so, I think you will see more consolidation.
You start to see more of that already in this year,
but you'll see more in years to come.
Speaker 13 (31:53):
Well, I just really want to pick up on that
election thing though, because I haven't heard anybody say that
it matters who wins. So were you making the point
that if the former president Donald Trump wins, or if
for or the current VP Harris if she wins, there's
going to be a difference in regulation. And if there is,
what does it look like.
Speaker 5 (32:10):
I mean, I can't speak to specifics, but there's a
view that will be well, there'll be more regulatory pressure
from regulators in a democratic significantly more can't comment really,
you know, I don't know, but more you'll be more,
all right, Josh, thanks so much for journey.
Speaker 3 (32:25):
Us really appreciate it.
Speaker 4 (32:26):
Jos Ziegen, Managing Principle, A co founder and Madison Realty
Capital in Abco Dolittle, Chief Markets correspondent for Bloomberg News
in our Bloomberg and aarct approp Pro studio, just kind
of get the laid down on the real estate business.
Speaker 2 (32:40):
You're listening to the Bloomberg Intelligence Podcast. Catch us live
weekdays at ten am Eastern on applecar Play and Androyd
Auto with the Bloomberg Business at You can also listen
live on Amazon Alexa from our flagship New York station
Just Say Alexa playing Bloomberg eleven thirty.
Speaker 4 (32:58):
Normal, Linda sitting in front Alex deal on Paul Sweeney.
You're live here in our Bloomberg and an Actor Broker
studio or streaming live on YouTube as well, So go
check us out there. Just got back from a little
one day corporate travel gig. Alex and I went down
to the Hilton Head Island or down to Kiwa for
a client event.
Speaker 3 (33:16):
Travel one. Fine, that's great.
Speaker 8 (33:18):
You were in United, right, what's you were on United?
Speaker 3 (33:20):
Down on Delta back on United? So both good?
Speaker 2 (33:23):
Oh?
Speaker 11 (33:23):
Good?
Speaker 3 (33:24):
Packed?
Speaker 4 (33:24):
I don't know the place was packed. I think people
are back out there traveling again. Here and my thing
on travel, I only travel. Somebody pays me to travel
as you should.
Speaker 3 (33:33):
I'm just like I like that philosophy.
Speaker 4 (33:35):
Exist anyway, I've been pretty much everywhere you need to go.
I think James Thornton joins us. He's a CEO of
Intrepid Travel, joining us from London via Zoom. James talk
to us about I love to get your perspective, just
kind of as you look at maybe business travel. What
are most companies doing in terms of business travel these
days versus pre pandemic?
Speaker 3 (33:55):
Are we back to those levels? Will we get back
to those levels? Where are we?
Speaker 1 (34:01):
Yeah, we're definitely back to the levels, Paul. I think
there was a misconception during the pandemic that the business
travel environment wouldn't recover and we'd all be stuck on
zoom and be meeting remotely. But we're seeing that airplanes
are full. Business travel, corporate travel clients are up.
Speaker 2 (34:17):
Year on year.
Speaker 1 (34:18):
Nothing beats being together face to face. So yeah, business
travel is back and people are flying around a meeting again.
Speaker 8 (34:24):
So of course everyone likes to keep in mind the
idea of limiting our carbon footprint. I'm curious, how are
business companies, How are they thinking about this when we
think about business travel, our companies being mindful or is
ESG a buzzword that's been left in the past. How
are we thinking about that now in twenty twenty four.
Speaker 1 (34:44):
Yeah, look, I think companies are becoming increasingly mindful about
their carbon outputs, particularly when it comes to their staff travel,
but also in the sense of the way in which
customers are thinking about their right in theies too. At
Intrepid Travel, we've reached launched carbon and labeled carbon labeling
program on five hundred of our itineries around the world,
(35:06):
and we display a number about the CO two emissions
that come from our trips. Is a bit like a
food label if you like, so customers can calculate how
much carbon emissions per traveler come from their trip applications.
So customer things be more interested in the carbon outputs
of their traveling experiences.
Speaker 4 (35:24):
You know you mentioned I just completed I did a
one on a tour of Ireland. Fantastic by the way,
and the Irish love me of course being from there.
But on the questionnaire afterwards, like how is the trip?
And it was awesome, off the charts, and then they
asked about the carbon footprint and I said, I could
not care less. Can you please just let me have
a vacation and just enjoy myself. But James, I think
(35:47):
I'm into my minority. I think travelers more and more
are thinking about the carbon footprint of the plane they take,
the cruise ship they take. How does the industry adapt
to that?
Speaker 5 (36:01):
Yeah?
Speaker 1 (36:02):
Absolutely, Paul. Look, I think there's two really important points here. One,
it's critically important that people have great holiday experiences. You know,
it's vitally important. We all go on holiday to relax,
to enjoy ourselves, to have fun, to try the local
food and enjoy a well aired break. But at the
same point, we also want, as much as possible make
sure that we're having a lighter impact upon the environment,
(36:22):
and we're trying to benefit local communities as much as
we possibly can. And that's why business is like in
Prepid are putting carbon labeling onto our itineries so that
customers can make more informed decision making choices. Absolutely, they
want to have a great trip, but they also want
to be aware about limiting the impact on the environment.
Speaker 8 (36:41):
And how are we thinking about this on an international scale.
I'm thinking about Paul talking about this trip to Ireland,
and I wonder if the US are we behind in
some of these efforts to really limit that carbon footprint.
How are you seeing this internationally?
Speaker 1 (36:56):
Yeah, look, I think Europe is certainly leading the way,
both from a legislate but also consumer points of view,
But I would say that the US is all stay
catching up, and we're certainly seeing demand from customers that
want to travel in a more sustainable, immersive way. Of course,
they want to get out and they want to see
the iconic sites, but they also want to try and
make sure that their tourism dollars are staying within the
(37:17):
local communities. And that's why we're seeing a real desire
for people to travel on intrepid style of sustainable experience
rich travel using different types of local transport, you staying
in different types of local accommodation and really getting under
the skin of a destination and hopefully having some amazing
holiday experiences.
Speaker 3 (37:35):
So what are we seeing.
Speaker 4 (37:36):
Here, James about some of those experiential trips as you mentioned,
and we saw that coming out of the pandemic. People,
I guess during the pandemic they buy stuff and goods,
but coming out of it, they wanted experiences. So they're
not just going to the typical like what I would
do is.
Speaker 3 (37:52):
Just go to a golf resort or beach resort.
Speaker 4 (37:54):
They're doing different things. What are some of the more
popular tours that you guys do.
Speaker 5 (37:59):
Yeah.
Speaker 1 (37:59):
Absolutely, I think we're living in the experiences of economy. Well,
people are desperate to get out, having been caught up
at home during the course of the pandemic and travel
being taken away as a right for people. They want
to give back out and they want to see the
iconic destinations. So we're seeing really big demand for destinations
like a Japan for example. You know, great immersive destination
where you can get out and you can have great
(38:20):
food experiences, but it's a bit more challenging to travel
around independently by yourself, and that's why using reliable tour
operators like Intrepid is a great way to get out
and see a destination. We're seeing Europe boom, particularly in
the shoulder seasons, getting out of that kind of peak
travel period of July and August when it's hot and
it's stuffy and it's crowded. Seeing a lot of demand
into Europe, particularly around those shoulder seasons of April May
(38:43):
and also September October. It's a little bit cooler and
the crowds are a little.
Speaker 8 (38:46):
Bit less, So James. From a legislative perspective, how are
companies being held accountable? Of course there's a lot of
business travel. We may fly out for one day and
come back. There's a lot of things that are going
on in that making that decision. All are businesses being
held accountable for this?
Speaker 1 (39:03):
Yeah, at the moment they're not, Nora, I think businesses
are they going to start to be held accountable for
what they say. What we're not seeing quite yet is
businesses being accountable for what they do. And so we're
certainly seeing, particularly driven out of Europe legislation to ensure
that companies are not greenwashing and they're advertising, and we
(39:24):
think companies being picked up when they are making big,
bold claims around being good for the environment, but people
are jumping on planes. So not only is it about
what people say in their advertising. Soon, we're going to
see legislation come in terms of the actual actions of
which companies are taking. And that's why I think it's
important that all companies are trying to take proactive steps
in terms of measuring their emissions, ideally offsetting their emissions,
(39:47):
but ultimately moving towards trying to decarbonize their activities, no
matter what industry they might be in.
Speaker 3 (39:54):
James, thanks so much for joining us.
Speaker 4 (39:55):
I really appreciate getting some of your thoughts there. James
Thornton needs the CEO of Intrepid Travel, joining us via
that zoom thing from London. Yeah, it took this my
first when I went to Ireland. There's so many things
you want to see. I've never taken like a tour before.
Maybe I'm getting to an age or that's kind of
what you do. I don't know, but there's so many
things you want to see in like a place like
Ireland that you have to do it that way, and
(40:16):
we did. We saw everything, so I feel good about
it and I'd recommend it.
Speaker 8 (40:19):
I was in Dublin back in April. Okay, first I'm
going to Ireland. Didn't get to do the massive tour
that I would have loved to do, but it's such
a beautiful place it is.
Speaker 3 (40:28):
It was good.
Speaker 4 (40:28):
So we did, like Dublin up the Belfast over to
darry so got the Northern Ireland experience too, and it
is different from the Republic of Ireland still today. Then
you come back down back into the Republic of Ireland
into Westport and then Limericks so very cool. So hold
the north half of the island. We'll do the southern
half and again saw a couple of Sweeney as a
matter of fact, went the mass at our family church
(40:51):
in Belfast back from back in the day.
Speaker 3 (40:53):
So that was pretty cool. Ireland, good, good times.
Speaker 2 (40:56):
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