>> WE ARE SET TO OPEN HIGHER THIS MORNING.
POWELL OUT OF THE WAY. NEXT IT IS APPLE. THE COUNTDOWN TO THE OPEN
STARTS RIGHT NOW. DANI: COMING UP
FED CHAIR JAY POWELL KEEPS THE RATE CUT DREAM ALIVE.
INVESTORS LOOK AHEAD TO PAYROLLS WITH APPLE EARNINGS ON
DECK. WE BEGIN WITH THE FED HOLDS
AGAIN. >> THE WHOLE GAME PLAN IS
BASICALLY UNCHANGED. WE WILL KEEP RATES HERE UNTIL
WE ARE HIGHLY CONFIDENT WE WILL GET INFLATION TO 2%.
NO HINT WHATSOEVER OF A RATE HIKE. >> I THINK THAT THERE IS A LOT
OF RELIEF THAT THE CHAIRMAN STAY TRUE TO WHAT WE'VE SEEN
FROM THIS CHAIRMAN. >> I THINK JAY POWELL STAYED ON
MESSAGE VERY WELL. THERE IS A CLEAR BIAS TOWARDS
EASING. HE STUCK TO THAT. >> THEY LEFT WIDE OPEN THE
QUESTION OF WHY HAS PROGRESS BEEN LESS THAN THEY EXPECTED ON
THE INFLATION FRONT. >> THE FEDERAL RESERVE IS NOT
LIVING UP TO THE COMMITMENT ON INFLATION THAT OTHER CENTRAL
BANKS ARE. >> LET THAT TIGHT POLICY WORK
FOR LONGER. THAT IS AS FAR AS THEY ARE
WILLING TO GO TODAY. THAT IS HAWKISH IN MAY.
WE WILL SEE WHAT HAWKISH MIGHT LOOK LIKE IN JUNE. >> THIS IS REALLY GOOD FOR THE
MARKETS. HERE IS A FED THAT IS TELLING
US, LOOK AT THE LONGER TERM, LOOK WHERE INFLATION WAS AND
LOOK WHERE WE'VE GOTTEN IT TO. DON'T WORRY ABOUT THE LAST
COUPLE OF MONTHS. WE WILL SEE WHAT HAPPENS THERE.
DANI: POWELL TOES THE LINE AND IT
DOESN'T ROCK THE BOAT. JOINING US IS THE CHIEF
CORRESPONDENT OF GLOBAL MACRO MARKETS.
WE ARE 19 HOURS FROM THE POWELL PRESS CONFERENCE.
WHAT IS STILL LINGERING IN YOUR MIND? LIZ:
WHAT A GREAT LINE OF SPEAKERS YOU WENT THROUGH. I THINK BILL DUDLEY, AND IN
ANOTHER PART OF HIS CLIP HE SAID THAT CHAIRMAN POWELL
BASICALLY SAID "WE GOT THIS." WHAT IS LINGERING AS I THINK
THAT THE MARKET HEARD HIM, THEY CUT OFF THE OPTION OF A HIKE
FOR NOW BECAUSE HE REALLY SLAPPED THAT DOWN, CLEARLY. IT IS REALLY GOING TO BE
DEPENDING ON THE DATA, RIGHT? OF COURSE POWELL AND THE FED
WILL DO WHATEVER THEY NEED TO DO.
THEY HAD SOME DATA TODAY, SUM OF THE COST INDEXES WERE
HIGHER, JOBLESS CLAIMS ARE HOVERING AT NOT TROUBLESOME
LEVELS, BUT THE MARKET STILL HAS YIELDS DOWN A LITTLE BIT.
WE GOT THE PIECE THAT THEY ARE EASING BIAS REMAINS.
WE HAVE JOBS DATA TOMORROW. I THINK THAT THERE IS JUST
GOING TO REMAIN A LOT OF ANGST TO TRADING AROUND THESE
NUMBERS, BECAUSE THEY KNOW, DESPITE WHAT CHAIRMAN POWELL
SAID, IF THE DATA CHANGES THEY WILL CHANGE THEIR TUNE.
I'M NOT SAYING THEY WILL HIKE BUT THEY ARE PRICED FOR ONE
FULL CUT, WHICH HAS BEEN THE CASE FOR A WHILE.
IF THAT IS PUSHED OUT OR THEY PRICE IN THE CHANCE, A BETTER
CHANCE OF TWO, WILL DEPEND ON THE LABOR DATA AND INFLATION
DATA TO THE NEXT COUPLE OF WEEKS. DANI:
BLOOMBERG'S LIZ MCCORMICK. JOINING US IS THE SENIOR
INVESTMENT STRATEGIST AT EDWARD JONES AND THE HEAD OF
MICROSTRATEGY AT ACADEMY SECURITIES.
WE HAD A POWELL THAT WAS CAREFUL NOT THE POOL AN
WILLIAMS AND INTRODUCE THE POSSIBILITY OF HIKES.
WE DON'T KNOW WHEN THE CUTS ARE GOING TO HAPPEN.
WHAT DID YOU MAKE OF HIS PERFORMANCE? PETER:
I THINK IT WAS DECENT. HE IS FOCUSED ON THE ABILITY TO
CUT. THAT IS WHERE HE WANTS TO GO.
HE IS TRYING TO KEEP THAT ON THE TABLE.
I THOUGHT HE WAS DISINGENUOUS WHEN HE STARTS TALKING ABOUT
THE LAG IN RENTAL INFLATION.
PROBABLY UNDERSTATED RENTAL INFLATION FOR YEARS AND THAT'S
PROBABLY ONE OF THE REASONS THEY WERE SLOW TO REACT.
IT'S GOOD THEY'RE LEARNING THEIR LESSONS WHEN THEY WERE
CALLING THINGS TRANSITORY. SOME OF THESE LAG EFFECTS I
DON'T BUY INTO. I THINK THAT WE WILL STRUGGLE
ON THE DATA. I THINK WE WILL GET A FEW GOOD
PRINTS THAT GIVES THE MARKET HOPE THAT WE GO BACK TO TWO.
I AM STILL IN THE TWO CAMP. DANI:
ARE YOU IN CAMP TWO CUTS AFTER POWELL AS WELL? >> POWELL SUMMARIZED IT WHEN HE
SAYS HE DOESN'T SEE THE STAG AND HE DOESN'T SEE THE
INFLATION. HE THINKS THAT INFLATION WILL
MODERATE OVER TIME SEEING THE IMPACTS FROM SHELTER AND RENT
PLAYING THROUGH. WE THINK THERE HAVEN'T BEEN
SIGNS THAT INFLATION IS RE-ACCELERATING.
THAT IS THE ONE THING THAT HAS GIVEN US SOME COMFORT.
WE THINK THAT THEY ARE BIASED TO CUT AND AT LEAST ONE CUT IS
COMING LATER THIS YEAR. KEEP IN MIND THIS IS SUPPOSED
TO BE A MULTI-YEAR RATE CUTTING CYCLE. IT WASN'T JUST 2024.
THEY HAD 202026. AS WE GRADUALLY MOVE TOWARDS --
THEY HAD 2025, 2026. AS WE MOVE TOWARDS NEUTRAL
RATES WE GET A BETTER ENVIRONMENT OVERALL. DANI:
NOT ONLY WAS THE BIAS TO CUTTING BUT THE BAR IS
EXTREMELY HIGH. IF I CAN READ YOU SOMETHING
POWELL SAID YESTERDAY, IF WE HAVE A PATH WHERE INFLATION
PROVES MORE PERSISTENT, A LABOR MARKET IS STRONG, AND WE AREN'T
GAINING GREATER CONFIDENCE, THAT WOULD BE THE CASE WHERE IT
WAS APPROPRIATE TO HOLD OFF RATE CUTS.
YOU COULD HAVE TAKEN OUT HOLD OFF RATE CUTS AND INSTEAD STUCK
IN HIKE RATES. IS THE FED PUT BACK IN THE ROOM
WITH US AND ALIVE. IS THIS A POWELL WHO DOESN'T
WANT TO UPSET MARKETS AND PUSH HIGHER? PETER:
WE TALKED LATE LAST YEAR I THINK HE WAS HAPPY TO CAUSE A
RECESSION IN 2023. IT WASN'T AN ELECTION YEAR.
HE DOESN'T WANT TO GO DOWN THAT PATH.
THEY'RE STARTING THE PROCESS OF REDUCING CUTIE, AND THAT SHOULD
BE SOMEWHAT SUPPORTIVE. I THINK THAT IS LOOKING FOR THE
DATA, MAYBE HAS HIS FINGERS CROSSED THAT IT COMES TOGETHER
SO HE DOESN'T HAVE TO HIKE. IT IS GOING TO BE A HIGH HURDLE
FOR HIM TO EVEN THINK ABOUT HIKING.
WE HAVE A LITTLE BIT OF COMFORT ON THE RIGHT SIDE.
I THINK THAT IT WILL EXTEND MORE TO THE TWO YEAR.
WE WILL GET BACK TO WORRYING ABOUT THE DEFICIT AND 10-YEAR
YIELDS PUSH HIGHER REGARDLESS OF WHAT FED POLICY WILL DO.
THIS WILL BE ABOUT DEFICITS AND ONGOING TREASURY SUPPLY, NOT
WHERE THE FRONT-END RATES ARE. DANI:
IF YOU PUT THAT TOGETHER, I UNDERSTAND WHY YOU TRADE THE
TWO-YEAR AND THAT -- IN THAT WAY AND DEFICITS.
LONGER OUTCOME IS AHEAD SCRATCHER.
HOW DO YOU TRADE A 10-YEAR WHEN YOU HAVE A POWELL WHO WON'T
TALK ABOUT HIKES? SO, WHEN HOT DATA COMES IN,
WHAT WE DO WITH THAT? MONA: THERE IS A TALE OF TWO
NARRATIVES. ONE IS THAT INFLATION IS
STICKIER THAN WE WOULD LIKE IT TO BE AND IT'S TAKING LONGER
THAN WE WOULD LIKE TO MOVE LOWER.
THE OTHER NARRATIVES AROUND THE U.S.
ECONOMY HOLDING A BETTER THAN EXPECTED.
THAT NARRATIVE HAS PLAYED OUT. WE HAVE SEEN NOT ONLY ECONOMIC
GROWTH HOLD UP EARNINGS GROWTH CONTINUE TO PERFORM AND EXCEED
EXPECTATIONS FOR THE FIRST QUARTER.
THE GROWTH NARRATIVE REMAINS INTACT.
THE 10 YEAR TO YOUR POINT, STOCKS AND BONDS WILL REACT
MORE TO WHAT IS HAPPENING IN UNDERLYING ECONOMIC GROWTH AND
EARNINGS GROWTH. WE THINK IF THAT STORY
CONTINUES TO DELIVER THAT THE 10 YEAR WILL PROBABLY BE
GETTING CLOSE TO SOME SORT OF PEAK LEVEL IN THE NEXT SIX TO
12 MONTHS. THAT IS AN INTERESTING
OPPORTUNITY FOR DURATION BROADLY. WE THINK THAT IF WE THINK ABOUT
THE HISTORICALLY BEST PREDICTOR OF FUTURE BOND RETURNS AND
INVESTMENT GRADE BOND RETURNS A PARTICULAR HAVE BEEN THE
STARTING RATE OF YIELDS.IF WE THINK WE ARE
GETTING CLOSER TO A PEAK RATE IN YIELDS WE THINK EXTENDING
DURATION OR NOT BEING SO OVERWEIGHT IN CASH OR CASH
HEAVY LIKE INSTRUMENTS MAKES SENSE IN THE YEAR AHEAD. DANI:
THERE ARE A LOT OF PEOPLE IN CASH MODE THAT NEED TO BE
TALKED DOWN FROM THAT. WHEN IT COMES TO EQUITY, IT CAN
DO WELL IF THERE'S GROWTH.
IF THAT IS DRIVING YIELDS HIGHER, WHAT YOU SAY TO THOSE
THAT SAY THAT BOND MARKETS HAVE DONE THEIR JOB OF PRICING OUT
SOME OF THE CUTS THAT WE HAD IN BUT EQUITY MARKETS HAVEN'T
WOKEN UP TO THAT? IS THERE REPRICING THAT NEEDS
TO HAPPEN EVEN IF THE ECONOMY IS STRONG? MONA:
I THINK THUS FAR WE STILL HAVEN'T SEEN THE NOTORIOUS
BROADENING OF MARKET LEADERSHIP. IT HAS BEEN PRETTY CONCENTRATED
IN THE MEGA CAP TECHNOLOGY SPACE ON THE EQUITY SIDE.
THAT MAKES SENSE GIVEN THAT YIELDS HAVE REMAINED HIGHER AND
DEFLATION IS STICKY AND WE ARE HIGHER FOR LONGER ON THE FED
NARRATIVE. WE THINK THE CATALYST THAT WILL
UNLOCK VALUE IN TERMS OF THE BROADENING OF MARKET LEADERSHIP
WHERE WE SEE CYCLICAL AND VALUE PARTS OF THE MARKET, THOSE WITH
BETTER VALUATIONS BROADLY PLAY CATCH UP, AND THAT WILL COME AS
WE GET CLOSER TO THE POTENTIAL FED RATE CUTTING CYCLE AS
INFLATION, HOPEFULLY, DOES PLAY SOME CATCH-UP AND INSTEAD OF
OVERHEATING WE GET SOME PRINTS THAT ARE BELOW EXPECTATIONS IN
THE BACK HALF OF THE YEAR. BY THE WAY, GROWTH IN THAT
ENVIRONMENT CAN CONTINUE TO PERFORM GIVEN RATES ARE COMING
DOWN, ECONOMIC GROWTH, AND THE CONSUMER HOLDING UP IN THAT
ENVIRONMENT. ODDLY SPEAKING WE ARE
CONCENTRATED IN THE EQUITY WORLD, BUT WE THINK THE MARKET
PARTICIPATION WILL PLAY OUT IN THE 12 TO 18 MONTHS AHEAD. DANI:
BROADENING TO COME? PETER: I THINK SO.
BUT WE BETTER PULL BACK IN 3Q SO THE NASDAQ 100 -- IF YOU
LOOK BACK, THE MARKET HASN'T DONE MUCH SINCE THE END OF
JANUARY. WE HAD THE START OF THE YEAR A
REALLY BIG SPIKE IN STOCKS, BUT IT HAS SETTLED IN.
IT HAS HAD SOME WEAKNESS. I THINK WE WILL SQUEEZE OUT
SOME EXCESSES IN THE AI. AS PEOPLE ARE WORKING THROUGH
THE COST-BENEFIT ANALYSIS, I THINK WE WILL SEE A LITTLE
PULLBACK FROM THE AI-TYPE OF STOCKS.
UNTIL WE SEE THAT PULLBACK POTABLE WITH THE RUSSELL 2000
OR THOSE STOCKS PERFORMING WELL, LOOKING AT CHINA, I THINK
LONGER TERM I FIND CHINA UN-INVESTABLE.
I THINK WE ARE SEPARATING FROM THEM. THEIR STOCK MARKET HAS
OUTPERFORMED SINCE FEBRUARY AND THERE'S A LOT OF UPSIDES AS
THEIR ECONOMY GETS BACK ON TRACK.
THE BIGGEST MISTAKE THAT PEOPLE ARE THINKING ABOUT RIGHT NOW,
MAYBE INCORRECTLY, IS THEY VIEW AN IMPROVING ECONOMY IN CHINA
WILL BE GOOD FOR U.S. STOCKS. I DON'T THINK THAT WILL BE THE
CASE. I THINK IN IMPROVING CHINA ECONOMY WILL BE GOOD FOR
CHINESE STOCKS BECAUSE THEY'RE BUYING MORE OF THEIR OWN BRANDS
AND TRYING TO EXPORT THOSE BRANDS.
IT IS A DIFFERENT DYNAMIC THAN THE PAST TWO DECADES. IF YOU THINK CHINA IS DOING
BETTER, THAT TRANSITION IS NOT GOING TO BE WHAT IT ONCE WAS. DANI:
ON THE POINT OF EARNINGS, YOU NOTED THAT WE'VE SEEN THE BIG
TECH STOCKS OVER THE PAST TWO WEEKS SWING 10%.
THESE ARE STOCKS TRADING MAYBE NOT EVEN SMALL CAP, LIKE PENNY
STOCKS. YOU'VE FLECKED CONCERNS ABOUT
LIQUIDITY. TELL US ABOUT THEM. HOW CONCERNED ARE YOU? PETER: I'M VERY CONCERNED.
I TRADED DERIVATIVES THROUGHOUT THE FINANCIAL CRISIS AND WHAT
WAS REMINISCENT IS THAT YOU HAD AIR POCKETS.
SOMETHING WOULD TRADE HERE AND SEEM LIQUID AND THEN IT WOULD
APPEAR HERE AND GET LIQUID AGAIN.
I THINK THAT WE HAVE SO MUCH ALGORITHMIC TRADING
WE GET AIR POCKETS. WE WILL PROBABLY ROUTE THE DAY
THAT WE WENT TO DAILY OPTIONS.
I THINK THOSE ARE SITUATING THESE MOVES.
IT COULD HAPPEN IN BOTH DIRECTIONS.
I THINK THAT IT HAS ALLOWED MARKETS TO GO HIGHER THAN THEY
WOULD HAVE OTHERWISE, BUT I THINK THAT WE ARE SUSCEPTIBLE
TO A SHARP AND FAST DECLINE. IT WAS A ONE-WAY STREET WITH
VERY LITTLE TRUE DEPTH OF LIQUIDITY. I WOULD BE CAUTIOUS.
I THINK THAT THERE IS A LOT OF POTENTIAL MOVEMENT.
IT SCARES ME, BECAUSE IT SEEMS UNUSUAL FOR TRILLION DOLLAR
COMPANIES TO SWING 10%, 12% A DAY ON A REGULAR BASIS. DANI:
LOOKING AT 24 HOUR TRADING, SO MORE FUN TIMES AHEAD.
MONA AND PETER, YOU WILL STICK WITH US.
LET'S TAKE A QUICK LOOK AT SOME OF THE STOCKS THAT ARE MOVING
AHEAD OF THE OPENING BELL. ABIGAIL:
ONE STOCK THAT IS SOARING IS CARVANA UP MORE THAN 30% AFTER
THE ONLINE USED CAR DEALER REPORTED A SURPRISE PROFIT UP
NEARLY 40%. ANALYSTS LIKE THE UNION GROWTH
ACCELERATION. THERE IS A 20% BEAR SHORTAGE.
TODAY'S MOVE UP IS PROBABLY LARGELY A SQUEEZE.
QUALCOMM OFFERED A STRONG FORECAST ON GOOD SMARTPHONE
DEMAND, ANDROIDS IN PARTICULAR. ETSY'S DOWN 16%, DEMAND IS
LAGGING. YOU CAN SEE THE STOCK DOWN
SHARPLY. DANI: ABIGAIL DOOLITTLE.
COMING UP, JAPAN SPENDS $23 BILLION IN THE LATEST YEN
INTERVENTION. >> EITHER THE BOJ'S POLICY
STATEMENT IS NOT AS STRONG OR THE INTERVENTION ISN'T
ULTIMATELY GOING TO WORK BECAUSE MONETARY POLICY ISN'T
GOING TO MOVE. DANI: WILD SWINGS.
WE WILL LOOK AT THEM AND THE YEN NEXT. THIS IS BLOOMBERG. ♪ >> THERE IS A TENSION BETWEEN
THE BOJ COMING OUT AS HE DID FRIDAY AND LAST WEEK SAYING
MONETARY POLICY IS NOT DRIVEN BY TRADE, SO TARGET MONETARY
POLICY, WE WILL RAISE RATES BUT WE HAVE TO DO IT QUICKLY.
I AM PARAPHRASING. EITHER THE BOJ'S POLICY
STATEMENT ISN'T AS STRONG AS IT SOUNDS OVER THE INTERVENTION
ISN'T ULTIMATELY GOING TO WORK BECAUSE MONETARY POLICY ISN'T
GOING TO MOVE. DANI: THE SECOND TIME IN A WEEK JAPAN
CONDUCTS INTERVENTION. THE LATEST ENTRY WAS 3.5
TRILLION YEN. THE MOVE IS AN AGGRESSIVE
STANCE FROM THE FINANCE MINISTRY AND WHAT COULD BE A
PROLONGED FIGHT TO SUPPORT THE CURRENCY. WE GOT THE COUNTS THIS MORNING,
THE DATA, WHAT DID WE LEARN? >> IT LOOKS LIKE IT HAS BEEN A
SECOND INTERVENTION THIS WEEK, AS YOU MENTIONED.
CHOOSING TO COME IN AFTER THE FED MEETING AND THE WINDOW OF
OPPORTUNITY WHEN CHAIRMAN POWELL WAS SENDING DOVISH
SIGNALS IN TERMS OF WHERE U.S. POLICY WILL BE GOING.
SEEMED TO HAVE SOME INITIAL BANG FOR THEIR BUCK.
TOKYO HAS YET TO CONFIRM THEY HAVE INTERVENED, NOT EARLIER IN
THE WEEK EITHER. KEEP MARKETS GUESSING AND WARY.
OUR COLLEAGUES IN TOKYO WHO RUN THE NUMBERS CAN SAY IT POINTS
TOWARDS THE BOJ STEPPING INTO BY THE YEN.
THE PRICE ACTION WOULD SUGGEST IT WAS SOME MAJOR TRADE OR
MAKING MOVES AROUND THAT TIME. AS WAS MENTIONED EARLIER, HOW
SUCCESSFUL CAN THIS BE GIVEN THE VARIANCE IN POLICY TO THE
U.S. AND TOKYO? DANI: ADAM POZEN IN THE CONVERSATION
THAT I HAD WITH HIM WAS BASICALLY SAYING THAT NO, IT
WON'T BE SUCCESSFUL. AS LONG AS MONETARY POLICY
STAYS AS IS, STAYS EASY, IS THERE A CONTRADICTION WITH THE
BANK OF JAPAN GOVERNOR WHO TALKS ABOUT THE EASINESS AND NOT TARGETING ANY FX LEVEL AND
THEN ONE THAT IS TRYING TO JUMP IN AND RIGHT SIZE THE FX MARKET?
ENDRA: IT IS ALL ABOUT THE PACE, THE
VOLATILITY. TRADERS SEEM TO THINK THE 160
AREA IS SOMETHING OF A REDLINE. NO DOUBT LISTENING TO FED CHAIR
POWELL YESTERDAY, THE OVERALL MESSAGE WAS THAT THERE MIGHT BE
CUTS THIS YEAR, BUT EVEN IF THERE IS, REALISTICALLY, THE
MARKETS ARE TALKING ONE CUT OF 25 BASIS POINTS, POSSIBLY TWO.
LIKEWISE THE BANK OF JAPAN MAY HIKE 25 ODD.
THE INTEREST-RATE DIFFERENTIAL WILL STILL BE THERE THAT IS
DRIVING DOLLAR STRENGTH KEEPING PRESSURE ON THE YEN.
AS LONG AS THERE IS A HUGE DIVERGENCE IN MONETARY POLICY
BETWEEN BOTH CURRENCIES IT WILL KEEP PRESSURE ON THE YEN AND
WILL TEST THE STRATEGY THAT THE AUTHORITIES AND TOKYO ARE
PURSUING. DANI: INCREASINGLY EXPENSIVE STRATEGY.
THANK YOU. LET'S GET BACK TO MONA AND
PETER. MONA, YOU LOOK AT WHAT THE YEN
DID AFTER THE BOJ INTERVENED ON MONDAY AND YESTERDAY, WHERE WE
ARE BASICALLY AT THE LEVELS THAT WE WERE ON FRIDAY.
IS THIS A LOSING BATTLE? MONA: I THINK, AS WAS ALLUDED TO
EARLIER, IT WILL BE TOUGH GIVEN THAT THERE IS SUCH A
DIFFERENTIAL BETWEEN THE TWO POLICY RATES, THE 210 YEAR
YIELDS IN THE U.S. AND JAPAN. THE GOOD NEWS IS BECAUSE THE
FED WAS MORE DOVISH YESTERDAY PERHAPS THE PEAK TENSION
BETWEEN THE DIFFERENTIAL BETWEEN MILLION AND U.S.
IS BEHIND US. IF THE FED IS HEADING TOWARDS
AT LEAST ONE TO TWO RATE CUTS THIS YEAR, AND IF THE BOJ IS
GRADUALLY GETTING TOWARDS ONE TO TWO RATE HIKES IN THE NEXT
12 MONTHS OR SO, PERHAPS THE DIFFERENTIAL NARROWS AND THE
PEAK TENSION COULD BE BEHIND US. OVERALL, THE JAPANESE ECONOMY
HAS SOME GOOD NEWS AHEAD OF IT. FOR THE FIRST TIME WE ARE
SEEING THAT ECONOMY COME OUT OF A STAGFLATIONARY ENVIRONMENT
THAT IT HAD BEEN IN FOR YEARS. LOW INFLATION, LOW GROWTH.WE
ARE FINALLY SEEING THE ECONOMY REACT POSITIVELY TO STIMULUS.
GROWTH AND INFLATION ARE PICKING UP.
THE BANK IS POISED FOR A RATE CUT AT SOME POINT IN THE FUTURE
-- EXCUSE ME, RATE HIKE AT SOME POINT IN THE FUTURE.
THAT'S A GOOD SIGNAL FOR THE ECONOMY GOING FORWARD.
THE FX MARKETS WILL HAVE TO PLAY OUT OVER TIME, BUT WE
THINK THAT SOME OF THE TENSIONS GOT EXACERBATED OVER THE LAST
FEW WEEKS AND WE COULD SEE THOSE EASE GOING FORWARD. DANI:
I HAVE MADE THAT MISTAKE SO MANY TIMES, SAYING THAT THE BOJ
WILL CUT. I DON'T KNOW HOW YOU KEEP YOUR
HEAD AROUND IT, TO BE FAIR. LOOKING AT THE INTEREST RATE
DIFFERENTIALS, WHERE THE BOJ IS GOING AND THE YEN IS GOING, WE
ARE IN THIS ENVIRONMENT DIFFERENT FROM 2022 WHEN THEY
SPENT 62 BILLION DOLLARS TO INTERVENE WHICH, LET'S BE
HONEST, WHAT HELPED WAS A SHRINKING YIELD DIFFERENTIAL.
THE BOJ DOESN'T HAVE THAT THIS TIME AROUND.
HOW EXPENSIVE, LASTING, AND USEFUL AS THIS PROJECT GOING TO
BE OF CONSISTENT INTERVENTION? PETER:
I THINK THAT IT MIGHT WORK THIS TIME AROUND. I GENERALLY DISMISS
INTERVENTION THINKING IT WON'T WORK.
WHAT I LIKE ABOUT THIS IS THAT THEY SEEM TO BE MORE STRATEGIC.
THEY DIDN'T JUMP IN AT 145, 150. IF YOU TALK TO PEOPLE, THEY ARE
WONDERING, HOW MUCH WORSE CAN THIS GET?
THEY LET SENTIMENT FILLED TO WHERE IT MIGHT BE EASY TO PUSH
BACK DOWN. THEY DIDN'T INTERVENE TOO EARLY.
I THINK THEY TARGETED TIMES WHEN THE MARKETS WERE LIQUID.
THEY HAD A LITTLE BIT OF GOOD NEWS ON THEIR SIDE TO GET THE
MAXIMUM BANG FOR THE YEN THAT THEY PUT AT THEIR DISPOSAL.
SO, I WOULD FIGHT THIS MOVE RIGHT NOW.
I THINK THEY WILL BE SUCCESSFUL IN THE NEAR TERM REGARDLESS OF
RATE DIFFERENTIALS BECAUSE THEY HAVE TIMED THE INTERVENTION
WELL. I THINK WE COULD GET BACK TO
150 OR THE 140'S IF THEY DO THIS CONSISTENTLY AND KEEP THE
STRATEGY OF TIMING CORRECTLY. THEN WE WILL HAVE TO SEE HOW
THE ECONOMIES PLAY OUT IN THE RATE DIFFERENTIAL.
NEAR TERM THIS WILL BE ABOUT TECHNICALS, CATCHING PEOPLE
OUTSIDE, AND MAYBE GENERATE THE MOMENTUM. DANI:
I'VE HAD SO MANY CONVERSATIONS ON INTERVENTION AND YOU ARE THE
FIRST PERSON TO SAY THAT IT WILL WORK.IT IS REFRESHING TO
HEAR AFTER THOSE WHO ARE SO NEGATIVE. PETER:
I THINK THAT IS THE FIRST TIME I EVER SAID IT WOULD WORK.
SO, THERE YOU GO. DANI: YOU ARE A CHANGED MAN.
IF YOU LOOK AT WHAT THE MARKETS HAVE DONE, IF
YOU LOOK AT A FED DECISION TOWARDS 158, TRADERS ARE ALMOST
LIKE BOND VIGILANTES. INSTEAD IN THE END
WHERE THEY ARE TESTING THE BOJ. THAT SEEMS LIKE A HARD
ENVIRONMENT TO OPERATE IN AND BE SUCCESSFUL IN INTERVENTION?
PETER: YES, BUT THIS TIME THE MARKETS
PUSHED SO FAR THERE IS PROBABLY A LOT OF WEAK SHORTS.
MAYBE WE CAN PUSH IT THROUGH. THEY PUSH IT THROUGH 145.
I FEEL LIKE WHEN I LOOK AT THE TECHNICALS AND THE SOUNDBITES THAT I'M CATCHING THIS IS MORE
SUSCEPTIBLE TO SHORT SQUEEZE THAN IF THEY INTERVENE AT 145.
THEY LET THE SHORTS GET OVERLY AGGRESSIVE.
THERE IS A CONTINGENT OF PEOPLE WAITING TO FILE LONG.
WHEN RATES WENT TO 5% LAST YEAR EVERYONE TALKED ABOUT THE SAME
THINGS WE COULD TALK ABOUT NOW. YOU COULD BET ON RATES GOING
OVER. THEN PEOPLE WERE TALKING 4%.
WE ARE BACK TO 460. THESE THINGS GO THROUGH EBBS AND
FLOWS.THAT IS WHY YIELDS COME DOWN A LITTLE BIT.
I THINK THAT THE JAPANESE YEN BE SUCCESSFUL.
THAT IS THE PAIN TRADE, AND THEN WE CAN RESUME THE MARCHES
HIGHER. DANI: WE WILL BRING YOU BACK ON FOR A
VICTORY LAP WHEN THEY ARE ULTIMATELY SUCCESSFUL.
THANK YOU SO MUCH FOR YOUR TIME THIS MORNING.
THE STREAMING WARS CONTINUE. NETFLIX GETS A BOOST FROM CCI
C, MORE MORNING CALLS NEXT. DANI: LET'S GET YOU YOUR MORNING
CALLS. ANALYSTS ON WALL STREET, FIRST
UP, SO US WHAT UPGRADING MGM RESORTS TO POSITIVE
HIGHLIGHTING THE RAPID RECOVERY ENCOURAGING TRENDS IN LAS VEGAS.
NOW WE HAVE COVERAGE OF TESLA STARTING WITH AN OVERWEIGHT
SAYING THAT THERE IS RECENT PROGRESS IN CHINA. FINALLY, UBS UPGRADES TJX TO
BUY EXPECTING OUTPERFORM GIVEN HEADWINDS FACING CONSUMERS. DANI:
AFTER A WHIPSAW OF A SESSION WE PUSH HIGHER FOR NASDAQ FUTURES.
HERE'S HOW MAYBE CONFUSED THINGS ARE.
POWELL SAYING WE WILL NOT GET CUTS IT IS SMALL CAPS UP 1.2%.
APPLE EARNINGS AFTER THE BELL. THOSE SHARES SO FAR HIGHER INTO
THE EARNINGS REPORT. NOT MUCH HAS CHANGED. NOT EVEN A BASIS POINT HIGHER
BUT WE ARE BACKING OFF A PERCENT ON THE FRONT END OF THE
CURVE SO THAT INFORMATION NOTHING TO PRICE IN THERE.
DOLLAR HAS BEEN WEAKER FOR MOST OF THE MORNING.
THE EURO FALLS VERSUS THE DOLLAR. WE ARE AT 1.06. ONE STOCK TO WATCH AT THE OPEN
IS PELOTON. THE COMPANY ANNOUNCED ITS CEO
WILL BE STEPPING DOWN. THE COMPANY WILL CUT 15% OF ITS
WORKFORCE. LET'S GET OVER TO BLOOMBERG'S
ED LUDLOW ON THE STORY. ED: THE STOCK IS REACTING
POSITIVELY UP ON TRACK FOR ITS BIGGEST JUMP SINCE NOVEMBER.
THE STORY IN AGGREGATE IS THINGS ARE NOT IMPROVING AT
PELOTON SO BARRY MCCARTHY WHO HAS BEEN THROUGH SEVERAL
RESTRUCTURING ACTIONS IS STEPPING DOWN.
THE BOARD WILL LEAD THE SEARCH FOR A SUCCESSOR.
50% REDUCTION IN HEADCOUNT GLOBALLY IS ABOUT 400 STAFF.
THE BAD NEWS CONTINUES. WHAT IS WORRYING IS THE FOR
YOUR OUTLOOK WHERE PELOTON IS TELLING US THAT THE TREND ON
HARDWARE SALES LEADS THEM TO BELIEVE THINGS WILL NOT BE ON
THE SOFTWARE SIDE EITHER. THE ESTIMATE FOR THE FULL YEAR
IS CONNECTED FITNESS SUBSCRIBERS WILL BECOME BELOW
THE 3.0 ONE MILLION THAT THEY FORECAST IN PART BECAUSE THEY
ARE SEEING A SLOWDOWN IN THE HARDWARE OFFERING. THIS STRATEGY HAS BEEN --
YOU'VE GOT ON THE PELOTON YOURSELF, I RECENTLY DIPPED MY
TOBACK IN AND GOT BACK INTO PELOTON.
BUT THERE ISN'T JUST THE VOLUME AND DEMAND FOR HARDWARE.
SO THE KNOCK ON EFFECT IS THE SOFTWARE SUBSCRIPTION SITE IS
SUFFERING. TO REMEDY THAT THEY'VE TRIED TO
GO TO HOTELS WHERE THEY PUT THE HARDWARE INTO THE GYM FACILITY.
THAT'S NOT REALLY WORKED EITHER. THE GOOD NEWS IS A CASH FLOW
PICTURE. THESE HEADCOUNT REDUCTIONS
RESULT IN $200 MILLION OF CASH FLOW SAVINGS.
THERE MIGHT BE SOME POSITIVE CASH FLOW PICTURE BY THE END OF
THIS YEAR BUT ALL IN ALL THINGS HAVE REALLY SLOWED DOWN AND IS
ONE PERSON SET ON SOCIAL MEDIA IF THE WHEELS ARE NOT COMING
OFF AT PELOTON THEY ARE NOT QUITE BACK ON.
THE STOCK IS MUCH HIGHER. >> IF THE FLYWHEEL IS NOT
COMING OFF THAN THEY DON'T HAVE REAL WHEELS.
MAYBE AMEND THAT A LITTLE BIT. ED LUDLOW THANK YOU SO MUCH.
LET'S GET TO ANOTHER CONSUMER STORY IT IS EBAY.
THE STOCK IS DROPPING. THE E-COMMERCE GIANT DELIVERED
A LIGHT FORECAST FOR THE SECOND QUARTER.
JOINING US WITH THE DETAILS IS ABIGAIL DOOLITTLE. ABIGAIL:
THIS PUTS THE STOCK ON PACE FOR A THIRD DAY IN A ROW.
SO INVESTORS REALLY NOT LIKING THE REPORT.
THEY DID BEAT TO SOME DEGREE IN THE QUARTER REPORTED BUT THE
GUIDE WAS A LITTLE BIT LIGHT AS IT RELATES TO REVENUE, THEY PUT
UP THE FORECAST OF $2.54 BILLION WHERE THE AVERAGE
ESTIMATE WAS CLOSER TO 2.56 BILLION DOLLARS SO NOT A HUGE
MISS BUT E-COMMERCE GIANT SUMMER STILL WONDERING WHETHER
OR NOT IT'S ANOTHER AREA IT CAN COMPETE WITH THE MORE MODERN
COMPETITION ESPECIALLY AMAZON AND WALMART TAKING SOME OF ITS
SHARE RECENTLY. INVESTORS ARE NOT LIKING THESE
RESULTS SO MUCH AT LEAST RIGHT NOW.
STOCKWELL OFF OF ITS LOWS AND ITS PREMARKET DOWN WHAT
ANALYSTS ARE OK. JP MORGAN
RESULTS WERE SLIGHTLY AHEAD, MACRO PRESSURES PERSIST BUT
MORGAN STANLEY SAYING THEY SHOWED SOLID MICRO
EXECUTION AND THEN PIPER SANDLER SAYING THEY'VE MADE A
BUYER OF THE STOCK ON ANY PULLBACKS SO WE ARE SEEING THEM
BUYING RIGHT NOW. >> THANK YOU VERY MUCH.
BLOOMBERG'S ABIGAIL DOOLITTLE. LET'S TURN TO CARVANA.
AFTER POSING A SURPRISE PROFIT. THIS HAS BEEN VOLATILE.
LET'S GET TO ISABEL LEE. >> SOARING INDEED UP 38% OF THE
HIGHEST SINCE APRIL OF 2022 AND SHARES ARE HOLDING AROUND 36%
SO THE COMPANY REPORTED STRONG EARNINGS IN SURPRISE PROFIT
THIS COMES AFTER THE COMPANY DIGS INTO ITS RESTRUCTURING
PLAN AND REGAINS ITS SALES MOMENTUM SO THEY REPORTED A NET
INCOME OF 49 MILLION. THIS IS A STARK REVERSAL FROM
THE 116 MILLION LOSS ANALYSTS WERE EXPECTING AND THE PROFIT
WAS HELD BY 75 MILLION GAIN THAT CARVANA HOLDS IN AN
INSURANCE FIRM. EVEN WITHOUT THAT ANALYSTS ARE
SAYING THEY WOULD'VE STILL BESTED EXPECTATIONS SO THEY
SAID RESULTS WERE IMPRESSIVE. JP MORGAN SAID THE RAPID
PROGRESS OF ALL FUNDS IS ALSO NOTEWORTHY.
FOR CARVANA THE RESULTS ARE ASSIGNED THEY ARE MOVING PAST
THE RESTRUCTURING AND ONTO BETTER JOBS SUCH AS A POSITION
TO BETTER GROW THEIR BUSINESS. THE STOCK HAS RISEN 65% THIS
YEAR AND 1000% THE PAST 12 MONTHS. DANI: FINALLY, LET'S GET TO SCE.
ANOTHER ONE WE ARE WATCHING AND E-COMMERCE GIANT SLIPPING AFTER
EARNINGS UNDERDELIVERED WEAKNESS IN
DISCRETIONARY SPENDING. SOMETHING FOR QUITE A FEW
CONSUMER COMPANIES. LET'S GET TO SIMONE FOXMAN ON
THIS. >> CEO JOSH SILVERMAN SAYING
HIGHER COSTS FOR OTHER ITEMS FOR CONSUMERS ARE DENTING SALES
MORE THAN EXPECTED IN THE FIRST QUARTER BRITAIN THEY SAY THIS
WAS IN LINE WITH GUIDANCE BUT THAT THE RANGE OF POTENTIAL
OUTCOMES FOR THIS YEAR THEY STILL BELIEVE THEY WILL SEE
SOME REVERSAL STRONGER SECOND HALF GROSS MERCHANDISE SALES
BUT THAT MARKETING SPEND IS GOING TO BE MORE IMPORTANT AS
THEY TRY TO COMPETE WITH THE LIKES OF AMAZON, WALMART, WHEN
WE LOOK AT GROSS MERCHANDISE SALES THAT'S ACTUALLY THE REAL
FOCUS FOR INVESTORS. 2.99 BILLION DOLLARS THAT WAS
3.7% LOWER ON A YEAR ON YEAR BASIS AND SLIGHTLY UNDER THE
ESTIMATE OF ABOUT $3 BILLION. WHAT'S INTERESTING IS THE
ACTIVITY 9.3 MILLION SELLERS COMING IN LIGHT AS BUYERS ALSO
SLIGHTLY GROWING A LITTLE BIT ON THAT ANTICIPATED.
WE SEE PRICE TARGETS CUT ACROSS THE STREET BUT MORGAN STANLEY
SAYING THAT MACRO PLAY A LARGE ROLE IN THE UNDERWHELMING
PERFORMANCE THEY ARE CONCERNED ABOUT THE INTERNALS OF ETSY.
THEY EXPECTED STRONGER GROWTH IN THE CORE MARKETPLACE AND
THEREFORE THERE ARE QUESTIONS ABOUT THE LONG-TERM GROWTH.
THEY CUT THEIR PRICE TARGET TO $52 A SHARE FROM 55.
LOOKING AT THE SHARES DOWN 15% TODAY. >> SIMONE FOXMAN.
THOSE ARE SOME OF THE EARNINGS WE GOT TODAY ALREADY BUT
LOOKING AHEAD BILL WILL GET ONE OF THE LAST OF THE MAG SEVEN
EARNINGS COMING IN AFTER THE BELL.
THEN THE LAST REPORT WOULD BE CHIP JOINT NVIDIA WHICH COMES
IN LATER THIS MONTH. JOINING US NOW IS MANDEEP SINGH
OF BLOOMBERG INTELLIGENCE. GREAT TO SEE YOU.
LOOKING AT WHAT APPLE HAS DONE ITS DOWN NEARLY 11% AND FALLEN
EVERY SINGLE MONTH SO FAR TO START THE YEAR.
WHERE IS THE BAR FOR APPLE IN THIS EARNINGS REPORT.
IS IT LOW CONSIDERING THAT OR DO THEY NEED TO SHOW UP AND
DELIVER. MANDEEP:
THE REAL KICKER TO ME IS WHAT ARE THEY GOING TO SHOW AROUND
GENERATIVE AI. REALLY, CHINA'S STORY IS KNOWN.
IT'S EMBEDDED IN THE NUMBERS AT THIS POINT IN TIME.
IF THEY CAN, WITH A LARGE LANGUAGE MODEL THIS CAN A
FEATURE THAT CHIP AND WHICH THEY ARE GOING TO LAUNCH
ANOTHER IPHONE IN SEPTEMBER, THAT'S GOING TO DRIVE HUGE
DEMAND REFRESH CYCLE EVERYONE IS ANTICIPATING.
IT'S A QUESTION OF WHAT KIND OF FEATURES CAN DAY GET IN AND
QUALCOMM SAID THERE PREMIUM CHIPS ARE DOING QUITE WELL AND
THERE IS DEMAND FOR AI FEATURES THEY HAVE INCORPORATED.
IN THE END IT COMES DOWN TO THE FEATURES AROUND GENERATIVE AI.
DANI: WE KNOW A LARGE PART OF THE
APPLE TEAM IS DEDICATED TO LOOKING AT AUTONOMOUS DRIVING.
WHERE DO THEY STAND? MANDEEP: CLEARLY WHEN YOU COMPARE THE
CAPEX OF ALL THE LARGE HYPER SCALARS, APPLE IS IN SPENDING
ANY MONEY ON NVIDIA GPU IS AT LEAST BASED ON THEIR CAPEX
NUMBERS SO THEY'VE BEEN BEHIND IN TERMS OF INVESTING AND
DEVELOPING THEIR OWN LARGE LANGUAGE MODEL BUT FROM WHAT
WE'VE BEEN GATHERING THEY ARE TRYING TO DEVELOP A SMALL
AMOUNT. AS MOST OF THE 500 BILLION
PARAMETER MODELS THAT WE KEEP HEARING FROM GPT AND GEMINI. THAT'S MORE APPROPRIATE, THE
QUESTION IS CAN THEY INTEGRATE IT IN TIME FOR SEPTEMBER LOGJAM.
THAT'S WHERE THE CAPEX NUMBERS IS GOING TO GIVE US SOME SENSE.
CLEARLY THEY ARE BEHIND. >> GOOGLE, 2 BILLION PAID MET
US AT SOMETHING BETWEEN 35 AND $40 BILLION FOR THEIR FORECAST.
MICROSOFT AND ALPHABET EXPECTED MATERIAL INCREASE FROM WHERE WE
ARE PLAYED WE HAVE SEEN INVESTORS REWARD THAT IN SOME
CASES AND PUNISH IT IN OTHER CASES.
HOW THIN ARE INVESTORS PATIENTS WHEN IT COMES TO CAPEX AND
ACTUALLY SEEING IT TURN AROUND INTO SOMETHING THAT IS
MONETIZED. MANDEEP: MICROSOFT CLEARLY IS OUT THERE
IN TERMS OF MONETIZING THAT GENERATIVE AI CAPEX AND IT'S
REFLECTED IN THEIR AZURE NUMBERS, THE GROWTH OF THAT
THEY SHOWED AROUND GENERATIVE AI WORKLOADS AND COPILOT SO
CLEARLY THERE IS A PATCH OF MONETIZATION.
MEDA HAS INCORPORATED A LOT OF THE AI FEATURES WITHIN THE APPS.
THAT'S WORKING QUITE WELL FOR THEM.
THE QUESTION IS FOR EVERYONE ELSE HOW DOES THAT TRANSLATE
INTO REAL MONETIZED ABLE REVENUE AND THE ANSWER ISN'T
VERY CLEAR BECAUSE THESE COMPANIES ALREADY HAVE A LOT OF
ENTERPRISE DATA AND THEY ARE ABLE TO ROLL AI SERVICES ON TOP
OF THAT. BUT FOR ANYONE ELSE DEVELOPING
THEIR OWN MODEL OR DEVELOPING SOMETHING OUTSIDE IT'S VERY
HARD TO MAKE SURE YOU GET ALL THE DATA AND ARE ABLE TO
MONETIZE IT. >> IT IS AN EXPENSIVE ENDEAVOR
BECAUSE NOT ONLY ARE THE PORTS EXPENSIVE THERE ARE SUPPLY
SHORTAGES. THE INDUSTRY SWINGS BETWEEN
SURPLUS AND DEFICIT. THE TALENT IS EXPENSIVE SO EVEN
THOUGH WE HAVE COMPANIES FLOWING TENS OF BILLIONS INTO
THE PROJECT OF AI HOW VOLATILE IS IT , HOW VOLATILE IS THE
CYCLE OF CHIPS AND INCORPORATING IT INTO THE
BUSINESSES. >> BASED ON WHAT WE ARE READING
WITH THE CAPEX NUMBERS THIS IS NOT A SHORT-TERM PHENOMENON.
WHAT YOU ARE GOING TO SEE IS A STEADY RAMP UP.
CLEARLY YOU'RE NOT GOING TO SEE 40 OR 50% CAPEX INCREASES ONCE
YOU LAP THESE BUT WHAT THEY ARE TRYING TO DO IS BUILD CAPACITY.
MODELS ARE GETTING LARGER AND LARGER AND RIGHT NOW THE FOCUS
IS ON DATA CENTERS. THAT'S WHERE INFRASTRUCTURE
LIES. NOW IT'S TRICKLING TO DEVICES
AND THERE IS DEMAND AND THAT'S WHAT BODES WELL FOR NVIDIA
BECAUSE EVEN THOUGH THEY HAVE TOUGHER COMMS IF CAPEX NUMBERS ARE GOING UP 40%, 50%, A LOT OF
THAT WILL TRICKLE DOWN TO NVIDIA.
THEY HAVE THE CHIPS EVERYONE WANTS. DANI:
LET'S SEE WHAT THE NUMBERS TELL US TODAY.
COMING UP MORE EARNINGS FOR YOU. A STRONG START TO THE YEAR AS
IT REACHES ITS FULL-YEAR GUIDANCE PRAYED WE WILL
SIT DOWN WITH STEVE AND YELL OFF ON THE STRATEGIC VISION
COMING NEXT. THIS IS BLOOMBERG. EASTERN AND 4:30 P.M. IN LONDON.
THIS IS BLOOMBERG. ♪ DANI: A STRONG START TO THE YEAR, A
POSITIVE OUTLOOK ANOTHER FOCUSING ON DIVERSIFYING THE
USES IN ITS OUTLETS. I'M PLEASED TO SAY JOINING ME
NOW IS STEPHEN YOU ALL OFF. GREAT TO SEE YOU.
ON A LOT OF THE EARNINGS WE GOT EVEN OVER THE PAST WEEK THERE
ARE SIGNS OF CONCERNS ABOUT THE CONSUMER.
WE'VE SEEN IT IN FOOD AND BEVERAGE, EVEN AMAZON TALKED
ABOUT THIS. WITH THE CONSUMERS, CUSTOMERS
COMING INTO YOUR OUTLETS ARE YOU SEEING SIGNS OF WEAKNESS. >> NOT THE FIRST QUARTER.
IN JANUARY SALES TRAFFIC INHIBITED A LITTLE BIT BY THE
WEATHER. FEBRUARY CAME BACK QUITE STRONG.
I THINK SOME OF THAT HAD TO DO WITH THE EASTER SELLING SEASON.
SPRING BREAKS IN BOTH MARCH AND APRIL WHEN PEOPLE ARE ON THE
ROAD GOING OUT TO SOME OF THESE RESORT DESTINATIONS WHERE WE
HAVE OUR SHOPPING CENTERS THIS SEEMS TO BE A LOT OF TRAFFIC
AND WE SEE CARS NOT ONLY DURING THE WEEK BUT ALSO EXTENDING
INTO THE WEEKEND. >> I REMEMBER GROWING UP AND
PASSING YOUR OUTLETS ON THE WAY TO THE BEACH AND SAYING I THINK
WE NEED TO STOP HERE. HOW DO YOU CHANGE FROM WE ARE
JUST DRIVING ALONG AND WE HAPPEN TO SEE A DESTINATION
ITSELF. >> A LOT OF THOSE MARKETS WHERE
WE HAVE OUR SHOPPING CENTERS ARE BECOMING GROWTH MARKETS.
SO WE ARE SEEING SOME OF THE FOLKS MOVING OUT OF CITIES INTO
THESE WE WOULD'VE CALLED SECONDARY LOCATIONS BACK IN THE
DAY. NOW MARKETS THAT ARE GROWING AT
GREAT LEAPS AND BOUNDS IN PLACES LIKE JUST OUTSIDE OF
GEORGIA. A GREAT EXAMPLE. WE HAVE A SHOPPING CENTER AND
ONE OF THE GREAT ROAD STORIES FOR THE LOCAL ECONOMY. SO WE ARE SEEING THAT TOURIST
CUSTOMER THAT WE'VE SEEN FOR YEARS AND YEARS STILL COMING IN
BUT NOW WE ARE CURATING TOWARDS THAT LOCAL CUSTOMER WHO COMES
MORE FREQUENTLY, COMES DURING THE WEEK.
ONCE BETTER AMENITIES, THESE ARE THE THINGS WE ARE
POSITIONING OURSELVES WITH. DANI:
YOU HAVE THE LOWER END AND YOU HAVE THE ASPIRATIONAL LUXURY.
KATE SPADE, MICHAEL KORS. HAVE YOU SEEN A BIFURCATION IN
THEIR BEHAVIOR? >> AS WE ADD MORE ASPIRATIONAL
BRANDS WHICH IS WHAT YOU'RE REFERRING TO, THERE IS AN
ASPIRATIONAL CUSTOMER TRADING UP SO THEY PROBABLY WON'T SHOP
THOSE BRANDS IN OTHER VENUES, FULL PRICED VENUES THAT THE
POINT OF ENTRY MIGHT BE THROUGH THE OUTLET BECAUSE IT'S ON SALE
EVERY DAY. AND WE ALSO SEE A CONSUMER
LOOKING FOR THEIR FAVORITE BRAND IN THE BEST POSSIBLE
PRICE. WE GET IT FROM BOTH ENDS AND I
THINK THAT'S THE MARKET WE ARE CATERING. DANI:
DO YOU BENEFIT FROM A CONSUMER WHO IS TRADING DOWN WITH THEIR
VERSION OF DOING THAT SHOPPING AND OUTLET, SAME BRAND INSTEAD. >> I THINK SO.
WE ARE NOT SELLING SNEAKERS AT THE BEST POSSIBLE PRICE PRAYED
WE ARE SELLING NIKES VALUE PRICE.
OUR CUSTOMERS ARE LOOKING FOR A BRAND. THAT'S WHAT THEY WANT.
THEY GET THOSE BRANDS THAT ARE AT THE SHOPPING CENTERS.
THEIR NEW BRANDS ARE COMING INTO THE BUSINESS.
LAST QUARTER WE ANNOUNCED TENANTS THAT ARE FRESH AND NEW
IN THE OUTLET SPACE. WE ARE EXCITED TO BRING THEM TO
OUR PORTFOLIO. >> ONE OF THE THINGS WE'VE SEEN
AMONG COMPANIES RIGHT NOW IS KIND OF THE CASE SHAPE.
ASPIRATIONAL NOT DOING AS WELL. BUT THE ULTRALUXURY HELD UP
EXTREMELY WELL. IS THERE ANY DESIRE TO GET THE
ULTRALUXURY INTO YOUR OUTLETS? STEPHEN:
WE TALKED ABOUT A SHOPPING CENTER IN LONDON.
THERE ARE POCKETS IN THE COUNTRY AND OVERSEAS THAT HAVE
OUTLETS THAT HAVE GREAT LUXURY PRESENCE AND WE ARE RAMPING UP
TO ADD THOSE AS WELL. WE ARE PRINCIPALLY POSITIONED
IN MARKETS IN THE FIRST THING YOU WANT TO DO IS MAKE SURE
YOUR MERCHANDISING TO THE CUSTOMER IT'S ACTUALLY SHOPPING
IN YOUR SHOPPING CENTERS BECAUSE WE WANT TO MAKE SURE
THE SHOPPER HAS A GREAT SHOPPING EXPERIENCE BUT ALSO
RETAILER HAS A GREAT EXPERIENCE. >> SO MANY OF THEM ARE HYPER
CONCERNED ABOUT BRAND DILUTION. >> THE AMOUNT OF VOLUME THESE
BRANDS DO IS PRETTY STAGGERING SO IT'S PROBABLY NOT AS
DIFFICULT BUT IT'S REALLY A QUESTION OF WHAT IS THE
AVAILABILITY OF ACCESS BECAUSE FOR THE MOST PART WHERE THOSE
PARTICULAR BRANDS ARE JUST SELLING EXCESS. I WOULD SAY THERE'S A WHOLE
HOST OF ITALIAN BRANDS THAT I THINK WOULD DO FANTASTIC IN
EUROPE AND WASHINGTON DC. SO WE ARE OBVIOUSLY AT BRANDS
LIKE THAT. >> ELSEWHERE IN THIS WORLD,
WE'VE COME OUT PERHAPS OVER REAL ESTATE PRICES OF CONCERNS,
IT HASN'T COMPLETELY GONE. THE AREAS CEO SAYING HE WOULD
TAKE YEARS FOR IT TO FIGURE OUT. IF THERE ARE CONTINUED TENSIONS
AND ISSUES WITH REAL ESTATE ARE YOU READY TO JUMP ON
OPPORTUNITIES AND EXPAND AND BUY A MORE REAL ESTATE. >> WE BOUGHT TWO PROPERTIES ONE
IN HUNTSVILLE ALABAMA IS OUR FIRST NON-OUTLET PROPERTY AND
WE BOUGHT THE OUTLET CENTER IN ASHEVILLE NORTH CAROLINA WHICH
IS OUR HOMETOWN. AS OPPORTUNITIES PRESENT
THEMSELVES WE ARE -- OUR BALANCE SHEET IS IN GREAT SHAPE.
WE REALLY HAVE ACCESS TO CAPITAL, THERE ARE SIGNIFICANT
PARTNERSHIP OPPORTUNITIES OUT THERE FOR US AS WELL.
PEOPLE LIKE US AS AN OPERATING COMPANY SO WE HAVE BEST IN
CLASS LEASING, MARKETING AND PROPERTY OPERATIONS.
THERE ARE NUMBER OF OWNERS THAT OUTSOURCE A LOT OF THAT
OPERATIONAL MUSCLE IN ORDER TO RUN THEIR PROPERTIES.
WE BRING THAT IN HOUSE SO WE THINK MORE STRATEGICALLY A
LITTLE BIT MORE LONG-TERM. THAT'S HOW WE RUN OUR
PROPERTIES. WE RUN THEM FOR THE LONG TERM. >> IS THERE ANYWHERE YOU WANT
TO BE MORE INTO THE YOU'RE LOOKING AT SPECIFICALLY. >> WE LIKE THE SOUTH. LESS SUSCEPTIBILITY TO WHETHER,
THE OUTDOOR OPEN AIR AND FOR THE MOST PART WHEN WE CAN FIND
THE REALLY GOOD PROPERTY IN THE SOUTH WE CAN EXTEND THAT
SELLING SEASON. >> LET ME KNOW WHEN THE LUXURY
GETS TO D.C.. THANK YOU SO MUCH. THANK YOU. TAGGER CEO.
IT'S GET TO SOME OF THE PRICE ACTION THIS MORNING. ABIGAIL:
OVERALL WE ARE LOOKING AT A SMALL GAIN IN THE S&P 500 ABOUT
4/10 OF 1%. MOST SECTORS ARE HIGHER LED BY
TECHNOLOGY AND MORE THAN 1%. MANY OTHERS ARE UP AND OF
COURSE WILL BE WATCHING APPLE ALL DAY AHEAD OF THOSE EARNINGS
LATER TODAY GIVEN THE FACT IT'S BEEN DOWN EVERY MONTH THIS YEAR
TO THE DOWNSIDE MATERIAL DOWN 1%.
A NUMBER OF THE OTHER CHEMICAL COMPANIES ARE DOWN.
MOSAIC BEING THE FERTILIZER COMPANY.
AS FOR ONE SECTOR THAT'S OUTPERFORMING ON THE WEEK
HEADED TO IT'S BEST WE CAN TWO MONTHS TAKE A LOOK AT BIOTECH.
DOWN JUST A LITTLE BIT TODAY BUT THIS WEEK AGAIN THE BEST
WEEK SINCE EARLY MARCH AND A LOT OF THIS HAS TO DO WITH
MODERNA A GOOD QUARTER. THIS INDEX IS TRADING HIGHER IN
PART. >> APPRECIATED.
ABIGAIL DOOLITTLE. COMING UP WE WILL GET YOU SOME
OF THE MARKET EVENTS YOU NEED TO BE WATCHING THAT'S UP NEXT
IN OUR TRADING DIARY. THIS IS BLOOMBERG. ♪ DANI:
WE ARE ABOUT 30 MINUTES PAST THE OPEN UP BY ABOUT 6/10 OF 1%
FOR THE RUSSELL THAT OUTPERFORMS THE NASDAQ IN S&P
500. NASDAQ RAISING. WE ARE SEEING OPTIONS PRICING
FOR THE MOST VOLATILE JOBS DAY IN ABOUT A YEAR WITH POWELL
OPENING UP THE GATES TO NO CUTS BEING PRICED OUT THIS YEAR.
THIS GET YOU A TRADING DIARY AND WHAT YOU NEED TO BE
WATCHING SO THE TOP OF THE HOUR WE WILL BE GETTING MARCH
FACTORY ORDERS AND DURABLE GOODS THIS AFTERNOON.
APPLE EARNINGS AFTER THE BELL. TOMORROW WE WILL BE ROUNDING
OUT THE WEEK WITH THE U.S. JOBS REPORT. THE ESTIMATES AT THE MOMENT ARE
FOR 242, 241. POWELL YESTERDAY SAYING HE
NEEDS TO SEE COOLING IN THE LABOR MARKET OR INFLATION DOWN
TO TARGET IN ORDER TO START THE CUT.
THIS WAS THE COUNTDOWN TO THE OPEN.
