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The real app performance has been the US corporate high yield.

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The semiconductor business is a really cyclical business.

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These are two big time blue chip companies.

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The window between the peak and cut changing super fast.

Bloomberg Intelligence with Alex Steel and Paul'sweeny on Bloomberg Radio.

Bloomberg Intelligence with Alex Steel and Paul'sweeny on Bloomberg Radio.

On Today's Bloomberg Intelligence Show, we dig inside the big business stories impacting Wall Street and the global markets. Each and every week we provide in depth research and data on some of the two thousand companies in one hundred and thirty industries our analysts cover worldwide. Today will take a look at the federal reserves rate path for twenty twenty five and how the income Trump administration could affect the economy. Plus we'll take a look at some of the companies our analysts are keeping an eye on in the new year. But first we dive into the health of the retail industry in a price sensitive climate. I guess host Caroline Hyde and I sat down with Bloomberg Intelligence senior retail analyst Jennifer Partashis for a look ahead at the retail space heading into the new year. Here's a portion of our conversation.

On Today's Bloomberg Intelligence Show, we dig inside the big business stories impacting Wall Street and the global markets. Each and every week we provide in depth research and data on some of the two thousand companies in one hundred and thirty industries our analysts cover worldwide. Today will take a look at the federal reserves rate path for twenty twenty five and how the income Trump administration could affect the economy. Plus we'll take a look at some of the companies our analysts are keeping an eye on in the new year. But first we dive into the health of the retail industry in a price sensitive climate. I guess host Caroline Hyde and I sat down with Bloomberg Intelligence senior retail analyst Jennifer Partashis for a look ahead at the retail space heading into the new year. Here's a portion of our conversation.

One of the things that we're looking at is really the consumer is doing well, but it's about where is their focus. And the focus is on value. And so what we're seeing is across the entire industry a lot of retailers trying to re orient them their operations in a way that presents a value. However that might mean to their core consumer. So for Nord's dream, you may see that pivoting in terms of the way they do their assortment. But for retailers like Walmart and Target, it's about price and it's about selection.

One of the things that we're looking at is really the consumer is doing well, but it's about where is their focus. And the focus is on value. And so what we're seeing is across the entire industry a lot of retailers trying to re orient them their operations in a way that presents a value. However that might mean to their core consumer. So for Nord's dream, you may see that pivoting in terms of the way they do their assortment. But for retailers like Walmart and Target, it's about price and it's about selection.

And there's a great story on that general in the Bloomberg terminal, Leslie Patton and Jay Won Kang have this story. The headline is just a great headline Kirkland for Christmas shoppers, itch logos for store brands. That kind of goes to your value argument. How do you see that with the stores you cover?

And there's a great story on that general in the Bloomberg terminal, Leslie Patton and Jay Won Kang have this story. The headline is just a great headline Kirkland for Christmas shoppers, itch logos for store brands. That kind of goes to your value argument. How do you see that with the stores you cover?

Yeah, value is as I said, it's of utmost importance. But private label had a great year in twenty twenty four, and we actually see that momentum just continuing in twenty twenty five. So Kirkland is Costco's own brand. It is over thirty percent, almost thirty five percent of their sales, and it is just a trusted brand to the point where consumers no longer think of it as a private label alternative to national brands. They just see it as a brand in and of itself. Walmart, Target, Kroger, Albertson's, these companies have all invested in private label in the last year couple like the last several years, and it's really starting to pay dividends because it's value, it's novelty, and it's something that consumers are really resonating with.

Yeah, value is as I said, it's of utmost importance. But private label had a great year in twenty twenty four, and we actually see that momentum just continuing in twenty twenty five. So Kirkland is Costco's own brand. It is over thirty percent, almost thirty five percent of their sales, and it is just a trusted brand to the point where consumers no longer think of it as a private label alternative to national brands. They just see it as a brand in and of itself. Walmart, Target, Kroger, Albertson's, these companies have all invested in private label in the last year couple like the last several years, and it's really starting to pay dividends because it's value, it's novelty, and it's something that consumers are really resonating with.

To get that data to understand that it's resonating with a consumer, they're having to be leaning into all the data points, largely through digital invest I'm sure, and through aultificial intelligence. How is that something that they're not just plowing money in by getting the realwards back.

To get that data to understand that it's resonating with a consumer, they're having to be leaning into all the data points, largely through digital invest I'm sure, and through aultificial intelligence. How is that something that they're not just plowing money in by getting the realwards back.

Yeah, the rise of retail media is really the answer to that question. And when we look at the industry, actually last year we made a prediction that retail media would be up by over twenty percent the revenue associated with it for twenty twenty four, and it looks like we're going to exceed that and it's on pace to continue that kind of momentum into twenty twenty five. So retail media is really advertising, and it's the selling of ad space, it's the selling of search results, and it's the digital products such as you see online as well as digital screens that you see in stores. And so retailers have really been unlocking the value of that and are finding that it's a way to bring a high margin, very low overhead business into their mainstream core.

Yeah, the rise of retail media is really the answer to that question. And when we look at the industry, actually last year we made a prediction that retail media would be up by over twenty percent the revenue associated with it for twenty twenty four, and it looks like we're going to exceed that and it's on pace to continue that kind of momentum into twenty twenty five. So retail media is really advertising, and it's the selling of ad space, it's the selling of search results, and it's the digital products such as you see online as well as digital screens that you see in stores. And so retailers have really been unlocking the value of that and are finding that it's a way to bring a high margin, very low overhead business into their mainstream core.

You know, Jen, that's a business for better or worse, I have experienced with Back in my banking days. We tried to finance a bunch of those companies because we felt like, you know, just like you said, they're captured customers, they're at the point of buying. What a great time for video to be introduced there in terms of advertising. What does it mean for the big retailers? What are the economics to the big retailers for this media.

You know, Jen, that's a business for better or worse, I have experienced with Back in my banking days. We tried to finance a bunch of those companies because we felt like, you know, just like you said, they're captured customers, they're at the point of buying. What a great time for video to be introduced there in terms of advertising. What does it mean for the big retailers? What are the economics to the big retailers for this media.

So this media carries a margin of eighty percent and when you think about when you think about retail staples, you're talking about operating margins in the three to five percent range, right, You're talking about gross margins in the high teens, low twenties. So the ability to have a revenue stream with such a high margin is very appealing to these companies. And they have the data. They have all this first party data that they can monetize, and so it really is a very effective partnering. And one of the interesting things that we're finding is that there's always been historically investment from say, packaged food companies into retailers for placement on shelves and things like that, but we're finding that retail media is actually incremental spend that's actually an even bigger tailwind for these retailers as they get deeper into this new revenue stream.

So this media carries a margin of eighty percent and when you think about when you think about retail staples, you're talking about operating margins in the three to five percent range, right, You're talking about gross margins in the high teens, low twenties. So the ability to have a revenue stream with such a high margin is very appealing to these companies. And they have the data. They have all this first party data that they can monetize, and so it really is a very effective partnering. And one of the interesting things that we're finding is that there's always been historically investment from say, packaged food companies into retailers for placement on shelves and things like that, but we're finding that retail media is actually incremental spend that's actually an even bigger tailwind for these retailers as they get deeper into this new revenue stream.

In many ways, everyone takes a leaf out of Amazon's book. In the end, I'm interested in Jan a little bit more about the pure data side of it and the forecasting side of it. We go to you to help us full cost, what the retail looks like. How are the companies themselves full casting in twenty twenty five.

In many ways, everyone takes a leaf out of Amazon's book. In the end, I'm interested in Jan a little bit more about the pure data side of it and the forecasting side of it. We go to you to help us full cost, what the retail looks like. How are the companies themselves full casting in twenty twenty five.

Well, it's been interesting because what we've really seen were in twenty twenty three and twenty twenty four, we saw some initial pilot cases of the use of AI, for example, to help with demand forecasting. And we're seeing that those pilot programs have been successful and are being more widely rolled out across organizations at places like Kroger and Walmart and Target.

Well, it's been interesting because what we've really seen were in twenty twenty three and twenty twenty four, we saw some initial pilot cases of the use of AI, for example, to help with demand forecasting. And we're seeing that those pilot programs have been successful and are being more widely rolled out across organizations at places like Kroger and Walmart and Target.

And you know what that really.

And you know what that really.

Means is that they're getting more efficient and smarter about understanding when they need product and where they need product. That then goes all the way back up to supply chain and makes them more efficient as an organization. And so, you know, the kind of cost cutting initiative is good from a operational perspective, but it's also good for customers because that means that what they want will be in the stores or online available at the time they want it.

Means is that they're getting more efficient and smarter about understanding when they need product and where they need product. That then goes all the way back up to supply chain and makes them more efficient as an organization. And so, you know, the kind of cost cutting initiative is good from a operational perspective, but it's also good for customers because that means that what they want will be in the stores or online available at the time they want it.

Our thanks to Jennifer bartashis Bloomberg Intelligence Senior retail analyst. She spoke with me and Guess host Caroline Hyde. Now we pivot to how mortgage rates will impact the health of the housing market. Alex Steel and I spoke with your reading Bloomberg Intelligence US home building analysts starting with his prediction for the housing market in twenty twenty five.

Our thanks to Jennifer bartashis Bloomberg Intelligence Senior retail analyst. She spoke with me and Guess host Caroline Hyde. Now we pivot to how mortgage rates will impact the health of the housing market. Alex Steel and I spoke with your reading Bloomberg Intelligence US home building analysts starting with his prediction for the housing market in twenty twenty five.

Yeah, so as you can imagine, the direction of mortgage rates obviously is going to be key in determining how the spring selling season unfolds and how housing ultimately fares in twenty twenty five. I mean, if we go back to September, we were looking at a rate at around six point one percent. There was a lot of optimism heading into next year, you know, but that quickly unwound. We're now looking at rates at about seven zero point one percent, So monthly payments are that much higher for buyers out there. So we think it's going to be hard to build a lot of momentum with the affordability challenges that are still out there in the market. That being said, we think that the broader housing space can still grind higher in twenty twenty five, you know, with the existing market returning to growth maybe in the low to mid single digit range, often extremely depressed base. Remember we're coming off back to back years at around a four million annualized rate, which is the lowest in more than a decade, So off of a low base for sure. In the new home market, we think you'll see similar growth, but we think the backdrop will continue to favor the large, well capitalized, publicly traded builders who have access to financing, access to land, access to the trades, compared to their smaller private peers who tend to rely on that regional and local banking for financing. So they've really struggled struggled with the cost and availability of that capital. So we think you'll see a bifurcation growth continue to play out.

Yeah, so as you can imagine, the direction of mortgage rates obviously is going to be key in determining how the spring selling season unfolds and how housing ultimately fares in twenty twenty five. I mean, if we go back to September, we were looking at a rate at around six point one percent. There was a lot of optimism heading into next year, you know, but that quickly unwound. We're now looking at rates at about seven zero point one percent, So monthly payments are that much higher for buyers out there. So we think it's going to be hard to build a lot of momentum with the affordability challenges that are still out there in the market. That being said, we think that the broader housing space can still grind higher in twenty twenty five, you know, with the existing market returning to growth maybe in the low to mid single digit range, often extremely depressed base. Remember we're coming off back to back years at around a four million annualized rate, which is the lowest in more than a decade, So off of a low base for sure. In the new home market, we think you'll see similar growth, but we think the backdrop will continue to favor the large, well capitalized, publicly traded builders who have access to financing, access to land, access to the trades, compared to their smaller private peers who tend to rely on that regional and local banking for financing. So they've really struggled struggled with the cost and availability of that capital. So we think you'll see a bifurcation growth continue to play out.

Drew, I'm going to ask you a thirty thousand foot question about housing market here in the United States. We're told that there's a housing shortage. A. Is that true? B? How did we get there? And what are your building companies going to do about it?

Drew, I'm going to ask you a thirty thousand foot question about housing market here in the United States. We're told that there's a housing shortage. A. Is that true? B? How did we get there? And what are your building companies going to do about it?

Yeah? So, I think the issue right now is that there's a shortage of homes on the market. A lot of that has to do with the fact that people are locked into a much lower mortgage rate, so they're disincentivized to put their house on the market and trade up to a new home and take on a much higher rate. At the same time, you have to remember back in twenty twenty, twenty twenty one, when money was cheap, you had a lot of people going out buying second and third homes. You saw the boom in the airbnb market. So I think, you know, the housing stock has been allocated in a different way than we've seen historically, which is contributing to that shortage. Now in terms of what the builders are doing, you know, it's going to be hard for them to put a lot of new supply onto the market, particularly as supplying the resale market starts to heat up. So we think you'll see new home production maybe increase in the load to mid single digit range kind of corresponds to what they're seeing from the demand side. But you know, we don't. We don't see the issue with housing being solved anytime soon.

Yeah? So, I think the issue right now is that there's a shortage of homes on the market. A lot of that has to do with the fact that people are locked into a much lower mortgage rate, so they're disincentivized to put their house on the market and trade up to a new home and take on a much higher rate. At the same time, you have to remember back in twenty twenty, twenty twenty one, when money was cheap, you had a lot of people going out buying second and third homes. You saw the boom in the airbnb market. So I think, you know, the housing stock has been allocated in a different way than we've seen historically, which is contributing to that shortage. Now in terms of what the builders are doing, you know, it's going to be hard for them to put a lot of new supply onto the market, particularly as supplying the resale market starts to heat up. So we think you'll see new home production maybe increase in the load to mid single digit range kind of corresponds to what they're seeing from the demand side. But you know, we don't. We don't see the issue with housing being solved anytime soon.

I love how we talked about low rates, thanks a lot, this is my moment where this is your moment.

I love how we talked about low rates, thanks a lot, this is my moment where this is your moment.

Two seventy five thirty or fix and then Paul complains about not being able to refine, and then all those the really cool conversations. So then we can, you know, move forward on that convo. The problem is with your builders, as Paul calls them, is that they wind up building, but it's still too expensive for people to buy it, and then they wind up having to give incentives, and then that winds up hurting their profitability. How long does that's part of the cycle last for.

Two seventy five thirty or fix and then Paul complains about not being able to refine, and then all those the really cool conversations. So then we can, you know, move forward on that convo. The problem is with your builders, as Paul calls them, is that they wind up building, but it's still too expensive for people to buy it, and then they wind up having to give incentives, and then that winds up hurting their profitability. How long does that's part of the cycle last for.

That's a great point, Alex. That's actually one of the key themes for twenty twenty five. Well, we think that volumes will continue to rebound, it's going to come at a cost for the builders. The use of sales incentives is at a multi year high. You know, a couple months ago, when we were looking out to twenty twenty five and we had mortgage rates coming down to the six percent range, I think there's a lot of optimism that builders were going to be able to pool back on that use of incentives, which would support margins into next year. But it's been exactly the opposite. So you know, we think sales incentives are going to remain elevate it we think margins will come under pressure next year. And it's not just incentives. I mean, you have higher cost land running through the P and L, and you have the potential for Paris and some immigration policy to add to the to the margin pressures that these guys are going to face next year.

That's a great point, Alex. That's actually one of the key themes for twenty twenty five. Well, we think that volumes will continue to rebound, it's going to come at a cost for the builders. The use of sales incentives is at a multi year high. You know, a couple months ago, when we were looking out to twenty twenty five and we had mortgage rates coming down to the six percent range, I think there's a lot of optimism that builders were going to be able to pool back on that use of incentives, which would support margins into next year. But it's been exactly the opposite. So you know, we think sales incentives are going to remain elevate it we think margins will come under pressure next year. And it's not just incentives. I mean, you have higher cost land running through the P and L, and you have the potential for Paris and some immigration policy to add to the to the margin pressures that these guys are going to face next year.

All Right, So a home was just constructed right next to me down at the Jersey Shore. It's being constructed as we speak, and I'm guessing swarming with workers there. I'm guessing some percentage of them are illegal immigrants.

All Right, So a home was just constructed right next to me down at the Jersey Shore. It's being constructed as we speak, and I'm guessing swarming with workers there. I'm guessing some percentage of them are illegal immigrants.

What are the what are.

What are the what are.

The builders telling you guys about a tighter immigration policy might mean on the ability to actually get these things built.

The builders telling you guys about a tighter immigration policy might mean on the ability to actually get these things built.

Yeah, there's some estimates out there that immigrants comprise about thirty percent of the entire US construction force, and as you mentioned, a large portion of those are undocumented. So in the event that they that we do get some policy coming through next year that puts a strain on that labor force. I think what you're going to see is a pullback in production. I think builders closings could be impacted because you're going to see cycle times, which is, you know, the amount of time from start to completion. You'll see them start to elongate, and I could pressure closings. At the same time, you know, builders are going to have to start to fight more to attract that labor. So you're going to see cost strives as well.

Yeah, there's some estimates out there that immigrants comprise about thirty percent of the entire US construction force, and as you mentioned, a large portion of those are undocumented. So in the event that they that we do get some policy coming through next year that puts a strain on that labor force. I think what you're going to see is a pullback in production. I think builders closings could be impacted because you're going to see cycle times, which is, you know, the amount of time from start to completion. You'll see them start to elongate, and I could pressure closings. At the same time, you know, builders are going to have to start to fight more to attract that labor. So you're going to see cost strives as well.

Right, So that says a profitability squeeze. It feels like on lots of different ends, which companies in your coverage universe do you feel like are best equipped to manage that.

Right, So that says a profitability squeeze. It feels like on lots of different ends, which companies in your coverage universe do you feel like are best equipped to manage that.

So there's a couple of things that we're looking at. One from a geographic perspective, we think that's going to become increasingly important in twenty twenty five. Some of the markets that are struggling a little bit, think of Texas and Florida, where you're seeing a lot more competitive supply. We think builders in those markets are maybe going to have to adjust prices or continue with the elevated incentives. So we think from a geographic perspective, you're likely to see relative strength in the Midwest, in the Northeast, and maybe park Its pockets of California. From a product perspective, you know, with rates rising, you have to think about who's most impacted by that, and as you would expect, it's the lower end of the entry level home buyer. So we think that they could remain under pressure into twenty twenty five with relative strength and that move up and luxury segment. So some builders that come to mind would be a Toll Brothers or a Teller Morrison.

So there's a couple of things that we're looking at. One from a geographic perspective, we think that's going to become increasingly important in twenty twenty five. Some of the markets that are struggling a little bit, think of Texas and Florida, where you're seeing a lot more competitive supply. We think builders in those markets are maybe going to have to adjust prices or continue with the elevated incentives. So we think from a geographic perspective, you're likely to see relative strength in the Midwest, in the Northeast, and maybe park Its pockets of California. From a product perspective, you know, with rates rising, you have to think about who's most impacted by that, and as you would expect, it's the lower end of the entry level home buyer. So we think that they could remain under pressure into twenty twenty five with relative strength and that move up and luxury segment. So some builders that come to mind would be a Toll Brothers or a Teller Morrison.

Our thanks to you're reading Bloomberg Intelligence US home Building Analyst. Coming up, we turned to the fed's rate path for twenty twenty five. You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in depth research and data on two thousand companies and one hundred and thirty industries. You can access Bloomberg Intelligence via bi Go on the terminal for my colleague Alex Steele. I'm Paul Sweeney. This is Bloomberg.

Our thanks to you're reading Bloomberg Intelligence US home Building Analyst. Coming up, we turned to the fed's rate path for twenty twenty five. You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in depth research and data on two thousand companies and one hundred and thirty industries. You can access Bloomberg Intelligence via bi Go on the terminal for my colleague Alex Steele. I'm Paul Sweeney. This is Bloomberg.

This is Bloomberg Intelligence with Alex Steele and Paul Sweeney on Bloomberg Radio.

This is Bloomberg Intelligence with Alex Steele and Paul Sweeney on Bloomberg Radio.

We look next at the macro environment. After the Fed lowerd it's benchmark policy rate by a quarter percentage point earlier this month and signaled just two reductions for twenty twenty five, San Francisco FED President Mary Daly said she was very comfortable with two rate cuts in twenty twenty five. She spoke about the Fed's rate path on Bloomberg recently with hosts Jonathan Farrell, Lisa Bromwitz, and Michael mckeeth. There's a little bit of their conversation.

We look next at the macro environment. After the Fed lowerd it's benchmark policy rate by a quarter percentage point earlier this month and signaled just two reductions for twenty twenty five, San Francisco FED President Mary Daly said she was very comfortable with two rate cuts in twenty twenty five. She spoke about the Fed's rate path on Bloomberg recently with hosts Jonathan Farrell, Lisa Bromwitz, and Michael mckeeth. There's a little bit of their conversation.

We have to remain agile.

We have to remain agile.

I mean, you know, the thing that's got us here is being resolute to achieve our dual mandate goals. Price stability was our focus when inflation was very high. The employment has come into the frame so that we're focused on both.

I mean, you know, the thing that's got us here is being resolute to achieve our dual mandate goals. Price stability was our focus when inflation was very high. The employment has come into the frame so that we're focused on both.

But then we also have to be agile.

But then we also have to be agile.

You know the world is uncertain, so we pencil into and you know, as that estimate or that projection gets further from when we made it, the accuracy of it probably falls. And so we're just going to continually take in more information consumer and every meeting your listeners should think about this. Every meeting is live from the standpoint that you're debating, you're discussing, you're thinking what's the right level of policy. But my projection is that it will take many fewer rate cuts next year than we thought. But I'll watch the economy and see if that works out.

You know the world is uncertain, so we pencil into and you know, as that estimate or that projection gets further from when we made it, the accuracy of it probably falls. And so we're just going to continually take in more information consumer and every meeting your listeners should think about this. Every meeting is live from the standpoint that you're debating, you're discussing, you're thinking what's the right level of policy. But my projection is that it will take many fewer rate cuts next year than we thought. But I'll watch the economy and see if that works out.

When we went into the cutting cycle, you were out front and saying you were concerned about the labor market and that we needed to make sure that we didn't lose the gains that we had. Now, at least coming out of Chairman Powell's press conference, it sounds like the focus has shifted to inflation again. Are you comfortable with that as this new phase that he's talking about.

When we went into the cutting cycle, you were out front and saying you were concerned about the labor market and that we needed to make sure that we didn't lose the gains that we had. Now, at least coming out of Chairman Powell's press conference, it sounds like the focus has shifted to inflation again. Are you comfortable with that as this new phase that he's talking about.

Well, I think of it as a new phase as well, and I characterize it slightly differently. I would say that for a long time, a persistent amount of time protracted, we were focused almost entirely on inflation. That's because the labor market was quite robust and inflation was seven six ' five. That was the right way to focus. Then the labor market came into the frame. That didn't mean we turned our focus totally to it. It just meant that after a long period of focusing only on inflation, we were now focused on both.

Well, I think of it as a new phase as well, and I characterize it slightly differently. I would say that for a long time, a persistent amount of time protracted, we were focused almost entirely on inflation. That's because the labor market was quite robust and inflation was seven six ' five. That was the right way to focus. Then the labor market came into the frame. That didn't mean we turned our focus totally to it. It just meant that after a long period of focusing only on inflation, we were now focused on both.

I think that is still the case.

I think that is still the case.

That's Mary Daily, president of the San Francisco FED, talking with Jonathan Ferrell, Lisa Bromwoos, and Michael McKee for more on the Fed's path forward and how the new Trump administration might impact the economy. Caroline Hyde and I spoke with Macro Perspectives founder and president and Julia Coronado. Here's a portion of our conversation, starting on her thoughts on the messaging at the December meeting.

That's Mary Daily, president of the San Francisco FED, talking with Jonathan Ferrell, Lisa Bromwoos, and Michael McKee for more on the Fed's path forward and how the new Trump administration might impact the economy. Caroline Hyde and I spoke with Macro Perspectives founder and president and Julia Coronado. Here's a portion of our conversation, starting on her thoughts on the messaging at the December meeting.

Their messaging that we got at the December meeting was a lot sterner than expected, with only two cuts and just a general tone of concern about inflation. And I think, you know, when we look at the data that's come in, it's fair for President Daily to say that, you know, it's the data have been disappointing on the inflation front. But this wouldn't have really happened if it weren't for the risks to inflation in the outlook, and they can't really pinpoint them or put two find a point on what's likely to happen. But every major policy prong of the incoming Trump administration could potentially be inflationary. So you can see they released their assessment of risks to inflation and unemployment, and the change in upside risks to inflation really moved at the December meeting. So we don't know the specifics on policy. Yes, we have to wait and see what materializes and how that feeds into the data.

Their messaging that we got at the December meeting was a lot sterner than expected, with only two cuts and just a general tone of concern about inflation. And I think, you know, when we look at the data that's come in, it's fair for President Daily to say that, you know, it's the data have been disappointing on the inflation front. But this wouldn't have really happened if it weren't for the risks to inflation in the outlook, and they can't really pinpoint them or put two find a point on what's likely to happen. But every major policy prong of the incoming Trump administration could potentially be inflationary. So you can see they released their assessment of risks to inflation and unemployment, and the change in upside risks to inflation really moved at the December meeting. So we don't know the specifics on policy. Yes, we have to wait and see what materializes and how that feeds into the data.

But there's a direction of travel here that's of concern to the f MC.

But there's a direction of travel here that's of concern to the f MC.

Broadly speaking, this was a big move across a lot of participants and so you know they want us to be on watch for that.

Broadly speaking, this was a big move across a lot of participants and so you know they want us to be on watch for that.

Have you been running the numbers and with the best case, worst case scenario. Yes, we don't know the direction exactly of where policy will go.

Have you been running the numbers and with the best case, worst case scenario. Yes, we don't know the direction exactly of where policy will go.

But we've been on this rodeo.

But we've been on this rodeo.

Before, and there's been tough talk about taris in the past.

Before, and there's been tough talk about taris in the past.

Yes, and we got tariffs in the past and we did see them flow through into goods prices. The difference was that we were in an environment in the Trump the first Trump administration where inflation was running low and in fact below the Fed's target, so they could be very sanguine and patient and sort of accommodate the increase in goods prices that came with the trade war. This time around, we're in a different environment. They've just re established credibility, They've just brought inflation back down, not even to their target yet, and so you know, the threat of a round of tariffs and an impulse into goods prices is more meaningful now.

Yes, and we got tariffs in the past and we did see them flow through into goods prices. The difference was that we were in an environment in the Trump the first Trump administration where inflation was running low and in fact below the Fed's target, so they could be very sanguine and patient and sort of accommodate the increase in goods prices that came with the trade war. This time around, we're in a different environment. They've just re established credibility, They've just brought inflation back down, not even to their target yet, and so you know, the threat of a round of tariffs and an impulse into goods prices is more meaningful now.

The thing that they're going to have to.

The thing that they're going to have to.

Grapple with, and we saw that also in last trade war is trade wars also destroyed demand. That spike in prices isn't good for consumer purchasing power, and it's unlikely to be accommodated like it was during the pandemic with a lot of fiscal support to households directly to households, which helped the economy whether the inflationary shock during the pandemic and sort of stay on track. In the first Strump administration, we actually saw the trade war damp and economic activity put the global manufacturing sector into a recession, and the FED actually ended up cutting rates in twenty nineteen to take out some insurance against that manufacturing recession broadening into the service sector. So you know, very different circumstances. This could weaken the economy, it could cause inflation, It could do both, and then the Fed's mandates go in different directions and they have to make.

Grapple with, and we saw that also in last trade war is trade wars also destroyed demand. That spike in prices isn't good for consumer purchasing power, and it's unlikely to be accommodated like it was during the pandemic with a lot of fiscal support to households directly to households, which helped the economy whether the inflationary shock during the pandemic and sort of stay on track. In the first Strump administration, we actually saw the trade war damp and economic activity put the global manufacturing sector into a recession, and the FED actually ended up cutting rates in twenty nineteen to take out some insurance against that manufacturing recession broadening into the service sector. So you know, very different circumstances. This could weaken the economy, it could cause inflation, It could do both, and then the Fed's mandates go in different directions and they have to make.

A judgment, Julia. So you know, tariffs are clearly an issue. What I've heard from a lot of folks is restrictive immigration policies, perhaps forced deportations that impact on the labor market that might even be even more inflationary going forward.

A judgment, Julia. So you know, tariffs are clearly an issue. What I've heard from a lot of folks is restrictive immigration policies, perhaps forced deportations that impact on the labor market that might even be even more inflationary going forward.

How do you view that risk?

How do you view that risk?

Yeah, no, absolutely, and I think that is definitely something we are likely to see. That is one of the main promises of the campaign, and we can already see the appointees and the plans being put in place to implement this policy. And let's not forget that immigration, that plentiful flow of immigration. While it became a political hot potato during the election, it's unambiguously positive from a macroeconomic standpoint. We had abundant labor supply, it helped growth, it helped demand.

Yeah, no, absolutely, and I think that is definitely something we are likely to see. That is one of the main promises of the campaign, and we can already see the appointees and the plans being put in place to implement this policy. And let's not forget that immigration, that plentiful flow of immigration. While it became a political hot potato during the election, it's unambiguously positive from a macroeconomic standpoint. We had abundant labor supply, it helped growth, it helped demand.

So immigration is good for the economy.

So immigration is good for the economy.

And to even just turn off the spigot, let alone turn around and cast a shadow over the labor market and deport some workers.

And to even just turn off the spigot, let alone turn around and cast a shadow over the labor market and deport some workers.

It's going to change the macro environment.

It's going to change the macro environment.

And yes, in areas where the most targeted population, the undocumented workers are employed, food services, construction. I have conversations with people here in Texas, people in the real estate industry that are pretty worried about the availability of workers as as early as next year, as early as the spring building season. So this could be very material. It could bring higher prices. It could also just slow down building activity because you just don't have the people that you need. Similarly, for food, availability of certain crops and the prices of those would likely spike. So leisure and hospitality another industry that relies heavily on an immigrant workforce. So yeah, we could see that ripple across numerous sectors in the economy, and it could be you know, by mid year, we're seeing some material constraints and some price increases on the back of that.

And yes, in areas where the most targeted population, the undocumented workers are employed, food services, construction. I have conversations with people here in Texas, people in the real estate industry that are pretty worried about the availability of workers as as early as next year, as early as the spring building season. So this could be very material. It could bring higher prices. It could also just slow down building activity because you just don't have the people that you need. Similarly, for food, availability of certain crops and the prices of those would likely spike. So leisure and hospitality another industry that relies heavily on an immigrant workforce. So yeah, we could see that ripple across numerous sectors in the economy, and it could be you know, by mid year, we're seeing some material constraints and some price increases on the back of that.

You know, and Julie, it kind of goes to that consumer confidence number we got today came in, you know, weaker than expected, and the expectations looking forward were weaker than expected. That actually surprised me because I've been talking to a lot of our guests since the election about a palpable sense of optimism in this country since the election, particularly as it relates to economic outlook, reduced taxes and so on and so forth. How do you think about the consumer consumer confidence? And that data surprise you today.

You know, and Julie, it kind of goes to that consumer confidence number we got today came in, you know, weaker than expected, and the expectations looking forward were weaker than expected. That actually surprised me because I've been talking to a lot of our guests since the election about a palpable sense of optimism in this country since the election, particularly as it relates to economic outlook, reduced taxes and so on and so forth. How do you think about the consumer consumer confidence? And that data surprise you today.

So I was just digging through those details. And of course the optimism depends on who you ask. So you're probably talking to a lot of market participants who have experienced the rally and are looking forward to maybe reduced regulation in the finance industry, maybe some corporate tax cuts.

So I was just digging through those details. And of course the optimism depends on who you ask. So you're probably talking to a lot of market participants who have experienced the rally and are looking forward to maybe reduced regulation in the finance industry, maybe some corporate tax cuts.

But when you look at.

But when you look at.

Consumers, well, there's a lot of uncertainty as to how this mix of tariffs and immigration and is going to affect more the average consumer. And when I looked at actually what was interesting you could see a little bit of a political footprint here when you look at it by region.

Consumers, well, there's a lot of uncertainty as to how this mix of tariffs and immigration and is going to affect more the average consumer. And when I looked at actually what was interesting you could see a little bit of a political footprint here when you look at it by region.

The Conference Board doesn't.

The Conference Board doesn't.

Have the breakdown by political party like the Michigan sent to measure does, but you can clearly see sort of the South confidence going up, but in the West and the Northeast the confidence going down.

Have the breakdown by political party like the Michigan sent to measure does, but you can clearly see sort of the South confidence going up, but in the West and the Northeast the confidence going down.

So you know, we are a fifty to fifty country. We always have been.

So you know, we are a fifty to fifty country. We always have been.

Some people are feeling better, some people are feeling a lot worse.

Some people are feeling better, some people are feeling a lot worse.

And it really depends on who you ask.

And it really depends on who you ask.

What about stockholders, because boy, twenty twenty four should have been the year that made everyone feel pretty good. It's if you've been long AI, if you've been long S and p as that bigger benchmarks, and then it just tails off in the last couple of weeks. So how does sentiment around being an asset holder right now feel?

What about stockholders, because boy, twenty twenty four should have been the year that made everyone feel pretty good. It's if you've been long AI, if you've been long S and p as that bigger benchmarks, and then it just tails off in the last couple of weeks. So how does sentiment around being an asset holder right now feel?

Yeah, yeah, well that's what was interesting about the numbers, right it was the expectations component, not the present situation. We have been on quite a tear in the stock market, and of course you all know that it's been very, very concentrated in a handful of names that are related to the AI, you know, sort of euphoria. But you know, now we're moving into the the expectations meets reality phase of change in administration.

Yeah, yeah, well that's what was interesting about the numbers, right it was the expectations component, not the present situation. We have been on quite a tear in the stock market, and of course you all know that it's been very, very concentrated in a handful of names that are related to the AI, you know, sort of euphoria. But you know, now we're moving into the the expectations meets reality phase of change in administration.

So by the end of January, we're going to know a.

So by the end of January, we're going to know a.

Lot more about this mix of policies and yeah, some are growth positive and some are growth negative, and so different industries are going to experience that differently.

Lot more about this mix of policies and yeah, some are growth positive and some are growth negative, and so different industries are going to experience that differently.

The tax cuts.

The tax cuts.

I think one of the things that we just saw with the budget dog fight is that it's a lot easier to talk about tax cuts on a campaign trail, the implement them in a very closely divided Congress, and even within the Republican Party. While they hold majorities in both houses, there's a lot of different views on the right the correct direction of fiscal policy. So we sort of imagine it's going to take most of the year to legislate anything meaningful on the fiscal front. They want to push forward a border a package early.

I think one of the things that we just saw with the budget dog fight is that it's a lot easier to talk about tax cuts on a campaign trail, the implement them in a very closely divided Congress, and even within the Republican Party. While they hold majorities in both houses, there's a lot of different views on the right the correct direction of fiscal policy. So we sort of imagine it's going to take most of the year to legislate anything meaningful on the fiscal front. They want to push forward a border a package early.

We'll see how that plays out. I'm sure.

We'll see how that plays out. I'm sure.

I assume they're going to be able to get a lot done. But remember, like again, very different from last time. Budget wise, the US fiscal position is a lot worse than last time, and so that room for maneuvering is a little tighter, and their ability to enact something that's really going to change the backdrop is more limited.

I assume they're going to be able to get a lot done. But remember, like again, very different from last time. Budget wise, the US fiscal position is a lot worse than last time, and so that room for maneuvering is a little tighter, and their ability to enact something that's really going to change the backdrop is more limited.

Enjoy about a minute left. How do you put in Elon Musk into your calculus here?

Enjoy about a minute left. How do you put in Elon Musk into your calculus here?

Elon Musk is going to.

Elon Musk is going to.

Be a noise generator at a minimum, and certainly will be as we saw with his budget fight, fighting for things that are good for his companies. But I think what we also saw in the last week is that he's not going to just get his way. He's going to talk a lot. Do I think he's actually going to be successful eliminating the VA health care system? No, I do not, So you know he's going to run into constraints. He's not an elected official. He actually doesn't have any sort of direct lever that he can pull. And these elected officials have a lot of views about the programs that they want to protect and their constituents that they want to serve. So I think it's going to be messy and loud and harder to extract the signal from the noise.

Be a noise generator at a minimum, and certainly will be as we saw with his budget fight, fighting for things that are good for his companies. But I think what we also saw in the last week is that he's not going to just get his way. He's going to talk a lot. Do I think he's actually going to be successful eliminating the VA health care system? No, I do not, So you know he's going to run into constraints. He's not an elected official. He actually doesn't have any sort of direct lever that he can pull. And these elected officials have a lot of views about the programs that they want to protect and their constituents that they want to serve. So I think it's going to be messy and loud and harder to extract the signal from the noise.

That's Juia CORNATDO She's president and founder of Macro Perspectives, speaking with me and guest host Caroline Hyde. Coming up next on the program, we look at the company's analysts at Bloomberg Intelligence expect to do well in the new year. You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in depth research and data on two thousand companies and one hundred and thirty industries. You can access Bloomberg Intelligence via b Igo on the terminal. I'm Paul Sweeney, and this is Bloomberg.

That's Juia CORNATDO She's president and founder of Macro Perspectives, speaking with me and guest host Caroline Hyde. Coming up next on the program, we look at the company's analysts at Bloomberg Intelligence expect to do well in the new year. You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in depth research and data on two thousand companies and one hundred and thirty industries. You can access Bloomberg Intelligence via b Igo on the terminal. I'm Paul Sweeney, and this is Bloomberg.

This is Bloomberg Intelligence with Alex Steele and Paul Sweeney on Bloomberg Radio.

This is Bloomberg Intelligence with Alex Steele and Paul Sweeney on Bloomberg Radio.

As we wrap up twenty twenty four and look ahead to twenty two twenty five, we wanted to bring in Bloomberg Intelligence Research Director for Content, Tim Craighead. His latest piece covers the fifty companies to watch this coming year using analysis from Bloomberg Intelligence. Let's dive into our conversation with Tim, starting with how he and his team started work on picking companies and sectors they think will do well in the new year.

As we wrap up twenty twenty four and look ahead to twenty two twenty five, we wanted to bring in Bloomberg Intelligence Research Director for Content, Tim Craighead. His latest piece covers the fifty companies to watch this coming year using analysis from Bloomberg Intelligence. Let's dive into our conversation with Tim, starting with how he and his team started work on picking companies and sectors they think will do well in the new year.

Across our team, we are thinking both on a bottom up and a top down perspective about this topic. On a bottom up perspective, we encourage all of our analysts to step up with their high conviction ideas where they feel like they've got something that's out of consensus, are different from what the market's thinking, and make a focus idea. And we have a list of focus ideas. There are about ninety of them right now that are these high conviction differentiated ideas where we see catalyst ahead that can bring the market around to our point of view from a top down perspective looking across those those groups of companies, Yeah, you can think about it, is that US or European or Asian oriented and actually this year it's pretty well balanced. From the standpoint of yes, you'd think the US is close to fifty percent, and then Europe and Asia are roughly about the same. And you think about where the ideas that are positive versus negative, and you know this is roughly eighty percent positive, twenty percent negative to coalesce into fifty that are really driven towards twenty twenty five as we see catalysts play out. And you have to say, it's really interesting because you compare versus last year, where there were there were big AI ideas and there was a lot of focus on negative China, especially with the property market. This year there's much more orientation towards ideas about cyclical recovery with a change in interest rates and sort of clarity on elections, and the China side of things is also more much more recovery orient and not so much worried about the property crisis. So we still get into some of the details, but that's a backdrop.

Across our team, we are thinking both on a bottom up and a top down perspective about this topic. On a bottom up perspective, we encourage all of our analysts to step up with their high conviction ideas where they feel like they've got something that's out of consensus, are different from what the market's thinking, and make a focus idea. And we have a list of focus ideas. There are about ninety of them right now that are these high conviction differentiated ideas where we see catalyst ahead that can bring the market around to our point of view from a top down perspective looking across those those groups of companies, Yeah, you can think about it, is that US or European or Asian oriented and actually this year it's pretty well balanced. From the standpoint of yes, you'd think the US is close to fifty percent, and then Europe and Asia are roughly about the same. And you think about where the ideas that are positive versus negative, and you know this is roughly eighty percent positive, twenty percent negative to coalesce into fifty that are really driven towards twenty twenty five as we see catalysts play out. And you have to say, it's really interesting because you compare versus last year, where there were there were big AI ideas and there was a lot of focus on negative China, especially with the property market. This year there's much more orientation towards ideas about cyclical recovery with a change in interest rates and sort of clarity on elections, and the China side of things is also more much more recovery orient and not so much worried about the property crisis. So we still get into some of the details, but that's a backdrop.

So we still have AI is still a thing, China, recovery, cycle, goal, recovery. What are some other buckets or themes that were reflected throughout the picks.

So we still have AI is still a thing, China, recovery, cycle, goal, recovery. What are some other buckets or themes that were reflected throughout the picks.

Now, it's interesting thinking about it this way. There is, there's definitely an innovation, new product flavor that we should talk about and get into. There's four new CEOs, but with those we see a couple that are positive, a couple that we've got some concerns about, not the CEO themselves, but the situation of the company that they're in that you know, maybe there's more work to be done than the market's thinking about. And you know there there's energy transition related ideas as well that I cross the globe not with and policies and whatnot coming from new governments. So yeah, those are some of the bigger buckets. So what's the call here on the energy transition? It feels like here in the States team it's kind of losing a little bit of a steam, but I know it's still going strong in other parts of the world. How do you guys kind of think about that? So a couple of things here. Number one, AIH we talk about this too, because we have a little different take this year than last. But AI is driving energy demand and there is simply no way that we can we can fulfill the demand that is going to be required or even is required today with good old fashioned carbon based energy. And so If you look at RWE, it's a European utility, but they've bought Constellation in the US and a lot of that is oriented towards clean energy growth and demand that's AI driven. The same thing is true with SUBC seven, which you know they do. They do construction on offshore energy projects and instead of good old fashioned drilling for oil, a lot of the stuff now is oriented towards all shore wind and even some solar. In TEPCO, Tokyo Electric Power is a nuclear story where Japan is now turning nuclear back on and that's going to drive earnings.

Now, it's interesting thinking about it this way. There is, there's definitely an innovation, new product flavor that we should talk about and get into. There's four new CEOs, but with those we see a couple that are positive, a couple that we've got some concerns about, not the CEO themselves, but the situation of the company that they're in that you know, maybe there's more work to be done than the market's thinking about. And you know there there's energy transition related ideas as well that I cross the globe not with and policies and whatnot coming from new governments. So yeah, those are some of the bigger buckets. So what's the call here on the energy transition? It feels like here in the States team it's kind of losing a little bit of a steam, but I know it's still going strong in other parts of the world. How do you guys kind of think about that? So a couple of things here. Number one, AIH we talk about this too, because we have a little different take this year than last. But AI is driving energy demand and there is simply no way that we can we can fulfill the demand that is going to be required or even is required today with good old fashioned carbon based energy. And so If you look at RWE, it's a European utility, but they've bought Constellation in the US and a lot of that is oriented towards clean energy growth and demand that's AI driven. The same thing is true with SUBC seven, which you know they do. They do construction on offshore energy projects and instead of good old fashioned drilling for oil, a lot of the stuff now is oriented towards all shore wind and even some solar. In TEPCO, Tokyo Electric Power is a nuclear story where Japan is now turning nuclear back on and that's going to drive earnings.

Hey, Tim, a lot of great names, and here a lot of great themes that you guys have held out. I think one of the stocks that's getting investors' attentions is Broadcommon. They're calling out their AI exposure. How do you guys at Bloomberg Intelligence think about AI? What companies are you highlighting for Bloomberg clients as relates to AI.

Hey, Tim, a lot of great names, and here a lot of great themes that you guys have held out. I think one of the stocks that's getting investors' attentions is Broadcommon. They're calling out their AI exposure. How do you guys at Bloomberg Intelligence think about AI? What companies are you highlighting for Bloomberg clients as relates to AI.

AI has five names on our list of fifty, so you think about it, it's ten percent of the list. That's a pretty big deal. And it's also interesting in that it's a different set of names than what we had last year, where we also had a good bit of exposure that was bigger sort of core AI names that you think about with large language models and whatnot, and some software companies. This year it's much more about some of the enabling technologies, and primarily in the world of Simiti inductors, and that's exactly where Broadcom sets. I've heard you talk to Kunjin a few minutes ago, a really interesting combination of semi and software in that company that is providing you know, enabling chips. But Cadence Design is the software company behind the design of SIMA inductors. Kla makes test and measurement tools that you can't do this high end sinitat inductor stuff without Micron is making high bandwidth memory chips, which again you have to have to make AI work. And then there's the odd one out is a company called Vat Group. They make vacuums and it's like super high end vacuums that create the vacuum in which you make semic conductors. So lots of interesting different kinds of plays.

AI has five names on our list of fifty, so you think about it, it's ten percent of the list. That's a pretty big deal. And it's also interesting in that it's a different set of names than what we had last year, where we also had a good bit of exposure that was bigger sort of core AI names that you think about with large language models and whatnot, and some software companies. This year it's much more about some of the enabling technologies, and primarily in the world of Simiti inductors, and that's exactly where Broadcom sets. I've heard you talk to Kunjin a few minutes ago, a really interesting combination of semi and software in that company that is providing you know, enabling chips. But Cadence Design is the software company behind the design of SIMA inductors. Kla makes test and measurement tools that you can't do this high end sinitat inductor stuff without Micron is making high bandwidth memory chips, which again you have to have to make AI work. And then there's the odd one out is a company called Vat Group. They make vacuums and it's like super high end vacuums that create the vacuum in which you make semic conductors. So lots of interesting different kinds of plays.

I did not know that either. What about the innovation parts, So I appreciate that AI dovetails with innovation, But aside from AI, what are some companies that can really fit that bucket.

I did not know that either. What about the innovation parts, So I appreciate that AI dovetails with innovation, But aside from AI, what are some companies that can really fit that bucket.

Well, i' tell you there are some really interesting wins there. You know, we can't talk about innovation without talking about something in biopharma. You know, last year we had Lily and we had Noble Anortis. This year we've put Astrozenica forward. They got a host of new data sets coming out in cancer and in respiratory REZI disease. You can tell I've been here in London so long. I say respiratory as host or respiratory, Yeah, exactly. There's another healthcare win, Insulent. They have what's becoming the standard of care and wearable insulin patches, the Omnipod five, And you know that's a pretty cool story that's growing gangbusters. You got a couple of car companies and it's because of new products. Call it innovation because it is. Tesla is going to launch their low price car at some point in the first half of the year that we think makes sense. And Orsia has five cars that are in process, a couple have been announced, a couple are coming, but importantly they're hybrid nine to eleven and you know those are gonna pardon upon drive really important revenue growth, and folks, just one last thing I would throw out to you. Guys. We were talking about the business yesterday, the banking businesses and now the other imax. We all like movies. This is the theater that you're gonna go and actually see a real movie at because you've got the monster screens and there's more American theaters installing them. But they're also going abroad and talking about dating ourselves in yesterday's conversation. Actually worked on that back at Goldman in a ninety four I think when we took them public. So you know it's been around a while, but there's accelerating story.

Well, i' tell you there are some really interesting wins there. You know, we can't talk about innovation without talking about something in biopharma. You know, last year we had Lily and we had Noble Anortis. This year we've put Astrozenica forward. They got a host of new data sets coming out in cancer and in respiratory REZI disease. You can tell I've been here in London so long. I say respiratory as host or respiratory, Yeah, exactly. There's another healthcare win, Insulent. They have what's becoming the standard of care and wearable insulin patches, the Omnipod five, And you know that's a pretty cool story that's growing gangbusters. You got a couple of car companies and it's because of new products. Call it innovation because it is. Tesla is going to launch their low price car at some point in the first half of the year that we think makes sense. And Orsia has five cars that are in process, a couple have been announced, a couple are coming, but importantly they're hybrid nine to eleven and you know those are gonna pardon upon drive really important revenue growth, and folks, just one last thing I would throw out to you. Guys. We were talking about the business yesterday, the banking businesses and now the other imax. We all like movies. This is the theater that you're gonna go and actually see a real movie at because you've got the monster screens and there's more American theaters installing them. But they're also going abroad and talking about dating ourselves in yesterday's conversation. Actually worked on that back at Goldman in a ninety four I think when we took them public. So you know it's been around a while, but there's accelerating story.

So let's start with the cycle gold recovery, because if I look at the list that you guys have, that's really the bucket where you're seeing a lot of the stocks highlighted. Give me an example of what kind of company would work in this theme of cycle gold recovery.

So let's start with the cycle gold recovery, because if I look at the list that you guys have, that's really the bucket where you're seeing a lot of the stocks highlighted. Give me an example of what kind of company would work in this theme of cycle gold recovery.

There's a broad view here of elections are over in the US and in Europe. There's some clarity central banks are cutting interest rates at least a little bit for a while. We'll see how long it lasts. And all of that should provide some better backdrop in terms of sentiment, and with that you could see labor markets improve a bit which plays into Workday which is a human resources software provider, and a Deco which is one of the larger placement recruiting companies. So that's an example. There's also home building that plays into this. So one of the big UK homebuilders is a company called per Simon. And then you've got you know, retail and other consumer product related companies, Saint Tapestry. You know, Tapestry makes coach, you know, the the great you know, handbag and and other clothes. And they've also got Kate Spade. And if we start to see some improvement in the consumer space, then that plays into you know, a cyclical story in addition to what Tapestry is doing specifically, so things like that.

There's a broad view here of elections are over in the US and in Europe. There's some clarity central banks are cutting interest rates at least a little bit for a while. We'll see how long it lasts. And all of that should provide some better backdrop in terms of sentiment, and with that you could see labor markets improve a bit which plays into Workday which is a human resources software provider, and a Deco which is one of the larger placement recruiting companies. So that's an example. There's also home building that plays into this. So one of the big UK homebuilders is a company called per Simon. And then you've got you know, retail and other consumer product related companies, Saint Tapestry. You know, Tapestry makes coach, you know, the the great you know, handbag and and other clothes. And they've also got Kate Spade. And if we start to see some improvement in the consumer space, then that plays into you know, a cyclical story in addition to what Tapestry is doing specifically, so things like that.

Hey Tim, you know, as you well know during your long career on Wall Street, a lot of what investors and traders do is try to figure out where the consensus is and do I have a different view to than consensus. If I do, then I'll buy the stock or sell the stock short and so on and so forth. You've identified some of companies where you think there might be risk to that consensus. Give us a name or two there.

Hey Tim, you know, as you well know during your long career on Wall Street, a lot of what investors and traders do is try to figure out where the consensus is and do I have a different view to than consensus. If I do, then I'll buy the stock or sell the stock short and so on and so forth. You've identified some of companies where you think there might be risk to that consensus. Give us a name or two there.

Yeah, so this this plays across regions, that plays across sectors. You know, we just talked about some consumer ideas that we think can can do better. You've got You've got estae Lauder, however, that we think is still misfiring in some of its core brands. So that's on the cautionary front. Nintendo. You know, I think pretty much everybody knows who they are. They're supposed to be in the midst of an upgrade cycle with a new console, the switch to that's been long delayed. We think the delays continue, and we think you've got earnings disappointments there that will happen. You know, there's a lot of AI hype and expectations are huge, and you know clearly we have AI related names on this list, but allan Teer is one of those that's smaller in scale. When it comes to larger language models and really high expectations. We think the company is very well placed, but we think expectations are probably too aggressive, and so we've actually got concerns on that sort of consensus front. As you rightfully point out, Paul, those are a couple that come to mind. It's interesting we've got a lot of China stimulus ideas going on here, and this might be a little far fetched for some of the US listeners, but we also have a negative view on Shanghai airport traffic is coming back. There is a lot of traffic, but a lot of their earnings actually come from the duty free sales that happen in the airports and the rent that they get off of that. And people just aren't buying as much when they travel as they used to, especially Chinese. They're buying it online or they're going to stores, not necessarily in the airports. So there's a lot of different ways to think about this.

Yeah, so this this plays across regions, that plays across sectors. You know, we just talked about some consumer ideas that we think can can do better. You've got You've got estae Lauder, however, that we think is still misfiring in some of its core brands. So that's on the cautionary front. Nintendo. You know, I think pretty much everybody knows who they are. They're supposed to be in the midst of an upgrade cycle with a new console, the switch to that's been long delayed. We think the delays continue, and we think you've got earnings disappointments there that will happen. You know, there's a lot of AI hype and expectations are huge, and you know clearly we have AI related names on this list, but allan Teer is one of those that's smaller in scale. When it comes to larger language models and really high expectations. We think the company is very well placed, but we think expectations are probably too aggressive, and so we've actually got concerns on that sort of consensus front. As you rightfully point out, Paul, those are a couple that come to mind. It's interesting we've got a lot of China stimulus ideas going on here, and this might be a little far fetched for some of the US listeners, but we also have a negative view on Shanghai airport traffic is coming back. There is a lot of traffic, but a lot of their earnings actually come from the duty free sales that happen in the airports and the rent that they get off of that. And people just aren't buying as much when they travel as they used to, especially Chinese. They're buying it online or they're going to stores, not necessarily in the airports. So there's a lot of different ways to think about this.

Our thanks to Bloomberg Intelligence Research Director for Content Tim Craikid for joining us. Find his latest work, Fifty Companies to Watch in twenty twenty five online at Bloomberg dot com and on the terminal. That's this week's edition of Bloomberg Intelligence on Bloomberg Radio, providing in depth research and data on two thousand companies and one hundred and thirty industries. And remember you can access Bloomberg Intelligence via Bigo on the terminal. From my colleague Alex Steele, I'm Paul Sweeney. Stay with us today's top stories and global business headlines are coming up right now.

Our thanks to Bloomberg Intelligence Research Director for Content Tim Craikid for joining us. Find his latest work, Fifty Companies to Watch in twenty twenty five online at Bloomberg dot com and on the terminal. That's this week's edition of Bloomberg Intelligence on Bloomberg Radio, providing in depth research and data on two thousand companies and one hundred and thirty industries. And remember you can access Bloomberg Intelligence via Bigo on the terminal. From my colleague Alex Steele, I'm Paul Sweeney. Stay with us today's top stories and global business headlines are coming up right now.