This is Bloomberg Intelligence with Alex Steinhl and Paul'sweenye.

This is Bloomberg Intelligence with Alex Steinhl and Paul'sweenye.

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

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

Are the companies lean enough? Have they trimmed all the fats?

Are the companies lean enough? Have they trimmed all the fats?

The semiconductor business is a really cyclical.

The semiconductor business is a really cyclical.

Business, breaking market headlines and corporate news from across the globe.

Business, breaking market headlines and corporate news from across the globe.

Do investors like the M and A that we've seen?

Do investors like the M and A that we've seen?

These are two big time blue chip companies.

These are two big time blue chip companies.

The window between the peak and cut changing super fast.

The window between the peak and cut changing super fast.

Bloomberg Intelligence with Alex Steinhl and Paul'sweenye.

Bloomberg Intelligence with Alex Steinhl and Paul'sweenye.

On Bloomberg Radio. On Today's Bloomberg Intelligence Show, we dig inside the big business stories impacting Wall Street and the global markets.

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 and one hundred and thirty industries our analysts cover worldwide.

Each and every week we provide in depth research and data on some of the two thousand companies and one hundred and thirty industries our analysts cover worldwide.

Today, we'll take a look at how one company is looking to fix your terrible board meetings.

Today, we'll take a look at how one company is looking to fix your terrible board meetings.

Plus we'll discuss why many Swings Day voters say they're worried about violence surrounding the US presidential election.

Plus we'll discuss why many Swings Day voters say they're worried about violence surrounding the US presidential election.

But first we dive into big tech and in Vidia. This week, maker gave a bullish forecast for second quarter.

But first we dive into big tech and in Vidia. This week, maker gave a bullish forecast for second quarter.

Revenue Nvidia also reported that its sales in the first quarter more than triple to twenty six billion, and this shows that spending on artificial intelligence computing remains strong for more.

Revenue Nvidia also reported that its sales in the first quarter more than triple to twenty six billion, and this shows that spending on artificial intelligence computing remains strong for more.

We were joined by Kunjon Sobani, Bloomberg Intelligence Senior semiconductor analyst. We first asked for his takeaways from Nvidia's results.

We were joined by Kunjon Sobani, Bloomberg Intelligence Senior semiconductor analyst. We first asked for his takeaways from Nvidia's results.

Demand on most of their products keep running ahead of supply. We don't see any slowing down in terms of purchasing from their customers. In fact, beyond their largest cloud customer, enterprise and consumer intern companies are coming in strong, so we don't see any sort of big risk that says they cannot continue.

Demand on most of their products keep running ahead of supply. We don't see any slowing down in terms of purchasing from their customers. In fact, beyond their largest cloud customer, enterprise and consumer intern companies are coming in strong, so we don't see any sort of big risk that says they cannot continue.

So, Kunjon, I was selling Alexon. When we get smart people on like yourself, I like to ask the question about competition. I'm kind of surprised that, you know, in Nvidia has this competitive leadership position relative to everybody else. How proprietary is their chip design versus I don't know the AMDs of the world, even as Cisco. What is the competitive landscape?

So, Kunjon, I was selling Alexon. When we get smart people on like yourself, I like to ask the question about competition. I'm kind of surprised that, you know, in Nvidia has this competitive leadership position relative to everybody else. How proprietary is their chip design versus I don't know the AMDs of the world, even as Cisco. What is the competitive landscape?

Yeah, I mean, look, they were I would say almost two to even arguably three years ahead of everyone, and it's not easy in the chip landscape to catch up when someone has that kind of a lead. They have actually aggressively gone out and out in it their peers. Before they were on an eighteen to twenty four month product cycle, Now they are on a twelve month product cycle. So they just keep staying ahead of their combination. Their combination is trying to catch up. AMD has made significant progress and now is another second viral alternative in the market. Hence you see that in their significant growth as well. But we don't think at this point there is anyone else who can rival the total system tco and performance that they have.

Yeah, I mean, look, they were I would say almost two to even arguably three years ahead of everyone, and it's not easy in the chip landscape to catch up when someone has that kind of a lead. They have actually aggressively gone out and out in it their peers. Before they were on an eighteen to twenty four month product cycle, Now they are on a twelve month product cycle. So they just keep staying ahead of their combination. Their combination is trying to catch up. AMD has made significant progress and now is another second viral alternative in the market. Hence you see that in their significant growth as well. But we don't think at this point there is anyone else who can rival the total system tco and performance that they have.

I was mentioning earlier that Nvidia gets about forty percent its revenue from the big four players, Microsoft, Meta Alphabet, and Amazon. What kind of risk is that, if any?

I was mentioning earlier that Nvidia gets about forty percent its revenue from the big four players, Microsoft, Meta Alphabet, and Amazon. What kind of risk is that, if any?

I mean there have been concerns around it. So there's two good data points that came out of this print. One that concentration did rid use for the very first time, and what we liked it, It was not reduced because the cloud guys slowed their purchasing. In fact, those top four guys that are expected to increase their capec spent by forty five percent this year and they are all lined up to purchase its newest Blackwell products. But what was good was that the share was taken by strong enterprise demand, which we really like because that is much more diversified and sticky.

I mean there have been concerns around it. So there's two good data points that came out of this print. One that concentration did rid use for the very first time, and what we liked it, It was not reduced because the cloud guys slowed their purchasing. In fact, those top four guys that are expected to increase their capec spent by forty five percent this year and they are all lined up to purchase its newest Blackwell products. But what was good was that the share was taken by strong enterprise demand, which we really like because that is much more diversified and sticky.

Kunjan. Let's say I'm at Amazon and I buy one of nvidious chips. When do I have to replace it?

Kunjan. Let's say I'm at Amazon and I buy one of nvidious chips. When do I have to replace it?

Question?

Question?

There's two answers to it. If we were in a normal sector semicaractor cycle like you are in smartphones or PCs, the refreshed time would be longer, so I would say on ideally three to five years. But what's going on right now is all of these customers are just racing against each other, so they cannot afford to stop. So as soon as a newer, better chip is available that they can change, they are going to change.

There's two answers to it. If we were in a normal sector semicaractor cycle like you are in smartphones or PCs, the refreshed time would be longer, so I would say on ideally three to five years. But what's going on right now is all of these customers are just racing against each other, so they cannot afford to stop. So as soon as a newer, better chip is available that they can change, they are going to change.

What would stop all this? We know that AI is going to grow, We know that there will be demand for chips. We know all that. That's a structural shift within the economy. But what makes it cyclical?

What would stop all this? We know that AI is going to grow, We know that there will be demand for chips. We know all that. That's a structural shift within the economy. But what makes it cyclical?

I think the first point of cyclicality would be when the demand momentum stops, which we haven't seen no signs of. Look, the supply keeps on coming up, so at some point demand is going to be meeting supply. And after that, if we see any kind of weakness in demand. Look, look, if the largest cloud providers don't see return on that investment, don't see monetization benefit, don't see their earnings and revenue grow from these investments, that's when we can start worrying about sort of a cyclical DOWNTOWND.

I think the first point of cyclicality would be when the demand momentum stops, which we haven't seen no signs of. Look, the supply keeps on coming up, so at some point demand is going to be meeting supply. And after that, if we see any kind of weakness in demand. Look, look, if the largest cloud providers don't see return on that investment, don't see monetization benefit, don't see their earnings and revenue grow from these investments, that's when we can start worrying about sort of a cyclical DOWNTOWND.

All right, So how else in your universe of semiconductors, how else do you if you play this trend?

All right, So how else in your universe of semiconductors, how else do you if you play this trend?

Look, it's still Nvidia still remains sort of the best pure play AI play in semiconductors. So I don't know why you would want to look elsewhere, but if you were forced to, we also like you know, players like broad Common MA when it comes to AI networking, and it comes to the ask chips, which and media's largest customers are designing themselves. So these are the two areas where we see significant growth coming in over the next two years.

Look, it's still Nvidia still remains sort of the best pure play AI play in semiconductors. So I don't know why you would want to look elsewhere, but if you were forced to, we also like you know, players like broad Common MA when it comes to AI networking, and it comes to the ask chips, which and media's largest customers are designing themselves. So these are the two areas where we see significant growth coming in over the next two years.

Our thanks to Kunjan Sobani, Bloomberg Intelligence senior semiconductor analysts.

Our thanks to Kunjan Sobani, Bloomberg Intelligence senior semiconductor analysts.

We move now to the home improvement retailer. Low's Lowe said the comparable sales fell four point one percent in the first quarter, though they were better than analysts projected.

We move now to the home improvement retailer. Low's Lowe said the comparable sales fell four point one percent in the first quarter, though they were better than analysts projected.

This all comes as uncertainty around interest rates and inflation continue to weigh on home improvement demand.

This all comes as uncertainty around interest rates and inflation continue to weigh on home improvement demand.

For more on all of this, we were joined by Drew Redding, Bloomberg Intelligence US home building analyst.

For more on all of this, we were joined by Drew Redding, Bloomberg Intelligence US home building analyst.

First asked Drew for his key takeaways on Loew's most recent report.

First asked Drew for his key takeaways on Loew's most recent report.

Quarter was a little bit of a tug of war between sales and margins. Part of that sales performance was due to the fact that there was a more promotional environment out there. If you think back to when Home Deepot reported last week, they cite a late start to spring is something that muted sales lows actually said. Spring got off to a good start, and that has to do with them being more we're aggressive on promotions as part of their Spring Fest, and I think that really speaks to, you know, what we're seeing really across the retail landscape with the consumer, and that's that they're looking for value wherever they could get it. Now, they did reaffirm their full year operating margin guidance, but that's going to require the company to execute on some internal initiatives. In the back half of the year. Loses made good progress in improving their their margin profile and them narrowing the gap with home Depot has really been a key that investors have kind of you know, grasped onto. So the fact that they're taking a little bit of a step back here maybe making them a little bit uneasy.

Quarter was a little bit of a tug of war between sales and margins. Part of that sales performance was due to the fact that there was a more promotional environment out there. If you think back to when Home Deepot reported last week, they cite a late start to spring is something that muted sales lows actually said. Spring got off to a good start, and that has to do with them being more we're aggressive on promotions as part of their Spring Fest, and I think that really speaks to, you know, what we're seeing really across the retail landscape with the consumer, and that's that they're looking for value wherever they could get it. Now, they did reaffirm their full year operating margin guidance, but that's going to require the company to execute on some internal initiatives. In the back half of the year. Loses made good progress in improving their their margin profile and them narrowing the gap with home Depot has really been a key that investors have kind of you know, grasped onto. So the fact that they're taking a little bit of a step back here maybe making them a little bit uneasy.

How much would the stock have to re rate for investors and analysts to say, okay, fine, the margins are suffering, but at least the volume and the sales are there.

How much would the stock have to re rate for investors and analysts to say, okay, fine, the margins are suffering, but at least the volume and the sales are there.

Yeah, Well, the stock is still trading above you know, the ten year average, even if you go back to prior to the pandemic. So from a pure valuation perspective, you know, it's still a little bit elevated. The move they've made on margins and now rowing the gap with Home Depot has been impressive over the last couple of years, So I think, you know, the bulls would argue that this is kind of a one off, and as we get to the back half of the year, margins start to improve as they implement some of their PPI initiatives, And in terms of sales, you know, we're not expecting a huge rebound in sales this year and the second half comps will definitely get easier, but even Lows has stated that comps may turn positive, but that's not a reflection of an improved demand. Environment. It's strictly a reflection of easier comps. So we think as we get into twenty twenty five, that's when we would expect the market to see more of a turn, as we get more of a rebound and existing home sales.

Yeah, Well, the stock is still trading above you know, the ten year average, even if you go back to prior to the pandemic. So from a pure valuation perspective, you know, it's still a little bit elevated. The move they've made on margins and now rowing the gap with Home Depot has been impressive over the last couple of years, So I think, you know, the bulls would argue that this is kind of a one off, and as we get to the back half of the year, margins start to improve as they implement some of their PPI initiatives, And in terms of sales, you know, we're not expecting a huge rebound in sales this year and the second half comps will definitely get easier, but even Lows has stated that comps may turn positive, but that's not a reflection of an improved demand. Environment. It's strictly a reflection of easier comps. So we think as we get into twenty twenty five, that's when we would expect the market to see more of a turn, as we get more of a rebound and existing home sales.

How about lumber, that's something they buy a lot of. How's the cost of lumber these days? How's that impacting their margins?

How about lumber, that's something they buy a lot of. How's the cost of lumber these days? How's that impacting their margins?

Yeah, lumber is about ten percent of sales for both Home Depot and Low's. Lumber was really more of a story. Last year was extremely volatile, so you saw the impact on the on their top line. There not so much of a story this year. I think Cody, particularly lumber are going to have less of an impact in the near term.

Yeah, lumber is about ten percent of sales for both Home Depot and Low's. Lumber was really more of a story. Last year was extremely volatile, so you saw the impact on the on their top line. There not so much of a story this year. I think Cody, particularly lumber are going to have less of an impact in the near term.

So you feel like we're not going to really see a benefit in hold twenty twenty five. I mean, some analysts are looking for the back half of this year maybe some improvement, but for you, it's really like a year out kind of thing.

So you feel like we're not going to really see a benefit in hold twenty twenty five. I mean, some analysts are looking for the back half of this year maybe some improvement, but for you, it's really like a year out kind of thing.

Well, I think as we get to the end of this year, I think you'll start to see a little bit of a turn, and you know, a lot of that is predicated upon with what happens in the housing market. Obviously, people are looking for the FED to cut rates at some point this year. Obviously not as much as we had hoped for previously, but we think that you know, when you when you look at existing home sales, we're you know, at the lowest levels in you know, more than two decades. So there's not a whole lot lower we can go absent you know, a broader economic decline where you start to see a lot of job loss. So we think that you know, if it's come in a little bit, you could kind of start to build a little momentum ending this year carrying into next year. When we think, you know, bigger picture about the home improvement market, there's some there's some solid tail winds out there. You know, you have homeowners who are sitting on record amount of home equity. When you think about you know, the rise and home prices we've seen over the last several years, you've got an aging housing stock, and I think the fact that mobility has been so low is going to continue to encourage people to invest in their house And I think what kind of triggers that is rates coming back in a little bit so you can start to tap that equity.

Well, I think as we get to the end of this year, I think you'll start to see a little bit of a turn, and you know, a lot of that is predicated upon with what happens in the housing market. Obviously, people are looking for the FED to cut rates at some point this year. Obviously not as much as we had hoped for previously, but we think that you know, when you when you look at existing home sales, we're you know, at the lowest levels in you know, more than two decades. So there's not a whole lot lower we can go absent you know, a broader economic decline where you start to see a lot of job loss. So we think that you know, if it's come in a little bit, you could kind of start to build a little momentum ending this year carrying into next year. When we think, you know, bigger picture about the home improvement market, there's some there's some solid tail winds out there. You know, you have homeowners who are sitting on record amount of home equity. When you think about you know, the rise and home prices we've seen over the last several years, you've got an aging housing stock, and I think the fact that mobility has been so low is going to continue to encourage people to invest in their house And I think what kind of triggers that is rates coming back in a little bit so you can start to tap that equity.

True, how many stores as lows have and are they adding stores, are they pairing backstores? Kind of worthy with their store count these days.

True, how many stores as lows have and are they adding stores, are they pairing backstores? Kind of worthy with their store count these days.

Yeah, so they're under two thousand. It's an interesting dynamic. So their competitor, Home Depot, is actually embarking on their first store expansion in a long time. Lows, on the other hand, has cut back. They got out of their Canadian business, which reduced their store count. But what they're doing from a store perspective is really introducing new formats. So they're starting to go after the rural customer. Their stores tend to be located in more rural locations compared to Home Depot, which are more densely populated locations, and they found success with that, so they're starting to compete more with the detractor supplies of the w world. They're also introducing Lows outlets, so if you think of, you know, appliances that might have things and scratches, you could go there and get heavily discounted items. And that's another way they're looking to kind of, you know, drive traffic through the Low's brand.

Yeah, so they're under two thousand. It's an interesting dynamic. So their competitor, Home Depot, is actually embarking on their first store expansion in a long time. Lows, on the other hand, has cut back. They got out of their Canadian business, which reduced their store count. But what they're doing from a store perspective is really introducing new formats. So they're starting to go after the rural customer. Their stores tend to be located in more rural locations compared to Home Depot, which are more densely populated locations, and they found success with that, so they're starting to compete more with the detractor supplies of the w world. They're also introducing Lows outlets, so if you think of, you know, appliances that might have things and scratches, you could go there and get heavily discounted items. And that's another way they're looking to kind of, you know, drive traffic through the Low's brand.

Okay, now you're speaking my language. You put outlet there and I'm like, boom, we will go find things that are cool.

Okay, now you're speaking my language. You put outlet there and I'm like, boom, we will go find things that are cool.

I don't do outlets either.

I don't do outlets either.

I know you don't do outlets. That's my thing. It's just my thing. Even if I had a bazillion dollars, I wouldn't pay full price part of the hunt. Okay, AnyWho so drew based on all this, If I wanted to play this housing market right now, what is the best play? And I say that because it's not like the housing market that the demand isn't there, The supply might not be there, the costs are a little too high, mortgage rates are too high, but eventually it'll normalize. What's the best way to capitalize?

I know you don't do outlets. That's my thing. It's just my thing. Even if I had a bazillion dollars, I wouldn't pay full price part of the hunt. Okay, AnyWho so drew based on all this, If I wanted to play this housing market right now, what is the best play? And I say that because it's not like the housing market that the demand isn't there, The supply might not be there, the costs are a little too high, mortgage rates are too high, but eventually it'll normalize. What's the best way to capitalize?

We think right now, kind of sitting at the top of the broader housing ecosystem is the home builders. We think, you know, from a supply perspective, they're in a good position. Their ability to buy down mortgage rates and make payments more palatable to the consumers is something that differentiates them versus the resale market. They're going to grow community counts in the coming year, so we really think that they're still in a good position from a competitive perspective. And when you look at you know, within the home building space, you have the large, well capitalized, publicly traded homebuilders who have access to land, access to labor, and you compare that versus the smaller private piers, and you have to remember home building is a very fragmented industry, particularly outside some of the largest markets. But those smaller private peers tend to rely on regional banks for growth capital. And with you know, a slowing economy and more concern there, you're starting to see a poolback and lending. So we think it's a good opportunity for those larger builders to continue to take share.

We think right now, kind of sitting at the top of the broader housing ecosystem is the home builders. We think, you know, from a supply perspective, they're in a good position. Their ability to buy down mortgage rates and make payments more palatable to the consumers is something that differentiates them versus the resale market. They're going to grow community counts in the coming year, so we really think that they're still in a good position from a competitive perspective. And when you look at you know, within the home building space, you have the large, well capitalized, publicly traded homebuilders who have access to land, access to labor, and you compare that versus the smaller private piers, and you have to remember home building is a very fragmented industry, particularly outside some of the largest markets. But those smaller private peers tend to rely on regional banks for growth capital. And with you know, a slowing economy and more concern there, you're starting to see a poolback and lending. So we think it's a good opportunity for those larger builders to continue to take share.

Our thanks to Drew reading Bloomberg Intelligence, US home building analyst.

Our thanks to Drew reading Bloomberg Intelligence, US home building analyst.

All right, coming out, we're going to say on retail and breakdown targets quarterly results.

All right, coming out, we're going to say on retail and breakdown targets quarterly results.

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. I'm Paul Sweeney and.

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. I'm Paul Sweeney and.

I'm Alex Steel, and this is Bloomberg.

I'm Alex Steel, and this is Bloomberg.

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

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

We look now at the retailer target. This week, the company reported first quarter earnings that missed analyst expectations and at sales fell about three percent year over year.

We look now at the retailer target. This week, the company reported first quarter earnings that missed analyst expectations and at sales fell about three percent year over year.

Target also said it remains cautious on discretionary spending over the coming months, despite having optimism for later this year. For more, we were joined by Jennifer bartashis Bloomberg Intelligence Senior analyst Retail, Staples and packaged Food.

Target also said it remains cautious on discretionary spending over the coming months, despite having optimism for later this year. For more, we were joined by Jennifer bartashis Bloomberg Intelligence Senior analyst Retail, Staples and packaged Food.

We first asked jen for her reaction to this week's report.

We first asked jen for her reaction to this week's report.

Target missed on profit, but they are very optimistic about second quarter and for the rest of the year, and so I think there's a little bit of reticence about how realistic that is when it comes to second quarter in terms so same store sales. You know, Target says that they're going to return to profit, like they're going to return to growth in second quarter. It's feasible, but remember last year second quarter is when they had the blowback from all of the boycotts, so they have a really easy comparison when you talk about a year over year. So that return to growth, yes, but there's a caveat around it. That means to me that the second half is going to be really important if they're going to reach those goals that they put out to is the.

Target missed on profit, but they are very optimistic about second quarter and for the rest of the year, and so I think there's a little bit of reticence about how realistic that is when it comes to second quarter in terms so same store sales. You know, Target says that they're going to return to profit, like they're going to return to growth in second quarter. It's feasible, but remember last year second quarter is when they had the blowback from all of the boycotts, so they have a really easy comparison when you talk about a year over year. So that return to growth, yes, but there's a caveat around it. That means to me that the second half is going to be really important if they're going to reach those goals that they put out to is the.

Target shopper the same similar no relation to the Walmart shopper.

Target shopper the same similar no relation to the Walmart shopper.

Well, historically speaking, the Target shopper has been a slightly higher income household. They tend to be a little bit more fashion forward, fashion focus type individuals, so there's been overlap. But Walmart has slowly been encroaching on what has been Target's kind of main audience, and Target has seen that their customers are under a lot of pressure because they're sort of middle income households. There's been a lot of inflationary press sure, a lot of cutbacks and discretionary spending, so there's been kind of pressure from both sides, and so Walmart says they're going to up their private label game, especially in apparel. That could be a threat to Target, but it is one of Target's core strengths. So if they can get people to come back and start engaging again, that's really what historically has helped Target drive their success.

Well, historically speaking, the Target shopper has been a slightly higher income household. They tend to be a little bit more fashion forward, fashion focus type individuals, so there's been overlap. But Walmart has slowly been encroaching on what has been Target's kind of main audience, and Target has seen that their customers are under a lot of pressure because they're sort of middle income households. There's been a lot of inflationary press sure, a lot of cutbacks and discretionary spending, so there's been kind of pressure from both sides, and so Walmart says they're going to up their private label game, especially in apparel. That could be a threat to Target, but it is one of Target's core strengths. So if they can get people to come back and start engaging again, that's really what historically has helped Target drive their success.

So reaffirming their guidance for the full year, I mean, like you mentioned, that means they're going to have to really deliver in the back of what are the levers they can pull to do that.

So reaffirming their guidance for the full year, I mean, like you mentioned, that means they're going to have to really deliver in the back of what are the levers they can pull to do that.

So from a profit perspective, they have a lot of things that are that they've been doing in terms of cost control, in terms of streamlining their supply chain. Their inventory was down in another seven percent this quarter. Those are all great things because it helps make them more efficient and cost effective. So from a margin perspective, you know, there's still some runway to continue to expand margins. The real question is are they going to be able to drive sales growth. What's concerning is that the in store sales for same store sales are still significantly lower. And you know, part of the idea behind the discretionary categories is that people come into stores and they browse and they find an outfit or they find an accessory. And it's great that digital sales are reaccelerating, but if people aren't in the store, that's a hard thing for Target to deal with.

So from a profit perspective, they have a lot of things that are that they've been doing in terms of cost control, in terms of streamlining their supply chain. Their inventory was down in another seven percent this quarter. Those are all great things because it helps make them more efficient and cost effective. So from a margin perspective, you know, there's still some runway to continue to expand margins. The real question is are they going to be able to drive sales growth. What's concerning is that the in store sales for same store sales are still significantly lower. And you know, part of the idea behind the discretionary categories is that people come into stores and they browse and they find an outfit or they find an accessory. And it's great that digital sales are reaccelerating, but if people aren't in the store, that's a hard thing for Target to deal with.

Hey, Jen, want to think back to the Walmart releases that I've really paid attention to. I always see double digit, maybe twenty percent e commerce sales growth. How does Target do there?

Hey, Jen, want to think back to the Walmart releases that I've really paid attention to. I always see double digit, maybe twenty percent e commerce sales growth. How does Target do there?

Well?

Well?

Target actually does pretty well in terms of digital sales growth, but there's a very different strategy. Walmart is pursuing a strategy of as many possible items as possible on the Walmart dot Com. They do a lot of third party sales. When it comes to Target, their broader assortment is much more curated, and so they are very thoughtful about which vendors they bring onto the target dot com to enhance the offering that Target has. So they're different approaches to e commerce. Both are seeing some success, but you can't really compare them strictly side by side.

Target actually does pretty well in terms of digital sales growth, but there's a very different strategy. Walmart is pursuing a strategy of as many possible items as possible on the Walmart dot Com. They do a lot of third party sales. When it comes to Target, their broader assortment is much more curated, and so they are very thoughtful about which vendors they bring onto the target dot com to enhance the offering that Target has. So they're different approaches to e commerce. Both are seeing some success, but you can't really compare them strictly side by side.

What other company, like what did you make of then TJX, for example, because in some ways they can be immune from the slowdown, right because everyone me included, we'll go shop. There are we seeing that reflected in the numbers?

What other company, like what did you make of then TJX, for example, because in some ways they can be immune from the slowdown, right because everyone me included, we'll go shop. There are we seeing that reflected in the numbers?

I mean, I think the strong results from TJX just underscore that people still like the treasure hunt, but people are seeking value and one of the things that Target talked about is that they need to reinforce that value proposition. That's part of why they've rejiggered their entire Target loyalty program with Target Circle TJX, everybody knows you can go and you have the potential to find something that is an amazing deal, and that's enough to draw people into stores. Target has has gotten a little bit away from that.

I mean, I think the strong results from TJX just underscore that people still like the treasure hunt, but people are seeking value and one of the things that Target talked about is that they need to reinforce that value proposition. That's part of why they've rejiggered their entire Target loyalty program with Target Circle TJX, everybody knows you can go and you have the potential to find something that is an amazing deal, and that's enough to draw people into stores. Target has has gotten a little bit away from that.

Yeah, yeah, see polism. So pauls, we've been in a TJX. I don't think he truly understands the beauty of this.

Yeah, yeah, see polism. So pauls, we've been in a TJX. I don't think he truly understands the beauty of this.

I went to my first Walmart last weekend.

I went to my first Walmart last weekend.

Yeah, I'm so. That's like a semi gold star. So they have not only just discounted stuff, but they have the runway and that's the jam. That is designer stuff on some serious sale and you can get that on clearance and you're looking at like a ninety percent off a designer kind of situation.

Yeah, I'm so. That's like a semi gold star. So they have not only just discounted stuff, but they have the runway and that's the jam. That is designer stuff on some serious sale and you can get that on clearance and you're looking at like a ninety percent off a designer kind of situation.

Do you know beforehanded whether it's going to be there?

Do you know beforehanded whether it's going to be there?

No, that's that's that's fun. Then you add the treasure hunt, and you don't know the beauty that will be unveiled as you go in. Am I selling this appropriately?

No, that's that's that's fun. Then you add the treasure hunt, and you don't know the beauty that will be unveiled as you go in. Am I selling this appropriately?

Jen?

Jen?

Absolutely? I mean that is that is some of the appeal. You just you never know what you're going to find, and so you go as often as you as you can because there's a chance you'll find that amazing deal.

Absolutely? I mean that is that is some of the appeal. You just you never know what you're going to find, and so you go as often as you as you can because there's a chance you'll find that amazing deal.

What's the promotional environment out there, Jenner. Are the Walmarts, the tjx's, the targets. Are they putting out a lot of promotions to get people in the store or to click that button.

What's the promotional environment out there, Jenner. Are the Walmarts, the tjx's, the targets. Are they putting out a lot of promotions to get people in the store or to click that button.

The promotional environment has been escalating, and so we talk you hear Walmart talk about rollbacks that's basically putting things on sale or discounts. Target talked about cutting prices by the end of the summer up to five thousand items, all for essential So the idea is to try to advertise that there's value proposition there and you know in force that they're they're looking at for the customer, trying to get people to engage in coming back and perhaps buying a little bit more. And let's be honest, it doesn't hurt from a public relations perspective when you have the White House talking about retailers not being responsible enough and rolling back costs on essentials. So there's certainly a little bit of a play there to help appease some of that political pressure.

The promotional environment has been escalating, and so we talk you hear Walmart talk about rollbacks that's basically putting things on sale or discounts. Target talked about cutting prices by the end of the summer up to five thousand items, all for essential So the idea is to try to advertise that there's value proposition there and you know in force that they're they're looking at for the customer, trying to get people to engage in coming back and perhaps buying a little bit more. And let's be honest, it doesn't hurt from a public relations perspective when you have the White House talking about retailers not being responsible enough and rolling back costs on essentials. So there's certainly a little bit of a play there to help appease some of that political pressure.

Is but that doesn't make me want to buy the stock though, No.

Is but that doesn't make me want to buy the stock though, No.

But you know it does help ultimately from a consumer perspective. If you think that it's a better value to shop there, or that you're getting more for your money, you're more inclined to shop there, and that ultimately leads to your traffic and your sales, and that is what is appealing to investors.

But you know it does help ultimately from a consumer perspective. If you think that it's a better value to shop there, or that you're getting more for your money, you're more inclined to shop there, and that ultimately leads to your traffic and your sales, and that is what is appealing to investors.

What are the dollar stores seeing these days? Are they seeing a pickup in traffic, maybe the people trading down from a Walmart or Target.

What are the dollar stores seeing these days? Are they seeing a pickup in traffic, maybe the people trading down from a Walmart or Target.

There's been some trade down into the dollar stores, and we tend to see that every time we go through sort of an economic depression. One of the challenges for the dollar stores is that people are coming in, but they've abandoned the discretionary spending, even though at dollar store the discretionary spending is not that expensive, so their consumables mix. For example, a Dollar General is is close to eighty percent of their sales are what would could be considered consumable items. That is good in terms of people coming into the store, but it's not great for the long term mix for the company because those are very low margin sales. They're high frequency, but people have been really watching those, you know, watching their wallets, and so the basket sizes are a little smaller, the mix is more just you know, more consumable. So we'll be watching for any signs that they're getting some hir income households coming in to spend on those more discretionary items, or that their their core consumers are loosening spending a little bit. But honestly, this quarter is probably not going to be you know.

There's been some trade down into the dollar stores, and we tend to see that every time we go through sort of an economic depression. One of the challenges for the dollar stores is that people are coming in, but they've abandoned the discretionary spending, even though at dollar store the discretionary spending is not that expensive, so their consumables mix. For example, a Dollar General is is close to eighty percent of their sales are what would could be considered consumable items. That is good in terms of people coming into the store, but it's not great for the long term mix for the company because those are very low margin sales. They're high frequency, but people have been really watching those, you know, watching their wallets, and so the basket sizes are a little smaller, the mix is more just you know, more consumable. So we'll be watching for any signs that they're getting some hir income households coming in to spend on those more discretionary items, or that their their core consumers are loosening spending a little bit. But honestly, this quarter is probably not going to be you know.

Panning out No, definitely not. I'm target falling the most, I should say, going back to Target the most is November of twenty twenty two. Does that feel extreme to you, considering that the actual numbers weren't like terrible terrible.

Panning out No, definitely not. I'm target falling the most, I should say, going back to Target the most is November of twenty twenty two. Does that feel extreme to you, considering that the actual numbers weren't like terrible terrible.

I think you shouldn't distarget it for being target. I guess this is my response to that. And what I mean, Like, what I mean by that is, you know, Target has always been about the fashion. It's been about the discretionary categories. It's been about home decor, it's been about things you know of that nature. They've never tried to be you know, heavy on the essentials category. And so when you've got consumer weakness and you've got people who aren't spending in those categories, it's hard to beat up Target for being true to what their values are. And so what I would say is, you know, if we see some improvement in just the discretionary spending, Target will start to take off again. You know, their sales will accelerate, people will be coming back. It seems more of a waiting game for when the consumer is ready for that at this point.

I think you shouldn't distarget it for being target. I guess this is my response to that. And what I mean, Like, what I mean by that is, you know, Target has always been about the fashion. It's been about the discretionary categories. It's been about home decor, it's been about things you know of that nature. They've never tried to be you know, heavy on the essentials category. And so when you've got consumer weakness and you've got people who aren't spending in those categories, it's hard to beat up Target for being true to what their values are. And so what I would say is, you know, if we see some improvement in just the discretionary spending, Target will start to take off again. You know, their sales will accelerate, people will be coming back. It seems more of a waiting game for when the consumer is ready for that at this point.

Our thanks to Jim Bartasha's Bloomberg Intelligence Senior analysts for Retail staples and packaged food.

Our thanks to Jim Bartasha's Bloomberg Intelligence Senior analysts for Retail staples and packaged food.

On Bloomberg Intelligence Radio, we bring you all the top analysts providing in depth research and data on two thousand companies and one hundred and thirty industries.

On Bloomberg Intelligence Radio, we bring you all the top analysts providing in depth research and data on two thousand companies and one hundred and thirty industries.

We also have something here at Bloomberg called Bloomberg New Energy Finance, and the idea behind it is to provide data on commodities, power, transport, industries, buildings and agriculture and also new technology.

We also have something here at Bloomberg called Bloomberg New Energy Finance, and the idea behind it is to provide data on commodities, power, transport, industries, buildings and agriculture and also new technology.

This week we also looked at a BNF report that said governments and companies need to spend an extra thirty four trillion dollars on the clean energy transition between now and twenty fifty to reach net zero emissions.

This week we also looked at a BNF report that said governments and companies need to spend an extra thirty four trillion dollars on the clean energy transition between now and twenty fifty to reach net zero emissions.

For more, we're drawn by Aiman Farhat, Bloomberg European Power and Renewables reporter.

For more, we're drawn by Aiman Farhat, Bloomberg European Power and Renewables reporter.

We first asked in for more context on the BNEF report.

We first asked in for more context on the BNEF report.

I mean they were pool outlines two scenarios. One of them is exactly that trying to get to net zero by twenty fifty, So it is possible it will cost something like one hundred and fifteen trillion dollars between now and twenty fifty, and twenty percent more than the actual kind of base case, which is if we just go along with all the all the different technologies actually make economical sense. So the net zero scenario is about governments putting in policy and putting in drivers to make it happen faster.

I mean they were pool outlines two scenarios. One of them is exactly that trying to get to net zero by twenty fifty, So it is possible it will cost something like one hundred and fifteen trillion dollars between now and twenty fifty, and twenty percent more than the actual kind of base case, which is if we just go along with all the all the different technologies actually make economical sense. So the net zero scenario is about governments putting in policy and putting in drivers to make it happen faster.

Are the big I guess players globally. I'm thinking just the West broadly defined China. Do we have global buy in to any of this right now or is it just piecemeal?

Are the big I guess players globally. I'm thinking just the West broadly defined China. Do we have global buy in to any of this right now or is it just piecemeal?

I think that's a good question. I think one of the things that the report does is look till twenty fifty, but as well as that, they also look for the next like five ten years, and they show that the investment level that's being planned for the next even just so twenty thirty isn't really there to keep on track to be reaching that zero. It isn't even there to be reaching any kind of these scenarios. So I'd say what the report redes say is that it is possible we have to really stop moving immediately, and that most players aren't moving fast enough. It's all a bit too slow.

I think that's a good question. I think one of the things that the report does is look till twenty fifty, but as well as that, they also look for the next like five ten years, and they show that the investment level that's being planned for the next even just so twenty thirty isn't really there to keep on track to be reaching that zero. It isn't even there to be reaching any kind of these scenarios. So I'd say what the report redes say is that it is possible we have to really stop moving immediately, and that most players aren't moving fast enough. It's all a bit too slow.

Say that number again, about how many trillions of dollars?

Say that number again, about how many trillions of dollars?

More so, it's two hundred and fifteen trillion for net zero, So that's about thirty four trillion dollars more than the base case.

More so, it's two hundred and fifteen trillion for net zero, So that's about thirty four trillion dollars more than the base case.

Oh my gosh, Okay, where does that is that all going to come from governments? I mean, at the end of the day, whether it's through taxes, et cetera.

Oh my gosh, Okay, where does that is that all going to come from governments? I mean, at the end of the day, whether it's through taxes, et cetera.

So that's going to be coming from government, from like private investment. I mean, this covers everything. This covers everything from grid to evs to you know, like how you're going to be getting your solar panels on your houses, getting wind farms in the sea. It really covers everything. But it just shows that when you take a holistic view, the cost is very high. You know, when you break it down by year, it might be you know, a few trillion per year, but over twenty sixtyeth period, that is a lot of money for the world to bear.

So that's going to be coming from government, from like private investment. I mean, this covers everything. This covers everything from grid to evs to you know, like how you're going to be getting your solar panels on your houses, getting wind farms in the sea. It really covers everything. But it just shows that when you take a holistic view, the cost is very high. You know, when you break it down by year, it might be you know, a few trillion per year, but over twenty sixtyeth period, that is a lot of money for the world to bear.

So Aiman, talk to us about the next ten years. What are some of the critical milestones that need to be met here? It feels like it's more than just everybody's going to have an electric vehicle.

So Aiman, talk to us about the next ten years. What are some of the critical milestones that need to be met here? It feels like it's more than just everybody's going to have an electric vehicle.

Yeah.

Yeah.

So when I was reading through this beautiful ten fifty page report, thing one thing that really stuck out to me at first is the report says that right now we start the tenure countdown, in ten years time, there will be one ice vehicle sold. It'll be all electric vehicles being sold. They want to triple renewables in that period as well to be on track for next year, and then triple them again in the next twenty years. So it really is kind of everything is doubling down.

So when I was reading through this beautiful ten fifty page report, thing one thing that really stuck out to me at first is the report says that right now we start the tenure countdown, in ten years time, there will be one ice vehicle sold. It'll be all electric vehicles being sold. They want to triple renewables in that period as well to be on track for next year, and then triple them again in the next twenty years. So it really is kind of everything is doubling down.

You know.

You know.

They have this whole section about sustainable aviation fuel, trying to decarbonize aviation. I think they said that something like the crops you have to grow to get this spio mass to get the stainial aviation fuel will take up as much space as the whole European Union. So some of these numbers are just really really huge, but are needed in the next ten fifteen years.

They have this whole section about sustainable aviation fuel, trying to decarbonize aviation. I think they said that something like the crops you have to grow to get this spio mass to get the stainial aviation fuel will take up as much space as the whole European Union. So some of these numbers are just really really huge, but are needed in the next ten fifteen years.

And that's so important because we also need the stuff for food and things, so there's also that that poses a lot of issues. I'm also curious as to the divide between developed and emerging markets when it comes to energy, because you know, Europe, in the US, we may have the money to tax and then maybe have the money to put forth, but India is sure doesn't, Africa sure doesn't, parts of Southeast Asia sure don't. How does the report address that lack of financing?

And that's so important because we also need the stuff for food and things, so there's also that that poses a lot of issues. I'm also curious as to the divide between developed and emerging markets when it comes to energy, because you know, Europe, in the US, we may have the money to tax and then maybe have the money to put forth, but India is sure doesn't, Africa sure doesn't, parts of Southeast Asia sure don't. How does the report address that lack of financing?

Yeah, it's interesting I think on both hands on some ways when it comes to like example, grid grid is a huge thing, one of the actually the second biggest costs to come into this twenty fifteen trillion, and actually in some of the developing nations, as you said India for example, because the grid is actually knew there, it's easier to upgrade it and to kind of build it out, you know, when you're talking about the British grid or the American grid, these ones are much older and harder to move forward. But then when it comes to things like renewables, you know, we still see lots of coal, lots of gas, lots of fossil fuels being used in Southeast Asia into the twenty thirties just because you know, they need that. Supply demand is growing, econditioning demand is growing, you know, a growing middle class, which means that they just need to keep up and they can't be going on too renewables as quickly as Europe can.

Yeah, it's interesting I think on both hands on some ways when it comes to like example, grid grid is a huge thing, one of the actually the second biggest costs to come into this twenty fifteen trillion, and actually in some of the developing nations, as you said India for example, because the grid is actually knew there, it's easier to upgrade it and to kind of build it out, you know, when you're talking about the British grid or the American grid, these ones are much older and harder to move forward. But then when it comes to things like renewables, you know, we still see lots of coal, lots of gas, lots of fossil fuels being used in Southeast Asia into the twenty thirties just because you know, they need that. Supply demand is growing, econditioning demand is growing, you know, a growing middle class, which means that they just need to keep up and they can't be going on too renewables as quickly as Europe can.

For example, our thanks to Aman Farhat Lumberg European Power and Renewables Reporter.

For example, our thanks to Aman Farhat Lumberg European Power and Renewables Reporter.

Coming up on the program, we're going to take a look at how one company is looking to fix your terrible board meetings.

Coming up on the program, we're going to take a look at how one company is looking to fix your terrible board meetings.

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 Big on the terminal.

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 Big on the terminal.

I'm Paul Sweeney and I'm Alex Steel, and this is Bloomberg.

I'm Paul Sweeney and I'm Alex Steel, and this is Bloomberg.

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

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

We move now to politics. Half of swing state voters say they're worried about violence surrounding the US presidential election. Now, that's according to the May Bloomberg News Morning Console poll.

We move now to politics. Half of swing state voters say they're worried about violence surrounding the US presidential election. Now, that's according to the May Bloomberg News Morning Console poll.

Many swing state voters also said they're worried that the growing presence of artificial intelligence could one day diminish privacy and hurt job prospects.

Many swing state voters also said they're worried that the growing presence of artificial intelligence could one day diminish privacy and hurt job prospects.

For more, we were joined by Jody Schneider, political news director for Bloomberg TV and Radio, and we first asked Jody about violence being that big concern in the latest poll.

For more, we were joined by Jody Schneider, political news director for Bloomberg TV and Radio, and we first asked Jody about violence being that big concern in the latest poll.

We've been doing this poll now since last fall, as you know, Paul, and we've been asking about the candidates themselves, and we continued to ask about that, but we wanted to ask on some issues as well, and this seemed to be one that's percolating out there quite a bit that we hear a lot from and so we went and asked the voters themselves, as in these swing states, in these seven swing states, and as you noted, about half say they are concerned about that, and it seems to be pretty evenly split between Republicans and Democrats in terms of that concern. So that's real and that could affect them in terms of how they vote, perhaps whether they vote, because both parties really need a big turnout. It's going to be, as everyone expects, a close election, close in terms of the popular vote, and of course that affects the electoral college, which is where it comes down to where the rubber meets the road.

We've been doing this poll now since last fall, as you know, Paul, and we've been asking about the candidates themselves, and we continued to ask about that, but we wanted to ask on some issues as well, and this seemed to be one that's percolating out there quite a bit that we hear a lot from and so we went and asked the voters themselves, as in these swing states, in these seven swing states, and as you noted, about half say they are concerned about that, and it seems to be pretty evenly split between Republicans and Democrats in terms of that concern. So that's real and that could affect them in terms of how they vote, perhaps whether they vote, because both parties really need a big turnout. It's going to be, as everyone expects, a close election, close in terms of the popular vote, and of course that affects the electoral college, which is where it comes down to where the rubber meets the road.

If you will, Jody, does the fear sway how people are going to vote.

If you will, Jody, does the fear sway how people are going to vote.

Well, I think it more could affect whether they vote, Alex, I really think that's part of it. If you fear that, you know, perhaps there's going to be violence surrounding this, or there's this kind of fear about things, maybe you say. And we've seen a lot of polling around the fact that there isn't a lot of excitement around either candidate. We had at one point polls showing that they wish there was someone other than Biden. Or Trump, but this is who we have, This is who's going to be on the ballots, and so I think it's more going to be a turnout issue. We'll see now. Of course, we do this pulling and we all talk about polls a great deal in an election year like this, but it's still it's still about five and a half months out before the election, and a lot of people don't make up their minds fully until after Labor Day. So this is still this is an issue that could affect voting, but we still have plenty of time before people actually start voting.

Well, I think it more could affect whether they vote, Alex, I really think that's part of it. If you fear that, you know, perhaps there's going to be violence surrounding this, or there's this kind of fear about things, maybe you say. And we've seen a lot of polling around the fact that there isn't a lot of excitement around either candidate. We had at one point polls showing that they wish there was someone other than Biden. Or Trump, but this is who we have, This is who's going to be on the ballots, and so I think it's more going to be a turnout issue. We'll see now. Of course, we do this pulling and we all talk about polls a great deal in an election year like this, but it's still it's still about five and a half months out before the election, and a lot of people don't make up their minds fully until after Labor Day. So this is still this is an issue that could affect voting, but we still have plenty of time before people actually start voting.

So Jody, aside from these issues, what are kind of the key issues that are polling has kind of illuminated are kind of going to be the key issues for these candidates through the election.

So Jody, aside from these issues, what are kind of the key issues that are polling has kind of illuminated are kind of going to be the key issues for these candidates through the election.

Yeah, so the race is narrowing.

Yeah, so the race is narrowing.

According to again, these are seven swing states where we think, you know, a lot of the election will be determined. And we found that six and ten of the voters worry about misinformation, not only violence but misinformation. Forty six percent had concerns about perhaps foreign interference in the election. So that's an interesting take. We've seen former President Trump's swing state lead dipping slightly. He is still ahead in many of these swing states according to our poll, but it has dipped slightly since the last time we pulled about a month ago, So that could be viewed as a little bit of encouraging news for those who support Biden, but those who support Trump say, well, he's still ahead there, So we have that. We also have that Biden gaining ground from April in each of the competitive sun Belt states, So that's an interesting factor that he's gaining there. The states where he needs to win. He absolutely must win what we're calling those blue wall states of Wisconsin, Pennsylvania, Michigan, which he won last time, which Hillary Clinton famously did not win in her race against Donald Trump. We're finding that he is doing a little bit better there. They're separated by no more than two percentage points in those blue wall states, so very close there.

According to again, these are seven swing states where we think, you know, a lot of the election will be determined. And we found that six and ten of the voters worry about misinformation, not only violence but misinformation. Forty six percent had concerns about perhaps foreign interference in the election. So that's an interesting take. We've seen former President Trump's swing state lead dipping slightly. He is still ahead in many of these swing states according to our poll, but it has dipped slightly since the last time we pulled about a month ago, So that could be viewed as a little bit of encouraging news for those who support Biden, but those who support Trump say, well, he's still ahead there, So we have that. We also have that Biden gaining ground from April in each of the competitive sun Belt states, So that's an interesting factor that he's gaining there. The states where he needs to win. He absolutely must win what we're calling those blue wall states of Wisconsin, Pennsylvania, Michigan, which he won last time, which Hillary Clinton famously did not win in her race against Donald Trump. We're finding that he is doing a little bit better there. They're separated by no more than two percentage points in those blue wall states, so very close there.

Judy, when you talked about misinformation, do we have an idea where voters are going to get their information if they're worried about misinformation.

Judy, when you talked about misinformation, do we have an idea where voters are going to get their information if they're worried about misinformation.

Well, that's a really good question, Alex and so many of them talk about misinformation, but then they go to places where they are, you know, where there's potentially misinformation and a lot of voters are getting their news from a lot of places that we don't necessarily consider traditional news outlets, so it's an interesting question. We did ask about TikTok. That's been a big issue the US government has under legislation that was passed for emergency funding for Ukraine and other places in the world. It was in there a ban on TikTok if the Chinese parent by Dance does not sell it. We asked these swing state voters whether they thought it was a good idea to ban TikTok, and almost half said they thought it was, So another interesting wrinkle there in terms of information all right.

Well, that's a really good question, Alex and so many of them talk about misinformation, but then they go to places where they are, you know, where there's potentially misinformation and a lot of voters are getting their news from a lot of places that we don't necessarily consider traditional news outlets, so it's an interesting question. We did ask about TikTok. That's been a big issue the US government has under legislation that was passed for emergency funding for Ukraine and other places in the world. It was in there a ban on TikTok if the Chinese parent by Dance does not sell it. We asked these swing state voters whether they thought it was a good idea to ban TikTok, and almost half said they thought it was, So another interesting wrinkle there in terms of information all right.

Thanks to Jody Schneider, political news director for Bloomberg TV and Radio, we.

Thanks to Jody Schneider, political news director for Bloomberg TV and Radio, we.

Now moved to the cloud space. ZECH, a cloud based software company, is now trying to fix any potential dread you may have for an upcoming board meeting.

Now moved to the cloud space. ZECH, a cloud based software company, is now trying to fix any potential dread you may have for an upcoming board meeting.

The company distills hundreds of pages of corporate documents and your interactive websites for boards to expedite meetings, and even has an AI product, and recently ZEK announced it closes seven and a half million dollar investment led by Salesforce Ventures.

The company distills hundreds of pages of corporate documents and your interactive websites for boards to expedite meetings, and even has an AI product, and recently ZEK announced it closes seven and a half million dollar investment led by Salesforce Ventures.

For more and all this, we were joined by ZECH co founder Edward Norton. We first asked him more about what zech is trying to do.

For more and all this, we were joined by ZECH co founder Edward Norton. We first asked him more about what zech is trying to do.

We're trying to make the experience between management of organizations, and I say that meaning corporations or nonprofits because obviously we've got a couple of million nonprofit organizations in this country that have governance and boards and stuff like that. We're trying to take what we feel is an increasingly toxic dynamic and reform it into being what it's supposed to be, which is a relationship that propels in organizations, supports, you know, brings additional leverage positivity to an organization. And we you know, I've definitely had some people say to me, like, you have an interesting day job, why would you get involved in a.

We're trying to make the experience between management of organizations, and I say that meaning corporations or nonprofits because obviously we've got a couple of million nonprofit organizations in this country that have governance and boards and stuff like that. We're trying to take what we feel is an increasingly toxic dynamic and reform it into being what it's supposed to be, which is a relationship that propels in organizations, supports, you know, brings additional leverage positivity to an organization. And we you know, I've definitely had some people say to me, like, you have an interesting day job, why would you get involved in a.

Your day job. Just for folks that on the radio, Edward Norton actor has been in a bunch of movies and all that kind of stuff.

Your day job. Just for folks that on the radio, Edward Norton actor has been in a bunch of movies and all that kind of stuff.

Yeah, the and I and I will, I will admit that, you know, on the surface, like a software platform for for board governance features seems pretty esoteric, but it grew out of it grew out of my own experiences over the last thirty years, not disimilar to years from serving on the board of arts organizations. Serving on you know, conservation organization boards. And then as I built my own companies, and I've built a few software companies that we had our own boards, people like Fred Wilson from Union Square or you know Excel or Graylock or these these firms. We were on the management side and we were experiencing what it meant to have a board. And then when I sold one of my companies and I joined the board of GoFundMe, the company that acquired us, you know, I started sitting on corporate boards and we my partners, and I really started feeling that that this there was this elephant in the room, which is that is that companies go through four to eight times a year. They go pencils down to get ready for this thing that essentially to them feels like a hall monitoring moment. And board members, on the other hand, when I was a board member, you got thirty six hours before the meeting, You get a ninety page PDF and you're supposed to read it in the airport terminal, and then you go to the meeting and get it read back to you.

Yeah, the and I and I will, I will admit that, you know, on the surface, like a software platform for for board governance features seems pretty esoteric, but it grew out of it grew out of my own experiences over the last thirty years, not disimilar to years from serving on the board of arts organizations. Serving on you know, conservation organization boards. And then as I built my own companies, and I've built a few software companies that we had our own boards, people like Fred Wilson from Union Square or you know Excel or Graylock or these these firms. We were on the management side and we were experiencing what it meant to have a board. And then when I sold one of my companies and I joined the board of GoFundMe, the company that acquired us, you know, I started sitting on corporate boards and we my partners, and I really started feeling that that this there was this elephant in the room, which is that is that companies go through four to eight times a year. They go pencils down to get ready for this thing that essentially to them feels like a hall monitoring moment. And board members, on the other hand, when I was a board member, you got thirty six hours before the meeting, You get a ninety page PDF and you're supposed to read it in the airport terminal, and then you go to the meeting and get it read back to you.

You know what I mean.

You know what I mean.

Like there was just so you're looking to make it a more what interactive visual engaging experience.

Like there was just so you're looking to make it a more what interactive visual engaging experience.

I think we say two things. One is quantitatively, board meetings are an enormous waste of time for everybody, and that has to do with the amount of redundant time waste on setting these meetings up and the presentation materials. And that can be crushed down by having cloud based AI powered tools that make it like a tenth the time for a company. On zech, a company can set up for a board meeting in one tenth the time that they were using to prep before it. Board members should get to read something that's you know, you wouldn't read in the New York Times or Bloomberg on a PDF. You read it in a mobile friendly scroll right that we expect that now and so everything about the user interface should be easier for both sides of the table. But also think about this, think about how much time, how many professional talented people with time is valuable sit there in board meetings, approving minutes, approvals, approving stock option packages, things that they ought to be able to do from the airport lounge in advance. So we built governance function that can be interactive and mobile.

I think we say two things. One is quantitatively, board meetings are an enormous waste of time for everybody, and that has to do with the amount of redundant time waste on setting these meetings up and the presentation materials. And that can be crushed down by having cloud based AI powered tools that make it like a tenth the time for a company. On zech, a company can set up for a board meeting in one tenth the time that they were using to prep before it. Board members should get to read something that's you know, you wouldn't read in the New York Times or Bloomberg on a PDF. You read it in a mobile friendly scroll right that we expect that now and so everything about the user interface should be easier for both sides of the table. But also think about this, think about how much time, how many professional talented people with time is valuable sit there in board meetings, approving minutes, approvals, approving stock option packages, things that they ought to be able to do from the airport lounge in advance. So we built governance function that can be interactive and mobile.

And also, so your customer is the board.

And also, so your customer is the board.

The customer is the company and the board. You know, yeah, both sides, management and board members suffer in different ways, and we've tried to reform it. But when you crush the redundant inefficiency of time waste, you improve the quality of the meeting too, because a board meeting should be a forward looking experience, not a You don't want to spend hours looking backward. Everybody can ingest the looking backward part before the meeting. You want meeting to be propulsive and additive to where the company or the organization is trying to go. And the best thing about what people are saying to us is not just oh, we really love the user interface. It's much easier, it's easier to read. We love that they're saying to us. This has radically improved the quality and the value of the meeting itself and what we're getting out of our board.

The customer is the company and the board. You know, yeah, both sides, management and board members suffer in different ways, and we've tried to reform it. But when you crush the redundant inefficiency of time waste, you improve the quality of the meeting too, because a board meeting should be a forward looking experience, not a You don't want to spend hours looking backward. Everybody can ingest the looking backward part before the meeting. You want meeting to be propulsive and additive to where the company or the organization is trying to go. And the best thing about what people are saying to us is not just oh, we really love the user interface. It's much easier, it's easier to read. We love that they're saying to us. This has radically improved the quality and the value of the meeting itself and what we're getting out of our board.

So you guys just raised about seven and a half million Series A led by Salesforce Ventures, including some other guys as well. What are you gonna do with it? And what's sort of your angle here?

So you guys just raised about seven and a half million Series A led by Salesforce Ventures, including some other guys as well. What are you gonna do with it? And what's sort of your angle here?

Well, you know, I think if you look at I mean, first of all, Salesforce to this day is still I mean, they still are the greatest innovator in cloud based corporate tools. And I've known Mark Benyov a long time, even though I never told him that we were doing this with his own team until it was done, because I didn't I didn't want to, you know, I didn't want it to come from the top down. The Salesforce team is really phenomenal. But you know, our fantasy was to work with Salesforce because really nobody, nobody understands the business of cloud based corporate tools better than they do. And I also like their ethos as a company. I think they have a great customer service ethos there. But you know, if you look at think about today, would you ever get a FedEx package with signature tabs on your legal documents?

Well, you know, I think if you look at I mean, first of all, Salesforce to this day is still I mean, they still are the greatest innovator in cloud based corporate tools. And I've known Mark Benyov a long time, even though I never told him that we were doing this with his own team until it was done, because I didn't I didn't want to, you know, I didn't want it to come from the top down. The Salesforce team is really phenomenal. But you know, our fantasy was to work with Salesforce because really nobody, nobody understands the business of cloud based corporate tools better than they do. And I also like their ethos as a company. I think they have a great customer service ethos there. But you know, if you look at think about today, would you ever get a FedEx package with signature tabs on your legal documents?

No?

No?

You get it in DocuSign now right. You don't manage your cap table in Excel spreadsheets anymore. You use Karta. And we've made this evolution towards lots of aspects of corporate function have gone into the cloud, but this really critical function hasn't. And we think that on a business level, to be honest, if you look at you know, Karta, which is a seven billion dollar private company and DocuSign is a fifteen billion dollar public company. There's an enormous market in relatively low priced corporate software tools, and we really thought that this was a good business. We think there's a very large marketplace of companies and nonprofit orgs that need to reform this critical piece.