Bloomberg Audio Studios, podcasts, radio news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple card playing Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

Bloomberg Audio Studios, podcasts, radio news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple card playing Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

All right, We've got just a whole slew of economic data here, and the question for a lot of folks is to what extent is that going to impact the Federal Reserve going forward?

All right, We've got just a whole slew of economic data here, and the question for a lot of folks is to what extent is that going to impact the Federal Reserve going forward?

Here?

Here?

We've got a FED meeting next week on the seventh, and then the meeting in December. What's the FED going to do? Fortunately for us, we have somebody who does this stuff for a living. We actually pay him to do this stuff, Ira Jersey. He's the best on the street. He's our US interest rate strategist. We appreciate getting a few minutes of this time interpret some of the economic data we've seen recently, maybe some of the remarks we've heard from some of these FED folks. How do you think the Fed's going to act over the next several meetings?

We've got a FED meeting next week on the seventh, and then the meeting in December. What's the FED going to do? Fortunately for us, we have somebody who does this stuff for a living. We actually pay him to do this stuff, Ira Jersey. He's the best on the street. He's our US interest rate strategist. We appreciate getting a few minutes of this time interpret some of the economic data we've seen recently, maybe some of the remarks we've heard from some of these FED folks. How do you think the Fed's going to act over the next several meetings?

Yeah, yeah, so I think it's shifted actually over the last month or so, given the strength of the data and in fact today's this morning's personal income and spending numbers, along with the PC deflator, the consumption deflator that we received will allow the Fed Reserve to be somewhat less dubbish than they were at the September meeting. So our expectation now is at the Fed will cut next week. The market's fully priced for it. The Fed, you know, they don't want to lose face. They just cut fifty bases points, so I think that they'll cut again. But the big important announcement is probably going to come during the press conference, where Jay Powell will kind of very maybe not so subtly hint that the Fed Reserve might skip the December meeting and then reevaluate if they're going to go in December. So the market's not fully priced for that yet. The market's still priced for better than even odds that they're going to cut in December, but I suspect that those odds will come off pretty dramatically.

Yeah, yeah, so I think it's shifted actually over the last month or so, given the strength of the data and in fact today's this morning's personal income and spending numbers, along with the PC deflator, the consumption deflator that we received will allow the Fed Reserve to be somewhat less dubbish than they were at the September meeting. So our expectation now is at the Fed will cut next week. The market's fully priced for it. The Fed, you know, they don't want to lose face. They just cut fifty bases points, so I think that they'll cut again. But the big important announcement is probably going to come during the press conference, where Jay Powell will kind of very maybe not so subtly hint that the Fed Reserve might skip the December meeting and then reevaluate if they're going to go in December. So the market's not fully priced for that yet. The market's still priced for better than even odds that they're going to cut in December, but I suspect that those odds will come off pretty dramatically.

Now that would be definitely an interesting things to see.

Now that would be definitely an interesting things to see.

The press conference, of which we'll have you know, Michael McKee will be there and you know he'll be there and we'll gate the full reporting.

The press conference, of which we'll have you know, Michael McKee will be there and you know he'll be there and we'll gate the full reporting.

Yeah, but as we're looking at these numbers that came out. I mean, there's still a bit of stickiness in terms of the core PCE, but overall PCE does seem to be trending lower, which of course we do know that consumers, investors, and the FED want to see how are you kind of viewing this data and the importance of it, especially since we do know that this is the Fed's preferred measure for inflation here.

Yeah, but as we're looking at these numbers that came out. I mean, there's still a bit of stickiness in terms of the core PCE, but overall PCE does seem to be trending lower, which of course we do know that consumers, investors, and the FED want to see how are you kind of viewing this data and the importance of it, especially since we do know that this is the Fed's preferred measure for inflation here.

Sure, so the feder Reserve and j Palace you've mentioned this in some recent speeches, that they focus on headline PC deflator, right, that's their preferred measure. That's a two point one percent, two percent of their target, so you know, call it done deal there. But as you noted, the core inflation measure is meaningfully higher than that at two point seven percent, which is largely driven by housing prices and the year and year change in housing prices, which still continue to be relatively sticky. But even that started to come off a little bit. And the big thing that I look at is some of the details and components in here. So you know, as soon as this data came out at eight thirty at eight by eight thirty five, I was updating a bunch of the charts and nerdiness that I do in parsing out this data. And if you look at services inflation, services inflation has been the single biggest driver, and that's been slowing pretty significantly over the last couple of months, and compared to a year ago, it's it's much much lower in fact, or slower, I should say, it's still growing, right, Prices are still going up, they're just going up a lot, a lot less than they had been before. And I think that the Federal Reserve is going to look at that and say, okay, look, if services inflation is actually rolling over and not going to be as big of a driver of inflation going forward, then that means that over time, core inflation will continue to come down. And yeah, you know, quite frankly, if core inflation is sticky at two and a half percent, that's fine for the Fed. The Fed just doesn't want that to go up, right, like I call it. Over three percent is unacceptable to the Fed. But you know, kind of hovering around two and a half percent would be absolutely fine as long as you have goods prices that aren't going up very quickly at all, which is the other aspect of this, right, which is why the election next week might actually have some impact, but not in the near term. It's much longer term impact, like do tariffs increase increased prices of goods? Which goods have been one of the bright points of the inflation data of.

Sure, so the feder Reserve and j Palace you've mentioned this in some recent speeches, that they focus on headline PC deflator, right, that's their preferred measure. That's a two point one percent, two percent of their target, so you know, call it done deal there. But as you noted, the core inflation measure is meaningfully higher than that at two point seven percent, which is largely driven by housing prices and the year and year change in housing prices, which still continue to be relatively sticky. But even that started to come off a little bit. And the big thing that I look at is some of the details and components in here. So you know, as soon as this data came out at eight thirty at eight by eight thirty five, I was updating a bunch of the charts and nerdiness that I do in parsing out this data. And if you look at services inflation, services inflation has been the single biggest driver, and that's been slowing pretty significantly over the last couple of months, and compared to a year ago, it's it's much much lower in fact, or slower, I should say, it's still growing, right, Prices are still going up, they're just going up a lot, a lot less than they had been before. And I think that the Federal Reserve is going to look at that and say, okay, look, if services inflation is actually rolling over and not going to be as big of a driver of inflation going forward, then that means that over time, core inflation will continue to come down. And yeah, you know, quite frankly, if core inflation is sticky at two and a half percent, that's fine for the Fed. The Fed just doesn't want that to go up, right, like I call it. Over three percent is unacceptable to the Fed. But you know, kind of hovering around two and a half percent would be absolutely fine as long as you have goods prices that aren't going up very quickly at all, which is the other aspect of this, right, which is why the election next week might actually have some impact, but not in the near term. It's much longer term impact, like do tariffs increase increased prices of goods? Which goods have been one of the bright points of the inflation data of.

Late All Right, our Jersey, thank you so much.

Late All Right, our Jersey, thank you so much.

We appreciate that our Jersey chief you wus interest rate strategists for Bloomberg Intelligence appreciate getting a few minutes of his time.

We appreciate that our Jersey chief you wus interest rate strategists for Bloomberg Intelligence appreciate getting a few minutes of his time.

You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at ten am Eastern on applecar Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty.

You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at ten am Eastern on applecar Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty.

Keith wrong enough and getha is the media analyst at Bloomberg Intelligency Space down in Princeton, New Jersey. Keith, A lot to talk to you about today. Let's start with Comcast. Was this announcement by the company that they're considering spelling off their cable networks? Was it expected by the street and do you think it could be a good move.

Keith wrong enough and getha is the media analyst at Bloomberg Intelligency Space down in Princeton, New Jersey. Keith, A lot to talk to you about today. Let's start with Comcast. Was this announcement by the company that they're considering spelling off their cable networks? Was it expected by the street and do you think it could be a good move.

I'm not so sure. If it was expected by the street, I mean, we've always known, especially from a timing perspective, Paul, I mean, we've always known Comcast is itching to do something when it comes to M and A, and especially as far as their NBC media business is concerned. You're absolutely right in pointing out that this is a segment that has been affected very adversely by court cutting. They're losing about eight to ten percent of their subscriber base every year and that has kind of really weighed on you know, both advertising revenue as well as distribution revenue, which is affiliate fees for the cable networks. Remember, they have some very good cable networks, whether it's USA, whether it's the Golf Channel, whether it's MSNBC. But again, across the board, you know, we've seen ratings pressure, we've seen advertising pressure, we've seen affiliate fee pressure. And so this is them basically saying, yeah, we need to do something about this, and we need to kind of spin this because this is really weighing on the valuation of the entire company.

I'm not so sure. If it was expected by the street, I mean, we've always known, especially from a timing perspective, Paul, I mean, we've always known Comcast is itching to do something when it comes to M and A, and especially as far as their NBC media business is concerned. You're absolutely right in pointing out that this is a segment that has been affected very adversely by court cutting. They're losing about eight to ten percent of their subscriber base every year and that has kind of really weighed on you know, both advertising revenue as well as distribution revenue, which is affiliate fees for the cable networks. Remember, they have some very good cable networks, whether it's USA, whether it's the Golf Channel, whether it's MSNBC. But again, across the board, you know, we've seen ratings pressure, we've seen advertising pressure, we've seen affiliate fee pressure. And so this is them basically saying, yeah, we need to do something about this, and we need to kind of spin this because this is really weighing on the valuation of the entire company.

Keep it. Talk to me about Peacock. What's going on there? Is that a good business for the company.

Keep it. Talk to me about Peacock. What's going on there? Is that a good business for the company.

The Peacock is you know, Comcasts and NBC solution streaming solution, and they've had some pretty good success. But again, if you're kind of looking at streaming as a as a subscriber scale game, Nora, well they're they're really far behind. So they have about thirty six thirty seven million subscribers. I mean every time they have a sports programming boost, either with the Olympics or you know, with a with an NFL playoff game, so they do kind of get those little bumps. But again, when you're comparing Peacock at you know, thirty seven million subscribers to Netflix at two hundred and eighty two million, I mean, there's just no comparison. So it's not a scalable solution, but it is a good solution nevertheless, for Comcasts at the time at the time being.

The Peacock is you know, Comcasts and NBC solution streaming solution, and they've had some pretty good success. But again, if you're kind of looking at streaming as a as a subscriber scale game, Nora, well they're they're really far behind. So they have about thirty six thirty seven million subscribers. I mean every time they have a sports programming boost, either with the Olympics or you know, with a with an NFL playoff game, so they do kind of get those little bumps. But again, when you're comparing Peacock at you know, thirty seven million subscribers to Netflix at two hundred and eighty two million, I mean, there's just no comparison. So it's not a scalable solution, but it is a good solution nevertheless, for Comcasts at the time at the time being.

You know, I've been a big fan of Comcasts as a stock for thirty plus years. The management family, the Roberts family there at Comcasts, Mister Roberts back in the day. What's the future of this company, Githa, how do people look at this commpany because you know, the cable their cable TV business, they're entertainment businesses. Is you talked about the cord cutting. Everybody who's got you know, what's the future of this company?

You know, I've been a big fan of Comcasts as a stock for thirty plus years. The management family, the Roberts family there at Comcasts, Mister Roberts back in the day. What's the future of this company, Githa, how do people look at this commpany because you know, the cable their cable TV business, they're entertainment businesses. Is you talked about the cord cutting. Everybody who's got you know, what's the future of this company?

Do you think I think the future of the company still remains very strong, Paul.

Do you think I think the future of the company still remains very strong, Paul.

So.

So.

Yes, they are a vertically integrated media company. They have both distribution as well as content. Majority of their IBADA, as you pointed out, comes from their cable connectivity business eighty percent of their IBADA and that part of the business has been you know, on you know, suffering from a little bit of a slowdown because broadband subscriber growth has really been hurt because of a lot of competition from both fiber as well as fixed wireless access. But it looks like there might be a slight turnaround, So there are some green shoots there and at the end of the day, while even if it might not be a big growth business, I think it will be a stable business and Comcast will be able to drive pretty healthy, you know, both revenue gains as well as you know, a load of mid single digit EBADA gains. Now, where you know kind of investors really struggle is what are they going to do with the end see asset And yes again now there it looks like they're evaluating some strategic options with the cable network business. But the studio is doing really well, and the theme parts, while suffering from some softness recently, will kind of see a reversal next year because they're opening one of their most ambitious projects ever in Orlando, Epic Universe, which will basically double their footprint in Orlando.

Yes, they are a vertically integrated media company. They have both distribution as well as content. Majority of their IBADA, as you pointed out, comes from their cable connectivity business eighty percent of their IBADA and that part of the business has been you know, on you know, suffering from a little bit of a slowdown because broadband subscriber growth has really been hurt because of a lot of competition from both fiber as well as fixed wireless access. But it looks like there might be a slight turnaround, So there are some green shoots there and at the end of the day, while even if it might not be a big growth business, I think it will be a stable business and Comcast will be able to drive pretty healthy, you know, both revenue gains as well as you know, a load of mid single digit EBADA gains. Now, where you know kind of investors really struggle is what are they going to do with the end see asset And yes again now there it looks like they're evaluating some strategic options with the cable network business. But the studio is doing really well, and the theme parts, while suffering from some softness recently, will kind of see a reversal next year because they're opening one of their most ambitious projects ever in Orlando, Epic Universe, which will basically double their footprint in Orlando.

Yeah.

Yeah.

I saw a big gone through the airport recently down in Orlando, tons of advertising for this new Universal park. And we saw some people where did I say? We were at the hotel Alex Steele and I for something and the people came down. No, they came from England just for the Universal Parks to Orlando. They didn't go to the Disney properties, which you're fascinating.

I saw a big gone through the airport recently down in Orlando, tons of advertising for this new Universal park. And we saw some people where did I say? We were at the hotel Alex Steele and I for something and the people came down. No, they came from England just for the Universal Parks to Orlando. They didn't go to the Disney properties, which you're fascinating.

This is back up. They were in separate rooms and it was a business trip, business.

This is back up. They were in separate rooms and it was a business trip, business.

Trip, Thank you, thank you.

Trip, Thank you, thank you.

Well, I wanted to move over to Peloton. I mean, of course, we did hear that news today that Ford's executive Peter Stern will be the next CEO of Peloton. They're really hoping that he will lead a turnaround. Of course, we know that this has really been a struggling company here. What has been the general sentiment? I mean, I'm seeing shares up substantially more than twenty percent in trading today.

Well, I wanted to move over to Peloton. I mean, of course, we did hear that news today that Ford's executive Peter Stern will be the next CEO of Peloton. They're really hoping that he will lead a turnaround. Of course, we know that this has really been a struggling company here. What has been the general sentiment? I mean, I'm seeing shares up substantially more than twenty percent in trading today.

Yeah, so I mean, you know, the sentiment obviously has has turned and it has shifted to a more positive sentiment. Of course, with this new announcement of a CEO, I think the street kind of now really expects an articulation off kind of this future of the future strategic direction for the company, the vision for the brand, and how this new CEO is going to go about accomplishing that. But in the interim, even as they've kind of waited, you know, for this new person to come on board, they've done a lot of things to kind of rite the ships. So one of the biggest problems for Peloton, along with you know, the softness in demand, has been you know, a very kind of bulky cost base, which led to a lot of losses, a lot of cash burn, and they've really kind of righted the ship there, if you will. So we saw them posting profitability that came in well about what consensus was expecting. They've raised their guidance for a justiny bit du for you know, fiscal twenty twenty five. Again, free cash flow as positive, So a lot of things to to cheer. But again, I think the ultimate question for this company is what is really the endgame for Peloton? Will they have sustainable demand, will they have sustainable free cash flow? Or is this just going to be kind of an m and A play.

Yeah, so I mean, you know, the sentiment obviously has has turned and it has shifted to a more positive sentiment. Of course, with this new announcement of a CEO, I think the street kind of now really expects an articulation off kind of this future of the future strategic direction for the company, the vision for the brand, and how this new CEO is going to go about accomplishing that. But in the interim, even as they've kind of waited, you know, for this new person to come on board, they've done a lot of things to kind of rite the ships. So one of the biggest problems for Peloton, along with you know, the softness in demand, has been you know, a very kind of bulky cost base, which led to a lot of losses, a lot of cash burn, and they've really kind of righted the ship there, if you will. So we saw them posting profitability that came in well about what consensus was expecting. They've raised their guidance for a justiny bit du for you know, fiscal twenty twenty five. Again, free cash flow as positive, So a lot of things to to cheer. But again, I think the ultimate question for this company is what is really the endgame for Peloton? Will they have sustainable demand, will they have sustainable free cash flow? Or is this just going to be kind of an m and A play.

So where do we go from here?

So where do we go from here?

Because you mentioned the free cash loan, and I'm looking at the FA function on the Bloomberg terminal and the company forecasted for the first time in many, many years. Maybe it's history free cashual positive in our fiscal twenty five and even more free casual positive fiscal twenty six. So it sounds like maybe, as you mentioned, they've righted the ship. But is this a standalone company gether or to investors feel like it could be part of something bigger, bigger experiential company.

Because you mentioned the free cash loan, and I'm looking at the FA function on the Bloomberg terminal and the company forecasted for the first time in many, many years. Maybe it's history free cashual positive in our fiscal twenty five and even more free casual positive fiscal twenty six. So it sounds like maybe, as you mentioned, they've righted the ship. But is this a standalone company gether or to investors feel like it could be part of something bigger, bigger experiential company.

I mean, Paul, there have been so many rumors about Peloton kind of ultimately being you know this this attractive MNA candidate, whether you know it's it could make sense for an Apple, whether it could make sense for Amazon. Over the past few months, there have actually been some rumblings about whether it makes sense for private equity, especially with all this focus on cost cuts. So that's still kind of a little bit of a wait and watch. I'm not so sure it really makes sense as a standalone company unless this new CEO has some really grand vision in terms of introducing new modalities, in terms of really resuscitating the demand, because you know, we're seeing subscribers kind of fall off quarter after quarter, and that really is the question. Yes, they are going to be you know, free cash flow positive in twenty twenty five and twenty twenty six, but that's really more by right sizing costs. At the end of the day, they have to grow their top line and you know that is where we're kind of still struggling.

I mean, Paul, there have been so many rumors about Peloton kind of ultimately being you know this this attractive MNA candidate, whether you know it's it could make sense for an Apple, whether it could make sense for Amazon. Over the past few months, there have actually been some rumblings about whether it makes sense for private equity, especially with all this focus on cost cuts. So that's still kind of a little bit of a wait and watch. I'm not so sure it really makes sense as a standalone company unless this new CEO has some really grand vision in terms of introducing new modalities, in terms of really resuscitating the demand, because you know, we're seeing subscribers kind of fall off quarter after quarter, and that really is the question. Yes, they are going to be you know, free cash flow positive in twenty twenty five and twenty twenty six, but that's really more by right sizing costs. At the end of the day, they have to grow their top line and you know that is where we're kind of still struggling.

All right, Githa, thanks so much for that.

All right, Githa, thanks so much for that.

Keith Ranganath, and she covers all of the media space for Bloomberg Intelligency space on our Princeton, New Jersey offices PEM.

Keith Ranganath, and she covers all of the media space for Bloomberg Intelligency space on our Princeton, New Jersey offices PEM.

You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays ten am Eastern on Apple Car, playing Android Otto with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays ten am Eastern on Apple Car, playing Android Otto with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

Alalu Aganga joins us.

Alalu Aganga joins us.

She's the US Chief Investment Officer at Mercer, joining us here in our studio.

She's the US Chief Investment Officer at Mercer, joining us here in our studio.

We appreciate you coming in.

We appreciate you coming in.

What do you make of this market when you talk to your clients because we've got people are telling me we've got an election next week, so I think that's kind of important. We've got earnings coming out like crazy this week. What's kind of the message you go out to your clients with these.

What do you make of this market when you talk to your clients because we've got people are telling me we've got an election next week, so I think that's kind of important. We've got earnings coming out like crazy this week. What's kind of the message you go out to your clients with these.

Days right now?

Days right now?

Hang tight, so you know, when you think of the elections, at least for us our clients as we say they're long term investors. There are a couple of things though with regards to elections that are top of mind. And the first is just uncertainty, and it's uncertainty around where you allocate capital, because for us, if you're tying up money for years and years and years and a policy change happens, that could affect your investments. So things like infrastructure, clean tech spending, you know, those areas that were attractive during the Inflation Reduction Act. Of any aspect of that changes, that's one issue. And then another thing that is top of mind for clients is the potential for tariffs like that is a big topic right now, depending on where that goes, and it's either that'll increase you're spending if you're an operating entity, those types of things, and the impact on the portfolio is is my portfolio generating enough, so top of mind in those two categories.

Hang tight, so you know, when you think of the elections, at least for us our clients as we say they're long term investors. There are a couple of things though with regards to elections that are top of mind. And the first is just uncertainty, and it's uncertainty around where you allocate capital, because for us, if you're tying up money for years and years and years and a policy change happens, that could affect your investments. So things like infrastructure, clean tech spending, you know, those areas that were attractive during the Inflation Reduction Act. Of any aspect of that changes, that's one issue. And then another thing that is top of mind for clients is the potential for tariffs like that is a big topic right now, depending on where that goes, and it's either that'll increase you're spending if you're an operating entity, those types of things, and the impact on the portfolio is is my portfolio generating enough, so top of mind in those two categories.

So when we think about next week and the potential outcome, are there any particular sectors that you're keeping an eye on depending on either presidential win.

So when we think about next week and the potential outcome, are there any particular sectors that you're keeping an eye on depending on either presidential win.

Well, we've actually most recently taken risk off the table. We were overweight equities just broadly going into these types of events because of the volatility and uncertainty. It's a close race as we know it. So we've moved back to tactically neutral across the board. So where at market weights, no real sector, no real geographic overweight going into this fixed income.

Well, we've actually most recently taken risk off the table. We were overweight equities just broadly going into these types of events because of the volatility and uncertainty. It's a close race as we know it. So we've moved back to tactically neutral across the board. So where at market weights, no real sector, no real geographic overweight going into this fixed income.

I mean, I don't know what's going on out there.

I mean, I don't know what's going on out there.

I mean I got a feathers cutting rates that I've got yields going up. So I don't know what are you doing in fixed InCom space or you're sticking with the treasure market. It takes some credit risk. How do you think about it?

I mean I got a feathers cutting rates that I've got yields going up. So I don't know what are you doing in fixed InCom space or you're sticking with the treasure market. It takes some credit risk. How do you think about it?

You know, when people throughout fixed income broadly, it plays like five roles in the portfolio, right, So diversification, income, inflation, protection, you name it for us. When folks are thinking about fixed income, they're really thinking in terms of diversification, and then we are we're encouraging clients to look more at non traditional strategies. Right, So where rates are today, hedge fund strategies, if you build a well diversified one, can actually really be more impactful in your portfolio than your traditional fixed income. Treasury correlation is negative point three too point five, but the rest is actually zero to positive positive correlation s equities. Where rates are today, it has a direct impact on companies bottom lines and funding and those types of things. Long short strategies for hedge funds do well in this type of rate environment, even though it's decreasing the trend. Following strategies are doing well as well. So those are some of the things that we're talking to clients about if they're looking for diversification that they traditionally go to fixed income for.

You know, when people throughout fixed income broadly, it plays like five roles in the portfolio, right, So diversification, income, inflation, protection, you name it for us. When folks are thinking about fixed income, they're really thinking in terms of diversification, and then we are we're encouraging clients to look more at non traditional strategies. Right, So where rates are today, hedge fund strategies, if you build a well diversified one, can actually really be more impactful in your portfolio than your traditional fixed income. Treasury correlation is negative point three too point five, but the rest is actually zero to positive positive correlation s equities. Where rates are today, it has a direct impact on companies bottom lines and funding and those types of things. Long short strategies for hedge funds do well in this type of rate environment, even though it's decreasing the trend. Following strategies are doing well as well. So those are some of the things that we're talking to clients about if they're looking for diversification that they traditionally go to fixed income for.

I mean, how are you thinking about data right now? Of course, we had PCE coming out this morning, and when we think about it, this year, we've really seen a brab browley. Of course we're seeing a breather today, but we do have the S and P five hundred up twenty percent year today. So how are you really viewing this data? Inflation? What is the consensus right now?

I mean, how are you thinking about data right now? Of course, we had PCE coming out this morning, and when we think about it, this year, we've really seen a brab browley. Of course we're seeing a breather today, but we do have the S and P five hundred up twenty percent year today. So how are you really viewing this data? Inflation? What is the consensus right now?

So for all the data points that are going in. We're piecing everything together to make the case. And we've been seeing this for some time around a soft landing, right. So, if you start with GDP data consensus was three point one, it came in what two point eight for the quarter, but that's still you know, that's still pretty decent. That's strong. Then if you go into the inflation numbers, CPI I think was like call it two point four for September non farm payroll at the start of the month. So the September numbers was like twenty five hundred or something like that. We've got numbers out tomorrow, so we'll see. But those three, coupled with the fifty basis point rate cut that happened, right like, all of the data points are still consistent with the fact that we are gently landing.

So for all the data points that are going in. We're piecing everything together to make the case. And we've been seeing this for some time around a soft landing, right. So, if you start with GDP data consensus was three point one, it came in what two point eight for the quarter, but that's still you know, that's still pretty decent. That's strong. Then if you go into the inflation numbers, CPI I think was like call it two point four for September non farm payroll at the start of the month. So the September numbers was like twenty five hundred or something like that. We've got numbers out tomorrow, so we'll see. But those three, coupled with the fifty basis point rate cut that happened, right like, all of the data points are still consistent with the fact that we are gently landing.

So when you're thinking about data more broadly, where is your focus? Are we looking at job data or inflation data? Seems as though there's been a shift more recently.

So when you're thinking about data more broadly, where is your focus? Are we looking at job data or inflation data? Seems as though there's been a shift more recently.

It's a mosaic because what we found is there's just no one data point that has predictive power for you from an investment standpoint. We've tested a number of different things, so it's both piecing the data together and then what is the interpretation for that point. We also look at commodity data right like, right now, geopolitics is somewhat front and center across the board, and that affects commodity, so we're watching that as well. So what we do gradually is as each piece of data comes in, we start getting a sense for where the trends are going and using that in addition to the earnings that are coming out. You know, for example, like we're looking at where earnings forecasts are and if you think of the US other than a small handful, like the earnings growth numbers aren't fantastic, you know, the magnificent seven maybe, but for the rest not so much.

It's a mosaic because what we found is there's just no one data point that has predictive power for you from an investment standpoint. We've tested a number of different things, so it's both piecing the data together and then what is the interpretation for that point. We also look at commodity data right like, right now, geopolitics is somewhat front and center across the board, and that affects commodity, so we're watching that as well. So what we do gradually is as each piece of data comes in, we start getting a sense for where the trends are going and using that in addition to the earnings that are coming out. You know, for example, like we're looking at where earnings forecasts are and if you think of the US other than a small handful, like the earnings growth numbers aren't fantastic, you know, the magnificent seven maybe, but for the rest not so much.

So what do you think this market needs to see out of earnings? We're kind of kind of in the middle of the earning season here do we need to see big It feels like we need to see big beats because we've got the market selling off. Nastak off two percent today on Microsoft and meta numbers I thought were pretty good but maybe just a little weak, and that's enough for the market to sell off.

So what do you think this market needs to see out of earnings? We're kind of kind of in the middle of the earning season here do we need to see big It feels like we need to see big beats because we've got the market selling off. Nastak off two percent today on Microsoft and meta numbers I thought were pretty good but maybe just a little weak, and that's enough for the market to sell off.

It's still tech though. If you were to think of the broader. You know, we need to see it expand beyond a specific category to be you know, more excited than we are now. Granted we're sitting here with the SMP where it is right, So the question is how consistent is it? And can it last?

It's still tech though. If you were to think of the broader. You know, we need to see it expand beyond a specific category to be you know, more excited than we are now. Granted we're sitting here with the SMP where it is right, So the question is how consistent is it? And can it last?

Do you see this rally lasting? Do you see it having further to run?

Do you see this rally lasting? Do you see it having further to run?

The thing about heck is that it continues to push the frontier right, so as you have more capex, more data, more innovation like never say never like those the bet against that has surely been wrong. But we will say, looking at valuations relative to history, we are at extremely stretched levels. So back to how we allocate capital for the longer term. If we're looking at our forward looking capital markets assumptions, for example, where we see longer term equities, especially US and more and more firms are coming out with numbers that are not as high as they have been. Right, So it's like what we've seen the last decade. Do we expect this type this magnitude going forward? We haven't seen it, and we're not convinced.

The thing about heck is that it continues to push the frontier right, so as you have more capex, more data, more innovation like never say never like those the bet against that has surely been wrong. But we will say, looking at valuations relative to history, we are at extremely stretched levels. So back to how we allocate capital for the longer term. If we're looking at our forward looking capital markets assumptions, for example, where we see longer term equities, especially US and more and more firms are coming out with numbers that are not as high as they have been. Right, So it's like what we've seen the last decade. Do we expect this type this magnitude going forward? We haven't seen it, and we're not convinced.

How about alternative investments? How do they figure into your outlook these days? I'm surprised when I go to see and visit with registered investment advisors representing their institutional clients that their clients are asking for it and they want something more than just two to five percent allocation. Kind of surprises me. It gets me a little nerve respect. How do you guys at an institution level think about alternatives?

How about alternative investments? How do they figure into your outlook these days? I'm surprised when I go to see and visit with registered investment advisors representing their institutional clients that their clients are asking for it and they want something more than just two to five percent allocation. Kind of surprises me. It gets me a little nerve respect. How do you guys at an institution level think about alternatives?

So the first part about it is assessing your liquidity profile. Even you know you're talking about individuals, but if you start thinking how much cash.

So the first part about it is assessing your liquidity profile. Even you know you're talking about individuals, but if you start thinking how much cash.

Do I need?

Do I need?

As we talk about cash planning with a number of organizations, especially operational ones, do you have enough cash for the first one year, eighteen months, maybe two years of operations? Then beyond that, let's start thinking of a waterfall. So where primaries in private equity has the longest tail, maybe private credit is six years, seven years. Can you withstand that We talked about hedge funds redemptions as quarterly for some, so it's more building out that profile real estate value add funds for seven years. So the place for private investments is along the waterfall for liquidity, and that's really how we encourage clients that think about it, and then more importantly, what type of role are they playing in your portfolio?

As we talk about cash planning with a number of organizations, especially operational ones, do you have enough cash for the first one year, eighteen months, maybe two years of operations? Then beyond that, let's start thinking of a waterfall. So where primaries in private equity has the longest tail, maybe private credit is six years, seven years. Can you withstand that We talked about hedge funds redemptions as quarterly for some, so it's more building out that profile real estate value add funds for seven years. So the place for private investments is along the waterfall for liquidity, and that's really how we encourage clients that think about it, and then more importantly, what type of role are they playing in your portfolio?

Is now the time for small caps. How are you all thinking about small caps right now?

Is now the time for small caps. How are you all thinking about small caps right now?

We have had some decent luck and small caps. However, the breakout of small cap companies, especially today, it has a decent number of what we call non earners right so, like the growth stories that will grow into some of these multiples in valuations, small cap stocks are also levered towards rates and are pretty sensitive in that regard to rates coming down. Okay, I guess it's good, but where we've seen the delivering of the earnings has been more large cap. However, from an active management standpoint, that's where you need the active managers to sort of sift through the index to be able to find those types of opportunities. So with active management, yes, just as an index could be a bit more challenging.

We have had some decent luck and small caps. However, the breakout of small cap companies, especially today, it has a decent number of what we call non earners right so, like the growth stories that will grow into some of these multiples in valuations, small cap stocks are also levered towards rates and are pretty sensitive in that regard to rates coming down. Okay, I guess it's good, but where we've seen the delivering of the earnings has been more large cap. However, from an active management standpoint, that's where you need the active managers to sort of sift through the index to be able to find those types of opportunities. So with active management, yes, just as an index could be a bit more challenging.

We are seeing again the Nastak off two percent today. I mean, does that tell you that are you concerned about the valuation of this market here? Because again I Lemmet and Microsoft numbers are pretty good but bloom, so we.

We are seeing again the Nastak off two percent today. I mean, does that tell you that are you concerned about the valuation of this market here? Because again I Lemmet and Microsoft numbers are pretty good but bloom, so we.

Are definitely not excited about valuations here. It's elevated. No matter what historical metric you look at it, it's pretty high. You know, off two percent todays is definitely not enough to be able to bring it back. So the valuations you're elevated, Is this where we would be overweight today. No, as they said, we're neutral, So valuations are elevated. It's one of the additional data points that we're looking at as you evaluate across your other portfolio the areas that could be more attractive, hence private markets.

Are definitely not excited about valuations here. It's elevated. No matter what historical metric you look at it, it's pretty high. You know, off two percent todays is definitely not enough to be able to bring it back. So the valuations you're elevated, Is this where we would be overweight today. No, as they said, we're neutral, So valuations are elevated. It's one of the additional data points that we're looking at as you evaluate across your other portfolio the areas that could be more attractive, hence private markets.

Yeah, very good.

Yeah, very good.

Alla Adana, thank you so much for joining us US chief investment officer at Mercer giving us some thoughts on these markets.

Alla Adana, thank you so much for joining us US chief investment officer at Mercer giving us some thoughts on these markets.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on applecar Play and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa play Bloomberg eleven thirty.

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It is never a good news day for a company when they re pull their guidance, not buying, no, not much you want to Investors don't like that, and just ask the good folks at es Day Lauder. They pulled their guidance. They got some challenges in their business. They called out China. But the stock falls the most on record. We're now down the lowest level since twenty fourteen, so real, real challenging day for Esday. Lotter goes to the whole luxury space. We've seen us all off in the luxury space. So when you want to talk luxury goods, there's only one place to go to. Deborah aChn, luxury goods analysts for Bloomberg Intelligence. She's based in London. She knows these companies.

It is never a good news day for a company when they re pull their guidance, not buying, no, not much you want to Investors don't like that, and just ask the good folks at es Day Lauder. They pulled their guidance. They got some challenges in their business. They called out China. But the stock falls the most on record. We're now down the lowest level since twenty fourteen, so real, real challenging day for Esday. Lotter goes to the whole luxury space. We've seen us all off in the luxury space. So when you want to talk luxury goods, there's only one place to go to. Deborah aChn, luxury goods analysts for Bloomberg Intelligence. She's based in London. She knows these companies.

Backwards and forwards.

Backwards and forwards.

Deb what's your take on the news coming out of ESDA Latder today.

Deb what's your take on the news coming out of ESDA Latder today.

I think it was.

I think it was.

Another case of outgoing management making promises in the market and the investors starting to really believe it after we saw some improvements coming through from the restructure program. So how this stood. We know steal Order are really heavily exposed in Asia Pacific, particularly in China and in travel retail across Asia. In skincare, they're more exposed than any of the peer group. And no, we've had negative and comment in the marketplace from the peer group that China is not doing so well, that it's even down versus where it was from a couple of months ago. The view really was that Estelaudry in August had said along with the others, that it would be a slightly odd They hoped it would be a slightly improved in market, and that just hits them hard. They have a new CEO coming in in January, and so they've given Q two guidance which is way below consensus expectation on EPs and also a minus six to minus eight percent on organic sales growth for two Q when the market looks for flat. So there's a lot to do, not just in Asia, but elsewhere.

Another case of outgoing management making promises in the market and the investors starting to really believe it after we saw some improvements coming through from the restructure program. So how this stood. We know steal Order are really heavily exposed in Asia Pacific, particularly in China and in travel retail across Asia. In skincare, they're more exposed than any of the peer group. And no, we've had negative and comment in the marketplace from the peer group that China is not doing so well, that it's even down versus where it was from a couple of months ago. The view really was that Estelaudry in August had said along with the others, that it would be a slightly odd They hoped it would be a slightly improved in market, and that just hits them hard. They have a new CEO coming in in January, and so they've given Q two guidance which is way below consensus expectation on EPs and also a minus six to minus eight percent on organic sales growth for two Q when the market looks for flat. So there's a lot to do, not just in Asia, but elsewhere.

I mean, for this company, the results were significantly worse than expected. I mean, we saw the guidance withdrawn for the four year guidance and then also a forty seven percent percent dividend cut, and I'm saying shares of the company down fifty two percent. But when I'm looking at Wall Street analyst readings, we're seeing seven buys and twenty five holds in zero cells. So I'm curious there, I mean, is there's still some hope left in the market in terms of this company being able to see a turnaround further to be seventy eight percent of Wall Streets saying to hold, but zero people saying to sell.

I mean, for this company, the results were significantly worse than expected. I mean, we saw the guidance withdrawn for the four year guidance and then also a forty seven percent percent dividend cut, and I'm saying shares of the company down fifty two percent. But when I'm looking at Wall Street analyst readings, we're seeing seven buys and twenty five holds in zero cells. So I'm curious there, I mean, is there's still some hope left in the market in terms of this company being able to see a turnaround further to be seventy eight percent of Wall Streets saying to hold, but zero people saying to sell.

Right, so we've seen it's been two and a half years in the making that we're looking for this transition and return to growth. We've seen margins move from mid twenty percent down to lo teens, down to single digit and that's where we sit today. And the expectation was really because of the exposure into Asia, particularly China, that we would see some improvement coming through and that we're on the precipice of this and we're just not seeing that. So I already imagine, you know, there'll be rethink on where we go, and certainly it's about structural fix it's about really the new CEO coming in with a new program, which is really I must say, we are seeing some improvements from a LI based on growth margin. Some improvements should come through and operate in. There are new much more social media type events taking place. They're doing very well with some of their brands in the US on Amazon Beauty online Store, so that's starting to come through. But there's so much to do, and one of the big things is to reposition themselves so they're not as exposed in Asia in the long term. That's what the investor has to decide in terms of the time in on that on where they really see the base.

Right, so we've seen it's been two and a half years in the making that we're looking for this transition and return to growth. We've seen margins move from mid twenty percent down to lo teens, down to single digit and that's where we sit today. And the expectation was really because of the exposure into Asia, particularly China, that we would see some improvement coming through and that we're on the precipice of this and we're just not seeing that. So I already imagine, you know, there'll be rethink on where we go, and certainly it's about structural fix it's about really the new CEO coming in with a new program, which is really I must say, we are seeing some improvements from a LI based on growth margin. Some improvements should come through and operate in. There are new much more social media type events taking place. They're doing very well with some of their brands in the US on Amazon Beauty online Store, so that's starting to come through. But there's so much to do, and one of the big things is to reposition themselves so they're not as exposed in Asia in the long term. That's what the investor has to decide in terms of the time in on that on where they really see the base.

And also pressuring the stock. I'm sure is the fact that the company did cut its dividend. It says to create financial flexibility for its incoming leadership team, but clearly.

And also pressuring the stock. I'm sure is the fact that the company did cut its dividend. It says to create financial flexibility for its incoming leadership team, but clearly.

The dividend cuts impacting it as well.

The dividend cuts impacting it as well.

Hey, deb, as a financial analyst, you look at all the levers on revenue, the levers on costs. Where do you think this new Managin team should be focusing. Is it repositioning their brand or is it just simply doing it more efficiently cutting costs.

Hey, deb, as a financial analyst, you look at all the levers on revenue, the levers on costs. Where do you think this new Managin team should be focusing. Is it repositioning their brand or is it just simply doing it more efficiently cutting costs.

Maybe when we think about in terms of the cost structure, there is some movement they can get out of there. So they have a big program running which will cost seven hundred million, and in the end they're looking for benefit of one point one to one point four billion, So they're guide into the top end of that cost cut, and I would imagine on the back of that they come somewhere near the bottom end when it comes to the savings they get over the program, probably not to twenty six but into twenty seven. So there are some savings to come through. But I think it's our reposition in what they have been closer to the market, understanding the consumer better, pulling in a younger audience. They're doing it small steps, small steps, but then the competition is getting ahead, so there's a lot going on. It's more about talking to the market, to the consumer and building up from the top line down.

Maybe when we think about in terms of the cost structure, there is some movement they can get out of there. So they have a big program running which will cost seven hundred million, and in the end they're looking for benefit of one point one to one point four billion, So they're guide into the top end of that cost cut, and I would imagine on the back of that they come somewhere near the bottom end when it comes to the savings they get over the program, probably not to twenty six but into twenty seven. So there are some savings to come through. But I think it's our reposition in what they have been closer to the market, understanding the consumer better, pulling in a younger audience. They're doing it small steps, small steps, but then the competition is getting ahead, so there's a lot going on. It's more about talking to the market, to the consumer and building up from the top line down.

All right, very good, Debacon, you are an expert on all things luxury, Debacon, She's a luxury good. Janos for Bloomberg Intelligence joining us from London via zoom.

All right, very good, Debacon, you are an expert on all things luxury, Debacon, She's a luxury good. Janos for Bloomberg Intelligence joining us from London via zoom.

You're listening to the Bloomberg Intelligence Podcast live weekdays at ten am Eastern on applecar Play and Android Auto with a Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa playing Bloomberg eleven thirty.

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Men Deep Sing Darkens to the door.

Men Deep Sing Darkens to the door.

I love it.

I love it.

We have him to play.

We have him to play.

Maybe for the sell off today, I thought the Meta and Microsoft numbers were pretty solid.

Maybe for the sell off today, I thought the Meta and Microsoft numbers were pretty solid.

We need to hear his lips.

We need to hear his lips.

Let's see what he has to say. Man Deep Sing Meta, Microsoft.

Let's see what he has to say. Man Deep Sing Meta, Microsoft.

Just summarize kind of what you think the market's reaction is today to these earnings. We're seeing a sell off in those names and in the broader market. How do you view this tech numbers from last night?

Just summarize kind of what you think the market's reaction is today to these earnings. We're seeing a sell off in those names and in the broader market. How do you view this tech numbers from last night?

Yeah, I mean the setup was very different from Alphabet in the sense that expectations were much higher, and in this case, I think with Microsoft at least they quantified the AI services contribution being ten billion dollars by next quarter, so that's huge. Still. You know, when it comes to Azure, the fact that growth is not accelerating solved with Google Cloud. It makes you wonder, you know, if Capex is growing fifty percent, why is it not translating into faster Azure growth? Even though thirty three percent is a very solid number, but you want to see that acceleration which we saw with Google.

Yeah, I mean the setup was very different from Alphabet in the sense that expectations were much higher, and in this case, I think with Microsoft at least they quantified the AI services contribution being ten billion dollars by next quarter, so that's huge. Still. You know, when it comes to Azure, the fact that growth is not accelerating solved with Google Cloud. It makes you wonder, you know, if Capex is growing fifty percent, why is it not translating into faster Azure growth? Even though thirty three percent is a very solid number, but you want to see that acceleration which we saw with Google.

So, I mean, coming into this earning season when we were thinking about the market more broadly expectations, it seems as though the bar was a little bit lower, so it should be a little bit easier for companies to be How are we thinking about tech earning season as a whole and how much we expect it to really drive the S and P five hundreds gains?

So, I mean, coming into this earning season when we were thinking about the market more broadly expectations, it seems as though the bar was a little bit lower, so it should be a little bit easier for companies to be How are we thinking about tech earning season as a whole and how much we expect it to really drive the S and P five hundreds gains?

Yeah, I mean, look at the first two MAC seven with Tesla and Alphabet, the bar was much lower. They came out with very good numbers and.

Yeah, I mean, look at the first two MAC seven with Tesla and Alphabet, the bar was much lower. They came out with very good numbers and.

You saw the stock reaction.

You saw the stock reaction.

In the case of Meta and Microsoft, the expectations were higher, and I would say Meta is somewhat different in the sense that they have their all large angrid model, they have their lead when it comes to you know, generative AI, but they don't have a separate AI revenue line like you see with you know, Microsoft or with Alphabet. And that's where you know, if they say, you know, Kapex is going to significantly increase for twenty twenty five without really quantifying how significant it will be, whether it's going to be twenty percent which is the consensus number, or thirty percent of fifty percent, nobody knows. And that's what I think created that uncertainty around Meta's Capex spin. And we saw what happened in three Q of twenty twenty two where they had a very similar print, but they actually quantified that significant and you know, the stock dropped twenty percent after that, So clearly there is some nervousness and uncertainty around their Capex spin.

In the case of Meta and Microsoft, the expectations were higher, and I would say Meta is somewhat different in the sense that they have their all large angrid model, they have their lead when it comes to you know, generative AI, but they don't have a separate AI revenue line like you see with you know, Microsoft or with Alphabet. And that's where you know, if they say, you know, Kapex is going to significantly increase for twenty twenty five without really quantifying how significant it will be, whether it's going to be twenty percent which is the consensus number, or thirty percent of fifty percent, nobody knows. And that's what I think created that uncertainty around Meta's Capex spin. And we saw what happened in three Q of twenty twenty two where they had a very similar print, but they actually quantified that significant and you know, the stock dropped twenty percent after that, So clearly there is some nervousness and uncertainty around their Capex spin.

I've Meta off about the three percent here today in training, looking at the shares of Microsoft off about five point eight percent, all right after the close tonight.

I've Meta off about the three percent here today in training, looking at the shares of Microsoft off about five point eight percent, all right after the close tonight.

A couple more of your name's Apple and Amazon. What should we be looking for for each of these names?

A couple more of your name's Apple and Amazon. What should we be looking for for each of these names?

I mean, again, the bar is much lower for Apple, So talking about you know how Tesla and Alphabet did well. The bar is lower for Apple. The problem with I think Apple is in terms of catalysts. They don't really have a catalyst for you know, a big beat and rais because China and you know other markets, you're not gonna see a big Apple refreshed cycle that everyone has been waiting for. Apple intelligence is a driver, but it will be more qualitative.

I mean, again, the bar is much lower for Apple, So talking about you know how Tesla and Alphabet did well. The bar is lower for Apple. The problem with I think Apple is in terms of catalysts. They don't really have a catalyst for you know, a big beat and rais because China and you know other markets, you're not gonna see a big Apple refreshed cycle that everyone has been waiting for. Apple intelligence is a driver, but it will be more qualitative.

You're not again Bloomberg intelligence. I know what that is?

You're not again Bloomberg intelligence. I know what that is?

So they copied us basically sounds like it.

So they copied us basically sounds like it.

What is it again? That their.

What is it again? That their.

Exactly the chip inside the phone, So they don't rely on in video GPUs. They actually do it on their chip which resides in the phone, and that's their Apple playbook. They vertically integrate. They don't really rely on anyone else. And it's just it's taking time to you know, really drive that top line.

Exactly the chip inside the phone, So they don't rely on in video GPUs. They actually do it on their chip which resides in the phone, and that's their Apple playbook. They vertically integrate. They don't really rely on anyone else. And it's just it's taking time to you know, really drive that top line.

So what's going on? DoorDash?

So what's going on? DoorDash?

Right?

Right?

I know? DoorDash? We have uber eat or I don't DoorDash. See you know I grew lub you forget I'm a premium member.

I know? DoorDash? We have uber eat or I don't DoorDash. See you know I grew lub you forget I'm a premium member.

Oh I didn't.

Oh I didn't.

This is maybe I shouldn't said that on air.

This is maybe I shouldn't said that on air.

I'll let you cook.

I'll let you cook.

I should, I should, I should cook more. I'm working on it, guys, But how much market shared does DoorDash have in comparison to say it's competitors Uber Eats and grub Hub.

I should, I should, I should cook more. I'm working on it, guys, But how much market shared does DoorDash have in comparison to say it's competitors Uber Eats and grub Hub.

I mean, they are a category leader when it comes to online delivery, and I think what they've done successfully is to expand into adjacent markets without spending a lot on acquisitions, which is what Uber did and it hurt their margins for a while. So in the case of DoorDash, it's been mostly organic and now there's partnership with Lyft. I mean, I think Lift needed it more than DoorDash, but it does help, you know, DoorDash being that category leader in the delivery and now getting it's foreign invite sharing.

I mean, they are a category leader when it comes to online delivery, and I think what they've done successfully is to expand into adjacent markets without spending a lot on acquisitions, which is what Uber did and it hurt their margins for a while. So in the case of DoorDash, it's been mostly organic and now there's partnership with Lyft. I mean, I think Lift needed it more than DoorDash, but it does help, you know, DoorDash being that category leader in the delivery and now getting it's foreign invite sharing.

I'm looking at shares a DoorDash of fifty seven percent this year.

I'm looking at shares a DoorDash of fifty seven percent this year.

Yeah, just amazing. It's got a market cap.

Yeah, just amazing. It's got a market cap.

Six It's an amazing management team, is that right? That really you listen to the call so much clarity. They do what they say on the call, and it's just I think they've built that credibility with investors.

Six It's an amazing management team, is that right? That really you listen to the call so much clarity. They do what they say on the call, and it's just I think they've built that credibility with investors.

It's you know, offspring number four.

It's you know, offspring number four.

John in college, I saw a couple of door dashes charges on the credit card.

John in college, I saw a couple of door dashes charges on the credit card.

I stopped.

I stopped.

The card was frozen for a week, and I said, no, get off your keysture and walk over mc Donalds and get your quarter.

The card was frozen for a week, and I said, no, get off your keysture and walk over mc Donalds and get your quarter.

Patter with with these share games, maybe I need to switch to door Dash.

Patter with with these share games, maybe I need to switch to door Dash.

Maybe we leave party.

Maybe we leave party.

So put it put in the context for John Tucker, he's thinking about this food delivery business Uber Eats versus door door Dash.

So put it put in the context for John Tucker, he's thinking about this food delivery business Uber Eats versus door door Dash.

I mean they had the playbook here is to do everything in last mile delivery and have you pay you know, ten dollars fifteen dollars subscription fee like your Amazon Prime. But Amazon Prime isn't catering to you know, ride sharing and food delivery. So that's where they want to be. That indispensable subscription, that monthly subscription that you may have to pay.

I mean they had the playbook here is to do everything in last mile delivery and have you pay you know, ten dollars fifteen dollars subscription fee like your Amazon Prime. But Amazon Prime isn't catering to you know, ride sharing and food delivery. So that's where they want to be. That indispensable subscription, that monthly subscription that you may have to pay.

And you do this, okay, but listen grub Hub, if you have Amazon Prime, you get the premium membership for free. I started it out as a student a while years ago, and then it transitioned into Amazon Prime.

And you do this, okay, but listen grub Hub, if you have Amazon Prime, you get the premium membership for free. I started it out as a student a while years ago, and then it transitioned into Amazon Prime.

And once they have your credit card number, the only option is to cancel the card. You can't just freeze it because they'll keep charging it.

And once they have your credit card number, the only option is to cancel the card. You can't just freeze it because they'll keep charging it.

Exactly.

Exactly.

I made the misake of actually time to call them.

I made the misake of actually time to call them.

Exactly all right, Seeing he covers all everything in the technology space.

Exactly all right, Seeing he covers all everything in the technology space.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple card Play and Android Auto with the Bloomberg Business. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa playing Bloomberg eleven thirty.

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You talk a lot about AI is a big driver for not just the big tech stocks, but just for the market everything for all it seems like. But there's downsites and you know, there's concern out there. And I think back to the writer strike in Hollywood earlier this year, and one of the big big issues for them, in addition getting paid more was protections from an AI. You know, they want to somebody come in in. Some AI bought writing a script for the next show.

You talk a lot about AI is a big driver for not just the big tech stocks, but just for the market everything for all it seems like. But there's downsites and you know, there's concern out there. And I think back to the writer strike in Hollywood earlier this year, and one of the big big issues for them, in addition getting paid more was protections from an AI. You know, they want to somebody come in in. Some AI bought writing a script for the next show.

You know, thank you.

You know, thank you.

It's a big legal issue. That's why we like to talk to smart people like Ronnie a set Home. She is a managing partner for set Home Law Group. Ronnie, let's talk about AI and music. Can AI create music?

It's a big legal issue. That's why we like to talk to smart people like Ronnie a set Home. She is a managing partner for set Home Law Group. Ronnie, let's talk about AI and music. Can AI create music?

It can and it has. I don't really I don't know if the listeners followed this story. But Ghostwriter, which is a great name for this quote unquote artist created a song using Drake and the Weekend. Although I don't know what the Weekend's calling himself right now, but at the time, the Weekend's voice and there was obviously no permission granted by these artists, and he created a song called Heart on My Sleeve. Whether or not the song is good doesn't really matter from legal first, and that's the scary part with AI. It's not just a learning tool. We hear about it in books and scripts, you know, reading and then creating overly inspired text. Now AI is learning your voice, your tone. We already have deep fakes out there, but now they're taking away somebody's livelihood and then god forbid, the messaging is not what the artist intended. It can be a big mess at the same time, you know, the Beatles just came out with a new song and they were able to isolate John Lennon's voice in order to create something new. So if you're using AI and music to enhance something that you own or you have permission to use, that's fantastic. But from a legal perspective, we have laws you have to follow. But then we have just you know, regular decency and morality, and you know, perhaps we can write a script for that in case people don't know about it.

It can and it has. I don't really I don't know if the listeners followed this story. But Ghostwriter, which is a great name for this quote unquote artist created a song using Drake and the Weekend. Although I don't know what the Weekend's calling himself right now, but at the time, the Weekend's voice and there was obviously no permission granted by these artists, and he created a song called Heart on My Sleeve. Whether or not the song is good doesn't really matter from legal first, and that's the scary part with AI. It's not just a learning tool. We hear about it in books and scripts, you know, reading and then creating overly inspired text. Now AI is learning your voice, your tone. We already have deep fakes out there, but now they're taking away somebody's livelihood and then god forbid, the messaging is not what the artist intended. It can be a big mess at the same time, you know, the Beatles just came out with a new song and they were able to isolate John Lennon's voice in order to create something new. So if you're using AI and music to enhance something that you own or you have permission to use, that's fantastic. But from a legal perspective, we have laws you have to follow. But then we have just you know, regular decency and morality, and you know, perhaps we can write a script for that in case people don't know about it.

Definitely, And it's funny that you brought up the Drake situation because that's what I was immediately thinking back to Drake and Kendrick Mr. We're having this back and forth that Drake used Tupac's voice as a synthetic voice through AI. What can you do about this? What is the resolve here?

Definitely, And it's funny that you brought up the Drake situation because that's what I was immediately thinking back to Drake and Kendrick Mr. We're having this back and forth that Drake used Tupac's voice as a synthetic voice through AI. What can you do about this? What is the resolve here?

I mean, unfortunately, you can't peremptorily stop somebody. I mean, yes, you can have a contract that tells someone you can't use my voice, or you can't use this estate's you know, property. However, we really need to explain to people what they can and cannot do legally, because the law allows you to protect yourself contractually and then you know, post problem through demand letters and litigation. But that can be very expensive. Perhaps, you know, Drake can afford that, but maybe new artists cannot.

I mean, unfortunately, you can't peremptorily stop somebody. I mean, yes, you can have a contract that tells someone you can't use my voice, or you can't use this estate's you know, property. However, we really need to explain to people what they can and cannot do legally, because the law allows you to protect yourself contractually and then you know, post problem through demand letters and litigation. But that can be very expensive. Perhaps, you know, Drake can afford that, but maybe new artists cannot.

So what are you advising your clients?

So what are you advising your clients?

Like, if I'm a new artist and I'm signing a contract, I now have to have language in there that says you cannot take my any of my content, voice, my lyrics, anything.

Like, if I'm a new artist and I'm signing a contract, I now have to have language in there that says you cannot take my any of my content, voice, my lyrics, anything.

Yeah.

Yeah.

So we do work on a lot of releases for celebrities. Quasi celebrities, artists, you know, you name it, and the language is to be extremely broad. Right you're doing a show like I'm doing this show, and you have unfettered riots to use a snippet of this program, the entire program, etc. So now we're adding that if AI is being utilized, first of all, we want to see information relative to how it's being utilized. Are you using it to enhance in case I sound a little scratchy or I have a lot of ums, or are you going to use my voice and put me on some other show I don't know about. So we're tightening the language a little bit and asking beforehand for the company's policy with respect to AI. And if you're dealing with a large company, you know, like Bloomberg, that's relatively easy. However, it's impossible to peremptorily stop individuals who are just really great at using technology, who may be somewhat anonymous.

So we do work on a lot of releases for celebrities. Quasi celebrities, artists, you know, you name it, and the language is to be extremely broad. Right you're doing a show like I'm doing this show, and you have unfettered riots to use a snippet of this program, the entire program, etc. So now we're adding that if AI is being utilized, first of all, we want to see information relative to how it's being utilized. Are you using it to enhance in case I sound a little scratchy or I have a lot of ums, or are you going to use my voice and put me on some other show I don't know about. So we're tightening the language a little bit and asking beforehand for the company's policy with respect to AI. And if you're dealing with a large company, you know, like Bloomberg, that's relatively easy. However, it's impossible to peremptorily stop individuals who are just really great at using technology, who may be somewhat anonymous.