Transcripts For BLOOMBERG Bloomberg 20240704

For equities you got stocks trading heavy bank of america says Fund Managers are overweight. Tech the most since 2021. Is there even cash left to buy any dip here from new york, im alex deal with my cohost in london, guy johnson. Welcome to bloomberg markets. Not as intense as it was a few hours ago, but were definitely seeing a strong up risk off kind of move within the market. Diy and holding up those are two things you never want to hear in the same sentence because it really does. To be honest, im just talking about from personal experience. The consumer thing i think is fascinating. Look at what is happening. You got strong wage data out of the uk, youve got marks and spencer, a stalwart of the british high street, coming out and announcing really strong results on your side of the pond. Home depot back to the to the diy thing. The numbers look good. Yeah. Structurally, i think theres a long term positive story, but what but a couple of things. I mean, one, gasoline prices are quite high. I mean, were definitely over four in some areas at the northeast here. So thats going to kind of eat into sentiment as well. And also, you get student loan repayments are going to kick back up. Yes. The Biden Administration is trying to fix that or get ahead of it and provide more relief. But if that kicks up, thats going to dent spending, too. Its like you can always make the bull bear side. Ive been hearing about why the consumer is going to be slowing down for a very long time now. Its not happening. Okay. Thats not true. Actually, the consumer is slowing down. If you widen the lens, the consumer is definitely slowing down. My point is that i think the consumer is going kicking and screaming. Theres still savings. Theres still a desire to spend. Theres still all kinds of reasons why the consumer wants to spend. The services story kind of speaks to that. There is a slowdown, but its its a slow slowdown. And as i say, i think the consumer the muscle memory is just to spend. And that continues to be the story. So our question of the day is a fairly straightforward one. Alex, isnt, but is the consumer fighting the fed and by extension, other Central Banks . Im going to fold the bank of england in here because its definitely got a wage problem. Lets figure this one out. Joining us on the consumer side, simone foxman, joining us on the macro side, simon white. Simon, im going to start with you. I read your piece on the markets live blog. You got to widen the lens, havent you . The consumer long term is definitely slowing down, but the rate of change rates have gone from 0 to 5. Weve weve seen a huge tightening of conditions, yet the consumer is only slowing down gradually. Is the consumer fighting the fed . I mean, as you say, its muscle memory. I mean, they are they are not going to suddenly unless they absolutely have to change their spending habits. I mean, its what people do. Its second nature. Yep. Unless theyve got a really strong reason not to. So whats clear, obviously, i think that a lot of people got this wrong. I got this wrong that you, you didnt really appreciate the extent of the excess savings, not just in the us, but in the uk and europe. And i think a lot of that stuff maybe isnt even in the official statistic. I mean, there was a rumor in the uk that 50 billion was fraudulent money. So youve got other money that might be circulating through that came from governments fraudulently thats circulating through the system. So theres obviously stuff thats really keeping things support sorted. But youre correct, the trend is definitely down. Its just not as sharply as you might have otherwise would have expected. Oh yeah, we definitely saw that here in the us too, with all the stimulus checks as well. Simone, youve been digging through home depot, the stock reacting positively. What do we wind up learning about the consumer like . Is the consumer really pushing back on the fed . Theres a lot of mixed mixed messages here because on one hand, while, yes, diy did hold up a little bit better than than home depot maybe was thinking if theres still weakness there, theres still weakness on the pro side. So there is an overall decline and thats why we saw comp sales down on 2 . Admittedly, they werent as bad as the 4 numbers that we were looking for, but i think, you know, when you step back and you analyze a lot of the context that weve gotten from executives in Corporate America recently, there are two different kinds of consumers. Theres the high end consumer thats traveling to europe, thats making plans to travel to asia that has built up a lot of equity in their homes. They are going strong. And then theres a lower end consumer, maybe a middle income consumer as well. That suddenly going to have to start paying back their Student Loans. Theyre already limiting how much theyre buying, whether at fast food or elsewhere. And theyre really starting to see the pain, which then leads me, guy, to sort of unions and how weve seen a lot of Union Agreements over in the uk here. Were looking at the writers strike. Theyre going to meet again with hollywood. Weve had trucker strike like theres yes, but weve seen that pay increase also. And if that kind of pay outpaces inflation, why wouldnt you keep spending . Well, thats the story in the uk, isnt it . Believe you me, we know about strikes. We know about unions, we know about that narrative. It is developing here and continues to develop here. Were seeing some extraordinary pay offers being dished out. And simon, this is this is the difference. Theres i was talking to John Beauvais about this a little bit earlier on today from blackrock. He was saying basically what we are going through is now what were now seeing is a demographic shift kicking in as well. There is a shortage of workers that gives labor more power. That means that were going to see wage bargaining actually having an effect for the first time in years and years and years. And that is going to continue to support the consumer. Yeah, i think thats obviously thats a medium term to longer term trend. I could certainly buy id say in a slightly shorter basis, id say certainly looking at the us, if you look at real wages, theyre actually not that much different from what they were in 2016, 2015, and theyre not that much above their long term average. Leading indicators also expect wages to start rolling over now. So to get any of these effects really feeding through, we need to see this continuation in wage growth because whats going to happen, of course. But momentum is there, isnt it . Well, the momentum is there from youre right, from unionization. But obviously you have to look at the you can have a number of different stories that weve heard about. But collectively, obviously, you have to see it in the aggregate data to know if its got momentum, if it is going to push forward, and it would need to continue doing that so that you get that continued wage growth. But lets say on the other hand, you still remember youve got, you know, costs such as mortgage costs are very high. You have Consumer Credit has been tightening. These things are very negative for consumption. So the wages thing will have to be counterbalanced with whats happening there as well. Just to update you guys, s p taking another leg lower now, up by almost 9 10 of 1 . Volume is light, but you have yields hitting session lows. Definitely evolving as a straight up risk off safety kind of session step with the dollar, though, the dollar is trading a little bit mixed. Simone, you cover the retail guys. We get target this week. We get walmart. What are we going to learn about the consumer through that, whether its a trade down kind of consumer or looking at the lower end. So target should be really interesting expectations are pretty low there. This tends to geared towards a little bit higher income of a consumer. Also, that middle income space. So if they really underperform, i think the expectation here first, First Sales Decline in four years. So if we get some outperform guidance, that would signal a much stronger consumer. But some of this might be idiosyncratic, like walmarts been a really interesting play too, because they have such a large food and grocery business that has allowed them to kind of hold up even for consumers that are pulling back elsewhere. So they get a really broad, sweeping view of the consumer there. The issues going to be margins. Again, food is a low margin. Business, electronics, things like that are much higher. Simon final point to you, alex, just brought up whats happening in the markets. Im trying to im trying to sort of rationalize what im seeing in front of im going to start with stocks. Is the stock market today signaling and its the middle of august, is the stock market signaling today that basically the fed is going to have to do more . Is the stock market today signaling that the fed is going to have to stay higher for longer . Is that the real message from retail sales is actually its not the consumer facing the fed. Its the fed having to fight the consumer. And maybe its got to fight a little harder. Yeah, i mean, at the margin, i think that that will have something i mean, you mentioned august. Weve got very light volumes at this time of year. But yeah, if you want to sort of create a potential narrative that maybe the fed will have to im not sure thats the way things will ultimately end up happening. But certainly the way things are today, if people are looking at these retail Sales Numbers on their monthly basis, as i pointed out earlier, i think if you look at a trend basis, they are still very negative. So it depends in a lot of things. But right now i think thats a credible narrative. Right . The markets looking at higher for longer again. Yeah, fair point. Fun combo. Guys, thanks a lot. Really appreciate it. Simon foxman, simon white, thank you both very much. So were going to put our question of the day. Is the consumer fighting the fed, katrina, dudley franklin, mutual advisers, investment strategist and portfolio manager, joins us now. Hey, guy, before we go, though, Hawaiian Electric industries would just cut to junk by s p shares, extending decline. Now theyre now down about 20 bucks. This comes after a billion like a massive amount was wiped out of its market cap yesterday on those wildfires in maui. Its the biggest provider of power and Utility Company in hawaii. Guy. Absolutely. And you look at what happened there. Well continue to follow this story both in terms of the death toll and the impact its going to have. How is how is how are they going to redevelop . Maui, i think is a critical question as well, that now needs to be thought about. This is bloomberg. This is a keepsake frame. This is actually a photo from my wedding. Im adam weiss, founder and ceo of keepsake, the mobile app that makes it easy to have your photos printed, framed and shipped to your doorstep. You just choose a photo that you love. You can preview it in over 100 frames and in a couple of days youre going to receive your photo in a beautiful handmade frame. So if youve got a special photo on your phone, install the free keepsake app. We would love a chance it for you. Manga baby, calm down. Calm down. Yo, your body, your beauty. Look down. Oh, look down at me. No, no, no, no. Wo wo wo wo wo wo wo wo wo wo wo wo. If you gon give me your low, low, low, low, low, low, low, low, low betas, rhythm and blues, caribbean sale now on visit beaches. Com wealth changing question on has your advisor created a portfolio based only on your age and risk tolerance . Thats simply not good enough. Your money deserves better and so do you. That Creative Planning our private Wealth Managers learn about you first and then they create a customized plan and portfolio by partnering with our inhouse money managers, accountants and attorneys. Dont settle for a standard portfolio. Book your free meeting today at Creative Planning. Com. Create a planning a richer way to wealth. The us consumer still remains extremely resilient. The consumer is strong. Very, very resilient. Resilient. Consumer sentiment is high. Brazilian consumer with their spending, youre going to begin to see the impact on the consumer demand cools just a bit. The consumer starting to show some cracks. Savers is starting to be exhausted. Savings are being worked down. Consumers are accelerating their borrowing. There will be some headwinds, Student Loans, the consumer is going to come under increasing pressure. Inflation, food prices, oil prices. There are a bunch of debts coming due rates start to materially weigh on consumer activity. Its how consumers behave, not what they say. So those are some of the guests that weve been speaking with on bloomberg about the us consumer, which i feel like weve been hearing and talking about for a very long time. So brings us to the question of the day. Is the consumer is fighting the fed, fighting the boe, fighting Central Banks. Joining us now, Katrina Dudley franklin, mutual advisers, investment strategist and portfolio manager, is the consumer fighting the fed. Katrina, i dont think we can think about it in terms of the consumer fighting the fed. The consumer plays two roles here. The first is the consumer is the employee. And you look at those employment numbers, they are persistently, you know, were keeping low unemployment. And thats on one side of the coin. And the fed is watching that. And youve seen comments that we maybe need to have some policies to loosen up the labor market and then on the other side, youre right, the consumer is the driver because so much of our spending, you know, 70 is consumer driven here in the economy. So, yes, the the consumer will be the driver of the fed, but thats because theyre playing those dual roles. So what does that mean for investor for for an investor think that you need to take a step back and have a look at what were seeing in terms of the commentary. Most of the ceos that we were listening to on the Second Quarter Earnings Call were seeing really strong signs. I think 70 of s p reporting companies actually beat estimates. So the quarter was strong, but they kept talking about this recession and its a recession that we keep talking about. We keep pushing off and we keep pushing off and we keep pushing off. So my question is, do we really need to have this recession or actually, can we just have a mild downturn and keep going . Yeah. And actually, guy that really dovetails nicely to the bank of america fund manager survey report where the majority of people now dont see a recession coming like theyre able to articulate a soft landing, which is why youve seen a lot of money go that cash pile has been drawn down. Yeah, moneys going into stocks. Moneys going into tech. Yes. Yes. But listen to the back end of that string we just had and Student Loans are kicking in. Gas prices are going higher. Mortgage costs are starting to have an impact as as people cant put off moving and they have to move and they have to accept higher rates. The headwinds are growing and katrina, what do you do with those headwinds . Can you just ignore them . You dont think theyre powerful enough . Weve gone from 0 to 5 on rates. The feds now talking about keeping rates sort of higher for longer. Arent there a series of quite significant headwinds that are gathering, gathering kind of into one that could knock this economy off course . Look, im the daughter of a homebuilder, so i know the homebuilding market well. And you talk about the rising mortgage costs because people are forced to move. Why are they moving . Theyre moving for a job and theyre usually moving for a job thats paying more money. And that means that they can afford the higher Mortgage Rates or if even if theyre just moving for a job at the same wage, the way to adjust for higher mortgage costs is to buy a house that is lower in value. So maybe you need to go a little further out. But we just think that, yes, on a like for like basis, those costs are higher, but we think that the consumer will be able to adjust to them. And im probably more in the camp that, you know, consumer are moving homes because theyre getting higher wages and better jobs somewhere else and that will more than cover the higher mortgage bill. So katrina pair that with what were seeing in the market then because the Market Reaction is a bit confusing to me, i would have thought with that setup, we would see some buy some selling in the front end of the curve. Yeah, youd see equities down because yields were higher and you see the dollar move a little higher. What do you make then of the market today . The market is really kind of balancing at the moment because they see a slowdown. I dont think that theyre talking about theyre seeing a recession. Theyre seeing a slowdown. And thats thats resulting in that tapering of the market and the tapering of expectations. But lets move over to the tech stocks, because thats really the 100 pound gorilla here thats been driving the s p in particular. And i think that the narrative for tech stocks was very 12 months ago. And if you look at it today, people are just seeing the opportunities that are created and that opportunity set is this confluence of both the new technology taking hold as well as the fact that we still havent solved this labor crisis and so technology and capital are the two things that are going to step in and help us because technology and capital will drive productivity, which means we can, as an economy, produce more with less labor. Thats a very long term story. Thats a structural story that you can invest in over the long term. It feels like youve got to be very nimble in the short term, though, to deal with a market thats really choppy. Katrina, ive been doing this a long time. I cant remember this level of uncertainty. Nobody, to be honest, really has a good idea of where were going. Sometimes you can see kind of momentum. Taking us in a certain direction doesnt feel like that right now. Whats your degree of certainty . How do you feel about at least tactically, the short term . I think tactically in the short term, were a little cautious as well. We do see some of those pressures on the valuation side. But the good news is, is that companies can grow into those valuations, which is that balance that we have long term versus short term. And we just keep coming back and looking at the narrative and just looking at the positives that are really weighing in here, which is the fully employed, the full employment number, which is a positive. The Housing Market has continued to be positive, real wages continue to be positive. And you know, the job numbers and the job losses continue to be under that number that were watching, which is, you know, 320, if you had three months of over three over 20, id start to get worried. But i just dont think youve got any signs here that were going into a recession. We may be going into a slowdown. And how do you play that . I think that you just need to take a look at the stocks model them out. I know you dont like the word long term, but model them out on a long term basis and see what the compound return is. And if it makes sense. Today you buy it. Its true. Guy doesnt like long term. Its always, you know, that moment. Im kidding. So to that point, though, i wonder, sir, how much cash is out there on the sidelines to do stuff in that weve seen a lot of money go into bonds right. Because you are getting higher yields now. You already are pretty much pare out any sort of underweight in the equity market. Tech is overbought. This is the fund manager survey that im talking about. Is there the will slash money to go in and buy the dip again, i think that theres a lot of cash sitting on the sidelines. And one of the areas that were seeing it is some of the alternative spaces where youve had, you know, some of you know, some of the longer term pension money theyve really full on that allocation. They continue to have inflows that need to be invested. So incrementally, i think that were positive in terms of flows into the equity markets. Yes, bonds still have yield, but in a rising tide in terms of a market which is going to have positive Economic Growth and also a market where you have inflation, i think that equities offer you some of the best protection out there. Katrina, this time next year, will the fed have cut rates in the kind of slowdown that youre talking about . Does the fed need to cut rates . I think if the fed does cut rates, itll be a very small adjustment. But the one thing that the fed has continued to emphasize to us is this data dependency. And thats really new language thats come out in the last couple of years. So i think that trying to predict what the data is going to say in 12 months time is difficult. As youve heard, were positive, which would lean towards the fact that we wont need that rate cut. But if were not quite if its not quite as good, and maybe that inflation number while its coming down, we start to see a pick up in unemployment numbers. The fed may need to cut just a little, but i want to emphasize a small cut. Were not looking for some of the, you know, the reversal of the rate hikes that weve seen over the last 12 months. Katrina, great stuff. Thank you very much. I dont mind the long term. I cant remember last week. The long term. Im okay with tomorrow morning. Tomorrow confuses me. Great stuff. Its true. Honestly, last week you asked me what we did. A lot of katrina. Dudley franklin mutual advisors, thank you very much indeed. Too much noise. Theres way too much noise around at the moment. Okay. Talking of noise, Hollywood Studios making a new offer to striking screenwriters deal. So the Writers Guild seeking assurances about i i it hopes will not replace them. Were going to have details. Were going to take you to San Francisco next. This is bloomberg. Fabulous surroundings. But everyones looking at their phones for Financial Insights from merrill. Is he hailing a ride to the concert hall . No. Hes making sure his portfolio and retirement plans work in harmony. They want to adopt a child and build a new home. So theyre talking numbers with their merrill adviser. Shes not researching her next role. Shes learning how to handle market ups and downs without the drama personalized advice so impressive, your money never stops working for you. With merrill, a bank of america company, what would you like the power to do instead of merely making money . Why not consider building money . Belpointe is the first publicly traded Opportunity Zone fund. Our unique fund targets tax advantaged Real Estate Investments designed to defer and eliminate your tax liability. Download the white paper at. Belpointe blue. Com belpointe building money o booking. Com. Im going to somewhere anywhere a beach house. A tree house. Honestly, i dont care to find the perfect Vacation Rental for you. Booking. Com booking. Com. Oh yeah. On 100,000 margin loan Interactive Brokers charges just 6. 83 . Do you know how much your broker charges fidelity and schwab charge over one and a half times as much. Etrade and Td Ameritrade are even higher. Move your account to Interactive Brokers and save at least 5,200 or much more. If youre trading big bucks. If you have employees, you need to check out the program, chef. Wonderful. Why . Mr. Wonderful . Because its cash flow that you dont have to pay back. Good to know. This guy is so smart and so some. To go to wunder trust. Com to see if youre eligible. It is 7 23 on the west coast. We want to get to the start up the top tech stories from the bay area and beyond where Silicon Valley starts. Its really beautiful morning. Joining us now, Bloomberg Technology cohost ed ludlow and okay San Francisco. But lets go a little bit to l. A. We have the writers strike. We have the Writers Union coming together with the studios for maybe a little bit of movement here. So according to sources, there was a meeting on august the 11th and a new offer has gone in from the alliance of Motion Picture and television producers, which represents the studios to the writers only. And what theyre basically saying is, well meet you halfway on pay, 5 salary hike for year one and a three year contract. The writers wanted 6 , a much improved offer around residual payments, which is when you write a show and it then ends up on a platform for which it was not originally destined. And you would have seen a lot of coverage in the press about how thats a real complaint for writers as they have shows that have aired hours and hours and hours, hundreds or thousands of hours on other platforms years after they were made. They never saw any money for it. So this is what were hearing from sources. The offer has gone in key, though, to the agreement to credit writers, human beings and not use artificial intelligence. Where does this leave the thespians, the actors . Do they have a similar deal coming down the pike . I knew you were going to ask that and we dont know the answer. I mean, what we do know, its okay. I mean, what we do know is that the combination of the writers and actors strike has impacted so many film and scripted tv series that are basically ground to a halt. Theyre not in production. I pulled up a list because i knew that you were going to ask me this. The rings of power, the follow up to amazons lord of the rings tv format is currently impacted. House of dragon hbo. I dont know on the actors side, what we do know from sources is two key names are now getting involved. Ted sarandos of netflix, bob iger of disney, and that on the writers side seems to have moved things along. You know, those are those are two shows that alex are not is not going to be happy about. Its going to point that out. I did that for her. Shes a big dungeons and dragons fan. I thought shed be like, oh, i didnt see house of dragons because i got just i just couldnt keep up with like all the different characters. It just kept dying and being put in. But of course i saw rings of power mean avi. But you know, anyway, it wasnt that great. But well see. Like, im never going to watch it. We have like 10s, but im wondering, like, who succumbed first . Was it the producer . Was it like bob iger . Thats like, lets get this done. Sarandos Ted Sarandos Netflix coceo. Sources say he was the driving force. Iger has joined more recently. The meeting was august 11th. We have no idea if theyll accept this latest offer, at least we know the offer has gone in. Okay, well, im glad our writers arent on strike. Great stuff, editor. Thank you very much indeed. Nice to see you. Otherwise, its just alex. Me and occasionally editor ludlum. Anyway, itll be back very soon. Were going to talk about european gas next as well. Theres a pivot. To avalara we can calculate sales tax automatically. Avalara. What if tax rates change . Filing sales tax returns, business license guidance, crossborder sales item classification . Does it connect with. What youre hearing . If you start having a little trouble, youre concerned that its going to cost you money. To this day only paid what i had to pay for the device. I go back every thing is covered. Theres so much youre missing by not having hearing aids. Well find you a hearing aid that fits your lifestyle and budget. At one of our over 1500 locations. Call miracle ear at one 800 miracle and schedule your to for imprint. Com for imprint for certain false or misleading search results can negatively impact your life. A bad online reputation can put you at significant risk of losing Job Opportunities or new customers. Reputation defender helps clean up your search results by wiping away negative First Impressions and allowing truthful positive content to rise to the top. Dont you deserve to have more control over how youre represented online . Get your free reputation report card reputationdefender. Com or call 187786685 55. Its an amazing thing when you show generosity of spirit to someone and you want people to be saved and to have a better life, then you dont stop. The idea that we have saved 5 million peoples lives. Its overwhelming. Its everything. Were about an hour into us trading session. Yes, volume is light, but a real risk off day developing here. The s p is almost down by about 1 . Abbys tracking the moves for us, abigail. Yeah, for sure. We definitely have a sell off on our hands. Alex that s p 500, as you were just mentioning, down 9 10 of 1 . And there may not be volume, but there is breadth to the sell off. Apple is the top point. Decliner for the s p 500 dragging the most, down 9 10 of 1 . But exxonmobil, Jp Morgan Chase right behind. So its rare to see all these different sectors participating. And on the month right now, the s p 500 down about 3 . This, of course, has the vix higher. That is the worst monthly performance of the year, the worst decline on the year. The vix, as you can see over the last few weeks, starting to trend higher, not quite at that 17 handle. It had been. In fact, right now the vix feels a little bit orderly relative to the degree of selling. But lets wait as the day goes on. And as for the s p 500 itself, well, from a technical standpoint, last week or a couple of weeks ago, at least, we were tracking a bearish divergence was which was that rally out of july on a falling rsi. You can now see that it is below that uptrend and and perhaps declining guy right to the bottom of that trend channel there suggesting more declines more pain could be ahead for stock longs. All right. Ill take it from there. Abigail, thanks a lot. Really appreciate it. We are seeing commodities get hit very hard as well. Oil off over 2 , one commodity thats able to kind of eke out a gain here. Our european natural gas prices, theyre up about 3 . You do have disruptions out of australian lng areas. You also have some black sea shipments continuing despite the fact that theres been some issues with vessels. There. Natalia konjevic is joining us to track the moves. Natalia hi alex. I would like to start with grains and wheat futures. So we know that russia exited from the grain deal. The reason why it is so important that if we look at this full screen, we see that grain corridor was accounted for, the majority of grain flows coming from ukraine. So before it, before the end of this deal, flows went through three main terminals. Pivdennyi, odessa and chornomorsk right now is just one port. Its basically a nonofficial corridor through danube and flows goes to flows, go to romania and some other destined regions. So but also one of the main reasons why wheat futures are moving lower is because we just have really good harvests around the world and lets talk about gas now. We do see this spike in european gas futures. And one of the main reasons, of course, is because there is a risk of supply disruptions coming from australia if we do see this strike of lng workers. But what we should keep an eye on is how europe will be dealing with gas storage and gas distribution this winter. So gas storage is really above well, seasonal levels right now in europe. And what some european and Global Traders are doing now, they are trying to use ukrainian gas storage as an opportunity. So this chart shows this picture really well. So we see that flows go from countries like poland, slovakia and moldova and hungary right now. So we do know that also ukraine offered traders at least 10,000,000,000m of underground facilities. And the reason why also it is so important is that we no longer have flows coming from russia through nord stream two. So basically this chart shows it really well. So now the main flows go through a ukrainian soldier terminal and also through turkey. Natalia, great stuff. Thank you very much indeed. Lets carry on the conversation to figure out particularly on that gas story, what is happening. Gerben galchenko, ukraines Energy Minister joins us now. He joins us from seattle. Hes at the net zero initiative, the ministers meeting that is taking place there. Minister, thank you very much indeed for your time. Over the last few days, we have seen a lot of volatility in european gas prices. Theres serious concern about what is happening in australia, but theres a growing expectation that maybe this volatility could continue into winter. Minister, how much storage is currently being used by europe governments, by European Energy traders . How much of the storage that you have is currently being used by these governments and Energy Storage and Energy Traders . Can you give us a number at the moment . What should we be seeing . Hello. Yeah, in fact that is very important point that the possibility to store gas in ukraine. So we have the biggest shortages in europe. That is more than 30 bcm of storages here in ukraine and what we see that the trend of of the previous months is that the European Companies Start Storing gas in ukraine, even despite the war. So and that is a good a good sign for us and that is a good sign for for europe also. So today we could say that already something around. 600 million of gas stored in ukraine, which is gas of European Companies, and that is also important for the security of supply in europe due to the the level of storages in european in in europe now because it is very high. So i think that that is a good solution for for the business and that is a good solution for european security. Do you expect more coming, minister, from europe . We expect more coming. So so i can tell you that we expect average something around from fifth 500 to 600 per month. So and we could offer we could offer so our storage is we need 15 bcm for ukraine for the next season. And so 15 bcm is open for storing in ukraine. Can we talk about what you expect to happen this this winter minister, both in terms of the situation in ukraine and what you think the Energy Situation is likely to look like in europe . I think that thats very important. I mean, when we are talking about the gas, this is very important instruments, which already started in european union, that is the joint purchasing platform, which would allow not to speculate the prices and manipulate the prices. And i think that that is very important decision concerning the Ukrainian Energy system. Of course, we we are preparing for the another hard winter. So and just recall you that the previous winter we were living under everyday massive attacks on the Energy Infrastructure from russia. So it started from the 10th of october and the last massive attacks. One was on the 9th of march. So and it was every every day by all kinds of weapons. So now we are preparing for the next winter and we are not expecting that they wouldnt shell our Energy System. Um, what alternatives do you have, though, if some of your power lines are seriously damaged, do you have to import other energy from for your own use . So that is a very important option for us. So and i can tell you that that the options which we use the previous winter, so that is the possibility to import electricity from european union. So we we were connected to the european grid 21 day after the beginning of the full scale invasion. And now we have this this possibility to import electricity from europe. In terms of what youve been able to manage this summer, to what extent have you been able to build up reserves of of key equipment, transformers, etcetera, that will help you deal with the situation as it progresses . This winter . Thats what we are working on right now and we were working before. Thats very important point because we we we need this reserve, not only equipment to to repair and to substitute the the destruction of the system. We also need to increase the reserves. And here i can mention that we have in constant assistance and from from our partners, and that is supply of all kinds of equipment in kind. And that is also the donation of the money to Energy Support fund of ukraine, which allowed us to buy the necessary equipment. Minister, could you tell me what conversations you have also with the us on energy . Obviously when there are issues in the black sea, particularly when it comes to oil vessels, you see a price spike and the us doesnt really have a lot of options when it comes to deflating an oil price spike. Are there conversations that happen . Of course we are in constant consultation with the us with and with with all all our partners and i can tell you that of course, we are monitoring the situation very closely. And so we are preparing and we are discussing different solutions. Okay, lets just talk about whats happening with with your nuclear facilities. Zaporizhzhia minister, can you just update me on what the latest is . This is the big fear that we all continue to have that that something goes wrong. Zaporizhzhia or maybe one of the other facilities as well. What is the situation, as you understand it currently . I can tell you that the situation become worse and worse, and that is not only not only our opinion, that is what is confirmed by the experts on the grid and and so today, they they stop the the force reactor. They start to move first reactor to the cool regime. But because of the equipment problem and that is that is the first signal that there is a destruction of the equipment in zaporizhzhia npp. Thats what we we also message to and we discussed this in details because that is the biggest threat is that is still 60 units and the the equipment become worse and worse. And that is the issue of Nuclear Safety and security. So before we let you go, minister, lets just tie this all in together, because weve talked about storage, weve talked about power lines, and weve talked about the port and were talking about nuclear as well in terms of the infrastructure there, what do you need in terms of the infrastructure there to make sure things can run smoothly and store well throughout the next few months . Um, i can tell you that the best solution, what we would have from the point of view of the energy that is the air Defense Systems and thats what we need really more and more because that is the best way to protect our Energy Infrastructure and that we see how it works. So thats why i can tell you that we would be ready for the next winter from the point of view of infrastructure, from the point of view of resources. But very important is to protect our Energy System from the missiles attacks. All right, minister, thanks a lot. We really appreciate your time today. Thank you very much. Gherman galchenko, ukraines Energy Minister. Thank you. Just to update you, markets continuing to roll over here. The s p off by about 1 . You got the big guys, you got amazon, apple, microsoft. Sure, the big weights there. Were going to keep you updated on the markets. All right. Coming up now, were going to get the real read on the consumer side with the president of real, real to discuss retail resistance and more. This is bloomberg. These bills are crazy. She has no idea shes sitting on a gold mine. Well, she doesnt know that if she owns a Life Insurance policy of 100,000 or more, she can sell all or part of it to coventry for cash. Even a term policy, even a term policy. Even a term policy. She find out if youre sitting on a gold mine, call Coventry Direct today at 800 383 9200 or visit Coventry Direct. Com trust and will has taken the process of creating your will and made it easy like while youre lounging on the couch. Easy all documents are state specific. 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Now when us jobs numbers are released bloomberg brings you crucial data at terminal speed and instant expert analysis. Nobody covers jobs today like bloomberg. This is bloomberg markets. You are looking at live pictures of the principal room. Sam chibbar bit digital ceo will be joining bloomberg crypto at 1 p. M. Eastern, 6 p. M. In london. This is bloomberg. So retail sales coming in really strong. Also the previous month revised higher and that led guy and i to talk about the consumer and why its why its fighting the fed just so much is the consumer fighting the fed. It does feel like the consumer is going nowhere quietly into the night. So joining us now for her take is rati shahi levick, president and chief operating officer of the realreal, which is a luxury consignment store rati. I alex explained to guy about real real. So hes all in it now. So he gets it. Give us some insight into how real, real sales and consignment track like what the economy and the consumer is doing. Yeah, its super interesting. So, you know, we always say that the market sets the price. The real rail doesnt set the price. Weve sold almost 35 million items at this point in taking millions of items every year, everything from, you know, Birkins Hermes birkins to chanel handbags to also clothing ready to wear and accessories. So well price the item it, well take it in, well process it, authenticate it. Thats super important. We have gemologists and watchmakers on staff and and the market, you know, will pay what it will pay for these items in the resale space. Good morning its guy so alex really did have to do that. She walked me through it the whole consignment thing is a word that i had to figure out. But anyway, rati talk to me about is anything changing, though . Are you noticing any trends that are emerging . The consumer is if you take a look at the retail Sales Numbers, the consumer is clearly slowing down. How does that show up in what youre seeing . Yeah, so its interesting. I mean, over the years, you know, lets start back, we went public in 2019 and we did see covid hit shortly after that. And fortunately, we and we did see a little bit of a trade down effect happened post covid. And so i will say right now for us, you know, i can only answer for the real, real were seeing actually something really interesting happen where the market is now going back to precovid numbers as far as what what will consumer pay for something. So when i look at our conversion numbers, conversion is very healthy on the demand side. When look at average selling price like for like items are actually up. Our average order value is up 10 year over year. So although our consignors are being more mindful in what theyre buying, theyre actually spending more on those marquee items. Im talking handbags, fine jewelry, watches. So its really interesting. Yes. But otherwise, like clearly a birkin bag is going to be different than like framed jeans. Right. So im wondering, like how the regular products are you having a discount a lot to get the same kind of volume. We were not were not discounting as much as, you know, we did during covid. And i will say that the numbers actually are flat. Precovid. So when i go back to 2019 numbers, the numbers are flat as far as average selling price. Again, if anything, average selling price for like for like items are up year over year. So you know, us being a value play helps when these prices are, you know, already marked down 70, 80 from the from the the msrp, we call it the retail price. It you know we dont you already are factoring in the value there. Everybodys talking about i lets talk about it through your lens is the real real going to be an ai company. Yeah so you know we use ai and we always have in many different ways our value prop and our moat is around our authentication process. So thats really where we stay focused. And what i mean by that is most of our handbags in a year will be authenticated via machine learning. So, you know, we have a piece of hardware, were monitoring things on the pixel level. We have gemologists and watchmakers, we Patent Technology with the university of arizona to measure the on diamonds to get the read that is most accurate. You know, youll see it being used in our call center. Were really focused on on, you know, Luxury Service for the consignor as were a supply constrained company. And most things sell through on the demand side. So you kind of have to reverse the way youre thinking about things. So if we are, you know, going to invest on the tech side, were going to were going to invest on the consignor in the consignors and their experience with the real rail. Before we let you go, theres so much more to ask before we let you go in terms of your actual, say, Retail Store Presence and also when youre just your back channel, what is your hiring looking like . Are you having to pay up more for for people . Yeah, you know, i would say that it depends on the role. Some roles. Yes, it depends on where we are. Authentication centers in arizona, we have our Retail Locations and then we have our sales team. Id say during the great resignation, things were a bit harder, but id say again, we pretty much flat year on year as far as payroll goes. Right. Were gonna leave it there. Really nice to speak with you. Such a useful conversation to have at a time like this when were trying to figure out whats happening. Some real information from the real, real rotisserie laveck. Thank you very much indeed. The real, real president and chief operating officer, alex. Were certainly seeing pressure coming on this market right now. Its fascinating to see whats happening, just how this retail has been taken i think is really interesting. I think it probably tells you, a about summer and b about positioning anyway, hedge funds putting their faith in big tech and related stocks. Were going to be discussing the 13 fs, next. Wall street beat is coming up. This is bloomberg. The principal room brought to you by principal asset management. Specialized expertise is unique perspectives optimized results. Principal asset manager isnt actively invested. Learn more at principal amcom. Its not just designed to look good, its built to command attention. Its not just a comfortable interior. Its a quiet refuge. Theyre not just headlines. They light the way forward and the new fully electric audi q8 etron models. My told me wouldnt qualify for the tax refund so called innovation refunds. Theyre a team of independent tax attorneys will work with your cpa to determine if your company is eligible. Take the first step to see if your Small Business qualifies. 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Window into what the big guys are doing. Sonali basak is joining us. All right. Tell me what we got. Well, we have to talk about the Technology Story here first. As youve been saying, because we did see a big movement into technology, but it was largely weighted in things like amazon. And you have seen some famous traders, the tiger cubs in particular, have really trimmed their holdings. When you looked at what they did in the tech world. Take, for example, co two, that is Philippe Laffont fund. They had trimmed some of the Largest Holdings that includes nvidia, meta, tesla, netflix. Youve seen Stan Druckenmiller at duquesne and Soros Fund Management really exit exposure to alphabet, for example. So there wasnt a singular story in technology. I would also say for me, the larger story was not actually in technology, where you also saw some other interesting moves like rokos Fund Management by qkc. You also saw the use of etfs to do things to get exposure to bonds. Particularly, you think about Soros Fund Management upping on lqd and you think about the fact that gvc, which is an ishares treasury etf being actually the most bought security of all of them. Yeah, soros is a different case, but why are you paying two and 20 to invest in a manager that invests in etfs . That is certainly true and you have to think a little bit here about why theyre buying these etfs instead of single name stock picking, especially when youre seeing such massive sells in the market. Also think the big question here is after such a big run up in technology stocks, what does this mean for the equity market in particular moving forward . What about what other areas were sort of hot with hedge funds that were surprising or that Going Forward where the action really is . I want to pivot a little bit because in addition to that 13 f data that Goldman Sachs, its prime brokerage, put out, a survey of investors. Remember, Goldman Sachs was one of the largest prime brokerages in the world, and they have said that credit hedge funds, not equity, are in vogue. I mean, this is you could see this a little bit in the market here. But what they said is credit is the most sought after strategy. And that was after an uptick at the end of last year. Now, one thing that remained interesting to me about this was the dialog, particularly about distressed hedge funds. This idea that distressed hedge funds, the interest is exploratory with some debate over the likelihood and timing of the new distressed cycle continuing. So you see investors flirting with this idea of future credit bets and really just just flirting with that idea of distress and not completely dipping their toes in at greater scale yet what recession seems to be the narrative at the moment . Sonali, thank you very much indeed. Perfect. Sonali basak with the wall street beat. Lets talk about what is coming up. Lets talk about the fact that weve got the european close on the radar screen now. What we are seeing today is actually a little bit of selling. So remember, weve been camped around the 460 level. Were kind of trading a little off that now. 454, were down by 1. 1 , lets call it that. So a little bit of action certainly in the equity market, volumes are super light. So just remember that as well. Were also getting action at the front end of the curve. Unsurprisingly, after we saw such strong wage data. Today, the markets beginning to look again at the possibility of the bank of england being forced to go. Another 50. Was the bank of england a little too early maybe to call the idea that we could be seeing a pause in rates and then want to talk about this. We were just talking to this talking about this with the ukrainian Energy Minister. They are storing a lot of gas in ukraine right now for europe, but that gas continues to spike. The reason for that, we dont know whether theres going to be a strike in australia that could have a really big impact anyway, all of this to be discussed soon. Virginie meza novara, its going to be joining us from allianz. This is bloomberg. Can you automate sales tax with avalara . You dont have to worry about things like changing tax rates or filing returns. Avalara i, i, i. Roller coaster prices, supply chain glitches, political unease. They do their best to wreck my Business Plans with so many unknowns. How do i know im making the right decisions . Aon helps me stay on top of things. They have expert points of view on volatility from around the world, paired with local insight that helps me get back on solid ground. Better wow, you get to watch all your favorite stuff. Its to die for. And its all right here. Streaming was never this easy, you know. This is the way. You really went all out didnt you . Um, its called commitment. Could you turn down the volume . Here, you can try. Get way more into what your into when you stream on the xfinity 10g network. Center. It will stay our hub. Well just have a rebalancing onto the continent and actually the numbers of who has moved across arent that big. So its sort of in the 200 level. And if you think about 15,000 people that sort of not that material. And so i do think both will basically continue to grow and continue to be very relevant. What will change, though, and the big thing thats changing is actually the risk taking is whats going to move. And so weve historically had risk taking in the uk that risk taking and the assets that go with it, not the people alone, but the assets that go with it. Thats the next phase of what were now moving into and that will be a material change. Tuesday, the 15th of august. European stocks drop, volume rains remains very, very light. Were going to discuss why in just a moment. The consumer absolutely front and central, front and center. The cant answer the close. It starts right now. The countdown is on in europe. This is bloomberg markets. European close with guy johnson and alix steel. So ive been banging on for the last few days