This is Bloomberg business Week Inside from the reporters and editors who bring you America's most trusted business magazine, plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast. It is our first week of twenty twenty four and got to say it was a busy start to the new year for markets, with Federal Reserve meeting minutes being released. We also got the December jobs report. We also saw a risk off trade for much of the week on expectations at the Fed. Now we'll keep interest rates elevated for longer. We've heard this before, Tim.
Perhaps not surprising then, as dak as a result taking the worst of it and so a head on the program, we'll examine both the bull and the bear case for the index's largest holding, the Ultimate megacap Apple.
Indeed.
Also ahead a wide ranging interview with arkinvest Kathy Wood, and you'll hear from Carnival CEO Josh Weinstein on what the cruise line can do for an encore on the heels of eight strong quarterly earnings to cap off twenty twenty three.
Plus, our Bloomberg Pursuits team lays out the ultimate travel guide for the next twelve months, which spans destinations on six of the seven continents. Sorry no trips to Anthwerp.
This is a story there, everybody.
And the Caribbean as well.
I'm already putting a list together overhere. I want to go all of that to come. We begin with the very first Bloomberg Big Take of twenty twenty four, covers everything, well almost everything, that Wall Street expects in the year ahead. The range everything from the mother of all rallies to a sell off for the ages. Talk about a standard deviation tip.
For a look at the key takeaways from more than six hundred and fifty calls from the financial world, we welcome Bloomberg News Senior editor Sam Potter. And as a reminder, on our last trading day of twenty twenty three, our most read story on the Bloomberg terminal was about how Wall Street's Best and Brightest flopped once again in twenty twenty three. So our first question for Sam, what's the use in surveying Wall Street for what to expect in the new new year?
Yeah, they really put me in a buying with that story at the end of last year. First, I should just say these are the investment outlooks that the biggest banks, the biggest asset managers and advisors put out every year. They start publishing the mid November. Many of them run to one hundred pages or more, containing all the wisdom and the forecasts for the year ahead. I've been putting these, I've been sort of collating the main calls for these for the last five years or so, five.
Or six years.
I've got to say it's interesting this time round because the dispersion there is dispersion is ever, but actually there's a fair fairly common consensus among most of the reports, which is, and it's a pretty sort of benign, middle of the road kind of view that we're going to the rate hikes that we've seen this past year or two,
they're finally going to buy it. Economy are going to slow, and that will prompt a central bank pivot somewhere in midyear, which could pave the way for a bit of a recovery and modest kind of games for stocks and bonds are seen. So actually, most of the forecasts are sort of leaving around this fairly benign outlet.
Does that, and that doesn't typically happen in terms of kind of a middle of the road thinking. You know, Sam, since you've done this, you know, for us a few times here at Bloomberg, is it more typically some extremes kind of all over.
Yeah.
So the reason, yes, the reason that that twenty twenty three was stood out so much and that my colleagues did that story last week was this time last year, everyone was very gloomy. They expected recession, and not a mild recession. A lot of people were predicting that it was going to be a very tough year as those rate hikes really grounded to the economy, and as it happened,
the economy held up pretty well. You guys were just talking about that, and then an AI frenzy from nowhere stoked the stock market, and so everyone's forecasts were sort of torn up this time around. As I say, it's a very kind of I mean the words they use are like mild recession, a healthy slowdown, benign. It's the soft landing, right, it's the successful soft landing, which most of the calls say, not all of them, As we say, is there are still some outliers, but it's unusually kind
of conservative. I guess this year it is.
But there's also this section on risks that I wanted to highlight. Sam what were some of the risks or I guess what is the general theme that runs through the different the different banks when they talk about risk for this year.
Well, there's the big and very obvious one, which is the election year ahead, which has been talked about quite a lot. I think it works out that more than a country is equating to more than half of the global economy, will be electing their leaders in the year ahead or are expected to, led of course by the United States. And at this point that is just too too tough to call. All the reports can all these poor strategists can do is say, you know, prepare for volatility.
It's too early to say, we don't know what's going to happen. So the US election is really a big one. Inflation has it been vanquished? If it proved stickier than everyone expects, then that could be a bit of a surprise for the market. And also geopolitics. I think in the past three or four years it's been the unexpected
that has derailed all the Wall Street courts. So the war in Ukraine and now we have these rail gaza so there is well, there is consensus, there's a lot of nervousness, and we see generally risks back to the downside.
Yeah, I feel like the geopolitics one of the things. Last week it was so quiet. I mean every morning we'd come in and futures were like point zero three, Like it was like barely moved. We actually got unchanged
a couple of times. It was just so quiet. But we were concerned about geopolitics, certainly as we started to see problems in the Red Sea, and you know, some of the big container shippers or the big you know, trading companies that are so important to moving stuff around in terms of our global supply chain saying I'm not going to do it Marisk you know again, I think today or in the last twenty four hours saying we're not going to send our ships through there. There's just
too much risks. At this point, I do feel like it's kind of wild here, Sam, wild in a scary way. That we now have the Russia Ukraine warheaded for its third year, right, and then we now have the Middle East where it does feel like things are escalating, and that there's a lot of kind of hot points. People. Last week we're talking about one hundred, more than one hundred attacks like in the region, So maybe we are
already in a third world war. If you had to say, you know, the biggest risk that maybe faces investors this year is it geopolitics.
Well, funnily enough, geopolitics. I mentioned it after the election because that seems to be where it comes on the radar. Obviously, the US election in particular has a huge bearing on the geopolitics because the foreign policy of the respective candidates is likely to be quite different. Yeah, I think geopolitics, A lot of the view is that the Russia and Ukraine war is kind of a known element. Now, those energy shocks that we experienced in the early days of
the war and not happening so much anymore. There are some rumblings, you know, if the Middle East escalates, obviously that can impact the energy sector. But yeah, a lot of I guess I don't know whether the strategists are just getting weary or but a lot of people saying, you know, in the long run, the markets look through these things, they look past these things, so don't worry about it. Too much. Far more important is the election.
And actually one thing that we haven't mentioned this fiscal picture which is looming in the background in particularly in the US, because a lot of people are wondering if the US could keep spending the way it is and how that is going to feed into the election.
One thing I wanted to ask is AI was such a big momentum play, if you will, and actually turned out to be fundamentally because we did see some strong numbers from Nvidia. Is there something else that kind of juices the markets? AI did it last year, those new class of weight loss drugs. Is there something in terms of a sector or trend? And just got about forty seconds here.
AI still is where I would say to that. I mean, for the longest time, they all will talk ESG and green energy and things, but it never sort of catches firing the way AI did this year. So a lot of the outlooks are talking about the potential for AI to keep supercharging returns and it's going to play out they see as a theme that's going to run and
around over the next couple of years. So AI still, But yeah, that's these things by their nature come out of the blue, right So if we knew the if I'd seen the magic ticket in these outlooks, I would well, I wouldn't be telling you guys. But come on, Sam, yeah, I would tell you.
If I knew you would.
Quit, you would make it.
If Sam is an, Sam's not doing the outlook for twenty twenty five. We know he found the golden ticket. Okay, that's what we know.
That is so true. Didn't somebody win?
Was it in Michigan?
Yeah, but I'm talking like, you know, more important than the lottery is like knowing.
What the markets are exactly. Sam Potter, thank you so much. We know it is later out there in London, so we were so glad we could bring this story to everybody. Sam Potter, Bloomberg News Senior editor on zoom from London. This is Bloomberg.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern Listen on Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App, or watch us live on YouTube.
The twenty twenty four rating year began with volatility for bitcoin investors. Early this past week, we saw the cryptocurrency briefly touch forty five thousand dollars for the first time since April of twenty twenty two, before retreating this on bets that the SEC will soon approve in exchange traded fund investing directly in the biggest token.
Yes, indeed, we're watching the calendar now. One person who has long been confident in this development as Kathy Wood, the founder, CEO and CIO of our Investment Management. She joined me in our Bloomberg TV colleagues Katie Greifeld and Manas Crani on December twenty eighth for a wide ranging conversation starting with arcs move to sell off its remaining position in the gray scale Bitcoin trust based on the shrinking discount to its net asset value.
We're as optimistic about bitcoin as we ever have been, but there are a few regulatory and tax uncertainties, and we had been waiting for the discount between GBTC and and.
NAVE to narrow.
It was as high as fifty percent at one point last year when there was great uncertainty around all of the turmoil in crypto generally, and now it's a single digit and there are now other products out there that we can use to gain exposure to bitcoin in this moment, and it's just a moment of uncertainty between now we think and January January eighth to tenth, somewhere in that range perhaps, but we will, out of an abundance of caution, didn't want to take any risk.
And I mean, let's get a little bit specific here, because we're talking about the ARC Next Generation Internet ETF.
The ticker there is.
ARC W and I think we caught a lot of people's attentions is that you completely sold down your remaining stake of the Grayscale Bitcoin Trust instead on the same day you bought into the pro Shares Bitcoin Strategy ETF. Of course, that tracks bitcoin futures, it doesn't actually hold the physical bitcoin.
Can you explain that shuffle?
What was the thinking there?
Sure a couple of things.
First of all, Biddo the pro Shares is already approved. There's no regulatory uncertainty having to do with it. So we chose to maintain our exposure through Biddo for the time being. And as I mentioned before, there are some tax and regulatory uncertainties still as part of this process. We don't know exactly who's going to be approved, and.
Whether they've met.
All the criteria that the SEC has put before us. We know we have, but we don't know if others, including GBTC.
Have, We just don't know.
So again, out of an abundance of caution and gbt's discount again it was as much as fifty percent relative to NAV. So not only have we enjoyed this year the run in bitcoin itself, but we've had the nice closing of that discount.
So it's been you know, double good news for us.
When you've talked about January tenth, Kathy, I think in another report, is that possible, whether it's you or somebody else in terms of the first spot bitcoin ETF actually getting approval.
Well, we think the probabilities have gone up because the SEC has been highly engaged compared to what was happening before.
Before it was just denying.
Approval, denying approval, and we just kept putting our filing in again, you know, try, try, ugged and determined, and so here we are. We think we're first in line, and that's why there is this January tenth deadline. But we like the idea that the SEC has been so engaged and it's not just with us, it's others as well. We think a number of a number of funds could be approved.
At the same time.
And they've been asking not only one set of questions, but follow up questions, and again that's a very good sign.
Well, speaking of engagement, Oh go ahead, please, no, no, no, no.
The last few questions have been very technical and so more der riguer. And you know, you'd expect them to be asking these questions as we head toward an approval. Now it's not one hundred percent certain, and so we want to make that.
Clear as well.
This is the SEC and we never know, you know, what might happen along the way.
Regulators can be tricky, that's for sure. Hey, listen, you mentioned engagement. Let's talk about engagement with your funds overall and especially the ARC Innovation Fund up seventy two percent year to date, easily apt performing some of the major market benchmarks, still down sixty five percent from the high back in February of twenty twenty one. For you, though, a lot of critics. We bring up your name, we bring up ARC, and you have a lot of fans, and you have a lot of critics. There's a lot
of discussion. Does it although a little bit like a victory lap this year.
Well, you know, we are very happy that a couple of things have happened that this idea that interest rates were going to continue moving higher has been proven incorrect. And I think even the Fed, while there is that small possibility, even the Fed is now starting to talk about the other side of the interest rate move And so I do believe all we've seen so far is
a reaction to that macro phenomenon or judgment call. We went through our flagship strategy and all of our strategies went through a very difficult time from February twenty one through December of twenty two, as interest rates, first of all, were presumed to move up or forecasts move up, and then when they did move up, so it was almost like a double discounting.
And so we've seen the.
First installment of the UH the correction there to the upside for our funds with this notion, and it's again the forecast that interest rates will come down.
And you know, we would presume that if they do come.
Down for the reasons we think they're going to come down, the most important one being deflation, then our funds will be in good shape because we are very Our companies thrive on deflation. Technologically enabled innovation is deflationary.
So Kathy, a very good morning too.
It's Manus, the first time we've met on So we're going to move to a deflationary environment.
We'll come back to the big macrocoll in a moment.
Just let's square it away before I talk to you about the flows in the funds, which is how much interest rate cuts do you presume? Are you forecasting? Leave the forecast of everybody else's side? Well, what do you what do you presume will happen next year?
Well, we put up a chart in one of our in the Nose, which is a YouTube video that I do every every month Employment Friday. And in that chart you will find a ratio. It's the metals to gold ratio, so metals price to goal price, and there has been an extremely tight correlation between that ratio and long term interest rates. In October we published it or early November, and what you will see is that there was a
very wide gap that had developed. The metals to gold ratio was near its low for the past twelve to fifteen years, and interest rates were at their highs five percent. The correlation if you just eyeballed that chart. The correlation suggested that rate should go to two percent. Now, maybe they won't go all the way to two percent, but we think that long term interest rates are way above where they're going to end because of defaise.
Okay, well, let's we'll come back to that and see why that we get to the two percent level. I'm going to ask you about the flows into the funds, which is obviously you know, as Krol just said, you've got a bit of a victory lap going on at the moment.
But this is the first year of outflows. Have those outflows stopped?
You've had a great performance in the back part of this year. Have the outflows stopped and has that bleed stopped?
Yes, Well, we were very gratified at our asset retention in twenty one and twenty two. In fact, we had net inflows if you combine both years of more than eighteen billion dollars and this year one, what might expect that those who averaged down into the very steep declines that we were seeing in twenty two especially might take
some profits. So we have had I know, for our flagship strategy, it's roughly five hundred million dollars and outflows maybe for all of our strategies one point eight million, so maybe ten percent of the inflows that we enjoyed during twenty one and twenty two. So again, we're very gratified and grateful to our clients for the support that we continue to receive.
So has the outflow stopped?
We have had days of on balance very recently, yes, And I think.
Part of this is many people do.
Tax management towards the end of the year, and so some of the outflows might have been associated with clients who got in at a high cost base and we're just harvesting some tax losses.
But I think we're through that.
Do you find a little surprising, though, Kathy, considering the run up or do you I'm curious about the conversations you do have with investors considering the year that you're having and then to see those flows, it's got to be a little disheartening.
Yeah, oh no, no, no, no, not at all.
Actually, we put out a piece for Resolute, our distributor who, and we basically showed them if you rebalance our strategy when there have been big moves one way or the other, if you rebalance regularly or based on a rule like when the funds up fifteen percent relative to everything else,
takes some profits. And what it showed that study showed that if you are disciplined that way, that over any rolling five year period, it is highly likely almost one hundred percent, I'm not quite sure if it's quite that high, but that you will beat the market, meaning as measured by the Nasdaq or the SMP over a rolling five year period. And so a lot of our funds are with advisors who are very sophisticated and responded somewhat perhaps in this tax management part of the year to that message.
I feel like we can't talk. We have to talk about Tesla and Elon Muskin. I know you just had a conversation on Twitter X. This has been I think from day one, right in terms of you starting out that you've had this investment in Tesla, and I remember when we first talked and you were getting started, you talked about him being the next Thomas Edison and how his vehicles would turn the US economy upside down. Having said that, there's an evolution and the ev world has changed,
how are you thinking it's still a top holding? How are you thinking about the Tesla story right now.
Well, first of all, Carol, thank you very much for letting me interview that time.
That was nearly ten years ago. Arcus is about.
To celebrate this tenth year anniversary and you gave us that opportunity, so thank you. The world is evolving, actually, I think even more closely to what we expected, because we expected a lot of traditional auto manufacturers to see the riding on the wall and rush as quickly as they could into scaling big time into electric vehicles. And what has happened recently, both GM and Ford have said we're stepping back. We're not going to do this until
it's profitable. The problem with that is, in order to be profitable, they need to scale.
That's how this works. These are learning curves.
That they are riding down, and those are expressed in costaclines. So the fact that they're pulling back means there's more share for Tesla and others who choose to go for it.
And Kavi, I want to keep the conversation going on elon Musk, but I want to bring it to the arc Venture Fund. Of course, it's not an ETF. You invest in private companies etc. In there and you take a look at the portfolio. You have SpaceX in there, and you also have X formerly known as Twitter, And in July you had told the Wall Street Journal that you had written down your Twitter steak by forty seven percent.
Fill us in on the past couple of months. Have you written it down further or how has that changed?
No, I think it's still there. You know, we have to be very careful. This is an interval fund, it is a forty act fund, and we have to mark to market every day. The good news is our clients can get in and have access to these amazing companies for just five hundred dollars and they get quarterly liquidity.
So that's the good news.
The markdowns are simply you know, if we see in the secondary market employee stock trading at a steep discount, we have to take that into account.
If we see others in the.
More traditional asset management work worldlike Fidelity and others marking their holdings down, we need to take that into consideration during our daily mark to market. So it's an abundance of caution. We have a five year investment time horizon. Do we think that's where X belongs in terms of valuations?
Absolutely not.
Absolutely not a roughly twenty ish billion dollar valuation for what we believe truly will become the everything app think we chat. Pay Elon started his entrepreneurial career in the payments industry, and he's been thinking about this for a long time. He now has money transmitter licenses in more than half of all of the states, which we learned on Twitter spaces or on x spaces, i should say, the other.
Day when we had our interview with him. So that's exciting. He's going for it.
He's going for it. We'll see if that one lands.
But let's talk a little bit more about the private markets, because obviously the private credit market has gotten a lot of attention right now. You're looking at the private markets through this interval fund that you have when you think about the opportunities there on that five year horizon that you have, do you see more so in the public markets or.
In the private markets right now?
Well, now that we've had this very nice run this year, we think the answer to that question is in the private markets. They're close. They're close. What's fascinating to us is that the public markets have been leading the private markets for the past three years. As our funds were were falling. In twenty one, private evaluations were going to all time highs along with the Nasdaq. They were taking
their ques, I suppose from the Nasdaq. But real innovation, if you looked at our portfolios, was starting to revalue to the downside, and even more so in twenty twenty two. We are still seeing major down rounds taking place in the private markets. And I'm always surprised at this sort of thing because you would think that the private markets lead the public markets. That has not been the case in the last few years.
Hey, Kathy, I got to be honest with you. I think whenever we think about Elon Musk brilliant but also erratic. And I'm curious how you think about Elon the individuals versus Elon the companies he's creating the things he's doing, because I think if there is time, any other CEO of a major publicly held company would I think it's safe to say not be able to get away with
a lot of what he has done. So help us educate us how you make sense of it of someone you have followed, talked with for many years.
Well, first of all, very often we just look at what he does, not exactly what he's saying, which can often be a distraction, or it can be an advertisement for his cars or for X or for SpaceX and so forth. But we have a scoring system as we are evaluating companies and their founders and their management teams, and there are six metrics, and one of them is MOTE and barriers to entry.
And I think Elon is a.
Maestro of raising barriers to entry with innovation, which that is so much faster than anyone else. Why because he's so first principles physics driven in his analysis of how to approach a new idea, a big idea.
So tell me this then, Kathy.
I mean, if you look at the cohort of the CEOs that you back, Brian Armstrong, does he hit that bar?
Is he above Elon? Or is he at the money?
You've got Elon, You've got Brian, You've got Tony Wood at Rocco.
Does anybody come close to Elon?
Or is Brian Armstrong maybe even at the money with Elon or above.
We don't actually look at the world that way, one relative to the other in terms of management teams. We do look from our scoring system at the scores, which include MOTE, management, people and culture, execution of valuation that might surprise people, and product and service leadership.
And thesis risk.
Those are the six scores, and both well, all three of them score very highly. Which one scores the highest? They are actually very close to one another, to be honest, they're.
Very close to one another.
So I mean, obviously Coinbase is one of your key holdings. We've talked a little bit about that. The other feature that we want to talk about is AI. I'm curious to know in open ai the valuations have ranged between eighty billion to one hundred billion. Will you take a position in open ai? Is that going to be part of your holdings as you explore the next development of AI and your holdings.
Well, in our private portfolios, we are already exposed to andthropic, which has been a major beneficiary of the drama around open ai that we all witnessed a few months ago.
But if you look at GPT.
Four, which is the latest large language model that open ai has published, it is way above others in terms of performance. So there you have it, the pros and the cons. So we can't tell you what we're going to do in that portfolio, but we are so impressed at how open ai has led the industry. We're also impressed, however, at the open source models, and we'd like to encourage more of that movement. We know that Meta Platforms has with Lamaitu and it's working on others. Is moving very
quickly and making great strides. So for much lower cost open sources, free companies can get close.
At GPT four book close.
So we want to see the open source movement in the venture fund we also own.
Kathy, We've got a oh sorry, no, no, no, we never have enough time with you. Can I ask you a really quick question five seconds? Any ETFs coming our way from you guys next year?
Well, real quickly.
As you may know, we bought a company in London. Yeah, they have some very interesting funds.
Our thanks to Kathy Wood, the founder, CEO and CIO of our investment management joining me Katie Greifeld to Maniscrani on December twenty eighth.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Easter on Bloomberg Radio, the Bloomberg Business app and YouTube. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty.
Old bonds.
All right, everybody, Apple something the most. That's September shares down three point six percent after Barclay's cutting their ratings and price target on the stock. Alic's there bearish of an expectation of soft demand for the latest iPhone and a lack of new features in the next iteration of the iPhone, arguing that's just not going to prompt customers to go out and upgrade. I don't know I need a new phone. I need a new watch.
This just watch the.
Apple that definitely need a new watch. You have, like the first.
Appatch that takes a road show is calling?
Which phone do you have?
Twelve?
Twelve?
Okay, yeah, you should probably get a new phone.
Well, Dan Ives has the opposite take. He is not a bear, just a couple of weeks ago, coming out with a note that argued that Apple is going to be the first four trillion dollar market cap company and that will happen by the end of this year.
It's two point eight trillion dollars right now.
Yeah, so a little ways to go. He's got an app or form and a two hundred and fifty dollars a share twelve month price target on Apple. Dan by the Way, Managing director, senior equity research analyst atweb Bush Securities. He's joining us from New York City on the phone. Hey Dan, so good to have you here. My new year already feels better. What do you make of this call? At Barkley's I'm going to assume if you were in a debate, you'd be like, Nope, you got it wrong.
I mean, it's like groundhog Day the movie.
Look, we've seen this before, right, I mean every year, the fire and a crowded theater, you know, first few days of the year scars everyone. The reality is I mean, is someone that spends so much time in Asia? This iPhone fifteen upgrade cycle has actually been strong. I mean China has come through I think, actually much better than feared. It's about the install based that many just continue to underestimate. Youre talking about the best install based in the world. Services,
double digital growth. I think a year from now, we look, this is going to be a four trillion dollar market.
What do you make of the channel check weekly step Barkley's analysts are talking about. Are you not seeing channel check weakness.
I mean, look, I mean everyone has their opinion, but for the last year, people have talked about challenge check weakness, and it's essentially been a fictional Netflix story, you know, in terms of what's actually come through. I'm not saying it's Roses and Champagne. But when I look relative to street expectations and relative to the upgrades, I mean, tim, we have not seen any cuts at this point in the cycle out of our Asian supply chain checks and you.
Would have already seen that now. And I think.
That's Look, Apple's like Rocky Balboa every time it's over the growth at a trillion, trillion and a half two trillion, three trips, and I think that cycle it speaks to our view of we're in the beginning, in our opinion, of a new tech bowl market, and to be bearish on Apple going into the it's the exact opposite of what we would be doing.
Having said that, Dan, you know, up almost fifty percent last year, is there some expectation that some investors are going to be taking profits, that there could be a little bit of a pullback after such a run like that, I mean, do the fundamentals justify that almost fifty percent run up in twenty twenty three.
Yeah, and you look, and we've talked about it.
You're going to have pullbacks like we always do, and pullbacks are healthy. But if from a valuation, I mean our view, it's just some of the parts. And that's really what started to happen with tech, with the godfather of AI and video. We've seen it with Google, We've seen it with Microsoft. That's what's happened with Apple. I mean, when you look at the valuation today, this is Apple with zero valuation for AI, which is going to be
the next phase of the story. So our view is we'll have some ebbs and flows here, but this is one where fundamentally we continue to think it's one where it goes higher on multiple it goes higher in.
Numbers, does Apple Like I'm looking at revenues for twenty twenty three, Greater China was about almost seventy three billion, America's as a group one hundred and sixty two billion, So certainly the biggest market. Will there always be a Chinese market for Apple products? In your view?
I mean, and look, and I think in kind it's important because if you go back over the last seventy years. The bear story in Apple, if you go back you trillion ago, it's China, right, Eventually that's the big bad way. Eventually that's going to that market. Domestically, geopolitical, the reality right now twenty percent iPhones coming out of China and you have one hundred million iPhones and trying just end.
Up great opportunity to lose.
So that's something where the growth continues to actually expand in China for Apple, and I think you'll you'll continue to have this as kind of a debatable point, but this is something that's just going to continue to expand, not contract, relative to what the average Chinese consumer wants.
Well, it's interesting because we just talked about ASML and the Biden administration putting pressure on it to not sell some of its really key China semi manufacturing equipment to that country.
I do you think.
Politics geopolitics between the US and China ultimately find a way to get along or does that continue to though, like I just wonder, doesn't it eventually make it more complicated for a company like Apple. Although Apple very important to China in terms of the amount of workers it's got putting to work.
Yeah, I mean, I peak its second biggest employer in China, right and I think even look at Tesla today, China numbers strong. So I think when you look at the political you know, sort of tightrope that's happened right now because it's an AI arms race. So let's just call it a between US and China. And right now because in video because of Microsoft in the US is actually ahead, it's going to be a balancing act.
But our view is geopolitical is a background noise.
I mean, this is the biggest tech transformation we've seen in thirty years, and it's one you're always going to have these worries. The reality is it's a dysfunctional relationship that continues. They both need each other in terms of US and China, and that's and that will continue to go down this path. And actually the tensions, I'd say, if anything, has maybe been toned down a bit relative to what we've seen over the last three four months.
Hey, Dan, Ives want to get your take on another part of the Barclay's downgrade, which has to do with the iPhone sixteen. It's a little early for us to be talking about the iPhone sixteen. After all, these things are unveiled usually in September, but analyst at Barclay's argue that there are no features or upgrades that are likely to make the iPhone sixteen more compelling. What do you make of that?
Look, they're probably the same ones that said you wouldn't have a big ten team in the national Championship and now you have two.
So look, it's just look.
It's always going to be it's easy to take shots, right, But the reality you're talking about two billion iOS devices and you have one point three billion iPhones.
That upgrade opportunity alone.
Is going to be two hundred forty two and fifty million units. And you look at iPhone sixteen, it goes back to Apple. They played chess, others played checkers. That's my most valuable company in the world. But you will look, the heaters are going to heat, and you're going to come out, especially coming out in the new year, the fire and a crowd theater.
Call, I get it.
You know, we've seen it many times in our almost twenty five years cover in tech. But we view as a golden buying opportunity and not time to you know, to hit the you know, the elevator for the cell button.
So what brings what brings Apple to four trillion dollars? What is the next big thing from Apple? What's the one more thing? Is Steve Jobs used to say.
It's good and look and obviously you know one of the best thought leaders out there, German.
You know it talks about a bit, but it's AI. I mean you have the biggest install based in the world.
So that monetize we viewed it's going to be an AI app store, It's going to be ultimately something that gets rolled out over the next year, and this is going to be AI apps within the services flywheel.
But is that vision pro is that the conduit is that the device is that the platform?
Vision pro from a form factor is the early stages of where this is all had see see the quick take would be like vision Pro thirty five hundred, it's not going to change the mat that that's not really a focused vision pro because two years from now that it's gonna be a twelve.
Hundred dollar basically look like sunglasses. It's all about developers.
Now, developers are gonna build more and more apps. They're gonna be AI generate, ar VR, and that's going to further mind to the insalt based, but tim it just goes back to when AirPods, when they release AirPods, and everyone's like, if they sell more than five million in a year, that would be the most unbelievable, eighth wonder of the world.
I think I bought five million, less.
Sure they sold ninety eight million in a year. So I'm just saying, like Apple's want it goes back to the Rocky Boutboa just continues to think it's over.
Next thing.
You know, you're watching Rocky eight.
If though some of what Barklay's comes true and there are some issues, would you start to rethink a little bit differently or would you just say, maybe this is a little bit of a slower year than we thought.
I just view it as here and there even some conservatism. I view it as overall slight turbulence chop that's ultimately going to forty thousand feet with smooth out in terms of where this.
Is all headed.
So that that's sort of my view in terms of how this is going to go. I'm not saying it's not gonna be can hit some chop getting there, But that's the nature of Apple's That's how it always is, and that's why you're always going to have one where the skeptics try to say this is the year it's over, innovations done, and yet at the top of that mountain is cooking Cooper Tina.
So what about Musk and Tesla? A little bit of a transition, not a good one, sorry, another but you've got an outpor form. You've got a three hundred and fifty dollars I think a share price target on this one. Some news about them falling behind byd and coarly ev sales slowing. What's your thoughts on Tesla here?
I mean deliveries today was the flecks, the muscles, I mean beef, the street China. A lot of the price cut, that price wars actually subsided strong China numbers, cyber truck. You know, we look demand to supplies ten to one, you know, in terms of what we see out there. And I think this is actually the next phase of the Tesla growth story that's come in the next one two three years in terms of full self driving supercharger as well as they you know, ultimately they're diving into
deep end of the pool. Others are peeling back in Detroit. So for Tesla, it's another one where many continue to bet against Musk and Tesla.
That's been the wrong bet.
How do you feel, Dan about byd it's now ahead of Tesla when it comes to quarterly EV sales.
I mean, I'm a big fan of BID. What they've done I've seen a firsthand is amazing. It's a two horse race in terms of essent to what's happening here.
But this is not a zeros get and there's there's not just one play.
We're talking about the biggest tech trans the biggest transformation to the auto industry since nineteen fifties, the green tidal wave that's come. And others will say, okay, is the demand is.
Yeah, That's what I was gonna say, is the demand there. I was having a conversation with my dad about this. Who loves his EV, and you know he has a Ford and I've talked about this a lot, Carol, but you know he took him so long to get it after he ordered it, Dan, and now they can't get these things off of lots because people aren't buying them. And he had a good point. He said, you know, everyone who has an EV actually wants them, and you can get an internal combustion engine car for a lot
less money. What about the demand question, Dan just.
Got about thirty forty seconds.
I mean for demand, I think it's it was maybe overestimated a bit, but we're still going at twenty five thirty percent of automo bis are going to be EV from three to four percent today. And that's why eventually likely your dad might be driving in EV in your future.
Oh he's got the Machi, loves it, but he had to wait forever, right, Yeah, he had to wait forever to get it. My mom loves it too, she drives it more than my dad.
Dan, do you drive an EV just quickly?
Yeah?
So?
And I'm also on the cyber truck list, So when I'm in the cyber truck, I'll pick you guys up.
Yeah, on the waxing and then we can drive it.
Deal deal, deal, Dan ives such a treat. Great to have you here on this first trading day of twenty twenty four. Only thing as I wish we could see you because you are a killer dresser. It's a weasy next time, Yeah, next time, get home safely. Dan, i'ves managing director senior equity research channel set would Bush Securities talking to us about Apple and Tesla, two of some big app performers last year.
He's bullish on twenty four.
He is indeed all right, you're listening and watching Bloomberg BusinessWeek. This is Bloomberg.
You're listening to the Bloomberg Business Podcast. Catch us live weekday afternoons from three to six Eastern Listen on Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App, or watch us live on YouTube.
Plenty ahead in our second hour of the weekend edition of Bloomberg Business Week, including a trip around the world literally courtesy of Bloomberg Pursuits, find out which destinations from nearly every corner of the globe need to be on your itinerary in the new year. And we're going to also tell you when to go, which is really kind of cool.
About this care We go now somewhere, yes please. And speaking of travel, Carol and our friends from Bloomberg Television sit down with the head of the world's largest cruise company and operator, Carnival CEO Josh Weinstein offers his view on the health of the consumer and explains why few can compete with the level of hospitality that his firm has to offer.
First, up this hour, we continue our look at Apple and its potential hurdles in the coming months. No American tech company has bet as heavily as it has on the economic interdependence of China and the US. Quite simply, Apple needs Chinese worker to make its iPhones and Chinese consumers to buy them, So this.
Would seem to make the deteriorating relationship between the two global superpowers, the US and China uniquely dangerous for Apple. Remember Biden launch an aggressive campaign to keep China from developing advanced semis and called Chinese President Chijin Ping a quote dictator, and then she pursued a strategy to limit China's reliance Carol and Western made technology.
But back and forth, back and forth. Apple.
Here's an Apple. We're up fifty percent last year.
Yeah, they did really well. So let's get into it. Because while the company is floated above the geopolitical tumult so far, Apple does enter this year twenty twenty four in danger of getting dragged into it. So writes our next guest. Not a guest, he's a friend of the show, friend of the family. Bloomberg BusinessWeek columnist Max Chafkin, who joins us here in our Bloomberg Interactive Story Interactive Broker's studio.
His story, by the way, in the new issue of Bloomberg Business Week, which is already by the way, the story available a Bloomberg dot com slash Business weekend on the Bloomberg terminal.
Year.
Happy New Year.
It's going to be happy new year for Apple.
Well, you know, I mean, look, Apple is a big and powerful company, and what we're talking about are certainly challenges but but but probably not existential challenges.
I mean, when you we.
Take a few steps back, there are a few companies that are as sort of bought into the idea of US China relations being fairly warm.
And that goes back decades.
When you talk about Tim Cook, where did he come from? Before he was CEO of Apple, he was essentially the architect of this supply chain, the supply chain that relies on these big outsourcers, most of them operating factories in China to a stat to manufacture phones and relies on a market of a market that has grown, you know, tremendously and has done really well by Apple over the past few years. You might have thought during the Trump presidency, you know, Trump a lot of anti China rhetoric, a
lot of rhetoric about globalization. Apple did great. And one of the reasons Apple did great is because although the trade war did not affect Apple, did affect Apple's competitors, primarily Huawei. So for several years, Huawei was essentially frozen out of the market for high end chips it had. In twenty nineteen, Huawei actually surpassed Apple in terms of handset sales globally the terms of units sold, and then it basically fell off a cliff because it lost access
to Semis, to the high end semis. And what happened last year is that Huawei, basically out of nowhere, and we've talked about this before, you know, launched this new phone, the Mate sixty Pro, that has a chip that is, although it's not quite a state of the art chip, it's a lot closer than it was. That phone has sold very well. Huawei is bouncing back, and that is
creating problems for Apple in China. At the same time that the Chinese government is introducing new restrictions that you know, the US has characterized as you know, retribution for our own restrictions. China has been sort of opaque about what they're doing. But it seems like, according to bloomber reporting that many Chinese workers, Chinese workers at state back companies are being encouraged or told or required not to bring iPhones to work. So you have these two sources of pressure.
One is competition, the other is government regulation, and they're biting Apple, you know, in a very important market.
Max. I think a big part of this story also is the fact that the ecosystem, the mobile ecosystem in China is not as sticky as the mobile ecosystem in other parts of the world. So here in the US, if you're an iOS or you know an iPhone user, your next phone is going to be an iPhone because you're like in that ecosystem you have all the apps. But then in China you have these over the top payments apps that work equally well whether you use an Android or whether you use an iOS device. We don't
have that. They don't have that stickiness that we have here with like I Message and other parts of the Apple ecosystem.
Well, and I mean a big point you think about what is appealing about an iPhone. Obviously, part of is the hardware. It's very beautiful, works fast, good chip so on. But the software part is important also, and of course software in China and these cloud services are regulated differently. You know, Chinese users may not have access to all of the cloud services that that are that that US users have access to, So so that's another factor. And of course there's been a lot of you know, sort
of media coverage around this issue. You know, in China. You know, there's there's talking sort of patriotic duty to buy you know, uh compones made by domestic companies, just as there is, I guess to some extent you know, in the US. But until recently that hasn't had much of an impact. And one reason it hasn't had much of an impact is because you haven't had really strong competitors. But now, you know, talking to analysts and so on,
the the competitors are getting better. They're getting they're closing that gap with Apple, you know, at a time when the government may be more interested. The government has long been interested in sort of reducing the you know, influence of foreign made technology equipment. But where the government now seems to be sort of doing something acting on that interest.
So does that have to be worried about China especially you know, consumers wanting their devices or being able to do it. I feel like we have had bulbear scenarios as of late in the last week or so, where there's some concerns about the uptick in China, specifically of the iPhone. So does Apple need to be worried? I mean, it also employs a lot of workers, which is a good thing for China.
So when you look at when you talk, when you hear what Apple's saying publicly, what they're saying is, you know, they're not seeing this. They're not worried. They've sort of signaled that the softness in China was not in the most recent quarter, was not related to this iPhone issue. And they still sell a lot and they're selling a lot, and we write in the story you know there are
big lines, you know at Apple stores. The fact is that this is a device that whatever the government says or does and whatever's happening politically, is popular with consumers. People like it and the same way they like it here. So that is all stuff that is going for Apple. And again, when you look back historically, we've sort of talked about this and these warnings have been swirling around for like a decade, and Apple has basically done well, has continue to grow at sales in China. No, sales
may bee plateauing to some extent. But but but now you know, people are raising concerns that we may be turning some kind of corner.
Can you talk a little bit Max about how this is a function of Tim Cook before he was CEO. I mean, this is a guy who was a supply chain expert before he was tapped to become interim CEO. And then you know CEO when Steve Jobs died, how did he set up Apple in China?
Well, and this is like such a fascinating thing because people think of Apple as this design first company and and you might think that the successor to Steve Jobs would be another head of the clouds to creative type and of course that's not what Tim Cook is. Tim Cook is a practical minded supply chain whiz. And you know it's worked incredibly well when you look at the amount of the number of devices, the way they've been able to squeeze costs to make this thing cheaper, to
maintain their profits. I mean, you know, a huge percentage of profits and the smartphone industry general, Apple, it's all kind of worked. Well, then again, it's maybe it's built on a vision of the world that is changing that and that will continue to change, assuming that you know, the US and China tensions between those two countries continues on.
Those supply chains. You write the supply chain diversification, right, because Apple is looking at other places. But it might be well, it looks like it's a way to reduce apples exposure to geopolitical blowback. It may be having the opposite effect. And you write Apple's a major employer in China and the government crackdown on iPhones could be seen as a warning about moving jobs out of the country.
That part of the story just kind of blew my mind because I don't know that we've really thought about it that way.
Yeah, so that's the thing. I mean, Apple sort of seems to have dispatched executive Tim Cook flew out there. At the beginning of twenty twenty three, senior Apple executive made public comments kind of a rare interview with state media talking about the kind of joint relationship between the two countries. Apple's really interested in sort of promoting the idea that, hey, it's been a really good employer in China.
Yes, it is.
It is interested in diversifying its supply chain, as are many companies, of course, because as we've seen with Covid and so on, there are reasons for that. But it's it's hard to escape the sense that they're that they're in a bit of a box they have to or that they at least have to walk a line where
they want to diversify their supply chain. They're they're trying to make more iPhones in India, both for reasons of diversification, because they want to reach that market, while at the same time trying to make sure that they keep those relationships in China that Tim Cook and this company have spent decades building intact. You know, they definitely can't just turn off the iPhone factories in China. China is going to be important Apple, you know, for many years going forward.
God, it's fascinating, right, It's like, we'll see what happens in the new year. It's hard to it would hard to be Tim Cook and kind of juggling it all. Max great great piece of like carry out into the new year. Max Chack in Commnis at Bloomberg Business Week. Coming up in the new issue of Business Week, it'll be out next week, but it's already on the Bloomberg terminal at Bloomberg dot com. Max. Thank you so much. Happy New Year. This is Bloomberg.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Easter on Bloomberg Radio, the Bloomberg Business app and YouTube. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa Play Bloomberg. Eleven thirty.
Kruse stocks led the travel and leisure industry as one of the market's best surprises in the past twelve months, and yet they slumped in the first trading days of twenty twenty four.
Well Our Bloomberg News team says the early losses are evidence of just how demanding investors have become for the top cruise lines to offer fresh catalysts After banner twenty twenty three, Resilient consumer spending habits led all three major cruise stocks to post their best annual gain since going public.
The biggest of the three, Carnival, came out with fourth quarter results that beat estimates late last month, and SMP Global ratings upgraded Carnival's credit rating two notches on its strong booking figures and higher prices. CEO Josh Weinstein sat down with Carolannis, Granny and Katie Greifeld on December twenty ninth for a closer look at the numbers and at the consumer twenty twenty three.
You know, we wrapped in November now, November thirtieth, and you know, the one word that we like to use as a as a summary is record. We had record demand, record yields, record pricing, record bookings, forward bookings, record on board spending level. So really across the board, our business has really thrived in twenty twenty three, and we expect much more in twenty twenty four.
It could continue because you're such a great gauge of how customers are feeling. You know, you have several brands, but you really kind of speak to you know, the everyday US consumer, if you will, and you just have a great read on it. Are they continuing to spend? Are they continue to do advanced book things and then once they're on their ships, Josh, continuing to spend as well.
Yeah, that is exactly what we see, you know, as a matter of fact, our Q four was from a pricing standpoint, the highest all year. So it's accelerating, it's not decelerating. And when we look when we look forward, we're actually two thirds booked for all of twenty twenty four already.
It's a nice visibility.
It's not too bad. We were about ten points higher than we were last year. And on top of the ticket bookings, we've actually started pulling forward on board spend, so we have about a more or less about a third of our onboard spend being prepaid in advance. So we have a really good amount of visibility. And those booking trends, they just haven't slowed down. You know, every quarter this year, you know, people expected it's got to slow down, it's got to go. We're going to see something.
The consumer is going to get impacted, and the fact is, with our business, we haven't seen it.
It's record after record.
As a matter of fact, we just ended the two weeks of you know, Cyber Monday and Black Friday at more records. And it's not just coming from one brand, it's not coming from the United States. It's global. It's with our global portfolio of brands, which is really really encouraging.
Do you think we're moving from many CEOs similar to yourself. I sat with that run global airlines and global businesses, have said, we've lived through a period of revenge tourism.
We were all locked up for a period of time.
This is something we had this parabolic reopening and you had a para rebooking. Are we evolving into some kind of new cycle? You said, there's no end insight in this demand. So if we've ended revenge tourism, how do you describe the next evolution?
Yeah, that's a great question. So we don't think this is revenge anymore. This is not pent up demand. It's two years on from when we really got back in full as a as a corporation. This is people who have decided what's meaningful for them. How do I want to spend my life? And experiences are what they're looking for, you know, unforgettable memories and creation with friends and family. And that's exactly what cruising has to offer.
And that's what I sat down with the at course CEO and he said, look, I haven't got enough hotel rooms and I haven't got enough high end staff to help me run this business, which then takes me to the cruise is the high end hotel. But to what extent are those packages off ship and on shore those additional spans, Are they critically important to the expansion and the turnaround from the loss that you've had. Do they add incrementally or significantly?
So, I mean, when we think about our business, we're a little bit different from when you're looking at hotel companies. You know, I'm staying in a hotel in New York, and I won't tell you which one it is, but I'll tell you the service is not very good. And we've learned how to live with that as a society. It's almost a tacit acceptance. No, we should not. And cruise industry, our brands did not deviate from service level. Our guests have high expectations and we aim to exceed them.
We do not close off floors, we do not shut areas down, We do not skimp on the services that we used to offer. It is full steam ahead, and that's what people expect and that's what they're willing to pay for, and that's what we're seeing.
And let's talk a little bit about the fact that you are a global brand. Of course, a global company that goes many places in the world. I don't need to tell you that the geopolitical landscape very fraud right now, too hot wars of course, conflict in the Red Sea? Has that impacted at all where you can go? And are you seeing any inflationary pressures from some of the things that we're talking.
About here, So the second question is no, we haven't seen anything of note. Obviously, we pay attention to crude prices, which is a good barometer of a lot of things. With respect to the impact on our business, we had about less than one percent of our business touching Israel in one way or another, not necessarily homeporting, but it might be one transit stop on a world cruise or something of that nature. We may changes some time ago.
We actually don't have any ships transiting the Red Sea area for several months, and so obviously safety first, and will we have mitigation plans should we need to adjust where those ships would be transiting, But as of now we're a watch and learn mode.
Also talk about your bond book, because it was interesting seeing just last week actually SMP coming out and upgrading Carnival. Not quite back to investment grade territory, but you're getting closer, not just higher not just higher on earnings day. Actually, you think back and the chief financial officer of Carnival said that there's a real possibility that Carnival will come
back to the debt markets in twenty twenty four. Where is your current thinking on that and what would actually bring you back to the debt market.
Well, really, the only thing that would bring us back to the debt market as far as we can see, is if there's opportunity to refinance on more favorable terms.
So lower rates, Yeah, lower rates.
We're not or managing our maturities, but we're not looking to lever up. As a matter of fact, as you said in the intro, we've managed to cut down our debt load by about five billion dollars so far, and we expect much more of that as we go forward. You know, that's priority one, two and three when it comes to our capital structure de lever So.
Hey, you know one of the things that it kind of ties together geopolitic but also kind of you know, we're thinking about growth. So a story that the first domestically built ship in China getting ready to hit the high seas. But it's a joint ventures you guys are involved in this and I think about how important China is for you guys, but also geopolitically concerns about China It's ambitions with Taiwan and whether or not there's going to be some problems there down the road.
Sure, well, we're very happy for the folks at the China JV. We actually unwound the JV earlier this year.
We did.
We did so we've been providing ship building expertise support for them and we were very happy to do that work a story.
So it says you guys are involved, but go ahead, Well, that could be.
How we're involved at this point. But from our perspective, we got a portfolio of world class brands all over the world and that's where our focus is. You know, it's great for the cruise industry that China has opened up and it will be opening up for international cruise companies. We're not going to be one of them that's going back in. We've got our assets where we want them.
We've changed our assets strategy, we've moved ships to different brands to accommodate the change in China, and they're doing very very well. So we'll take a wait and see approach on that as well.
But not a market you need to be in right now.
Just no, it's definitely not.
That was Josh Weinstein, the CEO of Carnival, with Carol and Bloomberg Televisions, Katie Greifeld and manas Granny back on December twenty ninth.
Still to come on Bloomberg Business Week the best new resorts, restaurants and museums to plan a trip in the year ahead.
Malta. It's a place that I have always kind of been interested in. It has so much on just a couple of islands, and you think of Malta as like old cities, kind of like Game of Thrones type stuff. But it's also got beautiful small towns, wonderful countrysides. Feels like Sicily.
Bloomberg Pursuits unveils it's data packed guide to your twenty twenty four in travel. That's on the other side. This is Bloomberg.
You're listening to the Bloomberg Business This Week podcast. Catch us live weekday afternoons from three to six Eastern Listen on Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App, or watch us live on YouTube.
The International Air Transport Association predicts that four points seven billion people will jump on planes in the coming year, generating some nine hundred and sixty four billion dollars in airfare alone. Wellness tourism also poised him to reach the one trillion dollar mark this year. I just want to go places.
People want to get pampered too when they go places with travelers looking for new hotels that dazzle and impress and experiences to match. It's creating opportunities for less heralded destinations to emerge. Our friends with Bloomberg Pursuits have sorted through all of the contenders to determine the twenty four most exciting places to travel in twenty twenty four, and of course the ideal times to pack up and go.
What a tough job, sorry list, indeed, my heart bleeds all right. This story will appear in the year ahead shore a Bloomberg Busess Week. It's available now at Bloomberg dot com, slash Business Week, and of course on the Bloomberg terminal.
Here with a.
Breakdown, our Bloomberg Pursuits editor Chris Rouser and deputy editor Jim Gaddy and Chris, I want to start with you because there are lots of places or both of you, you know, guys, where we can go? So how do you guys put this together? What's kind of the jam session that you have to kind of figure it out?
So we start working.
We keep track of places throughout the whole year, and we start working in like August on this particular project, so it could.
We march and you're like, oh, guys, that's that's gonna be one for the end of the yeah.
Yeah.
And what we do particularly is we focus on destinations that have that have news in them. So like a lot of some of these other lists that's like have you never heard of this place? Go off the beaten track. For us, it's is there more air access? Is it easier to reach than it has been in the past? Are there more luxury hotels or more Safari trip opportunities? There is just more stuff to do. Is a city having a major development boom?
Are there lots of new.
Reasons to visit a place? That's how our list is determined, all right.
So it's not alphabetical already the names out of a hat.
I Jim wanted to start sort of the on the ground research that goes into not just determining the places but also making sure that you have a good idea, that you and the team have a good idea of what can be found at these places.
Well, I have to give a shout out to our travels are Nikki Exstein, who it really works with people on the ground. As you know, we have many bureaus around the world. We work with those bureaus to identify places that have this business opportunity, and Nikki is in touch with them all year. We have freelancers that also are on the ground that sometimes go to these places specifically to write up you know, sometimes we think of these as like maybe we'll do something bigger on these
places later in the year in twenty twenty four. So we have people it's called this is kind of like our scouting trip.
I say it every year, but like I never get the call from you, Chris. It's like, hey, you need to go to Aspen in February to just check it out and sure, I have a surprisory.
Do you want to go to Aspen?
I do want to go skiing?
All right, let's leave our children with our spouse.
Sorry, guys, So Aspen's on the.
List, Yes, Aspen is on the list. So and I am. I've never been to Aspen and because of all this, I'm going to.
Try to go.
Yeah, in March, we should go, Chris.
Yes, Tim, come with me.
It's a good time to go.
So Aspen, you know, is so well known for all the restaurants in the fabulous hotels and the sort of luxury that's there, but what hasn't sort of grown a lot in decades is the actual ski terrain, and they've added They've added a huge, whole one hundred and fifty three acre part of the mountain which mostly shoots and glades and stuff. So that's like an exciting reason to go this year. And there's half a dozen new restaurants.
Well there's more than there's in the Northeast. Not as much snow as in Switzerland.
But you were saying lots of restaurants, Okay, So there's.
Half a dozen new restaurants, and then a bunch of hopes. There's a new hotel called the Molly Aspen. It's the first new hotel in five years, and a lot of the hotels that are already there have undergone renovations. So the Saint Regis is like totally redone. They have this fabulous Newspa. So there's a lot of reasons to go, both on the slopes and off.
I wonder too, like, as you guys go through the list, Jim, like, was there a favorite place that you're like, oh my god, I didn't know, or as you guys were reporting and writing about it and you're like, I'm going to go there.
You know. I was talking about this with Chris before Vick came over here. One of my favorite categories that we do is the place that you thought you knew, but it is totally different now. Las Vegas was an obvious candidate for that. They're on the list. Came in Islands, Carol, did you know that they have a thriving art scene.
I had no idea. I've been, I've gone there diving, but no, I did not know. I thought it's a place to park your money.
Yeah, but in February and in May they have these huge arts weeks, and so that was something that kind of appealed to me. Someone who loves going to the beach and also likes going to museums. You kind of get the best of both worlds there.
Let's go back to Vegas for a second, because for me, Tim, what, oh, I mean to be honest, For me, Vegas has been every time I've gone to Vegas, it's just been a drag. I mean it's like you're here for some conference that you don't want to be at. Uh, and you're stuck in a casino. Now there's the Sphere, which people everybody's talking about. I would love to go to the Sphere. What else is? What else is Vegas bring to the list?
Well, you know, they've kind of reinvented themselves as a sports destination. The super Bowl is there in February. Formula One has a presence there now, and there's a big fine dining restaurant seeing there, you know, and I don't know if this council is fine dining. But Hollywood star John Favro is opening up a food truck with Roy Troy.
Wingersingers. It was in years ago he like drove from LS directors.
Would you say he's a major Hollywood I know, I know.
So much.
I eat well, I've seen shows. It's kind of fun to Vegas.
Have you gone lately, Tim?
Have not?
Yeah? I went a couple of years. We went, but we went for like sixteen hours.
If you've talked to anyone who's gone this year. They will rave about it, you know, seeing Adele, seeing you two at the sphere. People are thrilled with Vegas.
Kate's Beyonce twice.
Hannah went to formula one.
You know, all right, there's a lot in education.
Okay, guess I had no idea. Sometimes maybe I'm just an idiot. But Transylvania's actually a real play.
Thank you for well.
Here.
Oh no, no, we actually have somebody in our makeup room. He's from Transylvania.
Well, and did you ask him if it was a real place?
He kind of left, so doesn't work on me anymore. Just kidding, I'm just kidding, Okay, So tell us about that.
It's real, So Transla reaching in Romania, and it's incredibly beautiful. If you've ever seen pictures. It's these craggy mountains and these old, uh you know, monasteries and churches that are literally a thousand years old. And you can stay in a hotel that's from the thirteenth century called bethlen Estates. It's an old ancestral manner. Now there's a bunch more sort of luxury destinations hotels kind of like rural farmhouses turned into sort of camp luxury camps.
What's also really cool about this is it's affordable. I mean luxury hotel prices. According to the chart that you guys have in the story, they don't even top two hundred dollars. Yeah, like that's that's pretty great.
And it feels like you're in a you know, you know, you love how you love a place that feels like you're in a totally different world. It's it's exactly that. You can go hiking, it's quiet, it's incredibly beautiful. You can see brand Castle, which is theoretically where Dracula lived and is in the movie Dracula, and I should say in the it wasn't Dracula.
We know it wasn't he real. It was real.
You know, it's funny that you talk about affordable though, And before we move on to something else Argentina, you guys point out because the storing inflation, like you're you know, a dollar's going to go really far. No easy segue, but Chris, do you have a favorite place in here that you were like, you know what, I got to put this on my list of places to go.
Yes, there's actually a few, and Transylvania was one of them.
Malta.
It's a place that I have always kind of been interested in, and it has so much on just a couple of islands.
It has.
The opening picture on our story is these crazy caves on one of the islands in Malta, which just looks like somewhere that doesn't shouldn't exist in the world.
I have to say, I'm obsessed with some YouTubers that sail around the world and they go to the Mediterranean and they have been here, and they just you see them kind of like, you know, just mooring there, and these places are stunning.
Yeah, and you think of Malta as like old cities, kind of like Game of Thrones type stuff, but it's also got beautiful small towns, wonderful countrysides.
Feels like Sicily.
And you know, as you mentioned Tim, if you go to the world the web version of this story, you'll see that we have luxury hotel prices from Kayaks, so you can see when prices are high and prices are low. And we talked to local travel agents to say, like, okay, maybe the prices are low because you shouldn't go at this time of year. So we match up the good hotel prices with the right.
Times to go.
All right, guys, thank you so much. Happy New Year to both of you. Our thanks as always to bloombergm Pursuits editor Chris Rouser and deputy editor Jim Gaddy.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern Listen on Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App, or watch us live on YouTube.
Carol Master along with Tim Stanvik. When you look up the most enviable job in the encyclopedia, you see a picture, no doubt about it, of our next guest. We're talking about Hannah Elliott. She's autocolumnist for Bloomberg Pursuits. She's also the co host of the new podcast Hot Pursuit. New episodes are dropping.
Weekly, so here's what that means. She flies around the world, drives new cars and gets to write about them for Bloomberg News. She got to drive about thirty different vehicles last year, from Porsches to Rolls Royce to Lamborghini's and Kia's and everything in between. Hannah joins us on Zoom from Los Angeles this afternoon. Hannah Before we get to your favorite cars that you got to drive last year, talk to us a little bit about where we are
when it comes to the auto industry. Why was twenty twenty three such a big year for the auto industry?
Well, great to talk to you guys, And in short, where we are is the most exciting time we've ever seen in the history of cars, if you ask me, we're seeing, of course, the most safe, the most efficient cars that we've ever had available at pretty fair pricing for consumers, a lot of choices, a lot of opportunities to bespoke if you want to spend a lot of money,
there's a lot of variety. Twenty twenty three was finally a year where we have a lot of ev and plug in options, So I mean, gosh, there's so much to choose for. It's a really exciting time, and we've really hit an inflection point when it comes to electric vehicles where we're headed.
So I'm having a lot of fun. I know you guys are too.
You do have the best job in the business. I just want to do a little pushback because we often come on and we're like electric vehicles there's still really expensive and I know Elon has cut his vehicles. There's the tax credit that's still out there, but it does feel like on the high end there's still a little pricey.
They are pricey, there's no denying that. I will point out that last year we had fourteen million electric vehicles sold globally, which is up over thirty percent from the previous year. So you are right, We're still a long way from total proliferation or from you know, electric vehicles not having a premium of pricing over non electric vehicles, but compared to where we were, we certainly are making
great strides. We're still seeing a lot of vehicles getting federal tax rebates, even though we are seeing fewer this year than last year. So that's a little bit of a tricky thing too. And I will say to you point, you know, Ford and General Motors have walked back their targets for some.
Of their electric trucks.
So again to your point, yeah, we are seeing a lot of options. We're seeing electric vehicles from Audi, Mercedes, Porsche, all of these great luxury brands. But with the non luxury we are seeing some hesitancy a little bit. So again it's exciting.
We don't know what's going to happen next.
Carol, I have a bone to pick. You said to Hannah that we're talking about, you know, EV's being pricey. Yeah, Hannah d drove a thirty million dollar Rolls Rice, so you know, seventy thousand a seventy thousand dollars. EV is like, you know, that's not pricey.
Okay, a little bit of a SmackDown.
I feel you, I feel you, I feel you.
All right, So Hannah, let's get to it. You did drive about you know you've got thirty I think that that you really really liked to talk to us about. Maybe is there one that's the top of the list for you?
Well, since you brought up Rolls Royce, I will go toward the easy target, which is the Rolls Royce Specter. This is the first electric vehicle from Rolls Royce. It's a really big deal. It doesn't cost thirty million dollars. It costs closer to five hundred thousand. So if you're gonna like you, I'll tell you it's all comforative. This
is a relative rare era that we're talking about. But the Specter is, for Rolls Royce a really important vehicle because it allows U their buyers, and Rolls Royce says their buyers. We're asking for it to really get in on the electric vehicle trend. I did drive this car in Cape Town. It is actually more Rolls Royce than any of the Rolls Royce I've driven, and I mean that. It's totally silent, totally smooth, very powerful, almost six hundred
horsepower equivalent. In a way, it's like if there were any vehicle meant to be an electric vehicle, it would be a Rolls Royce. So I really loved it, and I also like how it looked too, A big two door car.
That thing is cool. Check out Henna's video by the way of her Yeah, Cape Town, in Cape Town, that was cool.
You got some wine, right, I did have a little bit. I'm not a big wine drinker. Actually, I can't claim to know what I'm talking about when I talk wine, but I did have a little bit.
Yeah, yeah, driving of course, of course.
Oh no, okay, after only I want to go to.
The Porsche next the nine to eleven st it's the most expensive nine to eleven currently available. What is this beautiful car?
This is I don't want to say a tribute car because that makes it sound not new. This is a completely new car that is inspired by some racing Porsches from the late nineteen sixties and early nineteen seventies. So it's for the road. It's not a track car. It is for the road. It's made in limited production, just over nineteen hundred of them will be made, and it's inspired by these old, very sporty, fun light racing porschees.
It also comes with a watch if you want to if you want to get in on the Porscha design side of things too.
But it really is it's a man you, which I love. It's not electric.
This is a fully naturally aspirated, old school analogue Porsche. So for the non EVU people who really want a tangible, thrilling drive that feels like you're really driving, like you're shifting and you're hearing things.
I really loved it. The st might be the car for you.
Was it Barbie Pink or was it red?
Okay? This is a polarizing color.
The one I drove is called ruby Stone Neo and ruby Stone also known as ruby Starr, is a really historic color on a Porsche. Some people love it, some people hate it. It is like that Raspberry Hue. It's very memorable, you know. I it actually looks great in person.
I would say, I just get a.
New piece of luggage, and I think it's the same color.
We care cool.
Can I go to the G Wagon?
No, we're gonna go to the Key EV nine. There is the g Wagon, which we would all love to talk about, but we'll get about a middleton. Kia is on this list. Some would say, sorry, Kia, what kind of Elliott?
But as this list, I know this was really the surprise. And maybe this gets around to your first question, Carol, about the affordability of EV's. I was really impressed with the Kia EV nine Because it is priced from around fifty thousand dollars. It's not considered traditionally a luxury luxury brand, but this big seven passenger sc SUV was really well appointed. The range and performance figures are very comparable with something
you might see at Volvo or land Rover. Even so, this is Keia kind of moving, punching up in a way.
I thought they did a great job. I also just liked how it looked. I thought it was.
Very cool looking, maybe even cooler than the Cadillac Escalade, which is going to go electric in twenty twenty four, so there might be a little bit of a competition there. Yeah, check it out if you haven't seen it in person.
It's very cool.
And you can read about the g Wagon and you can read about the Lamborkhini.
Yes, this is an off R Lamborghini. It's the last internal combustion engine, the one they're gonna make Lamborghini.
I don't get it.
It raises so the clean you know, can you can grow over boulders?
I do get Hannah Elliott, she's amazing AutoCOM as a Bloomberg pursuits. Check out our story on the Bloomberg and at Bloomberg dot com. This is Bloomberg Radio. Thank you, Hannah.
This is the Bloomberg Business Week podcast of a little on Apple, Spotify and anywhere else you get your podcast. Listen live weekday afternoons from three to six Eastern on Bloomberg dot com, the iHeartRadio app, tune In, and the Bloomberg Business App. You can also watch us live every weekday on YouTube and always on the Bloomberg jerminalone