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I am looking at my Bloomberg looking at those FOMC minutes and they are just coming out. Mike McKee, you're on it.
When they met guys, the Fed officials looked at the economy and saw that it was good. Rate cuts were justified, but caution also called for. Going forward. Growth was stronger than expected. Upside risks to inflation small and little change. Downside risks to the labor market had decreased. The outlook supported another quarter point cut in the federal funds range, although members were it pains the Minute say to note
that policy was not a preset course. The dangers from letting policy get too tight match those from letting policy get too loose that they are data dependent. Among the upside risks to inflation, sudden disruptions to global supply chains, a larger than expected ease in financial conditions, stronger consumption, more persistent housing price increases, and those recent sharp increases
in insurance costs that we have seen. Several participants noting that their contacts in companies larger in sectors like financial services, construction, professional services, technology were more optimistic than smaller firms and firms in manufacturing. Interesting thing, they did not mention at
all the election in the minutes. Although strikes and hurricanes had affected recent labor market indicators, participants generally noted there was no sign of rapid deceleration in labor market conditions. Two other things to watch a discussion of financial stability and vulnerabilities that participants assessed warranted monitoring unrealized losses on bank assets and risks in commercial real estate, and one
note for trading deesks. Some participants suggesting at a future meeting the committee consider a technical adjustment to the overnight reverse repot rate to set the rate equal to the bottom of the target range of the Federal funds rate. That would put it in alignment with the existing structure when the facility was established.
All right, Michael McKee, Obviously they're at the Fed breaking down those latest FOMC minutes that of course from the November sixth, seventh FED meeting that was after the election. All right, Mike, big dump in terms of what you got from that release, You know, we go to you to kind of parse through it and what we need to know, what is the Bloomberg audience needs to know what stands out for you?
If anything, well, not a lot stands out, because it's pretty much as has been described by FED officials since then, and of course, as Jay Powell described it in his news conference following the meeting, the conditions were pretty good for the economy, better than expected in terms of growth and unemployment. Inflation had stalled out a little bit, but they still didn't think it was going to be a problem to get it down to two percent, and so
rake cuts were called for. But because the future was uncertain in terms of what was going to happen with inflation and the unmentioned labor election, rather, they wanted to make sure that people know they were data dependent and they are not on a preset course.
Well, that's what kind of strikes me, Matt.
Mike.
One of the headlines that you mentioned, and it's what we call hot sticky right here at Bloomberg. You know that the FED saw some saw pause or faster cuts as options depending on data. So you know what have we been saying at nauseum right there? Data dependent? It sounds like they could go kind of anywhere, perhaps at the December meeting even but definitely in twenty twenty five.
Well, definitely now the December meeting is open because the data have been mixed, and we have seen a little bit stronger inflation in both the CPI and PPI, and it's forecast to come out tomorrow in the PCE a little bit stronger. And if that's the case, then there is a case for pausing. We'll see what happens with the labor market. If the labor market comes in strong, if the jobs report on December sixth is strong, then you could probably start to bet on the idea of
a pause in December. But you get the impression that they are at this point thinking they're going to go in December and maybe pause in January. Once we get the new administration in place. We're going to get a new summary of economic projections, a new dot plot in December, and how do you predict anything at this point?
Well, that's where I wanted to go, and we are going to talk to you more about tariffs in just a minute, Mike, But we help us understand how the Federal Reserve thinks about potential policy from a new administration. We heard Jay Powell ask this question earlier this month at the press conference. But they do have to look at what tariffs could do to growth or what policies could do to growth in order to make these decisions.
Right, Yes, but they have to look at, as you say, what it does to growth, or to inflation, or to the labor markets. And at this point they don't have any idea. There are a lot of slogans out there, there are a lot of tweets out there, but there isn't any policy out there. And until they have a policy, they can't really measure it. Now'll give you one example, and I know you want to move on to tariffs. We'll talk about this. This tweet that came out last
night about tariffs from Canada and Mexico. There are something like forty billion dollars worth of automobile parts that come into the US from Canada and Mexico, but they crossed the border many times. There are some things like automobile seats that cross the border seven times how many times are those to be tariffed? Will they be tarffed? And that's the kind of thing that the FED doesn't know and it's impossible to model at this point.
Well, that's what you know. I keep thinking about that, Mike, in that you know, Donald Trump imposed then President Donald Trump imposed tariffs during his first administration. They carried or some of them carried over right over into the body administration. And I am curious when I get to speak with someone like you, is you know, what impact did those tariffs have on US economic growth? What do they have on kind of the cost of things, the inflationary picture?
Is there kind of a net tech takeaway as we now consider potentially another round of tariffs to come.
Well, there have been a lot of studies on those tariffs, and there's two points you want to make. One is that there are some specifically targeted tariffs, especially Chinese electronic products, that are done for national security reasons. But the general
tariffs basically raised the cost for Americans. Consumers paid the cost of those tariffs, according to almost every study that has been done, and it also brought down the number of jobs, not raised the number of jobs, it held the number of jobs created down and slowed growth a bit. Tariffs in general, just broadly applied, do not have a positive effect on the economy, and that's pretty much according to every economic study that's been done.
I do wonder to what extent, And look, again, these aren't policy. We're going by true social we're going by posts from the incoming president. But no question that if you're an executive at one of these companies that could be affected by tariffs, you're certainly thinking about your supply chain today differently than maybe you were thinking about it
just a few weeks ago. Mike, I do wonder about the economic effects of something like this, and whether or not it could be looked at as Okay, maybe this is just a bargaining tool. Maybe this is being used to threaten but actually be used as leverage, as some have suggested.
Yeah, the question I have that I would pose to people who make that argument is what are they negotiating. Canada and Mexico basically have free trade agreements with the United States. There aren't any tariffs on most products. So what is it you're looking for? Are you trying to get the Mexicans to stop people at the border? Well,
that's sort of already happening under Biden. Now, since last June, the amount of fentanyl coming into the country has dropped a lot, and China has pulled back on the amount of fentanyl it's letting go through its borders to the US. So there has been progress on these things that you could say would continue. So what is it exactly that's
being negotiated. That's the problem for companies is they don't know are they actually going to throw these tariffs on on day one, as as Donald Trump's truth Social said, or are these things going to be something that is for negotiation and are spread out over a period of time, in which case maybe you can adjust your supply chains
a little bit. For a lot of companies brought their supply chains back to this side of the Atlantic and Pacific and put them in Mexico, And so if you're going to tariff Mexican stuff, then that's going to be a problem as well. So there's a lot of uncertainty out there for corporate leaders, all right, And.
I just want to point out, as we're going to get into the next segment, you'll see who is our top of course, Mexico is our top trading partner. With the United States. So we're going to talk a little bit more into that, and that is ahead of China. Hey, Mike, thank you as always. Michael McKee, International Economics and Policy correspondent right out there outside the Federal Reserve in Washington.
Do you want to point out that trader's reaction to those FOMC minutes have been a bit muted to your yields slid slightly more than one basis point barely registers right in the context of some big moves earlier in the session. So for future yields are a little change from before the minutes came out. They show policymakers are cautious about future rate cuts. The messaging from Fed officials earlier in the month that the December cut was in doubt
seems to have done its job. So a little bit of a weighing in by our team here on our Markets Live blog.
Okay, so let's stay with US trade and tariff talk. As we just mentioned with Mike, Donald Trump posted to his True social network vowing again to impose additional ten percent tariffs on goods from China and twenty five percent tariffs on all products from Mexico and Canada. Assuming president like Trump implements these policies in January, it could raise prices on everyday goods, including TVs and cars. But it's also a sign he's making good on a signature campaign promise tariffs, tariff.
Tariff, tariff.
I am a tariff man.
To me, the most beautiful word in the dictionary is tariff.
Build your plant in the United States, and you don't have any tariffs?
All right? That, of course was Donald Trump before the US vote. Let's get more. Let's talk about what's going on a little bit more on terms of his proposals. Joining us is Henrietta Tres, co founder and director of Economic Policy and Vita Partners joining us from Jacksonville, Florida. Henrietta, is so great to have you here. Love listening to you when you join the surveillance team. Tell us about these proposals, your take and what the implications could be
for us, the trade picture for our economy. What are your initial thoughts?
Initial thoughts are you know we should be taking these tarfts very seriously, especially the China tariffs. I think they sound a little less worse, a little less bad than they ultimately will be. I mean, let's recall that there is three hundred and fifty billion dollars worth of goods coming in from China right now that already have twenty
five percent and seven and a half percent tariffs. When he says that he wants to increase the tariff by ten percentage points, that means the twenty five percent rate goes to thirty five percent across Lists one and two, which is fifty billion dollars worth of industrial inputs. And then on List three, which is two hundred billion dollars or more than that on a lot of things that we buy at at the grocery, at big box retail stores,
lot screen TVs, things like that. Those tariffs are already on at twenty five percent, so this would hike it
further to thirty five percent with China. The biggest unknown, and I think the biggest fear for investors and the FED and consumers is List four B. This is about one hundred and eighty billion dollars worth of everything that you buy at the grocery store, from a scented candle to a milk product, the powdered milk, things along those lines, and those have never been tariff before, largely because they're so regressive and consumer facing, and those would start off
under President Trump's tweet at ten percent next year.
Okay, well, Henriette, I want to bring in some upbreaking news. The President electors points to name Kevin Hassett to lead National Economic Council. It's a role spearheading the new administration's tax trait and spending agenda. Bloomberg News reporting this according to people familiar with the matter. Remember, he also backs
the Republican slate of tariff proposals. He was the chair of the Council of Economic Advisors during President Trump's first administration, So anyone who paid attention from twenty sixteen to twenty twenty is familiar with Kevin Hasset. The appointment will not become final until it's announced by Trump. What are your
thoughts on this? What do we know from his role in twenty sixteen and during Trump's first term, how he could implement tariffs this time around, or what it means for economic policy?
And we know he backs the Republican slate of tariff proposals, so he seems to be all in on this.
Yeah.
Absolutely, Kevin Hasten its definitely in on this.
I would say this is very Maggie universe, tariff universe, strong policy announcement or personnel announcement. When I think of NEC director going into next year, the first thing I think of is this is the kind of person who would encourage the House and Senate Republicans to include tariff's in their tax bill, and that is something that I
think is a real long shot. All the farming state senators have a real problem with this, along with specific members from individual states who don't like tariffs as a general US policy. But this suggests to me that he'll be working most closely with lawmakers, especially on the House side, which is a more generous bunch to the Trump administration
the Trump agenda than the Senate Republican conference. So look for Kevin Hasset to be somebody who coordinates more than say Alutnik or Besent on actually writing the tax bill next year, and then obviously having a cadre of control over tariff policy outside of Congress, within the White House executive orders things along those lines. That is a very strategic placement. I think he will be integral into the tariffrole.
I think the most important person to wait for is still Bob Leitheiser, but this is an indication that the tariffs are very real.
Hey, listen, Henriette. What I'm wondering is we start to get ideas of what, especially the Trump team when it comes to economic policy, trade policy, what it looks like, are we increasingly building an isolationist policy for the United States and anti growth policy, which was kind of the antithesis when he got elected because I think everybody thought he's in regulation, great for the business environment, you know, pro growth policy. How are you gaming that out?
Yeah?
I don't see any of that in a whole bunch of different avenues. And I would start with, you know, they talk about deregulation spurring exhaustive economic growth. And then they also talk about trimming two trillion dollars or three percent of federal spending to generate budget savings and otherwise reduce the deficit. That's definitely not going to happen when
you need sixty votes in the United States Senate. And then you also have this idea of a tax bill that is four point six trillion dollars just to keep things static. That's not including new tax rate reductions for
either corporations or individuals. And then you layer on the inflationary tariffs of twenty five percent on Canada and Mexico, our biggest trading partners, as you point out, and then ten percent across the board, already high tariffs against China, and we haven't even heard about his policy on the EU yet, which I think could result in auto tariffs as early as March thirty first, when the Section two thirty two tariffs suspension expires.
I'm glad you go ahead. There's just a lot there, there is, and I'm glad you mentioned the auto tariffs because that's exactly where I want to go. But also there the broader market reaction, Henrietta, I got to tell you, I'm a little surprised by the equity market reaction to this news last night. I expected to log in and see that stocks were down today as a result of this. Yes, you have GM and Ford lower as a result of her concerns of those companies being hit by auto tariffs.
Why do you think there is a muted reaction in the equity market today.
I think Mike Wakkeith said it exactly correct before. I mean, there's a misunderstanding, I think between what has happened and what people expect from Trump. They see this as posturing and not serious. But point me to a tariff that he has not actually imposed. Point me to a tariff that hasn't been on for months, if not years. And in the case of China's seven years worth of these tariffs, they are very real. They are not only real, they
are a mandatory component of his economic agenda. When you try to pass a five trillion dollar tax bill and say that you're going to get a trillion dollars in revenue from tariffs, you must impose those tariffs to generate the revenue. So I think there's wilful disbelief.
Well, wilful disbelief, or do you think the equity market has it wrong today and that he will follow through with tariffs such as these because that's what his past behavior has shown.
I think that they the market should be pricing in that these tariffs are very real. I'd layer on just a little bit further. I don't think that this is going to be the case with Canada and Mexico, but be mindful that it's not just a one time hit. When you're building an automobile, you cross the US Mexico and Canada border multiple times just for the same vehicle.
So is that twenty five percent tariff on just one time or is it on every single time it crosses between the borders, because that could be a five times event.
Hey, twenty seconds. Is this gonna be a problem for the US economy?
Absolutely, especially if LIS four B goes into effect. It's a huge problem and very disruptive on the Canada and Mexico front, which are our largest trading partners.
All right, great stuff, Oh my god, wish we had more time. Please come back soon. Henrietta Tres, co founder and director of economic Policy at the investment advisor and consultantly firm Veda Partners. Joining us here on this Tuesday.
You're listening to the Bloomberg Business podcast. Catch us Live weekday afternoons from two to five pm Eastern Listen on Apple car Play and then brought auto with a Bloomberg Business app or warn't us live on YouTube.
All right, cooks, We did get some housing data today, Sales of new homes in the United States slumping in the month of October to the lowest in almost two years. Two hurricanes, of course, hitting the South, and affordability challenges continued awigh on buyers. We also got some data tim on home price gains.
Yeah, this is really interesting. New single family home sales decrease seventeen percent last month to six hundred and ten thousand annualized rate. That's according to government data issued Tuesday. Home price gains in the US slowed in September two as buyers gained more negotiating power in the housing market. That national gage of prices rose three point nine percent from a year earlier. That's according to SMP core Logic Case Shiller.
And I'm figuring it plays into supplying to Mamble, Let's see what our next guest has to say, Chris, she has a front seat when it comes to the housing market. Kati Hubbard is executive EP of Capital Markets of the privately owned acid and real estate investment firm. They are Walton Global. They've got nearly four point four billion dollars of land under management, over ninety thousand acres under management throughout the United States, and they operate in the retail, industrial,
and commercial sectors. Katie joining us from Denver. Katie, good to have you here with us. How are you and how would you characterize the US housing market today?
Him? Carol Hi, Tim, Thanks for having me. I'm doing well, and yes, we definitely see that October had a lot of noise in it. As you mentioned, we had two hurricanes. Rates mortgage rates grows in October quite a bit, but it was a very regional outlook that came out. So the South specifically dropped twenty seven percent in sales. Well, the Northeast picked up fifty three percent in sales, So you just got to look at those regional areas.
I want to talk a little bit about where you are in the ecosystem of real estate, because you guys operate in a really interesting space. The idea is you buy land and hold on to it until developers who want to build homes want to develop that land, and then you sell it to them. So certainly, interest rate environment is really important to you. How do you feel about the rate environment and the rate path moving forward and how that's going to affect your business.
Yeah, so our clients are typically the largest public homebuilders, and the rate environment obviously is affecting all of the homeboilders, but the large ones that have the scale and the ability to buy down rates have been doing just that and been gaining market share in a rising rate environment. It's been good for the large homebuilders who are who are more competitive.
So it's it's okay, that's what's That's what's hard to understand because you know, the idea is when rates go down, people can afford to buy more homes. Hopefully, that's the idea. We haven't really seen that play out necessarily just because of the demand element here. But but how does it affect the way that homebuilders then come to you to purchase land?
Yeah, I mean it definitely just because we're typically feeding the land to the largest public homebuilders and they're less rate sensitive. The smaller builders that that don't have the ability to buy down the rates are more effective and can't really compete in the land space as well as
the large builders. We're also purchasing land ahead of needing it right now, so they're keeping an off balance sheet where smaller builders, who are also affected by the mortgages, they don't have the ability to land bank like the
larger competitors do. But obviously when rates go down, you know in that sweet spot when it goes below six percent, I mean, there's a lot of people on the sidelines right now that are waiting for that, and we think that that's going to be coming up into the next year. Probably won't be hitting below six percent this year, but a next year could get a lot of consumers off the sidelines.
Katie, one thing I'm curious about and I want to get your take on this, and we want to get into kind of what people want in homes going forward. I mean, I don't know if the mega mansion or the MC mansions are gone. But before we do that, we talk about the housing shortages in the United States. It's not just a one or two or three year thing. It's at least ten years, if not more. And that you don't have affordable housing in great cities, be it New York or elsewhere for those people who work in
this city but can't afford to live there. So it's not just about building housing, but building housing, affordable housing where it needs to be. So when you guys are acquiring land, is it in major cities, is it suburbs, like is it really feeding the demand that needs to be met?
Yeah?
Good question. So it's really it's regionally based, but we are typically on the outskirts of the cities where home builders can build larger scale communities versus those infill locations because we're dealing on a larger scale land land supply. But yeah, absolutely, the homebuilders have adjusted the type of product mixes that they're building to just for that affordability factor.
They're building more efficient floor plans. Everything is getting smaller, smaller kitchen, smaller garages, smaller storage to build a smaller home just to make them more affordable. What's considered doing higher density to your point, Carol, so less big bangons and more amenities geared towards the people that are able to purchase the homes. So you're seeing more pickable courts out there.
It's kind of funny what's considered affordable, Like, what do you guys consider affordable housing? And I know as geography and I understand that, but give me an idea.
Yeah, so the average new home is just hitting around in the four hundred and sixty seven thousand dollars range, and people are moving to the northeast now core affordability. I mean you can Youngstown, Ohio. You can get a house for one hundred and seventy one thousand dollars. It's one of the most affordable markets. And then they're going to where their jobs are located. So, for example, Syracuse, New York has a huge influx of people because Micron's
building one hundred billion dollar chip manufacturing plant. So if the jobs are there, then you know, it's relative to that market. But Southern California, I mean it's still one of the most expensive markets and one of the most difficult places to build because land is so expensive, So it is very relative.
Like you said, Well, that said, you do have quite a few assets in the state of California, quite a few in the San Diego area, a few in the Bay Area as well. What is attractive to you about that area given how expensive it is and how difficult it is for some home builders to actually build in California.
Doesn't scream affordable.
To me, right, It's just it's the overall fundamentals of people wanting to be in southern California. So the demand is there and you have a scarcity of land that's available for development. You used to have this mentality of you know, people didn't want things built in their backyard, the Nimbi mentality, Well, in California goes a step further. It's now called the banana mentality, which is build absolutely nothing anywhere near anything, So.
It makes it.
I've never heard that that's the Banana build Absolutely nothing anywhere near.
Anything exactly that, And that is the California It can be the California mentality. And so if you have the expertise and the boots on the ground to buy the land for the builders, the demand for people wanting to live there is there.
Nuts looking at the map of your website in terms of where you, guys, I guess have land and land assets, specifically Atlanta, is it still on fire for you, guys, or is that property land just sitting kind of empty and demand is cooled.
There definitely is demand there, but you are seeing less demand in the South. Like I mentioned the October numbers for the Southeast, we're down, but I mean it's still a good place for migration for the affordability factor.
Texas too, are people still fly to Texas Texas?
Texas continues to be a stronghold. Almost all of the top public builders have a very large presence in Texas. But we're moving to places in the Northeast like Delaware, where the public builders have told us they will take all of the land that we can bring them. In a place like Delaware, because you've got low property taxes, no social Security income tax, strong employment, great schools, and the surrounding cities are just much more expensive.
You basically, in thirty seconds, just tell us you basically have no assets in the sort of northwest quadrant of the United States, I mean all the way from Iowa to Washington and Oregon. Why is that.
We're going to be expanding our acquisition strategy. So we're going to be entering the Idaho market. We do land bank for t R. Horton in the Northwest, so we do have some assets holding land off balance sheet for them. So those are markets that we're exploring.
Where's the most expensive place to buy land right now?
Just ten seconds, Southern California, I mean California markets are the most expensive and the most difficulty.
That sun is going to develop perfect weather is going to cost.
You, Carol Master, of course it does, Katie Gosh is expensive. Yeah, Katie Herbert, thank you so much. SECONDI vice president capital markets at the privately owned asset and real estate investment company Walton Global.
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We are just a few days away from Thanksgiving. It also means Black Friday, which I think for a lot of people it's a lot of shopping. I don't know about you. I'm going to be here working. Are you going to be shopping?
I don't know. I don't like I don't like crowds, like I like.
This is interesting. You live in New York City and you take the subway every day, and it's very interesting here.
That is very true.
Point well taken. But when I can avoid, I have to get to work.
To be honest, I don't like crowds either, and I can't avoid the same place.
Just like. No, no, no, no, no.
Hey, I got some numbers for you. Deloyd out with some numbers ahead of the day, saying that the people it's surveyed are expected to spend six hundred and fifty dollars. That's between Black Friday and Cyber Monday this year. It's up fifteen percent over last year. It's also a new record.
That's a lot of spending. Also of note in that survey is that for the first time, online only retailers beat out all other retail formats as the preferred way consumers want to shop. I mean, go figure.
Okay, Well, for more on how retailers are thinking about the season this year, we go to Tom McGee, president and CEO at ICSC. It's the trade group that represents the global retail real estate industry, think brick and mortar and more. He joins us once again from New York time.
How are you great? To be with you guys, Thanksgiving?
Good to be with you.
Hey.
You Actually, it's interesting because you spend a lot of time at Deloitte, so you're familiar with this survey, I imagine, But I'm curious about your your thoughts on the online only portion of this that Carol just mentioned the idea that for the first time ever, online only retailers feed out all other retail formats is the preferred way consumers want to shop. You're on the brick and mortar side. How do you look at this?
Well, you know, I look at retail more from an omni channel perspective. I know that a lot of folks continue to break out retail between online and physical retail. But really retailers are somewhat agnostic in regards to where the transaction is consummated. You know, they know they have to deliver it from their customers, whether that's in the
online channel or the physical channel. And I think really the only channel manners with the consumer channel, and a lot of the online you know, a lot of online sales are fulfilled out of stores now. Stores are increasingly coming many fulfillment centers, so not used just for traditional shopping, but really ship from store or curbside pickup or click and collect, all those things that are initiated from an
online perspective but are actually fulfilled from the store. So I don't look at online, you know, the growth in online sales as a negative for physical retail. I think it just complements it. I mean, right quite frankly, the challenge right now for physical retail, you know, holistically across the country is the demand for physical space is in excess of the supply of available physical space that's out there.
So where are we in the story the demise of the mall, be it strip mall, big malls, medium, I don't know, you know, where are we on that as we do see some retail brands go to the wayside, and we do see kind of a filtering out. But where are we in that narrative, that story, that reality.
Time Well, you know, the you know, the the narrative of the demise of the mall has been around for a long time, for decades at this point, but here we are and the mall is still alive and kicking. I think when you think of physical retail, you have to think of it in multiple dimensions. So there is you know, kind of grocery anchored neighborhood centers. There's you know, traditional kind of power centers, which are the target Costco Walmart anchored centers. And then there's big malls, which can
range from smaller malls to big regional malls. And you know, it's the discussion around large regional malls is more nuanced. Some are doing exceptionally well, some are more challenged. The story around kind of the target Walmart anchored power centers and grocery anchored neighborhood centers is one of exceptional strength.
Right now. The suburban retail.
Is kind of on fire, and that's where you're really seeing this demand for space exceed the supply of space. So it depends upon which sector you're talking about, but generally speaking, you know the mall.
Malls have evolved.
And they've become much more than just just a place for people to shop through, a place for people to experience a whole host of different offerings, including dining and et cetera. As a matter of fact, I was at the mall last night watching Wicket and What to Eat right afterwards.
So you're in New York, so just give us. I don't want to you know, I'm not going to dox you or anything, but where were you?
Because I was, I won't to give you the mall a specific mall, but I was in New Jersey, Okay, which is and.
That's my point.
To some extent, I do spend a lot of time here in Manhattan, split time between Manhattan and New Jersey, and Manhattan is its own ecosystem, and so it's important to remember that what we see in Manhattan isn't necessarily what you know exists and throughout the rest of the United States, particularly in suburban areas.
Yes, that's what I wanted to talk about in these areas of growth here. You mentioned dining and You've mentioned that quite a few times when you've been on with us in the past. Is that the area of growth in these shopping centers or these sort of retail areas. You have that big anchor store, the Costcos, the Walmarts, but is it restaurants, is it dining. That's really the growth area.
Well, not necessarily an open air retail, you know, which is what you just mentioned, so you know, kind of
grocery anchored or Costco Walmart anchored. Those many of those retailers are doing exceptionally well because they're close to where people live and in a you know, in a post COVID, post pandemic environment, people are obviously working from home a lot more, so they have more time to shop and quite frankly, the benefit of having that physical retail space close to where people are living I was proven out
during the pandemic. So that's one of the reasons why the demand for space is so high, Because these retailers want to be close to where people live because it's a chance for them to yes have people come to the store to shop, but also to the fill online orders. It's much cheaper and more efficient for them to either ship from those local stores or have the consumer come
to those in the larger regional malls. Clearly, the mix of the curation of what's in that mall is lean more heavily towards experiential than product based retail over the course of the last ten to fifteen years, because they're trying to offer a collection of offerings in those regional malls, because they draw from a greater a larger geographic area.
Hey, Tom, you know what's interesting in the mall and retail shopping space. I'm just thinking about the Bloomberg audience. We talk about retail and consumer and of course we're getting ready for you know, the holiday shopping season. But what's interesting from your perspective and you think would be interesting to our audience and investing audience who are trying to kind of catch trends that might be going away or coming around.
Well, you know, the biggest trend I would tell you is the one I started with, which is the demand for space is an access to supply of space. And a lot of people are surprised by that. But if you think about just the numbers the you know, basically since the Great Financial Crisis. I'm oversimplifying this, but retail sales have almost doubled.
During that period of time.
GDP has grown by you know, close to forty percent. Physical retail square footage in the US has grown by about six percent during that period of time. So while retail sales have almost doubled, you haven't really had any increase in physical retail space. Now, in some areas you have, you know, in some areas of population growth, you might have had some additional square footage added in the Texas
is and the Floridas of the world. But generally speaking, in most densely populated areas, it's either remained flat or the amount of space has actually decreased during that period of time. And retailers want more physical space. I mean they most retailers actually want to open up more stores right now because of that last mile fulfillment they have discovered. Well, we talk a lot of media and a lot of
investors still talk about online versus physical. Retailers really think about it from an omni channel perspective, and they look at the store as an asset that they can utilize the multiple dimensions not only for traditional shopping, but particularly for fulfilling those online orders, and in fact online sales grow in areas where retailers open up stores, it grows not only the physical retail sales, but online sales as well.
Totally get it. I mean I do that when I sometimes we'll look for a retailer. I can easily, you know, pick up drop at a retail store in the city.
I say, there's the opis by online pickup in store.
Right exactly. There's some stores I think just outside our building, there's some openings for retail space. Oh, they're still there and they've been sitting there for a long time.
All right, come come join us here.
Thank you, Tommy Gee, thank you so much. At I see sc joining us right here on Bloomberg BusinessWeek.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern Listen on Apple car Play and then brout Auto with a Bloomberg Business app. I want us live on YouTube.
Well, it is time now for Bloomberg Plugged In. It's your weekly look at EV's.
All right, so lots of news already this week. It's only Tuesday. Tesla shares were down yesterday. They fell nearly four percent in the Monday trade after Bloomberg reported that the company's evs would be shut out from consumer rebates under proposal by California Governor Gavin Newsom, hitting the prospect prospective Democratic presidential hopeful against Republican power player Elon Muski.
Hell I was not happy about that.
A little bit of a battle. Well, listen, it used to be his home state, right he was did?
He pointed out that he said this on X. I don't know if I haven't fact checked it, but he said that Tesla is the only one that makes EV's in California so interesting.
So we're a little bit of a battle here. So we have a great guest to get into this.
We do. We got Andy Bennett with us. He's CEO of Drives. It's a company that provides EV charging management software. It's part of the five point eight billion dollar market cap publicly held Volunteer Corporation. Andy joins us from Beautiful Boulder, Colorado. Andy, how are you right?
Yeah? Thanks guys, nice to meet you. Cout Tim, Good to have you with us.
Hey, explain exactly what battery management software does? I mean, I think we all understand that you can't just charge your iPhone over and over again and expect the battery to last the same as it did on the first day four years later. Where does the software come into that.
Yeah, So, in general, we think about batteries in two ways.
Right.
Of course, it's the batteries that are in the car, right, so you have a battery management system that optimizes the use of that energy. But batteries are becoming more and more important for EV charging. In places like the United States, you have lots and lots of areas that you know, effectively are constrained from an energy perspective, and so you can put large batteries in those areas. You can control the flow of energy, so you can increase the number
of cars you can charge. So batteries, when you're thinking about EV charging, there's really two parts of the equation, and the first is that battery in the car, how it's behaving, how it's being utilized. And then those batteries that are going to yat gas stations all around the country. They're going to give us extra capacity to really keep that charging experience as quick as possible.
So, okay, so I'm just curious about you know, it's interesting. I'm listening to you talking, I'm thinking about when we talk about the ev world, Andy, a lot of what comes up is about range anxiety or people being able to find a place to recharge. You know, if I pop on a highway out to Connecticut, I see them the rest stops, they all have them, But in New
York City it's still really challenging. So I understand what you guys are doing, but I feel like, is this the cart before the horse in terms of having enough places just where people can charge before we kind of take it to the optimization level, which sounds like what you guys are doing.
Yeah, No, we do a little bit of both.
So we build the software behind the world's largest charge point operators, so we call them CPOs. So think about evy goo as a great example or shell and that software is looking at or the health of all those chargers out there. Is the network working, is it running? Energy is just one part of that total equation. Are you able to bill? Are you able to show up to a charger? And actually you know, use your credit card to go make that work? So without that, without
that fundamental software, there is no charging. Right, It's the it's the infrastructure software that makes it work. But you're absolutely right, when you think about the frustration that folks have today, it kind of comes in two sort of flavors. The first is, when I get to a charger, is it available right? And then if it's available, is everything working? And as we've seen in over the last couple of years, reliability is going up and up and up and up, which.
Is great, but then you're you nailed it.
The second part is we just don't have enough charging today and place enough public charging. So if you think about the United States, you know today we have roughly, let's say, about two hundred thousand available chargers to people.
Most of those are what we.
Call AC charge, so they're lots slower than the DC fast chargers that you might see on the highway. And if we were to keep up with really just the current sales that we have in evs right now, by the end of next year, we would still need to build four times more charging infrastructure in the United States to meet that demand. Some of those projections say by twenty twenty seven twenty twenty eight, we would need to build eight times more than what we currently have just to satisfy that what you.
Just mentioned, of course, which is range anxiety.
So a Trump administration, Are we going to then ramp up the building of these because it does sound like we need them. Like, what are your expectations around policies in the EV world and what it means for the industry and your business.
Yeah, I mean, look, clearly there's some headwinds with some of the administrative changes. Some of the things that could be changed is you know, we could get a drop in passenger EV adoption, right, so if we don't have you know, the incentives, then some folks just aren't going
to go buy those cars. Now, having said that, for a company like ourselves that is building the software for the charge point operators, there's still such a huge gap between having enough of those chargers out there to deal with the current requirements, you know, versus what's actually there that we kind of some of us in the industry are happy to kind of get a little bit of a catch up time there.
So no doubt I think if you think about, you know.
Right now, where are we in terms of charging infrastructure growth for the year. Most of the projections at the beginning of the year said, look, we'll probably end up at around thirty percent year of a year growth in public charging. We actually know it's it's probably closer to
thirty six or thirty eight percent growth. It's just an incredible cater I think about that, that's a massive amount of infrastructure that big CPOs are building as quickly as they can, and I think often we spend a little bit too much time maybe associating that build out with the NEVY funding, the federal funding that came out. Most of that infrastructure spending happened way before the federal government ever started to step in and incentivize. So, look, we
still have a ton of demand. The big CPOs are still building at just breakneck speed.
That's going to happen.
It may it may get a little bit compressed, of course, but it's still going to happen at a very very fast rate independent of the whole NEVY funding pathway.
I'm wondering about just the basic question, Andy, if we think about where all the gas stations are in this country, why is it cost prohibitive for these gas station owners to just add one or two EV charging systems to their existing gas stations? Like why doesn't why why is this so difficult to do?
Yeah, I got you know, Tim, that's a that's a really great question. You know, for me, I kind of to look for that answer. One of the best places to go look is in the Nordics, right where we know today over.
Ninety percent of all new cars or evs.
Look at the UK, look at Europe, which is, by the way, one of the places my company has been for years helping charge point operators.
You know, what you see as some gas.
Stations are really well suited for electrification and some some aren't. Maybe a couple quick comments about that, because you know, no matter what, we believe that the winners in this marketplace are are going to be the fueling stations that
also have other things, other amenities, other conveniences. So when you're in Oslo or outside of Oslo, whether you're in the urban area or you're you know, on the highways, what you see is EV charging stations that you know, have outdoor gyms, they have incredible food, clean bathrooms, really nice amenities.
The second you show up at one of these stations, you.
Connect to their Wi Fi and you start to get coupons to go inside and save ten percent on.
A cup of coffee. It's a really.
Really integrated experience, and we certainly see some of the larger retailers here in the United States. Starting down that pathway Apple Green, you've ever driven on Route ninety five is a perfect example as you go through New Jersey, extremely innovative around what that experience will look like. But having said that, some of those places just aren't great spots, right.
They may not.
Have the ability to they might not have just the real state to bring that in, they may not have the conveniences. And remember the average weight time is probably about twenty two minute minutes today as you're charging on a a DC fast charger, so you generally want to get.
Out of the car.
You're going to expect other amenities. But when you go back to the European example, what we do see, especially in their urban environments is a slower, more methodical transfer. So over time they don't just go one hundred percent electric. Those stations they may have you know, ten fueling pumps and two DC chargers to start with, and then and then they slowly pull out those pumping stations. Circle K is a great example in Europe where they have done
this really fluid transition. As the economics makes sense that DC fast charge is expensive, so just the way to think about it is break even on that investment, probably close to about eleven percent utilization. It has to be being used eleven percent of the time that it's there.
I will say, Carol, my trip to Norway a few years ago. The infrastructure just makes you cry when you compare it to US infrastructure. The tunnels, the tunnels are incredible. Just drill right through these mountains, miles long, totally well lit, not crowded at all. Unbelievable.
Maybe Elon's onto something with the boring company. I'm just saying, Hey, just got thirty seconds. Andy in a nutshell or word or two, how do you describe the ev mark it today?
You know, look, we make software behind these charging companies. We can barely keep up with the demand. And the growth that's taking place has been incredible. We're a company that's doubling year over year and just you know, building the things these folks need to be successful.
For us.
Your huge portion of the market still remains in Europe. The United States is just starting to grow. I think we're going to see a little bit of a dent taken out of passenger EV charging. Nothing is going to stop the electrification of large scale fleets though. That is
picking up at a pace that is really fantastic. And why that's relevant is as that continues to be successful, we're going to see whether it's a passenger or a truck co charging at these different places so the infrastructures can continue.
To roll out.
At the end of the day, if you build a car, right, there's two things you need to go get people buy an EV car, cut the cost of the battery, and get more EV infrastructure out there.
Totally makes sense. Andy Bennett really enjoyed the CEO of drives jotting us right here on Bloomberg Business.
That's a d R I v Z.
Very cool.
Yeah, I love that, brother, Marca.
Journal. How about you let me drive?
Oh no, no, no, no, honey, please, I'll do the gravel.
Let's wat I want to drive.
It's a good question.
This is the drive to the clothes dot com for me. I think we'll buy a Roundel Don on Bloomberg Radio, it is the drive to the clothes on this Wow, how do we get here?
Carol which one Tuesday, November.
Twenty six it's almost it's it's it's almost. It's almost time for Thanksgiving.
Oh no, no, let's see what Alan Lance has to say, because time flies when you're having fun. Director of research at Landsglobal dot com, President of Allan B. Lands and Associates with us once again from Toledo, Ohio. Hey, nice to have you here forgive the shortens today, but of course breaking news. Trump's all other certainly here at Bloomberg and rightfully so we are watching though the news out
of Washington, the geopolitics. What's changed in your view since Donald Trump was elected, uh, back into the White House?
Quite a big carol, obviously, you know, everybody's looking at
the glass half full. You know, some uh sectors have really underperformed, Like you know, the financials because of the potential deregulation have really you know, outperformed, and you've seen a good broadening out which is very healthy of the market where you know, it's not just the magnificent seven, you know, or tech you know, uh, communications services, but it's a small cap mid cap and uh, you know quite a few participants now in this rally, so so
that that's been healthy and uh, you know it was it was fairly predictable. There were a lot of stocks, including like software and tech had underperformed that you know, there's some key advantages. They're real well positioned for AI. And and what's going to happen with the advancement it's of AI and you know that that's starting to get invest attention and companies like Snowflake and Mango dB or starting to move.
Okay, so let's talk about some of these companies. You mentioned. Snowflake, it's one of your picks right now. The company reported earnings in recent days. Why are you bullish on Snowflake?
Yeah, Tim, we recommended it in June. We figured they just had a bad quarter. The stock moved down from three hundreds to as far as the low hundreds. Actually recommended one hundred and twenty four. It went to one hundred and seven. So we just kept on buying. We knew there's gonna be another quarter or two. And really over the past week they reported, you know, better than expected results and the stock has moved up. And that's happened with quite a few Mango, dB, Data, Dog, et cetera.
I think industers are starting to see that, you know, they can ride the coattails of some of the magnificent.
Sabbath Okay, and we don't have a ton of time, so I want to get to one more forgive me. We'll leave thirty seconds. Dell fave report earnings after the bell today. Why are you bullsh on Dell?
Then we like that, we wouldn't chase it, so basically we'd have it an old here, but it's one that you know when would have broke a hundred, you know, just like the video. These these companies are really volatile, so by you know when they're out of favor and you know, take some profits if you do see a spike with the Dell earnings tonight.
All right, Alan, thanks so much for joining us this afternoon. Alan Lance, director of Research over Atlance Global dot com, President of Alan B. Lance and Associates, joining us from Toledo, Ohio.
For This is the Bloomberg Business Week podcast, a Little Apple, Spotify and anywhere else you get your podcast. Listen live weekday afternoons from two to five pm Eastern on Bloomberg dot com, the iHeartRadio app, tune In, and the Bloomberg Business App. You can also watch as long I have every weekday on YouTube and always on the Bloomberg terminal
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