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Well, from money in the markets and in stocks to what's going on in the presidential election. The surging enthusiasm for Vice President Kamala Harrison Georgia and North Carolina is convincing local Democratic leaders that she can score the first double win in the southern swing states since Jimmy Carter. We got Michael Sasso with us Bloomberg News Real Economy reporter. He joins us from our Atlanta bureau, North Carolina and Georgia. Last time I checked, Michael, those were still firmly in
the toss up category. What data are the Harris campaigns seeing that make them think they can pull this off?
Well, some of the data comes from our own poll. The new Bloomberg Morning Console poll shows that the Harris campaign is up by two points in both Georgia and North Carolina. It's a somewhat of an improvement from just a month ago when Kamala had just ascended to the top of the ticket by a couple points in each state. But it's significantly better, I mean, six or seven points better than President Biden was doing about a month a
half ago. So they're seeing some very positive numbers in each state.
And even still though, I mean, I feel like it's important to note that we're still within the margin of error. I mean, even with this big surgeon momentum, we're kind of talking about a dead even heat here, which isn't exactly a runaway. And this, of course is such a strange, compressed campaign for Kamala Harris. It'll be really interesting to see where that goes from here. But you think about, of course, your reporting that you have, and you spin
it into next week's debate. I mean, how much potential is there to sort of change the polling based on what we actually hear in the debate between Donald Trump and Kamala Harris.
Well, I don't know that kind of goes beyond some of the reporting that I've done, but you're right, it is it remains very close. Some of the caveats there in North Carolina, for example, this is a very despite the big cities like Charlotte and Raleigh. It remains a fairly rural state. It has the second largest rural population in America, and so those tend to lean Republicans. So
you know they're making efforts. But yeah, that is some of the There is some there are some questions about whether the polling will hold up, in whether some of the some of the what do you call it enthusiasm will wane particularly, We'll see, have to see what it comes out of the debates.
As you said, Yeah, answering a question online or even on the phone is certainly different than getting to the pulls on or ahead of election day when you can vote in some of these areas. So every year, every four years or every two years after an election, there's a lot of hand raining that happens as to you know, which polls were spot on and which polls missed. We don't know what that's gonna say yet, But one thing that you can tell us, Michael, is the ground game
in these states from the Harris campaign. What are they doing with all the volunteers that they've actually been able to garner in the last six weeks or so.
Yeah, that's a big story. There are something like fifty two thousand additional volunteers that have come forward in between the two states. And that's a lot of people. So at the local level, places like Fayetteville, Georgia, and Greensboro, North Carolina, fairly small, middle sized cities, they're seeing twenty to thirty people new people every day. And whether they're trying the Harris pain is trying to put them to work mostly canvassing. What they tell me is there's nothing
more effective than knocking on doors. And so if you live in a swing stay right now, you're most likely going to get a door knock. And you know, so that's they're also doing phone banking. You know, I hear they're even having pancake breakfast. Then pancake breakfast. Democratic pancake breakfast in Veayetteville, Georgia is through the roof right now, kind of standing room only. From from what I'm told.
Well, I was actually down in your state just a couple of weeks ago. Sorry for not stopping by the office. By the way, I didn't have time. I was there for a Bloomberg event. Katie's giving me this look devastating. You're a terrible person. But one thing I did notice in my hotel room was when I turned on the television, was that literally no joke, every other ad was for Trump or Harris. And like, you are in a battleground state when you cannot avoid seeing some sort of political
advertisement for the top of the ticket. Just give us an idea of what things are like on the ground for you, as somebody who covers this stuff but also lives in a swing state.
Well, I have an eleven year old daughter, Veronica, and she can cite pretty much every Trump and Harris' campaign ad out there. I don't know, maybe it's a little bit scary because some of them get kind of negative, but you know, there's enough that she can cite the campaign ads as well as the pharmaceutical ads that are kind of unconstantly.
You know, you actually bring up a funny You actually bring up a funny point though with that, which is that an eleven year old is not the target demographic of who they want to reach, Like they're only trying to reach a few, you know, as their own. Mark Gongloff told us, like a football stadium full of people who will decide the election in a handful of states, Michael, So it's pretty remarkable to see all the money spent on such a small number of people.
Yeah, yeah, absolutely, what did they say? The state of Georgia came down to ten eleven million people came down a twelve thousand votes four years ago, So you're right. I mean that is well within the margin of error in these polls.
Michael Sasso, Bloomberg New's Real Economy Reporter, joining us from our Atlanta bureau in the heart of a swing state. Down there in Atlanta.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Apple card Play and then brout Auto with a Bloomberg Business app, or watch us live on YouTube.
Well, attention New England listeners. Check out Bloomberg Radio in and around Boston on ninety two nine FM. Maybe you're listening to us right now on ninety two nine FM. It is your news source for business news from the financial center of New England. Bloomberg Radio ninety two nine FM in and around Boston. Well, speaking of Boston, it is the birthplace. I didn't know this before. Yeah, it's the birthplace of public transit. Did you know that?
I didn't know it.
You didn't know that, but now I do.
Well, now you do.
That's a treat.
The country's first ever subway tunnel, it's still used today to connect the stop closest to the Mayor's office with the city's famed public garden. But Katie. Like other US transit systems, Boston has struggled with low ridership post pandemic. Decades of under investment have also left the region with antiquated infrastructure, a mishmash of technology, and a daunting budget shortfall. In fact, I could be saying the same thing about New York.
That's true.
Anyone listening or watching us in New York knows that well. Boston Mayor Michelle Wu has launched a social media campaign highlighting the transit systems shortfalls.
Good morning, We are here in Hyde Park on every any day a little before.
Nine am, and we're here to commute with tochi.
Uh go into benaf Barbart.
We're gonna say the bus a train at the end of the bus again.
How long should we be expecting the trip to be by?
Okay, let's go.
A bus to a train to a bus about an hour commute. That type of thing has serious financial and economic implications not just for individuals, but for entire city economies. That's where Kate Deneen comes in. She's president in CEO of a Better City. It's a nonprofit made up of business leaders to promote Boston's economy and the quality of life for residents. Kate joins us from Boston. Kate, good
to have you with us. Help us make the connection to reliable, solid, public transit in the economic health of a city.
Well, thank you so much for having me.
So from a Better Cities perspective, Greater Boston can't survive, let alone thrive without a safe, reliable, affordable, and a resilient public transit system. So it's really the key to unlocking our equitable growth and our global competitiveness. And so we see it as a foundational investment when we think about, you know, current affordability and retaining and recruiting new talent.
And let's talk about the concept of congestion pricing, because of course our New York listeners, that's probably where their mind went. You think about congestion pricing at it as it had been proposed in New York. It was theoretically going to help boost revenue for the city subways and reduce traffic, two things I'm sure Boston goers would like to see as well. Congestion pricing, as we know in
New York was pulled there at the last minute. Do you think it's a viable option for the City of Boston?
Can you see that future?
So I think we're at an inflection point where we need to have all options on the table. So the governor has convened a transportation funding task Force. I sit on that task force alongside other business leaders, and we are in the process right now of assessing different revenue raising policies, and that includes things like increasing fees on ubers and lifts, and then really more ambitious policies including roadway pricing and broad based taxes. So right now everything
is on the table. All eyes are co watching what's happening in New York City. I think people are eager to see if that plan does come back into play. So when you look at Greater Boston, I think we are thinking about our existing tolling infrastructure. Where could we add new tolls, Where could we ultimately experiment with things like variable time of day pricing, you know, colloquially known as congestion pricing. So I think all options need to be on the table.
I can tell you what's happening here in New York at this point, and it's nothing as of now. As you know, it was supposed to go into effect at the end of June and the governor decided to pull the plug on it at the last minute.
Okay.
We know the importance of reliable public transit in cities and how important it is to the economy, and we know that it costs money. But as soon as you start to raise that revenue, people say, I don't want to pay for it. How do you get people on the same page and help them understand that, well, this money will be used for something that will ultimately benefit including you, right right.
So I think that your intro was spot on.
You know, we are the birthplace of the American Revolution and the birthplace of public transit. So we have an aging infrastructure that has really suffered from decades of under investment. So we are at an inflection point again where the good news is that we have new leadership in place at the MBTA.
We call it the tee here.
Actually, somebody who came from the New York Transit System General manager Phil eng and he is starting to restore public trust in the system. Folks are seeing that the Tea is making smart investments in things like track improvement. Right This is really foundational work that is very disruptive. But there is a sentiment now here in Boston that this short term pain is worth the long term gain.
So we're starting to, I think, rebuild trust with both writers and with those in the legislature that are going to be needed to enact any of these policies that we're talking about. And I think that's step number one. I think step number two is continuing to lean in on transparency so that everybody can see the results of the current investments that are being made. And that is an uphill battle for sure, but we're starting to see.
The fruits of some of this labor that's happening right now. Well, can we be specific here?
I feel like we're dancing around what we're talking about. So we're talking about raising fees right, like we're talking about making it more expensive to ride the Tea. I mean, walk us through some of the options here. You have that, and there's the communication challenge of trying to communicate that this isn't the long term benefit that you will feel this. I mean, what other feasible options are there beyond just raising the cost? Is that really the only one?
So right now we're not focused on raising the cost of riding the tea. We in fact would love to experiment with new fair policies that makes it cheaper and easier for people to ride the tea. We're trying to assess different revenue raising policy outside of user fees that could go toward supporting both operating and capital investments at the tee. So we don't want to be raising faars
on writers. We also don't want to be cutting service, but we want to be thinking about different different levers, like I said, potentially increased tolling, potential broad based taxes, adjusting existing fee structures like t NC fees, FeAs on ubers and lifts, or r m V fees. You know, there are a lot of different policy levers that have been put into play in different parts of the US and abroad, and so right now we're assessing all of those options.
But it really you know.
When when it comes to actually getting those policies across the finish line, I think it's on the business community and the advocacy community, and of course the t to make the case that money that is given to the tea is.
Well spent to Yeah, that's very briefly, just in twenty seconds, what I wanted to end on. I think critics might say, yeah, well, there could be some inefficiencies when it comes to public trands. It certainly critics say that here in New York just in twenty seconds. Other places you think where without cutting service, they could actually be more efficient.
Certainly, there's always an opportunity to capitalize on efficiencies. I think one way to ensure that the agency is using money more efficiently is to ensure that they have the procurement tools that they need to get the money out the door quickly. And they don't have all of those tools that they need. So it's not just about more money on the operating capital side, it's about the right procurement mechanisms to ensure that that money is being spent effectively.
Hey, kath Deanene really appreciate you taking the time and joining us on Bloomberg BusinessWeek, President and CEO of a Better City, the nonprofit up in Boston.
You're listening to the Bloomberg Business Week podcast listen live each weekday he is starting at two pm Eastern on Apple Car play Royd Auto with the Bloomberg Business. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa playing Bloomberg eleven thirty.
All right, I got another pop quiz for you. What are the brand's original Penguin by Mon Singware, Laundry by Shelley Siegel, Kubabera, Ben Hogan, Grand Slam, John Henry, Manhattan, Access, and of course Perry Ellis all have in common.
I was hoping that you tell me.
Actually, okay, I will tell you. They're all part of the portfolio of Perry Ellis International. It's the privately held clothing, fashion, cosmetics and beauty company that was started close to sixty years ago. We got with us Oscar Feldon Christ, the president and CEO of Perry Ellis International. He joins us here in the Bloomberg Interactive Brokers studio. How are you.
I'm doing great? Thank you for having me today. It's a beautiful day in NYC.
Yeah, it is nice up here today. Finally in the beginning of fall too humid. Oscar, Yes, people here, Perry and they think of one brand, I think, but it's a portfolio of brands, and I didn't even mention the licensing that you guys do Nike, Callaway, PGA Tour, Jack Nicholas for golf apparel. Explain that the sort of the way the brand works and the licensing versus the actual apparel.
So where our business is basically a we operate with inbound licensees, where it's as you had mentioned, Callaway, Nike, PGA Tour, and Jack Nicholas. Then we have brands that we own, which are of course Perry Ellis, Original Penguin, Laundry by Shelley Siegel, and Kube Vera, just to name a few, And we operate the business seamlessly. So we work, we license product category gries out that we will never produce in house, so for example NetWare or if we
want to go into the home business. And we operate today in trying to develop the brands as pure lifestyles because that today is very important. When the individual shops, they shop for a brand that they know, and if they can buy the same brand that they have security of what the brand stands for and what it is, they go out and they would buy other product categories of that brand.
Right, Well, talk to us a little bit more about the distinction of a lifestyle brand versus, you know, maybe just an apparel company, because is it just about the actual products that you offer? Is it, you know, offering clothes and also maybe you have furniture or other home goods or what do you view as the distinction there?
Well, I don't think that for us, the distinction would be is that we're really truly in apparel and accessory. Come BENI very focused on men'swear, which basically is about ninety percent of our business. We do have a lady's business under Rafaela, which has been around for twenty plus years. We also will be operating laundry by Shelley Siegel's Sportswear coming in the fall season. We'll be doing it in house. Now, the balance of our business is predominantly the big business
is really men's wear and accessory. So when it's men'swear, it's Perry Ellis as I mentioned, golf, pickleball, tennis, etc. All the product categories that fall within the lifestyle that we produce those brands and product with.
I'm curious because you have a really interesting view from your Perch is the CEO of this portfolio. We hear a lot about consumers, some doing well, some doing not well, the high end doing fine, the lower end consumer struggling. You have a diversified portfolio. Where are you seeing strength? Where are you seeing weakness?
Well, we do business with basically every channel of distribution. I see strength still in Walmart is doing extremely well. The off price channel, as we've seen by their latest
Q two earnings, is doing well. I think that department stores and chain stores are a little bit more challenging, but I think that they all have new senior management in place today in many cases, so I feel that their strategy going forward will definitely will be able to see a betterness in their business, probably for the second half of the year versus many of them are new to the job.
Okay, So that's the distribution side, and.
I also yes in the distribution so I also forgot to mention we also do business on the sporting goods side, which has been forming well throughout the entire couple of years ahead of the game because people are definitely their lifestyle since COVID has definitely changed more outside and more involved in doing you know, different sports.
What about individual brands, where are you seeing strength versus weakness and individual brands that are in your portfolio.
I would say that, you know, men's in general is a lot more conservative than the women's side of the business. Men's don't change that often as you see in women's where you know today a woman has the opportunity to buy a pair of pants from Rafaela with a with another branded top. Our golf business, anything that has to do with sports, which today amounts to about sixty percent of our total business for the company, continues to do
well across all channels of distribution. We saw last month that rounds of golf played were a little bit down in general, but that's mainly more because of the wet weather that we had in certain parts of the country. But I would say golf continues to be strong. Tennis apparel, the excitement that you have currently today now with the US Open coming off the heels of Wimbledon, I think that, you know, overall, sports continues to be an important vehicle
of success for our company. When it comes to the Periellis brand, we're seeing success in go to work dress wear, casual wear. If Periells today I would say, we're probably market share one of the top dress pants in the market today as well as belt. We probably own about twenty percent of the belt market in department stores.
I want to go back to what you were saying about men's fast versus women's fashion, because the question I was going to ask you was how do you stay relevant? How do you stay relevant in changing fashion trends? Because you think about Lululemon, for example, you know there's been a lot of question marks over you know, the shifting silhouette that's popular right now, whether you know baggy jeans
are coming back, and if that's bad for Lululemon. Then you think about Abercrombie and Fitch, which has been able to reinvent itself and somehow make itself cool again and appeal to, you know, millennial women, not necessarily the teens that they're known for. But it sounds like what you're saying is that when it comes to men's fashion, that that's maybe not as big of.
A worry as it would be if you were women only.
Oh, most definitely, So I think women's fashion, I mean you have to deliver. Like in Raphaela, we deliver a new collection every thirty days wow, and and in some cases it doesn't hit the floor until six weeks after the you know you ship it, so you know you're you're behind the eight ball in many cases. I think on the men's side it's definitely more conservative. But to your point, it's all about innovation. You constantly have to be out looking for newness. Maybe color, may be fabrics
or silhouettes. If you're not on top of your game and shop and see what's out there and see the new up and coming brands. The amount of new brands that have been created over the last ten years just from the Internet has been unincredible.
That's pretty amazing, seeing little.
Small brands that you know, basically ten years ago didn't exist, and it's purely because of just using common sense and creating something that wasn't available. Hey.
One thing we talk a lot about is AI and the beneficiaries of AI, and so far there've been a handful of stocks that have been huge beneficiarias of the AI trade. A question coming from one of our loyal listeners viewers, he's asking if AI bleeds into your portfolio at all.
Well, AI is a function of operations, and how do you operate your business faster and being able to deliver quicker answers or even information. I think AI is definitely you're starting to see it maybe in prints where you tell you know you use AI to develop prints for you. You can use AI today in searches of product identity. So there's a lot of ways that we can use
AI for. We're in the process now of installing a brand new planning system that has an AI capabilities that we'll be able to give us new data faster.
Hey we're Bloomberg, so ten seconds then we got to run. Are you going to hit the public markets again? IPO coming anytime soon? All right, there it is that one second. That was one second. He's a man who knows time. And Oscar Feldon Christ, President and CEO of Perry Ellis International, brother Marco.
Journal.
How about you let me drive?
Oh no, no, no, no, who's.
Alright?
Please excuse me?
I want to drive.
It's a good question.
Good this is the drive to the clothes thing. Well around you down on Bloomberg Radio.
Well look at that, Katie Greifeld. Here we are eighteen minutes.
Till the close, and a lot of people will be happy for the markets to shut down. On has been a very brutal start to the trading month.
Hey, speaking of happy, I got some good news for people up in Boston. Yeah, yeah, Okay, Attention New England listeners. You can now hear Bloomberg Radio in and around Boston on ninety two nine FM. It is your news source for business news from the financial center of New England. It's Bloomberg nine FM.
I'm going to get that tattooed.
You should Yeah, do you never mind? Okay, not happening, Okay, get it, get it, get it tattooed.
Hey, speaking of.
Boston, Yeah, we got Aaron done with us, all right, senior equity portfolio manager at Morgan Stanley Investment Management joining us from Boston. Erin I would say, Happy Labor Day, three day weekend, but it's not so pretty if you're long in this market.
Yeah, it's been a I would say classical sort of sell off to start September. We got some not so great data from China that obviously set the tone a little bit. I think everyone's looking at the labor market report on Friday. I think you got a lot of profit taking and sort of deleveraging them on some of the probably shorter money. So you look at it, I mean you've got a very the defensive sectors classically holding in like staples, utilities, stuff like that, and otherwise it's
really a cyclical trade down right. It's everything. It's energy, materials, tech, everything else is getting marked lower. I think people are looking at the fall with the market coming in at all time high, and historically, you know, September, October, maybe even in November with the election is not always the best time for the market, and I think that's probably painting positioning now that we're into a new month.
Yeah, I mean, talk a little bit more about positioning and where you see the balance in markets right now, because this is a question I think I asked him sometime in the last hour. You think about what we saw last week and what we knew on Friday. Has anything changed between now and Friday? I mean, what are the fundamentals of this market and do they allow you to look past what we're seeing today.
Yeah, so I think you've flipped a month. That's I don't want to downplay that. I do think the Chinese data just continues to point to really a tough turnaround, and let's not underestimate how important the Chinese economy is to sort of global markets, so I think that's very important. Otherwise, I don't think a lot has changed. You know, there's a lot of conferences going around Boston, New York, around
the country. This is kind of the first week that conference season kicks on, and a lot of the messaging and what we're hearing and updates from companies hasn't really been that negative. I don't think you know, the chip sector has for instance, had a really negative one day news event or anything. This is really when I look at it, it's classically just risk off profit taking. So when I look at the economy, I think one of
the things that really stands out. And you mentioned the word balanced, and I would actually argue the market's been not balanced very well. And I think you've got this leading sort of group of stocks and the tech sector and comm services sector that have just been leading the entire market and pulling it higher. Inevitably, that's going to be what has to take the market lower because they account for such a big part of the index. And argue, you know, I think we are going to be fighting
a little bit of that. I think those are such crowded investments in portfolios, hedge funds, et cetera. That you are going to fight some sort of unwind at some point, and I think, you know, you're seeing some of that today. What I think is interesting and what allows us to look past that is I think you get some positioning trades here. Let's see what the employment says on Friday. What does that tell us about FED rate path going forward?
But I also think there's a lot of sectors in the market that have really been left behind.
Uh.
You know, that's energy, that's materials, you know, even I would say healthcare hasn't had the best go here. So a lot of sectors just haven't done well. And I think that's a lot of cyclical sectors. And so what I think we have ahead of ahead of US is
a global easing cycle. Right, You've seen rates cut globally, you've seen US rate rate cuts likely to come to me, barring sort of really drastically negative economic data, you are going to have an easing cycle here, which should help the cyclical stocks going forward.
I want to make sure I understand this right. Do you, Aaron, see any other fundamental issues when you look out across the economy. You mentioned the jobs report. Yeah, coming for the month of August on Friday. That's the next sort of catalyst that investors are looking to. But when you look out there, do you see any weakness that maybe investors are responding to.
Yeah, I think we've been watching this now for well over a year, and you know, last spring we started to do the math around this. The biggest issue is the consumer. We've been watching that last year. You saw, you know, early last year, mid last year, I think, you know, consumer pocketbooks and savings accounts were very padded
through the sort of pandemic stimulus that came through. What eventually has happened is that inflation ate away at that labor rates tried to keep and so what you're seeing is a consumer in the US and maybe even you know, in Asia, et cetera, that is, you know, in a much tighter position than they were, say eighteen months ago. And so for that we sort of position ourselves to try to get into consumer names of healthy the economy. But I think this is a lot of the weakness.
A lot of the concern is around the labor market, which the FED even pointed to as being something they're paying more attention to, and consumer spending, and if you get a big pull down and consumer spending, it's going to be tough for a number of people. The rest of the economy industrial, you know, whether it be clean energy, all these other trends are you know, they are in place, and companies are committed to spending a lot, you know, a lot of capital to build out sort of reshoring
and data center stuff. So I think the industrial side tends to be good. It's that consumer piece that I think is the most concerning.
And I'm running through your notes. I understand you have an eight member investment team, you average twenty five years of investment performance, and you're focus on asymmetric reward to risk opportunities. So tell us eron where you're finding those opportunities right now. What are some of your biggest convictions.
Yeah, so we really follow what we term an opportunistic value approach. We want to focus on three key areas of companies and we're we are stock pickers at the crux of everything, but we want business editor inherently good, have good returns. We want a good balance sheet so that these companies can withstand cycles and invest properly at
the bottom of the cycle. And we want good free cash flow generation, so hopefully they can compound value over time with that, We opportunistically look for where the market may be in our view, is misunderstanding something or maybe there's a management change that we think brings a lot of value to the ultimate value of the entire company. So that's very important to us. So some areas where we look are very stock driven. They're not say sector
driven per se. But you know, Bristol Myers is one that we think the pharma sector has outside of the GIL, outside of you know, the two big manufacturer Jillps has really just been left behind in this market. And you look at the valuation of Bristol, I mean, it's a hot single digit multiple stock on pe UH and when we look at atrinsic value, we just think that's undervaluing the cash flow stream. It's got a four point seven percent dividend yield that's well covered. They've got a gap
in the UH. They're gonna have an upcoming sort of exploration of some parents that's going to impact their Yes, we.
Got to run, unfortunately, but we love it when you come with picks, love when you join us. It's Aaron Dunn, Senior, equity portfolio manager, joining us from Boston Morgan Stanley Investment Management. This is Bloomberg BusinessWeek.
This is the Bloomberg Business Week Podcast. I've ailtble on Apple, Spotify and anywhere else you hit 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 us live every weekday on YouTube. And oh, he's on the Bloomberg terminal.
Mm hmm