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Hey, two tech companies that are on our radar today. That includes an Amazon related story as a rate of goods that may have been headed for Amazon. We'll get more on that in just a moment, but first we want to talk about Micron.
Yeah, investors shipping away this year's more than a thirty percent rally as the largest US maker of computer memory chips dropped efforts forecast disappointed investors who are looking for a bigger payoff from AI mania. This report, Carol definitely won about investor expectations and from Micron having to deliver and then.
Some Micron shares by the way right now down about six percent, down nearly eight percent and at their lows today.
Let's get to it.
Bloomberg News US Semiconductor and networking reporter Ian King back with us from our San Francisco bureau. Ian, you know, as we were breaking down Micron's results last night. I got to say, we were scratching our heads a bit at first because the results seemed pretty good. So we're exactly is the miser disappointment? Is it just again about investor expectations for this one?
No, you've nailed it. That's absolutely the case. I mean, they're predicting that revenue is going to be up over ninety percent in the current period, which you know is not a bad performance. I mean, obviously last year was a particularly brutal year for this industry, for this particular part of the industry. But you know, there was nothing wrong with the numbers according to all of the you know what the analysts said. It was just that some
of the higher estimates. You know, we're in the sort of eight billion dollar range for the quarter, and obviously they didn't come out and be that bullish, but really nothing wrong with the direction that the company's heading in terms of fundamentals.
We're talking about this as we're preparing for the segment. It's the largest US maker of memory chips, and to what extent does it play in AI and just remind everybody where it is in the chip space compared to all the other companies that you and we follow.
Yeah, I mean in terms of AI, we're still at the beginning stages of that having an impact on the memory chip industry. But according to Micron and its competitors, it's going to have an absolutely profound impact for a number of reasons. But basically the biggest reason is if you want to train a model faster, you bombard it with information. The best way to bombard it with information is to have more memory and have that memory be
much at faster at providing that information. So we've got this new product called a high bandwidth memory that they're pushing able to charge a lot of money for it. It's not just a plug and play commodity type product or any number of reasons that this will have a positive impact on the memory chip industry and Micron, but we are at the beginning stages of that.
Hey, one last quick question and anything for you not answered on the Micron earnings call. Just got about thirty seconds here.
Yeah, I mean, I'd got a lot of questions on where are we in terms of that HBM memory introduction, the problems is it difficult to make? And they said, yes, it's difficult to make, but We're doing exactly what we said we would. Was still on Cove.
All right, good stuff as always, Bloomberg News US Semiconductor networking reporter Ian King. Now, let's get to Amazon.
And a police rate of a southern California warehouse filled with suspected stolen merchandise that authorities say likely would have ended up on online marketplaces run by Amazon and other retailers with one on his Bloomberg exclusive. Here's Bloomberg News Technology and e commerce reporter Spencer Soaper with us from Southern California. Spencer, you're outside of Seattle, where you usually are. Talk to us a little bit about where you are and how the raid unfolded this morning.
Yes, so we're here in Santa Anna. It's about thirty miles south of Los Angeles. We're right off the Interstate five freeway here, and there's a warehouse behind that is actually like a liquidation business. You know, these can be legit businesses where they get products that are damaged or returned and then and then resell them. But police California Highway Patrol rated this location this morning because they suspected
that it's involved in trafficking of stolen goods. And a lot of the stuff that they've pulled out you can see is right next to me. Here you've got like space heaters, and you look on down the line. Then there's there's wine coolers, there's dog food down there. There's just all kinds of stuff. They're bringing it out one palette at a time. And a telltale signed for law enforcement was something like this is when it's a bunch of the same products wrapped up in in nice new
boxes like we're seeing here. They say, that's very suspicious because generally a liquidator is going to have just like a jumble of different stuff in like damage boxes that have been returned.
Spencer, as we said, you know this is an exclusive.
What led you to this story? What led police to this raid?
Well, this has been an ongoing effort to crack down on cargo theft. If it's a huge problem, it just keeps going up every year with no end in sight. Cargo theft nationally was up about fifty percent in the first quarter compared to the same period a year ago, and that number just keeps going up. So it was basically a routine law enforcement bust here and their efforts to try to shut down what's known as a fence, because once cargo thieves take this inventory, those generally get it.
They're getting it by the truck load.
Usually from a warehouse. They're often impersonating the person who's supposed to pick up that truck load, so no one even knows that they're thieves stealing stuff. They just kind of show up and pick it up, and then it can wind up in a place like this, And the effectiveness of shutting down a fence is it just makes it harder for cargo thieves to find a place to turn their stolen goods into cash. And so that's why they're hoping that this can maybe cool things off a little bit.
Nay Spencer, I think a lot of consumers understand the implications of shoplifting in the sense of, Okay, we see security increasingly at stores. We see going into stores things locked up behind plastic and you have to ask a sales associate for for help getting some toothpaste or deodorant or something. What are the implications of cargo theft? Talk to us about what happens to prices, what happens to insurance, and what happens to bottom lines.
Yeah, that's that's a really great question a point, and that's exactly it is. It's the cost is just going to get spread out to everyone. You know, the the retailers can take a loss if they lose the inventory that's en route to them. The brands take a loss if they're there inventory that's stole, and the insurance companies take a take a hit, the legitimate logistics companies take a hit. And there are estimates that this is like
a you know, seven hundred million dollar problem annually. So it's it's a it's a big problem, and just like shoplifting, it's hit the point where executives have to talk about it on earnings calls. They have to talk about their money they're losing from theft, either shoplifting or more organized cargo theft rings and so it is a problem that affects everybody.
Well.
As we mentioned Spencer, this authority is saying that the stolen goods, allegedly stolen goods behind you would likely end up on a marketplace on Amazon or perhaps other marketplaces on the Amazon part of this, You've covered Amazon for years. I still think that consumers don't necessarily understand the marketplace part of Amazon versus buying directly from Amazon. Talk a little bit about how stolen goods could end up on what many would consider a legitimate service like Amazon.
Yes, so if you buy something on Amazon, sixty percent of the products sold on Amazon come from independent merchants. It's kind of like going to a mole and going into a store. You're not buying from the mole, You're buying from that particular store. So the Amazon is like the digital version of that. So I've got a truck backing up next to me. So basically, if you have stolen goods and you want to unload them, selling it on Amazon is really a good way to do it
because you almost put some legitimacy in to it. Someone thinks, oh, I'm buying this from from Amazon, it must be legit as opposed to like the other day I was in Seattle and a guy was selling pork chops out of a gym bag. You know, I'm not I'm not really trusting the supply chain of that operation. Whereas if I see it on Amazon and it's new, I might I might buy that.
Our producer Elizabeth talking about somebody selling dry cleaning clothes on the corner like five dollars or something like that. Yeah, so it stuff happens in all different forms. What's Amazon's role in this, I mean in helping the police and other retailers to find these individuals.
Yeah, Amazon is involved. We know they've been communicating with law enforcement that's about this particular situation. That's as far as Amazon goes with us on that, But yeah, they are. They do have, you know, entire teams dedicated to try and identify what might be stolen inventory help law enforcement
if they're trying to track trace stuff back. And that's exactly the problem, right once you lose a cargo container of stuff it and it gets out of your site, if you don't catch those people in the act of doing it, how do you differentiate between what's stolen and what isn't Because there's so much inventory and circulation, and that's where Amazon can be helpful with law enforcement in
terms of helping them identify. Yes, this this load was supposed to come here on this day and it never arrived, or this trailer was taken on this day and it never got to its destination. That's where companies like Amazon can can be helpful with law enforcement.
Okay, Spencer for those watching on TV, they can see the boxes and palettes stacked up behind you. Do you have any understanding from authorities at this point about the size and scale of this bust, the value of products that was found.
Yeah, so they're estimating about about seven truckloads right now. So these would be big eighteen wheel rigs, so about about seven of those and the estimated value of at least at least a million dollars.
All right, real quickly, how often is this happening, these cargo thefts?
So in the first quarter there were nearly a thousand, so I mean you're looking at several a day in southern California is a real hotspot California, Texas, Illinois or where most of the stuff is going down. So we're kind of right in ground zero of cargo fift right now.
Well, you are a smack in the middle of it.
Exclusive reporting Spencer, thank you so much, Bloomberg News Technology and e Commerce reporter Spencer sober there in Santa Ana, California, smack in the middle of it as they are trying to figure out exactly right the complete value of it.
But he said, what seven truckloads? Did you say?
Yeah, Wow, it's a lot million dollars worth of goods.
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 brought auto with a Bloomberg Business at or watch us live on YouTube.
Well, yesterday you might recall our chat with the CEO of Carnival, Josh Weinstein. He talked about record setting demand for cruises that's helping sell tickets at high prices. He was our higher prices. He was incredibly beat. We wanted
to know more when it comes to summer travel. So that brings us to our next guest and the online travel company Booking Holdings, a belt weather for global travel, and the owner of Priceline, Kayak rental Cars, Open table and so much more with us right now is Priceline CEO Brett Keller joining us from Norwalk, Connecticut. Brett, great to have you here.
How are you doing very well gearing up for the Fourth of July weekend?
Here we'll talk about gearing up.
What are you expecting for Fourth of July and really summer travel overall.
Sure, Well, let's start with the holiday, because what we're seeing this summer is demand really compressing into the holiday periods, and fourth of July is typically the biggest of the year, and I think that's certainly teen up already. At the airports, we're seeing you know, good healthy demand flowing through TSA checkpoints up anywhere from you know, six to ten percent, and we should see another record breaking I think holiday
versus where we were back in twenty nineteen. Now with that said, you know, if you compare it to two thousand and ninete, we're really where we should be in twenty twenty one in terms of overall volumes. But of course with the pandemic, we're now just really coming out of that and still feeling some strength there. So things are looking good. We should have over seventy million visitors on the road, either mostly by car and then of course the rest by flight or bus.
Where you seeing particular strength or maybe changes in trends that you didn't see in previous years this year.
Sure, we last year it was the year of Europe, and we had a lot of outbound travel heading over to Europe. This year, we're seeing some of that mix flow back into kind of nearby zones within the US, So folks flying down to Mexico, flying to the Caribbean, even out to Hawaii. So we're seeing somewhat closer destination travel taking place, and of course some happening more in Asia.
Asia has been a very hot destination this year as things now there are fully opened up, especially with the end to dollar ratio, a lot of travel going into Japan and especially into Tokyo Kyoto. Those areas so hot markets. Obviously, the Olympics are going to help your pickup as we get into later in July, and so that will help props in business there as well.
Hey, Brett, any sign that travelers are looking to trade down, are looking for bargains or you see that on the provider side of things where they are making deals cutting prices.
Not in a material way. No, we've seen flight prices come down quite a bit over the last year. Flight prices are down almost fifteen percent, but that's largely due to expanded supply. So airlines have opened up more supply. American Airlines recently announced they've opened up eight percent more capacity, and so with that capacity that helps pull prices down for consumers, which is great. On the accommodation side, however,
prices are still up a couple percentage points. And so you know, the major hotel chains here in the US are doing everything possible to keep their prices up. They don't want to see those prices fall, as that's what they lean on to drive their profitability.
So they've been doing a pretty decent job of that.
But again in some of the valley periods, as we move through the summer, we are hearing from our partners that there's some help needed there to fill some excess capacity as and again in the accommodation space, there's always excess capacity.
They'd love to fill it all if they can, but that just isn't possible.
It's interesting because you know, Carol and I have been hitting the road doing some traveling lately, and the prices that we've seen in some of the cities that we've gone to for hotels have just been absolutely astronomical. I mean, in some cases we're going from three digits to four digits a night.
Brett.
It's just shocking to see that the prices go up so much. Are you only seeing that in major metropolitan areas around sort of peak travel times with business conferences and the like, or is that a new sort of trend that we're seeing.
Yeah, for the most part, I think that's true. Take New York City as an example, right, New York City put in some legislation that prevents alternative accommodations from really expanding there. So that's put additional pressure.
Talking about the ban on airbnbs.
Here, yes exactly, and so that obviously drives prices higher on the the hotel side. And New York has had a lot of inflow from outside of the US in terms of traffic coming in again now that it's fully opened up from other countries, a lot more visitors coming in from China, which was not the case a year ago. So that's helping to keep prices up in New York.
As you move to some other marketplaces, though, like Vegas and Orlando, which are really high leisure destination centers, you know, those seem to be not pushing up as high on the pricing point, and especially if you're not traveling in the peak vacation periods, you can get some amazing and incredible deals in those markets because there is so much supply in those markets.
Right, you talked about the importance of the July fourth holiday and your expectations around it. How does what happens July fourth, the week around it, if you will, and what that kind of how it sets the tone maybe for the rest of the summer season.
Well, that's a great question, and it's always hard to predict because you know, the fourth of July is really the peak travel period in the summer, and then people usually anchor their other vacation in time off around that. So it is a good indicator that leisure demand will continue through the summer at a healthy pace. However, again it's really business is carrying a lot more of the weight right now, I think in the travel industry than
is the leisure traveler. So while it's great to see leisure demand peaking during the fourth of July, the industry is going to lean a lot more heavily on the business sector as we move through the rest of the year because business is growing at a healthier clip than
leisure demand is. Right now, I think leisure travelers are really filling the pinch when it comes to the cost of airline tickets especially, and all of the other expenses that they're trying to fill, whereas on the business side, there's still growth there and that I think is predicted to growing. Where from seven to eight percent, which will be a real help and offset to some of this softening leisure side.
As Tim said, we have been doing more traveling as of late. The business sector in terms of travel, how much does it still have to kind of catch up to where it was pre pandemic.
Yeah, we're still about ten percentage points off of where we we're in twenty nineteen, so a little bit more to go.
Whereas leisure exceeded.
Twenty nineteen and twenty twenty two at the end of twenty two, so the leisure side really rebounded first and is now starting to, you know, kind of move into a more normal cyclical pattern, whereas business is still trying to catch up. And so the more business that can lay on top of that leisure demand, which already has caught up, it just makes for you know, a there is still growth happening in the in the travel business here in North America.
Hey, Brett, how are you feeling in terms of your comfort being in the online travel agency space right now? Given that anytime you go on an airline or call an airline, they remind people, okay, the best place to book is directly with the airline. How comfortable are you feeling being this sort of middle person right now.
Sure, Well, you know, listen, any company wants their customer to book directly with them, and the reason that online travel agencies exist is because we provide really compelling value. So the question is, okay, so what's the value we provide, And there's a number of points here to offer. One is clearly our ability to drive comparison shopping. So you know, when you come to price Line, we don't show you
one or two suppliers. We literally show you everybody, every airline, every hotel, chain partner, every independent property, and so you can make a really educated decision as a customer. The second is we're constantly fighting for you to find the very best deal that we can get from our partners, and oftentimes when you come here you sign in, we're going to get you a better price than what you
can find in many other locations around the world. And so those are the couple of values that we provide. We provide packaging where we can bundle these things together and drive our prices even more.
Brett ten seconds. Where are you going this summer?
Oh?
I'm heading to Idaho. My favorite day in the summer.
Got to get out into the woods, do a little running, a little fishing, and just enjoy some decompression time.
All right, sounds pretty magical. All right.
Brett Keller, thank you so much, Chief executive officer at Priceline, joining us from Norwalk, Connecticut.
You're listening to the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Eastern on Apple car Play and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa, Play Bloomberg eleven thirty in the morning.
My got it, Get to Denny's to get it one on list.
Just You're a perfect song. Paul Brennan for our next interview, thank you. You'll recall yesterday we were joined by the CEO of Carnival, who gave us his view that consumer spending, at least when it comes to booking Carnival cruises, continues to be very strong.
All right, So we've got a question, how are consumers feeling when it comes to eating out at restaurants? The data tell us one story. Spending at restaurants in the United States decline four tens of a percent in the month of May compared to the month before. That's according to last week's read on retail sales figures. While overall retail sales there rose and anemic one tenth of one percent.
Meanwhile, employment in food services and drinking places, according to the Non farm payrolls report for last month, continue to trend highre in May, rising by twenty five thousand. But for review from the front lines, we're joined by Denny's President and CEO, Kelly Valaid. She joins us from Dallas, Dennis. We should not. It's a small cap. It's got a market value around three hundred and sixty million dollars. The stock down about thirty six percent so far this year. Kelly,
good to have you with us. We know Denny's is doing some really interesting stuff when it comes to DEI, we're going to get to that in it just a bit. But first, you've got more than sixteen hundred restaurants, most of which are in the US. You've got a great view of what's going on with the consumer. In your view, how is the American consumer doing?
Yeah, thank you, it's great to be here. I appreciate the opportunity to talk today and talk all things consumer and then some conversations about d and I and I think with the consumer today, it's a tough time for all. I think people are still spending, but as we know, they are spending and using credit to do so. And I think they are also hearing and feeling this narrative of the rising costs that have happened for all industries, and they're looking.
For great value.
They're looking for great value, and they're coming to places when they see They're going to restaurants when they see there's a great value.
We have that at Denny's.
We're on air today with our all day diner deals and really that resonates with guests at a time when they know they need to know they can count on people like in brands like Denny's to meet them where they are. So I think, yeah, I think transactions slightly slightly down. That's that's been the case in the industry for some time, and so the stronger brands capturing traffic
is the name of the game. Doing that with great a great value proposition is Denny's sweet spot, and it's where we'll continue to really make sure our consumers know.
Kelly, one thing I want to go back to you said, you know, people are using credit now. To be fair, I do everything on kind of a credit card. Nobody carries cash anymore for the most part, And I love the point. So I'm just trying to understand how do we kind of write because most of us, I think, are using their credit card to do most things now nowadays, or our bank cards. So I'm just trying to put
that in context. Or is there something you are seeing that people are actually going into debt to eat out that.
Is exactly not to eat out.
But I just mean that discretionary spend being where it is, it is hitting our consumers and certainly hitting the middle to lower income consumer a bit more so. Not not necessarily using credit cards more to pay for food, but just in general dipping into their own savings and dipping into their own and maybe having more credit card debt.
Is what I meant by that. Thank you for thank you.
No, I just wanted to make sure I read you right. So Kelly and you talk about, you know, those that really kind of will win within the industry, or those that are thinking about the value for their customers. How have you guys been adjusting that to meet for your customers. Let's say over the last month or so or the last couple of months.
Absolutely, So yes, we brought back something that we've had in the pantry, I would say, right, something we've used in the past to really again meet those consumers where they are. We see what's happening in quick service and in fast food, and so for us, we're on air with our all Day Diner Deals offering right now, which is a starting price at not five ninety nine and six items under that all Day Diner Deals menu available twenty four to seven in many locations.
So we're leaning into.
That we'll actually be continuing to innovate all summer long around even the next evolution of a great value proposition and great value offer. Everyday value at Denny's is something we want every consumer to know they can count on us.
For the vast majority of your restaurants are franchised, but you do have you do operate restaurants, So from an operating perspective, talk to us about the costs that are associated with those restaurants in terms of food, in terms of labor. Are you starting to see that stabilized or is it still tough to attract and retain workers and are you still seeing food prices rise.
So food sale, I'll seek food first, and that part of your question. First food, the commodities environment as a whole has stabilized, and yet there were so many years the cumulative inflation has still made it a higher environment and cost higher on food overall, although it is stabilized significantly in the last twelve months. On labor, we don't necessarily.
We are feeling really good. We've got great retention programs in place, not only for our company restaurants we operate sixty six as you mentioned, and.
Then for our franchisees.
We really feel good about what we're seeing in terms of the stabilization even in markets like California, stabilization of the labor situation and our turnover our retention is pretty strong given how we take care of our employees in the company restaurants.
We have so those things have stabilized.
Yes, no, I'm sorry, please finish, go ahead, just.
Say both have stabilized to some extent. The run up and the cumulative effect over the years certainly changed the business model in general for all restaurants. These last few years have been difficult, and again there was such a run up for so long, especially on food costs. Though it's stabilized, there's still an effect there to the business model that we're all mindful of.
You've been in this industry for a while, You've seen the ups and downs of it. Obviously, you know understand the impact of the pandemic. You are CEO of Red Lobster, CEO Black Box Intelligence, you are at Brinker International, you are at Chili's.
You've seen a lot.
You're now at Denny's and you've been there since June of twenty twenty two, so a few years now. How would you describe kind of the current cycle for the restaurant industry, especially within this space that Denny's operates within.
Sure, I think absolutely this is an industry that is a resilient industry. Denny's is a resilient brand. And though there are some there's movements, and you referenced, you know, a couple of the different brands. There's movement in the industry. Always, there are winners, and there is room for great brands to continue. A brand like Denny's being as resilient as
it is seventy years young. We absolutely purchased and acquired a breakfast Cafe's Breakfast Cafe So we have two brands now, one very large flagship brand and then one that we are really bullish about and excited about growing. And there's room for that. So there's room for great brands that
are resilience. There's room for great brands that again are meeting their consumers where they are today and are responding to the model that's in place today and strengthening the business model all the while.
So, Kelly, is that where the growth is? Is it outside of Denny's for you? Because I look at the function on the Bloomberg terminal that shows us how many locations you have each year, and you're down from seventeen hundred back in twenty fourteen to at the end of twenty twenty three to one thousand, six hundred and thirty overall. So we've seen a decline when many restaurants have expanded the number absolutely.
So that's a great question. It's a fair question.
So what you've seen for us is through the pandemic, like many other restaurants, you saw declines, you saw closures, you saw markets maybe move, trade areas move slightly, and then you did see some really difficult decisions for operators that didn't either didn't reopen or have struggled since the pandemic. We are actually opening quite a few restaurants and we're back to opening more restis, John said we did in
two thousand since twenty eighteen in pre pandemic days. But we've got closures that we've been dealing with as well, So working with our franchisees, trying to do everything we can to strengthen their model, help them where we can. But we absolutely that's why you're seeing then that number be where it is. So Kiki's stabilizing and continuing to thrive for the Denny's brand is the goal. And then we've got something brand new that's very small that we have a separate now brand team.
For set up to deliver really big growth.
And we're excited about the growth that you'll see us demonstrate with Piki's in a different segment of the same kind of breakfast lunch category.
Hey, one thing we did want to ask you. We mentioned you were CEO at Red Lobster for a short time. How did you view the company's recent bankruptcy.
You know, I'm probably not I was there a very short amount of time. I'm probably not in the best place to comment on that at this point it was a short time and I am in a great place here at Denny's, in the place I belong.
So one of the things we want to ask you, because culture is so important, certainly for workers, for customers increasingly, we do want to talk to you guys about some of the initiatives you are doing when it comes to a diversity, equity, inclusion. What is it that really kind of drives the strategy at the company.
Yeah.
Absolutely, this is something that is so true and so foundational to who Denny's is as a brand. This is a brand that has never been apollo, that has got humble beginnings given this space, but thirty years ago the journey to what I would say is best in class, a best in class approach to this, a thoughtful and intentional approach to a diversity, equity and inclusion for all. We say we embrace openness, we are open for all, and it is foundational in everything we do.
So what we do.
Today and the programs that we have today really started thirty years ago, thirty years in the making. And the new alliance that we just announced called our Unity and the Community Alliance was really just another way to cement our commitment, our true commitment.
To embracing diversity for all.
And so it's an alliance with multiple organizations that we've been working with for many, many years and cementing.
That true partnership. And now we're just kind of.
Signing this pledge to say we'll pledge even more to demonstrate our commitments through, you know, through and through with key organizations. We were just out at Saint Thomas University at the Benjamin L. Crump School of Law and donated their five hundred thousand dollars scholarship there. We were we have many other partnerships and we've committed to three point three million dollars over the next multiple years giving to those organizations that have been with us, that have supported us.
And it's built on again multiple years of just being standing with and being a part of all these communities that we serve.
We're really proud of the work we do there.
You know, it's interesting I saw in the notes ahead of our interview that our producer Paul sent us that you are still referring to these initiatives as DEI initiatives, which surprised me because to many people the term DEI has become a word that they don't necessarily want to use our own. Simon Foxman here at Bloomberg News has done some great reporting over the last few months about Wall Street Banks retreating on DEI over backlash. How are you thinking about that as you lead this company?
So how we're thinking about it?
And it's absolutely we pay attention to the narrative and we're very conscious of how we think about it. Right the head of this effort reports directly to me. She is our Chief Inclusion and Community Engagement Officer, that's her title.
These efforts around diversity, equity, inclusion are so foundational to who we are that.
We don't want to change the narrative. We say we are America's diner for today's America, and that means we're diverse in every single sense of the word. Our communities, every community we serve, every guest we serve, we are every franchise e.
Our franchise e base is.
Incredibly diverse, our workforce is more diverse, invest in class and all of our programs again support that. So changing the narrative for us, or changing the name of how we've refer to it didn't necessarily make sense for us. Because our commitment is it just runs so deep, and it would be counter to who we are to say as America's diner for today's America that we don't want to still embrace this conversation.
So I will be quite honest with you. You know, we are very much thinking about tonight's debate here at Bloomberg, and I think a lot of Americans are, and certainly the media organization. I'm watching some footage President Biden arriving in Atlanta getting ready for the debate, the presidential debate, the upcoming elections. How are American politics and the November outcome impacting your business or overall strategy.
It's a great question.
Election years are always interesting for the restaurant industry. Historically they mean lots of people tuning in and maybe not dining out. They mean different things depending on what is happening in that environment. So not going to comment at
all on that environment. Our strategies are not impacted. We're staying again, very true to who we are and our strategies and being very focused on on those strategies so that things will happen as they are going to happen, and we'll be doing what we do to take care of guests and our team members and make sure that we are staying focused on the importance of taking care of the people we serve.
Okay, Kelly, before we let you go, we got to ask you about in Nvidia.
And for people who.
Are watching or listening right now, they might be thinking of themselves. Why are you asking the CEO of Denny's about in video? Are you guys doing AI? No, it's not that, because legend has it that back in the early nineteen nineties and Vidia's founders, including Jensen Wog came up with their idea for Nvidia aut a Denny's in Silicon Valley, and Jensen even worked at a Denny's in Portland when he was a teenager. Talk to us about I mean, a few months ago you went and met Jensen at that
Silicon Valley Denny's. Talk to us about what this has done for the brand.
So I'm so grateful to Jensen. I did get to meet Jensen. I consider him a friend. He is an amazing He's an amazing person. So aside from being the most valuable company, all the things that are happening, he's an amazing person that we met and we talked about our first jobs. His edit Denny's my first job in this industry. We connected, but he gives so much credence.
He's so kind about what he learned at Denny's, how he learned to interact and connect with people, the promotions he got from dishwasher to then best boy to then server. He's an amazing, outstanding individual, and I appreciate the call.
Outs that he does, the acknowledgment that he does make.
To what restaurants can do, what a restaurant like Denny's can do for you, for you socially, for you know, he paid it back by coming into the restaurant. He said he was one of the worst customers we've ever had because he sat there all night drinking coffee.
All him one of the best. And I think he's He's just truly remarkable. So did it's help, It's been great? Did you get great?
Did you get a black Well chap or anything like? Did he say, hey, thanks, Kelly, here's a chip. It's worth a million dollars?
No, I'm just kidding now totally.
We did do a trillion dollar incubator contest at Denny's and inspired.
Other people, and he voted with me. He was a judged with me. But haven't haven't gotten nothing else yet.
Okay, well he knows that. Call me, call me Jensen. All right, Denny's President CEO Kelly Valad joining.
Us brom.
Journal.
How about you let me drive?
Oh no, no, no, no, who's going to honey? Please gravel? Let's wait?
I want to dry.
It's good question.
This is the drive to the clothes.
Do think we'll buy around on Bluebirg Radio.
All right, everybody, just about eighteen minutes left in today's trading session. Bouncing around here, certainly on the equity trade. Remember we've just got you know, today tomorrow, and then we wrap up the month of June. We wrap up the second quarter, and we wrap up the first half. So kind of interesting to think about that heading into what will probably be a pretty much of a mellow week next week, because we're July fourth holiday.
I mean, Jessica's you're going.
To be I'm working, I'm working.
Can you give a little preview for what you're doing.
I'm gonna be hosting the Boston Pops.
Bloomberg has been involved in it for seven years, So remain Boston and I are going to go to Boston and host it with the Boston Pops. It's really wonderful, the July fourth celebrations, so much fun.
Well, we will certainly be tuning in before we get there, though.
Some stuff to get to you.
It's some business to get.
To we do.
Let's get to Amanda Gotti. She's chief investment officer at PNC Asset Management Group, joining us once again from Philadelphia. Amanda, how are you.
I'm doing great. How are you guys doing?
We're doing pretty well. Do you agree with with Carol's sentiment it's going to be a little sleepy next week on this holiday week?
I think it will be a little sleepy, although we might get some early fireworks out of tonight's debate. That's the thing that's sort of top of mind at the moment, so.
Boom, Well, let's go there, play that out for us. Yeah, what are the fireworks? And what does it mean from your perspective as a chief investment officer? What does it mean for investors?
Well?
I think really, I mean, I don't know that anything tonight is really going to be market moving in nature, but it's so so highly anticipated that you know, today's economic data comes out it's basically a snoozer relative to what might actually happen tonight, and so I don't think that the market is going to move necessarily on what happens, but it certainly is setting the stage for what we might expect over the next few months. At the end of the day, the market does not really care about
who is in the White House. It's really much more about the makeup of control. And so it's a holistic look at what happens this election cycle. But I think I think tonight it'll be very interesting, for sure.
So one thing that we do know, or we're told I guess, is that markets are efficient. It's always pricing in future events. And I'm wondering what is priced in in your view right now, Amanda. Is it Biden or a Trump win, or is it a full control of Congress from one party, a split Congress? What's priced in?
I'm not sure any of it is really priced in. I think I think this election cycle is perhaps the most complex and most uncertain in history, and so it really is anybody's guess at the moment as to what the path forward is going to hold. And of course it's very polarizing, right the two candidates are at complete opposite ends of the spectrum, and so we have seen some movement at the margin in terms of companies, industries, et cetera, but we don't have any clarity really on
the path forward. So I think it's a lot less about politics and a lot more about the FAB five And you know, this concentrated market and the fact that financial conditions continue to loosen up a bit. Those are really, in my view, the key drivers, at least based on where we are at halftime here for this year.
Of some of the dynamic trends, whether it be the consumers holding up, whether it's the artificial intelligence play. I do wonder when you think about investment strategies that really have longer legs, what are they or don't have longer legs?
Think, well, I think it's a great question, and it's hard, I think in this environment to zoom out. I keep talking about one of my favorite asset classes being global infrastructure. Certainly US infrastructure I think has a lot of legs, but I think also global infrastructure does as well. So if you have more than a hot minute in terms of a time horizon, I actually think there's a lot of opportunity over a very extended kind of multi year
period in that area. Of course, many of our investors aren't quite that patient, and so in this environment, we're still very much focused on high quality and quality oriented exposures, both in terms of equities and fixed income. It's just the right positioning for the late endings of this cycle.
What about longer term? How does that view shift for those investors who do you have that longer time horizon.
Well, we're starting to kick the tires on some sort of interesting I will spare you some of the details as it's not fully baked yet, but we're starting to kick the tires on some longer tailed infrastruction ructure type opportunities here. We've started to see some investor flows kind of move in that direction this year. It's kind of been an interesting technical move that we've seen, and so I think this is just very early innings as it
relates to infrastructure. So we're thinking through some creative ways to play that and leverage it because I think really, regardless of who wins this election cycle, I think that is going to continue to be a pretty dominant theme going forward.
All Right, I'm looking at your notes that you sent our producer Paul Brannan ahead of your appearance, and you're right that your song of the year is I can't get no satisfaction by the Rolling Stones. It's a classic. We all know it. I don't think we have the rights to it, so we can't play it right now. But Amanda, what's going.
On, Well, it's every year we have a lot of fun picking a song of the year. We do this at the beginning of the year, and I thought it was just timely to share that with you at the halfway point of the year, because for as much as I didn't feel I had a lot of satisfaction and investors didn't have a lot of satisfaction at the beginning of the year, everybody sort of felt kind of angsty and itchy about you know what comes next. We're coming off the heels of a torrid rally at the end
of twenty twenty three. What does it mean for twenty four And we've had so many I think existential yet unanswered questions that started the year, and we still don't have those answers, and so I would really like, from an investing standpoint, to get some answers to those questions to feel a lot more satisfied in the second half of this year. I think it'll happen. Time is on our side if you get that reference as well.
But there's a lot of true wait, are we going to be singing this though by the end of the year, possibly.
Singing this song?
Ye?
Is that the question? I hope that we're not. I hope that we're moving on to other songs and certainly happier times. I do think over the next six months we're going to get a lot more clarity to some of the unanswered questions around. You know, where the inflection point in the economic cycle is, What does the trajectory of earnings growth look like? How is the consumer holding up? Will we get a change of control in DC? Of course I'm pleading the fifth right now, but we will
get hopefully clarity on that. So there's a laundry list of questions. But as we start to get clarity, I think it adds fuel to this market rally. So I think it could be a strong second half.
Carol, you can sing that song whenever you want? Which one I can can't. I can't get any satisfaction.
Okay, I'll work or any or any of.
The songs on Amanda's playlist.
Okay, thanks there.
Yeah, I had a whole bunch for you.
We've been doing this since twenty fifteen, so I can give you the playlist.
What was the song it? Last year?
Last year was an entire album. Actually it was Ping Floyd's Dark Side of the movie. Yeah, perfect metaphor for a recession. Of course it failed to materialize, but we had so much fun with that one last year.
Just got to watch that one in sync with the Wizard of Oz? Which have you ever done that? What you didn't know about this?
Oh, you have to do your homework.
You have to kill me later mine. I love both the Wizard of Oz and Pink Floyd grew up on that album.
Yeah, you you started on the third roar of the MGM Lion and it's just an amazing experience. Am I wrong? Paul Brennan. Everyone's giving me the thumbs up, Amanda, how.
Have I missed it?
I'm going to do this together, and then when I come back and talk to.
You, we're gonna break it all all right, We'll be changing.
It's a deal. Amanda Gotti, Chief Investment Officer and B and C Asset Management Group.
Thank you so much, having good holiday.
This is the Bloomberg Business Week Podcast at 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 want us live every weekday on YouTube and always on the Bloomberg Terminale