Broadcasting live to New York, Bloomberg eleventh, Rio to Washington, d C, Bloomberg to Boston, Bloomberg twelve to San Francisco, Bloomberg nine to the Country series Exam General one nineteen and around the globe the Bloomberg Radio plus Dappen, Bloomberg dot Com. This is taking stock consumers spending on everything from cars to a an airline ticket a service up about zero point four percent last month, on top of a gain of one point one percent the month before.
Some have even revised up their forecast for second quarter GDP because they say the consumer is strong. My next guest, though, Craig Johnson, president of Customer Growth Partners, said, when you look inside the report, it's not so good for retailers and they have a lot on their plate to spend on and we're gonna find out why. He says that. By the way, I'm Kathleen Hayes Pin Fox, my co host on vacation. Now we go to Katherine Cowgary. She
the Bloomberg newsroom with a business flash. Thank you, Kathleen, with a stock market is extending yesterday's games as global markets continue to recover following Britain's vote to make a break with the European Union. There's speculation that policymakers will
continue to counter the effects of the withdrawal. In the wake of the vote, traders have pushed back bets on Federal reserve interest rate increases, indicating higher borrowing costs are unlikely before eighteen On taking Stock this afternoon at Marianna Cata, Lakota, former Minneapolis Fed president and a Bloomberg View columnists, was asked about a possible rate cut next month, that I don't anticipate that to be too likely on the FEDS genda and July. That is, I don't anticipate that there
would be cutting rates in July. We check the markets every fifteen minutes on Bloomberg Radio, down Industrial average is up two hundred ninety points one point seven percent at seventeen thousand, six hundred nine eight s and d F founded up thirty six points one percent to two thousand seventy one. The NAZDAC is up ninety one points I gain of two percent. Trading at forty three West Texas Intermediate crude oil of a dollar fifty nine and barrel
free point three percent to forty four. Spickled up six dollars nine agounce at ten year treasury down nine thirty seconds with the yield of one point four nine percent. Among today's South business stories, UBS Group has announced a sweeping overhaul of the leadership in its investment banking unit.
Three senior executives in the division are leaving. Roger Naylor Co. Had of Equities, Chris Murphy Co. Had a Fixed Income, Rates and Currency and Matt Hemming, head of Corporate Client Solutions in the Asia Pacific region, will all step down. One measure of home sales cooled and may. That's according to the National Association of Realtors. And now look at some of the other stories were following today on Bloomberg Radio. Thank you Catherine from the Bloomberg Newsroom. I'm Jill Schneider.
This news update is brought to you by the Jeep Grand Cherokee, the most awarded suv ever. The Grand Cherokee continues to raise the bar with its luxurious interior and legendary four by four capability. Drive on at your local Jeep dealer today. Although no group has taken responsibility for the attack on an Istanbul airport, Turkey is pointing the finger at Islamic state. Speaking at the North Alliance Leader's summit in Ottawa today, President Obama said the US is
committed to quote dismantling these networks of hate. They are continually losing ground, unable to govern those areas with me taken over, that they're going to be defeated. In Syria, they're going to be defeated. British Prime Minister David Cameron doesn't think he's the only one who should lose his job after the Brexit vote. Cameron called today on Labor
Party leader Jeremy Corbyn to step down. I have to say, the honorable gentleman, he talks about job insecurity and my two months ago it might be in my party's interest for him to sit there. It's not in the national address, and I was saying, for Heaven's sake, man go. Corbyn has said he won't quit, even though his colleagues gave
him a vote of no confide. It's all. Three suspected gunmen in the gang related Brooklyn shootout that killed innocent bystander Carrie good Bay are in custody and facing murder charges. The popular aide to Governor Andrew Cuomo, was shot in the head during a pre dawn celebration before the West Indian American Day Parade in September of two thousand fifteen. Global News twenty four hours a day, powered by more than twenty six hundred journalists and analysts in more than
one hundred twenty countries from the Bloomberg Newsroom. I'm Jill Schneider, and this is Bloomberg Katherine, thank you, and among today's sit top let's get let's get an update of those benchmarks. The down industrial laverage is currently up two hundred eighty one point, trading at seventeen thousand, six nine. Smp F founded up thirty five points of two thousand seventy one nastack higher by ninety points. It's trading at forty seven
eighty two. And that's a Bloomberg business flash. This is taking stock with Kathleen Hayes and Pim Fox on Bloomberg Radio. The consumer fili spin of the US economy over the last two months has spent at a strong enough rate for the Photowers or Bank of Atlanta to say it looks more than ever like. The U s economy is on track for growth of over two and a half percent in the second quarter, and that's the growth of just over one percent in the first What does this
mean for US retailers? Though a lot of things dry that broad, broad, broad measure of consumer spending. My next guest says, for retailers, there's all kinds of signs that the retail economy is sputtering. Craig Johnson is president of Customer Growth Partners. He's located in Connecticut, joining me who over in our New York studio today. Craig, welcome, It's always great to have you here. Great to be here, Kathleen.
So when you look at that report and people a lot of economy is saying, oh strong GDP consumer spending looks good. What is your response, Well, our responses we look at we we were very forward looking. We're out in the stores every week, a team of people across the country. So the consumer does account for about sixty of the retail economy of the entire economy of the g DP, but sixty percent of that sixty percent is
in services versus goods. Of course, retail is deal primarily in goods, and that is is being crowded out now by demands, nondiscretionary demands, whether healthcare whether insurance, whether housing, whether student debt payments. That that nondiscretionary set of demands is basically crowding out any kind of significant growth in retails. So right now we're looking at a flattish read not zero, but flattish kind of load to three plus percent in
terms of retail sales growth. Now. In order to make people spend their money, particularly when they have choices and they really don't want to let it go easily, you've got to get them something hot. You've got to give them a new fashion or something that is so enticing they'll they'll eke it out even by the less expression expensive version of That is partly the fault of retailers that their merchandise just isn't dazzling enough. Well, right now,
there are no giant crazes or fats. There's nothing really really hot. There are a couple of smaller things that are hot. Footwear, the sandal side is very Sandals are having its best season this year. This is where it's healed sandals, strappy sandals, et cetera. Um and rompers of all things are having to come back for the younger set. The younger female said, I should, I should say, but
these are not giant category movers. And then the other problem that we're having is is that two of the things that have been hot, performance wear is peeking out and fast fashion is fading fast. And these have been two huge drivers in retail, and we're seeing both of these begin to peek out a little bit. Fast fashion fading fast. Well, that's a great one, isn't it. Let's let's say that again. Uh, why where do you see it?
And uh will it pick up when more people It's only late June when people are more seriously saying, let's go to the mall, let's go downtown and buy some back to school close. Well, the lower traffic at the mall is part of the issue. But the problem in fast fashion per se is has been such an explosion of capacity of square foot its capacity over the last
half decade or decade. This is from twenty one from H and M, from Zara and Unicuo, and these companies have all collectively overshot the runway, and so we're left with too many retails square feet in in fast fashion chasing too few customer feet. And that's why a unicorne has begun to show uh closed stores uh fever twenty one,
which has been the giant, is seeing double digit negative comps. Uh. Even even H and M, which is remains of powerhouse internationally, is a little soft in the US well, speaking of retailers, UM and not sandals, but you know athletic footwear. Nike uh having some was under pressure. It's bounced back today, but yesterday reported that it's it's it's what they call their futures. Orders were up eleven percent. Analysts had projected what's gone with Nike? Are you worried about in Niko? Well,
there's a couple of issues. That one is the performance where issue wanting this on the on the apparel side, the apparel is is a growing part of their business, but they're getting increasingly competition from from the vertical chains such as Lulu into one hand, and an under armour, which remains a powerhouse on the other hand. Uh, And so that's part of that, that's that's part of the issue. Now.
They also claim in their commentary that there was some issue a year ago with the poor congestion delays which hyped up last year's work hard. Well, that's a little bit of excuse, but we think it's more the market is changing number one and under armour and the other performance where our specialties have been playing a bigger role. Brexit.
That's not gonna have much influence on US retailers, is it, except that maybe people whose currency has fallen in value, like people who live in the UK, won't be coming over here as much as shot well on on the Brexit side. Yeah. What what we're seeing, I guess is a couple of things. One is not going to be a giant impact. First of all, international tourism has already been slow here. This is whether it's from a Britain, UH, Europe, South America, China, Asia, It's already been a week, so
it isn't gonna get dramatically weaker. There are a couple of US vitos that have exposure in in in UH the UK, for instance, Abercrombie and Fitch, Walmart osdy unit and Costco. Costco is doing fine. A and f as weaken in over there, and then Walmart and Walmart's OZZ is weak. Costco is doing great. Walmart, how are they doing? Got ten seconds left? Uh? The Ozda unit right now is not faring well at all well in the UK. That that's their their their primarily grocery in some general
e MERCHANCT that's a little weak. Otherwise, Walmart is doing a little bit better domestical in the US and some foreign geographies. All right, well, thanks so much to Craig Johnson, president of Customer Growth Partners. He says reef Tail is being hurt because families have too many things like education and healthcare to spend on and they can't buy as
many closed shoes. In Athletic where I'm Kathleen Haze and this is taking stock on Bloomberg Radio, the consumer doesn't just buy clothes and shoes, you know, they go to the food and buy a lot of store. Coming up, Scott Rothbort from Lakeview Asset Management. He's been buying some whole foods and it is in partly lined with Brexit