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Elon Musk speaking with Michel Hussein, Editor at Large for Bloomberg Weekend at the Cutter Economic Form in a dotime. We're joined right now by the very same Michelle Hussein. Michelle Yeoman's duty interviewing Elon Musk. They're not the easiest subject to converse with. What's your takeaway as to I guess his kind of evolution back into corporate world away from some of his government responsibilities. Is that going to be a smooth transition? Is that going to be an
immediate transition? What was your takeaway?
Hello Paul, Hello Alex to from the Yeah, it's definitely quite an experience to interview Elon Musk, and for all your listeners, as anyone who saw it on Bloomberg TV or elsewhere on the live stream will know that it's a remote conversation. So I'm in Doha, he's in the US, but actually it's you know, it's probably a pretty intense
experience interviewing him, whatever the format or the setting. I was very struck by the fact that he the thing he wanted to emphasize was very much his corporate world and his businesses, not his role with DOGE, despite the fact we know it's ongoing and he said he'll be at the President's side for the remainder of this administration, in fact, even though DOGE doesn't last for the whole
duration of the administration. And when I asked him about whether this year is a pivotal year for that reason, he was kind of keen to characterize it as like, you know, he's seen many ups and downs in his time.
But I feel, especially with the fact that he ended up saying that he is going to do a lot less political donations and spend a lot less money on politics in the future, I wonder if, really, as he said to me, I'm a technologist first and foremost, and I wonder of this, if if these political endeavors have not given him exactly what he wanted and have put him on more on comfortable ground than he never acknowledged.
Yeah, I do have to give you a lot of credit. That was a tough interview. Anything remote like that in a conference stage is tough, and it was also really tough You've handled it really well. You didn't miss a beat, You flawlessly picked up all those questions. So I just have to give real kudos to you on that. And you pushed him quite a bit on the in the EV sales and he seemed to really stand behind.
No.
No, we're doing really well with the exception of Europe. What was some of your broader takeaway from that part of the conversation.
Well, look, it's clearly incredibly important to him. You know, teslaism is a tutemic company, and he's changed the car industry, not just electric bills. He has changed the car industry through what he's done there. It's also, of course a very very significant part of his wealth. So so therefore you can see that it's important on you know, on
on lots of different factors. Of course, the sales figures had them right in front of me for Europe and these are these are big markets and places where people are you know, very concerned about climate and have have you know, brought into Tesla and its vision for that reason. So it'll be very we do get month by month sales,
so I was looking at the April ones. It'll be very interesting to see what happens in May and but you know, obviously he's saying Europe is our weakest market and look at the rest of the world, and he feels that Tesla has has turned turned a corner and his commitment to it, you know, the bit you you played about pay and and the you know, his pay award is you know, obviously he's kind of like had the words that everyone heard on the judge who ruled
against him in Delaware. But I think it's clear Tesla is incredibly important to him. And you know, while he's got you know, other businesses that are that are at this point, you know, growing strongly in all markets, Starlin being a prime example of that, and the number of countries that are keen to get a slice of Starlink action and give him access to their jurisdictions for Starlink.
I think there is something too temic about Tesla, and I think it came out in that how keen he is for the brand to regain ground everywhere, whether or not you can do it in Europe, I don't.
Know, Michelle.
Kind of you know, through the election, in the first couple of weeks of the administration, Elon Musk was everywhere in every photo op and every video clip, and then he's really kind of gone radio silent for the last month or two. Where do you think he's how do you think this is going to play out over the coming weeks and months with him in terms of re engaging.
Well, I think those q ON sales figures at Tesla really forced that. But I wonder if again, you know, not that he could not that he bit off more than he could chew. But politics and government is a very different world, and I think it's probably a mutual benefit that he and the President have been, you know,
much less visible at each other's side. I'm sure they are still very close, although Elon Musk is been public about his differences with Peter Navarro, and in many ways, you know, where the tariff argument has ended up is much more in the in the Elon world and to Elon's worldview on trade rather than the Peter Navarro world.
But I think what he said about political donations and less political spending in future will be looked at with interest in other countries as well, in the UK, for example, where he where Donald Trump is close to Nigel Farage, though there would have been a lot of interest in whether at some point Elon Musk finds a way to donate to a UK political party, he finds a UK entity to enable that kind of donation to take place. Remember he's been seen a lot with the AfD leader
in Germany. So I do wonder whether this intent and this his words on political implications beyond the US.
Hi, Michelle, we got to leave it there. Thank you so much, really great stuff, Michelle Hussein. Thanks for doing US editor at Large for Bloomberg Weekend. Also to stay tuned for Bloomberg for everything from the Cutower Economic Forum, really wonderful interviews.
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Earnings so home Depot coming out that stock up four tens of one percent. Home Depot maintaining its guidance for the fiscal year despite a three tenths of one percent drop in COMP sales and US ticket sales did tick up because of smaller projects, not the big ones, Drew writing as Bloomberg Intelligence, US home Building analyst joins us to discuss, all right, we got the macro, we got the micro. Let's start with the macro for a moment.
Deferring large projects taking on small projects doesn't sound so bad. Do we get an idea of when deferring becomes non existent projects?
So one of the reasons why home improvement and hope DIPO have been so resilient is because a large portion of the industry has to do with that maintenance and repair oriented work. So I think that's where they're seeing a lot of the lift now. It's homeowners who are taking care of the things that they need to just to maintain their home. This really isn't now. It's been a couple of quarters now where we've heard from them
that big ticket discretionary categories have been relatively weaker. So think about things like kitchenery models, bathroom models, flooring projects. These are things that tend to be financed by the consumer, and with rates as high as they are right now, it's just become a little bit prohibitive for them to
undertake those projects. So I think in order to see more robust growth out of these categories, which is really the missing piece of the story, we need to see rates start to come back down a little bit.
How about tires. Is that impacting the costs of their goods like getting lumber from Canada, for example.
So we think home Depots pretty well positioned from a tariff perspective. They source about fifty percent of the products they sell from inside the US, and you know, like a lot of other retailers, over the last decade, they've done a great job in diversifying their supply chain. They actually said that over the next twelve months, no single country outside of the US is going to account for
more than ten percent of their product purchases. So the fact that they're diversifying their supply chain should help with costs. At the same time, given their scale the largest home improvement retailer, they'll have the ability to push back on some of their suppliers in terms of cost. Now, what they said is that they're looking to generally maintain their prices,
so I think people took that as a positive. You have to remember Home Depot sales about thirty thousand to forty thousand products in their store, so when they talk about pricing, they take a portfolio approach, so you may not see them raise the price on a particular item that was tariffed. But they look at the elasticities of their various products and they'll take prices they need to where they can, gotcha.
So they're going to manage that margin, so they're not going to sacrifice margin.
Then actually guided to an operating margin pretty much in line with what they were looking for at the end of last quarter. There are a couple puts in takes. They're doing better on shrinks, so they're managing their retail
theft a little better, which is always a positive. So they're also you know, getting some more leverage from productivity, so you know, I think pricing is going to be a component of it, but they also have other levers within the business that are going to help to maintain their margins, you know, where they expected them.
What's home Depot do with the number of stores? Have they added stores? Are they fully kind of where they want to be? What's the store count story?
Yeah? So interestingly, Home Depot over the last year has actually returned to store growth, which is something we haven't
seen from them in a very long time. They kind of have had the established footprint in the US, but as the business has grown so much as they've grown their pro business, they've started to add new stores in markets where you know, populations are growing or where they want to kind of take some of the pressure off the existing store base to look to drive some additional productivity. So this year they're adding about thirteen new stores. They're going to do that. I think their plan was about
eighty over a five year period. So the next couple of years they'll continue to add new units.
So what does this mean for say Low's Is this a good signal or is this more of a competitive signal?
So I think the story is pretty much the same for Home Depot and Lows. I mean, on a relative basis, home depots exposure to the professional customer at fifty percent versus only about thirty percent for Lows is driving out performance. So Low's exposure to softer DIY trends and there's big ticket discretionary categories, I think we'll drive a little bit of weakness. But you know, for both retailers, it's it's pretty much the same thing. You still have a weak
housing market. You know, home sales are in the low four million range, which is about twenty five percent below what a normalized level looks like and both retailers, like many are dealing with just an increasingly cautious consus. You know, there's a lot of discussion on when does the soft data start to translate into the hard data, and I think in the broader housing and home improvement ecosystem, you know,
I would argue that it already has. We heard from a lot of builders who are getting pushed back on, you know, buyers who are just reluctant to step into the market, whether they're concerned about their jobs or the direction of rates or the direction of home prices. And then like I mentioned in home improvement, just that financing piece, you know, and wanting to take undertake such a big project as giving people caution.
Drew just talking about rates on like the thirty year mortgage six point eighty six percent is there? What are your homeboters telling me about consumers and mortgage rates. I mean, at some point you got to say, hey, this is the new normal, this is where we are, this is the interest rate environment. If I'm going to buy a house or sell a house and move down to Florida, now's the time.
You know, Yeah, You're right, and I think higher for longer is the new normal. We actually rose back up above seven percent yesterday. So coming into the year, you know, there was a lot of expectations at rates were coming down, maybe we'd see some more momentum in sales. But that magic number is somewhere with a five handle, maybe five
and a half percent. And you know, as we've discussed previously, builders have been able to get there through the use of financing incentives, but they're having to work harder for each sale, and those incentives get more and more expensive as rates rise. What we've actually heard from some of the builders is, you know, maybe now is the time to not chase volume as hard as we wanted to before, because we want to preserve a little bit of margin and get the best return we can on our land assets.
So you're seeing some of them dial back their volume expectations in favor of margin.
Interesting. All right, Drew, Thanks lot, really appreciate your reading Boomberg Intelligence. You as home building analysts.
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John Creekmore joins us. He's chief investment Rofster Creekmore Wealth Advisors. John my notes, say you're from Morton, Illinois. Is that right?
Morton, Illinois, the self brooklamed pumpkin capital of the world. That's awesome.
Now I have to admit, John, I had no idea where Morton, Illinois was, so I Google mapped it just a minute ago. You guys are right outside of Peoria, Illinois. So there's nobody more Middle American than folks from Morton, Illinois and Peoria, Illinois.
The salt mines.
Exactly did the good folks out there? Do they care about tariffs and stuff like that?
I'll do it cure minally. So Caterpillar Incorporated was actually founded in pure Illinois. There's about eighty five thousand employees of Caterpillar right here, just right across the river from where I sit. And obviously a large portion of our sales come over different parts of the world and over into China, and so obviously we care minally about tariffs and how it plays out as far as as far as our own economic security right here in central Illinois.
How do you, John, then, as you think about when you talk to your clients, think about putting the tariff discussion and maybe some of the economic concernity that might result from a tariff world. How do you put that into your investment discussion.
You know, it's been so interesting to watch over the last year, especially as we saw more discussion even last year in the election cycle about trade and balance, about different methods to utilize and bring this trade and balance into a probably proper perspective. And one of the ones
talked about was the blunt instrument of a tariff. And a lot of folks did not have much much knowledge or background of terrorists except for there remembering affairs dealer's day off and as far as the discussion of terroists in that movie, and so not real academic there. But all of a sudden then they recognize this could be a big deal for them as far as inflation. It could be a big deal them as far as overall economic certainty. So we really to hear, what a courage
oot to take a step back. Let's go long term goal objectives. Ask yourself are you an investor or are you a trader? And then based upon your answer on that you can make decisions to make money in any invite fair. However, it's a little bit different methodologies. So number one was back in April. We encourage everyone. Actually before that, back in the middle of February, we saw the market hit at all time high and encourage everyone to say, hey, stay holm, there's going to be some
uncertainties and the storms coming about. We're going to make sure to make logical decisions based upon facts. And whenever we saw the tariff announcement hit on April the second, it caused a lot of emotion and a lot of uncertainty. We know the markets do not like uncertainty, so we
encourage them. Let's allow this to play out. Let's look for opportunities in the carnage, let's try to find ways to make money in the midst of and sure enough, whenever more information came out, cooler heads prevailed and we saw the markets bounce back, actually up twenty two percent from that low that we saw on April tenth.
So what are some of the companies that you like? Top pick to it?
Top pick right now is I love Lotos phenomenal company. Relative strength has been moving very mightily there strong mode. As far as the technology space of defense and as far as the medical research and development, and so love Litos and an early on investor in that this year and it's been a strong performer. You know, we actually
look for opportunities right now. We saw tremendous opportunities overall in the tech space with the sell off there in April and so big names in there, Snowflake, d Dog. We're a couple that we actually loaded up on early on and very happy for those investments.
Hey, John, I have to ask for a friend here. Enbridge.
That's a name on one.
So talk to us about energy and Enbridge.
You know, in Bridge is very interesting and so we look at energy, we look at what part of the energy sector that they are in, and so we know for sure as far as a lot of the oil companies, the shelves, the vps of the world, of the exxons, the mobiles, they all saw some tremendous price pressures as far as on their equity prices whenever we saw the price of oil drop down. And yet at the same time those involved in distribution. So there's Enbridge, they're actually
held very well. Their dividend is very strong and so nomemb HAPs in the economy. We know those still be moving oil through pipelines and through other distribution channels, and inn Bridge has been a long term player in that. So we see them as a strong cash position, very low long term debt. It's a great value holding if you have been served to as far as in the economy, those type of companies that does them Bridge really play out well.
All right, John, thank you so much, Really appreciate John Creek Moore, Chief Investment Officer, creek More Wealth Advisors, Morton, Illinois. Check it out, folks just outside of Peoria. Again, it doesn't get any more Middle America than that.
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So the big take today is one that terrified me, and I think every woman out there will echo my pain. It's a wonderful piece written by Anna Edney, and it talks about possible cancer and health risks that are lurking in a popular OTC drug. If you've ever had a urinary tract infection and you've ever gone to the drug store and gotten an over the counter medication. This part of the drug is in that and that's what's so scary because UTIs are extremely common and many treat it
with these kind of drugs. Anna is national healthcare reporter for Bloomberg News, and she joins us, Now, Anna, walk us through what this drug is. What kind of brands it's in A start there?
Yeah, sure, so probably the most popular one.
I think a lot of our listeners will recognize as Azo. It's in over the counter drugs, So you can go into most any store, you know, Target, Walmart, anything like that and purchase it. You don't need a prescription. You're a stat Is another brand, but all of these stores also make their own generic version. So it's something that is supposed to treat the pain with your.
Airy tract infections.
A lot of people seem to think it goes beyond that and it's actually curing their infection. So one of the issues being that, you know, people might need antibiotics, but instead they're they're using this.
Now, what's the drug in it that is causing some of the issues and how do we know?
Yeah, so this is.
The active ingredient in all of these drugs. It's what the generics will go by it. It's called naso purdine. I may still be butchering that name, but it's an unapproved drug, which was really interesting to me and something sort of new to me even though I've covered these issues for a long time that I came across.
What it means is the FDA.
Has never formally approved this drug, so you know, while millions of women are using it for decades that there's never been a true vetting of, you know, how this drug interacts with our bodies. One of the things that a National Cancer Institute study found, this.
Was back in nineteen seventy eight, is that.
It caused tumors to form in rats and mice. That's never been looked at in humans because it's never been this drug has never gone through clinical trials or anything like that.
That is just that that statement is so insane. And Paul, just let me I'll explain to you a little bit here. So if you have a UTI, it comes on really fast, and if you order to get medication from your doctor, goin to cologists. You have to go in so they can test it. And if you're in pain, and you know what it is because as you've had it before, you just go to the store, pick it up, and you feel better in twenty four hours. Like that's why these drugs are so popular and easy to access.
And what I learned and a story, and they're not FDA approved, they are essentially grandfathered in. So if I'm walking down the aisle looking at you know, over the counter drugs, do I have any way of knowing what's been FDA approved and maybe what hasn't been.
Yeah, I think that's a really good question.
And there were multiple you know, quotes out there from congressional testimony and other places where FDA staff members we're talking about there's you know, there are many such grandfathered in kind of drugs, but the agency did not give me a list, wouldn't even tell me how many might be out there. But there is potentially, you know, this is this takes a little sleuthing. It's not that easy
to do in the drugs deile. But if there's a website that the National Institutes of Health runs called Daily Med and people can search by drug there, I wouldn't say it's like the misuser friendly looking piece. But when if you look for azo or you're a stat or Finazo piarody.
In any of those, what.
Will come up as kind of a disclaimer saying, you know, this hasn't been vetted by the Food and Drug Administration, its safety is not known, and that kind of gives you an indication. You can dive deeper into that data and you can actually see that it's unapproved, But just for the lay person at least with that disclaimer, that would give you a good idea at the top.
So what happened then?
I think that's a good question.
So the FDA is they have a system where they're supposed to have vetted these kind of very old drugs and given them what's called a monograph. This is the agency's instruction book. Here's how this drugs should be made, Here's how the dosing what it should be, Here's how it should be manufactured. They have not done that for Finaeso piaritan. So it's possible that, you know, with this increased attention, that they could decide to look into that.
There's you know, they asked in two thousand and three whether this drug should actually be prescription only, just given the risks and that people don't often follow directions on OTC drugs. You know, you're only supposed to take this for two days, and you're not supposed to take it all the time. There are companies, particularly online retailers, that are really pushing this drug on women and girls kind of just to have on hand all the time just in case.
And I do so, yeah, why not? Right like you get over the counter, you have it there. You're not going to use the whole thing. That's why it was so scary, and we really appreciate it. It was a great piece everyone. You can read the Big Take story possible cancer and health risks, lurking and a popular OTC drug. You can check it out on Bloomberg dot com slash Big Take. You can also check it out on the Terminal. Anna,
thank you so much for writing this. Anna Atney, Bloomberg National healthcare Reporter.
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