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I want to check in with Ellen Wald. She is joining us here. Ellen. You know, a lot of going on in.
The geopolitical markets impacting the global crude market, but we still got crud at low levels Brent CRWD sixty one bucks, WTI fifty seven dollars here. What's your view of the supplying demand that there for global crud?
Yeah, I think a lot of what we're seeing right now is, first of all, kind of end of year, not a lot of trading going on.
In general, you know, not a lot of people on you know, working and trading a whole lot.
But also I do think that we are actually seeing a pullback because earlier this month there were incredible hopes that we might see a resolution to the Russia Ukraine conflict, and that one brought.
A lot of oil back of the market. I think we're kind of seeing kind of a pullback from that.
People are realizing like that's that's not actually going to happen that soon. I also think that we're also seeing a little bit of a pullback from a slight fear of a supply.
Disruption regarding Venezuela. It's pretty clear that the only supply disruption that's.
Going on is Venezuela's supply is not going to reach the rest of the world.
But the issue there is.
That once the US is comveandeered this crewed, and President Trump has said outright that he plans to just you know, take the crew, put it into two US supplies, put it into the spr and whatnot, and that actually introduces more supply into the system, because this was crude oil that was sanctioned, was kind of being bought on the black market, but now it's being introduced into the the larger supply, and so that's going to push prices down, believe it or not. Though I do think that, you know,
it's not quite settled there. We're really going off exactly what he said. So I think that there's a fear that we've got rising supply and that demand is not all that firm, that we could definitely see declining demand. I do think when we're looking ahead to twenty twenty six though, that people are looking very closely at the US supply and whether it's going to start to show signs of pulling back.
Interesting, So maybe an issue of oversupply going in twenty twenty six where US becomes sort of a marginal barrel there. What's really interesting in some of your notes and I'm thinking about today in particular the move We've got thin trading, but oil is lower. As you mentioned, maybe people are taking three steps ahead to think what Venezuela ultimately has in terms of.
Impact on supply.
But also there is tentative even though you seem to say it's a little bit ahead of its there is some tentative optimism around a long stalled Ukraine piece talk at least in Zelenski looking to visit President Trump in Florida. We understand you make the leap that maybe all of this is something that then ultimately affects China. Can you talk us through as to why we see Venezuela and Russia maybe impacting China in a way that we should keep an eye on.
Yeah, exactly, so, right now, China is a huge purchaser of Russian oil.
They're also a.
Purchaser of Venezuelan oil and not you know, to the.
Extent that they purchase Russian and Iranian crewed bit still and so really, you know, this impacts China supply, and China has really been kind of getting away with an incredible amount of very low cost supply that they're buying off of this so called black market.
And you know, if some of this supply that they even buying off the black market gets.
Transitioned into the regular you know, oil market into supply, yes, it's going to push prices down overall.
But China is.
Going to start to have to pay more because they're paying such incredible discounts.
For their sanctioned oil that they're buying right now.
So China could be kind of looking at this with They probably are looking at this with a lot of interest in you know, what's going to be the prices that we're going to have to pay for oil in twenty twenty six, given all of these shifting geopolitical factors, and so they may actually be anticipating having to pay more, whereas the rest of the world is looking at paying less.
Carolyn, you may not know this, but I am a big fan of the television show Landman, So I now consider myself an expert on all things oil and gas. So Ellen are good friends down in the oil patch. They can't be very happy with WTI and but they're fifty seven handle what are they doing today?
What are they doing?
So it's really interesting because if you want to know or if you want to get an idea about what's going on in the oil patch, yes, you could watch land Men. You could hop on over to the Dallas the Bank, the Dallas Federal Reserve where they do a quarterly survey of oil producers and also oil services companies, and they will give you a little glimpse into the mind of what they're thinking.
And so the latest survey has showed.
Everything from things are looking up. I'm you know, you know, not planning to reduce any production to I have to pay people to take my natural gas so that I can continue to produce.
So I think the answer is it's really mixed, and.
Some producers are looking at a better outlook and other producers are looking at a much more dismal outlook. And I do think that depends a lot on exactly where they're producing and how they're producing and what their wells look like, because it's really become a very complex and a complex game out there in terms of what kind of wells you have, what stage they're in, where you are and drilling in terms of how much you're going to get per barrel.
This is a term that nobody in the oil business likes to hear. But is there a gloss in global oil supply?
That depends when you ask.
I think if you if you ask the IA, they'll tell you, yes, we're in a huge oil supply clut. If you ask Opek, they're going to say no, it's definitely not as bad as the IA seems. Now, why can we have these two competing answers well, because it's actually.
Really hard to count all those barrels of oil out there.
It's not like you just get a number out of computer spits you a number for you know, what's global consumption today. These are things that they have to be measured and it can be quite difficult, particularly with all of these sanctioned oil going on out there. So I can see why they're coming off with different different answers.
Fascinating always catching up with Ellenwold of the Atlantic Council She's also got a book, Saudi Inc. We love to read that, So thank you.
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All right, retail sales, I think this Christmas season, the holiday season, from what we heard from the experts, Caroline, have been pretty solid. Kind of people are spending money, you know, so.
Anecdotally, anecdotally I spent some money.
Okay, speak right now, we've got some hard data folks joining us now with Michelle Allan, CEO of June Group and chief business officer at VERB talk about just kind of the consumer out there and retail and how's.
The consumer doing.
We've all heard about the K shaped economy, but what does that really mean for retailers out there and dollars being spent?
So, Michelle, thanks so much for joining us here.
What can you tell us about what we've learned over the last several.
Weeks, maybe about the US consumer?
Yeah, thanks thanks for having me. First of all, you know, we analyzed billions of search for on a basis using our Captify product, and what we're seeing in this holiday season is this very interesting behavior from consumers were you know, instead of being focused on deal driven shopping, they are shifting to an intent driven one. Obviously, before Black Friday you see a lot of you know, consumers looking for deals.
But what we saw in the time leading to Christmas after Black Friday is that consumers were looking for trusted brands, They were looking for creative toys, and they were looking for subscriptions that remove friction and deliver instant value. Overall, this tells us that consumers weren't overwhelmed by what was available there. They were more intentional and selective around the brands that they chose.
That's the term I've heard, like more intentional intentional buying. That's the first time I've heard that term here, but I've heard it a few times here this holiday season.
How promotional were retailers out there?
How promotional did they have to be, Michelle to drive traffic?
Yeah, some of them. You know, there are two sides of the spectrum. You know, if you look at the markets, you still have the Marshalls and tim us of the world. We are looking to cast a white net and to attract those consumers that are looking.
For for the for the deals.
At the same time, when you look at the DTC brands, you know there.
Will be partners of the world.
They were more focused on creating this you know, premium experience around the shopping and you saw that translate into searchers that were you know, very.
Specific to those brands.
I think that consumers we're looking for brands that are trustable, that you know, will allow them to cast the white net when they are going and you know, buying gifts for their friends and relatives, but also tread and true brands that will never be objectionable or questionable for their last ones.
How are people coming to those brands at the moment? There's companies that really managed to interweave the really bricks some watar element as well as the online and advertising. How you seeing people building a relationship with a brand at the moment.
Yeah, I think that some of it is traditional buying, you know, traditional e commerce buying. You see that a lot with the DTC brands who have their own you know e commerce environments.
But you also see a big shift into.
Social There was around one hundred and eighty percent increase in searches related to the TikTok shop. So if you consider that, you know, in the past, TikTok was a great venue for brand discovery. It was kind of like a PR tactic in a way, but now it's much more than that. It allows consumers to really close the loop and make a purchase very quickly, So it went beyond just, you know, a discovery tool as it used
to be. And I think that brands that are that are smart about reaching their target audiences are going to put more focus on those types of shoppings in environments because shopping windows are becoming smaller, shorter and shorter, and consumers want to feel good about the decisions that they make and social environment is allowing.
Them to do that.
I mean, how do we break down generationally or just bring us with people who are on TikTok? Is it who is the person that's spending right now? What do they seem like? What are they what are their views on gifting? Is it mainly parents that are coming into TikTok and doing it? What are you seeing in terms of the gen z cohorts as well, we see the full gamut.
I think that if you look at some of the brands that were mentioned in our research, you know, some of them cater to younger audiences, others cater to all their audiences.
So we see really the full the full range.
I think that sometimes people assume TikTok and those types of remdments are a better fit for the younger generations, but based on what we're seeing, it's actually the full range.
And that's just the beginning.
Right with the introduction of l A lamps and creating shoppable experience with experiences with l lamps, I think that we're going to see more and more shopping experiences becoming more focused and shorter, and again consumers will want to feel good about what the decisions that they made. Removing reduced that level of anxiety or FOMO is going to be key to those brands that are interested and being successful in these environments.
Michelle, I think we're just starting to see consumers broadly defined, get starting to get a little bit comfortable with AI and how AI might be helpful to them. Probably can say the same thing about retailers. How are they using AI? Just give us an overview kind of what we learned and maybe during this shopping season, was AI prominent with the consumer with the retailer.
I think we're in early stages of that. I do think that there are certain verticals in the market that are already taking advantage of, you know, consumer's ability to find the right solution for them. I think travel is a great example for that. I mean, think about how much time you normally spend in finding the best flight or the best hotel and using AI in order to
do that work for you. Using agents is going to reduce a lot of that thermo or anxiety that people normally have when they search for travel.
And you know, travel is one of.
Our biggest verticals, and we always look at, you know, what can travel clients or brands can do better, And I think that they are ahead of the game, and I'm expecting others in retail in other areas to follow suit and optimize, you know, in the same way that they used to optimize for web searchers, to opt demise for how their brands appear in those lm AI environments.
So this year, though Michelle talked to us, is it still e commerce taking share from bricks and mortar or do we have maybe kind of a new status quo there between e commerce and bricks and mortar.
I think that one interesting thing that we saw was actually digital subscriptions. I think that those generate this you know, instant value. You don't need to wait for a product to be delivered. And in the past, those types of products had a stigma to them that they are not thoughtful enough or not specific enough to the person that you were trying to gift, and we've seen that shift
over time. I think that, you know, based on the data that we're seeing this year, we saw some strong signals that digital products now carry as much weight as physical products, especially when time is scarce. And I think that what makes it even more interesting is if you look at the types of products that are were being promoted.
You know, can the on limited or peloton does also give a nod to everyone's New Year's resolutions, right and making sure that there is some alignment between the gift and what people are trying to do in Q one or you know Q five as we sometimes call it, all.
About the wellness. Michelle Alone, chief business Officer, over connecting advertisers to publishers across emerging channels great to get your expertise today. Thank you very much.
Ed.
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We're not going to look at the day. We're going to look at the and we're going to look at what twenty twenty six brings too. With Carole Pepper pe Pull they got the puffect.
The guest absolutely, Carol Pepper Pepper International CEO. Carol Again, Carolina and I were just kind of going over the total returns here in at twenty twenty five. What's the conversation you're having with your family office clients about twenty twenty six.
Yeah, well, family offices are excited about this strong rally and although some of them still sat a bit on the sidelines during twenty five because in the beginning of the year it did look a bit dicey, they're all ready to take their dry powder and start investing. So I think it's going to be a very strong year. The fundamentals are there. We got that second, we've got a ray cut in December, which is phenomenal. The markets are strong, they're strong underpinnings, and so I think people
are going to be going in early on. And as you say, if you can't make a deal in this market, go home, because it's going to be a fantastic market in twenty six.
How much risk do you think your clients are going to be looking to take care after three strong years of equity returns, I think maybe looking outside of traditional public equity for maybe some other areas that might generate return.
Well.
Family offices are always interested in alternative investments and non correlated assets because we create asset allocations that last for generations, and portfolios are each tailored to the particular purpose of that portfolio. So for sure, we were in precious metals a couple of years ago. We've written that trend up. The AI data center trend is honestly just getting started, and a lot of those deals have been in the private side, through private debt deals and private hedge funds
that are funding these plays. But those things will begin to come into the public markets as well. So AI technology, rare earth metals required to build a lot of this new technology that we're looking for in our country, deposits being found onshore that are going to be able to empower the resurgence of this new AI world that we're creating. There's a lot of areas to invest in this year in twenty.
Six Carol, can I jump in on that, because we are anticipating some mega IPOs potentially in the AI world. We're expecting maybe SpaceX's sort of AI and defense in many ways, but Opening Eye could well tap the markets. If you're someone who hasn't managed to gain access through the private markets, are you left holding the baby? Do you think though, that actually there's more room to run in terms of valuations once in the public market.
Absolutely, because you'll have an even larger capital base and they're just getting started.
Family officers are working on this. You know, if you think about how quickly.
The Internet changed, double triple, quadruple that rate of change. So even though we've got cutting edge ships today from Nvidia.
We don't know what they're going to look like.
Even by the end of the year, data centers that are the size of twenty football fields are going to shrink down to the size of shipping containers. Very shortly, you're going to find AI data centers inside of huge office buildings, for example, that have been repurposed to handle all the new compute power that's required. So you're going to see tremendous change happening in the AI space.
And as that happens, you need a lot of capital.
So yes, when it comes public, obviously the first few days is going to drift down. That's when you grab it, or on a fear day, because it's not like we're not going to have fear days in twenty six.
We always have fear days.
But yes, there will be opportunities for you to get into that trend, stick it into files college account or in your retirement account and just let it run.
How much is the AI bubble going to be the fear trend? We have this on again, off again view. It feels as though people are brought back into AI optimism just in the last couple of weeks, but since October and onwards, we've had these fleeting moments of panic really that the debt that's getting loaded onto certain companies, or indeed just whether the productivity gains are going to be enough to vindicate the amount of infrastructure investment that we're seeing.
Well, they will, it's just a question of timing, honestly.
And the good part for the AI companies, Unlike during the dot Com these companies.
Have a boatload of cash.
If you rec during the dot com era, people were you know, basically buying on vaporware with no cash, no innings, no nothing. And in this case there is a massive cash hoard behind a lot of these plays. They learn their lessons and so they're ready to ride through those periods when there's doubt because other things are happening in the world besides AI.
So I don't think they do.
You see that, Yes, other things are happening, whether whether they notice.
It or not, Carol, twenty twenty six is an election year, and that presumably will bring some level of uncertainty back into the marketplace.
How much of a risk, if any, is that to you.
I think it's going to be a lot of noise.
I mean, unless you have an impeachment of the president due to a regime change in the House, so the Senate, it will be noise.
There'll be a lot of noise there. You know.
Epstein is a disgusting situation, but again not economically changing the country's profile. So as long as there's more steadiness this year, hopefully on the direction of the economics, and hopefully some further relief on teriffs, you'll see the market happy enough.
And it's still.
An open question of who's going to win the midterms US, but it will be something that will take them a lot of airtime, but not necessarily a lot of economic change per se for the markets.
Carol, it's been great getting your expertise as we wrap up this year, an extraordinary year of record high on the S and P five hundred as we speak, Carol Pepper, great test of time. Pepper International CEO.
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