Outlook For The Retail Space

over the last a week to ten days. Very solid numbers, uh, some cautious outlooks, the delta varying obviously being a big issue, as well as supply chain issues. Let's really dig down on the world of retail. We can do that today with a Lane Kuan, co founder and partner of Quantified. She was a former head of Luxury at Amazon E. Lane, thanks so much for joining us here. Again, some pretty good numbers out of the retailers over the last week

or so. How are you thinking about the important back to school and then of course the holiday shopping season coming up? Absolutely, Paul Taylor, thanks for having me. So when we look at the holiday season this year, what we can expect is that everything is going to start earlier.

Brands and retailers have lost so much as we know, over the last eighteen months, and frankly, during the last year, brands and retailers cut a lot of their manufacturing, their purchase orders, inventory movement because they didn't know when things would start moving back into um, you know, normal retail cycles. However, Q four has been pinned as the time to return, and so we're starting to look at Q four not just starting in November, but frankly starting in September next month.

So I would expect to see fantastic new products starting to come out. Lots of brands know that they cannot afford to risk another peak season going awry, and so we're going to see fantastic new selection coming to shelves, coming to online e commerce sites starting next month. Are the products though, able to get there given some of the supply chain issues we've seen, Yeah, that's a fantastic question. As we know, transportation and logistics are much more expensive

nowadays due to labor shortages. Have your import volumes, higher fuel costs, increased partsy material costs across the board, and so that is part of the reason why we expect the season to start early is because everyone knows we cannot afford to be late. We cannot afford to miss this. We have to get it in three to four months earlier than when we would normally bring these products in

for the holiday season. Lane, what do you trying to gauge the consumers always such a difficult part of retail and in this environment where we're reopening but we're cautious about the delta variant? And how do you view the consumer here? How are you talking to your clients about how they should view the consumer? Another great question. So I think one of the biggest changes we saw last year with the consumer behavior during COVID is that people

stopped buying for the future. Their immediate mental shift came to what do I need today. I'm buying for today. I'm not buying long term items. I'm not buying investment pieces or specific luxury item that I was saving up for. I'm not certain about the future, so I'm going to buy things that take care of me today. And that's why we saw a huge shift into buying for comfort

practicality while bringing some joy. For example, we saw huge increases and athletesure wear, clothing, skincare, mail care and hair care, everything from home gadgets, appliances, in decor, even home fragrances saw a massive jump, and so we are starting to see folks starting to buy more for the future again, that is definitely coming into play. We think that's back to school. UH specific era that we're in right now has been incredibly productive and folks are very very happy

to see that that consumer demand has been returning. But we're still counting on the short term buying. I would say area focus for most consumers right now. It was really interesting that there were reports earlier this week that Amazon was looking at opening up several retails brick and mortar locations, which is the exact industry lane. As you know that they totally disrupted for some of the merchants on Amazon. You know, what are you thinking, what are

you advising? Is it too early to tell or we now thinking about shifting back and we will maybe we want to retail presents. You know, it's funny that you mentioned that, because we think that this is potentially very exciting idea that, if executed correctly, could be the next big thing in brick and mortar that we have been

looking out for. As we know, you know, Amazon has you know, taken out some of the largest major department stores in the brick and mortar presence over the last several years in some ways, and ironically it makes sense that they are now coming back to the space to try and claim it, you know, thinking that they can do it better than perhaps those that came before. We don't believe that brick and mortar in and in and itself is dead by any means. We just think that

it needs to manifest in a new way. And so based on what we're hearing, the department store could be incredibly productive. I think the secret sauce of Amazon's incredible customer service translating into a physical space is going to be really special. Not to mention that if they do focus on clothing, apparel, and perhaps even a beauty counselor in that physical space, they could frankly dominate the apparel space in the fashion space, which is a goal that

we've had for several several years now. Elane talked to us about luxury here, Um, how has it performed during the pandemic and kind of what's the outlook going forward, because I was shocked when I see some of the e commerce numbers from some of the luxury brands. I just can't imagine spending ten thousand dollars on a piece of jewelry and buying it online, but apparently people do

that stuff. You know, you're you're correct. Uh. So we have been seeing some really interesting trends, and I would say one of the other uh movements that we're starting to see pick up and would expect to see continue is what we're calling the return of the Roaring twenties. You know, folks on the same token, even though they've been buying lots of matching tight eye hoodie and jogger sets and comfortable rogues, they're also getting tired of that as well. They want to be able to dress up.

They want to be able to enjoy feeling glamorous and getting you know, made up. And so we're definitely seeing that there's a pretty steady stream of demand that's growing um by the month in terms of you know, customers buying luxury items, and because they know that a lot of these store physical presences are still unavailable, they're willing

to do it online. And to their credit, many brands through their e commerce site have done a pretty amazing job of improving the overall customer experience online, and so we're seeing a nice i would say, overall shift of customers willingly buying very very expensive items through e commerce. Elaine Kwan, thank you so much for joining us. We really appreciate it. Elaine Kwan, co founder partner of Quantified, a former head of Luxury at Amazon, giving us an

outlook for retail back to school. We're underway in the and it says apparently Elaine was saying, you know, we're gonna start shopping for the holiday stuff even sooner. Well, our good friends at Charles Schwab they have their latest latest Trader Pulse survey out tries to capture what's on top of mind for traders right now and again markets hitting new all time highs. How much higher it can we go? Barry Metzger joins us, his managing director of

Trading Services fort Charles Schwab. Again, Barry, thanks so much for joining us here. And we see markets at a near all time highs, seemingly on a daily basis, our traders getting nervous that we might be near the top here. Good morning, Paul, and thanks for having me. Uh, well, you know we're not actually seeing that. In fact, I would say in terms of market sentiment amongst our traders, one third of traders are bullish on the market and almost half our neutral on the next six months. So

you know, there is a mix. There's a mix of optimism and perhaps some caution, and no question, the rise of the delta variant and inflation is clearly weighing heavily on their minds. You know, traders universally reported that the continuation of the COVID nineteen pandemic is their number one concern right now, and eighty seven are concerned about the rise of the delta variant and the potential market impact

through the rest of the year. It is interesting because at least here in the media, we've been talking a lot about the rise of the variant. I had, for example, the pet Cove CEO on the other day and we asked him that question, is the variant are you seeing it in sales? And he said, like, we we haven't seen anything yet. When you talk to some of the airlines, they are saying they're seeing to change in bookings and

some hesitancy. So while it maybe on top of minds, is that translating into a change in behavior into a change in the way traders are trading. Yeah, Taylor, we we we have seen that. So you know, in terms of what we're seeing in traders, you one third of traders have already changed their strategies since Delta emerged, opting to increase their exposure to equities, cash, and fixed income.

And among the traders that haven't made changes due to Delta have say they may change strategies in the coming months. And so this group is looking at increasing cash exposure first and foremost, and then decreasing exposure to equities and investing in more domestic stock. So we we are seeing the Delta variant certainly play a role in how clients take a look at their portfolios. One of the things very like when we talked to you know, you guys it Schwab. You give us a good insight into the

retail investor. We had a big retail trading boom, if you will, during the pandemic as folks were kind of locked down here. Is that a thing to stay or are we gonna go back to more normalized trading activity from the retail sector, Paul, The retail trading boom is here to stay. A six percent of traders think this trend will continue, you know, and it's Schwab. We've seeing the entrance of younger investors also come into play, and from more than half of new Schwab retail households, we're

forty years old or under. For Q one, more than six of new households were forty and under. You know, the factors around the pandemic. It definitely helped to fire for new investors, but it's not the only factor we're seeing driving this UM. I think it's a combination of three things. Greater use and accessibility to investing and trading, so example of lower minimums or fractional shares, and then retail traders now have access to increasingly sophisticated tools that

look very similar to what institutional trader use use. And then lower training costs and most notably the move to zero commissions over the past year. Barry, I hate to ask this, but I hear that gen Z all their trading is bitcoin and dose coin, and it was interesting that there are some concerns about robin Hood's outlook, but that dose coin trading it actually really come and saved the day. Do you see that what are they trading. Well, you know, it's a great question because this is something

that is always on our mind. You know, we see both veteran and new traders alike digging into trading strategies and education and this is what's really important. Nearly half of traders reports spending more time on research before placing trades than they did before March. And that's fantastic. And on average, traders spend are spending seven hours researching and more than five hours pursuing trading education each week. And

we see this reflected in our own data. As an example, viewership of the t D and Marriage Trade Network increased from June to June of So, you know, traders have a preference for getting their information and research through online news sources and research reports um from their trading firm or elsewhere, versus say social media. You know, social media does provide some engagement opportunities to less than a quarter of traders are using it for trade ideas in education,

good news, I think. Barry Metzker, Managing director of Trading Services for Charles Schwab, thank you so much for joining. Is Charles Schwab out with our latest Trader Pulse, A survey indicating that the traders that Trump chats with remain generally bullish on this market place. Looking at the markets here, NASDAC leading the way up almost one full percentage point today. That's a good segue to our next guest, Ted Smith,

co founder and President Union Square Advisors. I want to talk technology here, tech, m and A, I p O S capital raising. It seems like technology continues to lead this market. Ted, thanks so much for joining us here, love to get your thoughts on kind of what you guys are seeing in the M and A space, particularly the tech side. Well, thanks for having me on. And it's certainly been a busy year over the course of one.

Really that this rally for us in tech started back in the second half of last year as we were first kind of coming out of the first wave of the pandemic. We continue to see tremendous activity across all all elements of the tech sector, but particularly in M and A. Across all M and A today, we've got more deal volume in the first half, and we saw

saw all of last year. Tech continues to to drive tremendous deal volumes were almost this year over last year, so we're just seeing a lot of volume and really no signs of that debating. Is it shocking given that we've really had an administration that's focused on dealmaking, focused on promoting more competition, very hard language about anti big tech, and yet some of these tech companies are saying, well, we're just going to try to squeeze it through while

we can. I think there's some element of that, there's a little asked for forgiveness rather than permission. But the reality of it is, even in the current administration, the targeting, if you will, or the focus of their uh clamping down on big on dealmaking is really reserved for the

largest of the large companies. UM so you see some concerns that the facebooks and the Googles is there may be some some focus on those companies, but check m and a volume really that we've seen over the course of the last year has been spread much more broadly than just those largest of the large companies, and so that that active is going to continue a pace and really hasn't been the focus of this administration. I love to talk to you about just kind of capital raising

in general. You know, we used to just focus on I p O s, but then we had direct listings and and SPACs and those types of things. What's the trend here? What are you seeing in the tech side in terms of capital raising? UH? In the equity markets? Well, we we think that the that the trend is really all about making more options available for folks who are

seeking liquidity. Yes, the regular way I p O market that we all know and love UH continues to be active, and we think that's going to continue to be the case. Direct listings are not for everybody, but for a certain class of issuer UH not necessarily needing to raise significant capital but simply wanting to see their shares traded, that's

an option for them. And then SPACs represent yet another alternative that we think we'll bring back some of the smaller sized i p o s or midsized i pos that have fallen out of favor over the course of the of the last few years as I p o s of gotten larger and larger and larger. UM. So what it really means from our perspective is is the capital markets are are evolving to enable different types of liquidity options for different types of companies, and we think

that's a good thing. What are the biggest headwinds though that you see from a capital raising perspective, I think there's continued scrutiny UH with respect to are these companies ready to be public? We've seen some of that, particularly UH in in UH. In the spack world, a number of companies have gone public through spacts that are pre revenue or very early stage in their evolution, and I think there's going to be more scrutiny on that and

investors and spacts. There's been some headwinds with respect to the pipe market as they say, public UH or private investment rather in public entities, which typically come along alongside of spacts, and that market has been sort of clogged up for a little bit. So we haven't seen as much as much activity in the in the back half of the spact that the spacking process, if you will,

But we think that will all settle out. From From an M and a transaction perspective, there really isn't a lot of headwind other than the regulatory one about which we spoke earlier. Right now, corporate balance sheets reflect a

lot of cash. Private equity funds have a tremendous amount of capital available to them, and they need to put that capital to work otherwise they need to either it invested in much lower yielding securities or give it back to their their limited partners, neither of which is very palatable to the folks who run those big pools of money. Ted, what are some of the sectors that you guys are

seeing some activity. I mean, I'm thinking, I'm trying to think, but what we write about and what we hear about the most, maybe like fintech, healthcare i T. What are some of the areas that you think are going to continue to be active. Well, those are certainly two that we see a lot of activity in. Fintech has been particularly active as we continue to to really evolve and in some cases rewrite the infrastructure that that underlies our,

you know, the entire financial services sector. Obviously, crypto currencies and and and exchanges around crypto continue to get obviously a lot of press, and there's a lot of evolution around what digital currencies are going to look like over the next five, ten years and beyond. We also think, to your point about healthcare i T, that there is a tremendous amount of of ongoing evolution and in some

cases revolution of the health care system. The use of software and digital technologies to improve patient outcomes, track how patients are are managed and monitored, and ultimately improve the overall health care system is getting a lot of focus and we're seeing a lot of activity there the broader digital transformation. I mean, many business processes today today are still done by you know, by hand, paper, pencil, rough spreadsheets.

Were continuing to see large organizations continue to invest in that um and then things that that are certainly not new to to your audience, uport to the tech sector, things like e commerce and in cloud infrastructure continue to evolve and change and we see tremendous amount of investment in the in those areas to make to make the overall operation business more efficient. So basically what you're saying is it's a good time to be a tech investment banker,

tech investor. That's kind of what I'm hearing here. Ted Smith, co founder and president of Union Square Advisors, always appreciate getting his thoughts on the tech space, and you know, Taylor is as Ted was mentioning it, just there's a lot of activity out there, there's a lot of capital out there, and there's a you know, um, a lot of M and A as a result and capital raising and really interesting comments, not only about the shift that we've seen indirect listings and spacks, and we saw flurry

of activity. Some of that, of course within the stock market has started to cool off. You wonder if there's now another push for that. Yeah, exactly, So we will keep on top of that green on the screen here today. We will have more coming up. Taylor Riggs sitting in from Matt Miller and Paul Sweeney. This is Bloomberg Markets. Alright, the as we talk about this COVID, the story has now moved towards the delta variant, the impact on that

we're seeing on the hospital system. A lot of i c U beds uh filled, most of them filled in a lot of key states. And the questions in the turn to PPE, are we're gonna have any type of shortages like we did back at the beginning. Let's bring in Michael Senensky, he CEO of we Shielded is a PPE company. Michael, thanks so much for joining us here.

We're starting to see the numbers in certain states go the wrong way, prompting some questions, will we have any PPE shortages like we did at the beginning of the pandemic. Thanks for having me UM. The unfortunate answer is we are tracking shortages that are happening right now. Over the next two months, we're expecting major shortages as well as huge spikes in prices. Is for PP. Can you remind us again, are these supply chain issues or is this

a demand problem? So, UM, these are supply chain issues that UM. For the past three months, it was pretty slow as far as the you know, the COVID spread and people were getting a little lax UM. So the supply that was on the ground was here and people weren't bringing in a lot of stuff from overseas because

we were so saturated. But with the spike from Delta UM, all of the supply on the ground is getting gobbled up UM and and causing us you know, left us with a shortage as far as what's coming in UM, coupled with huge uptick in shipping costs. So the perfect storm has been created of of lack of supply on the ground and not a lot of stuff coming in. All right, So let's talk about just you know, a lot of people. Obviously, the vaccination rates are much better

than they were obviously just even six months ago. When they continue to get better, despite some hesitancy. How do you think this delta variant will play out as should we expect a peak at some time in the next weeks or could this go even longer? From your perspective. So, um, the bad news is about delta is people with vaccinations

are still getting COVID and sick. Um. So it is bypassing the virus vaccines, the virus is just continuous, but still extraordinarily low percentage, right though, right, Um, you know, even with lower percentage, it's it's still a lot of people, you know, the grand scheme of things. So Um, when the hospitals are getting these new infections with the vaccines even um, you know, they're getting pressured and coupled with mask mandates, than the citizens put a pressure on the

supply chain. So it's all these things combined. Before COVID, you didn't have these pressures of every single person meeting PPE. But when all these surges happen plus mask mandates plus hospitals getting innovated, that's when you have these supply chain issues.

There's been a lot of conversations from the previous administration the current administration that I'm thinking, and Michael bear with me, is I sort of do a bird's walk here with chips right in manufacturing chips and protecting their own supply chain here in the US. Where are we in terms of manufacturing PPE here in the US as well, So we don't have to worry about some of the bottlenecks and the frustrations I think that we really had when

we were trying to get this stuff from China. So UM, we have seen you know, progress in national supply chain with with new pop up mass companies, especially in disinfecting white companies. UM. But the problem is, you know, and this is just overall macro where you know, everything labor, uh, the costs of the products to to make them overseas

is so much less than America. And you know, when we are looking for these uh personal protective equipment to be utilized one time, one time use, you know, people aren't really looking at American aid UM as as something which I wish we could. But the pricing is around half of it, you know, when you bring it in

from overseas. So while we have made progress on on having um, you know, American supply uh you know come up since the pandemic, it's still the cost benefits of of bringing it in from overseas outweighs the you know, buying American products. So, Michael, you were a longtime restaurateur in New York City. Give us your thirty second view of kind of what's the lay of the land of

the restaurants scene here in New York City. So my company was destroyed, um, you know March sixteen when the government mandated shutdowns and um, you know, uh right now it's been brutal, with around half the restaurants still never to reopen, and coupled with the government funds, the Restaurant Releaf Fund running out of money, uh, leaving a ton of restaurants just um, you know, without any help from

the government. So that that is created huge void of of you know, a lot of businesses being closed and um, it's not looking right right now. All right, Michael, thank you so much for that. We appreciate it. Michael Sninsky, CEO of we Shield UH and a longtime restaurant for

UH in New York City. Very tough times there, but you know we've seen what we have seen, you know, through this pandemic as the restaurants that have survived to become extraordinarily creative whether it's outdoor seating or delivery or curbside pick up, and uh, you know, unfortunately not enough for some, but a lot of the others are hanging on there. Hopefully they continue to prosper. Thanks for listening

to the Bloomberg Markets podcast. You can subscribe and listen to interviews with Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller. Yet on ball Sweeney, I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radiot