Retail Sales, Inflation, And Solar Energy

at Bloomberg dot com slash podcast. We got a lot of ECO data today and um, you know, it's kind of calls into question that, you know, the strength of the consumer a little bit, the concerns about inflation out there and how that's going to impact, uh, this economy, particularly in the first half of this year. Let's bring in David Riley. He's the chief investment strategist for Blue

Bay Asset Management. David, thanks so much for joining us here. Again, we got some of those uh that ECHO data today particularly relates to retail sales really weaker than expected. How did you take that data? Does that impact kind of your view of how this economy and these markets will perform in two No, I don't think a single month retail sales and number is really going to kind of alter that view in the way that we're constructing portfolios

but you know, you're absolutely right. I mean that the retailer sales number was very, very ugly, and I think it is a you know, would be a source of concern if we saw you know, more prints like that and evidence that you know, hrror inflation. Um. You know, concerns around the outlook was starting to have an impact on confidence about the consumer. But one of the things for this year, remember is that you know, it was all about demand for goods. It was all about demand

for stuff that you delivered in a bolt and tangibles. Um. And you know, we've seen that with retail sales been well above their pre pandemic trend. So I mean, I have been expecting that we'll see some rotation out of goods demand, out of retail sales into services. I'm not saying that's why we had this particul the week number just reported, but you know, that's kind of one of the trends which I think is going to be a

feature through two. And then that has implications as to how you're you know, you're you're you're looking in terms of your your credit picking as well. How does omicron play into this, because um, I can understand that the thesis. We bought all the goods we possibly could in the first year and a half of the pandemic, and now we want to get um some experiences. Me and Paul, for example, want to take a cruise, but UM, we're not going to obviously as the infection rates sores like this.

So how does that play in. Well, it's clearly going to have a negative impact in the near term in terms of UM spending and clearly going to continue away on things like leisure, on hospitality. But the experience in South Africa, the experience you know, from the UK, the experience from London where I'm calling from today, UM, is that you get this very dramatic rising cases, but then it actually comes off pretty relatively quickly as as well.

And I think, you know, thankfully arm acron does seem to be much less dangerous from a health perspective, and so I actually think that arm acron will will you know, kind of mark the transition, if you like, for COVID from from being a pandemic to becoming endemics. So we kind of learned to live with it and we get

on with our lives. So given that backdrop, David, what are the conversations you're having with your clients now as it relates to kind of that really opportunities might be here in Yeah, I mean, you know, when thinking about in constructing our fixed income and credit portfolios, try and kind of keep it pretty simple. I mean, I think we're in a rising rate environment. I do think the economy is doing reasonably well and default risk is very low,

so that makes it, you know, keep it simple. Basically, you favor credit over interest rate with and there's a lot of opportunities in UM credit and particularly floating rate UM credit. There's some you know, one and a half trillion dollars worth on some estimates of clos leverage loans, you know, mbs, another kind of securitized credit. So I do actually think, you know, it makes sense to increase your exposure to floating rate instruments and particularly to floating

rate credit. You can pick up you know, quite a decent carry um you know, sort of three fifty basis points over for a trip will be rated um cello trance. So there's certainly one of the things that we've been reflecting in some of our credit portfolios. And then also look at some of those sectors which we think will benefit from um, you know, higher rates. So again financials European subordinated there, we think there's still some value to

be had there. I think the one area where still pretty cautious on but I think could be interesting in the latter part of the year would actually be a merging market assets. You know that's meaningfully underperformed last year, so there's a lot of whis premium bill into emerging market assets. Hey, David, thanks so much for joining us. We appreciate chatting with you, getting your thoughts here on these markets, on the eco data we had today. David Riley,

chief investment Strategists for Blue Bay Asset Management. Let's go right now to J. J. Kinahan. Yeah, should we directly sure? I mean this is our American bank of the day chief market strategists. Well, I feel they're American because of the name, but I know the t D stands for Toronto Dominion. Yeah, um, and J. J. Kinahan joins us right now to talk about what's going on in UH in the market of I guess what's your main client,

j J? Well, I mean client. Well, first of all, you hit it on the head and thanks for havingy guys, and then it is an American company and Lyarics you owned by Charles up now. But uh, yes, So you know, if you say, what's our average client, I would say, you know, what's what's the main street American in terms

of the fact that, uh, it's just average people. And I would say the biggest thing about our client based over the last couple of years is, I think with the entire industry is our client base has gotten younger over the last two years. So I think that's probably the best thing. If you want to say what's the great effect of COVID, The great effect of COVID is more people to get interest in the market than ever. What do you think that that is good? And what

are they asking you now? J J. We're going into year three this pandemic, the economic disruption has been historical. What are they asking you now? Well, I think the biggest question for our clients is really the biggest question for the market, right, that's what is going to happen with interest rates? As we know, Um, you know, the the COVID variants kind of come and go if you will, in shorter terms. But I think everybody trying to figure out what's going to happen in interest rates overall is

the thing that's truly driving the markets. And you know, some clients this morning are saying, well, hold on. JP Morgan had record a record year. Yes, a bad quarter, but a record year. We expect earnings to be uh or interest rates to go higher throughout the year. Yet JP Morgan getting you know, kind of slapped today. So I think that things like that are a little bit confusing. If the market is supposed to be forward looking, how is it that JP Morgan is you know, eight percent

lower as we speak, So it's uh. You know, these kind of conundrums I think are very difficult for people to sort of get their arms around. Um. You know, I think it's really interesting the point you make about the how do you say this, the the youthening of your clients. I mean, I wonder how long it's been since that generation was interested. And it bodes well for the future of markets, right because al um, the kids

are in it to win it for the next few decades. UM. The previous generation or the one before that, probably didn't get involved until they were thirties, in their thirties or in their forties, UM, and then they had to had to give way too much gas and risk missing a curve. But these kids are probably gonna set themselves up well

for the future. Absolutely, And you want to know, the biggest thing I love is that our use of our education, you know, we we build a lot of our business on education has gone up in almost direct correlation, and actually as trading as you guys know, reporting on it every day has softened a bit from its peak obviously. Uh you know, in in the spring of last year, our education numbers haven't come down as much in their correlation.

So I think what you're really starting to see is people who not only are involved for the first time, but as you said, you know, in it to win it, in it for the longer term, and trying to figure out what everything means. You know, how do I use how do I use technical patterns for finding out the value of stocks going forward? How do I use options in a smart way in my portfolio? So I think that that's really been the best friend we've seen, all right, j J. Thank you so much for joining us. We're

gonna have you back on again soon. J. J. Kinahan, chief market strategist for t D Ameritor Trade, giving us his thoughts on these markets Bloomberg Markets Today. It's brought to you by Commonwealth, supporting more than two thousand independent financial advisors with the solutions they need to grow with thriving business. Commonwealth go where you grow. Visit Commonwealth dot

com to learn more. Well, Matt, I recently sold my house and like the day or two after we actually came to an agreement, that buyer said, can I come in with my entertainment consultant because they wanted to do a wireless audio, video, security, the whole thing. And apparently they had a consultant do that for them. So, you know, I had cable TV. I thought I was, okay, let's check in with that business, because that is a big business.

Bretton Ware, CEO, president chairman of Summit Wireless Technologies. Brett, what are people doing to their homes now in terms of home entertainment? It's not just a big screen and a cable box, is it? Not at all? It's pretty fascinating. Actually, if you look at just the consumer trends over the last ten years, it was big screen right then higher resolution to K four K, eight K, and at this point you're able to for a couple of grand by

a seventy seven inch TV, right, that looks spectacular. So the trend you see now is how do you move audio into around that TV? And how hard is it? And how expensive is it? And and how quickly can you set it up? And do you need that consultant? Right?

That consultant going to be several thousand dollars. Yeah, it all seems so confusing, and I wonder how how do you compete in a world where you know, Um, Apple, Google offer their products which admittedly are low quality sound, but you can get a little better performance out of something like so Nos and it's just super easy to operate. What are you pitching to a different field here? I mean, what are we talking about? Actually we're not in a

lot of ways. Now, there is one difference. If you want to stream music around your house, I mean, so Nos, Apple, Um, Amazon, all those WiFi speakers can do that. But if you want to create that immersive audio experience, not simulated, but really have it, then our technology with the White Association actually gives the consumer a very simple way to do that. And if you think of the beauty of the sound bar is two things. It's is a lot better than your TV and You just gotta plug it into the

wall and plug it into the HDMI port. Right when you look at the wiser technology that we market the same thing, you can get a complete immersive home theater system. And it's the same two step up steps right, you plug it. You plug a transmitter into the TV, and you plug your speakers into a wall outlet. You don't need to consultant, you don't need an installer. You don't have to pull wires through the wall or through the

attic or under the house. It's all wireless, and so our specialty is making sure up to eight speakers are all synchronized with together and with that video. That video now is great. These smart TVs are great, and there's so much content being streamed. Yet it all gets shoved into TV speakers or little sound bars. So, by the way, is the Wireless Speaker and Audio Association. I get us and UM So you guys make some high end products like uh um d a C board or you make

a thirty watt amp. It looks like I'm going through your website and looking at this stuff, but you put this into what partner products for consumer? Yeah, exactly. So we make the wireless chip and modules that transmits to all the speakers. But when you look at speakers, you can buy a five point one system for seven from Platin Audio, or you can buy a eight dollars stereo system from Banging Olson and every price point in between.

So the consumer chooses a price point, but WHISA enables the simplicity is set up and that spectacularly immersive sound. Now the Bail Lab stuff. Oh and you know what I was gonna say. When I was a kid, the pinnacle was you got like a CLIPS reference system hooked up to a nice pre amp and an amplifier. You guys, you can work with Clips as well. We do. They've they've got a speaker's designed with our products in them.

But you just don't need that preamp anymore. You don't need that a V receiver you plug a little um wise. It does sell one product itself, which is a universal transmitter. It won the c E S Audio Peripheral Product of top product, right, which is great. But you just plug that little transmitter into your HDU my port on the TV and it'll connect to every wise of speaker in that room. All right, Brett fascinating stuff. And then Matt was taking notes because he's about to move into the

compound in Westchester. Brett Moyer CEO, President Chairman of Summit Wireless Technologies. That's a public trading company. W I s A. We have uh an interview I'm excited about right now with Erica Brinker. She is the chief Marketing Officer and head of e s G at Array, sorry, chief commercial officer.

She was the CMO at Honeywell. Um, she's the c c O, I guess at A Ray Technology, and UM, this is quite cool because they installed trackers that tilt solar panels throughout the day in order to maximize energy output as we're all looking to do something to reduce our carbon footprint. Even me really well, you know I want I want a Mustang g T five HUD, but I also want an electric car and I'd love to power that with solar. So not to feel as guilty

about it. Let's bring her an. Erica Brinker joins us. Now, UM, talk to us Erica first of all about what you're doing at A Ray Technology and how customers can get hold of your products. Yeah. Absolutely, A Ray Technologies has been around for thirty years, which in the solar universe is quite a long time Our founder wrong Coreo was a real trailblazer in the area of solar and so, as you mentioned, UM, I was impressed with your knowledge. Yes,

we're a tracker UH manufacturer and technology company. There's also a software component that helps track and measure how much productivity is coming through the modules and we we basically are helping UH utility scale inner solar customers or they're those asset owners along term massive owners get the most out of their solar site. So in terms of like who our target market is, UM we love to hear that people are doing residential solar, but that's that's not

what we do. We're doing utility scale solar. So when you think about your major utility companies that are diversifying their portfolio into more renewables, that's who our customers are. So Eric could give us a sense of kind of where the energy industry large is here in the United States in terms of solar. So when you talk to those commercial customers of yours, what percentage of there you

know energy is solar versus maybe some traditional sources. Solar is still very fledgling, right, We know that the US market in particular UM the Biden administration has announced their intent to reach solar by UM. This is you know, a huge commitment since that that sits well below ten percent at this point. So what you really need is

this massive investment and utility scale solar. And when you think about solar versus hydrogen or nuclear or wind UM, we are the quickest to come online from the time that you start a solar site, and we are the most um i'd say, least disrupted. So the sun is always shining in the in the site UM where we are are putting them. You don't have a lot of especially with our product which is you know, largely sourced in the US. UM, you have a lot of productivity

and rely ability of the products. So in terms of utility companies looking to diversify solar is kind of what I would call a safer bet for them to diversify beyond fossil fuels. What happened Erica to the stock in May. I'll look at the chart and I see, you know, May eleven, May twelve, all of a sudden, there's like a tent drop UM And you had such a fantastic first few hundred days of trading after the I P O Yeah, so I think there's a couple of things

UM at work here. Currently. We have some headwinds, right, you have this commodity UH challenge with UH steel and aluminum, and so there's a lot of volatility, particularly in the US, around around those two materials. And then you we have continued logistics challenges. And so what we're doing for our customers so that we can hold price for them is we've completely changed our quoting process so that we are less vulnerable and our customers are less vulnerable to UM

those swings and commodities. And in the logistics challenges, we've also diversified our supply chains so that we are making our trackers closer to where they're delivering. And so that's really helped us UM create more stabilities in the pricing

models for our customers. UM. You know, all that said, with all of these fluctuations and with steel and aluminum being more expensive than they were, say even when we I POT a year and a half ago, UM, we are not seeing any demands slow down for solar and in fact, you know, we were delivered a little bit of a blow. It's filled back better, not passing yet UM. But again we don't hear from any of our customers that they're not building their sites because they're waiting for

this bill. There's just a huge demand for solar and we have our biggest book of business this year than we've had in our history. So des quite these challenges in the market, I think you're gonna see Solar make a really big comeback. Actually, I wanted to ask it also about your career path, because I think it's interesting for a lot of people who you know, have one act and then think about E. S. G. And their impact on the planet and want to have act too.

How do they make that change? Uh? Coming from Honeywell makes perfect sense at Array, But before that you had um leadership roles at Ralph Lauren, at Tiffany at Kate Spade, which is an entirely different industry if I'm not mistaken. So how did you make that jump? What what pushed you and how did you do it? First of all, I'm impressed with the homework that you did. Um. Most people don't go that far back to find out what

I was doing before. Um. Yeah, I mean I think there's a little bit of as you get further in your career, you want to do things that give you a sense of fulfillment. And certainly, Honeywell opened my eyes to what's possible when you make great technology, life changing technology, and so um, when I made the step over to Array, it was something was very personal to me. Um. I have young children. I want them to grow up at a place that is impacted by global warming and climate

change and doing something that's good for the world. So uh, we say, doing well as a company while also doing good. That's something that was really attractive to me. And so um, the E S G component of my job is something that it's been a learning experience understanding how much it's being embraced by the investment community, but also something that's just extremely personally fulfilling for me. I mean, I think that's the case for a lot of people right now, Erica.

I think there are people out there who say, like, all right, Ralph Lauren makes awesome clothes. I love the design, but I want to do something for the world. I want to do something that means something to humanity. How do you make that leap? How do you convince David

Cody to take you on? Well, you know, when you're when you talk about a function, if you're a finance person, if you're a marketing person like I was when I first started out, I think in all of our crafts and for what you do as well, um as a communicate or it is the skill set, temper cent is learning the product, and so if you can demonstrate expertise in your craft, I think that if you're talented and

the right cultural fit, you can apply that in any industry. Uh, it's just helping, um that next play picture you there, and so it might take a little bit of work or maybe you have to do something a bit extra um. But I joined Honeywell in their aerospace business and they were a bit surprised to know that I was listed too, but ended up being it ended up being they wanted someone from outside the industry and I wanted to get into the industry, So it just worked out. Eric, thank

you so much for joining us. Really good stuff. Erica brinker Head b S g Ray Technology Chief Commercial Officer. 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 three at on full Sweeney. I'm on Twitter at p T Sweeney Before the podcast. You can always catch us worldwide at Bloomberg Radio