US Stocks Limp Into Year End While Treasury Yields Rise

Summary

Bloomberg Businessweek Podcast Summary

Episode: US Stocks Limp Into Year End While Treasury Yields Rise
Air Date: December 31, 2025
Hosts: Carol Massar and Tim Stenovec

---

Episode Overview

This end-of-year episode focuses on the state of U.S. stocks as 2025 closes, the rise in Treasury yields, and the broader implications for investors heading into 2026. Featured segments include an in-depth analysis of alternative investments and passive market dynamics with Mike Green (Simplify Asset Management), a review of retail trends and consumer behavior with Laura Champine (Tabor Asset Management), critical discussions on the AI investment landscape with Manos Kukumides (umi), and a look at the “media wars” for Hollywood’s future with Ross Gerber (Gerber Kawasaki).

---

Key Discussion Points & Insights

1. Alternative Investments and Market Trends

Guest: Mike Green, Portfolio Manager & Chief Strategist, Simplify Asset Management
Timestamps: 03:04 – 10:30

Trends in Alt Investing

• Alternative ETFs, especially in managed futures and trend-following, have surged since regulatory changes circa 2020.

• Investors are increasingly looking beyond the traditional bond/equity mix for diversification and income.

  Mike Green:

  “One of the trends has been really critical … the alternative ETF space, which really didn’t emerge until 2020... managed futures, trend-following... as people look to diversify from the traditional bond/equity mix.” (03:37)

• There’s heightened demand for income through derivative strategies like call overwriting, put selling, and hedged high-yield credit funds, given uncertainty in the economy’s 2026 outlook.

Ongoing Success of Momentum and Mega-Caps

• Large-cap, momentum, and growth stocks have outperformed in 9 of the last 10 years.

• The structure of the U.S. retirement system encourages allocations to momentum/cap-focused indices.

  Green:

  “People are largely shun into momentum and cap-focused indices... Unless we see a significant change in the economy, it’s just really hard to bet that that’s not going to happen yet again.” (05:10)

Flows into Fixed Income and Money Markets

• Despite falling yields, money market funds are at all-time high assets; people are reluctant to move capital out despite rate drops.

• Fixed income, especially investment-grade debt (though some is “increasingly questionable”), continues attracting inflows.

  Green:

  “We continue to see astonishing demand for investment-grade debt... that is where we are seeing significant inflows.” (07:10)

Notable Quotes

• D: “Every year, people say momentum trade is over... value, small-caps will have their day. And yet, here we are a third year in a row.” (05:49)
• Green: “The areas that we’ve seen... true ESG healthcare fund... it’s performed fantastically well. That area of healthcare is starting to attract attention as technology starts to lose a little of its luster.” (09:15)

---

2. Retail Recap: Apparel, Consumer Behavior, Big Box Stores

Guest: Laura Champine, Director of Research & Consumer Sector Head, Tabor Asset Management
Timestamps: 14:02 – 22:16

Apparel & Accessories Boost

• Ongoing strength in apparel/accessories, aided by GLP-1s (weight loss drugs) transitioning to oral forms, spurring wardrobe changes.

  Champine:

  “So people have to buy new clothes if they’re changing size... and new clothes may as well have new accessories to go with it.” (14:26)

• Nike’s attempts at growth are pushing more product into off-price retailers, possibly diluting brand and pressuring margins.

  Champine:

  “I think it dilutes the brand and potentially it dilutes returns... Investors are really focused at this moment on sales... margins will be lower.” (15:38)

GLP-1s—Cultural & Retail Impact

• Usage is widespread enough to drive retail apparel demand, but adherence may be short-lived due to costs.

  Champine:

  “Most people don’t stay on GLP-1... when people stop, they might be eligible again in nine months... They stop them because they’re expensive.” (16:15, 16:45)

Shifts in Discretionary Spending & Big Box Performances

• Weakness in big-ticket categories (appliances, flooring, mattresses) is freeing up discretionary cash—much of which is going to apparel.

• Costco's strategy: pulled back on decor/big ticket items due to tariffs, focusing on consumables and international markets for profitability.

• Walmart is leveraging tech and AI for faster delivery, merchandise optimization, and is attracting higher-income shoppers.

  Champine:

  “Digital, tech, and AI... the way they’re using tech and AI, a lot of it’s the back end, making deliveries fast... better merchandising.” (19:27)

Beauty & Youth Markets

• Beauty retail, especially at Ulta and for younger demographics (8–18), is a bright spot for 2026.
• Five Below also called a winner for its appeal in youth beauty/accessories.

Big Calls for 2026

• Prediction: Victoria’s Secret to regain momentum—an uptick in market share could drive substantial returns.

  Champine:

  “At their peak, they were selling 45% of all bras... they’re down to 20%. A move up to 25 or 30... new clothes, new sizes, new undergarments.” (22:01)

---

3. The AI Boom, Investment Realism, and Open vs. Closed Models

Guest: Manos Kukumides, CEO of umi, ex-Google Cloud/AI Lead
Timestamps: 22:48 – 27:36

The AI Investment Landscape

• Tremendous progress in 2024-2025, but cracks are forming beneath the surface.

• Major challenge: powering all the newly-built AI data centers—electricity is a limiting factor.

• Biggest looming issue: some major AI companies (OpenAI, Anthropic) risk becoming "losing horses" due to business fundamentals and competition.

  Kukumides:

  “If I were to look in 2026, I think a bigger hiccup I foresee is some AI bubbles popping... Some companies like OpenAI, Anthropic and others... are going to start looking like the losing horse.” (24:47, 25:24)

• AI fundraising is likely to get tougher; investors are realizing some large players aren’t fundamentally sound.

The US AI Battleground: Open Source

• The real contest is in open-source AI; U.S. is trailing China's Alibaba (Quinn model) for enterprise needs.

• Long-term opportunity is in customized, niche, open models for business—not the generalist closed models.

  Kukumides:

  “We are missing on the most important AI battleground, and this is open source AI... more and more moving towards open models and unfortunately this is now primarily by Alibaba’s Quinn model as opposed to a US one.” (26:45)

---

4. Hollywood’s Future: Warner Bros, Netflix, Media’s Next Era

Guest: Ross Gerber, Co-Founder/President/CEO, Gerber Kawasaki
Timestamps: 30:55 – 39:00

The Warner Bros Bidding War

• The winner of Warner Bros will shape the future Hollywood landscape, but “the albatross” has a history of delivering buyer’s remorse.

• The real contest is between Netflix (defensive bid, smartly structured deals) and Ellison/Paramount (driven by business and possibly political motives).

  Gerber:

  “Every buyer of Warner Brothers has regretted it... this is a battle for control of the last piece of asset, you know, on the monopoly board of Hollywood.” (31:35)

• Netflix’s participation may be partly to force Ellison to overpay.

  Gerber:

  “I always thought Netflix was just bidding it up so that Ellison would just overpay substantially for this asset and be stuck with it in the end.” (34:09)

The Decline of Cable & the Rise of Social/Streaming Media

• Cable TV is dying; younger audiences shifted to YouTube and multi-platform distribution.

• News/media organizations must repurpose content for social media to maintain relevance.

  Gerber:

  “Cable is dead. It’s just a dying thing... You have to repurpose content for social media and have five or six different platforms.” (37:52)

• Likely scenario: legacy cable assets will be spun off into “ships with no future.”

---

Memorable Quotes

• Mike Green on passive investing:

  “People are largely shun into momentum and cap-focused indices by virtue of the way we structure our retirement system in the United States.” (05:10)

• Laura Champine on GLP-1s and retail:

  "So people have to buy new clothes if they’re changing size... as a cynic, I'll tell you we lose weight and gain it back.” (14:26, 16:15)

• Manos Kukumides (umi) on 2026 AI risks:

  “I think a bigger hiccup I foresee is some AI bubbles popping... Some companies... increasingly they're going to start looking like the losing horse.” (24:47)

• Ross Gerber on Warner Bros:

  “Every buyer of Warner Brothers has regretted it... this is really a battle for control of the last piece of asset, you know, on the monopoly board of Hollywood.” (31:35)

• Gerber on media’s future:

  “Cable is dead... You have to repurpose content for social media and have five or six different platforms.” (37:52)

---

Top Timestamps for Key Segments

• Alternative Investments & Markets (Mike Green): 03:04 – 10:30
• Retail & Consumer Trends (Laura Champine): 14:02 – 22:16
• AI Industry & Investment (Manos Kukumides): 22:48 – 27:36
• Media & Hollywood’s Future (Ross Gerber): 30:55 – 39:00

---

Summary Takeaways

• The end of 2025 shows persistent dominance of mega-cap/growth in U.S. markets, with passive flows reinforcing momentum.
• Fixed income and alternative assets are seeing innovation and strong inflows.
• Retail dynamics are shifting: apparel is ascendant; big box, especially Walmart (via tech), is thriving; shoppers are reallocating discretionary spend away from home goods towards clothing and beauty.
• AI investment is at an inflection point, with open-source models and infrastructure constraints as key battlegrounds.
• The media and Hollywood landscape faces massive consolidation and transformation as legacy assets become liabilities, and social/streaming channels take primacy.

---

For listeners who missed the episode: this edition provided timely end-of-year windows into the forces shaping finance, retail, technology, and media—offering big-picture takes, granular trendspotting, and memorable expert commentary heading into 2026.

Transcript

[A]

When patients have a disease and the cause is known, it usually ends up needing a specific solution. On the podcast targeting the toughest diseases.

[B]

We explore the innovative tools, methods and.

[A]

Unique philosophy Vertex Pharmaceuticals is using to search for treatments for some of humanity's most challenging diseases. Subscribe today wherever you listen to podcasts. Hey, Ryan Reynolds here wishing you a very happy half off holiday because right now Mint Mobile is offering you the gift of 50% off unlimited. To be clear, that's half price, not half the service. Mint is still premium unlimited wireless for.

[C]

A great price, so that means a half day.

[A]

Yeah, give it a [e-mail] Switch upfront payment of $45 for three month plan equivalent to $15 per month required new.

[D]

Customer offer for first three months only.

[A]

Speed slow after 35 gigabytes of network spizzy taxes and fees extra see mint mobile.com support for the show comes from Public, the investing platform for those who take it seriously. On Public you can build a multi asset portfolio of stocks, bonds, options, crypto and now generated assets which allow you to turn any idea into an investable index with AI. It all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year, you can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one of a kind index and lets you back test it against the S&P 500. Then you can invest in a few clicks. Generated assets are like ETFs with infinite possibilities, completely customizable and based on your thesis, not someone else's. Go to public.com podcast and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com podcast paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory services by Public Advisors llc. SEC Registered Advisor Generated Assets is an interactive analysis tool. Output is for informational purposes only and is not an investment recommendation or advice. Complete disclosures available at public.com disclosures this is Lavar Arrington from Two Pros and a Cup of Joe. Pizza Hut threw down a challenge and it's genius. Quarterbacks say Hut constantly. It's like they're asking for Pizza Hut by name. Pizza Hut is challenging any quarterback put pizza before they say Hut during the televised game. Pizza Hut will throw an actual pizza party in the city for the first QB that does it during a televised game, fans get the win.

[B]

Literally.

[A]

Listen closely. On game day when you hear Pizza Hut you know something big is about to happen. Visit pizza hut.com for details.

[D]

Bloomberg Audio Studios Podcasts Radio News this.

[A]

Is Bloomberg businessweek Daily reporting from the magazine that helps global leaders stay ahead with insight on the people, companies and trends shaping today's complex economy, plus global business, finance and tech news as it happens. The Bloomberg Business Week Daily Podcast with Carol Massar and Tim Stenovec on Bloomberg Radio.

[D]

We also have some questions about things like private credits, private markets, what happens next there? So with that as our backdrop, let's talk about the alternative investing landscape. We've got Mike Green with us, portfolio Manager and Chief Strategist at the ALT strategy RIA Simplify Asset Management. They offer an array of ETFs and funds Mike, good to have you here with Tim and me as we have just about two hours to go and we wrap up trading here in the United States. Alt Investing some clear winners and losers what trends do you think might carry into 2026?

[C]

Well, I think one of the trends has been really critical and it has been introduced with the alternative ETF space, which really didn't emerge until 2020 tied to regulatory changes, things like managed futures. And actually trend following are one of the tools that has made its way over into the ETF space that has been a leading area of interest as people look to diversify from the traditional bond equity mix. That's one area where I continually emphasize that you're trying not to actually outsmart the market. You're trying to recogn that there's information being diffused that you don't necessarily have at that point. So that trend following is one area I think other areas that we're seeing increased demand for various forms of income. Those take the form of derivative trading, things like call overwriting strategies or put selling strategies that are designed to enhance income. Or it can take the form of things like a hedged high yield credit fund, which is one that I manage at Simplify Asset Management. That is designed to reduce the risk associated with the uncertainty of areas like high yield. With credit spreads relatively tight, you want that fixed income exposure and that income generation. But we're really not certain how the economy is going to play out in 2026. Does the slowdown continue or does it reaccelerate? It's a good place to think about other ways to protect some of the some of the risks that you have in the portfolio.

[B]

So what do you think it's going to do?

[C]

I think unfortunately I heard you talking about the S and P and the lead in. Yeah, no, I spent a lot of.

[B]

Time, around 30 in a row of a bull market.

[C]

Yeah, well, actually the most, the most important statistic is if you pull up the statistics to show asset class performance. We're actually now, I believe in 9 out of the past 10 years that large cap, momentum and growth orientation has been the place to be. Unfortunately, as you know, that echoes the work that I do around the impact of passive investing in markets. People are largely shun into momentum and cap focused indices by virtue of the way we structure our retirement system in the United States. Unless we see a significant change in the economy, it's just really hard to bet that that's not going to happen yet again.

[D]

Yeah, you know that I love that you went there, Mike, because I can't tell you how many years, several years in a row where people said momentum trade is over. The big tech, you know, mega caps done. It's time to go into some of the value names, smaller caps. And yet, you know, here we are a third year in a row.

[B]

You said this every year for the last five years. Well, we're doing the show with you.

[D]

We see the outperformance. But when I look at the economy around me, what impacts my world, a lot of those mega cap names are largely what I spend a lot of time with on a daily basis.

[C]

I think there's some truth to that, but I think it also feeds back in both directions. Right. Given a very, very low cost of capital, we're seeing the impact that that has on the investments that these companies can make. That means that Amazon can go out and make acquisitions or Google can make the roughly 1500 acquisitions it's made over the past seven years. This puts them in front of you regardless of whether they earned that place initially.

[B]

Michael, I keep getting these emails from whatever formerly high yield savings account that I had. I don't call them high yield savings account. That tells me that the, the APR is going down. You know, the yield is going down as a result of the Fed lowering rates and as a result of rates coming down. That money that's in money markets, that's in high yield savings accounts, where it's going, where is it going?

[C]

Well, we're, we're really seeing that money trend is one, it continues to grow. So despite the fact that the yields are falling, money market funds continue to hit new highs in terms of assets. That is a byproduct of the money market yield in and of itself. After nearly a decade of roughly zero yields, suddenly people are getting 3 to 5% on those over the past several years. That's created significant additional income which has meant that money doesn't have to be spent in other areas. Particularly for those who are starting with money. The money can't really leave the the money market funds because when you go to buy, somebody else is going to sell and receive the assets as well. What can happen and what historically causes those assets to fall is either the loss of the underlying asset, bonds default, companies go bankrupt, etc. That requires injections of cash that take the form of primary securities, or we see a surge in new issuance, things like IPOs, credit for new investment purposes, etc. It's that latter part that I think we're actually going to really see in 2026. We continue to see astonishing demand for investment grade debt. Some of it is increasingly questionable how investment grade it is going into areas like data centers. But that is an area where we are continuing to see significant inflows is into the fixed income space.

[D]

Well, that's what I wanted to ask you. You know, just going on your website looking at some of the company ETFs that you guys offer out there. It is an array, it's Government Money Market, Managed Futures, Volatility, Premium Focus, High Yield Health Care, Tesla Volt, Tesla Revolution, etf, Energy Infrastructure, Gold, Bitcoin, China. These are some of the things that we're going to tackle over the next three hours. I am curious about. As we were getting near the end of the year, were you guys noticing any interesting trends in terms of flows in and out of some of these spaces? Especially after a year where whether it was gold, whether it was some of the commodities, whether it was, you know, some of the health care names and others that may have run up over 2025.

[C]

Well, there's a couple of areas and our growth is largely organic and driven by that innovation, we've seen tremendous inflows into areas like money market funds. We actually introduced a money market ETF in the past year that's powered a significant quantity of growth. Our fixed income strategy, the high yield strategy that I run, has done well and has attracted significant assets over the course of the year. Our other areas in fixed income where we offer differential exposure to coupon yields in things like mortgages, buying new issue mortgages as compared to the seasoned index that has been a beneficiary. The areas that we've seen that have been, I think, more alternative in their construction. We have a true ESG health care fund run by my good friend Mike Taylor. Mike donates all the proceeds associated with that to the Susan G. Komen Foundation. So it's truly giving. You know, it's doing good by doing good. It's performed fantastically well. That area of health care is starting to attract attention as technology starts to lose a little bit of its luster. The other area that I mentioned was the managed futures space. That's that is now our largest strategy and has really been a source of continued growth.

[D]

All right, well, hopefully we can continue talking about that certainly in the New Year. Happy New Year, Mike. Thank you so much. Mike Green, Portfolio Manager, Chief Strategist over at Simplify Asset Management, joining us here on this Wednesday.

[B]

Stay with us more from Bloomberg businessweek Daily Coming up after this.

[A]

When patients have a disease and the cause is known, it usually ends up needing a specific solution. On the podcast targeting the toughest diseases.

[B]

We explore the innovative tools, methods and.

[A]

Unique philosophy Vertex Pharmaceuticals is using to search for treatments for some of humanity's most challenging diseases. Subscribe today Wherever you listen to podcasts, Support for the show comes from Public, the investing platform for those who take it seriously. On Public, you can build a multi asset portfolio of stocks, bonds, options, crypto and now generated assets which allow you to turn any idea into an investable index. With AI. It all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year, you can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one of a kind index and lets you back test it against the S&P 500. Then you can invest in a few clicks. Generated assets are like ETFs with infinite possibilities, completely customizable and based on your thesis, not someone else's. Go to public.com podcast and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com podcast paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors llc. SEC Registered Advisor Generated Assets is an interactive analysis tool. Output is for informational purposes only and is not an investment recommendation or advice. Complete Disclosures available at public.comdisclosures this is Julian Edelman from Games With Names. This message is brought to you by Pizza Hut because if you're yelling Hut on Sundays, why not Yo, Pizza first.

[E]

So Pizza Hut just put out one of the coolest, like funniest challenges maybe ever.

[A]

Pizza Hut. What is it? Basically, if a quarterback says pizza before.

[E]

They say Hut, Pizza Hut will give that quarterback city a pizza party.

[A]

Is this real? Yeah.

[E]

Isn't that crazy.

[A]

You think coaches are bringing this up in team meetings?

[E]

You think a pizza party is worth a false start?

[A]

What if they got the other team to jump off sides with a Pizza Hut? Hey, whatever it takes this time of year. 100% this weekend. Let us know if you hear Pizza Hut. I know I'll be listening. This is Jacob Goldstein from what's yous Problem? Business software is expensive. And when you buy software from lots of different companies, it's not only expensive, it gets confusing. Slow to use, hard to integrate. Odoo solves that because all Odoo software is connected on a single affordable platform. Save money without missing out on the features you need. Odoo has no hidden costs and no limit on features or data. Odoo has over 60 apps available for any needs your business might have, all at no additional charge. Everything from websites to sales to inventory to accounting, all linked and talking to each other. Check out odoo@o d o o dot com. That's o d o o dot com. You're listening to the Bloomberg Businessweek Daily Podcast. Catch us live weekday afternoons from 2 to 5pm Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg business app or watch us live on YouTube.

[D]

All right, so we want to talk a little bit more about retail, more on the trends, the consumption habits and also the role of technology increasingly that may shape what goes on in the consumer space in the new year. Joining us right now is Laura Champagne. She's Tabor Asset Management's director and consumer sector head. Joining Tim and me right here in studio. Welcome, welcome.

[F]

Thanks, Carol. Thanks for having me.

[D]

How are you thinking about 2025 when it comes to the retail space?

[F]

2025 has been interesting. I think some of the trends like strength in apparel and accessories likely extended to next year. We're excited about GLP1s moving to oral, not just injectables. So people have to buy new clothes if they're changing size.

[B]

I was just going to say what is that doing for retail? But you answered the question.

[F]

Right, right, right.

[B]

Clothes, new size.

[F]

Exactly. And new clothes may as well have new accessories to go with it. So we're focused in on apparel. We think there are interesting things happening. You mentioned Nike. I think in an earlier segment. They are desperate and eager to grow again, which puts pressure on Adidas. It puts pressure on Hoka, on, on running. So I think that'll be an interesting sector to watch these guys duke it out there. We saw so much Nike at Burlington last yesterday and store in the store Burlington had three end caps of Nike and not the weird ones, not the Doritos partnership.

[D]

What does that tell you? That they're offloading stuff that just wasn't selling.

[F]

It's a weird time of year, right? So it's a clearance time of year. And it may be that or it may be that Nike will grow sales wherever they can. And off price, the three big off prices are top 10 footwear retailers.

[B]

Now, does that dilute the brand at all to be so focused on off price?

[F]

I think it dilutes the brand and potentially it dilutes the returns. So I think investors are really focused at this moment on sales than trying to turn sales positive. But margins will be lower. The reason the previous management team focused so much on direct was to maximize profit. We'll see how the market views it next year, but I would guess footwear's less profitable in 2026.

[B]

Okay, I want to go back to this thing you said about GLP1s, because I actually haven't.

[A]

Cool.

[D]

Right now, I.

[B]

As a society, are we losing, collectively losing so much weight that we are all changing our closets? We have to all get new clothes? I mean, is that how widespread these GLP1s are?

[F]

You know, as a cynic, I'll tell you that we lose weight and then we gain it back. So most people don't stay on the GLP1.

[B]

Well, if they don't, I. This was explained to me. I read this somewhere. The criticism of having to stay on these is like, well, if you stop working out, you get out of shape, too. So you have to think about it like that.

[F]

Most of the analysts we've talked to on. On the GLP1 say that, that when people stop GLP1s, they might be eligible again in nine months.

[B]

Do they stop them because they're no longer eligible?

[F]

They stop them because they're expensive. So some of the moves that people are making to make these. These drugs cheaper may help people stay on them longer term. Also injectable. It's a big deal to shift towards oral, we think.

[B]

So don't throw away the clothes, because.

[D]

That'S what I tell you, my husband. I'm never throwing them.

[B]

Away.

[D]

Hey. The thing, though, I want to say is that a lot of the GLP1s are actually for people who are diabetics. And so they tend to stay on them longer or forever because it's in managing the disease unless they ultimately don't need it anymore. But those are. It's also a market where people are losing weight dramatically and so, I mean that is a big sector of our economy or big sector of our population.

[F]

We also think that apparel is benefiting in part because you mentioned Whirlpool earlier. Big ticket appliances, flooring, those sales are way down. Mattresses trying to turn a corner. Furniture too. And we hope they do next year. But. But since those segments have been down and they've been such a big part of this consumer discretionary budget, it's left room for people to buy more apparel.

[B]

I just looked at the credit card statement. My wife not only rejoined Costco today, but put in a big order as well. That's what she's doing. Costco for 20, 26 things looking good.

[F]

Costco's been losing ground to Walmart and it's a slightly different customer. Although Walmart is gaining with higher income consumers. Costco took tariffs to heart in a serious way. That which meant that they had less decor for holiday. I've been in there once again yesterday a lot less furniture than they usually have this time of year. I think that.

[D]

So what do you mean they took it to heart that they didn't plan.

[F]

I mean that they canceled orders and they stopped buying some categories that they used to buy. So they had maybe a third as many Christmas trees as they normally would and are trying to make it up with like baked goods and wine which they're awesome at. But I think it's tough when you take so many big ticket items out of the store.

[D]

Talk to us.

[F]

Oh God.

[B]

It's still on. Costco is. I was looking, I was actually planning out tomorrow and I was thinking maybe we could actually do our Costco order tomorrow. They're closed just on New Year's Day. Is that pretty rare in retail these days?

[F]

It's rare in retail but Costco is there in where you want to work. Like they pay well, they take holidays, they pay good health care. Recently they started disclosing their regional profit trends. They're barely profitable in the U.S. it's just the membership fees. So anything you can buy from there you really should. They make most of their money in their international locations.

[D]

Looking at Costco down about 5 1/2% year to to date. Wal Mart is up almost 24% year to date. What is it that Wal Mart has kind of figured out? Is it the digital? Is it also kind of playing to a higher end consumer on some level?

[F]

It's that and it's also. And they work hand in hand. So the way they're using tech and AI, a lot of it's the back End making their deliveries so fast and helping them carry the right products. So better merchandising they'll deliver to your house. So if you don't enjoy the Walmart shopping experience experience, you can just wait for the truck. So that's bringing in higher income customers, staying really sharp on prices, being able to watch you know, real time competitors price.

[B]

That's where you get your gold bars.

[D]

That's where I get my gold bars, yeah. And I have them delivered. Hey, bring in the truck, unpack. What's the, what's the retail category that you find most interesting right now?

[F]

I think beauty is going to have a resurgence. I think that, that we've been, I don't know.

[D]

The Sephora that I go into just outside our office is, is often packed.

[F]

And you should check out Ulta when you're not in Manhattan because they are also packed.

[B]

Ray Bloomberg this week cover story Just in the last couple of months on this Amanda Mole wrote about Ulta success.

[F]

Remarkable and carrying a good mix of beauty, skin care, healthcare, which which others or hair care which others don't do. You know Sephora is really focused in on makeup and Ulta does a great job of caring like mid tier brands.

[B]

So who are the winners in this space in 2026?

[F]

Yeah, we like Ulta look for kids and we're seeing a lot more kids in makeup. Five Below, I think is a winner. I think Five Below had great price points.

[D]

When you say kids are you talking like 8 year olds?

[F]

I'm talking about 8 to 18. So it's me I guess that's kids. Yeah, I know but I do see them in Ulta and I see them in Five Below and in that kind of lipstick area, you know and also buying the fake that they had some great fake Kelly's yesterday when I was in stores and of course the Alhambra they're really good at you know, making it look luxurious for the little kids.

[D]

We led talking about Carvana which has just taken off in a big way this year. Ebay was up whirlpool as you mentioned Best Buy to the downside, any of those names that you think are worth.

[F]

Noting in Best Buy we're still concerned about the data we see does not look great for them and they got some help with with the new gaming systems this year that probably doesn't recur. So Best Buy it once again. Walmart taking consumer electronics very seriously and gaining with a higher income customer. It's not good news for Best Buy.

[B]

Give us a big prediction for next year. What happens we're going to ask what's.

[D]

The best day to shop at tjx when they get the new delivery.

[F]

You know, I think that that Victoria's Secret gets its momentum back next year.

[D]

You know, Dana Telsey talked about Victoria's Secret with us too, that they seem to be going through a redo and.

[F]

We don't need them to be massively successful for the stock to work. At their peak, they were selling 45% of all bras and units in the U.S. they're down to 20%. A move up to 25 or 30, you know, new clothes, new sizes, new undergarments.

[B]

All right, there it is. That's where we're going to end. That's the prediction. Well, hopefully we see you less than a year from now, but happy New Year, Laura. Thanks so much for joining us. Laura Champine is Tabor Asset Management's Director of Research and the Consumer Sector head.

[A]

This is the Bloomberg Business Week daily podcast. Listen live each weekday starting at 2pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg 11:30.

[D]

Gotta say though, Tim, if I had a nickel for every time I said AI or artificial intelligence, you'd almost be.

[B]

Able to share afford a share of.

[D]

Nvidia, I would not be here probably. No, no, love my job. Love my job. But you just think about how many times every conversation, even over the last couple of days as we get ready to wrap up 2025 artificial intelligence. Just in our world, there are questions about the spend, the build out and so on and so forth. But curious to see what our next guest has to say about all of this. Manos Kukumides. He is CEO of umi. He previously led the science and engineering for Google Cloud's natural language services while also bootstrapping and leading the Google Cloud Gen AI efforts. He has been working on Gen AI systems since 2016 at Microsoft and then at Metta. Man, it's great to have you here on Bloomberg businessweek and Bloomberg Markets. A reminder that AI has been around for a long time. So I'm curious, when you look at where we are today, how do you put it into perspective and what's kind of the significance significance of what happened in 2025 after what's been three nonstop years of talking about AI and AI investing?

[E]

Yeah.

[G]

Carol and team, thank you very much for having me. As you mentioned, I've been working on AI since 2016 or actually even earlier than that. 2016 was the first time I tried with some of my co founders at Tumi when we're still at Microsoft to build something like back in 2016. But it was just a little bit premature. And as you mentioned in the last couple of years has been tremendous progress, especially 2024, 2025. It's been moving forward and advancing at a breakneck speed that it's hard to keep up to and very exciting at the same time.

[D]

Do you buy all of the momentum? Do you believe that the spend and the build out is going to continue at this level or that there's going to be some hiccups, especially when it comes to power, finding the necessary power to keep all of these data centers going?

[G]

I think that it's very likely there are going to be some hiccups, as you mentioned. Definitely we can build data centers, but it's not enough power to power them. Then we can't use them. That's definitely a challenge that is yet to be solved. But if I were to look in 2026, I think a bigger hiccup that I foresee is going to be coming in 2026 or it may be a little bit later, but if it's later, it's going to be only because of the sunk cost fallacy. Is some AI bubbles popping? I don't think we're in a bubble, but I think there's Some companies like OpenAI, Anthropic and others that increasingly they're going to start looking like the losing horse.

[B]

Okay.

[G]

And I think they're going to be hiccups in any infrastructure they aspire to build and any funding they aspire to collect.

[B]

Yeah. It hasn't been difficult for these companies to raise funding up till now. But you think next year it could be tough.

[G]

I think things are going to be getting harder and harder. I think it's about time and it's already happening. Investors are coming to realize, even though it may be hard for them, because again, of all the sunk costs and all the billions that pour into supporting these companies that they are actually looking increasingly like they're losing horses. I don't think. I think they. The code red that OpenAI declared a couple of weeks ago was highly justifiable. There is, you know, behemoth, a much bigger player that can have all the talent that Open Air has and much more. That's making 400 billion revenue per year as opposed to losing 10 billion a year. That's in a much better position. It has a full stack across the research, the chips, the models, the applications in a much better position to win this.

[B]

We're going to be speaking to Joshua. Yeah, we're going to be speaking to Josh Wingrove in just a minute. Before we do that, I just, just set us up for that conversation with where the US is compared to the rest of the world when it comes to this technology and what the US needs to do very briefly in order to be the leader here.

[G]

Yes. So I think we may be doing good now in terms of the closed models and this is important for us to be doing well. But I think we are missing on the most important AI battleground and this is open source AI. I foresee looking in 2026. We've been talking to many enterprises from the smallest to the largest ones. And one trend that is clear is more and more they're moving towards open models and unfortunately this is now primarily by Alibaba's Quinn model as opposed to a US one. So that's I think the most important battleground that we need to win. More and more enterprises as they're maturing with their use of Genai, they're moving from large off the self under inferentiated closed models like GPT, Claude or Gemini that was building at Google. They're more and more moving towards small specialized custom models that are optimized for the use case and that's the battleground that needs to win.

[D]

All right, we shall see. We shall see what 2026 brings when it comes to open versus closed Manas. Thank you so much. Manos Cuckoo meat. Is he a CEO of umi? Joining us right here on Bloomberg.

[A]

Stay with us.

[B]

More from Bloomberg Businessweek Daily coming up after this.

[A]

Support for the show comes from Public, the investing platform for those who take it seriously. On Public, you can build a multi asset portfolio of stocks, bonds, options, crypto and now generated assets which allow you to turn any idea into an investable index. With AI. It all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year, you can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one of a kind index and lets you back test it against the S&P 500. Then you can invest in a few clicks. Generated assets are like ETFs with infinite possibilities, completely customizable and based on your thesis, not someone else's. Go to public.com podcast and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com podcast paid for by Public investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advice Advisory Services by Public Advisors, llc. SEC Registered Advisor Generated Assets is an interactive analysis tool. Output is for informational purposes only and is not an investment recommendation or advice. Complete disclosures available at public.com disclosures this is Lavar Arrington from Two Pros and a Cup of Joe Pizza Hut threw down a challenge and it's genius. Quarterbacks say Hut constantly. It's like they're asking for Pizza Hut by name. Pizza Hut is challenging any quarterback put pizza before they say Hut during the televised game. Pizza Hut will throw an actual pizza party in the city for the first QB that does it during a televised game, fans get the win.

[B]

Literally.

[A]

Listen closely on game day when you hear Pizza Hut, you know something big is about to happen. Visit pizzahut.com for details. This is Jacob Goldstein from what's yous Problem? Business software is expensive and when you buy software from lots of different companies, it's not only expensive, it gets confusing. Slow to use, hard to integrate. Odoo solves that because all Odoo software is connected on a single affordable platform. Save money without missing out on the features you need. Odoo has no hidden costs and no limit on features or data. Odoo has over 60 apps available for any needs your business might have, all at no additional charge. Everything from websites to sales to inventory to accounting. All linked and talking to each other. Check out Odoo at o d o o.com that's o d o o.com crunchy.

[D]

Crafts high performing skincare and makeup using only the safest clinically backed ingredients, all wrapped in sustainable packaging. It's beauty that delivers results without compromising your health or the planet. Now through January 1st, save up to 30% on Crunchy's seasonal gift sets, curated for intentional gifting or for treating yourself to a little self care. Visit crunchy.com to give the gift of real clean beauty this season. That's C-R U-H-.com crunchy the real clean beauty.

[A]

You're listening to the Bloomberg Businessweek Daily Podcast. Catch us live weekday afternoons from 2 to 5pm Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.

[D]

Let's get a little bit deeper though, into this media mania. Ross Gerber is with us. He's co Founder President CEO of Gerber, Kawasaki wealth and Investment Management out there on the West Coast. So good to have you here. Happy New Year to you Ross.

[E]

Happy New Year I'm happy to be spending the last day of the trading year with you guys.

[D]

Well, we love our conversations with you and it's fun to be talking about this with you. I mean, you did join Bloomberg recently, and I just asked Chris about it. This idea about whoever wins Warner Brothers will define the future of Hollywood. Chris made the point that whoever gets it, it's going to be a rough 2026 or 2027 for that company. How do you see it? Talk to us a little bit about this.

[E]

Well, he used a. Chris used a term that I've used about Warner, too, which is called the albatross. And the albatross is, you know, this thing around your neck that constantly driving you nuts and never helps you. Right. I think it was Rhyme of the Ancient Mariner, where that book was, the albatross was from. But the, the reality is Warner has never made anybody any money ever since the old days, since Stephen Ross started it, you know, and so every buyer of Warner Brothers has regretted it. And I think the buyer of Warner Brothers here will ultimately regret paying what they're paying for this, because this is really a battle for control of the last piece of asset, you know, on the monopoly board of Hollywood. And it's a pretty good asset, but it's a difficult one at best. And Netflix didn't need it. But the last thing they were going to do is seed all those assets to Paramount and really create a real competitor to them, to them by letting that Zaslav and Ellison team up against Netflix. So in the end, now they're, you know, they're both paying a ton for it. The Netflix deal is better structured and it has much lower cost of capital and involves stock. And I think it's just a better deal for.

[B]

And they're not getting those legacy. They wouldn't be getting the legacy TV network.

[E]

Yeah, you don't get the legacy cable. The only reason Ellison wants the legacy cable is to shut down CNN for Trump. You know, and so that's kind of behind the scenes of all this, is this battle for cnn. And, you know, the truth is Hastings is a Democrat and Netflix is more of a liberal company. And so, you know, they want to save CNN the way it is and just not be dealing with this. That's not their business. Where Ellison really has more than just money on his mind here. This is about power. And certainly that's where the support from the Trump administration comes for the Ellison bid is because he wants to go cnn. So go ahead.

[B]

Well, Ross, we only have a couple of A few minutes. So I want to make sure we get all the questions in on the Netflix side of things. If Netflix doesn't succeed in getting this, is that seen in your view as ultimately a win for, for shareholders? After all, Netflix shares are lower after making this bid for Warner Brothers Discovery.

[E]

You know, I've made a lot of money in Netflix stock over the last decade and, and I love the company and I think it's one of the best assets you could own. But we sold some of our Netflix when this deal went down because the valuation of Netflix is predicated on the business model that they have today. And by buying Warners, if they succeed, it changes the business model. And I think they deserve a lower PE ratio if they're going to be a traditional studio with all this clunkiness and also lack of clarity of what that future brings. Now, they can make great movies and it's a huge success, or they can make craft and it's a big loss, you know, but we saw what happened at Disney after they absorbed Fox. It was much harder than anybody thought to make this profitable. And now they finally are getting it together. This is years later. So I always thought that Netflix was just bidding it up so that, you know, Ellison would just overpay substantially for this asset and be stuck with it in the end. And then Netflix wins anyways. And that's what ultimately, if Elson wants the asset, he's going to have to pay 10 billion more for it. And that's the only way Warner Brothers will go for this. And so I do actually expect them to do that at some point. And then if Netflix like loses, they really win. And that would bring the stock price back, you know, back to 120 and all that kind of stuff. But it would also be great for their overall business because they wouldn't have to put all this capital to work at much lower returns.

[D]

So, Ross, do you expect what, one more offer from Paramount, another higher offer, and then that's it. And then Netflix says I'm out.

[E]

Well, I think that, you know, they got, you know, Daddy Ellison to sign off and say, you know, I'll pay for this if my kid actually gets this deal. Not just say, I'm going to pay for it, I'm actually going to pay for it. And then secondly, what's another 10 billion to the Ellison's? You know, when you're worth hundreds of billions of dollars, another 10 billion is like, I don't know, a pizza, you know, cost to them. So I think the real issue is they're vastly overpaying for the asset even at 100 billion. So it's just like 10 billion down the drain that goes to Zaslav. And boy, these, these payoffs that Zaslav and the executives getting are for hundreds of hundreds of millions of dollars. So something's going to happen. And I just don't see Ellison going away that easy. And I think Netflix would be satisfied with them vastly overpaying and walking away. But we'll see. I've been wrong. I was wrong about this in the beginning because I didn't think Netflix. Netflix would bet. But we'll see how badly Netflix really wants to win versus just win the game of business.

[D]

Can I ask you, and maybe this is something that's certainly, of course, near and dear to our hearts as we are in the media and news business and that has changed dramatically over the last 10, 20 years. And I just do wonder how this plays out and what it means for these cable news channels or even these network channels where it does seem like they are being even politicized more than ever. It's not just kind of the venue of cable, but we're now seeing kind of regular, linear really being politicized. The problems in that as we think about the importance of news and media in our world. Or is it not so important because everybody's on social media? Although that has its problems too.

[A]

Right?

[E]

Right. So you know where a lot of people are watching your Bloomberg is on YouTube. And I know you guys have a YouTube channel that's very active. Cause I get get all these alerts of every time you post my stuff on YouTube. And we all know that media organizations are smart to be reposting stuff on YouTube because that's where people are watching. And, and by that matter, I'm a big Google investor as well. But I think when you look at people my age or below, the way people Consume Media is 100 different news media than my age or above. You know, so my mom is still watching cnn, you know, but nobody I know who is younger watches CNN unless they're in an airport. So that's when I get most of the calls from my friends, is when I'm on CNN is when they're in the airport and they're like, oh, I saw you in the airport. You know, like, wow, that's great. And the other place I'm really popular is in gyms and country clubs where, where they still watch CNBC or have it on. But in real life, when I'm on a YouTube show, a hundred people are like, oh, I saw your YouTube show and da da da d. So it's the world has changed in the media landscape is changing. Cable is dead. It's just a dying thing. So if I'm a news organization, I have to repurpose my content for social media and have five or six different platforms that I'm putting out my content and then I'll get the, the result that I want by having enough views. But just being on cable TV is.

[B]

So Ross, we only have 30 seconds left and then we're going to do some news. Then we'll come back and get more time with you on Tesla. But if that's the case, then what happens if Paramount or if Paramount doesn't get the bid, Netflix does. What happens to the cable assets, very briefly?

[E]

Well, it'll be spun off like Versant in Versant is the Comcast cable assets. And, and you know where that goes, where these ships with no future go, I don't know. But it's smart for those companies to jettison those declining yet profitable assets because in five years, maybe less, they probably be worth almost nothing. So yeah, I'm sad to say I don't think people watching cable TV in five and 10 years.

[B]

Ross Gerber, we're going to come back to you. We got to leave it there for now because the closing bell is happening soon. Ross Gerber Co Founder, President, CEO of Gerber Kawasaki Wealth Management this is the.

[A]

Bloomberg businessweek daily podcast, available on Apple, Apple, Spotify and anywhere else you get. Your podcasts listen live weekday afternoons from 2 to 5pm Eastern on Bloomberg.com, the iHeartRadio app, TuneIn and the Bloomberg Business app. You can also watch us live Every weekday on YouTube and always on the Bloomberg terminal. If a Lenovo gaming computer is on your holiday list, don't shop around, just go directly to the source Lenovo.com it's your last chance to score exclusive deals on the gaming PCs you want, like the Lenovo Legion Tower 5 Gen 10 gaming desktop and Lenovo Lock Gaming Laptop. So avoid all that shopping chaos and price comparing and just go directly to the source lenovo.com where PCs are up to 35% off. That's lenovo.com.

[D]

We know no one's journey is the same. That's why Delta SkyMiles moves with you. From earning miles on reloads for coffee runs, shopping and things you do every day to connecting you to new experiences. A SkyMiles membership fits into your lifestyle.

[A]

Letting you do more of what makes you you.

[D]

It's more than travel. It's the membership that flies, dines, streams, rides, and arrives with you. Because when you have a membership that's as unique as you are, there's no telling where your journey will take you next. Learn [e-mail] SkyMiles At Hill's Pet Nutrition.

[A]

We know that pet parent guilt is real. Leaving too long, playing too little. New homes, new babies. Waking them up when they look so comfy. Running out of patience. Running out of treats, Running the vacuum.

[F]

You can only do so much. That's why there's hills.

[A]

Science led nutrition to help you give more love than humanly possible because you're only human. There's hills. Find the right [e-mail] science does more.

[E]

It'S football season and now you can.

[A]

Get anything you need for game day delivered with Uber Eats.

[E]

Well, almost. Almost anything. You can't get a running back, but baby back ribs.

[A]

Yes, Uber Eats official on demand food.

[E]

Delivery partner of the NFL.