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- [00:01]
Baillie Gifford Narrator
What is actual investing? We believe that it's a real world task to deliver thoughtful capital deployment. It's not about speculating over the short term. It's about understanding the long term opportunities for companies through technological progress or new business models. So we seek out those exploring big new ideas that will change the world. Then we back them to give those ideas time to flourish. Bailey Gifford Actual Investors Find out more@baileygifford.com.
- [00:30]
Tide Commercial Voice
Did you know Tide has been upgraded to provide an even better clean in cold water. Tide is specifically designed to fight any stain you throw at it, even in cold butter. Yep. Chocolate ice cream? Sure thing.
- [00:44]
Retail Analyst Lindsey Dutch
Barbecue sauce.
- [00:45]
Baillie Gifford Narrator
Tide's got you covered.
- [00:47]
Tide Commercial Voice
You don't need to use warm water. Additionally, Tide pods let you confidently fight tough stains with new coldzyme technology. Just remember, if it's gotta be clean.
- [00:57]
Baillie Gifford Narrator
It'S gotta be tied. So let me get this straight. Your company has data here, there and everywhere, but your AI can't use the data because it's here, there and everywhere?
- [01:11]
IBM/AWS AI Representative
Seems like something's missing.
- [01:13]
Baillie Gifford Narrator
Every business has unique data. IBM helps your AI access your data wherever it lives. To change how you do business, let's.
- [01:22]
IBM/AWS AI Representative
Create Smile to Business.
- [01:24]
Vincent Piazza
IBM.
- [01:29]
IBM/AWS AI Representative
Enterprise AI is redefining business operations and voice technology leads this transformation. While Alexa showcases consumer applications, AWS AI delivers enterprise scale voice solutions that are reshaping customer engagement across industries. Leverage Amazon's proven AI innovation to transform your customer experience and drive operational excellence. AWS AI the Voice of Innovation Discover the Alexa story at aws.com/AI/our-story.
- [02:03]
Scarlet Fu
Bloomberg Audio Studios Podcasts Radio News.
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Connie Chung
This is Bloomberg.
- [02:11]
Scarlet Fu
Intelligence with Scarlet Fu and Paul Sweeney.
- [02:14]
Paul Sweeney
How do you think the Fed is looking at tariffs? The uncertainty of tariffs?
- [02:18]
Scarlet Fu
Let's take a look at the sectors and how they perform.
- [02:20]
Paul Sweeney
A lot of investors getting whipsawed every day by news events, breaking market headlines.
- [02:24]
Scarlet Fu
And corporate news from across the globe. Could we see a market disruption? A market event?
- [02:30]
Paul Sweeney
People just too exuberant out there.
- [02:32]
Scarlet Fu
You see some so called low quality stocks driving this short term rally. Bloomberg Intelligence with Scarlet Fu and Paul Sweeney on Bloomberg Radio, YouTube and Bloomberg.
- [02:41]
Paul Sweeney
Originals on today's Bloomberg Intelligence show, we dig inside the big business stories impacting Wall street and the global markets.
- [02:47]
Scarlet Fu
Each and every week. We provide in depth research and data on some of the 2000 companies and 130 industries our analysts cover worldwide.
- [02:54]
Paul Sweeney
Today we'll look at the outlook for US oil and natural gas heading into the 2026 and why it's well positioned to benefit from structural demand.
- [03:02]
Scarlet Fu
Plus, we speak with award Winning journalist Connie Chung on the changes she is seeing in the media landscape.
- [03:07]
Paul Sweeney
But first, prospective homeowners in 2025 were boxed out by high borrowing costs and limited inventory, keeping affordability near record lows. That's according to the latest research from Bloomberg Intelligence.
- [03:17]
Scarlet Fu
That pressure is now reshaping 2026 as builders look to ramp up construction to meet pent up demand while still moving cautiously because of financing costs, labor shortages and of course, uncertain economic growth.
- [03:29]
Paul Sweeney
For more, I spoke with Drew Redding, Bloomberg Intelligence US Homebuilding analyst. I first asked Drew if lower interest rates will help the homebuilding sector.
- [03:36]
Baillie Gifford Narrator
So we actually think that 2026 is going to be another challenging year from a fundamental perspective for the builders. If you think about the weakness that we've had in demand over the last several quarters, it leaves much of the group coming into the year with backlogs that are down anywhere from 10 to 40%. And that's ultimately what translates into revenue over the next, call it three to nine months. In addition, I think you're going to see further pricing pressure as builders look to adjust prices to meet market demand. So we're going to have further base price reductions. And I think builders are going to have to continue to lean on incentives because it's something that home shoppers have become accustomed to and you know, they're looking for deals when they're out there in the market. So, you know, slow top line growth. And I think that incentive dynamic is also going to continue to pressure gross margins as we get into next year. You know, on the, on the positive side, we do have lower rates. So I do think that orders can grow next year. You know, we're looking at a six and a quarter rate, call it right now, last year we're almost 100 basis points higher heading into the spring. So lower rates and community count growth could support orders. But I think that revenue and margins are going to be down this year.
- [04:48]
Paul Sweeney
What's the relationship historically Drew, between new housing and existing home sales?
- [04:55]
Baillie Gifford Narrator
So the new home market is historically about 15% of overall housing transactions. So a much smaller piece of the market. You know, they've performed vastly differently over the last couple of years. If you look at the existing home market, we've been bumping along a 4 million annualized run rate of home sales for about three years now. And that's about 20% below normalized levels. So there's been a lot of pressure because the mortgage rate lock in effect affordability. We have seen an improvement in demand in the resale market as rates have come Down. You know, we're looking at purchase applications, which is the most high frequency data point that we have. So we have seen some improvement. And we think, you know, looking into 2026, you could see growth in the resale market anywhere from 5 to 10%, call it. But keep in mind that's off a historically low level.
- [05:46]
Paul Sweeney
What's the. Has the tariffs impacted the new home building market? I'm thinking lumber and all the other materials used in building a home. Has that had an impact on the profitability?
- [05:57]
Baillie Gifford Narrator
Yeah, good question. To this point, it really hasn't. We've heard from a number of builders who haven't seen much of a cost increase in 2025. I think you could see as you get into 2026 that become more of a problem. You know, we did an analysis that looked at all the tariffs that have come through and, you know, it shows that there could be a $10,000 cost increase per home as it relates to tariffs. Now, when you think about who's likely to feel that the most, it probably won't be the large single family production builders. They've got a lot of scale, they've got a lot of leverage, and they've had success in pushing back against their suppliers. I think you're more likely to see the pinch among smaller private home builders who just don't have that scale and ability to push back. So to this point, it hasn't had a big impact, but I think that's something you need watch as we look into next year.
- [06:45]
Paul Sweeney
Are they still building like crazy down there in Florida and Texas and Tennessee and those kinds of states?
- [06:52]
Baillie Gifford Narrator
Yeah, that's a good question. I mean, during the pandemic, that's where a lot of people were flocking to. There was a lot of construction down there. If you look at inventory levels now in the south, they're actually at the highest level on record. So that's where we're seeing a lot of the weakness in the new home market. There's so much inventory. Builders have had to get increasingly aggressive on prices, you know, to move inventory, a lot of incentives in the market, a lot of base price reduction. So that's really where we've seen the weakness. And if you contrast that to some of the stronger markets, it's really a tale of a couple regions. You have the Midwest and the Northeast, which tend not to be boom markets. We didn't see the same type of inventory growth there, and you're seeing a lot more price stability. On the other hand, you mentioned the south, but you also have the west, where there was a lot of inventory growth and we're seeing similar pricing pressure.
- [07:42]
Paul Sweeney
So is there still a housing shortage in this country? And if so, how does it right itself?
- [07:48]
Baillie Gifford Narrator
Yeah, another good question and one that's frequently debated. Just to take a step back, you'll hear estimates of anywhere to, you know, a million to 5 million unit housing shortage. But I think, you know, I think it's a more complex answer in that the shortage, so called shortage is probably more at lower price points. So there's a mismatch between where there's theoretically demand, which would be at lower price points, and what's available out there in the market. So it's really affordability, affordability problem that's holding things back. Now how do, how do we get, I mean the government has talked about all sorts of things in order to boost production and help builders to build more homes at reasonable prices. Whether it's, you know, dangling carrots in front of local municipalities to get them to reduce their regulations, you know, whether it's trying to knock down the price of building materials. There's a lot of different things. But I don't really think that there's necessarily any one single silver bullet that's going to solve this problem. I think at the end of the day you have home prices that are up more than 50% since 2019. And I think we need to let kind of the basic laws of supply and demand kind of take course in order to write that.
- [08:57]
Paul Sweeney
Our thanks to Drew Redding, Bloomberg Intelligence US Homebuilding Analyst. We move next to the consumer hardline space focusing on the retail sector for durable, non consumable goods like electronics, appliances, tools and sporting goods.
- [09:08]
Scarlet Fu
Bloomberg Intelligence recently put out its 2026 outlook for consumer hardlines in North America. And according to Buy, revenue gains should extend into 2026 for most consumer hardlines retailers.
- [09:19]
Paul Sweeney
For more guest host Isabel Lee and I were joined by Lindsay Dutch, Bloomberg Intelligence Consumer Hardlines Senior Analyst. We first asked Lindsey to talk to us about her expectations to for hardline retailers in 2026.
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Retail Analyst Lindsey Dutch
I think if you look at the guidance for the rest of the year, I think a lot of these big hardline companies are baking in a lot of uncertainty with the consumer. But the reality is that if we look back, you know, to performance to date and results to date, results have largely been better than expected and, and a lot of these retailers are sort of tracking to the upper half of their guidance range for the year because that consumer has stayed pretty, pretty resilient. You know, we see strength, you know, continuing to come from that higher income consumer, while the lower income might be continuing to pull back a little bit. And if you think about companies like Best Buy, Ulta Beauty, Williams Sonoma, Dick's Sporting Goods, you know, they are bringing, you know, premium products, new products, exclusive products to that consumer, and the consumers are willing to, to pay up for that. What was the one trend that shocked you this year, now that you look back? I think a lot of the trends have been a continuation of what we've been seeing. I think, you know, if we go back to late 2022, that is when the first pullback in that discretionary spend has been. But this is the first year that we've seen more newness. And newness is really a key driver. It's to getting consumers in the store and to fueling transactions. So the best retailers are getting both transaction and ticket growth. But I think those innovation pipelines that, that maybe were, you know, settled down a bit during COVID they've picked up again and bringing more newness is driving those transactions.
- [11:07]
Paul Sweeney
How promotional do you think retailers will be in 2026 to kind of drive the consumer to the store or to the mouse to click?
- [11:17]
Retail Analyst Lindsey Dutch
So promotions are very important to bringing shoppers to the store. Especially for someone like a Best Buy. Promotions are very key, especially around holiday. We seen that promotions are about flat in 25 versus 24, and I would sort of expect a continuation of that in 26, unless we see a huge spike in demand, in which case the retailers might be able to pull back on that promotional leverage a little bit. But this year so far it's been about flat. You do see companies like a Williams Sonoma, very select promotions. This has been a strategy coming out of COVID They sort of have stuck with it. They're even sticking with it, you know, through this season. Going into next year, Pottery Barn was a big focus for them. You know, they need a rebound in that brand and growth is slowly coming back, but they are staying steadfast in keeping those promotions very limited. I was going through your notes and then I read that many retailers are resuming or accelerating brick and mortar expansion plans because this leads to in store and online sales. And that's just kind of the reverse trend that I was expecting. But you made a point that Gen Z shows a strong preference for in person shopping. Can you talk to us more about that and how each generation is different? Sure, yeah. In store shopping is definitely back and just meeting the consumer where they are. So retailers, I think are more focused on all channels, whether it's whether they have an app, their online site, there's their brick and mortar stores. But brick and mortar as a whole, you know, we are seeing more openings than closings and that has been a trend for the past couple of years. But when we think about sort of the retail real estate market, the demand has been solid coming out of COVID and so vacancy is starting to get low and there's really no new properties being built.
- [13:09]
Connie Chung
So.
- [13:09]
Retail Analyst Lindsey Dutch
So these retailers looking to expand, which is great for their businesses, they really have to work hard to do so and find good space to open stores because there's just not that much of it. But Best Buy has talked about Gen Z's preference for in store shopping. So has Ulta Beauty. And so we're definitely seeing that across the board, but especially that younger generation.
- [13:32]
Paul Sweeney
There's plenty of retail space on Lexington Avenue and 58th Street, Manhattan. Lindsey John from the Highlands writes in and he wants to ask about Ulta Beauty, E L F Beauty, Sephora, how's that category look for 2026?
- [13:46]
Retail Analyst Lindsey Dutch
So demand has showed a strengthening sort of in the back half of 25. I think that momentum can continue into 26. I think for Ulta in particular, they have done a great job, you know, bringing, elevating their assortment and bringing on external exclusives and that has really helped them. Comps are going to get tougher next year and they need to continue to drive growth. And I think for them, you know, leaning into their salon services could be a key way to do that. Leaning into wellness is a key way to do that. There's multiple levers that they can pull. The categories that are showing the most strength is really fragrance and skin care and we would expect that demand to continue into next year.
- [14:29]
Paul Sweeney
Our thanks to Lindsey Dutch, Bloomberg Intelligence Consumer Hardline Senior analyst.
- [14:33]
Scarlet Fu
Coming up, 2026 should be a big year for natural gas producers. We'll explain why.
- [14:37]
Paul Sweeney
You're listening to Bloomberg Intelligence on Bloomberg Radio providing in depth research and data on 2000 companies and 130 industries.
- [14:44]
Scarlet Fu
You can access Bloomberg Intelligence via bigo on the terminal. I'm Scarlet Fu.
- [14:48]
Paul Sweeney
And I'm Paul Sweeney and this is Bloomberg.
- [14:54]
Baillie Gifford Narrator
What is actual investing? We believe that it's a real world task to deliver thoughtful capital deploy. It's not about speculating over the short term. It's about understanding the long term opportunities for companies through technological progress or new business models. So we seek out those exploring big new ideas that will change the world. Then we back them to give those ideas time to flourish. Baillie Gifford Actual investors find out more@baileygifford.com 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.
- [15:35]
Paul Sweeney
The Lenovo Legion Tower 5 Gen 10.
- [15:37]
Baillie Gifford Narrator
Gaming desktop and Lenovo Lock Gaming Laptop. So avoid all that shopping chaos and.
- [15:42]
Paul Sweeney
Price comparing and just go directly to.
- [15:44]
Baillie Gifford Narrator
The source lenovo.com where PCs are up to 35% off.
- [15:48]
IBM/AWS AI Representative
That's lenovo.com lenovo Lenovo Enterprise AI is revolutionizing customer engagement and Amazon's Alexa demonstrates this transformation at scale. Alexa represents a breakthrough in AI assistance evolving from basic command response to goal oriented autonomous operation. Powered by AWS AI, this enterprise grade technology processes billions of natural language interactions daily, continuously improving through machine learning. The result? A secure, scalable voice AI platform that's transforming customer experience across industries. For businesses, this represents more than just voice assistance, it's a proven framework for AI driven digital transformation. Global organizations are already deploying AWS voice technology solutions to enhance customer service, streamline operations and drive innovation. Transform your business operations with the same AI technology powering millions of Alexa interactions worldwide. AWS AI the Voice of Innovation Discover the Alexa story@aws.com AI our story.
- [17:03]
Baillie Gifford Narrator
So you're telling me that the AI.
- [17:04]
IBM/AWS AI Representative
That'S meant to make everyone's job easier.
- [17:06]
Vincent Piazza
To manage just adds more to manage?
- [17:09]
Baillie Gifford Narrator
On top of the thousands of apps the IT department already manages? Funny how that works. Any business can add AI.
- [17:17]
IBM/AWS AI Representative
IBM helps you scale and manage AI.
- [17:20]
Baillie Gifford Narrator
To change how you do business. Let's create smarter business IBM.
- [17:30]
Scarlet Fu
This is Bloomberg Intelligence with Scarlet Fu and Paul Sweeney on Bloomberg Radio.
- [17:37]
Paul Sweeney
The US continued a strong oil and gas production in 2025, with crude output near record levels and export growth.
- [17:44]
Scarlet Fu
One sector that performed particularly well is liquefied natural gas, and that is set to continue into 2026. According to by Natural gas exposed E and P Financial performance will gain momentum next year as winter fully kicks in and raises US Gas benchmarks.
- [17:58]
Paul Sweeney
For more on this, we're joined by Vincent Piazza, Bloomberg Intelligence Senior Equity Research Analyst. We first asked Vincent what the outlook is for natural gas demand in 2026.
- [18:07]
Vincent Piazza
From our perspective, we are definitely more constructive on natural gas commodity relative to oil, and there are three key drivers for natural gas in 2020. We have structural demand growth and that's from LNG exports and also pipeline exports down into Mexico. We have what the other presenter hinted at was a demand growth that's also a strong structural growth driver for 2026 the demand side is really quite clear. It's really the production side is running a little hotter this year versus last year. And that is our biggest risk to our 2026 call. That's the first key driver. The second key driver is relatively robust free cash flow yields as balances tighten. So there is a great deal of cash flow sloshing around in for this group that gives them a great deal of optionality. And where we think that optionality is going to be targeted, aside from base and supplemental dividends, is really M and A natural gas M and A lagged oil M and A. We think that turns in 2026. We saw the first real big hint of that in 2024 and 2025 when Expand Energy was created via the Seminole acquisition combination between Chesapeake and Southwestern Energy. That created a Goliath, the largest natural gas operator, natural gas producer, independent producer in the lower 48. We think that'll drive incremental M and A because the biggest central theme for us in 2026 is concentration via consolidation. We think that continues for the natural gas operators as it did for the oil centric names in 2025.
- [20:09]
Paul Sweeney
What are the folks down there in domestic production? What do they do with with oil around these these prices here?
- [20:15]
Vincent Piazza
They don't grow. We think production has peaked. We think you will see a change in sentiment as we see more focus natural gas relative to oil. What is interesting for the natural gas producers as you produce less liquids, so less crude, you also produce fewer molecules of what's called associated gas. That's great for the natural gas guys because that means balances tighten. So when you think about relative prices, that's a net benefit for the natural gas producers relative to the oil producers. Since Associated Gas is roughly call it 1/3 of total production of natural gas. So lower oil actually good for natural gas.
- [21:00]
Scarlet Fu
Which nat gas players are best positioned? I know Bloomberg Intelligence doesn't do buy hold sell on individual companies, but surely there are some that are attractive than others.
- [21:09]
Vincent Piazza
Yeah, absolutely. So again on this central theme of concentration via consolidation, expand has really gone out there and created a dominant player into the Central Basins EQT as well. The those are the two key names for 2026 given their size and relative importance in the market. Not only in the lower cost basin of Appalachia in the Northeast, but also near seaborne export markets around the Gulf, around Haynesville as well. So expand EQT. Those are two names that we have focus ideas out for 2026. You can take a look at that on the terminal within the Bloomberg ecosystem.
- [21:58]
Scarlet Fu
Nice.
- [21:59]
Paul Sweeney
What's the OPEC doing these days? Do we really. How much do we care about those folks? If we're a net exporter these days.
- [22:06]
Vincent Piazza
They are still the dominant player, the dominant governor of oil markets. They will still drive 2026 supply balances from the demand side. We think we have, we are past that peak peak growth demand here in the US we pumped out roughly 13.6 million barrels per day. We think we're past a peak there as well. In fact, the other central theme that we talked about for the oil players is really capital discipline. You're going to hear a lot more of that similar to what we talked about in 2024 and 2025. Investors. What your guys are telling people, Paul and Scarlet, is we don't want to see the production, we don' want to see a higher spending. What we really want to see is that free cash flow coming back to the investor base. All that sunk capital during the initial stage of the growth in shale. We are now at a maturity phase. We want to see those higher dividends, we want to see the base dividends, we want to see supplemental growth in dividends with buybacks taking a little more of a backseat in order to clean up any equity issuance via M and A market.
- [23:25]
Paul Sweeney
Our thanks to Vincent Piazza, Bloomberg Intelligence senior equity research analyst. Staying with energy, we now look at how one of the nation's largest utility companies is faring.
- [23:34]
Scarlet Fu
Exelon Corporation primarily engages in the generation of electricity from nuclear, fossil fuels, hydroelectric and renewables. For one of the company's recent data center boom and some of the challenges in managing a large energy grid. We spoke to Calvin Butler, CEO of Exelon.
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IBM/AWS AI Representative
We're critical to the development of AI data centers and large load quantum and we take that responsibility very serious. And from a standpoint of building that infrastructure, protecting that grid, it's going to be the backbone of all this. We always say that the energy sector is 5% of the GDP, but we power the next 95 and we take that very seriously.
- [24:16]
Scarlet Fu
You take it seriously. So walk us through some of the plans you're making, how you're preparing for this transition, for this increase in demand.
- [24:25]
Baillie Gifford Narrator
Yeah.
- [24:25]
IBM/AWS AI Representative
Thank you, Scarlett. What, what we have done, we've done a few things is one understanding for your listeners. Excellent. We are truly a transmission and distribution company, you know, proud to have six utilities operate in the electric, gas side through the pipes and wires. So having said that, being the backbone of that, we're encouraging those data centers and large developers to come into the states in which we operate, and we put together a comprehensive plan to get them online up and running sooner rather than later. Speed is everything for them. And so what it takes is a coordinated effort. And we've worked very hard to move upstream to get them online so they can do what they do, which is on the technology side. Now, as we do that, we have to keep in mind, first and foremost, the affordability factor for all of our communities. And that's what we're working with them to identify sites that are more ready to put their equipment and their technology in place.
- [25:29]
Paul Sweeney
We had a couple of governor races in New Jersey and in Virginia, and affordability was one of the big issues. And in New Jersey, the governor elect who actually won one of her number one issues was bringing down electric utility bills. So this is an issue that is we got to fund, we got to, I guess create and develop these data centers, but we got to do it in a way that it doesn't cause everybody's power bills to go up. How do you think about that transition?
- [25:57]
IBM/AWS AI Representative
Paul, you're absolutely right. It was a race in both New Jersey and Virginia an issue, and we believe it's going to be an issue in the 2026 elections because affordability, pocketbook issues are going to be key. So let me tell you what we're doing from Exelon perspective. We are protecting our residential customers. You know, we serve almost 11 million customers, so as important as it is for data center development, it's just more important for me to protect the other customers in this process. So we've come up with what we consider a rather innovative solution in creating a tariff, a transmission security agreement. So what that does is we require a letter of credit or a cash deposit from these large developers speculating or identifying what their 10 year revenue projections or cost projections coming back to our utility is. And anytime that they do not meet 80% of that load projections or cash projections, we draw down from that deposit. And what it does, it protects the other customers on the system for the investments that we're making. So we're being very intentional about protecting the other users on the system, because when it's done right, it should reduce the cost for everyone. But when it's done haphazardly or piecemeal, it can have ramifications that everyone else is impacted. But what you're seeing, not just from the capital investment, you're seeing the supply costs go up, supply costs are going up because of the increased demand, and we have inadequate generation on the system to do that. You use New Jersey as an example. Let me give you a real example of what happened to New Jersey customers last year. New Jersey customers average residential customers bill rose $34 because they were reconciling our bill, our bill, our cost, the demand, the transmission and distribution part went down $4 but the bill still went up 34. That's how important it is to get this supply stack right to help lower all customers bills.
- [28:06]
Scarlet Fu
Calvin, let me ask you about nuclear because the government announced it plans to buy and own up to 10 large new nuclear reactors that could be paid for using Japan's pledge to fund $550 billion of investments in the U.S. of course this is part of a push to meet surging demand for electricity and nuclear is increasingly seen as a solution to this need. What's your take?
- [28:27]
IBM/AWS AI Representative
I think it's critical. I truly believe in a all of the above approach and that nuclear baseload generation is going to be crit to us meeting this effort. As you know again, we've always taken an approach that every electron matters to help on affordability and that's why it's so critical. I use an example, the Crane center that's coming back online in Pennsylvania. That's critical because it's new generation coming back online. Microsoft is paying for it and that billion dollar loan is exactly what we need to encourage reopening of these former facilities to get more electrons back on. And that was one of the best operating nuclear plants prior to its shuttering.
- [29:15]
Paul Sweeney
Our thanks to Calvin Butler, CEO of Exelon.
- [29:17]
Scarlet Fu
Coming up, we go inside Walmart's masterclass in reputation rehab. Plus an honest conversation with renowned news journalist Connie Chung.
- [29:24]
Paul Sweeney
You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in depth research and data on 2000 companies and 130 industries.
- [29:31]
Scarlet Fu
You can access Bloomberg Intelligence via by go on the terminal. I'm Scarlet Fu.
- [29:34]
Paul Sweeney
And I'm Paul Sweeney and this is Bloomberg.
- [29:42]
Baillie Gifford Narrator
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.
- [29:53]
Paul Sweeney
Like the Lenovo Legion Tower 5 Gen.
- [29:55]
Baillie Gifford Narrator
10 gaming desk desktop and Lenovo Lock gaming laptop. So avoid all that shopping chaos and.
- [30:00]
Paul Sweeney
Price comparing and just go directly to.
- [30:02]
Baillie Gifford Narrator
The source lenovo.com where PCs are up to 35% off.
- [30:07]
Paul Sweeney
That's lenovo.com.
- [30:13]
IBM/AWS AI Representative
In today's digital economy, enterprise leaders are seeing firsthand how AI is transforming advertising. Amazon Ads demonstrates this every day. AWS AI processes billions of advertising decisions in real time, driving campaign optimization on a truly global scale. So what does this mean for enterprise operations? AWS AI enables precise targeting and dynamic optimization across your entire advertising ecosystem. Amazon has proven this through its own digital transformation, deploying enterprise grade AI solutions that compress multi week workflows into hours while maintaining precision at global scale. AWS AI's machine learning capabilities integrate seamlessly with existing advertising workflows, all while maintaining enterprise grade security and compliance. And because it scales effortlessly, it can support organizations operating in 10 markets or 100. Transform your advertising operations with the same AI technology that powers Amazon's global success. AWS AI Where Advertising Meets Intelligence See the Amazon ad story@aws.comai our-story.
- [31:27]
Baillie Gifford Narrator
So you're telling me that the AI.
- [31:29]
IBM/AWS AI Representative
That'S meant to make everyone's job easier.
- [31:31]
Baillie Gifford Narrator
To manage just adds more to manage on top of the thousands of apps the IT department already manages? Funny how that works. Any business can add AI.
- [31:42]
IBM/AWS AI Representative
IBM helps you scale and manage AI.
- [31:45]
Baillie Gifford Narrator
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- [32:57]
Scarlet Fu
This is Bloomberg Intelligence with Scarlet Fu and Paul Sweeney on Bloomberg Radio.
- [33:04]
Paul Sweeney
Walmart was once criticized for its treatment of workers as well as its negative impact on communities. But its reputation has been rehabilitated under CEO Doug McMillan.
- [33:13]
Scarlet Fu
That's the subject of a recent Bloomberg Opinion piece titled Inside Wal Mart's Masterclass in Reputation Rehab. For more, we're joined by the author of the piece, Bloomberg Opinion columnist Beth Cohet.
- [33:23]
Tide Commercial Voice
It's hard to Think about this now, but a decade ago, Walmart was one of the most reviled companies in America. Right. It was being criticized for paying its employees low wages, for wiping out mom and pop retailers, for basically creating a culture of disposable consumerism. So it really was getting hit from a lot of different angles. And rather than just ignore the bad press or you know, hire an army of PR people, it decided to do something about it. And Doug McMillan decided, we're going to invest in our people and $2.7 billion over a couple of years. And we now know this really paid off.
- [33:58]
Paul Sweeney
So I mean, for Doug McMillan, I mean to me, after reading your article, this could be one of his, as he's stepping down, could be one of his lasting legacies at the company.
- [34:07]
Tide Commercial Voice
I really think so. I think that, you know, he's been at the company now more than a decade. I think this will be among the most enduring things that he has done. I think this, I'm not sure that the company would be in the place it's at today if he had not really addressed this.
- [34:22]
Connie Chung
Yes.
- [34:22]
Scarlet Fu
And let's be clear about what exactly he did with that $2.7 million pay increases. There was training and really just attracting a better quality worker.
- [34:33]
Tide Commercial Voice
Yeah. And the way he did this was, right, it was pay increases, but more than anything else it was creating not low paying jobs, but a career. Right. There was now a path for people who started at Walmart to move up the ranks and that was really important to attracting more ambitious employees, to getting them to stay. And I think that, that, that shifted the whole culture of the company.
- [34:57]
Paul Sweeney
So what's the company saying about AI? Because there's a lot of angst just in the overall economy about what the impact I will have upon jobs. One could look at big box stores as an industry that might be at risk because they do employ so many people. What's, what does Walmart say?
- [35:12]
Tide Commercial Voice
Walmart's taken a very different approach, I think, than some other big employers. And, and it has embraced AI, let's be clear, like there's AI is embedded throughout the company, but it has not used AI to have some of these mass layoffs that, or justify some of these mass layoffs that we've seen at other companies. And I think part of that is this, this history. Like it knows how important these entry level workers are and that they, they need a path, they need this workforce to sort of grow the company. So it said, I will change every job. It knows that, but it is trying to get every worker through to the other side. So whether that's retraining, finding new rules for roles for them. So it's just a very different outlook, I think than what we're hearing from others.
- [36:00]
Scarlet Fu
And you've noted as well that the last 10 years at Walmart has led to tremendous return for shareholders. But also it's become a case study at Harvard Business School on how to, on how an experiment on paying your workers more or investing in workers can pay off.
- [36:16]
Tide Commercial Voice
Absolutely. I mean we, you mentioned this at the beginning, but Wall street hated this plant. I mean the company lost tremendous value when, when they announced it. And now, you know, we, we have the receipts a decade later and the, I think the market cap has tripled. The stock has returned more than 400%. So they really took a gamble on this and stuck with it. And it really, it has, it has paid off for them.
- [36:42]
Paul Sweeney
I mean, every time I look at the des screen on the Bloomberg terminal for Walmart, I'm blown away by the fact that they have 2.1 million employees. What's the retention of those employees? I'm wondering if there's like I would think in the warehouses it might be really, really high. I'm not sure about the stores. How is retention?
- [36:59]
Retail Analyst Lindsey Dutch
Sure.
- [36:59]
Tide Commercial Voice
So they've actually increased retention by 10% since 2015 when they, when they started this plan. And another thing is that they've some of the more management level roles, 75% of those are hired from within. So this pipeline is really critical for them. And so that's why I think that they are so focused on creating a place where people stay. That's, that's key.
- [37:22]
Scarlet Fu
And you only have to look at the outgoing CEO and the NTO. Right. Both Doug McMillan and John Furner, the successor, are Wal Mart lifers. They started off as hourly workers there.
- [37:32]
Tide Commercial Voice
Right. They know the importance of that. And having worked their way up, that needs to be something that continues there.
- [37:37]
Paul Sweeney
Is this something that you think the new CEO is as committed to as the prior CEO?
- [37:42]
Tide Commercial Voice
I would think so because he has the same background. I mean, I think he knows the importance of emerging technologies. He's really focused on that. But I think because of his history and he's worked very closely with McMillan for a long time. So I, they must be aligned on this.
- [37:59]
Paul Sweeney
Our thanks to Beth Cowett, Bloomberg opinion columnist. We move next to the interview we had this year with award winning journalist and news anchor Connie Chung.
- [38:07]
Scarlet Fu
Connie was the first woman to co anchor the CBS Evening News, the flagship news broadcast on cbs. She was also the first Asian American to anchor any news program on cbs, NBC and abc. Both were milestones in broadcast television history. Connie Chung was also out with a memoir this year titled Connie.
- [38:22]
Paul Sweeney
We began our conversation with the changing landscape of the news business on whether journalism should be treated more like a public good rather than a profit driven business.
- [38:31]
Connie Chung
Without question. When I first started at CBS News in 1971, it was owned by William Paley and he believed so strongly that the news division should be autonomous. We could spend as much money as it took to cover the news, and it was for the public good. But then what happened at CBS equally happened at NBC and abc. Greedy owners took over, bought the companies and made the bottom line the ultimate goal. We lost all of our obligation to be objective and be truthful. And all they wanted was money.
- [39:20]
Paul Sweeney
Yep.
- [39:21]
Connie Chung
And I am just mortified that to this day I see it. At cbs, money drove the, the greed drove the fact that it was sold to David Ellison and Larry Ellison and their unattention, I mean, they're not paying any attention to the old rules of journalism.
- [39:45]
Paul Sweeney
Well, is. One could argue just over the last 20, 25 years that the divide in this country and the divide in the, in the media coverage has been so stark and become maybe, maybe even more stark. How do you make, what do you make of that? The bias that may or may not be in the news business these days.
- [40:03]
Connie Chung
Who that may it is.
- [40:06]
Paul Sweeney
Okay, how do you view it, how you do? How has it changed?
- [40:09]
Connie Chung
Maybe I'm horrified. Horrified with anyone who says on television who purports to be an anchor or a news reporter say, I think, I don't care what you think. All I want is the facts. And I think everyone out there, because I've been across the country just in this last year and people just want the facts. I think the only saving grace is actually local news. Local news still just primarily provides the facts and the weather and sports.
- [40:47]
Scarlet Fu
With big tech comes of course, artificial intelligence. How do you make the case for why companies should not replace news reporters? News anchors with AI generated and presented news where they could focus on presumably the facts.
- [41:00]
Connie Chung
Folks, it's fake too. It's all fake news and we cannot depend on it. The social media has truly destroyed our reporting ability in, in many ways because nothing is fact checked. And I fear that AI would not be fact checked. We can't depend on it. I can see the value of AI for instance, if a doctor wants to look up research and figure out what a person's ailment is, he or she no longer has to Go through volumes and volumes of medical literature. AI can find it in a second. And there are so many good benefits. But I think AI has no place in. In news. It just doesn't. I mean, I don't know what happened to truth. I believe that truth ruled. When I was working in television, news was ancient. In ancient times.
- [42:09]
Scarlet Fu
Even though you have white hair, Paul.
- [42:12]
Connie Chung
I have white hair too. I just color it.
- [42:14]
IBM/AWS AI Representative
Right.
- [42:14]
Paul Sweeney
I understand. I understand. What's also changed. It seems like initiatives not just in media, but across corporate America and society. The diversity, equality, inclusion, that movement, if you will, or that. That seems to have lost its momentum. And is that a concern for the newsroom?
- [42:34]
Connie Chung
Do you think it died with this administration? It's become non existent and forced upon us. I would not have had a career had it not been for the 1964 Civil rights law which created the Equal Employment Opportunities Commission. My sister in law, Lynn Povich, who is a researcher at Newsweek, filed a class action lawsuit with the other women because they were not allowed to move beyond the research stage. They could not be reporters, they could not be writers, they could not be editors, period. Full stop. And I was, thanks to Lynn and the women's movement and the black movement at the time, in the 60s and 70s when I started, I would not have had my first job at CBS News covering Watergate, covering a presidential campaign, the losing campaign of George McGovern in 1972. And I would not have covered Nelson Rockefeller when he was Vice president after he took over Ford took over from Nixon. We are seeing a replay of Nixon and Watergate. But during Watergate, at least Congress had a backbone. Members of Congress like Senator Barry Goldwater went to Nixon and said, you're not going to. You're not going to survive. Right?
- [44:12]
Scarlet Fu
Yeah. No. A clear contrast to what we have on Capitol Hill today. Speaking of Watergate, Connie, there is a famous photo of you at a House Judiciary Committee hearing on Watergate. And it's you, a young Asian woman in a sea of white men. Do you think female News reporters in 2025 face the same challenges that you did in the 70s through 90s?
- [44:32]
Connie Chung
It really hasn't changed.
- [44:34]
Scarlet Fu
That's depressing.
- [44:34]
Connie Chung
No, I know. I'm sorry. But it hasn't changed for men who still dominate. Not that there's anything wrong with being a man. Paul.
- [44:45]
Paul Sweeney
So far so good.
- [44:47]
Connie Chung
What? So far so good.
- [44:48]
Paul Sweeney
So far so good.
- [44:49]
Connie Chung
Okay.
- [44:49]
Baillie Gifford Narrator
You mean what?
- [44:50]
Paul Sweeney
Just, you know, we all work together, we all get along happy in here in this little studio.
- [44:54]
Connie Chung
Okay, well, that's, that's good.
- [44:56]
Scarlet Fu
We control what we can control, right?
- [44:58]
Paul Sweeney
Yes, that's right.
- [44:59]
Connie Chung
Well, despite management. But yeah, it was in the 1970s, but even today there's a dominance of white males and it's not a level of parody. We are not seeing that. And in terms of this administration and its determination to kill dei, I'm hoping that we the people will not stand for it.
- [45:34]
Paul Sweeney
Our thanks to award winning journalist and news anchor Connie Chung. That's this week's edition of Bloomberg Intelligence on Bloomberg Radio, providing in depth research and data on 2,000 companies and 130 industries.
- [45:44]
Scarlet Fu
And remember, you can access Bloomberg Intelligence via BI Go on the terminal. I'm Scarlet Fu.
- [45:49]
Paul Sweeney
And I'm Paul Sweeney. Stay with us. Today's top stories and global business headlines are coming up right now.
- [45:55]
Baillie Gifford Narrator
If a Lenovo gaming computer is on your holiday list, don't shop around.
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Paul Sweeney
Just go directly to the source.
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Baillie Gifford Narrator
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Paul Sweeney
Price comparing and just go directly to the source.
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Baillie Gifford Narrator
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Paul Sweeney
That's Lenovo.com.
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Baillie Gifford Narrator
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