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- [00:00]
Intuit/Odoo Advertiser
Ditch the complexity.
- [00:01]
Karen Moscow
Intuit Enterprise Suite delivers AI native ERP.
- [00:04]
Nathan Hager
That is intuitive and intelligent.
- [00:06]
Rania Sedholm
Scale faster with advanced control.
- [00:08]
Nathan Hager
Getting started in days, not months.
- [00:10]
Intuit/Odoo Advertiser
Learn more@intuit.com Enterprise and get the power you need.
- [00:15]
Karen Moscow
Bloomberg Daybreak is your best way to get informed first thing in the morning right in your podcast feed. Hi, I'm Karen Moscow.
- [00:22]
Nathan Hager
And I'm Nathan Hager.
- [00:24]
Intuit/Odoo Advertiser
Each morning we're up early putting together.
- [00:26]
Nathan Hager
The latest episode of Bloomberg Daybreak US Edition.
- [00:29]
Intuit/Odoo Advertiser
It's your daily 15 minute podcast on.
- [00:32]
Michael Halen
The latest in global news, politics and international relations.
- [00:36]
Karen Moscow
Listen to the Bloomberg Daybreak US Edition podcast each morning for the stories that matter with the context you need.
- [00:42]
Michael Halen
Find us on Apple, Spotify or anywhere you listen.
- [00:50]
Bloomberg Intelligence Host
Bloomberg Audio Studios Podcasts Radio news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Aut with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.
- [01:11]
Karen Moscow
Mandeep Singh is here with us. He's the global tech research head. And Mandeep, this idea of big tech being called upon to pay for their own rising energy costs, as Bailey pointed out, this is author a non binding statement of principles. He pointed out the winners and losers on the utility side. What does this mean for big tech? I mean can any of them be come out of this ahead with something like this kind of pressure?
- [01:34]
Mandeep Singh
But right now I think everyone is looking at gigawatt data centers, right? And when you think about what is existing in terms of AI data centers, these are 50200 megawatt data centers. We are already talking about power requirements going 10x to 1 gigawatt. And and so how will a 70 to 80 year old grid supply electricity which is 10 times more than what these data centers already consume. And so from that perspective it is a very topical question that needs to be asked. Where are you getting the 10 times power that you need to run your 1 gigawatt data center? And I think that's the realization that's coming in now. It's being reflected in the prices that consumers have to pay because prices have gone up for electricity. But I mean the computing that AI does requires ten times more power. Now we're getting started realization and I think everything will follow through.
- [02:38]
Interviewer (possibly John or Bloomberg Host)
Now Mandeep, is there a sense that big tech leaders might be open to working with the White House on this to kind of be in Trump's favor here? And what might the impact be on their profit growth?
- [02:49]
Mandeep Singh
I mean there's no doubt that AI data Centers are a much lower profit gross margin business for hyperscalers. And these hyperscalers, I mean Amazon, Microsoft and Google, the three big ones, have huge footprint when it comes to the traditional CPU data centers. They were able to get to, you know, 65 to 70% gross margins on the public cloud businesses they had. Now with AI workloads, we're talking about a sub 50% gross margin business. No matter what kind of scale you have, just because of the economics involved, these are sub 50% gross margin businesses. So on premise software used to be 80 to 90% gross margin. With public cloud we got to 65 to 70. With AI, we are sub 50 gross margin. So from that perspective, I mean even if you're Microsoft, you don't have a choice, but your margins will have to come down.
- [03:45]
Karen Moscow
We're also looking at semiconductor stocks as the best performers in the S&P 500 by two dozen industry groups. And it feels like that TSMC bullish forecast was very much a tailwind for the industry. Obviously this is good news in terms of demand, but does anyone lose out here when TSMC is can't even meet the demand that is being required of it?
- [04:06]
Mandeep Singh
Well, lose out, I think. I mean what we have seen really is intel really benefiting. So I wouldn't say anybody is losing out, but clearly everyone is so focused right now on the AI side that I feel suddenly everyone realized, oh, storage is in short supply. We didn't talk about storage up until, you know, the beginning of this year. So there will be, you know, instances like this where one of the components gets neglected and suddenly everyone finds that to be in short supply when you need it. So it could happen, I think. CPUs. Nobody talked about CPUs in the past 12 months. Suddenly CPUs are in short supply. So that's where the IT infrastructure needs to be upgraded every four or five years. And when the time comes to upgrade the infrastructure, certain components, even if they're not tied to AI, could be in short supply because we have reallocated the resources towards meeting the AI demands.
- [05:07]
Karen Moscow
Stay with us. More from Bloomberg Intelligence coming up after this. Is your business outgrowing your current systems? Are you tired of the cost and crushing complexity of traditional ERPs? Meet Intuit Enterprise Suite, the AI native ERP that simplifies complexity and adapts with your business. It's enterprise grade power made intuitive, intelligent, adaptive and ready for what's next. Built for modern finance teams, Intuit Enterprise Suite helps you streamline complex financial management and gain real time visibility across all your entities. This AI native solution automates workflows and unifies your data, acting as a force multiplier for your team. You no longer have to migrate off into it as you grow. Get the advanced accounting and multi entity control you expect, but in a solution that finance teams actually enjoy using. Best of all, it's quick to adopt, letting you get going in days, not months. Scale with confidence. Get the power of an ERP without the complexity. Learn more@intuit.com Enterprise Today and Future Proof.
- [06:12]
Intuit/Odoo Advertiser
Your business Running a business is hard enough, so why make it harder? With a dozen different apps that don't talk to each other, one for sales, another for inventory, a separate one for accounting. Before you know it, you are drowning in software. Instead of growing your business, this is where Odoo comes in. Odoo is the only business software you'll ever need. It's an all in one, fully integrated platform that handles everything CRM, accounting, inventory, E commerce, HR and more. No more app overload, no more juggling logins. Just one seamless system that makes work easier. And the best part? Odoo replaces multiple expensive platforms for a fraction of the cost. It's built to grow with your business whether you are just starting out or already scaling up. Plus, it's easy to use, customizable and designed to streamline every process so you can focus on what really matters running your business. Thousands of businesses have made the switch, so why not you try Odoo for free@odoo.com that's O D O O.com I'm.
- [07:16]
June Grosso
June Grosso inviting you to join me for the Bloomberg Law Podcast. Every weekday we help you make sense of the legal stories that shape the nation and the world. Listen for complete analysis of the biggest court cases, the latest actions from Congress and regulators, and the legal moves driving the markets. From corporate law to constitutional law, and from state courts to the Supreme Court. At Bloomberg Law, we go beyond the day's headlines. We speak with top attorneys, judges, scholars and policy experts to break down what the rulings really mean. We do this every weekday, then bring you the best conversations in our daily podcast. Search for Bloomberg Law on YouTube, Apple, Spotify or anywhere else you listen on the East Coast, Listen as you start your day and on the west coast, catch up in the evening. That's the Bloomberg Law Podcast with me, June Grosso. Subscribe today wherever you get your podcasts.
- [08:16]
Bloomberg Intelligence Host
You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand, wherever you get your podcasts or watch us live on YouTube.
- [08:31]
Karen Moscow
Some earnings that we want to bring your attention to. J.B. hunt, the truck carrier reporting quarterly revenue that missed analysts estimates. Although some people might say that the bar was kind of high for this company, even as we've seen this continued weakness in freight demand. Lee Klaskow is Bloomberg Intelligence's senior transport logistics and shipping analyst, and he joins us now to give us his take on what we're seeing. So what is the story with J.B. hunt and how it's positioned for the current market environment?
- [09:00]
Nathan Hager
Yeah, if you take a look at the stock, it's been up a lot over the last couple of months. And some of that has been in anticipation of the trucking spot market to kind of turn more positive, more positively. And that would be through more supply coming out of the market. So the stock is off a little bit off today. It was off a lot in the, in the aftermarkets last night, but it's come back a little bit. And that's really being driven, I think, because of that, you know, kind of high expectations. But at the end of the day, the company did report a pretty good print. Their earnings came in above consensus. It was driven by their intermodal, their truckload and their final mile businesses. JB Hunt is a kind of an integrated transportation company. They provide a lot of different types of transportation services. Some of the ones that fell maybe short of expectations for the freight brokerage business and dedicated business and that, you know, the dedicated business is being driven by. It takes, you know, they're winning business, but it takes a while for some of those businesses to ramp up and to kind of drive the margins that they're expected to, because those, you know, those ramp up costs. You know, what I would say is that I think a lot of people were somewhat surprised by management's tone on the earnings call last night. You know, they noted that the market was fragile and that the supply that we've been seeing coming out of the truckload market, while it's been good, they don't want to get ahead of themselves and call this, you know, we're in full recovery mode because, you know, we've had some false positives in the past. So they were pretty, I guess, I guess, cautiously optimistic about the outlook when it comes to the, the truck spot market. And that's so important because it wants the truck spot market tightens, rates will go up in that market and that will kind of ripple across its contractual business, its dedicated business, its brokerage business. Its intermodal business. So it's kind of like the canary in the coal mine for freight transportation logistics providers.
- [11:06]
Interviewer (possibly John or Bloomberg Host)
Lee, J.B. hunt is of course a big macroeconomic bellwether. What is it telling us about the broader economy and the year ahead?
- [11:14]
Nathan Hager
Yeah, you know, companies like this will really do well when demand grows. Obviously, you know, they have seen, you know, a somewhat resilient consumer. They did note that, you know, while there wasn't a lot of imports coming into the country for peak season, they benefited from a lot of freight that was already in the country, moving across the country. So it does seem like, you know, they did see some peak demand during the fourth quarter, which is obviously positive. But you know, I don't need to tell you guys, it does seem like this economy is a K shape, but economy. And it's really not kind of a widespread economic growth that we're seeing where there's pockets of strength and pockets of pockets of weakness.
- [11:59]
Karen Moscow
So cost cuts helped limit the downside for JB Hunt. Is that the catalyst to get people excited again about JB Hunt, you know, what kind of cost savings it can realize this year? Maybe it can go further than what it had projected when it comes to reducing expenses.
- [12:15]
Nathan Hager
Yeah, I think there's two things here that people can get excited about. I think there is the prospect of a better pricing environment for JB Hunt and the broader transports. That's one. Secondly, you know, they're not just sitting and resting on their laurels. They are actively trying to take out costs. They took out around $25 million in the fourth quarter. Their run rate was somewhat over 100 million. Management didn't really want to guide too much and what they expect that they can take out in 2026. But I suspect that they're going to continue that trend next year and they could bring some of their margin targets. Most of their margins right now are trending below their kind of long term targets. And through these cost cutting initiatives, productivity gains, and it's not just cutting to the bone. We're not talking about that. They're trying to get more productive. So whether it's better utilization rates of their trailers, maybe it's better quicker turns for their drayage fleet. All these things will lower the overall cost. And if you put on top of that higher rates, it really could drive margins significantly higher and closer to those longer term targets.
- [13:23]
Karen Moscow
Stay with us. More from Bloomberg Intelligence coming up after this.
- [13:28]
Intuit/Odoo Advertiser
Running a business is hard enough, so why make it harder with a dozen different apps that don't talk to each other. One for sales, another for inventory, a separate one for accounting. Before you know it, you are drowning in software instead of growing your business. This is where Odoo comes in. Odoo is the only business software you'll ever need. It's an all in one fully integrated platform that handles everything CRM, accounting, inventory, E commerce, HR and more. No more app overload, no more juggling logins, just one seamless system that makes work easier. And the best part? Odoo replaces multiple expensive platforms for a fraction of the cost. It's built to grow with your business whether you are just starting out or already scaling up. Plus it's easy to use, customizable and designed to streamline every process so you can focus on what really matters running your business. Thousands of businesses have made the switch, so why not you try Odoo for free@odoo.com that's o d o o.com at.
- [14:30]
Rania Sedholm
Charmin we heard you shouldn't talk about going to the bathroom in public, so we decided to sing about it.
- [14:35]
Mandeep Singh
Charmin Ultra strong you can use less.
- [14:38]
Nathan Hager
Better than the rest Shaman Ultra strong.
- [14:41]
Mandeep Singh
Booty pass the clean text Salmon weave texture it's the best Study up, teach a lesson on fresh your booty pass.
- [14:49]
Rania Sedholm
The clean test Charmin Ultra Strong Charmin Ultra Strong with Diamond Weed Texture cleans better than the leading one plaid brand so you can use less Enjoy the go with Charmin.
- [15:01]
Bloomberg Intelligence Host
You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.
- [15:16]
Interviewer (possibly John or Bloomberg Host)
Saks Global filed for Chapter 11 bankruptcy protection, a humbling turn for the luxury retailer following a stretch of losses flagging turnaround efforts and a substantial merger related debt. There are also hidden costs to luxury consumers and brands. To discuss this with us is Rania Sedholm, Managing Partner at Sedholm Law Group. Rania, what does this bankruptcy mean also for Sachs shoppers and the brands that work with it?
- [15:44]
Rania Sedholm
A lot of the brands that worked with it are no longer working with it, which also, you know, precipitated its its decline. It is, it is sad, as you were saying, and I'm sure it's humbling. So it started, I would say at least a year and a half ago. I started hearing from smaller brands, some of whose only footprint in the United States is with Saks Fifth Avenue and Neiman Marcus Group, which is owned by the same company. They were not paying for Consigned goods, although the goods were selling. So this was the start of the end, really. And if you've tried to go shopping recently in Sax Fifth Avenue, you will notice a shift in the products that are available to you. And this is one of the reasons for consumers, you know, it's, it's tough to say when there's a bankruptcy estate, they do not have to honor any kind of credit or rewards program. But I understand in this instance they will be honoring it. The issue becomes for you, is there something there that you want to purchase and how are you feeling about the brand in general? Something that I think Saks did poorly was communicate. I received my first email from them about the bankruptcy yesterday, nothing prior to yesterday. So I think there is some room for growth there on the communication end. And, you know, going back to the brands, what's going to happen to them? It's, you know, it's, it's too late, you know, for them to do anything but on a going forward basis. If you are a brand and you're consigning your goods, there are a few things that you need to look out for. The first thing is your contractual provision. It should state in this agreement that you own your merchandise until it is sold. That's the very first thing. And then once that provision is there, there's something called a UCC filing. You should file a lien because this will give you an interest in the merchandise and you're no longer an unsecured creditor for, for purposes of bankruptcy. So you may actually get something.
- [17:48]
Karen Moscow
So there's legal recourse for the vendors of Sachs, many of which were not getting paid regularly in the last couple of months. How does Saks go about repairing its relationship not just with customers, but with these brands, the brands that it relies on in order to bring customers through the doors.
- [18:04]
Rania Sedholm
Yeah, I think, you know, people really discount the efficacy of good communication. But, you know, as an attorney, I can tell you that is of paramount importance. In fact, usually when there is a breakdown in relationship, it's because of communication. So the first thing that Zachs needs to do in my mind is tell everyone why this happened and what steps they're taking to remedy it, because we don't want them to be repeat offenders five years from now. We don't want to be sitting in the studio talking about the other bankruptcy that they're undergoing. So it's important to figure out the why when it's such a drastic step that you have to take. And tell everyone, tell your vendors what you're doing to and help build trust again.
- [18:47]
Interviewer (possibly John or Bloomberg Host)
Rania, when you get this type of bankruptcy filing, what does Sachs owe its investors and creditors?
- [18:54]
Rania Sedholm
Well, I don't know what the numbers are. However, the bankruptcy code ranks people by importance. Secured versus unsecured. And you know, the landlord is certainly a secured creditor to the extent that they owe them money. They, they will be paid first. Any kind of loan, they'll be paid, you know, one amongst one of the first as well. So it's too early. I don't have the list yet.
- [19:17]
Interviewer (possibly John or Bloomberg Host)
You were talking about some of the M and A debt. And this bankruptcy, of course comes a year after investors handed Sachs billions of dollars for its acquisition of Neiman Marcus, which was also struggling. What kind of risk was it putting investors through by acquiring Neiman Marcus?
- [19:35]
Rania Sedholm
I'm not sure that that marriage was off to a good start. From the beginning, you know, we as shoppers, I can speak for women or at least for myself. We shop at a whole host of different places and you could have one customer shop in multiple stores for different types of items. But in general it's safe to say that the Neiman Marcus Group shopper is not the same as the saxophone shopper who's not the same as Bloomingdale's or Macy's shopper. So I think that marriage was rocky to begin with and it was a hefty price that was paid. I'm hoping as a consumer and for everyone's sake that someone else buys Neiman Marcus Group or perhaps they can buy themselves back. We do see that sometimes where you purchase yourself back from your acquirer.
- [20:26]
Interviewer (possibly John or Bloomberg Host)
Yeah, I just went across the street to Saks off fifth thinking that I could get a nice deal on something and they just, yeah, got rid of everything. What is next for Saks here? Do you think it makes it out of this?
- [20:38]
Rania Sedholm
I think Sachs does make it out of this, but I'm an optimist by nature, just so everyone listening knows that. But I do think they're going to have to contract in order to grow. So this is a time to be extremely self aware, extremely scrutinous and determine which stores are going to provide you with the most relevance to your customers and which ones can you stock well and have preeminent customer service and then close the others. You can always reopen stores. It's, it's, it's not a good idea to just have a huge footprint. That's lackluster.
- [21:19]
Karen Moscow
Stay with us. More from Bloomberg Intelligence coming up after this.
- [21:24]
Intuit/Odoo Advertiser
Running a business is hard enough. So why make it harder with a dozen different apps that don't talk to each other. One for sales, another for inventory, a separate one for accounting. Before you know it, you are drowning in software. Instead of growing your business, this is where Odoo comes in. Odoo is the only business software you'll ever need. It's an all in one fully integrated platform that handles everything, CRM, accounting, inventory, e commerce, HR and more. No more app overload, no more juggling logins. Just one seamless system that makes work easier. And the best part, Odoo replaces multiple expensive platforms for a fraction of the cost. It's built to grow with your business whether you are just starting, already scaling up. Plus it's easy to use, customizable and designed to streamline every process so you can focus on what really matters running your business. Thousands of businesses have made the switch, so why not you try Odoo for free@odoo.com that's o d o o dot com.
- [22:27]
Bloomberg Intelligence Host
You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business Apple Listen on demand wherever you get your podcasts or watch us live on YouTube.
- [22:41]
Interviewer (possibly John or Bloomberg Host)
John, when was the last time you ate at McDonald's or Taco Bell?
- [22:46]
Intuit/Odoo Advertiser
It's been a while. TACO Bell, never McDonald's, maybe like years. Look at me, I can't eat that stuff anyway. Well apparently it is approaching noontime so lunch is here.
- [22:56]
Interviewer (possibly John or Bloomberg Host)
Where we go have to go there for lunch. We'll have to check out Taco Bell. Apparently those restaurants are going to get a boost from December economic data that is poised to lift us Restaurant same store sales. That's along with cheaper gas prices and relief from new tax rules. We'll get more into this with Michael Halen, Bloomberg Intelligence Senior restaurant and food services Analyst. Michael, what is your outlook for restaurant sales going into 2026?
- [23:26]
Michael Halen
Yeah, we think sales are set to improve here in 2026, especially in the first half. You know, oil gasoline prices are down, you know, 13ish percent versus 1Q of last year. We're lapping, you know, bad weather, cold weather, snow and a really bad flu season from a year ago. And then we have tax relief which historically really helps restaurant spending. And you know, and then we have a couple things on the upside. I mean this administration is looking into, you know, potentially credit card reform and I don't know if they're done with the tax reform and we could see more interest rate cuts. So all of those things we think are going to feed into better consumer sentiment. And we saw that in some of the economic data last month and we think it spells, you know, a much better year for restaurant spending.
- [24:24]
Intuit/Odoo Advertiser
We're talking about Daniel Blues restaurants or Mickey D's.
- [24:29]
Michael Halen
Well, you know, we think McDonald's, you know, a lot of the chains we cover are going to benefit, but we think, you know, McDonald's and Taco Bell. In our most recent note were two that we pointed to because low income consumer are going to benefit from the tax reform. They're, they're the segment of the consumer that have kind of pulled back from restaurants in the last couple of years and so giving them a boost with tax reform. They're the ones that are most sensitive to gasoline prices. So the cheaper gas is going to help them the most. And like I said, we've seen it in the consumer sentiment data that the improvement in University of Michigan consumer sentiment was due to low income consumers. So these things are all pointing to better results at fast food chains like McDonald's and Taco Bell.
- [25:17]
Interviewer (possibly John or Bloomberg Host)
Are there any specific chains that you think will be better, bigger beneficiaries than others?
- [25:23]
Michael Halen
Well, outside of those two, you know, Kava and Wingstop are a couple of names that we think can have big bounce back years. You know, Kava, you know, in a vacuum. It had a very good year. Right. But they didn't hit lofty targets that they had set and earnings slowed off of a very strong 2024. And so we think they're set up really nicely to see an extra acceleration here in same store sales and kind of the same thing in Wingstop. Both of them were victims in 2025 of incredible 2024 success. And now that they have much more reasonable same store sales comps to lap, you know, we think we could see a big boost there. You know, Wingstop, one of the big things that they have going on is a new smart kitchens that are going to massively, massively help the operations improve speed of service and get people their wings hotter and faster.
- [26:17]
Intuit/Odoo Advertiser
Oh, okay. What are you talking about? The intersection of AI and chicken wings?
- [26:24]
Michael Halen
Yeah, I mean, you know, restaurant business, Listen, the restaurant business, man, has been historically under invested in technology, you know, and they've been quickly stove in a.
- [26:36]
Intuit/Odoo Advertiser
Frying pan and a deep fryer. What, what technology?
- [26:41]
Michael Halen
Yeah, well, listen, when you go and sit down in a restaurant and you have five people ordering five different things, right, you don't start them all at the same time, right. Like your sushi is going to be done a lot, maybe faster or Slower than my chicken teriyaki. Right. And so technology is being used in the kitchen to let the cooks know when to fire each meal so that everything comes out at the expense, exact same time.
- [27:06]
Intuit/Odoo Advertiser
Hot.
- [27:08]
Michael Halen
Right. So there's definitely a lot of uses for, for artificial intelligence and smart kitchens in this industry.
- [27:14]
Interviewer (possibly John or Bloomberg Host)
So, Michael, what does that mean? Are we going to go into a McDonald's and see robots making our fries? What does this mean for jobs at restaurant chains?
- [27:22]
Michael Halen
Well, you know, restaurant chains have been able to reduce labor hours by increasing the amount of automation. Me, personally, I, you know, I don't, and I don't think we're going to go into restaurants that don't have humans working in them anytime soon or maybe ever. But you'll continue to see kiosks, right, because that takes away labor at the, at the counter. You'll continue to see upgrades to kitchens and more kitchen automation to help decrease the labor needs in the kitchen. It will, it will continue to be a point of focus as minimum wage continues to increase and labor continues to become hard to find. So, yeah, it's going to continue to move this direction. Like I said, we've. This business is underinvested in technology for a very long time, and so they have a long way to catch up to, you know, competitors say, in packaged food where their plants are very automated.
- [28:25]
Bloomberg Intelligence Host
This is the Bloomberg Intelligence podcast, available on Apple, Spotify and anywhere else you get. Your podcasts listen live each weekday 10am to noon 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.