In this podcast, Anjee Solanki discusses the slowing of US retail sales in August due to higher gasoline prices. The news of Disney considering selling ABC to Nexstar is revealed by Chris Palmeri and David Westin. Jim Chanos shares his investment outlook and thoughts on China. Paula Vissing talks about Little Caesars being the official pizza sponsor of the NFL. And George Schultze discusses the current performance of the US equity market and opportunities for distress.
Consumers are shifting towards purposeful buying and Quick-Service Restaurants due to increasing prices and inflation in food and grocery items.
Retailers are adapting to changing market conditions by considering store closures or portfolio optimization to focus on new customer growth and creating unique in-store experiences.
Walt Disney's potential sale of ABC to Nexstar Media Group reflects the ongoing transformation in the media industry as traditional media companies explore new partnerships and strategies to adapt to evolving market dynamics.
Deep dives
Consumer cautiousness and slowdown in retail spending
Consumers are becoming more cautious in their spending habits, resulting in slower growth in retail sales. In August, core retail sales only increased by 0.1%, indicating a slowdown in discretionary spending. Consumers are now more focused on purposeful buying rather than impulse purchases, likely due to increasing prices and inflation in food and grocery items. This shift in consumer behavior is evident in the uptick in spending at quick-service restaurants, such as Chick-fil-A and Raising Cane's, which offer convenience and affordability compared to grocery stores.
Store closures and portfolio optimization
Retailers are experiencing challenges and considering store closures or portfolio optimization to adapt to changing market conditions. Store closures can be driven by operational factors, high labor costs, or poor location choices. However, store closures are also seen as a healthy response to optimize portfolios and focus on new customer growth. Retailers that fail to reinvest in their brand or adapt to new market conditions may face bankruptcy or complete portfolio closures. The retail industry is now focusing on creating experiential brick-and-mortar stores to provide unique in-store experiences that cannot be replicated online.
Exploratory talks of selling ABC network and TV stations
Walt Disney has reportedly engaged in exploratory talks to sell its ABC network and TV stations to local broadcaster Nexstar Media Group. Disney is considering the sale as it reevaluates its business model in the face of changing market dynamics and the rise of streaming platforms. The potential deal could pose antitrust concerns and faces regulatory scrutiny. This move by Disney reflects the ongoing transformation in the media industry, with traditional media companies exploring new partnerships and business strategies to adapt to the evolving landscape.
China's Economic and Geopolitical Risks
In this podcast episode, the focus is on the economic and geopolitical risks posed by China. The guest, Jim Chainos, discusses his concerns about China's property market, dismal economic recovery post-COVID, and its various geopolitical squabbles with the United States. He highlights the shift in risks from purely financial to political and national security. Chainos also emphasizes the potential threat of a military incident in the South China Sea, rather than a premeditated attack. Overall, he expresses a pessimistic view on China and mentions being short on China for years.
Opportunities in Distressed Investing and the Rise of Fraud
In this part of the podcast, George Schultze, founder of Schultze Asset Management, discusses opportunities in distressed investing and the prevalence of fraud in the financial markets. He highlights the potential for increased distress as interest rates rise and the size of outstanding debt leads to a normal default cycle. Schultze suggests short selling overleveraged companies and sees value in certain companies that have already undergone restructuring. He also shares insights on the grayscale Bitcoin trust and the potential unlocking of value as it seeks to convert into an ETF. Lastly, Schultze discusses the accounting practices of companies and the prevalence of adjusted earnings, calling it the 'golden age of fraud.'
Anjee Solanki, National Director of U.S. Retail at Colliers, shares her thoughts on US retail sales that showed signs of slowing in August as consumers limited their discretionary spending amid higher gasoline prices. Bloomberg News Entertainment Reporter Chris Palmeri and Bloomberg Wall Street Week Host David Westin break the news that Disney is considering selling ABC to Nexstar. Jim Chanos, Founder and President of Chanos & Company, discusses his investment outlook and thoughts on China. Paula Vissing, President of Global Retail at Little Caesars, talks about the business of being the official pizza sponsor of the NFL. And we Drive to the Close with George Schultze, Founder and CEO of Schultze Asset Management. Hosts: Tim Stenovec and Simone Foxman. Producer: Paul Brennan.