Daybreak Holiday: Black Friday Sales, Markets, Bitcoin and Antitrust

0:01Happy Thanksgiving, everybody, and thank you for joining us on this special edition of Bloomberg Daybreak. U.S. markets are closed for the holiday. I'm Nathan Hager. Coming up this hour, it's been a volatile November for both the stock and cryptocurrency markets. We'll look at what's in store for the rest of this year and into 2026 with Scott Martin, Chief Investment Officer of Kingsview Wealth Management, and Bloomberg Intelligence Senior Commodity Strategist Mike McGlone. Plus, we'll update you on the latest antitrust battles facing high tech with Bloomberg Intelligence Senior Litigation Analyst Jennifer Rhee.

0:35But first, we are entering one of the busiest and most important times of year for retail. How are things shaping up as we get set for Black Friday and the countdown to the holidays? Let's ask a couple of our senior analysts in the retail space, Poonam Goyle and Lindsay Dutch of Bloomberg Intelligence. Happy holidays to both of you. And I think I saw a report going into this conversation from the National Retail Federation. They're predicting that holiday spending, I think, could pass a trillion dollars this year. Poonam, I'll start with you. Do you see those kind of levels from consumers? Yes, absolutely.

1:08The consumer has been quite resilient all year, to our surprise, despite the tariff headwinds. And we do think that spending will continue into Thanksgiving weekend, especially and then into December. But that said, spending will be selective. Shoppers are conscious, price conscious, more notably, and they are spending where they find the product that they are looking for. Lindsay, let's bring you in. what are you seeing in terms of consumer behavior and where they could be spending as we head into the holidays? Yes, I would agree. I think we're seeing resilience, especially coming from that higher income consumer, while the lower income consumer might be pulling back just a drop when we compare that year over year.

1:53But as Puna mentioned, you know, we do see growth coming into the season. And although there is a focus on value and price, consumers are splurging on things that they really want or that they need. So for a Best Buy, for example, we see strength in gaming, computing, phones, and a Dick's Sporting Goods. We see strength continuing on both footwear and apparel for sort of those new trendy sports items. Now, Putum, I know you cover a lot of apparel retailers as well in your focus at Bloomberg Intelligence. How are some of those companies set up for the holidays? I think they're set up quite nicely.

2:33I think the product, there's a lot of fashion. There's a lot of newness. In fact, we ran a sneaker survey just earlier this month. And what we found is that people want to buy sneakers for the holidays. So sneakers are a top category. Other top categories based on surveys we've seen are apparel, home, and as Lindsay said, electronics. So these are still the top categories in addition to, of course, toys where people will be spending their dollars this holiday. Interesting to bring toys in as well, given some of the tariff headwinds those types of products could be facing, not just in the holidays, but into next year as well.

3:11Could we be seeing tariff headwinds for retail going into next year, Lindsay? Yes. So the toy backdrop this year is very different than most years prior. You know, typically we see big retailers like a Walmart or a Target. They're taking their holiday toy inventory in July, sort of the middle of the year. This year, we saw a significant delay in those orders. They kind of fell into the fourth quarter. So there was a delay. and they also were taking on smaller shipments than historically they've done, thinking that they might replenish some product with domestic shipments in that holiday season.

3:51So there's a lot of uncertainty heading into 2026 for the toy makers and that sort of category as a whole. Just because we saw such a significant delay, we don't really know where demand is. And if we look at 2025 as a whole, really most of the demand has not been driven by kids' toys. It's really been driven by adults, their interest in trading cards, collectibles, and building sets. And the holiday is quite different with a focus on kids. We're speaking with Lindsay Dutch, a senior retail analyst at Bloomberg Intelligence, along with Poonam Goyle, also a senior retail analyst at Bloomberg Intelligence.

4:29Going into the holidays, of course, a lot of customers are thinking about deals going into Black Friday and beyond. How important, Poonam, is this weekend in particular for the retailers and what kind of deals are we seeing? This weekend is very important. It actually kicks off holiday despite all the deals we've been seeing prior to today. So I think deals will be prevalent. We don't expect steep, steep discounts. Like, you know, in the past, it's a years ago when there were inventory issues, we saw 50, 60, 70 % off at some times. I think we'll probably stay in the range of between 30 and 40 % off on average.

5:06That's what we saw last year. So I do expect discounts to be similar at most places. But you will have those doorbuster deals to get the shopper into the store. And we expect those to be there at Walmart and Target and some of these department stores where that is how they draw in customers. That said, today's Thanksgiving Day and stores are closed. So everyone is shopping, likely online and spending time with family. And online sales, we expect to still outpay store sales. That's an interesting return to trend to keep the stores closed on Thanksgiving. In past years, we've seen some of those doorbusters come Thanksgiving night.

5:44But, Lindsay, if we don't see the kinds of deep discounts that there have been in the past for the kickoff of holiday shopping season, And what could that mean for foot traffic? So we do still expect, you know, people to come out and shop. I agree with Poonam. I think the level of discounting might be similar to last year, but rolling out those discounts and having those special promotions is really the key to driving, you know, consumers to your store or to your website. And in thinking about foot traffic to stores, you know, Best Buy discussed that they are seeing a strong interest in in-store shopping coming from Gen Z.

6:24And we see that also in our coverage of Ulta Beauty. So that younger consumer, they like to go to the store. They like in-person shopping. And I think they'll be out for the weekend. That's an interesting point as well. Is that kind of a shift in trend in terms of shopper behavior overall, Poonam? The mall has become the new hangout spot. And especially the malls that are doing really well and have become entertainment hubs. So whether it's coming out, you know, last weekend aired Wicked, so there were a lot of teenagers in the mall, or if it's just going to a restaurant or with the new Dick's Sporting Goods at the mall that I went to was the House of Sports, a concept where there's entertainment built into it.

7:02That's what's attracting these younger people. In terms of the overall outlook for retail, we've gotten a lot of reports from the companies themselves from their earnings just heading into this weekend. Lindsay, based on what we've seen from the earnings reports so far, what does that tell us about what we could get into the holidays? I think the companies remain pretty conservative in how they're thinking about the fourth quarter. They don't want to get over their skis when they're thinking about, you know, what the sales might be. You know, we saw pretty, you know, low outlooks coming out of Best Buy, Dix, meaning a deceleration in same-source sales growth from the third quarter to the fourth quarter.

7:48I think that outlook, you know, is conservative. They're not really sure on the consumer. There is a lot of uncertainty still out there. But I think it does leave room for some surprises. You know, we have been seeing better than expected sales in the third quarter, a lot of that being driven by back to school, you know, from many retailers across the board. And I think there's definitely reason to be optimistic for a strong holiday season. If we're seeing those kind of conservative outlooks from the businesses, Poonam, does that point to sort of more of a difficulty for these companies to provide the kind of, you know, deep holiday discounts that they've been able to do in the past?

8:28Yeah, I think the conservative outlook stems from the uncertainty of just knowing where consumer behavior will be. But in terms of the deep discounts, don't get me wrong, there will be discounts. It's just you're not going to see the store, you know, at these deep discounts that we were used to seeing maybe even prior to the pandemic. And the reason why you won't see them is because inventory, as you could imagine, this year being a year with tariffs and levies added on to retailers, they didn't overbuy, right? So they've been very cautious in how they're buying inventory. And for a lot of them, inventory has been right-sized, which is what's been driving the healthier margin and the healthier sales and also healthier full price selling.

9:09You will find discounts. So Nike, for example, is still clearing out aged inventory. And a lot of the athleisure brands that are amiss to turn around, that's where you'll find inventory piles. But on old stuff, the new stuff, I think, will be fairly moderate levels. Lindsay, how do you see retailers weathering tariff impacts into next year? We've seen these companies kind of absorb the higher costs, at least in the short term, some front loading as well, as Poonam mentioned. But into 2026, what's your expectation there? So I do expect costs generally to continue rising, you know, into the next year, at least through the first half.

9:52So companies will be continuing with their mitigation strategies, whether that's, you know, continued movement in how they're sourcing products, where they're selling, the price points, all of those levers that they've been pulling sort of this year. I think that cost pressure could continue. But we have seen, as you mentioned, some resilience on the profit line across many retailers. And that is them passing some of those costs on or the costs haven't come quite to fruition to the levels that they were initially expecting. Also, you know, in some of the premium brands, like if you think about a Williams-Sonoma, for example, they are keeping discounts and promotions, even for the holiday season, very limited.

10:38And that does allow them to maintain such a strong margin, even when they're seeing some cost pickup. And, Poonam, how do you see some of the companies that you cover mitigating tariffs into 26? Yeah, I think so. There's two things that we have to think about when we think of 2026. First and the first half of the year, last year didn't have really tariff pressure, right? We were just speculating as what tariffs could be. So there is more pressure. But that said, the reason we've seen so much resilience, in my view, is because they're finding opportunities elsewhere. You know, when you think about artificial intelligence, generative AI, and how that's really helped streamline operations, create efficiencies, I think part of the reason they've been able to offset some of this pain in addition to supplier negotiations is because of the benefit that they're getting from AI.

11:25In our last minute, Lindsay, are there certain items that you think are going to find big competition from consumers sort of fighting each other to get into the stores to get under the tree this holiday season? You know, I think toys is typically a category where you might see something like that. When we looked at the toy lists coming out of Walmart, Target, and Amazon, those top toy lists, they look very similar to last year. So I don't know that there's a real hot item that you have to be at the door when they open to get or wait in line. Even Nintendo Switch, the inventory on that console is much greater than the original Nintendo Switch that was rolled out a couple years ago.

12:15So the inventory looks appropriate in that I don't think retailers are over inventory this season, but they have enough for the expected demand trends. All right. Well, happy holidays to both of you. Really appreciate you coming on with us. That's Poonam Goyle and Lindsay Dutch, senior retail analysts at Bloomberg Intelligence. And up next on this special Thanksgiving edition of Bloomberg Daybreak, is December going to bring any relief to stocks and crypto? We'll ask a couple experts in both those spaces as this holiday edition of Bloomberg Daybreak continues. I'm Nathan Hager, and this is Bloomberg.

13:00As markets move and headlines break, what matters most is context. A Bloomberg subscription gives you unmatched reporting, sharp analysis, and powerful tools that help you connect the dots. Visit Bloomberg.com slash podcast offer to learn more. Thanks for joining us on this special edition of Bloomberg Daybreak. U.S. markets are closed for the Thanksgiving holiday. I'm Nathan Hager. Well, after soaring from the spring into the fall, the stock market kind of took a breather this month. The S &P 500 is on track for its first monthly decline in seven. So is there more pain ahead, or could this be a buying opportunity?

13:40Let's ask Scott Martin. He's the chief investment officer at Kingsview Wealth Management. Happy holiday to you, Scott. I think we all remember what happened seven months ago, the April tariff announcement. We did get the bounce back since then. Can we be set up for a repeat of that this time around? Yes, it seems a little similar, actually, Nathan. And as we approach the holidays, I'm certainly in a little bit more of a... The market's been a little bit more of a giving mood, let's say, with regards to a give back in prices. And so I believe that this is going to be one of those stress points, again, that we did experience earlier this year where markets feel broken.

14:09They feel like they're focusing on the bad versus the good. And we're seeing that price action mostly across tech and but also across some other areas of the market that have been bled into by the liquidations that happened. So I think similar to what's gone on in April and even May this year, we're starting to have some of those weak hands get out of the market, those weak hands get out of those areas where there has been a little bit of froth. And so I think those weak hands are going to get out and allow these stronger hands to come in where you, the investor, could come in and find price levels that are a little bit more attractive than they were just a couple of months ago.

14:38And that's an opportunity for us to reallocate, rebalance, and get ready for next year as things go up again, in our opinion. Okay. Well, I'm going to go ahead and play devil's advocate here just a little bit because there is this debate in the market about whether the artificial intelligence names, the mega caps, have gotten too stretched in terms of their valuations. Is it just froth, or could there be more to give back here? I think there's probably some more to give back, certainly, because the markets have shown that as they get extended to the upside, as we get frothy, the markets also get too scared.

15:10They get too frightened, let's say. And so I think that's going to be the essence of what the market is. As investors ourselves, we have to remember that not only are markets nonlinear, they're also very emotionally driven. And so when fundamentals kind of get thrown out the window here with regards to both on the upside and downside, that creates opportunity for us. And so while we look longer term here, and that's beyond obviously five days, 10 days, or 30 days, we tend to look at these price levels and these price action as opportunities, as points where investors who really like the space, who really like the tech space, who really like the AI space, if it's servers, if it's AI, if it's areas in the market that have really been strong and really shown, as we saw with NVIDIA earlier in November, that really have the earnings and they really have the potential to deliver what I believe the market expects when it comes to profits, for example.

15:55I think there's a long-term story here in that space, or in the tech space especially, which has been hit reasonably hard in the last, say, several weeks. There's opportunities there for investors to take a stake here and say that, yes, things could be a little bit more volatile in the next month or two. But overall, the next, say, six to 12 months, it's our opinion that the prices will again rebound and they will go higher. Is it going to be an opportunity across the tech space, or do you think it's going to be like a stock picker's market in terms of what we see in tech? That's a great question.

16:21I think we've seen from the price action so far, Nathan, then it's going to probably be more of a stock picker's market in the sense of some of the tech has been doing okay. If you look at some of the Googles of the world, and even NVIDIA until most recently, and even Oracle until most recently, there has been strength. And so if you look at some of the names that maybe have relatively stayed stable or relatively been maybe against some of the big moves in tech in general, those would be areas that I think you could find some strength. But then again, if you look at the Corbys, for example, if you look at, say, AMD, those are areas that have come on with additional punishment that, in our opinion, looks a little bit overdone.

16:54So when you pick the stocks here and you look at some of the names that have been, say, irreparably punished, I think those are areas where investors can find some of the most upside going forward, because those are companies, too, that are getting, say, unduly punished because of this liquidation. And therefore, that's probably where most of the upside exists. Is there too much focus on the tech sector right now? Do you see any opportunities for either broadening in the stock market or a rotation at a tech? We do. I think the rotation of the tech, depending on how long it lasts, will obviously spread itself into different areas.

17:26We're already seeing that in, say, financials. We're seeing that in pharmaceuticals. My goodness, health care, which was a dead space for the last couple of years, has come on very strong. Utilities, what I'd like to call a very boring sector, have stepped up very well. So, yes, as the tech, let's say, tech malaise spreads through the rest of the year here, I think you're going to see those areas step up and take leadership. But as we've seen in the past, David, the real story here, though, and the real story for growth and the real story for investors that want that long-term appreciation, that still remains intact.

17:54If you just look over history, if you look at the healthcare space, if you look at pharmaceuticals, if you look at utilities, telecom, in fact, too, those areas have stepped up in times when there has been this general pullback area, this general pullback attitude in the marketplace. But the reality is that over the long term, it's tech that's going to provide that long-term growth potential. And so while tech does stay weak here, say, in the next short-term period, there's going to be that long-term appreciation, in fact, that will rebound and will reward investors that take a stake in some of these names.

18:22So is it going to be about a return to a fundamental thesis here, the idea of fundamentals coming back into play, or is there going to be the need for the Fed to support this market? That's the greatest question that we're all waiting for, is that we have a Fed meeting coming up in December. And in my opinion, I've been one of those that's been out there saying the Fed should not have cut rates the last two times, in fact. And so I believe the Fed is definitely being relied upon by the markets, by certainly the administration, to come in and say, quote-unquote, as you use the word, save this market.

18:53And it's funny to think about that because if you line that up with a fundamental story that you initiated there, what really is the Fed doing here? Because, yes, there's been some forced liquidation here. There's been some concerns of late about bank credit, about private credit and things like that being way too extended. And certainly interest rates being too high, I guess. But then again, we still have inflation that has not changed considerably. We have inflation that's around or about 3 percent plus. We're supposed to get to 2 percent. Never got there. That was the target of the Federal Reserve and Jerome Powell's commentary.

19:22We also have GDP growth now, Nathan. That's certainly above where it was some months ago when the Fed was concerned about cutting rates to help support the economy. GDP growth for our projections for both Q4 and some of the first parts of Q1 and Q2 for 2026. Looks like it's going to be in the range of 3.5 to 4 percent. And so job growth obviously being recently strong as we put a little pause on the job numbers over the last couple of months we started to see those come in. It's our opinion that the economy is strong enough for the Fed not to cut rates, actually. And so the Fed is going to probably have to be this red herring, if you will, or this savior in the face of this emotional investment period where I don't think that's necessary really for the Fed to do that.

20:02And so I think actually what's going to end up happening is whether the Fed cuts or not in December, that's not going to be a big, I guess, pattern shifter, if you will, for our sake of things as investors ourselves. But it is something that if the Fed does not cut, that could be taken poorly by the market. But I believe overall and longer term, that's the right move for the Fed is to step back, let the economy breathe a little bit, let everybody kind of calm down. And then therefore, we can be at a period where going forward, I think there's going to be a reason for the Fed possibly to cut some other time, but certainly not now.

20:29Interesting view on where things could go in terms of policy. Thank you for this, Scott. Great you having me on with us. Thank you very much. That's Scott Martin, Chief Investment Officer at Kingsview Wealth Management. Even harder hit than stocks this month have been cryptocurrencies. Bitcoin has plummeted from its high of$125 ,000 back just a little more than a month ago in early October. So let's look at what might be ahead. We're pleased to welcome Bloomberg Intelligence Senior Commodity Strategist Mike McGlone. And I say might be ahead, Mike, because it really is hard to predict what's going to happen with Bitcoin.

21:02I've got to think it's tough for you as well, is it? It certainly is, but sometimes it's best to be a contrarian and sometimes it's good to go with the flow. One mistake I did last year as I jumped on the contrarian battle and passed, I think, a little bit too early. But now I think that's working in the right way. Bitcoin just got way too expensive. of it laid in all the signs of a classic bull market peak with the president's flip and then all the ETF inflows and everything. And now, look, I think we've put in a pretty enduring peak. A key thing was breaking back down below 100 ,000 and then back down in the year, which is around 94 ,000.

21:37And now it's hovering below that level. And I think Bitcoin is just a good indication of a way overdue bull market that's correcting. And it could easily go back to 50 ,000, which is still my base case. Wow. What makes you think it could get down that low from the current levels that we're seeing right now? On the annual charts, certainly going back to 2021, 50 ,000 has been a key pivot. It looks like it can easily go back there. And the key thing is what has been happening is Bitcoin usually doesn't bottom until stock market volatility also peaks. And stock market volatility is just buried. It's running very low.

22:10If it ends the year at a current level around 11%. It'll be the lowest year end since 2017. And Bitcoin is basically the opposite of VIX in stock market volatility. So to me, that's the key risk. It goes back there. What can get it to sustain back above 100 ,000? I don't know, but it has to start with a higher stock market. I think the key risk is Bitcoin's warning us ahead of time that we are way overdue for the third down year for the stock market since 2008. We haven't had that. But every time we've had down years, there's only been two, 2018, 2022. That's coincided with the Bitcoin to gold ratio breaking down like it has so far this year.

22:45We've seen the correlation sort of breakdown as well between Bitcoin and what the stock market's been doing. We've seen this pretty steady decline in Bitcoin, despite some of the fluctuations that we've seen in the equity space. What do you think is behind that breakdown? The key thing, I think, is we just reached a pretty significant peak in cryptos. The bottom line is a lot of crypto people will tell you that Bitcoin is different from the other ones, but I'd like to point out in 2009, there was one cryptocurrency. And now on CoinMarketCap, there's listed 27 million. Now, most of those don't matter, but the bottom line is most of those have billions of dollars tracking them, and they basically really track nothing.

23:24So I think what we're doing is finally seeing the purge of excesses of a bull market. So are you thinking that we might not see the peak that we saw just a little over a month ago? I mean, we've had some analysts that we've heard from saying that they see Bitcoin getting as high as 200 ,000. Are you just out of that camp? Definitely. Well, those are the kind of things you see near peaks. What I'm looking forward to is every single time we've reached lows, I hear people calling for zero. No, haven't seen those yet. But when we initially dropped to around 100 ,000, my first take for 2026 was 50 or 150.

23:57And I stick with 150. That could happen this year. It's just normally how it does. Remember, this is a high spectrum of digital asset with unlimited competition. Now, Bitcoin is supposed to have a definable diminishing supply, but there's unlimited competition of other cryptocurrencies out there. And that's what we're finding out. So one good example is also look at Ethereum. Ethereum is running, has been trading between 2 ,000 and 4 ,000 for almost five years. And it's probably heading towards the other end, up the lower end of the range. So I think that's the key thing to remember. These are not even commodities.