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Not everyone can become a top journalist.
I was reminded of this while speaking with Alan Sloan, a seven-time winner of the Gerald Loeb Award (the highest honor given to a business journalist), on the Opening Bid podcast this week. Sloan, who has been in this crazy job for more than 50 years, was recalling an intense phone call he had with Donald J. Trump, who was then a New York real estate developer.
Other stories he told include the tough questions he asked bombastic CEOs and the thorough investigations he conducted into companies to uncover the truth for investors.
Listening to Sloan reaffirmed (or at least partially explains) why I approach everything I do in this field with the feeling that it could all be taken away from me tomorrow. At the same time, the conversation was further evidence that if I want to excel, I have to do far more than my competitors who sit at similar desks across town or across the country.
And being able to call a source in the middle of the night, send one important email at 3am, or take one more meeting at the bar after a long day can pay off in big ways.
These behind-the-scenes efforts tend to pay off at key economic and market moments. For example, I’ve been talking to leaders of public companies and top investors at major banks this coming earnings season.
Now, several months after Election Day, the chat has a different feel.
Some of the posts discuss the state of consumers with a lack of confidence, while others directly address concerns about the run-up to the election and the policies that will affect earnings beyond 2025.
This is information I learned by talking to a lot of people, just like OG journalists like Sloan have been doing for years.
Otis CEO Judy Marks
Elevator maker Otis (OTIS) didn’t report a strong quarterly report this week, but instead issued a warning about Chinese demand.
Marks, who also sits on the board of directors for dump truck maker Caterpillar (CAT), shared his thoughts on possible new tariffs proposed by President Trump. You can watch the full interview in the video above.
“I think tariffs impact the American economy. They impact Americans regardless of what they buy. We’ve seen tariffs continue to go up no matter which party wins. We need a conducive environment for growth where we, as multinational companies, can operate in a quality trade environment that everyone can understand.”
“When we are able to compete abroad, it drives more economic growth and jobs here in the United States, across all industries. Trade wars and tariff wars are not in the interest of the American economy or the American people.”
Whirlpool CEO Mark Bitzer
Whirlpool (WHR) also had a tough quarter, weighed down by a weak U.S. housing market, and after speaking with Bitzer, he didn’t think Whirlpool’s U.S. business would turn around this year, even if the Fed cuts interest rates in the fall.
Bitzer declined to comment on whether European industrial giant Bosch has expressed interest in buying the company, as recently reported.
“As we’ve said internally, interest rates don’t impact demographics or the age of the housing stock, which is the highest it’s been in my career.”
“The demographic trends are strong. Interest rates, mortgage rates and the famous lock-in effect that many consumers experience are holding everything back. But I would be cautious. One rate cut is not going to unfreeze the market. I think it’s going to take several steps. We’re going to need mortgage rates in the 5% range to really pick up steam.”
General Motors CFO Paul Jacobson
Unlike the other two, General Motors (GM) had a very strong quarter, and I would argue it was significantly better than Elon Musk’s Tesla (TSLA).
With EVs undoubtedly becoming a politicized issue during the presidential election, Jacobson said the company is trying to “transcend” the political arena.
But GM acknowledged it has benefited from the Biden administration’s efforts to promote domestic EVs, from building a charging network to offering a $7,500 tax credit to EV buyers. It’s unclear how that will change under a Trump-led White House.
“I think we’ve obviously benefited from the jobs stimulus and the industry creation, we’ve created thousands of jobs in battery cell factories, module assembly and so on. And these are good, strong union jobs by American workers. So we’re going to continue to invest. We’re going to be in this for the long term because we think this is a consumer choice.”
American Express CEO Steven Squeri
American Express (AXP) continues to feel the pull of younger consumers who are willing to pay higher fees to become cardholders, in part because it’s added more perks (like these new perks reported by Yahoo Finance’s personal finance team).
That was likely enough to prompt AmEx to raise its full-year earnings outlook despite signs of consumer caution, and it’s also boosting its full-year marketing budget by $800 million.
I asked Squeri if he was being more cautious in the second half of the year.
“If we had acted more cautiously, we would not have raised our guidance. We would not have increased our marketing or anything like that. I think the key point here is the Fed is going to do what they’re probably going to do in September. They definitely aren’t going to raise rates, they’re probably going to cut them. There will be more cuts by the end of the year. I think that will bolster consumer confidence. No one knows what’s going to happen with the November election, but the fact is, this company has been around for 174 years and has had 30 presidents. It will get through whatever it needs to.”
Chipotle CFO Jack Hartung
Hartung is soon to retire from Chipotle (CMG) after 23 successful years as CFO, and few have done it better.
But before he leaves office, Hartung pointed out some challenges on the company’s earnings call this week, with one that stood out to me in particular: the company’s resistance to rising prices after California raised its minimum wage for food workers.
Chipotle isn’t used to making price pushbacks.
Hartung said:
“When we raised wages by almost 20 percent, we had to raise prices by 6.5 percent to 7 percent. And what we saw was not a lot of resistance. It’s not because a Chipotle burrito is a little more expensive. There’s been a real decline in spending across the restaurant industry. And when we looked at restaurant companies that raised prices very, very high, [in California] The impact on sales was largely consistent with what we’ve seen: Restaurants that didn’t increase prices also saw sales decline.
Basically, everything is becoming more expensive. Customers are generally eating out less.”
Morgan Stanley Chief Investment Officer Mike Wilson
Wilson runs a large team at Morgan Stanley and speaks to some of the most influential investors in the world. He has a long history of making spot-on predictions (including predicting a bear market in 2022) and is one of the most widely followed strategists on Wall Street.
With tech stocks coming under renewed pressure this week, it was interesting to hear what Wilson had to say about valuing AI stocks in the opening bid.
“AI is sucking all the oxygen out of the room, but I think we’re now entering a dangerous stage where we need to look at it in numbers. Outside of the numbers, AI is everywhere. It’s not really boosting revenue and profits anywhere, except for a few companies where it’s obviously had a dramatic effect.”
Learn more about AI trading here.
Three times each week, I have insightful conversations with some of the biggest names in business. Starting BidOther episodes include Video Hub. View Your favorite streaming servicesor Apple Podcasts, Spotifyor wherever you can find your favorite podcasts.
Speaking of AI, in the Opening Bid episode below, veteran tech investor Eric Jackson of EMJ Capital explains why he thinks Nvidia’s (NVDA) valuation could double by the end of the year.
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