Stocks Hit by Rout in Chipmakers, Oil Soars | The Close 3/5/2026

0:11 ROMAINE: FINANCIAL MARKETS TAKING THEIR CUES FROM THE ENERGY SECTOR AS THE U.S. WAR WITH IRAN CONTINUES TO ESCALATE. LIVE AT BLOOMBERG HEADQUARTERS IN NEW YORK, I'M ROMAINE BOSTICK. KATIE: I'M KATIE GREIFELD. HERE IN THE U.S., S&P 500, NOT QUITE AT SESSION LOWS. BUT PRETTY CLOSE. DOWN 1.2%. A LOT OF THE PAIN TRADE COMING THROUGH WHEN IT COMES TO THE CHIPMAKERS. THE CHIP STOCKS IN GENERAL, PHILADELPHIA SEMICONDUCTOR INDEX, DOWN 2.7%. BLOOMBERG BROKE THE NEWS EARLIER TODAY THAT THE U.S. IS CONSIDERING REQUIRING PERMITS FOR SALES OF CHIPS FROM THE LIKES OF NVIDIA, AMD. YOU CAN SEE THE REACTION IN MARKETS. NOT SENDING A HAVEN BID INTO THE U.S. BOND MARKET.

0:58 10 YEAR TREASURY YIELDS HIGHER BY FIVE BASIS POINTS. WE ARE BACK ABOVE 410. ALL OF THE SENDING VOLATILITY THROUGH THE EQUITY MARKET, AS MEASURED BY THE VIX. WE ARE BACK TRADING WITH A 25 HANDLE. ROMAINE: KEEP A CLOSE EYE ON THE S&P 500. WE WILL TRY TO SEE IF THE DIP BUYERS ARE WILLING TO COME BACK IN IN THIS FINAL HOUR OF TRADING. IT'S NOT -- NOT LOOKING GOOD. CONTINUING TO PUT UPWARD PRESSURE ON OIL AND GAS PRICES. WTI CLOSING ABOVE $81 A BARREL. THAT IS PUTTING UPWARD PRESSURE ON GOVERNMENT BOND YIELDS, PUTTING DOWNWARD PRESSURE ON EQUITIES. VOLATILITY COMPLICATING THE ECONOMIC PICTURE, AND COMPLETE HITTING THE CALCULUS FOR THE FED. >> I'M WATCHING PRICES AT THE PUMP. THEY HAVE JUMPED UP OVER THE LAST WEEK.

1:44 YOU CAN SEE THAT WHEN YOU DRIVE AROUND. OF COURSE, NO ONE KNOWS WHETHER THIS WILL BE SHORT-TERM OR LONG-TERM. WE WILL SEE WHERE IT GOES. ROMAINE: THE ECONOMIC DATA NUMBERS ARE LARGELY COLLECTED BEFORE THE OUTBREAK OF THE WAR. THAT IS STILL POINTING TO STABILITY. THERE IS A MONTHLY REPORT FROM THE GOVERNMENT DUE TO TO -- DUE TOMORROW THAT IS EXPECTED TO SHOW TEPID JOB GROWTH IN FEBRUARY. MANY ECONOMISTS ATTRIBUTING THE LIKELY WEAK PRINT TO TEMPORARY FACTORS LIKE LABOR STRIKES AND BAD WEATHER. FOR NOW, KEEP AN EYE ON TRAVEL STOCKS. THEY BEAR THE MOST SEVERE BRUNT OF THE EQUITY SELLOFF. HILTON DOWN A SECOND DAY. UNITED AIRLINES DOWN A FIFTH. NORWEGIAN CRUISE HEADED TOWARD ITS WORST WEEK SINCE LAST APRIL. KEEP AN EYE ON APPAREL IMPORTERS AS A COUPLE OF WHICH HAVE CITED SUPPLY CHAIN DISRUPTIONS, AND ADJUSTED -- IN

2:32 ONE HOUR, WE WILL HEAR FROM CAP, SET TO RETURN -- TO REPORT EARNINGS. KATIE: BREAKING DOWNKATIE: THOSE NUMBERS ON "THE CLOSE." LET'S LOOK AT WHAT WE ARE SEEING WHEN IT COMES TO THE S&P 500. IT HAS BEEN THE DARLING OF THIS MARKET. THE LARGE-CAP, OR THE MARKET CAP, HAS GONE NOWHERE OVER THE PAST FEW MONTHS. YOU CAN SEE OVER THAT TIME, THE S&P EQUAL WEIGHT HAS BUILT A NICE RALLY. THEN YOU TAKE A LOOK AT THE PAST FIVE DAYS. THAT IS THAT BAR THERE IN THE BOTTOM. THE PAST FIVE DAYS, THE BIGGEST DROP WE HAVE SEEN ON A ROLLING BASIS SINCE NOVEMBER. THAT ROTATION TRADE THAT HAS BENEFITED THE EQUAL WEIGHT AND EVEN SOME OF THE SMALL CAPS, STARTING TO TURN HERE AS WE DIGEST WHAT WE SEE ON THE GEOPOLITICAL FRONT, AND WHAT GOT HAS MEANT FOR THE BOND

3:18 MARKET. RATES HAVE BEEN SENT HIGHER. THAT HAS NOT BEEN GOOD NEWS FOR THIS BROADENING OUT TRADE. ROMAINE: INTERESTING TO SEE THE CORRELATION PICKUP. OUR GUESTS JOIN THOSE HERE, HEAD OF U.S. EQUITY STRATEGY AND GLOBAL EQUITY LINKED STRATEGIES AT BARCLAYS. GREAT TO SEE YOU AGAIN. WE HAVE GONE THROUGH GEOPOLITICAL ISSUES FROM TIME TO TIME IN THE PAST. THE GENERAL NARRATIVE, HISTORICALLY, HAS BEEN THE READTHROUGH -- THE FEEDTHROUGH INTO EQUITIES USUALLY DOES NOT MATTER LONGER-TERM. THAT WE GET THE KNEE-JERK REACTIONS BUT EVENTUALLY THINGS SORT OUT. IS THERE ANY REASON TO THINK THIS TIME WOULD BE DIFFERENT? >> I THINK SO. I THINK THE RISK IS LIKELY HIGHER. WHAT YOU PAINTED AS THE HISTORICAL EXPERIENCE IN THE LAST FIVE OR SIX YEARS.

4:05 MOST OF THE CONFLICT HAVE BEEN CONTAINED GEOGRAPHICALLY. I THINK WHAT IS DIFFERENT ABOUT THIS CONFLICT IS IT HAS EXPANDED BEYOND THE VERY NARROW TARGET. IT'S DIFFICULT TO SAY WHETHER IT EXPANDS OR NOT. BECAUSE THE EXISTING REGIME AND IRAN IS ALREADY WEAK. AND IT IS RELATIVELY ONE-SIDED AND TERMS OF WHAT'S HAPPENING. I THINK THE RISK THAT SPREADS MORE AFFECTS THE OIL MARKETS, AT LEAST IN TERMS OF WHAT'S GOING ON. DOES IT CREATE THIS RISK? WHICH IS NOT BEING PRICED WITH THE MARKET. THE MARKET IS BEHAVING AS OF THIS IS GOING TO BE A CONTAINED AND VERY NORMALIZED. ROMAINE: IT'S INTERESTING, TODAY IS DIFFERENT BUT THE LAST COUPLE OF DAYS, YOU SEE PEOPLE START TO BUY THE DIP. IT'S INTERESTING TO SEE THE

4:52 DIRECT CORRELATION ON THE BLOOMBERG SCREEN BETWEEN WHAT KATIE WAS POINTING OUT. AS WE SEE ENERGY PRICES DRIFT HIRE -- HIGHER, THAT MEANS WE SEE A DROP IN STOCKS. WHAT DOES THAT TELL US? VENU: YOU HAVE TO WATCH OIL RIGHT NOW. ALREADY, THE RATES MARKET IS REPRICING THE CUTS OF THIS YEAR. ALREADY, THE CONCERN IS ABOUT THE REFLATIONARY IMPACT, WHILE THERE IS CONSTRUCTION ON INFLATION. THAT IS THAT RISK AS WELL. EVEN IF YOU LOOK AT OIL PRICES, THE REASON WHY IT IS MIXED IS BECAUSE THE OUTPERFORMANCE OF THE OIL SECTOR IS A LITTLE EXTENDED. FUNDAMENTALLY, IT IS DIFFICULT TO JUSTIFY WHERE THE OIL PRICES ARE RIGHT NOW.

5:38 IF YOU LOOK AT THE HISTORICAL RELATIONSHIP BETWEEN WHERE THE WTI AND OIL PRICES VERSUS WHERE PRICES ARE, IT IS ALREADY FACTORING IN 00 OIL PRICE. WHICH IS A STRETCH AT THIS POINT WHERE WE ARE CLOSER TO 80. SIMILARLY, OIL VALUATIONS ARE EXTENDED. UNLESS YOU THINK THE REAL PRICES HIGHER WHICH MEANS GREATER EARNINGS. BASED ON WHAT WE KNOW TODAY, VALUATIONS HAVE BECOME EXTENDED FOR THE ENERGY SECTOR. THERE IS A REAL RISK. KATIE: ONE OF THE HEADLINES WE GOT TODAY IN THE BLOOMBERG TERMINAL, WHEN YOU LOOK AT U.S. OIL WHERE IT IS PRICING $80 A BARREL FOR THE FIRST TIME SINCE JANUARY 2025. THEN THERE IS WHAT IS GOING ON WITH BRENT. WHERE DOES THIS LEAVE ENERGY EQUITIES? FOR A LOT OF FOLKS, THE KNEE-JERK REACTION WAS OK, I'M GOING TO BUY ENERGY STOCKS. SOUNDS LIKE WHAT YOU ARE SAYING

6:27 WHEN IT COMES TO THE ACTUAL UNDERLYING MARKET, WHAT'S GOING ON WITH OIL, MAYBE THAT IS NOT NECESSARILY THE TRADE GOING FORWARD. VENU: I THINK THE CHALLENGE -- WE MADE IT CLEAR IN THIS RESEARCH THAT ON ONE HAND, WE ARE CONFIDENT WHEN WE SAY THAT THEY ARE OUT RUNNING FUNDAMENTALS, THE ENERGY PIER 1'S AWFUL -- ALSO DIFFICULT IS -- THE ENERGY SECTOR HAS SEEN SIGNIFICANT OUTFLOWS OF CASH. MORE RECENTLY IN THE LAST EIGHT WEEKS, WE HAVE HAD THE STRONGEST INFLOWS IN QUITE SOME TIME. IF YOU LOOK AT THE OUTFLOWS, THAT IS WHAT HAS COME IN. AND ROOM TO CATCH UP. THAT'S WHY TO THE EXTENT THAT THE MONEY KEEPS GRAVITATING TOWARD THE SECTOR, WHOSE WEIGHT HAS COLLAPSED IN THE S&P TO LOW

7:13 LEVELS, IN THE 3% RANGE, IT'S DIFFICULT TO STICK TO FIND MENTAL ARGUMENTS WHICH SAYS IT IS OVER SHORT, TO THE EXPECTATION THAT OIL REMAINS HIGH FOR A SUSTAINED TIME. WHICH IS POSSIBLE, IF THIS CONFLICT EXTENDS SIGNIFICANTLY. BUT WE DON'T KNOW. KATIE: I DO WANT TO TALK ABOUT WHAT THIS MEANS FOR THE REST OF THE WORLD. BUT SPECIFICALLY EUROPE. THE CONVERSATIONS ROMAINE AND I HAVE HAD THIS WEEK IS THIS CONFLICT WE SEE IN THE MIDDLE EAST, WHAT'S HAPPENING WITH THESE ENERGY PRICES, WILL BE MORE ACUTELY FELT IN EUROPE RELATIVE TO THE UNITED STATES. YOU PUT THAT IN THE CONTEXT OF THE FACT THAT EUROPEAN STOCKS OVER VARYING TIME PERIODS HAVE BEEN OUTPERFORMING U.S. EQUITIES. COULD THIS EPISODE THROW A WRENCH IN THAT? VENU: ABSOLUTELY. THAT IS THE TRADE WE RECOMMENDED THIS WEEK.

8:03 BOTH IN THE CASH MARKETS, WHICH FROM MY STRATEGY PERSPECTIVE -- THE U.S. MEMBER IS A EXPORTER OF OIL. GEOGRAPHICALLY AND IN TERMS OF THE DEPENDENCE ON OIL AND GAS. IT IS EXACTLY THE OPPOSITE FOR EUROPE. NOT ONLY HAS ECONOMIC GROWTH BEEN WEAKER THAN THE U.S., THEY ARE MORE DEPENDENT ON OIL AND GAS. GAS, THEY MOVED AWAY FROM THEIR DEPENDENCY ON RUSSIA, TO A GREATER DEPENDENCY ON THE MIDDLE EAST. WE ABSOLUTELY AGREE. WE HAVE MANY WAYS TO EXPRESS IT. YOU EXPRESS IT IN THE DELIVERANCE MARKET BY PROTECTION. ESPECIALLY IN EUROPE. IT IS INTERESTING IF YOU LOOK AT VALUATIONS, WHAT HAS

8:49 HAPPENED SO FAR THIS YEAR, U.S. RIGHT NOW LOOKS MORE ATTRACTIVE. ON A FIVE-YEAR LOOK BACK BASIS, THE U.S. RIGHT NOW IS TRADING AT THE 57%. EUROPE IS IN THE 90TH PERCENTILE. THAT TELLS YOU THE VALUATION ARGUMENT, WHICH IS WHAT HELPED TO EUROPE FORM FOR THE LAST YEAR OR SO HAS DISSIPATED. ROMAINE: VENU KRISHNA VENU KRISHNA GREAT STUFF. , HEAD OF U.S. EQUITY STRATEGY AND GLOBAL EQUITY LINK STRATEGY AT BARCLAYS. A CLOSER LOOK AT THOSE ENERGY STOCKS. WHEN WE COME BACK, A DEEPER DIVE INTO THE ENERGY LANDSCAPE. EARNEST MONEY'S WILL BE JOINING US IN JUST A MINUTE. KATIE: THEN WE WILL PIVOT TO THE OTHER MARKET DRIVER. THE CHAIRMAN OF ALEX MILL, THE

9:35 FORMER CEO OF J. CREW, HE GIVES US THE BIRD I'S VIEW OF THE AMERICAN CONSUMER AND WHAT HE THINKS THE WINNING AND LOSING TRENDS ARE IN THE SECTOR. ROMAINE: AND A CONVERSATION WITH SCOTTIE PIPPEN, SENT TO AUCTION OFF A SLEW OF MEMORABILIA OVER AS OTHER BEES. DON'T MISS THAT CONVERSATION AND MORE COMING UP ON BLOOMBERG. KATIE: WE HAVE HAD A BIG WEEK OF ECONOMIC DATA. IT CULMINATES TOMORROW IN THE JOBS REPORT. ALSO RETAIL SALES FIGURES. IT LOOKS TO BE A STABILIZING ECONOMY HANGING IN THE BALANCE WITH WALL STREET ESTIMATING 55,000 JOB ADDITIONS IN FEBRUARY. LET'S DISCUSS WITH MARK ZANDI, CHIEF ECONOMIST AT MOODY'S ANALYTICS. LET'S START WITH THE JOBS

10:21 REPORT WE ARE GETTING AT 8:30 A.M. TOMORROW. YOU LOOK AT THE LABOR DATA WE HAVE GOTTEN SO FAR THIS WEEK, CLAIMS MOST RECENTLY COMING IN LIGHTER THAN EXPECTED. HOW DOES THAT SET US UP FOR TOMORROW'S REPORT? MARK: AS YOU SHOWED, THE CONSENSUS IS AROUND 50,000. THAT SOUNDS ABOUT RIGHT TO ME. A LOT OF CROSSCURRENTS HERE. I THINK THAT IS WHERE IT IS GOING TO LAND. 50 K WOULD BE CONSISTENT WITH THE GROWTH IN THE LABOR FORCE, MORE OR LESS. ABOUT ENOUGH JOBS TO MAKE SURE UNEMPLOYMENT REMAINS STABLE, 4.3% IS WHERE WE ARE. THAT IS PROBABLY WHERE IT STAYS. 50 K, PRETTY CLOSE TO ZERO. PRETTY UNCOMFORTABLE PLACE TO BE, PARTICULARLY GIVEN THE EFFECTS OF ARTIFICIAL INTELLIGENCE ARE STARTING TO HAVE -- TO COME ON IN TERMS OF PRODUCTIVITY GROWTH.

11:08 50K IS OK BUT IT'S NOT THAT GREAT, AND CERTAINLY NOT A PLACE YOU WANT TO STAY FOR VERY LONG. KATIE: IT'S INTERESTING HOW YOU PHRASE THAT. PRETTY MUCH ZERO. FEELS LIKE HE HAVE SEEN THIS LOW FIRE, LOW HIGHER FOR ALL WHILE. KIND OF DATA STANDSTILL. NOT GETTING THAT MUCH WORSE OR GETTING THAT MUCH BETTER. HOW DO YOU SEE THIS DEVELOPING AS WE HEAD INTO THE YEAR AHEAD, AND WHAT BREAKS US OUT OF THAT STANDSTILL TO EITHER DIRECTION? MARK: THE MOST LIKELY SCENARIO IS WE WILL GET JUICIER FROM FISCAL POLICY. DEFICIT FINANCED TO TAX CUTS AND SPENDING INCREASES. THAT, IN COMBINATION WITH THE JUICE FROM AI, THE INVESTMENT SPENDING, AND THE WEALTH

11:53 EFFECTS FROM HIGHER STOCK PRICES, IF THEY STAY IN. THAT SHOULD POWER GROWTH AND WE SHOULD GET A BIT OF A PICKUP IN JOB GROWTH HERE. A BE IF YOU TOLD ME THE AVERAGE MONTHLY JOB GROWTH IS CLOSER TO 75 K, THAT SOUNDS RIGHT TO ME. CAN'T SUPPORT MUCH STRONGER DROP -- JOB GROWTH AND THAT BECAUSE OF THE'S IN -- THE STRICT IMMIGRATION POLICY. WE CAN'T GET MUCH MORE THAN THAT. I DON'T SAY ANY OF THAT WITH ANY CONFIDENCE. IT FEELS VERY FRAGILE, TENUOUS TO ME. ALL OF THIS IS HAPPENING WITHOUT AI. THEN YOU HAVE ALL OF THESE OTHER UNCERTAINTIES, AND OBVIOUSLY THE MOST PRESSING IS WHAT IS GOING ON IN THE MIDDLE EAST. ROMAINE: WITH REGARDS TO AI AND THE FRAGILITY, THERE HAS BEEN A LOT OF TALK OF WHERE THE PRODUCTIVITY IMPROVEMENTS ARE.

12:40 WHETHER THAT COMES AT THE EXPENSE OF THE LABOR MARKET. A REPORT BY BLOOMBERG OF ORACLE, PLANNING TO CUT JOBS PRIMARILY BECAUSE OF THE ADDED COST FOR THE BUILDOUT. HOW MUCH VISIBILITY DO ECONOMISTS LIKE YOU EVEN HAVE WITH REGARDS TO WHAT THAT ACTUAL IMPACT WOULD BE? MARK: NOT A LOT. OBVIOUSLY THERE IS A BOATLOAD OF UNCERTAINTY. ONE OF THE INTERESTING THINGS ABOUT THIS IS ECONOMISTS, WHEN WE DO OUR FORECASTS AND LOOK TO THE FUTURE, WE LOOK AT HISTORY AND THE PAST. YOU LOOK AT THE HISTORY OF TECHNOLOGY, TECHNOLOGIES DIFFUSE RELATIVELY SLOWLY. . THEY ONLY GAIN TRACTION WHEN NEW COMPANIES FORM AND OPTIMIZE AROUND THE NEW TECHNOLOGY. TO SEE JOB LOSS IS A RESULT OF TECHNOLOGY BUT YOU ALLOW THE

13:26 REST OF THE ECONOMY TO CREATE OTHER JOBS, IT ON THAT OUT AND EVERYTHING IS OK. ECONOMISTS WANT TO GO WITH AI, BUT IT DOESN'T FEEL QUITE RIGHT IN THE CONTEXT OF HOW THIS IS COMING ON SO QUICKLY. IF YOU LISTEN TO THE FOLKS RUNNING THESE AI COMPANIES FOR A LITTLE BIT, LISTEN TO A COUPLE PODCASTS, LISTEN TO THE BLOOMBERG PODCAST WITH THESE AI FOLKS. IT MAKES YOU WONDER WHETHER HISTORY IS GOING TO BE A GOOD GUIDE TO THE FUTURE APPEARED WE HAVE TO BE PREPARED FOR DIFFERENT ALTERNATIVE SCENARIOS. I WOULDN'T BE AS CONCERNED IF WE WERE CREATING 200K JOBS PER MONTH WHICH IS WHAT WE WERE DOING A COUPLE YEARS AGO. WE ARE NOT CREATING ANY JOBS RIGHT NOW. ROMAINE: NOT EVEN IN THE REC CENTER. IF YOU GO BACK AND LOOK AT THE

14:11 INTERNET BOOM, THE COMPUTER WILL, THE INTERNET BOOM OF THE 90'S, THERE WAS TANGIBLE GROK -- TANGIBLE JOB GROWTH THAT WAS A DIRECT RESULT OF THAT. THAT'S NOT TO SAY THAT WON'T HAPPEN WITH THIS. BUT WE ARE NOT SEEING IT YET DESPITE THE MONEY THESE HYPERSCALERS ALONE HAVE COMMITTED TO THIS BUILDOUT. MARK: YOU ARE SEEING A LITTLE BIT, I DON'T WANT TO PUSH TOO FAR BUT YOU'VE GOT A LITTLE BIT ON CONSTRUCTION. WE ARE GETTING SOME CONSTRUCTION JOBS. BUT YOU ARE BROADLY RIGHT. IT'S HARD TO SEE JOB CREATION SO FAR. YOU HAVE TO WONDER WITH THESE PRODUCTIVITY GAINS COMING IN, IT FEELS LIKE THEY ARE COMING AND THERE IS A LOT OF ANECDOTES THAT SUGGEST THAT THE BLOCK LAYOFFS AND MORGAN STANLEY LAYOFFS. YOU MENTIONED AMAZON. THAT IS THE LEVEL OF CONCERN. THE WAY I WOULD FRAME IT IS THE

14:58 MOST LIKELY SCENARIO IS A RELATIVELY SANGUINE ONE. WE SHOULD BE OK. BUT THE DISTRIBUTION OF POSSIBLE OUTCOMES ARE VERY -- IS VERY FLAT. THE TALES ARE VERY FACT AS THE STATISTICIANS WOULD SAY. VERY HARD TO HANDICAP WHAT WILL PLAY OUT. ROMAINE: MARK ZANDI, CHIEF ECONOMIST OVER AT MOODY'S ANALYTICS WITH A FOCUS ON TECH AND AI, ALONGSIDE GEOPOLITICS. AN ANNOUNCEMENT OUT OF CVS HEALTH, TO BUILD OUT THEIR AI CAPABILITIES TO LOCKMAN -- TO BUILD UP THEIR CAPABILITIES. CONVERSATION WITH THAT CEO WHEN WE COME BACK AFTER THE BREAK. THIS IS BLOOMBERG. KATIE: KEEPING IN AI ON SHARES OF CVS HEALTH, DOWN WITH THE REST OF THE MARKET ON NEWS NOT

15:46 NECESSARILY ON THE NEWS, BUT THE NEWS CAME OUT THAT THE HEALTH CARE AND RETAIL PHARMACY COMPANY IS JOINING FORCES WITH GOOGLE CLOUD THROUGH THE LAUNCH OF HEALTH 100. THE PLATFORM WILL HELP CONSUMERS MANAGE THEIR HEALTH CARE NEEDS, REGARDLESS OF WHICH PHARMACY AND INSURANCE PROVIDER THEY USE PEER WE GOT THE CHANCE TO SPEAK WITH TILAK MANDADI, CHIEF EXPERIENCE AND TECHNOLOGY OFFICER OVER AT CVS ABOUT THAT PARTNERSHIP. HERE IS PART OF THAT CONVERSATION. TILAK: WHAT WE ARE CREATING IS A ONE STOP DESTINATION, KIND OF FRONT DOOR TO HEALTH CARE, FOR ANY CONSUMER IN AMERICA. IF YOU THINK BACK TO WHAT FRUSTRATES THE HEALTH CARE CONSUMERS IN AMERICA TODAY, NUMBER ONE, IT'S EXTREMELY --

16:32 EXTREMELY COMPLEX TO NAVIGATE ALL OF THE ORDERS. THERE ARE PHARMACIES, INSURANCE COMPANIES, DOCTORS. NAVIGATING ALL OF THAT IS VERY COMPLICATED. HEALTH 100 ENGAGEMENT PLATFORM MAKES IT VERY SIMPLE. IT'S VERY HARD TO FIGURE OUT WHAT COSTS WHAT. AND WHAT ARE THE COSTS IN HEALTH CARE. HEALTH 100 MAKES IT VERY SIMPLE FOR THE CONSUMER TO GET THAT TYPE OF CLARITY. IT ALSO MAKES IT REALLY EASY TO FIND CARE WHEN YOU NEED IT, WHETHER IT IS DIGITAL CARE OR REGULAR CARE. AND IT ALLOWS THE CONSUMER TO TAKE OWNERSHIP OF THEIR OWN HEALTH, AND THEIR HEALTH

17:19 RECORDS. THAT'S THE IDEA BEHIND HEALTH 100. KATIE: WHAT SEEMS CENTRAL TO THIS PLATFORM IS DATA. ACTUALLY HAVING DATA ON IT. WITHOUT IN MIND, HOW MANY OTHER HEALTH COMPANIES, WHEN YOU THINK ABOUT DOCTORS, INSURANCE, HAVE ACTUALLY SIGNED UP TO OFFER DATA ON THE PLATFORM? TILAK: INTEROPERABILITY IN HEALTH CARE IS A BIG PROBLEM. WE ARE ABSOLUTELY COMMITTED WITH CONSUMERS CONSENT GETTING ALL OF THE DATA THAT IS AVAILABLE FOR THE CONSUMER FROM ALL OF THE STAKEHOLDERS. WHETHER THAT'S THROUGH INFORMATION EXCHANGES, WHETHER THAT'S FOR -- THROUGH HR

18:04 INTEGRATION, OR THROUGH DIRECT CONDUCTIVITY. WE ARE COMMITTED TO CREATING THAT COMPREHENSIVE HEALTH RECORD FOR THE CONSUMER. KATIE: LET'S TALK ABOUT HOW AI FACTORS IN HERE. I'M LOOKING AT YOUR PRESS RELEASE, FOR EXAMPLE. PUT -- THIS PLATFORM WILL USE BUILT IN AGENDA TAKE AI. I WANT TO TALK ABOUT WHAT THAT MEANS IN THIS CONTEXT. THE CONCEPT OF A GENENTECH AI. HOW MUCH AUTONOMY WILL THE AI ACTUALLY HAVE WHEN IT COMES TO, FOR EXAMPLE, ORDERING MEDICAL SUPPLIES OR SCHEDULING APPOINTMENTS ON BEHALF OF AN ACTUAL HUMAN? TILAK: THAT'S A GREAT QUESTION. BEFORE I ANSWER THAT, I WANT TO BE VERY CLEAR. WE ARE ABSOLUTELY COMMITTED TO RESPONSIBLE AI. WE STARTED OUT WITH A SET OF

18:52 PRINCIPLES ON WHAT AI WILL DO AND WHAT WE WILL NOT LET AI DO. AND PRESERVE THAT HUMAN PART. HAVING SAID THAT, THE VERY UNIQUE PART OF THE HEALTH 100 PLATFORM IS EVERY CONSUMER ON HEALTH 100 WILL HAVE A PERSONAL AI AGENT WORKING AS A PARTNER IN THEIR HEALTH CARE JOURNEY. THIS AI AGENT WITH CONSUMER CONSENT KNOWS ALL ABOUT THE CONSUMER WITH -- BASED ON THE HEALTH PROFILE. AND IS CONSTANTLY THINKING ABOUT, WHAT DOES THE CONSUMER NEED NEXT? WHAT DOES THE PATIENT NEED NEXT? THIS AGENT IS A PERSISTENT AI

19:41 AGENT WITH CONSUMER CONSENT, CONTINUOUSLY FOCUSED ON THAT PARTICULAR CONSUMER. ROMAINE: I'M CURIOUS ABOUT ADDITIONAL COSTS. I UNDERSTAND THE UPFRONT COSTS ARE ALREADY THERE BUT MAINTAINING A SYSTEM LIKE THIS WILL REQUIRE A TREMENDOUS AMOUNT OF MAINTENANCE, SUPERVISION, MAY BE ADDITIONAL COMPUTER POWER. HAS NOT BEEN FACTORED INTO THE FORECAST? TILAK: SO, THE GOOD THING ABOUT HAVING DONE THIS ACROSS A HEALTH ECOSYSTEM IS A LOT OF THAT INFRASTRUCTURE IS ALREADY IN PLACE. AND WE KNOW WE HAVE CLEAR PLANS AND CLEAR THOUGHTS ON HOW TO SCALE IT AS THE BUSINESS SCALES. ROMAINE: ONE THING THAT SEEMS DIFFERENT WHEN WE TALK ABOUT THE BUILDOUT OF THESE TECHNOLOGY TOOLS, THERE HAS BEEN TALK ABOUT THE PACE OF CHANGE NOW THAT WE ARE

20:26 SEEING WITH REGARDS TO AI AND THE ASSOCIATED TOOLS. THE IDEA THAT YOU CAN BUILD AN INFRASTRUCTURE TODAY ON A TECHNOLOGY PLATFORM. UNLIKE MOVIE A FEW YEARS AGO WHERE YOU WOULD HAVE A RUNWAY OF YEARS, MAYBE DECADES BEFORE IT NEEDED TO BE REPLACED, AI IS ACCELERATING TO THE POINT WHERE WE MIGHT HAVE TO HAVE THIS CONVERSATION IN TWO YEARS. TILAK: I THINK THE WAY WE HAVE BUILT THIS PLATFORM IS VERY CONSISTENT WITH THE PACE OF AI. THE ENTIRE ARCHITECTURE IS TIED, WITH THE UNDERSTANDING THAT WE MIGHT USE OTHER MODELS, WE MIGHT CHANGE MODELS, WE

21:11 MIGHT TAKE ADVANTAGE OF A COMBINATION OF COGNITIVE AI AND LANGUAGE MODELS. ALL OF THAT WAS TAKEN INTO CONSIDERATION WHEN WE SET THIS ARCHITECTURE TO BE FLEXIBLE. KATIE: OUR THANKS TO TILAK MANDADI, CHIEF EXPERIENCE AND TECHNOLOGY OFFICER OVER AT CVS HEALTH. A REALLY INTERESTING CONVERSATION, REALLY SPEAKS TO HOW COMPANIES ACROSS EVERY INDUSTRY ARE TRYING TO HARNESS AND USE AI. THIS EXAMPLE, HEALTH CARE. A LOT OF QUESTIONS THERE ABOUT DATA AND HOW IT IS BEING USED. ROMAINE: WAY MORE COMPLICATED IN HEALTH CARE BECAUSE YOU NEED MY CONSENT TO USE A LOT OF THAT DATA. GOOGLE AND WHATEVER, THEY CAN SCRAPE WHATEVER ELSE I'M DOING. BUT WHEN IT COST TO MY HEALTH CARE, IT BECOMES A DIFFERENT ANIMAL. IT GETS SILO DUFF. SO HOW DO YOU PAN THAT I? KATIE: A DELICATE DANCE THERE.

22:01 WE WILL FOLLOW THAT STORY. WE WILL GO FROM THE HEALTH CARE SPACE TO THE ENERGY SECTOR. FORMER U.S. ENERGY SECRETARY AND FOUNDER OF THE EFI FOUNDATION, ERNEST MONIZ, HE JOINS US TO GIVE US HIS OUTLOOK AS THE CONFLICT IN THE MIDDLE EAST CONTINUES. THIS IS "THE CLOSE" ON BLOOMBERG. ♪ ROMAINE: A WET AND SOGGY NEW YORK CITY. THIS IS THE COUNTDOWN TO THE CLOSE. KATIE: KEEPING A CLOSE EYE ON THE EQUITY MARKET AND A CLOSE EYE ON WHAT IS GOING ON IN THE ENERGY MARKET AS WELL AS WE WERE MENTIONING EARLIER. WTI HITTING $80 A BARREL FOR THE FIRST TIME SINCE JANUARY 2025, A LITTLE BIT EARLIER TODAY. ROMAINE: WE HAD THE OFFICIAL SETTLEMENT A LITTLE WHILE AGO.

22:47 I WANT TO POINT OUT THAT THE SURGE WE SAW DURING THE SESSION, WHICH KIND OF CAME OUT OF NOWHERE -- FOR A WHILE, IT WAS STABLE, UP NINE .5%. THAT IS THE BIGGEST ONE DAY GAIN WE HAVE HAD GOING BACK TO 2020. THIS IS SORT OF THE YIN/YANG. THE MARKET IS KEEPING AN EYE ON WHAT ENERGY PRICES ARE DOING, HOW THAT FEEDS INTO TREASURY RATES, AND THE WAY THAT MOVES INTO EQUITIES. KATIE: YOU LOOK AT THE PAST FIVE DAYS OR SO. YOUR TOP PERFORMING SECTOR, NO SURPRISE, IS ENERGY. THE CONVERSATION WE WERE HAVING HALF AN HOUR AGO -- MAYBE WE ARE STARTING TO SEE THE LIGHT AT THE END OF THE TUNNEL WHEN IT COMES TO THAT OUTPERFORMANCE, WHEN YOU TAKE A LOOK AT SOME OF THESE VALUATIONS. ROMAINE:

23:36 THERE WAS JUST A REPORT ON THE TERMINAL -- THE INTERIOR SECRETARY DOUG BURGUM SAYING THAT THE TRUMP ADMINISTRATION IS WEIGHING OPTIONS TO ADDRESS THE SPIKE IN OIL AND GASOLINE PRICES. I WILL QUOTE HIM. EVERYTHING IS BEING CONSIDERED AND I THINK THERE ARE A SERIES OF IDEAS. LET'S GO TO EARNEST MONEY IS, A FORMER U.S. ENERGY SECRETARY AND NOW THE FOUNDER AND CEO OF THE EFI FOUNDATION. I WANT TO START WITH THE OPTIONS ON THE TABLE. WHEN YOU WORKED AS ENERGY SECRETARY DURING THE OBAMA ADMINISTRATION, OR UNDERSECRETARY DURING THE CLINTON ADMINISTRATION, YOU'VE DEALT WITH ENERGY PRICE SPIKES. I'M CURIOUS AS TO WHAT LEVERS DOES THE ADMINISTRATION HAVE TO TRY TO CONTAIN THE IMPACT. ERNEST: OF COURSE, ONE OF THE OPTIONS

24:22 THAT IS ALWAYS AVAILABLE, ALTHOUGH EXERCISED WISELY, I MIGHT SAY, IS THE RELEASE OF OIL FROM THE STRATEGIC PETROLEUM RESERVE. WE ARE DOWN NOW BUT WE STILL HAVE ABOUT 400 MILLION BARRELS IN THERE. BUT TO BE HONEST IF YOU LOOK AT THE SITUATION IN THE MIDEAST, IN THE GULF, CLEARLY THE BIG ISSUE, WE ALL KNOW, IS WHETHER THE STRAIT OF HORMUZ IS OPERATING. RIGHT NOW, OPERATIONALLY, TRAFFIC IS VERY, VERY SLOW GOING THROUGH THEIR. PRACTICALLY NONEXISTENT. AND SO FAR, THE PRICE OF OIL, OF COURSE, HAS RISEN. THE ORDER OF 10%.

25:10 THE PRICE OF THE WEST TEXAS BENCHMARK IS IN FACT OVER $80. IT HAS NOT BEEN THERE IN QUITE A WHILE. AND THE FEAR IS THAT IF THE STRAIGHT REMAINS CLOSED FOR MANY, MANY WEEKS, THAT WE WILL SEE A FURTHER RUN UP, POSSIBLY INTO THE TRIPLE DIGITS, IN TERMS OF OIL PRICES. BUT I ALSO WANT TO POINT OUT THAT THERE IS A LOT OF FOCUS ON OIL BUT THERE IS A HUGE IMPACT ON NATURAL GAS. QATAR EXPORTS A HUGE AMOUNT OF THE WORLD'S LIQUEFIED NATURAL GAS ALL THROUGH THE HORMUZ STRAIT. THAT IS SHUT DOWN. AND WE ARE SEEING STABLE PRICES IN THE UNITED STATES, BUT VERY VOLATILE PRICES FOR NATURAL GAS IN ASIA AND IN EUROPE, WHERE

25:59 MOST OF THE GAS FROM QATAR GOES TO ASIA, BUT A FAIR AMOUNT TO EUROPE AS WELL. SO THAT IS ANOTHER BIG PIECE OF VOLATILITY. AND ALL OF THESE MAY COME BACK EVENTUALLY TO BITE THE AMERICAN CONSUMER IN TERMS OF RISING ENERGY PRICES. ROMAINE: WITH REGARDS TO THE OPTIONS -- OBVIOUSLY, OPENING UP THE STATE OF HORMUZ -- BASED ON BLOOMBERG DATA, WE ARE SHOWING THAT ONLY MAY BE ABOUT 5% OF THE TRAFFIC IS MANAGING TO MAKE ITS WAY THROUGH THEIR, AS TO WHAT IT WOULD NORMALLY BE. THERE HAS BEEN TALK ABOUT PROVIDING SOME SORT OF INSURANCE. THE IDEA THAT WITH PRIVATE INSURERS PULLING BACK THAT THE U.S. WOULD GO INTO DEVELOPMENT AND OFFER SOME DEGREE FROM THE GOVERNMENT. IS THAT A VIABLE OPTION? HOW LONG WOULD IT TAKE A PROGRAM LIKE THAT TO GET UP AND RUNNING? ERNEST:

26:48 I THINK THE PRESIDENT HAS ADDRESSED THE RIGHT ISSUE, WHICH IS REDUCING RISK FOR SHIPS . OIL TANKERS ESPECIALLY. GAS, LNG TANKERS. BY THE WAY, WE SHOULD REMEMBER THAT I THINK THE MAJORITY OF SHIPS NORMALLY TRANSITING THE STATE OF -- THE STRAIT OF HORMUZ ARE COMMODITY SHIPS AND CARGO SHIPS AND THE LIKE. SO THE PRICE IMPACTS COULD BE FELT BEYOND OUR OIL AND GAS WITH A LOT OF INFLATIONARY PRESSURE. BUT IN TERMS OF THE OPTIONS THE PRESIDENT PUT FORWARD, OBVIOUSLY , MILITARY EXPORTS -- ESCORTS BEING ONE. BUT AS A REMINDER, WE ARE TALKING ABOUT TYPICALLY ALL FORMS OF SHIPPING, PROBABLY 80 TANKERS GOING THROUGH THE

27:34 STRAIGHT PER DAY, ON AVERAGE. THAT IS A LOT OF SHIPS TO BE ESCORTING, NUMBER ONE. NUMBER TWO, WHAT YOU MENTIONED EXPLICITLY IS THE UNITED STATES GOVERNMENT COVERING THE RISK PREMIUM ON INSURANCE. I THINK THAT IS A NICE IDEA IN PRINCIPLE. HOWEVER, I SHARE THE CONCERN THAT IT MAY TAKE AN AWFULLY LONG TIME, NUMBER ONE, TO GET THIS IN PLACE, ON THE SCALE OF THE HOPEFULLY RELATIVELY SHORT SHUTDOWN OF THE STRAIGHT, BUT IN ADDITION, YOU KNOW, IT IS GOING TO BE DIFFICULT, I THINK, FOR THE AMERICAN POLITICAL SYSTEM TO CONSIDER COVERING INSURANCE BY FOREIGN INSURERS

28:23 ENSURING FOREIGN SHIPS COME UP POSSIBLY TAKING OIL TO CHINA, LET'S SAY. I HAVE QUESTIONS WHETHER OR NOT THIS IS GOING TO BE IMPLEMENTABLE IN ANY SHORT TIMEFRAME. KATIE: YOU HAVE TO WONDER HOW THE AMERICAN VOTER IS FEELING ABOUT THIS ENTIRE SITUATION RIGHT NOW. WE ARE GOING TO FIND OUT SOON ENOUGH AS POLLING COMES IN, BUT ALSO AS WE GET CLOSER TO THOSE MIDTERMS. I WANT TO GO BACK TO SOME OF THE DIFFERENT LEVERS THE ADMINISTRATION COULD PULL WHEN IT COMES TO WHAT IS GOING ON WITH OIL PRICES RIGHT NOW. BLOOMBERG IS REPORTING THAT SOME IN WASHINGTON HAVE IDENTIFIED U.S. TREASURY PURCHASES OF OIL FUTURES AS A POSSIBILITY HERE. REUTERS REPORTED SOMETHING SIMILAR, SAYING THAT TREASURY COULD ANNOUNCE ACTION ON THE OIL FUTURES MARKET. I WOULD LOVE TO GET YOUR VIEW

29:12 HERE, WHETHER OR NOT THAT WOULD BE SOMETHING REALISTIC, AND IF THE TREASURY DID ENTER THE OIL FUTURES MARKET, WHETHER OR NOT IT WOULD MAKE A MEANINGFUL DIFFERENCE HERE. ERNEST: IT WOULD TAKE A VERY, VERY LARGE PURCHASE, AND THAT IS A MAJOR QUESTION. I THINK THE PRESIDENT AND MANY OTHERS HAVE BEEN VERY SUSPICIOUS OF ALL THE RESOURCES BEING POURED FROM THE UNITED STATES GOVERNMENT INTO THE PRIVATE SECTOR IN VARIOUS WAYS, INCLUDING VOLUME, FOR EXAMPLE -- THE FEDERAL RESERVE BUYING TREASURY BONDS. CLEARLY A POINT HERE WOULD BE TO TRY TO MAINTAIN A LID ON THE SHORT-TERM OIL PRICES. THAT USUALLY COMES AT THE EXPENSE OF HAVING SOME

30:01 LONGER-TERM INCREASE IN PRICES. SO I THINK IT IS -- THERE IS A LOT OF OPTIONS HERE. AGAIN, AS I HAD MENTIONED EARLIER, MOST STANDARD APPROACH, I WOULD SAY, HAS BEEN TO RELEASE OIL. IN 2022, FOR EXAMPLE, THE BIDEN ADMINISTRATION RELEASED A LOT OF OIL FROM THE RESERVE, PRECISELY TO KEEP PRICES DOWN AFTER THE RUSSIAN INVASION OF UKRAINE. AND THAT DID PROVIDE SOME SHORT-TERM RELIEF. BUT AS YOU KNOW, THERE IS A LOT OF DISCUSSION AMONG ECONOMISTS IN PARTICULAR RIGHT NOW AS TO HOW THAT LEAD TO GREAT INFLATIONARY PRESSURES. I THINK IT IS ALWAYS A TRADE-OFF, IN SOME SENSE, OF THE SHORT-TERM VERSUS THE

30:49 LONG-TERM. I WILL BE BLUNT. WITH MIDTERM ELECTIONS COMING UP, WE MAY SEE A BIT MORE SHORT-TERM THINKING. ROMAINE: HAVE TO LEAVE IT THERE. ALWAYS APPRECIATE YOU TAKING TIME. EARNEST MONEY IS, FORMER U.S. ENERGY SECRETARY, AND NOW AT THE EFI FOUNDATION. WHEN WE COME BACK, WE WILL CONTINUE TO ASSESS THE IMPACT ON STOCKS IN THE U.S., AND ONE OF THE IMPACTS IS TO THE UPSIDE. LOOK AT THE TRAVEL STOCKS. EXPEDIA HAVING ONE OF THEIR BEST DAYS GOING BACK MONTHS, UNRELATED TO WHAT IS GOING ON OVERSEAS. MORE RELATED TO OPENAI AND MAYBE A LITTLE BIT OF A BACKOFF. ♪ ROMAINE: SHARES OF BOOKING HOLDINGS OF THE MOST SINCE APRIL ON THE BACK OF A REPORT OUT OF THE

31:39 FOLKS OVER AT MIZUHO, THE ANALYSTS SAYING THAT OPENAI IS SCALING BACK SOME OF THE SHOPPING PLANS FOR CHATGPT. THAT COULD MARK THE BEGINNING OF THE END OF MAJOR DISRUPTION FEARS FOR E-COMMERCE, PARTICULARLY FROM THE ONLINE TRAVEL AGENCIES. NORAH MULINDA JOINS US NOW. SO OPENAI IS BACKING OFF FROM THIS? NORAH: APPARENTLY SO. THEY ARE SAYING THEY ARE ACTUALLY PULLING THEIR PLANS. OPENAI HAD INITIALLY PLANNED TO EMBED A CHECK OUT INSIDE THEIR CHATGPT BOUGHT, IN THE U.S. NOW, THEY ARE SAYING WE ARE NOT DOING THAT. THEY WERE SEEING USERS WERE NOT REALLY -- WHAT I WOULD IMAGINE IS TRUSTING THE IDEA WITHIN CHATGPT. THEY ARE NOW ESSENTIALLY MAKING

32:24 THIS PIVOT WHERE THEY WANT TO WORK WITH INDIVIDUAL COMPANIES, WHETHER IT BE INSTACART, EXPEDIA, BOOKING, AND WORK WITH THEM SO THAT ACTUALLY YOU WILL TALK THROUGH CHATGPT AND IT WILL LEAD YOU TO THEIR APPLICATIONS, AND THAT IS WHERE YOU WILL MAKE YOUR PURCHASES. THEY WILL STILL GET A PORTION OF THE SALES. ROMAINE: LIKE A MOB BOSS. NORAH: IF YOU WILL. KATIE: IT IS INTERESTING. TALK TO US MORE ABOUT OPENAI'S THINKING. IT FEELS LIKE WHEN IT COMES TO AI THIS IS BEING BUILT IN REAL TIME, BUT STILL, WHY EXACTLY THE LOGIC? NORAH: AS WE ARE READING THROUGH THE REPORT, IT IS ESSENTIALLY UNCLEAR. WE ARE SEEING ENGAGEMENT FROM USERS. A LOT OF THESE USERS ARE NONPAYING USERS. YOU HAVE TO THINK ABOUT WAYS YOU ARE ABLE TO MONETIZE THAT

33:12 GROUP OF PEOPLE THAT IS NOT PAYING FOR PREMIUM CHATGPT. I DON'T KNOW IF YOU USE CHATGPT AND ARE PAYING FOR IT, BUT MANY PEOPLE ARE UTILIZING IT IN A FREE FASHION. YOU ARE SEEING THEM TRY TO STRATEGIZE HOW THEY CAN STILL MAKE MONEY OFF OF THIS. ROMAINE: THERE IS THE QUESTION ABOUT THE COOPERATION, RIGHT? WE KNOW WHAT -- WE DON'T KNOW WHAT REALLY WENT ON BEHIND THE SCENES. AT SOME POINT, WHEN YOU TALK ABOUT USING EFFECTIVELY A PROPRIETARY PLATFORM -- BOOKING, EXPEDIA -- IF YOU ARE INTEGRATING THAT IN CHATGPT WITHOUT THEIR EXPLICIT PERMISSION, I WOULD ASSUME THAT WOULD HAVE BEEN AN ISSUE AS WELL. DO YOU THINK WE ARE GOING TO BE SEEN SOME OF THESE COMPANIES STRIKE DEALS? I THINK WE ALL AGREE THIS IS PROBABLY THE FUTURE ONE WAY OR THE OTHER. NORAH:

33:59 WE KNOW AT SEA, SHOPIFY -- THESE ARE COMPANIES THAT HAVE IN THE PAST TEAMED UP WITH OPENAI, AND THEY SEEM TO WANT TO MOVE FORWARD WITH THOSE EFFORTS. AMAZON LAST YEAR WERE SAYING THEY WERE A BIT APPREHENSIVE OF WORKING WITH AI-RELATED APPS LIKE CHATGPT. THIS WAS AMAZON. THEY BLOCKED THEM FROM SHOWING THEIR PRODUCTS IN A CHAT RESPONSES. NOW THEY ARE SAYING THEY MAY BE RETHINKING THAT DECISION, BUT YOU ARE STILL SEEING COMPANIES THAT ARE WARY DESPITE THE TREND. I HAVE NEVER DONE IT. I DON'T KNOW THAT I LOVE THE IDEA. PERSONALLY. ROMAINE: I MIGHT BUY A SANDWICH JUST AS TESTED OUT. COULD NEVER HURT. KATIE: HAMBURGER. NO CHEESE. IT IS GREAT TO SEE YOU. THAT IS OUR BLOOMBERG MARKETS CORRESPONDENT. ROMAINE:

34:48 WHAT IS GRUYERE, BY THE WAY? KATIE: IT IS A CHEESE. I THINK IT IS MAYBE ONE OF THOSE SOFTER CHEESES YOU DON'T LIKE. ROMAINE: IT'S FRENCH. KATIE: THIS IS "THE CLOSE." >> I THINK THE RISK THAT IT SPREADS MORE AFFECTS THE OIL MARKET, AFFECTS THE WHOLE MIDDLE EAST. IN TERMS OF WHAT IS GOING ON, THE RISK IS NOT BEING PRICED BY THE MARKET. THE MARKET IS BEHAVING AS IF THIS IS GOING TO QUICKLY NORMALIZE. ROMAINE: AN ANALYST AT BARCLAYS KICKING US OFF TO THE CLOSE. WE ARE OFF THE LOWS OF THE DAY BUT STILL HOLDING ON TO A GOOD CHUNK OF THE LOSSES. KATIE: NOT SEEING THE BUYERS OUT IN

35:37 FORCE. WITHIN 10 MINUTES, SOMETHING CRAZY MIGHT HAPPEN, BUT THE S&P 500 IS DOWN. I DON'T HAVE OIL ON THIS BOARD, AND I SHOULD. WE KNOW THE TRUMP ADMINISTRATION IS WATCHING THE PRICE OF OIL. THINK ABOUT THE REPORT WE GOT IN THE LAST COUPLE OF MINUTES THAT THE TRUMP ADMINISTRATION IS EYEING ALL OPTIONS TO CUT OIL PRICES AMID THE WAR WITH IRAN. CERTAINLY TOP OF MIND. ROMAINE: IT WAS SELLING EARLIER TODAY -- THE NEW SESSION IS SLIGHTLY BELOW THE HIGH. AS WE CUT YOU DOWN TO THE CLOSING BELL'S, WE ARE GOING TO DO SOMETHING A LITTLE BIT DIFFERENT AND TAKE MORE OF A LONGER-TERM STRUCTURAL LOOK AT WHAT IS GOING ON IN THE MARKETS. WE ARE JOINED BY THE HEAD OF U.S. WEALTH ADVISORY AND HEAD OF

36:24 RETIREMENT OVER AT BLACKROCK, WHO HAS BEEN THINKING A LOT ABOUT SOME OF THESE LONG-TERM SHIFTS IN THE MARKET, LONG-TERM SHIFTS IN WHERE MONEY IS GOING, WHERE MONEY NEEDS TO BE MANAGED. YOU SEE A BIG OPPORTUNITY WITH REGARDS TO THE NUMBER OF WOMEN WHO ARE GOING TO BE LOOKING FOR MAY BE MORE CREATIVE WAYS TO MANAGE THEIR MONEY. JAMIE: FIRST OF ALL, GREAT TO BE HERE AND TO SEE BOTH OF YOU. I'M SO GLAD YOU SAID IT IS A STRUCTURAL SHIFT. OFTEN, WE TALK ABOUT MARKETS AND WHERE MONEY IS FLOWING FROM AN ASSET CLASS OR SECTOR PERSPECTIVE. BUT WHEN YOU THINK ABOUT WHERE HIS MONEY GOING FROM A HUMAN BEING PERSPECTIVE, IT IS GOING TOWARD WOMEN. MCKINSEY PROJECTS THAT BY THE YEAR 2030, 50 PERCENT OF GLOBAL WEALTH WILL BE IN THE HANDS OF WOMEN. AND IT IS NOT JUST THE PROPORTION. IT IS ACTUALLY THE RATE IT IS GROWING.

37:14 IF YOU GO BACK JUST TO 2018, IT WAS 10 TRILLION SITTING WITH WOMEN. BY 2030, IT WILL BE 34 TRILLION. THE PACE OF GROWTH IS INCREDIBLE. THERE ARE LOTS OF REASONS. IT IS CULTURAL, BEHAVIORAL, LONGEVITY, AND DEMOGRAPHICS. THE BOTTOM LINE IS WOMEN ARE EARNING MORE AND FASTER, AND THEY ARE INHERITING MORE AND FASTER. ROMAINE: WHAT DOES YOUR TEAM HAVE TO DO TO MEET THOSE PEOPLE WHERE THEY ARE QUESTION MARK DOES THAT MEAN DIFFERENT TYPES OF ADVISORS, DIFFERENT TYPES OF INVESTMENT PRODUCTS? JAMIE: I WOULD SAY AT BLACKROCK WE HAVE TWO GOALS. FIRST IS TO GIVE PEOPLE ACCESS TO CAPITAL MARKETS, AND THAT IS EVOLVING. WE ARE MODERNIZING AND GIVING

38:00 PEOPLE ACCESS TO PUBLIC AND PRIVATE AND INDEX. SO THAT IS FIRST, TO HELP PEOPLE INVEST BETTER. SECOND, WE DON'T HAVE FINANCIAL ADVISORS. WE HELP FINANCIAL ADVISORS. ALL OVER THE INDUSTRY, FINANCIAL ADVISORS ARE SERVING CLIENTS AND TRYING TO HELP CLIENTS BUILD PORTFOLIOS, TRAINED TO HELP CLIENTS ACHIEVE THEIR GOALS. OUR GOAL IS TO HELP THOSE ADVISORS. TODAY, AS AN EXAMPLE, WE WERE OUT WITH FANTASTIC ADVISORS THIS MORNING, AND WE WERE TALKING ABOUT HOW CAN THEY GROW THEIR BUSINESS. HOW CAN THEY SCALE THEIR BUSINESS? ESPECIALLY AS WE THINK ABOUT WOMEN AND MEN, THE NEED FOR AFTER-TAX MANAGEMENT, A NEED FOR CUSTOMIZATION, THE NEED FOR ESTATE PLANNING AND EVERYTHING THAT COMES ALONG WITH IT -- IT IS GETTING MORE COMPLICATED AND WE ARE TRYING TO MAKE IT EASY.

38:45 KATIE: THE AFTER-TAX PIECE -- IT IS INTERESTING TO SEE THE FOCUS THERE, ESPECIALLY WHEN IT COMES TO SOME OF THE PRODUCTS BEING LAUNCHED. I WANT TO TALK A LITTLE BIT MORE ABOUT FINANCIAL ADVISORS. YOU WORK VERY CLOSELY WITH THEM. DO YOU THINK THAT WHEN YOU TAKE A LOOK OVER THE NEXT DECADE AND THE YEARS TO COME THAT THEY WILL CONTINUE TO BE RELEVANT? YOU THINK ABOUT THE GENERATIONS COMING UP. THEY ARE GROWING UP IN THIS AI-NATIVE ENVIRONMENT. THE MUSCLE MEMORY IS TO GO ASK AN ANIMAL -- M LLM, WHAT SHOULD I DO? I WONDER HOW FINANCIAL ADVISORS FIT INTO THAT FUTURE? JAMIE: THAT WAS A TOPIC OF DISCUSSION THIS MORNING WITH THESE FINANCIAL ADVISORS. I'M GOING TO USE MY OWN

39:30 EXPERIENCE, AND I RECOGNIZE THAT I AM NOT GROWING UP IN AN LLM UNIVERSE, BUT I USE MY LLM ALL THE TIME. WHAT I USE IT FOR IS TO GET SMARTER, RIGHT? I GET INFORMATION EASIER. I GET ACCESS TO THINGS. IT GIVES -- IT GIVES ME CONTEXT, CONFIDENCE, AND GREAT QUESTIONS TO ASK. WHEN I GO TO THE DOCTOR, I TAKE MY HOMEWORK. I PUT IT INTO THE LLM. IT GIVES ME SOME QUESTIONS TO ASK MY DOCTOR. AND THEN I GO SEE MY DOCTOR. I'M NEVER NOT GOING TO SEE MY DOCTOR. THE SAME WITH FINANCIAL ADVISORS. THERE IS THAT TRUST YOU WANT FROM A HUMAN. I THINK IT IS LESS ABOUT ADVISORS BEING REPLACED. I THINK THE BEST ADVISORS ARE GOING TO USE AI TO MAKE THEM MORE PRODUCTIVE, TO MAKE THEM BETTER WITH THEIR CLIENTS, TO

40:16 PERSONALIZE WHAT THEY ARE DOING WITH THEIR CLIENTS. SO THEY HAVE TO USE IT TO BE BETTER. KATIE: IT FEELS LIKE IN SO MANY DIFFERENT SCENARIOS, YOU WANT A HUMAN TO HAVE THE LAST LOOK OVER THE LAST WORD, WHATEVER IT MAY BE. I WANT TO TALK A LITTLE BIT ABOUT RETIREMENT, WHICH FITS INTO THE CONVERSATION ON WEALTH TRANSFER. BUT SPECIFICALLY WHAT WE ARE SEEING UNFOLD IN THE PRIVATE MARKETPLACE RIGHT NOW. A LOT OF SCARY HEADLINES WHEN IT COMES TO PRIVATE CREDIT AND PRIVATE ASSETS. HAVE YOU SEEN THAT IMPACT THE CONVERSATION YOU ARE HAVING WITH SOME OF YOUR INVESTORS AS TO WHETHER THERE IS DEMAND TO PUT PRIVATE ASSETS INTO 401(K)S, FOR EXAMPLE? JAMIE: THERE ARE SO MANY HEADLINES OUT THERE. AND THINK ABOUT THE PARTICIPANTS EVERYWHERE TRYING TO MAKE SENSE OF THIS, THE EVERYDAY PEOPLE TRYING TO

41:06 UNDERSTAND. WHEN WE TALK TO SPONSORS, FINANCIALS, INSTITUTIONS, REALLY WHAT THE QUESTION BECOMES IS, WHAT AM I SOLVING FOR? WHEN YOU THINK ABOUT YOUR EMPLOYEES ARE LIVING LONGER THAN EVER BEFORE AND THE RESPONSIBILITY OF SAVINGS IS MORE ON THE EMPLOYEE -- PENSION PLANS ARE NOT GROWING. THEY ARE SHRINKING. IT IS A DEFINED CONTRIBUTION PLAN AS WELL AS PERSONAL SAVINGS. POINT NUMBER TWO IS THAT THE CAPITAL MARKETS THEMSELVES ARE MODERNIZED. THERE IS MORE ACCESS TO MORE THINGS. IF YOU ARE NOT THINKING OF WHAT YOU COULD OFFER YOUR EMPLOYEES, YOU ARE, IN WAYS, DOING A DISSERVICE BY NOT LOOKING AT THE WHOLE POWER OF THE CAPITAL MARKETS ACROSS PUBLIC AND PRIVATE. THIRD IS, IT HAS TO BE DONE IN THE RIGHT WAY, WITH THE RIGHT MANAGERS, AND HAS TO BE DONE IN

41:51 A PORTFOLIO THAT IS INTEGRATED AND DIVERSIFIED ACROSS PUBLIC AND PRIVATE. SO THAT IS THE CONVERSATION WE ARE HAVING. THERE IS A LOT OF INTEREST, BUT THIS MOVE SLOWLY. IT IS NOT GOING TO SUDDENLY BE AN OVERNIGHT THING. I DO SEE WITH OUR CLIENTS, THEY DO UNDERSTAND THE WORLD IS CHANGING. THE MARKETS ARE MODERNIZING. WE HAVE TO FOLLOW. ROMAINE: GREAT CONVERSATION. HOPE TO HAVE IT AGAIN. THE HEAD OF U.S. PUBLIC WEALTH ADVISORY AND HEAD OF RETIREMENT OVER AT BLACKROCK. WE CUT YOU DOWN TO THE CLOSING BELL. WE CONTINUE TO SEE THE BUYERS COME BACK IN TO THIS MARKET, BUT IT LOOKS LIKE A HUGE TURNAROUND. WE ARE STILL GOING TO FINISH -- BARRING A HUGE TURNAROUND, WE ARE STILL GOING TO FINISH IN

42:36 THE RED. KATIE: AS YOU MENTION, WELL OFF THOSE LEVELS, BUT YOU LOOK AT THE BREAKDOWN OF THIS MARKET, AND AT THE INDIVIDUAL STOCK LEVEL, MORE LOSERS THAN GAINERS AT THIS MOMENT AS WE ARE MINUTES AWAY FROM THOSE BELLS. ROMAINE: A FULL BREAKDOWN OF ALL OF TODAY'S MARKET ACTION AND A PUSH AHEAD TO KEY EARNINGS COMING AFTER THE BELL. THAT CONVERSATION STARTS NOW. >> THE CLOSING BELL, BLOOMBERG'S COMPREHENSIVE CROSS-PLATFORM COVERAGE OF THE U.S. MARKETPLACE, STARTS RIGHT NOW. ROMAINE: AND RIGHT NOW WE ARE TWO MINUTES AWAY FROM THE END OF THE TRADING DAY. ROMAINE BOSTICK HERE WITH KATIE GREIFELD, TAKING YOU THROUGH TO THE CLOSING BELL. GLOBAL SIMULCAST -- CAROL MASSAR AND TIM STENOVEC JOINING

43:21 US NOW. WELCOME TO OUR PLATFORMS AND OUR PARTNERSHIP WITH YOUTUBE TO PARSE ANOTHER WILD DAY. CAROL: IT WAS WILD. WE ARE LOOKING AT A MARKET TRADE THAT IS STILL DOWN ACROSS THE BOARD, BUT WE ARE SEEING SOME BUYING INTO THE CLOSE. DEFINITELY OFF SOME OF OUR WORST LEVELS OF THE TRADE. TIM: THE WORST LEVEL WAS 1.44%. NOW WE ARE DOWN ONLY ABOUT 0.6%. KIND OF A SIMILAR STORY THAT WE SAW A COUPLE OF DAYS AGO, WHERE THE LOWS HAPPENED EARLIER IN THE SESSION AND WE RECOVERED FROM THOSE LOWS. THE QUESTION IS WHAT SHIFTED FOR INVESTORS. WHAT ARE THEY LOOKING AT DIFFERENTLY? KATIE: NOT CLEAR WHAT IS DRIVING THE BOUNCE BACK. MAYBE THE FACT WE ARE GETTING

44:07 CLOSER TO THE CLOSE. IT WAS INTERESTING TO SEE THE BIG DRAW DOWN ON THE BLOOMBERG NEWS HEADLINE THAT THE U.S. IS CONSIDERING REQUIRING PERMITS FOR GLOBAL AI CHIP SALES. BASICALLY, THE U.S. WOULD BE THE GATEKEEPER. THAT CERTAINLY TOOK A CHUNK OUT OF THE LIKES OF NVIDIA AND THE LIKES OF AMD. YOU ARE SEEING THAT STILL. TIM: NOW, NVIDIA IS HIGHER. ROMAINE: WHEN YOU LOOK AT THE INDEX LEVEL -- DAN CURTIS POINTED THIS OUT. THE LAST FEW DAYS, WHENEVER WE OPEN, WE STILL MANAGED TO CLOSE ABOVE THAT, EVEN IF THE DAY WAS DOWN. TODAY, IT LOOKS LIKE WE ARE ACTUALLY GOING TO CLOSE BELOW WHERE WE OPENED. IT GIVES YOU SOME IDEA AS TO THE MOMENTUM. MOMENTUM IS STILL, DESPITE THE

44:53 DECLINE INTO THE CLOSING BELL -- STILL POTENTIALLY TO THE DOWNSIDE. LET'S WALK YOU THROUGH THE NUMBERS ON THIS THURSDAY AFTERNOON. THE S&P 500 DOWN ROUGHLY 39 TO 40 POINTS. IT TAKES A WHILE FOR THESE NUMBERS TO SETTLE. THE DOW LOSING ALMOST 800 POINTS . THE NASDAQ COMPOSITE DOWN ABOUT 60 POINTS. THE RUSSELL 2000, 1 OF YOUR BIGGEST LAGGARDS ON THE DAY, LOSING ABOUT 50 POINTS, OR 1.9 PERCENT. CAROL: DIGGING INSIDE THE S&P 500, NO SURPRISE TO SEE MOST NAMES IN THE S&P 500 LOWER FOR THE THURSDAY TRADE. 365 NAMES TO THE DOWNSIDE. 130 SEVEN GAINING GROUND. ONE UNCHANGED. KATIE: SIMILAR BREAKDOWN AT THE SECTOR

45:40 LEVEL. THREE SECTORS FINISHING IN THE GREEN. EIGHT IN THE RED. YOU CAN SEE TECH PERFORMING HIGHER BY ABOUT 0.4 PERCENT. ENERGY WAS A WINNER ON THE DAY, HIGHER BY ABOUT 0.6 PERCENT. EVEN WITH A BLOOMBERG NEWS ARTICLE THAT THE ADMINISTRATION IS BASICALLY EYEING ALL OPTIONS TO CUT OIL PRICES. ALL OPTIONS. INCLUDING MAYBE ACTION WHEN IT COMES TO FUTURES. ALL OF THEM. THEY ARE ALL ON THE TABLE. CONSUMER STAPLES DOWN ABOUT 2.4%. CAROL: YOU MEAN MAYBE THEY WILL PAY WHEN I FILL UP? KATIE: THEORETICALLY ON THE TABLE. TIM: THAT WOULD BE INFLATIONARY IF THEY PAID FOR YOUR GAS. ROMAINE: YOU DON'T DRIVE, DO YOU?

46:28 CAROL: I LOVE TO DRIVE. WHO DOES NOT LOVE TO DRIVE? ROMAINE: SAFELY? CAROL: MY GOODNESS. THE NUMBER THREE GAINER IN THE S&P 500 -- I AM IGNORING YOU. BOOKING HOLDINGS, A GAIN OF ABOUT 8.5%. MIZUHO -- I ALWAYS -- TIM: IGNORE HIM. CAROL: YOU ARE KILLING ME. MIZUHO MOVING AWAY FROM AIRBNB ON AN EXPECTATION OF A MAJOR RELIEF RALLY COMING AFTER THE INFORMATION THAT OPENAI IS PULLING BACK FROM NATIVE CHATGPT CHECK OUT, PIVOTING INSTEAD TO APPLE-BASED PURCHASES. THE FIRM BELIEVES THE PIVOT AWAY FROM SHOPPING CHECK OUT

47:15 COULD SPELL THE BEGINNING OF THE END OF MAJOR DISRUPTION FEARS FOR INTERNET MARKETPLACE BUSINESSES INCLUDING ONLINE TRAVEL AGENTS AND OTHERS. SO THEY ARE LIKING THIS ONE IN A BIG WAY. INVESTORS MOVING INTO THAT. YOU SAW INVESTORS MOVING TO EXPEDIA AS WELL. BROADCOM TOPPING THE NASDAQ 100, UP ABOUT 4.8%. WE DID SEE THE STOCK BOUNCING AROUND LAST NIGHT AFTER IT REPORTED ITS LATEST QUARTERLY UPDATE. IT DID SETTLE IN TODAY HIGHER AFTER THE COMPANY POSTED FIRST QUARTER RESULTS THAT BEAT EXPECTATIONS ON KEY METRICS. YOU HAVE A POSITIVE REVENUE OUTLOOK. THE CEO SAYING THE COMPANY EXPECTS ITS AI CHIP SALES TO TOP 00 BILLION NEXT YEAR, AND THEY HAVE THE SUPPLY CHAIN TO DO IT. IT MARKS MAJOR INROADS INTO TERRITORY DOMINATED BY NVIDIA. AND HERE IS SOMETHING DIFFERENT.

48:04 I'M HOPING YOU ARE GOING TO FIND THIS ENTERTAINING, ROMAINE. WE ARE SEEING OFFSHORE -- ROMAINE: WHY WOULD THAT BE ENTERTAINING? I'M VERY FAMILIAR WITH THIS STORY. CAROL: YOU KNOW EVERYTHING. CAROL: IT IS A .8 BILLION MARKET CAP, OIL AND GAS EXPLORATION COMPANY, JUMPING TODAY, EXTENDING A RECENT RALLY TO A FIFTH STRAIGHT SESSION THAT HAS PUSHED THE STOCK UP ABOUT 60% IN THE PAST FIVE DAYS, AMID NEWS THAT THE TRUMP ADMINISTRATION WILL SEEK TO ACT TO ALLOW THE COMPANY'S PIPELINE UNIT TO RESTART ENERGY PRODUCTION. 27% OF THE FLOAT IS SHORT. IS THERE MORE YOU WANT TO ADD TO IT? ROMAINE: NO, I THOUGHT YOU WERE GOING TO SAY SOMETHING FUNNY OR INTERESTING. CAROL:

48:51 THAT IS WHAT MY BROTHERS ALWAYS SAY. YOU ARE A TOUGH CROWD. TIM: LET'S LOOK AT SOME OF THE DECLINERS ON THE DAY TODAY. ROMAINE: THEY SOUND COOL. CAROL: THEY ARE A LOT OF FUN. TIM: ROCHE TODAY DOWN 6.3 PERCENT. MID DAY, WE SAW SHARES TAKE A DIVE, THIS AFTER WE GOT RESULTS OF ROCHE HOLDING AND THE ZEALAND FARM OBESITY SHOT -- IT HAS SIDE EFFECTS COMPARABLE TO THAT OF A PLACEBO. THE REASON SHARES FELL IS BECAUSE INVESTORS COMPARED IT TO A SIMILAR DRUG FROM ELI LILLY THAT DELIVERS AS MUCH AS 20% WEIGHT LOSS. SO THE RESULT WAS UNDERWHELMING TO INVESTORS. STUBHUB HOLDINGS NOT HAVING A VERY GOOD DAY. TICKET RESALE OR SHARES FELL BY

49:41 12 POINT 4% TODAY AFTER THE COMPANY'S 2026 FOURTH-QUARTER FORECAST RESULTS CAME IN BELOW ANALYST ESTIMATES. ANALYSTS POINTED TO CHALLENGES FOR COMPS BECAUSE THERE IS NOT A TAYLOR SWIFT TOUR TO BOOST SALES. CAROL: SHE HAS TO TAKE A BREAK EVERY ONCE IN A WHILE. GET MARRIED, START A FAMILY. TIM: SHARES FELL 12.5%. IT IS TAYLOR, YOU KNOW? SHE IS A DRIVER AROUND THE WORLD. BAD BUNNY. HE IS A BIG ONE. I AM ALSO WATCHING SHARES OF UPS , UNITED POSTAL SERVICE. DID YOU SEE THIS? THEY WERE ON TRACK TO ACTUALLY CLOSE AT A MARKET VALUE THAT WOULD FALL BELOW FED EX FOR THE

50:29 FIRST TIME EVER COME WITH LINGERING ANXIETY AROUND THE LONG-TERM GROWTH. AN UPTICK AT THE END OF THE DAY. FEDEX, $7 BILLION IN MARKET CAP. U.P.S., STILL ABOVE IT. THAT DAY WILL HAVE TO WAIT. ROMAINE: LET'S GET YOU SOME EARNINGS. A SEMICONDUCTOR MAKER OUT WITH ITS RESULTS, $.80 A SHARE. A BEAT OF ABOUT A PENNY. BASICALLY ON THE NOSE OF WHAT THE STREET WAS LOOKING FOR. NOT SEEING A REVENUE FORECAST, BUT ADJUSTED GROSS MARGINS ALSO COMING IN, IN LINE WITH ESTIMATES. YOU SEE THE KNEE-JERK REACTION. WE WILL TRY TO DIVE A LITTLE DEEPER AND FIND OUT EXACTLY WHY. AND LET'S TAKE A QUICK CHECK OF

51:15 YIELDS AS WELL. WE ARE UP FOR A FOURTH STRAIGHT DAY ON BENCHMARK 10 YEAR YIELDS. IT IS SOMETHING THAT HAS NOT HAPPENED SINCE EARLY DECEMBER OF LAST YEAR. A REPRICING OF EXPECTATIONS. YOU SEE THAT REFLECTED IN THE TWO-YEAR YIELD, HIGHER BY ABOUT 30 BASIS POINTS. CAROL: A QUICK COMMENTARY ON MARV L AND THE PRESS RELEASE. CEO MATT MURPHY SAYS WE EXPECT YEAR ON YEAR GROWTH TO ACCELERATE EACH QUARTER IN FISCAL YEAR 2027, DRIVEN BY CONTINUED STRENGTH IN OUR DATA CENTER BUSINESS. INVESTORS ARE CERTAINLY EXCITED ABOUT THAT. WHAT I AM EXCITED ABOUT IS THAT -- THANK YOU, UNITED. THEY HAVE UPDATED THEIR POLICY. LISTEN. THIS IS THE WHOLE POINT. LISTEN. THEY ARE GOING TO REQUIRE

52:01 PASSENGERS TO USE HEADPHONES FOR AUDIO OR VIDEO. I DON'T EVEN KNOW WHY WE HAVE TO TELL PEOPLE TO DO THIS. IF YOU DON'T DO IT, THEY CAN REMOVE YOU FROM THE FLIGHT AND POSSIBLY DO A PERMANENT BAN ON IT. READ THE FINE PRINT. IF WE COULD JUST DO THAT ON SUBWAYS HERE, PLEASE. ROMAINE: CAROL IS FIRED UP. WHO HURT YOU? CAROL: CONSIDER IT. KATIE: HOW MANY REPEAT OFFENSES DO YOU HAVE TO HAVE TO BE PERMANENTLY BANNED FROM THE AIRLINE? THAT IS MY BIG QUESTION READING THIS STORY. ROMAINE: ARE WE PUTTING THIS ON THE FLIGHT ATTENDANTS AGAIN? I FEEL SORRY FOR THEM. THEY ARE ALREADY DEALING WITH ALL KINDS OF UNRULY STUFF.

52:46 BUT CAROL, YOU SEEM VERY -- KATIE: I AM HAPPY FOR YOU. CAROL: I LOVE PEOPLE. I LOVE THE SHARING CONCEPT. ROMAINE: I DON'T WANT TO SHARE AUDIO EITHER. I DON'T CARE WHAT YOU LISTEN TO. CAROL: I HAVE NO COMMENT. I AM WRAPPING BECAUSE MY FAMILY JUST TOLD ME TO WRAP. KATIE AND ROMAINE CONTINUE ON THE CLOSE ON TV AND TIM AND I CONTINUE WITH BLOOMBERG BUSINESSWEEK DAILY. WE WILL SEE YOU AGAIN SAME TIME, SAME PLACE TOMORROW. PLEASE WEAR HEADPHONES. ROMAINE: OUR COVERAGE CONTINUES ON BLOOMBERG TELEVISION. WE ARE AWAITING RESULTS OUT OF A KEY RETAILER -- GAP. WE WILL BREAK THEM DOWN AS SOON AS THEY HIT THE TAPE.

53:32 >> "THE COUNTDOWN" IS ON. EVERYTHING YOU NEED TO GET THE EDGE AT THE END OF THE MARKET DAY. THIS IS THE CLOSE. KATIE: WELCOME BACK TO THE CLOSE. ROMAINE: THE FOURTH STRAIGHT TRADING DAY SINCE THE WAR WITH IRAN BEGAN. EVERY DAY, WE HAVE SEEN STOCKS UNDER PRESSURE. DIP BUYERS COMING IN. A COUPLE OF THOSE DAYS, WE DID SEE THE MARKET PUSHED BACK INTO THE GREEN AT THE CLOSE. TODAY, NOT QUITE THERE, BUT WELL OFF THE LOWS OF THE DAY. WE ALSO SAW A LOT OF PRESSURE TODAY IN CHIP STOCKS ON THE BACK OF A NEW POLICY THAT MIGHT RESTRICT EXPORTS OF CHIPS. WE KEEP AN EYE ON WHAT HAS BEEN GOING ON IN THE ENERGY SPACE AND THE YIELD SPACE, BECAUSE THAT HAS BEEN A BIG DRIVER OF

54:18 BROADER MARKETS. KATIE: ABOUT CHIP STOCKS, NVIDIA INITIALLY LED THE DROP DOWN. YOU CAN SEE THEY MANAGED TO FINISH IN THE GREEN DESPITE THE REPORT THAT WE SAW IT EARLIER. NVIDIA SHARES FINISHING ABOUT 0.2% HIGHER. LOOK AT BROADCOM. THEY REPORTED EARNINGS ABOUT 24 HOURS AGO, DELIVERING A PRETTY UPBEAT FORECAST. YOU CAN SEE SHARES RISING ABOUT 4.8%. BERKSHIRE HATHAWAY CEO GREG ABELL COMING OUT AND SAYING HE IS GOING TO USE ALL OF HIS TAKE-HOME PAY TO BUY BERKSHIRE STOCK. TAKE A LOOK AT WHAT IT IS DOING, HIGHER BY ABOUT 2.7%. LET'S GET TO OUR TOP STORY THIS HOUR. WRAPPING UP A WEEK OF RETAIL REPORTS, TARGET, ABERCROMBIE, VICTORIA SECRET ALL IN THE BOOKS COME UP WITH CONSUMER

55:04 FACING COMPANIES ALREADY ISSUING WARNINGS DUE TO THE CONFLICT IN THE MIDDLE EAST. THE ABERCROMBIE CFO ANTICIPATING A SLIGHT SALES HEADWIND, WHILE VICTORIA'S SECRET SAYING IT IS EXPERIENCING SHIPPING DELAYS. THIS AS WE GET SET FOR RESULTS OUT OF GAP AND COSTCO, DUE TO DROP ANY MINUTE. LET'S GET TO THE CEO AND CHIEF SHOPPER AT WS L STRATEGIC RETAIL. WENDY, AS WE WAIT FOR THOSE GAP AND COSTCO RESULTS, LET'S TALK ABOUT WHAT SOME OF THESE COMPANIES ARE DEALING WITH. WE ALREADY HAD THE TARIFF SITUATION THAT THEY HAD TO DIGEST. NOW YOU THINK ABOUT WHAT IS HAPPENING IN THE MIDDLE EAST. WHAT DOES THIS POTENTIALLY MEAN FOR SUPPLY CHAINS, WHICH HAVE ALREADY BEEN STRESSED?

55:50 >> HELLO, KATIE. I THINK PART OF THIS IS WILL THE STOCK BE ON THE SHELF. WILL IT BE ON THE SHELF WHEN SHOPPERS WANT IT? THEY ARE ALREADY FEELING NERVOUS FROM THE END OF LAST YEAR, BEGINNING OF THIS YEAR. THAT MORE THAN ANYTHING -- AND THE IMPACT OF GAS PRICES, BECAUSE THAT HITS POCKETBOOKS REALLY FAST. IF THAT TAKES MONEY OUT OF THEIR WALLETS, THAT, MORE THAN ANYTHING ELSE, WILL IMPACT HOW THEY SPEND FOR ANYTHING. ROMAINE: I AM CURIOUS ABOUT THIS IDEA OF ATTRACTING SHOPPERS. IT IS RETAINING THE FOLKS YOU HAVE, BUT ALSO BRINGING NEW PEOPLE INTO THE FOLD. PROBABLY LESS OF AN ISSUE FOR COSTCO. CERTAINLY AN ISSUE FOR GAP.

56:36 >> PART OF THIS IS NOW THERE ARE SO MANY OPTIONS FOR LOWER PRICES IF YOU WANT THEM, INCLUDING USING AI TO DO IT. THERE ARE SO MANY OPTIONS FOR OTHER PLACES TO SHOP, WHICH PEOPLE DO ALREADY. SO THE CHALLENGE IS BALANCING INNOVATION AND GETTING PEOPLE TEMPTED WITH IS IT WORTH THE PRICE, AND THAT IS SOME OF WHAT WE ARE -- THAT TENSION WE ARE SEEING NOW. GAP HAVE BEEN DOING A GOOD JOB REINVENTING WHAT THE GAP BRAND, THE INDIVIDUAL BRAND MEANS, AND THAT IS PART OF THE CONVERSATION . ROMAINE: IS IT JUST ABOUT PRICE? THEY ALSO HAVE TO HAVE THE GOODS THEMSELVES, MEANING THE STYLE. >> THAT IS WHAT I MEAN BY INNOVATION. I CAN BUY DENIM ANYWHERE AT ANY PRICE.

57:22 I CAN BUY T-SHIRTS ANYWHERE AT ANY PRICE. RIGHT? ALL OF THAT IS PART OF IT. THE LOWEST PRICE? SO WHAT. I CAN GET IT IF I NEED IT FOR THE KIDS, FOR MYSELF, FOR WEEKENDS. THE DIFFERENCE REALLY IS, IS THERE SOMETHING INTERESTING FOR ME TO BUY TO GET ME OFF MY COUCH AND INTO THE STORES OR ONLINE? THAT IS WHAT WE HAVE BEEN USING IN MANY OF THE RETAILERS THAT LATELY HAVE NOT BEEN REALLY COMPELLING. GAP HAS BEEN DOING A GOOD JOB IN THEIR STYLING BUT ALSO THEIR MARKETING, WHICH HAS BROUGHT IN DIFFERENT CONSUMERS, NEW CONSUMERS BACK INTO THE STORES. KATIE: WE DO HAVE THOSE RESULTS UP FROM GAP, SO LET'S WALK THROUGH SOME OF THE HEADLINES RIGHT NOW WHEN IT COMES TO FOURTH-QUARTER

58:08 NET SALES COMING IN AT $4.24 BILLION. RIGHT ON IN TERMS OF THE ESTIMATE. GOING TO TAKE A LOOK AT WHERE THEY SEE FIRST QUARTER NET SALES -- EXPECTING 1% TO 2% GROWTH. ALSO GETTING FOURTH-QUARTER EPS FOR GAP, COMING IN AT $.45. THE ESTIMATE HAD BEEN FOR 46 CENTS. OLD NAVY HAS ARGUABLY BEEN THE BRIGHT SPOT OF THE CAP PORTFOLIO. THOSE COMP SALES COMING IN AT 3% GROWTH IN THE FOURTH QUARTER. THE ESTIMATE HAD BEEN FOR 4.35%. ROMAINE: I WONDER IF THAT IS GOING TO WEIGH ON THE SHARES. THE FULL-YEAR FORECAST FOR GAP ON A NET SALES BASIS IS SLIGHTLY ABOVE WHAT THE STREET WAS LOOKING FOR, BUT THEY ARE STILL TALKING ABOUT THE MARGIN

58:57 IMPACT. WENDY, I'M CURIOUS ABOUT THIS IDEA OF MANAGING THROUGH TURBULENT TIMES. WHEN WE TALK ABOUT APPAREL MAKERS, RETAILERS, A LOT ARE HEAVILY DEPENDENT ON THE IMPORT MARKET, NOT TO MENTION OTHER FACTORS THAT COULD DISRUPT THE SUPPLY CHAIN. WENDY: I THINK IT IS ALL OF THAT. WE HAD THE TARIFF CONVERSATION, THE SUPPLY CHAIN ISSUES THAT WE ARE STARTING TO SEE RIGHT NOW, OR MORE ANTICIPATION OF THOSE THAT WILL HAPPEN. JUST THE COST OF GAS TO SHIP THINGS. ALL OF THOSE SEEM TO HAVE AN IMPACT. ENERGY FOR THE AVERAGE AMERICAN HOUSEHOLD AS WELL AS THE AMERICAN RETAILER IS A CHALLENGE DAY BY DAY. THAT IS WHAT WE ARE SEEING IN THIS CAUTION FROM GAP OR ANY OF THE OTHER RETAILERS, EVEN IF THEY HAVE GOOD RESULTS SO FAR

59:44 THIS YEAR. KATIE: JUST TO DIG INTO THOSE RESULTS A LITTLE BIT MORE, I MENTIONED OLD NAVY. COMP SALES MISSED ESTIMATES. YOU ALSO SAW A SIMILAR RESULT WHEN IT COMES TO ATHLETA MISSING EXPECTATIONS. GAP, THE NAMESAKE BRAND, AND BANANA REPUBLIC COME UPBEAT. WHEN YOU LOOK AT THE GAP PORTFOLIO RIGHT NOW, WHAT DO YOU MAKE OF IT? WE KNOW THAT ATHLETA HAS BEEN A BIT OF A PROBLEM, AND TRYING TO BRING BACK THAT MOMENTUM HAS BEEN A STRUGGLE. WENDY: AND AGAIN I THINK LOTS OF COMPETITION IN THAT SPACE, WHETHER IT IS THE HIGH-END OF THE LULULEMONS OF THE WORLD -- YOU SEE A LOT GOING ON IN THAT SPACE. THEY HAVE BEEN QUITE SLOW TO RESPOND TO THE WAY CONSUMERS,

1:00:31 SHOPPERS ARE THINKING ABOUT ATHLEISURE, WHETHER IT IS FOR REAL FITNESS OR AN EVERYDAY LOOK. THERE IS A LOT OF CATCH-UP TO DO. BUT YOU SEE THE SUCCESS IN GENERAL OF THE GAP BRAND, WHERE THEY HAVE REALLY PUT THE EFFORT INTO DESIGN AND NEW MARKETING VOICES, TO MAKE IT MORE CONTEMPORARY. I THINK THAT IS THE OTHER THING WE ARE SEEING. ROMAINE: WE ONLY HAVE ABOUT 60 SECONDS, BUT I AM CURIOUS, WHEN YOU LOOK ACROSS THE LANDSCAPE, LOOK AT SOME OF THOSE LEGACY RETAILERS AND APPAREL MAKERS WHO HAVE FOUND NEW FOOTING -- WHO STAYS ON TOP THE MOST? WENDY: I DO THINK GAP THE BRAND HAS REALLY DONE THAT. I THINK OTHER THAN THAT AS YOU LOOK AT SOME OF THE RETAILERS, SOME OF THEM ARE DOING A BETTER JOB WITH THEIR OWN PRIVATE

1:01:20 BRAND, WHICH HAS MADE THIS MORE COMPETITIVE IN THIS SPACE. AND WE SEE BRANDS LIKE LULU DOING BETTER SELECTIVELY. I THINK WE ARE SEEING THAT LITTLE BIT, BUT IT HAS TO BE ABOUT INNOVATION. ROMAINE: ALWAYS A PLEASURE AND I HAVE TO STEP BY FLOWER GAME UP. WENDY IS AT STRATEGIC RETAIL. WE ARE ALSO GETTING EARNINGS OUT OF COSTCO. SECOND QUARTER COMP SALES UP AT 7.4%, ABOVE WHAT THE STREET WAS LOOKING FOR. U.S. COMP SALES ALSO COMING IN ABOVE WHAT THE STREET WAS LOOKING FOR. THE BOTTOM LINE NUMBER FOR UPS. KATIE: YOU CAN SEE TRADERS KIND OF DECIDING WHAT TO DO WITH SHARES AFTER HOURS. HIGHER BY A FRACTION HERE.

1:02:06 I WANT TO POINT OUT THAT COSTCO IS HIGHER BY 14% ON A TOTAL RETURN BASIS YEAR TO DATE. QUITE A STRONG START. ROMAINE: RETAIL LEGEND MICKEY DREXLER COMING BY THE PROGRAM IN JUST A BIT. STICK WITH US. ROMAINE: WELCOME BACK TO "THE CLOSE," CONTINUING OUR FOCUS ON THE RETAIL SECTOR. I HAD A CHANCE TO ASK ABOUT THE LONGEVITY OF UGG AND WHAT ADVICE THE FOUNDER GIVES FUTURE BRAND AMBASSADORS AS THEY COME UP THROUGH THE PIPELINE. TAKE A LISTEN. >> THE PRINCIPLES OF MARKETING AND BUILDING A BRAND HAVE NOT CHANGED. I WROTE A BOOK CALLED "THE BIRTH OF A BRAND." THE THEME OF IT IS YOU CANNOT

1:02:54 GIVE BIRTH TO ADULTS. EVERY BUSINESS STARTS WITH CONCEPTION, AND THEN THE FIRST ACTIONS. ONE EXAMPLE FROM AUSTRALIA WAS THE BIRTH OF UGG. EVERY BUSINESS GOES THROUGH ITS INFANCY, WHERE IT LOOKS LIKE IT IS FAILING BECAUSE IT DOESN'T DO ANYTHING. BUT IF YOU CAN KEEP WORKING AT IT AND YOU BELIEVE IN IT ENOUGH, IT WILL START THE TODDLING STAGE WHERE PEOPLE START TO GET INTERESTED IN YOUR PRODUCT, AND THEN IF IT IS A GREAT PRODUCT OR SERVICE, YOU GO INTO THE TEENAGE YEARS. THAT IS WHEN YOU REALLY START TO COME UP WITH ALL THE BIG BUSINESS PROBLEMS. AND IT WILL EVENTUALLY MATURE JUST LIKE UGG DID. IF YOU ARE A NEW PERSON STARTED

1:03:40 OUT, THAT IDEA THAT YOU ARE GOING TO BE AN INSTANT MILLIONAIRE -- STICK WITH IT, BUT NO YOU ARE GOING TO GO THROUGH THESE PHASES. ROMAINE: I WANT TO ASK YOU ABOUT WHAT THE DIFFERENCE IS BETWEEN A PRODUCT AND A BRAND. THAT MATTERS. >> GREAT QUESTION. A BRAND IS NOT YOUR TRADEMARK REGISTRATION. A BRAND IS NOT YOUR LOGO. A BRAND IS WHAT CONSUMERS THINK ABOUT YOU. IT TOOK FOUR YEARS BEFORE I UNDERSTOOD ADVERTISING AND MARKETING. YOU NEVER SELL YOUR PRODUCT. YOU SELL THE FEELING, THAT EMOTIONAL TIE THAT YOU WANT PEOPLE TO HAVE WITH YOUR PRODUCT. IF YOU ARE A NEW PERSON STARTING OUT WITH A NEW FOOTWEAR BRAND, THAT IS WHAT YOU HAVE TO CONQUER.

1:04:30 HOW DO YOU GET YOUR AUDIENCE TO WANT TO BE IN THE PHOTOGRAPH OR THE VIDEO OR WHATEVER IT IS THAT LAUNCHES THE TREND. ROMAINE: HOW DO YOU MAINTAIN THAT BRAND AUTHENTICITY ONCE YOU START GROWING AND SCALING UP? I FEEL LIKE IT IS PROBABLY EASIER TO DO THAT WHEN YOU ARE SMALL. YOU CAN TAKE BIGGER RISKS. ONCE YOU BECOME BIGGER, TAKING BIGGER RISKS MEANS THE POTENTIAL FOR BIGGER FAILURE. >> THE DEVOLUTION FOR ME WAS I STARTED WITH THOSE YOUTH SURFERS. THAT WAS HIGHLY SUCCESSFUL. I THOUGHT, MY GOD, SNOWBOARDING IS JUST BEGINNING. I WENT TO ALL THE SNOWBOARD MAGAZINES. THAT WAS A HUGE SUCCESS AS WELL, ADVERTISING TO THE YOUTH. I WAS STUCK IN THE MIDWEST AND BACK EAST, BECAUSE THEY DID NOT

1:05:15 KNOW WHAT THE KIDS DID IN THE WINTERTIME. EVENTUALLY, SOME SPORTING GOODS RETAILER TOLD ME THEY PLAY HOCKEY. I HAD BEEN IN AUSTRALIA. IT WAS AN ALIEN SPORT TO ME. HOCKEY, THAT TOOK THE BRAND NATIONWIDE. BUT THERE WAS SOMETHING MISSING. I WAS ALWAYS -- IT WAS FRAGMENTED IMAGES WHICH WERE NOT GOOD FOR THE BRAND. I CAME UP WITH THIS THING, CASUAL COMFORT, AND I STARTED TO ADVERTISE THAT AND HAD A REALLY SUCCESSFUL CAMPAIGN IN USA TODAY. THAT SORT OF TOOK IT INTO THE HOLLYWOOD AREA AND THE CELEBRITIES AREA, AND THAT IS WHEN THE TRACTION FOR THE BRAND -- EVEN THOUGH WE WERE DOING 5

1:06:05 MILLION, 6 MILLION AT THE TIME, IN SALES, THAT IS WHEN THE TRACTION STARTED TO GROW AND THAT DROVE IT UP TO THE 15 MILLION STAGE. ROMAINE: ARE YOU SURPRISED AT THE LONGEVITY OF THE BRAND THAT IS STILL THRIVING? >> I KNEW IT WOULD BE A PHENOMENON ONCE IT TOOK OFF. I THOUGHT IT WOULD BE A YEAR OR TWO AND I WOULD BE AN INSTANT MILLIONAIRE. BUT IT TOOK NEARLY 20 YEARS BEFORE I GOT TO THE STAGE WHERE I HAD TO SELL IT. IT JUST GOT TOO BIG. I PREDICTED BACK THEN IT WOULD BE A $200 MILLION, 300 MILLION DOLLAR COMPANY. SO THE ANSWER IS NO, I NEVER SAW IT BEING TOO BILLION DOLLARS A YEAR AT THE TIME. ROMAINE: IF THERE IS A YOUNG BRIAN SMITH OUT THERE TODAY WHO IS

1:06:50 TINKERING AROUND WITH AN IDEA IN HIS OR HER HEAD, WHAT IS THE ONE PIECE OF ADVICE YOU WOULD WANT TO LEAVE WITH THEM? >> IF YOU BELIEVE IN YOUR PRODUCT, JUST DON'T GIVE UP. THERE IS A GREAT SAYING. ONCE YOU START DOWN A PATH, THE UNIVERSE WILL CONSPIRE TO WORK WITH YOU. THAT IS SO TRUE. AS LONG AS YOU KEEP FOLLOWING MOMENTUM, THINGS WILL KEEP DROPPING INTO YOUR AWARENESS ABOUT, MY GOD, I CAN USE THAT CHANNEL. AS LONG AS YOU STAY IN MOMENTUM, THINGS WILL JUST FALL IN PLACE EVENTUALLY. IT SEEMS LIKE IT IS AGONIZINGLY SLOW, BUT THE THEME OF ANY BUSINESS -- YOU CANNOT GIVE BIRTH TO ADULTS. IF YOU HANG IN THERE,

1:07:36 EVENTUALLY IT IS GOING TO RISE TO THE TOP. ROMAINE: PART OF OUR CONVERSATION WITH BRIAN SMITH, THE FOUNDER OF THE UGG BRAND. HE SOLD IT A FEW YEARS AGO. YOU MUST BE A FAN OF UGG'S. KATIE: NOT AN UN-FAN. ROMAINE: THEY ARE SO WARM. KATIE: WHEN I WAS IN MIDDLE SCHOOL, ALL THE COOL GIRLS HAD THEM. I WAS NOT PART OF THAT CLICK. ROMAINE: BUT YOU ARE COOL NOW. KATIE: I GOT THE LAST LAUGH. KATIE: TAKING ANOTHER CHECK ON GAP AND COSTCO, BOTH NAMES DOWN, GAP MORE SO, 8.3%. LET'S GET MORE INSIGHT WHEN IT

1:08:23 COMES TO THE STATE OF THE RETAIL INDUSTRY AND THE CONSUMER. WE GO TO A LEGEND FOR THAT, MICKEY DREXLER, FORMER CEO AND CHAIRMAN OF J. CREW, MANY YEARS AT CAP AS WELL. GREAT TO SEE YOU. YOU LOOK AT JUST THIS WEEK WHEN IT COMES TO ABERCROMBIE, AMERICAN EAGLE AND NOW GAP FALLING IN AFTER HOURS, IT SEEMS LIKE A TOUGH MARKET FOR APPAREL MAKERS. WHEN YOU TAKE A LOOK AT THE LAY OF THE LAND, WHAT ARE YOU SEEING? MICKEY: WHAT I'M SEEING, AND I DO MY SURVEYS WHEN YOU INVITE ME ON, BUSINESS IS PRETTY GOOD AROUND, WHATEVER THAT MEANS, BUT FOR ME

1:09:11 IT'S NEVER BEEN ABOUT ESTIMATED EARNINGS EVEN THOUGH I WAS FORCED TO DO THAT. THE REAL DEAL IS JUDGE IT AGAINST LONGER-TERM GROWTH. I THINK IT'S ABOUT THE MERCHANDISE. I'M LESS IMPRESSED WITH THE MERCHANDISE I SEE AROUND RIGHT NOW. AT THE END OF THE DAY, IT'S ABOUT MERCHANTS RUNNING MERCHANDISING COMPANIES. ROMAINE: WHEN YOU SAY YOU ARE LESS IMPRESSED, IS THAT THE QUALITY OR THE STYLE? MICKEY: MULTIPLE CHOICE. IT DEPENDS ON THE COMPANY. SOME COMPANIES JUST STAY ON THE PROGRAM, THEY DO WHAT THEY DO,

1:09:57 AND OTHERS ARE SHORT-TERM -- I LIVED IN THE STOCK MARKET 30 YEARS BUT IT IS WHAT IT IS. KATIE: I WANT TO TALK A LITTLE ABOUT WHAT WE ARE SEEING AT THE TARIFF RUN. THERE'S BEEN A LOT OF BACK-AND-FORTH, THE SUPREME COURT OVERTURNING THE IEEPA TARIFFS, PRESIDENT TRUMP SAYING HE'S GOING TO IMPLEMENT 15% LEVEES ACROSS THE BOARD. IT'S VERY FLUID TO PUT IT MILDLY. MERCHANDISING ASIDE, HOW IS THAT IMPACTING SEE SUITES OR MAKING DECISIONS ABOUT WHAT THEY ARE ABLE TO GET ON THE SHELVES, WHAT THE SUPPLY CHAINS LOOK LIKE? MICKEY: LAST TIME I WAS HERE WE WERE FLYING BLIND. THE SUPREME COURT DECISION WAS

1:10:42 A BIT OF A CELEBRATION FOR SOME OF US, EVEN IF IT'S AN EXTRA 10% OR 15%, WE ARE STILL AHEAD IN INDIA AND CHINA THAN THE ORIGINAL TARIFFS. WE ARE RESTING EASIER. YOU NEVER KNOW IN THIS ENVIRONMENT WHAT CAN HAPPEN. BUT WE ARE FEELING GOOD IN OUR BUSINESS. I THINK THE INDUSTRY IS NOT FILLED WITH PRODUCT MERCHANT PEOPLE, AND ENOUGH OF THEM, AND I THINK AI -- IT WILL BE HELPFUL IN SOME AREAS BUT IT WILL NOT TAKE COLORS, IT WILL

1:11:27 NOT DESIGN CLOTHES ALTHOUGH I'VE HAD THAT DEBATE. AND IT DOESN'T HAVE EMOTION. IN OUR BUSINESS EMOTION AND CONNECTING TO MERCHANDISE AND MARKETING IS WHAT DRIVES THE BUSINESS. ROMAINE: YOU'VE SEEN A LOT OF RETAILERS GRAVITATE TO AI AND TECHNOLOGICAL TOOLS TO TRY TO REACH THE CONSUMER NOW. THERE'S BEEN A BIG DEBATE ABOUT KEEPING THEY HUMAN TOUCH AND INCORPORATING TECHNOLOGY. SHOPPERS ARE USING IT. WHAT IS YOUR APPROACH? MICKEY: I PLEAD NOT KNOWING MUCH ABOUT IT. ROMAINE: FAIR ENOUGH. MICKEY: I HAVE SOME TEAM MEMBERS WHO KNOW HOW TO USE IT I THINK GREAT MERCHANDISE AND PRODUCT

1:12:14 WILL NOT BE IMPACTED BY AI IN MY OWN OPINION. TECHNOLOGY FOR SURE, CHATGPT AND ALL OF THAT. IF YOU LIKE THE JACKET, YOU LIKE THE JACKET. I DON'T THINK AI WILL TELL YOU TO BUY MORE OF THAT JACKET. I WAS SPEAKING TO SOMEONE TODAY, TALKING ABOUT DEMAND ANALYSIS. I SAID I DON'T KNOW WHAT THAT IS. IF YOU BUY 100 AND FORECAST IT OUT, MAYBE YOU SHOULD HAVE BOUGHT 1000 THAT IS A MERCHANT'S ROLE. IN ANY INDUSTRY. ROMAINE: YOU'VE SEEN TECHNOLOGY CHANGE OVER TIME, EVEN BACK IN THE DAY.

1:13:01 YOU SAW A CHANGE, THERE WAS A CERTAIN PERIOD, WE HAD COMMERCE, THEN -- WE HAVE CATALOGS AND THEN E-COMMERCE. IT EVOLVES INTO SOMETHING ELSE. MICKEY: I THINK IT WILL EVOLVE BUT TECHNOLOGY I THINK HAS TAKEN A

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