The countdown is on. Everything you need to get the edge at the end of the market day. This is the close.
All the unresolved issues for markets reminding traders those issues are still unresolved. Live from Studio 2 here at Bloomberg headquarters in New York. I'm Roma Basti.
And I'm Sally Bakewell. And we're kicking you off to the closing bell here in New York. Let's get a check on the markets. And we'll start with oil since that is driving most of the action today. And we have Brent crude still elevated at about $106 amid continued tensions between the US and Iran. Even though there are some media reports suggesting that negotiators from both sides are discussing a potential phased path out of war that could involve a reopening of the Strait of Hormuz that has helped S&P 500 pair some of its earlier losses though. Let's have a look. Oh, it's up a little bit just after fluctuating between red and green today and the NASDAQ also up just a touch and of course this all has a big impact on bond yields and we saw the 30-year hit a multi-decade high earlier today at about 5.44% and it is still around there just a little bit higher so the pressure remains on.
Yeah, let's talk stick on those yields here for a second because we came into today with a lot of concerns about the strong growth, economic growth, sticky inflation, and that hawkish Fed kind of creating a bit of a perfect storm for those higher Treasury yields. A benchmark 10-year. We should point out right now on pace for its biggest monthly jump since October of 2024. And maybe that intensifies because you got Philadelphia Fed President Anna Walt Pollson joining the chorus of policy makers out there now saying that more Fed tightening may be needed to truly kick inflation back down to the central bank's 2% marker for the first time in 6 years. So the risk for markets right now is that at some point well the Treasury situation that selloff could become reinforcing. The closer the 10-year gets to five and a quarter, the more likely treasuries positively correlate with stocks and that increases the chance that they get sold down more and that begins to amplify losses in portfolios rather than hedge them vice versa. Lisa Charlotte, she posited that scenario.
I don't think what the Fed is ultimately going to do which may be 75 or 100 basis points does anything for inflation to be blunt because the drivers of inflation are not things that the Fed can affect. That having been said, it will on the margin clip the cyclicals, it will clip small caps, it will clip housing, it will clip some of the consumer discretionary and so that's a narrowing of the market. We know at the end of the day this entire bull market is an AI tech story and that means we're going to narrow back to that leadership.
Now unfortunately that AI leadership getting harder to discern for the immediate moment give Meta the spotlight with its Muse launch and palm hailed device. But a Bloomberg report that Oracle is said to have sent Blue Owl, the developer of its New Mexico data center project, a force majeure notice showing how permitting, power, construction, and tenant timing can delay usable capacity even after capital is committed. We want to kick you off to the close with a discussion about the collision right now between what's been going on in the debt markets, in AI, in public and private markets. And we do that with Henry Fernandez. He's the chairman and CEO at MSCI. Henry, great to see you here.
I do want to start off with the AI situation. I know in the past you've talked a lot about kind of where we are in this cycle. When you hear a company sort of basically put out a force majeure notice in this environment where there's so much borrowing but at the same time so much investment directly into that long-term story. What does that tell you about where we are in that cycle?
Well, it's a hugely revolutionary change. Like any revolution is never steady or straight line is going to go through ups and downs but the trend is inexorable. There is no alternative to putting this back in the genie, you know, the genie back in the bottle here. It is a force that will redefine the world, redefine economies, industries, societies, the way of life etc. So there will be a number of great things that will happen and there will be a number of accidents that will happen along the way but there is no alternative, you know, we need to embrace this technology in a safe and prudent way of course, but you know, there is no way out of this right.
When we talk about particularly in public markets how the AI trade has been concentrated in a relatively small handful of names. How does that reshape the way that you look at indexing, inclusion in the indexes because ultimately you are supposed to be representative of the market and at least for right now or the economy towards a certain extent and for right now that economy is AI.
See when a big industrial type of revolution takes place it's chaotic at the beginning there are a lot of people betting as to who will do the best who will survive who will dominate who will do this and all that is happening in the railroads and the auto industry it's happening in the auto industry in China as we speak there are hundreds of people contesting the leadership so that is not going to be any different here so right now investors are putting money everywhere that they can see a potential opportunity and a potential winner but there will be a shakeout and the shakeout will have some companies continue their trend in bigger values and some companies that will go out of existence. So the indexes reflect that right now and they should because the index is a reflection of the current market the current available opportunity set available market cap and that's what we do.
And you wrote this week about physical risks, climate, and you included AI in that. And you said that AI specifically has exacerbated physical risks because its power usage puts pressure on emissions and because of where the data centers are, they could be vulnerable to climate events. But do you think investors are really treating those kinds of concerns with urgency and real concern?
They're not. You know, like anything, whenever you have a crisis, you turn short term. A family will do that, a society will do that, the governments of the world will do that. So we have a lot of short-term crisis, you know, going on. So the focus of the world is leading with is dealing with those short-term crisis right now. So they're not focused on the effects of climate change. Even though you look at the drought in Europe and it's potentially going to shave off 1% of growth of Europe, which is all of the growth of Europe and the like. So there is that element of it, but it is human nature. That's how people, that's what we do. But I think that what is happening is the climate continues to change. The effects are evident all over the place in economies, in countries, in societies and all of that and therefore the people that are farsighted are beginning to take this into account especially physical risk and then obviously transition risk and so are we. So we are a company that are first of all contrarians and secondly we invest when there is blood in the street. We try to get that market share position in the market because it will come back and it will come back with a vengeance.
Well, that leads me to another question about what kind of business opportunity this is for you because I noticed some other research you put out in August where you said that geographic diversification in global equity portfolios may hide a common dependence on US hyperscalers AI capital spending and so a slowdown could actually potentially be very serious. What kind of tools and strategies can you provide to investors or are working on to provide to investors so that they can mitigate against that kind of concentration risk?
Yeah. So the global investment industry has three basic components in addition to human capital, massive amounts of data, a lot of models to help them understand and manage the portfolios and a lot of technology to do both. So almost like salad in a salad, lettuce, tomatoes, carrots, right? You know, that's are the basic ingredients. So those are our basic ingredients in everything we do. We're a modeling company, modeling risk, performance, asset location, portfolio, construction, private, public, doesn't matter. No, we model investments of every kind that requires an incredible amount of data and of course a lot of modeling and a lot of technology. AI is a godsend to us to that because what you have is the ability to capture enormous amounts of data more efficiently, more cheaply in order and the ability to scale up your models and develop better models, you know, better with better statistical output and all of that and of course the AI technology. Remember a lot of our distribution of all of this to the world is through SAS software basically and it's a very cumbersome process very expensive. So if we can couple all this content with agents for the utility and the use case of clients around the world that's also going to get incredible benefit. So that's what we're focused on.
Well I mean internally I mean you've talked about this idea of using agents a little bit more internally. I mean, have you actually put a number on what that actually would potentially save the company in terms of money?
Oh, a lot, you know, and we're just at the beginning of that, you know, process. We have 1.2 billion expenses that are growing at 8 and a half percent. That eventually will be negative growth because we can put agents to that and we can put all those savings into investments of the company. And, you know, ideally, we have 6,500 professionals at MSCI. I'd like to run the company given the ambitions we have with 65 maybe 600,000 people. The thing is we'll have five six thousand human people and the rest will be digital people and every person will have a lot of people reporting to them. It will be agents reporting to them and that's the way we should look at this AI transformation. You know the ability for somebody to have a lot of different people doing helping them do their job every day.
I do want to talk about another big revolution going on in markets and that's kind of the dominance of private markets or at least certainly them sharing the spotlight with public markets. You struck that deal with UPS I think about back in July. You acquired PM Insights which obviously gives you a lot more insights into what exactly the values of some of these companies are. Are you planning to launch a separate index specifically for private assets?
No, we already have hundreds of private asset indices recently, right? This is in the last broad-based one. Yeah. You know, this broadbased, narrow, you know, different segment, different asset classes and all of that.
The reason that is very important is because indices, benchmark indices are a measurement of a market, right? So when you think about what is the market, the market is about some aggregation of the market in an index. So we are able to now provide a good understanding of the total market for private credit for example for infrastructure in Southeast Asia you know and the like so that people can look at their portfolio and say am I missing out on that opportunity or am I do I have a good amount of assets into that opportunity. So we're really working in all of that.
But is that going to be are we going to get to a point where we're going to have something that's reliable on a daily basis or is that kind of impossible to do?
No we are. We are launching daily valuation private asset class indices. So what we do is that between the periods of reports which is about a quarter right what we do is we use modeling statistical models with a lot of other variables that affect the value of those investments in order to come up with a daily value of private equities or private credit or private infrastructure real estate so that we can give a sense of valuation in the interim period. Now some of that will be used for trading of transactions, exchange of value transactions and some of that will be more directional to understand how the interim period between quarters affects the valuation of the funds right.
Henry really appreciate it thank you.
Henry Fernandez chairman CEO over at MSCI as we count you down to the close here on this Thursday afternoon we also keep our eyes on what's been going on over at the United Nations the general assembly still underway here in New York. We want to go live now to the UN Rose Garden where Anmarie Hordern is sitting down right now with NATO Secretary General Mark Rutte. Anmarie,
Thank you. Thank you so much. An individual that I've had the privilege to catch up with throughout the years and now here in New York and someone he has been sitting down with all of the world leaders as there are now of course two hot wars that UN and UN leaders are trying to address. I'd like to begin what's going on and thank you so much for joining us.
Good to be back. It's great. It's great to see you.
I want to start what's going on first with Russia and Ukraine because you just met with Zelensky on the sidelines of this meeting. You're talking to all the European leaders. Do you see the contours of potentially a ceasefire coming to fruition?
Well, for that to happen, we need Putin to play ball and so far he is not. Which is a bit strange because he is losing over 43,000 of his own men each month now dead or seriously wounded in Ukraine. 1.2 million since this totally unprovoked war started. So, you would think he's not in a good place. He wants a deal, but somehow he so far is not playing ball, but hey, let's see what happens. And the Ukrainians are doing quite well on the battlefield, holding off the attacks by the Russians.
We know the message from this White House was all about diesel, diesel, diesel according to this readout from the Financial Times in terms of what the United States is concerned about and they want Ukraine to stop hitting refineries in Russia. Russia has for months an export ban on diesel. Do you see any willingness from Ukraine to do so?
Well, you've heard from Ukrainian president. He is willing to talk with the Russians or through the Americans to see what the Russians are willing to give in return. Because his cities are being pummeled and under attack from Russian fire. They are hitting them with missiles and with sometimes jet power drones even from Iran. So I think it's fair that there has to be a sort of balance and I think that's also what the Americans acknowledge and that's probably what they but I'm not privy to all those talks what they also try to accomplish.
I know this is not exactly a NATO problem but you do speak to all the European leaders. There is discussion amongst the EU that they have this outreach with the US because they are concerned about a diesel export ban because so much diesel goes to Europe from the United States. Are you feeling that frustration that concern?
No, I must say let me not comment on that because that is really European Union and I made one promise with Ursula from the president of European Commission. We work extremely well together but it doesn't help if we comment on each other's territories and I leave it with her because she is an excellent leader.
If you don't have diesel though that could be a problem for NATO.
Yeah. But there's also another issue which I can talk about and that is the refining capacity in Europe itself. What we are seeing is no new refineries being built in Europe. We are seeing that refineries are being closed down and if war breaks out, if the Russians would attack and we have to defend ourselves, we need massive amounts of diesel and all the oil products for our F-35s, our fighter jets, for our tanks, etc. And that is a big worry, but of course that is not directly linked now to whatever is playing out between the EU and the US.
How do you see the winter shaping up for Ukraine? Because they still need more Patriot missiles.
Again, I think over the coming months, you will see Ukraine doing well when it comes to the front line, well when it comes to striking deep inside Russia. But they need all the support they can get from Europe and the US and Canada when it comes to air defense and generally in terms of money and weapons supply into Ukraine. Luckily, that is still continuing, including from the United States, paid for by Canadians and Europeans. This is the deal, the PURL program, which the president and I agreed on last year, July. Very successful. The problem is that there is not sufficient supply at the moment of air defense interceptors but there is still a lot going into Ukraine supporting them in defending their cities.
How much have you been relying on this program?
It was very important because the US has some key capabilities which Europeans are not having and the president rightly said last year hey I'm not going to pay for it but I will continue delivering if you guys in Europe are willing to pay for it.
Do you feel the US has the stockpiles for it?
Yes, still the supply is going into Ukraine and the US is so big and has such a powerful military that I am fairly confident that will continue but of course you would love to have much more and also when it comes to the European missile defense systems you would love much more. So this will be a challenging issue going into the winter.
The theme in Ankara was really focused on the United States giving the Ukrainians licenses so they can just build their own Patriot missiles in their own country. Where are we on that?
Well, that's a discussion is continuing. I know the but I thought it was supposed to be done already. Well, even if it is done already, it will not lead to a lot of extra Patriot supply immediately. It takes quite some time before these new missiles come offline. What I'm working on is making sure that Ukraine has what they need in terms of the present stockpiles and then more generally we have any way to ramp up the production of interceptors. That is what the president is doing. Telling the American companies you have to quadruple your output if whether it's Raytheon or Lockheed Martin and the other big primes here in the United States and the same Europeans are doing saying hey listen guys we need much more output from the defense industrial base to protect ourselves.
How concerned are you in terms of Russian attacks, hybrid, not so hybrid, like what that happened in the German airport?
Well, you know, we are so much stronger. NATO is so much stronger. So my message to my NATO colleagues is first of all, stay calm. We know Russia is not in a good place when it comes to Ukraine. So, you will have some reactions from Putin, which is a bit of a panicky nature. Maybe even in the hybrid domain, even some more. And hey, we planned and prepared for that. We have all the response options you need. We will not always make it public. It will not always be tit for tat but we can defend ourselves when it comes to that. So stay calm. Secondly, carry on. Make sure that you continue investing your defense that we are not only stronger today but also in the future. And when it comes to Ukraine, this is our main focus. Make sure that Ukraine is as strong as possible in the fight so that they can negotiate a peace deal from a position of strength in a way that Russia will never ever try to attack Ukraine after such a peace deal. So we have got it and we are prepared. That's basically my message and a bit of steely resolve is needed here.
Countries are stretched thin though. There's two hot wars right now. What do you think the response needs to be from Europe when it comes to the Red Sea and the Strait of Hormuz?
Well, in the future, I would love after all these investments have been materialized and Europe is so much stronger over the coming years that when it comes to the Middle East, if a situation emerges which requires an intervention that the Europeans can do that, that it should not be the United States. It should be the Europeans being able to do it at the moment, the Europeans do not have the capabilities at a sufficient level to do it. So, you still need that US leadership.
Do you think that's a failure of NATO of the past?
Well, what we have seen is that since the fall of the Berlin wall, too much of the defense spending was cut thinking that we now were living in this kumbaya of never a war again and oh, we love each other, etc. And then Putin came on board and became more and more radicalized and became becoming a long-term threat from NATO. So, that's why we're spending more building the capabilities. This is what we need to do becoming stronger. But also important that we don't step into his trap because he would love for us in Europe to talk about him and his hybrid campaign against Europe or whatever it is and I'm telling the Europeans of course we have to protect ourselves but our main focus is continue the spending ramping up and continue the support for Ukraine.
The numbers when it comes to the Red Sea straight from speaks for themselves for Europe I believe 40% of trade goes to Asia through the Red Sea they are so reliant on these waterways when it comes to LNG and crude products. At the same time, there's definitely frustrations with some European countries that say this is not our problem.
The good news here is the following that more and more Europeans have listened to President Trump. So what you see for example quite openly countries like Estonia and Latvia and Lithuania helping with trying to make this trade of Hormuz safe again. Other European nations more discreetly they do this under so it's not completely open.
So more European nations are actually functioning and operating within the Middle East it's just not socialized.
Yes, so some openly and some more discreetly and when it comes to the Houthis and the situation in the Red Sea I'm also listening very carefully to my European colleagues and they're also discussing hey what can we do there because people do realize in Europe that when it comes to freedom of navigation and particularly now also with the Houthis and the Red Sea you cannot leave everything to the United States.
Well, Europe has a lot of demining capacity for example, much more than the United States has. There are two things where Europe is stronger. Ice breakers, you don't need them in the Middle East. And the second is demining. And demining can be done without putting your own soldiers at risk. You can do it distanced. You can do it also. You can use information from the sky. So you have many ways to do that.
The president today is meeting with Xi Jinping of China. Do you think China should be doing more when it comes to Iran?
Well, of course, all the pressure anyone can put on Iran to end this and to give up the nuclear capability and to end this war and think alone of the impact that would have on the Iranian population which is suffering now under this whole situation including the very heavy economic sanctions which have been imposed on Iran. So, they're really being choked off. So, any pressure by China and anyone else would be great. But we also know that Russia and North Korea and China and Iran have a close cooperation.
Did you see the Iranian president or foreign minister at the UN? Because I did see the foreign minister leave almost as you were coming in.
Yeah. No, no, we didn't. We didn't meet.
Didn't meet. No meetings with the Iranians for this one. Did you have a meeting by any chance with Lavrov?
No. So, there's really no engagement then from NATO to these adversaries.
Well, the engagement with Russia, I believe, really has to be led by the Americans because these are the ones the American nation, the president, this is what Putin listens to. The Europeans can back it up and support and be there and make sure that we work in a coordinated manner, but it has to be American-led and this is exactly what this president is doing. He broke the deadlock with Putin when he came into office. He wants to end the bloodshed. Because when I say 43,000 people seriously wounded or killed, think of the families, think of the cities, the communities, the next of kin, the friends of all these people being killed, senseless without any reason for a war which has absolutely which is totally unprovoked.
I think everyone's in agreement with you. They want to see wars ended. Secretary General Mark Rutte, thank you so much for your time.
Good to be back on the program.
That was of course the secretary general of NATO Mark Rutte right here alongside the UN General Assembly.
All right, our thanks to Anmarie Hordern. And out there in the UN Rose Garden, we turn our attention of course back to financial markets as we count you down to those closing bells just about 36 minutes away. Stocks well off session lows but still under pressure. And a big part of that, of course, has to do with the continued rise, Sally, that we're actually seeing in Treasury yield or 10-year yield up about seven basis points on the day, 5.2% roughly. I'm rounding up because it's probably going up.
It's probably going up. That's what people seem to be saying. There is potential for yield to go higher because our AI glut of supply of debt is probably not going to stop. And those other pressures like inflation driven by oil remains.
Yeah. And it gets to this idea too. We talk about this rise in yields which obviously is to a certain extent being sort of propelled by that rise in energy prices but it's more than that. There are the fiscal concerns and a lot of structural concerns not just here in the US but worldwide and it's raising the questions as to what price investors will demand to keep buying treasuries but how does that feed into equities? I mean, everybody knows the basic, you know, discounted cash flow valuations. It's basically you're plugging in a benchmark treasury number or at least some sort of benchmark yield number in there. And that number is materially higher than where it was a year ago. That's your denominator. So, that means everything goes down.
Everything goes down. And it is interesting because the equity markets do seem to be shrugging off a lot here. Is there a disconnect or is the equity market just prepared to survive in a high yield environment? Well, I'll push back on the shrugging off though, too. I mean, we are higher on the day, but only obviously less than a tenth of a percent. But this is really narrow. We're talking about 300 stocks in the S&P lower. But then you look at the names that are out front. It's Everpure, which is having a great day. Good. They gave a good forecast. Aluminina, Charles River, GoDaddy on a percentage basis. Those are your leaders. Even on a points basis, you got Meta and you got Eli Lilly. Let's take Meta out of the equation. And Eli Lilly is also an idiosyncratic story. Where's everybody else? Where's your Nvidias? Where's your Microsofts? Where's all that that sort of took us to the promised land over these last, you know, four years.
Yeah. So it gets to this idea and we're kind of in a vacuum too because we talk about this idea of we're still what I don't know another three weeks or so till we get to the next earning season. Most of the big macro events are kind of out of the way and the Fed for the most part is sitting on the sidelines. We're going to continue to count you down to those closing bells and actually continue a bit of a focus here on the world of tech and well maybe the secret sauce for Apple. You remember Ron Johnson? He's actually one of the guys who was alongside Steve Jobs back in the day, helped to launch the Apple Store. He went on to run JC Penney and a couple other companies. He's stopping by the program in just a bit right here on Bloomberg.
3:30 p.m. here in New York. This is the countdown to the close. I'm Roma Boston.
And you're Sally Bakewell.
Yeah, you are Sally Bakewell. Every day, you know, I walk straight down, you know, here on 59th Street and you can probably pass right by the big Apple store. And we talk about Apple undergoing a huge transformation since its beginnings more than 50 years ago. And a key part of that, certainly in the more recent years has been the Apple store itself, a vision brought to life by its creator, Ron Johnson, to connect consumers directly with the products. He joins us live in studio now and he's got a new book out called quote Shop Different How Retail Revealed Apple's Genius and that is where I want to start because I mean 25 years ago however long it was ago I mean it seems like it was just yesterday I mean the internet was supposed to kill retail we know that story might have been overstated but talk to me specifically in 2026 why a company like Apple needs such a massive retail footprint I don't mean just a flagship York. But why are they so dispersed everywhere physically?
It's actually not a massive footprint. Apple has 530 stores. You know, people like the Gap still have nearly a thousand stores in the US.
That's a global footprint.
Well, some people would say that a thousand is too many. Some people say 500 is too many.
No, but 500 is not too many. You really want to have a customers to have a choice of where to shop. The Apple stores have always been the gold standard. You got to remember, no matter where you buy an Apple product, when you need help or you need a repair, you want to come back to the store because they're going to help restore that relationship. So Apple's strength is not just its products, it's its two billion users worldwide.
You've got to launch relationships, deepen, and then restore them. And you can do that best in a store. There are things you can't do online.
There are a lot of people, particularly in this Tim Cook era, and I guess more we should probably call it sort of the new product era. This idea that as Apple introduces new products and products that are unfamiliar to at least the non-tech folks out there like a foldable phone or a Vision Pro and things like that that these are products that people want to have a little bit more of a hands-on experience with before they commit, you know, $2,000 or whatever to it. Does that help them having that physical footprint for a Duo launch or whatever comes next?
It absolutely helps. I mean, it's irreplaceable. People want to see products firsthand. Even when you upgrade each year to your new iPhone, even though it doesn't change much, people tend to go to the store to check it out before they buy. These are big investments. You know, it's over $1,000 for your entry level phone now, entry-level pro phone, and people want to make the right choice.
So, Ron, what do you think of the current bet on automated AI-driven commerce given that, you know, you built the Genius Bar on this idea of meaningful human interactions and face-to-face service?
Well, AI is the next big technology as we know. It's going to improve, it already is improving how we shop online. It's improving the experience in the store, right? I don't think it's going to change where we shop, but it'll elevate the experience across all channels.
Okay. And going back a little bit you were at Target I believe when it became Tar-zhay and you also proved at Apple that consumers will buy a premium product if the service is you know flawless but we're in a economy where the consumer is increasingly bifurcated. What do you think about that in terms of the experiential offering and premium brands? Can they really position themselves when the consumer is feeling strains and kind of in this K-shape?
No, the consumer is really bifurcated but both ends are doing well. You know in the US these dollar stores have been performing exceptionally well you know at the high end the luxury stores have been soft but overall they're very successful you know and so people are performing well in all types of formats it's also been true that in the middle for a change some of the long-term middle market brands Macy's the Gap Levi my former place Target kind of upper middle are all performing pretty well you know so this notion it's a misnomer that retail was going to get killed by the internet. As you mentioned, retail has thrived. It just took time for them to adapt to an omni channel world.
Well, with regards to that adaptation, I do just want to get your thoughts too on Target's improvements because let's face it, they had some issues and some of that was very idiosyncratic to them rather than some of broad-based issues. I mean, overall, when you look at what Michael Fiddel has done in this new team, you generally think they're pushing Target back in the right direction.
Oh, everything they're saying is the right kind of stuff. They're really focused on merchandising, differentiation, and then improving the
Service in the store.
Yeah. And you're starting to see that show up.
Well, one reason why I asked that because a big criticism of Target at the time is they lost sort of sight of who their customer was. It's the same issue with Apple with regards to how they their approach not only to the physical stores, but overall they seem to have a general understanding, certainly Tim Cook did, certainly Steve Jobs. We'll see if Turnis does a good understanding of who their co customer is or what they want that customer to be. You were you went to J Penney famously. Um did that not necessarily work out the best and I am curious as to what happened there and whether you misread who the J Penney customer was which I would think would be maybe a little bit different than who an Apple customer would be.
Yeah, I think I understood who the J C Penney customer was. I moved way too fast and then alienated a core segment which was that coupon-seeking value customer.
What I was trying to do is get pennies to a younger customer base which is essential for any brand to survive. I knew that at Target we had a high market share of young families. Pennies had a quite older customer. I just moved too fast and the marketing was poor. Made a ton of mistakes.
That gets to this idea though and other retailers have struggled. The retailers that have gone down the road of sort of being known for value, offering a lot of discounts, coupons, etc. It's hard to pull back from that. I think probably one of the more famous examples is Bed Bath and Beyond. It became a joke where it was like, you know, I I just wait for the next coupon to show up in mail before I would go there and no one ever pays full price. I mean, how does uh an executive sort of break free from that or I guess find a better bridge from being just all in on discounting all the time to maybe something that's a little more balanced?
You got to move slowly, okay? And then you got to communicate great. I mean, I made the mistake of going way too fast. I proved you can't just pull the needle out and go to everyday prices because at pennies, we had lower prices for people every day than people were buying with all their coupons and all have you had to be a PhD in pricing, you know, but it didn't matter because the customer perceived value from saving and middle American families felt that that was part of the role of the family to be a smart shopper. And we took away that psychological lift.
So, if you could give one single piece of advice to a retailer today, particularly when it comes to integrating AI, what perhaps would that be?
I'd say embrace the new technology fully. When the internet came out in 2000, it took a while for the physical retailers to embrace online shopping. Target until 2008, its store was run by Amazon. Then it took it back and then got everything going with all this buy online pickup store, everything that made it a better experience. Walmart did the same thing. Walmart today is worth eight times what it was in 2000. So they've survived, you know, this online shopping, but they've got a great marketplace. Retail's got to move quicker on new technologies.
