Hello and welcome to Ask for a Trend. I'm Josh Lipton. For the next half hour, we are breaking down the trends of today that'll move stocks tomorrow. There's a lot to keep track of, so we're focusing on what you need to know to get ahead of the curve. Here's some of the trends we're going to be diving into. It was a sliding start for stocks at the beginning of the trading week. Investors seem to have maybe lost their zest after Jackson Hole and as they parse retail data and await Nvidia earnings at the end of the session Monday. All major indices did end the day lower and back to school may be a big indicator of how healthy the American consumer is doing. We're talking with the CEO of Tanger for a comprehensive look into the state of retail and the consumer. And companies are spending a fortune on artificial intelligence. But will that truly pay off for the firms and investors? We're speaking with an expert about a so-called AI bubble and what you need to know. Well, we've watched a wave of retail data roll in over the past two weeks from consumer spending trends to back to school shopping. And join us now with a front row seat to the American shopper. We have Stephen Yalof, CEO of Tanger. Welcome Steve to the program. We're always looking for Steve for signs, lines of sight into the American consumer, how they're holding up, how healthy, how resilient they are. What are you seeing?
I think the consumer is resilient. You know, we're seeing traffic. If you go back to tariff announcements in early April, traffic's continued to build. So, built in April, May, June, July, and didn't stop in August. We see cars in the parking lots in our shopping centers, we see people spending and it's kind of interesting, sounds a little contrary to the storylines that are happening out there, but especially in the value space where we have most of our shopping centers, that's where we're seeing the customer lean in a little bit more heavily.
And when we talk Steve about the American consumer, we often talk about like it's one consumer but of course there's many. I mean broadly Steve, your outlets, your shopping centers, who are they catering to? What kind of consumer?
Well, you know, it's interesting. They're looking at a whole swath of consumer now. If you think about the consumer that's just looking for commodity at price, that's not really who shops in an outlet. The outlet consumer is looking for their favorite brands at the best possible price. And that's what we offer every day. So whether it's Nike or Gap or Coach or Kors or Kate Spade, it's brands that people are looking for. The customer, our customers are looking for sneakers for the best price that they can get them at. But what's interesting about our product and our shopping centers these days is you see a whole bunch of different uses are popping up. So we're now seeing brands like Sephora and Ulta come into our space because that's where the customers are. So if these brands want to get their products out in front of the customer, they're going to find that outlet channel in order to open up new stores.
Let me ask you, you know, in my house, my kids' first day of school was today, right? We did a bunch of shopping for that broadly. Back to school the season, how was it? How healthy?
Well, you know, interesting. We decided to go with a promotion and say back to school started as early as June. Now, in some geographies, school wasn't even out yet. But in other geographies, the school started to get out. The tariff narrative was, you know, Q3, Q4, maybe there'll be less product in stores. Maybe there'll be more expense associated with those products in the stores. So, let's get the customer out shopping earlier. And it actually was a really good promotion for us. So, we got the brands to buy in. We got the consumers in our centers earlier. And that's when we started to see traffic to build. And that traffic is continuing to build now. So, we like this early back to school promotion that we ran in the value channel. So, we were able to see a lot of customers bring their kids in early to buy and make sure they got the products they wanted at the best possible.
Can you look at back to school, Steve, and kind of draw that out? Does that give you any line of sight to okay, what maybe the holiday shopping season could look like?
Well, you know, back to school is the second biggest holiday for shopping of the year, obviously, second to the Christmas holiday. And what we did last year for the Christmas holiday is we started our promotion as early as November 1st. Halloween decorations come down and the Christmas decorations start going up. So we did a promotion last year where we brought holiday shopping further to November 1st saying Black Friday happens every day in our shopping centers.
You mentioned tariffs, Steve. What's your sense of how generally speaking retailers seem to be navigating that dynamic? Are they eating that? Are they passing along to consumers? Some mix of the two. What are you seeing?
Yeah, it's definitely a mix of the two. And we've seen brands start to push price as early as Q2 when there wasn't even a tariff impact to a lot of the products, but they were pushing pricing and testing the waters. Now, in the outlet channel, obviously everything's on sale every day. So, if you push base price, you can still discount off that base price. So, we saw a little bit of that happening.
You have a broad footprint there at Tanger. Are there any kind of interesting regional differences to call out in terms of what you're seeing at your outlets?
Well, you know, what's unique about the summer shopping season is that there's a level playing field. All of our centers are open air. You would say that the centers a little bit in the north on colder days and heavy snow days probably shop a little bit more difficult in the fall and closer to the winter months. But, you know, our shopping centers in the south, and we are a south-based company, those centers seem to be pretty active all year round.
Final questions to you. I'm curious. You're running these outlets, right? But as we all know, a lot of people that do, including myself, you're doing your shopping on your phone. What do you all do to get Josh Lipton off his phone, out of his house, into the outlet?
I am so glad you asked that question because that's what we think about every single day. And you know, we're trying to think what's going to differentiate us. How are we going to get you off the couch and into the shopping center? It's not easy. I just need your car in my parking lot and I can keep you there. So, we're adding food, we're adding stores, but we're also adding entertainment and we're adding loyalty. So, if we can gamify the experience with a loyalty program that rewards you for your visit, we can give you a better food experience when you get there. The outlets have never been known for food, but now we've been able to add a much better food offering. We've got great retail stores, not only outlet stores that offer that everyday value, but also we have maybe some full price offering that brings categories in that you can't get anywhere else. More reasons to put your car in our parking lot, more reasons for you to stay longer, more reason for you to build a bigger basket when you're there. Hopefully, tell your friends and come back and shop more.
Yeah, for me, good food would do it. Just speaking for myself, Steve, that's enough. Thank you, sir. Appreciate it. Great.
US stocks closing lower in today's trade, retreating from a powerful rally fueled by rate cut hopes. Here with the trading day takeaways is Yahoo Finance's Jared Blikre. Jared,
Thank you Josh. I think we're seeing more rotation in the market. We have low liquidity. It's the end of August, end of summer, and money's just kind of sloshing around sideways. Some days you see some winners, some days you see those same sectors and stocks as losers. And we can see this here today. These are the 11 S&P 500 sectors along with the S&P 500 itself. And you'll see a couple winners today. Energy and communication services. By the way, communication services XLC record closing high today. Haven't seen many of those recently. But look at who was the biggest losers today. Staples, healthcare, and utilities. Now, these three sectors in particular were the winners last Monday and I believe Tuesday. And so I was talking about rotation last week and I think that's more of what we're seeing today. It's just going up and then it's going down and we're seeing a lot of that here. And if we take a look at my leaders, we're also seeing that Mag 7 one week ago those you couldn't touch those. Nobody wanted Mag 7. Then on Friday things changed with Powell and we'll get into more of Powell in a second because I do believe that's instrumental. But you take a look at what's happened with some of the other stuff that was leading last week. XHB, that's homebuilders, that was a leader to the downside today. And the list goes on. So I think it's just more rotation and that explains a lot of what we're seeing, which really just appears to be random a lot of the time.
