Malls Welcomed Dogs. The Results Have Been Ruff.
Shopping centres adopt pet-friendly ‘pawlicies,’ and cope with puppy accidents and greyhounds running up and down the escalators
Shopping centres adopt pet-friendly ‘pawlicies,’ and cope with puppy accidents and greyhounds running up and down the escalators
NORWALK, Conn.—It was Weston Bear Marshall’s first time at the mall and he wasn’t up on his etiquette. Soon after arriving on Black Friday, the two-year-old lifted his leg and peed on an information sign.
“He’s marking his territory,” said Vincent Marshall, owner of the Old English sheepdog.
Malls are desperate to revive foot traffic after years of losing customers to e-commerce. That includes the four-footed kind, despite the occasional mishap.
“Not everyone makes it to the puppy-relief stations,” said Matthew Seebeck, senior general manager of the Norwalk, Conn., mall, called the SoNo Collection.
The mall’s doggie code of conduct, also known as the “pawlicy,” requires its furrier patrons to use the puppy facilities, which are equipped with patches of fake grass, plastic bags and paper towels. Owners who don’t follow the rules, which also require leashes, can be banned for up to a year. No one has been blacklisted yet, Mr. Seebeck said.
Weston’s human staff carried on with their shopping after his accident. The family posed for a photo with Santa and then lingered as shoppers came over to pet the 80-pound animal.
“If anyone’s nervous, he’ll win them over,” Mr. Marshall predicted. “He’s a very social dog. He’s thinking, ‘I want to introduce myself to all these people.’ That’s what is going through his doggie brain.”
Pacific Retail Capital Partners, which operates 22 malls in 12 states, has six pet-friendly centers and plans for a seventh next year, said Najla Kayyem, its executive vice president of marketing.
“People who have pets are a breed of their own and we want to be able to reach them,” she said.
The Eastridge Center in San Jose, Calif., has a Mini Cat Town, for playing with kittens up for adoption. At the Monroe Crossing Mall in Monroe, N.C., cats and bunnies on leashes scamper in for pet night with Santa, said marketing manager Wendi McCall. One shopper needed approval from Santa to bring a snake.
On Black Friday in 2021, two greyhounds busted loose from their owner at the SoNo Collection. “You could see the crowds of people parting as they ran up and down the escalator,” recalled Mr. Seebeck.
Another day at the same mall, a Great Dane took out a sweater display at the Altar’d State clothing chain. Earlier this year, a dog deposited a trail of poop outside H&M. Shoppers nearby barked at the owner to clean up after her pup, but she high-tailed it out, canine in tow.
The Rosedale Center in Roseville, Minn., for a time allowed dogs on Sunday mornings, but discontinued that. They overran the mall and left hair on garments, said Molly King, a manager there. “For every dog lover,” she added, “there is a dog not lover.”
Mike Lambrakis, of Tustin, Calif., lately has noticed more pooches while shopping. “I’ll be looking at clothing and suddenly there is a dog sniffing my leg,” said the 36-year-old financial adviser, who is allergic. “It makes it easier to justify shopping online.”
Ed Taylor, founder of the Worldwide Santa Claus Network said his members, who often play Kris Kringle at shopping centers, have been peed on, bitten and scratched. And he doesn’t mean by the children.
He has posed with goats, chickens, snakes and lizards at malls around the country, and a small lap dog once chomped on his finger. “He didn’t draw blood, but it was a shock,” said Mr. Taylor, who still enjoys seeing pets among shoppers.
The Foothills Mall in Maryville, Tenn., is pet friendly. Does it advertise that? Nope.
“If we did, then everyone would come with their animals and that would be more than we could handle,” said Tia Spires, the mall’s general manager.
Last month, Rod Morton, a 58-year-old advertising executive, was walking his goldendoodle Truly at the SoNo Collection mall in Connecticut. It was cold and rainy outside, with other challenges inside the mall.
The Nordstrom there offers complimentary puppuccinos, which are cups of whipped cream. Truly loves them—who wouldn’t?—but then races around on a sugar high, said Mr. Morton.
Another dog owner, Adam Bomberger, waited with his golden retriever Bailey outside of Aerie, where Mr. Bomberger’s girlfriend was shopping.
The store was too crowded for Bailey’s liking, according to Mr. Bomberger, a 34-year-old media technology specialist. He also has to steer Bailey away from stores that sell candles because the pup likes to lick the scented wax.
Nearby, Paisley and Bentley, both Pomeranians, were yapping and yipping like canine carolers. “They get excited,” explained Michael Lopez, a 22-year-old student at Sacred Heart University who was shopping with his girlfriend Valerie Navas, a 21-year-old nursing student.
Ms. Navas said the dogs tinkle on the rug almost every time they come to the mall. “They think the rug is a huge pee mat,” she said.
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Equities are often seen as expensive after promising start to 2023
A new trading year kicked off just weeks ago. Already it bears little resemblance to the carnage of 2022.
After languishing throughout last year, growth stocks have zoomed higher. Tesla Inc. and Nvidia Corp., for example, have jumped more than 30%. The outlook for bonds is brightening after a historic rout. Even bitcoin has rallied, despite ongoing effects from the collapse of the crypto exchange FTX.
The rebound has been driven by renewed optimism about the global economic outlook. Investors have embraced signs that inflation has peaked in the U.S. and abroad. Many are hoping that next week the Federal Reserve will slow its pace of interest-rate increases yet again. China’s lifting of Covid-19 restrictions pleasantly surprised many traders who have welcomed the move as a sign that more growth is ahead.
Still, risks loom large. Many investors aren’t convinced that the rebound is sustainable. Some are worried about stretched stock valuations, or whether corporate earnings will face more pain down the road. Others are fretting that markets aren’t fully pricing in the possibility of a recession, or what might happen if the Fed continues to fight inflation longer than currently anticipated.
We asked five investors to share how they are positioning for that uncertainty and where they think markets could be headed next. Here is what they said:
Cliff Asness, founder of AQR Capital Management, acknowledges that he wasn’t expecting the run in speculative stocks and digital currencies that has swept markets to kick off 2023.
Bitcoin prices have jumped around 40%. Some of the stocks that are the most heavily bet against on Wall Street are sitting on double-digit gains. Carvana Co. has soared nearly 64%, while MicroStrategy Inc. has surged more than 80%. Cathie Wood‘s ARK Innovation ETF has gained about 29%.
If the past few years have taught Mr. Asness anything, it is to be prepared for such run-ups to last much longer than expected. His lesson from the euphoria regarding risky trades in 2020 and 2021? Don’t count out the chance that the frenzy will return again, he said.
“It could be that there are still these crazy animal spirits out there,” Mr. Asness said.
Still, he said that hasn’t changed his conviction that cheaper stocks in the market, known as value stocks, are bound to keep soaring past their peers. There might be short spurts of outperformance for more-expensive slices of the market, as seen in January. But over the long term, he is sticking to his bet that value stocks will beat growth stocks. He is expecting a volatile, but profitable, stretch for the trade.
“I love the value trade,” Mr. Asness said. “We sing about it to our clients.”
For Richard Benson, co-chief investment officer of Millennium Global Investments Ltd., no single trade was more important last year than the blistering rise of the U.S. dollar.
Once a relatively placid area of markets following the 2008 financial crisis, currencies have found renewed focus from Wall Street and Main Street. Last year the dollar’s unrelenting rise dented multinational companies’ profits, exacerbated inflation for countries that import American goods and repeatedly surprised some traders who believed the greenback couldn’t keep rallying so fast.
The factors that spurred the dollar’s rise are now contributing to its fall. Ebbing inflation and expectations of slower interest-rate increases from the Fed have sent the dollar down 1.7% this year, as measured by the WSJ Dollar Index.
Mr. Benson is betting more pain for the dollar is ahead and sees the greenback weakening between 3% and 5% over the next three to six months.
“When the biggest central bank in the world is on the move, look at everything through their lens and don’t get distracted,” said Mr. Benson of the London-based currency fund manager, regarding the Fed.
This year Mr. Benson expects the dollar’s fall to ripple similarly far and wide across global economies and markets.
“I don’t see many people complaining about a weaker dollar” over the next few months, he said. “If the dollar is falling, that economic setup should also mean that tech stocks should do quite well.”
Mr. Benson said he expects the dollar’s fall to brighten the outlook for some emerging- market assets, and he is betting on China’s offshore yuan as the country’s economy reopens. He sees the euro strengthening versus the dollar if the eurozone’s economy continues to fare better than expected.
Even after the S&P 500 fell 15% from its record high reached in January 2022, U.S. stocks still look expensive, said Rupal Bhansali, chief investment officer of Ariel Investments, who oversees $6.7 billion in assets.
Of course, the market doesn’t appear as frothy as it did for much of 2020 and 2021, but she said she expects a steeper correction in prices ahead.
The broad stock-market gauge recently traded at 17.9 times its projected earnings over the next 12 months, according to FactSet. That is below the high of around 24 hit in late 2020, but above the historical average over the past 20 years of 15.7, FactSet data show.
“The old habit was buy the dip,” Ms. Bhansali said. “The new habit should be sell the rip.”
One reason Ms. Bhansali said the selloff might not be over yet? The market is still underestimating the Fed.
Investors repeatedly mispriced how fast the Fed would move in 2022, wrongly expecting the central bank to ease up on its rate increases. They were caught off guard by Fed Chair Jerome Powell‘s aggressive messages on interest rates. It stoked steep selloffs in the stock market, leading to the most turbulent year since the 2008 financial crisis. Now investors are making the same mistake again, Ms. Bhansali said.
Current stock valuations don’t reflect the big shift coming in central-bank policy, which she thinks will have to be more aggressive than many expect. Though broader measures of inflation have been falling, some slices, such as services inflation, have proved stickier. Ms. Bhansali is positioning for such areas as healthcare, which she thinks would be more insulated from a recession than the rest of the market, to outperform.
“The Fed is determined to win the war since they lost the battle,” Ms. Bhansali said.
Gone are the days when tumbling bond yields left investors with few alternatives to stocks. Finally, bonds are back, according to Niall O’Sullivan of Neuberger Berman, an investment manager overseeing about $427 billion in client assets at the end of 2022.
After a turbulent year for the fixed-income market in 2022, bonds have kicked off the new year on a more promising note. The Bloomberg U.S. Aggregate Bond Index—composed largely of U.S. Treasurys, highly rated corporate bonds and mortgage-backed securities—climbed 3% so far this year on a total return basis through Thursday’s close. That is the index’s best start to a year since it began in 1989, according to Dow Jones Market Data.
Mr. O’Sullivan, the chief investment officer of multi asset strategies for Europe, the Middle East and Africa at Neuberger Berman, said the single biggest conversation he is currently having with clients is how to increase fixed-income exposure.
“Strategically, the facts have changed. When you look at fixed income as an asset class…they’re now all providing yield, and possibly even more importantly, actual cash coupons of a meaningful size,” he said. “That is a very different world to the one we’ve been in for quite a long time.”
Mr. O’Sullivan said it is important to reconsider how much of an advantage stocks now hold over bonds, given what he believes are looming risks for the stock market. He predicts that inflation will be harder to wrangle than investors currently anticipate and that the Fed will hold its peak interest rate steady for longer than is currently expected. Even more worrying, he said, it will be harder for companies to continue passing on price increases to consumers, which means earnings could see bigger hits in the future.
“That is why we are wary on the equity side,” he said.
Among the products that Mr. O’Sullivan said he favours in the fixed-income space are higher-quality and shorter-term bonds. Still, he added, it is important for investors to find portfolio diversity outside bonds this year. For that, he said he views commodities as attractive, specifically metals such as copper, which could continue to benefit from China’s reopening.
Ramona Persaud, a portfolio manager at Fidelity Investments, said she can still identify bargains in a pricey market by looking in less-sanguine places. Find the fear, and find the value, she said.
“When fear really rises, you can buy some very well-run businesses,” she said.
Take Taiwan’s semiconductor companies. Concern over global trade and tensions with China have weighed on the shares of chip makers based on the island. But those fears have led many investors to overlook the competitive advantages those companies hold over rivals, she said.
“That is a good setup,” said Ms. Persaud, who considers herself a conservative value investor and manages more than $20 billion across several U.S. and Canadian funds.
The S&P 500 is trading above fair value, she said, which means “there just isn’t widespread opportunity,” and investors might be underestimating some of the risks that lie in waiting.
“That tells me the market is optimistic,” said Ms. Persaud. “That would be OK if the risks were not exogenous.”
Those challenges, whether rising interest rates and Fed policy or Russia’s war in Ukraine and concern over energy-security concerns in Europe, are complicated, and in many cases, interrelated.
It isn’t all bad news, she said. China ended its zero-Covid restrictions. A milder winter in Europe has blunted the effects of the war in Ukraine on energy prices and helped the continent sidestep recession, and inflation is slowing.
“These are reasons the market is so happy,” she said.
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