Stock market today: Stocks surge as jobs report revives rate-cut bets, Apple jumps 6% | May 3, 2024
[Music] hello happy Friday and welcome to Market domination I’m Julie Heyman that’s Josh Lipton live from our New York City headquarters we are giving you the ultimate investing Playbook to help tune out the noise and make the Right Moves for your money and here’s your headline Blitz getting you up to speed 1 hour before the closing bell rings on wal so it could be that these data on the hiring side while below expectations may be pointing to a moderating job market rather than a job market that’s falling off a cliff so it could be a job market that’s moving into a soft Landing um or it could be a sign that things are about to slow down much more um sharply in coming months when you look at the details the wage growth also slowing down only gradually uh I think all in all this does paint a kind of a soft Landing picture coming to scope at least as we go through the course of the year we are seeing a very steady increase of Apple’s Services uh growing as a percentage of both uh revenue and profit so with uh each new cycle apple is able to strengthen its position uh regarding Services uh allowing more users and to to subscribe to more services and pay more per service and per subscriber so um you know this is not only an iPhone story but a iPhone plus Services story we got an hour to go until the market Clos for the session for the week so let’s take a look at the major averages sponsored by tasty trade we’ve got a rally going on today both because of that worse than estimated jobs report this morning which perhaps investors found reassuring that the FED can maybe stay on hold for now but might things might be balancing uh sooner than expected we shall see inflation might be coming down and apple not hurting matters either so we’ve got the Dow right now up almost 450 points here for a gain up about 1.2% on the week by the way we now have the Dow up about 1.1% that’s its best week going back until about midm March as for the S&P 500 up on the week but really we have seen the surge at the end of the week including today with this one and qu% increase and then the NASDAQ leading the gains up by 2% and on that last front if you look at the groups in the S&P 500 and what is moving here today energy is down but you’ve got the xlk which is information technology doing the best today followed by materials and communication services and if you take a look at the NASDAQ here the NASDAQ 100 specifically you see Apple shares leading the gains up by 7% following that not as poor as feared uh earnings report as well as is that gigantic to $110 billion buyback so that definitely helping matters here and indeed all of the sort of Mega cap uh Tech here is Rising one more thing I want to check on before we dig more into uh the reaction to the jobs report is what’s going on in the bond market and here we have pretty significant push downward in yelds back to 4 and a half% Down by seven basis points today Josh Julie the US Labor Market cooling notably last month is both hiring and wage growth slowed more than econ economists expected the slow down in wages may help the case for the Federal Reserve to lower interest rates at some point this year even as inflation we know has remained higher than the central bank’s 2% Target for more let’s welcome in Dr Ed yardeni president of yardeni research Ed is always good to have you on the show so this jobs report Ed uh markets certainly uh like what what they saw uh but give us your take Ed what what did you make of it well I think the jobs report was a decent report we had a solid in employment uh wage inflation slowed down some uh all in all the labor market continues to expand we got record payrolls but in addition to the employment report it was the services purchasing managers index I think that also caught the markets attention that was much weaker than expected and so it all adds up to any concern anybody had that the FED might actually can think about raising rates that’s out the window and now we’re back to people thinking about maybe uh a rate cut are still in the cards between now and the end of the year and we see that in the way the two-year and the 10e are trading I’m glad you brought up that Services report though Ed because that maybe could even be read as dare I say stagflationary I mean you had the slow uh slowest activity there in four years but you had prices ticking up is that a cause for concern at all not really uh the purchasing managers index can be somewhat volatile we we actually had the uh orders index still very strong in that composite and we had the production down quite a bit and employment was very weak it’s hard to imagine that services employment gains aren’t going to continue so I think that I think that’s somewhat an exaggeration on the weak side but you it’s it’s a funny business we were in just when everybody’s sort of given up talking about hard landing and soft landing and saying there’s no Landing now suddenly people are talking about soft landing and I’m sure some hard Landers are going to come back out of H nation and start growling about that I’m curious Ed you know you look at the economy decent earnings decent so so what should give us confidence as investors that in fact if you look at the trajectory inflation it is going to come back uh to J Pal’s Target yeah I think so I think uh Pal’s been uh dead on right uh he got it wrong U A couple of years ago when he thought that inflation was going to be transitory then he started talking about persistent then he backed off again and because the in fact inflation’s turn turned out to be ra rather transitory there’s still some areas where inflation is a problem like auto insurance and repairing Autos but that’s not that’s not the fed’s job they can’t do much about that the overall inflation ratees remains on a moderating trend when you look at it year-over-year I mean if you really want to get yourself upset you can look at it month to month or even quarter to quarter and see that there was hotter numbers over the first quarter of the year but on a year-over-year basis we’re still going in the right direction and I think we will continue to go in that direction two 2 and a half% on the inflation rate I think can be achieved by the end of the year well I guess if you want to get yourself upset you can also look at say the year-over-year increase or two-year increase in your grocery bill for example Ed which yes I know the FED doesn’t look at sure but I I have to wonder if that is starting to have an effect on consumer spending as well um we’ve been hearing from some individual companies that have sort of raised that concern particular on the lower end yeah I think that’s a very good point uh the fact of the matter is you would think with the unemployment rate below 4% for 27 months in a row the consumer confidence would be pretty strong but uh there is sort of this nagging uh upset feeling that people have that when they go shopping prices are you know double digits higher than they were only a couple of years ago now there may be a little bit of money illusion because the at least from a macroeconomic standpoint wages have actually kept up with h with prices but again you can’t help noticing you go food shopping go to restaurant and uh by the essentials the prices are higher and that’s depressing quite a few people who maybe haven’t had the Good Fortune of seeing their wages stay stay up along with prices anded Eddie if you’re looking at inflation you know two two half% by by year and what’s your base case Ed now for for cuts I mean do you see Cuts coming and if so you know when do you think they start yeah I I at the beginning of the year I was not in the six to S uh cut Camp I was in the two to three cut camp and now I think uh at least before these numbers came out I thought that there’d be very little likelihood that the FED would lower interest rates we’ll see how the next batch of numbers come out but uh I think based on what we just saw today and what what the the treasury market is showing I think we can’t rule out uh one or two uh Cuts before the end of the year and that’s got the market excited I mean we’ve got a situation where good news is good news and bad news is good news in some ways maybe the fed put is back where people perceive that hey look if the economy really gets weak here as long as inflation is wiating the Fed could always lower interest rates so what’s the problem Ed where do you think the so-called last mile is going to come from where do you think that there is moderation to come this year that’s going to get us back down to the toward the fed’s target well you know goods inflation’s come down we got deflation again durable goods which is kind of the standard operating procedure for durable goods prior to the Pandemic those prices tended to fall non- durables are basically food and energy so their Commodities they tend to be volatile but we are saying that uh the geopolitical risk premium seems to have come out of oil and there’s enough food I I recognizing the prices are higher but the inflation rate is definitely simmered down in that area so that leaves with what fed share p is called the super core inflation rate it’s the consumption deflator the overall Consumer Price deflator excluding services and um excluding energy and that’s been sticky of late around three and a half percent but keep in mind about a year ago everybody was saying it’s stuck at 5% so we’ve already come down a lot in that area that thing that includes some of the stickier parts of inflation like auto insurance and car maintenance uh fee uh which have increased quite substantially but I think we’re going to see that moderating as well you know these prices just don’t go up at these at these rates forever Ed you’re not just an economist you’re a strategist so as you look at the stock market where do you where do you see opportunity yet what sectors do I want to be overweight here well I I think the way I look at the stock market these days is that every company now is a technology company that you companies are either making Technologies that are enhancing productivity or they’re using the technology to enhance productivity so I’m pretty bullish on the overall Market but within that I’ve continued to uh recommend overweighting technology Industrials financials um and energy is a sort of a shock absorber against geopolitical risk but um I still feel pretty comfortable with owning stocks that uh are going to do well if there’s no recession and I don’t see a recession for the next two years Ed great to see you as always thanks a lot for your perspective thank you thanks we are just getting started here on Market domination coming up Disney is set to report earnings on Tuesday we’ll speak to an analyst later in the hour about what to expect from the parks and streaming Giants and it’s the latest edition of our series goodbye or goodbye we’ll take a deep dive into two stocks to help you make the best choices for your portfolio stay tuned more Market domination after this [Music] he [Music] [Music] [Music] [Music] [Music] [Music] n [Music] [Music] [Music] [Music] [Music] [Music] [Music] the April jobs report coming in well below Economist expectations with 175,000 jobs added to the economy last month that is the slowest pace of job growth in six months we also saw annual wages jump less than 4% that’s the first time year-over year that is that’s the first time that’s happened in nearly three years joining us now lurina uici tro price chief us economist miss blina good to see you thanks for joining us so as we looked at kind of the breakdown of the jobs report what stood out to you as sort of the biggest surprise or the biggest area of slowing so let’s look at the number itself it was a big Miss relative to expectations but we’re only thinking about it as a relatively soft report because of those big upside surprises we saw in q1 175k uh is a healthy pay of job creation and this comes along with a continued deceleration in wage pressures I think this overall will make Powell feel that this patient approach that he’s taken this year is paying off and it’s the right approach now when I dissect the report one area of concern is the concentration of job growths uh in April continue to scoot towards healthare and education Healthcare and education plus government hiring had been uh strong supporters of employment growth throughout the last 6 to 12 months and that remains so should we have an unexpected flowing in healthc care hiring for instance because we have now reached uh the optimal level post pandemic this would expose employment growth in the US as to to downside risks the other area of concern as far as this report uh goes is the unemployment rate that is now at 3.9% but it is four times higher than at its trough in July of last year this gradual increase in the unemployment rate there’s nothing here very abrupt to raise red flags but that gradual increase I think it’s going to make fomc members sensitive to the fact that now they need to pay attention to their full employment mandate as well as their inflation mandate blur you know mentioned the wage picture I just want to dig into that a little bit so average hourly earnings blina Rose 0.2% in April they were up 3.9% uh from a year earlier that was the lowest monthly year- on-year increase since June 2021 I’m just curious Bina blina as you look at you know what does the wage picture look like from here it’s certainly a very good development we’re moving in the right direction and I think for the f1c and for economists such as myself this is going to be po particularly encouraging at the back of the ECI report last week which showed an upside surprise to wage pressures in q1 the average average hourly earnings measure suggest that we see continued moderation in wage pressures and we see that across the board the question here is what’s driving this moderation and again what we’re seeing is that in this business cycle both Consumer Price inflation and wage price inflation is slowing even without a a significant collapse in activity and increase in the unemployment rate for wages in particular I think that increase in labor force participation for prime age workers and overall increase supply of workers it’s driving this moderation in wages I would add to this that we’re also seeing significantly less labor market churn so let’s unpack this a little bit what we saw in 22 and early 2023 is that job switchers were getting very large wage increases much larger than the median or national average wage increases now that people are not switching jobs at such a fast space wage pressures are moderating as well so overall I think it’s the kind of report that suggests we can see continued progress on wage inflation because we’ve seen this positive shock to labor Supply in recent quarters blina just quickly though I’m going to ask sort of a different question than I asked Ed yord Denny a moment ago yes you might get that modering pressure on wages but you’re still seeing consumer prices outpa their growth outpace what’s happening with wages so at what point does the consumer get more squeezed I think this is a very good question and we need to be paying attention very closely to Trends in retail sales over the coming months because the consumer has been under a prolonged period of pressure from rising prices nevertheless what is upsetting this is the fact that not only uh wage pressures have almost kept up with inflation but job availability has been pretty high jobs have been plentiful so people have been able to work say 30 hours a week versus 20 hours a week in the pre pandemic economy so this kind of increase in aggregate in comes has really helped but continued um stickiness in inflation I think could undermine the the strength and the length of this recovery blina thank you so much for joining us today have a great weekend thank you time now for our call of the day Apple getting a Full Slate of price Target boost across Wall Street Morgan Stanley Bank of America JP Morgan Raymond James just a few raising their outlooks on the share this coming of course after Tech Giant reporting earnings that beat forecast announced that new $10 billion share repurchase plan there really two things that stood out to me Julie one was the forecast June Revenue guidance they told us that’s going to be up single digits year-over-year CFO Luca myri told us that actually before the call started yesterday that was in line with the street so a relief there I think and then of course as we mentioned that Capital return program just a monster buyback and that was more than many were looking for on the street I was talking analyst before that print you know they were looking more for like 90 billion so also a surprise there as well yeah the other thing that stands out to me in the analyst commentary is what people have to say about Ai and generative Ai and that’s sort of I wouldn’t call it all over the map but there is some dispersion in opinions about what the company said because we have to sort of extrapolate what’s going to happen the company has not been very specific and in fact Laura Martin over at Needum says that that has been a mistake uh she says we retain our buy rating on Apple because we believe that there working on geni geni Innovations but just not communicating them she says this is a flawed communication strategy in our view but not fatal to fundamental value um on the flip side you got Bank of America in its note to investors led by wamy Mohan today saying that they’re confident the company is well positioned in Genai you got our buddy Dan IES over at wed Bush saying he predicts an AI driven super cycle starting with iPhone 16 this fall but but it’s not because of anything that the company is specifically telling investors there are sort of hints being dropped right but there’s not a lot of clarity on that Str I would just I mean listen I I would just all the my only point to that Counterpoint be if you’re waiting for Apple to ever tell you exactly what’s in their product pipeline that is not how copertino rolls I think in part what people are reacting to frankly I was actually surprised cook even talked as much as he did even in those broad Strokes to talk about you know their strengths in Ai and I think they do have strength I think the fact that they Control software hardware and chips does mean in theory they can pull the trigger and move pretty quick when they’re ready to well and and that what you’re talking about there that lack of clarity because analysts are accustomed to it that’s why you still see that sort of level of confidence I think for sure coming up it’s the latest edition of our series goodbye or goodbye we’re going to take a deep dive into two stocks to help you make the best choices for your portfolio stay tuned more Market domination after this [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] now [Music] [Music] [Music] it’s a big noisy Universe of stocks out there welcome to goodbye or goodbye our goal to help cut through that noise to navigate the best moves for your portfolio today we’re detecting turbulent and optimistic investing trajectories in the Aerospace industry joining me here to discuss Don Nesbit FM investment senior portfolio manager Don thanks for being here appreciate it thanks for having me Julie it’s great to be here so let’s get to it northr Grumman is your buy stock here the one that you’re recommending folks take a look at here it’s been actually pretty volatile last year if you look at the stock so let’s go through why you like it here first of all let’s get to what they’re saying in terms of Sal and earnings growth there’s a lot going on in the world right now geopolitically is that’s what’s helping fuel their growth that certainly is helping um although even without recent events the stock has had a history of consistent earnings and sales growth and what is that been driven by then is it just sort of global military spending is there b is their biggest customer in the US government or is it are they more sort of Diversified what has been the US uh but as we’ see given the recent geopolitical events and many of the European countries are also now looking at their defense budgets looking to spend more so we expect North grman to be a beneficiary from that also uh they’re they’re boosting up in AI efforts there too to because they the technology that they’re involved with um also they have a space division which is growing and is actually profitable at this time interesting okay so then let’s get to um sort of what are the indicators of future growth right they’ve got a strong backlog they’ve got free cash flow so what does that tell you about how things are going to continue to go so this company has been from an operational basis very positive and their repurchase programs they’re putting more of the free cash flow uh from their operations back into shareholders hands they’ve had uh dividend increases over the last 20 years this stock is a dividend Aristocrat and uh the backlog order looked very good and we expect this trend to continue for people who don’t know what does a dividend aristocrat mean dividend Aristocrats are basically uh companies that have consistently raised their dividends over the last 20 years gotcha and so that’s uh one of your other points as you look at it not just does it have that consistently Rising dividend but also at what you say is an attractive valuation here yeah so northw Grumman right now is trading about 17 and a half times future oneye earnings compare that to the S&P which is now around 21 times so you’ve got a little bit of a discount there um when you look at its long-term growth prospects faet puts uh northr Grumman at about 22% versus we’re talking maybe a 12% for the market so um this slight discount to the market in terms of valuation but better growth prospects and then specifically that dividend yield is what at about 1.7% exactly and as I said they’ve been consistently increasing this they’ve also when they uh buy back shares that’s that’s similar to a dividend uh payment right returning cash to shareholders we always like to ask folks what the risks to the upside case are and in this case you know I asked sort of about diversification you know could they be over overly reliant on government contracts yeah and that’s the thing its strength can also be its weakness with the overreliance on the government however um you know theyve they’ve had a steady business with the government um the second thing is being in the high-tech area um they could uh you know suffer a similar to uh U um catastrophes or problems with their products like our next yes like our next one which we’ll get to in a moment and I should mention by the way I believe you hold shares in north of grman yes we do okay gotcha okay so let’s get to that other one that has suffered some setbacks perhaps no surprise we’re talking about Boe here um and just that they’ve seemed to sort of I don’t know not Domino but they they haven’t gone away they’ve been very persistent and that’s reflected in the shares here so we’ve got the management shakeup now happening and we don’t know who’s going to be running Boeing a year from now that’s right and if there’s anything the market hates it’s uncertainty and you see this time after time with stock a management change initially that’s a that’s uncertainty so the new Management’s going to have to come in prove itself before investors um become less fearful anybody on your wish list to run Boeing not in particular uh uh they’ve also had a shake up at the board level so I’m hoping that uh you know those industry experts could find the right person yeah that things will stabilize here also when we’re looking at that here Moody’s downgraded the company’s debt which is perhaps another headwind yeah yeah certainly credit issues is a indication of quality and um right now the uh boing is is is not a high quality name and uh it’s never good to be have have your credit downgraded by an agency right and sort of On a related note this is far from a dividend Aristocrat like the last company we were talking about they don’t pay a dividend exactly they stopped paying their dividend in uh 2020 with the pandemic and they haven’t resumed it since and right now they’re in no position to actually resume that because the earnings are not in good shape because of everything that’s been going exactly as a matter of fact um you know they’ve they’ve had a couple back toback quarters of negative earnings um the street is looking to maybe return to positive earnings in the third quarter of this year but that might be suspect and it won’t be until next year that we’re looking for you know full swing back to positive earnings for the year gotcha just like we talked about risks to the upside for Northern Grumman risks to the um risks through the upside case risk to the downside case here is that investors you know maybe say okay everything’s discounted in the shares already and we’ll look ahead and that maybe if they do appoint a new CEO that could help matters exactly and I think before this conversation started I would preface it by saying I may be a buyer of Boeing in the future it’s just how long I think for right now they’re they’re operating Under This Cloud of uncertainty and that’s grounding the stock um and until we start seeing um um positive earnings um pos positive a affirmations in their business the uh the Federal Regulators are out of their hair um you know one of the other things that’s happened as after all this is uh they they’ve riled up their customer base a lot of the the airlines so um the thing is though they are duopoly along with Airbus and and and and they will come back at some time whether that’s two quarters or two years I don’t know it sounds like it’ll take a lot that could turn the goodbye into goodbye all right let’s summarize what you’re telling investors Don so you say you would buy north of Grumman it has Robux sales grow strong free cash flow and backlog and that attractive valuation dividend Aristocrat I just love that phrase for some reason and you say avoid Boeing it faces operational uncertainties amid that management shakeup production problems as well and of course the overall uncertain business Outlook Don thanks so much for being here thanks for having appreciate it and thank you for watching goodbye or goodbye we’ll be bringing you episodes new episodes three times a week at 3:30 p.m. Eastern more Market domination on the other side time now for some of the day’s trending tickers Cloud flare shares dropping after reporting lower than expected guidance for second quarter Revenue lack glaster Outlook overshadowing the beat on earnings and revenue for the first quar and for uh CLA for viewers who who aren’t might be that familiar what these folks do is they offer software tools help customers kind of protect their websites make them run more quickly and reliably and the company did offer a Q2 Revenue Outlook not great uh missed what the street wanted to see otherwise as we know the print was actually fine adjuster earnings beat q1 sales beat analysts kind of were talking about cloudfare taken share new product launches but it was that forecast Julia really tanked this the stock today yeah and what’s interesting is we have had some Enterprise players now this earning season Express concerns about macroeconomic conditions about the willingness to spend of their customers and so this seems to be the situation here as well um even though the company did add I saw 122 new large customers with at least $100,000 in annual revenue so they to your point the numbers last quarter look good they are growing but there seems to be this nervousness around um some of this this it spending Fort Fortinet by the way was another company that was out today um with some similar kind of commentary um let’s talk about another stock we’re watching today Amgen those Shares are spiking as the company says it will no longer pursue eight weight lost pill but instead it’s going to focus on an injectable obesity treatment Yahoo finances Angeli klani is here and it’s the frequency or infrequency with which patients might have to use this that is giving it a special boost it seems yes that’s one of the ways that Amgen is looking to differentiate meriti from the other players on the market right now saying it could be as little as once a month um but all of course hinges on that phas three trial which they have yet to start they did give us a little tease of the phase 2 Data uh really just infusing more enthusiasm in the market for this drug we already saw them do that with the phase one trials so getting to that final point you can see the stock up more than or more than 11% now is up more than 133% earlier today uh what this really means for the market though is competition for wovi and Zep bound that’s Eli Lily and no Novo nordis drug and it’s important to look at what has happened um in the recent past we know that NOA Nordisk for example is already looking at Price drops of its drugs same OIC is down 40% since it launched in 2018 meanwhile wo’s price is looking to decrease allegedly already has but will be look will be coming down even further net price already down and what we’ve seen is the amount that these two companies Nova Doris and Eli Lily have been able to rake in from these gp1s already in a single year uh taking a look at uh q1 for both companies 3.9 billion in the diabetes drug OIC and 1.3 billion for wovi at fornovo and then meanwhile Eli Lily 1.8 billion for monjaro and just 57 million for Lily which came on the market last year for Z bound the weight loss truck so just in that short period of time already getting towards that 100 billion and so what we’re looking at is a really robust market pricing still a focus now will Amin be able to differentiate itself that way as well is the question mark so if you see on your screen these are the prices the list prices it’s important to say of these drugs of course we know that the total price that patients pay can be as little as $25 in some cases so right now the focus is how does Amgen differentiate both in the way that mariti is going to function as well as pricing on the market to compete with these really strong Market leaders and does it pose enough of a threat to the two Market leaders once it gets on the market itself and what and just quickly timeline when that would be potentially well the phase three trial isn’t hasn’t even started and the phase two data isn’t due for later this year so we’re looking at next year got it thanks so much appreciate it well let’s check on Expedia shares they have been sinking after first quarter bookings fell well below analyst expectations the company also trimmed it’s full your guidance the shares are down by 15% here a lot of this company blamed on verbo it’s a vacation rental business which is of course these competition from the likes of Airbnb but also more traditional vacation spots yeah they did they did add by the way exec talking about that said losing shared rals Airbnb and booking exec’s talking about spending on the brandly building it out more uh but acknowledging that’s going to you know take some time they said also just it looked like kind of just slower than expected growth in in the rest of the consumer business um it looks like as well anal reacting by the way I saw a team team at Piper They cut their R to neutral saying booking growth is decelerating yeah and they also did some sort of backend update that they talked about a little bit as well booking by the way booking holding also Holdings also out with its numbers uh but booking shares have been trading higher um the company said room night reservations are going to slow in the curtain quarter they blamed mid East tensions that that’s having an effect on Regional uh tourism but their numbers last quarter uh did look good don’t know if we have booking numbers but we’ll we’ll check on trust Julie on that yeah trust me on that all right let’s also there it is those Shares are up today let’s talk about TD Bank Bank as well those Shares are under pressure on reports the justice department is investigating the lender over money laundering tied to illicit fenal profits Analyst at National Bank of Canada saying the lender could face a hefty fine and earnings hit those Shares are down 5.8% now it’s interesting because the original report on this justice department inquiry surfaced yesterday the shares did fall yesterday but by less than 2% they are down more today and that perhaps has to do with this commentary from the National Bank of Canada which is talking about what could the effect on this be that it could be worse they say the latest Revelations quote suggest that these issues might not only result in a much larger fine than initially contemplated but also longer term implications for the financial performance yeah it’s interesting the bank is telling reporters listen we’re in a strong position plenty of capital liquidity and capacity anticipate continue to plan for additional monetary P penalties but the issue was just the uncertainty for investors really because what is the final size of the fine is going to be that the bank can’t say right now so if you’re investor you you just don’t have any line of sight there right moving on Paramount shares under pressure just hours before the exclusive talks between Paramount Global and sky dance expire a report from variety says the DL talks are falling apart the deadline comes after Apollo Global Management parent company of Yahoo finance and Sony Pictures submitted a $26 billion all cash bid for Paramount joining us now to discuss this as managing director at TD C Doug cyz Doug it’s always good to have you on the show um you know Doug on Paramount and sky dance uh your colleague there on the street Rich Greenfield over at light shed told his clients this morning Doug expects No Deal to get done here is that is that your bet Doug uh I I certainly don’t think a deal is gonna happen between Paramount and Apollo uh or Paramount and Apollo and Sony I think Sky Dan I don’t know um you know they’ve been talking for a while I think there’s some desire on both sides to see the deal happen you don’t you don’t always know sort of what the sticking points are uh until after the fact uh I I you know I wouldn’t be surprised to wake up on Monday morning to find a deal had been done and I wouldn’t be surprised to finding what had been done so let’s take the latter scenario for a moment here Doug what happens to Paramount if a deal doesn’t get done I mean the business has shrunk a lot the stock has gone down a lot so what is an independent future look like for Paramount well I I think they keep doing what they’re doing which you know they’re not the only Media company that’s struggling right now right I mean Warner Brother stock is down a lot Disney stock is well off its high uh it’s not a Paramount problem per se I think you know their their content assets probably aren’t as strong as Warner or Disney but they’re not bad uh you know particularly if you look at you know CBS obviously they’ve got the n pount plus keeps growing Subs it it’s getting closer to the point where it’s not a big money loser anymore um you know I think this industry’s problems are are industry problems and not company specific problems they need to be worked out in an industry level if they can be then I think Paramount can can be okay uh how long that’s going to take hard to say uh they are a leveraged company I don’t think that they’re so imminent danger oh I think we are losing Doug unfortunately hopefully we can get him back here because we wanted to talk to him about Disney earnings JY Disney earnings on Deck I I couldn’t wait to hear Doug’s thoughts on that which by the way I mean that stock on a roll of about 25% uh year to date heading in there so if you’re B Bob Iger aren’t you feeling pretty good your stocks up you fended off Nelson p I don’t know I don’t know if he can be too um complacent if you will I mean as Doug pointed out in his note recently where he looks at the streamers he sort of says you know we had like the unbundling era now we’re going to have the rebundling era which has already started to happen of course that not uh I mean Disney probably has stronger content than as he pointed out a Paramount but that doesn’t mean they’re in the clear Doug Doug do we have you back not yet not yet we do we do Doug it was a joke we have we got you we got you you there yeah okay so let’s talk about Disney how do you think they’re poised going into earnings yeah I think on the last call you know they had a lot of fireworks obviously they were in the middle of the the fight with Nelson pelts uh they wanted to drop a lot of sort of nuggets for investors to be excited about so you had the the sports JB announcement you had announcements about new content in the film pipeline uh the fortnite partnership you know there was a lot to sort of chew over and then on top of that they had a very strong earning report who gave guidance for the first time in a very long time uh investors liked all that I don’t I don’t know that they’ve got a lot left in their pocket um for this for this earnings report uh I think numbers will be fine but I don’t think you’re going to see nearly as much uh sort of new news as we did through months ago and Doug I’m just curious you know when you’re talking to your clients about this name the issue of succession here Doug H how much does that come up and and what are you telling your clients look it’s definitely a factor uh they’ve been trying to replace Bob Iger for 10 years and H haven’t successfully anyway um replacing him is very hard not just because you know he’s been I think on balance a very good executive uh but one thing he hadn’t do is developed a really good bench of people who could potentially replace him right people like Tom Stags J Rulo got essentially pushed out of the company because they were told they weren’t good enough and I think bringing someone in from the outside is just incredibly risky for Disney uh they have such a strong company culture that bringing a non- Disney person in uh I could go very badly wrong um I I I think I think sometimes about what’s happening with Boeing right now and you know how that one great company right what happened after they brought in some non- booing people and you know I’m not an expert on Boeing but you can read the headlines you know Disney is is a similar company that they have a very strong culture they’re very good at what they do but if you bring in someone from the outside who wasn’t familiar with that culture uh there’s a chance for damage obviously they just brought in a CFO from the outside um a very you know highly regarded person as long as there’s a Disney CEO in charge I think that’s fine but I think if you had a CEO and a CFO in charge of Disney that didn’t have history of Disney that could be very risky for the company gotcha Doug thanks so much thanks for your persistence there appreciate it good to catch up with you and have a great weekend thank you coming up a street fight mentality for fast casual dining that’s what McDonald says it needs to win over a cautious consumer we’ll discuss next on Market domination [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] consumers are feeling the pinch of inflation and passing that pain onto fast casual names with less frequent visits on this week’s first quarter earnings call McDonald CFO spoke about the push to win back customers clearly everybody’s fighting for fewer consumers or consumers that are certainly visiting uh less frequently and we’ve got to make sure we’ve got that street fighting mentality to win irregardless of the context around us we’re looking at how to navigate the big picture with the Yahoo finance Playbook to discuss we’re joined by Danilo gulo senior Analyst at Burnstein covering us restaurants and Dennis Gyer UBS executive director of equity research covering restaurants guys thanks so much for being here it is been an interesting period when we’ve been hearing from uh some of these restaurant names so far I do want to start the qsr space Quick Service restaurants what most people call fast food and take that um quote from McDonald’s here and that sort of Street Fighting mentality if you will danillo I’ll start with you how do you think that the likes of McDonald’s and its cohort are doing in getting those customers in the door yeah thank you for having us for SW and good to see you Dennis um look I think um you know getting customers uh into the door these days is incrementally harder we are seeing a pullback in the income consumer cohort traffic is slowing down across the entire industry and so you know everybody needs to be a little bit more mindful about playing the value orientation um a little bit more uh um a little bit more carefully these days and McDonald has been fairly um openly talking about bringing incremental value onto the table but we think it’s going to require some alignment with franchises and that is I think the big question mark going forward because franchisees to be able to fund and to be able to align on this National value platform they will need to really be excited about the level of profitability that comes with it in a context of profitability just starting to resurge in 2023 after significant dips in 2022 so the Playbook is out there the question is going to be alignment with franchisees Dennis I’m going to bring you in here and we’ll start there same question Dennis maybe just high level as you look across the companies in your coverage Universe Dennis how they and and getting customers to come in and spend some money yeah no thanks for having me and and I would say a few things I think we’ve certainly seen an industry slowdown across the industry that includes qsr fast food over the these last several months right maybe early in the in the year it was weather but these last few months it it clearly seems like the the restaurant consumer is is slowing um you know whether that’s savings are down interest rates are up obviously pricing is up broadly including you know meaningfully at restaurants or over the last few years I think you’re clearly seeing some some softness on the part of consumer demand consumer spending and there’s a bit of bifurcation it feels like where that that lower income consumer uh you’re hearing from a lot of the restaurants that that’s where some of the softnesses is starting to play out and I think as danillo kind of you know suggested there it feels like promotions values discounts you know has to probably be a a bigger part of of the industry’s value proposition right now than it has been over the last 12 months and you know you you heard it from McDonald’s the the Paul was so heavily focused on value um and you know trying to win on value and and highlighting value to to customers Starbucks kind of did the same thing on their call this week and and so I think clearly these restaurants are seeing this softness many of them at least and and they’re you trying to cater to the customer to to to highlight that value proposition to bring that traffic uh back in the door so it sounds like Dennis you think um at least judging from your buy rating on McDonald’s that you think McDonald’s is doing a pretty good job of doing that Danilo You’ve Got A Hold rating on McDonald’s what do they need to do to to better that value proposition that Dennis is talking about no I think I think Dennis is right first of all McDonald because of their scale they have a unique advantage to bring this value proposition a little bit more elevated uh and by the way value doesn’t mean necessarily just price competition value is a little bit broader than just what people eventually end up paying um and we think that McDonald with the investment they’re making in um also in digital could be bringing could be elevating more this value equation for consumers the problem is when it comes to pricing itself again um franchises at the end of the day are setting their prices and so one of the reasons why you know we are staying a little bit on the sideline is um you know we don’t have full conviction that the franchisee system will be supporting a significant price battle or Price War and the the competitive environment is not static and so uh last time that we saw a real price war was in 2018 and that one was a street fight you know it was creating some significant challenges across the rest of the industry with also um a high elevated level of disappointment from franchises and again mastering and balancing the act of you know convincing franchises restoring the profitability while at the same time trying to convince consumer to come back in as low en for the low-income consumer it’s extremely hard and it might require a little bit of time to be pulled off Dennis bring me back in here I want to get your take Dennis on Chipotle specifically uh what what a run Dennis it’s already up about 40% this year you tell your clients I know this one is still a buy at these levels how come Dennis yeah it still like it here obviously as you mentioned a tremendous run in in 2014 and and really you know going back well uh 2024 excuse me and going back well beyond that you know if you look at the results year is solidly positive traffic uh solidly positive same store sales growth growing stores in the US you know nine to to 10% or so you know earnings growth you know well north of of 20% as they’re expanding margins we still think fundamentally the story here is is very strong even as that valuation has continued to to creep up and and some of what we’re talking about right now with the consumer with the importance of value and danillo talked about it value means you know different things it’s not just absolute low price point and I think that’s relevant here right Starbucks um you know talked about this to some extent as well getting folks to come in highlighting value but I think what we see with Chipotle you know a $9 burrito chicken burrito chicken bowl $9 in change nationally I I consumers are telling you that’s that’s really good value even when you look at what the media is is is you know highlighting of late around McDonald’s pricing you see some stories the other way on on Chipotle that hey this is really good value consumers recognize this young and old and and you know Chipotle talked about look we’re seeing strength across income cohorts right upper income middle lower seeing the strength there and I think that highlights especially in this environment that that value is was winning and perceived value is winning and and chipotle has that so I think you overlay that with with what the the growth you know Dynamics look like you know and I think right now this valuation even at a more elevated level I think you can continue to see the stock work if they continue to execute the way that they have Dennis danillo was great having both you guys in the show today thanks for joining us thank you for having us thank you while wrapping up today’s market domination don’t go anywhere got you covered with all the action following the closing bell stay tuned for Market domination overtime [Music] [Music] he [Music] [Music] [Music] [Music] w [Music] [Music] [Music] [Music] up [Music] [Music] [Music] I’m a last there is the closing bell on Wall Street and now it’s Market domination overtime so let’s catch you up to speed on today’s action sponsored by tasty trade positive session for all three major averages here to end the week um and that’s because of course we got the jobs report this morning coming in weaker than estimated here also we saw the wage gains a little bit more moderate than than expected so that raising some optimism that inflation can indeed moderate this year so we see the Dow ra Rising by 450 points when all was sudden and down up 1.2% the S&P 500 up one a qu% the NASDAQ uh composite up by nearly 2% and there’s one more one more thing I have to mention and that of course is Apple if it comes up here I’ll show it to you there we go Apple shares up by 6% by the end of the day of course as we’ve been talking about the shares had been falling into its earnings report before this big upward move in rea ction to its earnings coming in better than estimated the big buyback that it announced a $110 billion authorization and some chatter about Ai and what’s going to happen for the company as a result so kind of interesting here that that was also a part of the upate today Josh all right Julie markets capping off a busy week with gains the week jobs report spark in a rally Jared blier is here with the takeaways of the trading Day Jared Josh you know I got to start with the US dollar because that has shown some weakness this week and if we can go to the Wi-Fi interactive I’m going to pull it up there I’m going to show you what I’m talking about the dollar a weaker dollar is a benefit for a lot of different asset classes uh from multinational uh Securities like uh stocks and also Commodities also cryptocurrency so here’s the year-to DAT dollar Index and we were just kind of stuck up here um and now we’re heading down let me show you a three-year chart so you can see where we are and how much farther down we might go the levels Jared what am I watching you can go all the way back down to about 100 105 right there 100.5 and that would be an incredible Tailwind now we’ve seen yields moderating this week as well you can see this is a three-year chart but on the year to date you can see how we’ve come off those yields rather sharply and now I can get into some of the fun stuff which is the sector action the heat Maps here is the 5-day look at sectors now Utilities in real estate number one well that’s not too exciting because those are defensive sectors that is reflecting the lower interest rates um and then tech tech is kind of a duration play so you can throw that in the utilities bucket in a certain sense that’s also outperforming here consumer discretionary healthc care also outperforming energy now crude oil is uh kind of operating on its own fundamentals I have a few comments about uh Commodities in a minute but energy and financial is the only thing in the red this week when we look at our leaders uh a lot of green here so MJ is cannabis uh I kind of discount that because it’s always number one or last because also had specific news because of the marijuana rescheduling yes which we see every month or two like almost on schedule there’s we get the same headlines and then we also have China I can show you China here um one second there’s China um a lot China’s on holiday right now they had uh in Asia a market holiday it was a Labor Day on May 1st so everybody took it now China’s taking the rest of the week off they’re taking I think they come back to Market on Monday so we’ll have to see what happens then but then in the commodity space um I mentioned that let’s see if we can get some Futures action here more red than green so commodity is not really taking advantage of that dollar weakness and and Josh loves to talk about selling May and go away now it’s May well here was a question one question for Jared blck on this seasonality which we do talk about right why the fact that we’re talking about a Jared why isn’t it priced in then it only accounts for maybe onethird I would say it accounts for to onethird of price action and there it can easily be overridden so if you have factors like the FED comes out of left field with a surprise decision it doesn’t matter what the seasonality is you’re going to see stocks do whatever they want to do in reaction to the Fed so it’s just a backdrop and so I call it a Tailwind but if we go back to the Wi-Fi interactive I’ll show you the seasonality map that has been working well this year this comes from Ryan detr over at Carson group uh so he’s specifically using these uh years right here these are all election years is going back to 1956 when we had a big start to the year so q1 was up more than 5% what happened this year well we had that big drop in April it might have front run some of this weakness that we’re seeing here so basically my mindset you see this little bottom here that’s basically towards that’s at the beginning of June I think we have the tendency to see more weakness over the next few weeks uh into early June but it doesn’t have to happen uh one thing that’s notable uh JP Morgan came out with a call two weeks ago that I wrote up in the morning brief they said they were calling for a tactical long because stocks had gone a little bit too far down too fast and guess what they bounce back up and right now the 50-day moving average is in play in the S&P 500 the NASDAQ the Dow so stocks are kind of at a critical inflection point there was one final thing I just wanted to note here is that Meme stocks meme stocks have really come alive this week and to your point Julia these are earning stories um coindesk actually was a disappointing earning but let me just show you uh how much green there is when I sort these by performance we have carvana up 44% GameStop almost 40% Tupperware cost Beyond fossil these are names at till R names that I haven’t really talked about much this year just because they haven’t been performing that well but now we are because they’re coming up all right thanks so much Jared I appreciate it well 80% of S&P 500 companies now reported earnings for the first quarter and growth is up 5% year-over-year coming in better than anticipated according to fa set here with a few takeaways from results overall Scott krystoff the transcript editor and founder of Avendale Asset Management thanks for being here Scott so as we look overall at the earning season I know you have some sort of specific thematic takeaways but first of all give us your big picture view as to how The Season’s been so far I think it’s been better than I expected certainly uh I think especially with respect to the consumer was expecting to see some weakness starting to filter through in the economy and it just hasn’t happened uh even though all of the pandemic era stimulus that came through the consumer balance sheets and was propelling uh spending obviously for the last several years even though that has kind of normalized at this point uh consumers are seem to still be strong I think comps are a little bit uh down from where they were in terms of like you’re comping in the low mid single digit range instead of the high single digit and double digit ranges for consumer spending type uh you know companies but I would say overall it’s been strong than than I anticipated and Scott another theme you know we got to get your take on is AI as you kind of you know you saw the report Scott you were listening to the conference calls what was your take did you did did you see Executives as excited as ever about that red hot Tech yeah my own te takeaway was really there are the tech companies that everybody knows that has that have real exposure to Ai and are working on building the infrastructure in order to be able to develop and deploy AI uh and they have a lot of things on their hands in order to do that it’s a really big infrastructure project uh that all of these companies are are all of the big hyperscaler cloud companies are undertaking right now um they’re all kind of in one bucket and they’re just working kind of going forward on deploying those and also improving models Etc and then there are a lot of companies that are in the traditional sort of Fortune 500 who are trying to figure out how to use AI in order to help their businesses and you’re seeing a lot of those CEOs who aren’t necessarily Tech CEOs quote unquote but are looking at AI very interested talking about use cases that they’re seeing in their companies um and getting ready to deploy those uh but that’s those are the two things that you’re really seeing in AI um in addition to that talking point that you’re that you’re seeing there is within that infrastructure build just seeing how energy intensive AI is I think people are really starting to understand that that’s one of the big bottlenecks for AI in addition to the semiconductors well and Scott what are the implications of that because I’ve heard a lot of talk about it but less about what it means right you know can we assume that that is going to mean demand for power companies but can we also assume that maybe AI is going to be even pricier than we’re accounting for because it’s not just about R&D and training it’s about increased energy costs yeah I mean I think like from an economic lens you look at any technology or any big Industrial Revolution it’s typically paired with some change in technology and some change in energy and I think what we’re seeing with AI is is this massive tool that’s being uh Built For Humanity that has the potential to you know multiply economic output to levels that we haven’t seen before but in order to do that it’s very energy intensive um and so what does that mean it means that we’ll have to be creating much more energy than we thought we were going to uh traditional renewable sources like wind and solar I think we’re already having trouble scaling to where people thought they were going to be needed for you know just traditional economic growth and so I think it brings into the purview things like nuclear more fision and fusion as well um and it also brings into the purview maybe we will have to use more fossil fuels than we were expecting to do so you saw some companies talking about you know restarting natural gas investment and things like that in terms of uh in terms of uh growing the econ the electricity output Scott another obviously that has climate change implications Scott another another top to get your take on inflation I’m just curious as we make our way through this earning season what what have we learned um about how executives are thinking that about that Dynamic both now and and looking ahead yeah I think the vast majority of um Executives that you’re seeing are kind of in the consensus that we’re seeing across markets and what the Fed was talking about this week of basically you’re seeing um inflation that’s stickier than uh was being expected um that the fed’s going to be on hold with respect to interest rate decreases but there was one comment that we put in the newslet last week from uh Walmart that was actually on a newscast but was talking about how they’re actually seeing deflation so they’re seeing much better inflation uh progress than I think the markets are expecting and obviously Walmart is a very very big the biggest retailer in the world and so um them seeing that I think has positive implications potentially for the path of inflation going forward and would be a surprise not only to markets but the Federal Reserve as well a positive surprise um so uh you know this is something to watch really closely because obviously consensus is pretty well dug in now that inflation is stickier than people were expecting and then the other takeway I guess we’re going in sort of revers order of of the bullets but uh that the consumer is still strong which I guess is sort of related to inflation maybe being less sticky but it’s interesting that you you to have taken away that the consumer’s still strong because we have had some examples of companies you know I can think of Starbucks for example that NE didn’t necessarily show as much consumer strength yeah I mean I really go back to the credit card companies first and foremost when I’m looking at how the consumer spend in general is is progressing and those companies were showing decent again the comps were lower than they have been but we’re still showing pretty strong strong uh consumer spending data um and so when I look across the totality of it I get the message and we had you know one week we ran probably eight or nine quotes from different companies talking about the consumer being very resilient Capital One calling the consumer quite strong um it the totality is the consumers are strong and again that was surprising to me going into this because I really thought especially the lower and mid middle inome consumers were starting to feel a lot of pressure from this inflation that we’ve been having that’s persistent and then also the end of pandemic era stimulus and so Scott just briefly then finally how putting all of this together how are you thinking strategically given what we have learned this earning season yeah that’s a good question I think strategically it’s still inflation is probably the number one thing because of the way that it impacts the fed’s ability to react and lower interest rates or keep interest rates on hold I think that’s going to be the story of the second you know half of the year is what the FED is going to be doing with those interest rates and so if inflation is indeed falling then you hopefully we’re still going to get some interest rate decreases and that should be a boost to securities prices Scott thanks so much for joining us and have a great weekend thank you coming up closing arguments set to end today in the landmark antitrust case against GL Google brought by the Department of Justice will get you the latest on the other side when Market domination overtime returns ever wonder why a stock suddenly drops double digits or Bitcoin unexpectedly hits record highs we’re unpacking the Catalyst driving daily Market action and explaining the Chain Reaction why are oil prices trending lower despite ongoing geopolitical tensions or why a company’s stock is up even though it missed on earnings Insight from Top strategist economists and Business Leaders will help you make the smartest choices for your portfolio this is catalyst tune in Daily 10:00 a.m. eastern on Yahoo finance [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] m [Music] [Music] [Music] now [Music] [Music] [Music] welcome back to Market domination overtime jar blicker standing by to get you up to speed on the action from today sponsored by tasty trade hey Jared hey Julie and let’s put the wi-fi interactive behind me where we we have a bullish close to the week and in fact we have eak out bullish closes for the week on all three Majors plus the Russell 2000 and here’s the Dow up 1.14% over the last 5 days 450 points of that today NASDAQ putting in gains of about the same S&P 500 a bit less at half a percent and the Russell 2000 a little bit more at 1.68% uh and we want to check in on what crypto has been doing this week I think it’s been really interesting this is Bitcoin gain today 5% uh but it’s had kind of a it’s kind of stalled out a little bit here’s a year- to-day chart now after we hit these record highs just short of 75,000 earlier in March we basically been trading sideways although we just di below and that would be part for the car course for crypto and for Bitcoin if that was a false breakdown and then we just head higher now if we get below 60,000 again maybe we’re going to head lower and we’ll hit one of those round numbers underneath that 50 45,000 but we don’t want to get ahead of ourselves uh I do want to talk about some of the flows that we were seeing this week we saw a huge influx of money into the new Bitcoin ETFs when they launched in January earlier this year and here behind me I have all the crypto flows since uh 2019 so pretty much the beginning of the original Bitcoin ETFs which were Futures based but not SP spot Bitcoin you can see we got a spike when Bitcoin hit its record highs in 2021 but then they fell off quite a bit and then the flows really came into effect with this last round of spot Bitcoin ETFs but you will notice that we do have a bit of a draw down this week in fact that is I believe larger than this draw down that we had one week in 2022 so is it totally riskof I think it’s too uh early to put any weight on whether this going to last into the future I do want to see Bitcoin hold above 60,000 as a Belle weather for the entire crypto class guys Jared thank you appreciate it closing arguments set to end today in the landmark antitrust case against Google brought by the Department of Justice the question at the heart of the trial did the tech giant illegally maintain its dominance in the online search Market here with more on what we’ve heard so far and what could be next is our Alexis Kenan so what’s our what’s the big takeaway now that the closing arguments are finishing up so yeah finishing up they’re still going these are two really long days and the two parties the justice department and Google’s lawyers they’re up there having a conversation with the judge the closing arguments uh allow the judge to probe both parties and try to crystallize their arguments so that he can then take it away and write his opinion that could be expected months weeks from now we just don’t know now the central question here did uh Google monopolize markets in search and search advertising that’s the first question and did they abuse those monopolies if they have them so that’s what the judge is grappling with and they’re looking at these contracts that Google entered into with various parties right smartphone manufacturers Apple Samsung browsers Modzilla Firefox Verizon Mobile carriers all kinds of parties that touch this mobile ecosystem and also desktop ecosystem to make Google search the default on those devices also did Google block Next Generation devices from being able to run rival search uh providers so uh that’s at the heart of this these contract s now the judge so far has questioned well how come there aren’t newcomers to this this search Market why do we have these Same Old Folks at the table that have been there for a couple decades right in most cases including Yahoo of course um and so that’s one question that they the judge has put to these parties also he’s asking on the other hand well what about Instagram Tik Tock bite dance uh Facebook are those substitutes for advertisers like are advertisers really being harm armed here so he’s worried about consumers worried about advertisers all these parties that play in the system the ecosystem of search uh the doj for its part has said that these contracts are blocking rival search engines from being able to scale the one thing right they need distribution in order to even make their product better like Google has over all these years on the other hand you have Google saying nope our 90% share in this search Market that’s because we are the best and that’s why consumers are partnering with us so those are the opposing uh arguments here but just take a look briefly at the dollars at stake here in 2021 this came out at trial Google paid a total of $6.3 billion of its total $258 billion in Revenue to secur that default placement for its search that’s across all of those parties that I talked about earlier Apple taking the Lion Share of that the majority to put the uh uh Google search on Safari 20 billion the company was paid in 2022 you go back to 2021 18 billion to Apple from Google and you go back to 2014 a billion doll so a big expansion there this is really important for all kinds of parties not just Google yeah if you’re if you’re an apple investor you’re watching this one really closely I’m just interesting Alexa let’s let’s say ultimately the judge agrees with the government agrees with Uncle Sam do we have any sense of what possible remedies could be at work here so what will happen is there will be a whole another phase of the trial right we’re talking depositions Witnesses it’s it’s like a whole another trial to figure out how do you even fix this situation if there is anti- competitive conduct found that’s really complicated so it involves all kinds of experts the government for its part has not said exactly what it wants the remedy to be it has said suggested structural remedies as a solution if that’s appropriate a structural remedies mean possibly breaking up the company it means restructuring the company in some way that would fix this alleged harm uh so we don’t know yet that will come later but certainly the government has put that on the table there’s no doubt about that interesting stuff thanks a lot Alexis thanks Alexis moving on Warner Brothers Discovery set to report earnings on Thursday and earlier this week we saw the stock take a hit that’s after the Wall Street Journal reported Comcast NBC Universal is working on a deal that would outbid wbd for NBA media rights those concerns have analysts worries worried heading into earings next week finances Alexander Canal is here with more Ali hey Josh yeah and there’s a f a few reasons why analysts are worried about this because on the one hand the cost savings that could help earnings down the line potentially but Sports content in general has been so key when you think about linear TV advertising Revenue when you think about those carriage fees even when it comes to the Allure of that type of content to a streaming service like Max or the upcoming JV partnership between ESPN and fox so this could really have long-term consequences for this company wbd currently shells out about $1.2 billion annually for those MBA media rights NBC is reported to be bidding 2.5 billion so more than double what wbd currently pays the current rights uh extend uh through the end of next season so now is a time where a lot of companies are coming out of the woodwork trying to negotiate a deal Bank of America analyst Jessica Reef Erick said that it is critical that wbd secures these rights given the fact that TNT boasts the highest Carriage fees out of all of the company’s cable networks and should the they lose these rights there is a real risk that they would not be able to maintain those High affiliate fees or even use the MBA as a bargaining chip for other types of cable deals city did put some numbers on this with analyst Jason bazinet estimating that a $250 million hit will come to adjusted eata should the company lose these rights that would be driven by a $270 million loss in annual ad revenue and a potential 45% decline in TNT’s affiliate fees so we’ll see what happens down the line the Wall Street Journal did note that Warner Brothers Discovery is trying everything they can to avoid this reality they want to be able to secure those rights they just you know need to come up with the money and when you’re dealing with a lot of competition especially with big Tech Amazon has been rumored in there for a potential streaming deal that becomes a little complicated all right we’ll keep watching Ally thank you yes time now for what to watch next week week starting off on the earnings front it’s another big week of earnings on Deck next week including Disney Uber and Toyota Disney reporting second quarter earnings before the Bell on Tuesday first after the company defeated active as investor Nelson pelts in that proxy fight analysts expecting parks to be the bright spot for the House of M despite inflationary wage pressure streaming we know also expected to get a boost from Price hikes and some more earnings the next week from Berkshire halfway lift and BP among others Berkshire pathway Warren Buffett’s conglomerate is on the verge of a major Milestone as it closes in on a trillion doll market cap the company will hold its annual shareholder meeting over the weekend it will be the first since the death of Buffett’s longtime business partner Charlie Munger and finally we’re going to get another round of fed commentary next week from fed Governor Lisa Cook and fed presidents Tom Barkin and John Williams this coming after commentate from fed Governor Michelle Bowman saying she’s willing to raise rates if inflation progress stalls that’ll do it for today’s market domination overtime be sure to come back on Monday 300 p.m. Eastern for all of your coverage leading up to and after the closing bell stay tuned more Yahoo Finance on the other side [Music] [Music] [Music] [Music] [Music] [Music] [Music] up [Music] [Music] [Music] [Music] [Music] [Music] [Music] the bid Administration taking aim at wealthy taxpayers the Internal Revenue Service updating its operating plan and looking at double the audit rate on the wealthiest Americans and it comes as an economist calls for attacks on billionaires in new Abed in the New York Times joining us now is Henrietta try’s Veta Partners managing partner and director of Economic Policy Henrietta is good to see you and maybe um maybe we’ll start there Henrietta so the IRS updating its operating plan looking at Double the audit rate on on the wealthiest Americans what do you make of that headline Henrietta yeah I mean it’s great the way that you frame that this is really about trying to find a way to collect the taxes that are already due as opposed to going through the rium rle of passing an entirely new tax bill so there’s about a $700 billion doll tax Gap right now and that’s just people who are not paying the taxes that are currently owed and what the administration’s going to go after is people earning more than $10 million and a really high standard for um businesses as well to say hey let’s let’s make sure we have the IRS agents that can conduct these Audits and actually collect the revenue that we want to be factoring in so we do not have to raise rates further um when we look into 2025 we have to pass a massive tax bill $3.8 trillion do worth of taxes in fact so if they can go at least part of the way you know almost a trillion dollars of the way is quite a lot towards paying that down with collection of tax cuts that are already there would be a pretty promising development for the IRS Henrietta have we seen efforts like this in the past before and how successful have they been honestly it’s been a really long time since the IRS has been funded at anything near a standard rate funding has been slashed since 2011 if you remember the budget Control Act where we had the sequester and there was big debate about deficit reduction in the United States um we slashed agencies across the board back then so what they’re really doing is trying to get the IRS back to par so they can conduct what in if this comes to pass what would only be about 15% of um income streams being audited so it’s still a really small portion and what about Henry out of this this headline op New York Times that got some attention and Economist saying you know it’s time to to tax the billionaires I don’t know if you had a chance to see that Henryetta or what you made of it yeah taxing billionaires plays really well with Americans across the board it’s obviously one of the core platforms of the Biden Administration and their budget um Democrats have been trying to go after billionaires or share BuyBacks or um High net worth individuals all through all different portions of the tax code um and what Americans are telling them is yes this is what we would like to see um it scores very well particularly in the weight of wake of President Biden State of the Union where he made it sort of a core pillar just after he rolled out the fiscal year 2025 budget so it’s a pretty standard component of the democratic party um it’s not on the Republican agenda uh but it is a popular Revenue Razer if memory serves it’s like a $200 billion do Revenue raiser so again another way to generate Revenue to offset the cost of extending the existing tax cuts that expire next year and Henryetta what’s it you know there’s some interesting research in this oped as well that that Josh mentioned mention that billionaires have a now have a lower effective tax rate than workingclass Americans and one of the things he points out is that uh if you don’t like the taxes in the US you there are various tools you can use to pay taxes in lower rate countries for example so what he’s proposing is a global uh billionaires tax is that something that you think would gain any political traction I I think coordinating Global tax policy as you can see from the efforts that secretary Yellen has been uh working on since I don’t know the last two treasury secretaries I think that’s way too difficult to pull off so I appreciate the apped and the tenor of it I think um You probably see some pretty popular polling for that sentiment around the world I mean the income gap in America and globally is risen exponentially since the what the 60s and 70s um so I I think that would be very popular coordinating it globally is really a non-starter we can barely get the business community on board there um but I do think a domestic tax hike where you know presidents from both parties have said you know if you don’t like the taxes that you pay here in America go incorporate your company somewhere else if you don’t want our legal protections our defense protections our R&D our patent protections you know Feel Free by all means to take your corporation elsewhere but if you want to take advantage of the preferences that America affords you the cost is paying your taxes which they obviously don’t do at the corporate level or at the billionaire level either and hen you know we’re talking here a lot about the revenue side of the house how about spending any kind of traction there um you know obviously Biden and Trump have made it clear they’re not going to touch entitlement spending yeah you really can’t touch entitlement spending it’s sort of a political third wheel uh or third rail and so as long as that’s the case you’re really talking about nickels and dimes here I know it sounds ridiculous to say but raising the corporate tax rate even by one percentage Point only generates $150 billion dollar in revenue and I say only because that would be like one month extension of the individual tax cuts it cost 3.8 trillion to extend the individual tax cuts so even increasing the corporate rate by just a percentage point is going to do nothing for you you really do need to go after the big ticket items which is raising the retirement age um and other tweaks to entitlements which neither president is going to do or come close to and in fact you’re really not going to have that conversation until you have split Congress and split Congressional control uh my forecast for the elections actually suggests that it wouldn’t happen unless Biden was the president and Republicans controlled either the house or the Senate and after we get through a debt sealing conversation and early next year and the tax reform bill then we start having a conversation about deficit reduction it would largely mirror 2011 and the Hallmark of that 2011 effort was that in fact we got no deficit reduction so even if they had the conversation again we’re a long way from entitlement reform regardless of who the president is and Henrietta just quickly you know you you gave your projection there for what we might see uh come November in terms of the tax rhetoric that we’re about to get you know once uh former president Trump gets out of out of court perhaps we’ll be getting a return to the campaign Trail and more perhaps talk about policy give us a little preview of what we can expect to hear from both sides on taxes specifically as we head into the fall sure um on the Trump side the argument is to extend all of his tax cuts as I mentioned that’s a $3.8 trillion do proposition wildly expensive would blow out the deficit by$ two to2 and a half trillion dollars and you’d still be on the hook for another nearly two2 trillion dollar in finding Revenue to offset that so for the Trump scenario the question you have to ask yourself is do you want the state and local tax reduction to remain expired and capped at 10K which is what we would see continue that’s about a $98 billion Revenue Razer so half of the rest of the gulf you need to fill and then the other uh portion that the Trump Administration would try to impose is a tariff which is otherwise a tax on consumers for everything coming in from All Nations whether that’s China or the EU or Mexico or uh Japan um much like we saw in 2018 and those tariffs are were still with us so the president Trump idea is 10% tariffs across the board that is almost his entire Revenue plan it would generate two and a half trillion dollars about $500 billion dollar of that would be negative GDP hits um retaliations from other corporations but the final leftovers is $2 trillion do which we would have to collect um principally from us consumers who pay the Tariff so I don’t expect any of those tariffs to go in to that extent but I do think a 10% hike at a minimum on imports from from China which right now are tariffed at about $370 billion worth of goods from China are being tariffed at between 7 and a half and 25% so you could see those tick up by 10 points um under under a Biden Administration what you would see instead is the top tax bracket the 37% bracket which is for you know very high net worth individuals would rise to its old 39.6% threshold and that’s the principal offset that the Biden Administration has it also proposed a share buyback tax I’m sure you’d hear a lot about the billionaire tax I don’t know if they’d ever have the votes to pull that off um but the basic question is would you rather have tariffs and tax cut for everyone or would you rather not have tariffs and see the top tax bracket people earning above a million dollars um for families filing jointly see that tax bracket hike that’s that’s really the question of the election and massive implications Henryetta we always appreciate the chance to have you on the show thanks so much for joining us thanks for having me stick around more Yahoo finance after this [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] right now we have 3% growth which is you know pretty solid growth I would say by any measure and we have inflation running under 3% I I don’t see the Stag or deflation actually no stag no inflation says Fed chair J pal we’ve got that going for us but no one in America seems happy at least if you look at some of the recent consumer confidence surveys is here to break down the disconnect and what this means for President Biden’s reelection efforts is our Rick Newman so Rick uh no stag no inflation I thought that was a compliment to the Biden economy I mean I guess Jay Powell can’t just come out and say the Biden economy is doing great but if you’ve got no Stag and you got no inflation and and we’re coming from inflation that sounds pretty good uh but you know this this is just not obviously not good enough for Joe Biden and and we’re seeing so many very interesting gyration so you know today’s jobs report uh we’ve been talking about it all day on the air job job growth is slowing a little bit so that’s good for financial markets and that is basically good uh for the outlook on inflation but we could be pivoting to a point where uh voters start to say Well they’re unhappy about the job market and they never got over inflation nobody has given uh Biden credit for what’s been uh the good things that have been happening in this economy and of course they’ve been really criticizing him for inflation I mean this shows up in consumer confidence surveys practically at recessionary levels his approval rating stinks so now we’re getting to a point where maybe this is good for inflation but the job market is weakening so um is this going to just be that Biden can’t please anybody that he’s never going to get credit for bringing inflation down uh and now people are going to start getting a little bit upset about a softening job market who knows but you know we’ve only got about six months left at this point for uh for voter attitudes to pick perk up in terms of Biden’s econ uh Biden’s handling of the economy or he’s in trouble in November you know Rick I feel like if we’re going to talk politics I would be remiss if I didn’t ask you about you know one of the biggest stories in the country right now which is going on these college campuses right uh protests the vandalism the violence Americans don’t like that Rick I’m I’m am curious how you think if at all that has just kind of political ramifications in your opinion that could have so Josh we obviously didn’t rehearse this ahead of time and you said the biggest story going on I was wonder if wondering if you’re going to talk about the Trump trial in Manhattan that’s what I thought too I guess I guess that’s you can sound off feel free Rick go go off on both well maybe when we get to a verdict it it it’ll Rise by a notch or two uh you know Biden did address what been happening on campuses this week and uh he did not side with the students for the most part I mean he really did address uh the anti- anti-Semitism that has been seeping out through some of these protests um so I think we have to think about where is this whole situation going to be by about October of of this year will this war have wound down will we see some improvement in the situation over there especially I think I think it’s it’s sooner than October I I I would guess like do you see do you see that at at do you see it at the DNC convention is what I’d be looking for I mean I don’t think this is the 1960s I mean in the 1960s when we did have it at the DNC convention I mean we had that was the United States being involved in a war and thousands of Americans dying in a war um I’m not seeing it I mean we’re we’re talking about a relatively small number of students on a few college campuses and by the way a lot of these protesters showing up at college campuses are not students they’re sort of like the um sort of like these um sleeper cells of protesters so just look for it so I’m not sure this has legs but I think it really depends on what happens over in Israel and Gaza Israel needs to wrap this up and if they don’t yeah ongoing problem Rick thank you buddy have a great weekend see you guys the Biden Administration finalizing requirements to qualify for inflation reduction act electric vehle tax credits doesn’t mouthful and China Hawks are not happy with more we are joined by panian PR what is the story here yeah it’s not that straightforward here there’s a couple components here but the big part is starting in 2025 um critical minerals and the batteries cannot come from countries like China or foreign entities of concern so that’s a problem but they’re out giving the automakers a bone here and saying hey uh stuff like non-traceable low value minerals like graphite can still come from China through 2027 so we’ll allow you to do do that but we’re going to ban you from doing more important Min minerals in China uh this is all part and partial to the two-stage sort of uh requirement system where you have the battery components battery minerals those have to come from uh countries that we have trade agreements with or ourselves that that kind of phases in over time and the battery components part you see there that’s also phased into time they want people to make components in North America so you have these two things coming up but then also there’s the foreign entities of concern which is like noo unless it’s something like graphite so a little bit of assist here for for the automakers but hey pricing and EV credits are very important for adoption graphite makes me think about and wonder where are my pencils uh where the graphite and my pencils coming from but um so what so understanding that it’s complicated what do we know what is the sort of effect what’s the bottom line for Ev for North American EV producers so the concern was that if you didn’t stage in the kind of the non-traceable low value none of the cars would would qualify for the EV tax credit uh that the US offers for for for uh EVs and that’s sort of what Joe Mansion is saying I want this to be hard to get because I want everything to be made in America but automaker is saying that’s not realistic their trade groups is saying we need to have the ability to get some of these cheaper materials other we can’t make these batteries we can’t ramp up the supply chain in the US so it buys them more time to ramp up that supply chain right and then but also right now only a third of all cars are are are sort of uh available to get the tax credit so You’ make it even harder if you change it so they want to be able to sort of increase adoption with Federal money got it all right thanks press appreciate it well coming up serve Robotics and its Fleet of bots are transforming the way folks are getting their food delivered we’re going to speak with the CEO about the company’s latest funding round we got one of the robots here in our studio we’re looking forward to getting an inperson look stay with us [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] Uber and Nvidia bat companies serve robotics looking to scale up an autonomous delivery with $40 million of new capital and in and fresh production agreement serve is ready to leverage its position now at the intersection of AI and Robotics Ali kashani serve robotics CEO joining us now to discuss all this and more Ali good to to see you good to see you thank you so let’s just let’s start with with the robots which are impressive Ali what what’s the what’s the problem you all are trying to solve for the problem is that we’re using two ton cars to move to pan bitos so this is just Last Mile the way we do it today is very inefficient if you think about this over Reliance in cars it causes CO2 emissions accidents injuries traffic um half of real States in cities are dedicated to cars rather than people so we are starting this transition away from Cars for applications where you don’t need to use a car like delivering 2 pound burritos so um the robots are being used right now in Los Angeles talk to me like give me an example okay if I’m going on an app and ordering my burrito what happens do I have the choice of how to get it or how does that work so you open Uber Eats you’re in La there’s a multiple hundreds of restaurants right now that we work with and if you place your order just like any other order you automatically are opted in to user robot it would uh receive your item from the restaurant show up at your door you go downstairs press a button to unlock grab your food does it have to be though within sort of a certain radius of both the restaurant and your home and and I don’t know I mean does it go on the like I have so many logistical questions does it go on the sidewalk does it go on the road how fast can it go how does all that work so it goes on the sidewalk it can cross intersections it can go 6 to you know 7 mes an hour maximum speed but mostly it’s slower than that it’s just you know in the sidewalk kind of flow after traffic and um it’s a couple mile radius but half of all deliveries in the United States are less than 2 and a half miles so most deliveries it can actually fulfill and what’s been the response Ali of regulators across the country to this Tech very positive so the first thing to keep in mind is that by default these robots are allowed to operate anywhere but 20 plus states have put regulations in favor to encourage us to launch the robots there and fundamentally one robot has 3,000 times less kinetic energy than a vehicle so Regulators understand that this this makes roads safer rather than you know what you’re dealing with self-driving cars it’s always a question of is it actually safer than humans right now we know that for a fact this is safer than a car doing the same thing uh but it has the advantage of reducing congestion and co2’s and also bringing the cost down for the local businesses that that right now are are struggling with the cost of delivery so it might be easier than operating on the road but I imagine still I mean we’ve talked a lot lately about a possible autonomous taxi business from a Tesla or from an Uber for that matter um what have you learned um are sort of the biggest challenges in moving around an autonomous vehicle or in this case a very a smaller um robot so the world is chaotic you’re on a sidewalk we’ve had to deal with goats uh among other things like you know there there’s everything that you can imagine that that is going to happen uh so you need to learn you need to learn how to adopt I think every company in this space that’s going to have a fleet off things moving by themselves is going to uh have to deal with that we are just one step ahead because we’ve been now doing this for a few years we’ve been on Uber’s platform for a couple of years delivering to tens of thousands of households in Los Angeles so we’ve learned a lot in that process but it’s all about just fine-tuning your AI finding fine-tuning your Sops you know learning how to respond to to those audities of real world and I you know not not everybody loves robots I mean vandalism most do most most do but seriously vandalism theft is that an issue in years of testing and operating this we’ve had one case when someone tried to steal a robot the robot came home by itself safely it escaped they were arrested within 30 minutes so generally a bad idea to seal a robot people mess with robots kids like to mess with robots all you have to do sometimes is play dead they get bored they walk away these robots deliver at a higher success rate than human careers do today by by a wide order of uh by by a wide margin actually so that includes the failures include all the cases of vandalism or people messing with them is it does it navigate by cameras by lar how does it work and how did that robot get away when somebody was trying to to mess with it it was loaded on the back of a truck it jumped off the truck it jumped off the truck came home unharmed it’s it’s crazy we have the video posted on social but uh it uses lar it has one lar on top you can see it has cameras so it’s a you know Fusion of sensors that happened to be what I did my Graduate Studies on years ago so it became quite relevant and it can navigate the sidewalk environment quite well mhm um just very quickly before we leave um what’s your sort of long-term plan sell the company go public what I mean obviously you’re not you’re only deployed in a few places for now so I know you got a long path ahead of you yeah so we we actually went public a couple weeks ago so we on NASDAQ right now yeah SV um so we have a contract with Uber to launch 2,000 robots on their platform obviously we’ve been working with them for some time now we want to expand that and we just signed Magna International to be our contract manufacturer they’re going to build and scale the robots with us we have some incredible Partners Nvidia is one of our largest investors and partners the chips inside here are from Nvidia and obviously Uber is our main partner that helps us scale thanks so much for being here and thanks for bringing the rot too pretty cool stuff appreciate it well that’ll do it for today’s yaho Finance live be sure to come back on Monday 3 p.m. Eastern for all of your coverage leading up to and after the closing bell have a great weekend [Music] [Music] [Music] e e e e
#stocks #inflation #YahooFinance #recession #bitcoin #Biden #Stockmarket #coronavirus #memestocks #Fed #YahooFinance #investing #stockmarket #crypto
To get the latest market news check out finance.yahoo.com
US stocks surged on Friday, as upbeat earnings from Apple (AAPL) lifted spirits and a weaker-than-expected jobs report revived bets that the Federal Reserve could cut interest rates sooner than thought.
The Dow Jones Industrial Average (^DJI) jumped 1.2%, or about 450 points, while the S&P 500 (^GSPC) rose 1.3%. The tech-heavy Nasdaq Composite (^IXIC) increased 2%.
The April jobs report painted a picture of a cooling US labor market, as employers added 175,000 jobs and the unemployment rate unexpectedly jumped to 3.9%. Economists had expected an addition of 240,000 jobs.
The report pushed up bets on a sooner-than-expected rate cut from the Fed. According to the CME FedWatch tool, traders see a roughly two-thirds chance of a rate cut in September.
Read more: What the Fed rate decision means for bank accounts, CDs, loans, and credit cards
Meanwhile, Apple was the star of the corporates Friday, as its quarterly profit beat expectations and it surprised investors with better revenue out of China than estimated in the face of reports of flagging iPhone sales.
While CEO Tim Cook talked up Apple’s plans for AI development — a key focus this earnings season — it was the company’s plans for a $110 billion stock buyback, the biggest in US history, that captured the market’s attention. Apple shares rose 6% in afternoon trading, buoying the Dow.
The blue-chip index is also seeing a boost from heavyweight Amgen (AMGN), whose shares soared almost 12% after comments by its CEO suggested its obesity drug could take on market leaders from Novo Nordisk (NVO).
For more on this article, please visit:
https://finance.yahoo.com/news/stock-market-today-stocks-surge-as-jobs-report-revives-rate-cut-bets-apple-jumps-6-124351520.html