Stock market at present: Dow targets for sixth day of gains while Nasdaq slips | March 8, 2024

It's 9:00 a.m. here in New York City I'm sh Smith alongside Brad Smith and this is Yahoo finance's Flagship show the morning brief Stock features here pointing to a lower open 30 minutes ahead of the opening bell on Wall Street the Dow coming off of five straight days of gains its longest win streak since December the S&P 500 up 4 days in a row.

Treasury yields also ticking slightly higher as investors track a slew of fed speak this week for hints about the path of interest rates we're also tracking oil prices following this morning on indicators of weak demand so let's get to it with the three things that you need to know your road map for the trading day Yahoo finances Jared blicker.

Madison Mills and Josh schaer have more thank you Brad we are tracking a slew of corporate earnings lift Uber Shopify and twio all trending tickers after reporting those quarterly results and we're going to hear from arm Holdings Robin Hood and Airbnb among others after the Bell Tesla shares Under Pressure ahead of the open here the justice.

Department reportedly looking at whether the company committed Securities and wire fraud fraud as part of its autopilot investigation Reuters reporting that prosecutors are probing if Tesla and CEO Elon Musk misled investors about the company's self-driving capabilities specifically around whether the cars can drive.

Themselves Tesla's autopilot and self-driving systems can help with steering braking and Lane changes but are not fully autonomous and shares of Reddit are soaring after its debut earnings report the company beating on the top and bottom lines with daily active users Rising 37% year-over-year to 87 M 82.7 million above analyst.

Expectations but so much of the stock movement we're seeing is coming from reddit's guidance Reddit seeing adjusted evida in a range of 0 to $15 million versus a loss of $13 million Wall Street had expected stock futures edging lower 30 minutes before the opening bell on Wall Street.

But Tesla is under pressure here Reuters reporting that the doj autopilot investigation is examining whether Tesla committed Securities and wire fraud in its self-driving claims so we're tracking shares of TSLA here pre-market they are down by about 32% and it certainly has been one of the larger claims that Tesla has continued to lean.

Into and how big of a deal full self- driving will have not just for its company but for the safety of the roadways that's been their pitch thus far however the claims that they're making to investors to Consumers here we'll see exactly what the investigation does yield here exactly when we're seeing the stock Under Pressure not a.

Huge surprise one given the news but also given the fact that we have really seen a run up since we did get that latest earnings report so again when you see news like this this is just another reason for investors to kind of take a step back here and reassess the current valuation of Tesla given the fact that there are so many macro concerns.

Surrounding this name in addition to the latest news that we're getting out this morning here on this probe so you couple that with the fact that we are seeing slowing demand for the EV space are certainly lots of questions around the robo taxi how realistic that is and exactly what that timeline looks like there going forward and then also just.

The ability here for Tesla to continue to sell cars at the rate that they have been without lowering price es even more we have certainly seen that pressure uh margins here over the last couple of quarters so that of course is front of mine here to investors so again you get a report like this news out like this here from what we're hearing exclusively.

From Reuters no surprise that we're seeing shares sell off just a bit now off nearly about 4% here ahead of the open you know the interesting thing is according to some surveys and and a AAA survey continues to come to mind to me because as much as we talk about Auto or full self-driving and autopilot full features there you know there's still a.

Lot of consumer skep skepticism that is in the market right now a AAA survey uh that they continue to run year over-year that's looked across some of the fear or uncertainty right now around full self-driving 66% have expressed fear of drivers on the road right now in the US have expressed fear 25% expressing uncertainty regarding fully self-driving.

Vehicles they cited uh continued lack of trust Trend and this that really peaked in the prior year and so as we get kind of more of the updates on this it's really going to become a core talking point for some of the automobile manufacturers especially in the electric vehicle landscape which we already know the demand environment has been waning a.

Bit right now so what is the next big trick that they can pull out well for many of them they had been leading into full self-driving but is there something else that they should be messaging knowing that the consumer mindset right now is actually still a little bit more skeptical than not of the full self-driving realm here yeah we can see.

Uh this news here this morning also coupled with the fact that we had rivan Miss as well it's really Weighing on the entire EV industry landscape so it's not only Tesla it's not only rivan that are under pressure here this morning you've also got niola off another just off just about 1% here you have canoe also trading lower Neo Xing some of the.

Chinese automakers there EV automakers also trading lower on this news so again when you get something like this this is this is a move that not only could potentially affect Tesla shareholders but you also see the pressure more widely based when you talk about EV adoption and exactly what that could mean for this space down the road.

Absolutely we're also tracking Reddit here this morning Reddit is among the top trending tickers on Yahoo finance the company posting its first earnings report as a public company and investors yeah they seem to be liking the news here Josh Schaefer is here with the details I mean Josh I I forget the the mascot's name already I know I should.

Remember this SN that's right how I forget SN yeah all right go for you guys here this I've just been tracking the earnings report on Reddit right that's what everyone did that's true so per Reddit I'll read you the numbers right so when you take a look at the numbers for Reddit it really was I think the second quarter Revenue.

Guidance here that probably impressed the investors the most uh second quarter Revenue guidance coming in in a range of 240 million to 255 million that was above the streets estimates for 228 million and then we were talking earlier about the adjusted eida guidance for the current quarter coming in a range of $0 to 15 million that's above what the.

Street had been expecting the street was actually expecting a loss of million so perhaps upside and revenue here maybe driving some of the potential profitability gains for Reddit that has been a looming question since this company went public of course is a how are they going to make more money how are they going to bring in more revenue.

And then B when will that eventually lead to profits I think overall reading through some analyst notes this morning people were just generally impressed with the quarter I mean Reddit beat what the stream was expecting pretty much up and down this report even when you look at something like daily active users coming in 82.7 million and I think the.

Looming question now for this stock is going to be what do people think of the valuation after we open the market today it starts to shoot up somewhere in the 10 to 15% range is where it's been this morning remember the last time we really saw Reddit take off right after the IPO a short report came out almost instantly and people started questioning sort of.

The valuation in the future plans here it seems like the most bullish people on Reddit are still talking a lot about the AI strategy overall and that's kind of the long-term play here yeah exactly and you got to ask yourself just how long that's going to take to really materialize right and that goes to the question about what that growth is going.

To look like in the coming quarters because there certainly is a lot to like within this print but I think those that still remain on the sidelines we're going to be talking to one analyst uh later on in the program who still has an underperformed rating on the stock and he's just pointing to that future growth and exactly when the dust settles and.

Some of this excitement leaves what exactly the realistic growth is going to look like for red but also just evaluating this type of given the crazy trading action that we have seen and given the fact that it is a meme stock I would think that that would make the job even tougher here for these analysts when they're trying to.

Figure out really the fundamental story here when it comes to Reddit yeah I mean when you think about that shaa and sort of zoom out from like a slightly macro perspective right it was a good report and the stock is up a little over 10% in pre-market trading that's not crazy but like that's how this works right that's normally what you're supposed to see if.

You get a beaten raise for a stock that hasn't done that well going into the report attemp % move is certainly not unheard of and that's something that uh our Markus reporter Jared blicker was writing about in the morning brief newsletter this morning we're starting to see some of these meme stocks like yes they've been on a run look at.

Carvana shares over the last two weeks right but should we even be calling carvana a meme stock anymore maybe but it also had a good earnings report right and that's why that stock is moving and I think that's why Reddit is moving here so for now it seems relatively tied to the fundamental story we'll see how much people want to talk about AI today and.

Then I think you start to get into a yes that's a use case for Reddit potential Revenue driver but what is that Revenue driver I mean it's just still a massive massive question for this company yeah they were talking about particularly within this earnings release in a world where content is increasingly Ai and influencer generated Reddit remaining.

One of the few uniquely human places on the internet that according to the press release of course here but ultimately I think it still comes back to for where AI plays a role within their strategy what is the biggest source of spending that we've heard about over the course of this earning season it has been where meta is going to spend further into AI.

Where Google or alphabet's going to spend further into Ai and so what that capex looks like for Reddit could be one of the next big catalysts that investors have to think about in their spending profile in this near term and is Reddit going to be a capex taker right sure I I think that's an interesting part of the story too Brad that was something that.

Laura Martin over at NM highlighted in her note today they put Reddit on their conviction list and she said she thinks reddit's data will become table Stakes for all generative AI language models over time in essence if you're going to get into the Gen large language model game if you're going to make something like japt and you want to have something.

That can interact you're going to want reddit's data of humans talking to use that right and so if they're going to be a capex taker from that sense of everyone that wants to get into AI a lot of people want to get into AI so maybe they benefit from that and certainly is the case and you can see it across the board when it comes to some of these so.

Many of these well I guess now positioned AI name sorry Josh thanks let's talk a little bit more about earning season because we are almost in the final stretch we've got just about 80% of companies in the S&P 500 reporting and we're on Pace for a 5% earnings growth rate in the first quarter putting them in perspective.

That's the biggest gain that we have seen in nearly two years according to the latest numbers out from fax set but there still are some key names that are on top two report especially in the retail sector and could potentially signal or it will at least give us a better sense of the consumer joining us now we want to bring in Brian J NX.

Wealth management Chief Economist and strategist Brian it's it's great to see you here so let's start with earning season right now because when you take a look at that growth number I just mentioned 5% earnings growth the best that we have seen in nearly two years what does that then tell us just about some of that momenta maybe that we.

Should expect to see or is shaping up to see here in the coming weeks and quarters yeah thank you for having me an earning season has turned out to be better than a lot of people expected I think according to fact sets numbers it maybe was 3.4% expect a coming in or at a 5% run rate and that's really you know I think helped support the markets here.

Provided a bit of a floor here but now what does it mean for the future going ahead we have seen a Divergence really continue where you have more tech companies more cyclically oriented companies tied to manufacturing and Industrials outperforming retail when I look at say xly so consumer discretionary how that has actually.

Lagged the broader market and so why is that if the consumer has been doing the heavy lifting with growth so far what does this tell us about the future the market might be sending a signal that the consumer is getting a little winded here we're seeing the screws begin to tighten and maybe the Baton is going to be passed to manufacturing industrial.

And maybe more export oriented companies that are really hitching their wagon to the global growth recovery as opposed to just being concentrated with us growth Brian why is it that companies that actually post earning surprises this earning period are actually being rewarded less than the the 5year average here yeah that's.

Really interesting isn't it and that's something that we oftentimes track is the surprises if they beat is it the headline number that the market is focused on is it the bottom line number and when we do the analysis it appears as though it's more driven by the guidance that they're giving about what to expect for the balance of the year or.

Even over the longer term so they can have a positive surprise for earnings but that's really just telling you what they've done lately as far as for the past quarter the real key question for markets being forward-looking is what's really coming ahead what's through that windshield and that's where you sometimes get positive surprises but.

Then coupled with a little bit of that negative guidance and then the stocks get punished or they don't get rewarded as much as what you would otherwise think Brian what does that then tell us about valuations because when you have stronger earnings here couple with the pullback that we've seen it makes these valuations look maybe a bit more.

Attractive at this point but how sustainable are these current valuations yeah so we've done some analysis here at Annex on our investment committee as far as there's a lot of people out there who look at say price to earnings or they take the inverse of that the earnings yield and they compare it to the 10-year.

Treasury yield and they say hey you know what there isn't much of a gap there the tenear treasury yield is really rich uh as far as high the earnings yield is really low maybe that's a negative sign for the future but really if you think back to that growth story stocks hopefully will be able to grow the earnings whereas the coupon income you.

Get from a treasury that doesn't grow and so we think it's a fairer comparison to look at the price to earnings relative to real yield so like on inflation protected securities you can look at the real yield and that Gap isn't nearly as narrow as what the gap between earnings yield and nominal treasuries are so we think that it's.

Actually for valuations as long as you are looking at companies that are quality profitable and that have that earnings Runway ahead of them as far as that growth that's where we think the better opportunities are and the valuations are therefore more sustainable when you have fed members questioning policy tightness right now.

And not taking off the table a potential cut entirely and and not and for this year potentially but then also leaving on the table a potential hike here I mean that that's signaling a little bit more unease that the markets may have to ingest here what do you think the reality of how the FED is evaluating this current economic reality and and.

Environment could net out in do you do you think we'll see another hike you know not yet I think that we actually aren't going to see a hike as until we've seen a few Cuts so at some point in the future they will likely have to hike again but from what level and I think it's actually healthy to show that there is that disagreement on.

The FED keeping hikes on the table um chair Powell effectively said there's a very very high bar in order to hike rates other officials have said no maybe that bar isn't quite as high so really what matters is the committee decision and chair Powell is really at the center of that committee so his view is probably the most important and there's.

That very high bar to actually hike we believe that inflation is going to start trending lower the first three months are not a Prelude to what to expect for the next 3 months for inflation now of course I could be proved wrong next week when we get the CPI number so we'll have to wait and see on that but so far it does look like they would rather hold.

Rates where they are for a longer period of time as opposed to reversing course and starting to hike again yeah CPI next big test next week and then of course uh we're going to have a lot more fed speak that's still yet to come this week as well just Brian lastly while we have you here when you talk to your clients if there are pullbacks and they're looking.

For opportunities to add into their portfolio or just hold on to cash right now what is the strategy that you hear them employing most often most often they're actually looking at fixed income looking for those opportunities to get these higher yields and so one of the strategies that we really like following is when you think about the short end of.

The yield curve so think about short-term investment grade there's lots of great ETFs and mutual funds out there that you can find using the Yahoo finance screener so shortterm investment grade or AAA Clos things like that on the short end but then longer term look at High quality there's nothing wrong with say a 10year treasury ETF or.

Something along those lines uh to get that type of income so on the short end you can go for higher yield on the long end you can go for higher quality Brian Jacobson always great to talk to you thanks so much for giving us some time here for your Insight NX wealth management Chief Economist and strategist.

Thanks well we are just getting started here on the morning brief coming up a tale of two ride hailing companies Lyft and Uber moving in opposite directions on the back of those results we will dig into the details next and Shopify Shares are plunging on expectations of declines and its gross margins we're going to dive into that earnings report plus.

Reddit shares getting a boost from strong results in his first print here as a public company we will speak with one analyst though who's still skep skeptical on the staff we've got all this and more you're watching a morning brief.

m.

A Tale of Two ride sharing companies here shares of uber and lift moving in opposite directions on the back of first quarter results Uber sinking after reporting a surprised loss in the quarter but Lyft seeing its active Riders grow at the fastest Pace since.

2022 so they you're taking a look at Lyft first here and some of the results here as we were diving into this both yesterday and then again this morning pouring through some of what the remarks were that the company really gave talking about the start to 2024 very strong first quarter results David richer the CEO talking about rides and.

Gross Brookings growing by more than 20% year-over-year here and then also saying that they're on track to deliver on some of those ful year goals with a higher level of free cash flow than we initially shared than they initially shared here so that could be one of the reasons why you're seeing shares react positively as well here on that free.

Cash flow projection yeah exactly when you take a look at this print here at least from lift there's not many signs of any consumer weakness when you take a look at a lot of these uh key uh earnings U numbers here that the company is putting up and it almost tells the story that Lyft seems to be getting better and better or in a better and.

Better position here as the quarters come on because there's lots of questions about what exactly their competition is going to look like or their ability to compete with Uber when it comes to obviously the dominant player within the space but when you take a look at this report it's improved I look here for 2024 free cash flow.

Conversion healthier Rider also driver metrics as well so that's a big reason here why we're seeing Lyft really perform up to expectations and exceed expectations in many instances here in its most recent quarter and then you're seeing shares or the stock get rewarded as a result now on the flip side bit of a different story when it comes to Uber.

Some disappointment there around their earning Sprint exactly that miss that we saw there when it comes to exactly what the growth Trends look like there we we saw a bit of a deceleration in bookings growth as well so pointed to maybe possible Satur ation that we could be seeing within their market so again a very different story here and as a.

Result you're seeing Uber shares sell off just a bit here ahead of the open we're looking at a drop here of just over 7 and a half per. yeah you know here's a few things to take away with this too I mean Uber you're looking at the price right now which is well above what about $25 above where the company won public at whereas Lyft is still.

Trying to get to that level get back to that level it's been a different type of story for Lyft because they don't have the same type of diversification esally across the eats or Freight delivery type of and I mean it's not Freight like putting things on a ship but at the same time it is trying to get things from point A to point but anyway all these.

Things considered the diversification both geographically and in service offering has looked different between the two all that said for investors that are trying to figure out where the most opportunity within this ride sharing uh industry is the comeback story of lift has been really interesting over the past year Shares are up by about 98%.

Over the past 52 weeks here so you got a question if there is more rotation into a company like lift both both on price right now and on potential valuation going forward from this point given some of the announcements that they're trying to chart forth as well here but Uber not too shabby in aggregate here yeah that's a very good point all right let's move.

On to another name that's trending here in Yahoo finance this morning and that is Shopify shares plunging after announcing it anticipates decreasing gross margins during the qu current quarter as it deals with the impact from the sale of its Logistics business to flexport now the company is saying that revenue is also taking a hit as a result.

And you're looking at shares falling nearly 20% here in the pre-market trading Beyond some of those headline numbers here and that surprise loss they're also facing some higher operating cost that of course has been a headwind here for the company in most recent quarters and then when you take a step back and you talk about the.

Weakening macro environment or concerns around the macro environment right now A cautious consumer that of course will potentially and is already Weighing on shopify's results and we're seeing more of a bearer take here on this print and on exactly what the current quarter could potentially look like here for Shopify yeah you know it's interesting.

They're talking about seeing the strongest version of Shopify in the history outstanding q1 performance Clear Proof of the dedication to the new shape of Shopify what that shape looks like to your point in a moderating consumer mindset in terms of where you're purchasing uh is also something worth tracking going forward from here but.

Theow gross merchandise volume that was up 23% Merchant Solutions was up 20% as well and then it's interesting as you look through some of the different areas that they did see more shopability um some of the what we would typically look at as the aisles here uh it's going to be interesting to see where they see even more of that recurring Revenue come.

In especially given the gross profit that actually grew 33% however investors still sending this lower here pre market right now about 18% all right airm share we got to talk about this one they're moving higher after reporting the third quarter Revenue jumping 51% from a year ago the company giving better than expected Revenue guidance for the.

Current quarter the buy now pay later company also seeing gross merchandise volume climb 36% hey where else did you hear that yeah we just talked about it but anyway all those things considered one of the major things that I jumped to within this report as you're taking a look at some of the actuals versus the estimates beting top and bottom one of.

The areas that they're actually seeing more purchas in Diversified growth for gross merchandise volume across all categories and products with everything except for sporting goods and now they're growing year-over-year not good news for Dick Sporting Goods or perhaps some of the other Sporting Goods retailers but here's where it got.

Interesting categories such as electronics and home and lifestyle that underperform were growth contributors during this most recent quarter even they got in on the action here yeah you're seeing a bit of a shift then highlights me how people are spending a bit differently this time around what stuck out to me in this report was the.

Delinquency Trends and kind of the stable the stability that we you're seeing at least when it comes to airm numbers because the 30 and 60-day rates they were essentially flat 90-day delinquency rate that actually fell so what does this signal well you talk about maybe potentially uh more sturdy growth more durable growth here going.

Forward and that growth potential what exactly that looks like here for fiscal 2024 and then the impact that this could ultimately have on guidance here for future quarters that of course is one of the driving factors in this print as well was shares up nearly 2% travel and ticketing also a major important driver growing 35% year-over-year that tells.

You that people changing how they spend about vacation it's very true all right we'll keep right here on Yahoo finance we got much more coming up on the way we've got the opening bell on Wall Street we will be taking a look at how the trading day is shaping up all through the major averages look to open the day in the red we'll be right back.

.

And there you've got a live look at the opening bell here take a look look at the NYSC where you've got Flor and Decor or Decor it's a big debate in The Newsroom here how you pronounce Decor or Decor but anyway they're ringing the opening bell at the NYSC and at the NASDAQ no mistaking that pronunciation Zapata AI ringing the opening bell there.

Let's get a check of the market sponsored by tasty trade here we've got all major averages lower here across the board as we're taking a look at the global and international heat map let's zero this in on yeah of course as us Americans would do the 500 you're seeing that down right now by about 4/10 of a percent here's a look at the sector.

Activity that we're seeing out the gate Staples leading the back yeah you have Staples one of the one of only two Healthcare the other sector here opening at least for right now very very early trading but opening here in the green on the flip side you got consumer discretionary not a huge surprise when you look at some of those earnings.

Prints out this morning the stock reaction that we're seeing that's under pressure here off just around 810 of a per as well as communication Services there so two sectors that had been leading the way also really uh leading the way when it comes to earnings results as well on the flip side here today they're actually falling under.

Pressure as well as the real estate sector off just around 7/10 of a percent we got team coverage here continuing that team coverage on the opening bell Yahoo finances Jared blicker is standing by with a closer look at some of this early action Jared thank you shaa let's go to the Wi-Fi interactive I am going to plot the year-to day charts for the.

Major indices and uh what I want to point out here here's the Dow we've had a nice multi-day thrust off of these lows still about halfway to go between between the high and the low here to get back to those Highs but the S&P 500 has really accelerated uh all the major indices have cleared their moving average the 50-day moving average and.

Now these uh record highs are in sight um as I've been writing uh I don't know that we can get materially Beyond them until we pass June we do have a little bit of bearish seasonality but uh in the meantime it is risk on and I got to track what's happening in the 10year t-note yield uh we do have a 1 P.M auction today we can see it's up by.

About three basis points given the fact that we don't have a lot of news this week that 1 pm auction is going to get a lot of play here and then here's the US dollar Index now I'm going to show some candlesticks you can see on a three-month chart we have uh 3 days up in a row and this is significant because the dollar uh is the tail that Wags the.

Rest of the dog and a lot of that has to do with multinational corporations Commodities uh cryptocurrencies dollar effects all of them so let's take a look at those sectors again what I wanted to show uh Shauna you mentioned Staples and I believe utilities Staples is back to record highs Staples and Utilities in fact are the only two sectors that have.

Managed to climb back to their record highs so far A little bit defensive uh but we'll have to see how this all shakes out like I said it might be a case of selling the rips uh until we finally clear that may seasonality headwind guys all right Jared thanks so much for breaking that down for us let's talk about some of the broader moves.

That we're seeing within the market and the bond market here because between sticky inflation future potential Ray Cuts here and Wars playing out in the Middle East and Ukraine it's reasonable to argue that we are currently in a macr driven environment here for the market but with Assets Now moving with unusual Independence at least according to our.

Next guest he's arguing that if you look just under the hood we might actually be in a micro Market here for more on this we want to bring in Andrew sheets Morgan Stanley Global head of corporate credit research it's great to have you here so talk to just about when everyone is saying this is a macro driven Market you're saying it actually might be a.

Micro driven Market why yeah thanks it's it's great to be here so I look I think it's very understandable I think if if we we read the news if we we talk to other investors all the focus is is often on these big macro variables you know when is the Fed going to make its first rate cut you know where are interest rates going where's inflation.

Uh headed uh you know some of these geopolitical concerns and and but if that were the real driver I think if were these big picture issuers that were driving the market I think what you'd expect is a lot of different assets a lot of different stocks a lot of credits all moving together all moving kind of to the same side of the ship at the same.

Time and that's simply not what we see I think this year so far has been unique in how independently individual stocks individual credits are moving from each other and and I think that's important I think that's a real sign that a higher for longer rate environment can mean that over overall things are fine but but individually you have winners and.

Losers and it creates a really good environment for stock picking for kind of active management because individual stocks individual credits are moving separately from each other even as the overall picture is somewhat more stable so I think that's an important distinction that we think really matters for markets I mean Andrew it just seems.

Like for so much of the year we've been trying to figure out will they won't they with the fed that's a macro you have to weigh in all these exogenous threats also macro I mean where are the the biggest micro indicators that are having more outsize impact than those macro events that we've had to discuss and continue to keep tabs on yeah I.

Think that's a great point so I I guess I think about this in in a couple of ways you know one is right we went from the market at the start of the Year pricing in almost seven rate cuts from the FED to the market today pricing in you know less than two cuts and over that time the market has been generally strong and and credit markets have been.

Strong spreads are tighter so I think the market has clearly shown that despite you know very different expectations of fed policy it it can continue to operate you can it can continue to be okay and I think we see this in a more you know kind of narrower level or more recent level where you know again after that that GDP number I.

Think it was two weeks ago where it looked like the headline GDP number was weak we we thought it was a little bit better but the initial read of that was it was weak GDP it was high inflation you know what helped turn the market around it was a very micro development around earnings that earning season has generally been pretty good in in Europe.

In the US so I I think you see that in the ability of earnings to offset some of the scarier macro headlines and I think you see this just generally with year-to-date performance With You know despite some big swings in fed expectations I think the market is telling you that it can it can handle that as long as other conditions are met.

So Andrew then is the market almost priced to Perfection at this point and then what does that ultimately mean here for investors identifying those best opportunities yeah so I think this is a question that really varies depending on what Market you're looking at um for for European equities for example we we do not think that's a market that's that's.

Priced for Perfection we still have reasonable upside to my colleagues targets um we think the loan Market in in the US kind of closer to uh to to my area of credit uh where we're yield are still above 9% for us loans uh we do not think that's that's priced for Perfection uh in the context of a soft Landing so it certainly I think varies.

Depending on where in the markets uh you know you look at but overall we we think that there are still opportunities around that that that are not yet kind of fully baking in the soft Landing scenario Andrew always a pleasure to get some of your insights Andrew sheets Morgan Stanley Global head of corporate credit research thanks so much for.

Taking the time good Switching gears here Reddit shares surging on the back of its first report as a public company but our next guest still skeptical about the stock more on this after the break.

a now.

Microsoft doubling down on AI investing over $3 billion to build out infrastructure in Wisconsin President Biden heading to Wisconsin today to make the announcement with Microsoft president Brad Smith yaho finances Dan Hy joins us now hey Dan what do we know.

About this that's right BR this is a $3.3 billion uh infrastructure investment from Microsoft in Racing Wisconsin this is the same place where uh president Trump had talked about foxcon building a massive facility for uh displays they ended up cutting that back significantly uh and uh not really Meeting those uh ambitious goals uh and.

So now Microsoft is moving into the space uh with this facility it's going to be a data center uh obviously with AI exploding they need more data centers part of the uh issue that Microsoft said in their last earnings call was that the reason why uh they didn't see more AI Revenue in the quarter was because they just couldn't meet demand for AI needs.

So this will uh help them build that out uh in addition to that they're going to offer uh educational programs for uh nearby uh residents so that they can train up in AI uh as well as a program to get local Business Leaders to start using Ai and so this is all part of kind of Microsoft's effort to kind of smooth the transition uh for companies into uh.

More AI use cases uh while continuing to build out the facilities that they they need to to run this kind of Technology all right Dan thanks so much for breaking that down for us again Microsoft shares though still under a bit of pressure here following the open not just about two tens of a percent Dan thanks let's get to Reddit because.

Shares there are surging after report reporting revenues surging 48% from a year ago and its first earnings release as a public company ad Revenue alone sored 39% the social media platform also giving Revenue projections here for the current quarter that are well above the streets expectations you're looking at Reddit now up just about 5% since the.

Start though of trading when you take a look at that Max chart you've got shares up just about 11% so here we are today above 51 bucks a share for more on these results we want to bring in Mark schik he's Bernstein internet equity research analy joining us now Mark it's good to see you so talk to us just about this print.

Because it looks like at least at first glance there is certainly a lot to like within this report you though don't seem to be convinced why yeah first uh thanks for having me and and it was objectively a great first uh report uh or or print out of the door uh for Reddit now is a a public company uh and the Topline numbers look great.

You know Revenue growth uh growing well above expectations led by ad growth which is what you want to see uh and engagement growth or user growth is also kind of very strong um and so near term we really like it as kind of a tactical play I I think they have some very easy Compares um you know what we're starting to see is that there's just a really.

Robust digital ad Market at the moment Management on the call last night shared you know this is kind of one of the best brand markets for brand ad Spence since 2022 uh you've seen it reflected elsewhere Pinterest Snapchat seen this massive acceleration uh in advertising growth uh and on the engagement front um you know a lot of that engagement has.

Actually been driven by logged out users uh so you know anybody who's been on Google is probably seeing Reddit Blue Links show up more and more um you know it's good to get those users they're probably slightly lower calorie users that's been the biggest bulk of kind of their engagement growth and you know as we know that over the longer term those.

Are just tougher users to monetize yeah you're probably talking about me Mark I I mean I I sometimes forget my password to Reddit but uh don't tell any of the scammers out that anyway all these things considered where is the biggest growth opportunity for Reddit right now I mean re-engaging with some of those users as you were just mentioning a.

Moment ago but also on the monetization it's more than just a platform where they've got to be able to have advertisers that are willing to run campaigns there there are other efforts that they need to put forward to monetize right H that's right and you know and so first is you want to bring advertisers onto your platform so you.

Need to have something to sell uh so they've been building out kind of a suite of AD products some of which look really similar to what we've seen elsewhere uh we heard management last night talk about potentially getting into search ads there's a lot of on platform search Behavior video ads which are certainly very popular right now.

Across Tik Tok meta you know YouTube Etc so there's more products that they can bring to the table and then beyond advertising you know they do have the big AI data licensing deal with Google there's a few other smaller ones that they've kind of mentioned so there's you know kind of call it a a platter of monetization opportunities ahead of them.

Here what type of additive do you think the AI and because of user generated content and and data that takes place on the platform as we were discussing earlier really exhibiting that human realm of conversations you know what type of additive do you think that could be over time to the revenue to the bottom line for this company yeah it's.

It's it's a good question and you know and so far the biggest deal is obviously the the Google one to kind of ingest that real human uh you know kind of data into some of those generative AI the Gemini results uh and I think we'll see you know if if Google Sees real value in it that it helps kind of create more authenticity in the responses not who.

Can kind of you know scam the algorithm the best or flood the algorithm the best to kind of deliver whatever results they want um you know we'll see if the others kind of come on board and I think that's one marker we're watching to see you know does open AI get involved and do a licensing deal does does meta with llama do a deal field as anthropic and so you.

Know we'll see how valuable this data is if we see the other big foundational model Builders follow suit mark talk to me just about what it would take for you to be a bit more bullish on this day and when you when you take into account what we're learning from this report it seems as though although maybe to early did call that it's almost turned a corner.

Here in terms of profitability what that timeline looks like it looks like user engagement though is still there what do you need to see in order to be more convinced yeah you know I think uh the the truth quarter as I call it's going to really start in the third quarter where you start lapping the change to to kind of the Google algorithm the.

Comparers get a little bit tougher from a monetization ramp perspective and then we'll see you know how kind of real and durable uh some of their efforts are that are underway um you know can they actually take some of these logged out users and convert them to being more kind of consistent engaging users uh can they know about enough about the users.

To be a valuable medium for advertisers to deploy you know ad dollars not just for top of funnel kind of brand campaigns but real you know commercial intent driving purchasing Behavior Uh type of ads and then we'll also see if any of those follow through AI deals show up and so you know we're watching it closely and I think they've got.

Another quarter at least ahead of them with uh you know with probably very solid results uh on the table and we'll see in the second half of the year of you know whether there's some of the more challenging efforts that are required for me to get more constructive at this price uh show up for investors that are even looking out to that that.

Third quarter as you were mentioning here what are some of the Dynamics that we could see play out on a Reddit as a result of an event like a general election season yeah you know they it's an interesting one because generally speaking during an an election season brand campaign platforms tend to do.

Quite well uh you know you've seen it in the past with YouTube as the election based advertising is not an insignificant number uh you know we'll see how valuable kind of the the Reddit base is it's it's certainly not the core Reddit Advertiser today and and so it's kind of 50/50 it might be a platform where they'll actually see uh the influx.

Of of political based ads show up as well or uh it could go the other way where um you know kind of their current advertisers tend to pull back during an election cycle because it does tend to get dominated uh you know by kind of political based ads Mark schik who is The Bernstein internet equity research analyst Mark always a pleasure to speak.

With you and get some insights likewise thanks for having me certainly we've got all your markets action ahead stay tuned you're watching the morning brief it's a jam-packed hour focusing on the biggest movers and shakers on Wall Street this is Market domination and here every day is game.

Day we have 1 hour left until the market close it's game time for investors to make their final plays the clock is ticking and we've got you covered with our quarter by quarter Playbook we're bringing you in on all the market action with step-by-step analysis of our biggest trending tickers and expert insight into today's biggest headlines.

We'll bring you the closing bell and get you to the Finish Line This is Mark domination tune in Daily from 3:00 to 400 p.m. Eastern e e.

E e another chapter in the closing Saga of collapsed crypto exchange FTX according to a court filing the company saying almost all of its customers will get their money back the company saying it owes creditors about $ 11.2 billion and the plan says that customers whose.

Claims amount to $50,000 or less will receive approximately 118% of the amount of their allowed claim the reorganization still has to be approved by the bankruptcy court here it's worth noting that of course when the company collapsed when FTX went down back in 2022 late 2022 Bitcoin at that price back then was what somewhere.

Around $20,000 and as we're taking a look at btcusd here today I don't know if we have the chart that we can toss up here on the screen but we should still be north of $60,000 61 $62,000 if you want to round up at home so all these things considered there's kind of a a a hefty Delta between what some of these people may have owned within FTX and.

What they will be owed as a result of the settlement too yeah that's such a good point there Brad especially when you take a look at the behavior here of Bitcoin ahead of this bankruptcy filing rate because it had sold off just about 50% here ahead of that so when you compare that the time of the value there what it was during the from this.

Bankruptcy filing to what it was today seriously a very very large gap when it talks about where funding is going to come from nearly 100% of it more than 99% of it coming from what they had raised from the company's Investment Portfolio and within that reports here that anthropic they're holding there uh they they sold the shares there and that.

For nearly 900 million dollar this year so again many of the many of those who have been affected by this filing are going to get 118 cents I guess on the dollar here when it comes to when it all evens out but again like you were saying this has to be approved there's still a couple of processes that need to take place before this is finalized but I.

Think that this doesn't really remove the uncertainty aspect surrounding crypto surrounding Bitcoin right and why so many people even remain on the sidelines when it comes to these type of Investments yes you can make the argument FTX is very much a one-off type of situation the fraud the allegations everything that had been confirmed there.

And found in court but still when people think about investing in crypto I think there is a hesitation here with a large portion of the investment audience who is a bit skeptical and a bit nervous of putting their money in crypto because of everything that has played out over the last several years well we've had some major profiles that have tried to emerge.

And cement themselves as Bitcoin or crypto Barons instead of making sure that they were cementing the service or the product that they were providing to actually sustain the well-being of sentiment for the industry at a whole here and and what do we mean by that I mean you you look at FTX and and S bankman freed now who has also for FTX.

They've had to previously approve a settlement with blockfi as well that was the largest creditor of FTX there have been continued missteps for the people who were looked at as Barons that's put a dent in the sentiment and it almost points exactly back to why uh Satoshi who wrote the and and pioneered the Bitcoin white paper is so anonymous.

Because it wasn't supposed to be annexed or be able to be made or broken by one and one figure alone here and so that was the prevailing origin story for Bitcoin and cryptocurrency here uh larger question here of now when you've got so many large financial institutions involved and invested where there's going to be more of an effort to make.

Sure that there is regulatory practices that actually solidify the sentiment from this point forward yeah exactly we were talking a bit to Anthony Pano about that yesterday in just in terms of what exactly that could potentially look like here in the years to come all right well coming up next hour m Mills is going to be here with me for our new show.

Catalyst we are going to be breaking down what's next for the chip sector and everything you need to know I'm looking for that forward to that we got our Pringles ready outside and you got other chips that you're going to be talking about too also later on in our 11a hour stay tuned for wealth where we'll be discussing why new home buyers are.

Drawing a line at fixer uppers we're talking to you if you're fixer ring a home fixure ring that's a new one you're watching y Finance.

now.

10 a.m. here in New York City I'm as Shauna Smith alongside Madison Welcome to our new show catalysts from equities to Commodities we are decoding Trends and uncovering the drivers behind today's market moves our team of experts they are here to help you navigate all the possible outcomes to help you make the best decisions for your portfolio.

It's Wednesday May 8th so let's dive into the Catalyst moving the markets today earning season entering its final stretch here testing the Market's strength in the last few trading sessions with 80% of the companies in the S&P 500 reporting already we on Pace for a 5% earnings growth rate in this first quarter that is the biggest gain.

In almost two years according to fact set we're also keeping an eye on crude this morning oil Futures extending losses down roughly about 1% on concerns of rising inventories that's putting pressure on prices this comes after the US Energy Information Administration the eia cut his 2024 World oil demand growth expectations and also hiked its output.

Forecast for the full year theia is set to release its inventory a later this hour and semi is feeling some pressure this morning after the Commerce Department confirmed that the US is revoking certain licenses for chip exports to T Chinese Tech Giant Huawei the agency saying the decision came during regular assessments into how the.

Agency can protect us National Security and foreign policy interests focusing in on the chip sector here this morning the US Commerce department is considering restricting the export of proprietary or Clos Source AI models this is according to a Reuters report now this is just the latest provision meant to safeguard AI.

Intelligence systems from China now just in March the administration halted shipments of nvidia's more advanced AI chips to the country and why we're bringing this up is exactly what this means for so many of the chip makers here in the us when we talk about this report and and the impact that this is ultimately going to have on us names.

Qualcomm and Intel are two names that we're talking about here this morning and you had Intel coming out saying that the band is is going to impact its second quarter Revenue so again what that pressure could ultimately look like here in the coming quarters is something that investors are taking note of and what people really need to start to.

Assess and realize here when they're starting to make some of those strategic movements here for their portfolios well and it's a great Point Sean on Intel kind of reversing some of their uh guidance for the second quarter here as you mentioned and Steve snik friend of the show telling me this morning that that is part of what's leading to some.

Of the downward action that we're seeing this right across your screen in the broader Industries now what's interesting here though is that Intel and Qualcomm the business they were doing with China was already really limited so I wonder to what extent part of this is Intel already having a really tough time and saying hey what a great.

Excuse to tell investors about uh with why we might be having some of this bad news here I am curious too how US policy makers are going to be interacting with China specifically as we get closer to the election shaa are we going to see more like hawkishness in their activity uh particularly too as we have this AI expansion are we just going to hear more.

And more of these restrictions yeah you you would think so when you take a look at the Biden Administration and a potential Trump presidency but both sides you can make the argument that they have taken a tough stance on China You could argue that maybe if Trump were to be reelected and back in the white house uh come November he would be even.

Tougher on China That's generally the sense that we've been getting from strategist from economists to uh industry experts here over the last several months and then you also have to talk about what exactly this means for China and the potential backlash flash there and ultimately what some of those retaliatory measures could potentially.

Look like down the road and what companies are then positioned to almost be hit the hardest here when we talk about those future retaliatory measures as well so when you talk about companies that have a large exposure to China they're watching these developments and escalation here in the tension between the two countries that's something.

That's on investors Radars here across Industries that's a great point and came up when Chinese officials were saying that the tick tock band situation opened up a tit forat so definitely something we're going to continue to monitor here well markets are on edge ahead of a busy week for Bond sales $42 billion of 10year notes on sale today now this is.

Part of the record-breaking $125 billion worth of treasuries that are up for auction this week so what does the demand at these auctions tell us about investor sentiment for more on the fixed income space we are joined by m matal Pim cor core strategies CIO thank you so much for joining us mid I'm curious about your thoughts on the demand that.

We're seeing at these auctions coming in a little bit better than we had perhaps anticipated what is that telling you about the action that we're going to see moving forward in the old space thanks for having me yeah I think as you mentioned the demand has certainly been pretty good with respect to treasury auctions I think when we take a step.

Back uh we have seen a correction in valuations when we started the year ten year was at 3.9% where we we were a couple of weeks ago tenure had reached around 4.7% was certainly a good amount of repricing essentially what that repricing has done is it has recreated value in fixed income uh I think that.

Value essentially implies that on a go forward basis over the next one year three year investors can expect healthy return in fixed income under most scenarios and then in a scenario where growth starts to slow down investors can have a even a double digit return potential in fixed income which is why you are seeing good amount of demand.

Both in the treasury auctions but broadly speaking across fixed income flows so when you're talking about that investment opportunity there more specifically where do you see the most opportunity for investors given that demand that will likely s yeah so I think uh from our perspective we see plenty of opportunities in high quality.

Fixed income within the US space uh I think agency mortgages is one area where we see a lot of value that sector underperformed over the last couple of years particularly post Silicon Valley Bank as some of the bank portfolio liquidations led to deepening in that space when we go outside of us we are seeing value in some of the high quality.

Sovereign uh and high quality credit Expressions outside of us where growth has been somewhat weaker where inflation is getting closer to Central bank's Target for example in countries like UK in Australia in Canada uh and then you know when we go beyond government and high quality mortgage Market even areas like you know high quality investment.

Grade and then even FX or emerging Market foreign currency space is offering value for investors to utilize to construct a high quality fixed income portfolio well M I'm curious about your take on that particularly because in reaction to what we heard from Neil kashari yesterday saying that we could have to stay higher for longer if we.

Can't tame inflation is that a catalyst for yields at the back end of the curve to also stay higher for longer and then would that make the lawn end of the curve more attractive to us investors yeah I think can certainly stay higher for longer uh I think the argument for higher for longer is inflation persisting uh above Central.

Bank's Target for some extended period of time another argument for higher for longer is the ongoing fiscal deficits uh where as far as I can see we can expect somewhere around 6 to 6 and a half% deficits irrespective of the election outcome in the US so in that framework yields can certainly stay higher for somewhat longer but Market is already.

Pricing that when we look at 10 year around 4.7 is 4.6% 30 year around 4 uh you know 6 to 4.7% uh that is already pricing in a some form of hire for longer I think one of my colleagues uh has done Tiffany Wilding has done a pretty interesting work with respect to uh Central Bank policy uh and the assessment is that at this point Central.

Bank policy uh is Shifting towards uh what we would call an opportunistic disinflation under that Paradigm the central bank can remain focused on you know getting inflation towards Target but at the same time also be mindful of uh uh uh you know the downside risks that are posed to unemployment rate or uh employment when the monetary policy.

Is already restrictive as it is currently so under that framework uh even if the inflation doesn't get to 2% inflation gets to 2 point something somewhere closer to 3% you could see Fed cut rates one to two times this year uh and in a scenario where inflation persist somewhat longer than the FED can keep rates here for some extended period.

Of time but if growth was to come down then there's plenty of room for fed to cut rates much more than currently expected and that could lead to a pretty meaningful upside return in fixed income to what extent does the risk of the deficit play into your view long term we're hearing a lot more about that looming uh elephant in the room.

Lately yeah so I think deficit is a concern uh I think uh you know 6 and a half% area deficit for an economy that already has 100 nearly 100% debt to GDP and where the nominal growth potential is you know call it somewhere around 5ish per uh when the so essentially that means that the deficit is higher than the nominal growth which means that over.

Time debt to GDP in the US economy continues to to grow higher so it's certainly a concern I think the way it plays out is probably through the term premium uh in the in the US rates Market which is why our preference is towards more intermediate bonds towards more 5ye 7year point of the curve relative to a more longer dated point in the curve Mo.

Matal we really appreciate you taking the time to join us here this morning Pimco core strategies a chief investment officer thanks so much thank you for having me well coming up Tesla's legal troubles continue the justice department reportedly examining whether Tesla misled consumers over its autonomous vehicles we'll tell you what the.

Long-term effect could have on the stock on the other side of the break.

N let's do a check of the market sponsored by tasty trade looking at a lot of red here the Dow basically flat the S&P down two10 of a percent in NASDAQ down 410 of.

A percent here the Dow just barely slipping into the green but it's interesting to see this movement particularly after we've seen a couple of days of the market rallying but it was on pretty light volume here so we might be seeing a little bit of profit taking this morning especially after some negative company news when we have.

Earnings from a company like uber pushing that stock down we also have uh idiosyncratic news with Intel and Tesla putting a little bit of a damper on the trade this morning and that's why we started to see Futures kind of ticking down after those reports and still seeing that negative action in the trade.

Today Tesla shares sinking after us prosecutors are reportedly invest investigating whether Tesla committed Securities or wire fraud by misleading investors regarding the capabilities of their self-driving technology now this is according to a report here from Reuters Yahoo finances PR super Manan has the latest details on that and PR.

You can see the concern playing out here for Tesla shares off just about two and a half% yeah reports to this probe into whether they committed you know wire fraud with Communications to Consumers about their abilities with the self-driving software and also Securities fraud you know did was any were any investors induced into buying.

The stock because of their what must was saying you know there's videos of musk saying or videos of Tesla saying that um the driver is only sitting here just for demonstration purposes the car is self-driving so you have a lot of puffery here that's the kind of the big question is is it salesmanship is it you know we the best number one self-driving.

Software like you hear that all the time is that just sort of like a sales tour is it actual they knew the system was unsafe or what not was not reliable they still said it anyway that it was in in order to profit so it's a lot of they got to prove a lot there for fraud but it's still not a good look right now and the probe is ongoing know what's going.

To happen with that but it's not a good look for their software well that's my question is what is really new about this report because we already know that the justice department has had questions about the self-driving technology and Tesla has talked about that in some of their filings so I'm curious what stands out for you as the newest bad news for.

Them here right so last year rers reported that the probe was about sort of the software itself right is it defective and and then did they knowingly put it out there like criminally right now it's like this is fraud is it is it outright fraud not only for consumers but also investors and you know there's going to be.

Investor lwuit coming up after this and if not already so that's the new wrinkle here again it could go away they could resolve this they could go away they could pay a fine um but at the time right now it's beyond just because nit also is pursuing they want all this data from the crashes to kind of show that did Tesla's remedial efforts when they.

Did the recall were those effective and they question whether it is all right PR great as always thank you so much for joining us we really appreciate it thank you so much for now we are going to go over to our guest I believe we because Tesla St is under pressure following the movement that we are seeing this morning Dan Levy is joining us here Dan thank.

You so much for being with us I hope that you were able to hear pra's great commentary on this and he was talking about the question about whether or not this really is fraud so I'm curious from your perspective Dan to what extent are you concerned that this could be fraud from Tesla yeah good morning thank you for.

For having me I I think that broadly for for Tesla and and you know I won't comment to to the report itself I think Tesla right now is in the process of validating and demonstrating the capabilities of of FSD uh obviously you know there one side of this that we're well aware of is consumers and consumer uptake and getting consumers to.

Appreciate it but on the other side of it is the regulatory front and um you know in general we view the regulatory side as a RI that needs to be monitored uh it's one where so far Tesla has been able to keep the functionality that they have out there but the the functionality but the regulatory side is a risk that certainly does need to be monitored on.

The FSD front Dan just give me your sense right now of Tesla how it is positioned following the runup that we have seen since earnings and the current valuation of the stock right now given some of those macro concerns that you were just talking about how big of a risk do you see that potentially being here than to the.

Downside there's a lot of uncertainty for Tesla right now um from a fundamental standpoint things are obviously a bit more challenged I think people are well aware that EV demand is pressured they their their demand is is under pressure we obviously saw that with a very soft one Q volume estimate uh at this point people are forecasting.

Volume to be largely flat we're flat on the year which you know was once sort of an unthinkable thought for for Tesla to have flat volume on what should have been you know very robust growth so the fundamental side is is challenged on the other side of it you have uh an investment thesis that's in pivot and I think that there is uncertainty because.

The stock or the narrative is pivoting away from what was viewed as some certainty around vehicle sales leveraging a cost advantage and instead leveraging bets that people View as possibly binary right the push to autonomous the push to Robo taxi these could be potentially largely disruptive bets but they're binary you know people.

Just don't know what the outcome is and so that's why I would say there's an era of uncertainty right and people are maybe buying the story about full self-driving versus the reality of it being here but I want to get your take on the robo taxi here as well does today's news change what we might be anticipating from the robo taxi moving.

Forward well I think we're you know I don't know that this this really changes the narrative I think we're we're waiting for a couple key things on Robo taxi one is certainly as it relates to today you know any updates on the regulatory front but we're waiting to see you know any updates on on Take rates uh and then we.

Have an AGM coming up uh which is a key event to watch for and then certainly August 8th is the robo taxi launch um you know and and clearly this narrative needs to play out both from the FSD side which is more of a you know what we view to be driver assist functionality as well as the fully driverless technology that Tesla has you know alluded to but.

Really hasn't given us much meat on the bone all right d we want to switch gears here and talk about another EV player that's certainly moving here at least at the downside today and that's rivan the EV maker extending its losses Shares are down just about nearly 7% right now in early action when you talk about the disappointing quarterly loss that the.

Company reported they're doing this amid this effort here to revamp their manufacturing operations are also trying to boost ultimately the output here for EVS how do you see rivan positioned within this increasingly crowded EV space look we think that rivan has uh really impressive product really good technology so we like what's going on.

There but we think at the core for rivan is a key Challenge on narrowing cost right uh first quarter was it was it was a fine quarter relative to consensus expectations but it was still sharply negative IA all the more so on free cash flow and I think what people are waiting to see is you know they've communicated a path to reaching gross profit break.

Even by the fourth quarter uh the factory rate that they just underwent or that they're they're in the process of going through right now is going to be a key opportunity to drive cost reduction but in many ways we think this is a a show me story and then on top of that you have tough demand where there's potentially price pressures which could.

Further pressure the path to profitability so great product really good technology but the question is is on the path to narrowing those costs and reaching break even and ultimate ultimately profitability well Dan according to the digi times here apple is in talks with rivan about a possible partnership what do you think the.

Likelihood of that is and what does it mean for Apple moving forward particularly after they've moved past the idea of an Apple car and instead invested into AI yeah really hard to say uh you know and it's it's it's unclear you know if there's any any substance to that uh I look I I think in general rivan is.

Constantly reviewing or considering the opportunity for strategic Partnerships any of that that could help you know certainly on on the investor side you know I think people are always watching for the opportunity for a strategic to come in and and help rivan in in you know in in that regard um but right now I think the core Focus for rivan really.

Is on uh reducing costs uh and driving toward profitability that's really the the core Focus right now Dan does Rivia need a partnership like apple not necessarily not necessarily I think right now like I said you know the core Focus for them just needs to be on narrowing costs and you know as you could see with apple they've they.

Basically exited the car market right all right well Dan Levy always great to have you thanks so much for taking the time to join us here this morning Barkley's senior Autos analyst thanks thank you and our Bush Shares are rising after reporting better than expected results in the first quarter a slumping sales in the US they were.

Actually offset by gains that the company saw over in Europe we're looking at a move higher of just about 4% Brook deama has those details for us Brook yeah good morning to you both shares jumped as much as 5% at the Mo Market open this morning largely because wal stre was really impressed by uh earnings and a revenue beat both the top and.

Bottom line that earnings beat came in at 75 cents and that was largely driven by stronger than expected margins Revenue grew 2.6% year-over-year to 14.55 billion on higher pricing but that was once again offset by volume declines and if we take a closer look overall volume came in higher than expected but still down about 0.6% and largely Geren.

As you could see here by that North America segment of the business where volume declined 99.9% largely due to declines here in the US because of that one-year anniversary of the budlight boycott we did see sales to retailers as well as sales to wholesalers down about uh 10 to 133% for bolt segments as those grocery.

Stores and retailers restock their shelves this spring but the company did see that see that did say that they are improving gradually from May 202 three and now market share here in the US is roughly flat compared to last year but this what decline was largely offset by middle americ especially with Mexico they did call Mexico their second Market.

We did see increase volumes there largely driven by Corona we also saw a Mia particularly Europe have strong volume growth Revenue there also increased in Europe and that was largely driven by pricing and premium brands that are doing well but largely there is a renewed Focus here for anheiser Bush to really focus in on what they believe.

Consumers need and what sort of connection they want from this beer Giant in terms of promotion at live music events as well as sporting events and of course we've heard from so many other companies that they're picking up share from these year year-over-year losses from Bud Light and so the competition is brewing I guess you could.

Say but the competition definitely is still very apparent across the board as these beer makers really look to capitalize on that loss that we saw last year well I loved that thanks for joining us as always Brooke really appreciate you thank you so much well Shopify Shares are plunging this morning after announcing it anticipates.

Decreasing gross margins during the current quarter this comes as it deals with the impact from the sale of its Logistics business to flex port with the company saying its revenue is also going to take a hit now what's interesting here is that we did see a 23% jump in their q1 revenue and Merchants were selling more through the e-commerce.

Platform but again they expect that to slow down that does feel like an interesting economic indicator to me particularly given that we saw a lot of selling decreasing at the likes of edsy and eBay and their earnings so it's interesting to see that bifurcation but looks like that gross merchandise volume raise was just not enough following that.

Logistics uh sale that took a big a big headwind for them about 300 basis points there yeah we're seeing that effect clearly the most recent results also the uh prospect that this could potentially weigh in current quarter results as well you're looking at a loss here of nearly 20% putting that in perspective we could actually see the biggest intraday drop.

Here for Shopify on record if we do remain just around those current levels so an important number here to keep in mind and as we stand right now with around 61 bucks a share it would be we could see maybe the lowest close that we had seen since November so we are seeing some material selling here on this name on the heels of those results that's.

Surprise loss that you were just talking about after the sale of its Logistics business and then even beyond that given the uncertain Mac environment right now given the fact that the consumer is maybe pushing off some of their spending or reassessing their spending plans that ultimately is going to weigh on shopify's business here going forward so.

You have the fundamental side of the business also some of those macro concerns there impacting shopify's I guess current quarter most recent quarter the current quarter right now and then also potentially the second half of the year so I think all that on the minds here of investors for shopified that's a really good point.

Shaa and it definitely tells us a lot about the sector in terms of consumer spending as well well the EV sector in focus on Wall Street today but the clean energy transition in the US going well beyond cars it also involves upgrading the electrical grid to support increased power demand for AI and data centers so which companies will likely benefit from.

That transition Yahoo finances Nez foray has the list for us hey NZ hey mat yeah we saw how higher interest rates last year put pressure on the clean energy sector but surging electricity demand is expected to benefit companies working on Renewables so this year is different improving infrastructure incentives from the government's inflation reduction act.

The IRA that is aimed at accelerating the transition to Green domestically produced Technologies are also expected to lift the sector so which of the companies are we looking at well on a clean energy chart here you can see vnova this is the company that just recently spun off out of uh ge and the stock is up 177% since going public this.

Is a renewable energy company they make gas turbines they make wind turbines and analysts are bullish on this stock because of increasing electricity demand and also grid Investments you've got seven buys four hold and one sell on this stock we're also taking a look by the way this is a year-to day chart we're also taking a look at First Solar.

This is the biggest the largest supplier of domestically produced solar modules their backlog goes into 2027 year to date the stock is up 11% Goldman Sachs recently in a note talking about how First Solar also has in uh direct um Partnerships with data centers like Microsoft for example so bullish on that stock and then we're also taking a.

Look at the utility space which by the way utilities is the third best performing sector out of the S&P 500 this year and we are taking a look at next era energy up year to date up 19% this company delivers energy that's in in the form of Renewables natural gas also nuclear and their CEO in their latest earnings call talked about the.

Redomestication of Industries in the US being Tailwind for this company data center energy usage also being a Tailwind for this company 17 buys five hold and one sell so while we do see in the overall renewable space we are are still seeing weakness in that area we are seeing companies that are these bright spots uh within that space.

Especially with the expectation of interest rates being cut later this year guys some that are well positioned here potentially for the coming years all right ANZ great stuff thanks thank you we got much more of your Market action ahead you're looking at the Dow up just around 21 points of trading just above the flatline on the flip side S&P and.

NASDAQ Under Pressure here in early market trading we'll be right back you're watching catalysts a.

m.

Now so much attention here at the milin Institute conference on inflation and the outlook for interest rates but maybe we haven't talked enough about the global Outlook and some of the biggest risks ahead let's bring in uh president.

At Lazard Ray McGuire Ray good to see you again it's been a while appreciate it good to see you both great to be here in person what of the one of the biggest risks I don't know if we talked enough about is China globalization risk what are some of these conversations like with clients right now so I would separate the the lens in two.

Parts one uh and I'm going to come back to clients because the view for the clients are somewhat different not diverging but different Focus what's in front of us and what's ahead of us today clients are think about impact of inflation the markets valuation both the asset management clients as well as the corporate clients that's what's in front.

Of what is the Fed policy what is it going to do with borrowing rates how does that reflect in the valuation if I want to monetize if I want to go fund a transaction for the asset management for the corporates what's my currency if I want to make a strategic transaction Reliance on Equity as a.

Source stock as a source the benefit of which is that I get to share in the upside and I get to share in the synergies so let's par that's what's in front of us what's ahead of us is as youve described what's taking place geoeconomic in geopolitically the global North and the.

Global South the dependence at the global North especially America has on the global South is not insignificant for example as we think about one of the macro Trends energy transition if you look at the dependence that the US has on the global South China refines 70 to.

90% of the precious minerals that are necessary for energy transition if I look at the continent of Africa the source of many of those raw materials or Peru or Chile so I look at the global South and see the dependence unless we somehow figure out how to invest so we become more self-reliant we have exposure which is not insignificant.

Today we're energy secure tomorrow we need to make certain that we're as energy secure tomorrow as we are today so from the perspective of your corporate clients when you think about the over Reliance on other countries does that drive Investments a as a way to safeguard the future how do you think they think about that right.

Now the answer is well not only from a corporate standpoint from a sovereign standpoint the chips act as an example the recognition that we need to be able to manufacture our own chips to to perfect the manufacturing of chips so yes for the sovereigns and for the corporates absolutely and what does that translate into we now have three or four.

Of the large tech companies going to put $200 billion investment into Capital expenditures so yes corporate you're thinking capex how do I invest today data centers as an example energy sources remember in order to in order to get to AI today it takes up 4% of the the country's energy the predictions by 2030.

Takes up 25% of the country's energy so we have to build energy sources in order to be able to to power anything to happen in gener of AI so yes our corporations are actively thinking about how they go through and make Capital expenditures for the future are corporations prepared correctly for either election outcome or the.

Presidential outcome in November I get the sense that CEO are they know it's there but they're not really planning their business for either outcome yet well I think that it may not be visible but corporations at moments in time like this go through scenario planning we do we try to help them out we have a geopolitical advisor Group which is you.

Know which is populated by some of the best thinkers on the planet and we put a lot of thinking in scenarios of what happens with this election outcome what happens if there's a different the different election outcome so the answer is yes yes they're thinking actively about it our group is very active globally and so the answer is yes what's.

The worst outcome can share what's the worst outcome there there are few scenarios out there to which we need to attend in order to be prepared well I I guess my my question would be if we're talking about the US election are the scenarios between a second Biden term or Trump term really that different from a corporate standpoint they could be but.

Remember World across the planet you got 50 some out elections so look at what so the risk that we have as we think about investing in the supply chain offshore there are two risk fundamental risks that investors look to one is currency and the other is political risk so let me ask you about that investment piece of.

It um you mentioned AI you mentioned chip I mean supply chain these are massive projects I me we are talking about the chip sack $39 billion in subsidies you look at what's happening in Europe more than $40 billion at a time when rates are still incredibly high or not incredibly High relatively High I should say um how do companies.

Make that calculation about investing in the future but knowing that that debt they have to incur as a result it's still going to be pretty high so the question is because these are so fundamental to how companies and the and the country operates think of a scenario if we don't make the invest ments so the answer is from Return standpoint we need.

To make sure that we're risk adjusted to have the appropriate returns but we also have to think strategically remember strategy drives financing in the corporate world and even in the asset management World strategy drives how they think about allocating I today today we have1 trillion doll of capital on the.

Sidelines deciding how it allocates itself in order to generate a return for the for the for the shareholders we have to do the same thing in terms of how we allocate our resources so companies are thinking very strategically about how they go about doing this and so yes the risk profile is critical they need to make returns.

For their investors for their shareholders and we advise them that is a primary concern but we also advise them on how they remain competitive they're not in Congress they're one and the same in order to maintain the focus on making sure that they do what is necessary as a corporate citizen so we're seeing we're seeing all of it come.

Into play at a moment in time when you have such GE econom geoeconomic and geopolitical challenges You' spent decades doing big deals um one of the most celebrated folks on the street doing deals what's company's Sense on the regulatory environment are they teing on trying to do a big deal with a backdrop.

Like this so uh you're great to ask the question that's a headwind and so corporations are trying to figure out as they go through and assess how they're going to grow and grow strategically will there be impediments to a strategic combination and that has become a factor here in ways that it has been historically maybe.

Not as profiled as it is today does through price like purchase price and maybe there's more breakup fees in any potential deal you see it get played out in different transactions but the risk apart from The Economic Consequences the Strategic consequences remember the vast majority of these transactions are strategically.

Driven very rarely in this environment are things just solely economic again strategies driving financing so the answer is yes as you think about a strategic transaction you have to ask yourself the question in get as much advice as you can on what the what the likely the the likely regul Sure Response is going to be that is now part.

Of the calculus to pick up on Brian's point though when we talk regulation it's not just about concerns about Anti-Trust getting flagged there's also concerns about any kind of foreign investment getting flagged particularly in the tech space too and I wonder if somebody who has been in this space for a while where do you see this all going.

To where's it all going to yeah you know it will play out for so long as we make the Investments to remain competitive and get beyond the divisiveness which we have to do in order for this country's best days to continue to be ahead of us we got to make those strategic Investments we have to reduce our exposure to the supply.

Chain we have to reduce that risk profile you're talking about foreign supply chain foreign supply chain today we're energy secure admittedly based on traditional energy sources tomorrow we need to be energy secure and technologically secure remember today we're the most advanced technology that exists anywhere on the planet we have to.

Maintain that LE which means we got to continue to invest all right we're uh we're going to leave it there uh president Lazar Ray McGuire good to see you again we appreciate it great to see you all thank you.

a.

us chip production is expected to Skyrocket over the next decade bolstered by incentives from the Biden administration's chips act here with more on this is Yahoo finances Dan Howley Dan that's right Sha this is according to a report by the.

Semiconductor industry Association and Boston Consulting Group and essentially what they're saying uh is that the chips act should be a success as far as getting the US uh back up when it comes to building chips on Shore and so let me just go over some of the numbers here uh they say that there's uh a 203% projected increase in fabrication.

Capacity uh from 2022 to 2023 that's compared to an only 11% increase in the prior decade from 2012 to 20122 now fabrication is essentially uh a place where they build chips so they call them Fabs because it's a fabrication facility uh but it's just a factory where they build chips the the other thing to point out is and this is very important the us.

Is going to grow its share of the ability to build Advanced logic chips these are uh chips that are below 10 nanometers uh when it comes to the the size of the uh the transistor so uh think of what you have in your iPhone uh your iPad Apple just announced yesterday a new 3 nanometer chip uh their their M4 we don't build those in in the US.

They're mostly built overseas but this is going to boost that uh to 28% of global capacity by 2032 and again in 2022 we built 0% of that so that means that the us is going to be increasing uh its ability to get these kinds of high-end chips out the door from within the country and that should uh help with supply chain bottlenecks uh in the.

Future and this all comes obviously uh as a result of uh the tensions with China and then also the pandemic where uh the supply chains were just completely disrupted and there were chip shortages across the world so the idea here then is to get more uh chip capacity on the ground in the US so that uh we can kind of avoid those in the.

Future all right Dan thank you so much as always for joining us that was our very own Dan Howley our in-house Tech expert appreciate it ride share earnings in focus with both Uber and Lyft reporting Uber is falling after reporting a surprise loss in the quarter including a $721 million loss related to the company's revaluation of.

Equity Investments meanwhile Lyft seeing gross bookings jumped 21% from the prior year it's active Riders growing at the fastest Pace since 2022 here with more we have John Blackledge TD count and Senior analyst John thanks so much for being here I mean talk to me about the bifurcation that we're seeing here is this an indic ation to you that.

Consumers are getting kind of tired of Uber's pricing and they're switching over to lift or is it a different story yeah I don't think so I mean yeah let's let's unpack it here we'll start with Uber um you know on the on the oneq results so the gross bookings uh were up about 20% year-over-year that was slightly below our forecast as Mobility.

Gross bookings and trips were impacted by um lower than expected Lam results but iida beat solidly 5% above consensus and then the 2q guide was fairly solid gross bookings on a constant currency basis up almost 21% ibit do guide was kind of in line with consensus at the midpoint I think the shares right are down right now for for two reasons.

Number one um lower 1q Mobility gross bookings and then the 2q guide was solid on a constant currency basis but lower on a on a reported basis as Uber's facing higher FX headwinds than we thought particularly um on the mobility side overall um I think the trends remain strong for Uber right 15% user growth they had 6% uh trip frequency.

Growth that drove overall trip growth uh up 21% year-over year and then on the mobility side uh the user growth was 177% so it was above total company user growth and they expect that to continue into 2q and the rest of the year um but but again yeah so I think just the lower Mobility uh in one Q uh and the guide was was a touch light on lft uh you know.

They had a really good quarter right they they like you mentioned they beat onow gross bookings Revenue was better iida also better 2q guide on Gross bookings and iida were above us so we raised numbers raised our price Target um and they also have an event coming up they have their first uh analyst day in New York City on on June 6 so that that.

Was also something um that that I think people will you know probably be somewhat positive kind of going into that um you know as they're going to lay out uh I think we think they're going to lay out like intermediate term targets John I want to talk to you first just about Uber and more specifically the stock reaction that we're seeing we've.

Got shares down nearly 8% given what you had just laid out there a moment ago is then the selling that we're seeing today a bit overdone I I think I think it will ultimately be overdone um and but but I I kind of understand it you know it's been a great stock over the last year um so expectations are you know fairly high.

And so with a little bit of of a Miss at one q and and as as I mentioned the 2q guide on a reported basis a little bit softer you know you get this kind of reaction but like I said I mean the the core just underpinning fundamentals of the business remain strong and so I I do believe it's a bit a bit of an overreaction well John I know that both.

Lyft and Uber were asked about the potential risk to ride sharing companies that autonomous vehicles pose particularly given some competition from Tesla of course both CEOs sounded pretty optimistic though so let's listen in I get excited about autonomous cars because I think great it's going to be another way for people to get around you.

Know you can sort of think of it as another car that we could you know run uh into our network if you're an AV Fleet owner or you are an individual owner of a car whether that's a Tesla or another kind of car you're just going to make more money and make a higher kind of return on your investment if you plug in your AVS into uh the Uber ecosystem.

And into Uber demand so um you know we think we bring a lot to the table we're looking to partner with the AV industry so John is it that easy that this can just be a partnership yeah yeah they both kind of mention the partner approach and like if you think about it for Uber right they have the huge customer base they have.

The matching and routing technology for both companies big customer bases matching a routing the payment systems regulatory exper expertise um and that that can drive higher utilization for AV Partners over time um and I think Dar mentioned like also um he thought AV could expand Mobility Marketplace uh with with lower.

Pricing which would spur higher adoption um and Uber in particular has the partnership with wh uh in Phoenix they are expanding AB Partnerships on the E side as well I think just the reality in my view uh as it relates to AV is that the headline probably headline risk probably won't uh match the time it's going to take uh to fully scale the.

Technology and as it scales Uber will be the most scaled partner globally on Mobility for for a for potential AV partners and then a leading one uh uh potential partner in delivery and lft will certainly um be able to partner uh in the US and Canada those are the two markets that lift operates in John can you give us a better idea of what.

Exactly that timeline looks like well uh yeah I mean your your guess is probably as good as mine I mean the companies haven't really said I mean I think if you listen to DAR today um he said it's it's going to take time and even and lift and even lift night it's going to um take many many years to be fully scaled I mean just for example I.

Think wh Mo's operational in three markets with Austin coming um that's three markets in the US uh and so it's going to take many many years and I think I think that's kind of how they were talking about it and that that's why I said like we're going to see these headlines um but actually when it's fully like when it is fully scaled it's.

Going to be probably many many years all right TD John black ledge thanks so much for joining us here this morning well it's early in the trading day but a key theme is it's the individual names to watch not so much the broader market and its growth stocks getting hit today earnings from Uber affirm Shopify and upstart all declining.

Here on the heels of their quarterly results and Maddie we're bringing this up on the heels of some commentary that we got early earlier this morning from Morgan Stanley's Andrew sheets and he was making the case that this isn't really this macro Market or macro driven a market that everyone has been talking about it's more micro and he pointed to.

Earnings so today at least when you take a look at some of the pressure that we're seeing in these growth names it really highlights some of that rotation that we've been seeing within the market and where we are seeing maybe pockets of strength outside of the mag 7 and then ultimately the question is whether or not earnings are going to hold up to.

Then further support the Market's gains it's a great point and it's similar to what we've been seeing particularly if you take a look at some of the ETFs out there showing some signs that we are seeing a little bit of broadening again Beyond some of the growth year names that investors tend to look towards I was looking at the Vanguard value ETF.

It's one of the top 10 ETFs getting inflows this week which could be an indication that investors are starting to see some broadening and looking back on our Notes too we know that black rock in Q2 said that their Outlook indicates that risk appetite could broaden Beyond Tech and if you look at those ETF inflows you are seeing evidence of that.

Yeah Manny that's a great point because even if you take a look at the sector action today and where we are seeing that leadership that also points to that point that we are trying to make here are making here just in terms of that rotation right because we take a look at the more defensive names that are leading today's trading action you've.

Got utilities among the biggest gainers today so again that's very different picture than what we had been seeing especially when you take into account the gains that were mostly driven by the mag 7 last year so again a bit of a rotation the question is whether or not that rotation is going to stick let's do a final check of the markets here we're.

Still looking at a bit of a mixed picture you've got the dowo and the S SMP holding on to gains just barely for the the S&P the NASDAQ though still in negative territory and coming up our new show wealth dedicated to all of your personal finance needs our very own Brad Smith is going to have you here for the next hour and we'll talk about tipping.

Etiquette so stay tuned for that and more.

M now.

Welcome to wealth everyone I'm Brad Smith and this is Yahoo finances guide to building your financial footprint our community of experts will give you the resources the tools the tips and the tricks that you need to grow your money on today's show housing hurdles we talked to an expert about when it'll get easier for people to buy homes yeah so.

Listen up for that plus prescription drug prices we dig into the Steep prices of medication for millions of Americans that part of our health is wealth week plus tipping Customs we ask an expert here to help us Define some of the social morals around giving extra cash for services all that and much more coming up during today's show let's kick.

Off the day with housing though it's a tough time for home buyers who are contending with elevated mortgage rates and low inventory and now a new survey from Fanny May reveals 80% of Americans think it's a bad time to buy a house here with more is Yahoo finances Danny Romero Danny take us into this Brad high home prices rising.

Mortgage rates aren't going anywhere data from the National Association of Realtors shows that more than 90% of the Metros across the US had price gains in the first quarter of this year the median sales price for a previously owned home grew 5% over the last year from a year ago to $389,000 for a single family home and the reason.

The low Supply is just not keeping up with consumer demand some of the regions that did see some of the strongest price gains one of them being the South home prices appreciated three about 3% uh on a yearly basis in the Northeast 11% in the midwest uh 7 uh 7.3% and in the west 7.3% so in the west region really is an interesting um.

Equation here because last year we saw price declines in the west and we're really seeing a turnaround story happen there but another key point from this data is really that the monthly mortgage payment for a previously owned home with a 20% down increased 9% from a year ago and it's about $2,000 Brad so Danny home buyers they don't seem like they have a.

Lot of choices right now so H how desperate is the situation here Brad buyers are saying noo to those fixer ERS uh they don't really want to be chipping Joanna right now even though that new listings have increased somewhat the quality of those properties have not and data from John Burns research and Consulting they surveyed.

About 1,400 uh resale agents and they found that 99% of those agents said that they have seen those home listings need some form of repair uh was um repair and ore updates meanwhile two-thirds of those agents also said that they saw homes that needed severe updating of kitchens and bathrooms so really this this data from John Burns really.

Reflects that buyers are not that desperate right now they want those movein ready homes and that's something where the builders have been able to step up the game and capture those customers Brad all right Danny thanks for setting up the coverage here for us today especially as we continue this conversation around housing aside from.

Tight inventories another major hurdle for home buyers is high mortgage rates the 30-year fixed currently sitting at 7.22% and with the odds of a rate cut being largely pushed back to September and maybe even Beyond depending upon who you ask buyers are surely wondering when they might see some relief with mortgages for more on this let's turn to.

Lawrence Yun National Association of Realtors Chief eon good friend of the show here Lawrence always a pleasure to speak with you you know just as we think about the broader housing environment right now and and what you're seeing show up in the data what is really at play here are we going to see this scenario continue to play out until rate.

Cuts come into the picture and and what is your best guess for when we might see that uh well thank you for having me on the show uh you know the most interesting situation from my perspective at the moment is that we have very high mortgage rates 7.2 7.3% rate despite that multiple offers are still happening the buyers are in the.

Marketplace is simply that there is not enough Supply to fully satisfy the market now of course there are some home buyers who simply cannot get into the market at the current rates so they are looking for better affordability when the mortgage rate declin I do believe that later this year the Federal Reserve will be cutting rates which will help.

Some uh the 30-year fixed rate mortgage but let's look at the longer term whatever rate cut the Federal Reserve is delaying this year will simply get pushed into next year so I think from the US economy we are looking at maybe six to eight rounds of rate Cuts all the way through 2025 which means that mortgage rate will surely be lower over.

This time span uh and people buy a home and we know from past experience people always refine Finance when the mortgage rate declined multiple offers still happening Lawrence as you mentioned but at what socioeconomic class is that more outsized from what you're saying uh you know uh the cash transaction has really risen maybe you.

Know people are saying I don't need mortgages mortgage rates are not important uh part is that homeowners have built sizable housing wealth uh in recent years and especially who are moving to more affordable regions whether it is from say inner suburbs of a major city going into the next County where things are a little more.

Affordable or in some cases people moving from expensive States say California to Nevada and they can buy all cash so we have seen a notable increase in the all cash transaction but let's remember the first generation buyer firsttime home buyers they're not cash buyers unless their family was can help them out so most first generation.

First time buyer they need the mortgages they're looking for more inventory uh perhaps it will begin to show a little later Builders are ramping up production Now new home construction is not for the first-time buyer but at least it provides some trade up opportunity among existing homeowner who will then release their starter homes on to the market and.

When the FED does begin cutting rates and they perhaps get in uh not just a single oneoff uh instance of a cut but perhaps a few Cuts come come forward what type of rush to refinancing do you expect to happen uh you know the refinancing always very sensitive to uh rate changes uh but I think what is key is that we know we are going to have.

More buyers when the rates decline that's almost a certainty the key question is whether we will have adequate Supply to meet that demand and I think that some of the current homeowners who are in so-called golden handcuffs uh that is to say that they are loving their previously obtained mortgages 3% % they don't want to give.

That up but we know that there are lifechanging circumstances having additional child in the family uh maybe there's some new job at different town uh or maybe they were looking for better School District so all this more life changing big decision impact I think people will begin to list their property look for their next home so as a.

Consumer be on the lookout for more listing as we proceed through the year you know I I saw a St about the number of Millennials turning 40 every day here and it was it was eye popping here Lawrence and a lot of Millennials are having those key life decisions and changes happening right now which also very much dubv Tails into the thinking.

About what the space is that they occupy for home do they need to upsize and you know get ready for more family formation what more largely are you seeing among that cohort uh you know the prime home buying age is typically in the uh the early 30 S I mean that has been pushed back in recent years to about mid-30s or even.

Pushing into the late 30s so we know that there is a strong desire for that ownership uh but perhaps it's been delayed couple of years because of a higher mortgage rate than what had been previously lack of inventory condition but the inventory is clearly turning for more inventory we are seeing in the data more inventory now compared to one year.

Ago now this does not mean that we are in a balanced Market we're simply moving from super tight Market to more availability that's a good Trend uh and I think this is a very early indicator that the home sales will be pushing higher later in the year furthermore home prices 90% of the country right now experiencing home price growth you know.

There have been a few reports that have emerged about another generation that's gen Z about the amount of debt that genen Z is relying on right now to what extent are you monitoring that as how it will play into the home ownership scenario for for that generation uh you know the younger generation uh you know trying to understand the importance of.

Financial literacy get that credit score uh under check uh improve those credit scores make those rental payments on time uh try to save up or down payment uh you know study hard and try to get the job that pays a little higher income so all that pass factors uh the traditional way of getting into home I think is that skill at play but of.

Course uh there is a a larger debt than normal compared to the Past generation uh so I think that is delaying some of the entry time of the home ownership but nonetheless when you look at the data homeowners typical wealth $400,000 typical renters only at 10,000 people know these figures they want to be on the ownership side even though it.

Is a delay entry point for Gen Z to come in but they understand the importance of home ownership Lawrence Yun who is the National Association of Realtors Chief Economist Lawrence it's always a pleasure to speak with you and great to get some of your insights appreciate it thank you certainly a new survey finds 99% of current and expected resale.

Listings are in need of some sort of repair that's according to John Burns real estate Consulting so if you are trying to sell your home is it worth it for you to do some work before putting it on the market yaho Finance contributor Ross Mack is here with some tips to get the best return on your DIY or your renovation investment here all.

Right so what are the homeowners out there that are undergoing these projects need to keep in mind well one I think everyone has to understand right more than half of Americans would much rather renovate their home and actually try to buy a new place right it makes sense right if you're locked in at call it sub 3% for.

Your mortgage do you really want to go out there and get over 7% on a mortgage right and I think when you're thinking about renovating your home you need to ask yourself am I trying to sell it and if that's the case how do I get the biggest bang for my buck because when you think about it you're going to be like oh maybe I need to redo my kitchen.

My bathrooms maybe I need to finish that basement you know those are the things that for you are going to make you feel better but it might not actually add to the value right when it comes to it I think it's very important to actually survey the land and maybe go on Zillow and actually look at what some of the other comparable homes in your.

Neighborhood are selling for to actually get a sense of does they do they have finished bathrooms do they have you know updated appliances in the kitchen Etc but one of the things that I learned and doing the research of the show is that when it's all said and done there's a shock value so what actually would give you the biggest bang for your buck is.

The exterior of the house followed by then the interior and so when we're talking about the exterior we're talking about that garage door we're talking about that entry door maybe Stone veneers on the sidings right and then that then you can get to the kitchen but when it's all set and done I think it's important to understand from an.

Aesthetic standpoint that shock value is what's going to give you the first biggest bang for your buck a garage door kitchen walkout is on my Pinterest board right now Ross so that's something that I'm keeping in mind for when I do own that house Ross thanks so much appreciate it my man thank you coming up everyone Amazon is expanding same.

Delivery on medications to over a dozen cities by the end of the year same day delivery there so should you trust and can it save your money that's next.

f.

Let's do a quick check of the market sponsored by tasty trade we're taking a look at the major averages in the US mixed right now the Dow Jon's Industrial Average holding on to gains by about one tenth of a percent but that's the only bright spot at least among the major averages the S&P 500 and the NASDAQ are both in negative territory right now the.

S&P 500 down 1/10th of a%c and the NASDAQ Composite lower by about a quarter of a percent well while shopping online dominates retail about 90% of consumers they still purchase their medications in person at pharmacies since 2020 though Amazon has been trying to gain a foothold in this market even announcing.

This year it expects same day delivery services for your meds to be available in up to a dozen US cities but for the consumer a major question is how much this will actually affect the overall price of prescription medications for more we bring in Dr Vin Gupta who is Amazon Pharmacy's chief medical officer as well as our own aneli klani uh Dr.

Gupta first and foremost here a lot of people are just wondering what the delta in the prices that they're paying will be when they're thinking about a same day delivery type of service versus going in person to some of the pharmacy benefits managers and picking it up the old-fashioned way and the way that many of us have been accustomed to for.

Decades at this point well Brad first of allk thank you for having me and Angelie great to see you again this is a service that we're launching in select cities across the country we'll have 12 by the end of the year we're really excited about it because we know Dent cities like New York City and Los Angeles the two new.

Cities where we have this capability if you if you get that prescription in if your provider can get that prescription in before say 5 o' uh we're able to get that to your door before the end of the evening and that matters for acute conditions and this is something that uh going to be growing again across the country but that time to treatment is.

Critical Brad we've talked about this so much during the pandemic early triaging early diagnosis paired with early treatment we can be at the door and people are used to Amazon being at the doorstep with their retail needs now we're doing it for healthare and we're building that trust what about the cost of it to Brad's Point are they are.

Patients expected to pay any different is insurance covering all this and are we looking at you know sort of a status quo in that realm or is it more expensive even though it's more convenient for patients to use Amazon now where where we offer it uh it's included in in in just in the checkout experience so no additional.

Charge for that Subs same day delivery experience uh and that's exactly what people expect uh from Amazon if if this is something where you're in a in Staten Island in Manhattan in parts of Brooklyn Queens this is something that will be offered to you um in the checkout experience and something that again if you're within that serviceable zip code.

Will offer it no additional charge V tell me when you're talking about the in-person pickup I know that just like Amazon's past when bookstores were the target we're now looking Ates and the in-person pickup part of that equation for pharmacies and we look at what the um you know the the push is to mail order and online ordering that hasn't.

Necessarily picked up uh to the point of that stat that we shared but at the same time Amazon is opening some of those in-person locations what does that tell you about the market right now and sort of the trust that people have in digital versions of healthcare well I'm I'm a pulmonologist Andre as you know and and home delivery.

Of medications to me is an area of incredible growth because it means something meaningful it's useful significant to clinical outcomes we know that 30% of people don't pick up the refills on time or if ever because it's an inconvenient experience especially if you're acutely not feeling well so home delivery us being the modern Pharmacy.

Meeting the needs of the Modern Age we're doing something we exist for a reason because the existing Legacy Pharmacy experience isn't Meeting those needs and so yes 10% to your exact point let's acknowledge the fact 10% of prescriptions are through home delivery 90% are still through that Legacy system system where people spend hours every.

Year in line in aggregate waiting for their medications to get picked up we are providing an alternative for patients and for their providers across the country I'm at the bedside if I know that my patient who's not feeling well with a COPD exacerbation can get their refills on time or their antibiotics on time that same day in a place like New.

York City why wouldn't I want to do that so I think part of this is just building the awareness that there's a better alternative home delivery the modern Pharmacy for the modern needs of a patient and that we need to start moving away from the Legacy system that isn't Meeting those needs is Amazon able to negotiate materially different with drug.

Makers to the extent that your customers Prime members subscribers or not would be able to see the delta in what they're paying or you know whether they were going to be purchasing that via pickup uh through one of the PBM competitors or through Amazon well Brad what I'll say is we have created a a storefront experience.

That that might be evocative if if you've used amazon.com for your retail needs Amazon farmacy very different uh portal experience sign on experience we keep Health Data separate and private from let's say if you have a retail uh profile uh but some there's some similarities in terms of pricing transparency based on how you want to.

Pay we offer a multiple different ways to pay either through estimated Insurance pricing if you haven't input your insurance insurance or through through a direct estimate of your co-pay if your insurance is on file we have a discount Savings Program the prime Prescription Savings discount program that that is essentially reflecting a.

Cost Plus model for variety of drugs and then critically and I think this is the real differentiation here Brad for Branded medications like insulin products if there's a manufactured coupon for one of those insulin products that we we have for this on our on our website uh that we're as part of our coupons program we will automatically.

Apply that uh to the end cost that is not something I should emphasize this that is not something that is common place across the industry people have to go hunting for it 85% of the time that coupon goes unapplied so if there is a way to save me money on medications whether it's a branded medication or generic medication you will find that at.

Amazon Pharmacy through a very easily navigable website and store fun experience Vin uh finally you're looking at you know the the entire industry and where it's going pbms in particular uh you know have a lot of say in this industry and there has been a breakup some employers are looking at and uh California Blue Shield for example.

Partnering with you to provide certain uh certain prescriptions in order to reduce costs and I think that's the point that patients are looking for is where can costs come down for them so how do these Partnerships uh including the one with Lily direct that was recently announced and like likely other Pharma companies that are coming in line.

For direct consumer you have that Avenue with the Amazon Network how does that translate into a better experience but also lower cost for patients well well until you just you said it right there the the pilot that we announced that's going to go live in 2025 of Blue Cross or Blue Shield of California H and some of our uh some.

Other peer stakeholder groups like C plus uh and a few other stakeholders we're really excited about the potential ADV because exactly to your point that the Journey of the prescription medication is different in that model where it's sourced directly from the manufacturer we're able to directly deliver it direct to the patient and so.

If there is going to be a markup in price that historically sometimes might be happening in different ways to acquire prescription this is potentially offering a different alternative where you may not see that level of markup and the patient's going to ultimately benefit with a lower cost so if there's an ability to innovate with traditional.

Stak holders and by the way that pilot includes many traditional stakeholders we will do that we've shown a willingness to do that Lily direct to me is very interesting because that's Lily saying uh they can choose any pharmacy to partner with we're one of two to do home delivery and and and there's a reason why they did that because they.

Recognize by the way this is not only just limited to to gops and Zep bound it's also insulin medications and migraine medications but what's important to them they're they're really concerned conned about proper prescribing of these medications making sure the patients that need these medications on julan Brad get these.

Medications and so what do we have Beyond home delivery Rapid uh delivery in places like uh Seattle and California New York City or Los Angeles rather we have clinical Excellence we have a team of clinical pharmacists that I work with closely that can answer questions on side effects that are available 247 365 so when you couple that with the ability.

To have home delivery you're we're truly building the modern Pharmacy that the future needs that the patients need right now but certainly the the pharmacy of the future that's why ay is is partnering with us it's bringing responsible prescribing of these critically needed medications to patients that need them the most Dr Vin.

Gupta who is the Amazon Pharmacy chief medical officer and our own aneli kamani thanks so much for the time in the conversation thank you coming up everyone the energy sector is up over 11% this year so is it time to consider an energy ETF we ask a portfolio manager that's right after the break.

.

now President Biden unveiling an over $3 billion investment in a Microsoft data center today but data centers guess what they require a lot of energy they consume about 1,000 kwatt hours per.

Square meter that's about 10 times the power consumption of a typical American Home according to CNC Tech group and as new data centers continue to open up to support generative AI power and energy might be a good ETF play for investors to consider especially thinking about the sector and how it's up over 11% year-to date as part of the ETF report.

Brought to you by investo QQQ joining me now we've got Eli Horton who is the TCW senior portfolio manager here okay we we just laid out the chart and looking at energy and the performance over this year so far I mean is this an area where investors could potentially see some continued upside momentum here yeah well thanks for having me it's good to be.

Here I think we are really starting to see the beginning of what we consider a mega theme or a transformative investment opportunity in the transformation of our Energy System um if you if you think about it we are in the very early Innings of migrating from using all fossil fuels to 100% Renewable Power Generation and we are only about.

15% of the way there there's been a lot of lofty targets that will make it by 2050 to a net zero State we won't uh this is a very complex challenge the world's investing five to6 trillion do per year to solve this problem and within this broad system and it's very broad it's not just en energy companies there's a there's a Litany of really.

Interesting opportunities what is the real timeline then that investors should be keeping in in mind as as kind of the core thesis around the energy landscape right now so look where we uh where we focus is is very longterm so certainly multi-year in nature last year 2023 was a very informative year for uh this thesis so uh there was a large developer.

Of offshore wind farms that walked away from two wind farms off the coast of New Jersey $3 billion that they sunk into the ground and these wind farms were deemed uneconomic and they walked away from it um hurts sold about a third of its EV Fleet why it was too expensive to maintain them they couldn't charge enough to the consumer because of some.

Range perceptions and so those are two examples of how difficult this transformation is where does it create the opportunity we think it's more in the brown businesses the Legacy companies rather than businesses so so think like uh Exon Mobile for example um not just your classic green company we'll invest in both but we are seeing.

Businesses that have sort of been left behind by the market as they focus on growth um that are really interesting and very attractive from valuation perspective you think about some of the infrastructure and and even the Investments that we were talking about a moment ago with the data center that President Biden visited with Microsoft's.

President Brad Smith um and we think about where that also leads into this broader kind of correlation between generative Ai and energy I mean how have you been monitoring that so the power and electrical grid is fascinating and it is a problem that is going to persist for years and let me give you some context because AI has just kind of lit.

A match on the dry kindling here so the past two decades power demand in the US has been dead flat over the next 25 years power consumption is going to double what's the risk to that though well here's the risk our grid is already a mess think about all the brown knuts that we have I live in California we have brownouts all the time Texas.

Declared a state of emergency in its grid last fall so the grid already cannot handle the current demand now we are going to double demand it's from electrifying Vehicles buildings it's from bringing manufacturing back here um reshoring it's from AI so demand's going to grow how we're going to solve that we're adding wind and solar to the grid.

That's great those are intermittent sources wind has to blow sun has to shine so it's less efficient so to meet a doubling of demand we need to Triple grid investment that's a lot of capital dollars and the businesses that are providing Solutions there uh will absolutely benefit and the ETFs that you're tracking right now that seem most.

Apt to keep Pace with this Demand right now right so uh there's a there's a couple strategies that are very relevant here the first is called transform systems ticker NZ Nets um that focuses on this energy transformation and then the second is transform supply chain ticker sub s which really focuses on bringing manufacturing and reshoring.

Back to the US Eli Horton TCW senior portfolio manager Eli great to see you here in studio thanks so much we've got much more on wealth after the break everyone you're watching Yahoo finance.

sh now.

So what's the next move in markets with fed raid hikes or Cuts in Focus let's dive in Newen CIO Sarah Malik Sarah good to see what person for a change yes it's great finally off the zoom off the zoom video yeah right I I I was telling to Kiko I love what you wrote recently about May potentially being weeds for Markus explain that to us because I'm.

Like wow I got to ask Sarah about that well we already saw the rain showers in April so the question is will weeds be coming up next markets are really fixated on what's the next move by the FED when will we get rate cuts and what's going to be the magnitude of them and really there's two things for Bulls and the bears for the Bulls payrolls.

Missed for last month and also manufacturing dat has been weak with q1 GDP missing estimates but the Bears can still point to inflation which is well above the fed's target and consumer spending until that inflation number hits the 2% fed target and stays there sustainably the fed's not going to be cutting rates is it fair to say you're.

Cautious on stocks here I think at S&P near 5200 I am cautious I see it more in a trading range I don't see any imminent issue to take the markets down but my concern is that without these rate Cuts coming in the near future what does that mean for the economy in terms of its ability to hold up and we are seeing those cracks already somewhat in the.

Employment market and with manufacturing on that point we heard from Minneapolis fed president Neil kashari here at the conference on the ground um raising a number of issues number one you know how much of where inflation is right now is in the control of the FED but also whether in fact we're Landing softly at 3% he said that keeps me up at night.

You've SE been in the camp that you don't think inflation is going to reach that 2% Target this year why I think you what the FED has been battling is inflation and they're trying to raise interest rates and sort of to Tamp inflation but what we've seen is you know more couple years of rate hikes and inflation is if anything starting to re.

Accelerate at the beginning of this year so what is and there's another thing that's out of the fed's control that does Drive markets and that's earnings earnings have been very strong and they've been led by technology companies we have the large digital shift to artificial intelligence that's been driving earnings higher and that could.

Continue to and that's really out of the fed's control too so it is a challenge for them right now trying to slow the economy enough so that they can clamp down on inflation one of the things that that we heard from um fed Jerome po last week Neil kashari seemed to reiterate here at the milkin conference is the labor market may be sort of that impetus.

That drives a potential rate cut in other words even if inflation remains at 3% or above if they start to see more deterioration in the labor market that would be a reason to cut how are you thinking about those two mandates right now well first of all April's employment consensus was a high hurdle it was one of the highest consensus numbers we've.

Seen since 2022 so it was going to be a hard one to beat like we've seen in Prior month so I wasn't surprised to see payrolls missed this month but they're still reasonably strong markets rallied last week on the fed's comment because they were actually relev that rate hikes were taken off the table I'm not convinced that we're not going to see.

Another rate hike if infl inflation re accelerates and the economy remains strong I think you could be bringing a hike back on the table it's not our base case but I think it's still an issue out there let me just check some of these off job market slow down a little bit economic slow down is happening based on GDP elections season inflation is still.

High are investors still being very complacent well e economy slowing moderately so not in a recession election years do tend to bring higher volatility but markets tend to go up in election years so that's you know kind of a neutral even somewhat on our side those those are important and let's go back to earnings which are the real key.

Driver of markets earnings have been strong 80% of companies in first quarter of this year have beaten earning consensus that's a positive for the market it's led by technology stocks where I agree we need to be a little more selective but that earnings as long as they continue I think markets can stay resilient even though they are a.

Little bit expensive as you look ahead to the second half of the year the election on the calendar obviously where does political risk factor into your overall assessment when you're looking at your I'd say short-term volatility long-term less volatility because we'll go back to the economy and earnings once the election happens but leading up to.

It more volatility in the markets and we do have new things to consider this year even though the candidates are known which would be sort of a positive for the markets because they like transparency and Clarity think about artificial intelligence potential misinformation international issu issues how we dealing with all of these.

Geopolitical issues those are going to be important to the voters and that could also impact Market movements and election volatility uh Mark lry the uh the founder of Avenue Capital told me because everybody is so over I guess overallocated or over invested in The Magnificent Seven names Nvidia Apple Amazon you name it we might be now.

Looking at a year of under performance because everybody is invested in these names do you agree with that I think it's the year of being selective and you saw that last week with meta which actually put up a good quarter with 27% Revenue growth The Whisper numbers were for 30% Revenue growth stock goes down because it's over over owned now you.

Look at Apple where if you look at the fundamentals of the quarter it's more about the next iPhone cycle seasonality trade but stock was under owned so Apple goes up so I think that crowding in these tech stocks is important for for these stocks but then we have these more resilient ones like Amazon Microsoft with its multi-year head start in.

Artificial intelligence these should continue to be like the little engines or the big engines that could you mentioned uh it's time to potentially look for defensive assets isn't apple or an Amazon a defensive asset apple is pretty defensive because it's under owned Amazon I think just has a resilience from investing in their.

Logistics during the pandemic when we see def when we say defensive assets we're also talking about areas like infrastructure multi-year positive trade for us because not only are we near Shoring on Shoring our businesses the shift to renewable energy both of those require more investment in the US and the components of infrastructure like.

Utilities and waste management tend to be less economically sensitive you mentioned the huge swings we saw on the back of some of the ma S names it's interesting to me that there seems to be on the one hand some concern about the scale of Investments that are needed to ramp up their AI offerings and yet you look across I mean you know meta had a.

Big number obviously in Investments that seemed to really affect their stock investors concern but that wasn't the case with a name like Microsoft or even an Amazon yeah I mean I would say that you know the long-term Head Start though that companies like Microsoft and Nvidia have are important go back to the late 90s where we were shifting to more use.

Of the internet there were so many companies out there I mean we all remember iPads companies you could buy which really weren't resilient businesses companies like Microsoft and Nvidia I think are long-term plays they have gotten such a head start in terms of investing in AI I think those are going to be the long-term winners.

Barring a little bit of you know up and down because of their valuations and and where people are positioning in the stocks you talked to a lot of investors let's focus on the average investor what's the number one mistake you still see them making cash on the sidelines I you Studies have shown that when you Market time you lose money relative to.

If you just stayed invested this started you know last year everyone expected a recession to come they are holding their cash in 5% returns nothing wrong with 5% returns but when the market is up multiples of that and even fixed income markets have yields that are higher than that today you're you're losing relative money so I really recommend stay.

Invested leg into the market average in that I think is the biggest mistake investors make and then of course they eventually get fomo fear of missing out when they come piling back into the market when the Market's already up feel like that's kind of right where we are right now right so basically you just told me I'm making a mistake I thought I.

Was doing pretty good with my 5% CD or maybe I'm not you know it's funny Brian I I sort of checked myself when you said that as well I think talking to us talking to us i' say 5% is good in 2014 wow hot take all right we're going to leave it there you be C Sarah M good to see you in person we appreciate yeah great.

Thanks for having me.

It's um been a bit like too much now lately you know um I've seen it go from like 12 to 15% to where you go somewhere and it's automatically 25% the pricing of food has gone up so tipping has gone up it's a double-edged sword but at the same point we are getting a service here in the states a lot of servers are making minimum wage you know they depend.

On that uh on that tip it's also the server and and the The Establishment to give that service as well so if you're not giving the service the proper service to your clients do you really deserve that 20% usually in Italy we don't uh we don't use tipping because uh we assume that waitress and so on are paid by their uh the the owner of the.

The Enterprise and so it's very different from me where keeping is requested to customer now today if actually you're kind of more forced into it you know the moment that you pull your card out they're like it's on the machine do you want to tip when they flip the the laptop around at you when they flip the little thing around you.

Feel like you're watched like somebody's you know bearing down on you it's almost giving you that that guilt feeling that if I do or don't and I don't feel that that's the right thing to to do for in a business atmosphere it's really about the experience you have with the service person having weight interest and made a living that way through college and.

Graduate school um but I don't like to have to do do it and feel like I have to do it if you wait on somebody or do a service absolutely you're entitled to a tip when it's like a self-service culture I don't know that uh the tip is warranted normally tipping should be a reward towards a service or something that's exceptional and it's almost like.

You need you're forced to do something that you may have not done because the service wasn't necessarily exceptional the advice I would give is if if you don't have the tip to don't go out um and that's not really for coffee I guess it's more Toad's restaurants Etc we've all been there we're just picking up a sweet tree perhaps and then.

The employee flips over that iPad and you're met with the dreaded tip screen then comes the guilt and the question do I have to tip some businesses often depend on the consumer to supplement their tipped employees wages and there are a lot of them nearly 4.3 million tipped employees in the US according to National employment law project as part.

Of Yahoo finances small business big opportunities week we're breaking down the psychology around tipping and Michael Lynn Cornell University professor of services marketing is here to tell us more so perhaps we begin with that very question what are the dos and don'ts what's the perhaps rule of thumb here that we should be deploying when.

We're kind of going tap of the button when that iPad is turned around I don't really like to tell people what they should and shouldn't do I don't think there's a God of tipping and I'm certainly not it um but I can tell you what people do do right when PE when people flip that screen it's not just the anecdotes that you.

Began this section with research tells us that people do feel pressure they will leave a tip but they're not happy about it okay but what perhaps you don't know or your viewers don't know is that in these kind of counter service settings the majority of people are still not leaving tips uh only for Baristas for restaurant carry out uh and.

Other counter Service uh situations it's typically 30 to 40% of customers who are leaving a tip which means that most people are not and I think you should take some uh feel some freedom to join the majority if you don't want to tip interesting okay so how how important is tipping and how does it help small businesses as.

Well you know I'm not sure that it helps small businesses as much as people think because while it does save labor cost uh those savings typically are passed on to consumers in the form of lower prices so that the real beneficiary I mean what tipping does is it gets price insensitive customers people who are willing to pay more than they have to.

They're effectively subsidizing uh the patronage of more price sensitive customers who aren't willing to uh pay more than they have to because of tipping those price uh sensitive customers are getting lower menu prices and so all of these things considered we were just taking a look at the screen here and we had a graphic.

That we were showing our viewers talking about where people most often tip and and who they don't tip what have you seen in some of those behaviors yeah look we most often tip waiters and waitresses uh we also tend to tip um delivery people uh Bart tiers uh taxi cab drivers people that we don't tip No.

One tips effectively people like doctors tax accountants lawyers um and then there's this middle group where a substantial number of people tip but not a majority and that's things like hotel maids um Uber drivers um and counter service even Baristas the majority of people aren't leaving the.

Tip should should small business and and even larger businesses as well that are in the service industry should they be accounting for what an employee would make in tips and fact factor that into the wage that they're offering and and when do you believe we'll see that be a reality that is a reality you're allowed to pay a subminimum wage to tipped.

Employees provided that they make up the difference in tips right Michael Lynn who is the Cornell University professor of services marketing Michael thanks so much for taking the time here with us today it was a pleasure thank you for inviting me absolutely well you've seen it in restaurants when you're paying your bill.

Toast we're not not talking about the bread we're talking about the cloud-based restaurant software company toast reported earnings that beat Wall Street expectations and guess what it's top trending Ticker on Yahoo finance for more on what the results say about the consumer we have Yahoo finances Madison Mills hey Maddie did you like that toast.

Intro just for you we did that just for you I mean you know I order a croissant bacon egg and cheese every day but we'll go with toast right now well it's interesting because I know the last guest was talking about how tipping maybe is used to kind of save money for the business and then they can pass that on to Consumers but when you look at.

These toast earnings I get an indication of the complete opposite story I get I see a picture of restaurants that are utilizing something like tipping to be able to keep profits strong there is evidence of that in this toast earnings print we saw 142% EA beat that is telling me that restaurants are doing really well but just to back it up for.

Anyone who's not familiar if you have not seen toast before this is the POS system that restaurants are using for things like your Apple P for example if you have a waiter come over to your table with a little credit card looking machine you can look for that toast logo my boyfriend and I are obsessed with this cuz we're nerds so we're constantly.

Looking to see what POS our restaurants are using a lot of the times it's toast uh you can also use this product to do things like change up the menus they have a kitchen option they can use you can see on your screen what I'm talking about here and also it can be used as a reservation tool for restaurants as well so what's interesting in this earnings.

Print again huge growth for the company we saw several uh folks coming out off across the street raising their price targets for toast following these earnings uh and again what I think is interesting for the consumer to look at is the profit gain that indicates to me that restaurants are doing well which could be an indication that the consumer.

They're still eating out I mean I like it because I think I collect points whenever I eat at a place that does have toast or one of the it's it's either toast or one of the competitors here I mean at the end of the day the pandemic has completely reshaped the dining experiences and for the point of sale systems that we have just become.

Accustomed to at this point toasta cemented themselves it was a question of whether or not they would be able to retain the same type of merchant or client base that they had in the immediate kind of receding of the height of the or the crest of the pandemic it's a great Point Brad because also they have one of one of the products that.

They offer is the one where you can kind of do the ordering yourself and a lot of restaurants were using that and picking up on that product during the p pandemic so they did have some struggles during Co they instituted a restructuring they recently did another one that is Weighing on their profits a little bit still but I would love for every.

Restaurant to let me just order I don't I don't like talking to people struggle I get nervous when I have to order with the person I mean I one of my first jobs was a waiter so um I got nervous it's not the waiter it's me I also wasn't good at it so there's that let's do a final check of the markets here everyone taking a look at the Dow the S&P 500 and.

The NASDAQ the Dow is holding on to gains it's up by about 2 t0 of% S&P 500 and NASDAQ down right now that's it for wealth I'm Brad Smith thanks so much for watching we'll see you tomorrow and stay tuned for Market domination with Julie hman Josh Lipton that's coming up 3 p p.m. eastern time you don't want to miss it.

sh.

Sharing is caring!