Stock market at the present time: S&P 500 poised for charge spanking unusual legend with Powell aid in highlight | March 7

Don Smith alongside Brad Smith and this is Yahoo finance's Flagship show the morning Breeze The Ultimate Guide to help investors make smarter decisions for their portfolio we're tracking early session volume while bringing you today's top Market themes and elevating Yahoo finance's most popular newsletter that's right the theme for today's show.

Their Eyes Were Watching Jerome to paraphrase the 1937 novel anyway stock futures moving higher ahead of fed share Jerome Pal's second day of his semiannual testimony to Congress this time before the Senate payal telling lawmakers that rate cuts are likely to start to take place at some point this year investors are looking for more.

Clarity on this issue as pal Fields questions before Congress today and President Biden said to deliver his State of the Union Address tonight White House officials signaling that President Biden will focus on lowering costs for Americans including drug pricing and Airline fees as well as combating sh inflation so let's get right to it the.

Three things that you need to know your road map for the trading day Yahoo finances Jennifer shamberger Jared blicker and Madison Mills have more fellow Reserve chair Jerome pal back on the hot seat this morning for the second day of a semiannual testimony before Congress this time before the Senate pal told house lawmakers on.

Wednesday that the FED is likely to cut rates at some point this year but not until officials get more data to verify and feel fully confident that inflation is heading back towards the fed's 2% inflation Target pal also said he expects to make Broad material changes to the fed's proposed Capital requirements known as basil 3 and.

Futures are in the green this morning with tech stocks taking the lead yet again AI darling chip stocks Nvidia and Micron Technology they are both top trending tickers on Yahoo finance's homepage they are set to extend their gains from the prior session the aid driven surgeon stocks over the past year has raised questions about whether the.

Market is in a bubble that has all but popped but Nvidia continues to defy Wall Street fears and New York Community Bank continuing its challenges after news that it lost 7% of its deposits in just one month now after that month the bank making its dramatic attempt to regain investor confidence working to get an infusion of.

Capital announcing a new CEO and a$1 billion infus from an investment firm run by former treasury secretary Steven minu those shares initially tanking following the report that NYCB was still on the hunt for investors but having said that after that deal was announced we did see the stock recovering a bit those Shares are up a little over half a.

Percent heading into the pre-market trade today it's round two for fed share Jerome pal on Capitol Hill today he Fields questions from the senate in just about an hour can we expect to hear anything new from pal is the big question today and what will markets be.

Paying closest attention to Yahoo finance reporter Jennifer shanberg is live from Capitol Hill hey Jennifer good morning that's right Brad Fed chair Jerome pal back on Capitol Hill this morning for his second day of semiannual testimony this time before the Senate Banking Committee pal expected to reiterate that the FED is.

Likely to cut rates at some point this year but not until officials get more data to verify and feel fully confident that inflation is heading back to the fed's 2% Target Democrats on the committee expected to focus in part on housing this morning Senate banking committee chair shered Brown expected to say in his opening statement quote the.

Cost of living is still far too expensive for most Americans pointing to housing and saying that quote those who rent feel like they'll never be able to afford to buy and those who already own their homes feel like they will never be able to afford a larger one if they decide to grow their family housing in the FED is also a concern for ranking.

Member of the House Financial Services committee Maxine Waters who took pal to task on this very issue yesterday saying that housing is the number one driver of inflation and that she's trying to focus on legislative priorities to help what she calls a housing crisis in this country one of the things that I've started to focus.

On is the local community the city councils and the Mayors I want One-Stop shops uh to expedite uh permitting and license in I want to make sure that they understand the role that they play in oversight I want the cdbg funds to be used for housing Senate Republicans are expected to focus on the impact of inflation on.

This economy regulations and the fed's proposed Capital requirements known as Basel 3 Fed chair pel's test testimony gets underway and just on over an hour here live on Capitol Hill back to you all right Jen thanks so much we look forward to the updates that you are going to bring our audience here throughout the day jeen for Shan bger.

Thanks well fed here J pal testifying for a second day on Capitol Hill stock futures pointing to a second day of gains Traders looking for any hints or Clues on the timing of that potential first Ray cut now J pal likely to strike a similar tone to what he did yesterday on the first day of questioning when he once again reiterated the FED as in no.

Rush to cut rates we want to see a little bit more data so that we can become confident and so that we can take that step of beginning to reduce policy rates it's a very important step we think because of the strength in the economy and the strength in the labor market and the progress we've made we can approach that.

Step carefully and thoughtfully uh and and with greater confidence here with more we want to bring in Andrew Levan he's a former special adviser of the Federal Reserve board Andrew it's great to see you again so nothing necessarily too surprising yesterday from pal when it comes to that timing of the First Rate Hut rate rate cut here the FED.

Wants to be a little bit more confident before they make that first move do you think that next move is necessarily going to be a rate cut or what else could be on the table at this point well I think it's interesting that um somewhat unusual that we have a congressional hearing two weeks before the next federal reserves monetary.

Policy meeting so what you might think of was yesterday and today is kind of a preview of the press conference that chair pal will be giving um in two weeks um when he announces their next decision and they will release a fresh set of projections of the Outlook um what what I'd say I think is that um the the.

Outlook that they described in December is pretty close to the Outlook that they seem to have now so in December the markets were thinking that fed might start cutting rates as soon as March that's clearly not going to happen now um um as of December uh fed officials were expecting to make two or three right cuts um and now it it's more clear.

To the markets that's going to probably happen later this year um you know could be June but could well be July August September um somewhere in that time frame would be would fit better with what I think what fed officials have probably been thinking all along for the last few months when we listen into a more data dependent fed and and try to.

Kind of Linger on every single word it it's becoming more evident that there's a trend that they're looking for that perhaps is different than what the markets were expecting them to zero in on and not being satisfied with just you know a six-month or a three-month trend of getting inflation back to a two handle from your own experience what is.

That Trend that they could be or should be evaluating well I think um it's interesting because um last summer chair pal was really emphasizing that they're looking closely at what's happening in the service sector um they know that Goods prices prices of refrigerators and cars can move up and down a lot um that.

Those tend to um have a lot of fluctuations some of which are are are U fairly quick um where service inflation tends to be very inertial very you know slow moving and so the challenge that fed is facing right now is that service inflation is about double where it was before the pandemic and that means that for the Fed to really be sure that.

Inflation's coming back to their target of 2% they really need to see clearly that the service of sector um prices are slowing um to be much more consistent with what service prices were doing before the pandemic and unfortunately this latest CPI report um wasn't consistent with that the latest CPI report said that um um a lot of a lot of.

Prices in the service sector are continuing to uh to move pretty fast um including housing but also many other dimensions of the service sector so I think that reinforced the caution that you've been hearing from chair Powell about they say we're highly attentive to inflation risks well that's it Andrew we have all this going so much.

Of the focus has been on inflation obviously taming inflation for now at least it seems like keeping rates where they are at the current levels what is that then going to do to the labor market because we have been embracing to see a little bit more of a deterioration or a deterioration really point blank in the labor market and that has it really.

Come through on the data are we going going to start to see that in the coming months um my personal view which I've been U interviews with you and your colleagues now for the last couple years I've have not thought all along for the last two years that the fed's policy is really tight the FED describes it as restrictive but I don't see that in the.

Data and for example this morning we just got the newest jobless claims not from the Department of Labor those look great um those look at historic low levels okay there's no sign here that a lot of companies are are making layoffs or or uh that there's a wave of layoffs about to break um the labor market looks really strong um uh consumer spending is.

Held up pretty well um you know there many signs of the economy is actually doing pretty well and so I think the challenge here for the FED which they're not communicating is that it's possible that the current stance of policy is not tight enough that if service inflation continues to be double its pre-pandemic levels um then the FED would probably.

Have to take some more steps to raise rates further um and CHP did not communicate that yesterday he probably won't say anything about it today he says we think we're at the peak in terms of where rates are going I wish they were less definitive about that because I think they should be highlighting the.

Possibility that that more tightening could be needed Andrew what's the difference between not tight enough and a successful soft Landing because that's what a lot of economists that we've spoken with as well are trying to evaluate what a real successful soft Landing looks like versus the FED needing to or running the risk of.

Overtightening from from your standpoint or running the risk of loosening too early right so I think if we use this phrase of Landing so we're thinking of Landing a plane at the airport um we should really be thinking of three terms we can describe Blen is hard Landing the plan comes in too fast and it's really painful for the for the passengers or.

Even they break the wheel they came down too hard um and in in the case of a policy that would mean that the the FED over tightens um we succeed in bringing inflation down but there's a lot of unemployment it's very painful um that's happened before in the early 80s we had a very hard laning that was the only way the FED could bring inflation down uh to.

Comfortable levels was with a with a very severe recession um the soft Landing means inflation comes back to their target um and the labor market still looks good and the economy is still growing that's a perfect Ling appla every the pass appla especially if you're coming through a thunderstorm and then you land the plane P really.

Grateful that the pilot got the the plane back onto the ground with no problem but I would call the no Landing scenario which is the one I'm still worried about I hope it's not the case but I'm I'm concerned about it um is if inflation in the service sector stays High um then we're not back to the Target and so um just staying at that.

Level of high inflation and and a nice labor market um is like the airplane continuing to U make C circles you know how this happen sometimes they just keep making Loops right of 30 mil away from the airport they're not Landing Landing means we got inflation back to the time Target with full employment Andrew L it's always great to.

Get your Insight sounds like this conversation's nowhere near over we look forward to having you back on Yahoo finance soon Andrew thanks so much well Switching gears here troubles and New York Community Bank Corp are escalating the bank announcing it's lost 7% of its deposits this month the regional lender also slashing its.

Dividend this morning to 1 cent that's from 5 cents and before that down from 17 cents now this all comes after NYC announced a new CEO And1 billion rescue plan on Wednesday shares moving higher this morning up just about 1% that slight edge up coming after a massive day of midday declines at least yesterday on a report that NYCB was.

Looking for investors official announcement of that $1 billion infusion pushing shares back into the green here with Mar we want to bring in Yang Tang he is a co-founder and CEO of arch indices Yang it's great to have you here on so just talk to us about this 1 billion doll infusion it's looking to reassure regain maybe the confidence of.

Investors out there that NYCB is going to be okay is it enough I don't think so uh and I think you know let's look at NYCB holistically it's 1157 billion in assets it's actually got a loan to deposit ratio over 100% so if you actually factor in the 7% deposit outflow you're probably closer to 110 115 which is a very problematic place.

For a bank secondly NYC B has 13 billion in commercial real estate and 37 billion multif family housing and this is where the problems arose uh if you think about what has happened to property prices interest rates started going up uh the cap rates have yet to readjust to the new environment of property prices so at this point $1 billion in a $50 billion.

Asset is about 2% so realistically what is the confidence that the new management team which seems like they've done due diligence for all of two and a half weeks have and where the loan book is going to end up what's the significance of the group of investors that have come forward versus another large Bank making an outright.

Acquisition of NYCB I think a lot of this was very much a headline investor um they have the former treasury secretary they have the former OC uh contoller chairman there they've worked together on IndyMac they've been successful in the past I don't think it's in the interest of the FED right now to push a huge consolidation wave.

Because that's going to lead to criticism and fear that the US Bank industry is going to be over consolid so if you actually look at the deal they got they got a very good deal given who they are Andrew the 7% of the loss NYCB lost 7% of his deposits in just one month is that maybe not as bad as the street had feared given the mass of.

Trouble that the bank is in I actually think it's worse the incremental cost of funding right now is extremely high they were asked on the call today what is the marginal cost of deposits avoided the question fed funds rates is 55% so if you go to the federal Home Loan Bank and you get a loan you're going to be looking at 6% the loan average yield on.

The loan right now is 5.72% so every dollar they have to replace is negative on the net interest margin what is this for telling about the rest of the commercial real estate sector right now I think it's very foretelling that there's going to be a lot more losses to come the commercial real estate lending sector is the bread and butter business.

Of regional Banks um you know everybody thought they were conservative lender in 2020 right interest rates are 0% you lend against a 4 and a half cap rate on a Class A office base great today 4 and a half cap rate on a Class A office bace gets nobody interested uh and if you kind of look at where you know even multif family prices have done the.

Prices have greatly appreciated income so interest rates are up the income from the property hasn't caught up with the property prices and you know you sit there and you go oh I have a 60 LTV I have a 50 LTV loan I'm a conservative lender well great everybody's a conservative lender in a good environment right who's a conservative.

Lender in a bad environment so what does that fallout look like then I think a lot more more Capital raisers are going to have to come they're going to have to push consolidation there's close to 5,000 banks in the United States it's dominated by four large ones the other 4, you know 800 and whatever really live on scraps so to make the business model.

Work especially in today's digital age you have to have some kind of economies of scale to compete the company said on that call as well in the presentation that 80% of the total deposits are insured what's the deal with the other 20% were they clear about that at all uh a lot of it is broker CS wholesale funding um they have some money market.

Accounts they also participate in reciprocal deposits uh so you know I give you a deposit you give me a deposit right you know the client is insured at two different banks but in a way I didn't lose the deposit um so they have a lot of those types of programs going they're all very expensive and that's the point is the marginal cost of.

Funding right now for a bank is extremely high you closely follow the sector clearly you have a very close eye on a number of of regional banks are there one two or three that stand out to you that maybe could be next in terms of that risk and could be in a similar situation to NYCB you know it's really hard to predict these things because a.

Bank fails when there's a run on the bank and you know if you look at Silicon Valley Bank First Republic Bank uh nobody knew that the Run was going to happen till it happened and all banks are kind of similar they also have very high commercial real estate multif family uh CR exposure and they have high loan to deposit ratio so if you want to.

Go through and do a quick screen who's got low Capital ratio High loan to deposit and high CR exposure Yang Kang great to have you thanks so much for having on set with the CEO of AR indices thanks thank you so much all right well coming up more results continuing here to show cracks in the consumer we're going to break down some.

Of today's TR top trending tickers you got Victoria Secret shares off 27% in the pre market we'll be right back.

we're taking a look at some trending tickers on the Yahoo finance platform this morning Kroger BJs and Victoria Secret all reporting results and continuing to show some cracks in the consumer right now let's start with.

Kroger here of course the tastiest uh and BJ would probably say hold my beard but anyway we'll start with Kroger one of the huge things and it's actually a through line that I'm kind of drawing between Kroger as you're seeing shares Higher by about 4% and BJs as well which we'll get to is this year of investment that they're talking a little bit more.

About both in assortment and Associate mix as well and so that considered it's going to be interesting to see how they continue to invest in those Associates generate attractive and sustainable uh shareholder returns as they were talking about and this comes after a 5-year period really of some of those historic Investments that they talk about but.

Both in wages benefits Career Development opportunities for some of their employees in this labor market and environment as well yeah the the uh earnings call is happening right now and the big Focus obviously on this earnings call is any clues as to the alberon's acquisition and whether or not they do still plan to pursue the deal despite.

Regulatory push back now in this earnings release that we got here from Kroger you're looking at shares onset to open at a 2-year high they did signal that maybe it's not over when it comes to Albertson so any Clarity on there is going to certainly be a focal point and then of course just more people going into the stores the same store sales.

Coming in better than expected a bullish Point here for Kroger yeah absolutely let's take a look at BJs as well here while we got some time extended it's down by about 2.3% going into the start of today's trade here and if you look at the past three years I mean it's been quite the run that this company has been on you think about how well BJs is doing.

You think about how well Costco even over the last stretch of years has been doing as well that was our 2022 Yahoo finance company of the year so all of these things considered one of the things in addition to the Investments and Associates you got to look at and kind of take out this fuel and gas because that's kind of where they're.

Seeing this year-over-year moderation and once you strip that out it's really a focus of where they're continuing to need to drive price in some places they talk about the increase in both comparative periods largely primarily driven in terms of the Investments by increased labor occupancy depreciation expenses result of new club and gas.

Station openings in addition to other Investments to drive strategic priorities right now yeah they certainly have momentum on their side that is clear from these results more people are becoming BJ members just around 7 million members here that's up 6% from a year ago so that really just highlights the trend that we have been talking.

About now for the last couple of quarters the fact that inflation still an issue for millions of Americans are being forced to be a little bit more Discerning in terms of their purchases they're trading down a name like BJs is benefiting here given the cost and given what the prices that they are able to offer their customers in bulk all right.

Let's go to the suure trade here uh Victoria Secrets you're seeing shares down by about 27% here out of the gate this morning and one of the huge things that caught my attention was even with the extra week the company underperformed some of the expectations that were out there that extra week they said added approximately 20 cents uh to.

The incremental net income per diluted share of approximately uh 20 20 cents as what I mentioned there that means that strip out that extra week and it's actually a year-over-year decline that you're looking at in the EPs and so that considered plus these new strategies that they're really going to look to implore right now too yeah this is a.

Stock obviously under a tremendous amount of pressure here in extended trading you have you can see the downward Trend that we're looking at on the three-year chart they've been trying to turn around the business trying to get some of that lost momentum back you can still see that this turnaround story is far from over still trying to gain it.

To the upside but again people are not making those discretionary purchases I guess you can argue whether they're not sust staple versus discretionary but those discretionary purchases and because of that names like Victoria Secret continue to be under pressure here well that argument will continue especially when you continue to kind of.

Ju suppose Victoria Secret in the move that we're seeing their pre-market down versus this up move that we're seeing in americ American Eagle Outfitters a brand that is the parent company of area as well so direct competition difference into the type of consumer perhaps in the at least generational age range as well yeah it's been amazing what they've been.

Able to do just in terms of appealing to the younger generation gen Z Millennials with their Airy brand really uh obviously boosting sales here in the most recent quarters all right well it's our time for our stock to watch Micron shares moving to the upside here this morning steel upgrading the stock to buy from hold raising their price Target to.

120 bucks a share Madison Mills is on the floor of the New York Stock Exchange with more on that call Maddie well shaa it's interesting just as I've been here on the floor looking at the news related to Micron Technology it appears that Goldman Sachs also issuing an upgrade here raising their price Target on Micron stock from 103 to.

112 so a little bit less of a stretch there as you mentioned stifle raising their price Target from 80 to 120 that is pushing up this name in the pre-market trade here they're up a little over 4% heading into the pre-market that's around $100 a share if we round up a little bit and they are trading near the top of their 52- we.

Range if you take a look at the Yahoo finance platform now what stood out to me in stifles note is that they look at the value relative to the anticipated growth of not just Micron but also all those other AI plays that we talked about constantly right your Nvidia your amds they have this whole chart looking at that ratio.

There and mu comes out looking really strong when it comes to their relative growth to their valuation so what does that mean it could mean that this is a good opportunity to buy and get in on Micron Technology that's also what Goldman Sachs said in their note that the pullback that we've seen and the kind of underperformance of Micron.

Relative to their peers in the space could be an indication that this is a time for investors who maybe haven't had the capital necessary to get in on an Nvidia can look at mu as an opportunity for a place to put some some Capital if they want to play this space but in a little bit more of a conservative well-priced manner all right Maddie.

Thanks so much again Micon chair is moving to the upside here just ahead of the open well coming up we are minutes away from the opening bell on Wall Street it will ring in just about 2 and a half minutes we've got more on today's move to the upside when we come.

Back there it is we did it again that's the opening bell on Wall Street and at the NASDAQ in Midtown Manhattan where.

They've got some fun Fetti because it's a day that ends in why pente ringing the opening bell at the NYSC ticker symbol PNR and in Midtown Manhattan you've got we're going to go with enur okay I like that pronunciation you like that one yeah okay all right we'll stick with that one for for now we'll Workshop it a little bit here in the break we've got.

Team coverage of the biggest Market Movers following the opening bell on Wall Street standing by at the New York Stock Exchange we've got Jay Woods alongside Madison Mills and Jared blicker was here at the Wi-Fi interactive on standby Madison just 30 minutes before fed chare Joe Pal's second day of congressional testimony.

Kicks off where are you hearing around the exchange well Brad I'm here with Jay Woods who I'd love to get that quote of what you just said what did you say when you just turn to the boards I said we're ripping what's going on hey did I curse I if I did I I don't want to quote that what's going on we're having a nice day.

Here remember Monday and Tuesday when we sold off this is the third time we've had close to a 2% sell off from from the the top of the S&P 500 we haven't had a 2% sell off in now I believe 90 days uh there have only been six streaks longer which is quite impressive and every time you think we're going to give a little bit back the buyers step in and and.

We're stepping in again despite pal testimony where we're going to be a little higher for longer so this Market's resilient and uh yeah it's it's pretty pretty amazing to see so we had the selloff and then we have this Catalyst for growth what is driving this growth that we're still seeing off of that sell off well we're seeing a.

Rotation um we had a good earning season we got through that uh we still have a few coming out later today but 99% are done so let's say we're done uh and uh now we're waiting for that next Catalyst what's that going to be I think it's going to be the CPI next week unemployment tomorrow but you know right now despite inflation still being a.

Little sticky and higher for longer Market is resilient and uh the broadening out uh we're seeing the Russell still continue to do well Healthcare Industrials materials those are doing well despite some of the mag 7 three of them in particular Tesla Apple and Google down for the year Tesla down over 20% Apple down over 10% that.

Usually scares this Market it's not so something's changed and it's a good narrative if you're an investor who has those three names that you mentioned and maybe even I would throw in a Microsoft they're kind of surviving but I feel like they're not thriving the way the other top three in the seven are what's your advice to them what should they be.

Thinking about and framing their thinking on should they be panicking right now well if that's their only stockholding yeah I'd be a little nervous because you're missing out on the rest of the rally but I mean Apple has proven time and time again that any pause any you know stop in their uptrend is probably a good buying opportunity.

Tesla a little different Google they have some AI concerns but Google's always figured it out as well so what it is is just a rotation and people are going to different asset classes whether it's Bitcoin and gold old which are making all-time highs crazy uh or some of the other smaller stocks that have not participated yet in the rally and.

Then you have ai it just doesn't slow down N Video over 900 this morning crazy when you look at AI plays I was just talking about Micron Technology what should investors be looking at in terms of the fundamentals the balance sheet on these companies to sus out where they can afford to play AI if they can't get in on Nvidia yeah well I mean you can.

Buy the SMH the semiconductor index that's a best best way to have a basket of stocks that are all AI related uh Nvidia definitely the best in class uh who is who's the next one up we have broadcom earnings after the close today it's going to be interesting to see what they do Nidia was up 260% coming into this week over 52 weeks you know.

Broadcom symbol avgo was up 135% so you do have stocks that are making tremendous runs in AI but Nvidia just outshines everybody it's best in class and it's Best in Class for a reason they keep raising the bar the AI story is Dan IES always says I know he's been on your network and talked to you guys in the studio it's still early Innings and and.

I believe Dan IES and uh you know you just have to be selected and if you want to get in buy a basket it's the best way to play it all right buy that basket thank you so much Jay we really appreciate you as always Brad and shaa I'll toss it back to you guys in the studio all right thanks so much Maddie and thanks Jay for telling us how to.

Play the movement that we're seeing to the upside by the basket all right let's get over to Jared blicker for a closer look at some of the gains that we're seeing at the open Jared yes stocks are indeed ripping we can see this across the board here small caps actually up the most up nearly 1% Dow is in the rear but it's still holding on to gains of.

About 54 basis points I want to talk about gold right now then I'll get into some stock action this is gold Futures over the last month and we are sitting on the sixth day of gains here you can see we've really launched higher pretty strong move and if you take a look at the prices that we've been at historically and here's a better uh.

Chart for you to gauge you can see uh all this sideways action and in fact on a five-year chart you're going to see it goes back even farther so when you have a long consolidation period uh you tend to when and you get a breakout you tend to go for extended periods after that as well so it's all about momentum now here's the gold volatility index yes.

There is a vix of the gold you can see rather low levels right now but interestingly gold tends to rise with volatility so we actually want to see this move up and uh to support the move and then finally I want to check out with respect to Gold the miners because they are lagging here Gold's up here miners down here they got a game of.

Catchup to do which they usually do once the Futures get going so we'll have to see if that happens and then rounding out the precious precious metals here's silver over 5 years it is still stuck in its range so it could very well break out and it will eventually uh but just not the time yet now checking inside the market interesting sector sector action.

We have materials up the most that's up 1% followed by Tech Industrials communication services and utilities so looking like a pretty healthy mix and for everybody worried about those Mega caps even Apple uh all of them up today uh broadcom J was just talking about them up 2% looking forward to those earnings after the belt now.

Bigger than Tesla and there's Nvidia another record high up 2% guys keeps climbing to the upside right Jared thanks so much for breaking that down for us let's get to some more trending tickers here on Yahoo finance first one that we are watching is rivan shares moving to the upside I'm nearly 4% jeffre is initiating coverage on the.

Stock with a buy rating $16 price Target saying that the EV company is quote leading sustainability and environmental credentials but will face some tests this year so they are seeing reasons to buy at current levels but they did point out two challenges saying that rivan does still need to cut its unit production cost by up to 35 to 45 35 to.

40,000 redesign purchasing manufacturing efficiency also they need to demonstrate that that R2 models model can be developed at a lower cost than what it currently costs to develop R1 so reasons to be bullish at current valuation levels but still a show me story yeah the presentation for that R2 model of course we're we're now R1 rearview.

Mirror now so we're focused in solely on this R2 that's scheduled or the presentation at least for March 7th that would be today here one of the other huge things is the funding that they would need in order to launch that R2 $2.5 billion is what's in Focus there and then also here you've just got a company that really needs to make sure.

That they are going through this environment uh of those reduced volumes in the first half of the year with some pickup and orders for the second half both either of Prior models in the R1 r1t whatever that may be or in the future model in this R2 as well and seeing what Market reception looks like for that right now especially with the.

Kind of moderation lower at least in demand in the EV environment at this point in time let's also take another look at a trending ticker that we're watching here shares of Novo nordis hitting a fresh record high with early trial data from its new drug showing a 13.1% weight loss in users after 12 weeks according to Reuters yahooo.

Finances aneli Amani joins us with the details hey an hey Brad yeah those numbers coming from Nova nordis Capital markets day that's their investor day where they're telling investors all about what's in the pipeline these numbers coming from a phase one trial and showing really promising compared to wovi which in a Midstate age trial was.

About 5% of weight loss if you take a look across the board and this is kind of apples to oranges but we have been seeing comparisons like this Amy cron which is the new drug that they are triing uh 13.1% compared to a GOI 5 to 6% in Phase 2 to three trials and then Zep found that's Eli Lily's drug a little bit higher which is what got them.

Ahead of the game meanwhile Viking Therapeutics Tre recently heard about beating all of them across the board but that's in a mid-stage trial now it's important to remember this phase one trial just means it's early days smaller subset of trial participants and there it is important to note that this is just a first test and they will have to.

Prove out these numbers in the phase two and phase three trial subsequently so still a boost for the company we know all eyes on Novo this year the stock up booming uh surpassing Tesla Market valuation according to reers just a few minutes ago so really a good time for noo all right indeed yeah you're to dat up 30% anelie thanks so much for.

Breaking this down for us coming up everyone fed pal sounding optimistic about rate Cuts fed share pal rather sounding optimistic about rate Cuts this week during his Congressional testimony we have a strategist to tell us how to position yourself ahead of potential Cuts that's only the other side of the break P it's like it.

is m.

stocks Rising as Traders look to fet share JP Pal's second day of testimony on Capitol Hill of course are going to be looking for any clues on the timing of that first Ray cut now pal telling lawmakers yesterday that it will likely.

Be appropriate to begin dialing back restrictive policy stance at some point this year although reiterating that the FED is not in any Rush taking a look at the movement that we're seeing today Tech leading the early action you've got the NASDAQ up just about 7 tense of a percent we want to bring in Drew peted he's a city's us Equity strategy.

Director Drew it's great to see you so I guess put this in perspective for us we're putting so much attention and focus on what we're going to be hearing from japal from the FED in terms of that the timing of the first Ray cut how much of that has already been priced into the market at this point so admittedly I think quite a bit.

Like at this point we really do need rates to move lower to justify the valuations where we're trading to today if I'm looking at the S&P 500 it's trading around 23 times trailing earnings and I understand you know we expect you know over 10% earnings growth for this year but built into our base case is some multiple D- rating so if we.

Want to push higher from our current levels which is about 5100 and hit something closer to our bull case of 5700 we do need rates to come in to justify the multiple are we in the bubble territory there's been so much talk about whether or not are seeing a bubble forming is there any truth or reason to worry about that so.

I'm laughing because this might be the best sells side trick on out there right now just say bubble or put bubble in a title and you'll get leadership and Views um I don't think that's Justified look I I don't have a ton of gray hair but if you you talk to my boss who's lived through the tech bubble the comparisons just aren't Fair they're not.

Fair at all and honestly what has been much health heier at this point is we've had a bunch of micro bubbles that inflated after the pandemic and we've been popping these smaller bubbles kind of one by one and investors have been much more Discerning about which companies they want to invest in and Chase prices higher and versus companies.

They don't so I actually think it's a lot more healthier than people are giving it credit for if we say the number of rate cuts that were anticipated coming into the start of this year decrease tremendously and and perhaps even slashed in half how much win does that take out of the sales for this.

Market I think we have a higher floor under markets even if we don't get as many rate Cuts I don't think we're dependent on rate Cuts just because fundamentals are so good so think of it this way there's basically two levers to get the market Higher One is interest rates come down and you can pay more for the multiple or earnings go up so we are.

Very confident in the fundamental story of the& p500 it's just the valuation side that we're a little bit more cautious on so if we don't get as many rate Cuts I don't think we necessarily need to have a massive pullback it's just going to put more pressure on fundamentals to deliver the Divergence through that we're seeing in the.

Performing of the performance of the mag s stocks obviously Tesla and apple underperforming Google also to a certain extent is that going to be a trend that you see widening out a bit beyond the mag 7 lers yeah look I think this happened within AI even so if you actually look at the performance of stocks that are kind of tagged to the.

Theme or trying to align them themselves with the theme they have had some of the widest dispersion of any of the themes that we track in the US market so if you say you're an AI stock and you beat and raise you have been significantly rewarded if you say you're an AI stock and you don't beat that substantially or your earnings estimates for the year.

Really don't move higher you've been punished so back to this idea of micro Bubbles and markets being Discerning I think that Trend continues because we're at higher valuation levels and because more companies are trying to align themselves with specific structural themes but again that is all healthy under the surface and even if within.

That theme of gener AI we've had these subtopics of course where a lot of it's been focused in on the chips thus far but there's still applications yet to come forward there's still language learning model specific companies here what is that next perhaps breakout star or breakout component or theme even as a subtopic within generative AI from your.

Perspective okay so within AI everyone again is talking about semis I think we've priced in a lot of good news I think to justify today's prices in some of the big semi names you need continual beat and raises throughout the year I think if you move out into the communication Services sector I think the expectations there and really what's.

Baked into the prices isn't as onerous so if I'm thinking about the sectors and the companies tied to generative AI I think I'm going to step away from some of the semis names and move into communication Services how soon how actively would you do that oh we're doing it right now uh when we think about Ai and honestly AI is one of our.

Top themes and our thematic strategy work um we are positioning that way now and when I look at our recommended list that's underweight some of the big mag seven names that are getting a lot of attention it's keeping up with the broader market right now so you might not get as rewarded is if you're playing some of those really hot semi stocks but.

There are a lot more names under the surface that are working in markets and there's been a very stealth broadening underneath uh the headline S&P 500 move true you mentioned your thematic strategies AI being one of them what are some of the others so fintech is another one this that's been an interesting area because that did go through a bubble you.

Know that we saw prices come down nearly 70% from their post-pandemic Highs but what's happening there is a lot of companies are getting religion about earnings in cash flow and profitability and we think by doing that they're going to show investors that they care about what matters to invers in a higher interest rate world and we think people.

Are going to come back to that theme so fintech another one uh really quickly on the value side of things I think infrastructure a lot of underinvestment there um both on energy infrastructure and broader infrastructure in the US as well Drew great to get some time and insight here on the broader Equity strategy that some of our viewers can.

Implore here Drew pedit who is the city us Equity strategy director thanks so much thank you guys we've got all your markets action ahead stay tuned you're watching Yahoo finance.

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Goldman Sachs raising its share buyback forecast for S&P 500 companies The Firm citing stronger than expected Mega cap Tech earnings growth here within this and the reasoning for it and one of the huge things that is going into it in this note they said they expect 16% growth in share repurchases from those.

Companies to $ 1.08 trillion in 2025 that comes after a rise that we saw in or expecting to see in $925 billion worth in 2024 here yeah certainly I mean this is is largely viewed as a win here for investors when this in fact does happen with stock BuyBacks because it obviously reduces the number of shares available so if you do have a dividend.

Paying company then you are then going to be getting more dividends on each quarter however often it is paid out so largely viewed as positive for investors and this is also I think a positive sign for the state of the economy right now as well right when you have companies that are feeling better about their balance sheet feeling better about the.

Opportunities that they see in front of them for the remainder of the year and over the next several years it's a positive then in terms of what the return could be for these companies over the next several years so again man sees this trend that we've seen play out over this past quarter it was a record number of BuyBacks I believe announced earlier.

In the quarter here first or second week of February so they see that quarter or they see that Trend I should say playing out here exceeding a trillion for the first time ever in 2025 see yeah one huge thing that I would track if you're looking at any of these companies that have already announced a buyback program or are adding on to it is the pace at.

Which they're continuing to buy into it of course especially at some of the higher valuations when you think of the tech companies out there that have years multi-year plans to really commit to these share BuyBacks perhaps some of those especially as they're looking at extremely high share prices that somewhat because of their operational.

Excellence and some of that because they're just in a hot market right now or are beneficiaries because of the AI annexation one thing or another the pacing at which they're actually executing on that buyback program might be incrementally important for uh viewers out there and investors to continue to track on a quarter by.

Quarter basis when they give updates on where they stand within that broader buyback program all right we'll keep it right here on Yahoo finance much more of your Market action ahead we'll be right back.

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About 30 minutes into the trading day here today let's take a look at and how things are shaping up all three majors are in the green as investors await fed share Pal's semiannual testimony before the Senate investors looking to japal for more clarity and further Clues on the timing of rate Cuts taking a look at some of those individual trending.

Tickers first up Burlington shares up just about 8 and a half% fourth quarter profit and sales beating the streets expectations the retailer also saw gr gross margins improve while its inventory levels fell and shares a big Lots in the red this morning as actually they've pivoted moved higher they're up by about 6% right now the discount.

Retailer reporting disappointing quarterly results though as its net loss for the quarter widened further widened to $30.7 million but CEO Bruce Thorne is staying optimistic Thorne sees a path to positive comparable sales and expects gross margin improvements to continue throughout the year an interest moving higher Jeffrey saying it would buy the.

Recent stock weakness you're looking at gains of of just over 1% now the analysts there reiterating its buy rating on the stock saying that they see the potential for 20% full year Revenue growth for the year again Pinterest Shing trading just around 35 bucks a share well shares of cyber security company crowd strike pulling back this.

Morning after surging on Wednesday the company issuing strong guidance and citing increased demand for its services this comes as we've seen huge companies recently hit by cyber attacks joining us now we've got George kurts who is the crowd strike co-founder and CEO George great to have you back on Yahoo finance here with us I mean you think about some.

Of the companies that have been impacted most recently by a wave of cyber threats here United Health you've got Microsoft reporting hackers spying on its Executives last year MGM casinos of course took aund hundred million hit from a hack I mean bad news in the environment generally good news for demand at least perhaps for some of your.

Solutions and services where are you seeing that demand remains strong in the environment right now well what we're seeing is broad-based demand and we uh we reflected um those results obviously for Q4 with um incredible growth 282 million of ARR for the quarter and uh 60 66% um uh rule of 40 if you will um with from a free cash flow perspective so.

What we're seeing is that the threat environment is actually getting worse we're seeing that take shape with some of uh the these companies that you talked about but the biggest thing to keep in mind is these adversaries are very determined uh it's very hard uh for organizations to continue to to battle them back and that's one of the reasons.

Why Crow strike has been successful we've got technology to help fight these sort of adversaries and stop the breach George given that and the fact that the threat seems to just be escalating at this point I know you made a acquisition here in the most recent quarter of flow security should we expect more m& down the line as you do try to beef up uh the.

Protection here against these types of threats we've been very diligent about our acquisition strategy we've got some great companies Great Technologies great teams over the years we're really excited about flow because that brings uh capabilities in the cloud that allows us to basically identify data be able to classify that data and be able to.

Protect that data from leaking and that ties nicely into our data protection module which we recently launched so having this dspm capabilities uh is really important for us and I think when you look at our Cloud strategy and what we put together and what we reflected and disclosed to Wall Street just a couple of days ago a.

$400 million business in Cloud security one of the largest and fastest growing Cloud security businesses on the planet so we're excited about those Acquisitions and we will continue to look at Great companies that fit within our product portfolio George I wonder and I've been able to have the the opportunity to go inside of one of these.

Artificial intelligence kind of War rooms or cyber security War rooms and it's it's clear that artificial intelligence is is within the fabric within the DNA of cyber security as a whole but for an industry how do you take that one step further and apply the the generative nature to it to go as far as rewriting code that further protects.

And suggests to some of your your portfolio clients how they can Implement that as well your AI has been a huge element of crowd strike success when I started the company people weren't even talking about AI it was uh machine learning and there's a lot of techniques that we use and over the years we've added more.

Capabilities in terms of identifying and finding things that have never been seen before over the last say 18 months uh We've created Charlotte AI which is our generative AI product and really the goal for Charlotte is to take the collective wisdom of crow strike to be able to distill it make it available to these sock analyst the folks that are.

Using our technology but more than just a chatbot it actually can drive workflow Automation and this is really important in today's environment there's not enough people to do this work there's not enough skilled people so our goal with Charlotte and generative AI is to take eight hours of work turn it into 10 minutes of work and take a level one.

Maybe an intro analyst and give the capabilities of a level three a very experienced analyst we think it's a game changer we just released it uh customers love it and we look forward to its future success J I'm curious given your Decades of experience within the industry where are we in AI adoption are we still right around that first inning.

And given that what does that then tell us about demand for your product five 10 years from now well to be candid I think we're putting the cleats on and getting ready to uh hit the Batters box I mean we are so early in this uh in this game if you look at generative AI what it means people are just trying to figure out how they use it uh internally how.

They use it safely which is one of the cool things about flow we can actually put guard rails on how people can use geni and and uh chat GPT and those sort of things so that that data doesn't flow out uh that the company doesn't want so very early Innings and I think you're seeing a lot of companies create a strategy around geni how do they use it.

Where do they use it what groups um how do you look at the data does the data go out to the internet is it used for training in someone else's llms very very early but there's so much promise so much promise from a Defender perspective and just I think a productivity perspective but also we talked about in our earnings call gen.

Really is a force multiplier for the adversaries it takes very esoteric tactics and techniques and brings it down to the masses you're going to see more adversaries come out of uh evil generative AI how do we more quickly deploy some of these Solutions especially knowing the the threats and how quickly they are also kind of.

Replicating their attempts towards getting towards some of the the critical data um that is extremely sensitive regardless of the sector uh that you're serving that's the beauty about the crowd strike Falcon platform single agent architecture single platform single console so when we added our Technologies around data protection as.

An example customers just need to turn it on it's a licensed entitlement it's all there and that sort of frictionless uh ease of use for our platform is one of the reasons why we've been so successful so we continue to focus on that and and build new technologies more important listen to customers what they're saying where are their problems.

They're experts in pain we need to be experts in Solutions and that's really what we're focused on and delivering that value to our customers George just lastly while we have you here I mean we're we're going into and we are a mid now clearly after super Tuesday and election year where should cyber security rank in what we're hearing from.

Political candidates knowing how much the Threat Level has raised I think it should be front and center I I can tell you it's front and center for Boards of directors was just on a call yesterday with a big uh fortun 500 company uh going through this it's the number one risk factor when you look at the political environment and you.

Look at uh our election integrity and process around that and really going beyond that now is is the Deep fake opportunities whether it's video or audio the ability to influence uh it's it's all wrapped together as a huge risk for election security and something that I know uh and I believe that the governments are taking seriously George.

Congratulations on the strong quarter we hope to have you back again soon on Yahoo finance George Curts a CEO of crowd strike Bitcoin trying to break above that record high but the road ahead could have some hiccups we've got more on that.

Next sh.

well Bitcoin regaining some momentum today heading back towards its recent record high while the markets digest the latest price swings there other there are some other key events looking to test the crypto space we got the results from Super Tuesday also the State of the Union Address we want to bring in farar.

Shazad he's coinbase's Chief policy officer for more on the state of crypto farar it's great to have you back here on Yahoo finance let's start with the results of super Tuesday the fact that uh certain candidates were able to win how much is that going to then potentially Advance crypto's agenda agenda and be a catalyst for the price.

Of Bitcoin in the months and years to come it's a good question I don't know how much it'll be a catalyst for the price of Bitcoin but it's an been an opportunity for the 52 million Americans who own crypto to really show that they want to be a part of the political process we started at coinbase a Grassroots movement through the Stanwood.

Crypto organization uh and we've been continuously surprised uh and quite excited by the degree to which our community want to gets wants to get involved we have about 300,000 people who signed up to be Advocates uh and super Tuesday was a great opportunity to demonstrate that they can.

Turn out in force uh when they're given the tools to do so so it's a great start and we're excited for the community to have a be a part of the political process going through the election year this year yeah and it's not even just here in the US I mean we're talking about a year a record year for people expected to participate in elections.

Around the world how does that change the trajectory even for where coinbase sees some of those potential opportunities in in new users well the opportunity is enormous remember coinbase started with very much of a commitment to compliance and meeting the regulatory expectations in all the markets in which we operate once.

You step out of the United States without with a with a couple of exceptions most jurisdictions and definitely all the major Financial Centers are adopting really clear workable rule so you have a real collaboration or a a convergence of interest between the crypto community and policy makers in the EU in the UK uh.

Singapore Australia Brazil Canada where there sensible rules being put into place we're earlier in that process in the US we've had a lot of politicization of the crypto issue unfortunately uh and we're hopeful that same trajectory of constructive collaboration with the crypto Community to develop good rules will happen here in the us and we're.

Excited for this election to be a turning point for that to happen yeah far I'm curious to get a little bit more of your thoughts on that just in terms of the prospects for regulatory Clarity what needs to happen how confident are you through the conversations that you are having with those down in DC that we are going to see some progress on this.

Front I'm very confident the issue is really timing whether it's this year or next but there's a consensus now and the White House is very much a part of this that we need stable coin legislation and so Democrats Republicans house senate white house uh and Congress all are on the same page that we need to move on stable coins now obviously the issues.

Are hard there's some tough issues that have to get resolved uh like with any piece of legislation but I think there's a decent chance that we'll get some progress and maybe even enactment of a stable coin bill this year on the market structure side I think there's a consensus emerging that we need to do that as well uh and but the political.

Calendar is uh Congress is obviously going to be turning to the elections the presidential RAC is on so that's going to be a little bit of a different calculus timing wise uh but I'm I expect that we'll see progress continuously in terms of co-sponsors or members just step stepping up and saying I want to be.

A part of this debate and I think that's very exciting for all of us in the community yeah and shaking off the stigma surrounding FDX is that a thing of the past or is that something that you're still hearing within some of those conversations that you're having well in a funny way we all want FTX in the industry in some ways we want.

FTX as an issue to go away but in other ways it should be front and center it's a real warning sign to all of us about what happens when there's not a clear organized Federal framework and Regulators that have a clear mandate to oversee the space and so you know you have FTX a foreign based foreign uh platform uh exchange operating outside.

Of us rules engaging in the type of behavior that they ultimately were found to have engaged in and so if policy makers want to avoid another FTX a federal Market structure bill is the way to do that give the cftc authority to regulate crypto Commodities uh give the SEC some direction on how to create a pathway for um you know for for issuers.

To issue of crypto Securities uh and I think we'll go well on our way to avoiding another FTX uh and which I think is critical and a shared you know interest of everybody in the industry and policy makers you know now that we're past Super Tuesday it's it's clearly a rematch now between former president Trump and current President.

Biden is there a better candidate that you expect the crypto Community to Rally around well I think our job in the industry is to set the table for the for the U for the candidates to decide where they want to be on the crypto issue it's been amazing to watch congressional candidates one after the other really important races throughout the country.

Including Adam Schiff who came out first in the in the California primary on super Tuesday to step up and say we need to keep this Innovation here in the US that they're Builders and innovators in California that are part of the Vitality of the state and I as the candidate want them to uh stay and build here Adam Schiff did that I think that worked well.

For him we've had a couple of other candidates do that on this that were on the ballot on super Tuesday but there's a lot of candidates um who've stepped up put their hands up and they and they've said I stand with crypto and I'm and we're very heartened by that and we're hoping the presidential candidates will will take the opportunity to speak to.

The 50 million Americans just like some of the congressional candidates have farar Shad thanks so much for taking the time here with us this morning coinbase Chief policy officer appreciate it thank you thanks for having me on certainly certainly well President Biden looking to highlight the path forward in lowering health care costs and expanding.

Access in his State of the Union Address let's get to yahooo finances anelie Kimani here with the details hey an that's right uh President Biden expected to focus on Healthcare something that the Administration has been pretty bullish on if you look at what the FTC has done in looking at deals as well as the of course inflation reduction act.

Which has allowed Medicare to negotiate prices well the plan has been for Medicare to be able to negotiate up to 20 drugs in the future and President Biden is going to say that he wants it to increase to up to 50 uh in addition he's looking at extending the $2,000 price cap on prescription drugs which will go into effect for Medicare next.

Year and expanding that into private insurance he wants uh Congress to start the process there meanwhile capping insulin at $35 a month also something that's applicable in Medicare and we've seen that from the companies but putting it down in words in law is something the president is calling on and so these make up the the bulk really of what uh.

The president is looking at there are various other health efforts that he's going to be calling out and continues to do so all while a lot of critics say he is up against the clock with the administration looking at of course the election meanwhile it's something that's a key issue for voters a kff poll for 2024 looked at 80% of Voters saying that.

Affordability of healthcare is something on their minds and should be addressed by candidates on the trail so all told she'll be an interesting time for the health industry yeah indeed anelie thanks so much for breaking this down for us here coming up everyone our next guest says that deal making is poised to make a comeback this year we'll tell you.

What could fuel the global m&a Rebound in the months ahead stay tuned.

deal making is expected to show new Signs of Life this year Morgan Stanley making the call that m&a activity is set to rebound not only in 2024 but in to come for more on the m&a comeback we've.

Got Andrew sheets who's the Morgan Stanley Chief Crosset cross asset strategist Andrew great to have you here on with us on Yahoo finance today first and foremost what what is really kind of the invigoration behind this and the m&a forecast yeah great it's it's great to be here so I think there are both cyclical and structural drivers that are.

Going on here you know if we think just about you know rebounding from last year deal making activity in 2023 was exceptionally low you know relative to the size of the economy maybe the lowest that we've seen in 30 years and so there's some important catchup as I think we see from markets increased confidence in a soft landing and a.

Better economic outcome that's going to catch up to corporate boardrooms but there's also a longer term picture here that's quite exciting there's activity that we think private Equity players need to do there are other forces that we think will be making up for multi-year deficits and there's some interesting Regional Trends so this.

Isn't just about a one-year catchup we also think this is a longer term story Andrew if we don't see the FED though cut rates before the end of the year how much is that going to then delay the recovery that you're expecting so I think it really depends on on what is the economic environment behind that delay you know I think if the FED is not.

Cutting rates this year because the economy is even stronger than expected I think that could peacefully coexist with uh more m&a activity as corporates get increasingly confident about the economic backdrop as fears of recession recede even further and then importantly you know we do think many private Equity investors you know the average kind of.

Amount of time their portfolio companies have been on their books remains historically high that they will kind of face pressure to act kind of regardless of what the FED is doing so I think it can still survive that sort of scenario now if if inflation's high and that's the reason why the FED is not been cutting rates that could be a bigger.

Challenge but I think if the FED isn't cutting because growth is better than expected we'd still think m&a recovers for investors out there that are trying to pick and choose or get ahead of some of the biggest m&a opportunities where are the sector hotspots that they should be perhaps keeping a close eye on so I I think there are a couple of places I.

Think they're The Usual Suspects like health care and Technology real estate's an interesting one and and that's also a sector where our analysts see lower regulatory hurdles to m&a than other sectors and you know as part of our work we really leaned heavily on Morgan Stanley's Global team of of equity analysts to really kind of dig into a.

Lot of these themes and there's some really interesting Regional stories as well we think m&a which has been in a huge almost decade long drought in Europe is picking up in a big way that's actually the region where Morgan Stanley Equity analysts are most optimistic on more M m&a activity versus consensus so I I think that could be one of these.

Factors where sentiment on Europe is certainly lower than other regions but where activity I think is more likely to surprise positively Andrew the push back that we've seen on the regulatory side the Crackdown on antitrust is that at all going to have more of a freeze or maybe chilling effect on the m&a pipeline no I I think that is a really.

Important factor to to flag I think that's one of the risks to this rebound but when we sit down with our our our analysts and we we think through these issues those regulatory forces first I think differ some by depending on what sector that we're looking at two I think when we ask our analysts holistically to think about the risks even factoring in.

The regulatory risks 50% of our industry teams globally still see m&a increasing and then also we think that this is an area where you know under either of the likely presidential outcomes we think companies could ultimately get more comfortable activity we the companies have now seen have a more experience with the Biden Administration and their.

Approach to m&a uh there would have been previous experience with the Trump administration's approach to m&a so these might be bumps but we don't see regulation as a major impediment to this multi-year rebound Andrew how much of this when you think about just the m&a forecast at a whole is attributable to on one side perhaps a challenging macro.

Environment that hitting some valuations for companies making it attractive for other entities that at least kick the tires and conversations versus the cost of homegrown Innovation compared to just going out and outright acquiring that Innovation yeah so I I think that's I think that's a good point I mean you you do have in the background you know a.

Number of these very kind of welld discussed but still important multi-year themes you know how how are companies going to adapt to AI how are companies going to adapt to De globalization or a more multi-polar world how how are you have exciting developments in in healthcare and in clean energy and and so I think in a lot of these places.

There is a real kind of build versus buy discussion that that will go on for a long period of time and and I think we also see this again to come back to the private Equity side that you know we think from the perspective of private Equity their end investors do expect them to distribute proceeds from their Investments and and the average kind of.

Amount of time a lot of these funds have held on to Investments is starting to become high so I think that's also going to be a force where there is more pressure to transact there's more pressure to come to some agreement on price and and that ultimately I think we we think will be helpful for driving more activity all right Andrew sheets.

Morgan Stanley Chief cross asset strategist thanks so much for hopping on here with us this morning well the air eras the latest in the escalation of tensions between the US and China now tension is rising after a former Google engineer has been indicted for stealing AI secrets to Aid Chinese companies Yahoo finances Alexis.

Keenan and Dan Hy joining us now they have a cover from two angles for us Alexis let's start with you lay out the legal details for us on this Federal indictment so these are federal charges by the Department of Justice against this 38-year-old former Google software engineer his name is Ling way ding he's a 38 years old as I said he's a Chinese.

National as well and these counts carry up to 40 years in federal prison so these are steep charges they come with deep consequences and basically what the justice department is saying is that this software engineer who was based in California that he was a part of the team for training AI large language models so basically he was a software.

Engineer who was telling the hardware at Google what to do how to execute these very high powerered sophisticated uh operations in order to power what we all now know are these large language models now uh the doj says that his theft of this material started in May of 2022 so we going back uh over a year and a half now he was.

Uploading they say 500 confidential files to his personal Google Drive and then trying to obscure it into an Apple notes and kind of turning it back into some pf uh PDFs in order to not have it traced now he then is allegedly went to uh China and took a position as CTO of a software company there largely doing the same type of or trying to do the same.

Type of training for these models as Google Google and other companies are in the race to do now he also on top of that allegedly started his own startup company and then went and tried in China at Tech conferences to solicit also uh investment in his own company he was uh taking for that CTO job approximately $15,000 per month plus bonus plus stock.

Options and I just want to read part of the complaint uh supposedly allegedly ding wrote in a WeChat group for this startup quot we have experienced with Google's 10,000 card computational Power Platform we just need to replicate and upgrade it and then further develop a computational Power Platform suited to China's national conditions uh so these.

Are the allegations we do not yet have a response from ding however he has been arrested oh snap all right H let's get you in on this what are the implications from this for Google and AI safety yeah I mean look this is this is something that isn't new uh there's been accusations of China stealing Us in intellectual property uh from tech.

Companies for for years uh and so it's not exactly uh a you know shock that something like this uh would happen that I mean intellectual uh theft happens regularly between all countries but I think for for Google in particular uh it's just kind of another black eye um when it comes to its AI uh Ambitions right we had the the recent Gemini.

Issues with the uh image Generations uh sh diverse Nazis which is a weird thing to pull up um we also had issues originally with Gemini when it launched they showed a video uh reporting to show the the AI doing things it actually wasn't doing um and so it it does appear as this is this is another black eye but as far as it's.

It's you know future or it's AI at all it's probably just going to continue to do things the way it's been doing it this is a rapidly evolving uh type of technology I don't think this impacts their business business as far as how they're going to grow their generative AI capabilities uh I I also don't think that this is going to be something that.

Investors are going to be thinking about uh longterm but it does show that obviously the competition in this in this space is just redh hot and it's not just between Google Microsoft and Amazon The Big Three uh as well as meow which is also in there uh but it's International so there's plenty of firms out there that are trying to catch up.

With what these companies are doing and it appears as though to some degree some will go uh allegedly as far as they need to all right Dan Hy Alexis Keenan thanks so much for breaking down uh both those angles for us here a story that we will continue to follow in Yahoo finance all right well coming up we've got all your Market action ahead stay tuned you're.

Watching Yahoo finance.

competition in the Footwear space is hot Legacy Brands now face more newcomers as Deckers Hoka brand and uh on running as well increasingly eating up more market share you've got staples like Nike and.

Adidas out there innovating and analysts at Burnstein saying that there's two main reason behind the shift one of them is what I just mentioned that Innovation and distribution Anisha Sherman who is the bernsteen senior analyst joins us now Anisha great to talk on this with you as always here all right so who's innovating who's not from your.

Perspective The Innovation from a technical perspective from the big Legacy Brands Nike and Adidas is still really strong they're still winning marathons they still have the fastest running shoes so if you're trained for a marathon they still have what you need the challenge is design Innovation sneakers are not just for running.

Anymore people are wearing them to work they're wearing them to Casual occasions and that casualization Trend means that you're not necessarily looking for the best carbon plates or you know midso foam in your shoes you're looking for something that looks different looks interesting looks fashion forward and that's where some of the newer Niche.

Brands have have outperformed and the Legacy brands have not Anisha the ability for some of these Legacy Brands to win back some of that lost market share do you see that being attainable and what what does the timeline look like for that so yeah so um as Brad said I mean some some of it is about Innovation some.

That is about bringing out new designs and I think we should see that this year we should see them doing better than they've done they've recognized the issue and in April as as we get into more of the spring summer season we should start to see more Innovation come out but the other piece is about distribution I mean these brands have.

Also cut their presence at a lot of local running stores so if you go to in your go into your local running specialty store um you're probably not going to see any Nike or any Adidas and so then you're not going to buy any and and that's been a huge challenge for them because these are differentiated brand heat driving retail retail outlets.

That people go to for advice on what shoe to pick and if you're not in there you're not getting selected so that is the other piece they need to gain back which also takes some time where are we at in the direct to Consumer cycle because that's kind of what you're alluding to here as well is is how these companies have really kind of tried to.

Pull in more of those interactions those engagements with people who are huge fans whether that be of hype or whether that just be of some of the mass product that they put out there where we at in that cycle and and where do you expect perhaps them to lean back into some of those distribution mechanisms so the the idea behind going.

DTC was originally as Nike put it to cut out what they called undifferentiated retailers retailers that they didn't see really promoting their brand promoting their brand equity and they could do without and I think that made perfect sense for a Big Brand like Nike which already has about 100% brand awareness they don't need to be an.

Undifferentiated retailers I think the challenge is they then went a bit too far and cut out a lot of differentiated ret rainers like these running specialty stores which actually do Drive brand heat and do Drive kind of interest and awareness building of their new product especially new casual designs and that's where they saw a big share loss that.

That they're now trying to reverse so yes they are trying to get back into some of these retailers it's not a complete reversal of the direct to Consumer strategy but it's kind of going back where they realized they pulled they pulled back two far and went too far DTC and cutting out differentiated positions which they want to get back in.

And you diving a bit uh deeper here into the investment implications of this who then in your view is positioned best at this point in the cycle yeah that's an interesting question because you know everybody wants to grow in specialty running that's one of the few areas that has been consistently outperforming there's.

More health and wellness Trends there's more casualization in fashion as I mentioned it's a strong segment and the newcomers on Hoka Etc are are growing Gang Busters but the big re the big Legacy players want to get back in as well so who's going to lose I mean from what what we've talked to in terms of uh you know our Channel checks to retailers.

It seems like who's going to lose first is the kind of tier two or smaller brands that are not leading market share so you know someone like a Sketchers or a puma or a Brooks or a s will see the first pinches um and then I think as Nike and I get back in it probably will take a little bit of a bite out of the growth of some of these newer High Niche.

Brands but that's a slow process I mean the earliest we're going to see some real meaningful shares shift to second half of this year probably more likely first half of next year so we're not talking about any kind of Rapid immediate change in the market position do you anticipate any one breakout star then over the course of this year within.

The shoe landscape sneaker landscape I think the stars are going to be the same as what we've seen in last year it's going to be on it's going to be Hoka um it's gonna be A6 I mean they continue to have momentum and I think that the Nike and add entrance is going to probably take the edge off their momentum but it will take about a year to do so so they.

Will still be the superstars of this year I Anisha I don't think we've had the chance to talk about this yet and and correct me if I'm wrong but the Lululemon entry into men's Footwear here adding on to what they've now been doing for a couple years within the women's category what do you look to to determine whether or not that turned.

Successful for them because I I went in on the day that they told me to go in store and try to get the shoe and they said yeah it's not it's not here we're we're waiting to get more inventory so I'm still trying to figure out what happened there but what would you look to to determine whether or not it's a success so Lululemon's shoe assortment.

Is a very small part of the portfolio it's less than 5% they are primarily in apparel as you know and their shoes based on our consumer research of thousands of consumers of the last couple of years their shoes are seen as a fashion purchase so they're not the shoes you put on to run a marathon there's shoes you wear on as a fashion.

Accessory particularly if you're wearing Lulu to toe you got their belt bag you got their you know apparel on um so it is a basket filler it's an additional purchase for an existing customer who already loves the brand and I think that's the role it plays which means it's never going to be a big part of the portfolio it's never going to be a.

Contender from a performance perspective but it's a nice basket addition from the fashion side which is helping them boost their growth so I would look at it as a small scale addition that will marginally help them but it's not a huge part of their portfolio and won't be all right Anisha Sherman Bernstein senior and thanks so much for breaking that.

Down for us joining us here on Yahoo finance this morning we want to take a look at Cher of Kroger moving to the upside here in early trading strong results out from the company we are getting some headlines crossing right now Kroger holding its earnings call saying that they've remain committed to defending their merger with Alberton we.

Got the push back the lawsuit from the FTC last week Brook dama joining us here on set with the details on that Brook we're now looking at gains of Just Around 7% yeah gain certainly Wall Street happy with what they're sharing in terms of how exactly this merger stands right now the company did say that hearing dates have not been set yet.

But they do expect to proceed in mid to late Summer and the CEO really acknowledging here that they have to size up to the competition that's growing from retail businesses like Walmart like wholesale clubs BJs out this morning as well as Costco after market closed today they're also saying that regardless of uh what actions they.

Have taken so far they want to remain clear that Crower keeps it its commitments and they know that this merger will result in secure jobs for the union they also said that they added more than 100,000 union jobs in a national retail environment as these union jobs shrink elsewhere they also mentioned that they're making historical.

Uh historic investments in wages including $2.4 billion do in incremental Investments since 2018 so Kroger really pushing for this acquis uh acquisition and what we really see here is that this traditional grocery company is really looking to compete with these wholesale clubs we did have BJ's report this morning and we we know that wholesale.

Clubs tend to do better during their fourth quarter that primary that uh crucial holiday season as compared to uh traditional grocery retailers and we really saw this play out this morning with these two names in the game Kroger and BJs and if you take a closer look at PJ's similar to what Koger said value really is the name of the game here both.

Grocery both wholesale and retailers really trying to take advantage of this opportunity here BJs did say that inflation continue to moderate but they didn't note that general merchandise really led the business this past quarter the CEO calling it a great story this quarter we saw positive growth in electronics television audio and video.

Games some of the things that we haven't heard in quite some time they also did say that their investment and Peril did do well for them but they have a far way to go they have far less stores than a Costco than a Sam's Club and so really we're seeing all these grocery all these uh wholesale clubs really look to secure growth and opportunity and that's really.

What krger is looking to do with that position as well and so is what is true for BJs expected to be true for Costco when they report after the BT today I just want an update on the Kirkland golf clubs here they've got a lawsuit right now taking place with that yeah I mean private label tracking that that's BR taking a closer look at.

I'm taking a look at the Kirkland brand seeing of private labels performing but I mean Costco they are expecting traffic and ticket to go up of course as we just mentioned with BJ's apparel groceries consumers are really looking for the best bang bang for their buck in this ongoing inflationary environment they do expect uh traffic and ticket to go up.

Over 4% for Costco as consumers once again look for Value in addition to that we are expecting to hear similar to BJ's discretionary do well during this holiday season we'll certainly also be taking a closer look to see if they mention anything about those membership price hikes we've been following that for what feels like quite some time now.

And the golf clubs and golf club and don't you last time we were talking about Costco don't you love their salmon was that you they got good salmon yeah yeah yeah the pesto butter salmon yeah what you only get right here onah thanks so much for that well coming up looking for alternative Investments you might want to look for your playlist at your.

Playlist for options we've got more on that next.

He now if you're looking for an alternative investment you might want to listen to this launching this week jukebox a royalty share investing platform is giving investors the opportunity to cash.

Into to music it's offering Securities backed by the royalty streams of songs from bigname artists like Taylor Swift and queen bee herself Beyonce here to tell us more we've got Scott Cohen who is the Jukebox CEO Scott thanks for taking the time here you got to break this down first and foremost for us I got 50 bucks I decide to put it into say.

Beyonce what happens well you have to think of it this way music makes money songs generate income it doesn't matter what era I mean we can go back you know Frank Sinatra Beatles you know Leed Zeppelin Madonna Michael Jackson songs make money and when that money is earned if you're a shareholder in one of those songs in.

Jukebox you earn money too Scott what do returns look like I think when investors are out there maybe they're not familiar with what they should be expecting if they were to invest their money into music royalties what should the end return or what should they I guess potentially expect well it it depends on which song they.

Invest in so different songs will have different returns um sometimes they're more modest 3 4% sometimes they can be 5% or more it really depends on the song but what is interesting about it is music as an asset class is uncorrelated and continues to grow every year I think Goldman Sachs pegged it at between six and 8% growth um over the next decade or.

So so you can imagine if maybe a yield is three or 4% now but what would it be five and 10 years from now so how does jukebox go about listing the songs we're looking at a few of them right now and I've actually got the site pulled up on my screen here as well these these are some well-known songs here yeah yeah so the music industry is complex uh.

Copyrights are complex so let me see if I can break it down as simple as possible so an issuer buys a portion of the income that a song makes from the rights holder the copyright holder um that issuer then takes those income streams to the SEC to get qualified and when it comes back essentially what they've done is convert the income from.

Hit songs into regulated Securities that are then listed on the jukebox platform so that anybody can buy shares Scott I know you just got the approval here from the SEC but what does what has interest uh looked like so far um it's been quite extraordinary I mean we we soft launched last week um once we once we heard back from the SEC that.

Those assets were qualified um we started making announcements earlier this week and we're already watching some of the assets selling out um it's been uh overwhelming in a great way would jukebox ever be the acquirer of an entire catalog of an artist um the issuers could i i i as we.

Stand now it's it's really about the issue or buying a portion of the income stream not the whole copyright but anything's possible in the future Scott I don't know if you can tell us this but what's been the most popular few songs so far I don't think I'm allowed to say that yet what has been have you gotten any feedback from the music industry.

Those artists just in terms of whether or not this could potentially help them build their brands even more well absolutely I mean we are working with the music Community we're working with the rights holders we're not trying to disrupt anyone and we're also working directly with the song writers and the recording artists so we if you can.

Imagine that when we list some of these rights the songwriter or the recording artist probably doesn't own those rights that's why these other companies have them but we we established this Creator program where we're determined to make sure that they are also participating in some of the wealth the the price per share for the songs they they range here.

What is what is that price Discovery process um well again we're trying to make sure that as we list them on the primary Market they're affordable that you know we're we're really thinking about the retail investor so it can be as cheap as a few dollars a share five I think the most expensive asset is $50 a share which one is that.

So I don't remember I'll search on the side which I remember you're gonna have to keep searching yeah um but but but the idea is we want we want retail investors fans of Music the general public to finally get involved I mean everybody's been on the sidelines watching all these big deals you know get announced as catalogs are sold it's.

Like wow how about the the fans the people that actually made these songs big in the first place have a chance to also share in the wealth Scott we got to go but you know how do you ensure that there's no we'll call it insider trading if you got somebody that's on the production of say before there's stranger things using.

Running up that hill and they already know that it's about to go viral all over again because of the show that it's annexed to and now you're seeing a spike in the number of people that are privy to that information buying into that song what is the the ruling then around that in those cases well it's no different for music than any other.

Insider information if you're sitting on non-public information that could impact the the the the the sharff then don't trade and this doesn't happen just for jukebox or music this happens for any regulated security well Scott Cohen great to have you here on Yahoo finance congratulations on the launch of jukebox.

We wish you all the best great thank you let's do a quick check of the markets just about an hour and a half into the trading day you're still looking at a second day of gains and Dow up just around 200 points NASDAQ Leading The Way of the three major averages up just about 1% some headlines coming out of DC on Pal's a second day of testifying in.

Front of lawmakers reiterating once again that rate Cuts can and will begin this year with continued disinflation also went on to say that the central bank is not going to hesitate to redo bank proposal so again two headlines to keep in mind as we look forward to the rest of the trading day hey my name it's extra strength deodorant after these two.

Days guys everyone Michelle kufo has you for the next hour stick around.

n welcome to Yahoo finance it's 11:00 a.m. on the East Coast 8:00 a.m. on the west I'm relle kufo here's what I'm watching this morning Fair chair Jerome Powell.

Testifying for a second day before Congress this time before the Senate reiterating if the economy evolves as expected the FED can begin to cut rates this year meanwhile gold is rising for a sixth day hitting a fresh high will break down the latest price action as markets weigh the prospects of interest rate cuts and President Biden gives up.

To deliver his State of the Union speech the annual address will give Biden a chance to highlight the administration's agenda and accomplishments but what exactly can Americans expect to hear we'll have more on this later on in the hour but first let's take a look at how the major indices are fairing an hour and a half into the trading day looking.

At the Dow there solidly up about half a percent or 192 points the S&P 500 there all sectors in the green up 44 points or 8% looking at the NASDAQ as well currently up just over 1% Apple the only mag 7 in the red so far this morning but we're still looking at Green across the board materials the leading sector for the S&P 500 let's also check in on the.

Action missing with the treasury market as fed CH J poell continues with his second second day of testimony looking at the 5-year yield pulling back ever so slightly currently it's sitting at 411 the 10-year also slightly up relatively flat as well and looking at the longest term 30e that's up about a third of a percent but still relatively flat across.

The board so far this morning well Fed chair Jerome Pal's second day of testimony before Congress is underway as we can see here from the live pictures here on Capitol Hill Yahoo finance reporter Jennifer shanberg is live from Capitol Hill with the latest Jennifer what's standing out to you so far relle Fed chair Jerome pal.

Reiterating to Senate lawmakers this warning that if the economy evolves as expected the FED will likely cut rates at some point this year once officials gain confidence in the data Senate banking committee chair sherid Brown pressed chair pal to cut rates before the unemployment rate Rises asking pal why wait until workers lose their jobs.

Why not act preventively take a listen we're well aware of that risk of course and and uh very conscious uh of avoiding it and what we said is if what we expect and what we're seeing is continued strong growth strong labor market and and continuing progress in in in bringing inflation down if that happens if the economy evolves over that um that.

Path then we do think that the process of carefully removing the restrictive stance of policy uh will will can and will begin uh over the course of this year both parties hit on how food prices are the highest in 30 years while home prices are the highest in 40 years pal said that even when interest rates drop though given that housing inventory is.

So low he expects that to continue to put upward pressure on home prices now separately pal reiterated that he expects broad material changes to the fed's proposed Capital requirements and says that the FED is looking at the impact of the rules on mortgage lending when asked when changes to this proposal could be made pal conjectured sometime.

Over the course of this year back to you ever so carefully worded there appreciate you giving us the latest there our very own Jennifer shanberg well as you heard there Fair chair Jerome pal reiterating that rate cuts are likely to happen this year during his second day of testimony on Capitol Hill with that in mind though.

When it comes to the number of cuts Minneapolis Fred president Neil Kashkari says with recent data he SE two rate cuts at most this year we're joining me now is Dennis lockart former president of the Federal Reserve Bank of Atlanta thank you for joining me this morning so first I want to of course I want to start with what.

We've heard this this careful balancing act that Fed chair poell is doing clearly waiting for more consistent data on inflation but at least signaling that rate rate cuts um are ahead looking though perhaps two rate Cuts or fewer according to um kashari where do you see things Landing is that enough given the strength of the.

Economy well the best indication we have is the so-called dot plots from the December summary of economic projections and those dots showed of I think four or five PE four people at two five or six at three and four at four Cuts so it was a range from two to four and obviously Neil Kashkari is in the two camp and has remained in that two Camp perhaps uh but.

I don't think the committee really knows quite yet when they when they begin the process the Cadence will be a cautious one so it could be as few as two cuts but if the data are accommodating it could be three or even four so JIS what is it about the consistency of the inflation data that we've seen so far that's giving the FED.

PA well the January numbers showed uh let's just say a a a deviation from the expected continued March downward in in the inflation rate looks like it might have been a pause or a stall but it's one month and they're not going to overreact to one month so they really have to step back and look at the totality of the inflation data and.

Decide what is the underlying Trend and get very confident that that underlying trend is headed toward 2% and nothing in in in data is is um is uh just predictable or absolutely linear and so they uh have to proceed cautiously to make sure they're reading the numbers correctly and of course Dennis we know.

That um the the fomc getting pressure from all sides here worrying that perhaps if we do see a rate cut in June if we are going to have another one it will bump up a little bit too close to the election date how do you see the FED managing some of these Dynamics as it's meant to be politically neutral but is still feeling the pressure of a lot of.

Lawmakers and economists as well saying it's time to cut there's a lot of pressure and there's a lot of noise I have a lot of confidence in chairman pal and the committee I know many of the people on the committee they are nonpartisan apolitical in conduct of monetary policy they will ignore the noise and make the best decision they.

Can make for the US economy well I know a lot of people don't believe that but they're just simply not highly affected by the political environment and I do want to ask you obviously we got some jobs data out this week ADP and jolts but of course looking ahead to the big jobs number what will you be looking at that what are your.

Expectations especially when it comes to the quality of those jobs well well there has been some press coverage of underemployment of college graduates and uh sometimes the jobs that get counted uh are actually part-time jobs so you do have to look under the hood a bit to to really get a sense of how strongly labor market is but that.

That said it it appears to be continuing a strong labor market strong employment picture um and it is continuing the process of back balancing out so what I'll be looking for is obviously the job creation number but also the average hourly earnings number that give you a sense of of supply and demand for labor and Dennis when you look at some.

Of the factors that are outside of the fed's control what's giving you the most pause about some of the impacts that we're seeing as especially consumers continue to spend even though things are tight and some of those pandemic savings have already run out well well in a strictly economic sense we we're we have a virtuous cycle.

Going on here where we have very low unemployment and most people who want a job can find some kind of a job so they have enough confidence in their income future that they will spend and that creates consumer demand and consumer expenditure and that drives the economy so the FED is dealing with this unusual set of circumstances that the uh the.

Policy rate is in restrictive territory but it does not seem to be slowing down the economy very much and that suggests it may be somewhat outside the control it's a of of of monetary policy that the the overall picture is um a a shortage of Labor is creating jobs which keeps people spending and no matter where they've set.

The the policy rate uh you know they may not be having the effect that normally you would expect with higher interest rates and Dennis one other thing I wanted to look at obviously we're coming up on the anniversary of the collapse of Silicon Valley Bank that'll be on on March 10th here but I do want to ask you because some of the repercussions that.

We've that we're still seeing in Regional Banks we know that has been mentioned at previous um at previous press conferences from fed share J power are you concerned about that giving some of the volatility that we've seeing in New York Community Bank and some of the other Regional Banks it certainly is a concern and I.

Noted that I I think chairman pal got the question yesterday and he gave a very measured answer that they're they're concerned and they're watching it but it's appears to be a a manageable situation in the banks it's uh centered in commercial real estate and particularly in office commercial real estate and the maturities of loans that.

Are coming up going to have to involv some uh perhaps some loss recognition and perhaps some um um you know some negotiation with owners and such I uh will take at face value the way uh Powell depicted it and that is it it's manageable but clearly it's a concern and the banks are going to have to work through it over the next two.

Years yes clearly clearly some of that still a murmuring in the background they're not quite Out of the Woods I appreciate you joining me this morning Dennis lockart former president of the Federal Reserve Bank of Atlanta thank you for your time today thank you right we're taking a look at gold prices hovering at record highs as.

Investors watch Fed CH your own Pal's testimony on Congress now very own iner is tracking the moves in the commodity continuing to see gold really still going strong here in is yeah that's right and gold bugs are saying look We're Off to the Races here uh we are watching gold future Futures higher I'm going to pull up this chart here so you.

Can see a a high of just above $2,172 per ounce of course adjusted for inflation you had highs back in 1980 those were the real Highs but nevertheless in nominal terms we are watching these Futures go higher and part of this has to do of course with the expectation from investors that interest rates will be lower later this.

Year and Jerome Powell speaking to Senators this morning morning reiterating that point that policy makers plan to cut interest rates later this year if inflation comes in as expected and that is what has been driving really uh gold prices higher year-to dat we are taking a look that's up more than four and a half around four.

And a half% uh year-to date and something else that's also driving gold higher of course is the US dollar Index as we have seen that dollar Index easing because gold gold is invoiced in US dollars so of course that goes in tandem also with that expectation of lower rates coming this year Michelle appreciate you tracking all of.

That action for us our very own Ines Fay thank you all right stay with us coming up we break down what you can expect to hear from President Biden's State of the Union Address tonight stay tuned.

a.

Is yeah the pressure is on for President Biden's State of the Union Address tonight at 9:00 p.m. Eastern now Biden is set to tout his achievements during the speech specifically focusing on lowering cost.

For consumers to tell us more on what economic themes we should be looking out for Yahoo finance reporter Rick Newman is here with the latest hey Rick hey relle uh I I'm putting this into three buckets so I think first Biden is going to tell us what he's been telling us uh for the last couple of years which is everything that's good about the economy.

Very strong labor market unemployment close to record lows I don't know if he'll mention uh the stock market but that's been hitting record highs and that's good for him as well so number one he's going to try to take credit for the good things that are going on number two he has to acknowledge there's more work to do uh and he'll be talking about.

What he hopes to continue accomplishing and that's where I think he's going to get into going after junk fees going after corporate greed some of these things we've uh been hearing about in the last couple of weeks uh and he's going to um talk about the need to continue to get inflation down because that's obviously a big concern among.

Voters and then number three he's going to start campaigning a little bit he's going to tell us what he wants to do in a second term and that will include a higher tax rate for corporations he wants higher taxes on high earners Millionaires and billionaires uh those are some of the things he campaigned on in 2020 and most of that he was unable.

To get done uh so far in his term and he's not going to get any tax increases at this point but that's how he's going to start distinguishing himself uh from Donald Trump on the Republican side who of course wants to cut taxes even lower and keep low taxes in place for the wealthy so Biden is going to be telling everybody what he's accomplished so far.

And basically beginning his uh reelection campaign in Earnest tonight and Mick it's tough because especially you have a consequential state of the union in an election year in a year where you ask yourself am I better off now than I was four years ago how difficult do you think it's going to be for the president to navigate that I.

Think that's a very tough challenge for Biden because we've got tons of survey data that show us uh I think it's fair to say a majority of Americans do not feel uh better off now than they were three or four years ago and this is an odd situation because um so how do voters think about the Trump presidency do they think about it only up until the.

Covid pandemic that happened in 2020 or do they factor in the covid pandemic uh and the way Trump's presidency ended so um I mean on the data uh Trump's PR presidency ended poorly in terms of the economic data because of all the jobs we lost uh from the covid pandemic and that's why Biden is right when he says uh you know Trump's one of the few.

Presidents to ever have um lost jobs under his presiden but that's because of covid I think what we're finding is a lot of Voters kind of um they kind of w put Co aside and they think about gas prices that were uh you know in the $2 uh2 to three range under Trump uh there was no inflation to speak of under Trump and they say well we were better off.

Under Trump I mean a lot of this inflation really has nothing to do with Biden or Trump it's uh much of it is just related to the covid pandemic supply chain shortages and all that kind of stuff but that doesn't really matter I mean the president gets credit or blame for what happens on his watch and that that's a challenge for Biden is to.

Convince people that things are going to get better and that he's the right guy uh for the next four years and I know Millions will be watching intently appreciate you as always our very own Rick Newman here Michelle well President Biden's last State of the Union Address attracted around 27 million people according to.

Neelon ratings and with a Biden Trump rematch all but guaranteed after super Tuesday will Biden be able to hammer home his economic winds in a way that really resonates with the millions of Voters watching to break this down for us we have Daniel horong National Economic Council deputy director thank you for joining us this morning so as.

Voters look at this consequential state of the union here in an election year what is President Biden going to have to hammer home in a way that will resonate more than it has already well I think this is an opportunity for President Biden to take a step back and look at first all the progress that we've made over the past.

Three years he came to office really inheriting an economic and Public Health crisis and we've seen wages uh now higher than they were before the pandemic after accounting for inflation wealth higher than it was jobs much higher than they were and you'll also see the president talk about the work that is left to do because there is.

Substantial work left to do to build an economy from the middle out and the bottom up as he likes to say he'll focus on stepss to lower costs for families Investments that we can make in our economy and in the American people and he'll also talk about the fact that we need to make sure that the wealthy and large corporations are paying their fair.

Share so let's break some of that down because obviously prices have moderated uh significantly but CPI data still showing people are paying more for goods and services than they were in 2020 how will the president address this with voters who who are saying inflation is still too high under his watch I think what you'll hear the president.

Say is you know we have made real progress on bringing inflation down as you pointed to we've made real progress on wages and wealth growing more than inflation but at the same time he understands uh that uh this has been a difficult few years for the American people coming out of the pandemic and then Global disruptions to energy.

Markets and Supply chains and he has a plan to lower costs for families to fight for a fair economy and that plan is very different uh from congressional Republicans who instead of focusing on lowering costs for middle class families have focused on tax cuts for the largest corporations and for the wealthiest Americans so it will be both I think a.

Real contrast uh with what we're seeing between the president and Congressional Republicans and a chance to talk about just how much progress we've made in the economy in a way that folks are starting to feel if you look at things like the recent uptakes and consumer sentiment and Daniel of course it is tough if you're the president when the.

Things are going well you tend to get the credit and when they're not you also get the blame whether or not it's something you inherited but as you look at corporate America's role in keeping inflation up and keeping prices elevated P President Biden has mentioned this before saying for all we've done to bring prices down there are still too.

Many corporations in America ripping people off how does that tend to land though with voters who are saying at the end of the day you're president while this is happening and there's only so much corporations can do well it's important to talk about a couple things here you know one of the.

Things that the president has talked about is making our economy more competitive going after uh illegal and unfair practices uh that uh well well predate the president's time in office you know enforcing our uh competition laws uh that that's not something that we all of a sudden need to do now it's something that the president has long.

Believed we need to do so you hear the president talk not just about what we can do to make sure that we're bringing costs down now but also ensure that over the long run we're building an economy that can grow and an economy that where the growth is is is shared uh and we see the benefits of economic growth flowing to workers and throwing flowing to the.

Middle class as well and Daniel in terms of the work still left to do that you mentioned there how do you see that affecting the economic Outlook what are some of the things that the president will hone in on in terms of what's ahead that he still needs to get completed well we've got to build a fair.

Tax system in this country uh it's unacceptable the president thinks that we've got a tax system where some billionaires pay a a a lower rate than middle class people um we've got to uh make sure that the largest corporations aren't able to uh get away with paying very little in tax he'll focus on that tonight he'll also talk about some of.

The Investments that we can make in our economy things like uh making sure that uh we're investing the necessary resources to expand the supply of housing in this country so that we can bring housing costs down over time so you hear the president talk about a range of issues like that tonight and I do want to ask because.

Obviously in an election year we are going to see some likely see some some campaign rhetoric in there what should we expect there and in terms of viewership yahu Finance conducted a poll about people watching because obviously sometimes at this point in an election here people already dug their heels in what sort of impact do you expect this.

To have on the election campaign given people's priorities well I I can't comment directly on the The Campaign from the White House but but what I can say is that um this speech tonight will be an effort to really take a step back and meet the American people where they are talk to them not just about the economy.

But a range of issues really laying the stakes and the contrast in Washington DC right now and you won't just see the president do it tonight you'll see uh this Administration and this President aggressively making the case for what we need to do to build an economy from the middle out and the bottom up in the weeks ahead.

We know inflation front and center for our viewers I know everyone will be uh keeping close watch appreciate you taking the time to join us this morning Daniel horang National Economic Council deputy director thank you for your time thank you all right coming up the sec's new rule on climate risk disclosures and.

What it means for businesses and investors that's coming up on the other side of this break.

apple is facing more regulatory scrutiny EU Regulators are set to question apple on its recent Feud with epic games and.

Its App Store rules let's Wai in Yahoo finances Dan Hy to give us the details so Dan walk us through where we are now and how we gotten here yeah so we'll start from where how we got here this is basically all comes back to uh uh epic games and apple Showdown where epic wanted to uh provide consumers with a third party means of purchasing items.

Inside of games uh Apple doesn't allow that through the App Store when epic went ahead and did that on their own uh Apple basically pulled fortnite and suspended epic games from being able to use the app store epic knowing that this would happen sued Apple uh and then basically uh in California what ended up happening was Apple was not found to be.

A monopolist but it did have uh what the court said were some anti- steering uh rules uh and so they had to address those now where this recent spat comes from uh is the EU and the digital markets act and uh Apple basically uh says that look we I can't we can't trust uh uh epic we need to put uh in place a kind of a back a block from them we're.

Not going to let them use our platforms uh because of the the prior issues we' have with them in Epic saying look the digital markets act uh which allows for thirdparty app stores on things things like iOS uh is in place and we should be allowed to put our app App Store there so uh what we're hearing from the the two companies is basically you know.

Obviously completely opposite so uh first we have a statement from epic where uh they say apple is taking one of the largest potential competitors to the Apple App Store which would be uh that epic game store uh they are undermining our ability to be a viable competitor and they are showing other developers what happens when you try to compete.

With apple or are critical of their unfair practices now essentially what uh epic is saying there is look uh CEO Tim Sweeney uh went ahead criticized apple and its U digital markets act Maneuvers as well as uh its its moves in the US and they're saying that that's why Apple is is not letting epic run any app store on iOS in the EU now apple on the flip.

Side had this to say epic's egregious breach of its contractual obligations LED courts to determine that Apple has the right to terminate any or all of Epic Games wholly owned subsidiaries Affiliates and or other entities under epic games control at any time Apple chose to exercise that right that uh comes from that California Court uh.

Ruling and so you know how that exactly plays out with the EU I I I don't know uh but you know it really comes down to two companies that are just at loggerheads over what they believe they should be allowed to do uh on iOS and for Apple they're not going to give this up obviously this is something that they're going to to hold on to uh.

They're trying to make uh moves that allow them to continue to remain in control of of iOS and the App Store and for epic look they have a mountain of money from fortnite uh and so they're going to go ahead and continue to fight this as well what it ends up doing is making apple look bad and making epic look bad so we'll see if either or.

Decides to pull back or doesn't or if the EU makes some decision now they're starting to probe apple and its decision to pull uh epic games ability to put games onto the App Store in the EU it's certainly a legal battle then when you consider the California ruling versus what what the EU is looking at in terms of the disproportionate or proportionate.

Reaction that apple had are we expecting to see more of these sorts of um these challenges when it comes to the App Store and Apple trying to maintain its dominance while still trying to stay within the rules here yeah I mean look you know uh when it comes to uh the $2 billion dollar that they they were fined from the EU over uh Apple music and uh.

Spotify Apple says that they're going to appeal that and so so you know clearly they're not going to just take this line down they're they're going to continue to try to I guess work through what the eu's rules are but uh to the Limit right and so that appears to be what they're what they're intent on doing they don't want to give up uh making money off of.

The App Store the way they do now through through uh commissions from developers when there's sales of their products uh or or apps themselves and so you you got to imagine that they're going to to continue toy try to to fight this as much as they can while still sticking to the law we continue to follow all of that.

Action interesting times indeed Dan Howley thank you so much for that update right shifting gears back to DC the push back begins a day after the SEC passed its highly anticipated final ruling on climate risk disclosures for large publicly traded companies now multiple parties say the rules are either too weak or too burdensome for.

Companies and overwhelming for investors for a reality check on the SEC vote and its impact let's bring in Rob fiser KPMG us ESG leader thank you for joining us this morning so first set the scene here about these about these disclosures and what companies will have to do here yeah so um you know there's a set of disclosures I think you you had uh.

For the largest filers you had a couple bullets up on the board um but they will have to talk about climate risk how they manage it how they govern it um what is the board's level of oversight and involvement and then they will for the largest viers in 26 they will then have to report on their scope one and two emissions if material that um focus on.

Materiality is a big point in this um scope three being excluded is certainly one of one of the highlights of the change from the draft rule as well indeed and for people who aren't familiar with these different emission Scopes so scope one comes from direct operations scope two is from the energy that powers those operations and scope.

Three which is where some of the criticism saying that the rule doesn't go far enough that trickles through the supply chain that's from company Supply chains and endes say a caruse emissions and you sort of you trail that from the the oil company through the petrol company and things like that do you think there is a disservice in not.

Including um scope 3 because this is something that really begs the question of the SEC potentially overstepping here yeah well I think there's certainly you know some people think that the law still goes too far some people don't believe it goes far enough and certainly pulling out you know value chain emissions scope three is a huge part of.

That but the the SEC received something like 24,000 comment letters 4,500 unique letters and that was certainly the biggest item so I think was something they had to look at pretty closely I think the thing that's getting maybe a bit lost in all this relle is the fact that Mo all of our large multinationals you know they operate in the EU there's.

Already the corporate sustainability reporting directive there that they'll be needing to comply with scope three is in California uh as that comes into effect scope 3 is in international sustainability standards around the world that many other countries are going to be adopting scope 3 is in and a lot of cases it's coming sooner than uh.

What would be required for some companies with these SEC disclosures so in some ways uh it's you know for many of our largest companies it's a bit of a moot point because they have to do it anyway because of other jurisdictional requirements and and the other really interesting part about that is when you look at the smaller filers scope one and.

Two actually are also not required to be reported however if they're in the value chain of these bigger companies because of these other Global requirements they're going to need to be able to report those emissions um you know private companies as well we ourselves actually have to report emissions today to a number of our big clients so I.

Think that the long game that the big picture on this with the global requirements is that um you know there's still going to be a ton of reporting of scope 3 emissions and it will trickle down through the global economy and so as you mentioned this is something that companies working in in other Global markets are already having.

To do so in terms of them the push back or some of the concerns that you're hearing from companies because this is essentially something that would give investors a bit more clarity uh in terms of how greenhouse gas emissions are affecting the company what are some of the companies that you're talking to in terms of challenges with adopting some.

Of these rules yeah well I think certainly you saw it reflected in the comment letters just the the level of Burden because it wasn't just scope 3 there were some um fairly particular requirements around some Financial disclosures in footnotes breaking down uh certain expenses by line items and those thresholds there's.

Still a 1% threshold but it's done on different base and will not be as onerous and that the things that have to be disclosed should be simply disaggregating costs that exist already in side books and Records so um a lot of that has come down so I think a lot of clients are really just focused on okay now this is a set of requirements that.

We that we have to to meet but they are also looking at at it in the totality uh as you alluded to with global and you know our rough estimate is that if you have to report under the EU csrd that's going to give you 75 to 80% of the information that you're going to need for the SEC climate Rule and so then when people are looking.

At this and saying okay it affects publicly traded companies what about private companies who want to IPO how have they been preparing for this because this has been a long time coming yeah it has been a long time coming and as I said many of those private companies if they're in the value chains of other larger companies.

They're already feeling this I can tell you you know we we as a private company we report emissions to a lot of clients as I mentioned and you know I certainly feel that as as mandatory reporting so I think most companies won't be as Splat footed as it it might appear as they look to IPO and over time you know would would have to be able to meet these.

Emissions requirements and again um California for example uh it doesn't matter whether you're public or private if you're in scope there you're going to have to report so I think that when you look at this kind of Patchwork quilt of requirements that organizations are faced with this is just one one building block within a broader scheme that.

They're going to have to to wrestle with but they're they're already on that journey and Rob just quickly in terms of either putting a number or sort of how much this is going to affect companies who will have to do that this extra cost of having to do that for those that aren't already reporting do we have an idea of what that's looking like for for.

Different companies yeah I think well there were some different uh uh listening to the SEC webcast I think different Commissioners had different points of view on how much that that uh that burden and that cost was but um you know for most organizations I I would say that we shouldn't lose sight of the broader point of the importance and the.

Value of having this information I mean one investors want it they want that comparability reliability and transparency but companies um you know many that we work with they're really focused on okay what's my strategy to thrive in a lowcar carbon future right as we do go through an energy transition you need this information so um it's not.

So much just a compliance reporting item but if you don't have this it's almost impossible to set an effective strategy execute on that and then continue to monitor see how you're doing so I think for many companies we work with they view it as a component of what they need to operate their business certainly see more companies.

Who already have had those risks in mind but at least having that public disclosure adding another level there appreciate you joining us this morning Rob fer KPMG us ESG leader thank you so much thank you all right coming up why Sun Run might be a good investment play this year we'll discuss that after this.

Break sh.

Jeff is Raising its price t on Sun Run saying the company's stock price could double over the next 12 months the solar energy company expects to see a rebound from 2023 taking advantage of growth in the residential solar Market as it switches to solar energy storage let's bring in dant elani Jeff's us Renewables.

Analyst to discuss more about the solar energy space good to have you on the show here so what are you seeing that's really got your enthus about where Sunrun could go from here sure so um um major markets in the US like in California they're going through a transition to a net metering policy that's basically incentivizing adoption.

Of storage um in the fourth quarter for example storage attach rates for Sunrun were 45% versus 15% in the beginning of the year and then in 2024 we expect uh Sunrun to increase the storage capacity by roughly 75% year on year and adding that storage is basically creative to Sun Run's uh net subscriber value by you uh of like several.

Th000 and what about the cost of solar storage how have you seen those price Dy Dynamics affecting Sun Run versus say other solar companies so um the cost for stories of cost have been uh trending lower and that's also um you know we see some upside to Sunrun um on that basically um you know um the company has talked about.

Lowering uh their Hardware costs which also includes you potentially storage as well by roughly 18% so we are seeing those cost Trend lower and I think that's going to obviously add more margin upside to the company and in terms of the impact of the inflation reduction act some of.

These tax credits are we we seeing of the of those who have it available to them are they taking full advantage of it or is there still a lot more upside there uh for Sunrun there is definitely more upside to that so there are you know uh three kind of um adders that you know we can talk about for sun Ron one is just the domestic content Adder uh.

The lowi income Adder um and then as well as uh you know just a couple more addas for them so I think for uh you know specifically for Sunrun um you could see an additional uh you know like roughly $765 if they apply domestic content to it so I think uh that is yet to play out for them in the subscriber value and I think that's.

Where we see some upsid as as well and of course I have to ask you about competition with China I remember solar panel tariffs was one of the initial things that actually uh ended up having that issue between the US and China at the very beginning of of the trade War here but how do you see competition in this space when it comes to solar.

Now um I think that uh challenge is or that you know challenge is still there I think that competition is still there um this being an election year is very pivotal uh for the solar industry as well depending on you know U how tariffs play out on China uh the the Biden Administration they had placed um a moratorium on solar panel inputs uh two.

Years ago um and that allowed um inputs of uh of panels into the US from countries like Vietnam Cambodia Thailand Malaysia and now that moratorium comes to end in um in June of 2024 this year so it's it's it's yet to see play out how and you know what the administration does uh to um add back those tariffs but if they do add back those tariffs and.

That should be um a potential Catalyst for solar manufacturers uh in the U or solar modile manufacturers in the US and in terms of potential headwinds obviously being in an election year depending on who who ends up being president in terms of the push you have President Biden still pushing clean energy but then of course you have.

Former president Trump really not invested not interested in investing on that side of it is that something that you've built into the base case as well from where Sunrun goes from here um so um I think you know some of the uh you know push back that we get from you know um investors is is you know what's going to happen to the IRA.

And I think there are many um you know conflicting views out there on what's going to happen with the IRA so I think that's kind of yet uh yet to play out but um if you look at well not necessarily you know sun run but you know some other solar panel manufacturers like First Solar for example uh they are manufacturing.

Capacity they are establishing manufacturing capacity in red States like Alabama which are you know heavily tilting towards Trump so you know um when and if Trump comes um you know to power I think that's going to be in important to see how how he you know um or all what decisions he makes that could potentially impact jobs in red.

States indeed something we'll continue to track I appreciate you taking the time to join us this morning Dand elani Jeff's us Renewables analyst thank you so much thank thank you all right we've still got all your markets action ahead stay tuned you're watching yahooo.

Finance 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.

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now.

More and more home sellers are offering concessions to sell their homes markets across the country are seeing more listings offering perks for buyers here to chat more about what's happening is Yahoo finances Rebecca Chen Rebecca this is quite the turnaround at a point where at one point you couldn't even get a look in when you were trying to get a.

House now the tide seems to be turning a buyers buying it though so uh that is correct relle we are seeing more concessions coming from sellers on the listings and this is quite interesting because you're right U it seems like there has been a shifting in the market right now and one in January about one and thir um deal.

Transactions has some kind of seller incentives that was offered in them and before we really talk about what the concessions were I want to talk about why sellers feel like they need to offer concessions right now and the reason is really just because there aren't enough home buyers on the market um a lot of agents are saying that their clients are.

Pulling back because they are leaving the market they have passed the market for one of the reasons and most of them cited that high mortgage rates has been a problem for them and the second reason a lot of them is also affordability related and they just cannot a lot of home buyers cannot find prices uh homes within their price range and then the.

Last is a lot of home buyers on the market right now say they cannot compete with all cash biders and these are the reason why over the last six months a lot of home buyers have really pulled back and now we kind of want to talk about what are the concessions that sellers are really offering um and the most common one is really just that um a.

Lot of them are offering credits for repair and maintenance um some of them are offering closing cost assistance and some of them are even doing a warranty assistant or some kind of rent back from buyers and these are the offers that sellers are really throwing into the market right now just hoping to close the deal somehow and it is quite.

Interesting as you previously mentioned that it seems like the tide has changed a little bit if you remember just a year or a year and a half ago sellers didn't have to do anything in listings were just flying all the the shelves you know uh buyers were waving contingency they weren't doing appraisals or they were waving appraisal contingencies or they.

Were even just having a fast close just to get that house but now it seems like it's evolving a little bit where sellers actually are trying to entice the home buyers to come back to the market with a little something extra but it is also worth noting that even with these concessions we haven't seen demand return to the market so home buyers even.

With all of these extra perks buyers are still waiting on the sideline so Rebecca you mentioned that most buyers are backing out from the housing market because of the high interest rates can sellers offer any kind of rate buy down that could help with that cost yeah that's a great question Rich.

Out and as we know um mortgage the high interest rate is really one of the key elements why buyers are not loving the market right now and there are some there are some concessions um that we are seeing on the market right now and that is the rate buy down it's essentially what the sellers can do is at the closing of the deal they pay some.

Kind of fee that brings down the buyer's loan cost we've seen home builders do this a lot um over the past couple months to help them make deals and what um and Tall Brothers one of the biggest home builder in the United States even offer rate as low as a temporary rate as low as 3.99% of one of their projects so this has definitely been going on and it.

Has worked for home builders and now it seems like home sellers are catching on agents in the survey uh we reported on basically say that they expect more sellers to offer this kind of concessions going into uh going into the spring buying season if demand just hasn't picked up um I do want to kind of note that yesterday the FED did come out.

And say they do expect some kind of rate Cut Rate cuts are likely sometimes this year now we don't know when that will be or how much rate cut that will be but one thing for certain is that home buyers they are looking for some kind of relief with interest rate whether it be coming from the fed or the home Sellers and I'm sure they'll be waiting.

To see if those rates come down a little bit more before they jump into The Fray of the housing market appreciate you our very own Rebecca Chen thanks so much well that does it for now I'm Rella kufo stay with us on Yahoo finance.

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