Stock market recently: S&P 500 hits original file as Tesla slides on earnings gloom | January 25, 2024

In New York City I'm Julie Hyman that's Josh Lipton this is Yahoo finance live and here's what we're watching this afternoon stocks searching for direction on the heels of strong economic data but weak earnings from Tesla the economy defying expectations at the end of 2023 growing at a rate of 3.3% we've got a breakdown straight ahead and Intel the.

Next big earnings test for big Tech the chipmaker set to report after the closing bell we're going to break down the results and give you expert analysis as soon as the numbers hit the tape plus the big business of the big game while we're still weeks away from the Super Bowl sports betting fever is heating up we'll get one analyst perspective on the.

State of play in the industry plus a look at Bud light's advertising comeback let's get you up to speed on the market action right now as we talked about really seeing a mixed picture here for stocks today still a lot of attention on individual earnings reports as sort of driving the action here right.

Now the NASDAQ is very little change to the upside actually all three major averagers are now in the green for the moment the NASDAQ a moment ago was lower the S&P is up about a quarter of 1% the Dow gaining about 111 Point uh points here and if you look at the groups in the S&P 500 and kind of the push and pull today energy is actually the best.

Performing group we've got oil prices higher today community communication Services also strong as our utilities on the downside today we've got that consumer discretionary group uh that is really the biggest drag on the S&P in today's session that's because Tesla is in that group yep and here's another Trend Julie Heim that we're going to.

Talk about today making headlines and something uh certainly investors have been thinking over which is layoffs Microsoft reportedly telling employees it will cut nearly 2,000 roles across Activision Blizzard and Xbox just months after it closed its fer with the video game company and Paramount CEO Bob bakish indicated layoffs would be coming.

In a memo to employees so this is um certainly a trend Julie we've seen making headlines this trend of of layoffs for sure in Tech um specifically and actually the journal has kind of this running list of companies that have already announced layoffs this year within Tech and already this year Google eBay rent the oneway uh Wayfair Xerox.

Have announced thousands of layoffs collectively at least we actually spoke uh recently to Linked In in Link in economists kind of about this trend specifically just in Tech and he told us what he's seeing in terms of of his platform take a listen to that like a lot of things in the US economy layoffs are seasonal they.

Primarily happen in January the second thing to keep in mind is that overall when we look at the data both at LinkedIn and the Bureau of Labor Statistics the labor market seems pretty steady and stable so it was interesting at least his take and again he's looking at his platform and across the economy he was not sounding the alarm at least.

When it comes to Tech he was kind of arguing that seasonality was playing a real variable when it comes to the layoffs we were seeing in this sector and I think there's probably there some other Trends too you can talk about kind of the the post pandemic and adjustments these companies are making the boom of AI I'm sure has a lot of them kind of.

Reconsidering who they hire when they hire where to commit resources but it's a trend and we keep watching it yeah and you know reallocation of resources to your point I think is a big part of this you had IBM as one of the companies saying over the past 24 hours that it's going to cut um some percentage of jobs this year in the low single digits but.

That it actually because of other additions is going to have the same number of employees at year end as they do now so you have to look at the net numbers obviously when you're talking about layoffs you can't just look at um the numbers that are being cut without the numbers that are also being hired and if you look um kind of zoom out and.

Look at what we have seen in the job market first of all we also got weekly jobless claims today we are seeing those tick higher on the week over week B basis and on the four-week rolling basis but if you look at the bigger tally of layoffs from the joltz report uh that comes out you you've definitely seen that we're not back to levels where we.

Were yes there was a spike during the pandemic in layoffs there was also sort of a not a spike but a surge during the financial crisis but we're not near those levels at this point in terms of those layoffs yeah I I know with tech too you know you do hear people asking the question could it be kind of foreshadowing what's coming is it kind.

Of maybe a canary in the coal mine but to your point right now I mean broadly this labor market is still sturdy I mean it's sub4 sub 4% unemployment wages growing yeah so it doesn't feel that way yet uh let's broaden it out and talk about the US economy experiencing a faster rate of growth than expected in the fourth quarter the latest data.

Highlighting consumer resilience despite ongoing concerns of a Slowdown for more on what the latest sign post indicate about the state of the economy let's welcome in Thomas Simons jeffy's senior us Economist Thomas thanks for being here so um your note in reaction to this I thought was interesting where you say you were expecting a capital K maybe now.

It's a lowercase k basically what you're talking about is the resilience in particular of the middle to Upper income consumer if I'm reading it right so how strong is that group right now so for the second half of last year I think it's undeniable that they were very strong you know I mean we've been looking for this pullback in spending.

And you're looking at credit metrics toer iting and more Reliance on things like buy now pay later and just thinking about the accumulated level of inflation that we've experienced over the last couple of years it seems like the consumer should be sort of ripe for a Slowdown but instead you know the second half of this year was was quite strong.

We had very strong spending over the summer on recreational activities uh and you know all sorts of other services as the economy really experienced the most normal sort of Summer most you know sort of similar pre to pre-pandemic conditions summer that we've seen in four years um and they continue that momentum into the holiday season as well.

I'm skeptical that we'll get a continuance of that as we get through into uh into q1 uh but at least for now it looks like the consumer was you know back to its old ways in terms of the you know the American Spirit here for the second half of 2023 yeah Thomas you know it's interesting just kind of com through some of the earnings report we.

Got uh recently just this week you know Proctor and Gamble Kimberly claric when you listen to them kind of talk about the consumer they were saying you know what the consumer is looking okay it's holding up here I am interested Thomas to get your take on the labor market I don't know if you heard you know Julie and I were just talking about that it.

Certainly seems sturdy now Thomas sub four% unemployment wages growing but when you look at at at the labor market over 2024 Thomas what's the trajectory what are you seeing there so I think we're probably about to hit a little bit of a soft patch in the labor market um especially if we do see this a Slowdown on the consumer side that we're.

Expecting there will be margin compression amongst businesses right so I think that what we've seen in the labor market data for the last few months is that there's been this decline in demand for labor that we can see with lower job postings whether it's indeed or uh the jolts data you know we do see slightly fewer um demand you know.

Slightly fewer openings right you also see the hours work data from the BLS that's coming down so it seems like employers are shifting towards um you know trying to maybe cut shifts or shift more towards uh part-time work rather than letting people go you know I do think that there's still amongst businesses idea that it was really.

Really hard to find people in the you know sort of post-pandemic recovery period it's going to be really hard to find people again at some point if there is you know even if people start to get uh to get let go so the jables claims St has been really low uh I I think that there's probably some element of you know perhaps a lack of a sense of.

Urgency on people who have been laid off because it's been relatively easy for most of them to go get a new job uh following a layoff in the last year or so also a lot of people especially in these Tech firms that are higher income earners probably sitting on a substantial amount of savings and and household Equity that they can rely on.

So they're not it's not like it was in say 2007 when everybody was levered to the eyeballs in Mortgage Debt and if you lost your job you knew you were going to Lost lose your house very quickly uh we'll we'll see if you know conditions evolve towards that but so far you know we're we're sort of at this long Plateau period I think in the top top of the.

Cycle for the labor market so that's reassuring that people have a better cushion but uh Thomas when you look to year end what is your target for unemployment and where do you think we're going to see the most deterioration is it going to be I mean we've been talking about these sort of so-called white collar or tech jobs that.

Are being cut but do you think that there's going to be more pain to be had on sort of the lower wage side I actually still think that there's reasonably good Demand on the lower wage side you know I mean like the the few areas that we still see substantial net hiring in the payroll data is in education uh health healthare and in.

Leisure and Hospitality right these tend to be especially in Leisure and Hospitality tend to be those sort of lower income hourly wage jobs and so far you know there's still a substantial deficit in the people working in those Industries relative to the levels that we saw even in February of 2020 I think that we're going to see another leg of.

This more you know I think good way to characterize is how he did right which is this white collar um or you know hoodie collar I guess type job in terms of you know more layoffs in Tech probably some more layoffs in financial services see a handful of the banks have uh you know announced some some pretty substantial uh cuts and whether.

Divisional or just uh you know some attrition type type losses but you know those are more higher paying jobs uh you know that's going to be a threat to that top half of the K that we were talking about in our in our recovery scenario as well so uh I think in terms of a point estimate for uh unemployment I think we'll probably get somewhere around like.

4.5 4.6% by the the end of the year we're not talking about a sort of catastrophic decline in the labor market it's really just a cooling off uh you know the pause that refreshes if we're going to reference an old Coca-Cola ad uh ad slogan and Thomas I'm interested just giv your you know kind of your your outlook here on the economy the labor.

Market the consumer what do you expect for the FED uh in 2024 Thomas in terms of you know when they're going to cut and by how much I would think and and tell me if I'm wrong if you're JP you're not in a rush are you because it's going pretty much as you want to see the econom is growing the labor markets sturdy and inflation's.

Cooling yeah I would say that it it has gone how you would have wanted it to go uh but I'm not sure that they have tremendous amount of confidence that it's going to continue to be this kind of goldilock scenario uh going forward because in the history of economic data it's extremely rare that you have a prolonged period of cooling inflation.

Without a you know commensurate decline in in aggregate demand or employment so I think that by the time we get get to March that conditions will look a little bit worse we will continue to see more disinflation and I think they'll be comfortable with a 25 basis point cut at that point I think they're going to want to go slow we're not talking about you.

Know an economy that's in freef Fall that they're trying to support with 50 or 75 basis point rate Cuts like they had to do uh you know certainly in 2020 or in 2008 uh this is more just kind of a you know a Readjustment right so I think we probably end up with a total of four Cuts they sto by July and then they sort of don't have to worry about um you.

Know accusations of meddling with the election and other political pressures there as well Thomas it was great to have you kick off the show today thanks so much for your time appreciate it of course thank you time now to check in on a few trending tickers moving today having a big day for airline earnings American.

Alaska Southwest all moving on the back of earnings today American was the big standout stocks up 10% we can start there Julie American reports investors clearly really like what they see they say profits this year uh going to beat consensus demands looking strong I also see analyst talking about Good Cost controls and uh bottom they're looking.

For 225 to 325 the street was closer to to 222 yeah I mean if I look at these three Airlines um American strong demand operating success from a cost perspective Alaska the bottom line there seem to be the bottom line in other words the company is doing good cost controls but Southwest not seeing as high growth so that was kind of what's.

Hitting those shares today so that's sort of the top line of each three of these American by the way I believe became another one of these companies um that also is criticizing Boeing by the way as in part of its earnings report joining the likes of Alaska um as well as United but um despite those costs related to Boeing which weighed on.

Alaska in particular um it looks like the longer term Outlook is helping the stock yeah Southwest you're right is an instrument because you saw Q4 adjusted profit 37 cents that's a beat uh looks like operating Revenue a record that was a slight beat and then capacity expansion this year that is 6% and that is down from the prior call I guess as.

Much as 8% and now initially I thought I saw that stock kind of popping and maybe investors were sort of thinking okay so tighten capacity great raise fairs boost the bottom line but you you see the stock turning red here I mean this is always the challenge with the airlines is the capacity back and forth you see that increase in demand they increase.

Capacity then demand comes out back a little bit but they've still got the capacity so right sizing that is just sort of a perennial challenge when it comes to the airlines um I mentioned that Boeing story and want to get to the latest there because shares of Boeing um we've been watching them as well today down 6% the Federal Aviation.

Administration or has ordered a hall of the production expansion of Boeing's 737 Max aircraft the whole line the manufacturer ing stoppage coming as the 737 max9 Fleet remains grounded now something that could be seen as helpful for Boeing here is that the FAA does have now inspection criteria what does Boeing need to do to get these planes.

Back in the air the ones that have been grounded but the fact that there now can't be this production expansion obviously hitting the shares in addition to the criticism that I mentioned coming now from American as well as the others yeah and then that criticism as you mentioned I mean some of it's public some of it has been reported.

This one today was very public I mean this one was American Airlines CEO speaking on another Network calling out the quality lapses we need them to produce a quality product every time he said we need them to get their act together um and of course yeah we've heard these similar frustrations from Alaska from United um some very out.

Front like these others were just getting reports about um but also it's interesting it's not just kind of tough talk Julie we are you know it's it's it's something investors can now measure I mean Alaska for example saying today they're going to incur a $150 million hit from the grounding of the max 9 Southwest is saying it doesn't think.

It'll receive the smaller Max 7 this year cut the number of aircraft deliveries it expects so interesting it's it's beyond just talk right and United which had ordered some Max 10s now is removing those from its plans it's not incorporating them anymore Boeing shares by the way are now down some 23% yeah just in.

2024 meanwhile let's take at shares of PayPal they are in the red today as well look at that down about 4% that's unveiling six new product innovations that will introduce AI into their platform but the announcement not living up to the hype I mean I I just want to pause for a second you can see where the announcement hit they were so excited.

About this announcement it came out and that's what happened to the stock I have so many questions about how this roll out occurred because so okay take a step back you got a new CEO here Alex Chris who's named SE over the summer so he tells reporters that the company is going to shock the world now those are very those are fighting.

Words I mean you got to that's huge that's going to make a headline and then we did have this event today investors don't seem so shocked at least in a good way yeah I mean it's not I mean it's all little it's sort of small things that are affecting the PayPal platform right there's a new checkout process that so.

People can log out with their face or fingerprint okay that's nice um they're doing a one-click guest checkout system they're calling fast lane they're adding some stuff of to ven profiles for businesses okay some new products here but is but is it it's obviously not I don't know exactly what the street was looking for maybe some.

More financial targets but that's not I will say you know speaking of the street you do see some more caution on this name creeping in and we have talked about on the show this name has taken some recent downgrades I mean from a few different firms I mean concerns about competition you'll hear or profitability press pressure but the worries have been.

Stacking up and now you've got a stock it is up still about 15% since early November but listen we're we're down a good 25% uh over the past 12 months here yeah all right well we're just getting started here on Yahoo finance live coming up the FTC launching an inquiry today into AI Investments made by Tech Giants Microsoft Amazon and Google we've.

Got the details on the other side plus Intel set to report its fourth quarter earnings after the Bell we'll have the numbers from the chipmaker when they come out and Yahoo finances theme we the AI Revolution continues today we'll speak to an expert to discuss the legal risks behind artificial intelligence all that more when yaho Finance.

returns.

Up the Federal Trade Commission launching an inquiry today into Investments made by Tech Giants Microsoft Amazon and Google into AI startups in Focus here.

Microsoft's backing of open Ai and Google and Amazon's investments into anthropic Yahoo finances Alex Alexis Keenan joins us now with more Alexis what are they looking into here what could be the possible issue well in one word uh risks of competition or lack of competition but the FTC here we had heard rumors that.

They were probing into Microsoft's relationship with open AI but now the agency demanding that these big tech companies share information Handover documents a lot of documents this is very comprehensive and these documents they want they say concern the Investments that the companies have made in generative AI developers FTC chair.

Lena Khan she said this study that they will do once they receive the information they're requesting will shed light on whether the investment and Partnerships risk distorting Innovation and undermining Fair competition now these Investments there at issue you mentioned some of them Microsoft's 49% stake in open AI its role as open ai's.

Exclusive cloud computing provider also Amazon's $4 billion doll roughly investment into anthropic and also Google's roughly 300 million investment and 10% share in anthropic now the agency is ordering disclosures under a section of FTC act that allows it to probe companies even when they're not filing an actual enforcement action when.

They're not actually going after a company for competitive uh violations of the FTC act or uh risks of uh anti-competitive monopolistic Behavior now the FTC says this inquiry will help it study how the Investments and the Partnerships between these companies impact competition they concern they say are that the Investments are going to be.

Somewhat equivalent to or that they have concerned that they will give access to key technology and inputs that are needed for comprehensive AI development the companies have 45 days to comply with this request but guys it's really sweeping it is very detailed what the agency is asking for here so it's sweeping there Alexis but I guess just.

Walk us through what what is this order H to achieve exactly yes so what they're demanding and I'm just going to go over a a few things here is this they're asking the companies to explain the directors and officers and employees strategy their internal strategic uh reasons for having targeted these Partnerships and going.

Through with them with these Investments also what are the practical implications of how they're going to actually make money off of this technology also the extent to which the companies can influence their AI Partners uh again Microsoft with that 49% uh ownership in open AI uh keeping it just under that 50% radar there and and they have a a.

Board seat a non-controlling board seat but the company have said that they don't have that much influence there in the past uh also any governing rights that the companies can exercise including board seats again and also the kind of due diligence that went on by Senior Management or for Senior Management in evaluating whether they.

Would ever enter into these Partnerships in the first Place guys Alexis thanks so much it's an important story we'll keep following it appreciate it tech stocks leading the way for the S&P this year but is the trade too crowded for everyday investors our next guest says it's time to look into small cap stocks joining us now is Sandy.

Villery villery company portfolio manager Sandy it is good to have you on the show so uh you say it's time to commit Capital to the small cap Sandy explain why why do you wna why do you want to be in those pint-sized companies right now yeah I mean you just look back at um last year and what a run that uh the the.

Large cap growth names had right like up 46% if you look at Vanguard Growth or something like that so I think they've had a good run and then you look at just valuation um the S&P 500 is trading you know well in excess of its 20-year average if the 20- year average is 18.9 times they're probably up at about 27 times and you look at small cap you know.

They're only trading it about 16.3 times versus you know the 20year average about 16 .7 so I think they've sort of been left for dead a little bit and it's time to you know take a look at some of these smaller names that have the opportunity to sort of you know outperform um you know given where large caps have have run to Sandy you're not the only person.

Um telling us this and yet um despite the seeming enthusiasm over small caps they've been Fallen right this year they've really been for the most part we've had some blips where they've done better what do you think the disconnect is here thus far what what's interesting is small caps do really well kind of coming out of a.

Recession they they do really poorly going into a recession and they do well coming out of it uh materially much better than than what large caps would do so it's it's been kind of a fits you know fits and starts as to are we gonna have this soft Landing are we going in a recession you know where are we um but I think I think they will catch up despite.

They the fact that they're you know they've lagged so far in 2024 um I still think there's a good chance that they outperform uh during the rest of the year as maybe those large caps stall out um you know mid Midway through the year after a very big runup and and let's get to some uh specific uh picks here Sandy I'm looking.

At a few of names that you like one is um Atlas Energy ticker aesi has done much in the past 12 months Sandy it's down about 4% here what are the catalysts you think that's going to get this one moving higher yeah I mean they just went public the beginning of last year so this is really a a brand new company but uh run by you know bud.

Brigham that's had a great uh great reputation in in the oil field services area but these guys are um you know they're they're really Mining and transporting sand in the peran Basin so we've done a lot of homework and there's nothing that's going to displace sand that that's as cheap um to do horizontal drilling and fracking so um they are.

Building a 42 mile conveyor belt system called the Dune Express where they're going to safely deliver sand to all their customers versus these terrible roads where there's fatalities with trucks and all these other things so um we we like that as we get closer towards end of the year uh but they've got plenty of capital and they're on time.

And you know under budget I'll be I'll be visiting them in mid-February so I'll get an update then but uh I I I think this is going to work out well and and it's going to be a very high cash producer just with their current business so uh we we like it a lot um another one that you like is pool Corp and man this thing has already been a.

Monster Sandy ex with the exception of of 2022 I mean it's what had a dozen years at least where it's been in the green and um notably soared during the pandemic because a lot of people were spending time in their backyard pools um so what's the growth trajectory look like from here yeah so um this is one that we've been involved with for a long.

Time I mean we are we're long-term holders but we we bought this originally in 1997 believe it or not and uh probably sold it in 2007 and then bought it back in 2010 and still own it so we've we've been holding this for 14 years so they were very nice years uh during covid when everybody spent their money as you mentioned on on.

Their on their backyards um but we think to 2023 really troughed out earnings are probably 1360 um we think earnings in 24 probably go to you know, 1550 and then and in 2025 they could go up to $18 so we think there's a lot of growth just coming coming off of the the bottom and and in 2023 will truly prove to be trough and if you like a company that.

Dominates uh these guys are as big as their top 50 competitors combined if you're buying chlorine for your swimming pool in Arizona New York or or Florida you're buying it through pool Corp our is the best there on this name that a lot of people are going to keep building new pools or no it's more or was it more about you know it's really just kind of.

Maintaining the pools you got yeah so um it's funny when we sold it back in 2007 it's because the it flip-flopped it used to be 2third boring pool you know repair and maintenance of your swimming pool um and then it flipped with the housing you know uh really booming it flipped to really new pool construction it became very.

Cyclical so now it's back to where it was where they're not so dependent and I'm going to say than you know 20% on new pool construction which we'll only see 70,000 pools put in um but every time a pool put is put in um that's more business for them because every seven or eight years you got a replaster you just have this big mess in your yard and most.

People don't let it turn black or green they tend to maintain it and keep up with it so the majority of their sales are just boring repair and maintenance of your swimming pool so we like it for that reason Sandy it was great having you on the show today appreciate your time and and those picks thank you thank you thanks.

Josh President Joe Biden treasury secretary Janet Yellen Riding High today on the latest GDP data a look at whether this continued strength will help Biden's approval rating that's straight ahead.

w m yeah.

President Joe Biden and treasury secretary Janet Yellen taking something of a Victory lap today Riding High on the latest GDP data the economy grew at 3.3% that's the annual Pace in the fourth quarter faster than expectations of around 2% here's what the president had to say on the latest numbers.

Today well thanks to the American people America now is the strongest growth the lowest inflation rate of any major economy in the world it's because of you we obviously have more work to do but we're making real progress building an economy from the middle out and the bottom up and not the top.

Down Rick Newman is here to talk about this hey Rick is are voters are voters buying what he's selling here they might be opening their ears a little bit to it uh we've been talking about this for a long time because Biden seems to be getting no credit for the things that are going right in the economy and he's been getting a lot of blame for what's.

Going wrong which namely has been inflation um but we are finally seeing a little bit of uptick which we've been talking about here on Yahoo finance past few days in consumer confidence uh the Michigan survey had a big jump in the latest reading uh probably because people finally are starting to think that inflation is on the way out they're.

Seeing gas prices come down food prices are moderating things are getting better but this has not yet translated into any change in Biden's approval rating uh it is still uh I just looked at it it's about 39% which is close to the lowest of his entire presidency and what happened with Biden's approval rating is it came down it's you know it was around.

50% before we U before we had this bout of inflation and it came down in direct proportion to inflation going up so the inflation rate has come down it's now well below almost at 3% almost back to normal really but Biden's approval rating has stayed very low it has it has not shown any rebound at all so far and Biden needs to get that up he needs to.

Get from uh 39 40% he needs to get that at least to 45% I think by election day to feel a little bit comfortable about getting reelected so um Biden's remarks today he's been saying the same things for the last two or three years pointing out what's going well with jobs and growth and then he uses that Frid we phas we still have a lot of work to do.

To refer to uh inflation getting inflation further down so um the big question for the whole country is whether voters start to give him a little more credit for this during the next uh 10 months is is there anything Rick you think he could proactively do um is there you know a shift in strategy or messaging that you think would help.

Maybe you know lift that approval rating off the floor messaging doesn't do the trick really because you can't tell people they should feel better than they do uh because that just makes you seem like you're out of touch like you don't know what it's like to you know to have to pay the bills or to have to deal with hamburger or cereal costs that are up 15.

Or 20% you're trying to feed three or four kids so messaging is not the answer the Biden Administration however has definitely been doing every single thing it can think of uh to try to get prices down and one of the areas I've been covering is energy I mean they have been trying to get more oil onto the global market from everywhere they can uh.

Fairly stealthily in some cases and that includes includes Iran Venezuela Guyana um places you would not normally associate with being uh us allies which they're not at least certainly Venezuela and Iran or not um but they've been trying to get every drop of oil onto the markets they can and uh they've kind of been succeeding I mean there is a lot of.

Oil coming onto markets including record us oil production interestingly you're not going to hear Biden brag that us oil production is at record highs because he has to appease the climate lobby but ironically that's something that is actually working out for him because gas prices have been coming down yeah I agree Rick I I don't think we'll see uh.

See B take a victory on that one but thank you for joining the show Rick always love the Insight bye guys moving on human shares slumping on the heels of an unexpected loss and a weak Outlook the report also dragging down other health insurance stocks in today's trade here with details is Yahoo finances aneli kamani an that's right.

You guys I know that we've talked about this before when Huma kind of indicated early on that they were expecting these numbers for their ful year outlook uh or sorry F year results and that is is a lot of pressure on the expenses of what they've had to pay because of higher utilization of their market so what we have is basically a a pressure on the.

Medicare Advantage market right now as a result of this higher utilization Huma feeling the pain a little bit more than others because it makes up such a large portion of the company's business if you take a look at this chart you'll see just what it looks like in terms of the players that are in this field United Health one of the largest players with.

29% of the market and human second uh with about 14% so that just kind of tells you or rather 18% tells you just how what you're looking at in the terms of this this field uh that you have with Medicare Advantage players now human is specifically saying that they looked at 91.4% mlr Medical loss ratio and what that means is that the number of uh the.

Dollars they got into with premiums was less than or was close to rather what they spent and typically companies want to stay between 80 to 85% that's the Mandate they got from the Affordable Care Act but human has seen a little bit more than that and while you would anticipate that that would be good that they're spending the dollars they're.

Getting in it actually means lower profits for the company so that's where human is under pressure right now they saw an uptake in inpatient and outpatient procedures also because of the supplement benefits that Medicare Advantage has they did not see the impact on this from flu or RSV which you might have expected because of that.

Previous bullet point but it actually is just sort of pent up demand from the pandemic uh still playing out as well as the continued increase of those that are 65 and older now JPM analysts note that by the time human looks to be able to rightsize this which could be after 2025 uh it could be too late Humanity did already resend their 2025 Outlook.

And a note JPM analyst said that growth in this market 65 and above is expected to moderate from high single digits to Mid single digits in the back half of the decade so that's where you can see you know sort of that uh play for the company and it's important to note that other large insurers may not feel this pressure because they have more.

Diversified books of business between commercial and other sectors well as human really largely in that Medicare Advantage space yeah the second largest player in it too thanks so much an appreciate it well s come on who finance Bud Light is returning to the Super Bowl this year with a 60c ad we've got details on the other.

side people like have family environment I always tell people we have family restaurant the job of a leader is to lead the people and for me is leading by example for over half a century Wolf Gang Puck has been a dominant figure on The Culinary stage building a.

Multi-million dollar Empire that includes more than 20 fine dining restaurants across the globe so what's his recipe for success and how is family at the core of his leadership style I think you have to give people like a family environment they want to feel they belong to some culture or some kind of a family the team all right I think.

If I treat the employees well the chef the manager they going to treat the employees well because it's a trickle down effect if I would yell at them and be abusive they would do the same things and I think we want the people come here and enjoy what they do you know we don't want them to think oh Wolf Gang is terrible I don't want to go to work but.

I have to be because I have to pay rent I want them to maybe feel the passion I have and maybe they learn something from that and they grow that way and learn more and become a good Chef or on their own restaurant you see it's like a family restaurant you know which is really nice I feel like you have such a good connection with everyone you work.

With look at that I get SK everybody's been working for him for like 30 40 years to me that means everything are you all right yes sir okay what is your biggest challenge as a leader not just for this industry but a leader period obviously what is the job of a leader is to lead the people if you are a general you have to lead people.

And I think for me is leading by example so if I wouldn't show up to work in the morning or at lunch and I said I come in at 3: in the afternoon and that's it but I'm here in the morning I go to the markets and I show show people actually how it's done how I like it done and what I think is the best way to do this business so that's how we present it to.

The guest we take it into the dining room nice and hot this is a Tomahawk so this is a great stake to share so what is your teaching style I think you know when I was young my teaching style was more rough you know I used to yell much more and because that's the way I learned you know I remember when I was in Austria the chef was crazy even at.

Bman used to yell all the time if something wasn't right something didn't come out right and for me now I try to teach people and not yell at them when they do something wrong everybody makes mistakes but to teach them how to do it the right way and I think that's really the most important thing to be positive so to give people a positive experience.

So when they work they say okay I learned something today generally if somebody makes a mistake I said this is the way we do it let me show you teaching it's hard because you have to do it over and over again to really teach people our culture to teach them how we want things cooked or how we want things served how they have to come and.

Smile you know sometimes that's the hardest thing and I tell all everybody you know if you have nice teeth smile be friendly because that's a big part of your experience so this is the kashon my mother used to make it for us it's like a pancake or a sule it smells so good it reminds me of my childhood totally growing up did your.

Mom was there a guiding principle or piece of advice she gave you that you still go back to to this day well my mother told me just make sure to make more money than you spend and you will be okay I said okay you know it's still today in the restaurants I say you know we have to make more money than we spend.

Yes we can lose one month's money but we have to make it back the next month at the end of the day if we don't make money we don't stay in business you're a big family man we saw that in the kitchen how do you strike that work life balance have the family work together like my son Byron is working with me I think that's the most.

Difficult thing for all of us in the restaurant business to find the right right balance to spend time with the children but also to show the children what work is how you make your money you know because sometimes they spend $50 and say it's only $50 and I always tell them you know how hard it is to make $50 true you know to get to the point where.

You can make $50 where you actually have somebody else do the work and you don't have to do it and get a little piece of that then you have to be really good at doing something so to me I think uh uh value is an important part you know instilling value in the kids and you only can do it if you spend time with them are you ever going to retire.

No well what makes this so fun I think if you love what you do you're passionate about what you do you're never going to stop MH and I think I always tell them I hope I die not in the middle of service in the kitchen maybe when every customer got their meal MH I kill over and they take me away is there no plans to to to put down the.

Steak Knife just yet no plans yet.

now betting on DraftKings in 2024 has proven a smart play so far stocks up about 9%.

Year to date that's outpacing the broader S&P 500 our next guest believes this stock still has more room to run and joining us now is Jed Kelly Oppenheimer managing director equity research Jed it is good to see you so I wanted to start J with these reports that I think are really interesting you called out in a recent note these.

Reports Jed that DraftKings is talking to bar stool Sports about this marketing uh partnership I'm just interested what you made of those headlines Jed does that kind of make sense to you DraftKings partnering up here with Dave pornoy yeah yeah and this is a potential partnership right because it has to be after the Super Bowl with UM after the.

Pen lockup yeah it makes a lot of sense to me I mean it's low eight figures so that probably implies it's something near the 10 million range I think bar stool's proven that if you have a good product which DraftKings clearly has a quality product bar stool is able to take their personalities to engage in contact in.

Content and boost the brand now it's not a GameChanger for draftking by any means but the deal does make a lot of sense if you look at the sex success barol had for something like a high noon we think we think it makes a lot of sense so so yeah we we like the partnership and you know it's low risk you know for it's it's low risk for both both for both for.

For DraftKings and it's obviously looks like a good deal for barol if it goes through so Jed again assuming it does go through what are we talking about in terms of the material gain for DraftKings as a result of it um you know I wouldn't call it anything really that material right we're talking about a $10 million advertising agreement what it.

Would do is you're still getting some of the most popular sports podcasts right part of my takes the number one sports podcast spinning chicklets the number one hockey podcast or plays the number one golf podcast right so you're giving them an effective medium however you know you still you take a step back I mean DraftKings is still going to spend.

Well over 600 million of of marketing dollars probably even more it's not that GameChanger I think it just it makes sense you know it was you know if you look at our note today it was like the fourth bullet point of our note so wasn't the Crux of today's report but we do like the partnership and Jed um looking at this stock listen.

It's been a monster Jed it's up 165% over the past 12 months but you still like it here what are the catalysts Jed that you think move it higher yeah what you've seen right is DraftKings in 21 right when interest rates were when when inflation was going up and interest rates were going up you know the speculative stocks like.

DraftKings got hit but now what has gone on is since the state um launches since you know the velocity of the state launches have have sort of slowed you are now seeing these sports betting stocks prove to investors that they can drive material profitability right like dra DraftKings next year is probably going to generate 55 56 incremental.

Margins 56% incremental margins so what is going to happen right as they're able to start to harvest meaningful contribution profit from vintage States you know states that have been live since 2022 you're going to start to see them put up a big eida number that makes a lot of your legacy gaming analyst a lot of your legacy consumer analysts.

Start to actually anchor a valuation to they can sleep tight at night the other thing that we think is going to happen is they drive more profitability they're eventually going to get Gap profitable what happens when they become Gap profitable you can start to become in the index right so we think for any consumer gaming investor this is going.

To be a core holding and if you look at their medium-term um eida guidance I think they're looking for two over2 billion dollars of eida by 2028 you put a mid- teens multiple on it you're talking a significant amount of upside from where the stock is right now um Jed the the most formidable competitor for DraftKings now appears to be FanDuel.

Flutter the parent company set to go public here in the us on Monday um already listed overseas does that listing in the US does that make any difference does that give them more Firepower for example to compete against DraftKings it it doesn't make a diff difference operationally I think it allows more investors just it gives them.

Another option however and and we don't cover flutter flutter but one thing I would point out is you know flutter it's not a true Apples to Apples comp right because flutter while FanDuel is operating awesome in the US they have a lot of international segments that have been operating for over 20 years that are near near a terminal growth rate or.

Terminal margins right so it's it's not a core comparison um so yeah could you get some people do a pair trade for sure I think if you look at like if you look at right now competitively flutter is still holding a pretty decent lead uh with sports betting with FanDuel they're doing a nice job with eye gaming I would say DraftKings is also doing a great job.

With eye gaming but the one thing too if you're kind of comparing this the two names you know if you still like DraftKings is DraftKings has more room to make up with the hold right I mean I think DraftKings structural holds somewhere around eight and a half percent F duels about 12 and a half percent right so DraftKings has about.

Call it 400 points of hold they could potentially make up so you kind of have a little more room to grow um but both both companies are operating very well in the US all right Jed Kelly thanks so much I really appreciate it set up also ahead of those draftking earnings in a few weeks appreciate it thanks for having me.

Anheiser bush has big plans for this year's Super Bowl the beer giant announcing today it will showcase three brands across two and a half minutes of advertising on February 11th Budweiser budlight and Michelob Ultra the plan comes as the company continues to recover after last Summer's budlike controversy sank the stock Brook to Pal.

Joins us now with more details on what to expect so coming out again trying to make a big impression here coming out real hot Ander V really saying here that they're going to be the largest alcohol beverage Advertiser during this year's Super Bowl really hoping to make a big splash and gain back all those drinkers they may have lost in the last year.

They're saying that they're really leaning into that core audience of Beer Drinkers and sports fans here in the US so their biggest brands they that they feel lend the most opportunity to see returns they're kicking off things with Budweiser they're going classic here the Clydesdales are back guys they're really uh hoping to lean into this message of.

What they say is resilience is determination but also they're nodding to their Heritage here really hoping to tap into that Nostalgia Factor but another brand that has also been under pressure is miklo ultra they're also debuting a commercial there teaming up with soccer Legend lonel Messi and really leaning into that Sports Drinker.

As well and Bud Light they're unveiling what appears to be a brand new character unsure exactly of what that will look like but really leaning into this easy to drink easy to enjoy marketing theme that they've really leaned into over the last half of 2023 and into 2024 but some challenges here Revenue continuing to see a decline and also that looming.

Strike that contract among teamers is set to expire on February 29th the same day as their earnings results all right Brooke dep thank you for that appreciate it coming up closing bell on Wall Street we'll check it in on latest maroo's top trending tickers stay.

tuned closing bell on Wall Street there it is let's do a quick check of the markets.

Here as we close things out on this Thursday all three major averages managing to finish the day in the green even though we had seen some wavering for the NASDAQ earlier in the session finishing Higher by uh about a fifth of 1% in its case the S&P up a half of 1% and the Dow the leader on the day up nearly 2/3 about 243 points on the day.

Energy stocks leading the gains on the day uh with oil prices higher as well and then of course again a lot of idiosyncratic moves that we saw during the session that were based on earnings here so that definitely uh pushing and pulling things during the day Tesla which we're going to talk more about in a second a big drag here on the S&P 500.

But then the airlines IBM um in the green and so that counterbalancing that drop in Tesla and so you mentioned Tesla at stick there those shares driven into the red as the EV maker warns production growth will be notably lower than 2023 while downward pressure continues on margins since Tesla began its cost cost cutting efforts late in 2022 so we know.

We broke this one earnings on air Julie stock dropped immediately and it has stayed down there's some big issues here for investors to think about in in 2024 we know broadly EV demand is slowing certainly here in North America we've talked about that we know Tesla has been cutting prices that's been the strategy Elon mus playing kind of the volume game.

Here does that continue and competition with with musk even been talking about competition specifically from those Chinese names so Tesla down the most in single session in a year it's also the worst reaction we have seen to earnings I believe going back to its second quarter of 2019 report which it reported obviously about three months later in.

Mid uh 2019 um something else that's interesting here is because of the market share Wipeout that we've seen for Tesla it is now smaller than Eli Lily of course Eli Lily is also gained because of glp1 so it's obesity drug so that's sort of the the magnitude of the drop that we are seeing today but it's on top of a big drop that we've already seen in.

Tesla shares this year so is this a sort of a bigger turning point for Tesla is this just sort of a rocky patch um was reading a little bit today about questions over why Tesla prioritized production of the Cyber Tru over the mass Market vehicle that the market really seems to want and that they're not going to get until 2025 at the.

Earliest so you know are is this sort of a more fundamental breaking if you will if I'm going to use a a of Auto analogy or or is it just something more shortterm I think we'll have to see Dan Ives by the way over at wed Bush Dan IES title of the note to his clients this morning we wrongly expected adults in the room on the call maintains the oper.

Form price Target 315 but Dan Ives coming in hot yeah definitely disappointed here if he's disappointed all right let's talk about IBM too those shares popped after the company Beat estimates on the top and bottom line reported a better than expected revenue and importantly free cash flow Outlook the stock climbing to a more than 10year.

High um in today's trading that is really significant because as we discussed yesterday the stock had been sort of stuck in a sideways trading range uh for really the better part of a decade and then broke out over the past year so now getting to that level uh the highest level in about a decade and a big gain in the wake of those earnings.

As well yeah here's the note that I like from ever core and of course that was the team that said listen we we think heading into the print they said we think this story is underappreciated as a way to play AI which which got some attention um they call out that note to their clients they say big blue is back that's their right the clients they say.

Uh stick with the upper form they're Target they take to 215 they think the print the guide especially that free cash flow guide we got positive for the story here yeah let's talk United Rentals as well sorry ho in there so excited to talk about the name I know I get it I get it it's exciting shares surging after surpassing Wall Street.

Estimates for the fourth core company also delivering a better than expected outlook for 2024 so this is the equipment rental giant looks like adjusted EPS beats Julie Revenue jumped it looks like 133% to 3.73 billion that's also a beat versus consensus um in tends to boost the buyb and the dividend so some Capital return there.

News as well yeah United Rentals is an interesting one as well not just because of what it said but also because of what it indicates right so this is sort of could you call it an economic Bell weather to some degree here the company says um that they are seeing strength here related to some of its longer term contracts here rental Revenue up by 14%.

Contractor Supply sales up 133% as well so that was quite interesting here that the company you know seeing strong demand in send markets yeah we should the forecast too looking ahead looks like they're calling for 2024 Revenue they range 14.65 to 14 I'm sorry 14.65 to 15.1 billion the upper end of that range does be consensus so that also.

Explains the move we saw today all right we move on the S&P 500 closing at another record high it's six straight day of gains Josh schaer is here with the details Josh Josh another record high not bad huh not bad if you're a stock market investor right now if you're long the market yeah if you're long the market which I think a lot of.

People probably are right but people that are looking to get in is sort of what I've been asking strategists about this week because I think right now can be maybe a scary time if you're an investor sitting on cash and you look at the S&P 500 at a record high and you're sort of wondering well if it's at a record high why would I ever buy now and.

There's been some interesting research out there I spoke with Cali Cox over eoro and she pointed out that when you buy at a record high you actually get a better return on average than if you buy on any other day over the course of the next year and so basically what that's showing us is it really doesn't matter that much I guess in some ways you're.

Looking at 10.1% over the next 12 months versus 99.5% so it's really not that big of a difference I'm not saying that her recommendation is it's advantageous necessarily to buy now but I think the other thing this chart speaks to too and several strategists have pointed this out when we're at record highs it's not common for stocks to just fall off a.

Cliff we would sort of need some kind of Black Swan event most people think for us to go from a record high to oh boy the S&P is tanking what is going on you know you need basically a pandemic like event or something like that black span event to bring us significantly down and one thing that I do think that Bulls are sort of pointing to right now is the.

News that really kind of send stocks higher to start the day today the GD preprint right and the other economic data we've had in July is continuing to show us an overall strong economy well if we have a strong economy that would probably be good for earnings in the long run because it would be good for companies because companies are growing.

And companies are making money and we know Josh if earnings are growing that's usually a good sign for stocks in the long run got it stocks up stocks go up you know S&P 500 Max chart right Julie and it's fine it's fine everything fine um let's talk about something that maybe Isn't So Fine uh we're just getting some numbers from Intel um just in the past.

Few moment the earnings coming out and let me just get right to it the first quarter forecast um leaves the company a lot of room to misestimates and the shares are down 6% first quarter adjusted earnings per share the company says is going to be 13 that is less than half what analysts had been predicting adjusted Revenue in.

Intel's first quarter going to be 12.2 to 13.2 billion $14.3 billion is what had been estimated now you're looking there at the fourth quarter numbers those numbers were fine they beat estimates but that forecast is a pretty big gap uh to what uh analysts had been expecting yeah I mean it's going to be get more color Insight exactly what they.

See ahead um there were some questions for the company W PCS what do they think PC shipments are going to look like in 2024 what are the trajectory kind of the PC market look like to them there's kind of some debate and discussion about the slope there data center will be in Focus too obviously that's where you know they find themselves competing against with.

Some bigname Rivals they were expected to have some new products coming out this year and some Bulls were betting on those to reverse some of the kind of market share losses they've been seeing um so interesting Wai to hear a little bit more on the call as well will be fascinating so I'm looking at the various uh divisions here Data Center.

And AI Revenue at $4 billion that's about in line with estimates last quarter mobile ey Revenue $637 million a little bit better than estimated and client Computing Revenue at $8.8 billion a little bit better than estimated the stuff that Intel's been working on is longterm and Pat geling and their CEO has basically been wanting P the.

Patience on the part of the market right as they get um all of the Fab stuff up and running eventually that is the fabrication of chips but in the meantime you know the if the numbers aren't looking good and it's been uneven I think we can say when it comes to Intel's results you know we'll we'll have to see how that comeback is looking.

I mean certainly listen some analysts Julie who cover this name were saying in fact they were calling this a make or break year for Intel what they meant by that is just the new products on the way they were looking for real verification that on the AI narrative that pet kelinger has has been showing here so they were looking at 20224 is really a.

Pivotal year for this stock um and at least initial reaction to this print isn't good it'll be interest to get some analyst reaction as well yeah just wanted to highlight something else that our producer flagged uh some commentary from Intel CFO David zenner talking about operational efficiencies being driven in the fourth quarter they.

Comfortably achieved he said our commitment to deliver $3 billion in cost Savings in 2023 we expect to unlock further efficiencies in 202 before and Beyond as we Implement our new internal Foundry model which is designed to drive greater transparency and accountability and higher Returns on our owner's Capital will that operational efficiency.

Entail people efficiency Dr you know cutting jobs I think um that'll be probably one of the questions that uh they're going to get on the call yeah The Foundry business what you're mentioning there so making chips for others right is a big part of Pat Ginger's kind of multi-year strategy and push but investors have have certainly.

Questions about that outside they should be and and just kind of the economics of that business we're going to talk more about Intel in just a few moments as we saw that fourth quarter beat but the first quarter missed the shares down 6% we're going to do a deeper dive into the numbers on the other side of the break with an analyst stay.

tuned.

Intel's shares sliding after the company's first quarter guidance missed the streets expectations just to put a fine point on it again here the company's revenue forecast at most 13.2.

Billion analysts on average had been looking for 14.3 billion we're joined Now by Matt Bryson wedbush Security senior vice president to talk more about this um Matt are you surprised by what looks like a pretty big miss here on that first quarter forecast and what's going on at.

Intel yeah I I I'm a bit surprised numbers are coming down uh as much as they are you always end up with some seasonality um in q1 this was certainly a bit more than than I'd expected um having said that if I'd have to guess um what we're going to hear from Intel on the call uh if you look at what was coming out of Taiwan in terms of numers.

Numbers uh their uh odms showed a a Slowdown in Q4 um so PC builds slowed down um obviously Intel ccg revenues um so their compute going into PCS lifted a fair amount in Q4 I I would bet that they just over ship demand a bit in Q4 and what we're seeing in q1 is those inventories getting work down again um and if I had to guess that's that's the.

Reason for the lower guide and so I'm interested how you see sort of the PC business over 2024 um you know there's kind of some debate between an as to what the PC market overall looks like what's your take so I actually think the PC Market's going to end up looking pretty good um so in part the reason that you saw those.

Bills in Taiwan get reduced um is it was oems uh looking to cut back on inventory because I think everyone wasit bit worried about macro so I I don't think there's a lot of finish goods inventory out there um because builds were slower in Q4 you get an easier comp into q1 um and then when you're thinking about the back half of the Year remember it was.

Three four years ago when we saw um all those purchases tied to covid uh on the corporate side of things there's typically a three-year refresh cycle uh so I think you get to the end this year uh between corporations refreshing their their PCS service contracts are up uh between there being a new windows OS uh between us not being that far away from.

Microsoft stopping support on Windows 10 I think you get a pretty nice refresh starting in it towards the end of of 2024 into 2025 is that going to be enough to help Intel though I know you're neutral on the shares Matt I mean what do you need to see from Intel here to get you back involved with an you know a higher.

Rating yeah so I I think when I look at Intel into 2024 and you look at their end markets um I mean what really matters is is PCS and servers uh what we saw in in 2023 it wasn't a great year for PCs again I think things get better in 2024 on the server side uh because corporations were worried about the macro they they weren't really spending.

Um you had the large Cloud uh providers shift spending towards AI so away from those standard servers that that use a lot of Intel compute um I think all of that has to reverse a little bit uh and so that that's all good backdrop drop for Intel but I think at the same time if you're investing in Intel right now you are making a bet on their.

Manufacturing road map um that they can get their new products out that they'll reestablish uh their their dominance in terms of process um and I'm just not there yet they just are starting to ship or started to ship in December uh their first seven nanometer part um so I think moving to to four moving to um three moving to TW to 18a um I I want to get a.

Little bit more confident that they're going to restore their manufacturing leadership and I I think that's why you're investing in Intel because you're making a bet on them being the leader in manufacturing again and Matt do you also see Intel as as a smart way for investors to play that broader secular AI theme you know obviously Pat gster.

Will talk a lot about the time the effort they're putting into that Tech how do you think about it yeah so I I think the data center on the Silicon side we have Nvidia is the clear leader um it it looks like AMD um is establishing itself as the closest competitor uh to to Nvidia at this point I I think int Intel is is behind those.

Two uh potentially behind uh some of the cloud providers uh attempts to build their own silicon so I'm a little bit less bullish around their uh ability to compete in AI the data center right now um where they may get a bump or a boost is certainly we're going to see AI inedge devices at some point um I just don't think it's a 2024 story I think.

It's a 2025 2026 story um when that happens um you'll see more content in devices there'll be be more potential revenue for for Intel again it it plays in that theme of a refresh cycle um but I don't think it's this year all right Matt Bryson thanks a lot really appreciate your perspective on Intel as we go through these numbers.

Thanks we are also watching shares of Levi Strauss sliding on earnings Guidance the company reporting better than expected earnings overall but Revenue did come in light um as we look at the at the headlines here what really stands out as well is that the company is cutting jobs it says it's going to eliminate 10 to 15% of its um jobs on.

The corporate level and this as Michelle gas is poised to take over as CEO from long time head of the company chip Berg here um and she's talking about newness and Innovation launching this year but they are doing those productivity um initiatives if you will um and the company's going to take an estimated restructuring charges of$ 110 to $120.

Million in the first quarter uh related to that the company's also focused uh says harmit Singh CFO of the company um on margin execution and gross margin expansion so we'll see what that means in terms of pricing and cost inputs for Levis as well yeah looks like the job Cuts they say going to mean charges of 110 to 120 120 million in.

Q1 um the Outlook also looks like it fell short uh versus expectations they're calling for EPS of 115 to 125 and Street was closer to 133 the executives are talking to press and saying they're planning for uncertainty and volatility in the year ahead in in their wholesale business Julie yeah and the stock is uh falling.

Here as we noted uh but it is initially we saw a quick downward leg of about five five and a half% now we're seeing it down a little more than two and a quarter percent so we'll see how investors continue to digest this especially when you look at the cost savings initiatives I mean a quick thing we should mention as well as we talk.

About all of this uh we did see Revenue increase uh last quarter by 3% um 2% on a constant currency basis direct to Consumer Revenue in particular was uh strong but the company says there is some uncertainty around wholesale revenues in particular going forward yep all right we'll keep watching meanwhile coming up earning season rolls on here.

We're breaking down the latest from visa on the other side stay tuned more Yahoo finance after this.

T-Mobile out with its fourth quarter results the share is down almost 3% here a mixed picture overall on the one hand the company added a net 934 th000 mobile phone customers which was ahead of.

Estimat and also a bigger gain than we saw for its competitors uh the company also added subscribers to its wireless home internet business 541 th000 there um so those two numbers good but earnings last quarter missed estimates even as Revenue beat yeah earnings under shot so it looks like 167 consensus was actually close to 199 so missed and.

Missed pretty meaningfully there though Q4 Revenue that was 20.5 billion so that would actually Beat the Street um this year they also are saying it looks like they expect five to 5 million 5.5 million net customer additions they're looking for adjusted earnings for interest tax appreciation and motorization that looked like they're.

Calling for uh 31.3 billion to 31.9 billion there yeah so maybe a little bit of disappoint with the forecast a little bit of disappointment with last quarter's earnings per share numbers U but it is interesting T-Mobile strategy to focus on you know sort of underserved areas for wireless service that has paid off in terms of numbers in terms of the.

Numbers of subscribers I mean that subscriber growth number that I mentioned there of 934 th000 just by way of comparison AT&T added 526,000 when it just reported its numbers Verizon added 449,000 um so you've seen you have seen that quicker growth with T-Mobile but um it looks like maybe it's costing it on the bottom line all right we'll keep.

Watching Switching gears as AI dominates markets and earnings calls new research shows 95% of workers say they see the value of working with it yet centur data also shows over half fear job loss and stress this concern is underscored by recent layoffs and Microsoft following the lead of Google Amazon and others now we have the author of that report Paul.

Do joining us for insights into navigating the AI Revolution and how businesses can invest in the future Paul it is good to see you I actually wanted to start maybe more high level Paul you know there's been this boom of interest in AI certainly investors are excited about it um companies talk about the time and effort and money they're.

Putting into this Tech poll but I'm interested as you as you kind of survey the landscape right now how do you see companies putting that that technology to work right now Paul what are the use cases that you see out there that that get your attention yeah thanks for having me on the program and it's a it's a great.

Question I think we're in the midst of a shift in terms of how companies are viewing AI now you know generative AI especially you know i' look at 2023 as the year of education and experimentation you know after all it was only 14 months or so ago when chat GPT burst on the scene and uh we've done over 700 generative AI projects for.

Clients uh and uh that's a wide array across uh Industries around the world and what we're seeing is a shift to more companies move from that experimentation to scale and we really see 2024 as the year when executives are looking to see the the results see the impact and see the value they can drive at scale so some of the use cases that that uh I'm.

Excited about that we're working with companies on are areas like drug Discovery in life sciences where you compare uh a scientist with uh with generative AI models that understand chemistry and biology and can dramatically accelerate the drug Discovery process you know very exciting all the way to examples like the.

Customer service where we're applying gender of AI today to help uh customer service agents respond to Cory's faster more productivity get better results to customers and you really dramatically increase the the satisfaction that customers are getting so kind of wind went all around and the interesting thing from some of those examples is the.

Workers enjoy the work better because it removes some of the drudgery it allows them to really focus on relationships and interaction and the things they like to do um Paul as as Josh alluded to we've also seen some redeployment of resources right we have heard about some layoffs this year Accenture itself did some layoffs last year as well as.

Companies trying to figure out where to put the resources what strikes me though is I've heard a lot of reassurances about how AI is going to make workers jobs more productive easier but the folks who are being let go are not being retrained to do AI jobs they're just being let go and then AI other AI people are being hired is the way I'm seeing is.

That what's going on here well we early in the cycle and that's uh what the report that we that uh we released showed is that workers are optimistic 95% of the workers surveyed uh do believe generative AI can help their careers and they're excited to learn more about it the 60% of them have anxiety about whether the company's.

Going to bring them along with it then you look at the at the uh company side of it it it's a different story where the the the SE Suite Executives we T that we surveyed don't see know you know the the broad release of people they see the need to you know to bring the people along so we call out the trust Gap that's forming and there's a need for.

Leaders to be you know better pitting the vision of what they're doing maybe be a little bit more transparent and then companies to invest in the learning platforms to bring the workers along so while you while workers want to while companies and leaders want to bring the workers along only about 5% of companies are investing in those learning.

Platforms and education at scale that number needs to go a lot higher to address you know the need for workers we're going to have the the reality is you're not going to be able to get rid of today's workers and hire tomorrow's workers because the the skills are changing so fast that the companies that win are going to be those that that.

Understand how to train and develop the learning program to bring their the workers along with them and and you know add the new skills that that uh that you need in this new generative AI World The Prompt engineering and other skills that are going to be you know table Stakes for any job in the future what what is it Paul about AI that helps companies.

Here more more than the tech they already have in place yeah you know it's important to step back and realize and I've been doing this over three decades and seen you know every kind of every one of these waves come through there hasn't been anything like generative AI over that period of time it is different and it has a different level of impact.

The re is one the speed you know 14 months you to the scale of impact we're seeing the second is this humanlike nature of the technology it's it's the first technology that's like looking in the mirror in terms of what it can do in terms of creating confidence other capabilities and as a result of that it changes everything that that people do.

So the job of the CEO the SE Suite the manufacturing worker the Frontline workers everybody's jobs are are going to change as result of this and that's what's really you know what's really uh different about it and therefore you know We Believe what's happening and what needs to happen is companies need to reinvent you know work itself and how.

It happens and that then changes you know the role that that uh people have so it'll be about how do you develop those new skills you know think back to the internet when it came out you know we before the internet we didn't have web designers e-commerce experts search engine you know optimizers we didn't have eBay Etsy you know entrepreneurs.

Building new businesses around the internet that's the new you know creation we're going to see we've identified 12 new jobs that don't that didn't exist a year ago that we're building and hiring within our company as we grow our AI you know Talent from 40,000 to 880,000 and um and that's just the tip of the iceberg as you look at.

Enabling everyone you know to be able to participate in this generative AI driven business World in economy Paul finally I want to ask you about what you train the models on right there's some been some um copyright questions right about the da the data that some of the models are pulling from we saw that play out for for example with the Hollywood strikes.

So how do you approach that and make sure that you have the rights to the data that you're train that you're training stuff on yeah you know we we announced a$3 billion investment last year in data and AI to build the capabilities that companies will need as they as they uh move through this journey and one of them is exactly what.

You said how do you choose the right models and train the models right there's over 600 models different Foundation models out there to choose from so it's a buing ARR of uh of choices that company's face and they're strategic and uh investment and lots of implications in which models and um to your point on you know you have to.

Understand how the models are trained there's decisions on proprietary models versus open- Source models and uh that's one thing we're working through a lot of companies on is how do you make those choices and then what degree of customization do you need to drive your business initially companies were thinking well I just use the model and.

I'll do what's called retrieval augmented generation or prompt engineering to get the right results out of the model and companies are now realizing that to drive really strategic results they need to invest more in using some of their own data to fine-tune or train the models to really drive that strategic impact and that's.

The with the investment we're making in different Industries and different solutions that's how we're trying to help companies move through that and do it in a safe way to avoid some of the risks that you have with uh with as you mentioned with intellectual property and other considerations Paul it's great to catch up with you as always thanks for.

Your time thank you quarterly results from media Giants Netflix and Comcast along with m&a reports on Paramount all catching wall Street's attention for what is next in Deal making in that space y who finances Alexander Canal here with the details ali um as you wrote about today there's also maybe a little bit of a gap between what the.

Street wants and what's happening with these companies like how what are you tracking most closely right now when it comes to all of these m&a stories well Wall Street analysts across the board certainly think that consolidation is coming the three names that have been thrown around are Comcast Warner Brothers Discovery and Paramount however.

I think it's been interesting that over the course of these earnings reports that have trickled in over the past week or so these companies aren't coming out and saying that they're really open to that idea so for example Comcast which reported earnings this morning at beat on both the top and bottom lines its CEO said that they are confident in the.

Assets that they have they're happy with them and they don't really want to do anything else sort of poured water on the idea that they could however analysts on the street have said peacock is one streaming service that could really serve as a potential Catalyst for some more m&a deal you could argue that peacock comboed with Max could.

Potentially be a very strong offering especially as consumers don't really want to have a ton of streaming services out there on the market but we haven't heard a ton from management that doesn't mean we're not going to have more questions from investors doesn't mean that Wall Street is more bearish on the idea of consolidation I certainly think.

It's something that's going to happen we've seen layoffs across theard for it I mean even Paramount earlier today confirming that layoffs are going to be hitting the company amid that m&a news so it's just part for the course with what's happening in this industry right now and where things are going from here yeah consolidation if you would have.

Placed your bet where would it be I really do think Paramount something's going to happen there this year I don't know when I don't know who the buyer could be but I think it's one company that if you look across the landscape it's very small about a $9 billion market cap you want to compare that to a Disney or Netflix Disney has about 170.

Billion Netflix 240 billion last day checked so this is a very small company it's really struggled with its debt on the streaming side of things losses continue to accelerate so you think that could be a better asset somewhere else the big question though is Paramount is a company that also has declining linear assets and no one wants to touch linear.

Netflix Excel Netflix itself said in its earnings report that they don't want to go near that so how do you rationalize a buyout of that company when you're really only interested in the studio side regulation how does that work with big m&a and media so there's a lot of overhanging questions as we get deeper into this a lot of the reporting around.

It has been maybe private Equity would buy the parent company or sell off Parts yeah yeah there's a lot of ways it could go reportedly some people with some very Deep Pockets have been kicking the cans on that one though it' be interesting thank you Ally appreciate it meanwhile coming up oil prices higher today Adit increasing tensions in the Red Sea more.

On that when Yahoo finance returns.

Visa out with its earnings after the close of training as well beating profit expectations in its first quarters thanks to strength in use of credit cards in a statement the company CEO noting cons consumer spending remaining.

Resilient the shares though are down 3% and honestly Josh and I are trying to figure out what is going on here uh because indeed the company's adjusted net income was 20 uh $241 a share excuse me better than estimates net revenue up 9% to $ 8.63 billion that was also ahead of estimates I'm also looking at the forecast here.

Maybe there's something going on there the company says it's right it what it just reported was its fiscal first quarter and it's fiscal second quarter it says Revenue will be up in the upper mid to high singled digigit range uh that is versus what analysts had been looking for just looking at the um increase that they're expecting 9% it.

Looks like is what analysts had been predicting in that so that maybe upper mid to high single digit 9% could be that maybe could be a little bit less than I don't know operating expense growth in the low double digit and earnings per share growth in the high teens according to the company yeah I think you're right to focus on the guide.

Because the print is solid I mean relative to expectations profit beat Revenue 8.63 billion that's a beat payments volumes in line operating expenses basically in line uh upbeat commentary from the CEO talking about how the consumer spending has remained resilient he says continues to see opportunity across consumer payments new.

Flows Valu added services so I think the street must be focused here on the forecast remember stock heading into the print you know about 20% over the past year was about you know four or 5% year to date Street remember is a fan of this name 39 buys eight holds not a single sale um payments volume as well I always love talking about these numbers because.

They're so enormous payments volume up more than 8% to$ 3.28 trillion dollar I mean Visa is the largest um payments Network so keep that in mind uh it also said the biggest spending growth came from Central Europe the midd eastn Africa as well as Latin America and the Caribbean those regions up about 20% from a year earlier so that um an.

Interesting stat as well where you look at the you know where the growth is coming from for the company yeah stocks been on roll remember just this week it actually hit a record high of about 273 well that is the uh context then as well when you look at the drop that we're seeing right now speaking of context let's talk oil prices right Rising.

Following the release of better than expected GDP growth for the fourth quarter of last year and it comes after increasing crude oil prices amid severe winter storms that stall domestic production for more we return to Yahoo finances inz Fay on the oil trade Hess hi Julie and it was a big day for oil prices today because they were up.

More than 2% as much as 3% for WTI breaking above the resistance of $75 a barrel above $77 a barrel today you also are looking at bran crude that is up more than 2 and a half% bran crude above $82 a barrel and some developments as you had mentioned uh the GDP print for the fourth quarter of last year in the US it came in uh hotter than expected.

For that preliminary print also China coming out with some stimulative measures for banks reducing the amount of liquidity that the banks have to have on hand and then you've got cold winter weather which has affected us production you had last week production down by a million barrels that's according to eia data North Dakota was heavily impacted.

Because of the freezing temperatures and then you've also had stockpiles which dropped last week so you had crude inventories which were down more than 9 million barrels and that was much more than what analysts had been expecting so all of this bullish for oil prices you did have gasoline supplies which increased uh by nearly 5 million barrels.

To a threeyear high that's bearish for oil prices but look the bottom line is is that these freezing temperatures they have had an impact on us production they've had an impact on refineries the refinery capacity was at 85 a half% last week according to EAA data so that really has been impacting prices as well as those houie attacks in the Red Sea.

Also keep in mind you've got a meeting coming up from OPEC Plus on February first so we'll see what happens after that as well you sure will and as thank you for that appreciate it thank you the boss of PNC financials making it clear that his Pittsburgh Bank needs to get bigger in the wake of a 2023 industry crisis is telling investors that scale.

Matters and he no longer wants the bank to be considered Regional stoking debate about the future of regional Banks and the potential for consolidation in this space senior reporter David holl has more David hey Josh uh in earnings last week uh PNC CEO William dim said in light of how deposits flooded into bigger Banks last year um during those.

Bank failures in the spring it's not critical that PNC get bigger itself PNC is the sixth largest bank in the country it's still considered uh what we call a Super Regional Bank um and I spoke with about four analysts on this uh who cover Regional Banks to sort of get their thoughts on what dim said and sort of what it means for the industry as a.

Whole um since last year's bank failures there has been this ongoing debate about what's going to happen to the industry um once things settle now uh they've said essentially three things and one is uh they all agreed consolid in US banking is is going to happen um in the in the medium term however before anything like that like a number of.

Banks consolidating can occur um Banks need to see uh uh interest rates regulation and Commercial Real Estate uh credit concerns sort of ease um to allow sort of the correct environment for that um it's also not quite so black and white even though um PNC has been uh very vocal about uh their views that size Matters um not all regional Banks.

Agree um and it's they're probably not all going to take the same Tac um and then finally I would just bring up that uh regardless of uh whether or not uh size does become more important uh dim che's message kind of served as a pretty clear uh advertisement that they are looking uh to buy more banks in the future and so we wanted to highlight.

This because it seems uh increasingly clear that PNC is going to become a key player in whatever happens to the industry going forward um really interesting stuff especially given where we were in Spring of last year but we also have to talk about a little bit of news from the nation's largest bank that is JP Morgan and made a bunch of.

Management changes here and most of these folks in fact none of these folks in this release are named Jamie Diamond but so we're trying to sort of contextualize and figure out what the significance of this what's the importance of some of these changes being announced yeah Julie uh this came out this afternoon um but it's a really.

Good read of it which is that this looks like plans for succession obviously Jamie Diamond um is it has been the CEO of the bank for uh more than two decades now and succession is a Hot Topic he's sort of been the LeBron James of of banking for some time now just based on his track record um so what JPM has done in the past is they've they've moved a.

Lot of uh key Executives around the bank sort of as a way to broaden their experience to see how they would do as potential successors if they can handle multiple places um the the key thing here is that the bank is sort of combining two divisions it's Investment Bank and it's Commercial Bank and it will have uh two new co-heads uh one in.

Particular Jennifer Pete who was co- CEO of the bank's uh sprawling consumer and Community Bank uh will take over that side Maryann Lake who along with peepack is are sort of the Front Runners as far as we know um for possible successors to Jamie Diamond she will take on the role as so Soul CEO of the consumer and Community Bank uh there are a bunch of.

Other executive changes and and some of those names have have been in the running in terms of of what we've heard but I think this all brings to the the question of you know why now why is this happening uh potentially it's because it's a new year and the bank has made a huge acquisition with First Republic um but we're gonna want to pay more.

Attention to this because Jamie Diamond is essentially um you know he's a key figure to the largest banks success and anything that happens uh while inevitable will certainly impact what investors think for sure he can't be CEO forever I guess he can try David thank you so much appreciate it coming up what to watch tomorrow.

We're going to break down the stories you need to know to start your day good morning this is Yahoo finance big news three things that you need to know we just got the announcement what happens now now I got a question what does success look like what was one of the biggest challenges that you fa how much does that raise the odds for a.

Recession this phase is over tell me what happens to the debt ceiling where does generative AI though fit into your portfolio talk to us about this diversification and what investors need to know and I think it's important this is the stuff that gets me out of bed fired up what's the Gateway what's the new bridge to opportunity doesn't matter.

If it's a soft planing or a hard Landing big big interview I I can't wait Supreme Court out with the ruling on President Biden's student debt cancellation right let's turn now to some recent Tech hernick and they give you information if you watch them closely president bosk president M FY guinsler thank you so much part of what Davis is about is.

Sharing best practices coming forward with ideas and then enabling those ideas into action and I would add that there is more to come on this and we keep producing products that help people lead healthier lives this is one of those rooms that use to simulate light in space interest rates will come down again figure out where your money.

Is going now you got to scope that out and the numbers really tell the story what does all this mean for you keep it tuned into y find it.

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Time now for to watch Friday January 26 on the earnings front American Express Colgate pom Olive First Citizens Bank shares and opheim are all reporting earnings tomorrow tomorrow American Express will be one to watch the Dow component is little changed so far this year it's a good proxy for the state of the high-end consumer analysts expecting.

Both revenue and earnings to rise from a year ago and over to the economy new personal consumption expenditures or PC data is out tomorrow morning it's the fed's preferred inflation gauge giving us more insight as to when we might see the First Rate cut and also its last look at inflation before next week's fed meeting and moving to the housing market.

Monthly pending homes sales numbers coming out tomorrow December sales expected to rise 2% after sales in November were flat news coming after mortgage rates ticked higher in the latest week 30-year fix now at 6.69% and finally you can tune in for another episode of Yahoo finances goodbye or goodbye tomorrow at 3:30 p.m.

Eastern where we help navigate the best moves for your portfolio in terms of what to watch I know you're zeroing in on pending home sales yeah housing Julie Heyman so today we got new home sales so they jumped 8% in December to a seasonally adjusted annual rate of 664 th000 that's right near the average for the year economists.

Still say inventories they still looked bit on the high side tomorrow pending home sales right so signed contracts of existing homes Economist calling for 2% jump there um I am zering in on American Express we were just talking about a Visa coming out with its numbers seeing an enormous amount of volume but the shares going down MX those shares by the.

Way up about 20% over the past year which is outpaced other uh financials here um and analysts are looking for revenue of just under $16 billion uh but they're also going to be closely watching its Revenue growth forecast the long-term Revenue growth forecast is 10% and there are some questions uh over whether they're going to be able to.

Achieve that are we going to see a little bit of erosion on the upper end of spending that's According to some analysts and anal one analyst over in Oppenheimer uh does talk about that there is that worry but it might be already baked into the stock in other words there's already skepticism that they can meet that um that goal so we'll.

See what happens yeah we had any number of companies this week though telling us you know the consumer looking okay so we'll see what we see we he from AMX tomorrow and the GDP report also showing that all right that'll do it for today's Yahoo finance live be sure to come back tomorrow at 3 p.m. Eastern for all of your coverage leading up to and after.

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