Stock market today: Stocks flip certain as Fed resolution looms | March 19, 2024

City I'm jna Smith along investors make smarter decisions for their portfolios we're tracking early session volume I'll bring you today's top Market themes and elevating Yahoo finance's most popular newsletter we got a lot of ground to cover this Tuesday Morning stock futures edging lower right now as investors take in the newest announcement from AI.

Darling Nvidia and awaits the latest interest rate decision from the Federal Reserve to come Wednesday that meeting two days though begins today all eyes on the central banks dotplot for further insight into the number of rate Cuts expected in 2024 and big news out today the era of negative interest rates is over at least for now the bank of Japan.

Raising its key rate for the first time in 17 years the Japanese Yen sliding against the dollar we're also seeing some movement to the downside in the bond market as well so let's right to with the three things that you need to know your road map for the trading day Yahoo finances Dan hle Josh schaer and Aiko Vegeta have.

More Nvidia is looking to hold on to its lead in the AI race CEO Jensen Wong took the wraps off the company's new Blackwell GPU architecture here in San Jose during its GTC conference yesterday W also took the wraps off of the company's new gb200 processor something Wong says is the world's most powerful.

Chip and stock futures edging lower this morning as the Federal Reserve kicks off its 2-day policy meeting with inflation still running well above the fed's 2% Target the FED is not expected to cut interest rates in March when it ends its two-day meeting on Wednesday investors will however be eager to digest the fed's latest Dot Plot which will signal.

Whether the central banks Central Bank officials still agree that three interest rate cuts are likely in 2024 and the bank of Japan raising borrowing costs for the first time in 17 years Japan ending 8 years of negative interest rates by setting a new policy rate between 0 and 0.1% the Japanese Yan sliding against the dollar on the news.

This morning as Global markets brace for the Ripple effects from the boj's tightening our top story this morning nvidia's big AI conference shares of the AI darling ticking lower after CEO Jensen hang unveiled the company's hotly anticipated Next Generation Blackwell chip alongside a number of other.

Announcements for those announcements we go to Yahoo finan is Dan holey here with the three biggest takeaways from the opening remarks from the CEO of Nvidia hey Dan yeah rad uh you know you could probably describe yesterday's conference uh where Wong took the stage uh at the uh sap Center in San Jose I mean as a.

Victory lap for the company uh the people were packed up to the rafters I mean I have some video that we'll we'll have uh later this week but it's it's absolutely incredible to see how many people were in there just to hear everything that he had to say and he basically kicked things off from uh when Nvidia started investing in AI to today.

So so the the three biggest things uh that he announced are the new Blackwell GPU architecture this is basically the uh successor to its h100 and h200 chips that's the uh uh Hopper architecture so going forward this is what uh AI chips are going to be based on at Nvidia they also announced the new gb2 200 super chip that's the uh Grace.

Blackwell is what G uh GB stands for Grace is their CPU Blackwell is a GPU and basically it takes two gpus uh and mates them together with a CPU to form what Wong says is the world's most powerful chip at the moment and so that Chip is going to be running uh different AI uh inferencing uh and training programs that companies want to get.

Access to and then finally uh he announced at the end of the show uh what they call Groot which is basically a new type of AI uh architecture a foundation model uh for humanoid uh like robots so uh you can think uh not exactly uh Terminator or Bender from Futurama but uh the early stages of getting some kind of humanoid like robot up and running.

And so it would be able to help with motor functions as well as natural language understanding uh and that he said is something that the company sees as a a very long-term bet for them so uh he was on stage there were some digital uh representations of some current humanoid like robots that are being developed right now that Nvidia is.

Actually working with so those are really the the the three key takeaways I think from from the event yesterday all right H thanks so much for bringing us the latest there from Nvidia we want to continue talking about what was unveiled yesterday because in video like d was just saying unveiling the world's most powerful AI chip at its big event this.

Week a move that could further solidify the chipmaker's dominance CEO Jensen Wong also taling Partnerships with companies like Dell sap synopsis Anis and Cadence Design Systems sending shares of those stocks higher in pre-market trading we want to bring in Bob o' Donnell he's Tech nalysis research president and chief analyst Bob.

It's great to have you here and I know you're joining us live from the conference I believe just your reaction to what we heard yesterday from Jensen Wong and whether or not those announcements lived up to the very high expectations well first to jump on Dan's comments as well I mean it was like a rock concert it was unbelievable uh just.

To see the level of excitement there and I went to gdc's a long gtc's a long time ago and let me tell you the mood was not the same as it was yesterday so clearly they do have this incredible momentum and yeah I do think they delivered on uh what they they promis and I'll even add one extra thing to what Dan had brought up in terms of important things not.

Entirely sure how the Market's reacting maybe some of this was already baked in but look at the end of the day this next Generation Blackwell Arch architecture sets the stage for them to stay ahead of the competition and arguably it was the first one designed and released in the generative AI era while previous Nvidia chips of course are being used for.

Generative AI they were actually built prior to the explosion of all this this one kind of was built in that time era the other big takeaway and this is a big strategic move long-term for NVIDIA like like Dan mentioned for Groot is software in general they unveiled something called Nims Nvidia inference microservices very technical thing but.

It's these little containerized applets that companies can use to put together gen applications and oh importantly of course it's based on nvidia's Cuda which is this soft layer that's been the sticky part of this whole system so the thing about Nims is that companies can make the process of building gen apps which by the way is still really hard.

Much easier thereby allowing more companies to do this and oh by the way in the along the way Nvidia becomes more of a software company in addition to being a chip company with new Revenue sources from that software and so Bob how does Nvidia add on to what is already seen seeming or feeling like these Peak levels of of generative AI.

Mentions second highest number by the way according to fact that data of S&P 500 companies citing AI on earnings calls over the past 10 years so how how much more difficult does it become for not just Nvidia but for the rest of the potential benefactors in this environment to now show Wall Street to show investors that it can actually.

Deliver on some of these promises well look Bri that's a great question question and and that's why I mentioned this Nim software and another concept they called AI Foundry the AI Foundry is this idea of being able to build for people like a Foundry a chip Foundry but this is a software Foundry these applications because yeah look the.

Excitement's been out there now it's about hey we need to deliver this and we've seen the potential we've seen proof of Concepts but how do we get you know regular companies to be able to build this stuff they don't have all the data scientists they need to be able to pull some of this stuff off so how do we make the process easier and that is what.

A lot of this software work that Nvidia is doing is working on and you know and on the other on the hardware side the other thing to remember like look when you're 90% of the market and you're way ahead of everybody you're basically competing with yourself that's what they're doing right now is they're competing with themselves pushing.

Themselves forward and you know I think they did a good job with blackd there's a lot of interesting things about the architecture uh that they've done like I said that are kind of built in this era of gen applications and they made some tweaks to allow performance improvements at you know at a big level and also important Energy Efficiency improvements.

Which also is going to help them in the long run Bob how critical is it for other Tech players when you see the reaction in a name like Dell here this morning after Jensen Wong touted the fact that he said quote nobody is better at building end to-end systems a very large scale for the Enterprise then Dell we're also seeing reaction in sap this.

Morning how critical is it for other Tech players to be using nvidia's platform at this stage in the AI cycle well you know I think they all think it's incredibly valuable and important I mean I have never seen more partner announcements at an event I think in my life I mean everybody in their brother like wanted to be associated with Nvidia.

And that's what we saw we saw all the major Cloud providers all the server makers Dell of course being called out but there's also HP there's Lenovo there's super micro there's these other companies who are also going to be building stuff uh with these all these software companies Anis Cadence um all you know all kinds of big companies who.

Are building software based on this because they see where the market is going they see in for in fact that Nvidia is in the lead so of course they want to associate themselves and that's why there was just this you know incredible array as I said of different partner announcements because they want to do that now we're also going to see a.

Lot of competitors right AMD is going to get in here and and this Market is going to continue to grow and even if Nvidia loses share which is is kind of hard not to do when you have that much the market is going to still grow so much that there's still growth opportunity for NVIDIA I don't know why the Market's reacting the way it is now like I said.

Hard to to predict under that particular detail but in the long run I think they've positioned themselves very nicely hey Bob just lastly while we have you here I mean there's a lot of focus on what the growth looks like for NVIDIA especially outside of the us as well are there any clear ansers that are coming forth from this conference about how.

This company is going to service into China where there's already even more between the US and China of the kind of tit fortat that's continuing to play out which puts a bit of a dampener on on the opportunities in that region no it absolutely does Brad and and I don't see an easy answer I mean this is a this is a difficult problem that I think all.

Tech Industries are going to All Tech companies are going to face people like Nvidia and AMD and Qualcomm and Intel in particular producing you know very highly performant chips you know they're the ones who are obviously being restricted more already and so yes that is a bit of a damper on the business so they are all working on developing chips.

Specifically for the China Market that can you know still provide some capabilities China says they want to do all their own but they are years and years behind the most advanced technology so um you know it's going to be a very interesting situation to watch again I think longer term what Nvidia tried to do at this particular show is.

Show to the world hey we're going to build these amazing chips and we're going to make them better and better but hey check out this software stuff because we're going to be doing it too we're going to start charging on a per hour basis of per GPU per hour to use some of these Services again that's really interesting Revenue there.

Obviously almost nothing right now but what's the opportunity all right well Jensen Hong CEO of Nvidia certainly resembling something of the greatest showman right now as this event continues to roll on our own Dan Hy out there Bob thank you so much for taking the time as well Bob O'Donnell technis research president and chief analyst.

Definitely well the bank of Japan the boj is Raising interest rates for the first time in 17 years today making it the last major Central Bank to exit the world's negative raid policy the country is the top holder of us sovereign debt and as yields are going up what does this mean for the global bond market to help break down how investors should be.

Looking at this policy change we've got Yahoo finances very own Akiko feta here with us heyo good morning to you Brad you're certainly right this is truly the end of an era when you consider the bank of Japan as you said the major Central Bank or the last of the major central banks to exit a policy that was largely seen.

As extreme and risky in the aftermath of the global financial crisis at its peak you had the European Central Bank as well as central banks in Denmark Switzerland and Sweden all setting their interest rates below zero and now that Japan's ended the longest experiment the question is going to be become number one how effective was this but also what.

Does it mean for Global markets we should mention the boj Governor largely messaged this move but we did see uh that dollar Yen cross push lower with the dollar or Yen I should say trading about 150 to the dollar there it's certainly going to be interesting for us investors to be watching here the impact this is going to have on bond markets.

Outside of Japan particularly treasuries this eight-year experiment left more than $4 trillion dollar $4 trillion in funds for higher yield outside of Japan Japan as you mentioned the largest buyer of US debt we're talking about $ 1.1 trillion dollar here and the question is going to be how quickly that money will return to Japan with yields for Japanese.

Government bonds expected to push higher though we should point out this yield differential between the Japanese government bonds and other bonds certainly Still Remains high now the other thing to watch here is going to be what happens to the Nik we've been talking about this a lot the Nik hitting records in recent weeks here largely.

Driven by fundamental policy changes but also driven by a cheaper Yen with again expected to push higher now what does that mean for the foreign money continuing to flow into the nik's rise here now as with other central banks the other thing to watch here is how rapidly the rates are going to rise we heard from boj Governor Kazo Eda saying that.

He doesn't anticipate the accommodated Financial conditions will be maintained for the time being or he anticipates I should say so he doesn't expect rates to rise very quickly because when you think about it the inflation rate in Japan's still up 2.2% the bank of Japan has has lagged the major central banks but we're not.

Talking about the kind of inflation that we saw in the US now one more thing to note here the government did or the boj did also abandon the yield curve control that is uh the the bond or the policy here that has kept Japanese governments largely Tethered to that 0% rate and what last number to leave you here with this really speaks to the scope of of.

This policy that has been in place uh for nearly a decade now 17 years since the hike all combined the bank of Japan bought more than6 trillion dollar in Japanese government bonds and guys at a time when we're talking about the debt to GDP ratio in the US in Japan it is the highest in developing countries 250% of GDP is what we're talking about.

So uh really historic numbers here but at least the end of an era with those negative interest rates policies coming to an end the end of an era and also the move uh really creating ripples Beyond Japan noted by a number of strategist analysts out this morning in reaction to the move here from the boj all right Aiko thanks so.

Much we've got much more of your Market action ahead we're about 15 minutes until the opening belt taking a look at Futures you have Futures pointing to the downside looks like markets set to open in the red we've got more on that when we come back.

now a historic move by the bank of Japan the.

Central Bank raising its key policy rate for the first time in 17 years Yen sliding against the dollar you also have yield moving to the downside now the bank of Japan's action coming ahead of the Federal Reserve decision tomorrow we want to bring in Christy aulan Black Rock senior investment and portfolio solution strategist Christie it's great.

To have you here on set thanks for having me so let's talk about let's start with the news out this morning Bank of Japan the big headline here in terms of what this means Ripple effects Beyond Japan talk to us about how you're looking at this from a strategist perspective yeah so you know I think that it it's important that we note how.

Momentous the moves were out of Japan that we saw this morning I know we've talked about it a bit um but the First Rate hike in 17 years you know a return out of um the very abnormal situation of negative interest rates and into positive interest rates we think that that sets a really positive backdrop for Japan and Japan equities and I think.

That how investors can think about that more broadly in their portfolio is just another way to maybe diversify away from some of the remarkable concentration that we see in the US Equity market so we're constructive on us Equity markets but we actually see a lot of opportunity for investors to add Japanese equities here as well and this is not significant.

Enough to throw off say a Warren Buffett who's invested further into Japanese trading houses we know in recent years I mean this is and for those who have subscribed to that same kind of buffettology if you will of the markets this is not enough to throw a wrench in that right no I I I think that the the broader macro Tailwinds that we're.

Seeing from Japan moving out of deflation and into an inflationary regime are enough to offset some of the headwinds that we might see from a stronger Yen crazy this of course comes ahead of the FED decision tomorrow a lot of the focus is going to be on that dotplot what exactly the economic projections are showing what is your.

Base case at this point and do you think the Market's a bit too optimistic about how many rates we are going to see or the degree of those uh rate Cuts before the end of the year yeah so I mean if we if we you know go back and and even just think about how we came into this year the market was expecting almost seven rate cuts um and there was also a 100%.

Chance of a cut you know tomorrow in March if we went back to January um now where we set there's about a 0% chance so as you point out you know we're not watching to see if the FED is going to move we're watching to see what the dotplots and the expectations of forward policy are going to look like so you know our view is is has always been that.

We think that there's probably going to be about three rate Cuts this year potentially starting in June or July I think what we're going to get tomorrow from the from the fed and and what we're watching to see if chair Pelicans sort of navigate here is leaving himself some optionality and I think the Dot Plot is going to show us that we're still.

Probably going to get maybe median three Cuts here but I think the risk is that it moves to two rather than it moves to four how much does that matter for the equity Market I I think that some of the reaction of that has already been priced in since we've already seen so many of those cuts come out of the market since you know just since January in year-to.

Dat but I do think that it can matter for the lower quality parts of the market so if we look at things like small caps and we look at really highly levered companies they've struggled a bit this year and I think they can continue to struggle so what we prefer instead is really staying I mean up in quality up in market cap we like.

Something like qual um is the msci I shares quality Factor ETF um that's performed well last year in this year and we think it can continue to do so especially if at the margins we start to see Cuts coming out of the market rather than going into it do you think that and and I was looking through your black rock weekly Market commentary that the.

Team puts out um and it had within there that inflation is likely to settle above the fed's 2% Target in 2025 so with that lead time I mean what does that spell out for Consumer sentiment what does that spell out for business confidence as well in that near-term period yeah so I mean I think that there's a few different drivers of.

Inflation happening what we saw during the pandemic was obviously a supply side crunch um and and so you know I think that led to more temporary inflation and the transitory that you know is probably a dirty word now when we look back at got it on a t-shirt at this point yeah exactly um I think that we see some broader Mega forces happening in the.

Economy um global economy that can lead to some of that higher structural inflation um so things like demographic changes um are are you know things that we're focusing on for the the kind of medium term I I think the more important thing for right now is that we think inflation can be a little bit volatile throughout this you know throughout 2024.

And so you know maybe it's not just when the FED starts cutting but how many times this year and again it all kind of leads us back to this up and quality trade as being the best place to sort of camp out when there's that amount of uncertainty and volatility that we should expect Chris De aulan who is the Black Rock senior investment and.

Portfolio solution strategies thanks so much for taking the time here in studio thanks so much for having me absolutely well investor risk appetite is at its highest in 3 years that's according to a new Bank of America survey out today we're joined at the desk now by Yahoo finance's very own Josh schaer each of us is picking one chart from this BFA.

Survey Josh to dive into so let's start with you what are you interested in here Brad a really exciting chart on Bon yields right we always want to talk about bond yields guys why not expectations for lower bond yields falling to a one-year low according to Bank of America and the reason I point this out is similar to the some some of.

The conversation you guys were just having about rates here and we've seen uh basically a repricing of what we're expecting from the fed this year down to about three Cuts now for the year and the largest question I think right now though is how how long are we going to see this volatility in the rate trade because right now that volatility in the.

Rate trade when you look at some of the things that benefited from the dobish in December like a small caps that's down almost 2% over the last week while the S&P is actually up a little bit if I was looking at my charts right earlier so you've seen a significant lagging still from small caps compared to the S&P 500 as we've gone into this unsteady trade.

One thing that was interesting though in that trade that Mike Wilson over at Morgan Stanley was pointing out is you've still seen large caps be able to perform here it just hasn't necessarily been Tech you've seen a little bit of a cycle into more of a broadening out and so that's kind of my biggest question post fed is can we still see some.

Support here and some broadening out even if the dot pot doesn't come in that dubish is the trade still broadening out or is it a sell off well and it's what it comes back to too and this takes us to my chart actually because it's a little bit more on macro as a came through via this fund manager survey uh and two-thirds of the respondents here.

Which was interesting saying that recession is unlikely in the next 12 months there you're taking a look at the chart here the recession risks dissipating and particularly one of the things that was noted here is that the global economy will exper well they said it was unlikely that the global economy will experience a recession in the next.

12 months get this and and take a look at that chart that is the most in uh most since February of 2022 so the highest level that we've seen since 2022 of respondents saying that it is unlikely we would see a recession so that perhaps dovetails into some of the com confidence or the risk on tenor in some of the here here's the question BR.

Sure does that start coming down if we end up in a higher for longer State and we have people start talking about lagging impacts again I'd be curious what that chart looks like in two months right because we've had everyone talking no recession we're in great shape we're in great shape right when do some of these economists start saying should I.

Be worried about the labor market we were we were worried about the labor market with high rates right and now we're talking higher for longer does this start to come back down everyone's taken off their recession call in the last six months it feels like does that start to shift back I think will be interesting you would think it would.

Right because it kind of goes to the narrative that we were talking about at least at the beginning of 2023 this expectation Josh like you were just saying the higher for longer the fact that we were in uh the expectations very different from the scenario that we're looking at today but if we do see any sort of change to the doot like our.

Previous guest christe was talking about if we do see any sort of risk here that maybe the FED is only going to cut two times maybe that doesn't necessarily impact equities at least to the extent that me many are fearing it would but you would think you would get a some more people at least a handful of more people saying that the risk of recession.

Is a little bit higher than what it is today someone's got to be contrer in ch got be well yeah well 62% of these respondents and this what the respondents are saying 62% of them saying uh there's a 62% probability of a soft Landing here so uh that is the consensus as right and real quick we're going to throw it my chart because we.

Talk about the most overcrowded trades how people are positioning we have seen a bit of a shift and long mag seven the most over crowded or the most crowded trade excuse me at this point 58% of respondents saying that so we have seen a bit of a shift here in terms of whether or not we're in an AI bevel the other topic that everyone loves to.

Debate at this point the respondents were pretty split 40% saying that we are in bubble 45% saying no so the jury is still out on that time's going to tell on all of our trips I Bitcoin was on there Bitcoin the headline 10% people are long Bitcoin first appearance in the chart I know all right well when we do this.

Again my chart's going first all right CH thanks so much we have the opening bell coming up in just about two minutes stick with us we'll be right back.

A now all right big opening bell energy big Cosmetics week energy over at the New York Stock Exchange 2 you had eyes lips and face elf yesterday and today you get a little Cody ringing the opening bell.

There at the New York Stock Exchange and in Midtown Manhattan you've got Gentex Corporation I'm just assuming that's how they walk around their office is saying it why not anyway gntx is the ticker symbol there you've got some mixed activity to begin today's trading session as we're taking a look at the major averages the Dow by the hair of.

Its chinny chin chin seeing gains we'll see if it can hold on to it's not how you start it's how you finish so we'll see what goes on there for those 30 components S&P 500 negative though and the NASDAQ compositive also negative uh composite excuse me hopefully uh it's able to get into positive anyway we're covering the biggest Market Movers.

Following the opening bell on Wall Street Yaga finances Madison Mills on the floor of the New York Stock Exchange lots of catalyst this morning Maddie the FED kicking off uh and that meeting is going to go forward nvidia's conference going into its second day help make sense of this well I thought that I would never.

See a Fed day where nobody here at the stock exchange talks to me about the FED for 30 minutes but here we are with the Nvidia conference taking up a little bit of the air in the room but interestingly it seems like the news about that chip that had twice the power of the previous chips offered by Nvidia kind of hitting the market like a lamb this morning and.

That is perhaps because a little bit of that news was already priced in I'm taking a look at Nvidia on the Yahoo finance platform it looks like it's down by about 2 and 1/2% here still trading near the mid to top of the 52- we range though so that's also a reminder that this is a name that's had such a huge runup it's not too surprising to see it.

Have a little bit of a pullback maybe some profit taking from investors who are uh looking to this uh developers conference as a chance to make a little bit of cash having said that though that is going to be dragging down the other major indices which are also impacted by that fed day though we are not anticipating getting any huge headlines.

Out of that as is notable for J Powell to traditionally say that he's data dependent to hem and ha so a little bit of a mehh day heading into the trade today you guys all right Maddie let's also take a look at crypto because Bitcoin sinking once again today we certainly have seen a massive pullback from the record highs that we were just.

Setting last week what are you hearing down there just in terms of the movement and the volatility that we have been seeing play out within the price this is another Boon for the retail investor right because that is what's driving a lot of the pricing action here we're seeing Bitcoin having hit these record highs over and over again.

Starting to stall a little bit I just want to pull up uh my notes Here on the 50-day moving average because that is going to be a critical level to watch when it comes to bitcoin here that's going to be at 56260 that's the next floor that we are looking at for Bitcoin now having said that this is not sort of a downer for.

Alt currencies in general because we're seeing a lot of positive movement and Sparkle in some of the alt coins think Doge think Sheba enu any of those names that you're going to see on Wall Street bets on Reddit and this is typical of what happens in a retail investor heavy asset class like Bitcoin you see this run up in the the main sort of asset.

Which is Bitcoin in this case and then investors say okay well where can I get in to have a little bit of an edge get a little bit of profit and in this case you're seeing this runup in mem coin so you're seeing investor excitement around that opportunity to get in and get a little bit of a faster pull at cash and that's exactly what we're seeing play.

Out here now this is really bad news for some of those spot Bitcoin ETFs I spoke here at the stock exchange with Grace scales head of global ETFs about their spot Bitcoin ETF which had record breaking outflows yesterday and it looks like that's going to continue moving forward this week you guys all right MD thanks so much up today's trading.

Activity and getting us started here appreciate it we'll check back in later on time for today's stock to watch right now unil L shares moving higher after announcing plans to spin-off its ice cream business and cut 7,500 jobs worldwide in an effort to scale back on costs the split is expected to come by the end of the year you're taking a look.

At shares right now they're up by about 2 and a half% I mean of course important to remember this business has five of the top 10 selling Global ice cream brands in includes walls Magnum and of course Ben and Jerry's exposure in both inhome and out of Home Market there exactly in terms of the Street's reaction to this they're pretty positive.

Barkley was out saying that they value this portion of the business right around see if I pull it up in my not it's right around $18 billion so the brands are like you were just saying a a handful of names that are very uh recognizable to nearly every single household Across the Nation and when you take into account what this means in the.

Long term for their business we have certainly seen a shift of their business under their new CEO we know the company had come under pressure from Nelson pelts who also has a board seat now on Union lever he's been pushing for some changes here so this move here is going to leave the company focused on just four businesses Beauty and well-being.

Personal Care Home Care and also nutrition so many analysts at least at the first reaction first glance are pretty encouraged by this given the fact that the ice cream business had slower growth also lower margin so they're saying that this play does make sense for lever here in the longer term yeah the CEO is saying fewer things with.

Better and greater impact so that's what they're going to be prioritizing we'll see how they continue to communicate some of the results to the street here coming up we're going to be bringing you even more coverage from Sarah week we go back to Houston Texas where the stars at night are big and bright we've got a conversation with Exxon Mobile CEO.

Darren Woods that's next yeah.

A a now.

I'm Julie Heyman you're watching Yahoo finance and I'm here at the Sarah week by S&P Global conference in Houston Texas where a big topic of conversation as we've been talking about has been the energy transition but there has been sort of a reframing of the conversation uh by some around the energy transition.

One of those folks is Darren Woods he is the CEO of Exon Mobile and he's joing me right now thanks so much for being here really appreciate it um when I say reframing the transition it's because you among others have sort of said we're going to need oil and gas for a little while here another comment on this front that really struck me today was from the.

CEO of Saudi aramco who said it was a fantasy that we could phase out oil and gas and he said instead we should be investing in them fantasies a pretty strong word and I'm curious what your thinking is around that and whether you think you've been suc uccessful in moving the conversation on this front so I think our emphasis has been uh one.

Recognizing the solution set that that the world's been pursuing with um wind and solar and EVS is a necessary but not sufficient set of solutions and that we've needed a much broader um set of solutions to try to drive the change and the transition that everybody's hoping for one that involves skill sets that frankly companies like.

Exom mobile and our industry can bring to bear and so that with the Biden ad Administration and the IRA started to open the aperture on other opportunities to reduce emissions above and beyond what wind and solar can do so carbon capture and storage a really important part hydrogen low carbon hydrogen is an important part of that biofuels is an.

Important part of uh decarbonizing uh the world and society and so that conversation is starting to evolve and people are becoming more acceptable accepting of that and that's what we're focused on is at this stage when we have this huge challenge in front of of us of decarbon the energy system is we need more solutions not less and I think.

We're seeing that conversation uh happen and because we've been so narrowly focused the time it's going to take to achieve it has been slowed I think one of the reasons for what you heard with the mean is that idea that as the longer it takes to transition the longer you're going to need traditional fuel sources.

Um I'm glad you brought up the IRA as well as sort of something that spurred investment here we're obviously in a presidential election here in the United States and former president Trump has talked about getting rid of the IRA obviously it's legislation so he couldn't do it alone but he could weaken it and depending on what happens to.

Congress as well maybe he could get more people on board sounds like you're a fan of the IRA it's been helpful in some ways to your industry so what are your thoughts on whether that could potentially be weakened well I think you know in terms of the IRA our view is if if the society wants to decarbonize the way to do that is to focus on the source.

Of the issue which is emissions and to focus on you know looking at Carbon intensity and setting standards for carbon intensity which the IRA did and so it basically is technology agnostic says what you should focus on is achieving an an outcome which is lower carbon intensity for a product that makes us a fan because that says it.

Opens up the opportunity for uh other businesses and industries to participate to try to meet that uh and that's why we're we're supportive why we've been looking at investing in that ultimately the decision as to how quickly you drive uh emissions reduction is going to be a function of what Society wants which will be represented through the.

Political process and the rules that come so if there's a change in the administration and they choose to take a different path then you know we're we're responsive to that but I think uh ultimately the world needs to decarbonize we need to do more to reduce emissions and I think the Raa is a good step towards that in terms of being.

Technology agnostic Focus on reducing the emissions and lowering the carbon intensity of society and I think that's the right approach so all else being equal you would not want president Trump to try to eliminate I think this back and forth as one Administration or one party comes into power and and the other one comes back and flip flopping is not.

Good for making progress in the space it's not good for business it's not good for society as a whole we need consistency in this space and so I would argue for you know uh have the right kind of bipartisan debates get to a solution set that people can agree on and then Implement that and sustain it consistently so that the businesses can.

Then begin to plan around that and make the kind of Investments that we need to in order to drive emissions reductions so the trajectory that we're on currently where we are still seeing growth of demand for oil and gas production of oil and gas at the same time as you talked about concommittant with the growth in other types of energy.

Sources and with carbon cap Technologies are you confident we can stay on this trajectory and also mitigate the worst effects of climate change you know some of the you know sort of climate catastrophes that we've begun to see crop up over the past SLE years I think one of the challenges is the way the problem has been stated in the past is.

We need to get rid of uh fossil fuels natural gas crude and uh and and coal and I think what we should stay focused on is we need to get rid of the emissions associated with the combustion of those things and I believe that while there are some circumstances where you need to get rid of the products and you can't continue to combust there'll be.

Other circumstances where you just deal with the emissions and so carbon capture and storage allows you to continue to use existing Energy Systems but capture the emissions associated with the combustion in those energy systems that will be a very important part of the solution if you look at what we're trying to do in our peran in the.

Unconventional business we are actually growing production in reducing emissions and we've got a net zero um emissions plan by 2030 for our peran production which is actually growing over this time frame so you can do both but you've got to be very thoughtful about it I think that again it comes back to the focus ought to be on how best do we reduce the.

Emissions in some case it means getting rid of existing Energy Systems in other cases it means dealing with the emissions associated with those Energy Systems and we should be open to either one of those if we open our minds and stay focused on the right problem statement I think we can make a lot of progress a lot more quickly than we have.

Been 2030 is not that far away no um how far are you towards that goal because we've seen some carbon capture both by you all and other companies um but it hasn't really scaled as of yet so are you expecting to see a big acceleration in the next six years so in the peran the net zero for the peran is the emissions associate with our production.

Of oil and gas and so we're on track to meet that objective and so we're electrifying we're putting in Renewable Power Systems or Contracting for Renewable Power to and so that that's on track and we're going to achieve that very very confident in that carbon capture and storage is a brand new industry and you know one of the big.

Challenges we've had in that space is you're creating a brand new uh value chain with a technology that historically is used for another purpose that's moving along but it's it is going to take time but just to give you an example of the scale that that our industry can bring to this we've got three contracts.

Uh with an industrial uh gas uh supplier with a steel plant and with a a fertilizer company to capture their CO2 and to store it 5 million tons perom this that uh storage that that capturing of that CO2 and storing it is the equivalent of all the electric vehicles that have been sold in the US in total so just three deals at scale is.

Equivalent to the entire electric vehicle Fleet in the United States and when and when are you there when in other words you sign the deal we' signed the deal so we're we're starting to build the facilities and we will be bringing those facilities on 2025 2026 time frame got and then that business will continue to grow we invested in a.

Pipeline a CO2 pipeline system that allows us to basically transport that CO2 we've got the ability to do the drilling and to manage the reservoir and we have the technology to capture the CO2 and so we're putting together that value chain signing deals we've got uh group that's continuing to work on additional deals and our expectations.

Will continue to grow and capture more and more CO2 and it'll make a big difference.

now Sarah week by S&P Global bringing together all of the top names in oil and natural gas for the annual Global energy.

Conference and Yahoo finance had a front row seat bringing top commentary including a conversation with Exxon Mobile CEO Darren Woods where he spoke with our very own Julie Hyman about the energy transition our emphasis has been uh one recognizing the solution set that that the world's been pursuing with um wind.

And solar and EVS is a necessary but not sufficient set of solutions and that we've needed a much broader um set of solutions to try to drive the change and the transition that everybody's hoping for for much more on the energy space we now joined by Paul moltov who is Pavo moltov excuse me Raymond James managing director and.

Equity research analyst Pavo thanks so much for taking the time here today you just heard the commentary there from from Darren Woods here I'd love to get your perspective on on what he had to say about this broader transition and and what some of those takeaways that he's seeing from that seat uh at Exxon Mobile from the swe.

Conference it's factually true that fossil fuels will continue to be needed for a long time to come I mean no one has seriously disputed that so when you know we talk about net zero emissions by you know 2050 right that's 26 years from now to stay the obvious and even then by 2050 there will still be need you know.

For some amount of fossil fuels for example natural gas to make chemicals you know oil for Aviation and and the Marine Market um but it is a question of time you know before for example Global oil demand peeks and begins to decline you know we we just don't know yet you know precisely what that timetable looks like.

So then pava with that in mind what do you think this really tells us about exxon's strategy then given the fact that demand for oil remains high and is likely to remain high like you were saying here for years to come well we we know that Exxon is acquiring um Pioneer Natural Resources you know one of the largest Acquisitions.

Uh in in the history of the oil and gas industry uh you know we we know that Exxon is investing in you know some kind of renewable and energy transition initiative so carbon capture uh that you know you've heard in the interview about uh but look as as a general premise uh the only oil companies today that are truly kind of needle moving in.

Their you know sustainable energy Investments are in Europe so these are going to be companies like BP equinor shell totel eii uh American you know oil and gas companies are generally further behind in their energy transition plans and the same thing you know I would say for companies like Sadi aramco or Petro.

China or Petra Bross Pavo I I wonder from your own modeling uh and your own research here into these equities into these major oil and gas names what timeline you're kind of annexing to some of the Ambitions that they've communicated to the street so Net Zero for just about all these uh players is uh middle of the.

Century right so that's long time from now to you know to say the least you know it's it's safe to say that you know none of the uh you know Executives who are you know who have made these Net Zero decisions in recent years will be running the companies know once Net Zero actually gets implemented by the middle of the century which means it will be up.

To the subsequent generations of management teams you know to make the kind of the the tougher decisions for know how to reach Net Zero you know within the next 25 30 years do you foresee a a changing of the guards or a changing of the person behind the Resolute desk in the white house as throwing off some of those.

Timelines well as I mentioned the the most ambitious you know road maps uh for you know in the nearer term for energy transition and the oil industry are are in Europe uh so of course the US election has has has no you know relationship to that uh as far as uh you know Biden versus Trump short answer is no um you know.

Once you know companies have committed to you know to Net Zero let's remember this is not because the government is forcing them to do it right nobody forced Exxon you know to put out a net zero Target no even in Europe by the way you know these are not legally binding uh you know Net Zero requirements for the individual.

Companies you know it's it's a largely matter of ESG shareholder pressure kind of voluntary decision making and here is the reality no matter how the politics goes uh energy transition will continue yes governments play a role they can play a useful role or a less a less useful role uh but for the industry it is important to remain.

On this road map or frankly risk getting left behind pav let's do out a little bit talk about what's going on at a macro level because the Big Driver one of the big drivers in the recent price uh to the upside movement to the upside in the price of crude has been Russia's war in Ukraine now there is talk or there is I guess some sort of thinking.

Line of thinking here that we could see a cap on the Move higher if we do see more Russian oil come online what what do you see this doing to the price of crude at least in the short term so when when Russia invaded Ukraine um just over two years ago you know the number one question right at the outset was would the Kremlin try to weaponize.

Its oil industry in other words deliberately cut off Supply as a way of hurting the global economy and the Kremlin tried playing that game with natural gas but not with oil so that's why when oil prices R up in the middle of 22 two they came down pretty quickly once people realized Russian oil is continuing to flow in recent weeks.

However we have seen the war quite literally begin to have an effect on on Russian Supply because Ukraine has become skilled at using drones to physically attack Russian oil infrastructure now it's not the oil fields themselves those are two are you know away in Siberia but the refineries across Russia you know the European.

Portion of Russia that are you know processing Russian crude have been attacked numerous times by by Ukrainian drones in recent weeks uh and that has pushed up uh the price of price of oil and in particularly the the price of um a refined product so gasoline and so on Pavo mov always great add to get your inside thanks so much for hopping on.

With us here this morning Raymond James the managing director and equity research analyst thanks paava keep right here on Yahoo finance much more of your Market action ahead we'll be right back.

n.

now good morning everyone I'm Brad Smith alongside Shauna Smith we're 30 minutes into the trading session here on the day let's take a look at how things are shaping up right now stocks they're.

Mixed as the federal reserve's March meeting gets under way all eyes are going to be on the fed's summary of economic projections or known in your hood as the Dot Plot investors they're going to try and gauge the number of rate cuts that we could see this year the S&P 500 down by about 210% right now all right let's get to some trending.

Tickers first up super micro computer Shares are actually plunging today off just about 12% now the news here is that the company plans to offer 2 million shares of its common stock in a public offering Goldman Sachs is a sole underwriter of this proposed offering and is expected to have a 30-day option to purchase up to 300,000 additional.

Shares this coming just a day after the computer server maker was added to the S&P 500 Index and certainly we have seen massive gains in this stock since the start of the Year we're also tracking shares of Chinese EV maker exping they are down right now after the company reported better than expected fourth quarter results the company delivered.

Over 60,000 vehicles in the quarter that's up from about 22,000 the year prior here the improved sales helped offset profit margin contraction xang saw that thanks to the EV pricing war that on margins there asro zenica trending in the news today is going to be buying a Canadian drug developer Fusion Pharmaceuticals for a deal valued.

At just around 2 billion now it's a sign that the pharmaceutical giant is betting on Next Generation Cancer Treatments shares of fusion are also surging on the news you can see the move to the upside there not a huge surprise trading just around 21 bucks a share all right also tracking here today Bentley's electric vehicle lineup coming in later than.

Anticipated the luxury automaker delaying its timeline on an all EV future by a few years Yahoo finance senior Autos reporter Pro Superman and here to tell us why this luxury automotive manufacturer is pushing it out a little bit here you know they still want to hit that 2030 EV timeline but but Bentley CEO Adrien Hallmark uh.

Told me in a group of journalists at a round table last week that some hybrids May extend beyond the companies that the previous 2030 2030 all EV deadline they think that you know as EV demand cools they want to keep some of these uh performance hybrids uh going going strong here because perform uh demand is still high for these cars of course.

We're seeing EV demand sort of reversed there so they're pushing back their first the debut of their first eeve to 2026 uh so 2025 and they want to have these EV cars out by 2030 but they just might not have fully electric portfolio just quite yet so BR this is a a setback here for the company as you look out to what demand is going to look like here.

For Bentley 2023 was a bit tough here given the obviously uh macroeconomic environment right now how does it look for 2024 are we expecting to see more of a rebound so I spoke to Adrian about these these issues and he said that you know 2023 was a bit of a dip compared to 2022 because it was such a strong year they had so many people who were.

Pandemic buying like crazy and they couldn't even fulfill they had 16,000 orders only 15,000 slots to actually make these cards which is a lot for a uh a huge a lot for a luxury automaker based in brit so um 2023 also saw uneven performance in China and Europe basically China is was had a a bad first half but then improved second half.

Europe was the reverse good first half bad second half and the US has been pretty strong so looking ate 2024 they expect kind of more the same Improvement in China I think was a big uh factor for them that's a huge market for for them with the BGA and then cars like that so yeah I I think that you're going to see that plus personalizations custom work.

Is like a huge profit driver that 70% of orders had these in their in their cars last year so they think that continues and they want to keep pushing that personalization custom work for their cars interesting all right we'll see if I can ever become one of the Bentley uh potential buyers out there a perspective and uh aspirational thank you so much.

Fross appreciate it well us home building bouncing back in February the new residential construction jumped 10.7% in February from the month prior to an annualized pace of more than 1 A5 million units that's according to the Commerce dep Department while home affordability continues to be a challenge for many Americans the.

Expectation the FED could could cut interest rates this year is making people more optimistic that we could be in a buyer market so for more on the housing sector we're joined by Jim Tobin who is the National Association of home builders chief executive officer and president the nahb has had some news of its own this week we'll dive into that.

Of course here Jim but what more noticeably are you seeing in this environment and and are we set up for a a shift in the sentiment out there good morning yeah I I do think we are set for a shift in sentiment uh I I hear I see optimism uh we were just at our our annual trade show just a couple of weeks ago and and the uh the vibe amongst all.

The attendees was was optimism I really think they are looking at 2024 as this pivot year uh where we come out of the the high interest rate environment hopefully we'll see some of those Fed rate cuts through the course of this year uh but really demand starting to come back and of course our our members are ready to respond by building more.

Homes and Apartments Jim what happens if we don't get three rate Cuts what happens if it's two or God forbid if it's zero what then happens to home builders well I I still I we are optimistic that it's at least two uh you know some people were forecasting something a little earlier in the year we think that the the rates are going to.

Be backloaded into the second half of the year um but we're we're I think we're not anticipating that we're really thinking that the econom is going to keep moving along and a nice Pace I know there's been some concern about a a little spike in inflation especially in the shelter inflation piece uh but I think that we will continue to see rates.

Moderate into the 6% range and again we're still waiting for people to get used to the new normal out here uh rather than those three or 4 per rates that we got used to over the last four or five years so again we're optimistic and and hopefully the the FED will uh will see uh that it's the right thing to do is to is to keep moving the the.

Country forward by bringing those rates down of course this week we got the the National Association of home builders um the Builder sentiment report that came out that came out on March 18th and just yesterday we heard from the chief Economist Robert deed saying however as home building activity picks up Builders will likely grapple with Rising material.

Prices particularly for lumber how eept is the consumer environment to really take on more of this pricing as new construction comes about yeah I mean between between labor and material prices and then then you have to factor in lot costs as well well I I think ultimately uh if if demand surges and and and building continues to.

To move forward but but not at the pace to meet uh that pent up demand I do see some spikes in prices coming and you know Lumber in Lumber in particular we saw those price spikes right after the the the covid uh the covid lockdowns when Home Building really got going it's just that we're not we're not sure that the lumber companies are are really.

Getting ready for a surge in demand that they're you kind of waiting for us to get a little farther out ahead and if we do do that then I I think the fear is that the lumber company's going to play catchup which means a supply Crunch and then price spikes and of course that just translates into higher higher construction costs Jim I'm curious the.

Big headline or what of the big headlines I should say within your industry over the last week has been the N settlement and the cap that this is placing on commission fees I'm curious does that have an impact on homebuilders or or what does that mean then for home builders going forward just in terms of whether or not they're able potentially.

To save money maybe in the long run or or is there any impact sure home home builders operate very much is is just a buyer or seller uh you know Realtors are involved in a lot of those if not most of those transactions when buying a new home uh so if if commission prices come down then of course the the cost of the Builder if they if the Builder is.

Selling the home they're they've been on the hook for that that 6% to help that uh that buyer get into the get into the home so I think is Commission come down uh hopefully we're priced down I hope that we will see cost to to builders come down as well as and and that just translates into lower home prices for consumers but again we have to see how.

This this all shakes out but uh but it it was a big move this week with n's decision Chim I'm curious have you heard from any of the home builders just how they're thinking about this and how big of a boost maybe they see potentially being to activity here in the longer run yeah it at the at the end of the day uh for for the the members of the.

Nationalist Association it's all about uh home price and and building an affordable home or apartment and anything that helps make it more affordable for Americans get into homes that's a good thing and if commissions are part of that uh that that is uh that's one of part of the equation the real answer in the long term though is.

Is something that the president said in a state of the union speech we've just got to build more Homes and Apartments we've got to increase Supply so for us the ultimate Panacea for the housing affordability crisis is more homes and more Apartments Jim look I'm I'm an aspirational homeowner one day what's the hot Market that you're seeing.

Everybody flock to right now or where we're seeing the most spikes just just so I have some things to consider out there I know that red fin is saying uh Portland Oregon and their uh in their report that came out this morning looking particularly across the home price index I think the only thing that could get me out there is probably.

Bendon dun's Golf Resort but what are you seeing actually uh I've been visiting with friends in in the Portland Market this week and it's true that the Portland Market very tight uh needs more housing house high home prices but yet Portland is really starting to wake up to the fact that they've got a supply.

And affordability problem so yes I think we're starting to see some activity out here on the West Coast but I still think the hot markets are always going to be in the Southeast I you know Texas moving East over into Florida and the Carolinas they just have a low regulatory environment they've got a a a very welcoming uh Pro Home Building Pro.

Apartment attitude down there and and they've got the weather uh not that Portland isn't lovely this time of year but uh at the end of the day um the southeast continues to be the Boom Town uh when it comes to Home Building in the in the country what do you think where you going or Southeast it's brick in Portland this time of the year I'm not.

Going out there I got to get a stronger jacket Jim it's not that good all right Jim always great to talk to you thanks so much for joining us here on Yahoo finance today Jim Tobin a National Association of home builders CEO and president thanks Jim thank you well coming up we will sit down with former Dallas fed president on what he thinks.

We are going to hear from Fed chair Jay Powell next week and where we are in the fed's fight against inflation Robert Kaplan joining us right after the break.

the Federal Reserve kicking off its.

Two-day meeting today now the big focus is going to be on the central bank's economic projections investors right now looking for any clues on the timing of that First Rate cut Traders right now pricing in about a 55% percent probability that we will see that First Rate cut in June to break this all down for us and what we could.

Expect from the FED going forward we want to bring in Robert Kaplan he's the former Federal Reserve Bank of Dallas president thank you so much for being here good to be here so let's talk about what we are likely going going to hear or see from the fed this week there's been so much emphasis placed on economic projections on the do plot how many Cuts.

We are going to get between now and year end how are you looking at that uh the FED said in December that they were uh penciling in three for this year I still think that's a pretty decent estimate it may slip to two but it'll be in the neighborhood of two to three but the most important thing that I think JP will try to do coming out of the mean is.

Keep his options and keep the fed's options open because uh there's a lot of mixed uh data and crosscurrents and so uh I don't think he wants to be boxed into any particular month or action but he wants to leave the options open that if they want to act in June they can but also they they reserve the right to Kick the Can a little bit beyond you so.

They've continued to talk about data dependency and and you're giving a nod to the mixed data that we are seeing right now so where would we see more of a trend be locked in that's in line with what the fed's targets are so I'm much more of a fan of what are the drivers of the data than the actual bouncing ball the data itself and the.

Drivers uh the two or three drivers I'll mention uh the economy remains resilient however um and the job market remains very strong uh there's been a little bit of increase in labor Supply which is helpful to the fed and that's why the unemployment rate ticked up but the truth is there's still very strong demand for Labor uh and maybe.

Productivity is improving a little bit the big crosscurrent that I think the FED is dealing with and they may or may not want to acknowledge is fiscal spending we ran a 15% deficit as a percentage GDP in 2020 we ran another close to 15% in 21 that was due to arpa but that arpa money actually is still not been fully spent and then you've got.

The inflation reduction act and then you've got the infrastructure act and so last year we ran a deficit over 7% of GDP in 2019 the deficit was four in a fraction here's the point uh fiscal spending I believe is one of the big reasons the economy has been this resilient and it's a big reason why the service sector inflation in the service.

Sector is very resilient we have a aging Society I wish we weren't aging but we are and Workforce growth is decelerating and so uh people are struggling to find workers in the service sector and I think that that makes inflation sticky and so the FED looking at all these crosscurrents uh is trying they don't.

Want to move prematurely uh it's been a long battle in inflation uh we're still at full employment and so I think they're going to be patient and I think they ought to be patient is that enough then to maybe support the out there that maybe in fact inflation has stalled and will stall around these levels for a little bit it's possible now remember.

There's two big parts of inflation goods and services in the goods area not perfect we've got pretty good disinflation in Goods it's it's the service sector that if there's a stall and it all revolves around workers excess demand for workers not enough workers uh and we're seeing uh if we see.

Some stalling or stickiness it'll be in the service sector and again if you're spending on new battery plants throughout the United States that's the inflation reduction act new infrastructure projects the unspent arpa money from 2021 is still being spent that increases demand for workers so there's a lot of sectors in this economy.

That are feel like they're in a recession some anything interest rate sensitive but this government spending on these projects in my opinion is creating a resilient bid for workers and that may be creating some of the stickiness which gives that which may create some of this stalling that you're referring to but I don't know and they.

Don't know the FED doesn't know and so when you don't know turn over a few more cards and and play it out and they and and if if the unemployment rate were spiking there'd be more urgency to act but it's not and so as long as unemployment stays employment stays strong and unemployment stays low I think they've got the luxury of patience.

The FED has leaned into of course its dual mandate as it should we had fed Cher pow though acknowledged that the pandemic may have changed in a sustained way how they target inflation in recent weeks and so with that in mind should the FED be over indexing or giving more weight to to some data points than others as they're trying to figure out.

What of the path they can lean on to try and uh combat the same inflationary pressures they should be looking at data but they should be looking at again fundamental drivers that explain the data problem with data is it gets revised it could be incorrect it could be misleading it's aggregated which happened with the employment situation.

Where we got those two key revisions I think the big fundamental drivers are we've got a decelerating aging Workforce and we've got substantial government spending that is uh that is bidding on workers um again the flip is you got a lot of immigration maybe some of those workers are entering the workforce that.

Would help productivity may be improving that would help I mean you could grow faster with lower inflation and so it's not clear though and sometimes when it's not clear you don't want to be a slave to the data but you want to see some discernable sustainable Trend and so far we lately we haven't quite seen that and I think there just take more time turn.

Over a few more cards so what does that then tell us about the soft Landing narrative it seems like that from the points that you're making that at least has the highest chance of happening at this point I think so so the good news is uh it's for me it's very it's unlikely in the near term we're going to have a recession the bad news is the.

Cost of that soft Landing you've got government debt to GDP over 100% you have government interest expense on its way to a trillion dollars by next year rates are staying high that really burdens business but it really burdens the federal government when you've got n trillion of treasuries to sell this year so the only thing is everybody's.

Obsessed understandably with what the fed's going to do fed will do its job I think they should be more obsessed with the government spending and The Leverage at the government level and government interest squeezing out government programs I think that's going to be the bigger issue to deal with and I think we we we do well to focus more on that.

Issue I think that's an issue that's going to be more thorny in the months and years ahead there's some overe exumer within the markets right now as it pertains to the the sentiment either driven by the AI Rally or driven by the level of cuts or the the pacing of the cuts that we would get as well as we saw through uh the BFA Global fund manager.

Survey the sentiment the highest since January of 2022 all that considered for this Market what should they expect of the FED to either continue to deliver or kind of dampen down some of the expectations so my own view if you look at financial markets more broadly Equity markets if if you've got growth that's sustainable if you've got improvements.

In productivity which is obviously helping AI as part of that then you could tolerate higher rates because you've got growth with it I think the fear for the equity markets for example and other markets is you got lower growth and still sticky inflation uh but right now I think the the the stock market's responding reasonably well not.

Just to the FED they they'd prefer the FED would have been able to cut rates by now but if the reason they're not able to cut is growth is better then then that that's bolstered the stock market my concern is this government spending will eventually need to Peter out we're going to need to get it under control and then I think you'll see a clear.

Picture of what's the or organic strength in this economy I think it may be slower growth than what we're seeing now and and I think that's more of a looming question for the markets but should this Market brace itself to be upset by the FED in the near term I don't think the FED itself is going to upset them I think the FED will do its.

Job I listen two years ago I felt the Fed was dramatically out of position rates were too low there was still buying bonds it's now done a 180 and fixed that I think the FED is well positioned now will do it job I don't think the fed by itself is it it's going to do it's going to do what it should do I think the market actually should be.

More worried about the fiscal situation and how much of this growth is organic versus artificially stimulated by government spending which is unlikely to be sustainable that's a bigger issue I think I think not the FED fed will do its job Robert Kaplan former Federal Reserve Bank of Dallas president thank you so much for taking the time here.

With us in studio good to talk with you absolutely we've got all your Market action straight ahead stay tuned you're watching Yahoo finance.

retail data out of China revealing better than expected sales growth one of.

The companies that has benefited from this to a certain extent has been xong when you take a look at their earnings a 53% quarter over quarter Revenue increase although off those relatively depressed levels for more on the state of China's market right now we want to bring cran shares Chief investment officer Brendan aher Brendan it's great.

To talk to you here just put us in perspective taking a step back and taking a look at the recent data that we've gotten out here from China it is looks like to be stepping in the right direction how close are we just in terms of really turning a corner and turning a corner and seeing a stronger recovery yeah thanks for the opportunity.

And certainly we're seeing China's economy come back it's it's incremental it's slow uh similar to your previous guest Mr Kaplan the former fed fed Governor China's been unwilling to do major fiscal stimulus because they don't want to go in further into debt they don't want to create inflation so they're allowing the economy to come.

Back and what we're seeing from the Q4 earnings thus far is restaurants and travel are where you're seeing the Chinese consumer start to spend more and we think that will uh broaden out to other areas like eCommerce which was quite strong in terms of retail sales so so China's coming back just a little bit slower than than maybe investors would.

Like and so for investors that are trying to position their portfolio and and looking across International opportunities how strong is China as a portfolio play and Are there specific sectors within the region that they should be focusing in on yeah I mean we're all invested in China either explicitly or implicit ly that you have.

A lot of China exposure through great us multinationals if it's Apple Tesla Starbucks Boeing um n you know a whole host in terms of explicit where we're really focused at crane chear is on the growth segments of China's economy that that some of the underperformance of China indices is due to very high weights to financials energy Industrials.

Materials and real estate slow low sectors so so crane is we want to get exposure to growth areas like domestic consumption as it happens online uh clean technology which includes electric vehicles solar wind uh but also technology plays like semiconductors how much though is some of this optimism being offset by the weakness that we.

Continue to see within the property sector and the fact that that continues to shake the confidence not only obviously of Chinese investors but also just from investor interest on a global scale yeah 100% I mean the the real estate situation in China is dual faceted one is the falling of real estate prices is weigh on domestic.

Consumption as Urban households have two-thirds of their wealth invested in real estate so so as part of their portfolios declined in value they've been been slower in terms of consumption the other side of the equation is distressed real estate players like the everr and Country Gardens uh the lack of property projects which means less.

Construction workers less demand for cement and steel and that's why real estate is receiving so much attention from the Chinese government they won't allow a financial crisis to occur it's not in their best interest to allow real estate unfold into a crisis which again is why we're seeing so much policy support as it relates to foreign policy.

And and international business how much of a trading event does the general election in 2024 here in the US create I think there's um you know geopolitics um unfortunately the politicians from both sides don't get don't get along nearly as well as business people uh just last night you saw nvidia's CEO speaking to how they're.

Actually creating uh chips for China's electric vehicle automakers um no different than Apple Tesla General Motors Exxon Mobile you know business people get along just fine and it's unfortunate that the two sides aren't traveling more uh like business people are I'm I'm I'm a little bit less concerned about the uh election because.

I think all the investors who are worried about it are no longer invested and that's that's kind of makes me constructively bullish on the um rally we've had since since January you mentioned the us multinationals earlier what what would be your top picks or plays for the rest of 2024 in China well I think I think you know.

Self- serving and highly biased you know our Flagship fund is focused uh kweb is focused on Chinese internet companies but I think those comp ianes as we saw even today look at 10cent Music Entertainment reported very strong earnings uh we had a a smaller company called Tong Chen travel reported Revenue growth over a 100% tomorrow we have.

Pindo Duo 10 cent and kashu Reporting so I think the Q4 earnings is showing this rebound it just it's been out of sight out of mind for investors and that's why we're seeing this grind higher which I'm all for even even today's BFA fund manager the most crowded trades long US tech short China I mean we've already started the rally and yet these people.

Are still shorting so again that grind higher makes me very constructive on the space and it's self- serving again and highly biased that I'm more uh I'm I'm heavily invested in kweb personally uh but that is an area I really do like just because of the very very cheap valuations as well as the orientation to China's domestic consumption story as it.

Comes back yeah it was interesting as you were mentioning 10cent Music Entertainment Group and the fourth quarter paying users the the music paying users up 20.6% there uh and the RPO increased by about 20% year-over-year so uh no doubt some good stats to come out of that report thank you so much for joining us.

Here today Brendan Ahern who is the crane shares Chief investment officer appreciate it thank Switching gears here let's talk a little oil oil prices pulling back from a 5mon high as in investor caution Creeps in here with the latest on the slippery slope is Yahoo finances Nez for hey Nez hey Brad yeah right now we are.

Seeing oil that's inching a little bit higher right now we're looking at oil Futures that are up 8/10 of a percent for WTI up above $83 per barrel Brent crude is also higher not a lot of movement today but adding to yesterday's uh 2% move and this is actually kind of a bullish sign because if you take a look at where we were at last week we.

Broke above $80 a barrel so the fact that it is just hanging out around 83 for West Texas intermediate that's a little bullish and some analysts are expecting now that you may see a a pullback uh in the near future but what is driving all of this well let me count the ways many ways here but first of all you've got the OPEC plus uh uh cuts that.

Are still going on you also have uh China data recently that came out that was uh positive uh for demand and then you've got falling inventories in the US uh and of course you have those drone attacks against Russian refineries which has been driving uh oil prices higher but let me show you one other point that I want to mention and that is re uh.

Energy related stocks year to date I want to pull up this chart take a look here the second best performer among the sectors up 9.4% for XLE so there has been a rotation going into these energy related stocks guys and that's excellent breakdown and coverage as always thanks so much appreciate it thank you coming up we're going to be taking a look at.

The state of real estate following the National Association of realter lawsuit settlement we'll break it down after this Yahoo finances wealth is your guide your group of advisers planners and jargon Busters to help you save build and grow your money how do I know if I'm saving enough for retirement how do I know if it's right for me to go on that.

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up a.

the National Association of Realtors settled Landmark lawsuits agreeing to pay $418 million in Damages and amend several rules around commissions the implications could be widespread not only for home buyers but also for the number of companies and businesses in the sector let's bring in Ryan Thomas.

Who is the managing director and real estate technology Analyst at KBW with steel company to discuss more here great to have you here with us who is the biggest beneficiary as the result of this settlement I mean thankfully consumers we think that these changes enacted in the settlement if it goes through are.

Are going to stand to reshape the housing market in the greatest fashion we've seen in over 50 years historically consumers have lacked a lot of transparency around the process of how commissions are set and paid particularly home buyers and we think that these changes ultimately bring a lot more knowledge to home buyers in in.

Their ability to negotiate and sign off on those commit and and at the end of the day hopefully that reduces Commissions in aggregate by as much as 30% or more we've estimated Ryan to what extent is this going to reshape the housing market and I asked that because we were talking to Jim Tobin he was nhb as CEO earlier in the.

Hour he's talking about the impact that that he sees at least it having for home builders here in the longer term how do you see that ultimately potentially boosting activity here over the next several months or once it goes into effect in the summer well the the plumbing of the housing market is is certainly complex and.

There's a lot of different stakeholders whether it be home builders as you point out mortgage companies title companies maybe the more obvious players like the residential brokerages and even the real estate portals that help consumers shop for homes and we think that this ultimately stands to impact all of those stakeholders um you know our Focus has.

Predominantly been on the impact to the traditional brokerage model and how that might need to evolve to adapt to these new rules and ultimately you know support buyers in this new type of structure that brings them more transparency and hopefully more options in the types of services that they can ultimately use in the home search.

Process now for brokerages that might entail a smaller commission pool for which they're competing around um and so that can certainly cause some disruption and then perhaps just as interestingly real estate portal is that you know have historically relied more on the buy side piece of this commission pool for their revenue models companies like Zillow.

Realor.com you know may need to reconsider their focus in the role that they play in the housing market um and potentially shift that focus more to the sell side in terms of advertising homes um for home builders as you point out you know the question becomes if this overall reduction in friction costs around one of life's biggest.

Transactions ultimately incentivizes more housing turnover improves affordability and certainly at the margin we think that's true but but that will take time and ultimately we think overall macro supply and demand Dynamics are going to play a bigger role for those types of players but it certainly you know shows.

You that this has a much far reaching impact than just the traditional you know broker players in in this landscape is this so significant then that it would change the perhaps price range that a a potential buyer is willing to take on for for a home well it's it's a very common debate around whether or not you know.

Commissions are are built into the home price and if those decline do home prices actually fall um you know there's data that supports that on both sides of of that coin you know my personal view has been that as we said earlier home prices are are set by supply and demand to the extent that you know these friction cost commissions around the.

Transaction are lowered perhaps that does uh end up reducing home prices at the margin uh you know I think another important factor here is that um you know there is going to be some added friction especially near term uh for home buyers that may potentially be on the hook to cover the cost of their.

Buyer Agents commission under their own pocket now Sellers and listing agents will still have certain mechanisms to be able to uh reimburse the home buyer for the cost of those Services um but to the the extent that that does not occur on a case-by Case basis some home buyers might need to re-evaluate you know whether or not they choose to work with.

An agent how much they're willing to pay the scope of services they they're they're seeking out a white glove service versus just a more basic type of offering and how that ultimately plays into their own affordability equasion around you know their their home search process right what what do you think is going to do for employment within the.

Sector specifically Realtors there has been a number of projections talk about the fact that people are going to be ultimately forced to leave the industry given the fact that their incomes won't be anything like they were prior to this ruling do you have any idea just of what the impact is going to look like here on the employment.

Level yeah I think if there's one thing industry folks tend to agree with most it's that there's far too many of them real estate agents across the country now you know there's different estimates around how many you know agents there are out there anywhere from one and a half million to even two to three million plus by some other estimates and.

A lot of those agents are more marginal you know you know meaning approaching this um approaching this uh business as more of a side gig a side hustle to support other um sources of income and so you know these marginal agents we think are the ones that might face a more um near-term reality of whether or not they choose to stay in the industry.

Based on you know the the cost of doing business going forward and how how that needs to evolve um you know ultimately this stands to benefit the subcohort of agents that are actually the full-time highest quality agents in terms of their ability to you know reckon with maybe a smaller pie of real estate commissions But ultimately getting a bigger slice of.

That pie right because those agents will be the ones who will be best positioned to pitch their value proposition win more business and ultimately benefit despite the fact that this might cause this disruption on the commission pool makes sense all right Ryan Ryan Thomas great to get your Insight here thanks so much for taking the time to join us this.

Morning KBW a Ste company thanks Ryan thank you well the force is strong with Disney CEO Bob iger's newest Ally Star Wars Creator George Lucas Lucas backing Iger in his proxy fight overboard seats with Nelson pelts here with the details Yahoo finances Alexandra Canal Ali yeah I love that intro shaa the force seems to be with Disney CEO Bob Iger we're.

Almost two weeks out from that critical shareholder meeting and it does seem like Disney has a lot of support George Lucas the latest high-profile name to come out in support of the company and its current board he released a statement saying in part quote creating magic is not for amateurs when I sold Lucas film just over a decade ago I was.

Delighted to become a Disney shareholder because of my longtime admiration for its iconic brand and Bob iger's leadership when Bob recently returned to the company during a difficult time I was relieved no one knows Disney better I remain a significant shareholder because I have full faith and confidence and the power of Disney and Bob's track.

Record of driving long-term value he says he has voted all of his shares for Disney's 12 directors now when he did sell Lucas film to Disney in a deal that was valued at just over 4 billion he acquired more than 37 million shares according to CNBC sources he is the largest individual shareholder at Disney and obviously such a high-profile name.

To boot which I think is important here as well and like I said recently we've seen JP Morgan CEO J d diamond come out and supported Disney and Bob Iger we've seen proxy advisory firm glass Lewis very respectable name in the space they also support Disney in the current board the grandchildren of Roy and Walt Disney so a lot of wind at the backs here of.

The Disney boardroom heading into this very critical shareholder meeting and we'll see what comes out of that vote all right do or do not there is no try uh we'll see if Lucas is successful in his bid here to get his voice heard as this proxy battle goes on Switching gears here though as well India's entertainment industry is booming right.

Now Ali but Us Media companies like Paramount we also know Disney finding it difficult to compete right now so both companies recently retreating from their respective positions in the country and tell us more what do we need to know about this yeah so I just thought it was interesting that in two weeks time we saw both Paramount and Disney really.

Pull back in India and India 1.4 billion population it's booming when you think about the opportunity there for TV the opportunity for for digital and online but there's a few reasons why these Legacy Media players are having a hard time number one it's very difficult to monetize in India the India consumer is used to really lowcost options a lot of.

Those streaming services are bundled with mobile providers because there's not a lot of broadband infrastructure they also have a lot of free ad supported services from those local providers so there's a really low willingness to pay there on part of the consumer so you're really up against a lot of those incumbent leaders at the.

Same time we also have those domestic struggles at home there's not a lot of opportunity to invest in some of the riskier uh overseas opportunities that would be India because right now we have streaming that is unprofitable for the bulk of players it requires a lot of capital investment that a lot of these domestic uh companies just don't have.

The luxury of exploring right now so it's really comes comes to if you want to be successful overseas you need to make the content Investments and really right now the only players that are doing that to a very successful level are Netflix and Amazon Prime video Netflix actually in 2024 their film and TV budget overseas is going to surpass.

That of their domestic investment so they're really approaching localization very critically and you know these Legacy players they just don't have the luxury of time on their side to do that although experts I've been speaking with said if they just are patient you could really see a pot of gold so they say at the end of the tunnel but it's just.

Right now there's a lot of other challenges so it's it's a big timing issue I think for these players yeah certainly Under Pressure many of these larger Legacy players obviously Under Pressure to cut cost right Ally thanks so much keep right here on Yahoo finance we got much more of your Market action ahead we'll be right.

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now Yahoo finances wealth is your guide your group of advisers planners and jargon Busters to help you save build and grow your money how do I know if I'm saving enough for retirement how do I know if it's right for me to go on that lavish vacation is it finally time to refinance my mortgage how do I pay less.

In taxes we'll get you the answers you need well earning it growing it and managing it it's more than tracking just the latest Market moves it's more than your favorite trending Pickers One does not simply build wealth without considering the entire Financial landscape it takes a.

Community and we've built one for you wealth cuts through the noise to help guide your financial decisions so that your money works for you wealth on Yahoo finance premieres March 25th the launch of wealth is just under a week away here on Yahoo finance and leading the charge our very own Brad Smith so Brad we just saw that wonderful.

Promo tell us what can we expect wealth is our brand new show airing daily between 11:00 a.m. and 12:00 p.m. eastern time just before lunch dedicated to personal finance so you can snack on a few of the tidbits that we have to offer during the show we want to help our viewers think about their financial situation holistically and have the best.

Resources for building their financial footprint so it's a major collaborative effort here both with our teams at Yahoo finance and some top names personal finance outside of our doors the first block of the show every day it's just going to be called my money we're talking about you out there we'll bring viewers the biggest news story of the.

Day in the context of what it means for your money and next week we're going to focus will oh yeah tax season everybody's talking about it right now because all of your hyper organized type A friends have already filled out their forms and maybe even got some money back in their pockets already but we're going to help you figure out and those of you.

Who haven't filed yet give you some helpful tips and tricks here so tune in for the premiere of wealth 11:00 a.m. eastern time Monday March 25th if your Bitcoin W up what now if that's your question we've got some tips for you if you updated your home to optimize Energy Efficiency we've got some tips for you is your child annoying you well get paid.

For it by Uncle Sam we've got some tips for you you got to let me know that tip yeah yeah you got good kids though you got your host in your you know you never know shouldn't say annoying but I am always down to save money so be looking watching for any of those tips all right let's do a quick check of the markets here before we let you go it's a mixed.

Picture the Dow still up in the green up about 150 points of Kiko and Michelle have you for the next hour we'll see you tomorrow.

a sh.

now welcome to Yahoo finance live it is 11:00 a.m. on the East Coast 8:00 a.m. on the west I'm Aiko fuja and here's what I'm watching this hour AI darling Nvidia unveiling what's in store for the company at its annual developer.

Conference with Nvidia moving full steam ahead in the AI race where does this leave its competitors we're going to be discussing investors also focusing in on the fed the crucial Federal Reserve policy meeting to indicate Clues on potential rate Cuts this year more ahead on where expectations are set meanwhile housing starts seeing a rebound in.

February notching the largest gain in 9 months could this signal align at the end of the tunnel for the housing market we'll discuss later this hour first though let's take a look at markets uh where things are trading right now we are 90 minutes into the trading day a bit of a split picture emerging here we've got the Dow up 141 points the S&P.

500 down five and the NASDAQ down 81 we've been watching those semiconductor shares very closely on the back of the Nvidia announcement yesterday Nvidia yes down about 2% here as are their competitors Intel down about 2.6 uh AMD taking the biggest hit so far down about 65% on the day so far let's take a look at where the treasury markets are right.

Now as we said we are watching very closely that fed meeting FMC kicking off that meeting a policy meeting today the 10year yeld down at 4.3% and the year old at 444 well the federal Reser reserves March meeting is underway while markets are expecting the rates to remain unchanged all eyeses will be on the.

Updated Dot Plot joining us now is our very own Jen shamberger uh Jen What specifically are you going to be looking for hey thereo that's right all eyes on whether the FED still sees three rate Cuts this year or whether officials could scale that projection back based on hotter inflation readings in the first two months of this year it only.

Takes two officials to pencil in two rate cuts for the median to change to two rate cuts from three and while the first two months of this year saw hotter inflation data some officials hadn't indicated that they were swayed to change their forecast case in point Cleveland fed president Loretta masterer told me last month in an interview she.

Was sticking with her forecast for three cuts on the back of the latest reading on the fed's favored in inflation gauge pce of course she reserved the right to change that forecast before this meeting now if officials don't think that the latest inflation readings change the overall picture that much it might argue for leaving estimates where they are.

Officials have warned that it would be quote unquote bumpy and they probably have some Vindication on taking a cautious approach given the hotter data that we've seen so these bumps in the road may be built into their previous forecast already that said it's always possible that they feel that there's a risk that inflation is stalling here of.

Course go the other major nugget that markets are watching for tomorrow is when the FED will finally begin lowering rates and for that all eyes will be on what Fed chair pal says during his press conference tomorrow back to you yeah Jen on on that point June becoming increasingly in Focus there but what factors are likely to affect the timing.

Of that rate cut yeah so so I think the key question that we all want answers to from pal is he told Senate lawmakers two weeks ago that the he he's not far from Gaining the confidence necessary to begin cutting rates which points to about two more months of data which would put us in June so that was keeping June on the table the question is that.

Was before the hot CPI reading does the the chair still stand by that and if that's the case on the flip side what about the labor market right because the FED has said there's two sides here now that they're looking at it's not just inflation and we saw the unemployment rate uh back up to 3.9% in the last employment report if.

That goes over 4% you have to wonder whether that could also serve as a trigger for the FED to begin cutting this fed really wants to engineer a soft Landing they want to keep people in their jobs so two major factors to watch on the potential timing for this Ray cut okay jenet I know you'll be all over that tomorrow Jen Shan bger bringing us.

The very latest out of the fomc well big news out of nvidia's GTC conference in San Jose CEO Jensen hang unveiling the company's Next Generation Blackwell AI chip as well as new Partnerships with software Giants and news it is bringing its Omniverse Enterprise technology to Apple's Vision Pro headset joining us now on all this news someone who.

Attended the keynote there you go you got that selfie Ray Ray Wong is constellation research founder and principal analysts always got to get that selfie right um you know look this is a stock when we're talking about Nvidia that is up about 75% year to date seeing it down today about 2% is that just a matter of a little profit taking.

On the back or sell the news situation Kiko you're definitely right they are taking some profit taking uh some money off the table I think a lot of the news was being hyped up all the way into the conference and I think that's where the stock price was there but I think we learned a lot of things at the conference and I think the most.

Important piece is that Nvidia is no longer just a chip company if you look at all their extensions they're focused on the next layer which is really that getting that chip extended out into the ecosystem and then of course focusing on software which is really important for them going forward yeah we'll talk about that.

Software part in just a minute but this is a stock that still largely trades on that potential or not even potential just the demand coming through from their gpus the Blackwell chip here b200 yesterday that was unveiled um largely expected but give me your first impression here about how this elevates nvidia's offering and really what this.

Means for AI overall well they did three things that were very important one they had backward compatibility which means if you have your old h100 chip you can swap it out onto Blackwell the second thing they did was they built a Lego type architecture that says you can tie all these gpus together and so it's almost.

Like you know we can turn like 10 gpus into one big giant GPU you can take a thousand gpus turn it into one big giant GPU and pull those resources and then I think the third thing we learned is this Blackwell platform actually achieves what we call Jensen's law not Moore's Law anymore the ability to double a thousand times compute every eight years.

That's actually an incredible thing when you think about what's required to take AI to the next level yeah I mean it it's it's so hard to I was trying to wrap my head around what exactly that means today Ray given how far we've already come right how does this stack up against the competition yes Nvidia is still far out.

Ahead but AMD as well as Intel really trying at least to make inroads here so there a couple things happening I mean if you look at the chip making ecosystem there were some Partnerships that were announced with cadence ansis synopsis so how you layer the chips how you put the chips together how you design them and of course how you manufacture the chips.

With tsmc they're taking advantage of tmc's 3 nanometer technology and more importantly the ability to actually bring these chips together and package them in the right way these are some of the most Advanced chipm Technologies that are out there and there's nothing like it to be seen and so the question is whether AMD or Intel or other chip.

Manufacturers can catch up or will people come up with an alternative to gpus to be able to solve the same set of problems I think the latter is what we're going to be be looking for to say is there something that will challenge the dominance of the GPU and will it come in a different package um you talk about the software.

Part of it I mean this was Nvidia sort of hinting at investors we're not just about chipm here um we did see them launch the cloud service or researchers to be able to test out nvidia's um Quantum Computing software in the grand scheme of things how big of a revenue driver is a software side likely to be for.

NVIDIA in the long term the software side will probably be bigger than the chip part of the business but when I mean long term think five to seven years out when the creation of the internet right was out there I mean we all thought the infrastructure companies were going to win right we're like Al they're going to be up there right.

You're talk about all these other companies like hey what's going to happen with Verizon and the Telo business but it turned out companies that actually built business models on the internet as a distribution Channel they're the ones that actually succeeded it's kind of like the story that people talk about in the refrigeration business.

When people were building out refriger it's like refrigerat manufacturers going to be the top companies but the company that went out was Coca-Cola so it's companies that can actually build software on top of these new ecosystems these are the ones that can actually build and make AI come to life yeah longterm then certainly.

Something investors going to be focused on um going back to Ray uh the Blackwell platform here the hopper line which is the one that preceded it we're talking about 30,000 to what $40,000 per chip um what's the pricing that you're looking at for Blackwell specific specifically where you think it would um allow Nvidia to maintain at least the revenue.

Momentum that we have seen well they haven't announced pricing but I think most people expect it to be slightly more expensive than the existing chipsets uh and because of the modularity and because of the reverse compatibility that's there uh so there hasn't been a lot of information about the pricing uh capabilities of what.

They're doing but I think the important piece is just to understand that you know the the architecture is Backward Compatible which means people keep their h100 chips and then they'll upgrade to Blackwell or different components of Blackwell you could see all the different combinations that you could do to combine what was happening on a.

Hopper Chip and A Blackwell platform and that was really the idea to say you know this is not a one-way Street it actually works back both ways and you can actually connect existing Legacy architecture with this and all the software will work the same in Cuda as well Ray Wong constellation research founder and principal analyst always.

Good to have you on the show thanks so much for joining us today thank you Kiko us home building is bouncing back housing starts rebounding more than expected in February we're going to tell you what the signals for housing affordability on the other side of the break we'll be right back Yahoo finances wealth is your guide.

Your group of advisers planners and jargon Busters to help you save build and grow your money how do I know if I'm saving enough for retirement how do I know if it's right for me to go on that lavish V vacation is it finally time to refinance my mortgage how do I pay less in taxes we'll get you the answers you need wellth earning it growing it and.

Managing it it's more than tracking just the latest Market moves it's more than your favorite trending tickers One does not simply build wealth without considering the entire Financial landscape it takes a community and we built one for you well cuts through the noise to help.

Guide your financial decisions so that your money works for you wealth on Yahoo finance premieres March 25th.

now housing starts rebounded in February from weather related weakness at the start of the Year Yahoo finances very own Danny r.

Has more on the housing markets recovery Danny akika what a turnaround story for the housing starts in February both single family and multif family housing starts jumped 10.7% last month and that was the strongest monthly gain since May of last year and this really this strong gain actually came from the single family.

Start um home side which is up 35% from a year ago signaling that building conditions were good in February uary also it shows that Builders remain optimistic about the spring selling season now multif family is a little bit of a different story there starts for those types of homes are down 34% from a year ago but also real estate is very.

Regional so regionally the Midwest and the South are really showing some strength while in the uh Northeast and the West are really showing some weakness on that side bottom line the new Home Market is still outperforming the existing home sales side and Builders are benefiting from this Dynamic one of their major advantages is.

That they're offering these incentives like mortgage rate buy Downs which is when you the Builder upfronts the cost to lower the rate on the loan that has been a big seller when trying to attract buyers into that type of Market but the rebound in February that we're seeing in these housing starts and permits really signals that the housing market is.

Healing as mortgage rates are softening Aiko okay let's hope that momentum Danny Romero thanks so much for bringing us that story well $418 million settlement by the National Association of Realtors is expected to usher in sweeping reform to the real estate market the settlement came after a federal judge rule that an.

Existing rule requiring compensation to a buyer agent artificially inflated housing fees to discuss the implications for buyers and sellers let ring Bill py he's py Capital CEO and Jeff Taylor emphasis Digital Risk founder and and Mortgage Bankers Association and gentlemen good to have both of you on today um Jeff uh Bill let me start with.

You first uh by talking about just sort of put this in context for us I me we keep hearing these sweeping reforms likely to happen this is a significant shift within the real estate market um put it in context for us well the reality is the home is made up of obviously Lumber and drywall and Roofing and all kinds of materials and.

Stuff a big part of it too is fees taxes title insurance mortgage insurance uh to the extent that one has all of those things and then another thing is the realtor fees now what's so interesting about this Landmark thing is that now basically the 6% in my opinion is really up for grabs and you're going to see people become very creative you're going.

To see companies become very creative as a way towards being more competitive and I think in an inflationary environment uh all creativeness in my opinion is welcome and I think that this is potentially very good for consumers well kind of creativity are we talking about Bill I think you know you could see.

Potentially people reduce their commissions you could also see I think some creative thinking like the builders have done where they've gone in as you just mentioned or your colleague just mentioned the builders have gone in and bought down mortgage rates uh as a means of making their homes meaning new homes more attractive for home buyers I think.

You could also see where you have potentially real being incentivized by some of the big Builders I think it's a very you know obviously this is kind of a bias statement from my persp perspective but it's a very bullish time I think because the big Builders are taking market share from smaller Builders all across the.

Country Jeff to what extent do you think this opens up the market I mean I I will I will admit that I do follow quite a lot of real estate agents online so many of them already taken to social media to say look we will meet you where you want to be especially for sellers who are concerned that the cost may come down on their end or come up on their end yeah a.

Founder of Digital Risk what we do is we help lenders make sure that they're providing quality of mortgage loans as MBA board member also very responsible making sure the housing market functions correctly and this has the potential to be as I saying a little bit of a GameChanger there's always been this perception that it's 3% and 3% 6% or 5%.

Depending upon where you are but now as you present that that contract look theoretically the seller the sell agent could say hey we're going to charge 3% but we're not going to provide anything for the the buyers the the buyer on that 3% % how is that going to affect that behavior that could change a lot going forward I think in a lot of other.

Industries as far as commissions have always been negotiable in housing in in real estate commissions they've been negotiable too but I would tell you of all if I look at money management and other Industries this has been sort of the hate at 6% coming out of the gates that we've had for many years so I think to the point of getting more creative.

Trying to say hey how much am I really going to have to pay in commission I think that dialogue is going to be happening a lot more at the signing of of a listing agency right starting the listing right now then it has historically and once that conversation opens up it's still longer this is just the way that it's been for 40 years and.

Here's the way we're entering our transaction you're going to see a lot of other potential ways for people trying to get that overall feed down on both sides I would imagine uh jefff to what extent do you think that reduces the rate on the seller side I mean it's been at 6% as you said the argument has always been.

This is just the way it is how does that come down moving forward so if I'm if I'm the seller right now and I'm I'm I'm trying to get a listing and I just said okay it's 6% and it says okay but I'm pling my listing agent and say wait do I have to pay 6% as a seller I see I'm reading documents it's 3% do I have to offer the other 3% why don't I.

Offer 3% and why don't my seller and my buyer split that 3% those are going to be a lot of the discussions that are going to happen more now because it's different okay and also if I'm a buyer if I'm a buyer's agent right now I'm if I go to ml I'm not going to see the my my 3% there's other ways to figure out other websites to go to see what the.

Seller will be offering as far as a commission to that buyer's agent but it changes the landscape right it gets people to be more creative they have to check different places and as consumers become educated on this the question's coming in on why does it have to be 6% that starts to really ramp up that conversation and it's going to be.

Especially that's going to change the industry I think quite a bit now if you're in market right now it's important to not this is expected to go in in July of this year so I would you know it's going to be business as usual between now and July of this year but if it does go into effect it's going to be a lot more discussions kind of going.

Forward uh Bill let's talk about the data that we got out this morning you know Danny just laying it out for us saying that there's certainly a lot more optimism here for the spring selling season when you look at the data that came through on housing starts for February what are you seeing we're seeing that things are.

Really kind of holding steady like you said at markets and some markets it's really hot I think you're going to have a strong spring selling season I think it might not be as good as it was when mortgage rates were way lower and things were kind of gang busters but I think that you're going to see a very strong spring selling season I'll just mention.

One thing I think that your colleague was absolutely right it depends on which Market you're in uh if you're in some of these markets where there's a lot of supply and stuff you're not going to see the type of home price appreciation or kind of as strong of a spring selling season on the other hand if you're in Florida or if you're in some of these.

Geographies that are doing very well I think you're going to see a very competitive spring selling season and I wouldn't be surprised to see people try to take market share and the big Builders frankly will probably do pretty well uh coming up into this spring selling season uh finally jefff when you look at.

Where the market has been um yes rates have been elevated yes inventory has still been very much limited and what you're seeing increasingly are those who are in the market are those who are existing homeowners when you think about where the conditions are today where they're likely to move in the next several months where does that leave.

Firsttime home buyers have had who have had such a hard time getting in I think we're Le the first time home buyers is actually I think it's starting to be slightly better and what I mean by that is last year we had and right now we have about 1.66 New Homes and Apartments being built currently under construction guys if you think back a.

Decade ago we lost around 6 M million units coming to market for various different reasons so I think and again depending where you are I have to be here in Florida where things are incredibly tight there is more inventory coming to the market you look at py you look at lard the big home builders are really putting a lot into the market so.

Um at a 7% interest rate right now that's still you know probably higher than historically has been but if you look at NBA and what they're projecting they're saying it's going to get down to around 6.6% hopefully over the course of the next three to three to four months that should help affordability a little bit coupled with 1.66 million houses.

Under under construction if somebody wants to sell their existing house and that end goal is to get into a new house that's a better point in time to do this now than it has been for the previous five years so I think overall the housing markets incredibly strong um I don't I think price appreciation will stay sort of flat to rising over the.

Course of the next year and if everybody is right and we do see some Fed rate cuts on the second half of this year um you could see even a a stronger springall uh home buying season Bill py py Capital CEO and Jeff Taylor emphasis Digital Risk founder and Mortgage Bankers Association board.

Member it's good to have both of you on today I really appreciate the perspective thank you coming up on the other side we're going to dig into the EV space what names you should be focusing on in the shifting space that's coming up after the.

Break e.

now we'll shell out with an announcement that it will be transitioning to improve its place in the EV market and shrinking its retail footprint let's bring in Yahoo finances pra superan to give us.

The details of pro are we talking about basically using the Shell footprint swapping out the pumps for Chargers are we talking about shutting down those stations altogether well hey well they want to shut down around 500 shell locations in 2024 and 2025 uh over the next two years so a th000 locations there but uh the.

The thinking here is they kind of want to optimize how they roll out their EV charger they call it the shell recharge product uh they see a big business for that especially in China and in Europe where demand is higher um they want to expand that to I think around 200,000 Chargers so uh the deal here is that um yes they going to divest some properties.

Here but they're also going to possibly expand with more charger plugs at current locations uh close those lower performing gas stations or filling stations uh add more chargers at Mobility hubs like think like things like supermarkets and coffee shops and they may just install more Chargers Kiko right at the current gas filling.

Stations they have they have 47,000 locations currently so closing 1,000 is about 2% so not that much but you that's still a th000 stations that are gone PR what does that tell you about where shell sees its place long term you know all this talk um about slowing growth in EV sales slowing adoption rates and yet you still got companies.

Who are saying look even though that's a story right now 10 years 20 years down the line the adoption that transition to EVS is still very much intact yeah you know it's not just shell to BP also getting involved with the in the Charger game too but I think what they're seeing is that they need to put these Chargers in really high traed areas also areas.

Where fleets will use them because if there's too much downtime it's not worth their trouble to invest hundreds of thousand dollars at each location to build these DC fast Chargers in some case but I think they also see the fact that if you have things like coffee shops and small retail shopping and other things that people can do at these.

Locations while they charge it makes a lot of sense like again the less downtime the better for them and I think that they believe that the way that their footprint exists not globally especially in Europe and China uh they can actually make money uh on the business and they and they're they're looking at at a 12% sort of rate of.

Return on this business down the line line H yeah it's going to be interesting to see what kind of experiences pop up on the back of these charging stations PR super Manan thanks so much for that thanks well we are watching shares of Herz closely this morning after news that its CEO will resign after a failed attempt into e that stock up about 1%.

Right now this follows an announcement back in January where the car retail company said it would sell onethird of its Fleet on low demand and increasing costs all of this of course coming against the back drop of Eevee adoption rates slowing although there is still growth in Western Eevee makers facing increasing competition from Chinese.

Players let's bring in Greg migliori Autoblog editorinchief to discuss more H Greg good to talk to you today you know there's been so much news here within the EV space that seems to point to a bit of a doom and gloom uh you know adoption rates aren't as rapid as they were and several years ago we were just talking about Fisker the other day and.

How they are uh POS production um because of a cash crunch what's the overall trend point to so right now I think we're in a state of where it's like the late stage early adopters so a lot of the folks who were really interested in EVS they already have them so now you're at that point where you're somewhere in that Delta.

Between Hey when's the mainstream general public going to really get and understand and use EVS uh and all the people who essentially were really the first first ones to get it they already have them so it's that's a challenging spot to be and of course infrastructure remains a great challenge uh just the news you were talking about with shell.

And of course with BP that's G to help dramatically because one of the biggest challenges EV owners and users face is it's a bit of a different experience simply to power up your car uh you have to seek out the charger you have to make sure the charger might be working if it doesn't work you have to go someplace else all that adds complexity.

To what is already a technology that is a little bit different for a lot of folks Greg what what we have learned over the course of uh the last six months even is that you got big players like a GM or a Ford that can afford to be able to pull different levers GM getting into more hybrids as a result of what they're seeing in the market and.

Then you've got the upstarts like a Fisker like a rivan like a lucid who don't have that kind of flexibility so if we're talking about a bit of a lull until the next wave begins where does that leave those upstarts so the upstarts historically have always been in kind of a dangerous position I almost hate to say that but.

You see that where they just they don't have as much of a room uh of a margin for error Fisker is talking about partnering with Nissan we've heard some news uh in the last couple weeks that fisker's you know finances perhaps aren't where they need to be and upstarts always face those challenges rivan is a great example of revealing a.

Couple of really interesting new products uh in the last couple of weeks uh the R2 and the R3 uh they're going to be more affordable they're amazing you know looking as far as designs really I think something that could give consumers something to think about they also mentioned hey they're not going to build these at a factory in Georgia.

They're going to consolidate their manufacturing operations in Illinois that's good business sense but it also is a situation where uh the company is being mindful that having multiple factories having these large Footprints might be a bit too ambitious I'm pretty optimistic for a company like rivan as far as Fisker Fisker has always been.

Great as far as design I remember there was a Fisker about 10 15 years ago and this is at least the second uh iteration of Fisker they appear to have less staying power but we'll see H Greg does this open up or at least increase the possibility of m&a I mean you've already talked about potential for Nissan and Fisker some kind of.

Partnership there what about rivan what about lucid well it's always a natural situation where you have these smaller companies like Lucid like rivan like Fisker that have one or two compelling products something that maybe a larger automaker Volkswagen General Motors Honda might want to get that product so.

I think they're always vulnerable to you know being picked off but there's also that's challenging in of itself because if you say somebody were to buy Fisker you have to deal with all the challenges that then comes with managing a smaller company that uh perhaps isn't as well integrated into your culture as you know some like an existing just standing up.

An existing uh entity so there's challenges in that sense as well I think a lot of these companies are very good at developing interesting products uh vehicles that are fun to drive they look great they have the range they have the batteries but then when it comes to mass production selling them and reaching like a new market that will grow their.

Company that's where the challenge comes in Lucid is a great example of a company that makes a very compelling product they're well-funded of course uh but they're also very expensive Vehicles so I I kind of doubt a company like Lucid will ever be truly mainstream Greg you know the the expectation is is this second wave of.

Adopters are going to be a lot more price conscious you mentioned infrastructure a ER but price still very much High when you talk about these brands that um you just mentioned as they look to offer more affordable Vehicles you've got the Chinese players like a byd selling cars that are what $10,000 maybe a little less in China.

Even if you have the tariffs you're still talking about a very aggressive price strategy does that leave a lot of these Western carmakers particularly vulnerable when they don't have a lowcost offering right now that's always going to be tricky I don't think there's sort of an immediate um you know danger if you will of uh the US market being.

Flooded with you know products from overseas manufacturers uh particularly from China the US market in particular has a a high cost of Entry a high barrier of entry for automakers it always has uh Americans like their cars large they like them well equipped they we have it's a highly regulated market it's not an easy thing to do I saw a byd.

Vehicle at the Detroit Auto Show in 2008 2010 and you know they're still not here so I think that's a little bit of a um it's a business it's a product situation that in some ways has actually gotten to be political uh I think where you're GNA see us and European automakers compete with China is in other overseas markets perhaps in India perhaps in China itself.

In South America and that's where it's going to be tricky to see how uh American automakers and other Western automakers could get that cost down to compete with you know a $10,000 byd um car that has great range and looks interesting uh that will be a big challenge for Western automakers okay we'll be watching that.

Head-to-head play out Greg migliori Auto blog editor and chief good to talk to you today I appreciate the time thank you well coming up more coverage from Sarah week we're going to bring you Julie heyman's convers ation with chevron's VP of carbon capture utilization and storage that is up on the other side of the break we'll be.

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m yeah you're watching Yahoo finance I'm Julie Heyman at the Sarah week by S&P Global conference in Houston Texas as we've.

Been talking about a big topic Air's energy transition and for the energy industry a big part of that is carbon capture so our next guest is squarely within that area he's Chris Powers he's the vice president of carbon capture utilization and storage at Chevron and thank you so much for being here Chris thanks Julie I appreciate it so a lot of.

Folks aren't necessarily uh familiar with what we call ccus which is the acronym for what we just talked about so when we talk about carbon capture it's effectively pulling carbon dioxide either out of the air or out of the processes that make uh refined products or how you get oil and gas out of the ground um and you store it you bury it.

In the ground you try and capture it in a way that it then doesn't add to the atmosphere do I have that right how how exactly you've nailed it so I think about it as a couple a couple of key steps in the process simply put CO2 is produced by nearly all the operations that give us the quality of life that we have today whether it's producing power.

Electricity whether it's producing cement steel oil and gas you emit CO2 as part of these processes and with the CCS business what we're hoping to do is capture the CO2 either before it's released into the atmosphere or as you pointed out take it out of the atmosphere through director capture you then compress it dehydrate it put it in.

A pipeline and move it to a site that has suitable storage deep underground uh then you inject it in the ground through a uh a well board just like you do in the part of the traditional business and you'll store it a couple miles underground uh for geologic time now this whole Endeavor has gotten a little bit of a shot in the arm from the.

Inflation reduction act um on the part of the Biden Administration and just also a general move towards carbon credits over the past let's call it 5 to 10 years so where is Chevron in this process and what kinds of projects are you all working on yeah we're taking a a global a global look at the uh this the ccus opportunity right so we're focused.

Squarely though in the US the IRA has driven a lot of capital into into uh foundational projects in the US but also across the Asia Pacific region uh so Australia is an area that's very perspective and we've have some projects that are announced there uh in the US though our main project is at bayu Bend which is in Southeast Texas uh only.

About 50 miles uh to the to the east of of Houston as well so what we're looking to do is to find geology that looks very suitable and aable to store the CO2 uh we then perform seismic uh analysis to identify by the zones of Interest we'll then drill uh delineation Wells or we call them appraisal Wells to understand the exact Rock properties we'll then.

Build out our Reservoir models and then you submit your permits uh to the EPA for to receive your class six permits and then that can kick off your project so I was reading a little bit about one of your projects off the coast of Australia the Gorgon project which is an a a liquefied national gas project where you're trying to capture some of the CO2.

But it sounds like it's really in some cases challenging to do and especially challenging to do economically not just actually physically so you know and each of these projects is sort of unique right so how do you do it how do you scale it and how do you make money off it at some point down the line yeah well it's early days for all of these energy.

Transition businesses I think that's the foundational thing to start with right so we're working on doing foundational projects that can build the foundations of a business that can grow and scale over time and you got to remember what we're really trying to do here is to enable decarbonization for many of these industries which are critical uh to.

Everyday life so we've learned a lot at gorgon and I think it's actually made us more optimistic about ccus than it has less um each Reservoir is a bit unique and so what we've applied the learnings from Gorgon to look at areas around the globe that are going to have the most prospective geology where we can uh have the uh the most uh uh simple and.

Predictable operations and that's what's made an area like the Gulf Coast uh look very favorable because it has the same type of Sands that have produced oil and gas uh for the last 100 years the same type of deposits are very amable for CO2 sequestration so we've done a broad swath and canvasing of geology around the globe we've identified the areas of.

Interest and we've secured poor space in those and are hoping to bring projects forward do we know how long the CO2 will stay captured in these areas because this is a relatively new thing that we're doing yeah so we're focused primarily on permanent sequestration some other companies are focused on enhanced oil recovery that's not been an.

Area of focus for Chevron but with the permanent sequestration the the CO2 permanent it's never getting out yeah and there's a number of different on the Rock property interstitial uh levels there's a number of different physical mechanisms that cause the CO2 to stay there but ultimately you inject it you have monitoring Wells that monitor how.

The CO2 progresses through the rock strata over time and then uh you you will terminate the uh injection at some point 10 20 years down the road you continue to monitor until the CO2 plume stabilizes and then at that point that project is finished and uh and it's uh the CO2 is stored for uh for geologic time now Chris I want to ask you this.

What role this business plays for Chevron and I mean a lot of the other uh big companies here are doing similar businesses if not exactly the same and so I guess I'm curious as we hear more rhetoric about that we are not seeing a sunsetting of oil and gas where there's still demand for oil and gas so in that case what role do these Technologies.

Play in your business and at some point will we see more of a a decrease in demand for oil and gas and these businesses will much be much more important important proportion of chevron's overall business a few things to unpack there Julie I appreciate the question Sor I know there was a lot of no that's great so in terms of uh I'll.

I'll break your question down uh peace me we're focused on both lowering the carbon intensity of our own operations as well as building third party facing businesses to uh help enable the harder to evate sectors like cement steel and power to decrease their emissions over time so we're tackling both of those uh pieces of of uh of of the transition in.

Terms of uh you know the growth right it's going to take it's going to take decades the the the these these businesses are capital intensive and uh you're going to need to invest Capital nowadays to grow businesses that are going to be uh in operation for decades to come so it's going to be a slow build but we're optimistic that over time.

These businesses will play a bigger and bigger role in the uh energy space on the terms of the supply stack we're a firm believer that all forms of energy are going to be required there's two billion people that still want to increase their standard of living around the world they live in some level of energy poverty and you're going to need.

You're going to need solar you're going to need wind you're going to need nuclear but you're also going to continue to need oil and natural gas you're going to need hydrogen you're going to need CCS so if we take a a big 10 approach and support all forms of energy I think we're going to be able to deliver the affordable reliable and ever.

Cleaner energy that the world needs and just very quickly ccus do we do you have an estimate at Chevron of when it could be profitable or is it still too early even it's it's very early days for these businesses the 40 uh the 45q credits through the IRA I view those as a uh as a foundational enabler to get these businesses moving and if you think about.

It it's not really that much different than what some of the other Industries solar and wind they also had um policy enablement to get started and then the businesses grow and scale over time cost cures come down and then the businesses can grow into a market Powers thanks so much appreciate it thank you very much appreciate it we'll have much more on.

Yaho finance right after this.

as Asen announcing it will purchase Canadian drug developer Fusion Pharmaceuticals in a $2 billion cash deal that's bringing Yahoo finances anelie kamani who's following this deal news for us um anelie what to what.

Extent does this expand the portfolio for Astro zenica it definitely is an additive for the company they're really looking to grow in oncology right now so this deal is $2 billion do acquisition for the company Fusion which is already a partner of the company they've already been working together for about three.

Years and so Fusion really adds uh a different type of oncology pipeline for the company if you take a look um at the relationship that we know that the Canadian based company also gives astroica growth in the Canada space so that's sort of where this uh adds to what astroica already has which is those um antibod drug uh drug conjugates and.

This is one aspect of it Fusion also has a couple other platforms as well to bring under the roof as has really been chasing oncology for a bit they currently have 40% Revenue as of 2023 that's an increase of 21% coming from oncology itself and so while it hasn't necessarily been a leader in the past the company did say at the JPM.

Conference earlier this year that it's driving towards becoming a leader in the space by 2030 so this just adds to what the compan is looking at currently does have a little bit more of a focus on breast cancer it has other types of platforms that it's focused on but these adcs really a big deal in the oncology space right now so this gets it going.

Further in that area and the stock getting a huge bump on the back of that Fusion Pharmaceuticals there uh aneli kamani thanks so much for that let's do a final check of the markets before we let you go we go into the noon hour here look looking at um a bit of a split picture kind of a quiet.

Trading day you could argue the Dow up oh although the Dow up 213 points the S&P 500 up roughly one and the NASDAQ down 55 of course investors uh keeping a close watch on what's playing out in DC with that FC policy meeting kicking off with some decision expected tomorrow about not a huge policy change expected on that front we've got all those bases.

Covered for you with much more to come here on Yahoo finance keep it right here.

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