Markets may have been closed yesterday for the Fourth of July, but stocks (^DJI, ^IXIC, ^GSPC) are looking reinvigorated at the end of July's first trading week. Josh Lipton and Jared Blikre are here to guide investors through the final trading hour of July 5 in today's installment of Market Domination.
The program welcomes on tastylive CEO Tom Sosnoff, who ponders whether the current meme stock trade can sustain itself or if it will fade back again like in 2021.
Oppenheimer chief investment strategist John Stoltzfus discusses how the Federal Reserve may be interpreting June's jobs data in relation to economic fortitude and its monetary policy.
Other top trending stocks include Boeing (BA), as reports indicate Justice Department officials could be prepping to charge the airline manufacturer with fraud; Big Lots (BIG) is closing more US store locations; and bitcoin (BTC-USD) takes a hit lower after defunct crypto exchange Mt. Gox begins repaying customers.
This post was written by Luke Carberry Mogan.
Video Transcript
Hello and welcome to market domination.
I'm Josh Flip in alongside Jared Blick re live from our NYC headquarters.
We're giving you the ultimate investing playbook to help tune out the noise and make the right moves for your money.
And here is your headline blitz getting you up to speed one hour before the closing bell rings on Wall Street.
This is another good absolutely rock solid labor report.
There's not much to complain about here.
Moreover, if you're a market player and you see those um downward revisions of 100 and 11,000 over the past couple of months, hey, guys, that's fed positive the trajectory with the weak eco data that we've received over, you know, probably the last 4 to 8 weeks, the jobs number this morning as well.
The trajectory has now been that the fed is, is more than likely cutting in September personally.
I think maybe they even need to consider July though.
That's off the table for now.
Pretty much any selling is likely to be staggered over a period of time.
And actually, there's a question as to whether there will be any sellers because as I say, it's likely that many of the claims have already traded hands and people already are either going to hold Bitcoin for the longer term or they're going to sell, but it's unlikely to happen all at once.
So it should be managed and the market should be able to absorb any supply coming through.
And we got under one hour to go.
Let's take a look at where we stand today.
You can see a lot of green.
Well, not in the small caps but the NASDAQ leading the way here up 83 basis points, 8/10 of 1%.
We want to check out the price action for four days.
That's how many days we have in this week, NASDAQ up nicely 3.4%.
And we know the NASDAQ and the Dow haven't always been complimentary, but we see the dow up 6/10 of a percent and we got the S and P 500 somewhere in between.
I want to fast forward to the bond market right now where we are seeing the 10 year T note yield down about eight basis points.
So that was in reaction to the report we got this morning, this was 8:30 a.m. right there and uh we did see stocks move a little bit, but this has not been a huge day.
Uh This is again the S and P 500 but I do want to move on to the VICS real quick.
Well, it looks like it disappeared.
So, let's just skip over to, uh, some heat maps where we have communication services leading the way up 1.7%.
Then we got staple health care, consumer, discretionary.
All of those outperforming.
And you take a look at the NASDAQ 100.
What a nice picture who needs NVIDIA, right.
It's down 1%.
But we got some other action in the mega caps.
Meta up 5%.
Apple up more than 1.5, alphabet up 2.5%.
The list goes on.
So Josh, let's break it down.
All right, Jared, thank you.
The June Jobs report showing another sign of the US job market continuing to cool the unemployment rate unexpectedly rise to the highest reading almost three years.
While June's Job edition saw a slight decline for May PNC Financial Services Group, chief economist Gus Foer joining us now to discuss Gus, it's always good to see you.
So you look at this report, Gus uh headline payroll growth of 206,000 did see Gus dower revisions uh mentioned and unemployment rate ticking up to 4.1%.
So some some puts and takes here but Gus uh break it down for us.
How, how did you read this report?
I read this report as being very positive, the job market continues to improve, but the pace of job growth is slowing towards a more sustainable pace over the longer run.
Uh We saw slower wage growth, which is reducing inflationary pressures from the labor market.
Uh But at the same time, wages are increasing more quickly than inflation.
So household incomes are going up and the economy should continue to expand.
So I think if you're at the fed, this is what you want to see.
Slower job growth, a little bit higher unemployment rate, slower wage growth.
And that would support cuts in the fed funds rate sometime later this year.
And do you think with a higher unemployment rate, there's something called the so rule and we don't need to get into the nitty gritty.
But you think if the unemployment rate kind of holds here around 4.14 0.2% that actually gives the fed a lot of cover to lower interest rates as it has been telegraphing it wants to do.
Uh That's right.
I mean, it's an indication that there is a bit more slack in the labor market.
Uh What they don't want to do is wait too long to cut because that increases the likelihood we get a recession, not necessarily this year, but let's say in mid 2025 I think they do want to cut because they're concerned that monetary policy is weighing on the economy.
Uh So this type of jobs report gives them the ability to do that.
They can say, look, inflation is slowing the labor market is cooling a bit.
Therefore, we should be cutting rates sometime later this year.
And Gus when would you be looking for in terms of later this year?
Are you in the September camp?
I'm more in the November camp because I think they'd like to get past the election.
Uh I think if they cut in September then that opens them up to political criticism.
So I think November looks more likely and I don't think it makes a big deal for the economy one way or the other.
Uh that being said, if we do see the job growth is slowing a little more than we're expecting, then we might get that September cut.
But I think, you know, right now November, but September is still in play, you know, uh time flies by here in a week, we got the big bank earnings just wondering uh you see anything in the data here uh that maybe we should be concerned about the consumer is the consumer still strong?
I think the consumer is still holding up.
As I said, real incomes continue to rise when we looked at things like debt service ratio, those are still pretty low.
Uh Obviously travel has been incredibly strong this summer.
And so there's no indication to me that there are significant problems for the consumer.
I think there are some low income consumers who are a little bit stretched, but we also have for high income consumers, we have rising stock prices, rising household wealth that's supporting spending and we have seen the savings rate tick up a little bit, which is what consumers are going to need to do over the longer run, save a little bit more.
So I think that they're still overall in good shape, uh, perhaps with a little bit of, of concern for, for lower income consumers in particular, uh, Gus and, and next week, of course, CP I is on deck.
I'm curious, what are you looking for there, Gus?
And how important is that?
Is that print to the Fed?
Uh So 0.1% on the overall CP I, we did see gasoline prices fall uh from May to June, particularly given that seasonally, we would expect them to increase.
Uh We expect to see the core at 0.2% increase from, from May to June again, that's good news from the Fed's perspective.
After some uh less progress in slowing in the inflation in early 2024 we're starting to see inflation slow a bit more.
That being said it takes more than one or two months for the Fed to be convinced that inflation is slowing.
But I think we will get better numbers on inflation over the next couple of months and then that supports a rate cut later this year.
Sometime Gus always good to have you on the show.
Thank you for joining us.
Thank you.
And we are just getting started here on market domination.
Coming up.
More meme mania shares of cost surging this morning by 26%.
We're going to discuss the hype behind the meme stock plus NVIDIA gets a rare downgrade.
We'll tell you why the analysts behind that call, near term risks ahead.
And later the summer box office is playing catch up after a rough start to the year.
Studios are betting on a large slate of mid range Sequels and prequels, but it may not be enough to keep movie goers back in theaters all that more when market domination returns, let us get now to our call of the day, New Street research downgrades NVIDIA to neutral the analysts citing limited further upside for the tech giant going forward.
And uh Josh, we were just talking about this real quickly over the break and uh this is uh some bad news to drop on a Friday, you know.
Um But yes, we're talking about it.
Um When we think about this, you know, the, the run that NVIDIA has had, there are a lot of valuation calls you can make on 100 and 50%.
Why not stop here?
Um So what's next?
I think, you know, the outlook beyond 2025 it requires a bit of faith.
But uh that's what's kind of gotten the stock here.
Yeah, I mean, really, it sounds like, you know, so this analyst says he dam is a neutral, says, look in the NVIDIA is getting fully valued for the base case says upside will only materialize in A B case in which the outlook beyond 2025 he says increases materially and we do not have a conviction on that.
Sc Nario playing out yet goes on to say, Jared, the quality of the franchise, he tells his it's intact.
Sounds like it's evaluation calls an issue here.
Well, if we go to a chart, let me just point out what happened last year, there was five or maybe even six months when NVIDIA basically did nothing.
And so this is a two year chart on the Wi Fi interactive.
It's gone up so far from then that it's hard to see and probably hard to remember because it's gone up most of this year.
But we had a good five months or so and then it just kind of petered off, didn't really get started again until the beginning of the year.
So, you know, maybe it takes a prolonged, uh not, not necessarily even correction and price, but maybe in time to get people interested in again.
Um But you know, NVIDIA, that's what it's done.
It's a textbook rally where, you know, you consolidate, you move to the next level and then you start all over again.
That's it.
All right.
We need out of voice on, on all things Invidia, all things markets here with more on video and the markets is Yahoo finance his very own miles Lyn.
Um I didn't know you were allowed to downgrade NVIDIA.
Is that only on Friday afternoons, you're only a live four, only allowed to do it on Friday afternoons after July 4th.
Otherwise, you know, too many people might see the call.
But no, I thought the point was Jared was just making on the technicals for NVIDIA.
Um, at this point in the proceedings really feels like the German one because when it comes to the fundamental case, you know, what more is there to say it is trading at a very expensive, well, OK, an optically expensive valuation, let's say, right, you know, with 2027 numbers, it actually looks reasonable, all this kind of stuff that analysts will, will go through.
But the stock chart itself and this is the challenge I think for a lot of, you know, fo managers who often times are more fundamentally biased is if you look at the chart for a lot of the names, you know, metas in this group that have just had these huge runs, you need to take a look around and ask yourself like not only where is the next bid, but what is constructive, you know, as technical analyst would say about this set up, right?
Like why has this stock proven that it is worth this over X amount of time?
And therefore, there's going to be a large incremental base of new buyers.
And the NVIDIA even the line chart here shows very clearly that while, you know, there's some shades of gray there.
Uh, the base between the highs and 21 to what we saw in 2023 there's a lot of folks there for two years, made no money in NVIDIA and then you have the A I trade come along and all of a sudden you've got this, you know, pop one several 100% points.
But, you know, Jared, it feels like you, I mean, you taught me years ago, you can correct through price or time and it feels like NVIDIA at a minimum needs some time in this low 120 after the split.
Yeah, I mean, it makes sense.
Um, you know, the earnings catalyst seems like, uh, NVIDIA gets one or two big pops a year.
So maybe it's already had its share.
But, you know, the elephant in the room is that NVIDIA is the elephant in the room.
Uh There's the concentration we're seeing in the market here has never been higher.
You go back to the Great Depression.
So we are in uncharted territory and it's, it's logical to think.
Well, what happens if this one stock falters?
Well, today NVIDIA is in the red and you got five other mega caps in the green.
So it's all right.
But I mean, what if they falter?
Um I think it's a legitimate argument and it's a concern but the market can, uh, you know, it can stay concentrated for far longer than you or I can remain solvent.
Yeah.
Well, you know, the last point I, I'm, I'm peeking your screen here, the wi Fi interactive, um, of, of the names that are, you know, moving the market higher today overall.
And, you know, I just put a story up on Yahoo Finance.
It's nothing else to do in this office.
No meetings.
No, nothing.
Right.
So let's do some work.
Um, all the, all the stocks leading the proceed, say you put something in our slack about the stocks making intraday record highs, pretty much every stock you would think with the exception of NVIDIA, but it feels like from a portfolio management perspective, investors are looking around right now and saying, man, I'm getting killed right now.
I'm getting trounced by the benchmark.
I can't keep pace with the S and P 500.
We've seen periods like this over time, early 2020 was actually one of them.
We saw a lot of this in 2021 where investors, you know, portfolio managers will just kind of, you know, take their medicine and say, I guess I need to own more meta, I guess it's I'm not gonna get in trouble, I'm not gonna get in trouble, right.
Owning more Amazon, owning more Google, owning more Apple, you know, a name that's been a laggard this year.
And a lot of rules that investors are, you know, beholden to will prevent them from certain concentrations.
They can't keep pace with the S and P, because they can't even own these stocks in the right percentages, et cetera, et cetera.
But right now I think a lot of folks are at the halfway point, the S and P was up 15%.
They might have been up a lot less than that.
And they're figuring, how can I make up the difference here?
And you're not, again, you're not gonna get in trouble going into a meeting saying we have initiated overweight on meta.
Everybody loves the story right now.
Stocks are 5% on no news.
Yeah.
How, how much do you think Miles Two is, is it, you have a day like today where you've got the big jobs report and it seems to just confirm the same story, the same narrative we've been telling for a while.
Every it's cooling, it's not crashing but it's cooling.
Inflation is moderating.
Maybe it gives Jay Powell some cover to cut, not July but fall.
It's the same year.
So maybe I'll just stick with what's been working.
Absolutely.
Stick with, stick with what's defensible.
And I think the, the thing that bears are probably excited about in this environment is it's like let's just run it back with the same story from last time.
These are the hyper scalar.
These are gonna be the winners in A I lower rates.
That means good for speculative tech.
That means more start ups.
That means more people buying services from Amazon, et cetera, et cetera.
All on down the chain and like, do you really wanna be buying these stocks at record highs because you hope there's gonna be a VC investments, which means they have to buy more chips, they need more services.
I'm not sure, like, I'm not sure that's the logic, but I see the tape today and I, I don't really know what else.
Right.
You're thinking there other than this worked, let's run it back and you know, maybe this is my new idea today, but look, no one's here.
So may maybe none of this really matters, right?
Like, no, it's, it's also Friday, July 5th and earning season is about to start and you've got corporate buybacks kind of slowing down here because of the calendar.
I mean, maybe none of this really matters, but it does feel like we are grasping at reasons to stay constructive or strategists are grasping reasons to stay constructive in a market that is really just about a I anyway, you cut it cost is up 32%.
New egg is up 22%.
He is the only other story in the market.
Well, that's what's interesting is this kind of has echoes of tw 2021.
It feels, I mean, Jared, it's crazy like this feels so much like 2021.
Um And maybe it resolves in a different direction, all the details feel a little bit different, but like the vibe out there in general, you know, I log on to my fidelity.
I'm like, I'm an idiot for not owning this stuff.
That's 2021.
That's 2021 stuff.
All right.
Miles.
Thank you.
As always, it's stocks set for new all time highs on as investors have embraced the prospect that the June Jobs Report will push the Federal Reserve closer to a rate cut for more on what this means and for what this means for your portfolio.
Let's wel welcome in John Soulus Oppenheimer, Chief Investment Strategist John.
Thank you for joining us here today.
We've been waxing poetic about Fridays and Jobs and everything else.
Just what's your, what's your first blush take on the Jobs report this morning?
I, I came in fine as far as I'm concerned when we looked at it, you know, if, if it's anything that it states very clearly to us, it jobs remains resilient even though we have seen slowing off the higher numbers that we used to get the, that's not uh that, that has to be expected.
The FED has raised 11 times uh and uh has been on pause for eight times now since March of 22nd through today.
Uh When you look at it, uh essentially the Feds done the job.
Uh they have a little bit further to go.
Uh 2% target uh on inflation remains somewhat elusive.
But in the meantime, they have yet to push the economy into a recession that resilience shows in business.
It shows even in the consumer and it certainly shows up in the job postings.
So the economy appears to be larger than the negative pitch book at this time.
And we say we think that's good for equities.
And John, what, what is your UN target for the S and P 500 here?
Uh My year end target has been exceeded twice this week in terms of the closing price, it's been exceeded several times in the last five or six days.
Uh But those were inner market uh uh moves but closing prices uh twice now in succession and it looks like it's going to happen again.
Today will be, we'll be reviewing our target over the weekend.
That's all I can say.
Whether we will, whatever we'll do with it, you'll find out on Monday.
Can I, can I ask you your honest opinion here about these targets?
These price targets a lot of times they're for 12 months or end of the year.
Um What do you, what do you say to investors with?
How, how serious should investors be taking these?
Well, I think that the most important thing uh that we'd have to think up here, Jarrett is that the uh the, the, the importance of the target really is, it's kind of the fun part of the game for strategists and the, and the press uh as well as investors who like to see what it is in terms of what's the direction, that's what really counts.
Are you looking for gains this year or not?
We started this year.
Well, last year in December we put in a 5200 target for the S and P 500 for this year.
It was one, if not the highest target on the street, people thought we were nuts.
It was exceeded sometime in the first quarter.
We raised it at that time, uh to 5500.
And now we've got to think about what we're going to do from here.
And it's our, our, our targets are based on uh very much on fundamentals.
It has to be the trends that we see both in economic data as well as in revenue growth uh and earnings growth, uh uh primarily in the S and P 500 as it right now is the leading index and the way this economy is structured.
And John, you mentioned earnings earnings season is here next week.
The big banks, John B broadly, what, what are you expecting from this earnings season?
I think we'll probably get a continuation of the trends we've been seeing in the big banks with uh the big banks uh uh surprising uh often to the upside at least one or two names uh with results likely to be coming in from both uh trading as well as from asset management uh related to uh lending facilities and commercial bank operations.
Uh We'll have to see what that looks like with the consumers slowing somewhat.
But overall, we're looking for a positive print on the banks with upside surprise, likely that said, look for it to be mixed.
And if the market does what it's done in the fourth quarter, in the first quarter, earnings season and likely this earnings season, uh a good result could easily be sold because the traders will say, well, we, we bought the rumor, we're selling on the news and then maybe in a couple of weeks, they, they may very well buy it back.
If you look at the performance of the financials, it's improving.
And we think that's because we're moving towards normalization.
We got a pretty big weekend, uh when it comes to interviews, uh, President Biden is expected to address the nation.
Um I, I'm wondering, does the election pose substantial risk for invest investors?
I mean, one day aside, maybe, you know, a, a 10 basis point move in the 10 year aside, are there real is a real headline risk from the election that coming that's coming up at, at least as, as of today, uh where we, we currently know, uh no matter what the noise is around the, the first debate, we at least know who the candidates are going into the weekend.
Uh And we'll have to see how things go forward.
But, you know, we, we know what Biden does.
We know what Trump is.
Trump can do.
Uh as a result of that, uh with that we've seen with both uh with, with Trump, if you remember 2016, when he won the election initially, the market thought, oh, he's going to be terrible for the markets for about 15 minutes.
And they decided that that wasn't the case and they bid stocks higher.
Similarly, with Biden, there was some worry uh because uh it was, uh it was, you know, the, uh going by the time we got to uh Biden's inauguration, uh you had uh uh the Democrats were in control of the Senate.
Uh And they were also in control of, of the White House and they had the, the, the, the uh the, the House was relatively uh a narrow uh uh gain of Republicans.
And the thought was what is it gonna be?
And it's been a really good year for the stock market.
So I think ultimately uh fiscal policy is the area where it could be perhaps worrisome with either uh of, of the, the two presidents, the current president, the past president.
But when the, when the rubber meets the road, people are getting more practical as we've seen in the volatility that we've experienced over the course of the last few years that indeed uh policy makes a difference.
The fed policy we think is the way to go.
Uh fiscal policy worries a little bit because a lot of times it pays more attention to constituencies that need to be served and doesn't consider things like uh the uh the the immense amount of debt that the US has the implications of spending.
But overall, I'm sorry to go on so long overall, what the market really cares about revenue and earnings, bro.
It's really what the market cares about it.
I love to get back to fundamentals here.
We'll see, we'll see what happens next week.
Always appreciate your insights and thanks for stopping by on a quiet Friday afternoon.
Coming up a deep dive into Amazon's growth story.
The tech giant reached a record high of $200 this week for the first time ever.
Good sign for Ceo Andy Jasse who's been on the job for three another eventful week for the meme trade roaring kitty revealing his 6.6% stake in Chewy and cost stock skyrocketing more than 100 and 40% on Wednesday.
So, what's next for meme stocks?
And what does it all mean for retail investors?
We're bringing in just a man to talk about this tasty live, Ceo Tom Saa for answers, Tom.
It is always good to see you, you know, big, big picture Tom in 2021 when I was talking about meme stocks.
I, I don't know if I would have thought skip ahead, you know, to July 2024 I'd still be talking about roaring kitty and Dave Portnoy and meme stocks.
I mean, I, I guess I would have been surprised if you've told me that.
Are you surprised Tom that this is still a trend, a theme that we're talking about?
Well, obviously, I, I think I'm in the same camp as you.
I, I would have been if you had told me three years later from 2021 we still be talking about this in 2024.
I think I would be super surprised.
But then again, OK, I'll throw another angle at you.
Maybe just the term meme stock and it's not just like the Gmes and the chewy, you know, I mean, was NVIDIA meme stock, you know, for an institutional meme stock.
I'm not sure if that's just the new, the new term that may stick, you know, for anything that's kind of, you know, out of control.
So a problem of taxonomy.
All right, putting that aside for a second uh is just we're just talking about uh with our uh head of news here that we got, we're feeling 2021 vibes and stick with me.
We got these mega caps uh stocks, uh heavy concentration, favoring uh just a handful of stocks.
And then out of the blue, we get this retail explosion in certain names.
We saw Games Stop and Keith Gill filing a 13 G now that's, that's a game changer too.
And Chuy, you see any s any similarities here?
Well, of course, I mean, first of all, there, there's two stories here.
The first story is the whole Keith Gill roaring kitty thing.
It's, it's an extraordinary story for retail investors because somebody did something incredible different than, than, than it's ever been done before.
And I mean, not too many retail investors turned 50 million into some couple of 100 million.
God knows how much money he has, but it's, it's really never been done before.
So that in itself is an unbelievable story.
Um But the other side to it, I think is you, you bring up AAA great point, you know, I mean, what does this mean?
Is this a repeat of 2021?
Because if you remember we normalized in 2022 and it was a pretty dark year for the markets.
And I think you are seeing, you know, you may be seeing some capitulation upside capitulation, you may be seeing kind of some euphoria that I don't know if we can, you know, can we maintain these levels or will we normalize, especially in volatility, especially in all the indexes and everything else.
So yeah, I'm gonna answer your question and say it's a little like 2021 not as extreme but a little bit like it.
Tom.
I'm just curious for folks who are listening right now and they're hearing us discussing, you know, uh Warren Kitty and the meme stocks and the moves and, and they wanna play it they want in Tom, what guidance would you give?
Is there any kind of just general um guidance, advice, tips and tricks.
Well, you know, at Tasty, we, um you know, we're like the third largest derivatives boutique.
So we, we um specialize in, in options when it comes to stocks like those.
You know, most, most of our um customers and most of our trade center in the option marketplace and most people that trade things like chewy and gamestop and things that have, you know, let's call these, these are pure asymmetrical plays, right?
You're just, you know, you want to risk one to make 10 or something like that.
And so a lot of people use the option marketplace for that.
And I would just be careful in the sense that the markets in there, even though these stocks are very liquid and even though they have a ton of trade, the markets aren't great, they're a little wide and you have to be careful about, you know, you, you have to be careful because some of the upside call skew is ridiculous.
And if you're not used to upside call skew, it just means that calls are priced more expensive than the puts.
And so it's where the velocity of risk is deemed to be.
So that's the only thing I would watch out for is just be careful about the upside call skew.
All right, we always appreciate a good risk management discussion.
Uh Give you the floor here.
Anything else you want to tell investors could be about retail stocks, uh, just about anything.
Well, you know, as we wind down for kind of, I, I'm sure you guys are dealing with the same stuff we're dealing with today.
It's just a weird week, you know, when you have a half day on Wednesday and a day off on Thursday, it's kind of, it, it's a, it's a weird breakup but we haven't, um, I don't think we've experienced, you know, this kind, it's been a long time since we haven't seen it, you know, a downtick.
I think it's been three, almost 350 days since we've had a 2% drawdown in the S and PS.
Um And I, I think we've gotten to the point where, you know, we're a little frothy as we like to say, the ducks are quacking.
So just be careful.
All right, the ducks are quacking.
We're going to leave it on that note.
Thank you for the visual and the audio as well.
Tom Sozo, as always.
Thank you.
Have a great weekend guys and it is time now for some trending tickers.
First up is Tesla.
Uh shares are higher this afternoon, putting them on track to extend their lo longest winning streak in over a year and this comes as a car manufacturer beat on quarterly deliveries earlier this week.
Uh But Josh, this is really a momentum story and if we go to the Wi Fi Interactive, I wanna chart what's going on in Tesla, but also the entire EV space.
So here's Tesla.
Uh I have been tracking this inverse head and shoulders pattern that finally played out.
And now we got this multiple uh day rally to the upside, but more broadly, look at the year to date in Tesla versus, and some of the bigger ones versus everything else.
You got this corner of stocks down there when I do equal weight, you just see that's most of the stocks right there and they are down a significant amount.
So hasn't been the best year for uh some of the smaller place players in ev but now we see Tesla guess what Tesla is just breaking into even.
You can see it's up without edging into the greens, 0.7% for that battling back, you know, stocks been rallying, of course, this week, uh report deliveries for the second quarter beat estimates investors liked it.
We did speak to Dan Ives over at Wedbush, Tesla Bowl.
You know, Ives came on the show pounded the table said, listen, the worst is in the rearview mirror for Tesla.
Very importantly, said it appears China saw many rebound in the June quarter of force in just a couple weeks.
Now, a few weeks, you got uh Chi uh Tesla's big report.
So we'll be watching closely to that another day.
We are on watch four here, check out Boeing, that company will soon know whether it's uh horrible 2024 is about to get even worse.
Shares are actually up fractionally here, about 4/10 of a percent.
But a crucial deadline is coming up here.
Uh Jared and, and the journal, I thought it a good piece kind of framing this story in which they said, listen, Boeing has to either plead guilty or argue at trial why it's innocent of a crime and already said it committed.
Um, doesn't sound like great options.
I mean, either way you play, you plead guilty.
Of course, that's another hit to a company that's already taken a big reputational hit and sounds like it would be fine.
There would be an IND independent, independent compliance monitor.
Um, not what any company by the way, of course, wants to deal with.
But as the journal notes, you know, that likely would put an end to the criminal liability.
On the other hand, you could fight it, you could go to trial, of course, trial.
Who knows what happens?
I think they just settle and we got some pretty good estimates in the ballpark for what that could mean.
Um So first of all, here's the theoretical maximum securities fraud exposures $28 billion.28 billion, but they're probably not going to come anywhere close to that.
Um Because it's a settlement, people settle the settlement value.
This is Bloomberg intelligence could be closer to 600 to 7 100 million.
That's Bloomberg Intelligence.
So Boeing violated a 2021 deferred prosecution agreement.
If this were a person, I would think they're facing jail time, but maybe this is just another 600 to 700 million may not sound like a slap on the wrist.
But when you consider the totality of the situation, at least in my mind it seems low, we'll see how it plays out.
All right, we're also watching the cryptocurrencies this afternoon.
Bitcoin sliding after collapsed exchange, Mount Gox is beginning to purportedly pay back the nearly $9 billion in Bitcoin and Bitcoin cash, it owes to customers from its bankruptcy back in 2014.
Now, the crypto exchange platforms like Coinbase are falling on the news and a simple question might be, why is this happening?
Why is the value of Bitcoin falling?
Well, you have 100 and 40,000 Bitcoins that this trustee has over in Japan when they start distributing those to customers.
A lot of are gonna say, well, I want to convert this to cash.
So they sell the Bitcoin and then they buy the uh us dollar or whatever their local currency is.
So that's what place places, potential pressure, but it doesn't have to separately over in Germany.
I think there's a trustee there.
So who's gonna distribute something like 50,000 Bitcoins?
That's a lot of money.
So, you know, another couple billion dollars there.
So this does tend to weigh on prices.
And I think, you know, the technicals in Bitcoin not looking very good real quick on the Wi Fi Interactive.
I like to draw this at least once a day.
Here we go.
This is the year's price action and now we are below.
We've dipped below before, but quickly recovered.
Doesn't look like that's happening today, but give it another day.
So, and then he said, well, what, what's the cast to get this one moving in the right direction again?
Would a Dovish Fed do it or two?
You know, I think a Dovish Fed is actually Bitcoin positive historically.
So that could have something to do with it.
Um You know, is Bitcoin the inflation ed?
I don't think we have enough time for that discussion.
Actually, we don't have enough time for that.
We'll make room, we'll make room.
They'll be on the podcast too.
Yeah.
Well, we got takeaways too.
So all Macy's, let's check that one.
Receiving some love and investor group seeking to buy Macy's has raised its buy out offer for a second time score.
The Wall Street Journal.
Uh So this part of the journal again reported that Arc House Management, Jared Brigade Capital Management have raised their buy out offer for the company to about 6.9 billion.
Investors are offering 2480 for Macy's shares they don't already own.
And Macy's uh pop in today is still down so far this year.
Yeah.
Um Not, I mean, Macy's is just kind of the shell of a company that it used to be, there is no way around that.
Uh $6.9 billion.
That is a song compared to previous, you know, valuations in, in prior years.
So I think uh yeah, this is gonna face, uh this is gonna be a tough decision for the Macy's board.
They got away a lot.
Um You know, at least they got the parade still.
Yeah, let's something.
Remember earlier this year, Macy said it would put two of Arc House's nominees on its board.
Kind of so ended the proxy battle.
So I know, listen, lots of headlines.
We'll see how this one ends up coming up, an investor's guide to fixed income.
Our next guest tells us the best way to build a portfolio with maximum benefits.
You're watching market domination discount, home goods retailer, Big Lots announcing it is planning to close more stores this year and may be forcing permanent closure, revealing elevated inflation has put a damper on customers buying power.
This is resulting in big losses for the company and substantial doubt.
That's a quote about its ability to continue operations.
Uh Josh, this is a stock that has been under a lot of pressure.
They're closing retail locations and I was just looking at the Wi Fi Interactive here.
We have a retail heat map.
You can't even see big lots.
That's how small of a company has become.
Um I can show you if I sort by equal weight here.
It is 42.8 million.
That is, uh, that is a very small amount.
You look at the year to day totals here.
It's been rough for a lot of these dollar stores.
All these, uh, that's up 30% but DG, uh, Dollar General down 6%.
Dollar tree down 25%.
Yeah, just reading through the headline Jared.
So they have around 1400 stores apparently nationwide still.
But, uh, to your point, listen, they closed about 50 stores in 2023.
Now plan to close about 40 stores this year and the stock has been clobbered clearly.
Yes.
All right.
Moving on the fixed income market could get interesting this election season following last week's presidential debate, the benchmark 10 year yield rose six points to 434.
We're looking at how to navigate the big picture on bonds with the Yahoo Finance playbook.
And joining us now to discuss is Kevin Nicholson Riverfront Investment Group, Global Fixed Income Cio Kevin.
It's good to see you.
So, actually, I'm interested to get your take.
First of all, just the big economic news today that jobs report Kevin.
What did you make of it?
What do you think the Fed makes of it?
I didn't make a whole lot of it, uh, because we've got a lot of gotten a lot of mixed data over the last couple of weeks.
Uh As far as the fed is concerned, I think that the fed will look at that information.
However, the fed is more focused on uh core P CE and I, I think that that's where their focus is going to be.
Uh a core PC dipped in May.
Um It only rose.
Uh uh what was it?
Uh point one per uh 0.1% month over month.
Um However, in June, uh it's supposed to rise is forecast to rise at 0.21% a month over month.
And then in July at 0.22% month over month.
So if you just hold that, uh June level, um for the rest of the year, you're gonna get core P CE at 2.95%.
And I think that is more important to the fed than the jobs report right now.
We got the 10 year.
Uh, it was only, it was at 4.5% a few days ago.
Now, it's closer to 4.25% just a couple bits away.
And there you see a year to date chart just wondering where do you think the tenure stops now?
So it's been traveling down for a few days.
Do we get support at 4.25%?
What does this mean for the market?
Well, I think that if we're gonna see the 10 year drop below that, we need to, from a technical standpoint, it needs to break through 420 thus far, it hasn't been able to do that.
Um, I think that in order for the 10 year to go lower, you're going to have to see something, uh, break or we're going to, uh, have to, uh, have a more risk off, um, market.
Um, right now I think that the 10 year is pretty much range bound, um, between four and 4.5% for the second half of the year.
I think that if, if we get, uh, the fed to, um, pull back and, and, and delay their rate cuts, we'll see the 10 year go back into that 435 to 450 range.
Um However, if they do begin to cut, I think that we're gonna be closer to the bottom end of my range of 4% closer to 4% by year end.
So, Kevin Le, let's say you're watching right now, you're a viewer, you're invested in treasuries.
What's your advice, Kevin?
What's your guidance?
So we own treasuries in our portfolios, but it's at the back end of the curve and it, and we did that, uh actually through strips.
Um But for the uh general portion of our portfolio and the, uh, we would actually look at the 3 to 10 year part of the curve.
We like taking credit risks over interest rate risk.
So we want to buy those corporate, those um, companies, um, bonds that uh are, that are investment grade that are gonna give us an additional yield of about 100 basis points on in the investment grade world.
Um So we're one lock in yields that are above 5%.
Um And then in the non investments grade world, when we think about high yield, we wanna stay at the front end of the curve, but we want to be able to get, you know, pick up uh incremental, you know, 300 basis points or so.
Um And we only recommend a high yield for those clients that have a longer time horizon beyond five years, but the client that has a time horizon inside of five years, we're focused on the investment grade credits.
So for high yield, can I read anything into that?
Um Are you concerned about some short term dynamics here?
Uh where you would recommend you have to have some strength or you gotta hold for five years?
Well, I think when I think about high yield, what I'm really focused in on are looking at those, those companies that are in the upper echelon of high yield.
So they're double B rated uh companies that have the opportunity to be able to move up into investment grade get upgraded.
And so, um that is where we have been focused.
Um because when we think of high yield, there are some companies that are, are basically fallen angels uh as they like to refer to them, they were once investment grade, they've fallen into non investment grade and they now right size their business and they're starting to do better and can get moved back up into the investment grade arena.
And so that's why uh we uh like the high yield there, but we want to um we put it in those clients portfolios that have a longer time horizon just in case it may take longer for that turnaround.
Kevin.
You know, I'm curious, election Front and Center ABC has its uh interview with President Biden tonight.
I'm just curious, Kevin, how much are your clients asking you about the election?
And, and what are you telling them right now?
Well, our clients aren't asking us anything about the election right now.
And to be quite honest, we will tell them that the election really doesn't make a difference in financial markets.
Uh It will, it's good headline grabbing news, but oftentimes it will uh have a very small uh impact on financial markets.
Um So, you know, for our, from our standpoint, from an investing standpoint, we're not focused on in on the election.
Uh The one thing that I would have say, uh, you know, we possibly will get after the election, a steepening yield curve and that's largely is gonna be dependent on the fed.
And, um, so we think that the fed is going to remain independent.
So I don't see a candidate uh either candidate being able to um force uh the uh fed to move.
So really, it's not gonna have an impact on the election from my vantage point.
Kevin.
We got under a minute, I'll give you the floor here.
Uh, any final words for investors?
Oh, I think that, uh, if I had to think of anything for investors, uh, for fixed income, I think that they need to lock in these higher rates while you can.
Uh, a lot of money has been sitting on the sidelines or have been invested in money markets over the past year.
Plus.
Well, if and when the bed does begin to cut rates, those that front end of the curve that is short maturities, uh you're no longer gonna be able to reinvest at those uh those higher yields that you're seeing.
Um you know, that have been north of 5%.
So that's why we're stressing, move out on the curve in that 3 to 10 year part of the curve and try to lock in using um credit uh markets uh to get that five plus uh percent yield because it's not gonna be there.
Um Once the, um the fed finally does uh begin to cut rates, Kevin always good to have you on the program.
Have a great weekend.
Thanks, you too.
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