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13:56
PDT

Earnings reports from Campbell's and Victoria's Secret are due in the morning.

Campbell's Victoria's Secret Lululemon Zscaler DocuSign Waller Austin Goolsbee ISM Scarlett Foo PRIVATE FEDFUNDS

– Lululemon, Zscaler, and DocuSign will report after the bell.

– Challenger job cuts data and weekly jobless claims will be released.

– ISM services update is also on the agenda.

– FedSpeak from Waller and Goolsbee could influence market movements.

earnings reportslabor market datamonetary policy

▸ Full transcript

I just people that are impacted, but the communities we serve as well because that's the age we live in. Bringing you the latest business news wherever and whenever it happens. I'm Scarlett Foo reporting from America's biggest military shipyard. This is Bloomberg. Here's what markets will have their eyes on over the next 24 hours: earnings in the morning out of Campbell's as well as Victoria's Secret, and then after the bell we're going to hear from Lululemon, Zscaler, and DocuSign. The drumbeat to Friday's jobs report continues. We're going to get the challenger job cuts data in the morning. We're also going to get those weekly jobless claims numbers and an update on ISM services. We're also going to get some FedSpeak out of Waller, Hammock, as well as Austin Goolsbee that could potentially move.

Analysis

Markets are focused on upcoming earnings reports from Campbell's, Victoria's Secret, Lululemon, Zscaler, and DocuSign, alongside key job data and FedSpeak that could influence market sentiment. The anticipation of Friday's jobs report is heightened by the release of challenger job cuts data and weekly jobless claims numbers, which may provide insights into labor market trends.

Smart money should note the potential volatility surrounding these earnings announcements, particularly in consumer discretionary sectors, as they may reflect broader economic conditions. Additionally, the FedSpeak from Waller and Goolsbee could signal shifts in monetary policy that impact interest rates and market liquidity.

13:54
PDT

Steve Ballmer suspended for one year by the NBA.

Steve Ballmer Los Angeles Clippers NBA New York Bloomberg Insight Bloomberg Power Players PRIVATE

– Clippers fined $30 million and forfeited five first-round draft picks.

– Punishment reflects a stricter enforcement of salary cap rules.

– Clippers' future competitiveness significantly impacted.

– Potential opportunities for rival teams in player acquisitions.

NBA complianceteam strategyfranchise value

▸ Full transcript

Returns to New York, powered by Bloomberg's award-winning journalists, front row conversations with the voices shaping the future of sports and business, where game changers connect from the board room to the locker room, a place for bold ideas, powerful insights, and high impact conversations. Every sport grounded in Bloomberg Insight. Join us. Bloomberg Power Players, New York, September 10th, 2026. He touches on everything that we care about: information, markets, prey, geopolitics.

Analysis

The NBA has imposed severe penalties on the Los Angeles Clippers, including a one-year suspension for owner Steve Ballmer, a $30 million fine, and the forfeiture of five first-round draft picks. This unprecedented punishment signals a significant shift in the league's enforcement of salary cap rules, potentially impacting team strategies and player acquisitions for years to come.

Smart investors should note that the Clippers' future competitiveness is now jeopardized, as losing five draft picks effectively limits their ability to rebuild or enhance their roster. This situation may create opportunities for rival teams to capitalize on the Clippers' weakened position in the league.

13:51
PDT

Steve Ballmer suspended for one year.

Steve Ballmer Clippers NBA Donald Sterling Robert Sarver OK DJ

– Clippers fined $30 million and forfeited five first-round draft picks.

– This is the harshest punishment since Donald Sterling's removal.

– Impact on Clippers' future competitiveness is significant.

– Potential for rival teams to gain advantage.

sports governanceteam valuationcompetitive balance

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I mean, you've got gray hair. Most people would say, OK, at your age, why are you still in school? But there has to be some value in your 30s, 40s, 50s, and beyond to always learning. Well, what does that mean for you? First of all, sir, this is not gray hair. This is S-P-H. It's called sex symbol hair. This is sex symbol hair. But anyway, I just love to learn. Now, that's not going to stop for me. You know, when I speak on certain things, I like to be in the expert category when I speak. I've been in law enforcement for over 20 years, so people know that I'm a reserve police officer. So right now I'm working on a degree in criminology. So when I speak on criminology, I have experience on the law enforcement side, but I will have a master's in criminology, which makes me an expert in criminology. All right, I have two quick questions for you. One goes back to DJ Diesel. And I mean, obviously you enjoy this and you've been in music, obviously with a rap career now as a DJ. But I mean, when I look at all of your businesses, is this sort of one of the more underrated business lines that you have under the Shaq umbrella? I mean, I wouldn't really call it a business. It's more of an adrenaline fix, you know, from age 18 to 39 for an hour and an hour and a half of the day when I walked into a building. So when I get that high, it's my responsibility to give people a good show. My father took me to a game one time; it was a terrible game, and he turned the radio down.

Analysis

The NBA has suspended Clippers owner Steve Ballmer for one year due to salary cap violations, resulting in a $30 million fine and the forfeiture of five first-round draft picks. This unprecedented punishment could significantly impact the Clippers' future roster decisions and overall competitiveness in the league.

Smart investors should note that the severity of this penalty reflects the league's commitment to maintaining competitive balance, which could influence team valuations and market dynamics in professional sports. The loss of draft picks may force the Clippers to rethink their strategy, potentially opening opportunities for rival teams to capitalize on their weakened position.

13:49
PDT

Steve Ballmer suspended for one year by the NBA.

Steve Ballmer Clippers NBA Donald Sterling Robert Sarver FIO GOOGL

– Clippers fined $30 million and forfeited five first-round draft picks.

– The punishment is the harshest since Donald Sterling's removal.

– Future team competitiveness may be compromised for the Clippers.

– Investors should monitor potential shifts in team strategy.

sports managementfranchise valuationsalary cap implications

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Children are obviously in a much different financial situation, but just because you have money doesn't necessarily mean you're responsible with it. I am curious as to what kind of conversations you've had with them as they were maturing to make sure they were ready to handle adulthood. I kind of treat my children, especially the older ones, like college students. I deployed in my house what is called an FIO system, my figured out system. If you don't know the answer, then you come to the professor. A lot of times, I don't want to be the one telling them how to do stuff and be like, 'Hey, you should try to figure this out. You should learn how to just explore on your own. ChatGPT, Google, ask your other friends, and just try to learn on your own.' Because that's kind of what I did, and that kind of made me strong. But I always tell them if they can't figure it out, they can always come to the professor. I know this is a project that's focused primarily on credit, but I assume some of these kids are going to want to pick your brain about just investing and building businesses, something that you've been very successful with since you retired and obviously, you know, even prior to when you left the NBA. I always try to keep it honest with the children. I'm not a master investor; however, my strategy has always worked for me. It doesn't always work for me, you know, after failing many, many times, as you know, we've talked about this a lot. My new strategy of investing in things that are going to change people's lives has always worked for me, so I always try to give.

Analysis

The NBA has suspended Clippers owner Steve Ballmer for one year due to salary cap violations, resulting in significant penalties including a $30 million fine and the forfeiture of five first-round draft picks. This harsh punishment could severely impact the Clippers' future competitiveness and roster decisions for years to come.

Smart investors should note the implications of this suspension on the Clippers' valuation and potential shifts in team strategy, as the loss of draft picks may force a reevaluation of their current roster and long-term plans. Additionally, the precedent set by this case could influence how other franchises manage their financial strategies moving forward.

13:47
PDT

Financial literacy is lacking in current education systems.

Credit One LSU DJ Diesel Jenna Bandy School of Hard Knocks Chicken Fry DJ Hard Knocks

– Partnerships with influencers can enhance engagement with younger audiences.

– Credit management education is crucial for future financial stability.

– The initiative may influence consumer credit behavior.

– There is a growing demand for practical financial education.

financial literacyinfluencer marketingeducation reform

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I'm in school right now, working on a degree in criminology. So, being back on college campuses is kind of natural to me. I love being around young minds that have the same excitement about learning and growing that I do. This is why part of this partnership with Credit One is so important to me. I see you also made sure to include LSU on one of your stops here. You made a joke about how you're going to make them dance afterwards. But that really is no joke. I mean, it's going to basically be credit tips and then it's DJ Diesel, which is more than just a moniker. I mean, this is a big business that you've sort of built up for yourself. Yeah, because, you know, when I was a youngster, nobody really sat me down and explained how credit or why a good credit score matters when I was young. I'm kind of appalled that they don't teach this in colleges. I had to learn the hard way. I have kids in college right now. Some of my kids just got out. I don't want them to struggle like I did. You yourself are obviously a big name, but then I look at some of the kind of content creators who are co-hosting this with you. I guess creators that speak to that younger generation, like Jenna Bandy, the guys from the School of Hard Knocks, Chicken Fry, and a few others. I mean, what do those people, and more importantly, their age and their sensibilities bring to the table for this type of project? You know, bringing in certain influences, we all have different perspectives.

Analysis

The discussion highlights the importance of financial literacy among young people, emphasizing the need for education on credit management. The partnership with Credit One aims to address this gap by providing credit tips and engaging younger audiences through influencers.

Smart money should note that the integration of financial education into college curricula is becoming increasingly vital, as many students lack essential knowledge about credit. This initiative could lead to a more financially savvy generation, potentially impacting consumer behavior and credit markets in the future.

13:45
PDT

Steve Ballmer suspended for one year.

Steve Ballmer Clippers NBA Donald Sterling Robert Sarver Kawhi Leonard The Clippers Randall Williams PRIVATE

– Clippers fined $30 million and forfeited five first-round draft picks.

– Punishment is the harshest since Donald Sterling's removal.

– Impact on Clippers' future roster decisions is significant.

– Salary cap circumvention may lead to stricter enforcement across the league.

sports governancesalary cap compliance

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Millionaires could pay players whatever they want, and essentially that's sort of what was going on. The NBA had been investigating this for almost a year now, and they found that they were essentially guilty. So they're guilty, and the punishment right now is Balmer is removed for one year. Kawhi Leonard himself was fined $700,000. The Clippers were stripped of five first-round draft picks and fined $30 million. What does that do to the Clippers as a team? I mean, it's five first-round draft picks. It's five years up until 2033, but it essentially cuts their team in half probably for the next 10 years. You think about that's somebody being suspended that they can't draft in ninth grade right now. So in terms of their future, they're trading Kawhi Leonard away, but the punishment is easily the harshest punishment that we have seen since the NBA removed an owner, which was Donald Sterling in the Clippers years ago. Is there any risk that Steve Ballmer would be removed? I doubt it. Donald Sterling at bars very high, and then of course we had Robert Sarver years ago who sold the team for different allegations. I think that salary cap circumvention is not grounds to remove an owner, and this punishment of $30 million and five first-round draft picks being forfeited is huge. Alright, Randall Williams, who covers everything sports for us here at Bloomberg, that headline once again: the NBA suspending Steve Ballmer, the owner of the Clippers, for one year for breaking salary cap rules. Now, we do want to stay in the world of sports, the business of sports, a little bit of a friendlier story here.

Analysis

The NBA has suspended Clippers owner Steve Ballmer for one year due to violations of salary cap rules, resulting in a $30 million fine and the forfeiture of five first-round draft picks. This punishment is the most severe since the removal of former owner Donald Sterling, significantly impacting the Clippers' future roster decisions.

Smart money should note that the loss of five first-round draft picks could cripple the Clippers' ability to rebuild over the next decade, potentially leading to a long-term decline in competitiveness. Additionally, the precedent set by this ruling may influence how other franchises approach salary cap compliance moving forward.

13:41
PDT

Natural gas supply concerns in Europe are increasing due to low stocks and transport issues.

Bill Perkins Scarlier Capital Management Magnetar CoreWeave Alex Little Q-Star Capital AI Alex Littlewitz Magnetar Capital

– Crude oil supply is tight but not at crisis levels compared to natural gas.

– AI is changing the landscape of knowledge production, making adaptability a crucial skill.

– Education should pivot towards teaching adaptability and critical thinking.

– Investment strategies should focus on resolving uncertainties in rapidly changing environments.

natural gas supplyAI adaptabilityeducation reform

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Sitting and saying what is our function? What is it that we do? It is no longer valid to say I transfer knowledge and I stamp a credential. That is gone. What you should be teaching people is not what to think, but how to think. How do I think? How do I learn? How quickly can I unlearn and relearn when the world's changing? It is an innate human capability, in fact the ultimate human capability that we can adapt in our lifetime. We can override our genes. We have the ability to decide whether the rules are the same or whether they've changed. And if they've changed, overwrite it. An AI model is not going to come to you and say, my model's obsolete. A human can say that AI model is obsolete. A human can say my model of the world's obsolete. That's being adaptive. That ability to go in, use AI as an augmenting tool to make better decisions and be open to, I say, separate your identity from being right and make your identity being adaptive because a person who wants to be right defends their answer. If you teach kids to be adaptable, what happens to be correct with their identity of being adaptable requires them to update every time the world changes. That's a skill that persists over time. In fact, the only skill that persists when the world's changing quickly is adaptability because expertise, the half-life of it, goes away. All right, Alec, I've got to leave it there. Alex Littlewitz, founder of Magnetar Capital.

Analysis

Concerns are rising over natural gas supply in Europe as low stocks and train disruptions heighten fears of a cold winter, overshadowing crude oil worries. The shift in knowledge production due to AI is creating a bottleneck in agency and adaptability, emphasizing the need for education to focus on how to think rather than what to think.

13:39
PDT

Human advantage is shifting from knowledge to judgment and agency.

Bill Perkins Scarlier Capital Management Magnetar CoreWeave Q-Star Capital

– Adaptability is crucial for effective decision-making in an AI-driven world.

– Education systems need to evolve to emphasize judgment and adaptability.

– Investors should focus on companies that promote innovative thinking.

– The commoditization of knowledge may alter competitive dynamics in various sectors.

education reformAI impact on laborinvestment strategyknowledge commoditization

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You mentioned something a little bit earlier about this idea of intelligence becoming a little bit more commoditized. You know, last week on this program we did a lot with the heads of various education firms and we talked a lot about how teaching needs to change both at the higher level but also even at the elementary level. I mean, what does it mean when you have these machines, these models that can, if not replicate, certainly do a decent enough approximation of human intelligence? I mean, where does that leave us? Where am I supposed to be teaching my children and my grandchildren? Because, and I think we're of the same generation. When we came up, it was all about knowledge. It was. And that was what was supposed to sort of make us successful and make us different. And now it kind of feels like we're moving into an era where that might not be the difference. I think it's not a story about the obsolescence of humans. It's the human advantage that is migrating to judgment and agency. It's not purely knowledge, which is now getting more commoditized, but judgment and agency. Judgment and agency, the driving engine behind them is adaptability, and here's why. Judgment is the ability to take your knowledge and make choices. Making and acting is expressing agency. If you use your judgment and express and take an action with a model of the world that's no longer valid, it gets you nowhere. You're just going faster in the wrong direction. Adaptability is the ability to say, I'm going to upgrade my mental model and that.

Analysis

The discussion highlights the shift in human advantage from knowledge to judgment and agency as intelligence becomes more commoditized. This transition emphasizes the importance of adaptability in decision-making, suggesting that future education should focus on developing these skills rather than merely imparting knowledge.

Smart money should recognize that as knowledge becomes widely accessible through AI, the value will increasingly lie in the ability to make informed decisions and adapt to changing circumstances. This shift could reshape investment strategies, prioritizing companies that foster adaptability and innovative thinking over traditional knowledge-based metrics.

13:37
PDT

Investing early in AI can yield high upside as uncertainties are resolved.

Bill Perkins Scarlier Capital Management Magnetar CoreWeave Q-Star Capital Ken Griffin Citadel AI

– Lower costs of capital will emerge as risk perceptions shift in the AI sector.

– Historical examples of circular finance indicate potential for demand creation.

– Current financing structures may lead to significant market maturation.

– Understanding the transition from uncertainty to risk is crucial for investment strategy.

AI investment strategycircular financecost of capitalrisk management

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And if I can go resolve it first and price it, because I'm early and sourcing it, I might be able to structure something where I have a forgiving investment, not so much downside but a lot of upside because nobody else is there. As people get in there, as people begin to understand and resolve the uncertainty, when it migrates to risk, lower costs of capital come in, spreads compress. And that is where a lot of people like us, we've made our money once it migrates over to a more risk framework because that's when the lower cost of capital comes in and drives the returns down. Well speaking of the cost of capital, I mean obviously your background is in structure of credit. You're obviously one of the early folks who walked in the door with Ken Griffin over at Citadel. Now when you look at some of the financing structures in the AI space right now, particularly kind of the circular nature of that, does that make sense to you? I mean I don't necessarily mean just in terms of return but also in terms of this idea of risk and uncertainty. I think people, sometimes the way back history is helpful. In railroads, when we created the whole railroad system, there was that same circular finance. When the airlines came in, there was circular finance. The airlines were funded originally because the demand was from the postal service. The railroads were gifted land, and around the land along the railroads, they created settlements, which created demand for people along the railroad lines. So there's a difference between the circular finance that leads and is eventually off taken by actual demand. That early financing is helpful. It's a trade.

Analysis

The discussion highlights the potential for investment in AI-related sectors, emphasizing the importance of being early to resolve uncertainties in the market. It suggests that as risk perceptions shift, lower costs of capital will drive returns, making early investments more lucrative.

Smart money should note the historical parallels drawn with circular finance in industries like railroads and airlines, indicating that early financing can create demand and lead to significant returns as the market matures. This insight suggests that current financing structures in the AI space may be setting the stage for future growth.

13:34
PDT

Broadcom's earnings met estimates but disappointed, leading to a 4% drop in shares.

Broadcom Mark Gensley Digital Bridge Bill Perkins Skylar Capital PJM ERCOT Magnetar CoreWeave Q-Star Capital AI

– A new ETF focuses on short-dated power futures, reflecting the growing importance of power in the AI sector.

– The production of knowledge has shifted from human to synthetic, creating new investment dynamics.

– Natural gas prices in Europe are a concern, with potential for volatility this winter.

– The 12-month curve in Texas is currently the cheapest since COVID, indicating attractive pricing.

AI growthenergy market volatility

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uncertainty back then when you were starting this firm and more importantly when you were sort of kicking the tires on a company like CoreWeave? Yeah, I think when we, so my conjecture has been what Magnetar focused on was thinking about times where there's very rapid change. In times like that when there's periods of uncertainty, typically people run away from it, people like certainty, which then creates an opportunity to go if you're the first person to be able to resolve the uncertainty. You might not be able to see and have clear of audience about everything coming next. But big regime changes like AI tend to unfold in four pieces. Something changes about the production. There's a change in abundance versus scarcity. You wind up having a bottleneck and then it never goes back. It's irreversible. So applying that to AI for Magnetar, the production of knowledge changed. Knowledge used to be for 100 years our domain humans. All of a sudden it's synthetically made, right? Why does that matter? Well, knowledge was scarce in humans. Now it's abundant. That migrates human, what is human territory for advantage to judgment and agency? We can talk about that in a second. But from a production perspective, when you have a change in the production of knowledge, it then leads to a scarcity of agency and an abundance of knowledge. The bottleneck became the physical production of it. So where CoreWeave stepped in was when we're modeling uncertainty, we go where.

Analysis

Broadcom shares are down about 4% following earnings that met estimates but disappointed investors. The conversation highlights the growing importance of power access in the AI boom, with a new ETF launched to capitalize on short-dated power futures tied to electrical grids in Texas and the Northeast.

The shift in knowledge production from human to synthetic has created a bottleneck in agency, which could present investment opportunities. As uncertainty in the energy market persists, particularly regarding natural gas prices in Europe, there is potential for significant volatility and price movements in the electricity sector.

13:32
PDT

Natural gas prices in Europe are under pressure due to low stocks.

Bill Perkins Scarlier Capital Management Magnetar CoreWeave Q-Star Capital TTF natural gas crude oil Europe TTF CIO AI Northwest Europe CL=F

– Concerns about a cold winter could exacerbate supply issues.

– Crude oil remains tight but is not expected to reach crisis levels.

– The energy market is experiencing structural shifts affecting pricing.

– Investors should focus on geopolitical events impacting energy supplies.

energy supply constraintsgeopolitical risksAI-driven demand

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With those trains down and that being a key supply to Europe and stocks being extremely low in Europe, there's a lot more concern for a cold winter in Europe than there is kind of a shortage of crude oil around the globe. That being said, crude oil is tight. They are finding ways to loosen it up. And just natural gas just doesn't have that flexibility that crude has. And so I'm more concerned about TTF natural gas prices and the possibility of stocking out this winter in Northwest Europe than I am crude oil being at crisis levels. Hey Bill, really great to catch up with you. We gotta talk again soon. Bill Perkins there, of course, a legend in the natural gas space, and now a partner and CIO over at Scarlier Capital Management. We continue our conversation this hour about the broader AI story and how we know, of course, that AI is a chip server, software revolution, but it's also a capital markets revolution. Investment firm Magnetar began 20 years ago with a playbook, not so much to predict winners and losers in the tech race, but to identify bottlenecks created by structural shifts. Finance those bottlenecks with downside projections while retaining some upside exposure. CoreWeave, of course, became one of its most notable case studies after providing secured and convertible capital to the company back in 2021. It's like treat GPUs, data centers, contracted demand, almost like, well Bill would know this, an AI era midstream asset. Alex Little, it's founded Magnetar, now leads his family office. Q-Star Capital.

Analysis

Natural gas prices in Europe are under significant pressure due to low stocks and concerns about a cold winter, while crude oil remains tight but manageable. The market is increasingly focused on the structural shifts in energy supply, particularly the bottlenecks in natural gas, which could lead to higher prices and volatility this winter.

Investors should note the divergence in the energy markets, where natural gas is facing more immediate supply constraints compared to crude oil. This situation highlights the importance of monitoring geopolitical events and their impact on energy prices, especially in the context of the ongoing AI-driven demand for power and infrastructure.

13:30
PDT

Broadcom shares down 4% post-earnings.

Broadcom Virginia Loudoun County Culpeper Mark Gensley Digital Bridge AI PJM ERCOT Skylar Capital Centaurus Bill

– Political pushback against data centers is affecting electricity growth plans.

– Texas electricity prices are at their lowest since COVID.

– AI growth uncertainty is influencing market pricing.

– Future recovery in growth could lead to price adjustments.

electricity pricingAI growthdata center impactpolitical influence

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I just want to make sure though too. I mean, is some of this already sort of baked into kind of the forward curves that we see for PJM, which runs the electrical grids here in the northeast and ERCOT, which is down in Texas? Is that already sort of baked into those forward curves? Well, the information is constantly changing. I mean, six months ago it was quite bullish and the political winds have changed. And there has been lots of pushback against data centers and the primary engine of electricity growth in the United States of America. And so a lot of the plans in terms of the gigawatts that were supposed to go on the ground are kind of delayed or in question. I think that there were legitimate concerns and I think there was legitimate propaganda. And I think when the propaganda clears, we'll be back on track for growth. And then the Ford curve will reflect that. But right now, for example, the 12-month curve in Texas is the cheapest it's ever been since COVID years, right? Over 10 years. So the prices are actually quite attractive right now, given the uncertainty into what AI growth is going to be in the next two years. Yeah. Hey Bill, before I let you go, I do just have to pick your brain. I mean, given your history, I know you, I would assume you've probably seen some of the recent ructions that we've seen in natural gas prices, diesel, a lot of the fuels because of the situation going on in the Middle East. Do you have any sense here, it's kind of like, you know, sort of what the long-term outlook might be if the situation in the Middle East isn't.

Analysis

Broadcom shares fell about 4% following earnings that met estimates but disappointed investors. The ongoing pushback against data centers and the uncertainty surrounding AI growth are impacting electricity pricing and future supply plans in the U.S.

The current low prices in Texas' 12-month electricity forward curve suggest a market underestimating the potential for AI-driven demand growth. As political winds shift, the eventual recovery in growth could lead to significant price adjustments in the energy sector, making it a critical area for investment consideration.

13:28
PDT

Broadcom's earnings met expectations but led to a 4% drop in shares.

Broadcom Virginia Mark Gensley Digital Bridge Skylar Capital Centaurus ERCOT PGM AI ETF

– Virginia's approach to data centers is seen as a model for balancing economic growth and energy needs.

– AI financing is becoming increasingly bifurcated, with rising yields in non-investment grade sectors.

– Electricity pricing is expected to rise, driven by demand and volatility.

– An actively managed ETF offers a different risk profile compared to traditional utility investments.

AI growthelectricity pricinginvestment grade creditdata center economics

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I want to have in my commodity basket; it allows you to do that. Yes, the AI story and the power growth story is going to pay out over many, many years. You can hold as long as you like. Give me a sense here. I mean, is the idea here, is this a bet on actual where electricity prices will go in terms of being higher, or is this more a bet on the volatility that might actually come as a result of some of the capacity constraints? Well, if you go along this product, this is a bet on prices rising over time. Perhaps quickly over time, but just rising over time. Having some inflation hedging as well in the electricity bucket. So that is the bet. You are betting that it will go up. And electricity is a tail product, right? Most of the pricing comes from these extraneous events. Sometimes it can print $5,000 from $50 or $60, in particular months in the summer. And our product allows you to go into the cash. We do not roll the futures contracts before they liquidate in the cash. We actually get the cash print and then we roll that cash into the rest of the contract. So you do get some high volatility in the front month but you're also in the whole strip. Well, I asked that because if I mean, if this is sort of a bet on price activity, what am I getting out of an actively managed ETF like yours as opposed to just buying a utility ETF, a utility company? I guess you're paying for management.

Analysis

Broadcom shares fell about 4% following earnings that met estimates but disappointed investors. The discussion highlighted the critical link between AI growth and power supply, emphasizing the need for reliable electricity as demand for data centers increases.

Smart money should note the emerging trifurcation in credit markets, particularly in AI financing, where non-investment grade cash flows are seeing rising yields due to increased risk perception. This shift could impact funding for AI projects and the broader tech landscape as investors adjust to higher risk premiums.

13:25
PDT

Broadcom's Q3 earnings met expectations but disappointed investors, leading to a 4% drop in shares.

Broadcom Mark Gansy Digital Bridge Virginia Loudoun County Culpeper Skylar Capital Centaurus PGM ERCOT AI ETF CL=F

– The AI industry's growth is becoming increasingly tied to access to power.

– Short-dated power futures are gaining attention as a new investment vehicle.

– The market is recognizing the importance of energy infrastructure for digital and industrial growth.

– Private credit financing for AI projects is seeing rising coupon rates due to increased risk.

AI infrastructureenergy investmentfinancing trends

▸ Full transcript

All right, Mark. We should have more time. Gotta leave it there. Always smart. Mark, really appreciate you getting up for us. Mark Gensley, chief executive officer over at Digital Bridge. And we should just point out that Broadcom shares are now down about 4% here after earnings that pretty much came in line with the estimates, but not much more than that and maybe a bit of a disappointment for investors. We continue our conversation, though, about the broader AI boom and the creation of a new race, not just for chips and servers, but of course for the power needed to run it all. He's a veteran gas and power trader. He founded Skylar Capital after a decade over at Centaurus. He's now trying to make wholesale electricity itself investable. He says the market has spent years rewarding the visible winners of the digital and industrial build-out while paying far less attention to the input they depend on. He says that blind spot matters because the next phase of growth here is going to be increasingly defined by access to power. He just launched an ETF a month or two ago that holds short-dated power futures tied primarily to the electrical grids in Texas and the US Northeast. Hey Bill, thanks for being here. Why, just give me a sense here, when we start talking about this idea of sort of what kind of these short-dated types of futures can actually do, why choose that particular instrument? Well, I think you get access to the prompt. It's a 12-month contract in PGM and ERCOT. And people have access to ETFs in oil, natural gas, but primarily the...

Analysis

Broadcom's earnings report showed results in line with expectations, but shares fell about 4%, indicating potential disappointment among investors. The conversation highlighted the critical role of power access in the AI boom, suggesting that future growth will increasingly depend on reliable energy sources.

Smart money should note the emerging focus on power futures as a new investment avenue, particularly in regions like Texas and the Northeast. This shift towards short-dated power futures could signal a growing recognition of the importance of energy infrastructure in supporting the digital economy.

13:23
PDT

Broadcom's Q3 revenue slightly exceeded expectations.

Broadcom PwC Digital Bridge Mark Gansy Virginia Arclight GPU AI

– Q4 revenue guidance is below market expectations.

– AI financing is becoming more expensive, particularly for non-investment grade entities.

– Private credit for AI projects has seen a significant increase in coupon rates.

– Investment grade cash flows remain stable amidst market bifurcation.

AI financingcredit market dynamicsinvestment grade stability

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And so our credit business was a great partner and continues to be a great partner to core. We've figured out how to secure ties GPUs. The whole concept there was that GPU commitment had a revenue tenor of about seven years, and we were able to create a bond that was five years. So we knew the anticipated repayment date was ultimately inside of the date of the maturity of the financing. Continuing to finance the sector is really about pairing the liability with contractual obligation and ultimately who is investment grade and who's not investment grade. What's happening in AI today remains really interesting. The market is really not bifurcated between good credit and bad credit; it's really trifurcated today. One investment grade, as you look across corporate debt and bonds, continues to trade perfectly safely, and there's a market for investment grade long-durated cash flows. Then you have not investment grade cash flows, stuff that's in the double B, single B, and that range, and that has a price for it. You see it's being priced every day and priced correctly. Here's where we get a little perhaps some altitude sickness when we think about what's going on in non-investment grade land, where you have businesses that are being financed by private credit. What we saw, you know, two to three years ago in private credit in the AI build-out was a coupon that was being priced in the 8 to 10 percent range, and today that's gapping out correctly at 12 to 14, maybe even 15 percent, because investors need to get credit for that risk. And so when we look at the ultimately the.

Analysis

Broadcom's recent earnings report showed a slight revenue beat, with Q3 revenue at $29.6 billion against expectations of $29.5 billion, but guidance for Q4 fell short of street estimates. The credit market for AI projects is becoming increasingly segmented, with non-investment grade financing costs rising significantly due to perceived risks, now priced at 12-15%.

13:21
PDT

Broadcom's Q3 earnings beat expectations.

Broadcom Mark Gansy Virginia Digital Bridge PwC MongoDB Dell PG&E AI Loudoun County

– Fourth-quarter revenue guidance is slightly below consensus.

– Virginia's government supports data centers with economic incentives.

– Concerns about financing AI projects persist.

– The data center model in Virginia may influence national trends.

data center investmentAI financingVirginia regulatory model

▸ Full transcript

And I think I like what the governor of Virginia has done. She's done a great job of making this not a political issue. She's candidly said that data centers are good for Virginia when our industry does it in a sensible way. And that sensibility is around putting money back into the grid, paying our fair share, and making sure in counties like Loudoun County or in Culpeper, Virginia, real estate taxes have actually gone down. The cost of power has actually gone down. Why? Because our industry worked with Virginia. Virginia, as you know, is the data center. Really, the fulcrum of the data center industry sits in Virginia. And now the government of Virginia has been clear, and she said, we're not going to deny data centers. We're going to make the hyperscalers and the data center developers put something back into the economy and build what's called sensible compute. And that's what we've done, and that's the model. That's the model that we have to replicate all across our country. Well said, Mark. I do want to ask you about just the financing issues going on right now with a lot of these AI projects, being financed with long-term leases, vendor support, a lot of guarantees.

Analysis

Broadcom reported third-quarter earnings of $3.32 per share, exceeding expectations, with revenue at $29.6 billion, slightly above estimates. However, guidance for the fourth quarter is slightly below consensus, indicating potential challenges ahead despite a strong semiconductor solutions business outlook.

The Virginia government is promoting a model for data centers that emphasizes economic contributions and sensible compute, which could influence future regulatory frameworks across the U.S. This approach may attract more investment in data centers while addressing local concerns about power costs and taxes, signaling a shift in how data center projects are financed and perceived.

13:19
PDT

Broadcom's Q3 EPS beat expectations but Q4 revenue guidance fell short.

Broadcom Digital Bridge PwC MongoDB Dell PG&E Jensen Arclight AI

– Concerns arise about Broadcom's ability to leverage AI growth.

– Shift in bottlenecks from chip production to power and permitting.

– Digital Bridge emphasizes the importance of power infrastructure for AI.

– Global data center spending projected to rise significantly.

AI infrastructuresemiconductor performancepower supply challenges

▸ Full transcript

There is a direct link between what's happening with Broadcom's earnings and the AI build-out. Obviously, hardware is an important part of the stack, but ultimately what is important is the ability to keep building and the ability to turn on compute.

Analysis

Broadcom's earnings report revealed a slight miss on fourth-quarter revenue guidance, which is expected at $34.8 billion, just below the street estimate of $35.1 billion. This raises concerns about the company's ability to capitalize on the AI boom, despite a solid performance in the recent quarter with earnings per share of $3.32, exceeding expectations of $3.23.

The broader implications suggest that while hardware remains crucial for AI development, the real challenge lies in the ability to scale compute resources effectively. Investors should note that supply chain constraints may be shifting from chip production to power and permitting issues, which could impact the pace of AI infrastructure development significantly.

13:17
PDT

Broadcom's Q3 EPS beat expectations.

Broadcom Mark Gansy Digital Bridge Arclight AI EPS And Jensen Main Street

– Revenue slightly exceeded estimates.

– Q4 revenue guidance is below consensus.

– Semiconductor solutions business may improve later.

– Cautious sentiment in the semiconductor sector.

semiconductor sectorAI developmentearnings guidance

▸ Full transcript

With the electron. And that was our thesis in buying Arclight, that to get to a token remain, the way you get there is you have to invest in the power. And Jensen said it best, you don't get a token without an electron. So we started at that fundamental concept of being able to control our destiny on power, and most importantly, being able to procure and build power that's safe for communities and doesn't hurt taxpayers. We thought it was a really good idea about two years ago. So when we met Arclight and started building power behind the meter that doesn't impact the grid. And most importantly, it doesn't hurt Main Street. We thought that was a really good idea. And now, two years later, that turns out to be the right decision. So we have to keep going. We have to keep building power that doesn't impact the grid. But more importantly, keeps our customers remain and our country on schedule with building AI. Hold that thought for one second. We're in conversation with Mark Gansy over at Digital Bridge. Those earnings from Broadcom crossing the wire right now, the third quarter EPS numbers, $3.32 per share. The street was looking for $3.23. Revenue in the quarter coming in at $29.6 billion. The street was looking for $29.5. So basically in line for the third quarter, for the fourth quarter, here's the guidance. The company says expect revenue of about $34.8 billion. That's a smidge lower than the average of street estimates, which is for roughly about $35.1. The company also says that it does see its semiconductor solutions business actually picking up steam a little bit later, but for the most recent quarter right now coming in.

Analysis

Broadcom reported third-quarter earnings of $3.32 per share, exceeding the street's expectation of $3.23, with revenue at $29.6 billion, slightly above the anticipated $29.5 billion. However, the guidance for the fourth quarter is $34.8 billion, which is below the consensus estimate of $35.1 billion, indicating potential headwinds ahead.

The semiconductor solutions business is expected to gain momentum later, but the guidance suggests cautious sentiment among investors. This could signal a broader concern regarding demand in the semiconductor sector, especially as companies navigate supply chain challenges and shifting market dynamics.

13:15
PDT

Broadcom's revenue growth is under pressure, raising concerns about its market position.

Broadcom PwC Digital Bridge Mark Gansy AI CEO Art Glick

– Global data center spending is expected to rise significantly, reaching $1.8 trillion by 2025.

– The AI silicon demand is being closely monitored as Broadcom prepares to report on it.

– Supply chain constraints are evolving, with power and permitting becoming critical issues.

– Digital Bridge is actively investing in data center infrastructure, indicating growth potential.

AI infrastructuredata center spendingsupply chain challenges

▸ Full transcript

Revenue growth was falling short of estimates. Now, here in September, Broadcom gets a shot at redemption. People are questioning the duration of their growth. And what I would say is that you can't count Hawk out. I think he is brilliant. And his engineers are brilliant. And they may lose share, but they won't lose share and must. Let's face it, the money is there for the taking. Consulting firm PwC today saying global data center spending will increase from $800 billion annually this year to $1.1 trillion in 2023 and $1.8 trillion by 2025. But as we wait for Broadcom to tell us about the demand for AI silicon, there is still a larger question of whether the physical world is keeping up. Bridge invests across data centers, fiber towers, and edge infrastructure. It's capitalizing on that so-called keep up. And in June, it agreed to acquire Art Glick, adding a power development pipeline that would fuel its growth and well it's actually fueling more questions as to whether the supply chain constraints for chip production are starting to be overshadowed by power, by permitting, by financing, even public acceptance. Are those the real bottlenecks of the AI build-out? Well, Mark Gansy, the CEO of Digital Bridge managing over 200 data centers globally, joins us right now to talk a little bit more about that. Mark, great to have you here on the program. I love your portfolio because you're pretty much across.

Analysis

Broadcom faces scrutiny as its revenue growth falls short of estimates, raising questions about the sustainability of its growth trajectory. Meanwhile, global data center spending is projected to surge, indicating a significant opportunity for companies involved in AI silicon and infrastructure development.

Smart investors should note that while Broadcom's leadership is confident in their engineering capabilities, the real bottlenecks in AI expansion may lie in power, permitting, and public acceptance rather than just chip production. This shift in focus could reshape investment strategies in the tech and infrastructure sectors.

13:13
PDT

S&P 500 closed at 7,666, up 0.5%.

S&P 500 MongoDB Dell Broadcom PG&E PG AI New York Software Services Index S&P 500 CL=F

– Software Services Index declined 2%, led by MongoDB.

– Dell reported strong earnings and guidance.

– Broadcom's upcoming earnings are highly anticipated.

– Financial sector ended a four-day losing streak.

AI investmenttech sector volatility

▸ Full transcript

Need to get the edge at the end of the market day. This is the close. We get the closing bells here in New York just a few minutes ago. The S&P 500 snapped a three-day losing streak, closing at 7,666. Well, that's a little ominous, up about half a percent on the day. It opened flat, but a lot of buyers came in early in the session and they actually stuck around. Yields were so due on the day, oil prices still elevated, but with stills, so a lot of the backdrop that we had that led to that sell-off for the previous three days is still out there. In fact, you saw the Software Services Index down about 2% on the day, taking a big leg down, MongoDB, one of the big decliners in that space. Meanwhile, you take a look at what's going on elsewhere, financials snapping a four-day losing streak, a big boost for a lot of those names. And then you have PG&E coming out, a lot of concerns right now about some of its liabilities with regards to those wildfires. And the tech space, that's what everybody's been talking about all day. Dell posted a phenomenal quarter yesterday and more importantly gave phenomenal guidance for the full year. We're still waiting to hear earnings out of Broadcom, which should be hitting the tape sometime soon. And that actually brings us to our top story for the hour and really the top story of the year. The next piece of the AI puzzle. In moments, we are going to hear from Broadcom. It's a will it or won't it story with regards to its ability to capitalize on the AI boom. Remember it surged 50% in the weeks after its earnings.

Analysis

The S&P 500 snapped a three-day losing streak, closing up about half a percent, while the Software Services Index fell by 2%, with MongoDB among the biggest decliners. Dell's strong quarterly performance and guidance contrasted with ongoing concerns in the tech sector, particularly as investors await Broadcom's earnings report amidst the AI boom.

13:10
PDT

Dow industrials up 300 points (0.6%)

Dow S&P NASDAQ Russell 2000 Snowflake GE Vernova HPE NetApp Broadcom WeatherHawk10 C3 AI Five Below

– S&P and NASDAQ also posted gains

– Russell 2000 outperformed with a 1.1% increase

– Communication services sector boosted market performance

– Snowflake shares surged over 17% in after-hours trading

market performancetech earningsAI investmentsmall cap growth

▸ Full transcript

building longevity. It's always a moving target to maximize the human experience. If there's anywhere in the world, I'm going to do this. It's going to be in Dubai. We are designing the architecture for human health. We've been able to test new technology and launch them here. Dubai has shaped my transformation because you're in a city that's growing, inspiring and fearlessly expanding. Higher emissions. Choose from global, US, Europe and tech stocks. All actively managed with monthly emissions. JP Morgan Equity Premium Income Active ETFs. We are the home of Active ETFs. Start your search for JP Morgan Income ETFs.

Analysis

The market closed positively, with the Dow industrials gaining about 300 points, or 0.6%, while the S&P and NASDAQ also saw gains. Notably, small caps outperformed, with the Russell 2000 up 1.1%, indicating a shift in investor sentiment towards smaller companies.

The communication services sector led the gains, suggesting a potential rotation into growth areas. Additionally, strong earnings reports from companies like Snowflake, which surged over 17% in after-hours trading, highlight the ongoing investor interest in tech and AI-driven growth.

13:07
PDT

Snowflake's second-quarter revenue beat estimates at $12.21 billion.

Snowflake Petco Broadcom HPE NetApp C3 AI GE Vernova Venezuela Winnie Park Five Below

– Adjusted EPS for Snowflake was $1.11, surpassing the $0.93 expected.

– Snowflake's shares rose 17.5% in after-hours trading.

– The company raised its fiscal year product revenue forecast to $6.07 billion.

– Operating margins are expected to improve, indicating better efficiency.

tech earningsoperating marginsinvestment sentiment

▸ Full transcript

look goes up to a range of 34 to 37% growth. So raising their forecast as for the quarter that just passed that was also a beat pretty much all around revenue in the most recent quarter 12.21 billion. The street was looking for about 11.9 and for the bottom line $1.11 a share. The street was looking for 93 cents a share and you see the shares there in the after-hours trade. They had been in the green but now slightly in the red. We got to talk snowflake because snowflake shares are just surging up more than 17% in the after-hours. The company sees fiscal year adjusted operating margin 14.5% it saw 13.5% the company sees third quarter adjusted operating margin at 15.5% it sees third quarter product revenue 1.59 to 1.59 that beat estimates of 1.51 it sees fiscal year product revenue at 6.07 billion that's a significant increase from what it saw earlier 5.84 billion to $5.86 billion. So second quarter revenue, beating estimates, third quarter product revenue forecast, beating estimates. Snowflake shares up 17.5% in the after-hours. Yeah, and I was kind of surprised by this initial pop here because we talk about a stock that I mean what just about mid-August excuse me was at its highest levels that we had seen since at least late 2021. So it is looked like a lot of investors had piled into this really pushing it up. But obviously getting a little bit more juice based on that release that we just got. All right, I wanna go to Petco on they there.

Analysis

Snowflake shares surged over 17% in after-hours trading following a strong earnings report that beat revenue estimates and raised forecasts for product revenue. The company reported second-quarter revenue of $12.21 billion, exceeding expectations, and provided an optimistic outlook for the third quarter and fiscal year.

13:05
PDT

Five Below's focus on customer-centric strategies is yielding positive results.

Five Below Winnie Park NetApp CEO EPS DXY

– NetApp's strong earnings and optimistic revenue guidance indicate robust demand in the application software sector.

– Social media and influencer trends are being leveraged effectively by Five Below.

– The market is responding positively to earnings beats from both companies.

– Continued momentum in consumer spending is suggested by Five Below's performance.

consumer spendingearnings growthsocial media influence

▸ Full transcript

For the full year, the street was looking for 9%. The shares are up about 1 to 2% in after-hours trading. All right, what does Winnie Park say? The CEO of Five Below, Winnie Park, says, "We are thrilled with our second quarter performance and the continued momentum of our customer-centric strategy." Winnie says the crew delivered strong results by collaborating on trend-right product stories at amazing value in stores that are fun and easy to shop. We remain maniacally focused on delivering our brand. I've actually never been to a Five Below like this. No? No. Well, you wouldn't like it; it's a lot of candy. Well, I think also when my kids get a little older, I think. I came in the other day, Alisa, and he was eating for breakfast, literally a carrot. A what? A carrot. It was a purple carrot. It's a great source of antioxidants. No hummus? No. I join you in not having been to a Five Below. I know that the company has been leveraging the social media and the influencer trend. We got other earnings crossing as well. Shares of Five Below are up by 2.6%. Looking at shares of NetApp right now in the after-hours, shares of NetApp are up about seven-tenths of 1%. It's an application software company in the real estate space. First-quarter adjusted EPS came in above estimates at $2.58. The outlook, though, the company sees second-quarter net revenue of $2.03 to $2.18 billion, which beats estimates significantly in second-quarter net revenue.

Analysis

Five Below shares rose by 2.6% after CEO Winnie Park expressed enthusiasm about the company's second quarter performance, highlighting a customer-centric strategy and strong product collaboration. NetApp also saw a modest increase of 0.7% in after-hours trading, with first-quarter adjusted EPS exceeding estimates and a positive revenue outlook for the second quarter.

13:03
PDT

HPE's AI server orders surged to over $130 billion.

Hewlett Packard Enterprise GE Vernova Venezuela HPE AI GE US Backstreet Boys Las Vegas

– GE Vernova's shares rose 2.6% due to energy grid repair commitments in Venezuela.

– The AI sector is becoming a major driver of market sentiment.

– Venezuela's energy sector requires at least $25 billion in investment.

– Emerging markets may present new investment opportunities.

AI infrastructure growthEmerging market investmentEnergy sector opportunities

▸ Full transcript

A forecast, what, 25 billion added to that, 192 billion for the year is what they're expecting here. That's phenomenal. So what is HPE going to do tonight? That's the question. I'll tell you in about seven minutes, or maybe even three minutes. I think we'll be gone then. The AI server forecast, though, to contextualize this a little bit, a three-fold increase over the prior year, the company's worked more than $130 billion in AI server orders just in the past 12 months. I mean, I think this set the tone for the day's trade. That's why I wanted to start with it. I also want to check in on GE Vernova because this is a story about the US and a story about Venezuela as well. Shares closed for GE Vernova up by 2.6% today. The company has committed to repairing large portions of Venezuela's power grid as part of a series of deals to boost the country's energy output. Venezuela's grid has deteriorated over the past two decades. Experts estimate the power sector needs at least $25 billion in investment. GE Vernova shares today up 2.6%. And I got it. Any time there's an excuse to talk about the sphere. The sphere. The sphere. I'm going to talk about it. Yeah. Did you do the, you went to the Backstreet Boys show there, didn't you, Roman? What? No, I did not. Oh, I thought you did. Next time. Next time. Okay. I'm waiting for InSync to go there. Okay. Shares up 5.5% today. This of course is the sphere in Las Vegas. Carolyn, I went. We saw the Wizard of Oz in 4D. You've heard of 3D. We saw it in 4D. Oh, okay. Okay. Wait. just on vacation together? I know we were there for work. Oh, okay.

Analysis

Hewlett Packard Enterprise (HPE) is expected to report a three-fold increase in AI server orders, amounting to over $130 billion in the past year, setting a positive tone for market sentiment. Meanwhile, GE Vernova's shares rose 2.6% after the company committed to repairing Venezuela's power grid, highlighting the potential for significant investment in the region's energy sector.

Smart money should note the growing demand for AI infrastructure, which could drive further investment in tech sectors, while the commitment to Venezuela's energy grid repair indicates potential opportunities in emerging markets. The dual focus on AI and energy infrastructure reflects broader trends in technology and sustainability that could shape future investment strategies.

13:01
PDT

Dow industrials up 300 points, S&P up 36 points.

Broadcom WeatherHawk10 HPE Snowflake NetApp C3 AI Russell 2000 S&P 500 Dow industrials communication services healthcare financials NASDAQ 100 S&P 500

– Small caps (Russell 2000) outperforming with a 1.1% gain.

– Communication services sector leading market gains.

– Rising yields continue to pose risks for equity investors.

– Concentration risk in AI stocks remains a concern.

equity market performanceAI concentration risksector rotation

▸ Full transcript

Earnings in this pretty decent position. No debt on the balance sheet, decent cash. So they're talking about whether there are prospects for returns to shareholders. We're also going to hear from PVH and Petko from the consumer side. And of course, quite a few tech earnings, a couple that might actually be consequential. We're going to hear from Broadcom and WeatherHawk10, finding a way to lean further into the AI trade. We're going to hear from HPE, Snowflake, NetApp as well as C3 AI. For now though, we get the closing bells in New York and it is going to be green across the screen for most of the major indices. Dow transport sitting this one out, but the Dow industrials are adding about 300 points or six tenths of 1% on the day. The S&P is adding roughly 36 points or a half a percent. A half a percent gain for the NASDAQ composite, a two tenths of a percent gain for the NASDAQ 100. And your outperformer on the day, it's the little guys, the small caps, the ones that Carol Master loved so much. The Russell 2000, it's 2000 of them, Tim Senevic, adding 33 points to 1.1%. She's on vacation. I don't think she's thinking about small caps at all. She's listening. I know she is. Sailing the high seas right now. And a little ham radio or whatever they got here. I think they have Starlink out there now. Dude, they are out of it. So maybe she's watching. Hi, Carol. Three stocks higher for every two stocks that were lower in the S&P 500. Sally, 302 moved higher. 200 fell today. That is right. Looking at the IMAP function, one of our favorites. And we can see that it is the communication services sector that seems to be boosting things at the moment, followed by both healthcare and financials, both looking for...

Analysis

U.S. equity markets closed higher, with the Dow industrials gaining about 300 points, driven by positive performance in communication services, healthcare, and financials. The rise in yields remains a concern, but the market is currently favoring equities over fixed income, with a notable focus on small-cap stocks outperforming larger indices.

Smart money should note the ongoing pressure from rising yields, influenced by U.S. fiscal concerns and global inflationary pressures. The concentration risk in AI-related stocks is significant, as top names dominate the S&P 500, suggesting a need for diversification in equity portfolios to mitigate potential volatility.

12:58
PDT

Schwab limits tax-aware long short accounts to $10 million.

Schwab Treasury Department Bloomberg Broadcom P V H The Treasury PRIVATE DXY

– Treasury Department is scrutinizing tax avoidance strategies.

– Asset managers are reevaluating their strategies amid regulatory pressures.

– Potential shift in high-net-worth tax management strategies.

– Increased regulatory scrutiny may affect market liquidity.

regulatory scrutinytax strategy limitations

▸ Full transcript

Closing bells with stocks not far off session highs and some breaking news crossing the Bloomberg terminal: a red headline on Schwab saying that it will further restrict tax-aware long short accounts, which will basically be capped at ten million dollars. This is according to a letter now circulating. I don't know, Sally, if you remember it was just a couple of months ago when Bloomberg reporters reported on how the Treasury Department was taking a closer look at some of these strategies, which I guess can be called tax avoidance depending on your way of looking at these 351 conversions, these sort of box trades, and all of these different spread products that have started to become a lot more popular. The Treasury said it was looking into it, making sure that they weren't 'abusive.' Wow, I mean that's fascinating. Yeah. We'll have to see how that one pans out. Yeah, and now we've heard from a couple of other asset managers out there and custodians basically taking a closer look at it themselves as to whether they would actually limit what's going on. We're now learning that Schwab is going to further restrict tax-aware long short accounts to a $10 million cap for now, according to a letter that Bloomberg reporters have obtained. We count you down to the closing bells, and we've counted down to some earnings out of Broadcom as well as P V H. That coverage starts right now. The closing bell: Bloomberg's comprehensive cross-platform coverage of the U.S. market close starts right now. Right now, we are two minutes away from the end of the trading day.

Analysis

Schwab announced it will further restrict tax-aware long short accounts to a $10 million cap, following scrutiny from the Treasury Department regarding potential tax avoidance strategies. This move reflects a growing trend among asset managers to reevaluate their strategies in light of regulatory pressures.

Smart money should note that this restriction could lead to a shift in how high-net-worth individuals manage their tax strategies, potentially driving them towards alternative investment vehicles. The increased regulatory scrutiny may also signal a broader trend of tightening oversight in the financial markets, impacting liquidity and investment strategies.

12:56
PDT

Over 60% of global reserves are held in dollars, maintaining its attractiveness.

U.S.Edward Jones Europe Japan EM AI DXY S&P 500

– Portfolio positioning favors equities, particularly U.S. large/mid-cap and emerging markets.

– Caution advised on developed international markets, with a focus on value opportunities.

– Concentration risk in AI stocks necessitates diversification strategies.

– Emerging markets offer growth potential outside the U.S. technology narrative.

equity positioningemerging marketsAI concentration riskglobal reserve currency

▸ Full transcript

Even still, over 60% of global reserves are held in the dollar. And so there's this idea that even though U.S. Treasury will continue to grind higher, it is still relatively more favorable and attractive than the global marketplace we've been seeing. All that being said, as we think about portfolio positioning, we still very much remain overweight equities versus fixed income at this juncture. Within equities, we like U.S. large and mid-cap, but we also still like emerging markets and international value. Now EM, we think, plays that alternative to U.S. technology. It also has a growth story when it comes to earnings as well. So there are drivers there outside of the yield story that we're watching. We are a little bit more cautious on just developed international; I think Europe and Japan, but parts of the value space there we think are compelling. So is that how you are sort of telling clients how to not be over-indexed on the AI trade? Or what are you pitching there? Yeah, absolutely. I think we want to be diversified when it comes to the AI trade. We know there's concentration risk. The S&P 500, we know top 10 names are levered to AI and make up probably over 40% of the index. Similarly, EM has a very large concentration of AI. In fact, a lot of major indexes have AI as a key driver and narrative. All that being said, we know that while AI is in the driver's seat right now, we do think.

Analysis

The discussion highlights the ongoing preference for equities over fixed income, with a focus on U.S. large and mid-cap stocks, as well as emerging markets. Despite the concentration risk associated with AI-driven stocks, there is a call for diversification within portfolios to mitigate exposure to this trend.

Smart money should note that while AI is currently a dominant narrative, emerging markets present a compelling growth story that could serve as an alternative to U.S. technology. Additionally, the caution towards developed international markets like Europe and Japan suggests a strategic pivot towards value investments in those regions.

12:54
PDT

Rising yields driven by U.S. fiscal pressures and global trends.

Giavanova GE-Vernova Chevron Caracas Mona Mahajan Edward Jones Bloomberg SpaceX U.S. Treasury AI CL=F

– Inflation and oil price uncertainty are key factors.

– AI sector's debt demand is influencing yield dynamics.

– Stabilization in inflation and fiscal improvements could lower yields.

– Current yield situation is a global phenomenon, not isolated to the U.S.

fiscal policyglobal yieldsinflation pressuresAI sector impact

▸ Full transcript

Growth story as well. So not a bad outcome but something we're watching. I mean it's very prescient of just talking about this idea of the difference in the change, the rate of change that we've seen in those yields relative to what we saw in the previous cycle. The other question that has to be answered is exactly why yields are rising in the first place because that will be a big determinant of whether this is, I guess, good or bad for equities. Why do you think they've been rising? Yeah, you know, look, there has been a confluence of factors that have come together. One, of course, is the fundamental story on the U.S. fiscal picture. Rising debt and deficit levels in the U.S., of course, put outward pressure on yields. But you combine that with a global yield story that has been moving higher. Inflationary pressures coming from uncertainty around oil and geopolitics. And then, of course, we have that AI narrative, which, by the way, AI hyperscalers and parts of the market are tapping debt markets and becoming competitors for U.S. Treasury. That puts upward pressure on yields as well. So a combination of factors we think fundamentally if we can see some better stabilization on the inflation and oil price front combined with some indication that we are addressing the fiscal story. Those will be really two meaningful drivers to bring yields back in line. Money, you just said it, it's a global yield story, not just a U.S. phenomenon, and so while the U.S. though is backed by pretty robust...

Analysis

Yields are rising due to a combination of U.S. fiscal pressures, global yield trends, and inflationary concerns, particularly related to oil and geopolitics. The AI sector's demand for debt is also contributing to upward pressure on yields, indicating a complex interplay of factors affecting the market.

Smart money should note that stabilization in inflation and oil prices, along with improvements in the U.S. fiscal situation, could be crucial in bringing yields back down. The current yield environment is not just a U.S. issue but part of a broader global trend, which could impact investment strategies across various asset classes.

12:52
PDT

10-year yield at approximately 4.75%

Mona Mahajan Edward Jones U.S. Treasury oil diesel futures CL=F

– 60 basis point increase year-to-date

– Current yield rise not as rapid as in 2022

– Equity markets remain sensitive to yield changes

– Oil prices and elevated yields create market uncertainty

interest ratesequity market volatility

▸ Full transcript

Year yield. That's down a touch so it's around 4.8 currently and if you're looking at diesel futures they're down just a touch to about 1.419. Yeah we talk about this idea of some of the bargain hunters are coming back in here but we should point out that the backdrop that a lot of people were concerned about just yesterday still remains. Obviously yields are still elevated. Oil prices are too and a lot of uncertainty about what transpires over the next few months. Mona Mahajan joins us right now ahead of investment strategy over at Edward Jones. Counting us down to the closing bells. Mona, great to see you. I want to start off with the yield story because that seems like one way or another that's going to continue to be the story. I guess the question is, is it a story that equity investors are going to be able to live with? Yeah. You know, look, the rise in yields has been pretty stark thus far in 2026. The 10 years now at 4.75ish plus. And keep in mind, we've had about a 60 basis point move year to date. Now there's two things that equity markets worry about when it comes to yield. The absolute rise in yield level and the speed of that rise. Now, 60 basis points over the course of this year seems fast. Keep in mind back in 2022, we actually had a 234 basis point move in a relatively sharp period of time. And that really puts some downward pressure on equity markets. So we're not quite there yet when it comes to speed. And the level, by the way, is also below that 5% threshold we saw back in.

Analysis

The rise in yields continues to be a significant concern for equity investors, with the 10-year yield hovering around 4.75%. While the current yield level is below the 5% threshold seen previously, the speed of the rise remains a critical factor for market stability.

Smart money should note that although the yield increase has been sharp this year, it has not yet reached the rapid pace observed in 2022, which caused substantial downward pressure on equities. This suggests that while caution is warranted, there may still be room for equities to adjust without immediate panic.

12:50
PDT

Wayfair's Atlanta flagship store highlights the importance of in-store experiences.

Wayfair Kate Gulliver Bloomberg PRIVATE

– Customers are surprised by the variety available in-store compared to online.

– Digital price tags ensure consistency between online and offline pricing.

– Technology integration allows seamless shopping transitions from store to online.

– A large segment of the market may remain offline despite e-commerce growth.

retail strategye-commerce growthconsumer behavior

▸ Full transcript

Even if the market continued to grow for e-commerce, probably a large chunk of the market in this space would stay offline. Kate Gulliver showed me around Wayfair's new 150,000 square foot Atlanta flagship store. When customers who have seen us online come into the store, they're generally a bit surprised by actually the breadth of what we offer. Often if you're going online, maybe you're looking for something particular. But when you come into the store, you walk in, you see the market square, you see all these pillows, you see the decorative accents. So what we're seeing actually is that in-store, we do really well in some categories that online are less a percentage of the total. How does technology help in kind of making it seamless online to store? I think the biggest thing is for the customer on the front end, that she can be in the store, that she can actually shop here, go back home, complete that purchase. And if you look at these sort of price tags and everything, they're all these digital tags because they're the exact same prices they are online. So you're not gonna be surprised that you saw something in the store, and then you decided to purchase it online that it's somehow different, and that the offering is different. It's actually very consistent, but when she's here, she can have her app open, and everything that she's doing here can be very similar to what she's doing at home. And I think that consistency is quite important. When news breaks, this is gonna be a complicated report. Bloomberg has you covered. SpaceX, second quarter revenue, 7.8 billion for all the.

Analysis

Wayfair's new flagship store in Atlanta showcases the company's strategy to bridge online and offline shopping experiences, emphasizing the consistency of pricing and product offerings. The store's layout surprises customers with the breadth of products available, indicating a potential shift in consumer behavior towards in-store shopping despite the growth of e-commerce.

Smart money should note that while e-commerce continues to expand, a significant portion of the market remains offline, suggesting that hybrid retail strategies could be crucial for capturing diverse consumer preferences. The integration of technology in the shopping experience enhances customer satisfaction and could lead to increased sales both in-store and online.

12:46
PDT

MongoDB's revenue growth is accelerating, with a guidance of $3 billion at 23%.

MongoDB GE Venezuela Chevron Trump administration PEDAVESA AI Mike Worth Jenda Louie Wall Street Mona Mahajan Investment Strategy PRIVATE CL=F

– The customer base includes large banks, insurance companies, and tech firms.

– GE-Vernova's deal in Venezuela signals a push for energy infrastructure improvements.

– Global demand for electric power equipment is rising, particularly in AI and data centers.

– The restoration of Venezuela's grid will be a slow process despite high expectations.

AI applicationsenergy infrastructureglobal demand

▸ Full transcript

Importantly, Giavanova is one of the world's largest manufacturers of the equipment that generates electric power and gets it to where it needs to go. The turbines and transformers that are the backbone of our electric system are in big demand across the world as part of the AI and data center build-out. The company is already seeing significant demand for its products. This will obviously be a new source of it. One thing that we're hearing about the GE-Vernova deal and deals with Chevron today down in Caracas is that none of this will happen overnight. There's a push to do things quickly to bring a big transformation to the grid and increase oil output, but everything needs repair down there. Much of this will be a slower progression than some folks in Washington, including the president, would like to see. It was interesting listening to Mike Worth's interview earlier; certainly, there is a slow step in the way he's viewing things. Jennifer, I really appreciate it. Jenda Louie down there in Washington covering all of this for us. Meanwhile, we come back to Wall Street as we count down to these closing bells here on September 2nd, with stocks trying to regain their momentum after starting the month off on the back foot. Mona Mahajan will be joining us after the break, Head of Investment Strategy at Edward Jones. This is Bloomberg.

Analysis

MongoDB is experiencing accelerated revenue growth, now guiding for $3 billion at a 23% growth rate, driven by a diverse customer base including large banks and tech companies. The company is poised to leverage its AI applications to upsell products, indicating strong future revenue potential.

The GE-Vernova deal to restore Venezuela's energy supply highlights the increasing global demand for electric power infrastructure, particularly as it relates to AI and data center developments. However, the transformation of Venezuela's grid will be gradual, suggesting that while there is optimism, the timeline for significant improvements may be longer than anticipated by investors.

12:44
PDT

GE Vernova partners with Venezuela to restore electric grid.

GE Vernova PEDA VESA Venezuela Trump administration GE PEDA VESA Jennifer De Bloomberg News Latin America CL=F PRIVATE

– Improving infrastructure may boost Venezuelan oil production.

– Alignment with Trump administration's energy strategy.

– Potential for increased foreign investment in Venezuela.

– Focus on energy stability could impact global oil supply.

energy infrastructureoil productiongeopolitical strategy

▸ Full transcript

This after the company inked the deal with Venezuela to help strengthen and restore the country's energy supply. Let's go down to Washington, where Jennifer DeLue, Bloomberg News reporter, who covers climate and environmental policy for us here, to talk a little bit more about exactly what that means. I know there are a lot of Trump administration officials in Venezuela. We had this big announcement coming out earlier today. What exactly is GE Vernova's involvement? Right. Well, GE Vernova basically signed this strategic alliance with state-owned PEDA VESA to revive and rebuild the country's electric grid. You know, this is an electric grid that went from, you know, decades ago being like a shining example of what can be done in Latin America, really, you know, the epitome of modern technology to one that's badly deteriorated; blackouts are common, and power is irregular. And that's not just feeding protests and making life hard for the Venezuelan people; it is a hardship and an obstacle to growing oil development and growing rather oil output and production in Venezuela, clearly a chief goal for the Trump administration and for Venezuela as it forges greater ties with Washington. So this fits into this broader Trump administration push to accelerate energy development in Venezuela with Western and U.S. companies. And given that level of deterioration in the grid that you mentioned there, how much of a difference is there between the two?

Analysis

GE Vernova has signed a strategic alliance with Venezuela's state-owned PEDA VESA to revive the country's deteriorating electric grid, which has been a significant obstacle to oil production and development. This partnership aligns with the Trump administration's broader strategy to enhance energy development in Venezuela through collaboration with Western companies.

The critical insight here is the potential for increased oil output in Venezuela, which could have significant implications for global oil supply dynamics. As the electric grid improves, it may facilitate not only domestic energy stability but also attract further foreign investment in the Venezuelan oil sector, making it a focal point for energy markets.

12:42
PDT

MongoDB's revenue grew 30%, the highest in three years.

MongoDB 11 Labs Mark Core Frontier Labs Voyage Stanford University CFO Mandy Fields CFO Bloomberg Insight Bloomberg Power Players New Mandy Fields PRIVATE

– Enterprise customers are increasingly adopting MongoDB for AI workloads.

– Voyage, an acquired embedding model, is driving customer growth.

– The company is targeting a revenue of $3 billion with 23% growth.

– MongoDB's customer base includes large banks, insurance companies, and digital natives.

AI infrastructureenterprise growthacquisition potential

▸ Full transcript

of sports and business where game changers connect from the boardroom to the locker room, a place for bold ideas, powerful insights, and high-impact conversations. Every sport grounded in Bloomberg Insight. Join us. Bloomberg Power Players New York, September 10th, 2026. He touches on everything that we care about: the economy, media and information, markets, trade, and geopolitics. He built on value, inclusivity, and fun. Now, CFO Mandy Fields has the company gearing up for its next phase of growth. What we've built over the last...

Analysis

MongoDB reported solid growth, with a 30% increase in revenue, driven by strong demand from enterprise customers for AI workloads. The company is positioning itself as a key data platform for the AI era, indicating potential for future growth as more applications transition to production.

The integration of Voyage, an embedding model acquired from Stanford, is expected to enhance customer engagement and revenue growth over time, particularly as AI applications proliferate. This strategic focus on AI capabilities could make MongoDB an attractive target for acquisition by larger tech firms seeking to bolster their data infrastructure.

12:38
PDT

MongoDB expects to reach $3 billion in revenue, growing at 23%.

MongoDB CJ Desai Fortune 100 Fortune 500 11 Labs Mark Core Frontier Labs voyage AI

– The company has 70,600 customers, with a strong presence in Fortune 100.

– AI applications are a key growth driver for MongoDB's revenue.

– Investor expectations are high, impacting share price reaction.

– MongoDB's customer base includes large banks, insurance companies, and tech firms.

AI applicationsrevenue growthcustomer diversification

▸ Full transcript

The revenue base will grow over time because all of these applications that people use voyage for are almost always AI applications, and then we can upsell and cross-sell them other products we have. Tell us a little bit more about who the MongoDB customer is. You mentioned on earnings that a large bank is using you. Which other customers are you targeting? Where do you see growth? Yeah, so overall we guided on the high end of the guidance yesterday for the first time, $3 billion in revenue and on the high end growing at 23%. So our revenue has accelerated now for two years in a row. So this is number one. When you look at our customer base, we have 70,600 customers. Our mix is pretty global between the Americas, Europe, and Asia. But in Fortune 100, we are highly concentrated. So large banks, large insurance companies, retail customers, you can also look at consumer product goods, auto industry, that's where our concentration is, telecommunications in all the names you've heard of in Fortune 100. We're also very present in Fortune 500, and then digital natives, AI natives, or some of the tech companies that keep products are also built on MongoDB. So I'm just to kind of circle back to where we started here with the share price reaction and this idea of high expectations, being able to sort of hit that bar. You've got an investor day coming up at the end.

Analysis

MongoDB's revenue guidance has accelerated, with expectations of reaching $3 billion and growing at 23%. The company has a diverse customer base, including large banks and tech firms, indicating strong demand across sectors.

The focus on AI applications presents a significant growth opportunity for MongoDB, as they can upsell additional products to their existing customer base. The concentration in Fortune 100 companies suggests a stable revenue stream, but the market's reaction to earnings highlights the challenge of meeting high investor expectations.

12:36
PDT

MongoDB's Atlas platform grew 29% but missed expectations.

MongoDB CJ Desai 11 Labs Mark Core Frontier Labs Voyage Stanford University AI Cloud Code

– The company reported 30% overall growth, the highest in three years.

– Voyage, acquired from Stanford, is crucial for embedding intelligence in data.

– AI workloads are being piloted by large enterprise customers.

– Monetization strategies for Voyage remain uncertain.

AI integrationcloud database growthmonetization challenges

▸ Full transcript

That are there and customer facing, that's when we will see our growth inflection change. Give me a sense here though, with those Frontier Labs, are they using the Voyage product when we talk about sort of the pulling data and stuff? So they are mainly actually using us, Romain, for our core operational data layers. So it's our Atlas, so they are using Atlas for us. AI native companies use us for Voyage and some enterprises use us for Voyage. The embedding model so that you can have a meaning of the data or the intelligence on the data, but the labs are using us for truly operational data. What is sort of the future of Voyage there? Because it seems like it's also a critical component of this. I don't know exactly what the monetization of it is, but when we get to this idea of your end users and more importantly the bean counters of your end users looking at the cost and usage of this, does that become an impediment to growth for it? So I would say first that our Voyage customer count, so Voyage is a company that we acquired out of Stanford University last year in February and the customer count because Voyage is recommended as the best in class embedding model which gives meaning to your data. That particular company is now part of MongoDB as in Voyage and the referral for developers to use Voyage mainly comes from either Cloud Code or Codex. So that is what is driving the growth on number of customers.

Analysis

MongoDB's shares are on track for their worst day since March following an earnings report that revealed cloud database platform Atlas's growth fell short of expectations. Despite a solid overall performance with 30% growth, concerns about future growth rates in the AI sector are emerging as key customers pilot AI workloads on the platform.

The integration of the Voyage product, acquired from Stanford, is critical for enhancing data intelligence, yet its monetization remains unclear. Smart investors should note that while MongoDB's growth is currently strong, the sustainability of this growth hinges on the successful adoption and monetization of its AI-related offerings.

12:33
PDT

MongoDB reported 30% growth, the highest in three years.

MongoDB 11 Labs Mark Core Frontier Labs AI CEO

– The company is actively involved in AI workloads with large enterprises.

– MongoDB's platform includes advanced functionalities like search and vector search.

– There is potential for MongoDB to become a takeover target in the AI sector.

– The growth is organic, indicating strong market demand.

AI integrationdatabase technologyM&A potential

▸ Full transcript

Enterprise are large customers. They use us for AI workloads. It's early, but they are running many pilots. Some of them are going to production that I shared yesterday. AI native companies like 11 Labs, Mark Core, very well-doing companies, successful companies also run on MongoDB. We also shared that Frontier Labs for many workloads are using MongoDB. It is early, and that's what we are saying it's early. So our growth is solid and consumption is solid on Atlas. But it's not if it's just when. We will see that inflection point. Now it's said by many in AI CEO that the best AI applications need strong databases. So if you're emerging as the data platform for the AI era, does this make you a potential takeover target for an AI firm? And have you had any interest at all? Feel free to share. So one, we would say, are we relevant in the AI world and AI workloads? Absolutely. And we believe that our platform is truly an intelligent data platform. We are just not a database. We have added functionality like search, vector search, and many others that we do that. The company continues to do well. The growth is organic. And we grew 30%, Roman, as you said. Yesterday, we chose the highest growth in three years. So overall, we believe in the potential. Our performance is great and we continue.

Analysis

MongoDB's growth remains solid, with a reported 30% increase, marking the highest growth in three years. The company is positioning itself as a key player in the AI space, emphasizing its intelligent data platform capabilities beyond just database functions.

Smart money should note that while MongoDB is experiencing strong organic growth, the potential for becoming a takeover target in the AI sector is increasing as demand for robust databases rises. The company's focus on AI workloads and the successful pilots with large enterprises could lead to significant strategic partnerships or acquisitions in the near future.

12:31
PDT

MongoDB's Atlas cloud platform growth was 29% for the fifth consecutive quarter.

MongoDB CJ Desai CJ CEO New York Romain Bostic Sally Bakewell Atlas Cloud Business On Atlas PRIVATE DXY

– The company's earnings report led to a significant drop in share price.

– Guidance for the second half indicates a potential slowdown in growth.

– Investor sentiment is sensitive to future growth expectations.

– Overall demand for MongoDB's services remains strong.

cloud computingearnings guidance

▸ Full transcript

Yield every Thursday at 5 p.m. London time right here on Bloomberg. Context changes everything. 3:30 p.m. here in New York. This is the countdown to the close. I'm Romain Bostic and I'm Sally Bakewell. Well, let's take a look at shares of MongoDB. Right now, they're actually on pace for their worst day going back to March, this following the company's earnings report yesterday. Analysts are citing that growth in the company's cloud database platform, Atlas, came in a bit below expectations. But let's hear from the person actually running the company. His name is CJ Desai and he is the CEO of MongoDB. Great to see you, CJ. Good to see you. We don't have to rehash the numbers, but we're talking basically your fastest growth that we've seen in a couple of years. You pretty much beat on every line out there, but you see the share reaction. And I was listening to the conference call and there seemed to be a lot of focus on what's going on with the Atlas Cloud Business. The guidance that you gave for the full year seems to suggest a bit of a step down in that growth rate in the second half. What's going on? So overall, we feel very good about the business. We feel good about the demand environment. On Atlas, it was our fifth quarter of 29% growth. And the total dollars that we bring in for Atlas, quarter over quarter, has been growing very nicely. When we guide, we guide for the current quarter as in the last year.

Analysis

MongoDB shares are on track for their worst day since March following an earnings report that revealed growth in the Atlas cloud database platform fell short of expectations. Despite a strong overall performance, the guidance for the second half suggests a potential slowdown in growth rates, raising concerns among investors.

Smart money should note that while Atlas has shown consistent growth, the market's reaction indicates a heightened sensitivity to guidance and future expectations. The focus on Atlas's growth trajectory may signal a critical juncture for MongoDB, where maintaining momentum is essential to investor confidence.

12:30
PDT

Company conducts secondary sales every one to two years for employee liquidity.

Bloomberg MongoDB IPO Bloomberg Insight Bloomberg Power Players New PRIVATE

– Potential for more secondary sales before the IPO.

– No urgency to go public; management is evaluating options.

– All investment bankers claim to be the best for IPO execution.

– Employee satisfaction is a priority, influencing liquidity strategies.

employee liquidityIPO strategy

▸ Full transcript

Every sport grounded in Bloomberg Insight. Join us, Bloomberg Power Players New York, September 10th, 2026. Market is. Since you don't have an IPO, how do people who work for you make some money? Do you make a market for people to sell their shares internally? Yes, so we do secondary every one or two years when people can sell a certain portion of their stocks to excel investors. So you've done secondary sales for your employees. So employees can then get some liquidity. Do you expect before you go public you'll do any more of those or are you just going to wait until you go public before you liquefy any more stock? Yeah, I think so. We might do second or second versus well before we do IPO because we do it every one or two years. So we might do second or second as well. All right. Well, if anybody wants to sell their shares to me, let me know and have any investment bankers told you why they're the best to do the IPO for you? Yeah, obviously every single one is the best. Everyone is the best. You're not in a rush to do it. You don't need to.

Analysis

The discussion highlighted the company's approach to providing liquidity for employees through secondary sales of stock, indicating a potential for future liquidity events before an IPO. This suggests a strategic move to maintain employee satisfaction and retention while navigating the path to public offering.

Smart money should note that the company is not in a rush to go public, which may indicate confidence in its current valuation and operational stability. The potential for secondary sales could also attract interest from investors looking for early access to shares before the IPO.

12:28
PDT

MongoDB's CEO will discuss recent earnings results.

MongoDB CEO

– The tech sector is under scrutiny for performance amid rising interest rates.

– Investors are increasingly focused on earnings growth in technology stocks.

– MongoDB's results may influence market sentiment towards cloud database services.

– The discussion could highlight shifts in consumer spending behavior.

tech sector performanceearnings growth focus

▸ Full transcript

For sure. That's a lot of stuff above five there. Anyway, we're going to talk to the CEO of MongoDB when we come back after the break on the heels of yesterday's results.

Analysis

MongoDB's CEO is set to discuss the company's recent results, which have garnered attention following yesterday's earnings announcement. This signals potential shifts in investor sentiment and market positioning for the tech sector, particularly in cloud database services.

Smart investors should note that MongoDB's performance may reflect broader trends in technology spending, especially as companies prioritize data management solutions amidst rising interest rates. The focus on earnings growth in tech stocks could indicate a shift in how investors assess value in a changing economic landscape.

12:25
PDT

Five Below's value proposition strengthens in a consumer backdrop focused on affordability.

Five Below Oppenheimer

– The company is effectively targeting trends that resonate with its core demographic of kids and parents.

– Higher gas prices may pressure consumer spending, impacting discretionary purchases.

– New management is enhancing Five Below's ability to capitalize on market trends.

– Seasonality remains a factor, but trend alignment is key for ongoing performance.

consumer spendingdiscount retailvalue proposition

▸ Full transcript

They are, Five Below is very good at delivering its core customers value. So if you have an environment like, I think very much think we're in right now where more consumers are seeking value, that's really a market share opportunity for Five Below because they're very good at delivering that value. But on the other hand, to balance this out, what Five Below sells are discretionary items. Now, again, they're for kids. So that often happens when parents find kids' products that become less discretionary; they are nonetheless discretionary. So when we see indications, you know, that consumers are under pressure, primarily now due to higher gas prices, that could have some negative impact. But overall, to answer your question, look, I think it's going to shake out more on the positive side where Five Below's value proposition is probably stronger in this consumer backdrop. Let's get to this idea though too. And when we talk about what the sort of longer-term growth story is and sort of what investors want to see. I mean, obviously the stock has performed well, but what sort of keeps this going? Is this one of these stories where we sort of look at it on the same seasonal basis that we look at other retailers? Is it sort of immune to that to a certain extent, given the array of product offerings? Yeah, look, there's definitely a seasonality here. You know, like most other retailers, I mean, they do have their peak type selling seasons, but I think the better way to answer your question is which was really key for our Five Below is to stay on these trends. And again, I think under new management, they're doing a much better.

Analysis

Five Below is positioned to capture market share as consumers increasingly seek value in a challenging economic environment, despite selling discretionary items. The company's ability to stay on trend under new management is crucial for sustaining its growth trajectory, especially as it navigates seasonal sales patterns.

12:23
PDT

Five Below shares up 28% year-to-date.

Five Below Brian Nagel Oppenheimer Wall Street DXY

– Company targets kids and parents with unique product offerings.

– Differentiates from traditional discount retailers.

– Focus on value-priced, on-trend merchandise.

– Potential for continued growth in retail sector.

retail performanceconsumer trends

▸ Full transcript

All right, as we await those earnings after the bell out of Broadcom, we are going to get another read on the retail space, and that is with Five Below. The discount retailer has outperformed its peers so far this year, with shares up about 28%. Joining us right now is Brian Nagel, the managing director and senior analyst over at Oppenheimer. He has Five Below with a market perform rating. This stock is actually, I mean, I was kind of curious about some of the turnaround that we've seen in this company. Obviously, the expansion of what they've done with regards to the types of product offerings. I never know what to make of Five Below. I know we sort of call it a discount retailer; I know that's its origin story, but every time I go in there, it just seems like it's a hodgepodge of everything. What is this company and what do you expect tonight? Well, first off, thanks for having me on your show. I always appreciate it. You know, Five Below is a unique retailer. You know, I know we on Wall Street tend to lump it in with the other dollar stores too, but it's really different. Five Below is a unique merchandiser that really gears its stores and its offerings towards kids and parents buying their kids products. So what Five Below has done historically and done very successfully is really jump on or in some cases drive key trends. So most recently, like Swiss dumplings and other factors, but they sell value-priced products that are geared towards kids and more on these on-trend type products.

Analysis

Five Below has outperformed its peers this year, with shares up about 28%. The company has successfully expanded its product offerings, targeting kids and parents with value-priced, on-trend merchandise.

Smart money should note that Five Below differentiates itself from typical discount retailers by capitalizing on key trends and focusing on a unique merchandising strategy. This positions the company well for continued growth, especially as consumer preferences shift towards value-oriented products for children.

12:19
PDT

High yield and emerging markets are preferred over investment grade credit.

NVIDIA Angkor Crawford Alger Bill Perkins LSEO

– Rising yields may not erode the value of technology stocks if driven by earnings growth.

– A shift towards technology and communication services is recommended.

– Quality balance sheets and high profitability are key factors in stock selection.

– Underweighting cyclicals is counterintuitive but strategic in the current environment.

credit spreadsrising yieldstechnology stockscorporate earnings

▸ Full transcript

We come only portfolio, however, and equities are not an option. We do believe the same vested in credit spreads towards the riskier part of the curve. So high yield emerging markets still gives you a little bit more fundamental buffer given how strong the fundamentals are than in investment grade. If you are an investor and you are anticipating a material rise in yield, equity investor, excuse me, does that change how attractive some of these stocks might be? Do you worry at all that sort of erodes the fundamental value case? So that is a very important question, right? Because historically, I would have said, well, if yields go up, reduce your exposure to higher duration stocks, such as technology. Why? Quality stocks with large, long-dated cash flows. However, if those cash flows, if yields are rising because earnings growth is accelerating and that earnings growth is exactly in those stocks, then the case is weaker. And this is why it's important to make that distinction. The rates are rising because real rates are rising and because productivity is going up. So we actually prefer being underweight the cyclicals, which is counterintuitive in a rising rates environment. We prefer being underweight the cyclicals at the moment and being overweight technology, communication services, why? Quality balance sheets, high productivity, high profitability. Alright, LSEO, great stuff as always.

Analysis

The discussion highlighted a preference for high yield and emerging market credit spreads over investment grade, emphasizing strong fundamentals in these areas. Additionally, the speaker noted a shift in strategy, favoring technology and communication services stocks despite rising yields, due to their quality balance sheets and profitability.

Smart money should recognize that rising yields driven by accelerating earnings growth can actually support technology stocks, challenging the traditional view of reducing exposure to higher duration equities. This pivot towards technology and communication services suggests a nuanced approach to navigating a rising rate environment, focusing on sectors with robust fundamentals rather than cyclicals.

12:17
PDT

Fed's actions have led to a bear flattening of the yield curve.

Fed Jackson Hole NVIDIA Anthropic Bill Perkins Alger Bloomberg FEDFUNDS

– Long-term rates may stabilize as the market adjusts to rate hike expectations.

– Rise in yields is primarily due to real yields, not inflation expectations.

– Corporate credit spreads are near multi-year tights, driven by strong earnings.

– Potential risks in corporate earnings could impact credit markets.

Fed policyyield curve dynamicscorporate credit spreads

▸ Full transcript

Right now. And so when I saw on your notes that you weren't scared of it and you were embracing it, my first question was why? It's for a couple of things. Which part of the curve? I think what changed materially ever since the Jackson Hole speech and compared to the last time I was here a few days ago is that that speech created an environment where the Fed has reiterated they are on the case and the curve finally bare flattened instead of bare steepening. In other words, that means that the long end of the curve is no longer chasing this risk premium that needs to be built in because we don't know what's next. With a bare flattening of the curve, of course, bonds still underperform, but it is an environment where the Fed is on the case and we might expect the long end of the curve now to begin stabilizing, reflecting what is already priced in. Now the Fed is priced for at least two hikes by mid-2027. And most importantly, this entire rise in yields was due to real yields, not inflation expectations. And real yields have a little bit more of a natural anchor, but also they are reflective of good growth, strong productivity, rather than a loss of confidence in the bond market. I wanted to ask you about corporate credit spreads, because those are near multi-year tights, probably driven largely by strong balance sheets and corporate earnings. But if we see cracks in corporate earnings driven by...

Analysis

The Fed's recent stance has led to a bear flattening of the yield curve, indicating a stabilization of long-term rates as the market adjusts to anticipated rate hikes. This shift suggests that the rise in yields is driven more by real yields reflecting economic growth rather than inflation expectations, which could signal a more resilient bond market moving forward.

Smart money should note that while corporate credit spreads are tight due to strong balance sheets, any cracks in corporate earnings could lead to significant market adjustments. The current environment may present opportunities for discerning investors to capitalize on potential mispricings in corporate credit as earnings reports unfold.

12:13
PDT

Anthropoc's valuation could reach two trillion, indicating substantial market opportunity.

Angkor Crawford Alger Bill Perkins Hermat Anthropic Broadcom Google Meta Marvell MediaTek NVIDIA AI PRIVATE

– Broadcom's market share is defensible in the short term, but competition is intensifying.

– AI's integration into various sectors is creating new investment avenues.

– The productivity gains from AI may justify higher costs for consumers.

– Investor sentiment is cautious regarding Broadcom's long-term growth potential.

AI market potentialtech competitioninvestment opportunitiesproductivity gains

▸ Full transcript

That's why when people are questioning, oh, a two trillion, how much more value is there on the table? Well, when you're effectively coming in and rewriting entire sectors, the opportunity set is big. All right, well, you're a big thinker and we always appreciate you being candid with us. Angkor Crawford is executive vice president and portfolio manager over at Alger. A little bit later in the show, we're gonna continue our conversation about what's going on in AI and take a look at it from the view of, well, the power sector and more importantly, I guess from Bill Perkins, of course, the guy who helped to take down the Hermat now, basically says he has a way you can bet on wholesale electricity power futures. That conversation coming up in a bit, right here on the close, right here on Bloomberg.

Analysis

The conversation highlighted the significant market potential for companies like Anthropoc, which is expected to launch with a valuation potentially exceeding two trillion dollars, driven by its transformative impact across sectors. Additionally, the discussion underscored the competitive landscape in AI, particularly regarding Broadcom's market share amidst rising competition from companies like MediaTek and Marvell.

12:11
PDT

NVIDIA is diversifying into infrastructure and model layers with NIMOTROM.

NVIDIA Anthropic NIMOTROM LLM AI Hugging Face For Anthropic NVDA

– Anthropic is targeting enterprise solutions, indicating growth potential.

– The AI market is evolving with companies expanding beyond initial offerings.

– NVIDIA's integration of software and hardware could strengthen its market position.

– Investors should watch for shifts in revenue generation strategies among AI firms.

AI market expansionbusiness model innovation

▸ Full transcript

Wong has ambitions to be more than just a guy who sells chips. We're seeing that with the reports about this Hugging Face deal. I get the same sense that Anthropic must be more than just an LLM model. What do you think those companies can become if this AI build-out is as solid and relentless as it seems to be? Gosh, you know, I think they can both spread their wings. I think every company, the opportunity for a lot of different companies is very broad today. What I think most of the market isn't really appreciating about NVIDIA is they are moving down the market, right? They're moving into the infrastructure and the model layer with NIMOTROM, which will allow them to basically be the provider of not only the software that you interact with in the intelligence layer, but also the GPUs that provide that intelligence. It's a very powerful business model for them as they start to get into the open model kind of realm and support their own chips with the intelligence layer. I think it's a very, very interesting pivot if they decide to really focus on that. For Anthropic, I think it's very clear that they're getting into enterprise. It wouldn't surprise me if they decided to buy a...

Analysis

NVIDIA is expanding its business model by moving into infrastructure and the model layer with NIMOTROM, positioning itself as a provider of both software and GPUs. Anthropic is also pivoting towards enterprise solutions, indicating a broader market opportunity for AI companies beyond their initial offerings.

Smart investors should note that NVIDIA's strategy to integrate software with hardware could enhance its competitive edge, while Anthropic's focus on enterprise suggests a significant shift in its growth potential. This dual approach may redefine market dynamics in the AI sector, creating new avenues for revenue generation.

12:08
PDT

Anthropic's public market valuation could exceed $2 trillion.

Anthropic ARR DXY

– Annual revenue has surged from $10 billion to an estimated $75-100 billion.

– Investors are questioning if the upside has already been priced in.

– The transition to public markets may introduce volatility.

– Market interest in AI companies remains strong.

AI market growthpublic market valuation

▸ Full transcript

The risk-reward is that great? I do want to ask you, she mentioned obviously Anthropoc and obviously that's kind of the big elephant in the room in terms of the next big entry into the public markets. I know, and at least in one of your funds, you hold that as obviously a private company right now. I'm curious though about where you see the valuation as a public company, assuming it comes out at what most people assume is going to be over that somewhere above that trillion dollar mark. Is that still something that you look at? And the public market is still providing a value opportunity for investors to some degree or another? Yeah, I think that the latest has been that Anthropoc is marketing. And I'm just reading a lot of the public reports as you guys are. But the latest has been that it will come out at a two trillion valuation. And I believe that there is upside from there. And just look at what has happened for Anthropoc over the last six months. They were at $10 billion in ARR at the end of the year. Today they're at $65 billion, and I would argue they're actually today at this run rate, they'll come out and be closer to $75 or $80 billion, and by year end, probably over $100 billion. It's not recurring revenue; it's annualized revenue. Yeah. The big question that at least investors in the public markets have is that a lot of the upside, at least the perception is a lot of upside in these names has already.

Analysis

Anthropic is expected to enter the public markets with a valuation potentially exceeding $2 trillion, reflecting significant growth from $10 billion in annual recurring revenue to an anticipated $75-100 billion by year-end. This rapid increase highlights the strong market interest and potential upside for investors, despite concerns about whether the perceived value has already peaked.

Smart investors should note that while the public market may be pricing in substantial growth, the actual revenue figures suggest that there is still room for further appreciation. The shift from private to public markets for such high-growth companies could lead to increased volatility as expectations adjust to actual performance metrics.

12:06
PDT

PG&E's stock decline reflects investor concerns over wildfire legislation.

PG&E Edison Gavin Newsom Broadcom Google Meta Anthropic Marvell MediaTek Neoclouds Pricewaterhouse Cooper Dell GOOGL META

– Broadcom's market position is stable for the next 12-24 months despite competitive pressures.

– The failure of California legislation complicates PG&E's financial outlook.

– Investor sentiment is cautious regarding Broadcom's growth duration.

– Community backlash against data centers is becoming a tangible business risk.

utility sector risksemiconductor competitionAI investment trendslegislative impact on business

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Does it impact the build out? It won't, and in part because the productivity gain on the top line is so significant using AI that we will be willing to pay as consumers the extra interest that the hyperscalers are going to have to pay or the Neoclouds are going to have to pay. I wanted to turn to Broadcom earnings because obviously they report today after the bell and it has this very enviable roster of AI clients like Google, Meta, and Anthropic. But with Marvell aggressively competing and hyperscalers building their own chips internally, how defensible is Broadcom's market share over the next 12 or 24 months? The next 12 to 24 months is very defensible. You know, because these cycles actually the design times are longer than 12 to 24 months. I think the risk to Broadcom is really what happens with MediaTek and Marvell and whether or not they get designed into the V9, which is the Google TPU or Google's version of the GPU. You know it's a risk and it's why Broadcom today trades at 13 times and not 23 times, right? Because people are questioning the duration of their growth. And what I would say is that you can't count Hawk out. I think he is brilliant and his engineers are brilliant. And they may lose share, but they won't lose share in mass.

Analysis

PG&E shares have dropped as much as 10% following the failure of proposed wildfire legislation in California, leading the company to defer $2 billion in investments next year. Meanwhile, Broadcom's market share appears defensible in the short term despite competition from Marvell and MediaTek, as design cycles are longer than 24 months.

12:04
PDT

Uber's layoffs aim for $1.5B to $2B in annual savings.

Uber PG&E Edison Gavin Newsom Sphere Entertainment Guggenheim Ecuador Costa Rica Pricewaterhouse Cooper Warsh AI

– PG&E shares down 10% amid wildfire legislation uncertainty.

– Sphere Entertainment shares up 6% after Guggenheim upgrade.

– Political backlash could hinder U.S. data center projects.

– International markets are positioning to attract tech investments.

tech investment risksAI expansionpolitical impact on markets

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People are misinformed. And look, I mean, we don't need to get too deep into politics, but as an investor and somebody who really understands the technology all behind this, if we do get to a point where we start to see any sort of significant delays in these projects because politicians decide they want to put a stop to it here, does that change at all your calculus for some of the investments that you've made? Look, I think what it does is it creates confusion and confusion creates volatility. I have no doubt that if we don't build them here, they will be built somewhere. So, you know, Ecuador, Costa Rica, they are starting to clear land for data centers and say, 'Hey, hyperscalers, you can't build it there, come build it here,' right? So there's a lot of different countries that are going to welcome AI and welcome the chips with open arms because they realize it's an opportunity and not something to be so fearful of. So it was interesting on Friday because Warsh dedicated quite a big chunk of his speech to AI and its role in productivity and also as a variable in monetary policy. But of course, the boom of AI depends a lot on debt. And so with his more hawkish pivot, is that undermining the potential for AI to expand? No, I don't think so. And in part because a lot of the AI build-out is actually being funded by cash flows from the hyperscalers. And so if you look at the old f***ing.

Analysis

Uber's stock is up over 2% following news of layoffs affecting 10% of its workforce, aimed at streamlining operations and investing in robotaxi partnerships. However, despite this rally, the stock remains down 6% for the day, indicating ongoing struggles amidst restructuring efforts.

The political landscape surrounding data center construction is shifting, with potential delays in the U.S. prompting hyperscalers to consider alternatives in countries like Ecuador and Costa Rica. This shift highlights a growing trend where international markets are positioning themselves as attractive destinations for AI and tech investments, potentially impacting U.S. competitiveness in the sector.

12:02
PDT

Dell's sales forecast increased by 14% to $192 billion.

Dell Pricewaterhouse Cooper AI Crawford Alger Uncle Crawford

– Global data center spending projected at $32 trillion by 2050.

– Community backlash poses a tangible risk to data center investments.

– Environmental concerns are influencing business strategies.

– Capital allocation and site selection are being reshaped by public sentiment.

data center investmentcommunity backlashinfrastructure boom

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Dell, well it's already in the midst of its moment. The server maker yesterday increased its annual sales forecast by 14% to a record $192 billion, almost double the revenue that Dell had just two years ago. The reason why can be found in a new report out from Pricewaterhouse Cooper's just today. They estimate the global data center spending may total $32 trillion through 2050. That is an unprecedented infrastructure boom that dwarfs past build-outs of railways, the internet, and even electrification. But there is one big risk and it has less to do with the companies and more to do with the people, the public, the political backlash that started as noise but is now becoming a tangible business risk case that executives and investors are now realizing they do have to start accounting for it. The community backlash is very real and concerns that people have are higher utilities, the water usage, the noise, the emissions in their communities. And it now has to be considered part of the business case. It's now part of the investment choices that have to be made. And certainly, it's shaping where the capital allocation and where the site selections. Alright, let's kick things off to the close with Uncle Crawford, executive vice president and portfolio manager over at Alger. You run a lot of strategies. You are invested across the entire AI stack. And I am just kind of curious about.

Analysis

Dell has raised its annual sales forecast by 14% to a record $192 billion, driven by a surge in global data center spending projected to reach $32 trillion by 2050. However, this growth faces risks from community backlash regarding environmental concerns, which executives and investors must now factor into their business strategies.

The significant increase in data center investment highlights a transformative infrastructure boom, yet the emerging public and political resistance could reshape capital allocation and site selection decisions. Smart money should be aware that addressing community concerns is becoming integral to the investment case in this sector.

12:00
PDT

Uber's layoffs aim for $1.5B to $2B in annual savings.

Uber PG&E Gavin Newsom Bloomberg Bloomberg News Bloomberg Business Week Bloomberg Trade EMS Bloomberg Power Players Las Vegas Sphere Guggenheim TV PRIVATE AAPL

– PG&E's investment deferral signals potential earnings pressure.

– Market reaction to Uber's restructuring is mixed despite initial gains.

– Legislative failures impact PG&E's operational outlook.

– Investors should monitor the evolving regulatory landscape in California.

corporate restructuringutility regulationinvestment strategy

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35% last year, 50% this year, so even with the damage we're seeing today with the rally we're seeing today, they were already soaring. I'm guessing you've been to this. Yeah, Carol and I went for both when we were out in Las Vegas. It was a team building. Yeah, we paid for our own tickets. Okay. And we saw the Wizard of Oz. Oh, yeah, just yesterday the sphere actually Monday announced that they're adding more like 40 visual effects to the Wizard of Oz, so more of those. I don't want to give anything away, but yeah, it's pretty wild. I haven't seen a concert there, but that's what I heard. The concerts are amazing. Yeah, that's what I heard. All right, we'll go to a team Backstreet Boys concert there. How's that? You need to say Kovac with today's stock movers for conversations like this. Check out our stock movers podcast, five-minute episodes on the biggest winners and losers in the stock market. Apple, Spotify, or anywhere you get your podcast. On TV, The Close is up next if you're sticking with Sun Radio. More. Get your fixed income fixed. Watch Bloomberg Real Yield every Thursday at 5 p.m. London time right here on Bloomberg. Context changes everything. The countdown is on everything you need to get the edge at the end of the market day. This is The Close. A respite for Wall Street even though the road ahead still looks the same. Live from studio two here at Bloomberg headquarters in New York, I'm Romain Bostic and I'm Saudi Bakewell.

Analysis

Uber's stock rose over 2% following news of significant layoffs, with the company cutting 3,300 employees to streamline operations and focus on robotaxi investments. Despite this rally, Uber's stock is still down 6% today, indicating ongoing struggles amidst restructuring efforts.

PG&E shares fell as much as 10% after the company announced a deferral of $2 billion in investments due to insufficient legislative support for wildfire response. This raises concerns about future earnings and the complex landscape of liability and insurance in California's wildfire crisis.

11:58
PDT

PG&E shares down 10% amid investment deferral.

PG&E Edison Gavin Newsom California PG PCG OK From California Las Vegas PCG A

– Edison also affected by wildfire legislation failures.

– Proposed measures to protect utilities did not pass.

– Earnings outlook remains uncertain despite guidance.

– Complex liability issues complicate the situation.

regulatory riskutility sector volatility

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But we've been talking about the California wildfire legislation, and PG&E and Edison have both been moving down this week. The company plans to defer about two billion in investments next year. The move comes after the company said the proposed revamp of the California wildfire response didn't do enough to protect those companies. Of course, both of those companies were rallying into that decision, and we're seeing obviously some of that rally being faded. Nevertheless, it's been pretty painful in the last few days. PG shares are down as much as 10%; that ticker is PCG. What was expected is that Gavin Newsom had pushed some measures to protect those companies, but they didn't make it into legislation. Obviously, it's a very complex case. There are insurers and families involved, making it really hard to figure out who covers the cost of all that. It's a very complicated issue, but things are not looking too great for the company. Even though it reaffirms its four-year guidance for this year, there are definitely a lot of questions about earnings going forward. OK, PG&E out there in California. From California to Las Vegas, we go. Yeah, Las Vegas, this is for a team. Sphere. Thank you. Of course, Sphere entertainers' shares are up. We have an upgrade from Guggenheim. Guggenheim's price target is the highest on the street at $208. The stock is up 6%; the ticker is A.

Analysis

PG&E and Edison shares have declined this week, with PG&E down as much as 10% after announcing a deferral of about $2 billion in investments due to insufficient wildfire response legislation. Despite reaffirming its four-year guidance, the outlook for earnings remains uncertain amid complex liability issues involving insurers and affected families.

The failure of proposed measures to protect these companies indicates a challenging regulatory environment that could hinder future investments and operational stability. Smart money should be cautious about the implications of ongoing wildfire risks and regulatory pressures on utility stocks in California, as these factors could lead to further volatility in the sector.

11:56
PDT

Uber's stock rose over 2% after announcing layoffs.

Uber Darik Kuzhurshahi Tim Stenevac Lisa Mateo Bloomberg News Danica Seikova Hey Danica Hi Dan Bloomberg Intelligence PRIVATE

– 3,300 employees will be laid off, about 10% of the workforce.

– The company is focusing on robot taxi partnerships.

– Projected annualized savings from restructuring are $1.5 billion to $2 billion.

– Uber's stock remains down 6% despite the positive news.

tech sector restructuringrobotaxi investment strategy

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Now, I'm Tim Stenevac along with Lisa Mateo. Let's take a look at some stocks on the move today. We are joined by Bloomberg News cross-asset reporter Danica Seikova. Hey Danica. Hi Dan, let's start with Uber. Uber is up today. The ticker, of course, is UBER. The stock is up more than two percent. It's actually on the back of news of layoffs. The company is laying off 3,300 employees, which is about 10% of its staff globally. They're really reducing those management layers and they're investing in the robot taxi part of the business, hailing those robot taxi partnerships. It's interesting; Bloomberg Intelligence estimates this will lead to $1.5 billion to $2 billion in annualized savings. Uber, actually, if you look here today, the company was struggling even with today's rally; it's down 6% here today. So perhaps with that restructuring, they are hoping to become a simpler and faster company. They're cutting a number of micro teams, so teams of one or two people, and they're betting big on robotaxi partnerships. The number we get is more than $10 billion in investments in that future, so it's an interesting bet in a vote that we are for them. So, you know, what's notable to me about this is I read this memo that our Bloomberg news team got from somebody at Uber, Darik Kuzhurshahi writing this, and there's a part in here about remote workers, and he only wants about one percent of the entire workforce to work remotely. So here I am thinking, okay, everybody's got to be...

Analysis

Uber's stock is up over 2% following the announcement of layoffs affecting 3,300 employees, which constitutes about 10% of its global workforce. The company aims to streamline operations and invest heavily in its robot taxi initiatives, with projected annualized savings of $1.5 billion to $2 billion.

Smart investors should note that despite the positive market reaction, Uber's stock is still down 6% today, indicating underlying struggles. The company's shift towards robotaxi partnerships, with over $10 billion in investments, signals a significant pivot that could reshape its business model but also carries execution risks.

11:54
PDT

S&P 500 up 0.4%, Nasdaq up 0.3%, Dow up 0.5%.

S&P 500 Nasdaq Dow oil ETF IQ AM Romain Bostic The Close Bloomberg Business Week Daily Carol Masser Tim Stenevac PRIVATE CL=F DXY

– Oil prices remain a key focus this week.

– Positive market sentiment despite geopolitical tensions.

– Investors may be positioning for a market rebound.

– Correlation between oil prices and equity performance is critical.

equity market performanceoil price volatility

▸ Full transcript

And I'm Romain Bostic, and this is The Close, live every weekday only on Bloomberg. Context changes everything; what is going to be the consequence for U.S. markets? We all seem to be scared across European equity markets. Take a look at how we're faring when it comes to Asia markets; it's a multi-trillion dollar industry. We'll show you what's happening in ETFs like no one else. The news. We'll be right back with more details. ETF IQ Mondays on Bloomberg. This is Bloomberg Business Week Daily with Carol Masser and Tim Stenevac on Bloomberg Radio and television. It is Bloomberg Business Week Daily. That's Lisa Matteo; she's the news anchor for Bloomberg this weekend, 7 AM and 10 AM. So I'm going to be a great weekend. Well, it's not the weekend yet; at least I know. Got some more days with us here today. It's like my Monday; today is your Monday, and what a Wednesday this Monday is, or a Monday this Wednesday is, I guess you could say. The S&P 500 is up four-tenths of one percent, the Nasdaq composite is up three-tenths of one percent, and the Dow is up half a percentage point. We were talking about oil earlier in the program; that's certainly been our focus this week.

Analysis

U.S. equity markets showed positive movement with the S&P 500 up 0.4%, the Nasdaq composite up 0.3%, and the Dow up 0.5%. Oil prices have been a focal point this week, indicating potential volatility in energy markets that could impact broader market sentiment.

The resilience of the markets amidst geopolitical tensions and economic uncertainty suggests that investors may be positioning for a rebound. Smart money should note the correlation between oil price movements and equity performance, as shifts in energy costs can significantly influence market dynamics.

11:49
PDT

Gainesboro residents are actively resisting real estate developments.

Gainesboro Mariba Knight Nate Fisher Josh Abadoy Mark Andreessen Doug Wilson Pete Hegseth Dairy Queen

– A new factory for drone components is being established in the area.

– Venture capitalists aim to create self-contained communities.

– The local community is divided on the benefits of new job opportunities.

– This model could be replicated in other small towns.

community resistanceventure capital trendslocal economic development

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Almost two years to push back in ways that probably you would only see in a small town, like having a sit-in at the local Dairy Queen, putting up lawn signs, and making t-shirts. They are working together and continuing to push back in the ways that they can. The resource mismatch is quite extreme, as you can imagine, but they're pretty creative and very resilient. But there's news. We reported, we did our last interviews just days before the last episode of the podcast aired, and that was because there had been an announcement that the real estate company was investing in a factory that was going to make components for drones and that they wanted to bring jobs to the area. That's something that now the people we've been talking to, but lots of others in the community, are now trying to understand: is that something that's good for us? Not exactly what they probably imagined for Gainesboro, but what do we do now? Mariba, before we go, we only have 20 seconds left, but it seems like venture capitalists and entrepreneurs, they always want—not always, but increasingly want to create their own spaces, like the second California movement and colonizing Mars and that sort of thing. Just 20 seconds: could this happen somewhere else? Absolutely. The intention is that they want to scale it up. They want to try it out.

Analysis

The community in Gainesboro is creatively pushing back against real estate developments, including a new factory for drone components, which raises questions about the impact on local jobs and culture. This situation reflects a broader trend where venture capitalists seek to establish controlled environments, potentially replicating this model in other regions.

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