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13:57
PDT

Upcoming industrial production and leading indicators data may impact Fed policy.

Jeff Schmidt Mickey Bowman Federal Reserve FX US Joe Matthew Kaylee Lines Sitzen Sie FEDFUNDS

– Triple-witching could lead to increased market volatility.

– FedSpeak from Jeff Schmidt and Mickey Bowman is anticipated.

– Traders are repositioning ahead of contract expirations.

– Market sentiment may shift based on economic data releases.

Fed policymarket volatility

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and his desire to tamp down interest rates through the mechanisms of the FX market. Meanwhile, back here in the US, we are going to get a couple of interesting economic data points. We're going to get an update on industrial production. We're also going to get those leading economic indicators here, which also may sort of feed into what the Fed does at its next meeting. Speaking of which, we are going to get FedSpeak from Jeff Schmidt, as well as Mickey Bowman. And don't forget, tomorrow is triple-witching here in the markets where futures options, all those contracts expire on the same day. So you have a lot of folks trying to reposition around that. We'll have full coverage of that right here on the close. For all your politics coverage, Joe Matthew and Kaylee Lines are up next at the top of the hour with Balance of Power. Touches on everything that we care about from the media and information, markets, trade, geopolitics. Sitzen Sie auf mehr.

Analysis

The upcoming economic data points, including industrial production and leading economic indicators, may influence the Federal Reserve's decisions at its next meeting. Additionally, the market is preparing for triple-witching, where multiple contracts expire simultaneously, prompting repositioning among traders.

Smart money should note the potential volatility surrounding triple-witching, as it often leads to significant market movements. Furthermore, the Fed's upcoming communications could provide insights into their monetary policy direction, particularly in relation to interest rates and economic growth.

13:55
PDT

Flora's partnership with Starbucks enhances brand visibility.

Jenny Britton Flora Starbucks

– Direct-to-consumer success has prepared Flora for retail expansion.

– Consumer preferences are shifting towards health-focused products.

– The fiber bar market is gaining traction as a new health trend.

– Flora's operational readiness is crucial for scaling effectively.

health food trendsretail partnerships

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So we're doing the same thing. We're taking that ice cream sensibility and bringing it into something that's truly good for you, thinking about there's the better for you movement in food. And now we think about this other movement called possibly the actually good for you movement. So we're, yeah. Can you talk to me a little bit about your partnership with Starbucks? Because obviously that gives you a higher profile. First, you know, it basically, people may aren't looking for a fiber bar. They go and get a cup of coffee and then they see your bar there and they may buy it and try. Does that sort of is the idea that Starbucks is the sales driver or is the idea that the person who buys that bar will then seek you out in other places down the road? I mean, I think both things being in Starbucks for a company. That's just starting. We're only 18 months old. I mean we launched 18 months ago. We've been working on it for four years. It's a very validating thing to have Starbucks get behind you and say that we believe in fiber just on the Starbucks thing, too. I am curious I mean you you've primarily been just direct to consumer, correct, right? Starbucks is the idea that you are going to push a little bit deeper into traditional retail shops as well. Yeah, and to be honest, we would have done that a little earlier if our website hadn't been so crowded. I mean, we ended up selling so much on our website that we had to kind of pull back, get our operations together, get it right. And we took this last year and a half to learn what customers want, get feedback, tweak the product, tweak everything, get our operations in command so that when Starbucks came calling, we were actually really perfectly ready for them.

Analysis

Jenny Britton's partnership with Starbucks is a significant validation for her fiber bar brand, Flora, as it enhances visibility and potential sales. The brand's direct-to-consumer success has prepared it for this retail expansion, indicating a strategic readiness to scale operations effectively.

Smart money should note the shift towards 'actually good for you' products, as consumer preferences evolve beyond traditional health trends. The collaboration with Starbucks not only boosts brand recognition but also positions Flora to capture a growing market segment focused on health-conscious snacks.

13:53
PDT

Jenny Britton's new fiber bars are made from produce trimmings.

Jenny Britton Jenny Splendid Ice Creams Starbucks AAPL FEDFUNDS

– Starbucks has begun to carry the fiber bars, increasing their market visibility.

– Using trimmings is more economical than sourcing pure fiber.

– The fiber trend may represent a long-term shift in consumer health preferences.

– The production process involves fermentation and dehydration, enhancing the product's value.

health food trendssustainability in food production

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Move over protein; fiber could be the latest grocery obsession. Jenny Splendid Ice Creams founder Jenny Britton stopped by to talk about her new fiber bars, Flora, and now she's using her experience to change that game. Take a listen as to what she had to say: we went from ice cream, my entire life, 26 years of my life; it was the most fun adventure ever and so flavorful, of course, to creating fiber. We make fiber from produce trim like apple cores, watermelon, other melon rinds, mango, and pineapple rinds, which are really good for your microbiome, and we make them into a bar. And yeah, Starbucks just picked us up, so we're conveniently located for everybody. Well, we'll talk about that. I mean, you're basically using trimmings. Is that more expensive to use something like that in a product like this, or is it actually more economical than sort of going out and sourcing pure fiber? Yes, and it's more economical because, of course, we get that, but then we're fermenting it, we're dehydrating it, we're milling it into a flour to then use. And it's whole fruit fiber, which is really good for your microbiome. So it's the best ingredients for us. But we can actually do that economically. We can dehydrate it, ferment it, and so on, because it's kind of inexpensive to start with in the beginning. Well, give me a sense here too, because I feel like fiber's kind of become like the new protein. How do you sort of guard against this maybe potentially being a fad? How much confidence do you have that this is a longer-term shift, a structural shift in the way we allow?

Analysis

Jenny Britton, founder of Jenny Splendid Ice Creams, is pivoting to fiber bars made from produce trimmings, which are now being picked up by Starbucks. This innovative approach not only utilizes waste but also offers a cost-effective way to produce high-quality fiber products that benefit gut health.

The shift towards fiber as a new health trend mirrors the previous protein boom, indicating a potential structural change in consumer preferences. Smart money should note the economic advantages of using byproducts in food production, which could lead to increased margins and sustainability in the food sector.

13:51
PDT

Lux Experience targets high-end customers, differentiating from competitors.

Lux Experience Mytheresa Farfetch Mr. Porter Wynet OutNet U.S.Europe Brent crude CIB Jennifer Zappasaja South Africa PRIVATE

– Mytheresa's growth indicates strong demand in the U.S. luxury market.

– Off-price luxury is gaining traction, contributing to overall growth.

– Flexibility in marketing strategy allows for rapid response to market changes.

– Higher average basket values reduce concerns over shipping costs.

luxury retail growthhigh-end consumer focusoff-price luxurymarket flexibility

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When a silent gesture orchestrates masterpieces, we're not just one step ahead. We're in a league of our own. From 50 years ago to today to tomorrow, CIB has always been here. Growth, innovation, and setting the standard for half a century. Progress driven by quiet mastery. In the minute, economic news, whenever and wherever it happens, I'm Jennifer Zappasaja in Mokopane, South Africa. And this is Bloomberg.

Analysis

The luxury retail market is experiencing significant growth, particularly in the U.S., where Mytheresa reported a 39% increase last quarter. The focus on high-end customers and the strategic shift towards off-price luxury segments are key differentiators for Lux Experience compared to competitors like Farfetch.

Smart money should note that Lux Experience's ability to pivot marketing resources to booming regions, such as the U.S., while maintaining flexibility without fixed assets, positions it advantageously against traditional luxury retailers. The emphasis on high-value customers with less reliance on discounts suggests a more sustainable profit model in the luxury sector.

13:49
PDT

Luxury customer base grew by 18% with increased spending.

Lux Experience Farfetch Mytheresa Net-a-Porter Mr. Porter Wynet OutNet U.S.Europe Brent crude JP KAM

– High-end consumers remain resilient despite economic pressures.

– Digital platforms are preferred by wealthy customers for convenience.

– U.S. luxury market shows strong growth potential.

– Off-price luxury is gaining traction in Europe.

luxury market resiliencehigh-end consumer behaviordigital retail strategyregional market dynamics

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Active ETFs. Wir sind The Home of Active ETFs. Starten Sie Ihre Suche nach JP Morgan in KAM ETFs. Dein Lieblingsspiel, Punkte verbinden. Denn für dich sind Daten, nicht einfach nur Daten. Sie sind das große Ganze, nur gut getanzt. Das ist für die, die in allem ein Muster erkennen. Das ist for the craft of finance. Markets, Preis, Geopolitik.

Analysis

The luxury market continues to show resilience, with high-end customers increasing their spending, as evidenced by an 18% growth in customer numbers and a 9% rise in per capita spending. Despite rising interest rates and cost pressures, there is currently no indication that wealthy consumers are feeling the pinch, as their wealth remains tied to strong stock and real estate markets.

The focus on high-end customers and digital convenience is paying off, with a significant share of sales coming from affluent spenders who prefer full-price purchases. The U.S. luxury market is thriving, allowing for flexible marketing strategies that can adapt to regional performance, highlighting the advantages of digital platforms over traditional retail models.

13:47
PDT

Lux Experience is reallocating marketing resources to the U.S. market due to its growth potential.

Lux Experience Michael Plegger Mytheresa S&P 500 NASDAQ Brent crude CEO Jenny Splendid Ice Creams Flora Fiber Bar S&P 500 NASDAQ DXY

– The company operates without fixed assets, allowing for flexibility in response to market changes.

– High-end consumers are showing resilience against inflation and economic pressures.

– Off-price luxury is becoming increasingly popular, particularly in Europe.

– Mytheresa reported a 39% growth in the last quarter, indicating strong performance in the luxury sector.

luxury market resilienceU.S. market growthoff-price luxury popularity

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If a region is not as booming anymore, we shift our marketing resources to another region. We have no fixed assets. We don't have a store network that now in Asia has the issue of less footfall. We move our marketing dollars to the booming U.S. market. I don't see signs of a decline, but it's also fully possible for us to mitigate as long as there's growth in the world. Peninsula. Maybe that comes back after the crisis. So we are in a much more flexible situation than classic physical luxury players. Michael Plegger there, the CEO of Lux Experience, a closer look at the luxury retail space. As we take a closer look right now at Hallmark is closed out on the day. Some folks with a little bit more money in their pocket with an S&P 500 up a percent on the day. The NASDAQ up 1.7%. A big part of that reason is because of the two lines at the bottom of your screen. A second day drift lower into your yields and a drift lower for a second day in Brent crude futures or Brent crude still camped out at above 100 bucks a barrel. When we come back, we continue our focus in on the consumer and we're going to focus in on two interesting spectrums of well, let's just say the culinary space fiber bars and ice cream. We're going to talk to Jenny. She founded Jenny Splendid Ice Creams and she also founded the Flora Fiber Bar business. We're going to talk to her about both of those endeavors.

Analysis

The luxury retail market remains resilient, with companies like Lux Experience shifting marketing resources to capitalize on growth in the U.S. market, despite potential challenges in other regions. The CEO highlighted the flexibility of their business model compared to traditional luxury players, allowing for strategic resource allocation without fixed assets.

Smart money should note that the luxury sector is currently benefiting from a polarized market, where high-end consumers continue to spend despite economic pressures. The focus on high-spending customers and digital convenience positions Lux Experience favorably against competitors, particularly in off-price luxury segments that are gaining traction in Europe.

13:45
PDT

Mytheresa grew 39% in the last quarter.

Mytheresa Wynet Netaporta Mr.Porta Outnet Europe U.S.

– Off-price luxury is gaining popularity in Europe.

– The U.S. luxury market is currently the strongest globally.

– Geopolitical tensions may impact U.S. luxury transactions.

– The company is treating off-price luxury as an independent business.

luxury market resilienceoff-price luxury growthgeopolitical risks

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We sold the outlet; Wynet was a massive turnaround, and to win the war, we wanted to reduce the battles. Ux is more than double the size of the Outnet. It has the leverage or cost leverage that we need to get there. It's not a strategic asset different from Wynet, Netaporta, and Mr.Porta, but in this polarized world, off-price luxury is highly popular. You can see it with many competitors. In the last quarter, we clocked in 23% growth in Europe with the U.S. business. We focus on Europe because for off-price, with lower margins and lower baskets, it doesn't make sense to ship overseas. But in Europe, there's a healthy core. We're growing it. We are treating it as an independent business. It will make money, but it's in the portfolio more for that than for strategic reasons. Let's talk about the geography of the overall business. The U.S. is doing great; it's actually been a bright spot with a lot of growth there. Do you worry at all, given the tariff situation, the geopolitical situations, and some of the other things that could potentially impede some of the transactions that actually occur from U.S.-based buyers? You're absolutely right. At the moment, the U.S. is probably the best luxury market in the world. Mytheresa grew 39% in the last quarter.

Analysis

The luxury market is showing resilience despite rising interest rates and cost pressures, with Mytheresa reporting a 39% growth in the last quarter. Off-price luxury is gaining traction, particularly in Europe, where the company is treating it as an independent business to capitalize on its popularity.

Smart money should note that while the U.S. luxury market is thriving, geopolitical tensions and tariffs could pose risks to transactions involving U.S.-based buyers. The focus on high-end customers and the shift towards off-price luxury could redefine competitive dynamics in the sector.

13:43
PDT

Lux is focusing on high-end customers, leading to higher profitability.

Lux Farfetch My Teresa Mr. Porter Net-a-Porter Yolks OutNet KPI

– Average basket value has reached around 900 euros.

– Less reliance on discounting is evident with a higher full-price share.

– Rising shipping costs are less impactful due to high-value merchandise.

– The strategy contrasts with competitors like Farfetch, which target aspirational buyers.

luxury market resiliencehigh-end consumer spendingprofitability focus

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Can this newly reimagined Lux experience buck that trend longer term? What are you doing differently than maybe those companies weren't able to do? The key difference amongst, of course, many operational differences is we always focused on these top high-end customers. Farfetch, a good example, was a marketplace very attractive to aspirational customers to find the one logo product. We have never focused on that. A share of 50% sitting with just 4% is not only a remarkable KPI, but it's showing we are dealing with a different customer. We are dealing with customers that, for reasons of convenience and efficiency, choose digital, but they're wealthy spenders, six-digit spenders a year, and that is not only a high-spending customer; it's a more profitable customer. We have much higher full-price share, so less discount with this customer. The average basket has reached around 900 euros, so even increasing shipping costs because of fuel costs are, of course, less of a concern if the parcel you ship around has 900 euro merchandise value inside. So I understand the strategy, certainly with My Teresa, certainly with Mr. Porter, and Net-a-Porter. But you have to kind of explain to me where Yolks fits all into this because you sold the OutNet, which was also in the discount luxury, if you will. Yolks is in that.

Analysis

The reimagined Lux experience is targeting high-end customers, focusing on profitability and full-price sales rather than discounting. This strategy is yielding a higher average basket value, indicating a shift towards more affluent consumers who are less sensitive to rising shipping costs.

Smart money should note that the emphasis on high-end clientele and reduced discounting could lead to sustained profitability, even amidst economic pressures. The ability to maintain a strong full-price share suggests resilience in luxury spending, potentially insulating the brand from broader market volatility.

13:42
PDT

Luxury customers grew by 18% with higher per capita spending.

Netaporta

– The market is polarized, benefiting both high-end and discount segments.

– No current signs of reduced spending among wealthy consumers.

– Wealth tied to stock market and real estate performance.

– Middle market remains risky amid economic pressures.

luxury market resilienceconsumer spending trends

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These customers grew by 18%, and they spend more per capita; the same for Netaporta, with a 9% higher spend per capita. This is how growth happens today in luxury. We are in a polarized market; it's at the top and, of course, at the discount end. The middle ground is the very risky ground. Well, let's get to an idea, though, of how durable the luxury market is if we're starting to see fewer customers in this space. I understand there is this threshold of customers that will always have the capacity to spend on these goods. But if we do reach a stage, I mean, we're talking on a day where interest rates are going up, and cost pressures on everyone, both low income and high income, are changing dramatically. Do you worry at all, particularly with some of your long-term targets, that some of those cost pressures might actually catch up to the wealthiest out there? At the moment, there's no indication whatsoever. The reality is we are dealing with customers whose resilience, whose elasticity is not tested with inflation going up four or five points, not at all. I mean, their wealth is, of course, dependent on the stock market, dependent on commodities, dependent on real estate. So as long as that is in good shape, we are in good shape, and we have seen that over the last years, which frankly were not the best in macroeconomics. And still, we continue to grow that cost.

Analysis

Luxury market resilience remains strong despite rising interest rates and cost pressures, with high-income customers showing no signs of reduced spending. The wealth of these consumers is closely tied to the stock market and real estate, suggesting that as long as these assets perform well, luxury spending will continue to grow.

Smart money should note that the luxury segment is polarized, with growth driven by both high-end and discount markets, while the middle ground remains risky. The current economic environment has not yet tested the elasticity of wealthy consumers, indicating a potential for sustained demand in luxury goods if macroeconomic conditions stabilize.

13:39
PDT

MaceRich's stock has increased significantly this year.

MaceRich Green Street Uniqlo Dick's Sporting Goods Zara Jack Shea Bank of America

– Mall values have risen 13% over the past year.

– Retail sales were up 1%, indicating consumer resilience.

– MaceRich has committed to opening 1,000 new stores.

– Higher borrowing costs may impact future financing strategies.

retail demandcapital costscommercial real estateconsumer spending

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politics.

Analysis

MaceRich's stock has surged significantly this year, benefiting from a 13% increase in mall values, as reported by Green Street. However, the company faces challenges due to a lack of high-quality retail space needed for expansion despite strong retailer demand for new stores.

The retail landscape is shifting, with unprecedented leasing demand from retailers seeking prime locations, which may counterbalance rising capital costs. MaceRich's strategy of opening new stores and backfilling vacancies could position it favorably in a tightening market, but the impact of higher borrowing costs remains a critical factor to monitor.

13:37
PDT

Macerich's stock has risen significantly this year.

Macerich Jack Shea Uniqlo Dick's Sporting Goods Zara Bank of America Green Street Fed Deptford Mall FEDFUNDS

– Mall values increased by 13%, leading the commercial property sector.

– Retail leasing demand is at unprecedented levels.

– Traffic at new store openings has shown substantial growth.

– Higher interest rates may not deter retail expansion in prime locations.

retail demandinterest ratescommercial real estate

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Beautiful asset. But half the ground is fee, which we own, and half is under a ground lease. There's a mortgage that sits on top of the whole thing. We're showing a map of a lot of your properties here. I'm curious about as you expand and look for other properties. And this goes back to the Fed. I mean, the cost of capital is going up. I mean, I saw, I mean, you had an exchangeable rate deal earlier this year at like two and a quarter. Then I saw on the Deptford Mall, you had a deal where it was like six, like seven percent roughly. Kind of make that math work for me and whether you sort of have to move your finance or change your financing structure in a way to account for a higher rate environment. I mean, higher rates right now like we can probably borrow on our first mortgage basis at about 6% on a mall not highly levered. Even with this rate increase, like our borrowing spreads are compressing. We have access to the term loan market. We raised convertible debentures at a two and a quarter percent rate, so we've got different sources of liquidity or costs of capital to pursue. But if you ask me, our cap rates are going to go up; it's kind of a function of just buyer-seller. I would have said maybe earlier this year they were trending down. I personally think they're going to flatten. I don't know if they'll go back up again, but the thing that's offsetting rates is unprecedented leasing demand on the part of retailers that need brick and mortar. They need new stores in the better centers, and they're really trying to partner with better landlords. Like the last thing they want to do is get stuck with a mall owner that's not investing or it's an over-levered asset.

Analysis

Macerich's stock has seen significant gains this year, driven by a 13% increase in mall values, outperforming other commercial property sectors. Despite rising interest rates, the company is experiencing unprecedented leasing demand from retailers seeking prime locations, which may offset the impact of higher borrowing costs.

The current retail landscape indicates a strong consumer base, with Macerich's traffic metrics showing substantial increases at new store openings. This suggests that while macroeconomic pressures exist, the demand for quality retail space remains robust, presenting potential growth opportunities for well-positioned mall operators.

13:35
PDT

Macerich's mall values increased by 13% over the past year.

Macerich Dicks Sporting Goods Bank of America Green Street Dicks House

– Dicks Sporting Goods is a key driver of traffic and sales for Macerich.

– Retail sales are up 1%, indicating consumer resilience.

– Macerich has committed to opening 1,000 new stores, with 950 already committed.

– Challenges remain in securing high-quality retail space for future growth.

retail recoveryconsumer spendingexperiential retail

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Shopping malls are always sort of anchored by a big department store. Dicks, obviously, I mean, you know, it's varied, but still, it's sporting goods. It's also experiential, and I am curious if that's a deliberate decision. Yeah, Dicks was, for us, that's a really critical ally for us to try to build more vibrancy, traffic, dwell time. My job as a landlord is to bring traffic, dwell time, and the right traffic that spends, right? So with the two Dicks stores, the House of Sports that we opened, we had an opening earlier this year at Freehold. The traffic of the center has maintained a 9% increase. So it's about a million two customers we project that will come in just because of the Dicks House of Sport. The opening weekend for Freehold compared to the year before, just looking at traffic, traffic was up 25%. Annapolis just opened on the weekend of August, that second week of August over the weekend. The traffic was about 33% up versus the period before. I was just talking with the team at Dicks. That's the best opening. It's the most frequent in-store right now. I think there were something like 111,000 people that came in over that weekend into that one store. So we expect that that will have a pretty profound impact. So it's just such a great offering. We'll just quickly, quickly. I mean, those are a couple of the success stories you mentioned, Annapolis, Maryland, Freehold, et cetera. I am curious, what's going on with the place in Colorado in Boulder, 29th Street? I mean, are you looking at a situation where there are just certain properties where you're just willing to turn?

Analysis

Macerich's recent performance highlights a significant rebound in mall values, with a reported 13% increase over the past year, driven by strong consumer traffic and strategic store openings. The company's focus on experiential retail, exemplified by the success of Dicks Sporting Goods, is enhancing foot traffic and sales across its properties.

Smart money should note that while Macerich is currently thriving, the challenge of securing high-quality retail space could hinder future growth. The company's proactive approach to filling vacant anchors and increasing store commitments indicates a robust strategy to capitalize on current consumer trends, but potential economic headwinds may pose risks ahead.

13:33
PDT

I mean we're talking about maybe potentially new tariffs coming down the pike energy prices are still elevated Maybe that gets solved by the…

FEDFUNDS

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I mean we're talking about maybe potentially new tariffs coming down the pike energy prices are still elevated Maybe that gets solved by the Fed maybe or not I have you sort of looked ahead and thought to yourself Should we start to prepare for a potential pullback by some consumers? Well the last time I visited with you And I'll have to say our stock went up about 25 to 40 percent and So maybe I'll keep coming back. Yeah, we raised 1.6 billion of equity and convertible securities during that period So our balance sheet is flushed with liquidity right now. And obviously we're trying to buy properties right now. It's a big part of our story right now. So we feel very, very secure from that standpoint. Just retailer demand to open stores. As part of our path forward, we had to open 1,000 new stores backfill 30 vacant anchors. And that's about 25% of our entire portfolio of space. We're basically 950 stores are committed at this point. We have 850 committed already 100 letters of intent out. We've got 50 more to go. We've done that in the last two years, in spite of all the noise about tariff, war, rates. But what are the commitments though too? I mean, because yesterday in your presentation you were talking about there were 30 of the targeted vacant anchors that were now committed. But then I looked at it, it was only like seven were only open. Yeah, seven are open. So where are the others right now? So they're all in various different stages of construction or delivery of the parcel. So we've got 13 that are.

13:31
PDT

Mall values increased by 13% in the past year.

MaceRich Uniqlo Dick Sporting Zara Green Street Bank of America CEO Jack Shea

– MaceRich's shares have risen significantly this year.

– Retail sales rose by 1%, indicating consumer strength.

– High-quality retail space is becoming scarce.

– Consumer behavior may be shifting towards premium retail experiences.

retail market dynamicscommercial real estateconsumer spending trends

▸ Full transcript

What do you actually do? Is this just for rich people? How do you know what to choose? We get a lot of smart people together. We're analyzing all of the data. We're doing research. And we're pulling all that together to think about what would be the best investment today that will make money in the future. Invest like the future's watching. New data out from real estate analytics firm Green Street shows mall values up 13% over the past year, topping all other commercial property sectors in that time. One name benefiting is MaceRich. Shares of the mall owner and operator whose tenants include Uniqlo, Dick Sporting, and Zara are up significantly this year. That bounce back, though, is now colliding with the new problem: a lack of high-quality retail space they need to keep growing. MaceRich's president and CEO Jack Shea joins us right now, fresh off of his presentation at yesterday's Bank of America real estate conference. Great to see you again, Jack. Hey, good to see you. Let's start off first. I want to start off first with retail sales. We got a retail sales report the other day. Up 1 percent. Surprised a lot of folks. That's not inflation-adjusted, but it kind of contributes to this narrative we've seen that the consumer is holding up. Are you seeing that in your properties?

Analysis

Mall values have surged by 13% over the past year, outperforming all other commercial property sectors, driven by a rebound in consumer spending. MaceRich, a key player in the mall sector, has seen significant share price increases, although they now face challenges due to a shortage of high-quality retail space needed for expansion.

The recent retail sales report showing a 1% increase, despite not being inflation-adjusted, suggests that consumer resilience is stronger than anticipated. This trend may indicate a shift in retail dynamics, where high-quality retail spaces become increasingly valuable as demand outstrips supply.

13:29
PDT

Bonta warns of potential unlawful interference in elections by Trump.

Rob Bonta California Trump CEO Supreme Court Attorney General

– California will take legal action to protect voting rights if necessary.

– State-level authority is emphasized over federal control in election matters.

– Increased scrutiny on election-related companies may arise.

– Legal battles could intensify as elections approach.

election integritystate authority

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Congress do. So he unlawfully tried to interfere with this coming election by interfering with vote by mail ballots. We put the nail in the coffin. We put a stake through the heart of that effort when the U.S. Supreme Court made the final ruling. And we won that case. But will he continue to try to interfere? Yes, I think he will. He will try to interfere with our elections. He is the threat to free and fair elections and election integrity. And if he acts unlawfully and tries to interfere with our fundamental right to vote, the right from which all of the rights flow, we will go to court and we will stop him. All right, Rob, I have to leave it there. I appreciate you being with us. I appreciate your candor, Rob Bonta, the Attorney General for the state of California. When we come back, we're going to check in on the consumer and check in on the surprising boom in shopping malls that's coming up next here with the CEO of Maserich right on. from the home of Active ETFs.

Analysis

California Attorney General Rob Bonta emphasized the state's role in protecting election integrity against potential unlawful interference from former President Trump, particularly regarding mail-in ballots. He asserted that if Trump attempts to disrupt the electoral process, the state will take legal action to uphold voting rights.

Smart money should note that Bonta's comments reflect a broader trend of state-level pushback against federal overreach, particularly in election-related matters. This could signal increased legal battles and regulatory scrutiny in the lead-up to elections, impacting market sentiment around companies involved in election technology and logistics.

13:27
PDT

State authority is emphasized in legal battles against federal overreach.

Trump U.S. Constitution 10th Amendment National Guard Kavanaugh Supreme Court FEDFUNDS

– The speaker claims an 83% success rate in lawsuits against the federal government.

– Concerns about mail-in ballot integrity may lead to regulatory changes.

– Antitrust enforcement at the state level could reshape market dynamics.

– The 10th Amendment is highlighted as a key legal foundation for state power.

state sovereigntyantitrust enforcementvoting regulations

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They want to impose it because it gives them more power. It's self-serving, but it is not consistent with the U.S. Constitution, the separation of powers, checks and balances, rights and freedoms, state sovereignty, the 10th Amendment, all the things that give limited power to the executive branch. They do have authority that's granted to them, but they don't have the authority of Congress. They don't have the authority of the courts. They don't have the authority of the states. We are designed in this democracy to share power, not have it all concentrated in the executive branch. So they have lost time and time again. We've sued them 92 times. We've won 83 percent of the time we protected funding that's ours when they tried to block it we protected rights and freedoms we've blocked we struck down tariffs we've pushed the federal national unlawfully federalized National Guard out of our state and you know we defended birthright citizenship a U.S. constitutional right that Trump tried to rewrite on his own so I'm not worried about that because I think the law is going to prevail the Constitution will be the final decider of where power lies and we have the 10th Amendment which gives the states vast authority. On the idea though of maybe cooperating, and I'm just going to ask you about the mail-in ballots, because we did get a bit of a Supreme Court backing this idea of still allowing that, though I felt like Kavanaugh sort of left the door open maybe for the Trump administration to come back on that. Is there been any discussion about maybe having some negotiation as to how to make mail-in balloting a little, to bolster it a little bit, to deal with maybe barcodes and scannable envelopes and other things that would satisfy maybe some of the federal government's concerns and at the same time provide that ease of access that most voters want.

Analysis

The ongoing legal battles highlight the tension between state authority and federal power, particularly regarding antitrust enforcement and election integrity. The speaker emphasizes the importance of state sovereignty and the constitutional framework that limits executive power, suggesting a robust defense against federal overreach.

Smart money should note the implications of state-level actions in antitrust cases, as they may signal a shift in regulatory dynamics, especially in tech and media sectors. Additionally, the discussion around mail-in ballots indicates potential regulatory changes that could affect voter turnout and election outcomes, which may have broader implications for political stability and market sentiment.

13:25
PDT

States won the liability phase against Ticketmaster Live Nation.

Ticketmaster Live Nation Trump administration Ninth Circuit Supreme Court CFTC US Ticketmaster Live Nation FEDFUNDS

– The remedies phase will determine potential divestiture or other actions.

– Prediction markets are under scrutiny, with states asserting regulatory authority.

– The Ninth Circuit ruling supports state involvement in gambling regulation.

– A Supreme Court decision could further clarify federal vs. state authority.

regulatory authoritygambling oversight

▸ Full transcript

The litigation is what we call bifurcated. There was a liability phase. That's done. We won the states. And now we're going into what we call the remedies phase, where we would determine if Ticketmaster will be divested or what other remedies will be imposed to address the unlawful conduct of Ticketmaster Live Nation. I want to get your thoughts on prediction markets. This has become a huge issue right now, where obviously the traditional sports books are very concerned about the prediction markets operating in, at least in their view, a gray area. This gets back down to federal regulation, which according to the Trump administration, they have authority over prediction markets and the states who have traditionally run sports books and other betting oversight here. Are you prepared to interject yourself further into that particularly after the Ninth Circuit ruling and now what I assume is gonna be a Supreme Court, the Supreme Court weighing in? I've been very clear about my position without the federal law and the CFTC, that their decisions do not preempt the states from being able to engage, if we wish, to protect the health, safety, and welfare of our people. When it comes to gambling, for example, states have been very involved in providing regulation. And the Ninth Circuit has found that that is the correct interpretation. Other circuits have found differently. So maybe it goes to the US Supreme Court. Right now the focus is on what authority the states have. And I believe the states have vast authority, and our authority is not preempted by the federal government. Do you worry about overall, and not just with the prediction marks, but everything that's going on, you know, mail-in balloting, all this other stuff about the erosion.

Analysis

The litigation against Ticketmaster Live Nation has progressed to the remedies phase, where potential divestiture and other remedies will be considered following a successful liability phase for the states. The discussion around prediction markets highlights a conflict between federal and state regulations, with states asserting their authority to regulate gambling despite federal oversight claims.

Smart money should note that the Ninth Circuit's ruling reinforces state authority, potentially leading to a Supreme Court decision that could reshape the regulatory landscape for prediction markets. This situation may create opportunities for states to implement more favorable regulations for local operators, impacting the competitive dynamics in the gambling sector.

13:23
PDT

Regulators are investigating AI incidents involving safety breaches.

OpenAI Hugging Face AI Wild West

– Companies are held liable for their AI products and cannot shift responsibility.

– Existing laws are being enforced to protect children from harmful AI interactions.

– The regulatory landscape for AI is evolving, potentially increasing compliance costs.

– Liability discussions may reshape how AI companies structure their services.

AI regulationchild safetyliability in tech

▸ Full transcript

We do, and we are looking very closely at chatbots, at AI, at AI agents. We have an investigation into the incident with OpenAI when their AI agents left the sandbox and got into areas that they shouldn't be, Hugging Face. And we are making sure that chatbots, we have laws preventing chatbots from teaching kids how to kill themselves. That's happened in the past, having sexual explicit conversations with kids. There's laws against non-consensual sexualized images being created using AI. So we are prepared to enforce all those and make sure our kids are safe and laws are followed. And AI is a new technology, new-ish, but it is not the Wild West. There are a whole bunch of existing laws and some new laws that apply that provide regulation and guardrails. Has there been discussion? I mean, I don't know what the current law is, obviously you do, but has there been discussion about who should shoulder the liability? Because when you talk to some of these companies they'll say, well, it's kind of this little shell game where they're saying, well, it's not really our thing, that agent is owned by the customer or it's owned by this person, that person. Have you guys kind of mapped out where liability would even fall? Yeah, you know they're responsible for the tools that they create, the products and services they put out into the world. They can't shift responsibility onto an individual for the products that they create for or the AI tools that they've created, like including chatbots. So, you know, of course, we'll be fair and appropriate with respect to.

Analysis

Regulatory scrutiny on AI technologies is intensifying, with investigations into incidents involving AI agents breaching safety protocols. Companies are being held accountable for the tools they create, emphasizing that liability cannot be shifted to users or customers.

Smart money should note the increasing regulatory environment surrounding AI, which could lead to stricter compliance costs for tech firms. The focus on child safety and existing laws suggests potential legal challenges for companies that fail to adhere to these regulations, impacting their operational strategies and market positions.

13:20
PDT

Generac Holdings benefits from Amazon deal.

Generac Holdings Amazon Intel SK Hynix AutoNation Paramount Warner Brothers Discovery California Attorney General Rob Bonta U.S. Department of Justice FTC Metta TikTok FEDFUNDS

– Intel sees increased interest in U.S. chip reshoring.

– AutoNation struggles with consumer caution.

– Paramount's merger faces legal challenges.

– State-level antitrust actions may rise.

antitrust enforcementmerger scrutinyconsumer protectionmarket competition

▸ Full transcript

Use that at least to use the DOJ's phrasing are national issues. I think well settled laws just fine, which allows for states to when the law and the facts provide for it and indicate that there's an antitrust violation to sue. This is very common. It would be unprecedented and it would be new precedent. It would be uncharted territory for us not to be able to do that. And I think it's particularly important now because I think that American people will see that the United States Department of Justice, the federal government, the FTC, have withdrawn and retreated from their enforcement of antitrust law. They're not protecting the affordability of the American people. Trump doesn't even believe in this thing called unaffordability. And so that job needs to get done. The federal government has played that role in the past, the US DOJ, the FTC, but they're not playing it now in the way that they should. So the states can and should step up to protect the American people, to make sure that they are not threatened with unlawful unaffordability. Higher prices have to pay more for less. So I think it's completely appropriate and it is well settled law under U.S. Supreme Court precedent. You had a victory with regards to Metta and getting them to settle, I mean you and the other states, I should point out getting them to settle $18 billion. There are still some contingencies though with some of the remedies that they're supposed to take on TikTok, YouTube and some of the other services also making those changes. How confident are you that they are going to do that and if they don't then what is your course of action? We think it was a really transformational moment, a watershed moment, an inflection moment, when we got Metta to make these changes going forward. It'll really...

Analysis

Generac Holdings surged following an $8 billion deal with Amazon, while Intel gained traction amid discussions of U.S. chip manufacturing reshoring. However, AutoNation faced significant declines due to consumer caution, and Paramount's stock weakened amid merger concerns with Warner Brothers Discovery.

The California Attorney General's push against the Paramount merger highlights a growing trend of state-level antitrust enforcement as federal agencies retreat. This could signal a shift in regulatory dynamics, potentially impacting corporate consolidation strategies and market competition across various sectors.

13:18
PDT

Generac Holdings is a significant gainer due to an $8 billion deal with Amazon.

Generac Holdings Amazon Intel SK Hynix AutoNation Paramount Warner Brothers Discovery Rob Bonta California U.S. Department of Justice DOJ DXY

– Intel is seeing increased interest related to U.S. chip manufacturing reshoring.

– AutoNation faces challenges with consumer caution, marking one of its worst days in years.

– Paramount's stock is under pressure amid concerns over its merger with Warner Brothers Discovery.

– California's lawsuit against the merger emphasizes the risks of job losses and economic impact.

merger regulationjob market impactentertainment sector dynamics

▸ Full transcript

But if they lost and they did pull out and you lost those jobs and that economic contribution, would the lawsuit in your view still have been worth it? Well, the lawsuit seeks to block harms to jobs. The merger stands, a study in L.A. County just showed, the merger will create thousands of jobs lost, 5,000 to 10,000. It'll create about a three billion dollar loss in economic activity. So the merger is what we are trying to block because of the harm it will create. So we're trying to make sure there's fair prices for consumers who pay for satellite, pay for cable, who want to go to the movies, and make sure we have a free and fair market where there's choice, quality, and competition. The merger tends to harm that free and fair market in three different markets. Well, I mean, once we get to the end of this month and the clock starts ticking, you start getting what, a $7 million a day hit to Paramount. They're asking for a $1.9 billion bond basically fronted by California taxpayers. The DOJ is even, I don't know if they've taken the side of that, but they've definitely weighed in on this. Are you prepared to put up that bond if necessary? I don't think we'll be asked to pay that bond. I think it's meritless. They agreed to have the trial next summer. That was an agreement. We agreed to all the terms. The terms did not include a bond. They're trying to rewrite a commitment, a promise. They're trying to renege on a commitment and a promise they made and try to ask for something after the fact that wasn't part of the original commitment. So I don't think they're going to win that. We're not particularly concerned in that, of course, we'll honor whatever the judge.

Analysis

California Attorney General Rob Bonta is actively seeking to block a major merger in Hollywood, citing potential job losses and economic harm. The merger could result in a loss of 5,000 to 10,000 jobs and approximately $3 billion in economic activity, raising concerns about market competition and consumer choice.

Smart money should note the implications of this legal battle on the broader media landscape, particularly as it highlights the tension between state and federal oversight of corporate mergers. The outcome could set a precedent for future mergers and acquisitions, impacting investor sentiment in the entertainment sector.

13:16
PDT

Bonta claims unlawful market concentration in three markets due to the merger.

Rob Bonta Paramount Warner Brothers Discovery California United States Department of Justice LA United States Department When Paramount DXY

– He prefers structural remedies over behavioral commitments from corporations.

– Paramount's threats to relocate jobs are viewed as hypocritical by Bonta.

– The case reflects a growing divide between state and federal antitrust enforcement.

– Investors should monitor the potential impact on the media sector and job markets.

antitrust enforcementcorporate consolidationmedia sector dynamics

▸ Full transcript

The market is very different from ours. We believe that we're the only ones that have looked at this case in the American market, looking at the different business markets that are impacted in an inappropriate way. With respect to the United States Department of Justice, I don't think they did an inappropriate review, and it was not rigorous. We came to a completely different conclusion when we applied the law on the facts; we clearly found unlawful levels of market concentration that are permissively unlawful under the law in three separate markets. We are confident in what we found. We're confident in our case, and so far we've been winning in court. When Paramount says, 'Okay, we're gonna relocate, you know, we're gonna take, you know, 50 plus thousand jobs and however many billions of dollars in economic contributions to the state somewhere else,' is that a legitimate threat in your view? I think only they know what they'll do or won't do. I can't comment on what a corporation will do or what it says; it seems hypocritical, though. What happens? I mean, is there something to fill that hole, or is that not, or is the impact manageable enough in your view? I know it's not your job to manage the impact, but I'm sure you have to consider an effort talking it over with other state leaders. Yeah, you know, I'm not focused on that. I've called it a threat; it's a threat that they've made since before we brought the lawsuit and since we brought the lawsuit. I think they're still making it today; it's consistent with their other professed commitments to LA and to California, so it's inconsistent. It seems hypocritical they decide to leave.

Analysis

California Attorney General Rob Bonta asserts that the proposed merger involving Paramount and Warner Brothers Discovery presents unlawful levels of market concentration in three markets, contradicting the Department of Justice's review. Bonta emphasizes the need for structural remedies rather than behavioral commitments, indicating a strong stance against corporate consolidation that could impact competition and consumers in the state.

The ongoing legal battle highlights the tension between state and federal oversight of corporate mergers, with Bonta's approach potentially setting a precedent for future antitrust cases. Investors should note the implications of this case on the media landscape and the broader market, particularly regarding corporate strategies and job relocations.

13:14
PDT

California AG Rob Bonta prioritizes structural remedies over behavioral commitments in antitrust case.

Rob Bonta Paramount

– Paramount's offer of 30 theatrical releases deemed insufficient by Bonta.

– Potential divestitures could reshape the media landscape significantly.

– Regulatory scrutiny on mergers may increase, impacting future corporate strategies.

– Bonta's actions reflect a growing divide between state and federal regulatory approaches.

antitrust regulationmedia consolidation

▸ Full transcript

Is it just kind of the sell-off of some of the cable networks, keeping the film studios kind of structurally together? What do you want? Yeah, I've talked in the past about the need for structural remedies. That is what we're seeking, that's what we're fighting for when it comes to the three markets that we have identified in our complaint as the ones that are impacted in an unlawful way by this proposed merger: blockbuster theatrical release, widespread theatrical release distribution, and cable channel licensing. So like in any antitrust case, we look at structural remedies as our top priority. Well, Paramount has offered to do a certain amount of releases that are theatrical. Why was that not enough to appease you? I think they said 30. That's a behavioral remedy. And we, again, we... That's not structural. That's not structural. Okay. Yeah, structural usually means keeping different corporate entities separate. A behavioral remedy is a commitment to behave in a certain way, do certain things at a time in the future. Those have typically been difficult to enforce and are not preferred to structural remedies. So sales of cable channels would be structural in your view? Yeah, divestitures, sell-offs. What about splitting off some of the intellectual property from, say, some of the franchises? Is that something that would be considered structurally acceptable to you? That could be a component. Do you think that Paramount would even be open to that? I mean, that's a big ask. Yeah, I don't know. It's up to them. There's a whole set of different possibilities. So through the settlement process that's ordered by the court, we'd be able to explain.

Analysis

California Attorney General Rob Bonta is pursuing structural remedies in the antitrust case against Paramount's proposed merger, emphasizing the need for divestitures rather than behavioral commitments. This stance highlights the ongoing tension between state and federal authorities regarding corporate consolidation and its implications for competition in the media landscape.

Smart money should note that Bonta's insistence on structural remedies could lead to significant changes in the media industry, potentially impacting Paramount's operational strategy and market position. The focus on divestitures may signal a broader trend of increased regulatory scrutiny on mergers and acquisitions, affecting how companies approach future deals.

13:12
PDT

Generac Holdings gains from $8 billion Amazon deal.

Generac Holdings Amazon Intel SK Hynix AutoNation Paramount Warner Brothers Discovery California Attorney General Rob Bonta SK Paramount Skydance California Attorney General Rob Justice Department AMZN FEDFUNDS

– Intel benefits from reshoring discussions and potential SK Hynix deal.

– AutoNation warns of cautious consumer sentiment, impacting stock performance.

– Paramount Skydance faces uncertainty regarding merger with Warner Brothers Discovery.

– California Attorney General Rob Bonta's lawsuit could hinder major Hollywood mergers.

corporate consolidationconsumer sentimentU.S. chip manufacturingmedia mergers

▸ Full transcript

One of the biggest gainers of the day is Generac Holdings on the back of that $8 billion deal with Amazon. Intel also getting a strong bid as a lot of people start to look at the potential for more reshoring of U.S. chip manufacturing, including the potential deal with SK Hynix on memory chips. But still some concerns out there with regards to consumer. AutoNation having one of its worst days in years after warning about a cautious consumer and keep an eye on Paramount Skydance. Shares had actually rallied about 40% from that year-to-date low back in late July but weakening just a bit here as more and more questions continued to mount here about the future of its tie-up with Warner Brothers Discovery. And that does bring us to our top story. One lawsuit that's actually holding up the biggest merger Hollywood has ever seen and the man who filed that case. In fact, California Attorney General Rob Bonta has put his office at the center of some of the country's biggest fights: curbing corporate consolidation, guardrails for social media companies, and a pushback on tariff and immigration policies from the Trump administration. But these fights increasingly come with economic trade-offs of their own, and perhaps none is more immediate than his effort to stop the largest merger in Hollywood history. Bonta says that he's protecting competition and consumers in his state, while the Justice Department pushes back saying he's a bit out of his lane and should let the federal government take the lead on issues involving national businesses. Here in Studio 2 for an exclusive conversation is the Attorney General of California, Rob.

Analysis

Generac Holdings surged on news of an $8 billion deal with Amazon, signaling strong demand for backup generators. Meanwhile, Intel's stock rose amid speculation about reshoring U.S. chip manufacturing, although consumer caution remains a concern as AutoNation faces significant declines.

13:10
PDT

Dow Jones up 300 points, S&P 500 up 86 points, NASDAQ up 1.7%.

Intel SK Hynex SpaceX Tesla Generac Fluence Energy Lenard Bloomberg Franci Lacqua AI Die Kleinigkeiten Der Geld PRIVATE DXY

– Two-year yield at 4.66%, down six basis points; ten-year yield at 4.93%, down 90 basis points.

– Generac shares surged 18% due to generator supply agreements.

– Fluence Energy shares fell 15% after cutting revenue forecasts.

– Concerns about consumer confidence affecting housing market sales.

market volatilityearnings seasonconsumer confidenceenergy sector risks

▸ Full transcript

Das ist für alle, die aus kleinen Insätzen einen großen Unterschied machen. Das ist für die Kraft der Finanz. Die Kleinigkeiten, da schaust du genauer hin. Denn wo andere nur Details sehen, erkennst du die Möglichkeiten. Das ist für alle, die aus kleinen Insights einen großen Unterschied machen. Das ist for the craft of finance. Der Geld zu anderen. Wir sehen Kryptos, Trillion Dollar Swings, die Ende des Jobs oder die Ende des Menschenstruggler. Wir sehen die endlosen Funktionen, die den AI-Hype fühlen. Während andere die Ruhe folgen, folgen wir die Geld. Ich bringe euch auf die Minute die ökologische News, wenn ever, und wo ever es passiert. Ich bin Franci Lacqua auf Lake Como, Italy und Und das ist Bloomberg.

Analysis

The financial markets showed resilience with the Dow Jones gaining approximately 300 points, while the S&P 500 and NASDAQ also posted significant increases. However, warnings from CEOs ahead of the upcoming earnings season indicate potential volatility ahead, particularly in sectors like housing and energy.

13:06
PDT

Fluence Energy's stock fell 15% after cutting revenue forecasts.

Fluence Energy Lenard Stuart Miller CEO Lisa Alexis

– Lenard's CEO reported declining consumer confidence affecting housing market purchases.

– Production issues at Fluence's Houston facility are a key concern.

– Rising rates are impacting consumer spending decisions.

– Market sentiment may shift due to these developments.

consumer confidenceenergy sector challengesinterest rates impact

▸ Full transcript

7% again, and also worsening conditions in the housing market. Revenue and profit falling in the third quarter at Lenard. CEO Stuart Miller on the call said consumer confidence has declined at rates as rates and affordability have driven more consumers to slow their purchase decision. And then to round out our decliners here, Fluence Energy. This is a company with a market cap of about $1.5 billion, tumbling 15% today, down more than 60% so far this year. An energy storage company cut its revenue forecast for the year. Analysts note that the trim to the guidance was attributable to production issues at its Houston facility. Alright, let's take a look at yields here because a different picture than what we saw in the days leading up to that Fed meeting yields down significantly across the curve, primarily on the longer end of the curve with eight basis points lower on your 30-year and your 20-year down about six to seven basis points right now on the two-year here so a bit of relief still some questions here as to whether that actually lasts much longer than a few days or whether we get another shock. One shock that I do have for you. I don't know if Lisa Alexis you guys are football fans, college football fans but the stadiums they're building now they're getting a lot price here and that means the tickets and more importantly the suites if you want in getting a lot price here as well too. They're looking like professional football stadiums like this is getting out of control but you know what? They have to pay their athletes. They have to pay the coaches. They got to pay the staff. That's right. They got a bill, a lot of bills coming. Where do they get the money though? That's the question.

Analysis

Fluence Energy's stock plummeted 15% after the company cut its revenue forecast due to production issues at its Houston facility, reflecting broader challenges in the energy storage sector. Meanwhile, Lenard's CEO noted a decline in consumer confidence as rising rates and affordability issues slow purchase decisions in the housing market.

The significant drop in Fluence Energy's stock highlights the vulnerability of companies reliant on production stability, while Lenard's commentary suggests a potential slowdown in consumer spending that could impact various sectors. Smart money should consider the implications of these trends on overall market sentiment and sector performance.

13:03
PDT

SpaceX shares up 2.5% due to potential Intel collaboration and merger talks with Tesla.

SpaceX Intel Tesla SK Hynex Generac Elon Musk SPCX AI SK GNRC But Intel SPCX TSLA GNRC PRIVATE

– Generac's stock increased by 18% following a major supply agreement.

– SpaceX is exploring affordable data sources to improve AI models.

– Strong demand for backup generators reflects resilience in the energy sector.

– Market sentiment remains positive for tech and energy stocks.

AI advancementsmerger speculationenergy resilience

▸ Full transcript

Plan should make in facility in Ohio or form a venture with Intel, major cloud computing firms. As K. Heineck said, they haven't made a decision about a deal with Intel. Intel didn't comment on that report. But Intel did break ground for its Ohio campus back in 2022, but it's kind of slowed down the pace of the work on that site. I want to go now to SpaceX, that's a sticker, SPCX and SpaceX shares are up nearly about two and a half percent. That shares of Elon Musk's rocket AI company. So city analysts, they're basically getting reports that SK Hynex was in talks with Intel. That might have given SpaceX that kind of boost. But you also have SpaceX building that chip-making facility with Tesla over in Austin, Texas. On top of that, analysts are pointing to talks about a SpaceX-Tesla merger. Could that happen? Is it not going to happen? That also could be part of it. But then you have this Bloomberg report that SpaceX has held internal discussions about buying customer operational information from troubled or defunct startups and that's targeting a more affordable data source to improve its artificial intelligence models. I have to end off with Generac, it's ticker GNRC and their shares are up 18%. They're the makeup of those backup generators. I have one for my house. It's broken right now so it's not working. I was stuck in the dark the other day. But the thing with these is that they agree to supply up to $8 billion worth of generators for...

Analysis

SpaceX shares rose nearly 2.5% amid reports of potential collaborations with Intel and discussions about a merger with Tesla. Generac's stock surged 18% as they secured a significant supply agreement for backup generators, highlighting strong demand in the energy sector.

The discussions around SpaceX's internal strategies to enhance AI capabilities through acquiring operational data from defunct startups indicate a strategic pivot towards more affordable data sources. This move could position SpaceX favorably in the competitive AI landscape, while Generac's contract underscores the ongoing investment in energy resilience amid market volatility.

13:01
PDT

Dow Jones gained approximately 300 points, closing up 0.6%.

Intel Dow Jones S&P 500 NASDAQ NASDAQ 100 Dow transports Russell 2000 INTC IMAP Lisa Russell Yeah Romain S&P 500 NASDAQ 100 PRIVATE

– S&P 500 rose by about 86 points, or 1.2%.

– NASDAQ composite increased by 1.7%, reflecting strong tech sector performance.

– Two-year yield decreased to 4.66%, down six basis points.

– Ten-year yield fell to 4.93%, down nine basis points.

earnings seasonbond yieldstech sector performance

▸ Full transcript

Down for a second day, yields slightly lower as well. The question is, is this the start of a trend line that the markets can count on or does it shift? Don't forget, Lisa. I mean, we're gonna get earnings season starting back up in just a few weeks and we're gonna have to hear from these CEOs and we're already getting warnings out of some of them. Yeah, we definitely are getting warnings. What I wanted to get to right now is get to some of those gainers. The gainers like Intel, INTC. Yeah, well, hang on just one second before we get there. We got the closing bell. You know, the market's not closed yet, Lisa. No, I'm sorry. You're getting headless here. Oh my gosh, anything could have happened in those last few seconds. I'm excited, Romaine. Well thankfully for Lisa, it looks like the gains have held in these final few seconds, adding about 300 points or so to the Dow Jones industrial average. That's good for a gain of about 6 tenths of 1%. The S&P 500 gonna close out the day right around 76, 37 and change, up about 86 points of 1.2%. The NASDAQ composite up about 1.7%. Similar story for the NASDAQ 100. On a percentage basis, Dow transports, which had an awful day yesterday, only calling back about 5 tenths of a percent on the day and Lisa Russell 2000 adding about 16 points as a bell up about a half a percent. Yeah Romain I want to head over to the yields face we have the two year 4.66 percent that's down about six basis points the ten year yield 4.93 percent and that's down about 90 but nine basis points right now. Let's now go to the IMAP that's IMAP on your Bloomberg terminal and it's no surprise you're seeing mostly green on your screen the tech space there is obviously the biggest winner, higher by more than 2 percent.

Analysis

U.S. markets closed higher, with the Dow Jones up about 300 points, while the S&P 500 and NASDAQ also saw significant gains. The tech sector led the rally, with notable performances from companies like Intel, despite ongoing warnings from some CEOs ahead of the upcoming earnings season.

The decline in bond yields, particularly the ten-year yield dropping to 4.93%, suggests a potential shift in market sentiment that could influence investor strategies. The tech sector's strength amidst these warnings indicates a divergence in market expectations, highlighting the importance of sector-specific analysis in the current environment.

12:59
PDT

S&P 500 index trending upwards with notable gains in Generac.

Nvidia Apple Microsoft AutoNation Kevin Warsh Black Rock Lizanne Saunders Charles Schwab Generac Lumentum Holdings Bloomberg BOJ PRIVATE S&P 500 CL=F

– Lumentum Holdings experiencing a significant decline.

– AI-related capital expenditures are increasing costs, impacting GDP.

– Market sentiment remains cautious amid inflation discussions.

– Oil prices are pulling back, affecting related stocks.

AI investment costsinflation impactmarket correlationsenergy sector volatility

▸ Full transcript

Other innovation has had in the past from an inflation standpoint, which was certainly something that Warsh has been talking quite a bit about. I think even if you believe, as he does, that it's long-term disinflationary, near-term it's inflationary; a lot of the build-out of AI is becoming much more costly, and it's a lot of imports too. Which is why, even though we have a capex boom, the import-export relationship is a drag on GDP. Lizanne Saunders, always great, chief investment strategist over at Charles Schwab. Counting down to those closing bells on Bloomberg. The closing bell. Bloomberg's comprehensive cross-platform coverage of the U.S. market close starts right now. And right now we are two minutes away from the end of the trading day. Romain Bostic alongside Isabelle Lee taking you through to that closing bell. It's a global simulcast. We're joined now by Lisa Mateo and Alexis Christopharis in today for Tim Stenevich and Carol Masser. Welcome to our audiences across all of our Bloomberg platforms, television, radio, our partnership with YouTube on a Thursday afternoon with all of the major indices high into the green. Yeah, we're looking into the green right now. If we look at the S&P 500 index, Generac up there, 19 percent; these are the most in the S&P 500. On the downside, Lumentum Holdings, they're down, oh gosh, nearly 3 percent right now. Yeah, you know what, I was noticing today, guys, oil pulling back big time today and crypto-related stocks.

Analysis

The S&P 500 index showed positive movement today, with Generac leading gains at 19%, while Lumentum Holdings faced a decline of nearly 3%. The ongoing discussions around inflation and the impact of AI on capital expenditures highlight a complex economic landscape, with potential near-term inflationary pressures despite long-term disinflationary views.

12:57
PDT

Market behavior remains connected to fundamentals despite psychological thresholds.

Kevin Warsh Lizanne Saunders Bloomberg 10-year yield equity market GDP FYI

– The 5% handle on the 10-year yield has historically correlated with poor equity performance.

– Artificial intelligence is increasingly influencing economic and market outlooks.

– Investors may find it harder to define market conditions due to AI's complexities.

– The current market environment is characterized by a shift in the correlation between stocks and bonds.

market psychologyAI impactbond yieldsequity performance

▸ Full transcript

If any additional move up becomes disorderly, so far it's been orderly, in keeping with where nominal GDP growth is, where inflation is, and where expectations for forward-looking monetary policy are. It's been fairly orderly and is connected to fundamentals. That said, those round numbers tend to bring in the psychological aspect to things. I think that was why 5% was a little bit tricky. It is the case, and maybe it's just coincidental, but if you look at all the handles on the 10-year, one did 1.99%, two to two, all the way up, the second worst performing handle for the equity market, three months out, 12 months out, is the five handle. So, there's a lot of other forces that drive what the market is going to do, so that's more of an FYI as opposed to a call on the market. I do want to get your thoughts, Lizanne, on artificial intelligence. It was brought up by Kevin Warsh, unprompted. It's obviously become a big factor in both economic outlooks and market outlooks. When you look at the long-term structural benefits of that, does it make the market easier to define for folks, or is it going to make it harder? Wow, that's a great question. You're welcome. Do I get to go into your commercials? It's got to have everybody guess saying, what a great question. That's what I'm looking for. I can tell you it's helping me do my job better.

Analysis

The market remains orderly despite approaching key psychological levels, with the 5% handle on the 10-year yield being particularly tricky. The discussion around artificial intelligence's impact on economic and market outlooks suggests that while it may provide structural benefits, it could complicate market definitions for investors.

12:54
PDT

Generac's stock saw a significant increase, reflecting market optimism.

Generac Amazon Oracle Bloom Kevin Warsh Nvidia Apple Microsoft AutoNation Black Rock BOJ AI META

– Concerns persist regarding Generac's delivery capabilities and execution.

– Amazon may invest in Generac, indicating a strategic move by hyperscalers.

– The broader market is experiencing an upswing following recent Fed decisions.

– Investors are cautious about consumer-facing sectors amid warnings from companies.

supply chain riskFed policyinvestment diversification

▸ Full transcript

But not necessarily spent. Is there any issue here that 2027, 2028, when they're supposed to start delivering these things, that that might not actually come to fruition? Well, that's what you're seeing analysts on Wall Street talking about. The concern, really, the risk here is whether or not they're actually going to be able to execute. Also about how many generators are actually going to be able to deliver as opposed to what they're actually claiming that they might be able to deliver. So there's a little bit of uncertainty there. But separate from that, you're also seeing Amazon potentially taking a stake in this company, which we've seen Oracle doing that back with Bloom as well. So it kind of just shows you that these hyperscalers are trying to find their ways into the broader ecosystem as it relates to even their own suppliers. So this is to show you another example of how hyperscalers are becoming the financiers of their own supply chain? Absolutely, and that's what we're seeing here with Generac and some of course on Wall Street talking about some concerns there and as you think about hyperscalers really putting their hands in so many different places if you were to see any sort of hiccup in this broader rally, what could that mean for the ripple effect of all the other companies that they have money tied up in? But certainly this is Amazon really potentially doubling down on not only working with Generac but also potentially investing in the space. Alright, normal under there with our stock of the hour shares of Generac up about 19% at one point hitting the biggest intraday gain going back to 2012. Meanwhile, the broader market remains on an upswing here after digesting the big decision from Kevin Warsh. When we come back, Lizanne Sarnes. Some see heroes. Others only egos. We see the era of billionaire athletes. While others follow the noise, we follow the money. Money. World is repricing risk. Geopolitics, inflation and AI are rewriting the rules of capital. In Japan, rates are resetting, corporate reform is accelerating and washing... where intelligence meets capital. Equity indices built on opinions? That's the old way. The new way is Bloomberg Equity Indices, built using transparent, rules-based methodologies that are more responsive to changes in the markets, powered by 450 billion daily data points and backed by research from hundreds of global experts, delivering benchmarks driven by the markets, not opinions. Bloomberg Equity Indices get evolved benchmarks days equity markets. The ongoing conflicts in the Middle East and Ukraine. There's renewed investor appetite for new names in the space. Excellent reporting. I'm Danny Berger and this is Bloomberg deals every Wednesday at 5 p.m. London time only on Bloomberg television. She investors top executives global innovators. Join me for in-depth conversations with them. Biggest newsmakers on the day's top stories. Insight with Hazlinda Amen, only on Bloomberg. Yeah, we got Nvidia, Apple, Microsoft, all your favorites favorites, getting a pretty strong bid here on the day, most of the drag on the market. Some of that can find still to other consumers face. We had a few warnings here from like AutoNation and a couple other companies saying they're still seeing softness there, but you kind of have to like overlay that with what we heard from Kevin Warsh yesterday here. I mean, we talk about obviously the potential for disinflation if the Fed actually is able to sort of have an impact, but a labor market that at least in his view is still relatively healthy, though may take a little bit of a hit if they do continue to raise rates. It was a very interesting speech hawkish by most people standards but yeah remains to be seen tomorrow we have the BOJ to your point or is it tonight overnight tonight we have the BOJ. Depends on what part of the world you're in. Yeah that is true that is true. Well we're here in New York we count you down to the closing bells with Liz Ann Saunders live in studio chief investment strategist Ed Charles Schwab. Great to see you. Nice to be here. Thanks. I'm gonna assume you flew all the way here just for us but I do want to start this was a pretty consequential week because everybody was really kind of laser focused in on what the Fed would do, whether they would actually sort of heed the market signal that maybe it was time to just nudge rates up a bit. We got that. Leading up to this though, I thought it was interesting. We started to see the correlation between stocks and bonds shift a little bit and I am curious as to whether that's something that's temporary or whether we should kind of expect that correlation to tighten even further in the months ahead. So I think we're in a new secular era. So and I've been writing about this for a while that the great moderation era which went from the mid to late 90s up until the inflation.

Analysis

Generac shares surged 19%, marking the largest intraday gain since 2012, amid concerns about the company's ability to deliver on its promises. Analysts are questioning the execution capabilities of Generac, while Amazon's potential investment signals a trend of hyperscalers financing their supply chains.

12:52
PDT

Generac's stock rose 19% following the Amazon deal.

Generac Amazon Nvidia Apple Microsoft AutoNation Kevin Warsh BOJ Charles Schwab Liz Ann Sonders New York NVDA AAPL MSFT FEDFUNDS

– Concerns exist about Generac's execution capabilities.

– Amazon may invest in Generac, reflecting a trend among hyperscalers.

– The correlation between stocks and bonds is changing.

– Kevin Warsh's speech highlighted a healthy labor market despite potential rate hikes.

supply chain investmentstock-bond correlationFed policymarket sentiment

▸ Full transcript

Yeah, we got Nvidia, Apple, Microsoft, all your favorites getting a pretty strong bid here on the day. Most of the drag on the market can still be found in other consumer-facing sectors. We had a few warnings here from AutoNation and a couple of other companies saying they're still seeing softness there, but you kind of have to overlay that with what we heard from Kevin Warsh yesterday. I mean, we talk about the potential for disinflation if the Fed actually is able to sort of have an impact, but a labor market that at least in his view is still relatively healthy, though it may take a little bit of a hit if they do continue to raise rates. It was a very interesting speech, hawkish by most people's standards, but it remains to be seen. Tomorrow we have the BOJ, or is it tonight? Overnight tonight we have the BOJ. Depends on what part of the world you're in. Yeah, that is true. Well, we're here in New York, counting you down to the closing bells with Liz Ann Sonders live in studio, chief investment strategist at Charles Schwab. Great to see you. Nice to be here. Thanks. I'm going to assume you flew all the way here just for us, but I do want to start. This was a pretty consequential week because everybody was really kind of laser-focused on what the Fed would do, whether they would actually heed the market signal that maybe it was time to just nudge rates up a bit. We got that. Leading up to this, though, I thought it was interesting. We started to see the correlation between stocks and bonds shift a little bit, and I am curious as to whether that's something that's temporary or whether we should kind of expect that correlation to tighten even further in the months ahead. So I think we're in a new secular era. I've been writing about this for a while, that the great moderation era, which went from the mid to late 90s up until the inflation.

Analysis

Shares of Generac surged after the company agreed to supply up to $8 billion worth of generators for Amazon's data centers, marking a significant shift from its traditional residential focus. Analysts express concerns about Generac's ability to deliver on this promise, especially as Amazon may also take a stake in the company, indicating a trend of hyperscalers investing in their supply chains.

The correlation between stocks and bonds is shifting, suggesting a potential new secular era in the markets. This change could indicate that the traditional relationship between these asset classes may not hold as strongly in the future, prompting investors to reassess their strategies.

12:50
PDT

Generac's stock rose 19% following a major deal with Amazon.

Generac Amazon Bloomberg Kevin Warsh Bloomberg Equity Indices Middle East Danny Berger Hazlinda Amen PRIVATE

– The deal marks Generac's expansion into the AI-driven data center market.

– Analysts are cautious about Generac's ability to fulfill its commitments.

– Amazon may take a stake in Generac, reflecting a trend among hyperscalers.

– Investor appetite for new names in the energy sector is increasing.

energy supply solutionsAI infrastructurehyperscaler financing

▸ Full transcript

Where intelligence meets capital. Equity indices built on opinions? That's the old way. The new way is Bloomberg Equity Indices, built using transparent, rules-based methodologies that are more responsive to changes in the markets, powered by 450 billion daily data points and backed by research from hundreds of global experts, delivering benchmarks driven by the markets, not opinions. Bloomberg Equity Indices get evolved benchmarks days equity markets. The ongoing conflicts in the Middle East and Ukraine. There's renewed investor appetite for new names in the space. Excellent reporting. I'm Danny Berger and this is Bloomberg deals every Wednesday at 5 p.m. London time only on Bloomberg television. She investors top executives global innovators. Join me for in-depth conversations with them. Biggest newsmakers on the day's top stories. Insight with Hazlinda Amen, only on Bloomberg.

Analysis

Generac's shares surged nearly 19% after securing a transformative deal to supply up to $8 billion worth of generators for Amazon's data centers. This partnership highlights Generac's shift from residential power solutions to a critical player in the AI-driven data center market.

Smart investors should note the potential risks surrounding Generac's ability to deliver on its commitments by 2027-2028, as analysts express concerns about execution and the actual number of generators that can be supplied. Additionally, Amazon's potential investment in Generac indicates a trend where hyperscalers are increasingly financing their own supply chains, which could reshape market dynamics.

12:48
PDT

Generac's stock rose 19% following a major deal with Amazon.

Generac Amazon JP Morgan Bloomberg Oracle Kevin Warsh Bank of Japan U.S. Treasury Vincent Reinhardt Romain Scott Besant AI

– The deal represents a strategic shift for Generac towards the data center market.

– Concerns exist regarding Generac's execution capabilities and delivery timelines.

– Amazon may consider investing in Generac, reflecting a trend among hyperscalers.

– The partnership could influence the broader tech supply chain dynamics.

supply chain riskAI demandcentral bank policy

▸ Full transcript

Some see heroes. Others only egos. We see the era of billionaire athletes. While others follow the noise, we follow the money. The world is repricing risk. Geopolitics, inflation, and AI are rewriting the rules of capital. In Japan, rates are resetting, corporate reform is accelerating and washing...

Analysis

Generac shares surged 19% after securing a deal to supply up to $8 billion worth of generators for Amazon's data centers, marking a significant shift from its traditional residential focus. This partnership highlights the growing demand for backup power solutions in the AI-driven data center sector, positioning Generac as a key player in a rapidly evolving market.

Analysts express concerns about Generac's ability to execute on its ambitious delivery timeline, with potential risks tied to the actual number of generators delivered. Additionally, Amazon's interest in potentially taking a stake in Generac underscores the trend of hyperscalers investing in their supply chains, which could have broader implications for the tech ecosystem and its suppliers.

12:46
PDT

Generac shares rose 19% following an $8 billion deal with Amazon.

Generac Amazon Kevin Warsh Oracle Bloom Wall Street Lizanne Sarnes AMZN

– Concerns exist regarding Generac's ability to fulfill delivery commitments.

– Amazon may take a stake in Generac, indicating deeper supply chain integration.

– Hyperscalers are increasingly financing their own supply chains.

– Market sentiment remains positive following the Fed's recent decisions.

supply chain riskFed policyhyperscaler investment

▸ Full transcript

Is there any issue here that 2027, 2028, when they're supposed to start delivering these things, that that might not actually come to fruition? Well, that's what you're seeing analysts on Wall Street talking about. The concern, really, the risk here is whether or not they're actually going to be able to execute. Also about how many generators are actually going to be able to deliver as opposed to what they're actually claiming that they might be able to deliver. So there's a little bit of uncertainty there. But separate from that, you're also seeing Amazon potentially taking a stake in this company, which we've seen Oracle doing that back with Bloom as well. So this is to show you that these hyperscalers are trying to find their ways into the broader ecosystem as it relates to even their own suppliers. So this is to show you another example of how hyperscalers are becoming the financiers of their own supply chain? Absolutely, and that's what we're seeing here with Generac and some of course on Wall Street talking about some concerns there and as you think about hyperscalers really putting their hands in so many different places if you were to see any sort of hiccup in this broader rally, what could that mean for the ripple effect of all the other companies that they have money tied up in? But certainly this is Amazon really potentially doubling down on not only working with Generac but also potentially investing in the space. Alright, normal under there with our stock of the hour shares of Generac up about 19% at one point hitting the biggest intraday gain going back to 2012. Meanwhile, the broader market remains on an upswing here after digesting the big decision from Kevin Warsh. When we come back, Lizanne Sarnes.

Analysis

Shares of Generac surged approximately 19% after securing a significant deal to supply up to $8 billion worth of generators for Amazon's data centers. This partnership highlights the increasing involvement of hyperscalers like Amazon in financing their supply chains, raising questions about execution risks and potential investments in the sector.

Smart money should note the uncertainty surrounding Generac's ability to deliver on its promises, as analysts express concerns about actual generator output versus projections. Additionally, Amazon's potential stake in Generac could signal a broader trend of hyperscalers integrating more deeply into their supply chains, which may have ripple effects across the industry.

12:44
PDT

Generac's stock surged following an $8 billion deal with Amazon.

Generac Amazon Bloomberg Nora Malinda AI Bloomberg News Bloomberg This Weekend Bloomberg Television Wall Street AMZN PRIVATE DXY

– The deal signifies Generac's shift from residential to commercial power solutions.

– Increased demand for data center energy solutions is driving this transformation.

– Concerns over power grid stability enhance the value of backup power systems.

– Potential for Generac to attract more contracts from tech companies.

AI infrastructureenergy solutionsbackup power

▸ Full transcript

The end of jobs or the end of human struggle. We see the endless funds fueling the AI hype. While others follow the noise, we follow the money. Bloomberg News. Welcome to Bloomberg This Weekend. This is Bloomberg Television. Shares of Generac surging after agreeing to supply up to $8 billion worth of generators for Amazon's data centers. Bloomberg's Nora Malinda joins us now for today's stock of the hour. Nora, thanks for being here. Talk to us about why this is such a big deal, a transformational deal for Generac. Well, it's a massive deal. That's what analysts are saying on Wall Street for Generac, because this is a company that's focused specifically on servicing backup power for houses. So certainly really in the residential space. That's how it's been in terms of a legacy basis. But now the fact that it could be potentially supplying power to the likes of Amazon and potentially this opening the floodgates for other companies as well. It really just shows that they are tackling and hopping in on that AI play, especially as you think about the fact that these data centers need so much power. They take on a lot of enormous amounts of power actually. And so if you think about the fact of the power grid potentially going out, that could risk billions of dollars when you think about computing infrastructure. So the fact that Generac.

Analysis

Shares of Generac surged after the company agreed to supply up to $8 billion worth of generators for Amazon's data centers. This deal marks a significant shift for Generac, traditionally focused on residential backup power, as it expands into the commercial sector driven by the growing demand for data center energy solutions.

The partnership with Amazon not only positions Generac as a key player in the AI infrastructure space but also highlights the increasing reliance on backup power solutions amid concerns over power grid stability. Smart investors should note that this could open doors for Generac to secure additional contracts with other major tech firms, further diversifying its revenue streams.

12:40
PDT

Market anticipates BOJ decision amid Fed rate hikes.

Vincent Reinhardt BNY Investments Bank of Japan U.S. Treasury Scott Besant Generac Amazon Fed BNY BOJ FX Chief Economist FEDFUNDS AMZN PRIVATE

– Potential hawkish BOJ stance could validate yen bets.

– U.S. Treasury's influence on BOJ policy is notable.

– Generac shares surged after a deal with Amazon.

– Market response to BOJ will be critical for FX dynamics.

central bank policycurrency dynamicsmarket volatility

▸ Full transcript

There for, you know, make the impact of monetary policy quite uneven. Vincent, thank you so much for those insights. We always appreciate you joining us, Vincent Reinhardt, Chief Economist at BNY Investments. It's a big week for central banks around the world, Romain. Yeah, I mean, this kind of wraps it up. We'll hear from the BOJ, and really I'm more intrigued by the interplay right now going on between the Bank of Japan and the U.S. Treasury. We'll see if Besant is actually relatively happy with what the BOJ decides. But more importantly, how the market is going to respond to the FX market. We saw some weakening yesterday in the yen after the Fed hike. And that gives you a sense here of what the market wants to see out of BOJ later tonight. And Vincent also made the point that how will Scott Besant put a lid on the five-year Treasury yields? I'll never forget the 'I am the House' comment. Anyway, we'll talk more about that later. Coming up, we have shares of Generac soaring after scoring a deal with Amazon. It's today's talk of the hour. Up next, this is the close on Bloomberg.

Analysis

The market is closely watching the Bank of Japan's upcoming decision, particularly in light of recent Fed rate hikes and the interplay with U.S. Treasury expectations. The potential for a hawkish stance from the BOJ could validate current yen bets, while any disappointment may lead to further market volatility.

Smart money should note the significant divergence in monetary policy approaches between the U.S. and Japan, especially as the Fed's tightening could pressure Japanese yields. The dynamics between these central banks may influence currency movements and broader market sentiment, particularly in the FX market.

12:37
PDT

Fed's unanimous decision indicates strong internal agreement on policy direction.

Fed Chair Warsh FEDFUNDS

– Chair Warsh's hawkish stance suggests potential for multiple rate hikes.

– Financial conditions still viewed as accommodative despite inflation concerns.

– Past inflation misses may lead to more aggressive Fed actions.

– Market may need to adjust expectations for future monetary policy.

Fed policyinflation management

▸ Full transcript

I think there are lots of risks to what the Fed did. With regard to the summary of economic projections, I would note that one participant didn't include himself in the survey, and I would think he's the most important one, Chair Warsh. What I heard yesterday was a chairman in charge. It was a unanimous decision. It wasn't front-run by leaks to newspapers. He got his board on board, even though he's probably the most hawkish member of the board. The reasons he articulated for policy tightening weren't closed; it was about getting the return of inflation to go time-lear. Well, you can always do better on that. He said financial conditions were still accommodative. You seem pretty sanguine about the prospects of spending staying above trend, and he kept regretting all the misses in the 66 months in which inflation has run above the Fed goal. That sounded like somebody was going to tighten a few times, not just what's in the path for the summary of economic projections. Now that, and that seemed to be what the market wanted to a certain degree or another, some confidence that there would be sort of a real effort to sort of tamp down inflation. I guess the question is, is it going to be measured enough where whatever damage to the economy?

Analysis

The Fed's recent decision reflects a unified stance among board members, particularly highlighting Chair Warsh's hawkish perspective on policy tightening to combat persistent inflation. This signals a potential for multiple rate hikes ahead, as the Fed aims to address financial conditions that remain accommodative despite inflation running above target for an extended period.

Smart money should note that the Fed's commitment to tightening may not be as gradual as previously anticipated, indicating a more aggressive approach to managing inflation. The acknowledgment of past inflation misses suggests a readiness to act decisively, which could impact market expectations and asset valuations significantly.

12:35
PDT

BOJ and Fed both adopting hawkish policies.

Bank of Japan Federal Reserve Vincent Reinhardt U.S. Treasury Department Japan U.S.BOJ So Vincent Secretary Yellen DXY FEDFUNDS

– Japanese households are under-diversified in yen-denominated securities.

– Rising 10-year treasury yields are a global phenomenon.

– Dollar-yen trade dynamics are influenced by central bank policies.

– Market pressures may increase due to interconnected monetary policies.

central bank policycurrency dynamicsinterest rates

▸ Full transcript

But it's also the case that Japan, as distinct from the U.S., is under-diversified. They hold, the Japanese household owns way more yen-denominated securities relative to the appropriate risk-taking. In the U.S., that is not the case, and it means we have an external discipline. The dollar moves, capital investors shift from place to place. Being under-diversified means it's harder to put that pressure on Japan. So sort of the interesting question you're asking about Japan is, gee, all the hallmarks of crises coming, why didn't they happen because they're under-diversified? So Vincent, do you have a hawkish BOJ on one side and a hawkish Fed on the other? It almost makes you think which central bank will be winning when it comes to the dollar-yen trade. It also makes you wonder how Secretary Yellen is going to keep a lid on 10-year treasury yields. An important reason 10-year rates are rising is a worldwide phenomenon, including the renormalization of rates in Japan. And if it's all central banks raising the tide to short rates, it's going to put pressure on 10-year yields.

Analysis

The discussion highlights the contrasting monetary policies of the Bank of Japan (BOJ) and the Federal Reserve (Fed), with both central banks adopting hawkish stances. The under-diversification of Japanese households in yen-denominated securities complicates Japan's economic pressures, raising questions about the dollar-yen trade dynamics.

Smart money should note that the rising 10-year treasury yields are influenced by global trends, including the renormalization of rates in Japan. This interconnectedness of central bank policies could create significant volatility in currency and bond markets, particularly affecting the dollar-yen exchange rate.

12:33
PDT

Japan's exit from negative rates is viewed as a success.

Bank of Japan Vincent Reinhardt Federal Reserve Japan And Japan FEDFUNDS

– Low inflation can benefit an aging population by transferring income from the young to the old.

– The U.S. managed to avoid a deflation trap that Japan experienced.

– Differences in monetary policy approaches between the U.S. and Japan are notable.

– The Bank of Japan's policy normalization is a critical development.

monetary policyJapan economy

▸ Full transcript

But that's a huge turnaround. As you sort of grade the progress that they've made, particularly on the monetary policy side, do you think that what has happened so far in this two, two and a half years since they came out of the negative rates has been, if not a success, certainly constructive? It's enormous progress because you have to put the central bank within society at large. And Japan is leading the pack within eight, for most macroeconomic distinctions, that is a very aging population. And for an aging population, low inflation or deep inflation isn't such a bad thing, because it's transferring income from the young to the old. It's not an accident that they live so long without it, with it. And it's to the credit of the Bank of Japan that they were able to manage and exit, or at least a renormalization of the stance of policy. Well, let me just bring this home for a second. I mean, because you were at the Fed's monetary affairs division when we were sort of experimenting with our own, you know, zero, near zero interest rate thing. And I mean, we seem to have avoided, I would think, I mean, you can correct me if you're wrong, that deflation trap that Japan was in, I know we didn't hold that line as long as they did, but what was the difference between what the U.S. did and what Japan had done in all those years prior? So there's a couple of things. One is don't undercount.

Analysis

Japan's central bank has made significant progress in exiting negative interest rates, which is seen as constructive for its aging population. The Bank of Japan's ability to manage this transition highlights a stark contrast with the U.S. approach to monetary policy, particularly in avoiding a deflation trap.

12:31
PDT

Market anticipates a BOJ rate hike, with expectations already priced in.

Bank of Japan Federal Reserve Vincent Reinhardt BNY Investments U.S. Treasury BOE BOJ US BNY New York Main Bostic Treasury Department FEDFUNDS

– The BOJ's decision could validate or disappoint hawkish yen bets.

– U.S. Treasury is pressuring the BOJ to keep pace with the Fed.

– Historical context includes the impact of negative interest rates on inflation.

– Vincent Reinhardt from BNY Investments provides insights on the economic implications.

global monetary policyinterest rate decisions

▸ Full transcript

3:30 p.m. Here in New York. This is the countdown to the close. Armor, Main Bostic, and I miss belly. You know we just got done with the Fed rate meeting yesterday. We had a BOE decision, and now everybody's looking ahead to the BOJ, which should come overnight tonight US time. It's interesting because it's almost becoming like the BOJ is secondary to the guidance because the market has already priced in a hike. So the real risk is whether the governor of the Bank of Japan validates the hawkish yen bets that we are seeing in the market or maybe disappoints them. I don't know. Yeah. And it's kind of interesting we talk about some of the pressure coming from the Treasury Department here in the U.S. for the BOJ to maybe try to keep pace with the Fed, though some would argue the Fed is maybe trying to keep pace with the BOJ. Yeah. They have a hike since I think June, but you know you go back to sort of those zero bound negative interest rate days. And of course, one of the canonical papers on that was the Bernanke-Reinhardt paper back in 2004, which really looked at the effect of negative short-term interest rates, very low interest rates, the effect of course on what happens with inflation and deflation and of course the escape velocity from that. Joining us right now is Vincent Reinhardt, Chief Economist over at BNY Investments to talk a little bit more about this. And before we get to the decision tomorrow, I do want to go back to kind of the.

Analysis

The market is closely watching the Bank of Japan (BOJ) as it prepares for its upcoming decision, with expectations already priced in for a rate hike. The real concern lies in whether the BOJ will affirm the hawkish sentiment surrounding the yen or potentially disappoint market expectations.

Smart money should note the ongoing pressure from the U.S. Treasury for the BOJ to align its policies with the Federal Reserve, highlighting a complex interplay between global monetary policies. This dynamic could influence currency valuations and investor sentiment across markets.

12:29
PDT

Data analysis is crucial for identifying future investment opportunities.

cryptos AI DXY

– Cryptocurrencies are experiencing significant volatility.

– AI investments are currently attracting substantial funding.

– A more analytical approach may outperform speculative trends.

– Investors should focus on sustainable returns rather than hype.

data-driven investmentcryptocurrency volatilityAI funding trends

▸ Full transcript

How do you know what to choose? We get a lot of smart people together. We're analyzing all of the data. We're doing research. And we're pulling all that together to think about what would be the best investment today that will make money in the future. Invest like the future is watching. A fad to some, the future of money to others. We see cryptos' trillion-dollar swings, the end of jobs, or the end of human struggle. We see the endless funds fueling the AI hype. While others follow the noise, we follow the money.

Analysis

The discussion highlights the importance of data analysis and research in identifying the best investment opportunities for future profitability. It contrasts the speculative nature of cryptocurrencies and AI hype with a more grounded approach focused on following the money.

Smart investors should recognize the potential volatility in the crypto market and the ongoing AI investment frenzy, which may not yield sustainable returns. The emphasis on data-driven decision-making suggests a shift towards more analytical investment strategies in a rapidly changing financial landscape.

12:27
PDT

Small insights can lead to significant investment opportunities.

JP Morgan Palo Alto Networks Bernstein JB Hunt Citizens Mark Benioff Salesforce Arizona State University California Community Colleges Die Kleinigkeiten

– Recognizing details is essential for making informed financial decisions.

– The ability to discern patterns may provide a competitive edge.

– Investors should focus on nuanced analysis rather than broad trends.

– Crafting finance involves a deep understanding of underlying data.

investment strategydetailed analysis

▸ Full transcript

Die Kleinigkeiten, da schaust du genauer hin. Denn wo andere nur Details sehen, erkennst du die Möglichkeiten. Das ist für alle, die aus kleinen Insights einen großen Unterschied machen. Das ist for the Craft of Finance.

Analysis

The discussion highlights the importance of recognizing opportunities within small details in finance. This perspective emphasizes that nuanced insights can lead to significant differences in investment outcomes.

Smart money should note that the ability to identify and leverage these insights is crucial in a competitive market, suggesting a potential edge for those who can discern patterns others overlook.

12:25
PDT

Raising funds in the current environment is challenging, even for well-known figures.

Arizona State University California Community Colleges President Crow Chancellor Sonia Ed Plus Arizona State

– Institutional partnerships may provide a pathway for scaling despite funding difficulties.

– The founder's reliance on touring highlights alternative revenue strategies in tough markets.

– Product market fit is established, but scaling remains a critical concern.

– Celebrity status does not guarantee easy access to funding.

fundraising challengesscaling strategiesinstitutional partnerships

▸ Full transcript

You know, as a responsible founder of a company, I don't think it's time for me to raise money to go to a B round. And so what I do is I go around touring every summer, and that's how I pay my employees. I tour to pay my bills, and it's a beautiful thing. I say that with a humble heart because it is hard raising money. I understand the fundraising environment out here is very difficult. You are very well known, and you have a certain celebrity not only within the music community but within the tech community that I would assume would actually maybe get you in the door of a lot of places that other people would not be able to get into. No, that's not all the case. No, it's not. What's the pushback? They don't believe in you, or they don't think that you're legitimate? What? No, so it's traction. So there is a stumbling block that we have, and that is like, how do we scale? And the scaling is gonna come in V2. And so that's why I really think President Crow at Arizona State University and all the folks at Ed Plus at Arizona State, and then Chancellor Sonia at California Community Colleges see what it is we're trying to do. And now that we have not only product market fit, we have institutions that are gonna help us scale across the students because our vision matches the same ambition.

Analysis

The founder of a tech company expressed challenges in raising funds for a B round, relying instead on touring to pay employees. Despite having product market fit and institutional support, scaling remains a significant hurdle due to traction issues.

12:23
PDT

Emphasis on individual ownership of predictive data systems.

Mark Benioff Salesforce FYI GPS ASU GSV

– Potential disruption of traditional business models.

– Progress in fundraising efforts indicates market fit.

– Growing trend towards aligning business with personal values.

– Innovative companies may attract increased investor interest.

data ownershippredictive analyticsmarket fit

▸ Full transcript

Just a correction, we're not going to become agents; we're going to have and own our own agents by empowering ourselves with our own data and then, you know, refining that data and agents that we build that reflect our beliefs, our concerns, our perspective, our points of view. So that we have, you know, a navigator to get us to, you know, our aspirations and dreams with aspirational GPS. And so it's something I think people should own. It's a human right to have a mathematical system that is our own, not a company's, like predicting you, a system that allows you to predict how you are going to materialize your ideations, how you are going to achieve the goals and the dreams that you want to see unfold. And no company should possess that; that should be the individual. These are powerful times, transformational times, and these times are going to awaken the imaginary in all of us. I do have to ask you about your business relationship with Mark Benioff, founder of Salesforce. At that ASU GSV summit a few months ago, you said that Benioff actually helped to kick off FYI's A round, and that the company had kind of finally reached this sort of market fit. Can you give us any update about sort of how much money you've raised and whether you're looking to raise more? Yeah, so.

Analysis

The discussion highlights the importance of individual ownership of predictive data systems, emphasizing that such tools should empower personal aspirations rather than serve corporate interests. Additionally, the conversation touches on the business relationship with Mark Benioff and the progress of fundraising efforts, indicating a potential shift in market dynamics as companies seek to align with personal values and goals.

Smart money should note the growing trend towards personal data ownership and predictive analytics, which could disrupt traditional business models. The mention of market fit and fundraising progress suggests that innovative companies may be gaining traction, potentially attracting investor interest in the tech sector.

12:21
PDT

Palo Alto Networks' valuation concerns arise despite strong AI-driven growth potential.

Palo Alto Networks Bernstein JB Hunt Citizens AI JB Palo Alto PRIVATE

– JB Hunt's demand remains robust, but cost pressures could weigh on earnings.

– Market reactions indicate cautious optimism in the cybersecurity and transportation sectors.

– Analysts are adjusting price targets based on sector performance and company outlooks.

– Investors should monitor the balance between growth potential and cost challenges.

cybersecurity sectortransportation costsAI-driven growth

▸ Full transcript

The coolest thing you can grow with money. What do you actually do? Is this just for rich people? How do you know what to choose? We get a lot of smart people together. We're analyzing all of the data. We're doing research. And we're pulling all that together to think about what would be the best investment today that will make money in the future. Invest like the future's watching. This is Bloomberg. Time now for our top calls. The big movers on the back of analysts' recommendations. And we start off with Palo Alto Networks. Bernstein downgraded the cybersecurity name to market perform, saying the entire sector may have gotten over its skis. Given the rally this year, Palo Alto has more than doubled so far. The firm, though, does boost its price target to 351 and argues that many AI-driven cybersecurity priorities have some natural growth headroom. Palo Alto shares up fractionally on the day. Next up, let's take a look at JB Hunt. Citizens raised its rating to outperform from market perform, despite the trucking company's warning yesterday that the higher cost for fuel and recruiting will hurt its earnings. The firm also boosted its price target to 300 bucks on the back of some commentary from management at JB Hunt, saying that demand remained strong across all.

Analysis

Palo Alto Networks was downgraded to market perform by Bernstein, which cited potential overvaluation in the cybersecurity sector despite raising its price target to $351. JB Hunt received an upgrade to outperform from Citizens, even as management warned about rising fuel and recruitment costs impacting earnings.

12:17
PDT

Oil volatility is low despite prices above $100.

Phoebe White UBS Rob Bonta Mesa Rich will.i.am Dreamforce Mandy Su Sebo Global Markets VIX QQQ SPX Ukraine QQQ SPX CL=F FEDFUNDS

– US economy shows resilience against geopolitical headwinds.

– Investors exhibit confidence with minimal downside hedging.

– Expect widening volatility premium as earnings season approaches.

– Tech trade fears are subsiding, impacting derivatives market.

oil price volatilityUS economic resilienceinvestor confidenceearnings season dynamics

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It kind of fears over the tech trade, the AI trade, subsiding, and then on top of that, just a kind of general pickup in macro volatility. So you've seen that premium between, like, say, QQQ versus SPX narrow, partly because QQQ vol is coming down, but also because SPX vol relative is also going up. Yeah. When you look at sort of where we are right now, in terms of what you're seeing in derivatives and options market, was this how you thought things would be, say, in January, February, or did it materially change as the year went on? In terms of the setup and volatility, I think if you had told me that we'd been this protracted war geopolitical conflict with oil back up to $100, I would probably have thought there would be more of a macroeconomic impact. So I do think it's surprising how resilient the US economy has been year to date in the face of all of these headwinds. And I think that's one of the reasons why the Fed is hiking rates, right? It's because, as Worsh said, because of resiliency. I mean, it's obviously laudable. And obviously the market likes that. I mean, we're talking about a market despite some of the recent hiccups. It's not far from its record highs. I mean, history says oil prices should probably be a lot higher given everything going on, not only in the straightaway moves, but in Ukraine and elsewhere. And then obviously just a lot of geopolitical risk. And yet, you know, companies, the bottom lines, have held up. Top lines have been created, at least for uncertain industries. And like I said, I mean, when we've talked a bit about this with you on the program, the kind of lack of downside hedging just shows a certain level of confidence that investors have.

Analysis

Oil prices have surged back to $100 per barrel, yet market volatility remains surprisingly low, indicating that traders perceive this as a persistent drag rather than a severe risk. The resilience of the US economy amidst geopolitical tensions and high oil prices is noteworthy, as it has led to a lack of downside hedging, reflecting investor confidence.

12:15
PDT

Earnings season volatility may increase compared to the last quarter.

UBS Phoebe White California Attorney General Rob Bonta Mesa Rich Will.i.am Sebo Global Markets Mandy Su VIX BOE ECB BOJ U.S.

– Traders are pricing in more uncertainty for individual stock performance.

– Higher interest rates historically lead to greater dispersion in stock returns.

– The current macro and geopolitical environment will be key drivers of market volatility.

– Oil prices and Treasury yields are influencing market sentiment.

earnings season volatilityinterest rate impactmarket dispersiongeopolitical risks

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In midterm election years, volatility tends to be a little bit higher. But I don't think that's going to be the catalyst that introduces significant volatility in the market going into the year-end. I think it's going to be much more on the macro and geopolitical environment. I mean, we're about a month away from the start of the next earnings season. Yes, which feels like the current, as you just ended, like two minutes ago. But give us a sense here as to what we should expect in terms of an increase in any sort of hedging volatility as we start to go into those earnings. Because I feel like this earnings season, at least from a fundamental basis, is going to be a little bit different than the last couple of seasons where we kind of knew everybody was going to beat, and everybody was going to raise. I feel like the commentary we're going to get this quarter is going to be a little bit different. So I would say compared to this past earnings season, like this past earnings season was really historic in terms of just how much volatility was being priced into the market by options traders for the single moves, single stock moves during earnings. So one of the measures we look at is dispersion. You can look at, for example, VIX EQ versus the VIX Index, which tells you how much additional volatility traders are pricing in for single stocks. That hit a record high in July on the last earnings season. That has since halved. Now, I would expect going into the next earnings season, that spread to start to widen again, particularly, I think, given that we're now in a higher interest rate environment. Higher rates historically have also been a dispersion driver, with people picking the winners or losers in a higher rates environment. So I would expect that premium to start widening again. We do see a lot of people looking at.

Analysis

The upcoming earnings season is expected to differ significantly from the previous one, with a potential increase in hedging volatility as traders anticipate varied outcomes. The current higher interest rate environment is likely to drive dispersion in stock performance, as investors seek to identify winners and losers amidst the changes.

12:12
PDT

Upcoming expiration of $2 trillion in derivatives may increase market volatility.

Mandy Su Sebo Global Markets oil Treasury VIX AI US CL=F

– Oil prices are above $100, but volatility remains low.

– Strong retail sales are supporting equity market stability.

– AI trade focus is mitigating investor fears.

– Oil traders perceive current conditions as a persistent drag.

market volatilityoil pricesAI traderetail sales

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$2 trillion in derivatives will expire, which could lead to a spike in volatility across the market. Mandy Su, the vice president and head of derivative market intelligence at Sebo Global Markets, joins us now. Mandy, thank you so much for joining us in person. So we do have the witching tomorrow. We have oil above $100 per barrel. We have Treasury yields hitting 5% at least, not today. Why aren't we seeing markets freak out more? Yeah, it's actually very interesting. We've seen some pretty big moves, I would say, in underlying assets, where you flag like the 5% move in yields and also oil. But if you look at volatility in those asset classes, they've actually been pretty tame. I would say specifically oil markets, something that we highlighted this week, where oil prices back to $100, oil volatility barely above the lows of the year. And that's telling you that oil traders see this as more of a persistent drag rather than a potential for severe tail events. So that tail risk premium in the oil market has come down quite a bit. And I would say in the equity market, it's really the focus has been on the AI trade, which as we've seen with earnings, a lot of the fears of that have dissipated. And then also the focus has been on the underlying US economy and the fact that the underlying economy is still so strong, particularly we sell with retail sales. I think those have helped suppress volatility for equity markets in particular. So you've seen some of the biggest VIX trades of the past two weeks. Is that smart hedging or do you think investors are maybe bracing themselves for something bigger? Yeah, so we've seen a notable trend. I would say over the past two, three weeks, it's been...

Analysis

The expiration of $2 trillion in derivatives could lead to increased market volatility, yet current volatility levels remain surprisingly low despite significant moves in oil and Treasury yields. Oil prices have returned to $100 per barrel, but oil volatility is near yearly lows, indicating traders view this as a persistent issue rather than a severe risk event.

Smart money should note that while volatility in oil and equity markets has been subdued, the focus on AI and strong retail sales is helping to suppress fears. This suggests that underlying economic strength may be providing a buffer against potential shocks, even as derivative expirations loom.

12:11
PDT

Scott Rubner is increasingly constructive on market outlook despite short-term challenges.

Citadel Scott Rubner Ed Yardeni S&P Phoebe White UBS ECB BOE BOJ Treasury Department Tronsi Lacquant Lake Homo

– Ed Yardeni has adjusted his S&P target timeline to mid-next year.

– Phoebe White believes 10-year yields have risen too quickly.

– Inflation trends are expected to improve as supply shocks diminish.

– The oil market poses a significant near-term risk.

market sentimentinterest ratesinflation trendsoil market risk

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The economy, media, and information. Markets, trade, geopolitics. Some see heroes. Others only egos. We see the era of billionaire athletes. While others follow the noise, we follow the money. Bringing you up to the minute economic news whenever you're in a situation like this. I'm Tronsi Lacquant on Lake Homo, Italy, and this is...

Analysis

Citadel's Scott Rubner is becoming more constructive on the market despite a short-term unfavorable supply-demand setup, indicating a potential shift in sentiment. Ed Yardeni has downgraded his S&P target timeline, now expecting a rise to 8,400 by mid-next year, while still maintaining a cautious yet bullish outlook.

Phoebe White from UBS suggests that the recent rise in 10-year yields may have gone too far too fast, driven by monetary policy expectations. She highlights that the main risk in the near term is the oil market, emphasizing the importance of monitoring inflation trends as supply shocks fade.

12:09
PDT

NASDAQ up over 500 points post-Fed rate hike.

NASDAQ Philly Semiconductor Index Citadel Scott Rubner Ed Yardeni Phoebe White UBS ECB BOE BOJ Treasury Department Mesa Rich PRIVATE FEDFUNDS CL=F

– Philly Semiconductor Index increased by more than 3%.

– Analysts expect one more rate hike in December.

– Ed Yardeni has adjusted S&P target to $7,900 for mid-next year.

– Concerns about inflation driven by supply shocks rather than underlying issues.

Fed policyinflation dynamicstech stock performancebond market expectations

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Those oil prices. Alright Phoebe, always great to have you. Really smart Phoebe White, head of US Rates Strategy over at UBS. She's kicking us off to the close here on this Thursday afternoon, a post-Fed day, but still a big focus on things going on in the world of government. A little bit later we're going to have an exclusive conversation with California Attorney General Rob Bonta on everything from the Paramount deal to the battle over mail and voting. Plus, parking lots, art packs, and food courts are buzzing again. That's as choppers make their way back into the malls. We'll find out what the deal is when we talk to the CEO of Mesa Rich, the third largest operator of shopping centers. And we're going to get it started with Grammy Award-winning singer, songwriter, and now tech CEO Will.i.am. We're going to talk to him about his speech that he's having out at Dreamforce, the investments or maybe lack thereof in FYI.ai, and his future for our agentic selves. All that more coming up in a bit right here on the close right here on Bloomberg. For these in data, not only data, they are the whole thing. This is for the craft of finance.

Analysis

Tech stocks are rallying significantly following the Fed's interest rate hike, with the NASDAQ up by over 500 points, indicating strong market sentiment. Analysts are cautiously optimistic, with some expecting further rate hikes while noting that inflation pressures may ease as supply shocks diminish.

Smart money should note that while the Fed's actions have led to a short-term rally, the underlying inflation dynamics are complex, with differing signals from core CPI and core PCE. Additionally, the anticipated monetary policy shifts could lead to a bull steepening in the yield curve, suggesting potential opportunities in duration management across different markets.

12:07
PDT

Global yields are rising due to supply factors.

ECB BOE BOJ U.S.Germany Treasury Department IG CL=F

– Expectations of a bull steepening in the yield curve.

– Central banks may be overpricing future rate hikes.

– U.S. growth may outperform compared to Europe.

– Oil prices pose a significant near-term risk.

global yieldscentral bank policyoil market riskduration positioning

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Globally, factors have been contributing to this move higher in global yields that will continue to remain a focus, with duration supply not just coming from the Treasury market but also the IG corporate market. All of that has played a role. Those factors are not going away. As we think about the moving yields here over the next few months, what we're expecting is more of a bull steepening in the curve where the front end can probably come off, but the long end stays a bit better anchored at these higher levels. What is the interplay between interest rates around the world right now? Obviously, the ECB was out in front and raising rates. The BOE seems to at least kind of stand back for now. And of course, there is a lot of pressure on the BOJ, at least apparently by the Treasury Department, to actually maybe start to lift their rates once again. Well, I think the common theme we've seen in all of these markets is we're pricing in a lot of tightening from all of these central banks. I think that theme of maybe pricing in a bit too much is common across a lot of these markets. We think for most central banks we will see around two hikes. When we think about cross-market opportunities, we feel a bit better about adding duration in Germany, for example, where we could start to see some of those tightening expectations start to weigh on growth a bit more than the U.S. So we still think there's some opportunity for growth outperformance in the U.S. versus elsewhere. When you look at the bond market, what's more dangerous for them here? Is it another oil spike or maybe them deciding that the fiscal deficit has just become too big to ignore? I think near term the bigger risk is the oil market. We don't know what the end game is of this war.

Analysis

Global yields are rising, driven by a combination of Treasury and investment-grade corporate market supply, with expectations of a bull steepening in the yield curve. Central banks are pricing in significant tightening, but there may be an overestimation of future rate hikes, particularly in the U.S. compared to Europe.

The interplay of global interest rates suggests that while the U.S. may see growth outperformance, the risks from oil prices and fiscal deficits loom large. Smart money should consider the potential for a shift in monetary policy expectations that could impact bond yields and overall market sentiment.

12:04
PDT

One more rate hike expected in December.

Fed CPI PCE FEDFUNDS

– Inflation likely to decrease as supply shocks fade.

– 10-year yields may have risen too quickly.

– Core CPI and core PCE show differing inflation signals.

– Monetary policy expectations are key drivers of yields.

monetary policyinflation trends

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That certainly leaves the door open for more. We think we will get one more hike in December, but that will probably start to see some progress on inflation as we turn into 2027. So I think there's still too much tightening that's priced into the curve. With regard to the progress that we make on inflation, is that gonna be because of the Fed or just sort of happenstance, if you will? Right, so we think that most of the run-up in inflation so far this year has primarily been due to supply shocks, right? And so as those supply shocks fade, we should naturally see inflation coming down. We don't really see an underlying inflation problem right now. You look at core CPI versus core PCE, the two main measures of consumer price inflation, those are sending very different signals. And we think that the signal we're seeing in CPI and some of these other measures of trend inflation are actually probably the better signal here. What about the 10-year yield? It's hit 5%, although now we're seeing a bit of a relief. Do you think that the market can sustain that or do you think that it has gone too far too fast? We think it's gone a little bit too far, too fast. I think the main driver of 10-year yields that has pushed it here has been this shift in monetary policy expectations. Certainly when you look at the move in yields we've had throughout the year, where we were at the start of the year, right just before the breakout of the war, we've seen a massive shift in monetary policy expectations to now pricing nearly four cumulative hikes through next year. So we think that that's moved a bit too far. I think monetary policy expectations will continue to be the main driver of yields.

Analysis

The market anticipates one more interest rate hike in December, with inflation expected to decrease as supply shocks fade. Current monetary policy expectations have driven 10-year yields up to 5%, but there is a belief that this increase may have been excessive and unsustainable.

Smart money should note the divergence between core CPI and core PCE signals, suggesting that underlying inflation pressures may not be as severe as perceived. Additionally, the shift in monetary policy expectations could lead to a recalibration of yields, impacting investment strategies moving forward.

12:02
PDT

Scott Rubner is increasingly constructive on equities despite short-term supply-demand challenges.

Citadel Scott Rubner Ed Yardeni S&P 500 AI US UBS Phoebe White

– Ed Yardeni has adjusted his S&P target timeline, now expecting 8,400 by mid-next year.

– The market is experiencing a rotational drawdown rather than a disorderly sell-off.

– AI leadership in the market is broadening, indicating potential growth areas.

– Caution remains in the market outlook despite positive earnings momentum.

equity market outlookAI leadershipS&P target adjustmentssupply-demand dynamics

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will actually be more than balanced out by lower costs for almost everything else. Citadel's Scott Rubner, who three weeks ago was actually preaching a bit of caution, out there today says he's actually growing increasingly constructive on what comes next with the recent equity drawdown being rotational rather than disorderly and AI leadership in his view broadening. The asterisk though is that a long-term upside story, while in the short term the supply-demand setup in September still remains unfavorable and the technical backdrop in his view is still a bit of a grind. Ed Yardeni, who last month upgraded his S&P target to $8,400 from $8,250, that level which was actually the highest on the street, now, and at the time he was citing fabulous earnings momentum, he's now paring that down just a bit. He still sees an implication of about a 4% rise in the S&P from yesterday's close, but he's still cautious, but well, I guess to a certain extent, still bullish. I'm thinking it's going to take a little longer to get to 8400. I don't think it's likely to happen by the end of the year now; I think it's more likely to happen by the middle of next year. 7900 is still obviously above where we are now, so it would still give us an awfully good year of returns. And as the market actually starts to reposition here, a lot of questions about what comes next. Phoebe White is head of US rates strategy at UBS, and you join to see her in studio. Phoebe, great to see you. Thanks so much for having me. Probably.

Analysis

Citadel's Scott Rubner is shifting from caution to a more constructive outlook on equities, noting that the recent drawdown has been rotational rather than disorderly, with AI leadership expanding. Meanwhile, Ed Yardeni has slightly downgraded his S&P target from 8,400 to a more cautious timeline, suggesting a potential rise of about 4% from yesterday's close but indicating it may take longer to reach his previous target.

12:00
PDT

NASDAQ up over 500 points, indicating strong tech performance.

Generac Amazon Nvidia AMD Broadcom Marvell Qualcomm Dell Securitize Coinbase Robinhood SEC AAPL FEDFUNDS NASDAQ PRIVATE S&P

– Philly Semiconductor Index rose more than 3%, signaling robust demand.

– S&P 500 on a winning streak, reaching its highest level in a month.

– Generac shows strong buy ratings, with potential for significant price increase.

– Securitize's stock surged 17% following SEC approval for digital securities.

Fed policytech sector strengthsemiconductor demanddigital securities

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To bring in along those stocks. Always a pleasure. All right, and for more conversations like this, listen to our new Stock Movers podcast, subscribe for five-minute episodes on the biggest winners and losers in the stock market. Listen to Stock Movers on Apple, Spotify, or anywhere you get your podcast. Take a look at the markets here a day after the Fed did the expected and raised interest rates for the first time in three years. We've got ourselves a nice rally here, Lisa. And tech stocks really outperforming the rest of the market today. We've got the NASDAQ up by 413 points, but wanted to point out the NASDAQ 100 up nearly 500 points now, or more than one and three-quarters percent. This is Bloomberg Business Week. Bringing you up-to-the-minute news, whenever and wherever it happens. I'm Joe Matthew in Chapel Hill, North Carolina, and this is Blue Knee. The countdown is on. Everything you need to get the edge at the end of the market day. This is the close. Sentiment shifts, anticipation rises for a change in direction for inflation. Live from Studio 2, here at Bloomberg headquarters in New York, I'm Romaine Bostick. And I'm Isabel Lee. We're kicking off to the closing bell here in the U.S. and this is where we stand. You're seeing an S&P that's higher by more than 1%. It actually is on the second day of winning streak and it's at the highest level in at least a month. And of course at the heart of that rally is the Philly Semiconductor Index higher by more than 3%. This actually saw a bit of a roller coaster.

Analysis

Tech stocks are rallying significantly following the Fed's first interest rate hike in three years, with the NASDAQ up by over 500 points. The Philly Semiconductor Index is a key driver of this rally, reflecting strong investor sentiment in the tech sector.

Smart money should note the resilience of semiconductor stocks, which are outperforming despite recent volatility. This suggests a potential shift in market dynamics, where tech may lead the recovery as inflation expectations evolve.

11:58
PDT

Securitize's stock rose 17% after SEC approval for digital stock trading.

Securitize Coinbase Robinhood SEC Bloomberg World Large, Small and Mid Cap Index SECZ CYN HOOD Bloomberg World Large Mid Cap Index Clarity Act CYN PRIVATE DXY

– Coinbase and Robinhood also saw gains of 5% and 3%, respectively.

– The fintech sector remains volatile due to regulatory uncertainties.

– Securitize is not in the S&P 500 but is part of the Bloomberg World Large, Small, and Mid Cap Index.

– Market cap of Securitize is around $1 billion.

digital securitiesfintech volatilitytokenization

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Securitize, a digital securities platform, actually went public in early July through a blank check merger. SECZ is the ticker, up about 17% on its best day since June 29th. The SEC did give the green light for the digital versions of stocks to start trading in the U.S. If you look at other tokenized stocks, the tokenized specifically Coinbase, CYN, the ticker is up about 5% today. Robinhood, with the ticker symbol HOOD, is up about 3%, on pace for its best day since September 3rd. Securitize is not in the S&P 500; it is actually in the Bloomberg World Large, Small, and Mid Cap Index, and it has a market cap of around a billion dollars. That's why you're seeing that get a boost on the crypto outlook and what it could mean for tokenization, along with its peers. It's interesting because the Clarity Act was a no-go in the Senate, and these stocks took a big hit. Then, Bingo, they bounced right back. The SEC comes back in and gives the green light on that. It remains to be seen exactly how the regulatory aspect will play out, as it is sensitive to that, as well as the direction of Bitcoin.

Analysis

Securitize, a digital securities platform, surged 17% following the SEC's approval for digital versions of stocks to trade in the U.S. This bounce back comes after a previous setback related to regulatory uncertainties, highlighting the volatility in the fintech sector.

Smart investors should note that while Securitize is smaller than its peers, its recent performance indicates a strong market interest in tokenization and digital assets. The regulatory landscape remains sensitive, and further developments could significantly impact the valuation of similar companies in the fintech space.

11:55
PDT

Generac has 16 buy ratings and no sell ratings.

Generac S&P 500 Amazon Nvidia AMD Broadcom Marvell Qualcomm Dell Brian Drabb MAG7 AMZN AMZN NVDA FEDFUNDS

– Analysts predict Generac's stock could double in 12-18 months.

– Amazon stock is up about 2%, in line with other MAG7 stocks.

– Nvidia is the best percentage point gainer in the S&P 500.

– Market recovery is observed after a knee-jerk reaction to the Fed meeting.

tech sector recoveryinvestment sentimenthousing market dynamics

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Data centers have been the hot play for a while when it comes to data centers over the last few years. Generac issued a warrant statement for a potential stake in the company, making it another play to watch. Compared to the S&P 500's gain of a little more than 10% this year, Generac is well outperforming the broader market. On the sell side, Generac has 16 buys, six holds, and zero sells. Analyst Brian Drabb from William Blair stated that the stock could potentially double in price over the next 12 to 18 months. Additionally, Amazon stock (AMZN) is up about 2%, moving in sympathy with other MAG7 stocks today. Notable chip movers include Nvidia, which is the best point gainer today in the S&P 500, along with AMD, Broadcom, Marvell, Qualcomm, and Dell. This comes after a sell-off that was perceived as a knee-jerk reaction to the Fed meeting, with buyers returning to the market.

Analysis

Generac is outperforming the S&P 500 with a significant number of buy ratings, and analysts predict the stock could potentially double in price within the next 12 to 18 months. Meanwhile, Amazon and other tech stocks are rallying, indicating a broader recovery in the market after recent volatility following the Fed meeting.

Smart money should note the resilience of Generac amidst market fluctuations, as its strong buy ratings suggest confidence in its growth potential. Additionally, the rally in tech stocks, particularly in the context of the MAG7, signals a possible shift in investor sentiment towards growth-oriented sectors despite recent headwinds.

11:53
PDT

Home builders report rising costs due to inflation in materials and labor.

Lenar Drew Bloomberg Intelligence U.S. home builders Federal Reserve AI Bloomberg Business Week Daily Carol Masser Tim Steneveck Bloomberg Radio Alexis Christophers Lisa Mateo PRIVATE

– Consumer confidence is low, leading to a wait-and-see approach among potential buyers.

– Pending home sales have improved slightly but remain 20% below normalized transaction levels.

– 67% of current mortgage holders have rates below 5%, limiting market mobility.

– Higher-end markets are relatively better positioned than entry-level segments.

housing market dynamicsconsumer confidencebuilder sentimentmortgage rates

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We see the endless funds fueling the AI hype. While others follow the noise, we follow the money. It touches on everything that we care about: the economy, media and information, markets, trade, and geopolitics. This is Bloomberg Business Week Daily with Carol Masser and Tim Steneveck on Bloomberg Radio and Television. Alexis Christophers is here along with Lisa Mateo. Carol and Tim have the day off; they're actually traveling back from Huntington Beach, California. They were at the Future Proof Wealth Management Festival, an outdoor festival. I saw Carol post a picture. There were palm trees. I know, it was quite lovely. But they are on a plane back, so Lisa and I are holding down the fort here. Time off for a look at some stocks on the move with about a little over an hour to go here in the trading day. We've got Bloomberg News, U.S. equities deputy team leader Jess Menton in studio with us. Jessica, good to see you. You brought along some goodies today, Generac. That is the company that manufactures generators. They're in the news today. What's going on?

Analysis

U.S. home builders are facing challenges due to rising home prices, increasing mortgage rates, and weakened consumer confidence, leading to a cautious market outlook. Despite a slight uptick in pending home sales, the existing home market remains depressed, with many current mortgage holders reluctant to move due to low rates.

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