>> I'M MATT MILLER.
WE ARE COUNTING DOWN ANOTHER 36 HOURS UNTIL WE GET NVIDIA
EARNINGS. THE MARKET SEEMS TO WANT TO SIT
ON ITS HANDS AND WAIT. THE COUNTDOWN TO THE OPEN
STARTS NOW. FUTURES ON HOLD WITH ANOTHER
DAY OF BUSY FED SPEAK. MACY'S AND LOWE'S BETTER THAN
EXPECTED RESULTS. NVIDIA EARNINGS TOMORROW AFTER
THE BELL ALREADY IN FOCUS. INSIGHT ON THE STATE OF THE
CONSUMER. >> IN MODERATION.
THIS IS WHY IT IS DANGEROUS FOR THE FED TO WAIT SO LONG BECAUSE
WE ARE NOT THE ECONOMY OF LAST YEAR IN TERMS OF REALLY FIRING
ON ALL CYLINDERS. THINGS ARE MODERATING.
THERE ARE MORE RISKS TO THE DOWNSIDE ON THE LABOR MARKET IN
PARTICULAR. YOU DO SEE SIGNS OF CONSUMERS
FALTERING. THOSE ARE RISK CASE. WE DON'T SEE THEM IN BASELINE.
MATT: JOINING US TO DISCUSS DAVID
SOWERBY OF ANCORA. INTERESTING TO GET HER TAKE.
IT WAS THE OPPOSITE OF WHAT WAS SAID YESTERDAY WHICH IS THE FED
HAS GOTTEN USED TO NORMAL INTEREST RATES AND WE SHOULD
STAY AND HE THINKS THEY COULD INFLATE A BUBBLE. DAVID: THE STATE OF THE CONSUMER IS
VERY HEALTHY. CONSUMERS DEFY THE LAW OF
GRAVITY. IN MY CAREER AS AN INVESTOR'S
AT THAT NEVER BET AGAINST THE U.S.
CONSUMER AND THAT IS WHY I AM STILL OVERWEIGHT CONSUMER
DISCRETIONARY STOCKS, A. BETTER THAN AVERAGE BACK STOCK.
THERE ARE ALWAYS GOING TO BE RISKS BUT THE BIGGEST RISK IS
NOT TAKING ENOUGH SUFFICIENT RISK. MATT: A LOT OF TALK ABOUT MODERATION.
I HEARD SOMEONE SAY YESTERDAY WE ARE MODERATELY MODERATING.
IS THE CONSUMER STILL -- I KNOW GOING TO BE THE GROWTH ENGINE
FOR THIS ECONOMY. THERE IS NO OTHER CHOICE BUT AS
STRONG AS THIS CONSUMER WAS COMING OUT OF THE PANDEMIC,
HIGHER INCOME CONSUMERS SUPPOSEDLY STEP DOWN TO SHOP AT
PLACES LIKE WALMART AND OBVIOUSLY DEBT CONTINUES TO BE
RISING AND DIFFICULT TO JUDGE. DAVID:
WE TAKE A STEP BACK AND TAKE A LOOK AT HOW MANY CONSUMERS HAVE
NO MORTGAGE OR A MORTGAGE RATES AT 3.5% OR EVEN LOWER.
THEY HAVE BEEN VERY GOOD, MUCH LIKE U.S.
CORPORATIONS, LOCKING IN LOW-COST DEBT AND EXTENDING THE
DURATION. THERE IS STILL EXCESS SAVINGS
FOR THE U.S. CONSUMER. THE KEY WILL BE ON A GO FORWARD
BASIS AS LONG AS REAL AFTER TAX INCOME, PERSONAL INCOME, IS GOING TO PRESENT -- 2% TO 2.5%,
THAT HELPS IN THE DISCRETIONARY SECTOR. MATT:
WE SAW A REPORT OUT TODAY ON NEW YORK. YOU MENTIONED A LOT OF
CONSUMERS DON'T HAVE A MORTGAGE. HERE IN NEW YORK THAT IS
BECAUSE THEY ARE PAYING RENT AND ONLY 5% OF THE APARTMENTS
ARE AFFORDABLE ACCORDING TO ZILLOW.
IF THAT IS THE ISSUE IN THE BIG CITIES, ISN'T THAT A PROBLEM?
DAVID: IT CAN BE, BUT IF YOU THINK
ABOUT THIS COUNTRY IN AGGREGATE, WHERE I LIVE IN
MICHIGAN IN THE MIDWEST, THERE IS A MANUFACTURING RENAISSANCE
THAT IS TAKING PLACE WITH ON SHORING AND RE-SHORING AND
MICHIGAN ON RATE -- ON PAR WITH THE U.S.
ONCE YOU GET OFF WALL STREET AND GET ON MAIN STREET, THE U.S.
HOUSEHOLD IS STILL IN BETTER THAN AVERAGE SHAPE.
I WOULD GIVE IT A SOLID LETTER GRADE B OR A B PLUS. MATT:
I WANT TO GET TO THE FED SPEAK THAT WE HAVE BEEN WATCHING
ALREADY A WEEK IT FEELS LIKE. IT CONTINUES ON AMELIA ISLAND.
MICHAEL MCKEE CAUGHT UP WITH THE FED PRESIDENT LORETTA
MESTER. >> I WAS ON THE RECORD SAYING I
WAS AT THE MEETING IN WHICH THE DEVELOPMENTS I HAVE SEEN IN THE
ECONOMY RIGHT NOW I WOULD NOT THINK THAT IS STILL APPROPRIATE
BECAUSE THE INFLATION RISKS THAT WE'VE GOT. MATT:
MICHAEL MCKEE JOINS US FROM AMELIA ISLAND.
FASCINATING EXCLUSIVE INTERVIEW THERE WITH LORETTA MESTER. WHAT ARE WE HERE TODAY AND
WAITING FOR TODAY STILL? MICHAEL:
EVERYBODY IS WAITING ON WALL STREET FOR SOME SIGN OF WHEN
THE FED MIGHT CUT BUT THEY ARE UNANIMOUS IN SAYING THEY ARE
NOT GOING TO TELL YOU. THREE IS OFF OF THE TABLE
LORETTA MESTER SAYS BUT SHE AND OTHERS HAVE BEEN SAYING THAT
FOR QUITE SOME TIME. THE QUESTION IS WHAT MIGHT BE
ON THE TABLE, AND EVERYONE'S ANSWER IS THEY HAVE TO WAIT AND
SEE THE DATA. WE GET A LOT OF FED SPEAK TODAY.
NOT EVERYBODY IS TALKING IN AREAS WHERE THEY MIGHT MAKE
SOME NEWS BUT CHRIS WALLER IS SPEAKING NOW AND LATER SUSAN
COLLINS FROM BOSTON WILL ADD HER VOICE TO THE WHOLE THING.
WE SHOULD SEE ANOTHER COUPLE PEOPLE WHO HAVE WADED INTO THE
DEBATE. WALLER IS MORE OPTIMISTIC THAN
HE HAS SOUNDED IN THE PAST. TODAY HE SAID MORE RECENT DATA
REQUIRES RESTRICTIVE POLICY IS HELPING AGGREGATE DEMAND AND
SUGGESTS PROGRESS TOWARD 2% HAS LIKELY RESUMED.
IN THE SPIRIT OF THE FIGHT, I WANT TO GIVE YOU GUYS SOMETHING
TO TALK ABOUT. CHRIS WALLER TAKES OBJECTION TO
THE WALL STREET VIEW THAT THE FED IS OVERLY DATA-DEPENDENT.
HE SAID IN HIS SPEECH TODAY, I HEAR FROM SOME WHO SAY THE FOMC
HAS BECOME OVERLY DATA-DEPENDENT.
THIS IS A PHRASE THAT HONESTLY DOESN'T MAKE MUCH SENSE TO ME. THE FEDERAL FUNDS RATE AT THE
END OF 20 24 MOVED BY 50 BASIS POINTS BETWEEN THE ECONOMIC
PROJECTIONS OVER 2024 AND HELD IT TO THE MEDIUM OF THREE RATE
CUTS OVER THE PAST YEAR. THAT HARDLY SEEMS LIKE AN
OVERLY DATA DEPENDENT FED TO ME. AN INTERESTING ARGUMENT HE IS
RAISING FOR THE FOLKS ON WALL STREET. HE IS DEFENDING THE FED.
WE HAVEN'T SEEN MUCH MOVEMENT IN FED FUNDS FUTURES.
THE FORECAST IS PRETTY MUCH THE SAME. MAYBE NOVEMBER AND LIKELY
DECEMBER. MATT: THANK YOU SO MUCH. DAVID SOWERBY IS STILL WITH US
FROM ANCORA. CONSUMERS ARE STILL SPENDING
MONEY ON WHAT? FIXING UP HOUSES, CARS?
I HEARD YOU TALKING ON BLOOMBERG SURVEILLANCE THIS
MORNING ABOUT THE STOCKS YOU LIKE BEING BENEFICIARIES OF
YOUR CHECK RATING FOR HOME IMPROVEMENT PROJECTS. DAVID:
THAT IS THE CASE. IT MAY NOT BE TRADITIONAL
RETAIL. WE KNOW MACY'S HAD A BETTER
THAN EXPECTED NUMBER BUT THE STOCK IS STILL SIGNIFICANTLY
LAGGED SINCE BEFORE COVID. TO BE OVERWEIGHT CONSUMER
DISCRETIONARY DOESN'T HAVE TO BE TRADITIONAL RETAIL.
IT COULD BE WINDOW HOTELS, LEISURE TRAVEL, 70% OF THE
BUSINESS, 9000 HOTELS THEY OWN ON THIS PLANET.
THEY ARE BUYING BACK SHARES BECAUSE THE STOCK HAS BEEN
CHALLENGED OUT OF BEING THE TARGET OF CHOICE HOTELS.
THERE IS A LEISURE PLAY. ON THE HOME SIDE, THINK A NAME
LIKE ANGIE'S LIST, SOMEONE WANTS TO DO REMODELING,
CONSTRUCTION, THEY GO TO ANGIE'S LIST AS A SOURCE THAT
IS PART OF IAC AS ALSO DIDI A MAGE -- DIGITAL MEDIA.
I THINK THERE WILL BE ON THE SERVICE SIDE, MAYBE NOT
TRADITIONAL RETAIL THAT THE CONSUMER AGAIN WILL DEFY
GRAVITY. MATT: ARE THESE
PICKS PART OF YOUR THESIS THAT THE SUCCESS WE HAVE SEEN IN
TERMS OF EARNINGS AND STOCK PRICE APPRECIATION HAS TO
BROADEN OUT? ARE YOU SEEING REAL EVIDENCE OF
THAT? DAVID: SLOWLY, MATT. THE RUBBER BAND WAS STRETCHED.
I LIVED THROUGH THE 2000 RUBBER BAND THAT WAS STRESSED BUT
THERE WERE DIFFERENT NAMES. THERE WAS CISCO, INTEL.
TODAY WE KNOW IT IS NVIDIA AS WELL AS A FEW OTHERS.
WHEN THE RUBBER BAND EVENTUALLY SNAPS BACK, WE SAW A PERIOD FROM 2000 TO 2007, COMPOUNDED
AT 2.7% BUT THE INDEX COMPOUNDED BETTER THAN 8%.
THAT IS STILL A GOOD BACKDROP IF YOU ARE FINDING COMPANIES
GROWING FREE CASH FLOW IN THE HIGH SINGLE DIGIT RANGE AND
RETURNING THAT WITH DIVIDEND GROWTH OF A SIMILAR GROWTH RATE
OF 8% TO 10%. THAT IS A GOOD BACKDROP TO
THEIR IS A RISK AND NOT TAKING SUFFICIENT RISK. MATT: I KNOW THE FREE CASH FLOW AND
RETURN OF CASH IS IMPORTANT TO YOU. HOW IMPORTANT IS NVIDIA
TOMORROW? A LOT OF PEOPLE ARE SAYING
TRADERS ARE SITTING ON THEIR HANDS WAITING FOR RESULTS AND
IT IS NOT UNTIL AFTER THE BELL ON WEDNESDAY.
IS IT THAT MONUMENTAL? DAVID: YOU COULD CALL IT THE SUPER
BOWL, THE LAST EPISODE OF A DALLAS BACK IN THE TV DAYS.
IT IS FRONT AND CENTER. BUT I WILL GIVE YOU A LITTLE
DIFFERENT NAME. BROADCOM SINCE THE END OF 2001
HAS COMPOUNDED 40% TO THE INVESTOR.
NOT QUITE IN THE NVIDIA STRATOSPHERE BUT SELLS AT A
SIGNIFICANT DISCOUNT TO NVIDIA AND DISCOUNT TO THE S&P 500.
I GET IT IS ALL ABOUT NVIDIA, IT WILL MORE BE ABOUT THE OTHER
490 NINE STOCKS IN THE S&P 500, SMALL CAPS, MID-CAPS AS WELL.
THIS MARKET WILL BROADEN OUT. MATT:
THANKS SO MUCH FOR JOINING US. DAVID SOWERBY FROM ANCORA
TALKING ABOUT THE STOCKS HE LIKES AND WHO SHOT JR. HERE IS
ABIGAIL DOOLITTLE. ABIGAIL: I HAVE NOT HEARD THE SHOW
DALLAS MENTIONED IN QUITE SOME TIME. GOOD STUFF. RELATIVELY FLAT FUTURES FOR THE
S&P 500. SHARES OF MACY TRADING UP 3.3
PERCENT, BEAT IN A MASSIVE WAY, 93% BETTER.
INVESTORS LIKING THIS THINKING MAYBE THERE IS A TURNAROUND IN
PLACE. IT ALSO PERHAPS TAKES PRESSURE
OFF OF ACTIVIST INVESTORS. LOWE'S UP THREE PERCENT, BEAT
ESTIMATES. DESPITE THE FACT THAT THEY FELL
4.1%, HITTING A BIG BOOST FROM PRO-CONTRACTORS.
PALO ALTO NETWORKS DOWN 6.6%. THEY PUT UP A QUARTER THAT WAS
DISAPPOINTING. THE SALES FORECAST EVEN MORE SO
DISAPPOINTING AND INVESTORS LOOKING AT SOMETHING AT THE
HIGHER END OF THE RANGE. IF YOU WILL RECALL, THEY PUT OF
A BRUTAL QUARTER AND FORECAST SO THIS IS THE SECOND TIME IN A
ROW. THE STOCK DROPPED 50% TO 20%,
RIGHT DOWN 6.6% IN THE PREMARKET. MATT:
THANK YOU FOR THAT. MACY'S BEATING PROFIT ESTIMATES.
>> IT IS DISCERNING AND WE EXPECT THE TREND TO CONTINUE
FOR MOST OF THE YEAR. MATT: THE CONSUMER IN THE SPOTLIGHT
AS RETAIL EARNINGS WRAP UP. THAT CONVERSATION STILL AHEAD.
THIS IS BLOOMBERG. ♪ >> THEY NOTED IN THE RELEASE
THEY HAD TO MOVE SOME SUMMER AND SPRING ITEMS TO GET THEM IN
BETTER SHAPE. THAT WAS SMART FOR THEM.
THE CONSUMER IS DISCERNING RIGHT NOW AND WE EXPECT THAT
TREND TO CONTINUE FOR MOST OF THE YEAR. MATT: MACY'S HANDILY BEATING PROFITS
LEADING THE STORE TO RAISE OUTLOOK FOR THE REST OF THE
YEAR. TONY SPRING, THE CEO, STTE A
WARNING ABOUT THE CONSUMER. HE SAID CONSUMERS REMAIN UNDER
PRESSURE DESPITE SENDING US A WARNING ABOUT THE
CONSUMER. HE SAID CONSUMERS REMAIN UNDER
PRESSURE DESPITE STRONG SALES. ROMAINE BOSTICK JOINS US AND
YOU WERE ON A CALL. ROMAINE:
HE MADE IT CLEAR THAT INFLATION IS AN ISSUE FOR A LOT OF THEIR
CUSTOMERS AND MADE IT CLEAR THAT SOME OF THE MORE
AFFORDABLE PRODUCTS, PRIVATE LABEL PRODUCTS, ARE DOING AS
WELL. THE FLIP SIDE OF THAT IS THEY
DID SEE A LOT OF GROWTH AND MORE IMPORTANTLY STABILITY ON
THE LUXURY SIDE, ON THE BLOOMINGDALE OUTSIDE WHEN IT
COMES TO WOMEN'S APPAREL AND SHOES AND IN BLOOM MERCURY, THE
COSMETICS AND SKINCARE BRAND OF PRODUCTS. MATT:
WHAT ABOUT THE SPRING TURNAROUND? WHAT IS THE PLAN?
ROMAINE: THEY ARE TUGGING THE FIRST 50
STORES THAT ARE THE PROTOTYPE FOR WHAT THEY WANT MACY'S TO BE.
THEY HAVE MADE BIG CHANGES IN THESE AND IN THE STORE FORMAT
AND ALLOWING VENDORS ON SITE AND THINK THEY CAN EXTRAPOLATE
THAT TO THE OTHER 300 OR SO STORES THEY HAVE.
TONY SPRING WAS VERY CLEAR, HE JUST TOOK OVER THIS JOB IN
FEBRUARY. IN HIS WORDS, HE IS IN THE
FIRST INNING OR FIRST QUARTER OF THIS AND IT IS GOING TO TAKE
SOME TIME BUT HE DOES SEE SOME GREEN SHOOTS, IF YOU WILL, WHEN
IT COMES TO APPAREL AND COSMETICS.
HE SAYS THIS YEAR THE FISCAL YEAR 2025, THEY ARE GOING TO
PUSH MUCH MORE DEEPLY INTO HOME FURNISHINGS. MATT: I HAVE ACTUALLY PURCHASED A
COUCH AT MACY'S. IT WAS 20 YEARS AGO. ROMAINE, THANK YOU VERY MUCH
TALKING ABOUT HIS INTERVIEW WITH THE CEO OF MACY'S. THEY WERE FIGHTING
OFF A BUY OFF FROM ACTIVIST INVESTORS. LET'S TALK TO OLIVER CHEN. WHAT ARE YOU THINKING FIRST AND
FOREMOST ABOUT THE ARK HOUSE AND BRIGADE CAPITAL MANAGEMENT
$6.6 BILLION OFFER? SHOULD THAT BE PUSHED AWAY OR
SHOULD THEY BE DEFENDING IT WITH A SPRING TURNAROUND?
OLIVER: WE ALWAYS HAVE TO CONSIDER WHAT
IS IN THE BEST OF THE FIDUCIARY POSITION FOR SHAREHOLDERS.
EVALUATING THIS IS IMPORTANT. FINANCING MAY OR MAY NOT BE
TOUGH FOR THE DEAL. MACY'S WAS WELL-CAPITALIZED AT
ONE TIME BUT THE CHALLENGE AHEAD WAS FAIRLY SUBSTANTIAL IN
TERMS OF WHAT THE COMPANY NEEDS TO DO.
THE BOTTOM LINE IS IT MACY'S NEEDS YOUNGER CUSTOMERS AS WELL
AS FIXING ITS OVERALL APPAREL BUSINESS.
THEY ARE UNDER WAY AND DOING THIS QUITE INTENTLY.
WE ARE SEEING EARLY GREEN SHOOTS BUT AS EVERYBODY
MENTIONED, THE CONSUMER IS IN A BIT OF A TUG-OF-WAR BETWEEN
NEEDS AND WANTS AND BASICALLY SUFFERING FROM THE ANXIETY OF
INFLATION AND LOOKING FOR DEALS AND VALUES .
THERE WERE MARKDOWNS TO PAY ATTENTION TO IN TERMS OF WARM
WEATHER APPAREL. THE TOP 50 STORES, GROWTH 50
WERE BETTER THAN EXPECTED. THAT IS A POSITIVE FACTOR.
FREE CASH FLOW AND CAPITALIZATION ARE STRONG
POSITIVE POINTS ON MACY'S OVERALL. MATT:
HOW MUCH OF A PROBLEM IN YOUR VIEW IS INFLATION?
JUSTIN WOOLFORD FROM THE UNIVERSITY OF MICHIGAN WAS
TALKING ABOUT HOW FOR MOST OF AMERICA WAGE GROWTH HAS
ECLIPSED THE CLIMB OF INFLATION, BUT FOR THE TOP 20%,
WHICH IS I ASSUME THE SHOPPER THAT MACY'S WANTS TO GET INTO
THE DOORS, INFLATION HAS BEEN MUCH WORSE THAN THEIR ABILITY
TO EARN MORE MONEY. HOW DO YOU VIEW IT FOR MACY'S?
OLIVER: WE ARE SEEING ENCOURAGINGLY AT
COSTCO THAT INFLATION IS GETTING BETTER BUT CONSUMER
CONFIDENCE IS STILL FAIRLY VOLATILE AND BIFURCATION IS
HAPPENING WITH MORE PRESSURE IN THE MIDDLE AND LOWER END.
WHAT IS HAPPENING WITH DISCRETIONARY ACROSS RETAIL IS
THE CONSUMER IS WAITING, PAUSING, LOOKING FOR DEALS,
LOOKING FOR BETTER DEALS AND DELAYING SOME DISCRETIONARY
ITEMS. ALSO SPENDING ON OTHER ITEMS LIKE SERVICES AND TRAVEL.
THAT HAS BEEN A FACTOR AND SOMETHING TO WATCH.
AT THE HIGH END, WE HAVE A ROBUST CUSTOMER BUT IT IS MIXED
AS WELL. WE SEE HIGHER AND CUSTOMERS
TRADING INTO WALMART -- HIGHER END CUSTOMERS TRADING INTO
WALMART. WE ARE LOOKING AT THE TRENDS
WITHIN LUXURY AS WELL. CHINA IS
SOMETHING TO WATCH TWO AS MIXED. WE ARE WATCHING WALMART, COSTCO
AND WE ARE WATCHING NVIDIA SHARES
DROPPING IN THE PREMARKET. NVIDIA HOPPER CHIPS AWAITING A
NEW CHIP. WE ARE FOLLOWING DETAILS
CLOSELY BECAUSE AS YOU KNOW, EVEN THOUGH YOU ARE COVERING
RETAIL, IT IS ALL ABOUT AI AND IT HAS BEEN FOR OVER A YEAR.
IS THIS SOMETHING THAT RETAILERS, MACY'S, A TECHNOLOGY
THEY CAN PUT TO GOOD USE AND HAVE THEY BEEN? OLIVER: WHAT WE SEE AHEAD FOR AI IS
LARGE LANGUAGE MODELS AND COMPUTER VISION.
WALMART IS FURTHER IN TERMS OF USING COMPUTER VISION AND AI
FOR MANAGEMENT. THE TRANSFORMATION FROM TALKING
TO YOUR COMPUTER AND SEARCH FOR LIKE A HUMAN AND THAT HAS BEEN
EMPLOYED AT MACY'S AS WELL AS WALMART.
WE ARE MOST IMPRESSED WITH WALMART IN THEIR USE OF AI COME
IN PART BECAUSE OF THE WALMART PLUS LOYALTY PROGRAM.
AI HAS THE POWER TO UNLOCK BETTER MERCHANDISING, LABOR AS
WELL AS INVENTORY REDUCTIONS AND SPECIFICALLY MERCHANDISING
GREATER FULL PRICE SELLING IT. IT WILL CHANGE THE WORLD AND
I'M QUITE FOCUSED ON THIS AS A TOPIC AS WELL. MATT:
I SAW WALMART'S ONLINE SALES WERE UP 22% IN THE LAST
QUARTER, A HUGE DRIVER OF THE GAMES THAT WE SAW THAT WALL
STREET WAS IMPRESSED BY. I THINK TAKING A CHUNK, AT
LEAST A SMALL CHUNK OUT OF AMAZON'S MARKET SHARE.
HOW IS MACY'S DOING WITH THE ONLINE PRESENCE? I KNOW THE SPRING TURNAROUND
ROMAINE WAS SAYING WOMEN'S SHOES AND THEY WANT TO GET MORE
FURNISHING BUT HOW ARE THEY DOING ONLINE? OLIVER: THE MARKETPLACE IS A BIG
OPPORTUNITY, USING THIRD-PARTY SELLERS AND MANAGED INVENTORIES.
MACY'S IS FOCUSED ON THAT IN TERMS OF COMPLEMENTING ITS OWN
ONLINE OFFERING. FURTHERMORE, THE MACY'S LOYALTY
PROGRAM IS VERY IMPORTANT FOR MAXIMIZING CUSTOMER LIFETIME
VALUE. THE KEY IS TO CONNECT BOTH
ONLINE AND OFF-LINE TO MAKE A BETTER CUSTOMER EXPERIENCE.
THAT BEING SAID, THE PHYSICAL RETAIL FOOTPRINT IS THE MOST
IMPORTANT AND THE NEED TO BE MORE THEATRICAL, EXPERIENTIAL,
AND YOU WENT THERE 10 YEARS AGO AND YOU NEED TO COME BACK AND
HAVE A REASON TO GO TO STORES THAT YOU CAN'T FIND ONLINE.
IN PART, THIS WILL REQUIRE A RENOVATION OF THE APPAREL
PORTFOLIO AND THE OWN BRANDS TO BECOME YOUNGER, OR RELEVANT TO
THE CUSTOMER. CUSTOMERS WANT TO STORE
EXPERIENCE THAT'S NOT VERY CLUTTERED.
THEY WANT A CURATED EXPERIENCE THAT HAS GOOD SERVICE AS WELL.
MATT: OLIVER, GREAT HAVING YOU ON THE
PROGRAM. OLIVER CHEN COMING TO US FROM
TD COWEN . BEN LAIDLER JOINS US. MATT:
TIME FOR THE MORNING CALLS, A LOOK AT ANALYST RECOMMENDATIONS
ON WALL STREET. BARCLAYS UPGRADING HP TO EQUAL
WEIGHT SAYING HYPE AROUND POTENTIAL AI PC'S SHOULD
PROVIDE SOME SUPPORT FOR SHARES. THEY WANT TO MAKE PERSONAL
COMPUTERS THAT ARE AI MACHINES. CITIGROUP OPENING A POSITIVE
CATALYST WATCH ON SHARES OF THE GAP, EXPECTING THE
RETAILER TO DELIVER BETTER THAN EXPECTED.
AND DOWNGRADING TOAST TO MATT:
THIS IS THE COUNTDOWN TO THE CLOSE.
AFTER A FRESH RECORD FOR THE S&P 500, YESTERDAY FUTURES
APPOINTING LOWER AHEAD OF THE OPENING BELL. WE CAN SEE THE S&P FUTURES AT
5323. WE WILL SEE IF THE NVIDIA NEWS
DRIVES THE MARKET LOWER. REPORTS FROM THE FINANCIAL
TIMES SAID HALTING ORDERS OF A NEW CHIP'S WAITING FOR THE NEXT
THING FROM NVIDIA. IN OTHER ASSETS MOVING AT THIS HOUR, THE EURO UNCHANGED AT
1.085 EIGHT. 10 YEAR YIELD AT 4.40 AND CRUDE
AT $78.95. LOWE'S BEATING ESTIMATES AFTER A
BOOST FROM PRO CONTRACTORS. ABIGAIL:
ADJUSTED EARNINGS ON SALES ALSO BEATING THE ONE POINT 1%.
A KEY METRIC THE INDUSTRY FOLLOWS FELL IN THE QUARTER BUT
BETTER THAN EXPECTED. AS YOU MENTIONED WHILE A LOT OF
THE DO-IT-YOURSELF HOME FIXERS HAVE BEEN ON THE SIDELINES AS
THE HOUSING MARKET HAS BEEN A LITTLE BIT STALLED, PRO
CONTRACTORS HAVE BEEN OUT AND HELPING LOWE'S HAVE A SOLID
REPORT. THE SHARES UP .6% AND OVER THE
LAST YEAR OR SO UP MORE THAN 10%, A SOLID SHOWING FOR LOWE'S.
MATT: I NEED TO GET OVER THERE AFTER
THE SHOW AND PICK UP A PRESSURE WASHER. ABIGAIL:
WORK YOU JUST THERE AT HOME DEPOT LAST WEEK?
WOULD YOU LIKE BETTER? MATT: I LIVE IN A HOME DEPOT AREA BUT
I WILL LOOK FOR LOWE''S BECAUSE I HEARD THEY HAVE A GOOD DEAL.
SIMONE FOXMAN IS HERE. SIMONE:
THE MARKET REACTING TO THE GREEN SHOOTS THAT THE CEO OF
MACY'S IS TALKING ABOUT IN TURNAROUND STRATEGY.
HE HAS OUTLINED A STRATEGY INVESTING IN NEW PRODUCTS,
DISPLAYS AND CUSTOMER EXPERIENCE AND EARLY SIGNS
SUGGEST THIS IS IT BEARING STRONGER GROWTH IN SOME STORES
THAT HAVE SEEN THE NUMBERS LOOKING GOOD, FIRST EARNINGS
COMING IN DOUBLE WHAT WAS EXPECTED AT $.27 A SHARE.
SECOND QUARTER EARNINGS LOOK TO BE ABOVE THE INITIAL ESTIMATES
AS WELL AND THE COMPANY ABLE TO RAISE THE SALES AND EARNINGS
FORECAST FOR THE FISCAL YEAR. SALES WILL STILL FALL 1% TO 3%,
IT EXPECTS. COMP SALES WERE ALSO DOWN 1.2%
ACROSS LOCATIONS, EVEN THOUGH BLOOMINGDALE'S AND BLUE
MERCURY, THE LUXURY SKINCARE AND FRAGRANCES AND BEAUTY
PRODUCTS LINE WAS UP. BEAUTY STRONG ACROSS THE BOARD.
WE HEARD FROM THE CEO THIS MORNING.
HE SAID THAT THE BEAT ON SALES IS ENCOURAGING IMPLIES THE
SECOND QUARTER IS OFF TO A DECENT START. BUT WE JUST HEARD FROM THE
COMPANY EXECUTIVES AND THEY DO SEE A CONSUMER THAT CONTINUES
TO BE PRESSURED. THEY THINK THEY HAD THE
FLEXIBILITY TO RESPOND OVER THE COURSE OF THE YEAR.
SHARES UP 3% IN EARLY TRADING. MATT:
LET'S TURN NOW AWAY FROM RETAIL TO SOFTWARE.
PALO ALTO GIVING A DOWNBEAT FORECAST RENEWING CONCERNS
ABOUT A SLOWDOWN IN CYBERSECURITY SERVICES. >> SHARES LOWER SINCE FEBRUARY.
IT IS THE DOWNBEAT FORECAST CAUSING INVESTORS JITTERS.
WE HAVE FORECAST LOWER THAN ANALYSTS EXPECTED.
WE HAVE FOURTH-QUARTER WHICH IS IN LINE IT.
SO EXTRA JITTERS BECAUSE IT FOLLOWS THE DISAPPOINTING
REPORT WE SAW LAST QUARTER WHICH LED PALO ALTO TO SEE THE
WORST SINGLE DAY DROP EVER. SHARES EDGING DOWN AND AT THAT
TIME THE CEO INVESTORS ARE SEEING SIGNS OF WHAT THEY CALL
PENDING FATIGUE. BUT NOW THE CEO SAID WE ADMIT
THERE IS VOLATILITY BUT HE ARGUED THAT IT IS DUE TO
PAYMENT TERMS. HE SAID THERE ARE OTHER METRICS AND OVER ALL
THE EXECUTIVES REMAIN BULLISH AND THEY EXPECT CYBERSECURITY
SPENDING TO CONTINUE BECAUSE ATTACKS CONTINUE.
THEY SAID THAT CUSTOMERS ARE MORE FOCUSED ON SECURING THEIR
CLOUD. FOR NOW, SHARES DOWN AS 6% BUT
TODAY UP 2%. MATT: NOW TO THE ALL-IMPORTANT
CHIPMAKER NVIDIA, DROPPING AFTER THE FINANCIAL TIMES
REPORTS THAT AWS HAS HALTED ORDERS FOR INVIDIOUS MOST
ADVANCED SUPER CHIP. AMAZON WEB SERVICES WAITING FOR
A MORE POWERFUL NEW MODEL TO COME OUT.
KATIE GREIFELD IS HERE WITH MORE. KATIE:
LOOKING AT WAS SHARES ARE DOING, DOWN ON THE HEELS OF THE
REPORTING FROM THE FINANCIAL TIMES. AMAZON WEB SERVICES, THE
LARGEST CLOUD COMPUTING PROVIDER HAS HALTED ORDERS OF
NVIDIA'S MOST ADVANCED SUPER CHIP TO WAIT FOR THE NEW
MODELS, SPECIFICALLY HALTING ORDERS OF THE HOPPER CHIP TO
WAIT FOR THE NEW CHIP. BACK IN MARCH NVIDIA UNVEILED A
NEW GENERATION OF PROCESSORS THAT WERE NAMED BLACKWELL.
THAT CAN BARELY AFTER A YEAR OF HOPPER BEGAN BEING SHIPPED TO
CUSTOMERS. YOU HAD THE NVIDIA CEO SEEING
THE NEW BLACKWELL PRODUCTS WILL BE TWICE AS POWERFUL FOR LARGE
LANGUAGE MODELS WHICH IS THE TECHNOLOGY BEHIND CHATGPT AND
THEY WILL HOLD OUT FOR THE NEW MODELS FOR AMAZON BEFORE TO BUY
THE NEW MODELS. THEY SAID THEY HAD FULLY
TRANSITIONED THE PREVIOUS ORDERS OR NVIDIA'S HOPPER SUPER
CHIP WHICH LAUNCHED IN AUGUST AND REPLACE THEM WITH THE
SUCCESSOR, THE BLACKWELL MODEL. THEY ARE NOT CANCELING THE
ORDERS BUT NERVES ARE HIGH RIGHT NOW BECAUSE NVIDIA
REPORTS EARNINGS AFTER THE BELL TOMORROW THAT MIGHT EXPLAIN WHY
YOU ARE SEEING A BIT OF A DIP IN THE SHARES, DOWN .9%.
NVIDIA IS UP ABOUT 90% YEAR TO DATE. MATT:
THEY ARE NOT DOING TOO BADLY. WE WILL FOLLOW THAT STORY VERY
CLOSELY, THE TRANSITION FROM HOPPER TO BLACKWELL MAY BE AN
ISSUE TOMORROW AFTER THE BELL. JOINING US NOW IS BEN LAIDLER,
STRATEGIST AT ETORO. I DON'T KNOW IF WE ARE AS
FOCUSED ON AI THIS YEAR AS LAST YEAR BUT SEEMS TO BE IMPORTANT
AFTER THE FED IN THE MARKETS. WHAT IS YOUR TAKE ON NVIDIA? BEN:
IT IS THE FED CUTTING INTEREST RATES AND EARNINGS GROWTH AND
ALL OF THAT EARNINGS GROWTH IS COMING OUT OF AI AND BIG TECH.
NVIDIA RESULTS ARE IMPORTANT AND FEELS LIKE IT HAS BECOME
ALMOST A MACRO EVENT. THE MARKET CAP IS BIGGER THAN
ALL THE STOCKS IN CHINA AND FRANCE RIGHT NOW.
IT IS IMPORTANT BUT I WOULD SAY TWO THINGS.
THEY ARE GOING TO MISS AT SOME POINT.
YOU CAN'T JUST RAISE EVERY SINGLE QUARTER.
THEY ARE GOING TO BE FINED THIS QUARTER.
WE HAVE ALREADY HEARD FROM CUSTOMERS AND COMPETITORS,
BUSINESS IS GREAT. IT IS GONNA BE SMALL FRIGHT
WHEN THEY MISS. THE SECOND THING IS THE REST OF
THE MARKET, PERFORMANCE IS RUNNING OUT AND I SEE SOME AIR
COMING OUT OF THE BIG TECH BALLOON NATURALLY OVER TIME.
A LITTLE BIT OF MONEY COMING OUT OF NVIDIA IN BIG TECH EVEN
HELP SUPERSIZE THEY ARE GOES A VERY LONG WAIT IN THE SMALLER
SECTORS AND OTHER PARTS OF THE WORLD. MATT:
I JUST GOT A MESSAGE FROM IF YOU ARE ASKING, IS THIS WHAT
2000 FELT LIKE, EVERYONE WAITING FROM EARNINGS FROM ONE
COMPANY? IT DOES FEEL A LITTLE FROTHY,
ANOTHER YEAR OF DOUBLE-DIGIT GAINS ALREADY AND NOT EVEN IN
JUNE. EVERY CHIP IS ON AI. ARE YOU CONCERNED THERE ARE TOO
MANY BOWLS, I MEAN AFTER MIKE WILSON'S CAPITULATION
YESTERDAY, ONLY ONE PAIR LEFT. BEN: FIRST, CISCO WHICH WAS THE
NVIDIA OF 2000 PEAKED AT 100 TIMES PE AND FRANKLY HAS NEVER
RECOVERED. NVIDIA IS 35 TIMES. WE CAN QUIBBLE ABOUT THAT BUT
THEY ARE DELIVERING ON PROFITS GROWTH.
THEY WILL QUADRUPLE TOMORROW. SECONDLY, THIS HAS BEEN A PAIN
TRADE. EVEN WITH A CAPITULATION, THE
CONSENSUS TARGET FOR THE S&P 500 IS STILL BELOW WHERE YOU
ARE TODAY. I THINK YOU SEE ELEMENTS OF
THAT EVERYWHERE. THERE ARE STILL $6.5 TRILLION
SITTING IN FUNDS. THE INVESTOR INDEX IS AVERAGE,
NOT FULL RETAIL SENTIMENT. MUTUAL FUND OUTFLOWS.
THE SENTIMENT IS NOT LOW BUT IT IS NOWHERE NEAR AT THE HIGHS.
THIS IS A PAIN TRADE AND A SLOW CAPITULATION THAT CONTINUES TO
GIVE. MATT: I WOULD BE REMISS IF I DIDN'T
PLAY YOU SOME OF THE SOUND THAT WE GOT FROM MORGAN STANLEY'S
MIKE WILSON. MIKE: IT REFLECTS THE UNCERTAINTY
THAT HAS BEEN THE CASE FOR THE LAST SEVERAL
YEARS. IT COULD HAPPEN WITH A HIGHER
THAN NORMAL DEGREE OF CERTAINTY. THAT IS REALLY THE HEADLINE
THAT SHOULD HAVE BEEN OUT, NOBODY KNOWS ANYTHING AND
PARTICULARLY AT A POINT IN TIME AND MAYBE OUR MISTAKE IS JUST
ADMITTING THAT WE DON'T KNOW AS MUCH AS MAYBE EVERYBODY ELSE
CLAIMS TO. THAT IS CALLED HUMILITY AND
SOMETHING WE HAVE LEARNED THE HARD WAY OVER LIFE. MATT:
WHEN HE CAPITULATED LAST YEAR, THAT IS WHEN THE MARKET TURNED
AROUND AND STARTED GOING DOWN AGAIN. WHAT DO YOU THINK IS THE
BIGGEST RISK TO THIS MARKET? I HAVE HEARD A LOT OF PEOPLE
TALK ABOUT THE LABOR PICTURE. IF PEOPLE START TO LOSE JOBS,
IS THIS THE END OF THIS? BEN: NO, BECAUSE YOU HAVE THE
INSURANCE POLICY WHICH IS THE FED COULD CUT INTEREST RATES.
I THINK THE RISK IS THE OTHER WAY AROUND AND WE MAY GET A
SENSE OF THE FED MINUTES TOMORROW WHICH IS THE OTHER BIG
ISSUE TOMORROW. IF INFLATION DOESN'T COOL AND
IF THE FED GETS FORCED TO HIKE INTEREST RATES, WE ARE NOT
GOING TO HAVE RATE CUTS AND THAT WOULD DO TWO THINGS, BRING
DOWN VALUATIONS AND ULTIMATELY COOL THE ECONOMY AND BRING DOWN
EARNINGS AND THAT IS THE DOUBLE HIT THIS MARKET IS NOT PREPARED
FOR. I THINK THAT IS A TAIL RISK THAT IS THE BIGGEST RISK IN THE
MARKET RIGHT NOW. MATT: HOW CONFIDENT ARE YOU THAT
INFLATION WILL COOL? A LOT OF PEOPLE, INCLUDING
JAMIE DIMON AT THE CONFERENCE A COUPLE DAYS AGO SAYING HE
DOESN'T THINK THAT IS GOING TO HAPPEN. BEN:
I THINK IT IS GOING TO COOL. I THINK IT WILL TAKE A BIT
LONGER THAN EXPECTED. WHY? BECAUSE YOU HAVE FIVE .5% IS
STRAIGHTS AND A PRODUCTIVITY BOOM AND A LOT OF THESE
STICKIER COMPONENTS WHETHER IT IS SHELTER, INSURANCE, HEALTH
CARE ARE PROBABLY LAGGING WILL CATCH UP OR CATCH DOWN
HOPEFULLY OVER TIME. THAT IS THE RISK BUT I THINK IT
IS A LITTLE OVERDONE. MATT: THE ACCELERATING OR ONGOING
MARKET BROADENING IS WHAT INVESTORS HAVE TALKED
ABOUT IN MUST BE A BRIGHT SPOT FOR YOU AS WELL.
HOW QUICKLY IS THAT HAPPENING IN WHERE DO YOU SEE THE MOST
EVIDENCE OF IT? BEN: I THINK IT IS HAPPENING AND
HAPPENING MOST NOTABLY INTERNATIONALLY.
CHINA WENT FROM A FAIR MARKET TO A BULL MARKET.
JAPAN CONTINUES TO MOTOR ON. THAT SHOULDN'T BE A SURPRISE.
THESE ARE THE MARKETS WHICH ARE IN THE CASE OF EUROPE GOING TO
CUT INTEREST RATES FIRST AND THE MOST CYCLICAL MARKETS, THE
ONES THAT ARE MOST SENSITIVE TO THE TURNAROUND IN THE ECONOMY
WHICH WE ARE EXPECTING. GLOBALLY AT WHAT WE ARE LOOKING
AT IS GOING TO BE SMALL CAPS. I SUSPECT THAT TAKES A LITTLE
BIT LONGER. WE ARE ABSOLUTELY SEEING THE
BROADENING TO CYCLICAL PARTS OF THE WORLD AND SECTORS, LIKE
FINANCIALS. MATT: WHAT IS THE RISK OF A TRUMP
PRESIDENCY THEN JEROME POWELL OUT THE DOOR? DOES THAT CONCERN YOU? BEN:
I DON'T THINK ANY OF THEM WILL BE BIG ENOUGH TO DERAIL THE
MARKET. WE ARE SEEING AN EARNINGS
RECOVERY THAT IS SLOWLY BUILDING AND SEEING INTEREST
RATES CUTS ON THE TABLE. THEY ARE ABSOLUTELY COMING IN
THE U.S. AND I DON'T THINK A TRUMP
PRESIDENCY WIL DERAIL
EITHER OF THOSE. MATT: I DON'T ANALYSTS ARE RAISING
ESTIMATES INTO Q2. GREAT TO GET SOME TIME WITH YOU
THIS MORNING. BEN LAIDLER JOINING US FROM
ETORO. CHIPS ARE STILL IN FOCUS. >> WITHOUT TIME ON, IT WOULD BE
VERY -- TAIWAN, IT WOULD BE VERY DIFFICULT FOR US TO DO OUR
JOBS AND SERVE AND BUILD HIS COMPANY. MATT: NVIDIA IN FOCUS AHEAD OF
EARNINGS TOMORROW. THAT CONVERSATION STILL AHEAD.
THIS IS BLOOMBERG. THE CEO OF ZUNE, KELLY STEP
OVER -- ZOOM. >> TAIWAN IS AT THE EPICENTER
OF THE WORLD SUPPLY CHAIN. WITHOUT TAIWAN, IT WOULD BE
VERY DIFFICULT FOR MICHAEL AND I TO DO OUR JOBS INTO SERVE AND
BUILD HIS COMPANY. THE TECHNOLOGY INDUSTRY DEPENDS
VERY HEAVILY ON TAIWAN AND CONTINUES TO FOR SOME TIME.
MATT: THAT WAS THE CEO OF NVIDIA SPEAKING TO ED LUDLOW IN AN
EXCLUSIVE INTERVIEW. SHARES OF NVIDIA ARE DOWN 1.5
PERCENT AFTER IT WAS REPORTED THAT AMAZON HALTED ORDERS FOR
THE HOPPER CHIP WAITING FOR AN EVEN MORE POWERFUL CHIP
APPARENTLY CALLED THE BLACKWELL. BLOOMBERG'S ALEX WEBB JOINS US
NOW FOR OUR EXPECTATIONS. THEY ARE HUGE BUT THIS COMPANY
IS USED TO HUGE EXPECTATIONS AND IN THE RECENT PAST AT LEAST
DELIVERS. ALEX: THEY HAVE MANAGED TO BEAT AND
BEAT AGAIN AND THE EARNINGS COME UP. IF THEY DON'T MEET
EXPECTATIONS, THAN THAT IS CONSIDERED VERY DISAPPOINTING. THEY MEET EXPECTATIONS, AND
WHAT THE ANALYSTS CONSENSUS IS, THAT IS CONSIDERED A MISS AND
YOU WOULD SEE THAT IN THE SHARE ACTION.
SO FAR IT HAS BEEN GOOD NEWS. THE CHALLENGE OF THE STORY IS
IS THERE GOING TO BE A DIP IN DEMAND AHEAD OF THE RELEASE OF
BLACKWELL IN THE FOURTH QUARTER? IF SO, THEN YOU MIGHT EXPECT A
SLIGHTLY DISAPPOINTING FORECAST FOR THE QUARTER WE ARE IN AND
THE CALENDAR THIRD QUARTER. THAT IS WHY THERE IS A SHARE
REACTION. PEOPLE EXPECT IN THE MEDIUM TO
LONG-TERM IT IS GOING TO BE FINE. MATT:
SURELY ANALYSTS THAT FOLLOW THIS COMPANY PROFESSIONALLY
WILL KNOW IF IT WILL LAG WHEN THEY RELEASE A NEW MODEL IN THE
SAME THING HAPPENS WITH CART MANUFACTURERS.
THIS ISN'T THE ONLY CHIP MAKER IN THE NEWS TODAY. I THOUGHT IT WAS AMAZING THAT
ASML AND TAIWAN SEMICONDUCTOR WOULD BE ABLE TO TURN OFF
MACHINES THAT MAKE THE HIGHEST TECH CHIPS IN THE WORLD.
THIS IS IN THE CASE OF CHINA INVADING TAIWAN BUT THEY HAVE
THE ABILITY TO TURN OFF MACHINES REMOTELY FOR ANY
REASON THEY WANT. ALEX: MAYBE IT ISN'T THAT SURPRISING
WHEN YOU THINK ABOUT THE NATURE OF BEING ABLE TO MONITOR AND
PERHAPS CONTROL REMOTELY INDUSTRIAL MACHINERY. THIS IS LIKE THE ULTIMATE PEACE
OF INDUSTRIAL MACHINERY. BUT IT APPLIES TO LOTS OF
DIFFERENT THINGS INCLUDING DEEP ULTRAVIOLET AND SOME MACHINES
ALREADY IN CHINA. IT IS SOMETHING THAT PERHAPS IT
DOESN'T SURPRISE ME AND INSISTING THAT THEY CAN AND
PROVIDES A LITTLE BIT OF RELIEF FOR ANYONE CONCERNED ABOUT WHAT
WOULD HAPPEN IF CHINA WOULD INVADE.
THERE ARE BIGGER ISSUES AND HIS CHINA WOULD SOMEHOW INVADE
TAIWAN, THEY WOULDN'T BE ABLE TO GET THE COMPONENTS NEEDED TO
MAKE THE CHIPS. THERE ARE DIFFERENT REASONS WHY
JUST HAVING THESE FACTORIES WOULD NOT MEAN THEY COULD
REPLICATE WHAT TAIWAN DOES. MATT:
I THOUGHT IT WAS INTERESTING THAT SOMEONE HAS ESSENTIALLY A
REMOTE CONTROL. THEY CAN TURN IT OFF IF CHINA
INVADES TAIWAN BUT WHAT HAPPENS IF CHINA GETS THE REMOTE?
THIS IS THE TYPE OF TECHNOLOGY THAT SOMEONE YOU DON'T WANT
COULD HOLD ON AND CONTROL THE CHIPMAKING MACHINES FOR THE
WORLD. I THINK IT IS ABSOLUTELY FASCINATING IF NOT SURPRISING.
WHAT ARE THE EXPECTATIONS FOR THIS MARKET, THE CHIP MARKET,
GOING FORWARD? CAN ANYONE CATCH UP TO NVIDIA?
I KNOW INTEL AND OTHERS HAVE BEEN GETTING LAPPED BUT HOPEFUL
WITH INVESTMENT IN A COUPLE YEARS THEY WILL BE ABLE TO.
ALEX: INTEL ISN'T REALLY IN THE SPACE.
IT LOOKS AS THOUGH NVIDIA IS STARTING TO ENCROACH MORE ON
INTEL'S SPACE. THE OTHER PLAYER IS AMD, WHICH
FOR A LONG TIME WAS THE MOST COMPARABLE COMPANY TO NVIDIA.
NVIDIA HAS MARCHED ON AMD AND THEY ARE ADDING REVENUE FOR THE
AI ACCELERATORS AND NVIDIA IS ABOUT TO REPORT THE MARKET IS
LOOKING FOR 24 BILLION DOLLARS IN REVENUE, UP FROM $7 BILLION
A YEAR AGO. IT IS COMPLETE DIFFERENT
LEAGUES OF GROWTH. THE FINAL ONE IS INTERESTING
WHAT IS GOING ON IN JAPAN WITH SOFTBANK, TALKING ABOUT
BRINGING A COMPETITOR TO NVIDIA AND THE CHALLENGE IS HOW THEY
DO IT IN A SHORT TIMEFRAME, NEEDING A HUGE AMOUNT OF
CAPITAL AND FROM A STANDING START IT SEEMS LIKE A HUGE
CHALLENGE. MATT: THANKS VERY MUCH, ALEX WEBB,
WRITES FOR BLOOMBERG'S OPINION AND FOCUSES IN ON THE TECH
INDUSTRY WHICH HE KNOWS SO MUCH ABOUT. LET'S GET TO OTHER SECTOR
ACTION THIS MORNING. WE WILL TO ABIGAIL DOOLITTLE.
ABIGAIL: THE SECTOR COMPOSITION REINFORCES WHAT YOU'VE BEEN
TALKING ABOUT, INVESTORS ON HOLD UNTIL THE NVIDIA RESULTS.
THE S&P 500 IS DOWN EVER SO SLIGHTLY.
MORE SECTORS AT THE MOMENT HIGHER BUT THAT IS ONLY BECAUSE
COMMUNICATION SERVICES IS UP FRACTIONALLY. UTILITIES THE BEST SECTOR, UP
.7% AS DIVIDENDS LOOK MORE ATTRACTIVE.
SAME WITH CONSUMER STAPLES. DOWNSIDE IS CONSUMER
DISCRETIONARY AND THE CHIP INDEX UNDERPERFORMING, DOWN 1.1
PERCENT ON NVIDIA AND OTHER CHIP MAKERS.
IF WE LOOK AT THE STOCKS FROM THE LAST NVIDIA REPORT, WE WILL
SEE IT IS UP 13%, A VERY HEALTHY POP.
WHAT IS INTERESTING IS THE STOCK STILL HAS NOT PUT IN
ANOTHER ALL-TIME HIGH, SO THIS INDEX IS LAGGING THE S&P 500
AND NASDAQ. I'M NOT SURE WHAT SORT OF A
TELL THAT IS BUT A DIVERGENCE CERTAINLY WORTH WATCHING GOING
INTO THIS HIGH-PRESSURE NVIDIA REPORT AFTER THE BELL. MATT: AS ALEX POINTS OUT AND RIGHTLY
SO, THERE ARE SO MANY DIFFERENT KINDS OF CHIPMAKERS AND
SOMEBODY LIKE NVIDIA IS DOING SOMETHING VERY DIFFERENT THAN A
D RAM MANUFACTURER. COMING UP, THE MARKET WILL
EVENTS YOU NEED TO BE WATCHING. MATT:
TIME FOR THE TRADING DIARY, WHAT YOU NEED TO WATCH THIS
WEEK. FED SPEAK FROM BAR, BOSTIC AND
COLLINS. TOMORROW, NVIDIA EARNINGS OUT
AFTER THE BELL. WE WILL GET FED MINUTES AS WE
HAVE BEEN TALKING ABOUT THIS MORNING.
THURSDAY WE GET INITIAL JOBLESS.
