Nasdaq leads gains, Dow notches 12th straight winning day: Stock market news today July 25, 2023

[Music] welcome to Yahoo finance live I'm Akiko Fujita along with Brad Smith let's get you up to speed on the market action with one hour left to go in the trading day the Dow is up 52 points by the way looking to notch its 12th straight day of games the S P 500 up 17 and the NASDAQ up 104 we're watching bond yields very closely with the fomc meeting kicking off that big rate decision coming down tomorrow you see the 10-year yield right now at 3-9 and the five-year up above four percent and then of course we're looking at sectors Tech leading the gains today as we look ahead to some big Tech earnings out today after the bell and Brad we've got our eye on Microsoft as well as alphabet it's going to be an interesting one because this is really the first test since we've gotten so much attention on artificial intelligence both of these names investors are going to have questions you know how much can they actually generate beyond the excitement I would argue probably too early to tell based on this latest quarter results but we'll see how the reaction goes hype phase last quarter this quarter it's a show me story it's going to be about where all of these companies are able to spell out just how much they're spending on some of these efforts as well here now we've been kind enough for the folks at home to break out some of the key things that we're watching as well for these earnings here yeah in Microsoft obviously a big one given their investment in open ai's chat GPT it was just last week where they talked about the subscription model for Microsoft 365 co-pilots essentially 30 dollars a month subscription there so we saw shares rally on the back of it this is a stock by the way Brad that is up more than 40 percent on the year there's going to be a lot of questions around AI how do you monetize that what's the growth process but also azure's performance because we have seen fourth straight quarters of declines a lot of companies pulling back on some of that cloud service investment what does that look like in this quarter a big question mark for Microsoft I'll just put some numbers on that cloud expectation as we're going into of course we've got about an hour left in trading here but for that cloud segment that you mentioned commercial Cloud expected to bring in by some of the Bloomberg consensus estimates about 30 billion dollars their intelligent Cloud expected to bring in 23.8 billion dollars and look for a gross margin percentage of about 70 percent for that business also another report out today alphabet I'm watching advertising Revenue growth plus what that generative AI spend looks like all right so alphabet wasn't exactly first out of the gate when it came to generative Ai and some of a bumpy rollout for Bard yeah I mean it doesn't even flow off the tongue at the end of the day Bard versus some of the other major names I mean we're looking at the humanization efforts of some of the AI efforts out there but at the end of the day I think for Google and what we're going to be watching more closely here keep an eye on what that Revenue X tack looks like as well 60.23 billion dollars is where they're expecting that to come in or at least the consensus estimates expecting that to come in at that's that traffic acquisition costs and then additionally EPS we're looking for that to come in at about a dollar 32 cents a share also just keep an eye on YouTube too we're talking of course about alphabet and Google and uh the subsidiaries of alphabet and you can't take your eye off of YouTube especially considering a lot of the attention or at least the wars for screen time they continue to move forward which is going to come into the fold with another company that reports after earnings today too and so YouTube those active users expected to be at about 2.75 billion but the revenue 7.41 billion well YouTube increasingly competitive with some of the other streaming services as well you know can they take advantage although you don't want to say take advantage of the opportunity in terms of some of the strikes that are happening right now especially in Hollywood what's going to be interesting to me with Google specifically you talked about the ad spend digital ad spend that's obviously the Big Driver to what extent does the chatbot barge chatbot disrupt the ad spend because that's been the concern are you user is not necessarily going to go for search in Google but ask for sort of the questions right using their generative AI technology is that going to cannibalize some of the user base some of the money that's going towards digital ads and that's been a big question mark because they've got two products two pipelines going right now you know and even if we don't see to your point the strike that you mentioned a moment ago even if we don't see that be a long-term strike for actors and writers where have people continued to go back to to get their content it's user generated content platforms like YouTube where people such as Issa Rae got her start on YouTube really just showing off that Ingenuity that creative ability and taking it directly to some of the viewers and building up a following that way and so it would be interesting to see how alphabet or YouTube in this instance also looks at this period and senses an opportunity for creators that are out there and if they're able to layer on generative AI correctly to some of those features how they can make it that much easier for creators to be able to reach the masses specifically on the con content creators the influencers that we talk about I mean that's gonna that's an interesting conversation that's happening because a lot of them aren't necessarily members of sag-aftra they see an opportunity to get in on content it's a bit of a tricky conversation that's happening another company that we're going to be watching after the Bell today is snap the stock always pretty reactive to earnings specifically digital aspect another big one here in terms of snap and then of course competition we talk a lot about snaps competition with Tick Tock Instagram now you add threads to the mix although threads is more text-based you have to wonder how much of that is actually going to disrupt into user base but snap is always a really volatile one around earnings in terms of the stock yeah I mean I love talking about this company when it comes earnings time because it's always kind of a toss-up coming into it you could totally expect one thing you could expect for them to blow it out on the water or out of the water on some of those daily active users by which they're expecting about 395 million or at least the street is here but one of the other kind of competitive things that you were mentioning that we need to watch out for is something more recently that came out which is with regard to tick tock according to reports Tick Tock shop is something that the company is hoping or looking for to have similar to success to some of the other shoppable websites out there particularly overseas in China as well such as Xi'an and Teemo and so that potentially coming as early as August here for tick tock and could be one of those major acknowledgments that a company like a snap or any of the other social media companies have to make as well yeah how sticky does it make the platform right another feature to add to the list there now in addition to all the earnings we're watching today we are under 24 hours away from the next fomc decision as it's widely expected the Federal Reserve will raise interest rates to the highest level in 22 years for more on what this means for markets moving forward we want to welcome in Blake Quinn RBC Capital markets head of rate strategy as well as Jeremy Schwartz Wisdom Tree Global Chief investment officer Blake let's start with you I'm here in studio as we think about where things are likely to move beyond the meeting tomorrow the expectation is another 25 basis point hike will there be a second one down the line what are you looking for yeah that's a big question I think tomorrow you know I wish I had a big juicy headline for you guys but I think it's going to be relatively quiet we all know the 25 basis point hike is coming also keep in mind at this meeting we're not getting an update to those SCP dot plots as we call them they give us some idea about what they're expecting down the road the last version we got in June did suggest that they were going to hike again but so far markets have not really bought on to that idea yet you know if you look at trading in the FED funds Futures contracts still suggesting that markets don't really see that September November additional hike happening so I think people are going to be really keyed in tomorrow to Pal's press conference just listening to see if he gives any kind of signaling one way or the other personally I think it's a little bit too early for that we still have two NFP prints two CPI prints before September so I just don't really see a reason for him to start pushing markets one way or the other or to start closing down their option set as they move in that September meeting there's a lot of data and a lot of time to make that decision on what to do after the July meeting Jeremy what about you is tomorrow business as expected and if so how can investors best position themselves to anticipate the fed and what their tenor may be in signaling the future yeah I agree tomorrow's not a major story now a lot of major surprises uh we do think the fed's making a mistake in a sense we we think they don't need to keep hiking uh that inflation is on its way down now you know we've been surprised actually how resilient all the markets have been the labor market the housing market got another case shill our housing data point this this today four months in a row of increases after seven months of declines that's been one of the feeders into our our view that inflation's already coming down was for the downward trajectory and shelter inflation but you know hopefully they don't keep going too much I mean the higher they go the more risk they do put us into a deeper recession than necessary uh but we gotta we got to admit that the market and the economy has been resilient to all these higher hikes let's talk about this sort of the macro conditions that are driving all this like you know we got the IMF today upping their growth forecast we're talking about three percent for 2023 now 2024 3 as well as you look at the economic data I know you said that you think it's too soon for the FED given what we know right now but are are we starting to see the real possibility of a potential soft Landing in other words are are we starting to to see sort of inflation pull back at a pace that maybe the FED is a little more comfortable with yeah absolutely I think the soft Landing is is quickly becoming somewhat of a consensus in the markets uh which is pretty shocking when you know compared to where we were two three months ago post svb uh you know people were very very um you know cynical on where the where the uh U.S economy was going and I think people were pricing in Cuts as soon as the summer that has clearly not turned uh you know turned out to be the case um Jeremy mentioned a lot of the positive data I think if you're looking at the fed and kind of thinking where they are relative to June I think some people might be expecting them to soften their tone because the inflation data did come in a bit weaker but if you look at the totality of the data and what's been happening on jobs what's been happening on consumption you know it does look like this soft Landing narrative is coming to play it was often derided as Immaculate deflation but that's what we're seeing inflation's coming down at a pretty healthy rate still and meanwhile we haven't seen that pain on the labor market or growth data that I think a lot of people thought had to go hand in hand necessarily with that slower inflation so that means Jeremy possibly a end to this Airline analogy that we've been using for the better part of about a year at this point so we'll have to find something new but at the same time it brings in this larger question of okay so if soft Landing then rally on and if so where should investors be positioning their portfolio you know we we had been getting more cautious we're starting to upgrade our view of the economy actually and that would actually lead you to some rotation away from what's been working right now what's been working has been growth in all the AI stories if you view that the economy is not going to go into recession you could go to the more cyclical areas like small cap value which are pricing in a recession in our view if if you avoid the recession or even have a softer recession than people thought before this could be be a return to sort of the cheaper price segments of the market uh and that's one thing we're looking at for the for the I don't have the year and Jeremy as we look ahead to after hours earnings today you know we were talking about some of the big Tech names that we're watching that have largely seen their valuations balloon on the back of this excitement around AI I mean where are you positioning yourself on that front um what does the tech thesis look like the higher the multiple you know the higher the expectations and the easier it becomes to disappoint a little bit uh we're already at peace right now on Nvidia that is 40 times trailing sales 25 times forward sales you know if you take those optimistic estimates of where they came the probability that they can outperform from 25 time sales Is Not Great over three to five years uh less than ten percent of companies that got to that multiple went on to outperform over three years in the short run uh perhaps the momentum continues but if you're saying the next three years I think it becomes much harder uh but generally all the big Tech you know there's like a 30 times earnings the rest of the Market's much cheaper to me I I prefer things like 12 p e High dividend stocks than the 30p tech stocks at the moment uh stay with us guys here uh because one thing that we also have to talk about is something that came out this morning in terms of economic data the conference boards consumer confidence index for July that hit a reading of 117. this is the highest level in two years as consumers are feeling increasingly confident about the current state of the U.S economy Blake do you expect this trend to continue um look I do think consumers are going to start slowing down one uh piece of that data that I think was a little bit overlooked was the percentage of consumers who said that they were planning on cutting back um you know in the future and and that is actually still showing a meaningful number of people who are planning to cut back you kind of couple that with the idea that student loan repayments are going to start which is going to bite into people's ability to spend their kind of monthly budgets I think both of those things combine to start pulling back consumption into the end of this year and we do have a little bit slower growth in Q3 and Q4 but still very far from what I would call a recession or a capital R hard Landing uh you know type of recession it's just very slow growth and then in 2024 actually comes back into positive territory but that is driven in part by this slowdown in consumption that we're expecting later this year yeah are we starting to see maybe more of sort of that divide narrow we've been talking so much about the consumer confidence versus the actual spending that we're seeing the divide that exists there may be that's starting to kind of narrow here as sort of consumers look at pulling back further and seeing the reality it is and I think over this last year and over this cycle um you know I think a lot of people have rightfully become a little bit more leery of of this kind of survey data that a lot of times doesn't really seem to match what consumers are actually doing and you could say the same for businesses as well so yes those things are perhaps coming together but we do think going forward that that is going to start to slow Jeremy how does this show up in terms of some of the companies that we're going to be watching or reporting earnings today and they've got you know three months worth of data plus some of the current quarter to look at to get a real-time pulse check of the consumer whether that be in their purchasing patterns on their e-commerce sides of their website whether that be in how much they're engaging uh even in Social platforms with brands with purchase intent so you know where where can we really look through some of the data that comes out today during earnings to Signal or give us some type of sense of the pulse check of the consumer as well I mean what I hear on these tech companies is increased spend you know they're expending to make these AI Investments the question will be what the revenue comes in the future you know Nvidia the semis you know they're the direct play for what are people buying they're buying these AI chips so they can do all this stuff hopefully hopefully adding new business opportunities for these tech companies is too early though to see it fully come to play and so that's where I feel like in expectations might be a little high at the moment uh but we'll have to see how it shows up I mean it you need to see Revenue to to match all the spending that's expected for AI I think it's just early in that that transition all right blank win RBC Capital markets head of rate strategy as well as Jeremy Schwartz who is the Wisdom Tree the global Chief investment officer thank you both for the time here this afternoon really appreciate it and we're just getting started here on Yahoo finance live coming up strike averted ups and Teamsters reaching a new five-year collective bargaining agreement will break down the deal and the impact on the company Straight Ahead plus home prices rising again in May we're hitting the latest housing hurdles later on in the hour and as we mentioned earnings season rolls on as big Tech gets started with Microsoft alphabet after the belt today plus Ghostface still on Snapchat as well of course they wanted to be mentioned we'll be right here to break down the numbers and all the stock moves stick around for much more when Yahoo finance returns foreign [Music] [Music] [Music] thank you [Music] foreign [Music] thank you [Music] let's do a check of the market sponsored by tastytrade we are looking at all three majors in the green right now with the down track for its 12th straight day of gains the S P 500 up 20 and the NASDAQ up 121. we're also taking a look at the vix the fear gauge as we like to call it here up just slightly there at 1403. well ups and the Teamsters Union reaching a tentative deal just days before their contract was set to expire the teamster saying agreement adds 30 billion dollars of new money while UPS isn't confirming those numbers CEO Carol tomay says the deal is a win-win-win agreement shares of UPS dropping on the news joining us now is third Bridge Senior analyst Anthony De Ryder you know Anthony You could argue crisis averted for UPS but in the long run this does increase the cost pressures for the company how do you assess the agreement that came down hey guys thanks so much for having me so yeah when we talk this UPS Teamsters deal it's best to frame in terms of Pros versus cons so Pros obviously you know the customer and shipper churn people were worried about uh you know if service were to be impacted that should be largely mitigated um you know given that survey should continue as usual now our experts have previously estimated that you know up to 10 of the UPS business could have been immediately up for grabs if not more depending on the strike duration and you know there are UPS members out there saying 170 million per day of Revenue apply 12 percent off margin what's that 20 million uh per day in alt March in our profit adds up now the cons though as you pointed out is that this is likely likely to be very cost inflationary right if we talk about the terms of the deal higher part-time pay no two-tier wage system you know outfitting the bands of AC for example it's clear that costs are going to go up for ups and that is into their margin outlook for the year that wouldn't be an issue if they could pass on those costs but our experts don't think they hand just because the shepherd base is sensitive right now you know they could lose quite a bit of business if they try and use yield as a lever now one last thing to point out longer term the question is in five years time what do they do you know our ship is going to stick around for the same drama will Teamsters be similarly powerful big questions so should investor be should investors based on at least the data that we know right now which there is very minimal of just the statements that we've seen come through should they be confident in the fact that a deal was done ahead of this deadline that was looming or should they be kind of kicking the tires on this one once we get a little bit more about what the actuals were that was necessary for them to kind of forfeit or make sure that they were conceding in order to reach a deal so I guess again the positives would be that had ups not reach the deal of teamsters and a strike event happened any business that would have been lost our experts indicated that would have been uh permanently lost or at least very difficult to get back so I think the positive for UPS investors might look at is that there's Top Line that's going to stay put obviously the cons is how are they going to deal with the margin compressive factors that I outlined earlier right I mean if they can't price it through they're gonna have to eat it themselves and that's obviously something that they're going to struggle with especially if Market stays soft like we saw in q1 um let me pick up on that point about what we saw in the lead up to a potential strike volume levels did go down uh because a lot of customers were look seeking out alternatives to what extent do those does that business come back automatically as a result of this and to your point yes cost pressures but it's also about boosting efficiency to compete in the market how do you think UPS is positioned so with the first point uh from what we've heard a lot of the business that was sniffing around at other carriers so say FedEx or on-track LaserShip post merge or even Postal Service a lot of that was looking for an alternative carrier so it may not have been actually lost and perhaps now that risk is abated onto your point of operating efficiency obviously for UPS if they keep those volumes they can leverage their Network more fully and realize those efficiencies so they haven't lost the volume to sort of backstop that right if they had lost that volume they would have definitely uh well they would have potentially experienced a loss of of scale economics Anthony derider I appreciate you joining us today thanks so much for your time thank you well the UPS tentative deal preventing 340 000 people from hitting the picket line but it's been a busy summer of strikes according to Bloomberg law 322 thousand workers have gone on strike this year including the writers and actors associations in their unions so we could see more as the UAW contract expires in September joining us now is Art Wheaton who is the director of Labor Relations at Cornell School of industrial Labor Relations great to have you here with us today perhaps we could start with the deal that just got made between ups and the teamsters here I would love to get your instant reaction to it and what this signals about the broader State of Union negotiations I think it's fantastic I'm delighted that we don't have a disruption in service I think that the teamsters were able to win quite a bit at the collective bargaining table but I also think UPS did a fine job as well so the strike was averted they have a few days left to to go before the contract actually expires and the process works well we have heard from other unions not specifically on ups but just the strikes that are happening is that there is a lot of unity among labor unions whether it is in Hollywood whether it is in Detroit where we're having a UAW negotiation right now I mean can you talk to me about where you think the workers leverage lies we've been talking the last year about how workers have the leverage because of a tight labor market is that what's driving a lot of these strikes that we've been seeing play out it's always a combination of different factors number one you do have a tight labor market so unemployment rates are lowest they've been in decades you also had a history of high inflation so everybody is looking at the at the bargaining table as a way to make up for all of the costs and the increased cost of living so that's also a factor you had it's been a huge covid and logistical nightmare for our supply chain for the last few years and this is the first opportunity to negotiate a contract post covid emergency so that's part of it and you have very very high positive Union approval or you the feelings about unions the highest it's been since about 1965. so you have very high approval ratings you have a president in the United States trying to claim he's the most union friendly president ever and unfortunately for us depending on who the president is can have an impact on the National Labor Relations Board and how things are managed So currently we have a more Union friendly president and that means the labor law tends to be a little bit more friendly towards a nlrb all of those factors come into play all right I imagine the answer is different for every different Union negotiation and and as it plays out to the consumer related here and I'm bringing that up because consumers might be thinking okay so who eats that cost is it me who's paying for service or is it the company that may have seen their profits be be able to be buoyed or even ballooned over years or corporate Executives that have seen their own kind of bottom line or compensation balloon over years between the negotiations of different contracts you know is it as simple as saying that the corporations need to eat more of this or where the consumers should expect or can expect some of that cost for you know labor costs to be factored or sent through to them I think the consumer is very well aware that there's been inflation and some costs go up and people think everyone deserves a decent wage so of course they're going to be some cost sharing but the part of it that you haven't mentioned is the increased revenue or increased productivity so by having the labor deal done you're not losing all of those customers so you're gaining that back and also if you keep your Workforce around longer they will usually be more productive and know their jobs better and how they're doing it you can increase on the productivity side as well so it's not all pure cost you do get gains by having a stable work environment and you're not trying to desperately find new employees that don't know how to do the job as well our wages and benefits certainly you know sort of top of Mind in so many of these negotiations but there's also it appears a Common Thread when you think about what's happening with for example the uh aw negotiations what's happening out in Hollywood with sag after and wga and it is about a a change that is happening a technological change in the case of the car makers it is about electric vehicles and what that means for job stability what that means for future skills same thing in Hollywood when you think about those particular issues how strong is the hand of labor unions right now it's it's strong in the hands of labor unions at least on the part of the UAW a little bit less so for Hollywood and for the writers and for the actors um but technology has been an issue for Generations it's not a new phenomenon the last time the actors went on on strike it was also technology driven and it was the whether it was VHS tapes or trying to get those recordings and you did have the cable uh programs doing it so technology continues to be an issue for the Auto industry the problem the UAW is facing is that the transition to electric vehicles and the batteries that are the biggest cost for those electric vehicles are being made in joint ventures so the UAW can't have a strike against the battery manufacturing component of it because it's not owned by General Motors or Ford they're joint ventures so by the nature of it being a joint venture makes it a more difficult time to bargain against the battery components but there is a lot of strength for stopping the building of trucks and SUVs which are in pretty short supply at the moment great insight and context there art Whedon I also haven't had to think about VHS videotapes in quite some time so thanks for the trip down memory lane appreciate it here this afternoon thanks well a possible deal brewing in the banking sector Bank of California reportedly in talks to acquire pacquest Jared blickery here with a closer look steep declines when you look at shares of pack West right now yeah I see a whole banking section A whole Regional banking sector under a bit of pressure here the two entities we're talking about are very small so pack West down here that's down 25 percent I'll show you some larger charts in a second but just kind of illustrate the size here uh Bank of California up 11 and just looking at the market cap Pac West is now under a billion dollars and you might be asking yourself why is a smaller company Bank of California potentially buying out a larger Bank I'm just speculating here could be some issues because Pac West has been selling off assets rather aggressively over the last three months now here is the intraday chart there have been multiple volatility halts since the uh since the announcement it looks like we're caught in another volatility halt right now but I want to show you what's been happening to the entire Regional banking sector over the last three months if we sort by performance we're going to notice something only a few names down here are in the red pack West is among them and you can see uh now it's trading again down 22.6 percent things are developing quickly here here's Bank of California up 29 over three months and uh looks like we got a couple names down here I don't want to spread rumors but uh might be in similar uh situation both of these entities Bank of California and pack West going to announce their earnings or at least they're slated to announce their earnings after the bell I would imagine I would expect that we're going to get some details on this uh but we really don't have many details yet this comes from a Wall Street Journal report they're saying that Center Bridge partners and also warbur Pincus are going to contribute Equity to the deal and then the only other person or entities that are going to supply Equity uh or funding are PE groups and that includes potentially our parent company Apollo Global Management aside from that uh just speculation so we'll be waiting for more news on that probably after the Bell guys yeah potential for yet another shake-up in the space there Jared thanks so much for that well coming up shares of GM riding downhill today as earnings season rolls on we're gonna dive into the numbers and the second app outlook for the Autos Giant on the other side of the break we'll be right back foreign [Music] [Music] [Music] thank you [Music] foreign [Music] [Music] [Music] thank you [Music] foreign [Music] extending their gains new data from the s p CoreLogic case Chiller index shows prices gaining seven tenths of a percent in May that's the fourth consecutive monthly increase joining us now we've got Craig Lazar who is the s p Dow Jones indices managing director and Global head of the index investment strategy group great to have you here with us Craig here help us break down some of the data from this most recent month but as well the broader Trend that we're seeing locked in okay I think that the most helpful context I can give you is to point out that uh home prices at least at our national index seem to have peaked almost a year ago in June of 2022 uh they then declined uh through January of this year 2023 so about a six or seven month period of Decline and that total decline amounted to about five percent from Peak to trough since January we've had now four consecutive months of increases in fact the uh this month's release or today's release which was for the month of May uh made it four months in a row and we have seen increasing prices uh so pretty clearly looking at those data anyway you would say the the decline that that looked like it probably had ended in January it sort of it's ended in January we're now just clearly in an uptrend um second thing to say I think is that the increase is very broad we monitor not only the national composite but also 20 individual cities in every one of the 20 uh was up in the month of May and also in in the month of April uh so the it's not a decline that's a gain that's concentrated in one or two areas uh but instead is is quite is quite broad um I guess the third thing to say this is always among the most interesting things when we when we look at these data uh is that the regional differences are quite striking I mean for uh literally five years until this month uh the the city with the largest year-over-year gain had been what I what I think of as a war for Vegas for about a year in Phoenix for nearly three years and last year or so it's it's gone back and forth between uh Tampa and Miami this month Chicago uh and uh Cleveland in second place so we're seeing a Resurgence of uh of the Rust Belt uh in in these most recent data so Craig when we're talking about 20 cities obviously story lines going to say why we are continuing to see the rebound what's driving it well I I think a couple things one is that the in the rapid increase in mortgage interest rates that we saw last year has has come to an end I mean when I say a rapid I mean we went in in the space of maybe uh six months or less from a from a mortgage rate with uh with a two or three handle up to something with a six or seven handle and it's kind of stabilized after that I think it ticked up a bit today uh but but we're still uh relatively stable compared uh to what was going on a year ago uh so there hasn't been that that rapid increase in rates and obviously the the more mortgage rates go up the less affordable houses become and the less able people are to buy them uh the second thing is that that as the economy has evolved over the last uh say six six months to a year uh it looks increasingly as though the Federal Reserve will be able to pull off what I think they would call a soft Landing in other words a reduction in interest in inflation rates we without putting the economy into a full-fledged recession obviously if there is a it influences people's incomes negatively it negatively affects we haven't had that yet so the fact that the rates seem to have flattened out if not decreased uh and the economy is still reasonably strong are both good things for the housing market the the additional factor of course that everyone who who uh studies this uh is aware of is that because so many people either bought for the first time or refinanced several years ago when mortgage rates were in the two to three uh neighborhood for those people to move and move up even to a larger house even if they need a larger house becomes much more expensive because they not only have to pay for the larger house they have to pay for a much higher cost of financing so the the increase in rates so rapidly after a a very low prolonged low set of rates uh makes uh makes it harder for people to move reduces Supply and therefore supports prices Craig just lastly while we have you here where in terms of volume right now even you know across the pricing metrics and fluctuations that may be taking place where is the the highest propensity to continue to bid into the home buying experience from what you're seeing the only way I can answer that is by looking at at the the City by city data and and I mentioned earlier the Midwest was the leading uh area uh this month prior several months that have been the southeast uh for the last you know at least six months or so the weakest area has been the West I mean Seattle and San Francisco are the two biggest decliners on a year over year basis and I I come back to trying to explain that to say well if you look at any set of of data on migration within the United States uh the the coasts are losing population California I think lost population last year for the first time in the history of California so if population is declining in relatively expensive relatively High tax areas and migrating to relatively less expensive and and taxed areas uh that would that would suggest support for the southeast and Midwest which is what we've seen Craig Lazar thanks so much for taking the time here with us today breaking down some of the latest economic data around the housing market really appreciate the time and context well shares of General Motors under pressure in today's trading session despite reporting a beat on the top and bottom line the stock they're down more than three percent the car maker wrestling with costs and building more electric vehicles here are the details we've got Yahoo finances Pros supermanian uh a number of headlines coming out of this call Number One news on the bolts but also this supplier that GM has sort of identified saying that's kind of slowed things down for them yeah so you know look at the numbers here huge Top Line beat 25 year of year growth and revenue like a nice strong beat they're upping that profit guidance again for the second time this year uh and the way they're doing that is they're they're getting extracting some costs out of Labor and marketing costs and things like that also we'll talk more about this but they're actually able to charge more for their each car but the big thing you mentioned is why is the stock down I think it has to do with the fact that there's issues with their EV sort of um sort of Runway they want to make hundred thousand EVS in the back half of this year they still say they're on target but there were some issues with a supplier that makes the modules here's Mary bear earlier today on that problem we've also added additional lines because we don't want module production to to gate our our launch of all the products that we have coming in the second half of this year and continuing into next and we know we're going to need that module um assembly capability anyway as we continue to grow beyond the 400 000. so disappointing um I've personally been reviewing the lines as you know I I've spent time in me earlier in my career running it so we'll get this behind us I'm very confident of the teams we have in place uh so we you'll see it improve as we get through um I would say into the you know end of third quarter beginning of fourth quarter and then I think it will primarily behind us uh by the end of the year I was surprised to hear that she said I'm personally getting involved going to the lines she used to be a mechanical engineer herself going there being wanting to see what's happening here why the module is not operating there's any GM Engineers to their supplier to get those lines up so that's how concerned they are about the rampant I think that was sort of the oh shoot moment for investors yeah talk about having your hands on the pulse of where perhaps there is the largest pain point at least right now in terms of hitting some of those goals so does it throw them so far off Target that it's changing investor sentiment out there at all I think it might be looking at today's in the movement today it's a little little down on actually a strong I thought financial performance so maybe there's some concern there but uh both Mary bear and CFO Paul Jacobson said they're still on track to make those hundred thousand EVS make 400 000 by the end of 2024 and a million I think by the end of 2025. so they're saying they're still on track I think there's some doubt as to whether that's going to happen yeah I mean the company is really touted 2024 is sort of a big year in terms of the transition to EVS but we've seen competitors cut prices did we hear anything from GM on that front in terms of where they how comfortable they feel in their pricing strategy right now so they're talking about how their their ATP or average transaction price went up 1400 bucks in the last quarter because it's a strong demand for the ice products right for the EVS they're not talking about are they saying that our prices are fine right now we've only heard ballpark what they want to charge for their three upcoming EVS now the Silverado the Blazer and the Equinox so they think that they're competitively priced but once those cards come on the market we'll see right you could get a Tesla Model 3 for 32 000 after the EV tax rate you can get a a cheap Volkswagen ID for AV so we'll see what the customer does when they when they see the Equinox versus these cars so I think that's that'll be the proof is when these cars on the market are they going to adjust pricing especially if Tesla goes on the Rampage again and cuts even more yeah we were just talking the other day right about whether they keep the volts and how we've seen more and more sort of higher price point cars coming out whether that's kind of where they're doubling down so interesting commentary coming out of GM thanks so much for that prize Well coming up on the other side pain at the pump gas is ticking up slightly but it's not just the price of the oil that's kicking up costs more on the latest crude Awakening when Yahoo finance returns foreign [Music] [Music] [Music] [Music] foreign [Music] [Music] thank you [Music] gas prices are ticking up slightly the national average for regular fuel is up around 7 cents over the past month but it's not just the price of oil that's kicking up costs Yahoo finance's Rick Newman has the story hey hey guys uh I came across some uh some economic research recently into profit margins on gasoline sales and I knew I had to look right into this because of all the conversations I've had with our audience members and drivers about why our gas prices so high uh who's making out when gas prices go up so it turns out uh if you think that um that retailers are charging more relative to the wholesale pressure actually right about that uh the profit margin on gasoline is about 77 percent higher than it was in 2019 and the profit margins have have more than doubled for a couple periods uh in the post-covered era so um yes retailers are taking a bigger chunk of the price of gas as a profit margin uh and before everybody goes howling about uh how much uh gas stations are ripping off drivers um keep in mind we have pretty tight supplies gasoline we have a limit on refineries there's basically a ceiling there so we don't have as uh you know Supply is pretty tight and that actually gives retailers pricing power uh this is what some people have been calling greed inflation um and uh it is kind of a thing greed flation as and when companies set the prices artificially right because of this expectation it's the price I mean you know let's remember I mean in capitalism uh producers at the wholesale level and retailers selling to Consumers everybody wants to sell their product for the highest price they they can get um usually competition um it helps bring prices down because people could you know sellers compete with each other but when you've got strong demand which we have because Americans have been buying stuff like crazy and now they're out and about and traveling and buying gasoline and when you have tight Supply that is the those are the two factors that actually give sellers pricing power so that's why they're able to charge these prices really quickly Rick this is a question that always comes up when we talk about gas prices to what extent is that price dictated by those individual gas stations how much of it is the oil company's oil price I mean right so despite Rising profit margins the cost of oil is still the biggest factor in gasoline and rather than thinking that the it is um the sellers that are dictating the price I think the biggest Factor there is the is the lack of refining capacity I mean we have actually lost refining capacity in the United States and we'll probably never have a new um petroleum Refinery built in the United States so that's a bottleneck even when even when oil prices are low we have a bottleneck on refining and I think that constricts supply and that gives retailers pricing power Rick Newman thanks so much for breaking this down for us really appreciate it bye guys well nearly three in four Americans say they don't feel financially secure at the moment that's according to a recent bank rate survey 41 point to insufficient retirement funds as a factor that's keeping them from Financial Security we want to help change that by getting you retirement ready and here are the five-part retirement checklist is Gene chatzky Financial expert and opportunity Knox Financial coach Gene let's start with that list what's on the top five yeah absolutely first of all nice to see you thanks for having me first thing that you have to do is figure out what your retirement looks like and I know that that sounds really obvious but in particular we know that there is often a disconnect between couples when are you retiring where are you retiring what will you do day to day in your retirement will you continue to earn some sort of an income as many people do you gotta scope that out and then you have to part two step two figure out how much that's actually going to cost putting numbers together with your plan A lot of people are banking on Old math they're they're thinking well my retirement life is probably going to cost me about 80 percent of My pre-retirement Life um that was true for some of our parents and some of our grandparents but we're retiring younger in some cases we're retiring healthier in a lot of cases we've got more years to live and so figuring out where your where that money that you are going to come up with is actually going to go what it's going to fund how much housing is going to cost how much transportation is going to cost how much travel you want to do how much you're banking on for health care that's an integral part of the equation and a lot of people have no idea where their money is even going day to day so that is a good place to start figure out where your money is going now if you're feeling like you're at a loss with that my coaching program which is called Finance fix it's a program that we developed at hermoney.com can help it helps you get in touch with your money so that you can save a little more spend a little less and start to make progress towards your goals Gene you'll have to forgive me for reading ahead on this assignment as well this top five list number three it talks about the sources of income and I mean I've always been taught you got to have five streams of income I'm working on it to all the people that told me that growing up but where within your retirement checklist do you advise people on where they can find different sources of retirement funds so these days most of us don't have pensions with the exception of Social Security I'll come to that in just a second we do have retirement accounts and we've been told accumulate accumulate accumulate money in these accounts well now we're in a position when we look for retirement in the face where we have to say all right how do I take this sum of money and make it last as long as I do and there are additional strategies that you need to dig into that involve coordinating taxes so that you're pulling the money out of the right Accounts at the right time that you think about things like do you want to craft a retirement paycheck using some of that money to perhaps buy you an annuity that will provide a stream of income that will last as long as you will last without having to worry about it and when it comes to Social Security people without a strategy for when they're going to take Social Security leave a lot of money on the table in particular for the higher earner in the family you want to try to wait as long as possible between age 62 and age 70 before tapping Social Security because for every additional year you wait you get a bump in benefits equal to about eight percent that's a guaranteed return and it's tough to beat on a year-to-year basis by putting your money into a diversified portfolio of Investments finally looking at number four and five on your list how do you think people should be thinking about long-term care and ultimately that last part getting help what do you advise people so when it comes to long-term care um this is particularly important for women we're going to outlive the men in our lives many of us who are partnered will take care of the men in our lives but then when it comes to our own care we we should be looking into a bundle of benefits that will pay for things like nursing home care or at-home Health Care unless we've got enough money to pay for those things ourselves it's a complicated product uh comes in a lot of permutations which is why getting help is is number five on the list and it's Paramount if you are more than 10 years or 10 years or so out from retirement if you're around 50 55 and you have yet to go through a pre-retirement checkup that puts you through all of these steps that looks at whether or not you're well situated to embrace the retirement that you want it's time to have that checkup you want to have it with a financial advisor who is a fiduciary who has your best interest at heart and you want to make sure that you lay out a plan that you can follow for the next decade it may change that's okay but having a plan is the only thing that will really get you going certainly good advice there a lot of people taking notes Gene chatzke good to talk to you today I really appreciate the time coming up the closing bell on Wall Street we're going to check in on the latest Market moves and the top trending ticker stay tuned [Music] thank you [Music] foreign [Music] [Music] thank you [Music] foreign [Music] thank you [Music] the closing bell on Wall Street ringing right and now you've got ticker symbol CPT ringing the closing bell right there at the NYSC now time for a checkup the markets sponsored by tastytrade all the US major averages settling right now and in positive territory the Dow Jones Industrial Average you're seeing that flat just barely to the upside right now by about one tenth of a percent will be generous and round that off too S P 500 you're seeing that settle Higher by a little more than a quarter of a percent and the NASDAQ Composite that closes in the green to round out our Trifecta or the hat trick or the triple double whatever you want to call it call the NASDAQ triple double yeah triple yeah you're a big basketball fan yeah we like that all right cool well here we are in the NBA offseason so we've got to figure out other things to do like listen to music shares of Spotify they're tanking today following second quarter results that disappointed investors as gross margins missed analysts expectations the music streaming giant also Heights the cost of its premium subscription let's take a look at shares right now they're down by about 14 percent that's where they end the day so not quite its worst trading day on session but it ain't great here ultimately we were looking through some of these results we've got Alec now here with us on set to help us really round out this conversation wasn't quite a Miss on the the Maus they beat in that category though oh yeah subscribers is doing very well paying users doing very well it seems like investors are concerned that the price hikes which went up by one dollar for the Premium plan now that's going to negatively impact subscribers moving forward which has really been the lifeline for this company another metric that investors have closely kept their eye on is gross margins that disappointed in the quarter it's been declining we did see an upbeat surprise in the last earnings report which did fuel some gains then so I think the fact that we're reversing that right now is a concern for investors but a lot of this has to do with a few different headwinds one being foreign exchange another being the fact that royalties uh the cost of royalties are higher um and also Spotify is streamlining its podcast business so there are greater losses around cuts to that unit I think there's going to be continued cuts to come based on some of the results that we did get here we saw Revenue um Miss estimates we saw losses widen we also saw free cash flow although it was positive it was down sequentially and year over year so profitability just continues to be a struggle for this company and investors don't really seem to have the patience anymore but analysts are really preaching the long-term game for Spotify yeah although interesting when you look at podcast advertising Revenue right we've been talking about how much money they spent on that they were accelerated to more than 30 percent year and year so things at least on that front yeah I guess it's about the cost and the investment versus the revenue exactly and they say they are going to take a very strategic approach to their podcast Investments so that means really leaning in on the podcast that are doing well and getting rid of those that maybe aren't we saw them part ways with Prince Harry and Meghan Markle that was a very very costly and definitely Endeavor so that's something that they're going to continue to do throughout 2023 but clearly right now with the stock down so much investors weren't too happy but look at that year-to-date performance I mean it's up more than 75 so this is a stock that has really battled back some serious lows let's talk about another stock we've been watching closely today shares of 3M closing today higher following the company's latest earnings report the industrial conglomerate posted 7.9 and 9 billion dollars in Revenue beating analyst estimates of 7.87 billion the company also raised its full-year earnings guidance and reaffirmed its Revenue guidance guys this is a company that is still very much in transition they've really leaned in on the high growth businesses like climate Tech like semiconductors there's still a big overhang though and it is the legal settlement settlements for this company there is the the settlement the 10 billion dollar settlement from last month on the forever chemicals that we like to call contaminating drinking water there's there's a slew of liabilities that they're still having to clear here that continues to be an overhang but when you take that out of the picture things looking to the upside for the company yeah and like we've been talking about with a lot of these companies and their earnings if you're able to boost that Outlook and boost that guidance that is a positive and you're going to be rewarded by investors I also think a company like 3M which is very Diversified it helps you can lean on different sectors of the business for example automotives was very strong in the quarter Healthcare was also up slightly that helped offset some of those lower growth units like safety and Industrials for example those sales Fall 5.4 percent in the quarter um but you're right despite that large second quarter loss the fact that we did get that adjusted profit beat by a pretty significant margin on top of that Outlook raise I think that's that's a positive for 3M moving forward absolutely here we're also tracking shares of Disney this afternoon shares of the House of Mouse closing the day in negative territory down by about one percent following a downgrade to underperform neutral by Atlantic equities analyst Hamilton Faber who also lowered his price Target on the media giant from 70 or 276 dollars from 113 favor citing concerns around Disney's linear advertising saying it's clear that advertising is set to fall far faster uh far faster than they have seen previously there and you're seeing that reflected in the shares of Disney here on the day as well Ali yeah Disney is just a company that's dealing with a few problems right I mean we have this slowdown in their franchise business the box office for example we've seen some of those Marvel movies struggle and that's going to have a ripple effect to Disney plus a couple with that we've had an animation slowdown of sorts and then in the background is this double Hollywood strike and we're already starting to see the impact there with the company reportedly pushing some of those film schedules to adjust for the strike so that's something that we're going to continue to watch outside of films there's the uncertainty surrounding the macro environment you mentioned the decline in linear networks I mean Bob Iger he's clearly not married to them he already hinted that he would be open to selling some of those TV assets but who would be the buyer there so there's a lot of uncertainty Sports is continuing to do well but then there's a question of when Disney will take ESPN fully over the top there were reports that they're already holding strategic partnership conversations with major leagues like the NFL we'll see if that comes to fruition but there are a lot of unanswered questions when it comes to Disney and A lot's going to be riding on this earnings yeah the company that really clearly wants to accelerate into digital but still has the weight coming from linear a lot of transitions still happening on that front another stock we're watching is Chipotle the company set to report earnings at this time tomorrow our very own Brook De Palma is here with a preview Brooke good afternoon Akiko that's right it's second quarter earnings results are expected to be reported Wednesday after market close and Wall Street pretty optimistic about this one Revenue expected to come in at 2.54 billion dollars up 14.5 year over year adjusted earnings per share also expect it to be higher year over year of 34 to 12 and 24 cents now same Source sales getting lots of drivers here including increased foot traffic that limited time offering the chicken Alpac store and a pause on price increases earlier this year that same story sales numbers expected to jump nearly eight percent year over year now taking a closer look at that foot traffic that is expected to drive steam Source sales this past second quarter in June foot traffic was up 14.7 year over year may up also 17 and in April 15.2 percent as you can see here according to placer.ai that's far higher than it's fast cash appears so think far higher than kava than sweetgreen among many others in the fast casual space and holding prices seems to be working for the fast food chain as well as winning over analysts on the street from TD cow and they're saying Chipotle's value perceptions are outperforming the fast casual pure group at a widening clip wet Bush saying something similar to saying that it's well positioned to regain its uh value Advantage by holding menu pricing peers Below in 2023 which could drive accelerating transaction growth as the second half of the Year progresses other things other items or other um results that analysts are looking for on the street is how far they are moving along as far as Union expansion goes William Blair is saying in a note that they expect eight to nine percent this year ramping to 10 over the next few years of course earlier this month Chipotle announced plans to spread or expand rather to the Middle East and of course analysts continuing to launch that robot expansion of course they recently announced the avocado and shipping an Old Town favorite only about a year old now yeah I'm sure that's going to be mentioned on the earnings call quite a few times but Brooke you mentioned the chicken Alpa store what's the hype there what are Wall Street analysts saying about that you know a really food inflation continues to be a story that we continue to watch in 2023 and according to TD Cowan the chicken Alpha store has actually outperformed last year's Polo Asado and so it is now going to be what they expect to be the most successful protein limited time offering now it's important to note here that beef makes up about 20 of Chipotle's food basket avocados make about nine percent and so with those two items being a go-to for consumers those are facing higher prices but chicken prices moving lower and so ultimately if we saw more consumers move towards that perhaps it helps Chipotle's food basket as chicken prices continue to lower and so lots of food inflation unit expansion and lots of foot traffic expected to be the top drivers of this quarter for Chipotle all right Yahoo finance his own Brooke De Palma thanks so much for covering all of that and keeping a close eye on the tastiest part of the markets perhaps here appreciate it bro all right Switching gears here shares of alphabet are trading higher after reporting earnings you're seeing an immediate reaction of about five percent to the upside in the extended hours move right now let's break down some of the numbers for you it was ultimately a beat on top and bottom lines here for both EPs and revenue taking a look at the earnings per share that came in at a dollar 44 cents and the diluted EPS there and then Revenue that came in at about 74.6 billion dollars that X tax revenue that you're looking at on screen which is what a lot of the analysts and investors pay close attention to that coming in north of 62 billion dollars there and breaking down one of the other big announcements that came within this second quarter 2023 earnings release they have also announced plans for chief financial officers uh the transition there and appointment of a president and chief investment officer so the CFO of alphabet and Google Ruth porat going to be transitioning into a new role here and Reporting into Sunday try I also want to mention a few other just quick call outs Here YouTube Revenue also worthy of note here as investors pay close attention to this grappling for Consumer attention and the screen Wars Here YouTube that brought in 7.66 billion dollars it'll be interesting to see what more color they give on the earnings call as well especially given the fact that this is another company that was investing heavily in generative AI as well to try and maintain its dominance in search yeah investors looking for a little more color on integration how they plan to integrate the technology there but that news on Ruth Pura is certainly a pretty significant one there just given her Helm scfo there for a very long time yeah certainly and I mean you think about the number of different areas that Ruth has really had to govern the financials for this company over whether that be the other bets and just how much they were spending in areas like waymo or where they were putting that forward in terms of other Investments to try and make sure that they weren't missing out on The Cutting Edge of Technology where it didn't make sense for them to home grow something in turn only and so for alphabet and the PowerHouse and the capital cash that they've been able to put to work and making sure that they can either acquire to grow or build something internally that incrementally allows them to grow and add on to other offerings that they either take to end to end consumers within households or taking to other businesses in the form of cloud and since I mentioned Cloud as well here there's a company that's very important to close uh pay close attention to here that cloud Revenue line item that brought in about eight billion dollars for the company so this is largely and of course comes as no surprise here still an advertising company but has been looking to make sure that they are able to capitalize more on the cloud important to note that if you compare this to the quarter same quarter last quarter or last year rather they were actually able to swing this to a a net income operating gain here last year the same quarter it was a loss of about 590 million dollars they saw a net income of about 395 million dollars for this second quarter this year okay let's talk about these other big Tech name that's now reporting their results shares of Microsoft under pressure in after hours here down now more than two percent when you look at the numbers a solid beat both on Revenue as well as earnings per share but it really is about the outlook here for the company and concerns about continued slowdown in Investments so let's walk you through the numbers here Revenue coming in at 56.19 billion dollars earnings per share at 2.69 some numbers we like to look at in terms of where things stand intelligent Cloud Revenue at 23.99 billion that's also a beep pretty close to where estimates were we're also seeing operating income coming in at 24.25 billion capex at 8.9 billion um one thing that you know we've been watching on the one hand there's been an excitement around Ai and Microsoft's Investments there there's also sort of where their core business has been in that has been in Enterprise here when you look at revenue and more personal Computing that came in at 13.9 billion dollars it was down four percent Windows OEM Revenue decreased 12 and that's something that we have heard in terms of companies increasingly sort of maybe pulling back some of their investments in the face of what is more of kind of a cloudy outlook on the macro front now um the big question here going into the call is going to be well how are they going to be monetizing AI what is that growth process look like tatya Nadella in the releasing organizations are not only asking how but how fast they can apply this next generation of AI to address the biggest opportunities and challenges they face safely and responsibly he goes on to say we're focused on leading the new AI platform shift is that going to be enough to really get investors excited beyond what has already been built into the stock here and the potential for additional growth coming from AI technology no it's a great point and I think as we were talking about this earlier coming into the report it's really going to be about how much on the call they disclose about the level of spending that they're comfortable continuing to put forward whether that's investments in other entities like open Ai and whether they add incremental investment on top of that considering the head start out of the gate that open AI has had in some of the research development and actually bringing a product to Market that everybody and their grandmother is talking about if they're at the if they're at the summer barbecue everybody wants to know about chat GPT and so at the end of the day from Microsoft now where do you further that investment into some of your other tentacles that you have that round out this holistic msft umbrella here whether that be AI within LinkedIn whether that be AI within some of their advertising products within search engine as well investors want to hear the answers about when that's going to be monetized and when that trickles through some of the margins too yeah and we did kind of get a preview of that right when Microsoft announced some of their pricing strategy last week 30 a month in terms of use of their generative AI during their with their co-pilot service on top of what companies are already paying so we're getting a glimpse of how Enterprise customers are wanting to integrate that it is about how quickly that growth will come and how quickly the revenue is going to come in yeah spot on here let's also talk a little bit more about some earnings that have come through shares of snap they are plunging right now by about 16 percent we'll round that off to a little more than 15 right now after reporting earnings Ali Canal is here to break down the numbers for the brand of ghost face Chilla yes and this share reaction is largely due to forecasts that came in weaker than expected but we did see a beat on both the top and bottom line revenue coming in at 1.07 billion versus the estimated 1.05 billion now that's a decrease of four percent year over year and it marks the second straight period of declining year-over-year revenue for this company we did see a narrower than expected loss for adjusted uh per share loss of two cents versus a loss of four cents that was expected Global daily active users also B estimates 397 million in total where whereas average revenue per user another beat there 2.69 as the expected two bucks and 67 cents now when we go to the forecast here they do see third quarter adjusted ebitda losses to amount between 50 million to 100 million that's assuming that the company's daily active users will reach between 405 million and 406 million now staff has been aggressively trying to reshape its business they said they're going to continue to invest in AI other infrastructure to improve the performance of its ad platform and drive deeper content engagement a lot of the experts we've been speaking with have said content engagement is going to be key especially with those younger consumers like gen Z and Millennials on the call I'm sure investors will be very tuned in on the health of snap plus what those subscriptions are like how that could add to average revenue per user um Snapchat a snap I should say also saying that the forecast assumes modest sequential headcount growth as we continue to carefully calibrate our operating investment and to focus on the inputs most essential to the acceleration of Top Line growth again that's Q3 adjusted ebitda expectations between 50 million to 100 million there you know this is a company that could face a ton of questions on this earnings call just looking at the stock reaction and as investors and analysts who are going to be pegging the executives with questions on that call when they get the chance I think back to the the previous earnings uh earnings call that took place when Rich Greenfield was asking them the question of should you be scaling back the purchases or at least the capital that you're expending right now on even some of the augmented reality features that you're putting into this platform and it's a larger question of the cost restructuring that may need to continue to take place snap I think had pushed back saying we've already put much of that forward so we're confident now in the way that we are moving and how much we're spending uh and then where that goes into different AI chat bots on the platform or whether that is to enhance against the content experience too but in these screen Wars Snapchat acknowledged years back that everybody from Netflix all the way to a tick tock is their competitor and that's a wide range of people that are vying for Consumer attention right now instead not always really kind of assessed or valued is sort of you know sort of the tech play as in you know they were very ahead on AR they they have been incorporating AI as well it's not necessarily valued the same when you compare the excitement around it I should note by the way meta shares up nearly two percent here now and after hours too because it's interesting always to see the reaction between what's been playing out in snap tomorrow meta reporting that stock though you know maybe in reaction to what's happening with Google as well and digital ads there but uh up nearly two percent right now you know just one last note here we've been looking at the plusification of everything essentially Snapchat Plus their subscription service that offers exclusive experimental and then additionally pre-release features that reached 4 million paying subscribers in Q2 that's one year after launch they're noting here as well so perhaps we'll get a little bit more color about that and what their pricing strategy might be in the future as well position is still a big question yeah yeah exactly the concern Yahoo finance is Zone Ali Canal joining us to break down some of the numbers this afternoon thanks so much let's do a quick check of the market sponsored by tastytrade let you know where things ended today's trading activity the Dow S P 500 and the Nasdaq all ended the day in the green the Dow flat just barely to the upside S P 500 fractional gains there as well three tens of a percent will be generous around that off too and then as that composite you're seeing gains there of about six tenths of a percent as we closed out the trading session well Tech Giants Microsoft and alphabet are out with their latest quarterly results we have Ted Mortensen the bear technology tests desk sector strategist with deeper insights into what is catching investors eyes big names here reporting we are seeing stocks moving in the opposite direction let's start with the one that's under pressure here Microsoft we're seeing a beat on the top and bottom line here but it is about the decelerating growth here particularly around Cloud what's your Takeaway on that front well first of all Azure was the main focus here they had guided uh 26 to 27 percent they came in at 27 percent I think a lot of people were looking for a higher number uh you know deliver on gen AI um on loads of gen AI it's very obvious that the Enterprise now is still in this optimization stage of looking at their Cloud uh spend so that's a little bit disappointing and people are looking at a higher number there is it is it unrealistic of investors to expect though a monetization of generative AI this soon in the game for even a Powerhouse like Microsoft that's the right point but you know uh Sadia is is uh has uh been very very aggressive in his um narrative on open Ai and I think people uh were looking for a little bit better on those loads um generative AI is it's not a flip of the switch and you asked the right question uh these are re-architectures of data stacks and infrastructure and it does take a long time so you know you can look out about a year out and you'll start to see it hit the model but you know there is a fair amount of high expectations with Microsoft being up 46 percent year to day yeah and Ted you know you could argue maybe they're they're a pullback a slight pullback is needed given the excitement yeah a healthy pullback we should say um you know when you look at Microsoft always a good pulse of just wear Enterprise is spending right now given the deceleration we've seen on that front as well what does that tell you about where companies are putting their money I think this is the optimization trade uh everybody's uh really looking at their I.T budgets pretty aggressively that's nothing new uh with our conversations with cios Microsoft is kind of the death star of Technology they are swimming totally out of their Lanes they're innovating faster than anybody else they're using their 17 billion dollar cash flow uh per quarter to really integrate AI into areas like development tools on GitHub which I think is going to be very strong as well as moving into security so when I talk to CEOs or our analyst Tech Team talk to CEOs uh one thing comes out um Microsoft is becoming a line item in budgets and I think along with every single company in Tech those I.T budgets are not infinite especially in 23. I think something that you just alluded to is really no worthy here and that we've moved past this kind of hype phase or narrative selling cycle or part of the cycle for generative Ai and for a lot of tech companies and even non-tech companies that had said that they were going to be able to benefit and leverage from it no doubt that could be true but now that we're in the the prove it phase how many other companies kind of across the Spectrum here could be set to face some tough questions from investors and and ultimately perhaps see their stock prices react in tandem that's the right question I mean I sit on over 70 calls a quarter on Tech and I'd say 90 percent of the CEOs are saying they're generative AI companies some are and some are somewhat imposters and I think you're going to see the companies where the Emperors don't have clothes and then the company's taking massive share uh it's more of a platform cell and there's some infrastructure picks and shovels that are going to do extremely well but not everybody is going to catch this wave it takes a lot of free cash flow and a lot of Engineers finally Ted we're watching shares of alphabet moving in the opposite direction certainly a number of things to hit on in terms of what investors are watching there it is the monetization of their AI technology it's also about the growth they've seen in YouTube and digital ad spend what's the one that you think really is leading to these gains I mean to what extent are is a six percent popular Justified it's uh you know if you look at Google Google's up uh I want to say about uh 39 year-to-date so it's a little bit below the Microsoft um uh gains but it's all advertising um advertising uh last quarter was somewhat muted and um this Improvement uh on Advertising is noteworthy uh also I think as uh if you look at gcp which is their Cloud offering it's solid growth of you know call it 28 so they're one of the big three between Amazon and Microsoft and very very poised uh from a cloud standpoint it's an engineering company and I think um some of the general the Gen AI uh you know privates are using gcp because it's much more flexible on apis and um quite frankly they've been a Pioneer for a long time uh on on AI infrastructure yeah just lastly while we have you here Ted I mean the street has become used to hearing from Ruth poorat in one facet or another and now there's going to be transition as the search commences for a new Chief Financial Officer you know what do you believe this next iteration of that position particularly could hold is it one of kind of extreme cost measurement even more so than than Ruth has done over the years and having to monitor where some of that spend is going out the door and where they're able to monetize a very well oiled parts of their business she's one of the best CFOs in the business if not you know the top five CFOs in the business and the investor Community had a tremendous amount of trust with her she was very much of a straight shooter and and quite frankly it had a very good command of the numbers so the person coming in uh is gonna have to be that type of person um CFO communication is key with the uh institutional Market um and you know Google's gonna have uh a hard role to find uh to um really take advantage of uh having Ruth in the seat for so many years it's been a it's been a blessing for the company she's uh she's an all-world CFO certainly have been at the helm the Steady Hand at the helm for many many years Ted Mortensen it's good to talk to you today I appreciate appreciate your Insight okay all right have a good afternoon well coming up snapshares plunging after hours amid its third quarter guidance missing expectations we're going to break down the numbers on the other side of the break we'll be right back [Music] [Music] thank you [Music] thank you [Music] foreign [Music] [Music] [Music] [Music] foreign [Music] [Music] [Music] thank you [Music] foreign plunging on third quarter guidance despite beating on earnings for more on this we turn to Scott Kessler third Bridge Global sector lead for Tech media and Telecom Scott good to talk to you today a huge decline to what we're looking at down more than 17 percent here what do you think yeah I mean look this is not surprising I think snap has got to be one of the more volatile uh names within this category and even across TMT in conjunction with uh quarterly results I think it's really more of the same I feel like I've seen this movie at least once or twice before where snap essentially is indicating that there are some challenges the challenges could be coming from the macro backdrop could be coming from the fact that you know they've been overhauling their ad technology and platform or the fact that it is in fact a very competitive market all that put together means that there are I think continuing issues that snap has to overcome and investors are not especially patient especially at this point Scott you read a report like this you see the share price reaction sure year to date they're up by about 40 percent but with all of the competitive fact actors that are in the market right now and the ways that consumers attention are being pulled in One Direction or another on either user generated content or just consumption of that content can investors still feel comfortable holding snap I mean to be honest I don't know how people can feel comfortable especially given the implied decline in the share suggested in the after hours trading that being said however I think it's appropriate to kind of wait and see in terms of what the company has to say look the company announced a pretty major restructuring a little less than a year ago I think it was August of last year they talked about prioritizing you know things like user growth and revenue growth and essentially AR VR presumably monetizing that they're focusing on those things but really to be able to truly execute they need to be able to get their advertising technology and platform in place and it's took it's taken them a lot longer than people might have expected and it's at a negative impact on their ability to kind of drive monetization and that's what people want to see at this point I think that the company he would be well advised to hopefully indicate that they're in position to kind of relaunch the ad platform so that they can really benefit from what historically has been a really strong period for them and that's the holiday shopping season so we'll see what they say there in prioritizing some of those features Scott at what cost though here because it seemed like in the previous quarter that was the question that many analysts got ahead of how much are you willing to spend to continue to prioritize some of these efforts knowing that you're in a a corporate advertising spend slow down or kind of low period yeah look I mean I think these are things that they need to do they've already embarked on this spending so they can't just stop Midstream um nonetheless I do think it's reasonable to ask when is this going to be done and when are you going to start being able to you know flip the switch and be able to really capitalize on the Investments that they've been making for a number of quarters at this point I think those are very reasonable questions I also think uh that people should be wondering about other monetization efforts you know we spoke with an expert not that long ago who pontificated that yes you know monetizing snap map is uh you know an opportunity maybe a priority but not something that we should expect until next year I think sometimes with SNAP it seems like there's a lack of a sense of urgency coming from company leadership we clearly saw that urgency when the company announced a pretty massive restructuring last August but since then I think people are kind of wondering when the benefits of that restructuring are really going to manifest themselves and Scott we didn't even get to the competition discussion of all that but certainly a lot to talk about when it comes to snap stock Scott Kessler appreciate your time today thank you switching gear shares of Whirlpool sinking today as the company saw weaker demand for its products this quarter despite signs of inflationary pressures easing whirlpool's Executive Vice President and Chief Financial Officer James Peter spoke with our Yahoo finance morning team about the most recent quarter take a listen what we're seeing in terms of demand you could probably break down into three different buckets here and if you think about our business there's a big part of it that's replacement and that's 50 to 55 percent of the appliances we sell and that actually that segment is relatively stable and strong and pretty predictable the next part is what we'll call discretionary spend and that's about 30 percent of our business or 30 percent of the industry that's the segment right now that I would say the consumer is still relatively tentative in and part of that is driven by existing home sales are still relatively low and if you think about it when people buy an existing home one of the the few things they do change out when they move in might be the appliances so that segment right now we would say is is below where we expected but this is relatively stable now the last part of the industry in our business which is about 15 percent for us is new home construction and we're beginning to see that pick up and I think you've seen in the last you know couple of weeks a couple of the large Builders come out and be rather positive and we're seeing the same thing we're beginning to see their business pick up which means in about six months our business picks up as those homes are completed so as I said it's probably a mixed bag on demand within the U.S and then if you go outside the U.S you know part of what impacted us within the quarter is that demand in emea was down by about 10 percent and that's just the macroeconomic environment there and lower consumer sentiment but you know as I said in the U.S we are positive on the the demand in the future and we do believe we'll begin to see some of that pick up and with with people who can't find existing homes many of them will turn to remodels at some point which then Falls in that discretionary bucket for us Jim uh it's Barn here good to see you as always you know how fast will that rebound in the U.S housing market take place this week we're supposed to get what could be the last interest rate hike for this cycle from the Federal Reserve what does that mean to the next six to 12 months in the housing sector yeah no that's a good question like I said I we're already seeing the signs of new home construction pickup as you know people who are in the market for a home and couldn't find an existing home due to low inventory and and the reason there's low inventories many of us know it's with mortgage rates where they are nobody wants to give up on their you know two and a half three percent mortgage to take on a seven percent mortgage right now so we expect to see that pick up in new home construction uh you know over the next six to 12 months I think then as you look to next year we would expect to begin to see as interest rates stabilize and it's kind of been absorbed and normalized within the marketplace you'll begin to see some of those existing home sales pick up but you know right now I'd say new home construction will be the first thing to show signs of growth people who are buying new appliances what kind of choices are they making because I know you guys have you know you've been doing more sales more promotions but at the same time you've been leaning into some of your higher end stuff I know you guys bought InSinkErator um I am an InSinkErator owner myself with a kitchen Renault that I did um so how many people are making those higher end decisions right now of your customers yeah I would say you know the mix it and first off thank you for buying InSinkErator but uh the mix of our customers we see right now is relatively stable and pretty much in line with with what we saw you know historically and especially pre-covered now as I mentioned as new home construction picks up what you do start to get is a disproportionate amount of kitchen appliances because every new home takes on average around five appliances the majority of those being kitchen appliances so you know that's the categories that we expect to see pick up I'd say right now though our balance of sale or our mix of product is relatively similar to what have been in the past as well as our mix of Brands we still are seeing the consumers buying in in the premium space and also in the mass space so despite the fact that that the promotional environment has returned to levels that we would have seen before covid I'd say you know consumers are still buying at that premium and especially that mass premium segment right now Jim I put this question to general motor CFO this morning and I'll put it to you do you think inflation has peaked for this cycle are you confident that you can say that I I would say listen we from a material cost perspective we saw the peak probably late last year um you know and if we look at other costs our Logistics costs have come down I'd say labor is the one cost that you know what would I would say is that it's inflation is probably steadied there and it's at a more typical rate obviously I don't think labor costs will come back down but we have seen you know we talked about our material cost for the year we saw about a three to four hundred million deflation in our total material costs and in our Logistics costs and other things like that you know we saw similar levels of deflation so I do believe at least for our business when you take it in aggregate inflation has peaked but if you break it down among the components there's still a few areas where we are seeing some inflation our thanks to whirlpool's Executive Vice President and Chief Financial Officer James Peter as well as the Yahoo finance morning crew coming up we're going around the horn and checking in on some of today's top stories stick around foreign [Music] [Music] [Music] [Music] thank you [Music] [Music] [Music] foreign [Music] [Music] [Music] foreign [Music] [Music] welcome back to Yahoo finance live we're talking the top stories of the day we have a Kiko Fujita tuning in on the conversation along with prostate Romanian and Perez I want to start with you because you're looking at an EV card it's back from the dead the bolt is back the bolt uh three months after yeah it was a short death yeah so today on the GM Ernie's call Mary Barron the beginning of the call said that the Chevy bolt EV which they said was ending production last quarter is not coming back as a next gen model next gen by the way is a corporate buzzword which will we will get to later anyway they called let's call the next general TV it's gonna come back like I said it's gonna be powered by the Altium battery platform which is uh according to GM going to be a cheaper platform from the build on um the new car will I imagine will likely be in that same thirty thousand dollar ish price range because that's where the Bull made it made its its money right it's it is a cheap Eevee for the masses and GM sold more than they ever have in the last two quarters so it was surprising to see it go but I'm not surprised to see it come back what's interesting to me is the number that GM threw out which is 70 of drivers who trade in a vehicle to get the bolt traded a non-gm vehicle at the end of the day when you think about the EV transition it is about GM trying to appeal to a y lighter wider swath right we're at five percent market share right now in terms of new buyers EV sales GM is the name as well as Ford that's supposed to get it to a much wider Spectrum so not only is it people who are buying in on GM who usually wouldn't it's also the price point and that's why it's interesting that just three months after the fact they're bringing it back yeah and what do you think the price point will mean for a company like Tesla especially since we're seeing these pricing Wars occur I was I'm curious if did Tesla have any price stock reaction after the news broke which yeah I didn't see any reactions to that I know that the model 3 if you include the federal tax credit is like 33 right so that's competing in that same that same class and right now I think GM thinks that if if they need to compete against the Tesla Model 3 they're going to make the bolt better and that might include that ultimate platform well and we're talking about 7 500 tax credit that's Federal but if you've got states which I always like to bring up because in California it's 7 500 on top of that I mean that is a steep discount when you think about a model 3 which is why you see them everywhere in California and many other states too right so so GM is going into that market trying to compete it is about a lower price point and I'm curious if we're talking five percent to get to ten percent where is that market is it in sort of these trucks you know that the F-150 Lightning these other trucks that are selling at a higher price point or is it on the lower end from drivers who are saying I don't want to be paying gas prices but I also don't have seventy thousand dollars to buy a new car I think if we're going to get even past 10 it's got to be at that lower end the the middle class buyer that wants to go into electrics when right now they're being priced out they don't have that many options aside from the bull which they're getting rid of right so that's going to come online I think you're right you forgot about the leaf the leaf with the leaf I don't think it's competitive in terms of range but but I think I think it's I think trucks too because trucks are such a huge the biggest Market in America is trucks if you can make those trucks cheaper and good range yeah yeah I mean we're seeing EV adoption pick up across the board so I'm very curious to see the sales for those bolts but speaking of driving I want to move on to what's driving the economy and that's Taylor Swift Barbie and Beyonce okay we're in this Goldilocks economy right now we're not too hot not too cold but post covet we've seen this surge of people wanting to dive into experiences live events on top of that we have a work from home situation which makes it a lot easier to travel so axios is up with this new report citing moodies about how people are traveling more to concerts justifying that I I'll work from my hotel on Friday I'll go to the Taylor Swift concert here I'll go over here it's booming local economies so it's interesting to see this era and we were just talking about Barbie and Oppenheimer how that boosted the box office in a record-breaking way how people are spending money on those things and that's leading to a boom of sorts I am a little curious and I will say I'm a little skeptical about how much remote work plays into that now having said that we have seen this huge transition from Goods into Services right so people want experiences they're willing to Shell out money and with Taylor Swift specifically I thought it's interesting that the Federal Reserve president of Philly fed president yes made a mention of of the bookings with hotels seeing the highest post pandemic and specifically cited Taylor Swift fans coming into town and what we're seeing is that people are taking advantage of the excitement same thing with Barbie yes they had big sponsorships in place but they also your local theater you're talking about there are people there are businesses who are trying to jump onto that because consumers are willing to Shell the money and there was and there is important museums having like Swift like promotions people were coming in town so they're doing other types of touristy activities restaurants too uh also reading that uh was it was it another country that said that in some City they boosted uh inflation Sweden I think for Beyonce tickets potentially I wanted to ask you about this one thing in particular so the New York Times had an opinion piece to talk about how women are craving uh positive uh win for Content that Embraces femininity too the writer wrote something to lines of the obvious lesson from the gargantuan success of both Barbie and the heiress tour is that there's a huge underserved market for entertainment that takes the feelings of girls and women seriously do you guys agree with that I don't know if I would read into it that seriously is it I mean if you look at it at the context of the box office there's not a ton of female-led stories and I do think there is a desire for new like we were saying new original content new types of Storytelling not the same old same old that we've been seeing and you're seeing that reflected in the numbers with some of those Marvel Superhero films some of those more franchises not doing so well so do things from that perspective there is a desire for for different types of new experiences at the end of the day yes right you could relate that to movies well here we go see oh my God he's ready for that all right let's move on to the next story because Paz is clearly very excited about it there is a company Haystack that is company would come coming up with essentially what is a guidebook for corporate jargon and I want to pull up this number because I think this is interesting if anybody who has worked in an office knows there are very specific words that are used that you would never use with your friends in a normal conversation that comes in Corpus break and specifically when we talk about that 60 percent of workers around the world this is according to a recent study conducted by LinkedIn and Duolingo so they didn't know the terminology that was used in their workplace that's a problem oh I mean when a new term pops up the new term pops up so they're just smiling and nodding okay let's just open it up Pros is itching to go here what is the most hated or or the corporate jargon you hate the most so Akiko you you kick us off here because I this is I think a relatively new one I've heard it more and more North Star the North Star this is our North Star this is our goal this is what we want to do this is what we want to aim for no need to say North Star and I will admit I don't think they're Magellan all of a sudden they're Magellan and every single office I do think it is used in marketing in PR largely but it's kind of spilled into the everyday office space too okay just goal that's our goal this is where we want to go no need for Northstar yeah mine I would say is low hanging fruit I'm scarred by this one from a previous job it was always a messaging of we got to go over the low-hanging fruit which was never technically low hanging fruit it was it was harder than it implied that the phrasing implied so yeah you know I don't want to talk about fruit in the office so that would be Mine mine's a newer one that I heard recently that I think you guys maybe give her to uh the juice isn't worth the squeeze right so it's like I I have not heard this a task that will produce some sort of benefit but it's too much work so it's not worth the squeeze it I hate that just say it's not worth it worth doing it but I have a couple ones that I also hate I hate ping like we're pinging I'm guilty of you I use it too so much but it's like we're not sonar we're not submarine people here um Circle back oh so guilty and admission Mission critical is about what here's one that I like I like next gen the Bold I like next gen I like I like Game Changer I use gaming chair all the time I like Roi what's the ROI is return on investment and my favorite one is the Kendall royism C to the table where's this seat at the table you know like you're leaning into the succession there okay all right I like that well we're gonna keep debating our favorite and least favorite office Legos we'll be right back on Yahoo Finance on the other side of this break [Music] all right [Music] foreign [Music] [Music] [Music] [Music] [Music] thank you [Music] [Music] foreign [Music] [Music] [Music] [Music] [Music] thank you it is closing time here at Yahoo finance here's a look at some of the top stories of the day the Teamsters Union and UPS averting a strike the two sides announced a tentative deal just days before the current contract expires and it affects 340 000 employees according to the teamsters a contract includes historic wage increases air conditioning in trucks and one more paid holiday it also eliminates a two-tier pay system another deal in the regional banking sector pacwest and Bank of California announcing they will merge in an all-stock deal as they look to navigate the post banking crisis environment pacwest has been shedding assets to try to bolster liquidity the combined bank will have about 3 36 billion dollars in assets in alphabet shares Rising on better than expected second quarter results but a leadership shake-up is dominating the headlines CFO Ruth poorat now transitioning to a new role she'll become the company's president and chief investment officer but she will stay on as CFO until a successor is found time now to take a look at what to watch tomorrow Fed chair Jerome Powell will take you to the podium after the FED makes the latest decision on the path for interest rates the majority of economists expect the Federal Reserve to raise rates 25 basis points after last month's decision to pause investors will be looking for an indication of future potential rate increases before year end while the FED remains committed to bring inflation down to its two percent Target and on the earnings front we'll be hearing from more big tech companies meta is next up to report its quarterly results in what CEO Mark Zuckerberg has said this to be the company's year of efficiency meanwhile consumer names like Coca-Cola and chipotle yeah they're also set to release earnings investors will be looking to get an additional read on consumer Behavior there this coming after consumer confidence saw its second straight month of gains standing at the highest level since July of 2021 and last but not least here want to watch fresh data is out tomorrow morning on new home sales for the month of June U.S new home sales advanced in May to the fastest Pace in over a year and as limited inventory in the resale Market remains a pain point we'll look to see if June delivers another rise in sales of new homes and that does it for Brad and I on today's Yahoo finance live be sure to come back tomorrow at 3 P.M Eastern for all of your coverage leading up to and after the closing though have a good night [Music] [Music] [Music] thank you [Music] [Music] [Music] foreign [Music] [Music] [Music] [Music] [Music] [Music] [Music]

Channel: Yahoo Finance

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Keywords: Yahoo Finance, Personal Finance, Money, Investing, Business, Savings, Investment, Stocks, Bonds, FX, Currencies, NYSE, Equities, News, Politics, Market, Markets, Yahoo FInance Premium, Stock market, bitcoin, bonds, market, recession, inflation, stocks, federal reserve, CPI

Id: d5GjyuO-68A

Length: 121min 50sec (7310 seconds)

Published: Tue Jul 25 2023