>>> INVESTORS TURNING THEIR FOCUS TO WHAT'S TO COME IN 2024. THE PRESIDENTIAL ELECTION IS INCREASINGLY IN FOCUS. >>> PLUS, THE A.I. BATTLE HEATS UP. WE'LL HEAR ABOUT SKY HIGH EXPECTATIONS FOR THE NEXT FOUR YEARS. >>> OUT OF THIS WORLD. SPACEX APPROACHES INVESTORS FOR ANOTHER TENDER OFFER. IT COMES AMID RUMBLINGS OF A POSSIBLE IPO IN 2024, EVEN THOUGH ELON MUSK DENIES ONE IS COMING. >>> THE A.I. MARKET LEADER TOOK A HIT AS A COMPANY AT THE TORE UNVEILED ITS HAND. AMDC UNVEIL A SO-CALLED MI-300 AT AN EVENT IN SAN JOSE, CALIFORNIA. THEY'RE SEEN AS A BIG THREAT. YAHOO FINANCE'S EXECUTIVE EDITOR BRIAN SOZZI SPOKE WITH AMD'S CEO. >> FOR A.I., YOU NEED THESE EXTREMELY POWERFUL GPUs. THERE'S VERY FEW COMPANIES THAT CAN BUILD THESE THINGS. I'M JUST SO EXCITED AND REALLY, YOU KNOW, LOVE BEING PART OF THE OPPORTUNITY TO CHANGE THE INDUSTRY WITH OUR A.I. TECH. >> HOW LONG DOES IT TAKE TO COME UP WITH A CHIP WITH 153 BILLION TRANSISTORS ON IT? >> WE'VE BEEN WORKING ON THIS ROAD MAP FOR OVER FIVE YEARS. YOU DON'T WAKE UP JUST ONE DAY AND SAY I WANT TO BUILD AN A.I. CHIP, BUT IT'S BEEN STEADY PROGRESS, RIGHT? YOU KNOW VERY MUCH WHAT WE'VE BEEN ABLE TO DO WITH OUR EPIC PRODUCT LINE FOR ALL OF THESE LARGE DATA CENTERS AND CLOUD INSTALLATIONS. WE'RE ON OUR FOURTH GENERATION WITH OUR ZEN-4 TECHNOLOGY. IT'S VERY SIMILAR ON THIS SIDE. WE'RE LAUNCHING OUR THIRD GENERATION OF OUR ARCHITECTURE. EVERY GENERATION WE WORK CLOSELY WITH OUR CUSTOMERS AND PARTNERS ON HOW TO MAKE, YOU KNOW, THEIR SOFTWARE BETTER, AND HOW TO MAKE OUR SYSTEMS BETTER. WHAT MAKES TODAY SO SPECIAL IS IT'S NOT JUST IT'S A GREAT PRODUCT. GREAT PRODUCTS COME ALONG, YOU KNOW, ALL THE TIME, BUT IT'S ALSO A GREAT PRODUCT AT THE RIGHT TIME, SOLVING THE RIGHT PROBLEM FOR THE INDUSTRY. >> BASICALLY AMD SHOWING THAT NVIDIA IS NOT THE ONLY GAME IN TOWN WHEN IT COMES TO THESE POWERFUL CHIPS. THIS IS A BIG BOON FOR IT. IT'S BEEN TALKED ABOUT FOR IT NOW. IT'S A HUGE WIN IN TERMS OF IT FINALLY BEING PRESENTED TO US. IT SAYS 1 1/2 TIMES MORE MEMORY CAPACITY THAN THE PREVIOUS VERSION, SUPPOSED TO BE MORE ENERGY EFFICIENT, BETTER MEMORY CAPACITY THAN THE PREDECESSORS. AMD -- LISA SU SAYS IT'S THE HIGHEST PERFORMING ACCELERATOR IN THE WORLD. WE'LL SEE IF IT CAN COMPETE WITH NVIDIA, THE MARKET LEADER. IT'S OFTEN CONSIDERED A DISTANT SECOND, BUT AMD IS LIKE, WE'RE AT THE TABLE, TOO. >> MI-300 IS EXACTLY WHAT IT IS. I THINK WHAT WE ARE TALKING ABOUT IN THIS CONVERSATION PARTICULARLY WAS SOME OF THE OTHER DEMAND WE'RE SEEING FROM OTHER COMPANIES. THE COMPANY HAD ALREADY TALKED ABOUT SOME OF THE MAJOR PARTNERSHIPS IT HAD LANDED. OTHERS HAVE BEEN ADOPTING IT NEW INSTINCT MI-300-X, ACCELERATORS FOR TRAINING AND SOLUTIONS. WHAT DOES THIS MEAN FOR INVESTORS, AS THEY CONTINUE TO EVALUATE THE YEAR THAT HAS BEEN. YOU KIND OF HAVE THE PROTOCOL FOR HOW THIS WILL ADDRESS DEMAND. YOU'VE GOTTEN A CUT ON THE TOP OF THE STACK. YOU HAVE THE APPLICATIONS THAT SIT ON TOP OF THE LANGUAGE LEARNING MODELS. THOSE SIT ON TOP OF THE CHIPS. THIS IS THE THRUST FORWARD IN DEMAND WE HAVE SEEN AND THE INTRODUCTION OF THAT CHIPS PART OF THIS BROADER EQUATION REALLY COULD BE ABOUT SOME OF THE LANGUAGE LEARNING MODELS, AND THE APPLICATION PERHAPS SOMETIME IN THE MID PORTION TO THE BACK HALF OF THE YEARS. SOME OF THAT WE'VE GOT TALKING ABOUT AN DAN HOWLEY WASHINGTON BREAKING DOWN. >> AND AMD, FROM PREVIOUSLY 30 BILLION TO 45 BILLION, IN TERMS OF THE RELEASE OF THIS MI-300, RIGHT? >> WE'LL SEE. >>> STAY TUNED. WE'LL HAVE LOTS MORE FROM THAT INTERVIEW WITH AMD CEO LISA SU NEXT HOUR. >>> GOP CANDIDATES CLASHED ON THE NEWS NATION DEBATE STAGE LAST NIGHT. TAKE A LISTEN. >> NIKKI, I DON'T HAVE A WOMAN PROBLEM. YOU HAVE A CORRUPTION PROBLEM. I THINK THAT'S WHAT PEOPLE NEED TO KNOW. NIKKI IS CORRUPT. THIS IS A WOMAN WHO WILL SAY -- SO SHE CAN BUY A BIGGER HOUSE. >> GOVERNOR HALLIE, WOULD YOU LIKE TO RESPOND? >> NO, IT'S NOT WORTH MY TIME TO RESPOND TO HIM. >> NIKKI HALEY GREW THE MOST CRITICISM, FIELDING ATTACKS ON HER WALL STREET DONOR BASE. SHE'S GAINED GROUND, NARROWING THE GAP WITH DeSANTIS, BUT BOTH STILL FALL FAR BEHIND PRESIDENT TRUMP. WITH MORE OF WHAT WE LEARNED LAST NIGHT, RICK NEWMAN JOINS US. THERE WERE CERTAINLY FIERY, SOME MOMENTS STOOD OUT TO ME. NIKKI DID HAVE A COMEBACK. WHAT DID YOU TAKE AWAY? >> THAT WAS A GOOD EXAMPLE OF HER AND VIVEK RAMASWAMY AND RON DeSANTIS GOING AFTER HALLIE. SHE'S BEEN GAINING SUPPORT OF SOME WEALTHY BACKERS. THAT'S BASICALLY WHAT RAM ASWAMMY WAS GOING AFTER. SHE WENT TO SERVE ON THE BOEING BOARD. SHE NOW GETTING SUPPORT. SO THEY TRY TO MAKE THEIR POINT MADE THE POINT VERY WELL, BUT THEY'RE GOING AFTER NIKKI HALEY, AND ONE THING RAMASWAMY THERE, CHRIS CHRISTIE HE WENT AFTER HIM LATER, AND HE SAID YOU'RE THE MOST OBNOXIOUS BLOWHARD IN AMERICA. AND HE SEEMS LIKE IT. HE LECTURES EVERYTHING, INTERRUPTS EVERYBODY, AND HE PLANTED ONE OR TWO FEET ON THE FRINGE LAST NIGHT WHEN HE SAID THE RIOTS AT THE U.S. CAPITOL WERE AN INSIDE JOB, SOMEBODY INSIDE THE GOVERNMENT SAID THAT ON A NATIONALLY TELEVISED DEBATE. HE'S COMING OUT AS ONE OF THE LOSERS FROM THE DEBATE. I'M NOT SURE ANYONE WON IF YOU DEFINE IT AS GAINING GROUND ON DONALD TRUMP. AS THE MODERATORS POINTED OUT, EVERYBODY IS FAR BEHIND DONALD TRUMP. YET WE GOT THROUGH THE FOURTH AND FINAL DEBATE. >> RICK, WHAT ARE WE STILL HEARING FROM SOME OF THE VOTERS STILL THROWING SUPPORT BEHIND TRUMP A POLL FOUND MOST SUPPORTERS OF THE FORMER PRESIDENT STILL PREFER A PRIMARY WHERE NOBODY IS OPPOSING TRUMP, BUT THAT'S NOT EXACTLY WHAT THEY'RE GOING TO GET HERE. >> NOT SURPRISING. IT'S THE WHOLE BATTLE WITHIN THE REPUBLICAN PARTIES IS DONALD TUMP IS BLOCKING OUT THE SUN FROM THE OTHER CANDIDATES. WHAT WE SAW WITH THESE FOUR CANDIDATES LAST NIGHT NARROWED DOWN FROM I THINK EIGHT IN THE FIRST GOP DEBATE OVER THE SUMMER, ALL ARE TRYING TO FIND SOME WAY TO GET SUPPORT OUTSIDE OF DONALD TRUMP. CHRIS CHRISTIE IS DOING IT BY ATTACKING TRUMP DIRECTLY. WE SAUCE HE TACTIC LAST NIGHT WAS TO CALL THE OTHER THREE CANDIDATES SAID WHY AREN'T YOU ATTACKING HIM DIRECTLY. FOR THE MOST PORT THEY WOULDN'T DO IT. THE REASON IS BECAUSE THEY'RE HOPING TRUMP DRIFTS AWAY OR GETS CONVICTED, OR SOME WAY HE'S NO LONGER THERE AND THE OTHER THREE CANDIDATES CAN MAKE A CLAIM TO THE TRUMP VOTERS. WHO KNOWS WHAT'S GOING TO HAPPEN. RON DeSANTIS DID SAY I'M TIRED ABOUT THE POLLS, LET'S SEE WHAT THE VOTERS SAY. THE FIRST VOTE IS IN THE IOWA CAUCUS IS ABOUT SIX WEEKS AGO. HONESTLY, I THINK ALL OF US WHO HAVE BEEN FOLLOWING THERE AND IS IING THROUGH THESE SOMETIMES DIFFICULT TO WATCH GOP DEBATES WILL BE GRATEFUL WHEN WE GET TO THE POINT OF VOTING AND CAN GET SOME KIND OF OUTCOME. >> THANK YOU FOR WATCHING IT SO I COULD WATCH THE GRIMPLG LAST NIGHT. >> MY PLEASURE, SORT OF. [ LAUGHTER ] >> WE'LL TALK SOOK. >>> SPACEX'S LATEST VALUATION IS SKY HIGH ACCORDING TO BLOOMBERG. SO LET'S DIVE INTO THE POSSIBILITY OF THE MOST VALUABLE START-UP WITH PRAS. >> BLOOMBERG IS REPORTING THAT SPACEX DISCUSSING THE TENDER OFFER. AS YOU MENTIONED, $175 BILLION OR MO, MORE THAN WHAT BOEING OR ANY OTHER SPACE DEFENSE COMPANY IS WORTH. IF YOU'RE ON THE MARKET SIDE, YES, ON PAR WITH T MOBILE OR THE NIKES OF THE WORLD. THEY'RE A MATURE COMPANY AT THIS POINT. THEY DOMINATED THE COMMERCIAL SPACE LAUNCH, AND OF COURSE THEY OPERATE THE STARLINK SATELLITE SERVICE THERE. PULLING IN $9 BILLION IN REVENUE. SO HEAVY INTERESTED FOR INVESTORS TO GET IN WHILE THEY CAN. >> QUICKLY, PRAS, WE HAVE TO FOLLOW UP. ELON MUSK HAS FAMOUSLY SAID IN THE PAST HE WOULD NOT WANT TO TAKE THIS COMPANY PUBLIC. WHAT'S THE SHIFT BEEN THERE? >> IN TERMS OF WHAT, EXACTLY? >> IN TERMS OF SPACEX EVEN POTENTIALLY MAKING A PUBLIC DEBUT? >> YOU KNOW IF YOU CAN KEEP MONEY AND SATISFIED YOUR INVESTORS, YOU CAN BE PRIVATE AS LONG AS YOU SAID, BUT OTHER INVESTORS MAY WANT TO BE UNLOCKED AT FULL VALUE. WHATEVER IT'S GOING TO BE, THAT'S WHAT PEOPLE ARE LOOKING AT, RIGHT? THEN YOU FACE THE SCRUTINY OF INVESTORS AND ANALYSTS. IF YOU'RE MUSK, YOU'RE SAYING TO YOURSELF, I'LL KEEP MY INVESTORS HAPPY, I'LL JUST STAY PRIVATE. >>> LET'S SHIFT GEARS. APPARENTLY STIFEL INITIATING COVERAGE OF RIVIAN. THE MOVING COMES FROM THE ANALYST WHO SEES BETTER PRICING, STRONG DEMAND AND MARKET EXPANSION IN THE YEAR AHEAD. SO, GIVEN THIS, HOW DO YOU THINK RIVIAN IS SET UP FOR 2024? THE NOTE DID ALSO CALL OUT SOME POTENTIAL HEADWINDS. >> YOU KNOW, I THINK RECENTLY THE STOCK IS DOING WELL, UP 20% IN THE LAST MONTH, FLAT FOR THE YEAR, WHICH IS KIND OF GOOD FOR THE COMPANY AT THIS POINT. THE STOCK WAS GETTING HAMMERED EARLIER. STIFEL LOOKING AT THE LONG-TERM PIC PICTURE, IT SEEMS, EASE THE YEARS AHEAD. THE IMPROVING MARGINS, ANALYSTS SAYING THEY DEAL WITH THE AMAZON FOR THE EV DELIVERY ADVANCE IS A GOOD THING, BETTER BATTERY TECHNOLOGY AND BETTER PRICING. THE COMPANY STILL LOST A BILLION LAST QUARTER, BACK OF THE HAND MATH WITH THE VEHICLES DELIVERIES, MEANS THEY LOST WITH EVERY CAR. STILL, LOSING $60,000 ON EACH CAR, THEY HAVE A LONG WAY TO GO BEFORE YOU SAY YOU'RE MAKING MONEY. THEY HAVE ABOUT A YEAR AND A HALF OF RUNWAY, SO YOU'RE ABSOLUTELY RIGHT, 2024 IS HUGE FOR THEM. CAN THEY AT LEAST BREAK EVEN? >> THAT'S PRETTY GOOD BACK OF THE HAND MATH, PRAS. I HOPE YOU USED A WASHABLE MARKER. WE'LL SEE EXACTLY WHERE THE CATALYSTS EMERGE HERE. THEY HAVE AN AGREEMENT WITH VANS, DO YOU BELIEVE THE BROADER SENTIMENT IS FOR A MASSIVE SHIFT, OR WILL IT CONTINUE TO PLAY OUT AS A SHOW-ME STORY? >> I THINK IN THIS PICKUP SPACE, THERE'S BEEN A LOT OF POSITIVITY RECENTLY. THE FACT THAT FORD AND GM HAVE BEEN PUSHING THEIR PLANTS BECAUSE OF THE FACT THEY'RE SEEING DEMAND COME DOWN A BIT. GM DOESN'T EVEN HAVE A NON-WORK TRUCK. THEY ONLY HAVE A COMMERCIAL TRUCK OUT RIGHT NOW. THEY'RE PUSHING BACK ON THE EXPECTATIONS. RIVIAN IS SAYING WE'VE EXPANDED OUR SALES EVERY QUARTER, BOOSTING OUR YEARLY OUTLOOK. THEY'VE DONE IT IN SUCCESSFUL QUARTERS IN A ROW. MAKING THAT RECREATION SPACE, MAYBE THAT'S WHERE WE NEED TO BE FOR HIGH-END, EXPENSIVE PICKUPS. WE'LL SEE HOW THAT PLAYS OUT. BUT I THINK RIVIANS IS SET UP QUITE WELL. >> APPRECIATE IT, EVERYTHING FROM THE LAND AND SKY, PRAS SUBRAMANIAN HAS IT COVERED. >> JUST DON'T QUOTE ME ON THE BACK OF THE HAND MATH. >> THAT VIDEO WILL LAST FOREVER. THANK YOU, PRAS INTO INVESTORS KEEPING AN EYE ON .EN, WHERE THE CENTRAL BANK GOVERNOR ISSUED SOME COMMENTS THAT MAY MEAN THE COUNTRY EXITS FROM THE ULTRA-LOW INTEREST RATES. JARED, YOU'RE GOOD WITH THE HEAT MAP, WHAT DO WE KNOW? >> THIS HAS BEEN A LONG TIME COMING. JAPAN HAS HAD ULTRA-LOW INTEREST RATES FOR QUITE SOME TIME. YOU HAVE TO GO BACK TO THE 2015 WHERE THEY WERE EVEN POSITIVE, AND EVEN BEFORE THAT, THEY WERE AT 0.1%, BUT IT'S INTERESTING, THIS DECEMBER MEETING WE'LL HAVE, I BELIEVE THE 18th OR 19th, WE HAVE A GRAPHIC HERE WHERE INTEREST RATE HIKES ARE GETTING PRICED IN. THE REASON THIS IS IMPORTANT IS BECAUSE THIS WAS UNEXPECTED. NOW THE BOND MARKET VIGILANTES ARE SEEING THE WRITING ON THE WALL. THERE'S TOO GREAT OF A DIFFERENTIAL IN THE INTEREST RATE BETWEEN THE UNITED STATES AND JAPAN, SO ALL THIS MONEY HAS BEEN FLOWING IN TO TAKE ADVANTAGE OF THE HIGHER INTEREST RATES. THAT'S BEEN WEAKENING THE YEN, AND THIS IS JUST UNSUSTAINABLE. WE CAN SEE THIS CHART HERE, THIS IS U.S. DOLLAR LOSING GROUND, BUT THAT MEANS THE YEN IS STRENGTHENING. A YEAR TO DATE, YOU CAN SEE AN OPPOSITE TREND HERE. THAT IS THE U.S. DOLLAR GETTING STRONGER, NOW WE HAVE BROKEN THIS TRENDS CHANNEL, SO TECHNICALLY, WE MAY BE IN STORE. THIS COULD BE VERY WELL A TOP. LET ME SHOW YOU A TEN-YEAR CHART. THIS IS THE HIGHEST EXCHANGE RATE WE HAVE SEEN IN TEN YEARS. YOU HAVE TO GO ALL THE WAY BACK TO THE DOT-COM BUBBLE. ANOTHER THING I WOULD NOTE IS THAT JAPAN, WE'RE TALKING ABOUT JAPAN HIKING FOR THE FIRST TIME. THE U.S. STARTED THAT LAST YEAR. THIS IS A BIT OF LATE TO THE PARTY, BUT THIS IS WHERE JAPAN HAS BEEN FINDING IT SELF-IN THE MIDST OF THE GLOBAL BUSINESS CYCLE THE LAST 20 YEARS. THEY'RE GENERALLY THE LAST TO CUT, SO AS THE U.S. IS THINKING ABOUT CUTTING RATES, JAPAN IS THINK BEING NORMALIZING RATES. WHAT IMPLICATION DOES THIS HAVE? THE MARKET IS SOLVE ABOUT THE BOJ, AND THAT THE CONCERN IS THERE'S A DISORDERLY UNWIND OF THIS POLICY. >> JARED BLIKRE, THANK YOU. >> THANK YOU. >>> ALL RIGHT. WE'VE GOT ALL YOUR MARKETS ACTION AHEAD. STAY TUNED. YOU'RE WATCHING YAHOO FINANCE. >>> THIS TIME LAST YEAR, ANALYSTS WERE GLOOMY ON WHAT WAS IN STORE FOR THE STOCK MARKET IN 2023, ESPECIALLY GIVEN ISSUES SUCH AS THE WAR IN UKRAINE, THE PROSPECT OF HIGHER INTEREST RATES AND EXPECTATIONS OF A RECESSION. THIS YEAR'S MARKET HAS DEFIED THE EXPECTATIONS THIS YEAR, THE S&P 500 UP MORE THAN 18% YEAR TO DATE, THANKS TO A STRONG PERFORMANCE OF COMPONENTS. WITH MORE STOCK MARKET BULLS MAKING THE CASE FOR 2024, INVESTORS WANT TO KNOW THE BEST WAY TO PLAY THESE ANTICIPATED GAIN. WE'RE JOINED BY ALTHEAM SPINOZI, AND DAVE RASA. GREAT TO HAVE YOU BOTH HERE. ALTHEA, IF WE'RE LOOKING OUT TO 2024 AND DUST THE OFF THE CRYSTAL BALL, WHAT ARE SOME OF THE KEYS INVESTORS SHOULD BE LOOKING FOR. >> WELL, IT'S NOT FROM 2023 IN TERMS OF THINGS TO LOOK OUT FOR. IT'S GOING TO BE INNOVATION, GROWTH AND UNEMPLOYMENT. REALISTICALLY, WE BELIEVE THAT INFLATION IS GOING TO HAVE LESS IMPORTANCE THAN GROWTH THROUGHOUT 2024. SINCE OR BANKS ARE GOING TO BE CAUTIOUS ABOUT THAT. SO, BY NOW, THE MARKET THAT IS PRICING INTEREST RATE CAPS BY THE END OF 2024, WE BELIEVE THAT THAT IS AHEAD OF -- AND WHAT WE ARE GOING TO DO PROBABLY AT THE BEGINNING OF 2024 IS MARKET PRICING OUT SOME OF THOSE INTEREST RATE CUTS, AND THAT IS LIKELY TO PROVOKE ANOTHER -- ANOTHER RISE THAT ARE GOING TO PROBABLY TO HIT 5% BEFORE THE BULL MARKET BEGINS. >> DAVE, I WANT TO ASK YOU, WHAT DO YOU THINK ABOUT THE MAG ANY OF SET SEVEN AND THEIR SETUP FOR 2024? >> I HAVE TO AGREE. I HAVE TO AGREE WITH MY FELLOW PANELIST'S COMMENTS. THE ECONOMIC BACKGROUND HASN'T CHANGED MUCH. WE KNOW GROWTH IS SLOWING, INFLATION IS STILL HIGH, BUT COMING DOWN, AND THE FEDERAL RESERVE AND OTHER BANKING WILL BE INCREDIBLY CAUTIOUS ABOUT CUTTING RATES AGAIN TO SPURT I THINK SOME OF THE EUPHORIA WE SAW BEFORE. SO, INVESTORS ARE LIKELY GOING TO CONTINUE TO STICK WITH WHAT'S WORKED, THUS THROUGH THE FIRST HALF OF 2024. THESE COMPANIES, AGAIN, THERE'S A LOT OF NAYSAYERS ABOUT THEIR VALUATIONS, BUT THEY OFFER HIGH MARGINS, STABLE PRICING POWER. SO WE THINK OF THEM AS JUST SEVEN SECURITIES, BUT IF THE PICK THEM APART, THEY OFFER A LOT OF DIFFERENT OPPORTUNITIES ACROSS THE TECHNOLOGY AND CONSUMER SPACE. ALTHEA, WE WANT TO GET SOME OF YOUR BIG PREDICTIONS HERE, AS YOU'RE LOOKING OUT TO 2024, AND PERHAPS SOME OUTLIERS YOU'LL BE TRACKING? >> YES, DEFINITELY WANT TO LOOK AT THE DIVERGENCE MEANING WHO WILL CUT RATES FIRST. WE BELIEVE IT'S GOING TO BE THE ECB, REALISTICALLY THAT MEANS THAT THE ECB MIGHT BE COMING WITH MORE INFLATION AT HOME. COMMODITIES ARE QUOTING THE U.S. DOLLARS, SO IF THE ECB IS GOING TO CUT RATES, THEY WILL -- THAT MIGHT REIGNITE INFLATION. IT'S NOT GOING TO BE AN EASY TASK FOR THE ECB IN 2024 FOR THE SIMPLE REASON THAT EUROPE IS ALREADY IN A RECESSION, SO IT'S ALREADY CHOOSING INFLATION OVER GROWTH. IF THAT DIVERGENCE BECOMING INCREASING NEXT YEAR, ESPECIALLY WITH THE FED AND THE ECB LOOKING TO CUT RATES AND THE BANK OF JAPAN HIKING THEM, IT'S GOING TO BE -- >> DAVID, I WANT SOME OF YOUR PREDICTIONS AS WELL. YOU HAVE SOME OUTRAGEOUS MARKET PREDICTIONS FOR 2024, SO TAKE US THROUGH WHAT YOURS ARE? >> I THINK IT'S ALWAYS FIND TO SAY -- NOT JUST FUN, BUT PRUDENT. ONE IN PARTICULAR IS A AROUND THE PRESIDENTIAL ELECTION. WE JUST HAD OUR FOURTH PRESIDENTIAL DEBATE, AND A CANDY IN THE LEAD HAS NOT SHOWN UP. WHAT'S HAPPEN IN THE POLLING WITH ROBERT KENNEDY, JR. SHOULD NOT IGNORE. THIS IS PROBABLY THE FIRST TIME SINCE ROSS PEROT COULD CREDIBLY BED A THIRD CANDIDATE. WE KNOW INCREASINGLY, SIMPLY AS THE CALENDAR TURNS TO 2024, INVESTORS WILL START THINKING ABOUT THE ELECTION AND THE VOLATILITY THAT COULD BRING. SO, I DO THING INVESTORS NEED TO PREPARE FOR A MORE VOLATILE BACK HALF OF 2024 THAN WE HAVE SEEN. I THINK THERE WILL BE QUESTION, BUT HONESTLY WHAT THEY TEND TO NOT DO IS CUT RIGHT BEFORE AN ELECTION SEASON FROM A POLITICAL STANDPOINT. I REALLY HAVE BEEN ADVOCATING INVESTORS TO KEEP AN EYE ON THIS REGARDLESS OF POLITICS, BECAUSE IT WILL POTENTIAL HAVE AN IMPACT ON PORTFOLIOS. REALLY QUICKLY, YOU WANT THIS IS NOT YOUR BASE CASE. WHAT ARE YOU LOOKING FOR? WHAT IS THE CATALYST FOR A FURTHER BREAKOUT? >> YEAH, WELL, IT'S INTERESTING. AT SOME POINT ONCE WE START PRICING IN THE ACTUAL OPPORTUNITY FOR RATE CUTS, I'M NOT TALKING ABOUT THE MOVES WE SILK THIS WEEK. SOME OF THAT IS A LOT OF SHORT COVERING AND REVERSALS. WHAT I'M REALLY LOOKING FOR IS DO WE GET THE SLOWDOWN IN THE STOCK MARKET? IT SEEMS AS THOUGH HAS HASN'T HAPPENED Y■ET. IF THAT HAPPENS, THEN I DO THINK WE'RE GOING TO SEE THE IDEA THAT WE'LL SEE SMALLER CAPS RALLY, UNPROFITABLE COMPANIES RALLY FOR A MORE MATERIAL WAY. BUT UNTIL THAT HAPPENS, I THINK THE ECONOMY ENVIRONMENT WILL CONTINUE TO FAVORS THE LARGEST COMPANIES, WITH HIGH PROFIT MARGINS, AND THE ABILITY TO NAVIGATE WHAT'S BECOME AN UNCERTAINLY ECONOMIC ENVIRONMENT. >> INDEED. THANK YOU BOTH FOR JOINING US THIS MORNING. ♪ >>> ALL RIGHT. WE WANT TO LOOK AT THE OPENING BELL ON WALL STREET AND DO A QUICK CHECK OF THE MARKET ACTION, WHERE INVESTORS ARE GOING TO BE ABSOLUTELY OFF TO THE RACES THIS MORNING. AHEAD OF THE JOBS REPORT THIS WEEK. I MEAN, THE JOBS PICTURE CERTAINLY HAS BEEN IN FOCUS FOR THE ENTIRE WEEK. WE'VE HAD ADP OFF THIS WEEK. THE DOW IS STARTING OFF A BIT HIGHER WITH A GAIN OF JUST SHY OF A QUARTER PERCENT, BETTER BY 73 POINTS. S&P UP 20 POINTS, NASDAQ AS WELL GETTING OFF TO THE RACES, UP 85. SO YOU'RE SEEING SOME GAINS AHEAD OF THE BIG JOBS REPORT WE WILL BE WATCHING FOR TOMORROW. WE HAVE IN JOBS DATA IN TODAY. WE'LL GET INTO THAT LATER. >>> BULLISH CALLS FOR THE YEAR AHEAD, BUT LOTS OF HEADWINDS. BARCLAYS HAS ENTERED THE CHAT, SAYING THE MARKET COULD HAVE THE BEST OF BOTH WORLDS, EVEN IF THE CURRENT REALLY MAY BE OVERDONE. >> THEY DO NOT SHARE THIS OPTIMISTIC OUTLOOK. JOINING US IS MADISON MILLS. MADDY, HELP MAKE SENSE OF BOTH THESE CALLS. >> THE BULLS VERSUS THE BEARS. I LOVE THE JUXTAPOSITION. BARCLAYS, THE BEST OF BOTH WO WORLDS, SO THEY'RE SAYING DISINFLATION WILL MAKE THE FED HAPPY, BUT NOT SO MUCH THAT IT STALLS GROWTH. THAT IS OBVIOUSLY GOOD NEWS FOR MARKETS. THEY DO ADMIT THAT THERE'S FOMO LEADING TO TOO MUCH EUPHORIA, BUT THEY SAY THAT'S NOT REALLY GOING TO MATTER WHEN EARNINGS SUPPORT THE FUNDAMENTAL PICTURE HERE, THAT THOSE MAGNIFICENT SEVEN STOCKS CONTINUE TO GROW AS WE HEAD INTO 2024 HERE. THEY ALSO SAY THAT SOFT LANDING IS -- ALSO INDICATING POTENTIAL FOR MORE UP SIDE. THEY COULD CHASE THE MARKET EVEN HIGHER, BUT THEN WE GET GREAT NEWS AS THE YEAR HEADS FORWARD HERE, AGAIN JUST ADDING THAT THERE IS A LOT OF POTENTIALLY FOR THE UP SIDE, EVEN AS WE HEAD INTO THE END OF THE YEAR WITH QUESTION MARKS. >> YOU HAVE THE BULLISH SCENARIO, AND THEN -- I DON'T KNOW IF CITI WOULD CHARACTERIZE IT AS BEARISH, BUT OF THE TWO DIFFERENT PERSPECTIVES. IT'S INTERESTING TO SEE, YOU KNOW, JUST THE FLIP OF THAT. >> YEAH, THE CITI NOTE KEPT GETTING WORSE AND WORSE, BY THE WAY, AS I WAS READING IT. I THOUGHT I HAD DIGESTED THE BAD NEWS. THEY SAY EVEN IF THE LABOR MARKET CONTINUES TO LOOK THE WAY IT HAS, AND TO THE POINT YOU WERE MAKING EARLIER, DIANE, WE DID GET A BIT OF THAT LOOK IN TODAY'S INITIAL JOBLESS CLAIMS, SO IT DOES SUPPORT CITI'S VIEW THAT THERE'S NOT ENOUGH OF A CRACK IN THE LABOR MARKET TO LEAD TO DISINFLATION, SO WE COULD SEE A RECESSION, AND ALSO ACCORDING TO CITI, DISINFLATION NOT NECESSARILY HAPPENING IF WE DON'T SEE THAT CRACK IN THE LABOR MARKET. I'M CURIOUS HOW THEY'RE PUTTING THOSE TWO TOGETHER. IF YOU'RE GOING TO GET A RECESSION CALL, THAT SAID, THIS TIME OF YEAR FOR THE INITIAL JOBLESS CLAIMS CAN BE CHOPPY WITH THE HOLIDAYS. IF YOU LOOK AT THE FOUR-WEEK MOVING AVERAGE, IT IS AT THE HIGHEST LEVEL IN TWO YEARS. HOPEFULLY WE'LL GET MORE CLARITY ON WHERE 24 JOB MARKET IS AT WITH THE JOBS REPORT TOMORROW. >> THAT'S A GOOD POINT. ALL RIGHT. MADISON, THANK YOU FOR THE DEEP DIVE. WE'LL SEE WHO'S RIGHT AT THE END OF NEXT YEAR. >>> ABBVIE ACQUIRING A DEAL. THIS IS THE SECOND LARGE DEAL FOR THE PHARMACEUTICAL COMPANY IN JUST THE PAST WEEK AFTER IT AGREED TO BUY IMMUNOGEN. THE DEALS COME AFTER ONE OF ABBVIE'S MOST LUCRATIVE DRUGS HAD A GOOD YEAR. THE PRONUNCIATIONS COME FAST AND FURIOUS. >> HUMURA IS AN EXAMPLE OF THE DOMINO EFFECT. LOOKING OUT THERE TO SEE WHAT KIND OF M&A DEALS THE COMPANES CAN LOOK AT THAT WON'T GRAB THE ATTENTION OF THE FTC. WE JUST HEARD FROM ABLEGITIMATE'S EXECUTIVES ON A CALL BECAUSE OF THIS DEAL, THE $8.7 BILLION ACQUISITION. THAT'S REALLY SOMETHING THAT THE COMPANY BELIEVES ALL IT NEEDS TO BOOST THE PIPELINE. EXECUTIVES SAID THEY'RE NOT LOOKING FOR ANY LARGER LATE-STAGE DEALS FOR RIGHT NOW, BUT THEY'LL CONTINUE TO LOOK FOR SMALLER, EARLIER STAGE DEALS. THEY'RE PRETTY CONFIDENT THIS WON'T RAISE EYEBROWING AT THE FTC WITH NO MAJOR OVERLAPS, ALL OF THIS COMING FROM AN EXECUTIVE CALL EARLY THIS MORNING. THAT SETS UP A STRONGER PIPELINE FOR ABBVIE, AS THEY'VE HAD TO DEAL WITH THE PRESSURE FROM MUMI -- HUMIRA. IT HASN'T TAKEN THE BIG HIT THEY ASSUMED, CHANGING FROM ABOUT 37% DOWN TO INSTEAD 35% DOWN IN SALES FROM 2022. SO FAR THIS YEAR NETTING $11 BILLION THROUGH THE THIRD QUARTER. WE'LL SEE WHAT THE FOURTH QUARTER HOLDS. BUT THEY'VE HAD SORT OF FAVORABLE POSITIONING WITH INSURERS, SO IT HASN'T OVER TIME NECESSARILY DONE MUCH TO IMPACT CONSTANTLY BEAT ON THAT PRODUCT SPECIFICALLY. SO ABBVIE'S STORY IS WHAT WE'RE SEEING LARGE SCALE IN PHARMA RIGHT NOW WITH THE LARGE COMPANIES LOOKING FOR DEALS THAT CAN BOLSTER THEIR PIPELINE AS OF THE PEAK FOR WHAT WOULD LE A PATENT CLIFF IN 2029 COMES TO THE FRONT. >> WE KNOW THAT'S KEY FOR THAT SECTOR. ANJALEE KHEMLANI, THANKS SO MUCH. >>> ALL RIGHT. DOLLAR GENERAL OUT OF WITH ITS Q3 EARNINGS TODAY, EXPECTING KNELT SALES GROWTH BETWEEN 1.5% AND 2.5%. LAST QUARTER IT DID BEAT THE EPS EXPECTATIONS. SAME-STORE SALES FELL, BUT NET SALES NICKED BY 2.4%. THE COMPANY CITED INVENTORY SHRINK AS A SIGNIFICANT HEADWIND. YOU SEE IT'S BEING REWARDED IN THE EARLY ACTION, UP ABOUT 2.5% ON ITS SHARES. OPPENHEIMER ALREADY OUT WITH A NOTE SAYING IT'S BETTER THAN FEARED, Q3 FROM DOLLARS GENERAL WITH ACTIONS TO STABILIZE ITS BUSINESS. WE KNOW EARLIER THIS YEAR THERE WAS A C-SUITE SHAKE-UP AS WELL, SO PUTTING THEM ON A BETTER PATH NOW WITH THE CEO SAYING THAT, WHILE WE'RE NOT SATISFIED WITH THE FINANCIAL RESULTS FOR THE THIRD QUARTER, MENTIONING OBVIOUSLY THE INVENTORY SHRINK, THEY'RE PLEASED WITH THE MOMENTUM OF THE SALES TRENDS. >> ONE OF THE OTHER HUGE ANNOUNCEMENTS IS THE GROWTH OF THE REAL ESTATE PLANS HERE. THEY'RE ANNOUNCING TODAY THAT THE REAL ESTATE GROWTH PLANS FOR FISCAL 2024 INCLUDES APPROXIMATELY 2,385 PROJECTS IN TOTAL, 800 NEW STORES. 1500 REMODELS, WHICH IS ACTUALLY A MODEST SLOWDOWN COMPARED TO THE NUMBER OF PROJECTS? RECENT YEARS. THAT'S SOMETHING THAT INVESTORS SHOULD PAY ATTENTION TO AS WELL HERE. THAT COULD ABSOLUTELY CHANGE THE FABRIC OF THE NUMBER OF DOORS THEY OPERATE AT THE END OF THE DAY. YOU IMPACT SOME OF THE IMPACTS, NET SALES PRIMARILY DRIVEN BY CONTRIBUTIONS FROM NEW STORES, AND HOW IMPORTANT THAT IS TO THE NEW GROWTH METRIC THERE. BUT THE DECREASE IN SAME-STORE SALES, THAT ACTUALLY WAS ABOUT 1.3% COMPARED TO THE SAME QUARTER LAST YEAR. THAT'S NOTEWORTHY, SO THE TICKETS SHRINKING A BIT AS THEY'RE TRYING TO ENGAGE WITH MORE CUSTOMERS. STILL, IN A PERIOD WHERE THEY'RE SEEING LESS OF A TRANSACTION VALUE PER TICKET PER VISIT THAT A CUSTOMER WAS MAKING. >> IT'S INTERESTING TO SEE THAT, ESPECIALLY WHEN YOU THINK ABOUT JUST WHERE INFLATION IS DESPITE IT COMING DOWN, WHERE DOLLAR GENERAL WOULD BE A PLAY THAT, YOU KNOW, YOU COULD SEE STANDING UP IN THE FACE OF STICKY INFLATION IN TERMS OF O OPPEN OPPENHEIMER'S INVEST THESIS. THEY DO BELIEVE -- THEY DO GIVE THIS CAVEAT. THEY BELIEVE THAT IT REMAINS A SHOW-ME STORY IN TERMS OF WHERE IT IS TODAY. WE'LL SEE IF THIS IS A BUY THE RU RUMOR/SELL THE NEWS KIND OF PLAY. >>> WE HAVE MORE ACTION AHEAD. STAY TUNED. YOU'RE WATCHING YAHOO FINANCE. >>> TECH STOPS HAVE DOM FATED MARKETS IN 2023, OUTPERFORMING THE OTHER 493 STOCKS IN THE S&P 500. HEADING INTO 2024, SOME INVESTORS ARE LOOKING TO BRANCH OUT, SEEKING GROWTH IN OTHER CATEGORIES, POSSIBLY TO ADD SOME SIN TO YOUR PORTFOLIO. OUR NEXT GUEST SAYS THE BEST BET FOR 2024 IS CONSTELLATION BRANDS. TALK TO US. >> WE THINK THIS IS A STORY OF ACCELERATING EPS GROWTH. WE UPGRADED THE STOCK IN SEPTEMBER. THE BRANDS DO INCREDIBLY WELL WITH YOUNGER CONSUMERS. SO OUR PROPRIETARY RESEARCH SHOWS 18 TO 34-YEAR-OLD CONSUMERS HAVE AN OUTSIZED PREFERENCE, WHICH SHOULD LEAD TO DURABLE MARKET SHARES. >> WHAT COULD HAVE MORE OUTSIZED TYPE OF EFFECT ON HOW THESE STOCKS PERFORM GOING INTO NEXT YEAR, TOO. >> WELL, IT'S BEEN AN INTERESTING YEAR. WITH THE CONTROVERSY AROUND BUD LIGHT, AND CONSTELLATION HAS BEEN A NET BENEFICIARY OF THAT. BUT MODELO AS A BRAND HAS BEEN ON A MULTI-YEAR TRAJECTORY. THERE'S NICE DEMOGRAPHIC TAILWINDS THAT SHOULD DRIVE DUR BUSINESS ON THE TOP LINE. >>> WHAT ABOUT MOULSEN COORS? >> THEY'VE BEEN A NET BENEFICIARY OF THE DISLOCATION WITH THE API PORTFOLIO. WHILE THE LOSSES HAVE BEEN CONCENTRATED IN BUD LIGHT, CONSUMERS FIGURED OUT THE REST OF THE BRANDS. SO BOTH COORS LIGHT AND MILLER LIGHT HAVE BEEN GAINING SHARES SUBTLE SIMULTANEOUSLY FOR MANY YEARS. >> I WANT TO ASK, I DON'T KNOW IF THIS COMES UP IN YOUR RESEARCH, THE IMPACT OF, SAY, THE GLP-1 DISCUSSION AND IT IMPACTING PEOPLE'S APPETITE FOR A BEVERAGE. IS THAT A HEADWIND THAT IS FACING ANY OF THESE BEER MAKERS? >> POTENTIALLY. IF WE ASSUME THAT THE EARLY ADOPTERS OF GLP-1s ARE HIGHER INCOME CONSUMERS, THEY TEND TO -- IT'S A COMBINATION OF INTENTIONAL ABSTINENCE, WHICH WE FIND TO BE OUTSIZED WITH YOUNGER CONSUMERS TAKING MONTH-LONG BREAKS, AS WELL A INTERACTION WITH CANNABIS. THAT MARKET IS A MARKET ALL OF 202, THAT'S OVER 10% OF THE ALCOHOL MARKET. WE BELIEVE WE'RE SEEING DISLOCATION INTO THE LEGAL CANNABIS MARKET. IT'S A WAY FOR CONSUMERS TO TAKE A BREAK FROM ALCOHOL BY SUBSTITUTING IT WITH CANNABIS. WE SEE A PARTICULAR TREND WITH 18 TO 25-YEAR-OLDS. THERE'S BEEN A DIVERGENCE WHERE ALCOHOL CONSUMPTION HAS BEEN ON THE DECLINE, BUT REPORTED CANNED ABYSS HAS ALSO BEEN ON THE RISE. >> ARE THERE ANY MAJOR M&A ACTIVITIES THAT WE'RE ANTICIPATING TO COME ABOUT NEXT YEAR AS WE THINK ABOUT THE BRANDS THAT HAVE DONE AS A STAND ALONE, WHERE THEY MIGHT BE EYEING IN ORDER TO GROW OUT THEIR PORTFOLIO. >> WE'VE SEEN A REVERSAL IN M&A ACTIVITY FOR BEER SPECIFICALLY, WHERE YOU HAD SEEN A LOT OF ACQUISITIONS OF CRAFT BEER BRANDS. YOU'LL RECALL CONSTELLATION ACQUIRED BALLAST POINT, A NUMBER OF ACQUISITIONS FOR MOULSEN COORS AS WELL. ABI SOLD TO A CANADIAN CANNABIS COMPANY. SO YOU HAVE SEEN PORTFOLIO CLEANUP FROM THE MAJOR OPERATORS. >> IS THERE AN EXPECTATION FOR GROWTH, AND WHICH FEE IS SET UP THE BEST FOR 2024? >> WE ONLY MODEL IT FROM AN INDUSTRY PERSPECTIVE AS OPPOSED TO COMPANY STOCKS, BUT WE'RE LOOKING FOR DURABLE HIGH SINGLE-DIGIT GROWTH OVER THE NEXT FIVE YEARS WE HAVE A GROWING NUMBER OF STATES THAT HAVE LEGALIZED. SO, YEAH, CONTINUED EXPANSION OF ADULT-USE MARKETPLACES, BUT ALSO CONTINUED ADOPTION WITH CONSUMERS MORE BROADLY. >> WHAT'S THE BEST WAY FOR EXECUTIVES -- WE WERE TALKING ABOUT SOME OF THE ISSUES THAT BD LIGHT HAS FACED EARLIER THIS YEAR. EXECUTIVES ARE TRYING TO FIGURE OUT THINGS, INCLUDING CONSUMER TASTE PROFILES, HAVING TO AND A HALF DATE WHAT IS FROM THEIR VANTAGE POINT ELECTION SEASON, WHERE SOME OF THE ISSUES PRESENT IN 2023 COULD HAVE LIGHTER FLUID THROWN ON THEM IN SOME FASHION OR ANOTHER. WHERE ARE YOU SEEING THE TONE, THE MESSAGING COME ACROSS FROM THESE EXECUTIVES THAT GIVE YOU CONFIDENCE. >> I THINK EVERYONE IS TALKING ABOUT MORE OVERSIGHT, BEING VERY CAREFUL ABOUT THE MESSAGING, STAYING TRUE TO THE BRAND. GENERALLY YOU HAVEN'T SEEN HOG COMPANIES DIVE INTO THE POLITICAL LANDSCAPE. I WOULD EXPECT THAT COMPANIES IN MY SPACE ARE MORE FOCUSED ON THE HEALTH OF CONSUMER AND THE AMOUNT OF PRICING THE CONSUMERS HAD TO ABSORB. THERE WERE A LOT OF PRICE INCREASES IN 2022. YOU CAN SEE THAT THAT PRICING IS NORMALIZING IN THE BACK HALF OF '23, WHICH WILL CREATE TOUGHER COMPS AS WE HEAD INTO 2024. >> AND SOME OF THIS MAY HELP US GET THROUGH ANOTHER ELECTION. [ LAUGHTER ] VIVIAN, GREAT TO SEE YOU. >> THANK YOU. >>> ALL YOUR MARKETS ACTION IS AHEAD. STAY TUNED. >>> ACCORDING TO AAA DATA, THE NATIONAL AVERAGE PRICE FOR GAS IS SITTING AT $3.20. THIS MARKS THE LOWEST PRICE WE HAVE SEEN SINCE EARLY JANUARY. INES FERRE HAS MORE DETAILS. >> YEAH, BRAD, WHEN YOU LOOK AT THE BIG PICTURE, YOU'RE SEEING THE AVERAGES AT $3.20. IN FACT, THIS IS THE LOWEST REALLY OF THE YEAR, BECAUSE ON JANUARY 1st, WE SAW GASOLINE AVERAGING AT $3.21, SO WHY HAVE WE SEEN THIS DO DECLINE? SEASONAL DEMAND IS LOWER. REFINERIES HAVE BEEN RAMPING UP PRODUCTION, SO YOU'RE SEEING A BUILD OF GASOLINE. WE HAD THE EIA DATA SHOWING INVENTORIES LAST WEEK WERE UP BY MORE THAN 5 MILLION BARRELS. THAT'S MUCH MORE THAN HAD BEEN ANTICIPATED. THE BUILD WAS EXPECTED AT 1.3 MILLION. SO IT KIND OF SHOWS YOU THE AMOUNT OF GASOLINE THAT HAS BEEN PROUD RECENTLY. NOW, WHERE ARE GASOLINE PRICES GOING TO BE GOING? THEY'RE EXPECTED TO CONTINUE WITH THIS DOWN TREND. ANDY LI PO. PO SAYS HE'S EXPECTING GASOLINE TO BE LOWINGER BY FIVE TO SEVEN CENTS IN THE COMING WEEK. COULD YOU SEE UNDER $3 PER GALLON IN YOUR STATE? 17 STATES ALREADY ARE SEEING THAT AVERAGES. COULD WE GET THERE FOR A NATIONAL AVERAGE? IT'S POSSIBLE, HE'S NOT PREDICTING IT RIGHT NOW, BUT IT ALL DEPENDS ON WHAT HAPPENS WITH OIL PRICES. >> I CERTAINLY LOVE THE DIRECTION OF THAT PERSONALLY. I WANT TO TALK ABOUT ANOTHER ENERGY PLAY DIRECTLY IMPACTED BY THE DIRECTION OF CRUDE OIL. TALK ABOUT WHAT'S HAPPENING WITH DIESEL PRICES, INES. >> DIESEL PRICES ARE ALSO ON THE DOWN TREND. IF YOU LOOK AT DIESEL PRICES LAST YEAR, COMPARED TO THIS YEAR, PERCENTAGE-WISE, DIESEL PRICES HAVE COME DOWN EVEN MORE THAN GASOLINE, PERCENT-WISE, SO YOU'RE LOOKING AT AN AVERAGE GALLON OF DIESEL 14, APPEARED LAST YEARS AT THE $5.03. IN EUROPE IT'S USED QUITE A BIT. WHEN YOU HAD THE UKRAINE WAR, YOU'VE HAD TO GEAR UP, SCRAMBLING TO GET SUPPLY. YOU HAD A LOT OF DEMAND OUT OF THE GULF COAST IN THE U.S. FOR THE DIESEL, NOW YOU HAVE MIDDLE EASTERN REFINERIES PUTTING MORE OF THAT SUPPLY ON THE MARKET. SO THAT'S MARKET OF THE REASON WHY YOU'RE ALSO SEEING DIESEL ON A DOWNWARD TREND. BOTTOM LINE WITH THE FIGHT AGAINST INFLATION, THESE LOWER FIELD PRICES WILL BODE WELL WHEN IT COMES TO THAT. >> I LIKE THAT. INES FERRE, THANKS SO MUCH. >> THANK YOU. >>> MORE OF YOUR MARKETS ACTION AHEAD. STAY TUNED. YOU'RE WATCHING YAHOO FINANCE. >>> YAHOO FINANCE IS COUNTING DOWN TO THE BIGGEST STORY OF 2023. WHAT'S GOING TO TAKE THE TOP SPOT? >> WHOA WHOA WHOA, JOSH, INFLATION IS CLEARLY THE TOP STORY. THIS PIECE I HAVE HERE IS SUPPOSED TO BE $18, BUT WE'RE IN NEW YORK CITY. I ADDED PEPPERONI, SO IT COST, GET THIS, $29. >> YOU MIGHT WANT THE PIE TO GO, THE STORY IS OpenAI, ChatGPT, CASE CLOSED. >> THAT'S A BIG BUZZWORD, BUT REMEMBER THE CRISIS BACK IN MARCH? WE HAD JPMORGAN STEP IN AND BUY FIRST REPUBLIC. PRETTY BIG DEAL, BROOKE. >> I'M KIND OF A BIG DEAL. >> I THINK THE BANKING CRISIS MIGHT WIN. >> I THINK WE'RE ALL FORGETTING ABOUT A SMALL CULTURAL ICON KNOWN AS BARBIE. MONTHS LATER WE'RE STILL TALKING ABOUT IT. >> I THINK WE'RE ALL RIGHT HERE. STAY TUNED FOR YAHOO FINANCE, AND WE'LL HEAR THE BIGGEST STORY AS WE COUNT DOWN TO 2024. >> INFLATION. ♪ >>> I'M DIANE KING-HALL, ALONGSIDE THE GREAT BRAD SMITH. WE BEGIN THIS HOUR WITH STOCKS TRYING TO GAIN SOME MOMENTUM AHEAD OF TOMORROW'S PAYROLLS REPORT. JOBLESS CLAIMS INCREASED LESS THAN EXPECTED LAST WEEK, GIVING TRADERS FOOD FOR THOUGHT AMID COOLING ECONOMIC INDICATORS. >>> MEANTIME, SHARES OF SPRINKLER SLUMPING THIS MORNING. CONTRACT RENEWALS SLOWED IN THE PAST QUARTER AS CUSTOMERS DEAL WITH WORSENING MACRO HEADWINDS. EVEN SO, THE COMPANY MANAGED TO BEAT EXPECTATIONS ON REVENUE, HITTING RECORD PROFITABILITY IN THE THIRD QUARTER. >>> WE'RE ALSO WATCHING CHAIRS OF C3 A.I., THE STOCK DIVING AFTER IT MISSED FORECASTS FOR REVENUE GROWTH. THE COMPANY SALES OUTLOOK FOR THE JANUARY QUARTER FALLING SHORT OF EXPECTATION. EARLIER THIS YEAR, C3 A.I. WITHDREW GUIDANCE IT'D BECOME PROFITABLE BY THE END OF 2024. >>> ALSO, TAKE A LOOK AT TAKE TWO SHARES. THE VIDEO GAME PUBLISHER WAS HIT WITH A DOWNGRADE FROM BUY TO NEUTRAL AT BANK OF AMERICA. ANALYSTS POINTING TO THE ASSUMPTION OF A DELAYED LAUNCH FOR THE WIDELY ANTICIPATED VIDEO GAME, GRAND THEFT AUTO 6. >>> NOW, JOBLESS CLAIMS LAST WEEK WERE BARELY CHANGED WITH LAYOFF RES MAKING AT LOW LEVELS. WEDNESDAY ALSO BROUGHT FRESH SIGNS OF A LABOR SLOWDOWN WITH ADP'S PRIVATE PAYROLL NUMBERS. NEXT UP, FRIDAY'S NOVEMBER JOBS REPORT. WITH US NOW TO DISCUSS IS MIKE REID, RBC CAPITAL MARKETS U.S. ECONOMIST. THANKS FOR JOINING US, MIKE. LET'S TALK ABOUT THE LATEST NUMBERS THAT WE'VE GOTTEN. NOT SO MUCH JOBLESS CLAIMS, WEEKLY CLAIMS, BECAUSE WE KNOW THAT'S, YOU KNOW, WEEK BY WEEK. YES, YOU HAVE THE FOUR-WEEK MOVING AVERAGE, BUT WHAT DO ADP'S NUMBERS TELL YOU ABOUT WHAT WE CAN EXPECT WITH THE BIG REPORT WE'RE SET TO GET FROM THE GOVERNMENT? >> SURE. GOOD TO BE HERE, DIANE. YOU KNOW, IF YOU LOOK AT THE ADP REPORT, THAT SHOWED A CONSISTENT SLOWDOWN IN HIRING, BUT IF YOU LOOK AT THE DETAILS IN TERMS OF SECTOR EMPLOYMENT, WE SAW TRADE, TRANSPORTATION, AND UTILITIES ACCOUNTED FOR ABOUT HALF OF THAT GAIN. SO THERE, YOU HAVE SEASONAL HIRING AHEAD OF THEOLIDAY SEASON, AHEAD OF THE SEASON. THAT SHOWS, INDEED, CONSUMERS ARE STILL SPENDING. >> ONE OF THE THINGS THAT WE'VE CONTINUED TO HEAR, AT LEAST GOING INTO THIS REPORT FROM SOME OF THE FIRMS OUT THERE ON WALL STREET, IS JUST WHERE THAT CONSUMER SPENDING IS EXPECTED TO HOLD UP AND ACTUALLY SUPPORT SOME OF THE BROADER EMPLOYMENT SITUATION. HOW ARE YOU READING THROUGH THAT RIGHT NOW? >> YEAH, THERE ARE A FEW SECTORS THAT ARE STILL GETTING QUITE STRONG IF YOU LOOK AT HEALTH CARE, RETAIL SPENDING. ALSO ONLINE SPENDING. THAT'S WHERE WE WOULD EXPECT TO SEE STRENGTH IN TRANSPORTATION, FOR EXAMPLE. >> THEN TALK TO US ABOUT WHAT IMPACT YOU'RE EXPECTING TO SEE IN THE NOVEMBER JOBS REPORT FROM THIS SLEW OF STRIKES WE'VE BEEN WATCHING. >> CERTAINLY. SO IF YOU LOOK BACK LAST MONTH, WE SAW MANUFACTURING HAD A NOTABLE DECLINE. THAT SHOULD BE ADDED BACK IN. YOU ALSO HAVE THE SCREEN ACTORS' GUILD STRIKE THAT ENDED. THOSE WILL INDEED BE ADDED BACK IN. HOWEVER, IT IS WORTH NOTING IN TERMS OF THE UNEMPLOYMENT RATE, THOSE WORKERS ARE NOT COUNTED AS UNEMPLOYED IN THE EYES OF THE HOUSEHOLD SURVEY. THAT'LL HAVE NO IMPACT ON THE UNEMPLOYMENT RATE. >> ONE OF THE THINGS WE'VE CONTINUED TO HEAR FROM THE FED, AND AT LEAST THEIR POSITIONING AND EVALUATION OF THE EMPLOYMENT SITUATION, IS THAT WAGES ARE NOT THE LARGEST DRIVER OF PERSISTENT INFLATION RIGHT NOW. HOW ARE YOU GUYS EVALUATING THE WAGE FRONT? EVEN THOUGH WE ARE STILL CONTINUING TO SEE INCREASES, THOSE INCREASES ARE NOT NEARLY AT THE PACES WE HAD SEEN EVEN THIS TIME LAST YEAR. >> YEAH, ABSOLUTELY. YOU KNOW, IT'S A TREND WE'VE BEEN KEEPING A CLOSE EYE ON. WAGE GROWTH HAS BEEN SLOWING. ONE SECTOR, IN PARTICULAR, I'VE BEEN POINTING TO IS THE INFORMATION SECTOR, PARTICULARLY WITHIN TECH. THERE WE KNOW -- WE SAW NOTABLE LAYOFFS THROUGHOUT 2022. IF YOU LOOKED AT THE PAST REPORT, THEIR WAGE GROWTH ON A YEAR-OVER-YEAR BASIS WAS WELL BELOW 2%. >> I ALSO WANT TO BRING INTO OUR CONVERSATION THE JOLTS REPORT, WHICH WAS OUT EARLIER THIS WEEK. WHAT STANDS OUT TO YOU IN TERMS OF -- SOMETIMES, SOME EXECUTIVES POINT OUT THERE IS A MISMATCH IN TERMS OF THE SKILLS GAP AND THE JOB OPENINGS THAT ARE OUT THERE. WHAT STOOD OUT TO YOU IN TERMS OF THE DIRECTION OF THE JOLTS REPORT? >> WE ARE EXPECTING THE JOLTS, THE JOB OPENINGS, IN PARTICULAR, TO CONTINUE TO COME DOWN. THERE ARE STILL SOME SECTORS THAT DO NEED TO RECOVER IN TERMS OF THEIR PRE-COVID LEVELS. NOTABLY, LEISURE AND HOSPITALITY. BUT THERE, I THINK YOU HAVE SOME STRUCTURAL ISSUES, NAMELY, GEOGRAPHIC MISMATCHES. YOU HAVE JOB OPENINGS IN PLACES WHERE WORKERS AREN'T NECESSARILY LOCATED. >> I THINK YOU JUST SAID SOMETHING REALLY INTERESTING I WANTED TO DOUBLE BACK TO, ESPECIALLY WITHIN TECHNOLOGY RIGHT NOW. BECAUSE IT SEEMED LIKE WHEN THE ENTIRE KERFUFFLE AND COUP WAS TAKING PLACE AT OPEN A.I., THERE WERE A NUMBER OF TECH FIRMS THAT OPENED THEIR DOORS AND SAID, "HEY, WHATEVER YOU WERE BEING PAID THERE, WE ARE WILLING TO ADD ON TO THAT, EITHER MATCH IT OR GIVEN YOU MORE IN COMPENSATION IN ONE FORM OR ANOTHER." IT SEEMS LIKE EVEN THOUGH THE CUTS HAVE TAKEN PLACE, AND THAT FILTERED THROUGH AND IMPACTED SOME OF THE WAGE FIGURE AS YOU WERE TRACKING IT, IT IS ALSO INTERESTING BECAUSE MANY OF THEM ARE STILL HOLDING, PERHAPS, A LITTLE BIT OF SPACE FOR WHERE THERE ARE KEY OPPORTUNITIES TO TAKE ON EMPLOYEES FOR KEY AREAS THAT ARE GROWTH PARTS OF THEIR BUSINESS, TOO. HOW COULD THAT PERHAPS HAVE A BROADER IMPACT AS WE GO INTO NEXT YEAR AND A.I. IS STILL ANTICIPATED TO BE ONE OF THE LARGEST THEMES, TOO? >> ABSOLUTELY. IF YOU THINK ABOUT THE STAFFING STRUCTURE OF INDUSTRIES, IT REALLY COMES DOWN TO OCCUPATIONS. THERE, WHEN YOU THINK ABOUT, SAY, SOFTWARE ENGINEERS OR COMPUTER PROGRAMMERS, THOSE ARE THE TYPES OF JOBS THAT ARE STILL IN VERY HIGH DEMAND AND VERY HARD TO FIND WORKERS WITH THOSE PARTICULAR SKILL SETS. WHERE YOU DO SEE JOB LOSSES IN THE BROADER TECH SECTOR MAY NOT NECESSARILY BE WITHIN THOSE OCCUPATIONS. >> MIKE, BEFORE WE LOSE YOU, I WANT TO GET YOUR PREDICTION FOR THE JOBS REPORT. WHAT IS YOUR NUMBER FOR BOTH SIDES? >> SURE. WE'RE LOOKING FOR THE HEADLINE PAYROLL GAIN TO COME IN AROUND $185,000. WE ARE LOOKING FOR THE UNEMPLOYMENT RATE TO TICK UP TO 4%. THAT WOULD BE IN LINE WITH WHAT WE SAW WITH THE CONTINUED CLAIMS NUMBER TICKING UP THROUGHOUT NOVEMBER. >> IF IT DOES HIT THAT LEVEL, WHAT DO YOU THINK THAT SIGNALS TO THE FED? >> YOU KNOW, I THINK FOR THE FED, THEY'RE STILL KEEPING AN EYE ON INFLATION. WE DON'T EXPECT THEM TO TURN THEIR FOCUS TO LABOR JUST YET. WE NEED INFLATION TO COME DOWN MUCH MORE IN LINE WITH THEIR TARGET. >> ALL RIGHT. MIKE, THANKS SO MUCH FOR TAKING THE TIME HERE WITH US TODAY. REALLY APPRECIATE THE INSIGHT AND THE OUTLOOK GOING INTO 2024. RBC CAPITAL MARKETS U.S. ECONOMIST, MIKE REID. >> THANKS FOR HAVING ME. >> THANK YOU. >>> MORE MARKETS ACTION AHEAD. STAY TUNED. YOU'RE WATCHING YAHOO! FINANCE. >>> BIG MOMENT IN THE HISTORY OF AMD, RELEASING ITS NEW SUPER, HIGH-POWERED A.I. CHIP. LET'S GET RIGHT TO THE PERSON WHO HAS HELPED ENGINEER A CHIP LIKE THIS. OF COURSE, ALONG WITH HER TEAM, THAT IS DR. LISA SUE, CHAIR AND CAO OF AMD. GREAT TO GET SOME TIME WITH YOU. WOW, THE PRESENTATION ON STAGE BLEW A LOT OF MINDS, NOT ONLY IN MARKETS BUT ALSO IN THE TECH INDUSTRY. THANK YOU FOR DOING THIS. LET'S START ON SOMETHING VERY, VERY SIMPLE. HOW DO YOU PUT, AND I THINK I GOT THIS NUMBER RIGHT, 153 BILLION TRANSISTORS ON A CHIP? EXPLAIN IT TO THE COMMONERS OUT THERE. >> RIGHT. WONDERFUL TO SEE YOU. THANK YOU FOR SPENDING SOME TIME WITH US. IT'S BEEN A BIG, BIG DAY FOR AMD. I WOULD SAY I'M SO PROUD OF THE TEAM. WE'VE DONE -- IT WAS REALLY AN OPPORTUNITY FOR US TO TALK ABOUT JUST HOW IMPORTANT A.I. IS OVERALL, AND THEN OUR PRODUCTS WITHIN IT. YES, YOU'RE ABSOLUTELY RIGHT, I SAID 153 BILLION TRANSISTORS. IT'S THE MOST COMPLEX, YOU KNOW, CHIP WE'VE EVER BUILT. IT IS THE MOST COMPLEX CHIP, FRANKLY, IN THE INDUSTRY. THE WAY YOU DO IT IS, LET'S CALL IT WITH A LOT OF TECHNOLOGY. WE'RE SUPER EXCITED ABOUT THE CAPABILITIES OF, YOU KNOW, MI300. IF YOU THINK ABOUT JUST HOW IMPORTANT A.I. HAS BECOME, RIGHT? A.I. IS LIKE IN EVERY CONVERSATION, NO MATTER WHICH INDUSTRY YOU'RE IN, NO MATTER WHAT YOU'RE TRYING TO DO. FOR A.I., YOU NEED THESE EXTREMELY POWERFUL GPUs. THERE ARE VERY, VERY FEW COMPANIES WHO CAN BUILD THESE THINGS. I'M JUST, YOU KNOW, SO EXCITED AND REALLY, YOU KNOW, LOVE BEING PART OF THE OPPORTUNITY TO REALLY CHANGE THE INDUSTRY WITH OUR A.I. TECH. >> HOW LONG DOES IT TAKE TO COME UP WITH A CHIP THAT HAS 153 BILLION TRANSITORS ON IT? >> WE'VE BEEN WORKING ON THIS ROAD MAP OVER THREE YEARS. YOU DON'T WAKE UP ONE DAY AND SAY, "HEY, I WANT TO BUILD AN A.I. CHIP." IT'S BEEN STEADY PROGRESS. YOU KNOW VERY MUCH WHAT WE'VE BEEN ABLE TO DO WITH OUR EPIC PRODUCT LINE FOR ALL OF THESE LARGE DATA CENTERS AND CLOUD INSTALLATIONS. WE'RE ON OUR FOURTH GENERATION WITH, YOU KNOW, OUR ZEN4 TECHNOLOGY. IT IS VERY SIMILAR ON THE GPU SIDE. WE'RE LAUNCHING WHAT WE CALL OUR THIRD GENERATION OF OUR GPU ARCHITECTURE. EVERY GENERATION, IT GETS BETTER. EVERY GENERATION, WE WORK REALLY CLOSELY WITH OUR CUSTOMERS AND PARTNERS ON HOW TO MAKE THEIR SOFTWARE BETTER AND OUR SYSTEMS BETTER. YEAH, IT TAKES QUITE A LONG TIME TO DO THIS. WHAT MAKES TODAY SO SPECIAL IS IT'S NOT JUST -- YOU KNOW, IT'S A GREAT PRODUCT. GREAT PRODUCTS COME ALONG, YOU KNOW, ALL THE TIME. IT'S ALSO A GREAT PRODUCT AT THE RIGHT TIME, SOLVING THE RIGHT PROBLEM FOR THE INDUSTRY. THAT'S WHERE WE ARE WITH A.I. A.I. IS AT THE VERY BEGINNING OF ABO A ADOPTION. WHAT IS CLEAR IS YOU NEED COMPUTE. THAT'S THE FOUNDATION OF A.I. THAT'S WHAT WE'RE BUILDING WITH MI300X. EVERY ONE OF THOSE 153 BILLION TRANSISTORS ARE HELPING US LEARN, HELPING COMPUTE LEARN, HELPING US ANSWER QUESTIONS, AND REALLY DEPLOYING IN BROAD SCALE WITH A LOT OF OUR PARTNERS. >> I'M WATCHING YOU ON STAGE, AND I'M BLOWN AWAY BY THESE NUMBERS. LOOK, I'M NOT A SCIENTIST, BUT ALL OF IT SEEMED, LIKE, WOW, THIS IS GAME-CHANGING TECHNOLOGY. HOW COMPLEX IS IT TO MANUFACTURE THESE CHIPS, AND THEN HOW MANY -- DO YOU HAVE AN ESTIMATE ON HOW MANY YOU'LL MAKE NEXT YEAR? >> ABSOLUTELY, BRIAN. IT IS SO MANY PROCESS STEPS. IF YOU THINK ABOUT THESE MI300s, THEY'RE MADE UP OF 12 LITTLE CHIPS, CHIPLETS, IN 5 AND 6 NANOMETER TECHNOLOGY. WE ACTUALLY STACK CHIPS, YOU KNOW, BOTH HORIZONTALLY AS WELL AS VERTICALLY, SO WE BRING CHIPS ON TOP OF EACH OTHER. IT TAKES ABOUT, YOU KNOW, SEVEN PLUS MONTHS, SEVEN, EIGHT MONTHS TO MANUFACTURE. WHEN YOU START TODAY, IT TAKES SEVEN OR EIGHT MONTHS BEFORE IT COMES OUT. YEAH, IT TAKES A LONG TIME. NOW, I HAVE TO SAY, WE'VE BEEN PLANNING FOR THIS DAY, SO, YOU KNOW, WE'RE EXPERTS IN THE SUPPLY CHAIN. I THINK IN THE SEMICONDUCTOR WORLD, THIS IS WHAT WE DO. WE HAVE, YOU KNOW, SIGNIFICANT SUPPLY THAT'S COMING OUT IN 2024. WE'RE WORKING WITH A NUMBER OF PARTNERS. YOU SAW A NUMBER OF THEM TODAY, YOU KNOW, SO HONORED TO HAVE MICROSOFT, META, ORACLE, DELL, LENOVO, SUPER MICRO, YOU KNOW, A NUMBER OF REALLY SMART A.I. START-UPS THAT ARE THERE. WHAT WE SEE IS, THE ECOSYSTEM IS HUNGRY FOR THIS TECHNOLOGY, AND WE'RE READY FOR IT. >> LISA, ARE YOU JUST SOLD OUT? WHAT'S THE BACKLOG OF SALES LOOK LIKE FOR THESE CHIPS? >> WELL, BRIAN, WHAT WE SAID IN OUR LAST CONFERENCE CALL IS THAT, YOU KNOW, WE HAVE VERY CLEAR LINE OF SIGHT TO, YOU KNOW, $2 BILLION OF REVENUE NEXT YEAR. WHAT WE ALSO SAID IS WE PLAN FOR SUCCESS. FROM MY PERSPECTIVE, WE CONTINUE TO WORK WITH OUR CUSTOMERS TO DEPLOY AS QUICKLY AS POSSIBLE. DEMAND IS HIGH. WE HAVE MUCH MORE SUPPLY THAN $2 BILLION, SO I DO BELIEVE AS WE GO THROUGH NEXT YEAR, WE'LL BE ABLE TO UPDATE THOSE NUMBERS. >> WOW. THAT'S MIND-BLOWING STUFF. LET'S STAY ON THIS THREAD OF ME NOT BEING A SCIENTIST. SO I WATCHED YOUR WHOLE PRESENTATION. I'M WATCHING AND I CONTINUE TO WATCH IT. I CAME AWAY THINKING, YOUR CHIPS WILL ADD MORE POWER TO LARGE LANGUAGE MODELS. HELP US UNDERSTAND WHAT THESE CHIPS WILL LET THESE MODELS DO THAT THEY CAN'T DO TODAY. >> YEAH, NO, THAT'S A GREAT QUESTION, BRIAN. SO, LOOK, I THINK WE'VE ALL, YOU KNOW, REALLY EXPERIENCED HOW POWERFUL CHAT GPT AND CO-PILOT FUNCTIONS ARE IN OUR PERSONAL LIVES, IN OUR BUSINESSES, IN OUR ENTERPRISES. WE'RE USING IT WITHIN AMD TO BUILD BETTER CHIPS. THAT'S WHERE THE TECHNOLOGY IS. NOW, AS YOU GUYS KNOW, SOMETIMES WHEN YOU ASK, YOU KNOW, CHAT GPT A QUESTION, IT WON'T GIVE YOU QUITE THE RIGHT ANSWER BECAUSE THE MODEL DOESN'T HAVE, LET'S CALL IT, ALL OF THE KNOWLEDGE. WHEN YOU HAVE LARGER MODELS, WHEN YOU ACTUALLY TRAIN IT ON MORE INFORMATION, IT'LL GET MORE AND MORE ACCURATE. SO WHAT WE'RE WORKING ON IS A TECHNOLOGY FOR THE NEXT GENERATION AND THE NEXT GENERATION. WHAT WE'RE TRYING TO DO IS TO MAKE THIS A.I. TECHNOLOGY SO EASY TO USE BUT SO POWERFUL THAT IT MAKES ALL OUR DAILY LIVES BETTER. SO MORE COMPUTE WILL ALLOW YOU TO TRAIN BETTER MODELS. THEY'LL BE SMARTER. IT'LL ALSO ALLOW YOU TO GET ANSWERS MUCH MORE QUICKLY SO YOU DON'T HAVE TO WAIT. SOMETIMES THERE'S A LITTLE BIT OF A DELAY BETWEEN WHEN YOU ASK THE QUESTION AND WHEN YOU ACTUALLY GET THE ANSWER. WE'RE BUILDING THESE CHIPS SO THAT THAT DELAY IS AS SHORT AS POSSIBLE. YOU CAN BRING THAT COMPUTING TECHNOLOGY EVERYWHERE YOU GO, LIKE, INCLUDING IN YOUR PCs, FOR EXAMPLE. >> SO IF WE'RE HAVING THIS CONVERSATION A YEAR FROM NOW, WHAT ARE THESE MODELS DOING THAT THEY AREN'T DOING TODAY? >> I THINK THE MOST IMPORTANT THING, BRIAN, IS WE WANT THEM TO BE RIGHT. WE WANT THEM TO BE AS GOOD AS POSSIBLE. WE WANT THEM TO HELP US ANSWER QUESTIONS AS QUICKLY AS POSSIBLE. WE WANT THE ANSWER TO BE THE RIGHT ANSWER. SO THESE MODELS ARE GOING TO GET MUCH MORE ACCURATE. THEY'RE GOING TO BE MUCH MORE ATTUNED TO YOUR DATA, YOU KNOW, PARTICULARLY WHEN YOU THINK ABOUT YOUR OWN PERSONAL SPACE OR YOUR OWN ENTERPRISE SPACE. FOR THAT, YOU NEED LOTS AND LOTS OF GPUs. TODAY, YOU KNOW, IT IS ONE OF THOSE CONSTRAINED RESOURCES. YOU KNOW, OUR JOB IS TO MAKE THE TECHNOLOGY BETTER AND ENSURE THERE'S PLENTY OF OPPORTUNITY FOR, YOU KNOW, ALL COMPANIES TO HAVE ACCESS TO THIS GREAT TECHNOLOGY. >> YOU'VE SEEN A LOT OF DIFFERENT ADVANCES IN TECHNOLOGY THROUGHOUT THE COURSE OF YOUR CAREER. I WAS THINKING, I THINK YOU MENTIONED THIS ON STAGE, TOO, THE CREATION OR THE START OF THE INTERNET. ARE COMPANIES PUTTING IN THE RIGHT SAFEGUARDS TO PROTECT SOCIETY FROM THESE LARGE LANGUAGE MODELS, GIVEN HOW FAST THINGS ARE MOVING IN THIS? >> YOU KNOW, I WOULD SAY THAT THIS MOMENT IS, YOU KNOW, JUST UNLIKE ANY OTHER MOMENT. I'VE BEEN IN THIS INDUSTRY, YOU KNOW, 30 PLUS YEARS. WE'VE SEEN A LOT OF GREAT TECHNOLOGY, BUT A.I. IS A STEP FUNCTION ABOVE THAT IN TERMS OF WHAT WE BELIEVE THE POTENTIAL IS. NOW, WE DO HAVE TO PUT IN SAFEGUARDS. I THINK THERE'S A LOT OF WORK GOING ON IN THAT AREA, BUT THE UPSIDE, YOU KNOW, FAR OUTWEIGHS THE POTENTIAL RISKS. YOU KNOW, AS TECHNOLOGY COMPANIES, WE'RE ALL IN THIS TOGETHER TO ENSURE THAT THE TECHNOLOGY IS ROLLED OUT IN A VERY PRODUCTIVE AND CAPABLE, AS >> THERE'S BEEN A LOT OF DISCUSSION SINCE WE LAST SPOKE, LISA, ON SENDING A.I. CHIPS TO CHINA. WHAT IS YOUR POSITION ON THIS? >> WELL, I MEAN, FROM AN OVERALL STANDPOINT, YOU KNOW, WE CERTAINLY SPEND A LOT OF TIME WITH THE ADMINISTRATION. WE UNDERSTAND THE IMPORTANCE OF THE EXPORT CONTROL REGULATIONS TO, YOU KNOW, ENSURE WE'RE KEEPING THE MOST ADVANCED TECHNOLOGIES IN THE UNITED STATES. WE ABSOLUTELY UNDERSTAND THAT. THAT BEING THE CASE, CHINA IS ALSO AN IMPORTANT MARKET AND WE HAVE A LOT OF GREAT PARTNERS THERE. SO I THINK THE KEY IS, YOU KNOW, WE PLAN TO HAVE A PORTFOLIO. YOU KNOW, IN THAT PORTFOLIO, WE ARE GOING TO BE, YOU KNOW, EXTREMELY FOCUSED ON ENSURING THAT, YOU KNOW, WE HAVE SORT OF LEADING-EDGE TECHNOLOGY AND WE ALSO HAVE A BROAD PORTFOLIO FOR ALL APPLICATIONS. >> OUR THANKS TO BRIAN SOZZO FOR THE IN-DEPTH INTERVIEW WITH LISA SU. >>> WE HAVE YOUR MARKETS ACTION AHEAD. STAY TUNED. YOU'RE WATCHING YAHOO! FINANCE. HERE'S A LIVE LOOK AT WALL STREET. >>> BARCLAY'S TECHNOLOGY CONFERENCE IS UNDER WAY IN SAN FRANCISCO. TOP BUSINESS LEADERS ARE COMING TOGETHER TO DISCUSS ALL THINGS ARTIFICIAL INTELLIGENCE AS WE LOOK TO BIG INVESTMENT IDEAS AND THEMES IN THE NEW YEAR. YAHOO! FINANCE'S SEANA SMITH IS ON THE GROUND TALKING TO ATTENDEES ABOUT WHAT IS DRIVING TECH INTO 2024. >> JUNIPER NETWORKS IS RAMPING UP ITS FOCUS ON A.I. NOW, THE TECHNOLOGY HAS BECOME A CORNERSTONE TO THE COMPANY'S STRATEGY. THEY'RE USING IT TO DRIVE LONG-TERM GROWTH AND ALSO IMPROVE PROFITABILITY. HERE TO DISCUSS THAT AND MUCH MORE, WE WANT TO BRING IN ROMNEY RAHIM, THE CEO OF JUNIPER NETWORKS. THANKS FOR TAKING THE TIME. >> THANKS FOR HAVING ME. >> LET'S TALK ABOUT THE A.I. INVESTMENTS. THAT REALLY HAS BEEN THE HYPE WORD, THE WORD THAT -- THE BUZZWORD THAT PEOPLE HAVE FOCUSED ON OVER THE LAST 12 MONTHS. IN TERMS OF WHAT IT'S DONE FOR JUNIPER'S BUSINESS, WHAT ARE YOU HEARING? >> A.I. IS DEFINITELY NOT A NEW THING FOR JUNIPER. WE'VE ACTUALLY BEEN INVESTING IN THIS TECHNOLOGY FOR THE LAST FIVE YEARS. OUR A.I.-DRIVEN ENTERPRISE BUSINESS HAS BEEN PERFORMING PHENOMENALLY WELL. IN FACT, OUR MYSTIFIED, WHAT WE CALL OUR MYSTIFIED SOLUTION, WHICH IS DRIVEN BY A.I. TECHNOLOGY THAT'S ESSENTIALLY ENABLING US TO RUN NETWORKS MORE EFFICIENTLY, DELIGHT OUR NETWORK OPERATORS, DELIGHT THE END USER, HAS GROWN OVER THE LAST TWO REPORTED QUARTERS, APPROXIMATELY 100% YEAR-OVER-YEAR. THIS DOESN'T HAPPEN BY ACCIDENT. WE'RE TAKING SHARE AT AN UNPRECEDENTED RATE, AND THIS IS PROOF THAT A.I. IS NOT JUST IN ITS HYPE CYCLE, IT'S PROOF THAT A.I. IS ACTUALLY DELIVERING REAL RESULTS FOR OUR END CUSTOMERS. >> BECAUSE OF THAT, YOU ARE ALREADY SEEING A RETURN, YOU'RE SEEING THE IMPACT FROM A.I., YOUR INVESTMENTS, ON YOUR REVENUE. HOW HAS THAT BEEN SHAPING YOUR STRATEGY GOING FORWARD, THE FUTURE A.I. INITIATIVES? >> IT IS A GREAT QUESTION. THUS FAR, WHERE WE HAVE BENEFITTED IS IN WHAT WE CALL A.I. OPERATIONS. WE HAVE AN A.I. ENGINE THAT'S DRIVING NETWORK OPERATIONS AND IMPROVING THE EXPERIENCE TO THE END CUSTOMER AND TO THE NETWORK OPERATOR. THE FUTURE, I THINK, WE CONTINUE TO DO THAT. WE WILL CONTINUE TO BENEFIT FROM THE DIFFERENTIATION WE'RE SEEING THROUGH A.I., BUT WE ADD ANOTHER AREA OF INVESTMENT THAT CAN REPRESENT A BILLION DOLLAR OPPORTUNITY, AROUND THE A.I. INFRASTRUCTURE, RIGHT? ANYBODY THAT IS LEVERAGING A.I. NEEDS TO ESSENTIALLY TAP INTO LARGE CLUSTERS OF GPUs THAT ARE CONNECTED THROUGH NETWORKING. JUNIPER IS REALLY GOOD AT BUILDING HIGH-PERFORMANCE, HIGHLY-EFFICIENT, HIGHLY-RELIABLE NETWORKS, AND WE'RE DOING THAT TO CAPTURE THIS CLUSTERING OPPORTUNITY FOR THE A.I. INFRASTRUCTURE IN THE FUTURE. THAT'S THE NEXT, NEW, BIG OPPORTUNITY FOR OUR COMPANY. >> BECAUSE OF MAYBE SOME OF THESE INITIATIVES, YOU ALSO RECENTLY ANNOUNCED A BIT OF RESTRUCTURING. IT INCLUDED LAYOFFS. WHAT IS YOUR MESSAGE TO INVESTORS IN TERMS OF WHY THIS MAKES SENSE AND THIS STRATEGY, SOME OF THE MOVES YOU HAVE DONE SO FAR, WHY THAT MAKES SENSE FOR JUNIPER IN THE LONG RUN? >> WE HAD TO DO A RELATIVELY SMALL RESTRUCTURING EFFORT. WE DON'T LIKE TO DO THESE THINGS, BUT WE DO THEM FOR A COUPLE OF REASONS. ONE IS WE ARE COMMITTED TO NOT JUST GROWTH BUT PROFITABLE GROWTH FOR OUR INVESTORS. EVEN MORE IMPORTANTLY, IT'S TO ENSURE WE'RE INVESTING ON THE RIGHT SIDE OF INDUSTRY CHANGE. ESSENTIALLY, WE ARE INVESTING AND HIRING IN NEW AREAS AROUND CLOUD-DELIVERED CAPABILITIES, A.I. TECHNOLOGIES, DATA SCIENCE, THAT WILL ENSURE THAT OUR SOLUTIONS ARE GOING TO BE DIFFERENTIATED TODAY AND IN THE FUTURE. >> WHEN IT COMES TO SOME OF THE STRAINS IN YOUR BUSINESS, ENTERPRISE STICKING OUT IN TERMS OF MOVES IN RECENT QUARTERS, LOOKING AHEAD TO NEXT YEAR, WHAT DO YOU SEE. >> THE INVESTMENTS IN A.I. HAVE MOSTLY TODAY BENEFITTED OUR ENTERPRISE BUSINESS, AND JUNIPER HAS TRADITIONALLY BEEN KNOWN AS A COMPANY THAT SERVES SERVICE PROVIDERS AND CLOUD PROVIDERS. THE LAST REPORTED QUARTER IN Q3, ENTERPRISE, FOR THE FIRST TIME IN THE COMPANY'S HISTORY, BECAME OVER 50% OF TOTAL REVENUE. I EXPECT THAT ENTERPRISE WILL CONTINUE TO GROW FASTER THAN ANY OTHER OF OUR SEGMENTS. THAT'S GREAT. BECAUSE RIGHT NOW, OUR SUPERPOWER AS A COMPANY IS THE DIVERSITY OF OUR BUSINESS. WE DON'T JUST RELY ON ONE OR TWO VERTICALS. WE RELY ON THREE KEY THINGS, SERVICE PROVIDER, CLOUD AND ENTERPRISE. THAT GIVES THE RESILIENCE TO OVERCOME HEADWINDS OR MACRO CHALLENGES. >> TALK TO US A LITTLE BIT MORE ABOUT THE MACRO CHALLENGES, THE FACT THERE'S SO MUCH UNCERTAINTY LOOKING AHEAD TO NEXT YEAR AND BEYOND. AS THE CEO OF JUNIPER, HOW ARE YOU EVALUATING, OR HOW, I GUESS, ARE YOU APPROACHING THAT UNCERTAINTY IN TERMS OF SOME OF THE DECISIONS THAT YOU'RE MAKING? >> YEAH, IT'S A GOOD QUESTION. AGAIN, I THINK OUR SUPERPOWER IS OUR DIVERSITY. RIGHT NOW, FOR EXAMPLE, CLOUD PROVIDERS AND SERVICE PROVIDERS ARE EXPERIENCING A PERIOD OF HEADWINDS BECAUSE THEY'RE DIGESTING A MASSIVE AMOUNT OF INFRASTRUCTURE THAT THEY HAVE BROUGHT OVER THE LAST SEVERAL YEARS. THEY NEED TO CONSUME IT, DEPLOY IT, AND SO ON. ENTERPRISE, RELATIVELY SPEAKING, IS MUCH MORE ROBUST. FOR THAT REASON, WE'RE RELYING ON ENTERPRISE, WHICH, AGAIN, REPRESENTS THE BULK OF OUR BUSINESS, TO ACHIEVE SUSTAINABLE, LONG-TERM REVENUE GROWTH. >> RAMI, ONE OF THE TOPIC POINTS THAT CAME UP ON YOUR MOST RECENT EARNINGS CALL WAS INVENTORY, THE LEVELS YOU'RE SEEING, ELEVATED INVENTORY LEVELS. IN TERMS OF THAT NORMALIZING, WHAT'S THE TIMELINE FOR THAT? >> NEXT YEAR, REVENUE GROWTH WILL BE MUTED BECAUSE OF THE FACT THAT MUCH OF THIS YEAR'S REVENUE GROWTH HAS BEEN FROM THE DEPLETION OF THE INVENTORY. I THINK AS YOU GET INTO NEXT YEAR, INVENTORY LEVELS SHOULD BE SORT OF BACK TO NORMAL. AT THAT POINT, ORDERS WILL START TO RECOVER, WHICH IS WHY WE EXPECT ORDERS ACROSS THE BOARD, IN ALL OF CUSTOMER LEVELS, TO BE MEANINGFUL NEXT YEAR. >> LOOKING AHEAD TO 2024, CAN YOU IDENTIFY THE BIGGEST RISK OR CHALLENGES AHEAD FOR JUNIPER? >> I HONESTLY FEEL REALLY GOOD ABOUT OUR COMPETITIVE DIFFERENTIATION. WE HAVEN'T BEEN THIS STRONG SINCE THE BIRTH OF OUR KCOMPANY THAT I WAS FORTUNATE ENOUGH TO SEE CLOSE TO 30 YEARS AGO. IT'S THOSE FACTORS OUTSIDE OF OUR CONTROL. OW LONG WILL IT TAKE FOR THE DIGESTION PERIOD AND THE CLOUD PROVIDER AND SERVICE PROVIDER TO PLAY OUT? YOU KNOW, I AM VERY CONFIDENT THAT CLOUD PROVIDERS WILL NEED TO EVENTUALLY INVEST IN NETWORKS. IT'LL JUST TAKE A BIT OF TIME. THAT TIMING IS A LITTLE UNCERTAIN RIGHT NOW. >> RAMI RAHIM, THANK YOU FOR TAKING THE TIME TO JOIN US. CEO OF JUNIPER NETWORKS. >> THANK YOU SO MUCH. >> THANKS TO SEANA SMITH AT THE BARCLAYS TECHNOLOGY CONFERENCE WITH THAT WIDE-RANGING INTERVIEW WITH RAMI RAHIM. >>> ARTIFICIAL INTELLIGENCE HAS TAKEN THE LIMELIGHT, BUT NOT EVERYONE IS BUYING INTO THE HYPE. THE EU IS TAKING CHARGE OF REGULATION THIS WEEK. AFTER A 24-HOUR NEGOTIATION, REGULATORS WILL CONTINUE TO DRAFT THE COMPREHENSIVE REGULATION ON FRIDAY. FOR MORE ON WHAT WE CAN EXPECT, YAHOO! FINANCE'S DAN HOWLEY IS HERE TO BREAK IT ALL DOWN. DAN, IT SEEMS LIKE THESE WERE PRETTY TENSE NEGOTIATIONS. WHAT ARE WE LOOKING FOR COME FRIDAY? >> YEAH, THIS WAS, YOU KNOW, LIKE YOU SAID, A MARATHON NEGOTIATING SESSION ON WEDNESDAY WITH THE EU OVER THESE A.I. REGULATIONS. GOING INTO FRIDAY, YOU CAN EXPECT THEM TO CONTINUE TO TRY TO HASH OUT SOME OF THE DISAGREEMENTS THAT THEY CURRENTLY HAVE. THIS WAS SOMETHING THAT WAS PUT TOGETHER IN 2021, BEFORE OPEN A.I. HAD RELEASED CHAT GPT, BEFORE MICROSOFT WAS ON BOARD WITH ITS OWN CO-PILOT, PRIOR TO GOOGLE'S RELEASE OF ITS BART SOFTWARE. I MEAN, BEFORE THE BIG GEN-A.I. EXPLOSION. THE FACT THAT THE TECHNOLOGY IS CHANGING SO QUICKLY, SO RECENTLY, THOUGH, IT'S KIND OF THROWING A WRENCH INTO THE WORKS. JUST TO BREAK IT DOWN, THE EU'S ORIGINAL PROPOSALS HAVE A.I. BROKEN DOWN INTO A FEW CATEGORIES. THE FIRST IS UNACCEPTABLE RISK IN WHICH COUNTRIES WOULD NOT BE ABLE TO USE A.I. THOSE INCLUDE THINGS LIKE SOCIAL SCORING, WHAT YOU'D CLASSIFY PEOPLE BASED ON THEIR BEHAVIOR, SOCIO-ECONOMIC STATUS, PERSONAL CHARACTERISTICS. REALTIME BIOMETRIC IDENTIFICATION SYSTEMS. THEN BEHAVIORAL MANIPULATION. SO ONE OF THE EXAMPLES THE EU PUTS IS VOICE-ACTIVATED TOYS THAT WOULD ENCOURAGE DANGEROUS BEHAVIOR IN CHILDREN. THINK OF, I GUESS, A NEFARIOUS TICKLE ME ELMO OR SOMETHING. YOU WOULD HAVE TO HAVE THINGS MONITORED BY THE EU AND CONTINUALLY CHECKED OUT. GENERATIVE A.I. IS ON THE LIST OF ITEMS, BUT THEY'D BASICALLY HAVE TO DISCLOSE WHAT'S GOING ON WITH THE ACTUAL PLATFORMS TO EU REGULATORS. THERE IS LIMITED RISK, A.I. SYSTEMS. THOSE, THEY'D HAVE TO GET LOOKED AT AND KIND OF ALLOWED TO FUNCTION. NOW, THE HANGUPS HERE FOR THE EU THAT'S, YOU KNOW, BEING HASHED OUT NOW ARE OVER THOSE BIOMETRIC CAPABILITIES. GOVERNMENTS DON'T WANT THEM, BUT SOME MEMBERS OF GOVERNMENT DO. PARTICULARLY LAW ENFORCEMENT, MILITARY, THEY WANT TO BE ABLE TO USE THOSE KINDS OF A.I. SYSTEMS. THAT'S A STICKING POINT. THE OTHER IS ON GENERATIVE A.I. SYSTEMS THAT ARE OPEN SOURCE. SO IF YOU HAVE AN OPEN SOURCE SYSTEM, IT BASICALLY MEANS YOU HAVE THE SOURCE CODE OUT IN THE WORLD. GENERALLY, THAT IDEA IS THAT THEY'RE SUPPOSED TO BE SAFER BECAUSE EVERYBODY HAS EYES ON THEM. IT'S NOT A PROPRIETARY SYSTEM. YOU CAN SAY, OKAY, RESEARCHERS AROUND THE WORLD, TAKE A LOOK. FRANCE AND GERMANY HAVE COME FORWARD AND SAID, "LOOK, WE DON'T THINK THAT THE OPEN SOURCE SYSTEMS NEED TO BE REGULATED AS HEAVILY. WE KIND OF WANT TO PULL THAT BACK." THERE'S DISAGREEMENTS ON THAT, AS WELL. THE BIG DEAL HERE, THOUGH, IS THAT THIS WOULD BE, AS YOU SAID, ONE OF THE MOST COMPREHENSIVE A.I. LAWS IN THE WORLD. YOU KNOW, CHINA DOES HAVE A.I. LAWS ALREADY. THIS WOULD GO A STEP FURTHER. IT WOULD ALSO GIVE THE EU, ONCE AGAIN, A LEG UP ON THE U.S., WHICH STILL DOESN'T HAVE PRIVACY REGULATIONS, FEDERAL PRIVACY REGULATIONS WHEN IT COMES TO THE WEB. THEY HAVE THAT ALREADY IN THE EU. NOW, THEY WOULD DO THAT AGAIN WITH A.I., ENSURING THAT THERE'S SOME FORM OF PROTECTION AGAINST THE USE OF THE TECHNOLOGY. THE U.S. STILL WOEFULLY BEHIND. YOU KNOW, IF THEY CAN'T GET THIS SORTED OUT RATHER SOON, THEY'RE GOING TO GO INTO ELECTIONS, THEN WE LIKELY WOULDN'T SEE THIS TAKE SHAPE. AGAIN, THIS WAS STARTED IN 2021. IT IS SOMETHING THAT THEY REALLY NEED TO GET ON. >> ESPECIALLY IF THEY'RE THINKING ABOUT TALKING ABOUT PROTECTIONS EVEN WITHIN FIGURINE DOLLS AND WHATNOT. AT LEAST A FEW PEOPLE WITHIN THE EU MUST HAVE SEEN THAT ASHLEY O EPISODE FEATURING MILEY CYRUS, DAN. WE'LL SEE WHAT COMES OF THIS GOING FORWARD. APPRECIATE IT. THANKS SO MUCH, DAN. >>> ALL YOUR MARKET'S ACTION AHEAD. STAY TUNED. YOU'RE WATCHING YAHOO! FINANCE. >>> CEOs OF THE NATION'S LARGEST BANKS WERE QUESTIONED WEDNESDAY BY SENATORS FOR THREE HOURS IN CONGRESS' ANNUAL OVERSIGHT HEARING OF WALL STREET. EXECUTIVES WARNED LAWMAKERS THAT THE FEDERAL RESERVE'S PROPOSED HIGHER CAPITAL REQUIREMENTS WILL HARM CONSUMERS AND THE ECONOMY. YAHOO! FINANCE'S JENNIFER SCHAUMBURGER TALKED TO A CEO WHO THINKS THAT MAY BE RIGHT. TAKE US THROUGH YOUR CONVERSATION. >> GOOD MORNING. I SAT DOWN WITH DEMOCRATIC SENATOR MARK WARNER LAST NIGHT FOR REACTION TO BANK CEOs' COMMENTS. I ASKED WHETHER HE SHARES THE CONCERNS IT COULD HURT LENDING AND CONSUMERS. HE TOLD ME THE BANKS HAVE AN ARGUMENT THIS TIME, AND HE'S BEEN TOLD BY REGULATORS A LOT OF REVISIONS ARE COMING TO THAT PLAN. TAKE A LISTEN. >> MY FRIENDS IN THE BANKING INDUSTRY, WHENEVER THERE IS A NEW REGULATION OR RULE, THEY ALWAYS SAY, "THE SKY IS FALLING. THE SKY IS FALLING." THIS TIME, THOUGH, I THINK THEY'VE GOT AN ARGUMENT. I THINK THAT YOU'VE GOT THE CIRCUMSTANCE WHERE INTEREST RATES ARE AT RECENT HIGH. THE IDEA OF ADDITIONAL CAPITAL REQUIREMENTS AND A BUFFER BEYOND WHAT IS ALREADY IN PLACE MEANS THERE'S LESS CAPITAL AVAILABLE FOR LENDING. WHEN YOU HAVE CIVIL RIGHTS ORGANIZATIONS SAYING THIS IS NOT THE RIGHT TIME, AND I'VE BEEN TOLD BY THE REGULATORS THEY HAVE A LOT OF REVISIONS BUT, YOU KNOW, I'M GOING TO BE ANXIOUS TO SE HOW THIS PLAYS OUT, BUT I DO THINK THEY HAVE SOME CONCERNS THAT OUGHT TO BE HEARD OUT. AT THE SAME TIME, THOUGH, I GET A LITTLE FRUSTRATED WITH THEM AT TIMES BECAUSE THERE ARE OTHER TOOLS THAT COULD DEAL WITH ISSUES LIKE LIQUIDITY. WE GO BACK TO THE VERY BEGINNINGS OF THE FEDERAL RESERVE, WHEN IT WAS FIRST CREATED, THERE IS THE DISCOUNT WINDOW, WHERE THIS YOU GOT A BANK THAT'S GOT A LIQUIDITY ISSUE, YOU GO TO THE DISCOUNT WINDOW. MATTER OF FACT, TWO OF THE MAJOR FAILURES THIS YEAR, SVB AND SIGNATURE, DIDN'T EVEN KNOW HOW TO USE THAT TOOL. SO ONE OF THE THINGS I'VE BEEN EXPLORING IS, YOU KNOW, I KNOW BANKS ARE RELUCTANT TO USE IT BECAUSE IT COMES WITH A STIGMA, BUT YOU CAN'T COMPLAIN ABOUT OTHER REGULATION IFS THEYEXISTI. COULD WE HAVE A REQUIREMENT THAT IS ON SOME LEVEL OF RANDOM BASIS? YOU HAD TO DEMONSTRATE YOU KNEW HOW TO USEHE WINDOW. CAN I WORK WITH THE BANKING COMMUNITY SO THEY CAN USE THAT WINDOW IN A WAY THAT DOESN'T CREATE A STIGMA, DOESN'T HURT THE STOCK PRICE, BUT IS ALSO A TOOL ON LIQUIDITY THAT WAS SET UP IN THE FIRST PLACE? >> IF REGULATORS DON'T MAKE CHANGES UP TO YOUR LIKING THAT YOU STILL FEEL LIKE IT IS GOING TO IMPEDE THE ECONOMY, CREDIT AVAILABILITY, THE CONSUMER, WHAT IS THE LIKELIHOOD YOU COULD ENACT THE CONGRESIONAL REVIEW ACT TO STOP IMPLEMENTATION, AND WOULD YOU SUPPORT THAT? >> A LOT OF MY REPUBLICAN FRIENDS ARE ALREADY MAKING THAT THREAT. I FELT LIKE IT WAS KIND OF YING AND YANG AT THE HEARING. YOU HAD SOME PEOPLE SAYING, YOU KNOW, THESE BANKS HAVE CREATED EVERY PROBLEM IN CAPITALISM. YOU HAVE THE OTHER GROUP SAYING THE REGULATORS HAVE CREATED ALL THESE PROBLEMS. I'M NOT, FRANKLY, IN EITHER CAMP. I'M GOING TO RESERVE JUDGMENT UNTIL I SEE WHAT THIS FINAL RULE LOOKS LIKE, HOW MANY REVISIONS ARE MADE, THEN WE CAN HAVE THAT CONVERSATION. >> SWITCHING GEARS SLIGHTLY, I WANT TO ASK YOU ABOUT ARTIFICIAL INTELLIGENCE. YOU'VE EXPRESSED CONCERN IT COULD DISRUPT CAPITAL MARKETS. I KNOW YOU HAVE SOME LEGISLATION YOU'RE WORKING ON THAT WOULD DESIGNATE THE FINANCIAL STABILITY OVERSIGHT COUNCIL TO LOOK AT THOSE A.I.-RELATED RISKS. WHAT CAN YOU TELL US ABOUT THAT? WHAT DOES THAT INCLUDE? >> REMEMBER, A.I. RIGHT NOW, WITHOUT EVEN THE NEXT GENERATION, COULD COMPLETELY DISRUPT TRUST IN PUBLIC MARKETS. THE DEEP FAKES, THROUGH THE APPEARANCE OF FAKE SECURITIES FILINGS, THROUGH, YOU KNOW, MISINFORMATION ABOUT PRODUCTS. I'M AMAZED THAT WE'VE NOT SEEN MORE MANIPULATION. BECAUSE ARTIFICIAL INTELLIGENCE TOUCHES, POTENTIALLY, SO MANY PARTS OF THE MARKET, IT SEEMS IN MY MIND THE FSOC, CREATED OUT OF THE 2008 FINANCIAL CRISIS, WHICH BRINGS TOGETHER THE HEAD OF ALL THE REGULATORY ENTITIES THAT CAN LOOK ACROSS THE WHOLE LANDSCAPE, WOULD BE A GOOD PLACE TO CHARGE THAT GROUP WITH RECOMMENDATIONS. NOW, LET ME BE THE FIRST TO ACKNO ACKNOWLEDGE, FSOC'S RECORD OF TAKING ON BIG ISSUES HAS BEEN MIXED. BUT, BOY, OH, BOY, THIS SEEMS LIKE A TAILOR-MADE PROBLEM FOR THEM TO TAKE ON. WHAT WE WERE LOOKING AT IS, YOU KNOW, COULD THEY COME UP WITH REGULATIONS, MAKE SURE CONGRESS STILL HAS A SAY, BUT HAVE THOSE S REGULATIONS OR IDEAS IMPLEMENTED? AGAIN, WITHIN APPROPRIATE CONGRESS REVIEW. >> WHEN DO YOU THINK WE COULD ACTUALLY SEE LEGISLATION ON A.I. MOVE FORWARD? I KNOW YOU HAVE PUT FORTH LEGISLATIVE PROPOSALS. LEADER SCHUMER HAS SAID THIS IS A TOP PRIORITY. WHEN CAN WE SEE SOME OF THIS ENACTED SND. >> I THINK, ONE, IT HAS TO BE BIPARTISAN. I'M TALKING WITH A LOT OF MY REPUBLICAN COLLEAGUES. TWO OF THE AREAS WHERE A.I. COULD MOST DISRUPTIVE IS PUBLIC MARKETS, BUT ALSO WE COME WITH A PRESIDENTIAL AND CONGRESSIONAL ELECTION NEXT YEAR. YOU COULD HAVE HUGE MANIPULATION ON THE ELECTIONS. THOSE WOULD BE AREAS THAT I THINK WE SHOULD START. SOME OF THE MORE GRANDIOSE SCHEMES WHERE WE HAVE TO COME UP WITH AN ENTIRE FRAMEWORK, I THINK THAT MAY BE TOO AMBITIOUS. AGAIN, I HAVE THE SCARS FROM TRYING TO -- YOU KNOW, I HAVE A DOZEN DIFFERENT BIPARTISAN BILLS AROUND SOCIAL MEDIA AND NOT A SINGLE ONE HAS PASSED. I'M A LITTLE LESS AMBITIOUS IN TERMS OF WHAT WE CAN PASS IN THE SHORT TERM. >> SPEAKING OF SOCIAL MEDIA, TIKTOK HAS RECEIVED MAJOR CRITICISM IN THE WAKE OF THE ISRA ISRAEL-HAMAS WAR, FOR THE FEELING THEY PUT FORTH PRO-PALESTINIAN CONTENT AND ANTI-SEMITIC CONTENT. THIS ON TOP OF FEARS FROM LAWMAKERS THAT PERHAPS CHINA IS ABLE TO USE THIS APP TO SPY ON THE U.S. AS THE HEAD OF THE SENATE INTELLIGENCE COMMITTEE, WOULD YOU BE IN FAVOR OF BANNING TIKTOK? >> LOOK, I ACTUALLY HAD LEGISLATION EARLIER THIS YEAR CALLED THE RESTRICT ACT. 13 REPUBLICANS, 13 DEMOCRATS, COMPLETELY BIPARTISAN. THE ADMINISTRATION SUPPORTED. IT WOULD SPECIFICALLY BAN TIKTOK. WE NEED A FRAMEWORK, THOUGH, THAT WOULD GIVE THE COMMERCE DEPARTMENT AVAILABILITY FOR THINGS OWNED BY CHINA, IRAN, KOREA, TO HAVE A PROCESS. TIKTOK WOULD GET ITS DAY IN COURT, BUT WE DON'T EVEN HAVE A WAY TO GRAPPLE WITH IT. WE WERE MOVING ALONG SMOOTHLY UNTIL TIKTOK SPENT ABOUT $100 MILLION ON LOBBYING, AND WE HAD THE FAR RIGHT AND FAR LEFT ATTACK IT. TIKTOK IS A CHALLENGE. THERE'S A LOT OF CREATIVITY ON TIKTOK. I JUST WISH IT WASN'T, AT THE END OF THE DAY, CONTROLLED BY THE COMMUNIST PARTY OF CHINA. >> MY THANKS TO SENATOR MARK WARNER FOR THAT INTERVIEW. BRAD, BACK TO YOU IN NEW YORK. >> JENNIFER, THANKS SO MUCH. GREAT CONVERSATION THERE. A LOT OF INSIGHTS REALLY EXTRAPOLATED FROM IT. APPRECIATE IT. >>> WE'RE GETTING A LABOR MARKET DOWNLOAD THIS WEEKEND. THERE IS A SIGNIFICANT LOOSENING IN THE ONCE TIGHT JOB MARKET. AS JOB OPENINGS DECLINE, MORE CONSUMERS MAY BE INCLINED TO PINCH THEIR PENNIES IN THE COMING MONTHS. HOW IS THIS IMPACTING BIG TICKET CONSUMER DISCRETIONARY BUSINESSES? WE HEARD FROM LOWE'S THAT BIG TICKET PRICES ARE FALLING, BUT LOVE SAC IS STILL SEEING CATEGORY OUTPERFORMANCE. LOVE SAC REPORTED A 14% INCREASE IN NET SALES IN ITS THIRD QUARTER AND SAYS IT IS PLEASED WITH THE START OF THE HOLIDAY SEASON. WE'VE GOT WITH US HERE TODAY SEAN NELSON, LOVESAC CEO, WITH US TO DISCUSS THE RESULTS. GREAT TO SEE YOU. WE'D LIKE TO DIVE INTO WHAT YOU'RE SEEING THIS QUARTER AND HOW YOU WOULD DESCRIBE THE CONSUMER RIGHT NOW. >> YEAH, LOOK, IT'S A MIXED BAG IN THE SENSE THAT I THINK THAT WE'RE ALL WATCHING THE SAME NEWS. THE WORLD HAS ALL SORTS OF CHAOTIC ELEMENTS AT THE MOMENT. I THINK THAT PEOPLE, YOU KNOW, WE CALL THEM CONSUMERS, BUT PEOPLE IN GENERAL SOMETIMES FEEL A BITTNER VOU NERVOUS AND WORRI THE HIGH INTEREST RATES, HAVE A HARD TIME FIGURING OUT THE NEXT MOVE, IF THEY NEED TO MOVE. IT'S HARD TO SELL THEIR HOME, ET CE CETERA. THERE'S A LOT OF MONEY ON THE SIDELINES RIGHT NOW. THERE ARE PEOPLE WHO FEEL NERVOUS IN GENERAL. AT THE SAME TIME, THE WORLD MARCHES ON. I LEARNED THIS BACK IN 2008, '09, '10, STILL IN THE HOME FURNISHINGS BUSINESS EVEN BACK THEN. LOVESAC GREW AND GREW THROUGH THAT RECESSION BECAUSE, YOU KNOW, WHILE BUSINESS CURTAILED 10%, 20%, LET'S SAY, GENERALLY, THE OTHER 80% STILL MARCHES ON. I THINK THAT'S, IN A WAY, WHAT'S HAPPENING NOW. IT'S UNIQUE FOR THE HOME CATEGORY BECAUSE WE'RE EXPERIENCING A HANGOVER AFTER COVID. THEN AGAIN, IT IS UNIQUE FOR LOVESAC BECAUSE WE'VE BEEN ON SUCH AN UPTICK AS WE'VE BUILT THE BRAND OVER THESE PAST FEW YEARS VERY INTENSELY AND HAD A LOT OF SUCCESS. SO, YOU KNOW, WE'RE KIND OF A STANDOUT IN OUR CATEGORY, WHICH IS, AGAIN, EXPERIENCING SEVERE HEADWINDS, THE HOME CATEGORY IN GENERAL, AS YOU MENTIONED. BUT, YOU KNOW, WE'RE GLAD TO BE DOING OKAY. >> SO, I WANT TO ASK YOU ABOUT, YOU HAD SOME DOUBLE DIGIT GROWTH THERE, ESPECIALLY LOOKING AT YOUR REVENUE NUMBER IN YOUR LATEST QUARTER. IN YOUR OUTLOOK FOR Q4 AND FOR 2024, IN PARTICULAR, I WANT TO HONE IN ON 2024, IT LOOKS STRONG IN PROJECTING SALES IN THE RANGE OF $710 MILLION TO $720 MILLION FOR FISCAL YEAR 2024. WHAT ARE THE ASSUMPTIONS THAT ARE BEHIND THAT PROJECTION? >> YEAH, SO OUR FISCAL 2024 IS THE YEAR THAT'S ENDING IN, YOU KNOW, LET'S SAY, 60 DAYS FROM NOW. WE'RE ON THAT JANUARY END CALENDAR. >> RIGHT. >> LOOKING BEYOND THAT TO THE FOLLOWING YEAR, WHICH IS WHAT I'M GUESSING YOU'RE ASKING ABOUT, IS STILL A BIT UNKNOWN. YOU KNOW, WE HAVEN'T PUT OUT GUIDANCE FOR THE COMING YEAR. WE DO EXPECT GROWTH FOR THE YEAR IN BALANCE. WE'LL END WITH PROBABLY THE HIGHEST GROWTH IN OUR CATEGORY, WHICH, OF COURSE, WE'RE VERY PROUD OF. AT THE SAME TIME, IT'S OUR LOWEST GROWTH IN QUITE A WHILE. YOU KNOW, BEFORE THIS, I THINK WE WERE ON AN 8 OR 9 YEAR, 30% TO 40% GROWTH. IT'S BEEN A TEAR FOR LOVESAC AS WE'VE BUILT THE BRAND. YOU KNOW, THIS IS A SOFTER YEAR FOR US, BUT A STRONG YEAR FOR THE -- VERSUS OUR CATEGORY. WE'RE BEING CAUTIOUS ON THE CONSUMER THROUGH THE HOLIDAY. WE HAD A GREAT BLACK FRIDAY FOR SURE, BUT, YOU KNOW, THERE'S JUST A LOT SWIRLING IN THE WORLD. WE'RE MAINTAINING A LOT OF CAUTION IN GENERAL. >> SHAWN, WE'VE COME A LONG WAY, THE BUSINESS HAS COME A LONG WAY, SINCE THE DAYS WE WERE SITTING ON LOVESACS IN TIMES SQUARE, KICKING BACK, CHATTING. THIS WAS BEFORE THE COMPANY WENT PUBLIC. >> YES. >> YOU THINK TO HOW THE BUSINESS HAS GROWN NOW, AND SOME OF THE NEW PRODUCT INITIATIVES WE'VE HEARD YOU TALK ABOUT, WHETHER IT IS ANGLED SIDES, PARTNERSHIPS WITH MICROSOFT'S XBOX AT THE END OF THE DAY. HOW ARE YOU SEEING CONSUMERS GRAVITATE TOWARD THE DIFFERENT PRODUCTS THAT LOVESAC IS PULLING OUT NOW, AND IS THERE A SWEET SPOT WITHIN THAT NEW TYPE OF DEMOGRAPHIC, THE CONSUMER THAT YOU'RE SEEING COME INTO THE BRAND? >> ABSOLUTELY. LOOK, LOVESAC IS A LEADER IN INNOVATION. WE DON'T DO A TON OF THINGS, BUT THE THINGS WE DO, AS YOU CAN SEE, ARE VERY INNOVATIVE. GOT COMPLETE EMBEDDED SURROUND SOUND SYSTEM, CHARGE YOUR PHONE INVISIBLY IN OUR COUCHES. NO ONE HAS THAT, PATENTED BY LOVESAC. AS WE CONTINUE TO PUT OUT NEW PRODUCTS THAT ALLOW PEOPLE WHO BOUGHT THEIR LOVESAC PIECES, EVEN YEARS AGO LIKE WHEN WE MET, TO ADD THE ANGLED SIDE ON, TO ADD STELL TECH ON, IT'S SATISFYING. IT PAYS OFF TO THAT SUSTAINABILITY-MINDED CONSUMER WHO, WHETHER OR NOT THEY'RE RECYCLING THEMSELVES, IT MAKES THEM FEEL GOOD TO KNOW THEY'VE BOUGHT SOMETHING THAT HAS REAL VALUE AND CAN BE SUSTAINABLE, A PRODUCT THAT CAN LAST AND LAST. AS INNOVATION COMES OUT, IT DOESN'T OBSOLETE IT. IN THAT WAY, WE'RE FLYING IN THE FACE OF SO MANY TECH COMPANIES, SO MANY PRODUCT COMPANIES THAT ENGINEER THINGS TO FAIL. WE'RE GOING THE OPPOSITE DIRECTION, AND I THINK THAT'S A BIG PART OF OUR SUCCESS. >> SHAWN, WE HAD THIS INTERNAL CHAT ABOUT SERIOUS SUBJECTS AND, OF COURSE, THE SONG POPPED UP IN OUR CONVERSATION YESTERDAY. YOU KNOW WHAT SONG. "LOVE SHACK." I'M NOT GOING TO SING IT. >> YEAH. >> NO! I'M NOT GOING TO SING IT. YOU SING IT. NO, BUT WHAT IT DOES BRING UP FOR US IS THIS QUESTION ABOUT YOUR MARKETING AND/OR DIS DISCOUNTING STRATEGY THAT YOU MAY HAVE TO EMPLOY AS YOU THINK ABOUT HOW CONSUMERS ARE BECOMING MORE DISCRETIONARY AND PINCHING PENNIES, DECIDING WHERE THEY'RE GOING TO SPEND THEIR DOLLARS. ARE YOU HAVING TO MAKE ANY CHANGES WITH REGARD TO OUR MARKETING AND/OR DISCOUNTING STRATEGY? >> BROADLY AT RETAIL, DISCOUNTS ARE EXTREMELY HIGH, ESPECIALLY IN THE HOME CATEGORY WHERE YOU HAVE MANY FIRMS STRUGGLING TO KEEP UP, YOU KNOW, WITH GROWTH AT THIS TIME. THAT CERTAINLY AFFECTS US. WE CERTAINLY ARE NAVIGATING THAT SURGICALLY. OUR SALES COME FROM A BUILT-UP PIPELINE OF CUSTOMERS WHO ARE INTERESTED IN OUR PRODUCTS BECAUSE THEY'RE SO UNIQUE, RIGHT? THERE IS NOTHING QUITE LIKE OUR PRODUCTS, AND MOST OF THEM ARE PATENTED. YOU CAN'T FIND ANYTHING EXACTLY LIKE IT. THANKFULLY, WE DISCOUNT LESS THAN ALL OF OUR PEERS THAT WE'RE OBSERVING. WE'VE DRIVEN OUR GROSS MARGINS UP BY 900 BASIS POINTS THIS LAST QUARTER. I MEAN, YOU KNOW, THEY'RE IN THE HIGH 50s, WHICH FOR OUR CATEGORY, IS EXTREMELY HIGH, HIGHEST IN THE CATEGORY, I THINK. THANKFULLY, WE'VE BEEN ABLE TO WALK THAT KNIFE'S EDGE. WE ARE DISCOUNTING MORE THIS SEASON THAN WE WERE LAST YEAR, BUT LESS THAN OUR PEERS. I THINK, BROADLY, THAT'S THE NICE EDGE WE HOPE TO CONTINUE TO WALK ON. AT THE SAME TIME, WE DO EXPECT THAT PROMOTIONAL ENVIRONMENT TO CONTINUE TO BE AGGRESSIVE THROUGHOUT THE BALANCE OF THIS YEAR, THROUGH JANUARY FOR US, AND EVEN ON INTO NEXT YEAR. LOOK, THERE'S A LOT OF HEADWINDS TO THE HOME CATEGORY RIGHT NOW FROM THIS POST-COVID HANGOVER. WE DON'T DENY THAT. IN FACT, BY WHAT WE CAN OBSERVE, IT'S WORSE THAN 2008, '09, '10. THANKFULLY, LOVESAC BUILT ITS BRAND IN A WAY THAT GIVES US MOMENTUM TO GROW THROUGH THIS, EVEN AS IT IS TOUGHER THAN IT WAS BEFORE. >> ALL RIGHT. SHAWN NELSON STANDING UP IN THE FACE OF THE CHANGES IN YOUR INDUSTRY, WE APPRECIATE YOUR TIME. CEO OF LOVESAC, NOT LOVE SHAKE, BABY. ♪ LOVE SHACK ♪ >> THAT'S RIGHT. IF I HAD A DOLLAR FOR EACH TIME -- >> THAT YOU HEAR IT, I'M SURE. >> APPRECIATE IT. LOVE YOU GUYS. >> TAKE CARE. >>> WE'VE GOT MORE OF YOUR MARKET'S ACTION AHEAD. STAY TUNED. YOU'RE WATCHING YAHOO! FINANCE. >>> ALL RIGHT. TIME TO GET COSMIC. NOT MORE TALK ON SPACEX. WE'LL SHAVE THAT FOR THE NEXT HOUR. WE'RE TALKING ABOUT COSMIC. McDONALD'S SPIN-OFF BRAND LAUNCHING IN BOILINGBROOK, ILLINOIS, THIS WEEK. COSMIC WAS ORIGINALLY A McDONALD'S MASCOT FROM THE 1980s. HE TOOK THE FORM OF AN ALIEN FROM OUTER SPACE WHO LOVES McDONALD'S FOOD. COSMIC, NOT AS WELL-KNOWN AS SOME OTHER MASCOTS, BUT THIS GUY, GRIMACE BUT MAYBE HE'S SET FOR A COMEBACK. IF GRIMACE AS THE CMO OF McDONALD'S TOLD US REPRESENTS HAPPINESS AND JOY, WHAT DOES COSMIC REPRESENT? >> THIS OUT OF THIS WORLD EXPERIENCE THAT McDONALD'S IS REALLY HOPING TO WIN FANS OVER WITH. NOW, THEY DID TEASE IT BACK IN JULY, THIS SMALL RESTAURANT CONCEPT THAT HAS THE DNA OF McDONALD'S BUT A UNIQUE PERSONALITY. THAT PERSONALITY, COSMIC, THE OUTER SPACE ALIEN CHARACTER. NOW, THEY'RE INTENDING TO SOLVE THE 3:00 P.M. SLUMP, THEY SAID, WITH CUSTOMIZABLE DRINKS. YOU HAVE THE SWEET AND SAVORY TREATS. THEY'RE TESTING OUT DIFFERENT OPTIONS OR DIFFERENT LAYOFFS. AS YOU CAN SEE, THEY HAVE MULTIPLE DRIVE-THROUGH LANES. IT'LL GIVE CUSTOMERS THE OPPORTUNITY TO PAY WITH A CREDIT CARD AT THE ORDER SPEAKER. THEN THEY'LL BE ABLE TO CHOOSE, OR, RATHER, McDONALD, COSMIC EMPLOYEES, WILL TELL THEM WHICH PICK-UP LANE TO GO TO TO INCREASE SPEED OR EFFICIENCY. IF YOUR ORDER IS MORE COMPLEX, PERHAPS YOU'LL GO TO ANOTHER WINDOW. NOW, THIS IS JUST ONE LOCATION LAUNCHING THIS WEEK NEAR THE HEADQUARTERS IN ILLINOIS. NINE OTHERS ARE SET TO LAUNCH IN THE FIRST HALF OF 2024 IN TEXAS. THIS IS ALL JUST A PILOT. McDONALD'S WILL ASSESS IT FOR A YEAR AND SEE WHERE IT GOES. >> SO PSPEAKING OF THIS BEING A PILOT, IS THIS AN ATTEMPT TO, SAY, TAKE ON A STARBUCKS OR SOMETHING LIKE THAT? >> THAT IS THE QUESTION. I THINK MANY ANALYSTS AND INVESTORS ARE CERTAINLY WONDERING THAT. McDONALD'S CEO SAID, DON'T GET TOO EXCITED HERE. IT'S JUST TEN STORES. HE SAYS THIS IS MORE SO ABOUT THE POTENTIAL THAT McDONALD'S HAS TO BUILD ANOTHER CONCEPT. BUT YOU CAN'T HELP BUT THINK OF STARBUCKS REALLY LOOKING TO GET CUSTOMERS IN THE DOOR DURING THAT 2:00 TO 3:00, YOU KNOW, THE AFTERNOON HOUR, OF COURSE. YOU ALSO HAVE DUTCH BRO'S, YOU HAVE WENDY'S THAT SERVES COFFEE ALL DAY. YOU HAVE INTERNATIONAL BRANDS LIKE TIM HORTON'S, A DUNKIN. LOOKING TO TEST THIS NEW CONCEPT AND PERHAPS GO UP AGAINST THE BIG GUYS. WE KNOW THE SPACE VERY WELL. >> WE'LL SEE IF THEY CAN REALLY ACHIEVE WHAT THEY'RE TRYING TO ACHIEVE. BROOKE, THANK YOU SO MUCH. >>> ALL RIGHT. THAT IS ALL FROM US TODAY. ROCHELLE HAS YOU IN THE NEXT HOUR. >>> WELCOME TO YAHOO! FINANCE. IT'S 11:00 A.M. ON THE EAST COAST, 8:00 A.M. ON THE WEST. I'M RACHELLE AKUFFO. HERE'S A LOOK AT WHAT I'M WATCHING THIS MORNING. THE FINAL FRONTIER. FOR ELON MUSK'S MUSK SPACEX, IT COULD BE A STOCK MARKET LISTING. REPORTS OF ANOTHER TENDER OFFER VA VALUED AT $175 BILLION WILL REIGNITE THAT CONVERSATION. WE'LL DIVE INTO IT THIS HOUR. >>> AND PRESIDENT BIDEN'S ADMINISTRATION SAYS IT HAS THE AUTHORITY TO LICENSE SOME DRUG PATENTS IF THE PRICE IS TOO HIGH. IT COULD MEAN BIG CHANGES FOR THE INDUSTRY AND THE POTENTIAL FOR SOME SERIOUS BLOW BACK. >>> AND WE DEEP DIVE ON A CLASSIC COMPANY THAT'S BEEN MAKING SOME MAJOR CHANGES. WE HEAR FROM BARNES & NOBLE, ONE OF THE OLDEST BOOK RETAILERS IN THE UNITED STATES ON HOW IT REVAMPED ITS BUSINESS AND HOW IT PLANS TO BEAT OUT THE COMPETITION GOING FORWARD. >>> BUT FIRST, LET'S CHECK IN ON THE MAJOR INDICES AN HOUR AND A HALF INTO THE TRADING DAY. LOOKING AT THE DOW, RELATIVELY FLAT THERE. UP ABOUT 50 POINTS ON THE DAY, THOUGH. THE S&P 500 THERE IN POSITIVE TERRITORY, UP 30 POINTS OR .7%. WE'RE SEEING COMMUNICATIONS SERVICES, THE LEADER THERE. HEALTH CARE, THE ONLY S&P SECTOR IN THE RED SO FAR THIS MORNING, AND THE TECH-HEAVY NASDAQ UP 151 POINTS OR JUST OVER 1%. LET'S ALSO CHECK IN ON THE TREASURY MARKET AS OF COURSE WE AWAIT THAT JOBS DATA THAT'S GOING TO BE COMING OUT THIS WEEK AS WELL. LOOKING AT THE SHORTER TERM FIVE-YEAR, UP ABOUT .4%. THE TEN-YEAR, UP .8%. AND LOOKING AT THE LONGEST TERM 30-YEAR, CURRENTLY UP JUST OVER 1% ON THE DAY. >>>WELL, COULD AN IPO FINALLY BE IN THE STARS FOR ELON MUSK'S SPACEX? THAT DEBATE HAS BEEN REIGNITED. ACCORDING TO BLOOMBERG, THE COMPANY HAS INITIATED DISCUSSIONS ABOUT SELLING INSIDER SHARES AT A PRICE THAT VALUES SPACEX AT $175 BILLION OR MORE MORE. THIS COMES AMID RUMBLINGS OF A SPINOFF OF THE SATELLITE BUSINESS. STAR LINK IS THE LARGEST REVENUE DRIVER FOR SPACEX. THE COMPANY IS EYEING $15 BILLION IN REVENUE IN 2024, THANKS MOSTLY TO ITS SATELLITE LAUNCH BUSINESS. SPACEX'S STARLINK OWNS 5,000 SATELLITES ORBITING EARTH AND PROVIDING HIGH SPEED INTERNET TO 60 COUNTRIES, RIVALING THE LIKES OF AMAZON'S PROJECT AND OTHERS. LET'S TALK MORE WITH CHRIS QUILTY, CO-CEO AND PRESIDENT OF QUILTY, A SATELLITE AND BUSINESS INTELLIGENCE COMPANY. THANK YOU SO MUCH FOR JOINING US THIS MORNING. SO TALK ABOUT SOME OF THE INTERESTS HERE THAT YOU'RE SEEING FROM THE CLIENTS YOU'RE TALKING TO, ESPECIALLY WHEN IT COMES TO STARLINK. >> YEAH, SO TRADITIONALLY, STARLINK WAS PRIMARILY VIEWED AS A LAUNCH COMPANY, AND MOST OF THE COMPANIES IN THE INDUSTRY HAD A FAVORABLE VIEW. THEY WERE LOWERING LAUNCH COSTS, INCREASING LAUNCH ACCESS. THE SHIFT TO STARLINK, HOWEVER HAS SHIFTED SOMEWHAT OF THE COMPETITIVE BALANCE. THEY'RE COMPETING WITH MANY OF THE CUSTOMERS THAT THEY USE TO LAUNCH. THEY'RE GROWING THAT BUSINESS FROM WHAT HAD LIBEEN A CONSUMER FOCUS TO THE CORE ENTERPRISE MARKETS THAT SUSTAIN THE EXISTING SATELLITE COMMUNICATIONS INDUSTRY, AND THEY HAVE BEEN MOVING FAST, MOVING INTO AREAS LIKE IN-FLIGHT CONNECTIVITY, THE MARITIME MARKET. OTHER ENTERPRISE APPLICATIONS, AND THEY'VE ALSO EATEN INTO WHAT IS A LARGE PART OF THE INDUSTRY'S BUSINESS IN THE GOVERNMENT. IN GENERAL, PRIOR TO THE LAUNCH OF STARLINK, ABOUT TWO-THIRDS OF THEIR REVENUE WAS COMING FROM GOVERNMENT CUSTOMERS. THEY HAVE BIG PROGRAMS THEY'RE ALSO WORKING WITH THE SPACE DEVELOPMENT AGENCY, WITH NASA, AND THAT WILL CONTINUE TO BE A LARGE PART OF IT, BUT FOR, YOU KNOW, THE RUMORS AROUND IPOs OR SPINOFFS AND THE VALUATION DISCUSSIONS, THE VALUE IS GOING TO COME FROM THE STARLINK SIDE OF THE BUSINESS, AND THAT'S WHERE THEY HAVE BEEN GROWING AND PUTTING A LOT OF THEIR EMPHASIS IN THE LAST YEAR OR TWO. >> AS YOU THINK ABOUT HOW MUCH WE SAW THAT COME INTO PLAY IN UKRAINE WITH THE RUSSIAN INVASION THERE, IT REALLY DOES ALSO RAISE SOME ETHICAL QUESTIONS ABOUT HAVING SO MUCH POWER CONCENTRATED WITH ONE PARTICULAR COMPANY. HOW ARE YOU VIEWING SOME OF THE ETHICS IN THIS WHEN YOU THINK ABOUT STARLINK'S IMPACT HERE AND HOW INVESTORS ARE VIEWING THAT? >> WELL, IT'S A TOUGH ISSUE, RIGHT? ELON MUSK HAS BEEN MERCURIAL AT TIMES, CERTAINLY CUTTING OFF ACCESS IN UKRAINE WAS SOMETHING THAT OPENED THE EYES OF MANY COMPANIES AND MANY GOVERNMENT OFFICIALS AROUND THE ACCESS OF THAT SERVICE, WHICH HAS BECOME VITAL FOR U.S. MILITARY AND CERTAINLY UKRAINE. IT'S A UNIQUE CAPABILITY. NOBODY ELSE CAN OFFER IT TODAY, THOUGH THEY DO HAVE A COMPETITOR IN ONE WEB THAT IS STARTING TO LAUNCH SERVICES, SO THERE IS AT LEAST ONE ALTERNATIVE. BUT, YOU KNOW, I GUESS THE CHALLENGE HERE IS FOR SPACEX, THEY NEED TO WALK A THIN LINE BETWEEN PROVIDING THE SERVICE THAT THE GOVERNMENT CUSTOMERS WANT AND BEING SURE THAT THEY DON'T OVERTEP STEP THEIR BOUNDS RESTRICTING THAT. YOU HAVE SEEN COMPETITORS, ONE WEB AND AMAZON WILL MAKE DISTINCT POLICIES AROUND HOW THEY PROVIDE GOVERNMENT SERVICE TO AVOID THAT EFFECT, AND IN SOME WAYS TO DRAW THE CUSTOMERS OVER FROM STARLINK. >> CHRIS, YOU RAISE AN INTERESTING POINT ABOUT SOME OF THE COLLABORATORS THAT SPACEX HAD COULD BECOME COMPETITORS IN THE SPACE. BREAK DOWN THE DIFFERENT SORTS OF SATELLITES AND THINGS WE'RE TALKING ABOUT HERE. YOU HAVE SOME BY INTERNET CONNECTIVE, OTHERS IN TERMS OF MILITARY APPLICATIONS AS WELL. WHO ARE STARLINK'S COMPETITORS IN THOSE SPACES? >> ON THE LAUNCH SIDE OF THE BUSINESS, YOU HAVE HEARD PEOPLE BANDING AROUND THE WORLD MONOPOLY. THEY'RE NOT A MONOPOLY. THERE ARE OTHER LAUNCH PROVIDERS. THEY CERTAINLY HAVE A DOMINANT POSITION IN THE MARKET. IN THE LAUNCH MARKET, IT'S HISTORICALLY BEEN A FAIRLY STATIC INDUSTRY OVER THE YEARS. WE'RE SEEING INCREDIBLE GROWTH. I MEAN, JUST EARLIER THIS MONTH, THEY TOOK DOWN A NEARLY BILLION DOLLAR CONTRACT FROM A COMPETITOR THAT HAD NO OTHER OPTION BUT TO LAUNCH ON SPACEX. THERE JUST SIMPLY AREN'T HEAVY LIFT LAUNCH VEHICLES ON THE MARKET TODAY. THERE MIGHT BE IN '26, WHEN TELESTAT BEGINS TO LAUNCH. THERE SHOULD BE, BUT UNFORTUNATELY, AMAZON PAID ABOUT $10 BILLION TO BUY 83 HEAVY LIFT LAUNCHES, AND THAT'S TO GET THEIR KIPER CONSTELLATION ON ORBIT, AND THAT SUCKED THE CAPACITY OUT OF THE INDUSTRY. IF YOU'RE LOOKING TO LAUNCH ANYWHERE FROM 2024 TO 2027, YOU KNOW, IT'S BASICALLY SPACEX FOR MORE CUSTOMERS. THERE ARE FOREIGN LAUNCH PROVIDERS, MIGHT BE ABLE TO GET A JAPANESE MH3 OR SOMETHING WITH INDIA, BUT RUSSIA IS OUT OF THE MARKET, AND THE EUROPEANS ARE STRUGGLING WITH BRINGING THEIR NEW LAUNCH CAPABILITY ONLINE, AND IN FACT, THEY HAVE BEEN FORCED TO BUY LAUNCHES FROM SPACEX. AS HAS AMAZON JUST RECENTLY. >> SO, THEN, CHRIS, WHEN YOU HINK ABOUT WHERE INVEST GOES FROM HERE, DIFFERENT SORTS OF SPACE INVESTMENT, WE HAVE BEEN TALKING ABOUT WHAT HAPPENED TO VIRGIN GALACTIC PULLING BACK THERE. WHERE ARE THE MOST LUCRATIVE SPACES THAT OTHER COMPANIES COULD TRY AND GET INTO SINCE SPACEX IS DOMINANT IN THIS SPACE AND THE LAUNCH SPACE? >> I WOULD SAY SPACEX HAS BEEN AN INCREDIBLE BOON FOR THIS INDUSTRY IN WHAT THEY HAVE DONE WITH LAUNCH COSTS. THE REASON WE'RE UNDERGOING A SPACE RENAISSANCE TODAY IS BASICALLY LAUNCH COSTS HAD BEEN UNCHANGED AT 10 TO $20 A KILOGRAM FOR 50 YEARS, AND SPACEX HAS BROUGHT THAT DOWN. YOU CAN BUY FOR $6,500 A KILOGRAM, YOU KNOW, A RIDE SHARE LAUNCH, AN ENTIRE ROCKET, AND DRIVE YOUR LAUNCH COSTS DOWN TO ABOUT 1,500 BUCKS IF YOU LAUNCH WITH THE FALCON HEAVY. IT'S LOWERING THOSE LAUNCH COSTS THAT HAVE SUDDENLY ENABLED PEOPLE TO LOOK AT BUSINESS MODELS, WHETHER IT'S MANUFACTURING IN SPACE OR BUILDING A DATA CENTER ON THE MOON, AND SUDDENLY, THE ECONOMICS WORK, LIKE THE LAUNCH COSTS HAVE GOTTEN TO A POINT WHERE NEW BUSINESS MODELS ARE POSSIBLE. WE JUST PUBLISHED A REPORT AND LOOKED AT 350 CONSTELLATIONS THAT ARE PLANNED. MOST OF THESE HAVE SOME LEVEL OF FUNDING. MANY OF THEM ARE, YOU KNOW, WELL ON THE WAY GENERATING REVENUE, AND THAT'S GOING TO DRIVE ABOUT 20,000 SATELLITES THAT NEED TO GET LAUNCHED BEFORE THE END OF THE DECADE. SPACEX IS GOING TO GRAB A BIG CHUNK OF THAT. WE HAVEN'T TALKED ABOUT STARSHIP, THAT COULD TAKE UP A LOT OF CAPACITY, BUT, YOU KNOW, THE PROBLEM HERE IS RIGHT NOW, IN THE NEAR TERM, WE'RE IN A BIT OF A CONSTRAINED ENVIRONMENT FOR LAUNCH, AND SO MANY OF THESE COMPANIES THAT NEED TO BUILD OUT CONSTELLATIONS, RAISE CAPITAL, THEY'RE TO SOME DEGREE BEING SLOWED DOWN IN THEIR ABILITY TO GET TO REVENUE BECAUSE THE LAUNCH ENVIRONMENT HAS BECOME SO TIGHT. THE SATELLITE COMMUNICATIONS INDUSTRY, WHICH IS THE LARGEST TRADITIONAL INDUSTRY HERE IS WHAT SPACEX IS TARGETING WITH THE STARLINK. BUT TO PUT IT IN PERSPECTIVE. I KNOW YOU'RE GOING TO ASK THE QUESTION. THE RUMORS AROUND VALUATION GOING UP HERE, I CAN'T CONFIRM THEM. I HAVE SEEN THE NEWS ARTICLES, THE THING IS THE CHALLENGE FOR THEM IS THAT THE EMPIRE SATELLITE COMMUNICATIONS INDUSTRY IS ONLY AROUND $25 BILLION IN REVENUE, AND IF YOU'RE LOOKING AT 150 OR $170 BILLION VALUATION FOR STAR LINK, YOU HAVE TO SQUARE THE CIRCLE WITH A LAUNCH BUSINESS WHICH HISTORICALLY HAS BEEN ABOUT $5 BILLION A YEAR. AND A TELECOM BUSINESS IN STARLINK, THAT FAIR ENOUGH, IF YOU TAKE THE LARGEST TELECOMS IN THE WORLD FROM, YOU KNOW, NTT, DEUTSCHE TELECOM, T-MOBILE, YOU CAN KIND OF GET THERE IF YOU BELIEVE THEY CAN GROW TO THAT SCALE. THEY WOULD CERTAINLY BE THE FIRST COMPANY IN THE SATELLITE INDUSTRY TO MOVE OUT TO, YOU KNOW, LARGE ENTERPRISE, TRADITIONAL MARKETS THAT WERE SERVED BY TERRESTRIAL FIBER. AND THEY WILL COMPETE WITH MARKETS IF THEY WANTED ROADS WITH THE SIZE THEY'RE PROJECTING. >> CERTAINLY A FASCINATING SPACE TO BE IN THE POTENTIAL FOR DISRUPTION HERE, SEVERAL INDUSTRIES CERTAINLY APPARENT. APPRECIATE YOU TAKING THE TIME TO JOIN ME. CHRIS QUILTY, CO-CEO OF QUILTY SPACE. THANK YOU VERY MUCH. >> THANK YOU. >>> INVESTORS ARE KEEPING AN EYE ON JAPAN, THE CENTRAL BANK ISSUED A FEW COMMENTS, THE COUNTRY MAY EXIT FROM THE ULTRA LOW INTEREST RATES IT HAS HAD FOR DECADES. MARKETS ARE PRICING IN RATE CUTS FOR THE FED AND THE EUROPEAN CENTRAL BANK AND THE BANK OF ENGLAND. LET'S BRING IN YAHOO! FINANCE'S JARED BLIKRE WHO'S TRACKING THE RATE BETS. >> WE ARE TRACKING THAT IN THE FOREIGN MARKET, THAT'S FOREIGN EXCHANGE. THE JAPANESE YEN CROSSED WITH OTHER PAIRS ACROSS THE WORLD. WE HAVE THE NUMBER ONE GAINER HERE, ACTUALLY THE GAINER VERSUS A MEXICAN PESO. THAT'S UP NEARLY 3%. THEN WE HAVE THE SWISS FRANK, THE ARGENTINE PESO, THE U.S. DOLLAR, THE JAPANESE YEN DOESN'T MOVE QUICKLY. MOST DO NOT MOVE MUCH IN A DAY. THIS IS UPSETTING FOR A LOT OF TRADERS HERE. LET'S TAKE A LOOK AT THE YEAR TO DATE. I'M PRESENTING THE PAIRING IN REVERSE ORDER. THE JAPANESE YEN, VERSUS EVERYTHING HERE, BUT THE YEN HAS BEEN WEAKENING ALL YEARLONG AND IF YOU TAKE A LOOK AT A THREE-YEAR CHART, IT'S BEEN WEAKENING. IT'S LOST A QUARTER OF ITS VALUE TO THE U.S. DOLLAR, AND LET'S EXAMINE EXACTLY WHY THAT IS. NOW, HERE I HAVE GLOBAL INTEREST RATES. THIS IS THE FED FUNDS, THE ECB DEPOSIT RATE, THE JAPAN POLICY RATE. THESE ARE THE SHORT-TERM INTEREST RATES OF THESE THREE BANKS GOING BACK TO THE GLOBAL FINANCIAL CRISIS. YOU CAN SEE MOST OF THE POLICY RATES AFTER THE GLOBAL FINANCIAL CRISIS WERE AROUND ZERO, AND THEN WE HAD JAPAN EXPERIMENT WITH NEGATIVE RATES. THAT'S WHERE THEY STILL ARE. AND THE ECB EXPERIMENTED WITH THEM TOO. HOWEVER, THE ECB LIFTED OFF, SO DID THE FED, AND THEN WITH THESE HIGHER INTEREST RATES IN THE UNITED STATES, THAT ENCOURAGES ALL OF THESE CAPITAL FLOWS INTO THE U.S. DOLLAR FROM THE YEN, IN ORDER TO BE ABLE TO TAKE ADVANTAGE OF IT. SO THAT'S WHY THE YEN WAS WEAKENING. NOW THAT IT LOOKS LIKE THE BANK OF JAPAN IS GOING TO BE STRENGTHENING NEXT YEAR AND PERHAPS EVEN THIS YEAR, TRADERS ARE GOING A LITTLE BIT, I WOULD SAY THEY'RE TRYING TO SHUFFLE THEIR BOOKS TO ALIGN WITH REALITY HERE. THESE ARE GLOBAL YIELD CURVES. THIS IS JAPAN, U.S. AND EURO. THE ONE THING AFTER JAPAN IS IT'S UPWARDLY SLOPING. THIS IS WHAT YOU EXPECT IN A YIELD CURVE WHERE LONGER DATED TENORS COMMAND A HIGHER INTEREST RATE. THAT'S ONLY BECAUSE THE BANK OF JAPAN IS ARTIFICIALLY KEEPING RATES ON THE SHORT END OF THE CURVE. THE BIG QUESTION FOR TRADERS IS WHAT HAPPENS WHEN YOU GET THAT LIFTOFF. IS IT GOING TO BE AN ORDERLY UNWIND OR A DISORDERLY ONE. I WOULD SHARE THAT IS PROBABLY BECOMING DISORDERLY, AND THAT'S WHAT WE'RE SEEING BECAUSE THIS IS THE ODDS OF A RATE HIKE FOR THE BANK OF JAPAN AFTER DECEMBER MEETING IN ABOUT TWO WEEKS HERE. THOSE HAVE BEEN SHOOTING UP. NOW, IT WAS THOUGHT, ONLY A FEW DAYS AGO THAT THIS WAS NOT A LIVE MEETING. THIS WAS NOT A MEETING AT WHICH THE BANK OF JAPAN WOULD HAVE TO RAISE RATES. HOWEVER, BOND VIGILANTES ARE TELLING ANOTHER STORY, AND WE'RE SEEING THIS HUGE MOVE IN THE CURRENCY MARKET TODAY AS A RESULT. WE DON'T KNOW EXACTLY WHEN THE BANK OF JAPAN IS GOING TO HAVE TO NORMALIZE, BUT THIS IS PROBABLY GOING TO BE ONE OF THE BIGGER STORIES OF 2024, ESPECIALLY IN THE EARLY GOINGS HERE. INTEREST RATES AFFECT EVERYTHING ELSE. IF JAPAN RAISES THEIR INTEREST RATE, I WANT TO SHOW YOU WHAT HAPPENS IN THE U.S. THE U.S. RATES ACTUALLY LOWER BECAUSE GLOBAL FUNDS ARE COMPETING FOR DEMAND OF THE HIGHEST INTEREST RATE ALL AROUND THE WORLD. SO TODAY, AS A RESULT OF ALL OF THESE MOVES IN THE JAPANESE YEN, WE'RE ACTUALLY SEEING AN INCREASE OF ABOUT THREE BASIS POINTS IN THE TEN-YEAR T NOTE YIELD. IF JAPAN EXPLICITLY RAISES RATES, THAT'S GOING TO SHOOT HIGHER. ALL OF THIS IS ENGAGED IN A GIANT FEEDBACK LOOP. WE HAVE HAD ULTRA LOW RATES IN JAPAN FOR A LONG TIME, AND CONCERNS FOR TRADERS ARE HOW ORDERLY OR DISORDERLY IS GOING TO BE POLICY NORMALIZATION, A QUESTION FOR THEEW YEAR, BUT MAYBE NOW IN DECEMBER. >> DOOINDEED, IT'S ONE OF THOSE FACTORS, WE'RE LOOKING AT WHAT THE FED CAN DO, AND OUTSIDE OF THEIR CONTROL. DEFINITELY ONE TO WATCH. APPRECIATE THAT BREAKDOWN, OUR VERY OWN JARED BLIKRE. >>> CENTAL BANK POLICY WILL PLAY A LARGE ROLE IN MARKET MOVES IN 2024. WE WANT TO DIVE DEEPER INTO THE BETS INVESTORS ARE MAKING ON THE RATES FORECAST, WITH OMAR AGUILAR, SCHAUB CIO AND CEO. THE BANK OF JAPAN SEEMS LIKE IT MAY BE LEANING TOWARDS A RATE HIKE WHICH WOULD ENDEARS OF NEGATIVE RATES. CAN YOU BREAK DOWN THE DECISION AND THE IMPACT IT COULD HAVE ON MARKETS? >> YES, THANK YOU VERY MUCH FOR HAVING ME TODAY, AND IT IS QUITE AN INTERESTING DISCUSSION IN THE MARKETS. IT SEEMS LIKE, YOU KNOW, PEOPLE ARE, YOU KNOW DISCOUNTING THE LABOR MARKE REPORT FRO TOMORROW MORE THAN WHAT IS HAPPENING, YOU KNOW, OVERSEAS. AND WITH THE PENTIAL DECISION OF, YOU KNOW, T END OF AN ERA. Y RATE HIKE INAPAN CHANGES THE LICY THEY HAVE HAD FOR DECADES, YOUKNOW, GETTING OUT OS A BIG CHANGE IN HOW THE DIFFERENT DYNAMICS GOING IN GLOBAL MARKETS. YOU KNOW, AEW THINGS TO JUST TE IN TERMS OF THIS DECISION. I THINK WHAT'S POINTED OUT EARLIER, WEAKNES OF THE YEN SEVERAL YEARS, RELATIVE TO OTHER CURRENCIESS ALWAY SOMETHING THAT THE BANK OF JAN HAS ACTUALLY SN AS SOMETHING GOOD. IE STABILITY OF THEIRCONOMY, AND THAT WAS ON THE HEELS OF SOMETHING TH IS VERY IMPORTAT FOR THE BANK OFJAPAN, WHICH IS KNOW, BELOW THE 2%. NOW, FOR THE LAST8 MONTHS, YOU KNOW, THE RATE OF INFLATION IN JAPA HAS ACTUALLY SURPASSED THAT 2% LEVEL, AND AOT OF THAT HAS DO WITH THE FACT THAT THEY HAVE HAD SEVERAL DISCUSSIONWITH THE UNION LABORS THE CNGES WITH THE OTHER WORKERS, AND THAT HAS PUT WAGE GROWTH, Y KNOW, UNDER INFLATION I JAPANN LEVELS THAT TY HAVEN'T SEE IN A LONG ME. WHENOU PUT THAT IN THE CONTEXT O DERIBED BEFORE THAT THE REST OF THE WORLD, OER INSTCENTRA BANKS,FED, ECB, THE BANK OF ENAND HAVE BEENGGRESSIVE IN RAISG RATES. AT PUTS PAN IN A DIFFILT POSITION, D THEREFORE, YOU KNOW, THEYE ENDING THEIR POLICYOR NEGATIVE RES AS WELL AS THE YIELD CURVE CONTROL A WHILE. SO WHATOESHAT DO? IT PUT PRESSURE ON GLOBAL I THINK, YOUNOW, COMPETITION THEFORE PUTS MORERESSURE IN TH U.S.NDS. IT CLEARLY PROVIDES A VERYICE PON E FLIPIDE, AS THE BAN OF JAPAN ISS POTENTIALLY CUTTING RATES SO THA TAIL WIND FOR AN APPCIATION OF T. AT THE SAME TIME IT ULD ALSO POTENTIALLY PUT ALOOR IO THE POTENTIA OUTPERFORMANCE OF JAPANE STOCKS. >> A WITH AT IN O AGENT COELATION BETWEEN THE MOON WH THE YEN AND THE IACT IT'S HAD OU.S.OND YIELDS THIS MNING. WH SHOULD WE EXPECT INERMS OFOLATITY IN THE U. BOND MAET? >> THAT HA BEE T THEME OF PROBABLY THEHEME OF THE LT TWO YW GLOBAL BD YLDS AND PARTICULAR U.S YIELDS HAVE ACTUALLY BEENCREDIBLY RESPONSIBLEOR A LOT OF E EN VOLATI EQTYMARKETS. YOU KNOW, WE EXPECT CONTINUE AT ASTNTIL WE G THE FI THE FEDAL RESERVE THAT WILL BE TIR PAU. AND E POTENAL F TALK OUT A MORE DOSH, U KNOW, COERSATIONS. SO W EXPT THAT, Y OW, YIDS CTINU TO BE VOTILE. THINK A. NO TOOONG AGO, WE WERE TALKING ABOUT15 10-AR YIELD, AN WE HA SEEN THESE SWINGS IN YIES RESULT OF WHAT HAS HPENE WITH EECOMY,LEAR THE SITI NEWS ABOUT INFLATION, WELL ASHE PENTIAL THAT, YOU KNOR YOU KNOW PAY, YOU KNOW, FOR AN ECOMICECOVERY DOWN THE ROAD. > A YOUNOW THA IT'S DISCIPLINED,OT JP ON EVERY SINGL YO ALSO SAY Y CAN UHIS VOLATILI TOREBALAE YOUR PORTLIO Y. THAT?SOMEONE GO ABOUT DNG KNOW, TS IS A IMPORTANT PT THE AR, AND WRE IN TSE RT OF TRANSITIONERIO BECAUSE, Y L TH TIGHTENINCYCL USULY WHAT YOUE VOLATILITYITHI ASSET ASSE SO WE AMONG SECTS, AND WE ALSO MAET AIX BECSE ASHE ME SHORT EF TH, SEE THE POTENTIF THAT YLD CURVE VERSN WE HAVHAD ER WHEN YOU SEEHESE DYNAMS A WORKINGUT TOGEER,HERE A CLEA OPR INSTORS TAKE LOSSES I SOME OF THEIROSITIONSNDEPLACE CLSES OR SIMILAR INVESENT EOSSE VEHICL THA GESHEM EXSURE TO THE AET CLA BUT AT THE SE TIME PROVIDE A FRES STAING LOOK SOHEY IFOU HAVE EN, FOR EXAMPL . THE VOLALITYHAT YOU SAW BACK, YOUKNOW, IN 20 WITH ERGY OUTPERFORNG, D ENGY UER PERFORMING, YOU SEE THOE OPPORTUNIESOR INVESTORS T TH ISIMIL TO THE ONE ICLE MAININING H SECTORTO T SCKS OR E TIDEAND THE TAKE AANTA OF POTENTL >> CERTAINLYMPORNT ASWE, U KNOW, END THIS YEAR, AN AS PEO WELL. OMAR AGLAR, APPRECIE YOU JOININGG N IR CIO, THA YOU VERY MUCH >>> COMIN I TALKED TO A RECLING EXPERT AB ENVIROENTND HOW CORPOTION ARE STEPNG U NEXT. >>> THE FTC SENDING WNING LETTERS TO STOP EXCESSIVE PATENTS TO PHARMA COMPANIE AND THIS WEEK, THE WHITEOUSE DECIDING IT HAS THE AHORITY TO LICENSE THE PATENTS OF CERTAIN MEDITIONS TO LOWER PATIENT COSTS. FOR MORE ON THIS, YAHOO! FINANCE REPORTER, ANJALEE KHEMLANIS A BIT OF AERY BUSY SEASON, INDEED, FOR PHMA. >> IT CERTAINLY HAS, RACHELLE, AND IT'S IMPORTANT TO POINT OUT THESE ARE ACTIONS BY THE GOVERNMENT THAT HAVE BEEN DISCUSSING FOR QUITE SOME TIME. MECARE DRUG PRICING GOTIATIONS FIRST TO HIT THE INDUSTRY WITH THOSE TEN SELECTED DRUGS FOLLOWED BY THE FTC CALLING OUT CERTAIN COMPANIES FOR THEIR ASTHMA INHALER AND OTHER DEVICES AS WELL AS EPIPENS. SO THAT HAS BEEN ANOTHER AREA OF FOCUS FOR THE FTC, IN ADDITION TO WHAT WE HAVE SEEN WITH, YOU KNOW, CHALLENGING SOME OF THE M&A ACTIVITY THAT WE SAW NOTABLY AMGEN AND HORIZON, AS WELL AS PFIZER AND CJENGEN THIS YEAR. A BIG FOCUS TO CURB WHAT THEY SEE AS PHARMA'S POWERS. AND THE WHITE HOUSE ANNOUNCING IT'S GOING TO LOOK INTO WHAT WAS AN OLDER ASSET PUT INTO PLACE, WHAT IS KNOWN AS MARCHING RIGHTS, THE DOLE ACT OF 1980 WHICH ALLOWED BASICALLY, ANY INVENTOR, OR HOLDER OF INVENTIONS THE RIGHT WITH DEVELOPMENT OF FEDERAL DOLLARS, THE RIGHT TO GRANT LICENSES FOR THE INVENTIONS TO A THIRD PARTY, AND THAT'S BASICALLY WHAT THE WHITE HOUSE IS LOOKING TO DO THROUGH THE NIH. NOW, IT'S IMPORTANT TO ANNOUNCE THAT THE WHITE HOUSE IS LOOKING AT THIS BECAUSE OF THE COST OF DRUGS. THEY CITED THAT IN WHAT THEIR GUIDANCE WOULD BE, AND THAT IS AN INTERESTING POINT TO SOME EXPERTS BECAUSE FOR THE LONGEST TIME, THERE HAS BEEN DISCUSSION ABOUT WHETHER OR NOT PRICE COULD BE USED AS JUSTIFICATION TO LOOK AT LICENSING. THAT'S SOMETHING THAT THE PRIOR ADMINISTRATION HAD LOOKED TO TRY AND BLOCK FROM HAPPENING. CLEARLY THIS ADMINISTRATION IS TAKING A COMPLETELY DIFFERENT SUBSTANTIATION. SO ALL TOLD, A REALLY ROUGH YEAR FOR THE INDUSTRY WITH THE GOVERNMENT TRYING TO CURB THEIR POWER AND COSTS FOR AMERICANS. IT'S IMPORTANT TO POINT OUT THAT A LOT OF THESE ARE SORT OF LIMITED IN IMPACT. THEY DO INVOLVE SOME OF THE LARGEST COMPANIES, IN SOME CASES, MEDICARE DRUG PRICING HITTING SOME AT THE SAME TIME AS THE FTC ACTION. SO SOME OF THESE COMPANIES ARE SORT OF GETTING HIT FROM MULTIPLE SIDES. BUT IN ORDER FOR THE GOVERNMENT TO SORT OF MOVE FORWARD, THERE DEFINITELY HAS TO BE MORE FOCUS ON THESE SMALLER ATTEMPTS. THAT'S THE ONLY WAY THAT THEY CAN DO IT. THE SCREEN YOU JUST SAW WAS A LIST OF SOME OF THE DRUGS THAT HAVE BEEN DEVELOPED WITH PUBLIC FUNDING. MOST NOTABLY, IF YOU RECALL, MODERNA'S COVID VACCINE, THAT WAS ONE THAT STARTED THIS CONVERSATION, BACK DURING THE PANDEMIC TIMES, BUT THERE'S ALSO OTHER EXAMPLES, LIKE HIV DRUGS FROM GILEAD. ALL TOLD, AN INTERESTING TIME TO KIND OF WATCH HOW MANY OF THESE ACTIONS PAN OUT. >> INDEED, AND WE'LL HAVE TO SEE HOW THAT IMPACTS R AND D SPENDING, AND IMPLICATIONS THERE AS WELL FOR SOME OF THESE COMPANIES. APPRECIATE YOU AS ALWAYS, OUR VERY OWN ANJALEE KHEMLANI. THANK YOU SO MUCH. >>> DIVISIONS AT COP28 IN DUBAI OVER THE FUTURE OF FOSSIL FUELS AND WHICH COUNTRIES SHOULD FOOT THE BILL. THAT CONTINUES. IT COMES AS A RECORD NUMBER OF FOSSIL FUEL REPS ATTEND. SO WHERE DOES THAT LEAVE CORPORATIONS? NEARLY ALL OF THE CHEMICALS USED TO MAKE PLASTIC USE FOSSIL FUELS ENDS UP IN NEW U.S. CENTER REDUCING THE NEED TO CREATE NEW PLASTICS. pNOW, THE REPUBLIC SER POLYMER CENTER IS OPENING IN LAS VEGAS THIS WEEK. IT'S EXPECTED TO PRODUCE MORE THAN 100 MILLION POUNDS OF RECYCLED PLASTIC EACH YEAR FOR PACKAGING AND OTHER APPLICATIONS. THE CENTER ALREADY HAS A BIG NAME CUSTOMER ON THE DOCKET HERE. REPUBLIC SERVICES CEO JOHN VAN DER ARK IS HERE TO TELL US MORE. THANK YOU SO MUCH FOR JOINING US THIS MORNING, JOHN. I WANT TO FIRST START WITH THIS BIG NAME HERE. PEOPLE THINK OF PLASTIC. THEY THINK OF PACKAGING, BUT TALK ABOUT COCA-COLA HERE. >> YEAH, OBVIOUSLY WE COLLECT A LOT OF PLASTICS. WE PICK UP SOMETHING 5 MILLION TIMES EVERY DAY, AND A BIG CHUNK OF WHAT WE PICKED UP IS RECYCLING, AND THAT'S, YOU KNOW, CARD BOARD AND PLASTICS ARE THE TWO BIGGEST COMMODITIES. MOST OF PLASTICS TODAY GETS DOWN CYCLED. THINK OF YOUR WATER BOTTLE, DE DETERGENT BOTTLE, MILK JUGS, THAT'S GOING IN PIPES, CARPETS, IT'S NOT GOING IN A LANDFILL BUT AT THE END OF THE LIFE OF THAT IT'S GOING IN THE LANDFILL. WHA TRUE CIRCUMS TURNING THE BEVERAGE BOTTLE BACK BOOT BEVERAGE BOTTLE. THAT'S WHERE COCA-COLA COMES IN. THEY HAVE HAD BOLD TARGETS >> HOW DIFFICULT IS IT WHEN SOME OF THESE TARGETS, THEY ARE VOLUNTARY, SOME OF THESE COMPANIES ARE DOING THIS OF THEIR OWN ACCORD, PUSHING FOR SUSTAINABILITY HERE. TALK ABOUT SOME OF THE PARTNERSHIPS YOU'RE MAKING WITH COMPANIES, AND HOW INVENT VISED S -- INCENTIVIZED YOUR CLIENTS ARE. >> YOU SEE CALIFORNIA, WASHINGTON, NEW JERSEY, THEY'RE PUTTING IN MANDATES THAT BY 2025, 15%, POST CONSUMER CONTENT. RAMPS UP TO 50% BY 2030. BOTH SOFT THINGS ARE AT PLAY, AND LISTEN, THERE'S A LOT OF DEMAND FOR THE PRODUCT BECAUSE THE MARKET IS IN SHORT SUPPLY. WE COULD HAVE SOLD OUT LAS VEGAS CENTER FIVE TIMES OVER IF WE WANTED TO. PEOPLE ARE LINED UP BECAUSE THE MARKET IS SHORT SUPPLY ON FOOD GRADE, AND THAT'S WHAT THE CENTER UNLOCKS. >> TALK ABOUT RECYCLED PLASTIC, AND HOW IT'S MADE AND HOW YOU SEE THAT CONTRIBUTING TO THE CIRCULAR ECONOMY, WHEN WE THINK OF THE FUTURE OF REDUCING FOSSIL FUEL USE. >> WE TAKE THE PLASTIC OUT OF 75 RECYCLING CENTERS, AND THE WEST COAST OPERATIONS WILL FLOW THROUGH LAS VEGAS, AND WE'LL HAVE THREE MORE CENTERS THROUGH THE YEARS. IT SORTS THE PLASTIC, HDP, P.E.T., SEPARATES THEM, COLOR SORTING, HOT WASH ASKING CLEANING, AND PELTIZES IT. IT GOES TO THE BOTTLES OF MANUFACTURERS, TO THE FOOD GRADE PRODUCT. NO ONE HAS DONE THIS IN THE UNITED STATES, AND IT'S A BIG INVESTMENT. WE'RE GOING TO SPEND $75 MILLION IN LAS VEGAS, AND $3 MILLION ACROSS THE COUNTRY IN FOUR CENTERS TO GET THIS PRODUCT WHERE IT NEEDS, AND AGAIN, IT'S GOOD FOR THE ENVIRONMENT. IT'S GOOD FOR OUR SHAREHOLDERS AS WELL. WE THINK WE'RE GOING TO HAVE A POSITIVE RETURN AS WELL. >> TALK ABOUT SOME OF THE RETURNS. YOU MENTIONED THE INVESTMENT IN THIS SPACE. WHAT SORT OF RETURNS ARE YOU SEEING SO FAR, AND WHAT ARE THE EXPECTATIONS GOING FORWARD? >> WE THINK WE'RE GOING TO HAVE NORTH OF OUR COMPANY EBITA MARGIN ON THIS PRODUCT. NORTH OF 30%, AND RATES OF RETURN IN THE MID-TEENS. THESE ARE ATTRACTIVE INVESTMENTS, AND TIES INTO OUR BELIEF THAT IN ORDER TO BE ECONOMICALLY SUSTAINABLE, OR ENVIRONMENTALLY SUSTAINABLE, YOU HAVE TO BE ECONOMICALLY SUSTAINABLE. THOSE TWO THINGS HAVE TO GO HAND IN HAND. IF YOU WANT TO BE GOOD, YOU HAVE TO BE PROFITABLE OVER TIME, WHICH ALLOWS US TO REINVEST AND BROADLY, WE'RE TRYING TO CHALLENGE EVERY TON THAT GOES INTO ONE OF OUR LANDFILLS, AND THINK, COULD WE DO SOMETHING DIFFERENT WITH IT. COULD WE HAVE A SECOND LIFE FOR THAT PRODUCT, WHICH IS GOOD FOR OUR REVENUE, GOOD FOR OUR SHAREHOLDERS, AND ALSO ALLOWS US TO PRESERVE THAT VALUABLE LAN LANDFILL SPACE FOR FUTURE GENERATIONS. >> WHEN YOU LOOK AT SOME OF THE RESISTANCE, OBVIOUSLY YOU HAVE A LOT OF COMPANIES RELYING ON FOSSIL FUELS, AND WHEN YOU LOOK AT THE RESISTANCE, WHAT DO YOU THINK IS GOING TO BE THE TIPPING POINT TO PERHAPS ENCOURAGE OR SPEED UP THE ENERGY TRANSITION? >> YEAH, I THINK WHERE WE'RE PRO ON IS MULTIPLE SOLUTIONS. SO LOTS OF PEOPLE TALKING ABOUT BANNING SINGLE USE PLASTICS. I WOULD ENCOURAGE SOMEONE TO LIVE THEIR LIFE WITHOUT A SINGLE USE PLASTIC. IT WILL BE CHALLENGING. PLASTICS ARE WITH US FOR A WHILE, AND WE THINK WE NEED TO WORK ON THIS ON EVERY FRONT. MECHANICAL RECYCLING, CHEMICAL RECYCLING, MATERIAL INSTISUBSTIN AND PLASTIC DESIGNS. AND ENZYMES THAT COULD EAT PLASTICS COULD BE VIABLE. WE'RE NOT LOCKED INTO ANY ONE SOLUTION. WE KNOW THERE'S A SINGLE USE PLASTICS PROBLEM, AND WE WANT TO BE ARTPART OF THE SOLUTION, THES A LOT OF TALKING AND WE FAVOR DOING. WE VOTE WITH OUR FEET, WITH OUR WALLET TO ARRESTING THE TREND ON CAN MAKE A DIFFERENCE. >> AND CERTAINLY WILL BE WELCOME NEWS FOR INVESTORS WHO ARE LOOKING TO GET INTO THE SPACE AND SEEING WHAT THE PATH TO REVENUE WOULD LOOK LIKE FOR THEM. APPRECIATE YOU JOINING US. JOHN VAN DERARK, THANK YOU VERY MUCH. >>> SEANA SMITH IS SPEAKING WITH THE CEO OF KATO NETWORK ABOUT AI'S IMPACT. >>> WELCOME BACK TO YAHOO! FINANCE. TWO OF THE DOMINATING THEMES AT BARCLAYS GLOBAL TECH CONFERENCE IS AI AND CYBER SECURITY. LET'S TALK MORE ABOUT HOW AI IS SHAPING THE CYBER SECURITY LANDSCAPE, AND WHAT WE CAN EXPECT IN TERMS OF THE THEMES FOR CYBER SECURITY IN THE NEW YEAR. I WANT TO BRING IN SLOW MOE KRAM E -- SHLOMO KRAMER, CEO OF CATO. >> THERE ARE TWO DIMENSIONS TO THE IMPACT. ONE IS NEW TYPES OF ATTACKS. MAINLY DEEP FAKE AND HOW DO YOU KNOW THIS IS REAL OR NOT. THAT'S BECOMING A MUCH BIGGER PROBLEM WITH AI, AND THE SECOND IS JUST INDUSTRIALIZATION. RIGHT? IF IT'S A HUMAN BEING BEHIND THE TECH, THERE'S A CERTAIN PACE. IF IT'S AN AI MACHINE, IT BECOMES MUCH FASTER, MUCH BROADER MUCH MORE QUICKLY. SO REALLY THE DEFENSES NEEDS TO KEEP PACE WITH BOTH NEW TYPES OF TECH AND NEW SCALE. >> HOW CAN YOU DOING THAT? WE ARE USING AI TO FEND OFF THE RISKS THAT AI POSES, HOW ARE YOU DOING THAT, AND I GUESS IN REALTIME, HOW MUCH MORE EFFECTIVE IS IT FOR YOU AT CATO NETWORKS IN TERMS OF RECOGNIZING THESE ATTACKS? >> FIRST OF ALL, AI IS NOT NEW AT CATO NETWORKS. WE HAVE BEEN USING AI SINCE DAY ONE, AS A CLOUD SERVICE, WE USED AI FROM DAY ONE TO COLLECT ALL THE DATA FROM OUR CUSTOMERS, AND RUN ALLEG RUN ALGORITHMS, AND NOW WITH THE LARGE LANGUAGE MODELS, THE NEXT GENERATION OF AI, THIS IS A ROAD MAP AND WHAT WE EMBED IN OUR SOLUTIONS, SO THAT'S AN ONGOING RACE, IF YOU WANT. YOU HAVE TO RUN AS FAST AS YOU CAN IN ORDER TO STAY IN THE SAME PLACE. >> HOW WOULD YOU CHARACTERIZE, YOU'RE A VETERAN OF THE INDUSTRY, YOU HAVE BEEN AROUND FOR MANY NEW BREAK TTHROUGHS, MY NEW TECHNOLOGIES, IN TERMS OF WHAT AI IS DOING TO YOUR INDUSTRY, TOUCHING EVERY INDUSTRY, COMPARING THAT TO INNOVATIONS IN THE PAST, HOW DOES IT STACK UP? >> IT STACKS UP WITH THE iPHONE AND WITH THE PERSONAL COMPUTER AND WITH THE INTERNET. THAT'S AT THAT LEVEL OF IMPORTANCE. SO ABSOLUTELY. IT'S A REVOLUTION. >> WHEN IT COMES TO DEMAND FOR YOUR BUSINESS, YOUR BUSINESS HAS GROWN DRAMATICALLY OVER THE LAST SEVERAL YEARS. RIGHT NOW, YOU HAVE 150 MILLION, I BELIEVE, IN ANNUAL RECURRING AVENUE. >> MORE THAN THAT. MORE THAN 2,000 ENTERPRISE CUSTOMERS. >> SO GOING OFF OF THAT IN TERMS OF HOW QUICKLY YOU HAVE BEEN ABLE TO SCALE YOUR BUSINESS, WHAT'S THE NEXT STEP FOR CATO NETWORKS? >> FOR US, WE ARE BOTH GOING UP MARKET AND DELIVERING THE POWERFUL SIMPLICITY TO LARGER AND LARGER ENTERPRISES, AND WE ARE EXPANDING THE VALUE OF OUR PLATFORM, REALLY MORE CAPABILITIES DELIVERED WITH ZERO TCO TO OUR EXISTING CUSTOMERS SO WE CAN PARTNER AND BE MORE STRATEGIC FOR THEM. >> WHEN IT COMES TO PARTNERS AND CUSTOMERS HERE, YOU HAVE REOGNIZABLE NAMES WHEN IT COMES TO PORSCHE, FORMULA E RING CENTRAL, IN TERMS OF THEIR P PRIORITIES, WHAT ARE YOU HEARING FROM THE BIGGEST RISKS THAT THEY ARE FEARFUL OF AND HOW YOU THEN CAN HELP MITIGATE SOME OF THOSE RISKS? >> YOU KNOW WHAT, I THINK THE BIGGEST RISK FOR THEM IS COMPLEXITY. I DON'T KNOW IF YOU'VE EVER BEEN TO THE RSA SHOW, AND SAW ALL OF THE THOUSANDS OF BOOTS THAT NOW YOU NEED TO CONSUME THESE SOLUTIONS, THE COMPLEXITY IS THE DANGER. WHEN THE CIO OF CARLSBERG TELLS ME THAT WE ARE THE APPLE OF NETWORK SECURITY, THAT TELLS EVERYTHING. IT'S ALL ABOUT THE HOW AND THE HOW TO CONSUME ALL OF THESE CAPABILITIES MORE THAN EXACTLY THE WHAT. THE WHAT IS THERE. THE HOW IS NOT THERE IN CYBER SECURITY. >> SO WHAT DOES THAT MEAN, THEN, JUST IN TERMS OF GROWTH, THEN, THE OPPORTUNITY THAT LIES AHEAD, THE FACT THAT THERE'S SUCH A NEED FOR THIS, AND IT ALMOST SOUNDS LIKE WE'RE IN THE EARLY INNINGS. >> EXACTLY, IT'S ALL ABOUT THE PLATFORM, AND DELIVERING A PLATFORM THAT CAN BRING MORE AND MORE CAPABILITIES WITHOUT ADDITIONAL COST AND ADDITIONAL COMPLEXITY TO THE CUSTOMERS. AND THAT'S THE DIVISION OF US IN GENERAL. >> WHAT YOU HAVE BEEN AROUND THE INDUSTRY FOR QUITE SOME TIME, VERY SUCCESSFUL IN TERMS OF YOUR PREVIOUS ENTREPRENEURSHIP, COMPANIES THAT YOU FOUNDED TAKEN PUBLIC. CHECK POINT SOFTWARE, IMPERVA, BOTH COMPANIES YOU HAVE TAKEN PUBLIC. DO YOU HAVE PLANS TO DO THAT FOR K CATO? >> I THINK CATO CAN BE A LARGE, NEXT-GENERATION SECURITY COMPANY, AND GOING PUBLIC IS A MILESTONE IN THAT DIRECTION, SO DEFINITELY PREPARING THE COMPANY TO BE A PUBLIC COMPANY. >> IS IT SOMETHING THAT YOU'RE MAYBE CONSIDERING FOR 2024? >> IT REALLY DEPENDS ON THE MARKET. WE CAN DO SO MUCH ABOUT OUR EXECUTION, BUT THE MARKET ALSO NEEDS TO BE THERE. >> SHLOMO KRAMER, GREAT TO GET SOME TIME WITH YOU TODAY. THANK YOU SO MUCH. CEO AND COFOUNDER OF CATO NETWORKS. >> THANK YOU. >> AND THANKS TO OUR VERY OWN SEANA SMITH FOR THAT INTERVIEW. >>> WELL, STAY WITH US. A NEW CHAPTER FOR BARNES & NOBLE, CEO JAMES DORT JOINS US NEXT WITH MORE ON THE BOOKSTORE'S BEHEMOTH TURN AROUND PLAN. THAT'S COMING UP NEXT AFTER THE BREAK. VR >>> IT'S BEEN A TOUGH FEW YEARS FOR BOOK STORES. SALES TANKED FOLLOWING YEARS OF DECLINE BETWEEN 2008 AND 2019 ACCORDING TO THE FEDERAL RESERVE. HEAD WINDS FROM AMAZON, E COMMERCE. ENTER BARNES & NOBLE, ONE OF THE OLDEST BOOK RETAILERS IN THE UNITED STATES. THE COMPANY IS REINVENTING AND REVAMPING ITS BUSINESS TO DODGE THE PITFALLS OF THREATENING BOOK STORES. HOW DOES THE COMPANY CONTINUE ITS QUEST FOR GROWTH. LET'S BRING IN BARNES & NOBLE CEO JAMES DAUNT TO DISCUSS MORE. WELCOME TO THE SHOW, JAMES, SO TALK ABOUT HOW BARNES & NOBLE IS REVAMPING AND RESTRUCTURING TO REALLY MEET THE NEEDS OF TODAY'S BOOK LOVERS AND CONSUMERS? >> REALLY BY BEING VERY VERY OLD FASHIONED AND BACKING THE PRINCIPLE IF YOU RUN A GOOD BOOKSTORE, PEOPLE WILL COME INTO IT, AND THE BETTER THE BOOKSTORE IS AND FOCUSED ON BOOKS, THE MORE CUSTOMERS YOU'LL HAVE AND THE BETTER YOU'LL DO. IT'S HELPFUL THAT WE'RE ALSO INVESTING IN THE STORES AND MAKING THEM MORE BEAUTIFUL. IT'S REALLY ABOUT THE BOOKS WITHIN THEM, AND GIVING THEM THE FREEDOM TO CURATE THEIR STORES IN AN INTERESTING WAY. >> TALK ABOUT THAT. FOR PEOPLE WHO HAVEN'T BEEN INTO A BARNES & NOBLE WHO HAD REALLY CONVERTED ONLINE, WHAT SHOULD THEY EXPECT NOW VERSUS THE BARNES & NOBLE THEY USED TO KNOW, SAY PREAMAZON AND PRE-PANDEMIC. >> I THINK PRE-PANDEMIC PIT WASA PILOT HIGH TYPE OF RETAILER AND TRYING TO RUN THE BOOKSTORE EVERYWHERE, AS CONVENTIONAL RETAILERS TRY TO DO. THAT WORKS IF YOU'RE SELLING SNEAKERS OR CLOTHES AND YOU'RE A PHARMACY CHAIN. A BOOKSTORE SHOULD BE VERY REFLECTED AGAINST LOCAL CUSTOMER BASE IN THE COMMUNITY IN WHICH IT SITS, AND THE COMMUNITY CAN JUDGE THAT BY THE BOOK SELLERS. WE HAVE GIVEN THEM A REAL FREEDOM TO DO THAT. ALSO, YOU WILL FIND PLENTY OF THINGS THAT WE BELIEVE SIT ALONGSIDE BOOKS VERY NICELY, EDUCATIONAL TOYS, YOU KNOW, GREETINGS CARS, WRAPPING PAPER, THOSE KINDS OF THINGS. BUT YOU'RE NOT GOING TO FIND ANY MORE WHAT DID RATHER DOMINATE THE STORES IN THE PAST, WHICH IS JUST STUFF WE HOPED TO SELL. AND ALL OF THAT GONE NOW. I THINK WE HAVE CLEANED IT UP, MADE IT MUCH MORE ENTICING, INTERESTING TO BE IN, AND GIVEN THE AUTONOMY TO THE BOOK SELLERS TO REALLY RUN THEIR STORES AS INTELLIGENTLY AS THEY'RE ABLE. >> SO WHEN YOU LOOK AT THE CONSUMER SPENDING YOU'RE SEEING ON BOOKS, AS PEOPLE ARE TIGHTENING THEIR PURSE STRINGS AT THE MOMENT DURING INFLATION, AND TRYING TO LOOK PERHAPS AT OTHER RETAILERS LOOKING FOR CHEAPER OPTIONS HERE. HOW IS BARNES & NOBLE MANAGING THINGS LIKE DISCOUNTING AND PRICING TO KEEP CONSUMERS COMING IN? >> I COME FROM ACTUALLY AN INDEPENDENT BOOKSTORE BACKGROUND. THAT'S WHERE I STARTED OUT, AND AS AN INDEPENDENT BOOK SELLER, YOU'RE IN QUITE A TOUGH SPACE. AS A LARGE BOOK SELLER, WE CAN AFFORD TO DO A LOT OF DISCOUNTING, THE MULTIBI BUYS, Y ONE, GET ONE, HALF PRICE, THOSE THINGS, BUT AT THE END OF THE DAY, IT'S ABOUT CREATING ENTICING SPACES. AND BOOKS ARE VERY GOOD VALUE, CERTAINLY VERY GOOD VALUE COMPARED TO MOST OTHER WAYS IN WHICH PEOPLE SPEND THEIR LEISURE TIME. IT'S MUCH MORE EXPENSIVE TO GO TO THE MOVIES. CERTAINLY A LOT MORE EXPENSIVE TO GO TO RESTAURANTS AND THE LIKE. SO BOOKS ARE VERY GOOD VALUE, AND WE HAVE HAD THIS TREMENDOUS UP SURGE DURING THE PANDEMIC, AND THAT'S BEEN SUSTAINED POST PANDEMIC, SO BOOKS ARE VERY VERY POPULAR AT THE MOMENT. >> I WANT TO ASK ABOUT SOME OF THE HEAD WINDS WE'RE SEEING HERE. 2023 HAS BEEN A YEAR FOR LABOR UNIONS. WE HAVE SEEN THAT PUSH. BARNES & NOBLE NOT EXEMPT FROM THE PUSH AS WELL. HOW ARE YOU MANAGING SORT OF HELPING, YOU KNOW, EMPLOYEES AND BOOK SELLERS WITH THE COST OF LIVING, WHILE ALSO KEEPING IN MIND, YOU KNOW, PEOPLE ARE PULLING BACK ON SPENDING OR PERHAPS DOWN SPENDING OR PERHAPS LOOKING FOR CHEAPER ALTERNATIVES. >> WE'RE LUCKY BECAUSE OUR SALES ARE CONTINUING TO RISE. AND I THINK AS LONG AS WE CONTINUE TO OFFER BETTER BOOK STORES, THE SALES WILL HOPEFULLY KEEP ON INCREASING. AS WE INCREASE OUR SALES, IT'S HOW RESPONSIBLY AND SENSIBLY WE USE THE PROFIT. PART OF IT IS ON IMPROVING THE BUSINESS, PART OF IT IS ON OPENING NEW STORES. A LARGE PART OF IT HAS TO BE TO PAY FOR OUR EMPLOYEES, THE BOOK SELLERS WHO ARE DRIVING THRKS A -- DRIVING THIS AND TRYING TO CREATE A BALANCE, ALL THAT ARE IMPORTANT TO DRIVE THE BUSINESS FORWARD. PAY IS VERY IMPORTANT, AND AS YOU SAY QUITE RIGHTLY, THERE'S A DEMAND FROM THOSE AT THE LOWER END OF THE SCALE TO HAVE MORE. >> AND SO AS YOU LOOK AT SOME OF THE OTHER TRENDS, WE TALKED ABOUT LABOR UNIONS, BUT ALSO CHANGING CONSUMERS. YOU CAN'T THINK ABOUT MARKETING AND ADVERTISING WITHOUT THINKING ABOUT SOCIAL MEDIA, AND OF COURSE TIKTOK, VERY PROM NEGL INENT. WHEN YOU TAKE THIS NEIGHBORHOOD APPROACH TO BOOKSTORES, DRAWING NEW CUSTOMERS INTO THE LIGHT, BUT GAUGING HOW YOU'RE TRACKING THAT, HOW YOU'RE ABLE TO PREDICT TRENDS AS WELL, ESPECIALLY GOING INTO THE HOLIDAYS. >> I THINK IT'S COUNTER INTUITIVELY,: I THINK DOING IT FROM NEW YORK CITY MAKES LITTLE SENSE IF YOU'RE RUNNING STORES ALL OVER THE COUNTRY. WHAT WE HAVE DONE IS EMPOWER LOCAL BOOK SELLERS IN EACH INDIVIDUAL STORE TO RUN ITS OWN SOCIAL MEDIA PLATFORMS, TO ENGAGE VIA INSTAGRAM, PINTEREST, AS YOU SAY, TIKTOK, WHICHEVER, AND INDEED, PROBABLY ALL OF TOSE. AND TO DO SO IN A WAY THAT IS SORT OF SENSIBLE AND ENGAGING FOR THE LOCAL COMMUNITY. LUCKILY, WE EMPLOY LOTS OF YOUNG PEOPLE, AND THEY'RE DRAMATICALLY BETTER AT DOING IT THAN PEOPLE WITH GRAY HAIR LIKE ME, AND IT HAS BEEN SUCCESSFUL FOR US. BUT VERY VARIED. VERY INVENTIVE, SOMETIMES VERY FUNNY, AND HOPEFULLY SO FAR ONLY ON OCCASION GETTING US INTO TROUBLE. IT IS NOT TRYING TO CONTROL IT CORPORATELY. IT'S JUST LET IT ROLL. >> JAMES, I HAVE TO ASK YOU, WHAT ARE YOU READING AT THE MOMENT? >> OH, I'M ALWAYS READING. I BELATEDLY, AND JUST FINISHED THE HEAVEN AND EARTH GROCERY STORE, WHICH I ABSOLUTELY RECOMMEND TO EVERYBODY C. IT'S THE MOST FANTASTIC NOVEL. THEY COME ALONG EVERY THREE YEARS, AND WE'VE GOT A WONDERFUL ONE, AND IT IS ONE OF OUR BOOKS OF THE YEAR. THE WAGER WHICH YOU HAVE UP THERE IS ALSO A REALLY REALLY GOOD READ. >> AND I NOTICED THAT DON'T LET THE PIGEON DRIVE THE SLATE, ONE OF MY NEPHEW'S FAVORITE'S. ONE OF THE 2023 BOOKS FOR BARNES & NOBLE AS WELL. APPRECIATE YOU TAKING THE TIME TO JOINING US. BARNES & NOBLE CEO JAMES DAUNT, THANK YOU SO MUCH. >> THANK YOU. >>> LEGO GROUP AND EPIC GAMES HAVE JOINED FORCES JUST IN TIME BEFORE THE HOLIDS FOR AN ULTIMATE GAMING EXPERIENCE. LEGO FORTNITE ALLOWS PLAYERS TO BUILD IN AN IMAGINARY WORLD. TECH EDITOR, DAN HOWLEY IS ALL OVER THIS FOR US. YOU WERE ABLE TO TEST OUT THE GAME. TELL US ABOUT YOUR EXPERIENCE AND THE MAIN TAKE AWAYS. >> SOME PEOPLE GO TO WAR ZONES, I GO IN AREAS IN NEW YORK WHERE I PLAY VIDEO GAMES FOR A FEW HOURS. THIS IS A LOT OF FUN, ACTUALLY. IT'S LEGO TEAMING UP WITH FORTNITE, EPIC GAMES. BASICALLY THERE'S TWO VERSIONS OF THIS. IT'S INSIDE FORTNITE, YOU HAVE THE NEW META VERSE THING THEY'RE STARTING WHERE THEY HAVE A LEGO GAME ON ITS OWN. THEY HAVE A RACING GAME ON ITS OWN, AND THEY HAVE A RHYTHM GAME ON ITS OWN. THE RHYTHM GAME IS MADE BY HARMONICS, THE PEOPLE BEHIND GUITAR HERO YEARS AND YEARS AGO. THE LEGO SIDE OF THINGS, IT'S BASICALLY, AS YOU SAID, A CRAFTING SURVIVAL GAME WHERE THE IDEA IS YOU HAVE TO COLLECT RESOURCES AROUND THE WORLD, FOOD, YOU HAVE TO EAT. YOU HAVE TO BUILD SHELTER, KEEP YOURSELF WOMAN. IT'S BASICALLY KIND OF CAMPING, BUT IN A VIDEO GAME. YOU DO THIS USING LEGO BLOCKS. YOU GO AROUND CHOPPING DOWN TREES AND PICK UP PIECES OF WHAT WOULD BE LEGO WOOD. LEGO SAYS THEY HAVE TAKEN A HUGE NUMBER OF THE ACTUAL LEGO PIECES THAT THEY DESIGNED IN THEIR OWN FACILITIES AND THEN TRANSFERRED THEM INTO THIS FORTNITE GAME FOR LEGO FORTNITE, YOU'RE BUILDING WITH ACTUAL LEGO PIECES. IT REALLY IS QUITE INVENTIVE. SO I HAVE A FEW TAKE AWAYS AFTER PLAYING IT FOR A FEW MINUTES. THE BIG THING IS IT'S EXPANSIVE. YOU CAN SEE SNOW CAPPED MOUNTAINS IN THE BACKGROUND. I WAS STANDING THERE, SAW THE SNOW CAPPED MOUNTAINS, I COULD WALK THERE. YOU KNOW, SEVERAL KILOMETERS LARGE, THIS WORLD, THAT YOU CAN BUILD UP. YOU CAN INVITE FRIENDS TO JOIN YOUR WORLD ONLINE. YOU CAN GIVE THEM BASICALLY KEYS TO YOUR LITTLE KINGDOM, AND THEY CAN JUMP ON IF YOU'RE NOT ONLINE AT THE TIME, AND YOU CAN KIND OF DEFEND YOURSELVES FROM VARIOUS, YOU KNOW, NEFARIOUS CHARACTERS IN THE GAME AS WELL. THERE'S ALSO THE FACT THAT THIS IS MARRYING TWO ABSOLUTELY MASSIVE FRANCHISES. I MEAN, FORTNITE IS OUTRAGEOUSLY LARGE. EVERYBODY KNOWS ABOUT IT. I HAPPEN TO NOT BE A FORTNITE PLAYER, I PLAY OTHER GAMES. I KNOW ABOUT IT. I HAVE PLAYED IT BEFORE, AND THEN LEGO, WHO DOESN'T KNOW WHAT LEGOS ARE. I WAS REMINISCING ABOUT PLAYING WITH MY PIRATE SET AS A KID AND HAD THE LEGO ALLIGATOR THERE, AND THE THIRD THING IS IT'S GOING TO PULL GAMERS INTO LEGO, AND LEG O USERS INTO GAMES. IT'S MARRYING THE TWO AND MAKING SURE THERE'S CROSSOVER, WHICH IS IMPORTANT. THIS KIND OF GAME LENDS WELL TO THE WORLD OF FORTNITE. IMPORTANTLY THERE'S A LOT OF PROTECTIONS FOR KIDS. THERE'S NOT GOING TO BE THE MAD DASH WITH SOMETHING LIKE FORTNITE, THIS IS GEARED TOWARDS YOUNGER USERS, AND OLDER USERS. THERE'S A SAND BOX MODE WHERE YOU CAN GET LEGO PIECES IN THE GAME AND BUILD WHATEVER YOU WANT AND WALK AROUND THAT. IF YOU WANT TO BUILD A VERSION OF THE TAJ MAHAL, YOU CAN DO THAT, AND WALK AROUND THE INSIDE OF IT BASED ON HOW YOU WANT TO BUILD IT. >> IT SEEMS LIKE A PERFECT PARTNERSHIP. MY DAUGHTER LOVES BUILDING AND ROBOX, MINECRAFT AND LEGOS. IT SEEMS PERFECT. HOW DOES THIS COMPARE TO RIFLES LIKE MINECRAFT? >> IT'S INTERESTING. AS I WAS PLAYING IT, THIS IS GOING AGAINST THE LARGEST GAME EVER IN MINECRAFT. THAT IS ON VIRTUALLY EVERY PLATFORM YOU CAN THINK OF, AND YOU KNOW, THERE'S A WHOLE GENERATION OF KIDS WHO CAME UP WITH THAT AS THEIR GO-TO GAME. IT DEFINITELY HAS ITS WORK CUT OUT FOR IT AS FAR AS COMPETITION GOES. I THINK, THOUGH, YOU KNOW, THE ASTHETIC IS VERY DIFFERENT FROM MINECRAFT, YOU KNOW, IT'S BLOCKS IN MINECRAFT, LEGO, YOU'RE BUILDING WITH LEGOS BUT IT LOOKS A LITTLE BIT CLEANER. I DO THINK THAT IT'S GOING TO HAVE THAT ADVANTAGE OBVIOUSLY FROM FORTNITE PLAYERS WHO WANT SOMETHING DIFFERENT BUT DON'T NECESSARILY WANT TO HAVE TO JUMP INTO A DIFFERENT GAME. IT'S IMPORTANT TO POINT OUT. THIS IS FREE STILL, AS FORTNITE IS FREE, THIS IS FREE TO PLAY. YOU'LL BE ABLE TO JUMP ON FROM THE FORTNITE MAIN SCREEN AND DIVE IN. IT'S NOT AS THOUGH IT'S DIFFICULT TO GET. IT'S GOING TO BE AVAILABLE ON WHATEVER YOU CAN GET FORTNITE ON, YOUR PLAY STATION, PC, XBOX, SWITCH, WHAT HAVE YOU. YOU'LL BE ABLE TO PLAY THERE. THAT'S GOING TO BE REALLY IMPORTANT. I THINK THIS IS GOING TO BE SOMETHING THAT WOULD BUILD ON THE LEGO BRANDING FOR SURE WHEN IT COMES TO GAMING. THEY HAVE ALREADY DONE A GREAT JOB WITH GAMING SO FAR, BUT THIS IS JUST GOING TO PUSH IT FURTHER WITH AN AUDIENCE AS LARGE AS FORTNITE'S. >> IT'S PERFECT AND NOSTALGIC. I HOPE YOU GET LEGO GOODIES IN YOUR STOCKING THIS YEAR. APPRECIATE YOU AS ALWAYS, OUR VERY OWN DAN HOWLEY. >>> SHARES IN PAYPAL SLIDING, AMAZON SAYS IT WILL STOP ACCEPTING VENMO FOR PAYMENT. IT WILL ACCEPT VENMO DEBIT AND CREDIT CARDS, THEY HAVE OWNED THE POPULAR PAYMENT SERVICE SINCE 2013 AND IS REGARDING AS ONE OF THE MOST POPULAR MOBILE APPLICATIONS TO MAKE IN-PERSON PAYMENTS IN THE U.S. THE COMPANY ONLY ANNOUNCED LAST OCTOBER THAT IT WOULD BEGIN ACCEPTING VENMO AT THE CHECKOUT. QUITE A QUICK TURN AROUND. >>> THAT DOES IT FOR YOU, I'M RACHELLE AKUFFO. STAY WITH US ON YAHOO! FINANCE.
