♪ >>> HELLO AND WELCOME TO "MARKET DOMINATION," I'M JULIE HYMAN, THAT'S JOSH LIPTON LIVE FROM OUR NEW YORK CITY HEADQUARTERS. WE ARE GIVING YOU THE ULTIMATE INVESTING PLAYBOOK TO TUNE OUT THE NOISE AND MAKE THE RIGHT MOVES FOR YOUR MONEY. >> YOUR HEADLINE BLITZ GETTING YOU UP TO SPEED ONE HOURS BEFORE THE CLOSING BELL RINGS ON BALL STREET. ♪ >> WHAT I THINK YOU'LL SEE COMING FROM POWELL AND THE FED THIS WEEK IS, YOU KNOW, SOME MORE TIME, SOME MORE PATIENCE AND THE PROSPECT POTENTIALLY FOR A RATE HIKE NOT A CUT. I THINK THAT IS SOMETHING THAT THE MARKET IS INCREDIBLY FOCUSED ON. >> WHAT TESLA CERTAINLY HAS TO DO IS STAY ON THE FOREFRONT OF INNOVATION. THEY HAVE TO BE THE MOST TECHNOLOGICALLY ADVANCED CAR OPTION BECAUSE THEY CAN'T COMPETE ON PRICE BECAUSE THE DYNAMICS OF THE CHINESE MARKET. TESLA NEEDS TO MAKE A PROFIT LIKE A LOT OF THESE CHINESE FIRMS SO IT CAN'T COMPETE IN AN EVEN FIELD, IT NEEDS TO STAY ON THE TOP OF THE TECHNOLOGY LADDER. THIS ALLOWS IT TO STAY ON TOP FOR A LITTLE WHILE LONGER. >> THIS IS LATE STAGE LEGACY MEDIA AT ITS WORST. BOB BACKISH HAS BEEN IN CHARGE OF PARAMOUNT FOR A NUMBER OF YEARS, HE HAS BEEN TRYING TO GUIDE THIS, YOU KNOW, VERY LEAKY SHIP INTO A CALMER WATERS AND IT'S JUST NOT HAPPENING. HE HAS LOST THE CONFIDENCE, LOST THE FAITH OF CONTROLLING SHAREHOLDERS, SHARI REDSTONE. >> WE HAVE GOT AN HOUR TO GO UNTIL THE MARKET CLOSE. LET'S TAKE A LOOK AT THE MAJOR AVERAGES SPONSORED BY TASTY TRADE. WE START WITH THE DOW HERE, WHICH HAS HAD A LITTLE BIT OF A BOUNCING AROUND TODAY BUT IN A NARROW RANGE, RIGHT NOW UP A FIFTH OF 1%, THE S&P 500 VERY LITTLE CHANGE, IT HAS TAKEN A LITTLE BIT OF A LEG LOWER AS REF' HEADED THROUGHOUT THE SESSION, THE NASDAQ ALSO VERY LITTLE CHANGED ON THE DAY. WITH HE CONTINUE TO WATCH THE BOND MARKET AS WELL. BOND YIELDS TRENDING LOWER BUT HAS NOT SERVED TO GIVE STOCKS A LIFT. A LOT OF THE FOCUS REMAINS MICRO VERSUS MACRO, WE WILL TALK MORE ABOUT TESLA IN A MOMENT AND THE EFFECT IT'S HAVING BUT I ALSO WANTED TO CHECK ON ANOTHER STOCK WE ARE WATCHING. YOU JUST HEARD IT MENTIONED. I'M TALKING ABOUT PARAMOUNT GLOBAL. REPORTS THAT BOB BACKISH MIGHT BE OUT AS CEO, THIS AS THE COMPANY HAS RECEIVED SEVERAL BUYOUT OFFERS THAT SHERRI REDSTONE IS CONSIDERING AS IS THE BOARD AND SHAREHOLDERS. IT REPORTS ITS EARNINGS AFTER THE CLOSE. AMIDST ALL OF THAT THE SHARES ARE UP BY 3% TODAY. THAT'S A STOCK WE ARE FOCUSED ON. A QUICK LOOK AT SECTORS HERE AS WELL, WE'VE GOT COMMUNICATION SERVICES DOWN THE MOST TODAY, OFF BY 1.4%. CONSUMER DISCRETIONARY AND UTILITIES ARE UP SO NOT REALLY A BIG THEME HERE THAT WE'RE SEEING IN TERMS OF ROTATION OR WHAT'S DOING WELL AND NOT ON A SECTOR BASIS, JOSH. >> JULIE, TESLA HAS FINALLY RECEIVED THE LONG AWAITED FULL SELF-DRIVING APPROVAL IN CHINA THIS COMING FOLLOWING MUSK'S SURPRISE VISIT TO BEIJING THIS WEEKEND. JOINING US FOR MORE ON WHAT THIS MEANS FOR THE EV MAKER LET'S WELCOME IN DAN IVES. IT IS ALWAYS GREAT TO HAVE YOU ON THE SHOW. I'M LOOKING AT THIS STOCK, DAN, IT IS JUST ROARING HIGHER ON THIS HEADLINE. LET'S START THERE, DAN. DOES THAT REACTION MAKE SENSE TO YOU? >> I THINK IT MAKES COMPLETE SENSE BECAUSE, LOOK, JOSH, THIS IS A WATERSHED MOMENT FOR MUSK TO GET FSD IN CHINA, IT'S A GAME CHANGER. THIS IS YEARS IN THE MAKING, NO INVESTOR THOUGHT THIS WAS GOING TO HAPPEN FOR THE NEXT YEAR. HE GETS BACK ON THAT PLANE FROM BEIJING DRINKING MIMOSAS, THIS WAS A TROPHY CASE WIN. >> DAN, WHY, THOUGH? BECAUSE ALL OF THE OTHER ELECTRIC VEHICLE MAKERS THAT ARE ALREADY COMPETING WITH TESLA IN CHINA, THEY ALREADY HAVE AUTONOMOUS DRIVING CAPABILITIES THAT HAVE ALREADY EXISTED. THERE'S BEEN OF COURSE PRICE WARS GOING ON IN CHINA AND STIFF COMPETITION FROM THOSE OTHER ELECTRIC VEHICLE MAKERS. IF I'M A CHINESE CONSUMER AND I'M THINKING ABOUT BUYING A CAR, IS FSD REALLY THE THING THAT'S GOING TO BE PUSHING ME OVER THE EDGE TO BUY A TESLA VERSUS A BYD OR ANOTHER CAR? >> YEAH, THAT'S A GREAT QUESTION, JULIE. I'D SAY THERE'S TWO REASONS WHY THIS IS SO IMPORTANT, ONE, FSD THE AUTONOMOUS VISION NUMBER ONE IN OUR OPINION BEING OVER THE COMING YEARS THEY NEEDED CHINA. IN TERMS OF JUST FROM A DATA PERSPECTIVE WHEN YOU THINK HAVE AN AI ANGLE WHAT THEY'RE DOING, THEY NEEDED CHINA. >> BUT WE DON'T KNOW IF THEY CAN -- SORRY TO INTERRUPT, DAN. WE DON'T KNOW IF THEY CAN -- HOW THEY CAN USE THAT DATA, RIGHT? >> WELL, YET, BUT ULTIMATELY IF YOU LOOK WHAT MUSK HAS BEEN ABLE TO DO, REMEMBER YEARS AGO THEY SAY HE WOULD NEVER BE ABLE TO BUILD A FACTORY IN CHINA NOW LOOK AT GEGA. THE POINT IS THEY NEED TESLA AS MUCH AS TESLA NEEDS CHINA BECAUSE IT'S THE TROPHY CASE. YOU LOOK AT APPLE, YOU LOOK AT TESLA, TWO OF THE BEST BRANDS IN THE WORLD, THAT'S WHY THEY ALLOW THIS. WITH FIDU AS A PARTNER. THE REASON IT'S SO IMPORTANT IS THAT TESLA ALMOST HAD ONE HAND BEHIND ITS BACK NOT HAVING FSD IN CHINA, NOW THEY HAVE THAT. AND I BELIEVE WHAT IS STARTING TO GET FACTORED IN HERE IS THE DEMAND. I'M NOT SAYING THE NEXT WEEK OR TWO, BUT DEMAND RECOVERY IN CHINA, BUT BETTER AGAINST MUSK IT'S LIKE BETTING AGAINST BRUNSON IN THE PLAYOFFS. >> AND, DAN, ULTIMATELY IT SEEMS LIKE IF YOU ARE A TELL LA BULL ARE YOU EXCITED BECAUSE YOU ULTIMATELY THINK, LISTEN, THIS POTENTIALLY -- THE IMPACT THIS HAS ON SUBSCRIPTION FEES, ON MAYBE EVEN LICENSING THIS SOFTWARE, OEMs IS IT A MARGIN STORY, DAN? >> I THINK TWO THINGS. ONE, WHEN YOU LOOK AT TESLA CHINA IT EXPANDS TO TEN. WHAT THEY WILL BE ABLE TO DO FROM AUTONOMOUS, NOT JUST ABOUT THE NEXT 6, 12 MONTHS ESPECIALLY WITH BADU WHERE DOES THIS GO OVER THE NEXT THREE, FIVE YEARS WHEN YOU THINK OF ROBO TAXIS AND THE AUTONOMOUS VISION. TWO, THIS SHOWS YOU'RE STARTING TO SEE MUSK AND CHINA THAT RELATIONSHIP GET TIGHTER AND TIGHTER AND THAT'S A GREAT THING FOR THE STOCK. THAT'S IMPORTANT BECAUSE WE ALL KNOW THAT'S BEEN THE BIGGEST OVER END YEAR AND THAT'S WHY RIGHT NOW THE BEARS ON TESLA WHICH SO FAR WON THIS YEAR THEY'RE GOING BACK INTO THOSE HIBERNATION INTO THE CAVES. >> DAN, IT'S MY UNDERSTANDING AND I DON'T KNOW IF YOU KNOW THIS, MAYBE IF YOU DO, WE TALKED A FEW YEARS AGO WHEN THE OTHER CHINESE AUTO MAKERS WHO HAD SOME AUTONOMOUS DRIVING CAPABILITY AND IT'S MY UNDERSTANDING THAT THE REGULATIONS ARE A BIT DIFFERENT THERE. THAT YOU HAVE TO SORT OF TAKE A COURSE, RIGHT, BEFORE YOU CAN GET AN AUTONOMOUS VEHICLE OR PARTIALLY AUTONOMOUS VEHICLE. DO YOU KNOW ABOUT THAT AND IS TESLA GOING TO BE SUBJECT TO THAT AS WELL? >> YEAH, LOOK, I THINK THESE ARE THINGS THAT ALL NEED TO COME OUT IN TERMS OF THE NEXT STEPS, BUT I THINK THE IMPORTANT THING IS THIS IS A BROADER GLOBAL VISION AND I THINK FOR CHINA THIS IS ALMOST A SHOT ACROSS THE BOW AT THE U.S. IN TERMS OF ON FSD YOU CAN SEE THEM ON THE FAST TRACK VERSUS WHAT'S HAPPENING HERE AND TESLA THAT'S THE GOLDEN GOOSE, THEY'RE GOING AFTER CHINA, THEY NEEDED FSD, IT'S A KEY PART OF THE LONG-TERM STORY AND WHEN YOU SEE THE STOCK UP, I BELIEVE IT'S JUST THE START OF THE LONGER TERM VISION NOW TAKING HOLD. >> AND, DAN, I'M INTERESTED WHY YOU THINK CHINA DECIDED TO IN FACT GREEN LIGHT THIS TECH. DO YOU THINK IT'S BECAUSE OFFICIALS OVER THERE, DAN, MAYBE THEY JUST BELIEVE THAT FSD IS ULTIMATELY RELATIVELY SAFER OVER THE LONG TERM? DO YOU THINK THEY WERE TRYING TO EXTEND MAYBE AN OLIVE BRANG THE U.S. AS TENSIONS ARE RUNNING HOT? WHAT ARE THE REASONS YOU THINK THEY GREEN LIT THIS? >> I THINK IT'S ALL OF THE ABOVE AND YOU HAVE THE MOST FOLLOWED HUMAN IN THE WORLD IN MUSK AND MUSK BEING IN BEIJING, NOT JUST A PHOTO OP, THAT'S WHAT CHINA WANTS. CHINA WANTS THAT RELATIONSHIP TO INCREASE JUST LIKE THEY DO WITH APPLE AS WELL. WHEN YOU LOOK AT FSD THEY'RE GOING TO DOUBLE DOWN ON THAT AND YOU CANNOT DOUBLE DOWN ON FSD IF TESLA IS NOT INVOLVED AND THAT'S WHY I THINK MUSK WENT THERE ON THE SURPRISE VISIT THIS WEEKEND AND HE COMES BACK WITH JUST A HUGE WIN. >> DAN, SO TESLA SALES IN CHINA WERE DOWN ALMOST 4% IN THE FIRST QUARTER WHILE THE REST OF THE MARKET THERE WAS GROWING. AND YOU SORT OF CAUTION THAT THIS IS MORE OF A LONG-TERM STORY BUT DO WE SEE A TURN AROUND IN THE FORTUNES OF CHINA SALES FOR TESLA THIS YEAR? >> LOOK, I THINK YOU'RE GOING TO START TO SEE WHAT I BELIEVE -- I'M NOT SAYING IN THE NEXT MONTH, THE SECOND HALF OF THE YEAR I THINK YOU SEE A REBOUND IN CHINA SALES AND I THINK TESLA HAS A NUMBER OF THINGS UP THEIR SLEEVES THEY'RE GOING TO INFUSE IN CHINA WHICH WILL BE SIGNIFICANT. IT GOES BACK TO AS SOMEONE THAT'S BEEN IN THE REGION MANY TIMES MASSIVE COMPETITION, SUCH IMPRESSIVE, YOU KNOW, VEHICLES THAT YOU SEE THERE FROM OEMs, BUT THERE'S ONE TESLA AND AT THE END OF THE DAY YOU'RE GOING TO SEE A LOT OF CONSUMERS THEY WANT TO BE DRIVING A TESLA, NOT JUST IN CHINA, BUT IN THE U.S., EUROPE AND THAT'S WHY I BELIEVE THEY ARE JUST GOING THROUGH A DIGESTION PERIOD. THE GROWTH STORY IS NOT DONE AT TESLA. >> DAN, YOU'RE KIND OF GOING WHERE I WAS HOPING TO ASK YOU ABOUT. JUST BEYOND CHINA GENERALLY, DAN, DO YOU THINK MAYBE WE'RE PAST THE WORST QUARTERLY TRENDS NOW FOR TESLA AT LEAST FOR A WHILE? THE TEAM AT KANA COURT THAT'S WHAT THEY WERE ARGUING TO THEIR CLIENTS THIS MORNING. >> I THINK THEY DO GREAT WORK THERE, GEORGE. LOOK, I THINK THE WORST FOR NOW I THINK IS BEHIND US AND I THINK THIS SHOWS JUST A CHANGE THAT WE'RE SEEING IN TERMS NOT JUST THE TONE, BUT EVEN WITH MUSK. I MEAN, NOW YOU'RE SEEING THAT PILOT ON THE PLANE, STARTING WITH THE CONFERENCE CALL, NOW GOING OVER TO CHINA AND THAT'S WHY MUSK 10% POLITICIAN, 90% CEO. THAT'S THE KEY TO THE STOCK. >> SO DO YOU THINK TO GO -- I JUST WANT TO ASK YOU FINALLY ABOUT THE OTHER BIG ISSUE THAT WAS THE OVERHANG FOR THE STOCK AND THAT'S THE QUESTIONS ABOUT, YOU KNOW, THE MODEL 2 OR MINI CAR OR WHATEVER YOU WANT TO CALL IT. DO YOU BELIEVE MUSK THAT IT'S COMING OUT, I DON'T KNOW, END OF THIS YEAR, NEXT YEAR? WHAT DO YOU THINK IS THE REAL TIMELINE? >> OH, I THINK -- I WILL CALL IT A MODEL 2.5. I THINK THAT WILL BE OUT A YEAR FROM NOW AND -- SO THE POINT IS IT'S NOT A MODEL 2 IN TERMS OF NEXT GEN, BUT IT'S GOING TO BE A SUB 30 K VEHICLE, SCALED DOWN MODEL 3 WITH ENHANCED SOFTWARE. THAT'S WHAT THEY NEEDED. THAT WAS MUSIC TO THE EARS OF THE -- THAT'S WHY THIS WEEK IT'S BEEN A NIGHTMARE ON ELM STREET FOR THE BEARS. >> ALL RIGHT. I GUESS IT HAS. THANKS SO MUCH. GOOD TO SEE YOU, DAN. WE'RE JUST GETTING STARTED HERE ON "MARKET DOMINATION." COMING UP, THE LATEST EPISODE OF OUR VIDEO SERIES NEXT. O . >>> PLUS PARAMOUNT SHARES ARE RISING THAT THEY MIGHT OUST THE CEO. WE WILL BREAK THOSE NUMBERS AFTER THE CLOSING BELL. >>> PLUS LATER IN THE HOUR IT'S THE NEWEST EDITION OF GOOD-BYE OR GOOD BUY. TWO MAGNIFICENT SEVEN TO MAKE THE BEST CHOICES FOR YOUR PORTFOLIO. STAY TUNED, MORE "MARKET DOMINATION" AFTER THIS. FUJITA. >>> U.S. TREASURY UNEXPECTEDLY LIFTING ITS ESTIMATE FOR QUARTERLY FEDERAL BORROWING, IT'S LOOK TO GO BORROW $243 BILLION IN THE CURRENT QUARTER. THE TREASURY CITING WEAKER CASH RECEIPTS AND FOR THE JULY TO SEPTEMBER QUARTER THE TREASURY SAID IT EXPECTS TO BORROW A NET $847 BILLION. SO THE UPSIDE OF ALL OF THIS WHEN THE TREASURY BORROWS, IT BORROWS BY SELLING DEBT AND SO THE UPSIDE TO THIS IS IF YOU HAVE MORE SUPPLY COMING TO MARKET YOU COULD POTENTIALLY SEE PRICES DOWN, YIELDS HIGHER, WHICH IS OBVIOUSLY A POINT OF SENSITIVITY HERE. SO WE'VE SEEN STOCKS, THEY'RE NOT DOWN MUCH, BUT A LITTLE BIT OF A LEG LOWER. >> LOOKS LIKE STOCKS GOT SOME GAINS AFTER THAT HIT, YIELDS BOUNCED OFF THEIR LOWS. SO SOME REACTION FROM THE MARKETS. >> NOT ONLY WAS IT AN INCREASE IN THE BORROWING PLANT BUT IT'S ALSO HIGHER THAN MOST BANKS ON THE STREET WERE LOOKING FOR JUST AS ONE EXAMPLE JPMORGAN WAS LOOKING FOR $227 BILLION AND THEN THIS $243 BILLION IS HIGHER THAN THAT ANTICIPATED. >> WE CAN ASK OUR NEXT GUEST ABOUT IT. >> LET'S TALK ABOUT THE BIG PICTURE, STOCKS ON WALL STREET MIXED, KICKING OFF A BIG WEEK OF FEDERAL JUDGE DECISIONS. JOINING US TO BREAK DOWN WHAT TO EXPECT FROM ALL OF THIS ACTION-PACKED WEEK IS DENNIS DEEBUSHER. DENNIS, GOOD TO SEE YOU. IT'S BEEN A LITTLE WHILE. GREAT TO HAVE YOU HERE AND TO GET YOUR PERSPECTIVE. WE JUST HEARD ABOUT THAT REFRESH RI ANNOUNCEMENT HERE, ALREADY ADDING TO CONCERNS ABOUT A HIGHER FOR LONGER RATE REGIME HERE. THAT PERCOLATING THROUGH THE TREASURY MARKET AS WELL. WHAT'S YOUR REACTION TO THAT AND DO YOU THINK WE ARE HIGHER FOR LONGER HERE AND WHAT DOES THAT EVEN MEAN? >> FOR SURE. I DO THINK WE'RE HIGHER FOR LONGER. I THINK THE DEFINITION WOULD BE THE FED KEEPING THE FEDERAL FUNDS RATE RIGHT AROUND CURRENT LEVELS UNTIL THEY'RE COMFORTABLE THAT INFLATION GETS -- I GUESS A BETTER TERM UNDER CONTROL OR IN LINE WITH THEIR TARGETS AROUND 2.7% THIS YEAR AND CLOSER TO 2.1% NEXT YEAR. TO YOUR POINT ON THE AUCTIONS OR BETTER YET THE AMOUNT OF FUNDING THAT IS REQUIRED, IT KEEPS CREEPING HIGHER WHICH MEANS IT'S EVEN MORE CRITICAL THAT YOU DO SEE INFLATION COME UNDER CONTROL BECAUSE IF THAT DOESN'T HAPPEN THEN SUPPLY WILL BE HARDER TO ABSORB BY THE PRIVATE SECTOR. YOU HAVE A HIGHER IMPLIED DEFICIT CERTAINLY WITH HIGHER NOMINAL INTEREST RATES, INFLATION ONLY WOULD ADD TO THAT. PUSHING UP INTEREST RATES. SO, YEAH, IT'S REALLY IMPORTANT THAT INFLATION GETS UNDER CONTROL. I'M A LITTLE BIT SURPRISED SINCE THE CPI REPORT THAT 10-YEAR YIELDS AREN'T HIGHER. SO THAT IS A BIG SURPRISING. MAYBE THERE IS A BET EVER INFLATION, MEANING MORE DOVISH INFLATION TO COME BUT THAT HE IS SURPRISING TO US. >> BRINGING INFLATION AND YOU CONTROL, CLEARLY WE SAW A LOT OF PROGRESS IN THAT FIGHT. WE KIND OF STALLED HERE. WHAT DO YOU THINK DOES GET US, YOU KNOW, TO THAT LAST MILE HERE, DENNIS, TO JAY POWELL'S TARGET? DO YOU HAVE TO SEE THE ECONOMY MEANINGFULLY WEAKENED, DENNIS, DOES IT MEAN UNEMPLOYMENT HAS TO RAMP? WHAT GETS US THERE? >> THERE'S THREE MAIN THINGS, WAGES, WAGES AND WAGES. WHEN IT COMES DOWN TO INFLATION AND YOUR FORECAST FOR KWOER SERVICES, WHICH IS WHAT WE'RE ALL KIND OF TRYING TO FIGURE OUT WHERE AND HOW HIGH THAT'S GOING TO BE IN THE FUTURE, WAGE GROWTH IS CRITICAL AND THEN TO YOUR POINT WILL WAGE GROWTH GET TO CLOSER TO 3.5% FROM, SAY, THE CURRENT 4 JUST BY NORMAL LABOR MARKET LOOSENING, RATES COMING DOWN, LESS HIRING OR WILL YOU NEED A MUCH HIGHER UNEMPLOYMENT RATE? THAT'S THE CRITICAL QUESTION. SO FAR WAGE GROWTH HAS SLOWLY COME DOWN BUT IT'S STALLED AND IT'S STALLED IN A WAY THAT MAKES PEOPLE CONCERNED THAT INFLATION WILL BE TOO HIGH, THE FED WOULD HAVE TO TIGHTEN FINANCIAL CONDITIONS AGAIN, THE UNEMPLOYMENT RATE MOVES HIGHER. OUR CALL IS YOU NEED SOME COMBINATION OF LIKE 2 TO 2.5% ECONOMIC GROWTH, MAYBE A LITTLE BIT WEAKER AND THEN YOU WILL BE COMFORTABLE THAT WAGE GROWTH WILL COME DOWN IN A WAY THAT THE FED CAN BE COMFORTABLE WITH. MEANING WE DON'T NEED A MUCH HIGHER UNEMPLOYMENT RATE. IF WE STAY WITH ECONOMIC DEMAND THAT'S LIKE WELL ABOVE 2.5 IN THE INITIAL LAUNCH HERE INTO TWO Q IS A PRETTY STRONG ONE, TIGHTER FINANCIAL CONDITIONS WOULD BE NEEDED AND THAT WOULD PROBABLY BE ASSOCIATED EVENTUALLY WITH A HIGHER UNEMPLOYMENT RATE. >> DENNIS, AT THE SAME TIME THAT WAGES PERHAPS NEED TO COME DOWN OR STABILIZE AT LEAST, WE HAVE HAD GOODS INFLATION THAT HAS BEEN TICKING UP AGAIN. THERE WAS A CHART THAT APOLLO SHARED TODAY LOOKING AT MANUFACTURING PMI PRICES PAID THAT SHOWED COMING POTENTIAL REBOUND IN THAT GOODS INFLATION. SO THIS, THEN, MAKES THE FED'S JOB EVEN MORE DIFFICULT, RIGHT, BECAUSE AS WE'VE SEEN IN THE PAST THEY DON'T NECESSARILY HAVE A GREAT LEVER TO PULL WHEN IT COMES TO THIS TYPE OF INFLATION, DO THEY? >> THEY DON'T, BUT I THINK THE GOOD NEWS THERE IS THAT THE GOODS INFLATION YOU'VE SEEN IS GOING TO BE VERY DIFFICULT TO EXTRAPOLATE. SO ON A THREE-MONTH MOVING BASIS CORE GOODS PRICES WERE DOWN LIKE NEGATIVE 2.3% IN DECEMBER, THEY RAMPED UP TO PLUS -- ROUGHLY 2.8%, EXITING 1 Q, A LOT WAS CONSUMER ELECTRONICS DRIVEN, THERE WAS SOME FINANCE PRICING IN HERE IF YOU WANT TO GET INTO THE WEEDS, TOO. IT'S STRUF THAT I WOULDN'T EXTRAPOLATE. YOU CAN BE COMFORTABLE THAT GOODS ARE GOING TO COME BACK DOWN A LITTLE BIT BUT NOT ENOUGH TO OFFSET WAGE GROWTH. I'M NOT WORRIED ABOUT GOODS PRICES STAYING AROUND CURRENT LEVELS, YOU WILL PROBABLY SEE THEM COME UP BUT NOT ENOUGH TO OFFSET CORE SERVICES INFLATION IF WAGES DON'T COME DOWN MORE. IT'S VERY SIMPLE. IF WAGES DON'T COME DOWN MORE IN LINE WITH WHAT THE FED NEEDS, ROUGHLY 3.5% OVER TIME THEN YOU CAN REST ASSURED RATES WILL BE HIGHER FOR LONGER, ROUGHLY AROUND CURRENT LEVELS WITH SOME THREAT OF AN INCREASE AND THAT'S THE WORLD WE WILL LIVE IN UNTIL THE LABOR MARKET HAS LOOSENED COMFORTABLY. >> DENNIS, LET'S SWITCH GEARS AND TALK EARNINGS AS WELL. WE HAVE BIG NAMES ON TOP, AMAZON, APPLE. JUST WHAT YOU HAVE LEARNED SO FAR THIS EARNINGS SEASON, WHAT HAVE BEEN INJURE BIG TAKE A WAYS AND HAVE YOU ADJUSTED WHERE YOU WANT TO BE INVESTED AS A RESULT? >> NOT REALLY ADJUSTED WHERE YOU WANT TO BE. 45% OF THE INDEX AS OF THIS MORNING HAD REPORTED, 80% OF COMPANIES ARE BEATING, THAT'S WELL HIGHER THAN NORMAL. I GUESS ONE OF THE POSITIVES OF HIGHER INFLATION IS STRONGER EARNINGS GROWTH. IF YOU HAVE RELATIVELY STABLE 10 YEAR YIELDS WHAT WE HAVE NOW. IT'S DIFFICULT TO BE NEGATIVE ON THE MARKET. ONE OF THE MAIN TAKE A WAYS IS THAT IT'S NOT ALL JUST BIG TECH. YOU ARE SEEING SOME BROADENING OUT AND IMPROVEMENT IN EARNINGS. FINANCIALS AND BANKS IN PARTICULAR. I MEAN, NORMALLY WHEN WE'VE SEEN THESE INCREASES IN TENS FROM THE CPI REPORT, BANKS AND FINANCIALS HAVE COME UNDER INTENSE PRESSURE. THAT DIDN'T HAPPEN THIS TIME. THERE WERE SOME BIG ONES, YOU KNOW, THAT WE SAW, BUT, YOU KNOW, THE REGIONAL BANK INDEX IS ACTING MUCH BETTER THAN YOU WOULD HAVE THOUGHT GIVEN THE INCREASE IN 10-YEAR YIELDS BECAUSE EARNINGS HAVE BEEN MORE STABLE. EVEN SENTIMENT FOR EARNINGS HAS IMPROVED. THERE IS A BROADENING OUT AND IMPROVEMENT IN EARNINGS. THEORETICALLY THAT SHOULD BE GOOD FOR THE, QUOTE, UNQUOTE, AVERAGE STOCK RELATIVE TO THE MAG SEVEN, BUT, YEAH, ALL FOR NAUGHT IF WE DON'T GET INFLATION UNDER CONTROL AND 10 YEAR YIELDS START DRIVING HIGHER. THAT EARNINGS GROWTH WILL COME DOWN IF TENS GO UP A LOT. >> WE WILL SEE WHAT JAY POWELL DOES ON WEDNESDAY. THANKS FOR JOINING THE SHOW. >> THANK YOU. >>> COMING UP, THE LATEST EDITION OF OUR SERIES GOOD BUY OR GOOD-BYE. A DEEP DIVE INTO TWO STOCKS TO HELP YOU MAKE THE BEST CHOICES FOR YOUR PORTFOLIO. MORE "MARKET DOMINATION" AFTER THIS. ♪ >>> IT'S A BIG NOISY UNIVERSE OF STOCKS OUT THERE. WELCOME TO GOOD-BYE OR GOOD BUY. OUR GOAL TO HELP CUT THROUGH THAT NOISE TO NAVIGATE THE BEST MOVES FOR YOUR PORTFOLIO. TODAY TWO AI PLAYERS IN BIG TECH, BOTH OF WHICH RECENTLY DELIVERED FIRST QUARTER RESULTS. JOINING ME MELISSA OTTO HEAD OF TMT RESEARCH AT VISIBLE ALPHA. >> THANKS FOR HAVING ME. >> THE STOCK YOU ARE MORE BULLISH ON OF THOSE THAT JUST DELIVERED THEIR NUMBERS AND THAT IS MICROSOFT. THE SHARES HAVE DONE QUITE WELL OVER THE PAST YEAR AND IN REACTION TO THOSE NUMBERS OF COURSE AND WE GOT THE STOCK CHART. SO LET'S RUN THROUGH WHY YOU ARE MORE BULLISH ON THIS NAME. LET'S START WITH AZURE AND THE CLOUD DEMAND THAT MICROSOFT IS SEEING. WHAT HAVE WE LEARNED IN THE QUARTER THAT GRAVES YOU REASONS FOR OPTIMISM? >> IT'S BEEN A DYNAMIC EARNINGS SEASON BASED ON THE VISIBLE ALPHA CONSENSUS COMING INTO THE QUARTER AND COMING OUT OF THE QUARTER FOR MICROSOFT. WE REALLY SAW THE COMPANY EITHER MEETING OR BEATING EXPECTATIONS ON NUMEROUS FRONTS IN THE QUARTER AND THEN PROVIDING GUIDANCE THAT WAS PARTICULARLY FOR THE AZURE BUSINESS AHEAD OF EXPECTATIONS. THE AZURE BUSINESS BASED ON MANAGEMENT COMMENTARY IS ESSENTIALLY SEEING DEMAND THAT'S EXCEEDING WHERE THE CURRENT CAPACITY IS AND THEY'RE TAKING SHARE. SO I WOULD SAY NET-NET THAT'S A PRETTY GOOD POSITION TO BE IN IN THIS ENVIRONMENT. >> MELISSA, WE ARE GOING TO PAUSE BECAUSE WE'RE HAVING A LITTLE TECHNICAL DIFFICULTY WITH YOUR MIC BUT WE WILL GET YOU ALL SET. WE ARE GOING TO TAKE A BREAK AND COME RIGHT BACK. STICK WITH US. ♪ >>> IT'S A BIG NOISY UNIVERSE OF STOCKS OUT THERE. WELCOME TO GOOD-BYE OR GOOD BUY. OUR GOAL TO HELP CUT THROUGH THAT NOISE TO NAVIGATE THE BEST MOVES FOR YOUR PORTFOLIO. TODAY WE'RE TAKING A LOOK AT TWO AI PLAYERS IN BIG TECH, BOTH OF WHICH RECENTLY DELIVERED THEIR QUARTERLY RESULTS. JOINING ME IS MELISSA OTTO HEAD OF TMT RESEARCH AT VISIBLE ALPHA. WE ARE ALL SET NOW. LET'S TALK ABOUT THE STOCK THAT YOU WERE MORE BULLISH ON IN THIS UNIVERSE FIRST OF ALL AND THAT IS MICROSOFT. MICROSOFT OF COURSE HAS RISEN OVER THE PAST YEAR AND ROSE IN RESPONSE TO ITS RESULTS AS WELL AND YOU LIKE IT IN PART BECAUSE OF THE DEMAND THAT WE ARE SEEING FOR THE CLOUD BUSINESS, FOR AZURE. SO TALK ME THROUGH THAT. >> THANKS FOR HAVING ME ON, JULIE, GREAT TO BE HERE. IT'S BEEN AN INCREDIBLY EXCITING -- INCREDIBLE EXCITING EARNINGS SEASON. MICROSOFT DELIVERED A QUARTER EITHER IN LINE WITH EXPECTATIONS OR ON MANY COUNTS I WOULD SAY THEY BEAT EXPECTATIONS BASED ON VISIBLE ALPHA CONSENSUS AND THEN LOOKING AHEAD TO THEIR GUIDANCE, THEIR GUIDANCE BEAT EXPECTATIONS ON MULTIPLE COUNTS BASED ON VISIBLE ALPHA'S -- BASED ON VISIBLE ALPHA'S CONSENSUS. AS WE LOOK INTO SOME OF THE DETAILS AROUND THAT DATA, WHAT HAS BEEN REALLY INTERESTING IS THAT COMPANY MANAGEMENT HAS SAID DEMAND FOR THE AZURE BUSINESS HAS BEEN EXCEEDING CAPACITY AND THAT THE COMPANY CONTINUES TO TAKE SHARE IN THE SPACE. THAT'S A GREAT PLACE TO BE IN THIS CURRENT ENVIRONMENT. BASED ON VISIBLE ALPHA CONSENSUS FOR THE AZURE BUSINESS, THAT BUSINESS WAS ACTUALLY EXPECTED TO GENERATE ABOUT $94 BILLION IN REVENUE IN 2025, NOW IT'S EXPECTED TO GENERATE $96 BILLION. SO JUST KIND OF PRE QUARTER, GOING POST QUARTER IN A COUPLE OF DAYS THE SENTIMENT AROUND THAT BUSINESS IS ALREADY TICKING UP SUGGESTING THAT THERE IS SOME OPTIMISM BUILDING INTO THOSE NUMBERS AND THOSE FUNDAMENTALS AND I THINK, YOU KNOW, AS WE THINK ABOUT THE RISKS TO THAT BUSINESS, LOOKING AROUND WHAT COULD ACTUALLY, YOU KNOW, DRIVE DEMAND, WHAT IS DRIVING DEMAND, IT'S ALL ABOUT AI. >> LET ME RESULT YOU THERE BECAUSE WE'VE GOT THE STRONG AZURE OUTLOOK WHICH YOU TALKED A LITTLE BIT ABOUT AS WELL BUT I DO WANT TO TALK ABOUT HOW AI IS SORT OF READING INTO ALL OF THIS BECAUSE WHAT'S INTERESTING ABOUT MICROSOFT IS THERE'S DEMAND FOR AZURE SERVICES BECAUSE OF OTHER COMPANIES TRAINING THEIR AI AND THEN THERE ARE THINGS THAT MICROSOFT IS DOING OFFERING ITS OWN AI SERVICES. SO IT'S SORT OF, YOU KNOW, BENEFITTING ON TWO DIFFERENT FRONTS. >> I THINK THE CRUX OF THE AZURE BUSINESS AND DEMAND FOR WHAT IS REALLY ABOUT DEMAND FOR PUBLIC CLOUD AND THE SOLUTIONS THAT ARE AROUND THAT THAT WILL ENABLE THE AI TO ACTUALLY HAPPEN WITHIN ORGANIZATIONS AND INSTITUTIONS, ENTERPRISES. ONE OF THE THINGS THAT CEO NADELLA CALLED OUT IN THE EARNINGS CALL WAS TALKING ABOUT THE CULTURAL TRANSFORMATION THAT COMPANIES HAVE TO MAKE TO GET THROUGH THIS AND THIS IS REALLY ONE OF THE POTENTIAL RISKS. THAT CULTURAL TRANSITION MAY ACTUALLY TAKE LONGER THAN COMPANIES ARE ANTICIPATING AS THEY EMBED THOSE METHODOLOGIES, TRAIN PEOPLE AND REALLY THINK ABOUT HOW GENERATIVE AI IS GOING TO BE EMBEDDED IN THEIR WORK FLOWS. >> MAYBE IT'S GOING TO BE A LITTLE MORE SLOW THAN ANTICIPATED. OVERALL YOU ARE BULLISH WITH MICROSOFT BUT WITH THAT CAVEAT THAT MAYBE THAT CULT RAT TRANSFORMATION WILL BE A LITTLE SLOWER. LET'S GET TO THE STOCK THAT YOU ARE MORE BEARISH ON IN THIS UNIVERSE AND THAT IS META. NOW, META, LIKE MICROSOFT, HAS DONE WELL OVER THE PAST YEAR, HAS OUTPERFORMED MICROSOFT OVER THE PAST YEAR BUT IN REACTION TO THE EARNINGS OF COURSE WE SAW A DECLINE. A LOT OF THAT HAS TO DO WITH WHAT THEY PREDICTED ON EXPENSES. THAT'S SOMETHING THAT OBVIOUSLY CAUGHT YOUR ATTENTION. >> INDEED. IN LINE WITH THIS EXCITING EARNINGS SEASON META THEY DELIVERED A QUARTER THAT WAS BROADLY IN LINE WITH VISIBLE ALPHA CONSENSUS, LOOKING AHEAD TO GUIDANCE IT WAS MIXED ON THE TOP LINE THEY DELIVERED IN LINE GUIDANCE, BUT ON THE EXPENSE LINE BASED ON VISIBLE ALPHA CONSENSUS IT WAS HIGHER. >> YEAH. >> AND I THINK THAT -- I THINK THAT COMBINED WITH COMMENTARY FROM MARK ZUCKERBERG SAYING THAT THIS IS GOING TO CONTINUE FOR A WHILE IT'S SUGGESTED THAT THE YEAR OF EFFICIENCY IS POTENTIALLY OVER. >> RIGHT. >> AND SO AS WE LOOK AT VISIBLE ALPHA CONSENSUS NUMBERS FOR THE EXPENSE LINE RIGHT NOW THAT -- THE EXPENSES ARE EXPECTED TO BE $96 BILLION THIS YEAR, BUT TO JUMP TO $119 BILLION BY 2026 BASED ON VISIBLE ALPHA CONSENSUS WHAT'S INTERESTING ABOUT THAT NUMBER IS IT RANGES FROM 110 TO $126 BILLION SO IT MEANS THERE WAS A $16 BILLION QUESTION MARK OUT THERE ABOUT WHAT MET AT THAT CAN ACTUALLY DO WITH THEIR EXPENSE LINE. SO I THINK THAT'S SOMETHING WE'RE WATCHING VERY CLOSELY. >> INVESTORS WANT THAT PREDICTABILITY. DRAW THE CONTRAST BETWEEN A META, MICROSOFT SPENDING MORE ON AI, TOO, ALPHABET IS DEFINITELY SPENDING MORE ON AI. WHY IS IT A BAD THING FOR META? IS IT BECAUSE OF THAT UNPREDICTABILITY? IN TERMS OF EXPECTATIONS, THE EXPECTATIONS THE EXPENSES HAVE RAMPED FASTER THAN EXPECTED, NUMBER ONE, AND THEN YOU HAVE THIS HUGE RANGE IN TERMS OF WHERE THE EXPENSES MAY ACTUALLY LAND. I THINK GOING OVER THE NEXT COUPLE OF QUARTERS WHAT WOULD BE IDEAL IS TO GET MUCH MORE VISIBILITY INTO WHAT THOSE EXPENSES WILL ACTUALLY LOOK LIKE RATHER THAN SOME NEBULOUS COMMENTS FROM SENIOR MANAGEMENT. I THINK WE WOULD LIKE TO KNOW THEY ARE GOING TO BE HIGHER FOR LONGER BUT ACTUALLY HOW MUCH HIGHER. WHEN DOES THE RUBBER HIT THE ROAD IN TERMS OF WHAT THOSE NUMBERS WILL ACTUALLY LOOK LIKE AND WHAT CAN WE ANTICIPATE SO THAT, YOU KNOW, IT WILL BE MUCH CLEARER IN TERMS OF WHAT THAT RANGE SHOULD ACTUALLY BE. >> RIGHT. RIGHT. >> ALL OF THAT MAKES SENSE, WANTING MORE. AS YOU SAID YOU ANTICIPATE TOTAL COST TO RISE, ON THE FLIP SIDE MAYBE IT WILL COME IN ON THE LOW END OF THAT OR MAYBE -- OR MAYBE IT WILL BE MORE CLEAR WHAT THE ROI IS FROM THIS MONEY THAT THEY'RE SPENDING. >> INDEED. WE WOULD LIKE TO SEE THEY'RE SPENDING THIS MONEY, WHAT DO SHAREHOLDERS GET IN RETURN FOR IT. I THINK THERE ARE SOME OPEN QUESTIONS AROUND THAT. >> YEAH. DEFINITELY SO. SO MORE BEARISH ON META, MORE BULLISH ON MICROSOFT. I'M GOING TO RUN THROUGH AND SUMMARIZE WHAT YOU ARE TELLING FOLKS HERE. YOU'RE MORE BULLISH ON MICROSOFT, IT DELIVERED A VERY SOLID QUARTER WITH THE AZURE BUSINESS, THE OUTLOOK FOR THAT BUSINESS LOOKED STRONG ON THE OTHER SIDE, YOU ARE MORE ABOUT BEARISH ON META BECAUSE OF THAT BIG INCREASE IN EXPENSES AND THE UNCERTAINTY ON WHAT EXACTLY THEY'RE GOING TO BE. THANK YOU FOR WATCHING GOOD-BYE OR GOOD BUY. WE WILL BE BRINGING YOU NEW EPISODES THREE TIMES A WEEK AT 3:30 P.M. EASTERN. >>> AND NOW FOR OUR TOP ANALYST CALL OF THE DAY. APPLE RECEIVING AN UPGRADE FROM BERNSTEIN TO OUTPERFORM OR MARKET PERFORM THE ANALYST BEHIND THAT CALL URGES INVESTORS TO BE LIKE BUFFETT AND BUY SHARES WHILE THEY ARE AT A LOWER COST. APPLE SHARES ARE SOARING TODAY. INTERESTING, JULIO, THIS IS A WELL-KNOWN APPLE ANALYST WHICH IS PART OF THE STORY, THIS IS TONY SAGANAKI. WHEN HE MAKES A BIG CHANGE IT GETS ATTENTION, IT DOES GO TO THE EQUIVALENT OF A BUY. HIS PRICE TARGET STAYED THE SAME, 195. IN GENERAL HIS POINT IS, LISTEN, WE KNOW APPLE HAS BEEN UNDER PRESSURE FOR A FEW DIFFERENT REASONS, THE STOCK IS IN A FUNK, IT'S LAGGING, THE MARKET IS LAGGING, BIG TECH PEERS AND THE BAD NEWS HE'S SUGGESTING A PRICED IN AND LIKE THE VALUATION AT THESE LEVELS. >> ONE, HE SAYS THE CHINA STORY IS MISUNDERSTOOD, IT'S NOT A STRUCTURAL, IT'S A CYCLICAL OR SEASONAL PROBLEM. SAYS THE SALES SHOULD IMPROVE. HE SAID THE iPHONE 16 COULD BE STRONG BECAUSE HE EXPECTS AI FUNCTIONALITY IN THE NEXT VERSION OF THE iPHONE. THIRDLY, WHEN YOU TALKED ABOUT A VALUATION I THOUGHT IT WAS INTERESTING, HE VIEWS APPLE AS AN ICONIC CONSUMER BRAND NOT NECESSARILY AS A TECH HARDWARE COMPANY AND AS SUCH HIS -- THE PEERS WHEN HE IS LOOKING AT VALUATION HE PUT IT AGAINST CONSUMER BRANDS AND HE SAYS BY THAT MEASURE IT'S NOT ACTUALLY NECESSARILY OVERVALUED. >> AND THAT'S WHAT HE MEANS WHEN HE'S SAYING BE LIKE BUFFETT. THERE IS THIS THESIS THAT SOME PEOPLE SAY YOU SHOULD THINK OF APPLE AS A CONSUMER STAPLE COMPANY, YOU BUY IT AND BUY IT OVER AGAIN. >> ONE QUICK CAVEAT AND WE TALKED ABOUT THIS BEFORE THE SHOW, TONY SAGANAKI HAS BEEN AT A MARKET PERFORM, THAT'S BEEN HIS RATING FOR APPLE SINCE 2018. HE DOWNGRADE ID IT FROM OUTPERFORM TO MARKET PERFORM ON FEBRUARY 2nd OF THAT YEAR, SINCE THEN THE STOCK HAS RALLIED 335%. IF YOU WERE HOLDING THE STOCK YOU WERE FINE BUT YOU WEREN'T ADDING TO IT AS IT WAS HAVING A PRETTY BIG UPSIDE. >> ANOTHER SMART TAKE ON ALL THINGS APPLE. ALL EYES WILL BE ON THE iPHONE MAKER WHEN IT REPORTS RESULTS FOR THE FISCAL SECOND QUARTER THIS THURSDAY. THE STOCK HAS HAD LACKLUSTER START TO THE YEAR, DOWN MORE THAN ABOUT 10% IN 2024. HERE IS WHAT TO WATCH FOR THE iPHONE MAKER'S RESULTS BEN BAHARIN. IT IS GREAT TO HAVE YOU ON THE SHOW. APPLE DOES REPORT THURSDAY. BEN, WALK ME THROUGH WHAT ARE THE KEY METRICS YOU WILL BE FOCUSED ON WHEN THE PRINT HITS THE TAPE. >> SEEING WHERE WE ARE AT IN TERMS OF iPHONE SALES. MOST ESTIMATES CAME IN EXPECTING IT TO BE RELATIVELY FLAT SO MAYBE SLIGHTLY UP, MAYBE SLIGHTLY DOWN BUT NOT A HUGE DRASTIC CHANGE. I THINK THAT'S A POSITIVE. THERE'S CERTAINLY BEEN AREAS OF THE WORLD LOOKS LIKE SOME NUMBERS CAME IN THAT IN EUROPE THEY GREW AND IN THE U.S. THEY ACTUALLY GREW SLIGHTLY, OBVIOUSLY WE'VE TALKED ABOUT BEFORE THEY'RE DOWN IN CHINA. SO ON TOP OF JUST WHERE iPHONE S I THINK THAT'S WHERE WE ARE GOING TO LOOK AT WHERE WE ARE AT IN THE CYCLE AND ANY COMMENTARY AROUND THAT. HOW ARE THINGS LOOKING IN CHINA? ARE WE SEEING A RECOVERY IN HIGH ASP, PARTS OF THE MARKET? I THINK THOSE WILL BE SOME OF THE BIG QUESTIONS. ONE OF THE THINGS PEOPLE WILL BE LOOKING AT IS THERE ANY COMMENTARY OR MICK SHIFT, THE LAST COUPLE YEARS WITH iPHONES BUYERS MOVED MORE TO THE HIGH END OF THE MARKET BUYING PRO AND PRO MAX, I THINK THEY WILL SEE IF THAT'S CONTINUING TO GET A GAUGE OF ASPs. A LOT OF THAT HOPEFULLY COMES OUT IN COMMENTARY. ALL EYES ON iPHONE AND SEEING WHERE WE ARE AT IN THIS CYCLE AND EXPECTATIONS ARE PROBABLY RELATIVELY FLAT. >> WHEN YOU TALK ABOUT SOMETHING LIKE THE SERVICES BUSINESS AS WELL, BEN, IS THAT JUST SORT OF CHUGGING ALONG STEADY AS SHE GOES THERE, YOU KNOW, THAT'S NOT REALLY WHERE THE SWING IS COMING FROM AT APPLE ANYMORE. >> I THINK THERE'S A NUMBER OF THINGS IN TERMS OF THE GROWTH BUSINESS. SERVICES IN MY OPINION UNDERSCORES THE STICKINESS OF THE ECOSYSTEM, IF YOU LISTEN TO MANAGEMENT THEY TALK A LOT ABOUT THE GROWING INSTALLED BASE, APPLE DOES NOT LOSE A LOT OF CUSTOMERS, THIS HE HAVE A VERY STICKY AND THEY RETAIN THOSE CUSTOMERS. THOSE CUSTOMERS SPEND MONEY IN THE ECOSYSTEM ALA SERVICES. THAT'S A STAT THAT CONTINUES TO SHOW ENGAGEMENT. WE EXPECT THAT AGAIN TO CONTINUE TO HAVE SOME PARTS OF GROWTH, WE DON'T REALLY KNOW HOW MUCH CYCLICALITY THERE IS IN SERVICES. IT SLOWED, BUT A LOT OF THE NUMBERS THEY SHARE AROUND WHAT THEIR CUSTOMERS ARE DOING, ADDING NEW SUBSCRIPTIONS, SPENDING MONEY IN THE APP STORE, ENGAGING IN THOSE SUBSCRIPTION SERVICES, BUYING MORE THAT'S REALLY JUST SHOWING THE HEALTH OF THE ECOSYSTEM BECAUSE AS APPLE GROWS NEW CUSTOMERS, EVERY QUARTER THEY TALK ABOUT GROWING THEIR INSTALLED BASE THOSE CUSTOMERS DON'T LEAVE AND THEY SPEND MORE MONEY WHICH CREATES THE SUM OF THE WHOLE PARTS STORY FOR APPLE. >> PART OF THE REASON THAT STOCK HAS BEEN UNDER PRESSURE BECAUSE THERE'S CONCERN BY SOME IN INVESTORS ABOUT THE COMPANY'S GEN AI STRATEGY. WHAT DO YOU THINK THAT STRATEGY IS AND DO YOU THINK WE GET ANY MORE INSIGHT, NEW INSIGHT INTO IT ON THIS EARNINGS CALL? >> PROBABLY NOT ON THIS EARNINGS CALL, HONESTLY. HONESTLY I THINK BIG EXPECTATIONS AT THIS POINT IS AROUND THE WORLDWIDE DEVELOPER EVENT. A BIG PART OF THIS AND I DO THINK PEOPLE SOMETIMES UNDERAPPRECIATE WHAT APPLE IS DOING IN SILL CAN AND APPLE SILL CAN, ANYBODY WHO COVERS THE SEMICONDUCTOR INDUSTRY RELATIVE TO AI KNOW THAT IT IS THE FUNDAMENTAL FORCE DRIVING INCREASES IN AI CAPABILITIES. SO ON THESE DEVICES APPLE IS WELL-POSITIONED WITH THAT, WITH THEIR APPLE SILICON, THEIR APPLE NEURAL ENGINE AND SOME OF THOSE THINGS THAT ARE YET TO BE FULLY TAPPED INTO FOR AI. NOW, THE BIG QUESTION IS WHAT DO THEY DO FOR DEVELOPERS, WHAT SOFTWARE TOOLS DO THEY DO AND HOW DO THEY UNLOCK THE SOFTWARE POTENTIAL OF THAT SILL CAN IN ORDER TO MOVE AND LET MORE DEVELOPERS TAKE ADVANTAGE THAT HAVE AND BRING VALUE TO CUSTOMERS IN WHATEVER WAY APPLE SEES FIT. WE STILL DON'T KNOW WHAT THE MAJOR USE CASES ARE FOR THESE THINGS, WE HOPE THEY'RE HELPFUL AND I THINK WE WILL WAIT UNTIL WWDC TO SEE WHAT THAT LOOKS LIKE FROM APPLE'S STANDPOINT. >> UNFORTUNATELY WE WON'T FIND OUT THE ANSWER TO THAT QUESTION LIKELY THIS WEEK WHEN THEY REPORT EARNINGS. BUT ALSO OUT WITH EARNINGS THIS WEEK WILL BE AMAZON AND I'M CURIOUS WHAT YOU'RE WATCHING FOR THERE, ESPECIALLY AFTER WE SAW THE BIG AZURE GROWTH AT MICROSOFT, IT WILL BE INTERESTING TO SEE WHAT AWS LOOKS LIKE. >> YEAH, I THINK THAT'S THE SAME, EVERYBODY IS GOING TO BE LOOKING AT CLOUD GROWTH FOR AWS. RIGHT NOW IT'S SUPER TRENDY TO TALK ABOUT CapX, EVERYTHING WANTS TO SEE WHAT THE HYPER SCALERS ARE SPENDING IN TERMS OF NEW INFRASTRUCTURE, BUYING AI SERVERS, CREATING AI FACTORIES AS NVIDIA LIKES TO CALL THEM. I THINK THAT'S GOING TO BE A BIG SPOTLIGHT WHAT AMAZON'S GROWTH IS IN TERMS OF AWS. I THINK IT'S PROBABLY PREDICTABLE IT WILL BE HEALTHY, SOMEWHAT DOUBLE DIGIT. WHERE ARE THEY GOING, WHERE ARE THEY GUIDING AND WHAT CapX ARE THEY INVESTING. I THINK EXPECTATIONS ARE THAT THAT'S HEALTHY. AWS IS GOING TO BE STRONG JUST LIKE THE OTHER HYPER SCALERS. BUT, AGAIN, IT'S A VERY EXPENSIVE ENVIRONMENT TO KEEP INVESTING IN THAT AI AND START TO MONETIZE AI IN THAT THROUGH AND IN AMAZON'S CASE E-COMMERCE AND A HOST OF OTHER SERVICES THEY PROVIDE TO START UP SERVICES ENTERPRISES. >> I'VE SEEN A BUNCH OF SPECULATION ON THE BUY AND SELL SIDE. PEOPLE WANT TO SEE THEM MOVE MORE CLOSELY AND START TO DO A DIVIDEND. I DON'T KNOW IF IT'S THIS QUARTER, HARD TO PREDICT, BUT IT DOES FEEL LIKE THAT'S INEVITABLE. AT THE SAME TIME IF YOU LOOK AT BETWEEN GOOGLE'S LONG-TERM PROSPECTS AND THE BEHEMOTH THAT IS AMAZON, STILL A HIGHLY DESIRABLE STOCK. I DON'T THINK THEY NEED A TON MORE INCENTIVES TO JUMP INTO THAT BECAUSE REVENUE WILL CONTINUE TO BE STRONG. I THINK IT'S SOMETHING ON A LOT OF INVESTORS' MIND. OBVIOUSLY IF THEY DO THAT I THINK THERE WILL BE A LOT OF POSITIVITY TO THAT. >> GOOD TO SEE YOU. THANKS FOR JOINING US TO CHAT ABOUT WHAT TO EXPECT FROM TECH HEAVY WEIGHTS. >> THANKS FOR HAVING ME. >>> WITH EARNINGS SEASON UNDER WAY WE ARE TAKING A LOOK AT THE HEALTH CARE SPACE IN OUR INVESTOR PLAYBOOK. STAY TUNED. ♪ >>> HEALTH CARE IS ONE OF THE LARGEST SECTORS IN THE S&P 500 BUT IT HAS UNDERPERFORMED OVERALL MARKETS THIS YEAR AS THE FIRST QUARTER EARNINGS SEASON GETS UNDER WAY WE'RE LOOKING AT HOW TO NAVIGATE THE BIG PICTURE WITH THE YAHOO! FINANCE PLAYBOOK. TO DISCUSS THE OUTLOOK FOR THE INDUSTRY WE'RE JOINED BY MEGAN FITZGERALD AND BRIAN TANQUILA. THANK YOU BOTH FOR BEING HERE. MEG, FRIEND OF THE SHOW, GOOD TO SEE YOU AS ALWAYS, BRIAN, WELCOME. MEG, LET'S START WITH YOU BECAUSE WE HAVE INDEED SEEN HEALTH CARE UNDERPERFORM AND OBVIOUSLY HEALTH CARE IS VERY COMPLICATED, THERE ARE A LOT OF DIFFERENT SUBSECTORS RIGHT NOW, THERE'S BEEN A LOT OF SORT OF FIREWORKS AROUND WHAT IS HAPPENING IN PHARMA, IN THE GLP 1s, WHAT ARE WE GOING TO SEE EARNINGS WISE? ARE WE GOING TO SEE COMPANIES DELIVER ON SOME OF THAT PROMISE? >> I THINK WE ARE. I THINK HEALTH CARE IT'S MATERIAL TO THE FORTUNE 500, THERE'S STILL A LOT OF LONG AND IMPORTANT TAIL WINDS AROUND DEMOGRAPHICS, INNOVATION AND THIS TENDS TO BE A PLACE THAT DOES WELL DURING DOWN TURNS AND DURING ELECTIONS. SO I'M PRETTY BULLISH THAT HEALTH CARE WILL GET OUT OF BEING A LAGGARD AND MOVE TO THE FRONT. I DO BELIEVE YOU'RE GOING TO SEE STRONG EARNINGS THIS WEEK FROM LILY AND NOVO AND THOSE THAT HAVE A GLP PORTFOLIO. QUITE FRANKLY I THINK IT'S AN EASY BEAT. I THINK THE ONE THAT EVERYONE IS MORE INTERESTED IN TO SEE HOW PFIZER UNFOLDS WITH THE C GEN ACQUISITION AND INTEGRATION AS WELL AS SOME OF THEIR COST CUTTING INITIATIVES. LAST WEEK BRISTOL-MYERS SQUIB SAID THEY WERE GOING THROUGH A $1.5 BILLION COST CUTTING. I THINK MANY IN PHARMA ARE GETTING DOWN TO FIGHTING WEIGHT, OPTIMIZING THEIR PORTFOLIOS AND QUITE FRANKLY THEY HAVE ABOUT A TRILLION DOLLARS WORTH OF DRY POWDER. I THINK THE MEETING AT ASCO IN 30 DAYS WILL BE VERY INTERESTING TO SEE IF THERE'S SOME ACQUISITIONS. >> BRIAN, SAME QUESTION TO YOU. TALKING ABOUT HEALTH CARE, OBVIOUSLY BIG SECTOR, LOTS OF VERTICALS AND SUBSECTORS, BUT GIVE US YOUR BIG PICTURE TAKE. WHAT ARE YOU EXPECTING WITH EARNINGS? >> JOSH, THANK YOU. YEAH, I THINK THE FIRST THING I WOULD SAY IS WHAT WE'VE SEEN SO FAR IS THAT THERE IS -- OR HAS BEEN A RISE IN BROADER HEALTH CARE UTILIZATION TRENDS. KIND OF TAKING BACK TO MEGAN'S COMMENT ABOUT DEM STRAFKS BEING A TAILWIND. WE'RE STARTING TO SEE THAT SHOW UP IN THE EARNINGS RESULTS OF THE MANAGED CARE COMPANIES, THE HEALTH CARE INSURANCE GUIDES AND THAT HAS TRANSLATED TO UNDERPERFORMANCE FOR NAMES LIKE UNITED HEALTH AND HUMANA OVER THE LAST SIX MONTHS. NOW, THE FLIP SIDE OF THAT, THOUGH, IS THAT WE ARE SEEING THE CORRESPONDING STRENGTH IN VOLUMES FROM HOSPITALS, LABS, IMAGING COMPANIES AND BASICALLY ALL THESE HEALTH CARE PROVIDERS. SO WHAT WE'RE SEEING IS THAT, YOU KNOW, WHEN I LOOK AT MY COVERAGE UNIVERSE OF HEALTH CARE STOCKS, SERVICES STOCK, WE'VE SEEN SOME STRENGTH YEAR TO DATE IN SOME OF THESE BIG NAMES. >> BRIAN, I'M CURIOUS ABOUT THERE IS ANY CONCERN IF WE ARE STARTING TO SEE A LITTLE BIT OF WEAKNESS AT THE EDGES OF CONSUMER SPENDING IF WE WILL SEE ANY KIND OF DECREASE IN ELECTIVE SURGERIES OR OTHER KINDS OF PROCEDURES AND IF THAT'S GOING TO PRESSURE THE COMPANIES THAT YOU COVER. >> DO YOU KNOW WHAT'S INTERESTING IS WE ARE SEEING STRENGTH IN ELECTIVE PROCEDURES, PRIMARILY IN THE MEDICARE ADVANTAGE POPULATION OR THE SENIORS, RIGHT, SO IF YOU THINK ABOUT IT GOVERNMENT RUN INSURANCE FOR SENIORS, THERE'S VERY LITTLE OUT-OF-POCKET THERE. IT'S NOT AS SENSITIVE TO BROADER ECONOMIC TRENDS BECAUSE THE AGING DEMOGRAPHIC, THE AGING POPULATION TREND IS THERE, NOW IF YOU THINK ABOUT THE OLDEST BABY BOOMER SWORN IN 1946 IS NOW 78 YEARS OLD. WE'VE SEEN THE SENIOR POPULATION GET TO THAT POINT WHERE THEY'RE USING MORE HEALTH CARE, GETTING MORE SICKLY. SO WITHOUT A BIG OUT-OF-POCKET COMPONENT THE MACRO SIDE OF THINGS IS NOT IMPACTING DEMAND IN UTILIZATION. WHERE WE ARE SEEING THE IMPACT OF MACRO THERE IS ON THE CONSUMER HEALTH CARE SIDE. IF YOU ARE THINKING OF THE DRUGSTORE, RIGHT, WHEN YOU LOOK AT WHAT CVS AND WALGREENS HAVE SAID WE ARE SEEING WEAKNESS ON THE FRONT END OF THE STORE AS A RESULT OF PRESSURES ON THE CONSUMER. ON THE TRUE HEALTH CARE UTILIZATION ENVIRONMENT REAL HEALTH CARE SERVICES HAS ACTUALLY BEEN ON THE UPTREND IF NOT -- IT'S REALLY BEEN STRONG THE LAST FEW MONTHS. >> MEGAN, ANOTHER BIG TREND WE'VE SEEN IN THE SPACE IS M&A. I'M CURIOUS IF YOU EXPECT THAT TO CONTINUE OR IF THERE ARE VERTICALS OR SUBSECTORS WHERE YOU WOULD EXPECT TO SEE THAT ACTIVITY BE MORE PRONOUNCED. >> I THINK IT'S A GREAT QUESTION. I THINK A LOT OF BIOTECH HAS SLOWED DOWN BECAUSE OF THE RATE ENVIRONMENT BUT BIG PHARMA IS ACTIVE, LAST WEEK THERE WAS A BILLION DOLLAR ACQUISITION. I THINK BIG PHARMA WILL CONTINUE TO PUT MONEY TO WORK AND THEN THERE'S BEEN A LOT OF ACTIVITY IN THE PRIVATE SECTOR AND ON THE VC AND PE SIDE. LAST WEEK WE SAW ONE OF THE LARGEST BIOTECH STARTUPS EVER GET OFF THE GROUND AND THAT WAS IN AI, A BILLION DOLLAR LAUNCH OF A NEW COMPANY THAT WAS GOING TO TRY TO EXPEDITE DRUG DEVELOPMENT. SO I THINK THE PRIVATE MARKETS WILL BE VERY ACTIVE, I THINK THEY WILL CONTINUE TO BE A LOT OF COMPANIES DIVESTING THINGS IN HEALTH CARE THAT ARE NOT CORE ASSETS AND SO I THINK IT SHOULD BE AN INTERESTING YEAR. THE ONLY CAVEAT IS OBVIOUSLY THE RATE ENVIRONMENT MAKES IT A LITTLE BIT TRICKY FOR SOME THAT DON'T HAVE CASH AND ARE LOOKING FOR FINANCING. >> BRIAN, AS I LOOK AT THE EARNINGS PICKS THAT YOU HAVE, THE PICKS RIGHT NOW AND I SEE THE LIKES OF BRIGHT SPRING AND TENANT ON THE LIST. WHAT SORT OF DISTINGUISHES THE STOCKS THAT YOU LIKE BETTER RIGHT NOW IN AN ENVIRONMENT THAT YOU DESCRIBED AS SORT OF BROADLY POSITIVE. >> THE GRAPHIC OF THE PICKS THAT WE HAVE GETTING INTO EARNINGS SEASON. THE BROADER THEME REALLY HERE IS UTILIZATION. SO TENET HEALTH CARE RUNS ONE OF THE BIGGER CHAINS OF SURGERY CENTERS, AMBULATORY SURGERY CENTERS ACROSS THE COUNTRY SO THEY'RE BENEFITTING FROM ELECTIVE SURGERY SPECIFICALLY IN JOINT REPLACEMENT. SENIOR POPULATION IS GROWING AND THEY'RE GETTING OLDER, GETTING MORE JOINT REPLACEMENT CASES AND DOCTORS WOULD RATHER DO THEM OUTPATIENT THAN INPATIENT, MOVING AWAY FROM HOSPITAL. SO TENET IS A BIG BENEFICIARY OF THAT. HCA HAS ALSO SEEN SOME OF THAT. BEHAVIORAL HEALTH, JULIE, IS AN AREA WE ARE BULLISH ON. WE THINK THERE IS A LOT OF CONSUMER INTEREST AND GOVERNMENT FUNDING AND INSURANCE FUNDING TO BOLSTER BEHAVIORAL HEALTH, MENTAL HEALTH SERVICES AND ACCESS. SO WE LIKE ACADIA HEALTH FOR THAT MATTER. BRIGHT SPRING IS A PLAY ON BIOTECH AND SPECIALTY DRUGS. ONE OF THE LARGEST DISTRIBUTOR OF SPECIALTY PHARMACEUTICALS IN THE COUNTRY. AS THE PIPELINE OF NEW DRUGS COMES IN, NEW DRUG DEVELOPMENT TRANSLATES TO GOOD LEVELS FOR BRYCE STREAM. RADNAC THE LARGEST OPERATOR OF IMAGING CENTERS IN THE U.S., BUT THE FLIP SIDE OF THAT IS THEY ACTUALLY ARE THE WORLD'S LARGEST IMAGING COMPANY IN AI BY REVENUE. SO THEY'RE BENEFITTING FROM THE USE OF AI IN DIAGNOSTIC IMAGING TO HAVE FDA APPROVED PRODUCTS USED IN THE U.S. AND THE UK. SO WE'RE BULLISH ON THEM HERE. >> I'M INTERESTED TO GET YOUR TAKE ON THIS, MEGAN. AN INTERESTING HEAD LINE. YOU YOU A ORACLE IS MOVING ITS HEADQUARTERS TO NASHVILLE TO BE CLOSER TO THE HEALTH CARE INDUSTRY. IS NASHVILLE -- DOES WE THINK ABOUT IT AS ONE OF THE NEW EPI CENTERS OF THE HEALTH CARE INDUSTRY? >> I THINK IT'S BEEN THE EPI CENTER FOR TEN YEARS AND A LOT OF PEOPLE ARE FIGURING IT OUT. IT DEFINITELY IS A HUB OF INNOVATION. IT'S WHERE HCA WAS BORN. I HAD INVESTED A LONG TIME AGO IN A COMPANY CALLED NAVI HEALTH BRED RIGHT OUT OF THERE. TIGHT ALIGNMENT BETWEEN PROVIDERS AND PAYERS AND JUST A SMART NETWORK OF FOLKS. I SAW TODAY A CHART, HOUSES ARE VERY EXPENSIVE THERE, SO MIGHT BE A LITTLE LATE, MIGHT HAVE TO RENT OR GET A ROOMMATE IF THAT'S GOING TO BE YOUR HEALTH CARE PLACE TO KIND OF VENTURE TO. >> I THINK BRIAN IS ALREADY THERE. DON'T YOU LIVE IN NASHVILLE. >> JOSH, I'M IN NASHVILLE, SO I'VE SEEN IT GROW AND TO MEGAN'S POINT, THINK INNOVATION IN HEALTH CARE SERVICES IS VERY STRONG HERE, BUT WE'VE SEEN IT EXPAND BEYOND HEALTH CARE SERVICES. WE'RE SEEING HEALTH CARE TECH, THERE'S LIFE SCIENCES COMPANIES STARTING TO MERGE NEAR NATIONAL. SO IT IS REALLY BECOMING THE HEALTH CARE HUB OUTSIDE OF PIE OWE TK. WE'RE PRETTY EXCITED HERE ON THE GROUND FOR WHAT IT DOES. >> MEGAN, BRIAN, GREAT TO HAVE YOU ON THE SHOW TODAY. THANKS FOR JOINING US. >> THANK YOU. >> WHILE WE'RE WRAPPING UP TODAY'S "MARKET DOMINATION," DON'T GO ANYWHERE. WE HAVE YOU COVERED WITH ALL THE ACTION FOLLOWING THE CLOSER BELL INCLUDING THE LATEST EARNINGS FROM PARAMOUNT. STAY TUNED FOR "MARKET DOMINATION OVERTIME." ♪ ♪ ♪ >>> THERE IS THE CLOSING BELL ON WALL TREAT STREET AND NOW IT'S "MARKET DOMINATION OVERTIME." WE'RE JOINED BY JARED BLIKRE TO GET YOU UP TO DATE ON THE SESSION. WE RECOVERED COME OF THOSE LOSSES THAT HAPPENED RIGHT AROUND 3:00 P.M. WHEN WE GOT NEWS ABOUT THE LARGER THAN ESTIMATED BORROWING PLANS OF THE U.S. TREASURY. THE DOW STILL MANAGING TO GO UP ABOUT 147 POINTS BY THE END OF THE SESSION. THE S&P 500 FINISHING HIGHER BY ABOUT A THIRD OF 1% AS DID THE NASDAQ. ALL THREE AVERAGES HIGHER, NOT A BARN BURNER KIND OF A DAY, FINISHING UP. A QUICK TREND ON TRENDING, TOO, TO GET ONE FINAL CHECK ON HOW TESLA DID BEFORE THE END OF THE DAY. FINISHING UP BY 15% HERE. SO BIG INCREASE THERE OBVIOUSLY AFTER WE -- AFTER WE HAD THE NEWS OF ELON MUSK VISITING CHINA AND GETTING APPROVAL TO ROLL OUT FULL SELF-DRIVING FSD THERE. SOFI TECHNOLOGIES WAS OUR EARNINGS LOSING OF THE DAY DOWN 10% AFTER THAT COMPANY GAME OUT WITH A FORECAST A LITTLE BELOW WHAT ANALYSTS HAD BEEN ANTICIPATING. THAT'S WHAT HAPPENED ON THE INDIVIDUAL MOVER FRONT, HIGHLIGHTS. THIS CHECK SPONSORED BY FACIE TRADE. OVER TO JARED FOR A CLOSER LOOK AT THE ACTION. >> THANK YOU, JULIE. I WANT TO STICK WITH TESLA FOR TWO SECONDS. I'M GOING TO PUT A FOUR-DAY CHART ON. IT'S UP 34%, THE BEST FOUR-DAY RUN IN ABOUT FOUR YEARS, YOU WOULD HAVE TO GO BACK TO 2020. ON THAT NOTE LET'S PIVOT TO SECTORS HERE, CONSUMER DISCRETIONARY BY BY THE WAY TESLA IS ONE OF THE BIGGEST MEMBERS NEXT TO AMAZON, XLY ENDED UP 2.35%. FOLLOWING THAT WE HAVE UTILITIES AND REAL ESTATE. SO TWO DEFENSIVE SECTORS, TWO INTEREST RATE SENSITIVE SECTORS. THOSE ARE FOLLOWING. THEN WE HAVE MATERIALS, INDUSTRIES AND ENERGY TO ROUND OUT THE TOP ROW. COMMUNICATION SERVICES AND FINANCIALS WERE THE ONLY TWO SECTORS IN THE RED. LET'S TAKE A LOOK AT THE NASDAQ 100, INDEED ALPHABET DROPPING A LITTLE BIT AFTER ITS OUTPERFORMANCE LAST WEEK, YOU CAN SEE IT'S DOWN 3.37%, META IN THE SECTOR DOWN 2.4%. MICROSOFT A TECH STOCK DOWN 1, APPLE 2.5% TO THE GREEN SIDE. SOMETHING WE HAVEN'T SEEN A LOT OF RECENTLY. LOOKING FORWARD TO EARNINGS A LITTLE LATER IN THE WEEK. HERE IS MYEL LEADERS BOARD, ARC DISRUPTIVE, UNPROFITABLE TECH 2.38% IN THE UPPER LEFT, FOLLOWED BY SOLAR, GAMBLING, BIOTECH, KOREAN STOCKS, EMERGING MARKETS, REALLY INTERESTING MIX BUT NOT ANYTHING TAKING MY EYE FAR AND AWAY OFF THE PAGE HERE. GBTC MY BITCOIN PLAY THE BIGGEST LOSER HERE. ALSO LOOKING AT REGIONAL BANKS, KRE DOWN .8%. INTERESTED AHEAD OF THE FED MEETING WE HAVE WEDNESDAY BUT NOTHING TOO BIG JUMPING OUT HERE, JOSH. >> ALL RIGHT. AND I'M GOING TO TAKE IT, JARED. WE DO HAVE BREAKING NEWS HERE. PARAMOUNT CEO BOB BAKISH IS STEPPING DOWN. THIS CONFIRMING SOME REPORTS IN RECENT DAYS THAT HIS JOB WAS IN JEOPARDY. AS HAD BEEN EXPECTED AS WELL OR HAD BEEN REPORTED UPON, HE WILL BE REPLACED NOT BY A SINGLE CEO BUT A SO-CALLED OFFICE OF THE CEO WITH HEADS OF THE VARIOUS DIVISIONS OF THE COMPANY. NOW, AGAIN, IN RECENT DAYS THERE WERE REPORTS THAT SHARI REDSTONE AND MEMBERS OF THE BOARD WERE NOT SATISFIED WITH BAKISH'S LEADERSHIP. THE MARKET CAP HAS BEEN CUT AS HE HAS BEEN CEO BUT THE BACKDROP FOR ALL OF THIS IS, A, THE COMPANY IS UP FOR SALE, IT'S GOT SEVERAL BIDS ON THE TABLE AND, B, IT'S JUST REPORTING ITS EARNINGS AS WELL. I'M JUST SEEING THOSE NUMBERS CROSS, TOO, AND IT LOOKS LIKE THEY'RE MISSING BY A LITTLE BIT. WE'RE GOING TO KEEP GOING THROUGH THOSE NUMBERS, BUT, JOSH, JUST HAS BEEN AN EXTRAORDINARY TIME FOR PARAMOUNT SHAREHOLDERS. >> OBVIOUSLY THIS COMPANY IS IN PLAY. IF AND WHEN A DEAL GETS DONE HOW THIS IMPACTS AND INFLUENCES THAT BECAUSE YOU WOULD NOW BE DOING THIS HUGE DEAL AT A TIME WHEN YOU HAVE HAD DRAMATIC BIG CHANGES IN THE C SUITE SO YOU WOULD BE TRYING TO DO A DEAL THAT'S OBVIOUSLY VERY SENSITIVE. POTENTIALLY REGULATORY HURDLES AND AT THE VERY SAME TIME AS YOU'VE HAD ENORMOUS CHANGES ON WHO IS RUNNING THE COMPANY. HOW THAT COULD IMPACT AND INFLUENCE THE POTENTIAL DEAL IF WE HEAR ONE GETS DONE. >> LET ME RUN THROUGH THE NUMBERS IF THAT'S OKAY WE JUST DON'T THOSE PARAMOUNT GLOBAL NUMBERS, TOO. LOOKS LIKE REVENUE COMING IN AT $7.69 BILLION, THE ESTIMATE WAS FOR $7.74 BILLION. ADJUSTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS 62 CENTS THAT'S BETTER THAN HAD BEEN ESTIMATED. IF YOU LOOK AT THE DIFFERENT DIVISIONS HERE, TV REVENUE COMING IN A LITTLE LIGHT OF ESTIMATES AT $5.23 BILLION, DIRECT TO CONSUMER REVENUE $1.88 BILLION ROUGHLY IN LINE AND FILM TO ENTERTAINMENT REVENUE A LITTLE BETTER THAN ESTIMATED A $605 MILLION. SO A LITTLE BIT OF A MIXED QUARTER THERE. I DON'T SEE ANY KIND OF FORECAST AS OF YET HERE FROM THE COMPANY, BUT YOU SEE THE SHARES MOVING HIGHER IN THE FIRST BLUSH READ HERE. YOU KNOW, THE BIG QUESTION, I DON'T EVEN KNOW HOW ONE TRADES THIS THING WITHOUT KNOWING WHAT A SALE IS GOING TO LOOK LIKE. >> WE DID SEE REPORTS THAT THERE WAS THIS SKY DANCE OFFER THAT DID GET -- THERE WAS A SWEETENER THERE, SO DOES THAT KIND OF MOVE -- MOVE THE NEEDLE? OF COURSE, THERE'S OTHERS, YOU KNOW, WE'RE WAITING TO SEE APOLLO PARENT COMPANY OF THIS NETWORK AND SONY. THERE IS A LOT IN PLAY. THE NUMBERS TO YOUR POINT, JULIE, NOW WE ARE DRIFTING HERE, BUT WE STILL HAVE ABOUT 1% IN THE AFTERHOURS. ALL OF IT TAKES A BACK SEAT TO THE DRAMA OF WHETHER THIS COMPANY REMAINS AN INDEPENDENT COMPANY. >> IF IT REMAINS AN INDEPENDENT COMPANY AS ITSELF OR GETS BROKEN INTO DIFFERENT PARTS. ALSO SEEING A HEADLINE THE PARAMOUNT PLUS SUBSCRIBERS RISING TO 71 MILLION WHICH LOOKS TO BE A LITTLE BIT BETTER THAN HAD BEEN ESTIMATED. SOME OF THESE NUMBERS ACTUALLY LOOKING PRETTY DECENT HERE EVEN AS THERE IS THIS DRAMA UNFOLDING AROUND THE COMPANY AND WHY THE SHARES ARE BOUNCING AROUND AS INVESTORS RIGHT TO FIGURE OUT WHAT TO MAKE OF ALL OF THIS. >> LUCKILY WE HAVE A SMART ANALYST COMING UP TO WALK US THROUGH THIS. >> WE DO, IT IS A COMPLICATED SITUATION. >> STOCKS INCHING HIGHER. JOSH SCHAFER IS HERE WITH THE TAKE A WAYS. >> I'M NOT GOING TO SUGAR COAT IT, IT WASN'T THE MOST EXCITING MONDAY WE HAVE HAD IN MARKETS HERE, RIGHT, BUT I THINK SORT OF ZOOMING OUT MAYBE ONE OF THE CONDITIONS IT WASN'T THE MOST EXCITING MONDAY IS BECAUSE WE DO HAVE A BIG WEEK AHEAD OF US WITH A LOT OF CATALYSTS AND I THINK THAT'S SORT OF TAKING THE FOREFRONT TO START THE WEEK HERE. SPECIFICALLY I WAS STRUCK READING THROUGH VARIOUS WALL STREET RESEARCH TODAY AND ALL TALKING ABOUT TREASURY YIELDS AND THE RISE WE'VE SEEN IN THE TEN YEAR, AND THE TEN YEAR BEING THE KEY TO THE DIRECTION. I THINK THAT'S WHY WE SAW A LITTLE BIT OF A SELLOFF LATER IN THE DAY. I SHOULDN'T SAY SELLOFF, A LITTLE BIT OF A DROP IN WHERE WE WERE ON THE DAY AS THERE WERE MAYBE CONCERNS THAT WE MIGHT HAVE RISING YIELDS PERHAPS TO OPEN THE MARKET TOMORROW. I THINK OVERALL THAT SEEMS TO BE WHERE A LARGE PART OF THE FOCUSES RIGHT NOW, NOT NECESSARILY ON EARNINGS. THERE ARE A LOT OF PEOPLE COMING OUT AND SAYING POSITIVE EARNINGS FROM AMAZON AND APPLE CAN GIVE US REASSURANCES THAT THE RALLY IS GOING TO CONTINUE. THAT DOESN'T REALLY SEEM TO BE WHERE THE BROADER MARKET NARRATIVE IS AT RIGHT NOW. SEEMS TO BE A LOT OF CONCERN ABOUT WHAT JAY POWELL IS GOING TO SAY ON WEDNESDAY AND WHAT THAT DOES TO TREASURY YIELDS. MIKE WILSON AT MORGAN STANLEY SAYING HE THINKS UNLESS POWELL IS DOVISH, PERHAPS AGGRESSIVELY DOVISH WE DON'T SEE THE TEN YEAR TICK DOWN TO WHERE IT IS RIGHT NOW, UP ABOVE 4.6%. STRATEGISTS DON'T LIKE STOCKS IN THAT LARGE CAP SECTOR AND IT LIMITS WHERE YOU CAN GO. >> IT'S INTERESTING, TOO, BECAUSE -- THAT THEY'RE FOCUSED ON THAT AND NOT ON EARNINGS BECAUSE THE REACTIONS TO EARNINGS HAVE NOT BEEN FANTASTIC. COMPANIES HAVE BEEN BEATING BUT STOCKS HAVE NOT BEEN PERFORMING VERY WELL AND REACTION AS WE'VE TALKED ABOUT. >> WILSON POINTED OUT IN HIS NOTE THE AVERAGE EARNINGS SURPRISE FOR S&P 500 COMPANIES THIS QUARTER IS AT 9% WHICH WOULD BE THE BEST SINCE 2021, BUT THE REACTION HE DESCRIBES AS, QUOTE, MUTED, STOCKS REALLY HAVEN'T DONE THAT WELL. I DON'T KNOW, JULIE, MAYBE YIELDS IS PLAYING A PART IN THAT OR THE OVERALL WE WILL CALL IT MACRO UNCERTAINTY WHICH IS WHAT WE LIKE TO SAY. >> LIVE SHIFT. >> WHEN WE DON'T KNOW WHY WHAT SEEMS LIKE A GOOD READ ISN'T MOVING A STOCK THAT MUCH YOU FALL BACK ON THAT. OKAY, EARNINGS ARE DECENT FOR THIS QUARTER BUT WHERE ARE THINGS HEADED WITH RATES? ARE WE GOING TO GET ANY LEVEL OF A CUT THIS YEAR OR ARE WE PERHAPS SHIFTING SOMEWHERE TO MAYBE THEY START TALKING ABOUT HIKE -- I THINK PEOPLE ARE IN A LITTLE BIT OF A -- PLACE ON IT AND MA MAKES IT HARD TO MAKE A DECISION ON EARNINGS UNLESS YOU'RE TESLA. >> NOT AN EARNINGS STORY, BUT YOU PUT IN A CALL TO OUR FRIEND IGOR AT S 3 TO FIGURE OUT WAS PART OF THE MOVE THAT WE SAW RECENTLY WHICH IS A BIG UPWARD MOVE IN THE SHARES WAS IT A SHORT SQUEEZE. >> HE SAID IT WASN'T NECESSARILY A SHORT SQUEEZE, THAT'S NOT HOW HE WOULD DEFINE WHAT'S BEEN HAPPENING IN TESLA SHARES BUT WE HAVE SEEN SHORTS LOSE A MASSIVE AMOUNT OF MONEY OVER THE LAST WEEK, SHORTS HAVE LOST OVER $5 BILLION IN THE PAST FEW DAYS AS THE STOCK HAS GONE UP OVER 30% SINCE TESLA DID REPORT EARNINGS. IT'S BEEN AN INTERESTING RIDE FOR TESLA. PEOPLE WERE BEARISH ON THE STOCK GOING INTO EARNINGS, SHORTS ARE STILL UP SEVERAL BILLION DOLLARS ON THEIR SHORT POSITIONS FOR IT HE IS LA ON THE YEAR THAT. GIVES YOU A LITTLE BIT POINT OF REFERENCE OF HOW BAD THE STOCK HAS BEEN DOING. TO ME THE MOST INTERESTING THING THAT S 3 POINTED OUT, 2 MILLION NEW OPEN SHORT POSITIONS IN THE LAST WEEK AS THE STOCK HAS BEEN GOING UP. TO ME THAT SORT OF SPEAKS TO WHERE THE TESLA STORY IS AT RIGHT NOW. RIGHT? YOU'RE EITHER BOUGHT INTO THE AI FUTURE AND SORT OF THE LOFTY GOALS OR YOU'RE STILL SITTING AND LOOKING AT THE FUNDAMENTALS AS PLENTY OF ANALYSTS WE'VE SPOKEN WITH WITHIN THE LAST WEEK ARE AND SAYING THE STORY ISN'T THERE. I THINK IT'S INTERESTING THAT EVEN AS THE STOCK HAS SORT OF FOUGHT BACK AND HAD A NICE WEEK THERE ARE STILL PEOPLE COMING IN AND SAYING I'M NOT BUYING THIS STORY. >> IT WAS INTERESTING. WE PUT THIS QUESTION TO DAN IVES ABOUT HOW THE TEAM AT CANACORD THEY DO GOOD WORK, THEY WERE POSING THAT QUESTION MAYBE THROUGH THE WORST AT LEAST FOR A LITTLE WHILE HERE. THEY ARE BULLS BUT IT WAS INTERESTING TO PUT THAT OUT THERE. >> EVEN THOUGH DAN HAS FLIPPED, DAN IVES, HE CALLED IT A TURNING POINT -- >> TURNING TO BAD, NOW HE'S BACK TO GOOD. >> NOW HE'S LIKE THINGS MADE OUT OKAY. I GUESS WE WILL WAIT AND SEE. >> THANK YOU, JOSH. APPRECIATE IT. >> WE MOVE ON. A KEY EVENT ON THE CALENDAR THIS WEEK OF COURSE WEDNESDAY'S BIG FED DECISION AND NEWS CONFERENCE FROM FED CHAIR JEROME POWELL, WHILE NO MOVE ON RATES IS EXPECTED ANYMORE INVESTORS WILL BE LISTENING CLOSELY TO HOW SUPER BOWL ADDRESSES QUESTIONS ON THE STANCE ON RATE CUTS. JOINING US IS ATLANTA FEDERAL RESERVE PRESIDENT DENNIS LOCKHART. WHAT DO YOU EXPECT TO HEAR ON WEDNESDAY? WHAT DO YOU THINK THE FED SAYS AND DONE, DENNIS? >> WELL, IN THE PRESS CONFERENCE I THINK HE ALMOST HAS TO BE SOMEWHAT NONCOMMITTAL BECAUSE THE QUESTION OF RATE CUTS AND THE TIMING OF RATE CUTS AND EVEN THE QUESTION OF A RATE HIKE ARE ALL IN THE AIR AT THE MOMENT. HE'S COMING OFF, THEY'RE COMING OFF A QUARTER OF SIDEWAYS INFLATION DATA SO THEY REALLY DON'T HAVE A GOOD SENSE OF HOW THE INFLATION PICTURE OR THE DISINFLATION PICTURE IS GOING TO PLAY OUT. SO I THINK THEY HAVE TO KEEP THEIR OPTIONS OPEN. SO THIS IS LIKELY TO BE A NONCOMMITTAL MEETING. >> ARE YOU IN THE CAMP THAT THINKS THERE IS EVEN A POSSIBILITY THAT WE COULD SEE ANOTHER INTEREST RATE INCREASE AND IF NOT A HIKE THEN OTHER WAYS, MAYBE SOME QUANTITATIVE TIGHTENING OR SOME OTHER METHODS ON THE EDGES TO SORT OF TIGHTEN THINGS HERE. >> I DON'T THINK A RATE ENTRIES IS THE BASE CASE BUT I ALSO DO NOT THINK IT'S PROBABILITY TO ZERO. JUST DEPENDS A LITTLE BIT ON HOW THE REST OF THE YEAR PLAYS OUT. SO I DON'T THINK POWELL WILL ENCOURAGE THE VIEW THAT THERE'S GOING TO BE A RATE INCREASE, HOWEVER, HE WILL PROBABLY ALSO NOT -- HE WON'T TOTALLY TAKE IT OFF THE TABLE AND HE WILL REPEAT WHAT HE SAID BEFORE AND THAT IS IF IT'S NECESSARY THE COMMITTEE WILL NOT HESITATE TO ACT IN THAT RESPECT. THIS IS A TIME IN WHICH IT'S UNCLEAR WHETHER THE FIRST QUARTER INFLATION WAS A STALLING OUT OR JUST A BUMP IN THE ROAD AND I THINK HE JUST SIMPLY CANNOT BE DEFINITIVE ON ANY PARTICULAR PATH TO POLL. >> I DENNIS, I ASKED THIS QUESTION EARLIER IN THE SHOW, ANOTHER GUEST, BUT I WANT TO GET YOUR TAKE ON IT AS WELL. INFLATION, WE DID SEE GREAT PROGRESS, SEEMED STALLED OUT HERE. TO GET BACK TO JAY POWELL'S TARGET, DENNIS, WHAT NEEDS TO HAPPEN? DOES UNEMPLOYMENT NEED TO RAMP? >> IF YOU'RE GOING TO SEE A SLOWING OF THE ECONOMY, A SLOWING OF DEMAND, A SLOWING OF EFFECTIVELY THE TOP LINE OF THE ECONOMY YOU'RE PROBABLY GOING TO SEE A RISE IN THE U 3 UNEMPLOYMENT RATE TO SOME EXTENT. I DON'T THINK THE COMMITTEE IS ENCOURAGING THAT OR WANTS TO SEE IT RISE WELL ABOVE WHERE WE ARE TODAY. THEY STILL WOULD LIKE TO SEE THIS SOFT WINDY SCENARIO PLAY OUT, BUT, YES, I THINK EMPLOYMENT IS SOMETHING THAT PROBABLY HAS TO MOVE A BIT IF THEY'RE GOING TO BLUNT DEMAND ENOUGH TO GET THE INFLATION RATE RESUMED ITS PATH TO 2%. >> DENNIS, I'M CURIOUS TO GET YOUR TAKE ON WHY THE TIGHTENING THAT HAS HAPPENED THUS FAR IS NOT HAVING THE INTENDED EFFECT. AND WE'RE TALKING ABOUT A POTENTIAL SLOWING OF THE ECONOMY AND UNEMPLOYMENT RATE GOING UP, BUT IT HASN'T HAPPENED ALREADY. SO WHY WOULD IT NOW HAPPEN? >> YES, IT'S QUITE INTERESTING THAT EVEN THOUGH THE COMMITTEE AS STATED IN THE PAST THEIR BELIEF THAT WE ARE IN RESTRICTIVE TERRITORY AND IN RESTRICTIVE TERRITORY WE SHOULD BE SEEING THE EFFECT OF THE HIGH INTEREST RATE SETTING, IN FACT, THE RESILIENCE OF THE ECONOMY HAS MOTORED ON REALLY STRONGLY AND IT APPEARS THAT CERTAIN SECTORS AT LEAST ARE SOMEWHAT IMPERVIOUS TO THE HIGH INTEREST RATES, AND THERE COULD BE A LOT OF REASONS FOR THAT. WE HAVE ALL READ ABOUT PEOPLE WHO ARE LOCKED INTO LOW RATE MORTGAGES AND THEREFORE THEY ARE NOT REALLY HIT BY THE HIGHER RATES. PEOPLE PERHAPS WHO ARE AFFLUENT ENOUGH NOT TO HAVE TO USE THEIR CREDIT CARDS, THAT KIND OF THING. THERE PROBABLY ARE MULTIPLE REASONS WHY THERE'S SOME IMPERVIOUSNESS TO HIGH INTEREST RATES BUT SO FAR THE ECONOMY HAS TOLERATED THIS RATE SETTING EXTREMELY EASILY IT SEEMS TO ME. >> DENNIS, IT IS ALWAYS GREAT TO HAVE YOU ON THE SHOW. THANKS SO MUCH. >> THANK YOU. >>> ON THE OTHER SIDE WE WILL BE JOINED BY AN ANALYST TO TAKE A DEEPER DIVE INTO THE LATEST FROM PARAMOUNT AS THEY ARE MOVING ON WITH A NEW LEADERSHIP TEAM THERE. STAY TUNED, MORE "MARKET DOMINATION OVERTIME" COMING UP. ♪ >>> LET'S GET YOU UP TO SPEED ON THE ACTION FROM TODAY'S TRADES SPONSORED BY TASTY TRADE. MODEST GAINS TODAY ON WALL STREET. LISTEN, WE KNOW THERE IS A LOT OF NEWS COMING THIS WEEK, WE'VE GOT AMAZON AND APPLE EARNINGS ON DECK. FIRST QUARTER EARNINGS BY THE WAY, JULIE, ON TRACK TO INCREASE H 4.7% FROM A YEAR AGO COMPARED TO AN ESTIMATE OF 3.8%. WE ALSO HAVE FED DAY ON WEDNESDAY, CHA WILL JAY POWELL DO AND SAY. BIG APRIL JOBS REPORT ON FRIDAY. MAYBE NOT TOO SURPRISING NO BIG MOVES OF THE BIG INDEXES, THE DOW AT .4%, S&P 500 UP .3%, NASDAQ UP ABOUT .3%. >> PARAMOUNT ANNOUNCING A LEADERSHIP CHANGE AS CEO BOB BAKISH STEPS DOWN, HE WILL BE PRE PLACED BY EXECUTIVES, THE COMPANY BOOSTS A BEAT ON EARNINGS, 62 CENTS ON ADJUSTED EARNINGS PER SHARE, ESTIMATES OF 36%, REVENUE DID MISS WALL STREET EXPECTATIONS, THE STOCK UP AROUND 2%, BEEN BOUNCING AROUND IN AFTER HOURS TRADING. JOINING US TO DISCUSS JAMIE LUMLY. THERE IS A LO TO SIFT THROUGH HERE. I'M GOING TO START WITH THE LEADERSHIP CHANGE. AS BAKISH IS OUT AND THERE IS THIS COMMITTEE OF DIFFERENT HEADS OF DIVISIONS FORMING THE OFFICE OF THE CEO. PUTTING YOU A SIDE EVERYTHING ELSE GOING ON WITH THE COMPANY, IF WE CAN, IS THIS THE RIGHT MOVE FOR PARAMOUNT? >> THANKS FOR HAVING ME. REALLY THERE IS SO MUCH TO PAY ATTENTION TO IT'S HARD TO REALLY FOCUS ON ONE PIECE WITHOUT LOOKING AT THE OTHERS. DEFINITELY THE TIMING AROUND THIS CEO TRANSITION IS CERTAINLY INTERESTING AS OF COURSE RAISES THE QUESTION IS THIS WHAT IS BEST TO MAKE SURE THAT M&A WILL BE COMPLETED AS IT IS VERY EVIDENT THAT THE REDSTONE FAMILY IS LOOKING TO CASH OUT AND MAKE A DEAL AND THIS COULD POTENTIALLY WEIGH ON WHETHER OR NOT WE WILL SEE A DEAL BE MADE BY THIS FRIDAY WHEN THOSE 30 DAY EXCLUSIVITY PERIOD WITH SKY DANCE COMES TO A CLOSE. LOOKING AT THE BUSINESS FUNDAMENTALS, M&A ASIDE, PARAMOUNT HAS BEEN FACING A VARIETY OF CHALLENGES THE LAST FEW YEARS, TRYING TO FIND THE BEST WAY TO STABILIZE THE TRADITIONAL LINEAR TV BUSINESS WHILE MAKING THE PIVOT TO STREAMING. THERE IS POSITIVE SIGNS IN STREAMING IF WE LOOK AT THOSE OPERATIVE RESULTS, TRIMMING LOSSES FOR PARAMOUNT PLUS, CONTINUING TO SEE SUBSCRIBER GROWTH, THINGS GOING IN THE RIGHT DIRECTION THERE. WHOEVER ULTIMATELY GETS IN THE CEO SEAT, IT IS A TOUGH JOB. THEY DO NEED TO FIGURE OUT WHAT THE TRANSITION LOOKS LIKE AND HOW CAN PARAMOUNT DO THAT FAST ENOUGH BEFORE THEY SEE PRESSURE ON THEIR UNDERLYING MEDIA BUSINESS. >> THIS DEAL BETWEEN PARAMOUNT AND DIE DANCE, EXCLUSIVE TALKS UNTIL MAY 3rd. BOTTOM LINE AS YOU LOOK AT IT DO YOU THINK THAT DEAL DOES GET DONE? >> AT THIS POINT IT IS REALLY TOUGH TO SAY BECAUSE ON THE ONE HAND THERE ARE DEFINITELY SOME ADVANTAGES TO CONTROLLING VOTING SHAREHOLDERS RIGHT NOW, BUT AT THE SAME TIME THERE'S BEEN A LOT OF PUSH BACK FROM REGULAR SHAREHOLDERS HERE, TOO, AND LOOKING AT WAYS IN WHICH THIS MIGHT NOT BE THE DEAL IN WHICH THEY ENVISION FOR PARAMOUNT. ALSO IF WE LOOK AT THIS IF SKY DANCE IS ABLE TO ULTIMATELY GET THIS THROUGH IT DOES CREATE A POWERHOUSE IN TERMS OF STUDIO CAPABILITIES. DOESN'T FULLY ADDRESS THE CHALLENGES FACING THE LINEAR PARTS OF THAT BUSINESS AND A LOT OF THOSE CHALLENGES WILL PERSIST. CERTAINLY WHILE THE BALANCE SHEET MIGHT BE IN A MORE STABLE POSITION THERE IS NOT A CLEAR PLAN AS TO WHAT THE BEST WAY IS TO ADDRESS UNDERLYING ISSUES. WITH HE COULD SEE A DEAL BUT THERE SEEMS TO BE A LOT OF DISCUSSION GOING ON AT THE 11th HOUR HERE. >> JAMIE, WHAT DO YOU THINK IS THE BEST OUTCOME FOR SHAREHOLDERS? >> WHAT WE'VE BEEN HEARING IS THAT AT THE END OF THE DAY FOR PARAMOUNT THE MOST LIKELY MOVE IS TO BREAK UP THIS BUSINESS. THERE ARE A LOT OF VERY VALUABLE ASSETS HERE, IF WE LOOK AT THE HISTORY OF THE PARAMOUNT STUDIO, THE IP THAT WE HAVE, THE CAPABILITIES THEY HAVE THAT CHURN OUT SOME OF THE BIGGEST MOVIES OF THE LAST FEW YEARS THERE IS DEFINITELY A LOT THE BUSINESS CAN OFFER BUT AT THE SAME TIME THERE ARE OTHER PARTS WHICH MIGHT NOT NECESSARILY MAKE THE MOST SENSE HOLDING ON TO GOING FORWARD. ANOTHER MOVING PIECE IS THE FACT THAT PARAMOUNT IS ENGAGING IN NEGOTIATIONS WITH CHARTER AND WE MIGHT SEE A FUNDAMENTALLY DIFFERENT PICTURE FOR WHAT'S GOING ON WITH THOSE CABLE ASSETS GOING FORWARD AND THERE MIGHT BE A FUTURE WHERE PARAMOUNT SHOULD TRY TO NOT RELY AS MUCH ON THOSE CABLE PROPERTIES WHICH MIGHT NOT BE ABLE TO CANE DISTRIBUTION OR ADD DOLLARS GOING FORWARD. WE COULD SEE A BIT MORE OF A BREAKING UP OF THIS COMPANY TO REALIZE THE TRUE POTENTIAL OF DIFFERENT PARTS OF THIS BUSINESS. THE QUESTION IS WHO IS GOING TO MANAGE THE MORE CHALLENGING PARTS OF THAT MEDIA PORTFOLIO WHICH IS NOT WHAT EVERYONE WANTS TO PICK UP RIGHT NOW. >> THIS IS ALL AGAINST THE BACKDROP OF MUCH TOUGHER REGULATORY ENVIRONMENT. I'M CURIOUS ABOUT A DEAL GOT DONE WHAT KIND OF REGULATORY RISK DO YOU THINK, JAMIE, THERE WOULD BE HERE? >> THE BIG REGULATORY PIECE IS FOCUSED AROUND WHAT IT REALLY MEANS TO OWN AND OPERATE A NETWORK. WHEN YOU LOOK AT CBS IT CERTAINLY HAS A LOT OF VUE TO IT, A LOT OF INTERESTING ASPECTS FROM THE SPORTS RIGHTS THAT THAT INCLUDES BUT THERE ARE CERTAIN COMPANIES WHICH WOULD NOT BE ABLE TO RUN THAT BUSINESS. IF WE THINK ABOUT COMCAST HASN'T BEEN IN THE PICTURE HERE BUT WHAT IT WOULD MEAN FOR THEM TO OPERATE NBC AND CBS, SOMETHING THAT REGULATORS WOULD NOT MOST LIKELY TAKE A POSITIVE VIEW ON. LOOKING AT ULTIMATE OWNERSHIP AT CBS IS SOMETHING WHICH WOULD DEFINITELY BRING REGULATORY SCRUTINY. ALSO THE OTHER PIECE ABOUT OVERALL CONCENTRATION OF MEDIA ASSETS. IF WE THINK ABOUT THE LANDSCAPE TODAY THERE HAVE BEEN A NUMBER OF CASES WHERE DEALS HAVE BEEN STALLED OR PLAYED IN THE MEDIA SPACE. THINKING ABOUT WHAT THAT SUITOR IS, WHAT STALE THEY ALREADY HAVE IS SOMETHING WHICH COULD FACTOR INTO THIS AS WELL. >> JAMIE, THANK YOU FOR HELPING US TRY TO UNRAVEL THIS COMPLICATED SITUATION. >> THANK YOU. >>> COMING UP, WE'RE GOING TO TELL YOU EVERYTHING YOU NEED TO WATCH FOR TUESDAY TO BEST KICK START YOUR TRADING DAY. STAY TUNED, MORE "MARKET DOMINATION OVERTIME" ON THE OTHER SIDE. ♪ >>> TIME NOW FOR WHAT TO WATCH TUESDAY APRIL 30th. STARTING ON THE EARNINGS FRONT, ANOTHER BIG WEEK OF EARNINGS AHEAD WITH AMAZON, AMD AND 3M FROM THE TECH SECTOR REPORTING TOMORROW AMONG OTHERS. WALL STREET WILL KEEP A CLOSE EYE ON AMAZON FIRST QUARTER RESULTS THE BELL EARNINGS EXPECTED TO COME IN AT $1.20 PER SHARE, REVENUE OF $159 BILLION. >>> A KNEW MORE EARNINGS, REPORTING FROM FOOD AND BEVERAGE COMPANIES INCLUDING COCA-COLA, STARBUCKS AND MONDELEZ. FIRST QUARTER EARNINGS WILL COME AFTER THE BELL AS WELL. A STEADY SURGE IN COCOA PRICES WILL BE A FOCUS ON TOMORROW'S EARNINGS CAN A YOU WILL. >> NEW CONSUMER CONFIDENCE DATA COMING OUT IN THE MORNING. ECONOMISTS FORECAST THAT NUMBER TO COME IN LOWER, THE REPORT GIVING US MORE INSIGHT ON CONSUMERS AS INFLATION CONTINUES TO GO STICKY. >> THAT WILL DO IT FOR TODAY'S "MARKET DOMINATION OVERTIME." STAY TUNED, AFTER THE BREAK THE LATEST EDITION OF OUR VIDEO SERIES NEXT, AKIKO FUJITA HEADS OUT TO FIREFLY AEROSPACE RANCH TO SEE THE FUTURE OF MORKT MANUFACTURING. THAT AND MORE WHEN YAHOO! FINANCE RETURNS. ♪ >>> SO YOU START WITH HAIR NETS. >> THIS IS TO MAKE SURE NO PARTICLES ARE LEFT BEHIND. >> RIGHT. >> WHAT'S GOING TO HAPPEN TO THE LANDER. >> SPONTANEOUSLY COME BUST. >> I DON'T WANT TO RISK THE MISSION. >> XL. >> A LOT OF XLs BACK HERE. >> COME ON IN. SO THIS IS OUR CLEAN ROOM. THIS IS WHERE WE DO ALL OF THE ASSEMBLY OF OUR SPACECRAFT AND YOU WILL SEE RIGHT OVER HERE IS BLUE GHOST MISSION ONE. >> Reporter: THE BLUE GHOST LANDER IS THIRD IN LINE TO ATTEMPT A MOON LANDING THIS YEAR. DEVELOPED BY FIREFLY AEROSPACE THE COMPANY IS PART OF A NEW GENERATION OF UPSTARTS SEEKING COMMERCIAL SUCCESS IN A PLACE FEW HAVE GONE SUCCESSFULLY. FIREFLY IS DRIVING A MISSION ARMED WITH $112 MILLION FROM N NASA, IT'S GOAL TO DEVELOP A RELIABLE DELIVERY VEHICLE TO THE LUNAR SURFACE. >> ONE OF THE THINGS THAT IS A LITTLE BIT DIFFERENT AND UNIQUE ABOUT CLIPS MISSIONS IS THAT WE ARE TAKING A LITTLE BIT MORE RISK WITH EACH MISSION BUT IT GIVES US MORE SHOTS ON GOAL. >> Reporter: IT'S THE NEW PLAYBOOK IN THE SPACE ECONOMY, DRIVEN BY ELON MUSK AND SPACEX. >> THE MISSIONS WE'RE SEEING RIGHT NOW ARE COSTING FRACTIONS OF WHAT THEY WOULD HAVE LIKELY COST HAD THEY BEEN RUN BY NASA. >> Reporter: ONE-TENTH OF THE COST ACCORDING TO THE WORLD ECONOMIC FORUM, THAT'S FUELING PRIVATE COMPETITION, ACCELERATING PRODUCTION TIMES AND INCREASING LAUNCH COUNTS. >> WE'RE LEARNING FROM OUR EXPERIENCES WITH OUR COMMERCIAL PARTNERS SO IT'S A WHOLE DIFFERENT WAY OF DOING THE SPACE PROGRAM. >> Reporter: A PROGRAM LOOKING TO STAY AHEAD IN THE NEXT PHASE OF A GLOBAL SPACE RACE, CREWED MISSIONS TO THE MOON. THIS IS WHAT'S NEXT IN THE NEW SPACE ECONOMY. ♪ >> WE'RE GETTING READY. SO THEY'RE CHILLING IN THE ENGINE RIGHT NOW. LAST LITTLE BIT. >> OH, MY GOD. THAT IS INCREDIBLE. >> THEY SAY EVERYTHING IS BIGGER IN TEXAS AND AT FIREFLY'S SPRAWLING 200 ACRE ROCKET RANCH THESE DAILY ENGINE TESTS ARE JUST A SMALL PART OF THE COMPANY'S OPERATIONS. >> THIS IS OUR FIRST STAGE OF THAT ALPHA ROCKET, THE SECOND STAGE IS ON OUR TEST STAND. >> Reporter: THE MISSION HERE IS TO BUILD AN END TO END SPACE TRANSPORTATION COMPANY WITH EACH VEHICLE MANUFACTURED AND ASSEMBLED IN-HOUSE. >> WE LAUNCH, WE LAND AND WE ORBIT. WE ARE UNIQUE IN THAT REGARD. THERE AREN'T MANY ORGANIZATIONS OUT THERE THAT WOULD SAY THEY DO ALL THREE OF THOSE THINGS AS A PURPOSE. >> Reporter: FIREFLY DOESN'T JUST LAUNCH ROCKETS AND LANDERS, IT BUILDS ORBITAL VEHICLES THAT STAY IN ORBIT READY TO REPAIR, REFUEL AND RELOCATE SATELLITES. THE COMPANY SUCCESSFULLY LAUNCHED THREE ROCKETS INTO ORBIT SO FAR. >> WE WILL HAVE A LOT OF THE SAME AVE CHRONICS ON THIS SPACECRAFT THAT WE USE FOR ROCKETS. THESE ARE COLD GAS THRUSTERS, THE SAME ONES WE USE ON ROCKETS. >> Reporter: THAT REUSE OF MATERIALS IS PART OF A PUSH TO DRIVE COSTS DOWN. IN 2023 THE COMPANY DOUBLED THE SIZE OF ITS FACILITIES HERE TO AUTOMATE A BIG PART OF ITS PRODUCTION. >> THIS AFP MACHINE LET'S US BUILD OUR ALPHA LAUNCH VEHICLE STRUCTURES IN JUST SEVEN DAYS AND OUR MEDIUM LAUNCH VEHICLES IN 30 DAYS WHICH IS A HUGE IMPROVEMENT OVER MONTHS WITH THE MORE TYPICAL TECHNOLOGY OF LASER GUIDED HAND PLACEMENT MANUFACTURING. >> Reporter: NINE TIMES FASTER AND SEVEN TIMES CHEAPER ACCORDING TO FIREFLY. IT'S ONE EXAMPLE OF JUST HOW QUICKLY COMMERCIAL SPACE COMPANIES ARE TRANSFORMING A $630 BILLION INDUSTRY. IN THIS NEW SPACE ECONOMY IT'S THE PRIVATE FIRMS DRIVING THE MISSIONS WITH NASA AS THE CUST CUSTOMER. >> HOW MUCH OF WHAT FIREFLY IS DOING TODAY, BEING ABLE TO OWN THE FULL STAFF IS BECAUSE OF WHAT SPACEX HAS PROVEN OUT? >> SPACEX AND THEIR PRESENCE CREATED A BRIDGE WHERE WE WENT FROM ALMOST ENTIRELY GOVERNMENT FUNDED AND OWNED MISSIONS TO A COMMERCIAL INFRASTRUCTURE AND A THOUGHT PROCESS THAT REDEFINED HOW DO WE MOVE WITH SPEED TO GET THINGS BUILT? IF THAT HADN'T BEEN DONE THERE IS NO WAY WE COULD HAVE TAKEN INSIDE OF THE TIME FRAMES WE DID. >> THAT HAS SAVED THE U.S. GOVERNMENT A LOT OF MONEY BY GETTING A COMMERCIAL BUSINESS INVOLVED THAT IS NOT ONLY DOING THIS FOR NASA, BUT IS NOW A LAUNCHER ACROSS THE BOARD FOR COMMERCIAL AND OTHER GOVERNMENT PAY LOADS, AND IT'S SPAWNING OFF ALL KINDS OF NEW BUSINESSES. >> Reporter: THAT LOWER COST AND ABILITY TO MOVE QUICKLY HAS TRANSFORMED THE BUSINESS OF SPACE. TODAY COMPANIES LIKE SPACEX ARE LAUNCHING EVERY 34 HOURS. THAT'S NEARLY 260 LAUNCHES PER YEAR. THE INVESTMENTS ARE POURING IN. THE SPACE ECONOMY IS NOW FORECAST TO REACH $1.8 TRILLION IN ROUGHLY A DECADE. GROWTH HAS LARGELY BEEN LIMITED TO LAUNCH SYSTEMS AND SATELLITES, BUT NASA IS LEANING ON THESE PRIVATE COMPANIES TO TAKE THEM EVEN FURTHER. THE AGENCIES AWARDED $2.6 BILLION IN GRANTS TO DEVELOP A LOW COST TRANSPORTATION SYSTEM TO THE MOON TO TAKE NASA'S RESEARCH TO THE LUNAR SURFACE. >> WE CAN SURVEY THE SOUTH POLE OF THE MOON BEFORE OUR ASTRONAUTS EVER GET THERE. >> AND LIFTOFF OF THE FIRST UNITED LAUNCH ALLIANCE VULCAN ROCKET. >> WE SAW TWO ATTEMPTS ALREADY, ONE ASTROBOTIC THAT HAD A VALVE PROBLEM AND THEN WE SAW INTUITIVE MACHINES. >> WE CAN CONFIRM WITHOUT A DOUBT THAT OUR EQUIPMENT IS ON THE SURFACE OF THE MOON. >> HAD A SOFT LANDING ON THE SOUTH POLE. IT SENT BACK ALL KINDS OF DATA. >> Reporter: FIREFLY IS NEXT IN LINE. IT'S BLUE GHOST LANDER IS SET TO LAUNCH IN THE SECOND HALF OF 2024 ON BOARD A SPACEX ROCKET. >> WE HAVE TEN DIFFERENT PAY LOADS ON THIS MISSION. WE HAVE EVERYTHING FROM A DEVICE THAT SAMPLES LUNAR REGULATE SO SOMETHING TESTING GPS CAPABILITY ON THE WAY TO THE MOON AS WELL AS A DRILL THAT'S GOING TO DRILL INTO THE SURFACE. >> Reporter: THAT MISSION ALONE WILL COST ROUGHLY $100 MILLION ACCORDING TO THE COMPANY. BACK IN THE 1960s NASA PAID ROUGHLY $660 MILLION FOR SIMILAR MISSIONS WHEN ADJUSTED FOR INFLATION. >> THREE, TWO, ONE. BOOSERS AND ENGINES. AND LIFTOFF OF ARTEMIS ONE. >> Reporter: IT'S ALL LAYING THE GROUNDWORK FOR THE ARTEMIS MISSIONS, NASA'S PROJECT TO RETURN ASTRONAUTS TO THE MOON. IT IS NOW SET FOR 2025 AFTER A DELAY. >> WHAT IS NASA TRYING TO ACCOMPLISH THIS TIME AROUND? >> WE WANT TO GO TO MARS AND BEYOND. WE NEED TO LEARN TO LIVE IN A VERY HOSTILE ENVIRONMENT, TO BE ABLE TO SUPPLY OURSELVES, TO INVENT, TO CREATE. IN ORDER FOR US TO BE ABLE TO SEND HUMANS ALL THE WAY TO MARS AND ULTIMATELY BEYOND. >> Reporter: NASA FACES PLENTY OF COMPETITION GLOBALLY. MORE THAN 100 LUNAR MISSIONS ARE PLANNED BY GOVERNMENT AND PRIVATE COMPANIES THIS DECADE ACCORDING TO THE EUROPEAN SPACE AGENCY. CHINA IS THE BIGGEST COMPETITOR, IT'S AIMING TO LAND ITS OWN ASTRONAUTS ON THE MOON BY 2030. >> WHY IS IT IMPORTANT FOR THE U.S. TO BE FIRST, PARTICULARLY IN THE SOUTH POLE? >> I THINK THAT SINCE IT'S VERY CLEAR THAT CHINA HAS ANNOUNCED THAT THEY ARE GOING AND INTEND TO GO TO THE SOUTH POLE OF THE MOON, THEY'VE SAID THAT THEY'RE GOING TO SET UP A RESEARCH STATION. ALL THAT'S GOOD, BUT I THINK FROM PAST EXPERIENCE WITH CHINA ON THE FACE OF THE EARTH I THINK IT'S NOT BEYOND THE PALE THAT CHINA WOULD SUDDENLY SAY WE'RE HERE, YOU STAY OUT. AND SO THAT'S WHY I THINK WE'RE IN A SPACE RACE. TO GET THERE TO THE VERY PROMISING SOUTH POLE OF THE MOON. WHY? BECAUSE WE THINK THERE'S WATER THERE AND IF THERE'S WATER IN ABUNDANCE, THEN THERE IS ROCKET FUEL AND THAT GIVES US A GAS STATION ON THE SOUTH POLE. >> Reporter: COMMERCIAL REVENUES ALREADY MAKE UP ROUGHLY 80% OF THE GLOBAL SPACE ECONOMY TODAY. THAT SHARE IS EXPECTED TO GET EVEN BIGGER, RAISING CONCERNS ABOUT RELYING TOO MUCH ON THE PRIVATE SECTOR. >> IN THE PAST NASA VERY MUCH HAS BEEN A CIVIL ORGANIZATION THAT WORKS VERY CLOSELY WITH THE DEPARTMENT OF DEFENSE AND MANY OF THE TECHNOLOGIES THAT GO INTO SPACE ARE CONTROLLED BY THE U.S. FEDERAL GOVERNMENT. THE RISK IS THAT YOU START TO PUT MORE AND MORE OF THAT INTO INDUSTRY AND YOU ARE NOW BEHOLDEN TO THE EXPERSE AND EXPERIENCE OF INDUSTRY KIND OF IN THE SAME WAY THAT YOU ARE WITH A LOT OF THE AEROSPACE AND DEFENSE INDUSTRY AS IT EXIST TODAY. WE HAVE A FEW SET OF VERY POWERFUL PRIMES WHO ARE GREAT AT WHAT THEY DO AND THEY DEVELOP SOME OF THE MOST AMAZING ADVANCED TECHNOLOGIES OUT THERE, BUT THE GOVERNMENT NO LONGER OWNS AND CONTROLS A LOT OF THOSE ASSETS. >> MARTINEZ ALSO SAYS THERE IS AN ADDED RISK TO PUBLICLY-TRADED COMPANIES. INTUITIVE MACHINES STOCK TRIPLED IN VALUE IN THE LEAD UP TO THE MOON LANDING BUT IT FELL MORE THAN 30% ONCE SHAREHOLDERS LEARNED THE LANDER HAD TIPPED OVER PREVENTING ITS FULL MISSION BY BEING COMPLETED. >> THIS INDUSTRY IS VERY DIFFICULT, VERY SPECULATIVE AND THERE'S A LOT OF RISK IN IT AND IT IS HARD TO GO AT THE PACE THAT YOU NEED TO GO AND TO TAKE SOME OF THE RISKS THAT YOU NEED TO TAKE IF YOU ARE FOCUSED ON NEAR TERM VALUE FOR SHAREHOLDERS. >> Reporter: FIREFLY IS REMAINING PRIVATE FOR NOW, ADDING SPEED TO ITS EQUATION. IN 2023 THE COMPANY LAUNCHED A SATELLITE INTO ORBIT 27 HOURS AFTER RECEIVING THE ORDER SHAT RIDGE THE PREVIOUS RESPONSE TIME OF 21 DAYS. >> I JUST KEEP THINKING THAT, YOU KNOW, WHAT YOU HEAR FROM COMMERCIAL COMPANIES IS WE'RE MORE NIMBLE, WE CAN MORE QUICKER, WE'RE MORE AGGRESSIVE. IS SAFETY BEING COMPROMISED IN ALL OF THIS? >> NO, YOU CAN'T LOSE MISSIONS. YOU CAN'T ENDANGER PEOPLE. THERE IS NO BUSINESS PLAN THAT SURVIVES ANY AMOUNT OF SPEED AND AGILITY. IF YOU ARE HURTING PEOPLE AND YOU'RE NOT PROTECTING A CUSTOMER'S INVESTMENT. >> Reporter: COMPANIES ARE EXPLORING OPPORTUNITIES BEYOND UNMANNED MISSIONS TO THE MOON. STARTUP'S ASTRO LAB AND INTUITIVE MACHINES ARE BUILDING THEIR OWN VEHICLES WITH NASA FUNDING TO SHUTTLE ARTEMIS ASTRONAUTS AROUND THE LUNAR SURFACE. FIREFLY IS RACING AHEAD WITH ITS OWN PLANS, THE COMPANY IS BUILDING A MEDIUM SIZED ROCKET WITH NORTHROP GRUMMAN SO IT CAN LAUNCH ITS LANDER WITHOUT THE HELP OF SPACEX AND MOVING INTO LUNAR MISSIONS INDEPENDENT OF NASA. >> WE BELIEVE THERE'S ENOUGH DEMAND FOR US TO SCHEDULE A FIREFLY RUN LUNAR MISSION USING THAT PLATFORM BEHIND US WITH 100% COMMERCIAL PAY LOADS ON IT. >> NO NASA FUNDING. >> NO NASA FUNDING BUT ISN'T IT INTERESTING NASA MIGHT BE ONE OF THOSE TENANTS. THEY MIGHT SAY GLAD YOU'RE RUNNING THAT MISSION WE'D LIKE A SPOT. THAT'S WHERE THIS NEEDS TO GO. COMMERCIAL INDUSTRY MUCH LIKE WE PLUG INTO THE WALL AND SAY THERE'S ELECTRICITY THERE. COMMERCIAL INDUSTRY NEEDS TO BE RUNNING THAT TRANSIT AND THE GOVERNMENT INSTEAD OF BEING THE PRIME CONTRACT DRIVER WILL BE -- WILL UTILIZE THAT CAPACITY. THERE'S MOST DEFINITELY ENOUGH DEMAND ON THE COMMERCIAL SIDE TO TELL FIREFLY THE INDICATORS ARE THERE, LET'S SAY NOUNS THAT MISSION. >> HOW IMPORTANT IS IT TO GET IT RIGHT THE FIRST TIME? >> NOBODY IS LIMITING OUR CAPABILITY TO, HEY, IT WILL BE GREAT IF WE JUST MAKE AN ATTEMPT. WE'RE GOING TO PUT THAT LANDER DOWN EXACTLY WHERE IT NEEDS TO GO ON THE SURFACE OF THE NOON. THAT'S THE MISSION. THAT'S WHAT WE SIGNED UP TO WHERE EVERYBODY'S FOCUS IS. WE'RE TO PARTICIPATE IN THESE MISSIONS NOW, LEARN EVERYTHING THAT WE CAN SO WHEN THE COMMERCIAL LUNAR MARKET EVOLVES WE'RE READY THEN TO SCALE IT. I THINK OUR FOCUS IS MAKING SURE NO MATTER HOW MANY WINNERS AND LOSERS THERE ARE, FIREFLY IS ONE OF THE WINNERS. HIGH DEGREE OF CONFIDENCE THAT'S GOING TO BE TRUE. >> FOR MORE ON THE KEY ASPECTS TO THE NEW SPACE ECONOMY AKIKO FUJITA IS JOINING US TO DISCUSS. FIRST OF ALL, HOW FRIGGING COOL. >> THAT ROCKET RANCH. I HAVE TO TELL YOU IT'S PRETTY INCREDIBLE THAT THEY DO ALL OF THAT WITHIN THAT RANCH. AND ALSO WHEN YOU HEAR THE NASA ADMINISTRATOR TALKING ABOUT FINDING WATER ON THE MOON, THAT THAT COULD BE THE WEIGH STATION, THE FUELING STATION, IT'S JUST REALLY COOL STUFF. SO OBVIOUSLY WE HAVE COME A LONG WAY IN TERMS OF THE PRIVATIZATION OF THE SPACE INDUSTRY. WHAT'S THE SORT OF NEXT STEP IN MATURATION IN TERMS OF MAKING MONEY, IN TERMS OF IT BEING MORE OF A REAL INDUSTRY? >> I MEAN, WHEN YOU THINK ABOUT COMMERCIAL SPACE TODAY IT'S STILL LARGELY LIMITED TO ROCKETS AND SATELLITE LAUNCHES, WITH HE TALKED ABOUT THAT IN OUR STORY. SPACEX IS ABSOLUTELY DOMINANT IN THAT. THERE IS THAT NEXT PHASE THAT A LOT OF THESE STARTUPS ARE LOOKING TO WHICH IS NUMBER ONE IF YOU CAN GET HUMANS TO THE MOON SUCCESSFULLY, IF YOU FIND THE RESOURCES THEN THAT AS BILL NELSON SAID BECOMES A GAS STATION THAT GETS TO YOU MARS AND ULTIMATELY THAT IS THE END GOAL FOR SO MANY OF THESE COMPANIES. NOW, SEPARATELY FROM THAT THERE IS A TIMELINE FOR THE ISS RETIRING. NOW, YOU'VE GOT -- IF YOU LOOK AT THE LAST FEW DECADES IT'S BEEN THE INTERNATIONAL SPACE STATION, THAT'S WHERE THE COOPERATION IS HAD. NOW YOU HAVE THE ISS, THE CHINESE WITH THEIR OWN SPACE STATION AND COMMERCIAL COMPANIES LIKE BLUE ORIGIN GETTING IN AS WELL. THAT'S A LOT MORE FRAGMENTED, BUT WHEN YOU ASK WHAT DOES THAT MEAN FOR COMMERCIAL COMPANIES? WELL, NO HE IS ARE EVEN MORE OPPORTUNITIES. THERE'S ALREADY PHARMA DEVELOPMENT HAPPENING ON THE ISS THAT COULD BECOME EACH MORE COMMERCIAL BECAUSE YOU HAVE SO MUCH MORE REAL ESTATE YOU COULD GO TO WITHIN ORK BIT. >> TAKING A STEP BACK, WE WERE TALKING OFF CAMERA ABOUT THIS, THIS EXPLOSION OF INTEREST IN SPACE STARTUPS, SOME OF THESE STARTUPS HAVE RAISE ADD TON OF MONEY. WHAT'S DRIVING ALL OF THAT? YOU TALK IN THE PIECE ABOUT DECLINING COST OF ROCKET LAUNCHES IS ONE THING BUT SOUNDS LIKE SOME CREDIT IS GOING TO SPACEX AS WELL HERE. >> I THINK ALL OF THESE STARTUPS WOULD SAID IT'S SPACEX. THEY SET THE ROADMAP, THE TEMPLATE FOR THESE COMPANIES TO FOLLOW, WHICH IS WHY WE TALK ABOUT THE NEW SPACE ECONOMY. IF YOU THINK ABOUT WHERE THINGS WERE, IT WAS SO MUCH DOMINATED BY NAS A IS A AND GOVERNMENTS. THAT'S NOT WHERE THINGS ARE TODAY. WHAT'S INTERESTING TO SEE IS THERE IS THE SATELLITE LAUNCHES ROCKETS, THAT'S THE COMMERCIAL SIDE OF THINGS. TO YOUR POINT, JULIE, THAT YOU ASKED OFF CAMERA, WHEN DO LUNAR MISSIONS BECOME COMMERCIALLY -- WHEN DOES IT BECOME PROFITABLE? WE PUT THAT QUESTION TO BILL WEBER OVER AT FIREFLY AND HE SAID, LOOK, IT USUALLY TAKES ABOUT A DECADE. HE IS LOOKING AT THAT, BUT HE HAS SEEN A LOT OF COMMERCIAL DEMAND. THOSE COMPANIES OUT THERE THAT HAVE SEEN WHAT NASA IS DOING IN PART PARTNERSHIP WITH FIREFLY AND ASTROBOTIC, SAYING I WANT TO TAKE MY RESEARCH TO THE MOON, CAN I PAY YOU TO TAKE IT THERE. BECAUSE HE SEES THAT DEMAND HE SAYS THE PATH TO PROFITABILITY IS THERE WHEN YOU THINK ABOUT WHERE FIREFLY IS RIGHT NOW, THEY CAN DO THESE MISSIONS BECAUSE THEY HAVE A LOT OF REVENUE COMING IN FROM THE ROCKET LAUNCHES AND THE SATELLITE LAUNCHES AS WELL. YOU HAVE TO BE A LITTLE MORE DIVERSIFIED, THAT'S THE MESSAGE WE GOT FROM SOME OF THESE COMPANIES. >> VERY QUICKLY ARE THERE ANY RISKS OF PRIVATIZATION? >> SO ONE OF THE THINGS MATT MARTINEZ BY BCG TALKED ABOUT IS BECAUSE IT WAS ALL ABOUT NASA, THE GOVERNMENT OWNED THE PROPERTY, THE ASSETS. THAT'S NOT THE CASE ANYMORE. WE HAVE HAD THESE CONVERSATIONS OVER THE LAST SEVERAL MONTHS WITH ELON MUSK AND WHAT HE'S SAYING ON TWITTER, THERE A RISK WITH HIM, YOU KNOW, SORT OF TALKING ABOUT THESE THINGS, WANTING THE U.S. GOVERNMENT CONTRACTS WITH SPACEX. THERE IS A RISK OF SPACEX HAVING SO MUCH OF THE MARKET, THAT'S A QUESTION THAT'S BEEN RAISED, THAT'S SOMETHING THAT MATT MARTINEZ TALKED ABOUT AS WELL, BUT, YOU KNOW, LOOK, THE REALITY IS THEY ARE DRIVING THE SPACE EXPLORATION RIGHT NOW BUT NASA IS INVOLVED IN THE OVERSIGHT AND THEY HAVE SAID VERY CLEARLY IF IT'S NOT SAFE, WE DON'T WANT TO MOVE FORWARD WITH IT. >> AKIKO, GREAT REPORTING, AWESOME STORY. THANK YOU. >>> COMING UP SHARES OF CHEGG SINKING AFTER HOURS, THE COMPANY ANNOUNCED A SHAKEUP AT CEO. WE WILL GET YOU THE LATEST ON THE OTHER SIDE. >>> LAMBORGHINI UNVEIL THE NEWEST VERSION OF ITS BEST SELLING SUV, YOU CAN PLUG IT IN. FOR MORE ON THE NEW HYBRID WE HAVE YAHOO! FINANCE'S PRAS SUBRAMANIAN. >> GOING GREEN, YOU CAN PLUG IT IN BUT IT'S NOT JUST ABOUT THE GREEN ELEMENTS AND THEY SAID 80% LESS C02 EMISSIONS IT'S ABOUT HORSEPOWER AND PERFORMANCE, ALMOST 800 HORSEPOWER, 40 MILE ELECTRIC RANGE BUT ALSO MORE ABOUT THAT EXTRA OOMPH FROM ELECTRIC POWER. I SPOKE TO THE LAMBORGHINI CEO ABOUT THIS CAR AND WHETHER THEY HAVE A BIG EV PLAN. ARE HYBRIDS PUSHING EV SCHLT OUT OF THE PICTURE. HERE IS WHAT THEY HAVE TO SAY. >> WE LIVE IN THE HERE AND THE NOW. IT'S USELESS TO ASK WHAT IS GOING TO HAPPEN IN FIVE OR EVEN MORE YEARS. BUT WHAT WAS DIFFICULT TO BE ACCEPTED MAYBE FIVE YEARS AGO FOR SUPER SPORTS CAR MANUFACTURER LIKE US, TODAY IS NO MATTER IT'S DIGESTED, THE HYBRIDS ARE DIGESTED BECAUSE WE PROMISED MORE PERFORMANCE AND LESS C02 EMISSIONES. >> HE IS TALKING ABOUT THIS RECIPE OF HYBRID PERFORMANCE THAT ALSO GIVES YOU THE PERFORMANCE PLUS ALSO THE GREEN ELEMENTS OF IT. HE'S SAYING THAT THE BUYERS HAVE DIGESTED THE FACT THIS IS WHAT WE WANT, WE WANT HYBRIDS RIGHT NOW. >> INTERESTS. WHAT DOES THE LUKT RI MARKET -- WE'VE BEEN TALKING A LOT LATELY ABOUT HOW THE EV MARKET HAS BEEN WANING AT LEAST FOR NOW AND PEOPLE WANT HYBRIDS. IS THAT TRUE ON THE LUXURY LEVEL ALSO? >> YEAH, I WAS A LITTLE SURPRISED TO HEAR THAT THAT ACTUALLY THERE IS NOT A KIND OF TABOO AGAINST A BATTERY-POWERED CAR OR PARTIALLY BATTERY-POWERED CAR. THIS WAS A $250,000 CAR HE SAID IS SOLD OUT FOR THE NEXT YEAR THROUGH 2025. PRETTY HIGH DEMAND FOR A CAR THAT ISN'T JUST STANDARD V-8 POWERED CAR. >> IF YOU SPEND $260,000 ON A CAR AND IT DIDN'T HAVE THAT OOMPH OBVIOUSLY THEY HAVE TO FIGURE OUT A WAY TO -- BECAUSE HYBRIDS DO HAVE THAT SORT OF STEREOTYPE THAT THEY DON'T HAVE THE SAME POWER THAT A TRADITIONAL GAS POWERED CAR HAS. IF YOU ARE GOING TO PUT THAT PRICE TAG ON IT YOU BETTER DELIVER THAT POWER. >> IT HAS TO SOUND GOOD, IT HAS TO MAKE ALL THE RIGHT SORT OF -- THE VROOM, BUT ALSO THE QUIET COOL ELECTRIC DRIVE. YOU MENTIONED LUXURY CONSUMER. WHENEVER I GET A CHANCE I LIKE TO SPEAK TO STEFAN ABOUT THE CONSUMER, IT'S A HIGH END WELL-HEALED CLIENTELE. THEY HAVE BEEN REACTING TO HIGH RATES. THEY DO HAVE ISSUES WITH STUFF LIKE THAT, BUT SPEAKING OF AMERICA AT LEAST HE SAYS AT THAT TIME AMERICAN MARKET IS PRETTY STRONG AND IT'S THEIR TOP MARKET. HERE IS WHAT HE HAD TO SAY ABOUT THAT. >> THIS IS THE LARGEST MARKET FOR US, THE U.S. MARKET, BY FAR. IN COMPARISON THE CHINESE MARKET IS MUCH SMALLER, EVEN THOUGH THE AUTOMOTIVE MARKET IS BIGGER. WHEN WE SPEAK ABOUT LUXURY FOR US WE HAVE TO SELL LOCALLY, BUT OUR CARS THEY HAVE TO FIT IN THE SAME WAY IN THE ENTIRE WORLD. SO IT'S A VERY COMPLEX APPROACH. WE ARE NOT TALKING ABOUT FASHION OR ACCESSORIES OR WATCHES. YOU CAN HAVE SOMETHING LOCALLY AND YOU CAN BUY IT WHEREVER YOU WANT. SO THE EFFORT WE HAVE TO PUT INTO THE DEVELOPMENT AND THE COST OF THE CARS IS BY FAR MORE COMPLEX THAN IN OTHER LUXURY BUSINESSES. PLUS I HAVE TO SAY THAT THERE IS NO WEAKNESS IN THE WORLD. >> SO YOU KIND OF TOOK A WHILE TO GET TO THE PART WHERE HE SAID NO WEAKNESS IN THAT WORLD FOR THE LUXURY CONSUMER. EVEN FOR PRODUCTS THAT HAVE TO BE SO LOCALIZED FOR EACH AREA, STILL STRONGER EVEN FOR THESE SPORTS CARS. >> VERY INTERESTING. THANKS A LOT, PRAS. >>> THAT WILL DO IT FOR TODAY'S "YAHOO! FINANCE LIVE." COME BACK TOMORROW AT 3:00 P.M. EASTERN FOR ALL OF YOUR COVERAGE LEADING UP TO AND AFTER THE CLOSING BELL. ♪
