♪ ♪ ♪ >>> HELLO AND WELCOME TO MARKET DOMINATION. I'M JULIE HYMAN. THAT'S JOSH LIPTON LIVE FROM OUR NEW YORK HEADQUARTERS. YOU ARE WATCHING OUR BRAND-NEW SHOW AIM AT GIVING YOU, THE VIEWERS, THE ULTIMATE INVESTMENT PLAYBOOK AND WE'LL TUNE OUT THE NOISE AND GIVE YOU THE RIGHT MOVES FOR YOUR MONEY. >> FROM THE YAHOO FINANCE TRENDING TICKERS TO THE MACRO ECONOMIC FORCES SHAPING THE MARKET, WE'LL DIG DEEPER INTO EVERYTHING YOU NEED TO KNOW IN THE LAST HOUR OF TRADING. >> HERE IS YOUR HEADLINE BLITZ GETTING YOU UP TO SPEED ONE HOUR BEFORE THE CLOSING BELL RINGS ON WALL STREET. ♪ ♪ ♪ >>> I DON'T WANT TO PUT THE LABEL ON IT. OTHER PEOPLE CAN DO THAT, BUT I WOULD JUST SAY WE'RE USING OUR TOOLS TO, YOU KNOW, KEEP A STRONG LABOR MARKET AND STRONG GROWTH WHILE MAKING FURTHER PROGRESS AT GETTING INFLATION DOWN TO 2% FOR THE BENEFIT OF THE PUBLIC. >> IF THE FED EASES TOO SOON BEFORE IT IS AT ITS GOAL, THE MARKET PARTICIPANTS WILL RALLY A LOT AND IF INFLATION DOESN'T FALL IT WILL BE EVEN MORE STUBBORN BECAUSE OF THE EASING OF FINANCIAL CONDITIONS. [ WHISTLE ] >> I THINK EARNINGS THIS YEAR WILL BE THE BIGGEST DIFFERENTIATOR BECAUSE I DON'T SEE THE FED DOING A WHOLE LOT THIS YEAR. IF THE ECONOMY IS STRONG AT THE END OF THE DAY, THERE ARE ONLY TWO THINGS THAT DETERMINE STOCK PRICES, RIGHT? ITS EARNINGS AND THE MULTIPLE YOU PUT ON THEM. [ WHISTLE ] >> THE ELECTION STARTS RIGHT NOW. THE CAMPAIGN FOR THE FALL STARTS RIGHT NOW WHERE YOU WILL HAVE ONE OF THE LONGEST CAMPAIGNS THAT WE'VE EVER SEEN. [ WHISTLE ] >> SO WE'VE GOT ONE HOUR TO GO UNTIL THE MARKET CLOSE AND LET'S GET YOU UP TO SPEED ON THE MARKET ACTION. WE START WITH THE MAJOR INDICES HERE AND IT ECHOES WHAT DAN NILES WAS JUST TALKING ABOUT THAT THE FED WILL NOT NECESSARILY SET THE NARRATIVE AND INDEED, JAY POWELL ON CAPITOL HILL DIDN'T SAY ANYTHING TO UPSET THE APPLECART. SO WE SEE THE DOW WHICH YES WAS HIGHER EARLIER IN THE SESSION AND LITTLE CHANGE UP 6.5 POINTS AND THE S&P 500 UP ABOUT A THIRD OF 1% AND WE SHOULD ALSO CHECK IN ON INTEREST RATES IN THE WAKE OF HIS COMMENTS AND THERE WE DON'T HAVE MUCH CHANGE EITHER, DOWN ABOUT THREE BASIS POINTS TO 4.1% ON THE TEN YEAR. SO THAT'S WHERE WE STAND ON THAT FRONT. I ALSO JUST QUICKLY WANTED TO CHECK ON WHAT WE ARE SEEING SECTOR WISE IN THE S&P 500 IS ONLY ONE GROUP IN THE RED AND THAT IS CONSUMER DISCRETIONARY AND WE HAVE UTILITIES AND CONSUMER STAPLES LEADING THE DAY TODAY AND OVER FOR THE STOCK THAT WE ARE WATCHING. >> WE HAVE TO TALK ABOUT NYCB, NEW YORK COMMUNITY BANCORP, BECAUSE WE HAVE BIG HEADLINES DROPPING HERE. THEY HAVE NOW INDEED RAISED $1 BILLION FROM PRIVATE INVESTORS. IF THAT INCLUDES HUDSON BAY, REVERE REVERNCE CAPITAL AND THE AFOREMENTIONED STEVE MNUCHIN AND JOSEPH WILL BE THE NEW CEO IN CHARGE AND ALESSANDRO DANELO WHO WAS RECENTLY REMAINED CEO WILL REMAIN NONEXECUTIVE CHAIRMAN AT THE BANK. EARLIER TODAY WE DID HAVE A HEADLINE AND THEY WERE TALKING TO INVESTORS AND YOU SAW THE HEADLINE CAUSE A BIG STROCK IN THE DROP AND IT CRATERED AND NOW THE NEWS IS CONFIRM 1K3D THEY'VE SECURED THIS $1 BILLION INJECTION AND LAST TIME THE STOCK WAS HALTED AND WE'LL SEE HOW INVESTORS ARE REAKING. >> IT LOOKS IT WAS HALTED PENDING NEWS AND THE NEWS IMQAA OUT AND YOU SAW THE BIG JUMP IN THE STOCK AND WHAT HAPPENS WHEN YOU SEE BIG MOVES LIKE THAT YOU HAVE AUTOMATIC TRADING AND NOW YOU SEE TRADING ONCE AGAIN AND THERE'S BOUNCING AROUND AND THERE'S BEEN BANK SPECIFICALLY AND SOME CONCERNS ABOUT WHETHER WE WOULD GET A RE-DO OF LAST SPRING. MOST OF THOSE CONCERNS AND BROADER CONCERNS HAVE BEEN CUT OFF TO SOME EXTENT AND THERE WERE CONCERNS WHETHER THE SPEC WOULD CONTINUE IN THE SAME FORM AND I DON'T THINK IT'S BEEN ENTIRELY RESOLVED WITH THIS EQUITY RAISE. >> AND YOU DON'T WANT THE QUESTIONS OF THE BANK AND THIS IS CONFIDENCE, INVESTORS, AND THERE'S STILL CONFIDENCE IN REGULATORS WHO ARE CLOSELY WATCHING AND MAKE SURE THE DEPOSITORS IS SECURE. >> THE BACKDROP IS JAY POWEL AND HIS COMMENTS AND INVESTORS KEEPING AN EYE ON COMMENT OR OF JEROME POWELL AS HE WRAPS UP HIS FIRST DAY OF CONGRESSIONAL TESTIMONY. JENNIFER SHOM BERGER IS ON CAPITOL HILL WITH THE LATEST. BRING US THE HIGHLIGHTS. >> JULIE, IN HIS FIRST DAY OF SEMIANNUAL TESTIMONY BEFORE CONGRESS FED CHAIR POWELL TOLD LAWMAKERS THAT THE FED WILL CUT RATES AT SOME POINT THIS YEAR AND SAID THAT HE EXPECTS BROAD, MATERIEL CHANGES TO THE PROPOSED CAPITAL REQUIREMENTS KNOWN AS BASEL THREE. TODAY'S MESSAGE WAS UNCHANGED WITH CHAIR POWELL REITERATING THAT WHILE THE FED DOESN'T NEED TO SEE INFLATION DROP, OFFICIALS NEED TO SEE GOOD DATA TO FEEL FULLY CONFIDENCE THAT INFLATION IS MOVING LOWER IN ORDER TO CUT RATES. TAKE A LISTEN. >> WE DON'T WANT TO HAVE A SITUATION WHERE IT TURNS OUT THAT THE SIX MONTHS OF GOOD INFLATION DATA WE HAD LAST YEAR THAT THAT DIDN'T TURN OUT TO BE AN ACCURATE SIGNAL OF WHERE UNDERLYING INFLATION IS? >> DEMOCRATIC MEMBER MAXINE WATERS FOCUSING ON HOUSING SAYING IT'S THE NUMBER ONE DRIVING OF INFLATION. IN AN INTERVIEW FOLLOWING THE HEARING WATERS TOLD ME THAT SHE WOULD LIKE TO SEE THE FED TARGET INFLATION HIGHER THAN 2% AND WOULD LIKE TO SEE THE FED LOWER RATE AS SOON AS THE MARCH POLICY MEETING. >> I AM ABSOLUTELY CONVINCED THAT THESE RATES SHOULD BE LOWERED, THAT PEOPLE ARE PAYING A DISPROPOSIRTIONATE AMOUNT OF THEIR INCOME FOR NECESSITIES LIKED IF AND SO WE'VE GOT TO BRING THOSE RATES DOWN. >> SO YOU'D LIKE SEE THE FED LOWER RATES AS SOON AS THE MARCH 20th POLICY MEETING LATER THIS MONTH? >> YES. ABSOLUTELY. I'M OPTIMISTIC AT EVERY MEETING. >> MEANWHILE, REPUBLICANS FOCUSED ON THE FED'S PROPOSED CAPITAL REQUIREMENTS WITH COMMITTEE CHAIRMAN PATRICK McHENRY ASKING THE PROPOSAL TO START OVER AGAIN. WHILE DECISIONS HAVE NOT YET BEEN MADE, HE WOULDN'T RULE OUT DOING JUST THAT CALLING IT, QUOTE, A VERY PLAUSIBLE OPTION AND SAYING THE FED WANTS TO TAKE ITS TIME AND DO IT RIGHT. BACK TO YOU. >> JENNIFER SHOMBERGER, THANK YOU VERY MUCH. APPRECIATE IT. FOR COMMENTS FROM FED CHAIR JEROME POWEL AND WHAT IT MEANS AGAINST THE FIGHT OF INFLATION AND SETH, THE CHIEF GLOBAL ECONOMIST. GREAT TO HAVE YOU ON THE SHOW. >> THANK YOU FOR HAVING ME. >> THE ECONOMY IS STRONG. HE SAID LABOR MARKET'S STRONG AND INFLATION IS MOVING IN THE RIGHT DIRECTION. HE WANTS A BIT MORE GOOD DATA, RIGHT? WHAT WERE YOUR BIG TAKEAWAYS. WHAT DID YOU LEARN? >> I THINK HE IS AT A POINT WHERE THEY CAN'T BE DEFINITIVE. THE DATA IS STRONGER THAN THE MARKS EXPECTED AND THE FED EXPECTED AND THE TRICK IS TO FIGURE OUT HOW MUCH OF THIS IS A BLIP? IF WE LOOK OVER THE PAST TWO YEARS THE RATE HAS BEEN COOLING AND EVERY SO OFTEN, BOOM, A REALLY BIG MONTH OF NON-FARM PAYROLLS AND THEN IT GOES BACK TO THE TREND AND THAT'S PRESUMABLY WHAT POWELL AND COMPANY ARE ASSUMING AND THAT'S WHAT WE'RE A SOUPINGSUMMING AND THE MARKET REACTION TO IT WHICH WAS AS LITTLE CHANGE AS POSSIBLE, PRESERVE OPTIONALITY. I HAVE TO SAY RIGHT NOW THE MARKET PRICING IS VERY CONSISTENT WITH WHERE WE'VE BEEN FOR A WHILE WHICH IS TO SAY THE FIRST CUT PROBABLY IN JUNE, WITH A TOTAL OF 100 BASIS CUTS FOR THE REST OF THE YEAR AND THERE'S GOT TO BE UNCERTAINY AND WE HAVE TO SEE THE DATA BETWEEN NOW AND THEN. >> ON A DAY WHEN WE SEE POWELL BEFORE CONGRESS, YOU GET TWO VERSIONS OF AMERICA, RIGHT? YOU GET THE VERSION THAT AYANNA PRESLEY, FOR EXAMPLE, BROUGHT UP WHEN SHE SAID INTEREST RATES NEED TO COME DOWN TO MAKE HOUSING MORE AFFORDABLE AND THEN YOU HAVE PATRICK McCARTHY WHO IS THE CHAIR OF THE COMMITTEE SAYING DON'T MAKE THIS POLITICAL. DON'T BRING DOWN RATES BEFORE THEY NEED TO BE AND IT JUST LEAVES ME TO THINK ABOUT SENTIMENT IN THOSE SORT OF TWO VISIONS OF WHERE WE ARE ECONOMICALLY. LIKE, HOW DO YOU THINK ABOUT KIND OF WHERE WE ARE WITH INFLATION AND WHAT THOSE VIEWS REFLECT? >> IT'S A SUPER DIFFICULT SITUATION. WE HAD A BOUT OF INFLATION THAT IS WORSE THAN JUST ABOUT ANYTHING WE'VE SEEN. I'M IN MY EARLY 50s AND I DON'T LOOK LIKE I'M IN MY EARLY 50s AND BY THE TIME -- SINCE THE TIME THAT I'VE BEEN A CONSCIOUS ADULT MAKING REAL DECISIONS WE HAVEN'T SEEN INFLATION LIKE THIS AND IN THAT REGARD IT'S A BIG DEAL AND THEY WERE WORRYING IS THIS A REPLAY OF THE 1970s? THE ANSWER IS NO AT THIS POINT. PEOPLE HAD TO UNDERSTAND THAT. ON THE OTHER HAND, THE ECONOMY IS STRONG, AND THAT STRENGTH, IF IT CONTINUES UNCHECKED, COULD MEAN THAT SOME OF THE RESIDUAL RESTRAINTS STAYS THERE FOREVER AND THE FED IS TRYING TO SLOW THE ECONOMY ENOUGH THAT INFLATION IS UNDER CONTROL, BUT NOT SO MUCH THAT IT WOULD CAUSE A RECESSION. THE MOST INTERESTING PARTS OF THE ECONOMY IS HOUSING, CONSUMER DURABLES AND ANYONE WHO HAS TO BORROW IN ORDER TO BUY THINGS WHICH IS A LOT OF PEOPLE REALLY FEEL THAT PAIN. ON THE OTHER HAND, EVERYBODY KNOWS THAT INFLATION IS TOO HIGH. EVERYBODY HAS SEEN THOSE PRICES GOING UP AND SO THE FED REALLY IS STUCK BETWEEN A ROCK AND THE HARD PLACE AND THEY'RE TRYING HARD TO BALANCE THINGS. >> YOU THINK THAT THE CUTS COME IN JUNE. DOES THAT EXACT TIMING MATTER, THOUGH? >> NO. I HAVE TO SAY AS A MACRO ECONOMIST THAT SPENT TOO MUCH TIME WORKING WITH STATISTICS THERE IS LOTS OF FUZZINESS WITH THE SORT OF BIG-PICTURE DATA. RIGHT NOW WITH THE MARKET ANTICIPATING SOME EASING LATER IN THE YEAR, THAT'S ABOUT WHAT MATTERS. IF IT HAPPENS IN JUNE, IF IT HAPPENS IN JULY, I DON'T THINK THAT'S WHAT'S MOST IMPORTANT IS THE FED CONTINUING TO COMMUNICATE A REASONABLY COHERENT MESSAGE AND THAT'S WHERE WE ARE. >> DOES THE PUSHBACK OF THE FED'S FIRST INTEREST RATE CUT IS THAT WHAT WE SEE FROM CENTRAL BANKERS AROUND THE GLOBE IN TERMS OF STRATEGY? >> I THINK IT DOES TO VARYING DEGREES. FOR EXAMPLE, I WOULD CALL OUT MY COLLEAGUE WHO IS OUR CHIEF ASIAN ECONOMIST. A LOT OF ASIAN CENTRAL BANKERS WILL BE WAITING FOR THE FED. THEY DON'T WANT TO MOVE IN FRONT OF THE FED AND THEY DON'T WANT TO PUT AT RISK ANY EXCHANGE RATE STABILITY. I THINK TO A LESSER DEGREE ACROSS THE ATLANTIC, WE'VE GOT THE EUROPEAN CENTRAL BANK. WE TECHNICALLY IN OUR FORECASTS HAVE THEM CUTTING BEFORE THE FED BY A MATTER OF WEEKS SO I DON'T THINK THAT REALLY COUNTS AND SO ONE QUESTION THAT I GET FROM CLIENTS ALL THE TIME IS WELL, SUPPOSE FOR WHATEVER REASON THE FED DOESN'T CUT AT ALL THIS YEAR, DOES THAT MEAN THE ECB CAN'T CUT AT ALL? I DON'T THINK THE ANSWER IS NOT AT ALL. IT MEANS PROBABLY LESS THAN WOULD HAVE BEEN THE CASE IF THE FED FOLLOWED THROUGH WITH ALL OF THE CUTS. THEY HAVE TO WORRY ABOUT THE INTEREST RATE DIFFERENTIALS AND THEY TAKE THROUGH THE EXCHANGE RATE WHICH IS THE DOMESTIC INFLATION SO IT MATTERS. IT'S NOT THE WHOLE STORY, BUT IT'S GOT TO BE ONE OF THE COMPONENTS. >> THE ADP REPORT THIS MORNING IS 140,000, BUT IT'S STILL STRONG. WHAT ARE YOU LOOKING AT ON FRIDAY TO GET THE BIG GOVERNMENT REPORT? >> THE LAST JOBS REPORT WAS SUPER STRONG AND WE THINK THAT WAS SOMETHING OF AN A NOMALY AN 160,000 ON PRIVATE PAYROLLS AND ABOUT 205,000 ON TOTAL. OBVIOUSLY THE DIFFERENCE IS GOVERNMENT EMPLOYMENT AND IT'S IMPORTANT TO REMEMBER, EVERY CYCLE IT'S THE GOVERNMENT EMPLOYMENT BE IT FEDERAL, STATE AND LOCAL LAGS THE REST OF THE CYCLE AND WE'RE SEEING BIGGER CONTRIBUTIONS AND FOR PRIVATE PAYROLLS WE'RE LOOKING FOR THINGS TO SETTLE BACK DOWN ABOUT 160,000. >> WE'LL SEE HOW IT GOES. GOOD TO SEE YOU. THANKS FOR COMING IN. WE REALLY APPRECIATE IT. WE ARE GETTING STARTED ON MARKET DOMINATION. COMING UP, ABERCROMBIE & FITCH FORECAST ITS LATEST EARNINGS REPORT AND BRIAN SOZZI SPEAKS TO THE CEO ON THE OTHER SIDE OF THE BREAK. OUR SERIES EDITION, GOOD-BYE OR GOOD BUY, TWO STOCKS TO HELP YOU MAKE THE BEST CHOICES FOR YOUR PORTFOLIO. STICK AROUND. MORE MARKET DOMINATION STILL TO COME. ♪ ♪ STORIES IN ALL OF RETAIL CONTINUE TO PLAY OUT IN THE HOLIDAY QUARTER AND THAT IS THE ONGOING TURNAROUND OF ABERCROMBIE & FITCH. LET'S GET RIGHT TO THE CEO OF MAKING IT HAPPEN, AND THAT IS FRAN HOROWITZ. FRAN, ALWAYS NICE TO GET A FEW MINUTES WITH YOU ESPECIALLY ON AN EARNINGS DAY. YOU REALLY SAID SOMETHING REALLY INTERESTING TO ME ON YOUR EARNINGS CALL. YOU SAID LAST YEAR WAS A DEFINING YEAR FOR YOUR COMPANY. EXPLAIN THAT TO THE TWO OF US. >> ABSOLUTELY. SO IN JUNE OF 2022, BRIAN, WE CAME OUT WITH AN INVESTOR DAY WHEN THINGS IN THE WORLD WERE NOT PARTICULARLY LOOKING GREAT, AND IT TOOK A LOT OF COURAGE TO COME OUT AT THAT POINT AND STATE OUR OALWAYS FORWARD PLAN WITH 43 TOP LINE REVENUE AND ABOUT AN 8% OPERATING MARGIN AND OVERALL THE DATA WAS RECEIVED WELL, BUT VERY CAUTIOUSLY. NOW TO HIT THOSE TARGETS, FOR THE MOST PART, TWO YEARS EARLY, IS A PRETTY INCREDIBLE MOMENT FOR US AND THAT'S EXACTLY WHY I SAID DEFINING. NOW OUR GOAL FOR 2024 IS CERTAINLY TO PROVE THAT THOSE ARE SUSTAINABLE AND CAN CONTINUE TO GROW ON TOP OF THAT. >> WHAT'S REMARKABLE TO ME AMONG MANY THINGS THIS QUARTER IS THAT THE ECONOMY IS NOT OUT THERE GROWING 5% IN TERMS OF GDP. WAGES AREN'T GOING THROUGH THE ROOF. CONSUMERS ARE MAKING CHOICES ON WHERE THEY WANT TO SHOP OR WHERE THEY DON'T WANT TO SHOP. THEY'RE OUT THERE TAKING VACATIONS AND MAYBE NOT BUYING APPAREL FROM SOMEONE, A DEPARTMENT STORE. WHY DO YOU THINK YOU'VE BEEN ABLE TO GROW THE BUSINESS THE WAY YOU HAVE WITH A CUSTOMER SET, SAY 20 YEARS OLD TO LATE 30s, IN SOME CASES THEY DON'T HAVE A LOT OF MONEY. >> WELL, I THINK YOU SAID IT. THE CUSTOMER HAS A CHOICE AND THEY'RE CHOOSING US. THAT'S BECAUSE WE HAVE BEEN ABLE TO GET THE PRODUCT VOICED EXPERIENCE REALLY ALIGNED AND WHAT THE CONSUMER IS LOOKING FOR. WE HAVE THE KIDS BRAND WHICH IS ALSO RESONATING AND WE TAKE THEM RIGHT THROUGH HOLLISTER AND INTO ADULTHOOD INTO ABERCROMBIE, BUT HAVING THE PRODUCT THEY ARE LOOKING FOR AND STAYING CLOSE AND TRULY LISTENING TO THIS CUSTOMER WHICH OUR TEAM HAS GOTTEN VERY, VERY GOOD AT IS THE BIG WIN. ON TOP OF THAT, OUR BIGGEST LEARNING COMING OUT OF COVID IS THE DISCIPLINE ON INVENTORY AND MAKING SURE THAT WE ARE LEAN AND MEAN AND THAT WE ARE REACTING TO THE BUSINESS ON A WEEKLY BASIS. SO WE SIT DOWN WITH THE TEAM AND WE MAKE SURE THAT WE LOOK AT THE BEST-SELLERS AND WHAT'S WORKING AND WHAT'S NOT WORKING AND WE FEED THAT INVENTORY EVERY WEEK AND WE CHASE WHAT'S WORKING. >> YOU'RE CERTAINLY, YOUR TEAM AND YOUR COMPANY AND THE OUTLIER IN SPECIALTY APPAREL AND THERE HAVE BEEN SIGNS OF LIFE. DO YOU THINK WE'RE WATCHING JUST A REBIRTH OF THE SPECIALTY APPAREL INDUSTRY WHERE CONSUMERS ARE TIRED OF SPENDING AN HOUR AND TRYING TO FIND THINGS THEY NEED AND THEY'RE GOING BACK TO SPECIALTY RETAILERS? >> OUR OMNI CUSTOMER WHO SHOPS BOTH OF THE DIGITAL CHANNEL IN THE STORES IS OUR MOST PROFITABLE CUSTOMER. THAT'S ONE THAT CAN SHOP WHEREVER, WHENEVER THEY SHOP WITH US AND THERE'S AN OPPORTUNITY TO STAY FOCUSED ON THEIR CONSUMER AND MAKE SURE THAT THEIR EXPERIENCE IS TRULY A SEAMLESS ONE. >> IS THIS THE YEAR -- YOU TALKED A LOT ABOUT TRYING ON THE CALL AND TRYING TO SUSTAIN THESE RESULTS. IS THIS THE YEAR YOU TRY TO PROVE TO WALL STREET THAT THE PAST 18 MONTHS WEREN'T A FLUKE? >> LISTEN, I HOPE WE'VE ALREADY PROVED THAT, BUT IT'S A VERY FAIR QUESTION. WE CAME IN WITH A STRONG RESOLVE AND THINGS WERE DIFFICULT FOR US BECAUSE OF THE SUPPLY CHAIN ISSUES AND 23 IS EXACTLY THAT AND IT IS A DEFINING YEAR THAT ALL OF THE WORK OVER THE PAST SEVERAL YEARS OF REBUILDING THE FOUNDATION OF THIS COMPANY, GETTING THESE GRANTS ON THE RIGHT TRAJECTORY AND GETTING CLOSE TO THAT CUSTOMER ARE PLAYING OFF, OUR PLAYBOOK IS PAYING OFF AND THE CUSTOMERS ARE CHOOSING US AND IT COULDN'T BE MORE EXCITING. >> WHY IS ABERCROMBIE & FITCH, WHY IS THAT BRAND STILL OUTPERFORMING HOLLISTER? >> THE INTERESTING THING ABOUT THE ABERCROMBIE BRAND, BRIAN, I KNOW YOU'VE BEEN ON THIS JOURNEY WITH ME FOR A LONG TIME IS THE FACT THAT WE HAVE BEEN ABLE TO CHANGE THE ADDRESSABLE MARKET. IT IS NO LONGER A TEEN MALL BRAND. IT'S NO LONGER SHORTS AND T-SHIRTS AND IT'S TRULY A LIFESTYLE BRAND. P & G JOINED US IN THE EARLY 20s. WE'RE SEEING THAT CUSTOMER STAY WELL INTO THE LATE 30s AND EVEN EARLY 40s. >> THANK YOU FOR KEEPING ME IN THERE, FRAN. IN THE EARNINGS CALL YOU SAID 20 TO LATE 30s. FRAN AGED ME OUT OF ABERCROMBIE AND I'M STILL BUYING STUFF AT THE STORES. >> NO, WE LOVE YOU AS A CUSTOMER. THE SECOND PART OF THAT IS THE FACT THAT WE'VE EXPANDED THIS CATEGORY, SO FROM YPB, OUR ACTIVE ASSORTMENT TO BEST DRESSED GUEST AND THE WEDDING SHOP WE LAUNCHED TODAY WAS A DIRECT RESULT IN UNDERSTANDING THE WEDDING JOURN'SEY AND HOW MY TIMES SHE NEEDS TO BE ADDRESSED FOR THAT AND THE CATEGORY HAS BEEN A BIG PART OF THE WIN. BIG PART OF THE WIN, APOLOGIES. >> ONE THEME I'M SEEING IN THESE RETAILER RESULTS, AND I THINK I SAW IT ON YOURS, RETAILERS ARE BACK TO OPENING STORES. NOT TEN STORES A YEAR, NOT 20 STORES A YEAR AND I EVEN SAW IT IN THE HOME IMPROVEMENT RETAILERS. YOU MENTIONED 45 STORE OPENINGS IN TERMS OF REMODELS AND WHAT GIVES YOU THE CONFIDENCE TO UP THAT PACE AND GO FASTER WITH OPENINGS AND WILL YOU TAKE SOME OF THESE OPENINGS BACK OVERSEAS? >> SO THIS IS OUR THIRD YOREAR A NET STORE OPENER. WE HAVE BEEN ON THIS JOURNEY OF RECONCILING OUR SQUARE FOOTAGE IN OUR STORES FOR MANY, MANY YEARS AND IT'S EXCITING TO BE BACK ON THE SIDE OF GROWTH. WE WILL OPEN IN '24, 75 NEW EXPERIENCES. TO ANSWER YOUR QUESTION, THE MAJORITY OF THOSE STILL WILL LEAN TOWARD NORTH AMERICA AND ABERCROMBIE AND WE WILL BE OPENING UP STORES AROUND THE WORLD. AS WE WILL CONTINUE TO MOVE ON THIS OPPORTUNITY THAT WE WILL CALL OUT WE WILL CONTINUE TO SEE OPENINGS AND THIS YEAR WE'LL BE FOCUSED ON NORTH AMERICA TOWARD ABERCROMBIE. >> JUST DOING ROUGH MATH, BASED ON ANNUAL SALES OF LAST YEAR, YOU HAVE $700 MILLION UNTIL YOU HIT A $5 BILLION SALES GOAL THAT YOU OUTLINED A COUPLE OF YEARS AGO AND TO ME THAT TIME THAT WAS AN ASPIRATIONAL NUMBER AND NOT SAYING THAT FRAN CAN HIT IT AND $5 BILLION IS A LOT AND WHEN DO YOU THINK YOU CAN HIT THE NUMBER AND HOW DO YOU GET THERE? IS IT A COMBINATION OF OPENING NEW STORES AND JUST TAKING A BRAND OVERSEAS IN FURTHER REFINING THE ASSORTMENT? >> BACK IN 2022, WE PUT THAT ASPIRATIONAL TARGET OUT THERE. WE CERTAINLY GOT CLOSER TO THE ALWAYS FORWARD PORTION OF THAT TWO YEARS EARLIER THAN WE EXPECTED. SO OUR GOAL THIS YEAR IS TO REALLY CONTINUE ON THE GROWTH PATH TO MAKE SURE THAT THIS PROFITABLE SIT SUSTAINABLE AND WE CAN CONTINUE TO PROVE TO EVERYBODY THAT WE'RE ON THE RIGHT PATH. 5 BILLION IS STILL AN ASPIRATIONAL OUT THERE AND STILL ON TO THE DIGITAL BUSINESS AND WE'VE DONE A LOT OF WORK AND A LOT OF INVESTMENT IN THAT FRONT, AS WELL. >> FRAN, I KNEW I FORGOT TO ASK YOU THIS, ON YOUR WEBSITE, ABERCROMBIE, CALLING '90s NOSTALGIA CLOTHING. I WORE THIS STUFF. WHEN DID THIS '90s STUFF COME BACK. I STILL HAVE SOME IN MY CLOSET. >> THAT'S OUGHALL RIGHT. IF YOU NEED THE LOOSER FITTING, LOWER BAGGY JEANS WE HAVE SOME FOR YOU. >> WE WILL TAKE THAT OFFLINE. FRAN HOROWITZ, ABERCROMBIE & FITCH, NICE TO SEE YOU. WE'LL TALK TO YOU SOON. ♪ ♪ >>> LET'S CHECK IN ON SOME OF THE TOP CALLS, TESLA SHARES ARE DROPPING FOR A THIRD DAY IN A ROW. TODAY'S NEWS, JULIE, IS THAT A VERY WELL KNOWN TESLA BULL, THAT WOULD BE ADAM JONAS FROM MORGAN STANLEY, ADAM TAKES OUT THE RED PEN AND STARTS CUTTING AND DOES MAINTAIN HIS BUY RATING. WE WANT TO STRESS THAT AND DOES CUT THE PRICE TARGET AND TAKES IT DOWN TO 320 AND TELLS THE COMPANY IT COULD REPORT A LOSS THIS YEAR BASED ON GAP ACCOUNTING. HE TELLS THEM COMPANIES ARE DUMPING EVs AND HYBRIDS COMPETING TO THE MARGINAL EV BUYER AND THIS IS COMING AS TESLA'S STOCK HAS SUFFERED A ROUGH SLIDE. WE'VE GOT ABOUT 30% NOW. >> YOU COULD ARGUE EVEN THAT JONAS IS LATE TO THE PARTY. A LOT OF WHAT HE TALKS ABOUT IS OTHER PEOPLE WHO WERE NOT AS SANGUINE ON TESLA HAVE TALKED ABOUT IN THIS MARKET ALREADY. ONE OF THE INTERESTING POINTS HERE, HE SAYS THAT TESLA'S PRODUCT IS RELATIVELY AGED, THAT IT IS -- WHILE THE OTHER MAJOR AUTOMAKERS ARE SORT OF EARLIER IN THEIR CYCLES WHICH HAS BEEN A DISADVANTAGE FOR THEM. AT THIS POINT, HE SAYS, MAYBE TESLA'S PRODUCT IS NOT AS EXCITING AND MANY ANALYSTS ON THE STREET ARE WAITING FOR THEM TO COME OUT FOR THEIR NEXT MASS MARKET AUTOMOBILE. SO THAT'S SOMETHING TO CONSIDER, AS WELL. HE'S ALSO TALKING ABOUT THE PENETRATION OF TESLA IN THE MATURE MARKETS LIKE CALIFORNIA ALREADY AND HE ALSO, OF COURSE, TALKS ABOUT COMPETITION IN CHINA. >> IT WAS SO DOWN BEAT, YOU FELT LIKE WHY IS THIS SO OVERWEIGHT? I THINK IT'S AN AUTO STOCK AND I THINK IT'S AN ENERGY PLAY AND AN AI PLAY AND ROBOTICS PLAY AND HE'S STICKING WITH IT DESPITE WHAT HE ACKNOWLEDGES IS BEAR SENTIMENT AT THIS POINT. >> MOVING ON. >> CHECK OUT SHARES OF PALANTIR. THEY ARE SURGING AFTER THE COMPANY WON A $178 MILLION WITH THE U.S. ARMY. PALANTIR WILL NOW BUILD TEN AI-POWERED DATA SYSTEMS THAT AGGREGATE DATA FROM SPACE AND TERRESTRIAL SENSORS FOR LONG-RANGE PRECISION TARGETING AND OTHER MISSIONS. NOT EVERYONE IS A BELIEVER. RBC RATES PALANTIR UNDERPERFORMED AND HE JOINS US NOW. IT IS ALWAYS GOOD TO SEE YOU ON THE SHOW. LET'S GET TO THE REACTION AND THIS IS SURGING 9% TODAY ON THE HEADLINE. DO YOU THINK THAT MOVE IS JUSTIFIED? >> THANKS FOR HAVING ME, ALWAYS A PLEASURE TO CHAT WITH YOU. LOOK, MY PERSPECTIVE TO ME THE MOVE UP IS PROBABLY NOT JUSTIFIED. THIS CONTRACT WAS KNOWN AND I'VE BEEN TALKING TO A LOT OF MY CLIENTS ABOUT THIS EXACT CONTRACT AND SIMILAR SIZE TO WHAT WAS EXPECTED. I BELIEVE IT WAS CONTEMPLATED IN THE GUIDANCE THAT MANAGEMENT GAVE US ON THE Q4 EARNINGS REPORT. I LOOK AT THE STOCK RIGHT NOW. THIS COMPANY HAS A BIGGER MARKET CAP THAN SNOWFLAKE AND A BIGGER CAP THAN LAST ONE AND I'M NOT SURE THAT'S JUSTIFIED RIGHT NOW. RISHI, BY THE SAME TOKEN U YOU'VE BEEN AN UNDERPERFORMER ON THE STOCK AND IT KEEPS GOING UP. OBVIOUSLY, YOU WERE DIVERGING FROM THE POPULAR PERCEPTION OF PALANTIR. WHAT WOULD NEED TO CHANGE IN THAT PERCEPTION BECAUSE IT SEEMS LIKE THE FUNDAMENTALS ARE NOT NECESSARILY GOING TO CHANGE. WHAT WOULD NEED TO CHANGE TO MAKE THE STREET COME TO WHERE YOU ARE ON PALANTIR? >> ABSOLUTELY. YOU'RE RIGHT, THE FUNDAMENTALS ARE WHAT THEY ARE AND THIS IS AT 25 TIMES REVENUE GROWING LESS THAN 20% WHICH IS UNHEARD OF IN SOFTWARE AND I THINK WHAT IT TAKES IS RECOGNITION THAT WHAT PALANTIR CLAIMS TO BE AND WHAT THEY ARE ARE TWO DIFFERENT THINGS. I'M NOT SAYING THERE'S NO VALUE IN THE TECHNOLOGY. THERE ABSOLUTELY IS. THERE ABSOLUTELY IS AN AI PLAY TO GET THE DATA AND STAY IN ORDER FOR GENERATIVE AI AND WHAT THIS IS NOT. THIS IS NOT A CUTTING-EDGE GENERATIVE AI COMPANY. THIS IS NOT A COMPANY THAT IS INNOVATING WHEN IT COMES TO GENERATIVE, AI, AND WHEN THAT BRIDGE OR GAP OF WHAT IS THE MESSAGE THEY'RE COMMUNICATING FOR INVESTORS AND PARTICULARLY RETAIL INVESTORS AND WHAT IS REALITY. WHEN THAT STARTS TO NARROW, I THINK YOU SEE THE STOCK COME BACK MORE TOWARD THE PRICE TARGET WHICH REPRESENTS FAIR VALUE FOR THE COMPANY. >> THE PUSH ON AI, RISHI, HOW MANY CUSTOMERS ARE USING AND PAYING FOR THE COMPANY'S AI PLATFORM? >> BASED ON MY CHATS, THE ANSWER IS VERY, VERY FEW. THEY TALK A LOT ABOUT GOOD CAPS AND AIT AND WHEN WE TALK TO PARTNERS AND INDUSTRY PARTICIPANTS WHO ARE WORKING WITH PIOs OF GLOBAL 2000 COMPANIES, VERY, VERY FEW CUSTOMERS ARE PAYING FOR AIP AND ACTIVELY USING IT. ARE THEY INTERESTED AND CURIOUS BECAUSE OF THE MARKETING AND THE MESSAGING AROUND PALANTIR? ABSOLUTELY. IS THAT REAL REVENUE SHOWING UP IN THE MODEL TODAY? NO. >> SOMETHING ELSE THAT STRUCK ME AND I WAS LOOKING AT PALANTIR AND YOU MENTIONED THE VALUATION A MOMENT AGO. PART OF THE LATEST OF THE UPSWING IN THE TECH STOCKS HAS BEEN THAT THE P-E IS NOT NECESSARILY RISING BECAUSE THE E IS RISING, RIGHT, TO MEET IT. YOU LOOK AT NVIDIA AS AN EXAMPLE. IN THE CASE OF PALANTIR, THAT P-E HAS BEEN GOING UP. SO HOW MUCH OF YOUR CALL IS BASED ON VALUATION HERE? >> LOOK, VALUATION'S A PART OF IT, BUT LET'S BE HONEST, IF THIS ACTUALLY WAS GENERATIVE AND IF THIS WAS OPEN AI, FOR EXAMPLE, YOU COULD MAKE THE ARGUMENT THAT SUPER HIGH MULTIPLES DESERVE AND THAT'S FUTURE REVENUE THAT WILL COME IN AND SEE MARGIN EXPANSION AND THAT STUFF AND GIVEN THAT'S NOT REALITY HERE. I FEEL LIKE THIS IS PRICING IN A LOT OF HYPE AND THIS IS PRICING IN THAT MESSAGING AND I WANT TO BE VERY CLEAR, I AM A HUGE BELIEVER IN GENERATIVE AI TECHNOLOGY. I THINK THIS IS AKIN, TO MOBILE AND I THINK THE MARKET IS OVERESTIMATING HOW EFFICIENT PALANTIR WILL BE FROM GENERATIVE AI. >> YOU'LL GET THE EQUIVALENT OF A SELL ON THIS NAME. HOW COULD YOU BE WRONG, RISHI? JUST WALK US THROUGH THE UPSIDE RISK TO THE CALL? >> I THINK THERE ARE TWO UPSIDE RISKS AND THE NUMBER ONE IS THEY GET THEIR ACT TOGETHER AND COME UP WITH REAL TECHNOLOGY THAT GENERATES REAL VALUE AND IS DIFFERENTIATED AND MORE THAT IT WORKS THE THIRD PARTY. WE ARE MONITORING THAT VERY, VERY CLOSELY. I THINK PIECE NUMBER TWO IS WHAT WE ARE DETERMINING THE SELF-FULFILLING PROPHECY RISK AND WE'VE DONE WORK ON THE UNDERLYING TECHNOLOGY, BUT IF PALANTIR CAN GO TO ENTERPRISES CONVINCE THEM THAT THEIR SOFTWARE CAN DO ALL OF THESE USE CASES, MAYBE REALITY DOESN'T MATTER AND MAYBE THE SALES PITCH IS ALL THAT MATTERS EVEN IF THE TECHNOLOGY DOESN'T SUPPORT IT AND THAT, I THINK, WILL ULTIMATELY COME TO BEAR OVER THE NEXT COUPLE OF YEARS, BUT IF THAT SELF-FULFILLING PROPHECY HAPPENS I WILL BE PROVEN WRONG IN THE NEAR-TERM. >> RISHI, ALWAYS LOVE HAVING YOU ON THE SHOW AND THANK YOU VERY MUCH FOR BEING ON THE SHOW WITH US. APPRECIATE IT. >> THANK YOU. >>> COMING UP, THE LATEST EDITION OF OUR SERIES, GOOD BUY OR GOOD-BYE. WE'LL GET INVESTOR INSIGHT TO HELP YOU MAKE THE BEST CHOICES FOR YOUR PORTFOLIO. STICK AROUND, MORE MARKET DOMINATION STILL TO COME. ♪ ♪ >>> IT'S A BIG, NOISY UNIVERSE OF STOCKS OUT THERE. WELCOME TO GOOD BUY OR GOOD-BYE. OUR GOAL TO HELP CUT THE NOISE TO NAVIGATE THE BEST MOVES FOR YOUR PORTFOLIO. TODAY WE ARE FOCUSING ON THE ENERGY SECTOR WITH OIL PRICES RISING MEGA MERGERS TAKING PLACE AND THE DEMAND ON THE GRID IN FOCUS AS THE AI INDUSTRY PICKS UP PLACE. THERE ARE PLENTY OF INVESTMENT AREAS OPENING UP AND WHAT'S THE BEST PLACE TO PLAY IT. I AM HERE WITH CASE CAPITAL ADVISERS MANAGING PARTNER AND MAY I SAY I'VE KNOWN KENNY FOR A LONG TIME AND IT IS A REAL PLEASURE TO HAVE YOU HERE TO DO THIS TODAY. >> SO MUCH FUN. >> GOING BACK TO MY DAYS ON THE FLOOR OF THE NEW YORK STOCK EXCHANGE. LET'S GET TO YOUR BUY STOCK HERE. IT IS CONSOLE ENERGY. THE STOCK HAS GONE UP MORE OR LESS OVER THE PAST YEAR. FIRST OF ALL, YOU SAY STRONG EARNINGS. >> YOU'VE GOT STRONG EARNINGS AND THEY'VE GOT STRONGER EARNINGS IN 2024, AND EXPECTING TH $15 A SHARE AND I THINK IT'S LOW AND THEY CAN COME IN BETTER THAN THAT. >> THEY'RE IN THIS BUYBACK MODE AND IT TRADES AT A FOUR TIMES MULTIPLE. ITS TRADING AT AN EIGHT TIMES MULTIPLE AND WE'RE TALKING ABOUT $120 IN THE STOCK WHICH IS CURRENTLY TRADING AT 85 AT THE MOMENT. >> ALSO, THERE'S THE IDEA THAT THERE IS A BIG, NEW SUCKER OF ENERGY, IF YOU WILL. >> THERE IS A HUGE SUCKER OF ENERGY AND THE DATA CENTERS THAT ARE ALL OVER THE PLACE. THEY JUST SUCK THE ENERGY IN OFF THE GRID. SO WE AS A NATION WILL HAVE TO COME UP WITH ALL SOURCES OF ENERGY THAT WE HAVE AND THIS IS A COAL AND THERMAL METALOGICAL PRODUCER. THIS IS NOT GOING AWAY, RIGHT? AS MUCH AS THEY'RE SAYING IT'S COAL AND FOSSIL FUELS AND IT'S NOT GOING AWAY BECAUSE WE NEED THE ENERGY. >> WELL, IT IS NOT GOING AWAY EXCEPT THERE IS A TRANSITION. >> CORRECT. >> THAT WOULD BE THE RISK TO YOUR BULL CASE HERE. WE HAVE SEEN AN AT.ED POLICY PIVOT AWAY FROM COAL. YOU MAY HAVE A POLICY PIVOT, AND IF THE ALTERNATIVE ENERGY WILL NOT PRODUCE ENOUGH ENERGY AND WE'LL GO BACK TO WHAT DOES PRODUCE ENERGY AND IF THEY FORCE IT OUT OR IF THEY GET THE MORE CLIMATE CHANGE PRESSURES AND THEN YOU CAN SEE THE STORIES BACK OUT A LITTLE BIT. >> GOTCHA. LET'S GET BACK TO THE STOCKS THAT YOU DON'T LIKE. THERE IS THE BIG OIL AND GAS COMPANY CHEVRON. WE'RE TALKING ABOUT WHERE THE OPPORTUNITY IS, AND I THINK THAT'S REALLY WHAT WE'RE TALKING ABOUT. LET'S RUN THROUGH IT THEN. YOU'RE TALKING ABOUT 10% PROFIT MARGIN. >> THIS HAS A 10% PROFIT MARGIN VERSUS CIX, THEY HAVE A 25% PROFIT MARGIN. CHEVRON HAS 13% RETURN ON EQUITY AND CIX HAS A 50% RETURN ON EQUITY AND JUST MATHEMATICALLY, THOSE NUMBERS ARE DIFFERENT, RIGHT? SO IF YOU'RE TALKING ABOUT A TRADE AND ONE TO TRADE AND ONE MADE TO AVOID THAT IS APPARENT. >> ANOTHER WAY TO VALUE HERE IS EBITDA TO MARKET CAP. >> RIGHT. TO MARKET CAP. SERVE TIMES, CEIX BUYS BACK -- THEY CONTINUE TO BUY BACK THE STOCK AND IT'S STILL GOING TO BE CHEAPER ON A RELATIVE BASIS THAN CHEVRON AND THAT'S THE OPPORTUNITY. >> IT IS TRYING TO MAKE A MONSTER ACQUISITION. >> THE RISK TO THIS, ONCE AGAIN, IS REGULATION, RIGHT? IF MY NUMBERS OF MY ANALYSIS IS WRONG AND THERE'S THE PUSH FOR RENEWABLES. LOOK, CHEVRON HAS A BIG PRESENCE IN RENEWABLES AND THEY COULD END UP BEING GOOD FOR CHEVRON AND THAT COULD BE THE RISK OF WHY I'M WRONG. >> AND DIVERSIFYING REVENUE STREAMS AND BRING IN MORE MONEY. >> WHICH THEY ARE ON THE ALTERNATIVE PLATFORMS, BUT FROM AN INVESTMENT TRADING PERSPECTIVE. >> GOTCHA. >> THAT SHORT-TERM THEORY THAT I'VE COME UP WITH WORKS. >> DO YOU LIKE ENERGY AT LARGE? >> I LIKE ENERGY. I PARTICULARLY LIKE ENERGY GOING INTO 2024 AND 2025. LOOK, IF THERE'S A CHANGE OF LEADERSHIP AT THE TOP, A REPUBLICAN ADMINISTRATION, I THINK ENERGY IS REALLY IN PLAY IN THE REPUBLICAN ADMINISTRATION. >> LET'S SUMMARIZE WHEN YOU ARE TELLING PEOPLE HERE WITH THIS PARTICULAR PLAY AND BUY ENERGY BASED ON THE DEMAND AND CHEVRON, THE RETURN ON INVESTMENT IS TOO LOW AS ARE THE PROFIT MARGINS. >> CORRECTION. >> ONE OTHER THING THAT I WANTED TO DISCUSS WHILE YOU'RE HERE. YOU ARE WELL KNOWN NOT JUST FOR PUTTING OUT A DAILY MARKET NOTE, BUT YOU ALWAYS INCLUDE A RECIPE IN THAT NOTE. >> BECAUSE FOOD AND FINANCE KIND OF WORK. BECAUSE FINANCE IS UNNERVING FOR PEOPLE AND FOOD IS NOURISHING AND I DON'T COOK FANCY AND I COOK HOMESTYLE. TODAY I GIVE YOU ZIUCCHINI SURPRISE. >> YOU SLICE THEM ON THE MANDOLIN SO THEY'RE LONG AND FRESH GRATED PARMIGIANO CHEESE AND YOU SLICE THE ZUCCHINI AND DIP THEM IN THE OIL AND THE BREAD CRUMBS THAT YOU'VE MIXED WITH THE CHEESE AND SALT AND PEPPER AND YOU PUT A SLICE OF PROSCIUTTO OR HAM OR PROVOLONE CHEESE OR WHATEVER YOU WANT AND ROLL THEM AND PUT THEM IN A BAKING DISH AND PUT THEM IN THE OVEN FOR 350 DEGREES FOR 25 OR 30 MINUTES. TAKE THEM OUT AND THEY'RE ALL NICE AND BROWN AND MELTY INSIDE. THEY'RE DELICIOUS. >> I LIKE IT. >> YOU CAN HAVE IT AS DINNER OR AN APPETIZER. THAT'S MY GOOD BUY IS THE ZUCCHINI SURPRISE. >> THANK YOU FOR COMING IN. >> THANK YOU FOR HAVING ME. I ENJOYED IT. THAT DOES IT FOR GOOD-BYE OR GOOD BUY. YOU GOT A BONUS RECIPE AND WE'LL BRING YOU NEW EPISODES OF THIS AT 3:30 P.M. ♪ ♪ >>> CHECKING ON A FEW TRENDING TICKERS, WE ARE UNDER 20 MINUTE AWAY NOW TO THE CLOSING BELL ON WALL STREET. LET'S START WITH FOOTLOCKER. THAT STOCK IS NOSEDIVING IN TODAY'S TRADE. THE BIG NEWS IS THE CHAIN IS SAYING IT WILL PUSH BACK ITS PLAN TO EXPAND SALE TO 9.5 BILLION TO TWO YEARS AND NOW STORE FORMATS AND LOYALTY PROGRAMS AND THAT'S EXPECTED TO BE CHEAP IN 2028. THE COMPANY DID OFFER A FORECAST FOR PROJECTED EARNINGS AND THEY'RE LOOKING FOR 150 TO 170 FOR THE FISCAL YEAR AND THAT IS NOT GOOD ENOUGH AND THAT DOES UNDERSHOOT WHAT ANALYSTS HAD EXPECTED AND THAT IS AFTER A ROUGH YEAR AND YOU SEE HOW THE FISCAL YEAR ENDED IN JANUARY AND IT FELL BY 7% AND THE SHARES HAVE BEEN ALL OVER THE PLACE AND YOU'VE SEEN VOLATILITY AND SOME OF THE ANALYSTS OVER AT CITI IS SAYING THAT THE WAY THEY GOT TO COMPS LAST QUARTER AHEAD OF ESTIMATES IS THEY HAD TO PUT MORE THINGS ON SALE AND SO THAT'S BEEN PROBLEMATIC FOR THE MARGINS THERE AND WE HAVE SEEN AS WE COME OUT OF THE INVENTORY CORRECTION WITHIN RETAIL THERE'S BEEN MORE DISPERSION AND EVERYONE WAS DISCOUNTING AND YOU'RE SEEING MORE NORMALIZATION, BUT FOOTLOCKER IS STILL IN THE DISCOUNTING CAP AND THERE YOU GET THE PRESSURE IN THE MARGINS. >> AND THE INTERESTING COMMENTATING BY THE CONSUMER AND IT'S BEEN HIT BY INFLATION, FOOD COSTS AND ALL REDUCING SAVINGS. >> YEAH. EXACTLY. ALL RIGHT. LET'S TALK ABOUT JD.COM AND THOSE SHARES DROPPING AFTER EXPERIENCING THE RETAILER WITH A $3 BILLION STOCK REPURCHASE PROGRAM AND THAT HAS BEEN SOMETHING THAT ANALYSTS HAVE BEEN POINTING TO, AS WELL AS SOMETHING THAT HAS BEEN POSITIVE. THEY LIKE THAT BUYBACK. CITI ALSO SAYING, APPLAUDING THE STEPPED-UP REPURCHASE OF PROGRAM, I SHOULD SAY. AND THE COMPANY ALSO TRYING TO GET ITS PRICING RIGHT JUST LIKE WE'RE SEEING WITH FOOTLOCKER HERE IN THE U.S. AND J.D. ALSO HAVING THAT STRUGGLE. >> ALSO INTERESTING IS THE BACKDROP OF A DOMESTIC CHINESE ECONOMY THAT'S JUST SHAKY WITH THE PROPERTY CRISIS AND DEFLATION AND RETAIL SALES ARE COMING IN WEAK AND THAT'S SURPRISING AND WE'VE HEARD THESE REPORTS THAT JD HAS BEEN KICKING THE TIRES IN THE UK. >> EVEN THOUGH SALES BEAT AND THE NET INCOME WAS BELOW ESTIMATE AND SOMETHING INTERESTING TO POINT OUT THERE. >> YEAH. >> COMING UP, WE'RE LOOKING AT HOW TO NAVIGATE THE RECENT LOSSES WITH THE MAGNIFICENT SEVEN WITH TODAY'S PLAYBOOK. ♪ ♪ ♪ ♪ >>> APPLE SHARES ON TRACK FOR THEIR SIXTH STRAIGHT DECLINE. THE STOCK NOW OFF 10% FROM ITS MOST RECENT HIGH. JA JARED BLIKRE IS HERE WITH THE NEXT SET OF TRADERS THAT ARE WATCHING. >> THANK YOU, JOSH. IT'S GETTING UGLY OUT THERE. YOU CAN SEE BEHIND ME, THIS IS A YEAR TO DATE CHART OF APPLE AND 180 WAS THE SUPPORT LEVEL TO WATCH THERE AND WE HAVE NOW TRADED UNDER IT FOR ABOUT THREE STRAIGHT DAYS. NOW I'M GOING TO GO TO A THREE-YEAR CHART SO I CAN SHOW YOU THE LEVELS THAT ARE OF INTEREST BELOW THE CURRENT PRICE. SO 165 IS WHERE THE RUBBER MEETS THE ROAD RIGHT HERE. AND 169 PRETTY CLOSE TO THAT AND THEN YOU HAVE THE 150 AREA AND I INCLUDE 145 AND THEN THE REAL BIGGEST SUPPORT I'M SEEING IS 120 TO 125 AND THAT IS WAY DOWN THERE. NOW THAT WOULD BE AN EXTREME MOVE AND IT PROBABLY WOULDN'T HAPPEN OVERNIGHT AND IT DOESN'T HAVE TO HAPPEN OVERALL, BUT ONE OF THE INTERESTING THINGS THAT'S HAPPENED OVER THE LAST FEW DAYS IS THE MARKET HAS COME DOWN SO FAST. APPLE'S STOCK HAS COME DOWN SO FAST IT IS OVERSOLD AND IN PACK, THERE'S SOMETHING CALLED THE RELATIVE STRENGTH INDICATOR IT HAS PRINTED A 22 OUT OF 100. ANYTHING UNDER A 30 IS CONSIDERED OVERSOLD AND WHEN THIS HAPPENS A LOT OF TIME THERE IS A REVERSION AND I RAN THE STATISTICS AND HERE'S WHAT IT'S LOOKING LIKE FOR WHEN WE GET A DROP BELOW THE ISI BELOW 25 AND IT POPPED BACK ABOVE. GOING BACK 25 YEARS IT'S HAPPENED 12 TIMES, BUT THE STATISTICS ARE REALLY BAD OVER THE NEXT TWO DAYS. THE NEXT WEEK, TWO WEEKS AND ONE MONTH, YOU HAVE TO GO OUT TO A QUARTER. SO IT MIGHT NOT BE THE BEST TIME TO BE BUYING APPLE RIGHT NOW, AND I'LL JUST CLOSE WITH AN APPLE SEASONALITY. THIS IS AVERAGE RETURNS PER MONTH AND YOU CAN SEE THROUGH MAY, GENERALLY PRETTY POSITIVE HERE. SO WE DO HAVE THAT SLIGHT TAILWIND OF POSITIVE SEASONALITY AND COULD BE SOME MORE PAIN IN TERMS OF -- MORE PAIN POTENTIALLY IN THE SHORT TERM HERE, GUYS. >> THANKS, JARED. APPRECIATE IT. WE'LL BE WATCHING. ♪ ♪ >>> WITH JUST OVER TEN MINUTES LEFT UNTIL THE CLOSING BELL ON WALL STREET, WE ARE LOOKING AT HOW TO NAVIGATE THE BIG PICTURE WITH THE YAHOO FINANCE PLAYBOOK. NVIDIA AND META MAKING HEADLINES FOR RECORD GAINS, TAKE A CLOSER LOOK AT WHERE AND WHY INVESTORS CAN FIND VALUE WITHIN THE TECH SECTOR. JOINING US NOW, DOUG CLINTON AND MANAGING PARTNER AND COREY JOHNSON, THE CHIEF MARKET STRATEGIST. THANKS, GUYS, FOR BEING HERE. WE THINK OF GROWTH AND VALUE AS BEING DIAMETRICALLY OPPOSED, BUT WHEN DOES IT MAKE SENSE FOR INVESTORS TO LOOK FOR VALUE IN TECH AS TRADITIONALLY A GROWTHY SECTOR? >> YEAH. THERE ARE CLASSICAL DEFINITIONS OF THESE TYPES OF NAMES AND HISTORICALLY, WE HAVEN'T SEEN -- WE'VE SEEN TECH AS GROWTH AND INDEED A LOT OF TECH COMPANIES WITHOUT PROFITS ARE HARD TO VALUE AS VALUE STOCKS, BUT I THINK A LOT OF THAT HAS CHANGED OVER TIME AND WE'VE SEEN THE KING OF ALL VALUE INVESTORS AND WARREN BUFFETT WITH HIS GIANT HOLDINGS IN APPLE AND THE TECHNOLOGY CAN'T BE VALUED IS JUST WRONG, AND THEN THERE'S TIMING AND THAT'S WHEN INVESTORS HAVE TO THINK ABOUT WHAT THEY'RE INVESTING FOR AND WHAT KINDS OF RETURNS AND WHEN THEY NEED THEM AND TO UNDERSTAND IF IT'S WORTH A LONG WAIT, IF THERE ARE SOME THINGS THAT ARE WILLING TO BE MORE SPECULATIVE AND WHAT THE TIMING IS FOR THOSE INVESTMENTS TO FIGURE OUT WHAT THE MARKET IS FAVORING AT THAT MOMENT. THERE ARE TIMES WHEN THE MARKET LOVES VALUE STOCKS AND THERE ARE TIMES WHEN THE MARKET HATES IT. >> DOUG, I WANT TO BRING YOU IN HERE AND YOU FIND DEEP VALUE IN TECH AND IT CAN BE A CHALLENGE, BUT YOU HAVE NAMES FOR US. WHY IS SK HEINE, WHY DOES THAT FIT THE BILL HERE? >> IF YOU REWIND THE CLOCK A YEAR, NVIDIA WAS PROBABLY THE VALUE IN TECH, AND IT MIGHT HAVE BEEN THE GREATEST VALUE IN TECH PERIOD IN HINDSIGH BECAUSE IF YOU HAD A CRYSTAL BALL, THE STOCK MIGHT HAVE TRADED TEN TIMES ACTUAL EARNINGS AND TO YOUR QUESTION ABOUT HYNIX, IT'S A MEMORY SUPPLIER TO NVIDIA. NVIDIA USES THE HYNIX BAND MEMORY AND THE CHIPS THAT ARE IN HUGE DEMAND FROM HYPERSCALERS AND NOW POTENTIALLY SOVEREIGN NATIONS AND OTHER INDUSTRIAL COMPANIES THAT ARE BUILDING THEIR AI INFRASTRUCTURE AND WE SEE HYNIX THAT ARE IN THE DEEP WATER WATER, WE SEE CONTINUED DEMAND FOR THOSE NVIDIA CHIPS. >> DOUG, SOMETHING I'M CURIOUS TO GET YOUR TAKE ON WITH SOMETHING LIKE AN S.K.HYNIX, SEMICONDUCTORS ARE A COMMODITY BUSINESS AND MEMORY CHIPS PARTICULARLY SO, DO YOU SEE THE AI CYCLE SMOOTHING THAT OUT AND MAKING THAT BUSINESS LESS COMMODITIZED? >> I THINK IN THE MEDIUM TERM, YES. SO THERE IS SOME NUANCE TO THIS ANSWER. I THINK THE AI CYCLE THAT WE ARE JUST ENTERING INTO RIGHT NOW WILL LAST LIKELY LONGER THAN MANY OF THE OTHER CYCLES THAN WE'VE SEEN IN THE PAST. I THINK WE'LL HAVE A VERY LONG ROAD OF INFRASTRUCTURE BUILD TO SUPPORT AI BECAUSE RIGHT NOW THE WAY THAT AI MODELS WORK, INTELLIGENCE IS WHOLLY DEPENDENT ON ELECTRICITY AND CHIPS, AND SO AS LONG AS THAT IS TRUE WITH THESE MODELS, AND I THINK IT'S TRUE FOR SEVERAL YEARS FROM NOW, WE WILL CONTINUE TO BUILD DATA CENTERS THAT HOUSE THOUSANDS OF THESE CHIPS AND EVEN THOUGH MEMORY HAS BEEN A LITTLE BIT COMMODITIZED IN THE PAST THERE ARE ONLY THREE BIG MEMORY VENDORS AND IT'S HYNIX, MICRON AND SAMSUNG, AND I THINK HYNIX HAS BEEN ON THE FRONT END OF AGGRESSIVE DEVELOPMENT OF NEW MEMORY PRODUCTS AND THAT'S WHY I THINK THEY'LL STAY IN THE LEAGUE. >> WOULD YOU PREFER S.K. HYNIX OVER THE BIG RIVAL MICRON? >> I THINK YOU CAN EARN BOTH. AND HERE'S A CHALLENGE THAT'S A NUANCE FOR INVESTORS AND IT'S A LITTLE BIT HARD TO GET ACCESS TO IT. YOU CAN'T GET ACCESS IN THE LOOPY T.F. THAT I MENTIONED EARLIER. FOR MICRON, OBVIOUSLY, THAT'S A U.S.-LISTED STOCK. IF YOU WANT TOP PLAY MEMORY BROADLY AND WANT DIRECT EXPOSURE, MICRON IS THE EASIER ROUTE TO GO. SO, COREY, I WANT TO TAKE IT TO YOU AND LOOK AT THE MARKETS. >> DRAM IS DRAM AND THEY HAVE ALWAYS TOLD US THAT THEY'RE DRAM SPECIAL AND THE MARKET HAS TOLD <u>S THAT'S NOT THE CASE.</u> SO WHAT WE KNOW, WHETHER IT'S SAMSUNG, HYNIX OR MICRON, DRAM PRICES ARE EXTRAORDINARILY VOLATILE BECAUSE IT IS EASIER TO SWAP OUT DRAM THAN IT IS THE CPU. IT IS A GRAPHICS PROCESSOR AND IT IS SO DIFFICULT TO SWAP OUT AND THAT'S WHY YOU SEE THE TOP LINE GROWTH FROM NVIDIA, AND TO DOUG'S POINT, I'VE BEEN KICKING MYSELF FOR NOT OWNING NVIDIA IN MY PERSONAL ACCOUNTS AND IN MY PORTFOLIO AND YET, I LOOKED AT THE OTHER MORNING AND ONE OF MY BIGGEST HOLDINGS FOR YEARS HAS BEEN COMFORT SYSTEMS WHICH IS AN OBSERVATION THAT I WOULD STOP FROM KICKING MYSELF WAS LOOKING AT THIS COMPANY AND THE COMFORT SYSTEMS THAT HAS HVAC REPAIR AND NOTHING MORE SEXY THAN THE NOTION OF FIXING HVAC AND IT IS ALMOST IDENTICAL TO THAT OF NVIDIA. >> MY POINT IS THIS MARKET IS MORE KINDER TO VALUE INVESTORS THAN WE HAVE BEEN FOR YEARS AND WE DO SEE WINNERS SEPARATED BY LOSERS, IN TECHNOLOGY AND OUTSIDE OF TECHNOLOGY. LOOK AT THAT STOCK AND HOW WELL IT'S PERFORMING COMPARED TO PALO ALTO NETWORKS. IT CAME OUT A FEW WEEKS AGO AND THEY WERE SAYING -- WAS IT A WEEK AGO? THE TIME IS FLYING, TELLING US THEY WERE SEEING CUSTOMER FATIGUE AND YOU SEE CROWDSTRIKE GOING OUT TO THE SAME TYPES OF CUSTOMERS SAYING THEY'RE HAPPY TO BUY. IT SUGGESTS THAT THE COMPANIES ARE PERFORMING DIFFERENTLY AND THE MARKET IS ABLE TO DETERMINE WINNERS FROM LOSERS. A STOCK PICKER'S MARKET IS A NECESSARY ELEMENT TO A VALUE STOCK PERFORMING, AND WHAT WE SEE RIGHT NOW IS, YEAH, WHILE WE ARE AT ALL-TIME HIGHS IN OR AROUND THE S&P 500 AND THE NASDAQ AND BEYOND, WHAT WE ARE SEEING IS THE MARKET IS DISTINGUISHING BETWEEN WINNERS AND LOSERS AND NVIDIA HAS BEEN A FANTASTIC WINNER AND IT'S STILL ON A PRICE TO EARNINGS GROWTH RATIO, A LOT MORE AFFORDABLE THAN MANY OTHER COMPANIES EVEN IN THE SAME SECTOR. >> DOUG, I'LL BRING IT TO YOU. I'LL SWITCH GEARS FOR YOU, DOUG. I'M CURIOUS ABOUT YOUR ANSWER. YOUR FIRM, DOUG, IT OWNS ALPHABET AND THERE'S THE STOCK THAT'S IN THE RED SO FAR THIS YEAR, DOUG. THERE'S BEEN THIS REAL CRITICISM AND IT'S JUST NOT MOVING FAST ENOUGH WHEN IT COMES TO AI. AS A SHAREHOLDER, DOUG, DO YOU SHARE THAT WORRY? >> YOU'VE BEEN SUPER FRUSTRATED, I WOULD SAY, JOSH IN TERMS OF THE SPEED AND DEVELOPMENT WITH AI. GOOGLE, ALPHABET, THEY HAVE ALL OF THE TOOLS AND ALL OF THE COMPONENTS THEY NEED TO BE THE REAL RUNAWAY LEADERS IN AI. THEY HAVE THE DATA. THEY HAVE THE TEAM AND THE DISTRIBUTION THROUGH PRODUCTS LIKE ANDROID AND CHROME. THEY JUST HAVEN'T HAD THE PACE THAT OPEN AI HAS HAD AND THAT'S WHAT YOU SEE WHEN START-UPS LIKE OPEN AI INCUMBENTS AND THAT'S A WORRY FOR US AND THEY STILL HAVE ALL THOSE INGREDIENTS AND THAT'S WHY I HAVEN'T SOLD THE STOCK YET AND WHY IT'S OPTIMISTIC AND YOU'RE HEARING MORE OF THAT AND I THINK THE COMPANY NEEDS TO MAKE A STATEMENT, MAKE A MOVE, HAVE SOME SORT OF ALMOST A META-LIKE MOMENT A YEAR AGO WHEN THEY MOVED INTO A YEAR OF EFFICIENCY AND THEY NEED SOMETHING TO LIGHT THE FIRE AGAIN TO PUT THOSE ASSETS INTO MOTION. >> DOUG, COREY, THANK YOU BOTH FOR JOINING THE SHOW TODAY. I REALLY APPRECIATE IT. >> GOOD TO SEE YOU, ALL THREE OF YOU FOR THAT MATTER. >> WHILE WE'RE WRAPPING UP MARKET DOMINATION, WE WILL HAVE YOU COVERED. STAY TUNED FOR MARKET DOMINATION OVERTIME. ♪ ♪ . >>> THERE IS THE CLOSING BELL ON WALL STREET AND NOW IT IS MARKET DOMINATION OVERTIME. JOSH AND I JOINED BY JARED REPUBLIC REPUBLICRY BLIKRE TO GET YOU UP TO SPEED AND LET'S SEE WHERE THE MAJOR AVERAGES ENDED UP. WE SAW THE DOW BOUNCE OFF THE LOWS OF THE SESSION FINISHING IT HIGHER BY 76 POINTS A GAIN. THE S&P 500 UP ABOUT HALF OF 1% AND WHAT'S NOTABLE TO ME IS THEY'RE THE SMALLEST AND THE LARGEST ALSO HELPING LEAD TODAY. THE RUSSELL 2000 UP 0.6% AND SO WAS THE NASDAQ 100 UP TWO-THIRDS OF 1% AND DIVERGING THERE FROM THEIR SORT OF LARGE BRETHREN AND ALSO I WANT TO TAKE A LOOK AT THE TEN-YEAR NOTE. THERE WE HAVE IT, GIVEN THAT WE HEARD FROM JAY POWELL AND GIVEN THAT THERE WASN'T A BIG CHANGE TO THE MOVEMENT OF WHEN THE FED MIGHT CHANGE RATES. WE SAW THE THREE BASIS POINT DECLINE IN THE TEN-YEAR YIELD TO 4.1%. JARED HAS A CLOSER LOOK AT TODAY'S SECTOR ACTION AND MORE. HI, JARED. >> JULIE, DEFENSIVENESS TODAY. WE DID HAVE TECH LEADING EARLIER WHY, BUT NOT IN THE END. UTILITIES AND STAPLES ROUND OUT THE TOP TWO FOLLOWED BY MATERIAL AND THEN TECH AND REAL ESTATE. WE HAVE CONSUMER STAPLES AND THAT WAS THE WINNER TODAY OR THE SECOND BEST WINNER AND THEN CONSUMER DISCRETIONARY THAT'S THE RETAIL DISCRETIONARY ORIENTED PART AND THAT WAS DOWN 34 BASIS POINTS THERE. WHEN WE LOOK AT THE NASDAQ 100, ANOTHER MONSTER DAY FOR NVIDIA, WELL OVER 20 NEW HIGHS THIS YEAR ALONE AND IT'S UP TO $887 AND AMD, ANOTHER RECORD CLOSE AND J.P. MORGAN AND COSTCO AND PROGRESSIVE FINANCIAL AND ANOTHER BROAD SWATH OF LEADERS E MERGI MERGING IN THIS MARKET, JOSH. >> THAT WOULD HAVE TO BE CROWD STRIKE TODAY. LOOK AT THE SURGE THAT STOCK MADE UP ABOUT 11%, REPORTED Q4 RESULTS THAT BEAT THE GUIDANCE AND ALSO PLEASING THE STREET. INTERESTING IN THE CYBERSECURITIES CASE AND SOME LIKE CROWDSTRIKE, CLEARLY CAPITALIZING AND OTHERS LIKE PALO ALTO NETWORKS HAVE DISAPPOINTED INVESTORS AND WE DID SPEAK WITH ROB OWENS ON THE SHOW AND HE SAID THE CYBERSPACE SETS UP FOR ANYTHING HE HAS SEEN IN A COUPLE OF DECADES AND GEORGE KURTZ WILL BE ON YAHOO FINANCE AND THE CAN'T-MISS INTERVIEW. >> COREY JOHNSON JUST TALKED ABOUT THAT WE ARE STARTING TO SEE COMPANIES DIFFERENTIATE THEMSELVES EVEN IN THE SAME SPACE WHICH HE SAID IS A BETTER ENVIRONMENT FOR THE STOCK PICKER'S MARKET AND THE MORGAN STANLEY ANALYST SAYING TODAY THERE IS NO SPENDING FATIGUE HERE WHEN IT COMES TO CROWD STRIKE GIVEN WHAT WE HEARD FROM PALO ALTO AND WE'LL GET MORE COLOR WHETHER IT'S AN EXECUTION ISSUE AND AN OVERALL DEMAND ISSUE AND WHAT'S GOING ON NOW. >> THIS STOCK UP ABOUT 160% IN THE PAST 12 MONTHS AND ANALYSTS NOT DETERRED AND OVERWHELMING. >> SOME ARE LOOKING LESS THAN MAGNIFICENT. BOTH APPLE AND TESLA ENDING THE DAY LOWER AFTER SEVERAL SESSIONS IN DECLINES AND MADISON MILLS WITH THE TAKEAWAY OF THE DAY AND THIS SPEAKS TO WHAT WE ARE SAYING IS THAT WE ARE STARTING TO SEE SOME OF THE DIVERGENCES. >> WE ARE GETTING A LOT OF FUN, PIPPY NAMES FROM THE STREET. JOSH AND I WERE TALKING ABOUT THE THREE AIA AMIGOS WHICH MY TAKE PEOPLE WOULD PAY MILLIONS OF DOLLARS FOR IS THERE ARE THREE WINNERS, ONE SURVIVOR AND THREE LOSERS. YOU HAVE APPLE, TESLA STRUGGLING YEAR TO DATE AND I WANT TO TALK ABOUT THEIR EXPOSURE TO CHINA BECAUSE THAT'S ONE OF THE PRIMARY DRIVERS AND THE CHALLENGES THAT THEY'RE HAVING WITH TESLA. WOE HAVE WEAK DELIVERIES IN CHINA AND APPLE SALES ARE STRUGGLING AND ALPHABET WHICH ANNOUNCED AI-DRIVEN SEARCH FUNCTIONALITY EARLIER THIS YEAR THAT THEY HAD TO TAKE OFF THE MARKET IN UNDER 24 HOURS BECAUSE OF CHALLENGES WITH THAT AI. THAT LEADS ME TO MY SUCCESS POINT HERE. THE AI AND MENTIONS OF AI ARE NOT SNENOUGH. YOU HAVE TO BE ABLE TO USE IT AND IT HAS TO WORK IN ORDER FOR THE MARKET TO BE HAPPY ABOUT IT AND THERE'S NO BETTER CASE THAN NVIDIA AS JARED MENTIONED, THE SEA OF GREEN, AND NVIDIA HAS MAINTAINED THE SEA OF GREEN EVEN WHEN WE'VE SEEN THE SELL-OFF. LIFTING UP THE BROADER MARKET HERE. IN TERMS OF WHAT'S NEXT, IT SEEMS LIKE THESE AI PLAYS THAT CAN WIN ON NOT ONLY THE USE CASE AND ALSO THE FUNDAMENTALS AND KEEPING THOSE SALES UP IN SPITE REGIONS LIKE CHINA. THAT IS GOING TO BE THE KEY FOR THIS RALLY MOVING FORWARD. >> IT WAS INTERESTING, WE JUST SPOKE TO DEEPWATER AND CLEARLY EXPRESSING SOME REAL FRUSTRATION THERE. >> WITH ALPHABET, YOU MEAN? >> WITH ALPHABET, YEAH. >> IT DOESN'T WORK AND IF YOU INTRODUCE SOMETHING TO THE MARKET THAT DOESN'T WORK YET YOU CAN'T BE SURPRISED WHEN PEOPLE AREN'T HAPPY ABOUT THAT, I WOULD IMAGINE, BUT THEN I'M ALSO INTERESTED IN MICROSOFT. THEY'RE UP ON THE YEAR, SO I THINK WE HAVE A CHART SHOWING THE MAGNIFICENT SEVEN NAMES COMPARED YEAR TO DATE. THEY WERE THE CLEAR WINNER OF AI BECAUSE OF OPEN AI, OF COURSE, BUT REALLY TRAILING THE LIKES OF NVIDIA AND THE MAGNIFICENT SEVEN TRADE AND I'M CURIOUS WHETHER THEY'LL HAVE A CATALYST FOR MORE GROWTH MOVING FORWARD ON AI OR IF THAT'S JUST PRICED INTO THE NAME AT THIS POINT. >> IT'S INTERESTING AS WE TALK ABOUT NOW THAT SOME OF THEM ARE LAGGING AND YET UP UNTIL A COUPLE OF DAYS AGO, THE MARKET WAS CONTINUING TO MAKE NEW HIGHS WHICH SORT OF LENDS CREDENCE TO THE IDEA THAT THERE IS A BROADENING THAT'S BEEN HAPPENING AND NANCY TENGLER CALLED IT A QUIET BROADENING. >> STEALTH. >> HEALTH BROADENING IN THE MARKET THAT'S BEEN HAPPENING. THE IDEA THAT THE MARKET COULD NOT GO UP UNLESS THESE GUYS WERE GOING UP, THAT NOW SEEMS TO BE GOING AWAY A LITTLE BIT. >> WE HAD THE UBS NOTE SAYING RAIN OR SHINE WHETHER YOU HAVE THE FED RAISING RATES OR WHETHER YOU HAVE ALL OF THE MAGNIFICENT SERVE PERFORMING WELL TO YOUR POINT, JULIE. IT SEEMS LIKE THIS MARKET WILL GO UP, REGARDLESS. AS LONG AS NVIDIA IS THERE, WE'RE COOL. >> THE STOCKS GO UP. >> THANK YOU VERY MUCH. APPRECIATE IT. >> MOVING ON, WE'RE TAKING A LOOK AT THE BOND MARKET AND THE FED CHAIR JAY POWELL SAID THE CENTRAL BANK ISN'T READY TO CUT RATES JUST YET. JOINING US NOW IS STEVE BLAKELY. GOOD TO SEE YOU. >> THANKS FOR HAVING ME. >> JAY POWELL, I THINK HE DID EXACTLY WHAT HE WANTED TO DO WHICH WAS MAKE NO NEWS, RIGHT? WHAT DID YOU MAKE OF IT? ANY BIG TAKEAWAYS? >> HE'S REINFORCING THE MESSAGE THAT THEY'VE BEEN TRYING TO GET THE MARKET ON SITE WITH, AND THEY WANT TO THE HAVE CONVICTION THAT INFLATION WILL KEEP GRINDING DOWN AND THERE'S A LOT OF DEBATE INTEREST SOME OF THE RECENT INPUTS INTO THE CALCULATION AND NONETHELESS, THEY'RE TRYING TO MAKE IT CLEAR THAT THEY ARE GOING TO KEEP WATCHING THE DATA ROLL IN AND THERE IS A SCENARIO HERE WHERE I THINK THEY'RE COMFORTABLE WITH THE LABOR MARKET BEING STRONG AS LONG AS THEY CONTINUE TO SEE INFLATION FALL. >> FROM THE BOND MARKET PERSPECTIVE, HAS THE FED DONE A GOOD JOB? IN OTHER WORDS, THE FED FREQUENTLY COMES UNDER FIRE AND THEY CAME UNDER FIRE IN CONGRESS TODAY AS HE ALWAYS DOES, BUT DO YOU THINK THAT THE ACTION THAT WE HAVE SEEN IN PRICES HAS INDICATED CONFIDENCE IN THE FED AND YOU KNOW, SORT OF A SMOOTHNESS OF THE REACTION THAT DOESN'T INDICATE ALARM? >> I THINK WHAT YOU'RE SEEING IN THE MARKET IS A COMFORT LEVEL WITH FINANCIAL CONDITIONS WHERE THEY ARE. THERE IS A LITTLE BIT OF CONCERN THAT CONDITIONS LOOSENED QUITE A LOT TOWARD THE END OF THE YEAR AND THEY WANT TO CONTINUE TO TRY TO KEEP THOSE IN CHECK BECAUSE I THINK WHAT THEY DON'T WANT TO THE HAVE HAPPEN IS SEE A DRAMATIC LOOSENING AND THEN THE VIEW THAT THE WEALTH EFFECTS AND EVERYTHING ELSE CAN START DRIVING PRESSURES BACK UP. SO THEY SEEM TO HAVE -- IF YOU WANT TO MEASURE SUCCESS, THEY SEEM TO MOVE THE MARKET UP THE SIX-CUT NARRATIVE. THEY MOVED IT OFF AND PUSHED THE TIMING BACK TO SOME DEGREE. SO WE WENT FROM MARCH TO JUNE AND TO THREE-PLUS CUTS. SO THEY WERE SUCCESSFUL IN REALIGNING THE MARKET IN THAT VIEW. >> SAY THE FED DOES ENGINEER A SOFT LANDING AND THEY PULLED IT OFF AND INFLATION COMES BACK DOW TO 2% WITHOUT A DOWNTURN. FOR FIXED INCOME INVESTORS IF THAT IS THE SCENARIO, WHERE WOULD BE OPPORTUNITY? >> IN THAT CASE YOU CAN BROADEN OUT YOUR PORTFOLIO IN FIXED INCOME. YOU SHOULD HOLD, LET'S CALL IT INTERMEDIATE TREASURY EXPOSH YOU ARE AND YOU CAN GET COMFORTABLE HOLDING A HIGH YIELD IS ONE EXAMPLE. SO FOR TREASURY, SOMETHING LIKE IEF FOR HIGH YIELD. YOU CAN HOLD USHY AND HY AND HYDB AND ALL OF THESE PRODUCTS WILL GIVE YOU AN EXTRA INCOME BOOST AND ALSO IN A SOFT LANDING SCENARIO, YOU ARE NOT EXPECTING SPREADS TO WIDEN OUT. SO YOU CAN THEN RELY ON THAT INCOME WITHOUT HAVING TO WORRY TOO MUCH ABOUT POSSIBLE DRAWDOWNS FROM SPREAD WIDENING. >> DO YOU THINK IT IS THE LIKELY ONE? >> I THINK IT'S STILL THE BASE CASE. WITH CAVEATS, THERE ARE A LOT OF THINGS THAT CAN HAPPEN AS WE PROGRESS FURTHER AND IT DOES LOOK AND THERE MAY BE A LOT OF THINGS GOING ON WITH THIS WHERE, FOR EXAMPLE, YOU GUYS WERE TALKING ABOUT AI AND THE PRODU PRODUCTIVITY EFFECTS THAT WERE INCREASING AND WE'LL HAVE TO SEE HOW THAT PLAYS OUT AND THAT'S STILL THE BASE CASE. >> YEARN IT'S A POPULAR OPINION, BUT SAY LARRY SUMMERS IS RIGHT AND DR. SUMMERS RECENTLY SAID I THINK YOU CAN PUT IT AS A MEANINGFUL RISK IN YOUR OPINION THAT THE NEXT MOVE IN RATES IS UPWARD AND NOT DOWNWARD. IF THAT'S RIGHT, HOW DOES THAT CHANGE THE CATALYST FOR INVESTORS. >> THAT'S AN INTERESTING ONE. LET'S TAKE THAT SCENARIO, IF YOU DO SEE A STRONG CPI PRINT AND THE OTHER INDICATORS THAT WOULD LEAD THEM TO CONCLUDE THAT WE THOUGHT WE WERE RESTRICTIVE, BUT MAYBE NOT. THEY MAY VERY WELL START TO TIGHTEN. SO IN THAT CASE, YOU GO BACK TO THE SHORTENED PLAYBOOK. SO WHAT DOES THAT LOOK LIKE? THAT LOOKS LIKE T-BILLS AND SGOFSGOV AND TREASURY FLOATERS AND YOU WANT TO RIDE THE SHORT RATES AND SHORT-DATED TIPS. SO FOR MONETIZING THAT INFLATION WITHOUT TAKING TOO MUCH INTEREST RATE RISK SO STIP IS AN EXAMPLE TO DO THAT AND YOU'D HAVE TO REFER BACK TO THAT BOOK WHILE YOU'RE WAITING FOR THIS TO CALM BACK DOWN. BUT AGAIN, POSSIBLE, BUT I THINK THE BASE CASE THEY SEEM TO BE HEADING ON THIS -- >> WE'VE CALLED MEANINGFUL RISK OR SOMETHING DIFFERENT? >> I'M NOT SURE I WOULD QUITE p I DO THINK I NEED TO SEE SOME MORE DATA TO GET A HANDLE ON IT? IS THERE A NONE-ZERO CHANCE, AND THE RECENT DATA THAT'S WORN IN AND PCE FORTUNATELY CAME IN WITH EXPECT EG EXPECTATIONS AND SOME PEOPLE WANTED TO SEE THE NUMBER ROLL OUT SHARPLY AND HEY, IF THIS BECOMES STUBBORN AND STICKY IT'S A POSSIBILITY? DO YOU THINK IT'S REASSURING TO THE MARKET THAT POWELL IS HAMMERING HOME THE MESSAGE THAT THE FED WILL BEGIN TO MOVE EVEN IF IT'S NOT ALL OF THE WAY TO 2%, AS THEY FEEL CONFIDENT IT'S APPROACHING 2%? >> I THINK THAT'S RIGHT. BECAUSE WITH THE RISK THAT THEY ARE TRYING TO HANDLE IS THAT, YOU KNOW, AS YOU KNOW THE LAG EFFECTS. IT'S ONE OF THOSE THINGS WHERE YOU HAVE TO BE A LITTLE BIT CAREFUL BECAUSE YOU DON'T KNOW EXACTLY WHEN YOU'RE GOING TO LAND IT, AND SO IF YOU STAY RESTRICTED FOR TOO LONG YOU WILL EVERSHOOT. IT IS A CHALLENGING THING TO GET THAT EXACTLY RIGHT SO THAT'S WHY THEY'RE BEING ATTENTIVE TO IT AND IF THEY SEE THE MOMENTUM CONTINUING WITH THAT, THAT IS WHEN THEY DECIDE ULTIMATELY THAT THEY CAN PULL BACK AND THEY WANT TO SEE A FEW MORE VAL DAGSZ POINTS ON THAT. >> A BIT MORE GOOD DATA. THANKS SO MUCH FOR JOINING US TODAY. APPRECIATE IT. >> FED CHAIR JEROME POWELL IS TESTIFYING TODAY AND IS HEADING BACK TO THE HILL TOMORROW AND WE'LL KEEP DIVING DEEPER INTO THE COMMENTS. STAY TUNED. MORE "MARKET DOMINATION OVERTIME" COMING UP RIGHT AFTER THIS. ♪ ♪ ♪ >>> PRESIDENT BIDEN GIVING HIS STATE OF THE UNION ADDRESS TOMORROW. BIDEN WILL LOOK TO ASSURE VOTERS ABOUT THE STRENGTH OF THE ECONOMY, SOMETHING MANY AMERICANS CONSIDER IS IN POOR CONDITION ACCORDING TO A RECENT NEW YORK TIMES-SIENNA POLL. FOR MORE ON TOMORROW 18 STATE OF THE UNION WE HAVE YAHOO FINANCE'S VERY OWN RICK NEWMAN. WHAT WILL HE SAY? WHAT ARE HIS PRIORITIES? >> I THINK WHAT HE DOES IS MORE IMPORTANT THAN WHAT HE SAYS. BIDEN NEEDS TO SHOW UP ON CAPITOL HILL AND DO 25 JUMPING JACKS, TEN OR 20 SIT-UPS AND MAYBE TAKE A COUPLE OF LAPS WITHIN THE CHAMBER AND DEMONSTRATE TO AMERICA THAT HE IS THE MOST VIGOROUS 81-YEAR-OLD IN THE NATION AND THEN IS DOESN'T MATTER WHAT HE SAYS. I DON'T THINK HE'S GOING TO DO THAT, PROBABLY. I'M ONLY HALF JOKING. >> THAT SOMETHING PEOPLE WOULD TUNE INTO. >> THE NUMBER ONE THING HE HAS TO DO IS NOT FALL OVER OR HAVE A SENIOR MOMENT OR DEMONSTRATE IN SOME WAY THAT CONCERNS ABOUT HIS FRAILTY ARE VALID, AND I THINK HE KNOWS THAT. I THINK HIS CAMPAIGN KNOWS THAT. THERE COULD BE SOME HECKLING FROM REPUBLICANS IN THE CROWD TRYING TO SEE IF THEY CAN GOAT HIM ON AND MAYBE SUCKER HIM INTO A WEAK MOMENT WHERE HE FLUBS OR SAYS SOMETHING OFF-THE-CUFF OR CONFUSES THE LEADER OF THIS COUNTRY WITH THAT COUNTRY AND SO ON. I THINK THAT IS ACTUALLY MORE INTERESTING TO POLITICAL ANALYSTS AT THIS POINT THAN WHAT HE'S GOING TO SAY BECAUSE I THINK WE KNOW WHAT HE'S GOING TO SAY. IT'S WHAT HE'S BEEN SAYING IN HIS SPEECHES ACROSS THE COUNTRY FOR THE LAST SIX OR NINE MONTHS. THE ECONOMY IS STRONG, LABOR MARKET IS STROSNG, BUT WE STILL HAVE WORK TO DO AND HE'LL HIGHLIGHT THE THINGS HE THINKS HE'S DONE WELL AND HE'LL TALK ABOUT THE NEXT FOUR YEARS AND WE'LL HEAR ABOUT GETTING DRUG PRICES UNDER CONTROL AND OTHER EFFORTS TO GET PRICES DOWN. HE'S THINKING ABOUT JUNK FEES LATELY AND CORPORATE GREED, WE WILL HEAR ABOUT. IT'S NOT HIS FAULT AND IT'S THE GREEDY CORPORATIONS AND STUFF LIKE THAT. I'VE SEEN SOME ANALYSTS SAY COULD YOU SHORTEN THE SPEECH, PLEASE, BECAUSE NOT THAT MANY PEOPLE WATCH ANYWAY. >> WHO WAS THE SPEECH FOR? AND I THINK, LOOK, THIS IS OVERPLAYED EVERY SINGLE YEAR. THE POLITICAL GEEKS GET ALL EXCITED ABOUT IT AND LAST YEAR, THE AUDIENCE FOR THE STATE OF THE UNION WAS ABOUT ONE-FOURTH OF WHAT IT WAS FOR THE SUPER BOWL AND I'M SURPRISED IT WAS WHAT IT WAS LAST YEAR. >> THAT'S SHOCKING AND ARE MORE PEOPLE GOING TO BE INTERESTED NOW THAT WE ARE INTO THE GENERAL ELECTRIC PAIN. AND THIS IS A MILK TOASTY EVENT THAT'S NOT DECISIVE ONE WAY OR ANOTHER AND THAT'S WHY BIDEN HAS TO GET THROUGH IT WITH HIS TWO FEET ON THE GROUND. >> YOU KNOW WHO I'VE BEEN THINKING ABOUT RECENTLY AND RONALD REAGAN. >> BECAUSE HE WAS OLD WHEN HE WAS IN OFFICE, AND SORRY TO PUT IT THAT WAY, BUT HE WAS OLD AND TOWARD THE END HE HAD ALZHEIMER'S. AND I AM NOT OLD ENOUGH TO REALLY REMEMBER HIS PERFORMANCE TOWARDS THE END. >> AT THAT POINT HE WASN'T RUNNING FOR RE-ELECTION. ? CORRECT. >> THAT'S CORRECT. >> ONE THING THAT REAGAN DID THAT IS RELEVANT IS THAT HE TURNED HIS AGE TO HIS ADVANTAGE BY, YOU KNOW, POINTING AND MAKING SOME FUN AS HE SAID IN THE JOKE. I DON'T WANT TO MAKE AGE AN ISSUE BECAUSE I DON'T WANT TO EXPLOIT MY OP BONPONENT'S LACK EXPERIENCE. HE TURNED IT INTO A JOKE AND BIDEN WENT ON LATE NIGHT AND HE MADE A REFERENCE TO WHEN HE FIRST RAN FOR POLITICAL OFFICE EIGHT YEARS AGO. I THINK IT'S A GOOD IDEA IF HE'S KIND OF FUNNY AND NOT CRINGY. IT HAS TO LOOK -- REAGAN KNEW HOW TO DELIVER A LINE. HE WAS AN ACTOR AND THAT LINE, WITHOUT A DOUBT WAS RELERSED AND IT DIDN'T LOOK REHEARSED BECAUSE HE DELIVERED IT WELL AND BIDEN COMES OFF WITH WHAT WERE SUPPOSED TO BE ZINGERS AND HE DIDN'T PRACTICE ENOUGH IN THE MIRROR AND SOMETHING LIKE THAT, IT WON'T WORK, BUT LIKE IT OR NOT, AND BY THE WAY, TRUMP IS NOT SPRY EITHER. THERE ARE VIDEOS WHERE HE DRAGS HIS RIGHT LEG. WHAT IS WRONG WITH TRUMP AND HE DOESN'T LOOK LIKE HE'S TOO SWIFT ON HIS FEET EITHER, IT'S NOT JUST BIDEN. >> THEY'RE BOTH OLD. >> THEY ARE. >> RICK NEWMAN, THANK YOU VERY MUCH. WE APPRECIATE IT. >> JEROME POWELL TESTIFYING IN FRONT OF THE HOUSE FINANCIAL SERVICES COMMITTEE TODAY KICKING OFF TWO DAYS OF CONGRESSIONAL TESTIMONY. THE WORD FROM POWER IS THE CONTINUING PROGRESS ON INFLATION COURT IS NOT ASSURED AND THE CENTRAL BANK IS STILL EXPECTED TO CUT RATES LATER THIS YEAR. >> JOINING US NOW IS SENATOR CYNTHIA OF WYOMING AND POWELL WILL BE IN FRONT OF THAT COMMITTEE TOMORROW. THANK YOU VERY MUCH FOR BEING HERE. WE REALLY APPRECIATE IT. >> MY PLEASURE. >> I'M CURIOUS, WHAT DO YOU WANT TO KNOW FROM JAY POWELL TOMORROW WHEN YOU GET THE CHANCE TO QUESTION HIM? >> WELL, I'D LIKE TO VISIT WITH HIM ABOUT A COUPLE OF THINGS. ONE IS ABOUT QUANTITATIVE EASING AND WE'VE SEEN THAT AS THE FED HAS PRINED MORE AND MORE MONEY THAT IT HAS HELPED DRIVE UP INFLATION AND NOW THEY'RE SAYING THAT THEY'RE NOT READY TO REDUCE RATES BECAUSE INFLATION IS STILL AN ISSUE, AND I WANT TO KNOW WHAT IN THE LONG TERM QUANTITATIVE EASING LOOKS LIKE AND IF THEY WERE TO DO QUANTITATIVE TIGHTENING WOULD WALL STREET BAL SXK HOW DO WE GET BACK TO SOME SORT OF EQUILIBRIUM WITH REGARD TO HOW MUCH MONEY WE HAVE CIRCULATING IN OUR SYSTEM. >> I'D ALSO LIKE TO VISIT WITH HIM JUST ABOUT HOW MUCH INDIVIDUALS ARE A FORECASTED BY THIS INFLATION? BECAUSE EVEN THOUGH THE ECONOMIC INDICATORS THAT THE FED LOOKS LIKE ARE DIFFERENT FROM WHAT HAPPENS TO THE CONSUMER, THE EVERYDAY CONSUMER IS PAYING WAY MORE FOR GASOLINE, FOR GROCERIES, FOR NATURAL GAS, FOR RENT AND SO THE FEDERAL RESERVE CAN TOUT ALL DAY LONG THAT THE ECONOMY'S GETTING BETTER AND WE WILL NOT HAVE A RECESSION, THAT WE'LL BE ABLE TO CUT RATES AT SOME POINT, BUT IF THE AMERICAN PEOPLE DON'T SEE THAT, THEY CONTINUE TO LOSE BUYING POWER COMPARED TO THEIR PAYCHECKS. SO WHEN WILL THE REDUCTION IN INFLATION THAT THE FED SEES HIT THE EVERYDAY CONSUMER? WHEN WILL IT AFFECT GROCERY PRICES AND GASOLINE PRICES, RENT AND THE THINGS THAT PEOPLE ARE BUYING EVERY DAY, THE EVERYDAY CONSUMER IS NOT SHARING IN WHAT THE FED SEES AS AN IMPROVING ECONOMY. >> AND SENATOR, IT'S GREAT TO SEE YOU. I WANT TO SWITCH GEARS HERE TO ANOTHER TOPIC. WE HAVE SKYBRIDGE FOUNDER ANTHONY SCARAMUCCI ON WITH US THIS WEEK, AND HE THINKS THAT BITCOIN WOULD BE BETTER OFF UNDER ANOTHER BUYOUT TERM. TAKE A LISTEN, SENATOR, TO WHAT HE HAD TO SAY. >> MR. TRUMP IS GOING TO LOSE THIS ELECTION. JOE BIDEN WILL GET RE-ELECTED AND THAT WILL BE GENERALLY GOOD FOR THE MARKETS WHICH ARE AT AN ALL-TIME HIGH, I MIGHT POINT OUT DURING THE BIDEN ADMINISTRATION AND IT WILL ALSO BE VERY GOOD FOR BITCOINERS BECAUSE YOU MAY NOT LIKE THE REGULATION, BUT AT LEAST THERE IS A PREDICTABLE PROCESS TO THE LAW. >> YOU HEARD MR. SCARAMUCCI THERE, A BIT GOING BULL. WHAT DO YOU MAKE OF HIS COMMENTS THERE? >> I DISAGREE WITH HIM THAT THERE IS UNDER STUD REGULATORY FRAMEWORK RIGHT NOW. THERE IS NOT AND WHAT I HEARD FROM THE INDUSTRY IS THE LACK OF A REGULATORY FRAMEWORK MEANS THAT THEY ARE REGULATED BY ENFORCEMENT ACTIONS THAT INCLUDE PENALTIES. >> I THINK THAT THE INDUSTRY WOULD RATHER HAVE CONGRESS LEGISLATE ON THIS SO THEY HAVE A CLEAR REGULATORY FRAMEWORK GOING FORWARD AND THAT ONLY COMES THROUGH LEGISLATION. IT DOESN'T COME THROUGH ENFORCEMENT ACTION. NOW I DO THINK THAT BITCOIN'S GOING TO BE FINE. THE 11 EXCHANGE-TRADED FUNDS THAT WERE APPROVED THIS YEAR INCLUDED BY SOME OF THE LONGEST NAMES IN FINANCIAL SERVICES THAT ARE VERY STABLE ARE GOING TO BRING PEOPLE INTEREST THE BITCOIN EXCHANGE-TRADED FUND THAT WILL HAVE A COMFORT LEVEL THAT THAT'S A PLACE THAT THEY CAN GET INVOLVED IN BITCOIN THAT DOESN'T MAKE THEM UNCOMFORTABLE. THE OTHER THING THAT WILL HAPPEN WITH BITCOIN IS IT'S GOING TO GO THROUGH HAVING IN APRIL WHICH MEANS HALF AS MANY BITCOIN WILL BE PRODUCED EVERY TEN MINUTES SO THE SCARCITY THAT'S BUILT INTO THE PHONE CALL FOR BITCOIN IS GOING TO START KICKING IN IN ITS ABILITY TO GO UP IN PRICE BECAUSE WE'LL HAVE A MORE HARDENED ASSET. THE MORE PEOPLE THAT ARE IN BITCOIN, THE MORE HARD, MEANING SECURE THAT ASSET GETS AND IT'S JUST GOING TO DRIVE UP THE PRICE. ? I DISAGREE WITH MR. SCARAMUCCI THAT WE HAVE A REGULATORY FRAME WORK AND THAT'S WHY, AND THE FINANCIAL INNOVATION. ? >> WHAT IS THE MOST URGENT THING THAT NEEDS TO BE ENACTED IN TERMS OF THAT REGULATION? >> YOU'RE TALKING ABOUT BITCOIN ETHER WHICH ARE THE MORE ESTABLISHED COINS, IF YOU WILL AND AT THE SAME TIME THAT YOU'VE SEEN THE REESE NOT CRYPTO RALLY AND YOU SEE DOG WITH HAT IS ONE OF THE OTHER COINS THAT ARE SEEING A RALLY HERE. DO YOU THINK THAT THERE NEED TO BE MORE GUARD RAILS AROUND THE COINS? >> ABSOLUTELY. THERE ARE THOUSANDS OF COINS AND THEY ARE ALT, MEANING THEY ARE ALTERNATIVES THAT DON'T HAVE A CLEAR REGULATORY FRAMEWORK, AND A NUMBER OF THEM ARE SECURITIES AND THEY'RE NOT COMMODITIES LIKE BITCOIN IS. IF YOU KNOW ONE IS A COMMODITY IT WOULD BE REGULATED BY THE COMMODITY FUTURES TRADING COMMISSION AND SOME OF THOSE THAT HAVE THE INCIDENTS OF A SECURITY SHOULD BE REGULATED BY THE SEC AND WE DON'T HAVE THAT REGULATORY FRAMEWORK TO CLARIFY WHICH IS WHICH. SO SOME OF THESE COINS FOR PEOPLE WHO THINK MAYBE BITCOIN IS SYNONYMOUS WITH CRYPTOCURRENCY, IT'S NOT. THE ONLY THING THAT YOU CAN CLEARLY PUT YOUR MONEY IN RIGHT NOW AND KNOW THAT IT'S A GOOD STORE VALUE AND A SOLID MEANS OF EXCHANGE GOING FORWARD IS BITCOIN. A LOT OF YOU SAID THAT THE COINS ARE HIGHLY SPECULATIVE AND SO WE NEED CONSUMER PROTECTION HERE AND WE DON'T HAVE IT. >> SENATOR, I WANT TO GET YOU OUT HERE ON THIS AND I'M JUST CURIOUS, DO YOU THINK WE MIGHT SEE A SPOT, ETHEREUM ETF THIS YEAR? LET'S BE HONEST. IT TOOK A LAWSUIT TO GET CHAIRMAN GENSLER TO APPROVE A SPOT, BITCOIN ETF AND DO YOU THINK WE MIGHT SEE A SPOT WITH ETHEREUM ETF? >> I DON'T KNOW. I THINK IT WAS SO MUCH MORE LOGICAL TO DO A BITCOIN ETF FIRST BECAUSE OF THE FUNDAMENTALS ARE SO WELL UNDERSTOOD. THEY'RE SO SECURE, BUT THE BITCOIN ETF MAKES SENSE TO ME. WITH REGARD TO ETHEREUM IT MIGHT TAKE A LITTLE MORE TIME TO MAKE SURE THAT IT HAS SOME OF THE SAME, CLEAR FUNDAMENTAL SAFETY MEASURES IN TERMS OF CONSUMER PROTECTION THAT BITCOIN HAS. SO THAT MIGHT TAKE LONGER INVENTORY EFFORT BY THE SEC, AND I DON'T KNOW IF THAT COULD BE ACCOMPLISHED BEFORE THE END OF THE YEAR. >> SENATOR, THANK YOU SO MUCH FOR SITTING ON THE SHOW. WE APPRECIATE YOUR TIME AND INSIGHT. >> NICE TO SEE YOU. >> THURSDAY, MARCH 7th, WRAPPING UP TWO STRAIGHT DAYS OF TESTIMONY AND TOMORROW WE'LL ANSWER QUESTIONS ON THE COMMITTEE ON WHETHER THE FED WILL START CUTTING RATES AND DID SAY HE'S STILL EXPECTING IT TO HAPPEN LATER THAT YEAR. >> A SOMEWHAT BUSY DAY ON THE CALENDAR EVEN AS EARNINGS SEASON WINDS DOWN. BROADCOM, COSTCO, KROGER, MARVELL TECHNOLOGY AND GAP, THEY ALL REPORT TOMORROW. BROADCOM ANNOUNCING FIRST QUARTER EARNINGS AFTER THE BELL. THE SEMICONDUCTOR GIANT HAS BEEN ON AN ABSOLUTE TEAR. THE STOCK UP 20% TO STOCK THE YEAR AND OVER 20% OVER THE LAST SIX MONTHS. >> WE'LL GET INSIT INTO THE STATE OF CONSUMER TOMORROW AFTERNOON AND THE ECONOMISTS ARE EXPECTING THE NUMBER TO JUMP FOR THE MONTH OF JANUARY AS THE BILLS COME DUE FOR HOLIDAY SPENDING AND IT'S HAPPENING AGAINST THE BACKDROP OF THE BIDEN ADMINISTRATION SEEKING TO IMPOSE A NEW LIMIT ON CREDIT CARD LATE FEES. >> THAT'S ONE OF THE THINGS THAT WE COULD EXPECT DISCUSSED IN THE STATE OF THE UNION. >> FOR SURE. THAT WILL DO IT FOR TODAY'S MARKET DOMINATION OVERTIME AND BE SURE TO COME BACK TOMORROW LEADING UP TO AND AFTER THE CLOSING BELL. STAY TUNED. MORE YAHOO FINANCE COMING YOUR WAY ON THE OTHER SIDE. >>> INSANE AND VOLATILE, JUST TWO WORDS HOW OUR NEXT GUEST DESCRIBES THE NEXT 24 HOURS IN BITCOIN TRADING AND BITCOIN HITTING A NEW ALL-TIME HIGH AND PLUNGING AND IT'S BEEN A ROCKY ROAD FOR INVESTORS TRYING TO DIGEST THE MOVE AND MAY WHAT COME NEXT. SCOTT WALKER, CRYPTO COMMENTATOR AND THE WOLF OF WALL STREET PODCAST AND YOUTUBE SERIES. SCOTT, IT'S GOOD TO SEE YOU. I DON'T KNOW IF WE SHOULD EVER TRY AND MAKE A CALL ON WHERE BITCOIN IS HEADED IN THE NEAR-TERM, IT SOUNDS TOUGH, BUT THE SURGE HAS BEEN INCREDIBLE. WE SAW THE DROP YESTERDAY, BUT STILL, A MOVE OF 50% ALREADY THIS YEAR, SCOTT. INTERESTING, JUST HIGH LEVEL. WHAT DO YOU MAKE OF THE MOVE WE'VE SEEN, SCOTT AND WHERE ARE YOU IN THE NEAR TO INTERMEET ATT INTERMEDIATE TERM. >> THEY SHOULD JUST ZOOM OUT BECAUSE WE SEE THIS KIND OF VOLATILITY AND THE WE LITERALLY JUST CALL IT TUESDAY IN THE CRYPTO MARKET AND IT HAPPENED TO HAVE BEEN ON A TUESDAY, BUT NO SURPRISE WHEN THERE WAS LEVERAGE BUILT UP AND A MASSIVE OPEN INTEREST WHEN WE SAW THE FLUSH OF THAT LEVERAGE AND IT'S A BILLION DOLLARS LIQUIDATED WHICH IS PRETTY INSANE AND IF YOU WONDER WHAT IS DRIVING THIS FUNDAMENTAL MOVE AND IT'S OBVIOUSLY THE APPROVAL OF THE ETFs AND IN ADVANCE OF THAT, THE NARRATIVE THAT THE BITCOIN SPOT ETFs WOULD BE APPROVED AND WE'RE SEEING ABSOLUTELY MASSIVE DAILY INFLOWS FROM 69,000 DOWN TO 59,000. WE SAW OVER 700 MILLION INTO THE ETF SPOT ALONE. SO WITH THAT MUCH BUYING WE CAN SEE THESE FLOWS AND IT IS VERY TRANSPARENT AND WE HAVE A FUNDAMENTAL REASON WHY WE SEE BITCOIN CONTINUE TO RISE AND I DON'T SEE THOSE FLOWS STOPPING ANY TIME SOON AND THE REASON FOR THAT IS BECAUSE THEY HAVEN'T EVEN BEEN UNLOCKED, THESE PRODUCTS, FOR MOST RAs AND INSTITUTIONAL CUSTOMERS AND VANGUARD DOESN'T OFFER THESE PRODUCTS AND MAYBE THEY WON'T. MERRILL LYNCH JUST APPROVEDED A FEW OF THEM AND WE HAVE RIAs WITH THE CARSON GROUP UNDER MANAGEMENT GROUP THAT HAS NOW APPROVED FOUR OF THESE AND THESE TRICKLE OF APPROVALS, PEOPLE DOING THEIR DUE DILIGENCE AND WE'LL DEFINITELY CONTINUE TO SEE A LOT MORE BUYING OF THESE SPOTTY ETFs. >> SCOTT, JUST TO BE CLEAR, CARSON GROUP AND WHAT HAVE YOU WEREN'T BUYING CRYPTO BEFORE BECAUSE FOR REGULATORY REASONS THEY COULD NOT ON BEHALF OF THE CLIENT'S PORTFOLIOS AND BITCOIN WASN'T LIQUID ENOUGH AND THEY WEREN'T RECOMMENDING IT? TALK TO US ABOUT THAT. >> IT'S PRIMARILY THE FORMER. THERE WASN'T A WAY THAT A LOT OF THESE INSTITUTIONS COULD, IN A MANNER OF A FIDUCIARY COULD APPROVE GOING TO COINBASE AND CUSTODY IN YOUR OWN ASSETS AND IF YOU WANT THE MORE CYNICAL ZERO, RA RECOMMENDS THINGS TO MAKE THEM MORE MONEY AND THEY WEREN'T GOING TO SEND YOU TO BUY BITCOIN. NOW THAT WE HAVE THE ETF, THE MINUTE THEY WERE APPROVED, MOST DIDN'T BELIEVE THEY WOULD BE APPROVED IN THE FIRST PLACE AND THERE WAS A LOT OF SURPRISE. THEY DIDN'T WANT TO WASTE THEIR TIME STARTING TO TALK TO THEIR CLIENTS ABOUT PRODUCTS THAT DIDN'T EVEN EXIST YET. SO THAT'S WHY NOW THEY'RE DOING THEIR DUE DILIGENCE AND THEY'RE COMING ONLINE AND THEY'LL CHARGE THE MANAGEMENT FEE ON THE SPOTTY ETFs LIKE EVERYTHING ELSE AND EVENTUALLY YOU'LL BE USED AS COLLATERAL AND THEY'RE USING FINANCIAL ASSETS IF THEY'RE BUYING THEM AS THE ETF AND THEY'RE NOT BUYING SPOT BITCOIN, TO BE CLEAR. I THINK PEOPLE SHOULD BUY BITCOIN THEMSELVES AND REALLY OWN THE ASSET CLASS AND THIS IS HUGE, FUNDAMENTALLY FOR THE MARKET AND ILLIQUIDITY OR EVEN THE FACT THAT THEY'RE SO VOLATILE. FACEBOOK, META HAD A LARGER DRAWDOWN THAN BITCOIN IN THE LAST BEAR MARKET AND THERE'S A LOT OF COROLLARIES IN THIS WITH STOCKS AND OTHER ASSETS AND THE FACT THAT THEY WEREN'T ONLINE YET AND NOW THEY'RE TAKING THE TIME TO DO IT. HOW OFTEN DOES SOMEONE CALL THEIR FINANCIAL ADVISER, ONCE EVERY THREE MONTHS OR ONCE EVERY SIX MONTHS? THESE JUST GOT APPROVED. >> SCOTT, ANOTHER POTENTIAL CATALYST AND SO-CALLED BITCOIN HAVING WHICH IS FAST APPROACHING, SCOTT, APRIL. HISTORICALLY, WHAT HAS THAT MEANT FOR BITCOIN? >> HISTORICALLY IT'S BEING DRIVEN FOR BEING HONEST AND BITCOIN WAS A DIFFERENT ASSET EACH TIME AND THAT'S NOT STATISTICALLY SIGNIFICANT AND WHAT WE GENERALLY SEE IS THE NEW SUPPLIER THEY WERE TALKING ABOUT BEFORE, AND THE NEW SUPPLY CUT IN HALF AND USUALLY WE SEE THAT DIGESTED INTO THE MARKET OVER THE NEXT FIVE TO SIX MONTHS AND SORT OF A BORING SUMMER AND THEN IN THE FALL WE SEE BITCOIN GOING PARABOLIC AND SEE THE MASSIVE MOVES TO THE UPSIDE AND BREAKING NEW ALL-TIME HIGHS AND DOUBLING AND TRIPLING THE ALL-TIME HIGHS INTO THE NEXT YEAR AND WE'VE NEVE SEEN AN ALL-TIME HIGH MADE BEFORE YESTERDAY BEFORE THAT HAVING. THIS TIME IT'S DIFFERENT AND IT'S THE FOREMOST DANGEROUS WORDS IN INVESTING AND SIR JOHN TEMPLETON, BUT THIS TIME IT HAS BEEN DIFFERENT, AND WHAT YOU EXPECT WITH THIS LEVEL OF DEMAND IN SUPPLY REDUCING AND YOU'LL SEE MUCH HIGHER PRICES AND OOH REALLY ECONOMICS 101. >> DO YOU HAVE A PRICE TARGET, SCOTT AND I'M ASKING BECAUSE A LOT OF FOLKS OUT THERE ARE PRICE TARGETS AND I WONDER FOR INVESTORS SHOULD THEY THINK OF THE BITCOIN TARGET, FOR EXAMPLE, BECAUSE MODELING BITCOIN CAN BE KIND OF TRICKY. >> MY BITCOIN TARGET IS TO DIE AND HAND IT OFF TO MY KIDS AND HOLD IT FOREVER BECAUSE I TRULY BELIEVE IN THE ASSET AND THAT'S NOT TRUE OF THE REST OF THE MARKET, I VIEW THE REST OF THE MARKET SPECULATIVE AS VC INVESTMENTS WHICH ARE TOTALLY FINE AND BITCOIN IS BETTER FOR HOLDING THEM AND THE MICHAEL SAILOR CAMP ON THAT AND IT'S DANGEROUS AND I DON'T HAVE A CRYSTAL BALL AND IF YOU LOOK PAST HAVING CYCLES YOU DO HAVE MULTIPLES OF THE PREVIOUS ALL-TIME HIGH AND EACH CYCLE HAS BEEN MORE MUTED THAN THE LAST AS IT MATURES AND THE MARKET CAP INCREASES AND IT'S HARDER TO MOVE AND WE HAD A 20,000 TOP AND WE MANAGED TO 70,000. A THREE AND A HALF X FROM THE 70,000 HIGH IS PUTTING US WELL INTO THE 200s, AND WE DO A TWO, TWO AND A HALF X AND THAT EASILY PUTS US IN THE 150 TO 200,000 RANGE CON SSERVATIVELY, IF YOU LOOK AT HISTORY, IT'S LITERALLY NOTHING. FOR ME, I'M LOOKING MUCH BEYOND THIS CYCLE. I DON'T CARE WHAT HAPPENS IN THE NEXT TWO YEARS. I DON'T CARE WHAT HAPPENS IN THE NEXT TEN YEARS AND I THINK THIS ASSET IS GOING TO 500,000 AND A MILLION EVENTUALLY BECAUSE WE KNOW HOW IRRESPONSIBILITY GOVERNMENT IS WITH THEIR MONEY. >> SCOTT, APPRECIATE YOU JOINING THE SHOW. THANKS SO MUCH. >> COMING UP, WEIGHT LOSS DRUGS CAN COST TAXPAYERS BIG TIME UNLESS CONGRESS TAKES ACTION. MORE ON THAT WHEN YAHOO FINANCE RETURNS. ♪ ♪ >>> UNITED HEALTH GROUP AND THE U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES ARE LAYING OUT ACTION PLANS ON UNITEDHEALTHCARE, A UNIT OF UNITED HEALTH GROUP, HE SAID. OUR HEALTH REPORTER ANJALEE KHEMLANI IS HERE. >> THAT'S RIGHT. THE CHANGE OF CYBER ATTACK HAS BEEN IN THE NEWS FOR THE PAST TWO WEEKS AND REALLY CREATING PROBLEMS FOR HOSPITALS, DOCTOR GROUPS AND PHARMACIES. UNITED HEALTH CAME OUT WITH A LENGTHY STATEMENT YESTERDAY SAYING THAT THEY ARE BACK ONLINE MOSTLY WITH PHARMACIES SO THEY'RE AT ABOUT 100% AND SHOULD BE REACHING THERE BY THE END OF THIS WEEK AND MEANWHILE, HOSPITALS ARE 90% BACK ONLINE AND TO RECAP, IT DOES PROCESSING OF PAGES AND CLAIMS AND AUTHORIZATIONS FOR THESE ENTITIES AND SO WHAT REALLY HAPPENED IS IN ADDITION TO UNITED COMING OUT WITH GIVING THAT UPDATE, THE U.S. HEALTH DEPARTMENT HAS NOW INTERVENED BECAUSE OF HOW PROBLEM ATTIC THIS HAS BEEN, STOPPING PAYMENT ALTOGETHER FOR SOME HEALTH ENTITIES INCLUDING DOCTOR GROUPS AND THE LIKE AND THEY FOUND WAYS TO HELP THESE GROUPS FIND ALTERNATE PAYMENT ROUTES AND ASKING FOR LENIENCY ON PRIOR AUTHORIZATION FROM OTHER INSURERS IN ORDER TO BE ABLE TO CONTINUE THE FLOW OF OPERATIONS ESSENTIALLY. IF YOU THINK ABOUT IT, CVS HAD 25% AND THE SIZE AND THE SCALE OF WHAT THIS CHANGE DEAL IS, AND YOU HEARD ABOUT CYBER ATTACKS OVER THE YEARS ANY THIS IS THE LARGEST ONE BECAUSE IT HITS AT A KEY PART OF THE PIPELINE OF HEALTH CARE AND THAT IS SORT OF THE PAYMENT SYSTEMS AND JUST HOW INTEROPERABLITY AND CLOSED OFF SYSTEMS WORK. ONE OF THE KEY THING FOR UNITED HEALTH IS HOW LARGE A ROLE IT PLAYS IN THE ECONOMY OF HEALTH CARE AND IT'S ONE OF THE LARGEST EMPLOYERS OF PROVIDERS AND IT ALSO CONTROLS A LOT OF HEALTH CARE DOLLARS IF YOU TAKE A LOOK AT IT. NOT ONLY DO THEY HAVE CHANGE, BUT THEY ALSO HAVE AN ENTIRE ARM DEDICATED TO FINANCE AND INCLUDES HSAs AND FTAs AND OTHER BENEFITS. IN ADDITION TO THAT, THEY FINANCE AFFORDABLE HOUSING AND GET LOW TAX CREDITS BASED ON THAT, AS WELL AS ARE THE OWNERS. THEY ACQUIRED ONE OF THE LARGEST PROCESSORS FOR THE WIC PROGRAM AND MEDICARE. A LOT OF HEALTH CARE DOLLARS UNDER ONE ROOF WHICH IS WHY THERE IS A LOT OF FOCUS ON THIS AND THE QUESTION OF WHETHER OR NOT THEY'RE PREPARED AND OTHER HEALTH ENTITIES ARE PREPARED AS THEY'RE GETTING MORE INTO THE TECH SPACE TO COUNTER SOME OF THESE POTENTIAL ATTACKS. >> OR PREVENT THEM, HOPEFULLY, BEFORE THEY EVEN START. ANJALEE, THANK YOU SO MUCH. APPRECIATE IT. >>> THERE IS HOPE FOR AMERICA'S OBESITY EPIDEMIC THANKS TO THE POPULARITY OF WEIGHT LOSS DRUGS AND THE SO-CALLED MIRACLE INJECTIONS COULD COME AT A STEEP COST UNLESS CONGRESS TAKES ACTION AS SAID IN A RECENT OP ED. M.I.T. ECONOMICS DEPARTMENT CHAIRMAN, THANK YOU SO MUCH FOR BEING HERE. AS YOU WROTE IN THE OP ED, THE COSTS OF THESE DRUGS ARE, INDEED, QUITE ONEROUS AND THERE HAVE BEEN A LOT OF CONCERNS RAISED ABOUT EVENTUALLY WILL ONLY WEALTHY PEOPLE BE ABLE TO AFFORD THEM WHEN IT IS LOWER INCOME FOLKS WHO SUFFER HIGHER RATES OF OBESITY. WHAT DO YOU DO ABOUT THIS PROBE LE PROBLEM. LET'S START WITH THE FACTS. THE CURRENT COST OF THESE DRUGS IS $15,000 A YEAR AND LET'S BE CLEAR ABOUT TWO THINGS. THESE ARE GREAT, MIRACULOUS DRUGS AND THEY SEEM TO BE A VERY EFFECTIVE WAY TO LOSE WEIGHT IN AN ARENA THAT HAVE BEEN HARD TO BE EFFECTIVE. ONCE YOU TAKE THEM, YOU HAVE TO TAKE THEM FOREVER AND ONCE YOU STOP YOU GAIN THE WEIGHT BACK. $15,000 FOREVER. FOR INSTANCE IN THE HOME COUNTRY OF NOVO NORDISK IN DENMARK THE COST IS $3500. WE ESTIMATE THAT AT THE CURRENT COST IF ALL OBESE PEOPLE IN AMERICA WERE MADE ELIGIBLE FOR THIS DRUG AT $15,000 THAT WOULD BE A NET COST TO THE U.S. GOVERNMENT OF $800 BILLION A YEAR. THAT'S A HUGE AMOUNT OF MONEY. THAT'S THE COST OF OUR MEDICARE PROGRAM. OUR ESTIMATE COULD BE OFF BY 100 BILLION HERE, A HUNDRED BILLION THERE AND IT'S STILL A BIG NUMBER NO MATTER WHAT AND WE SUGGEST THAT THE FEDERAL GOVERNMENT NEEDS TO AGGRESSIVELY CONSIDER HOW TO RESET THE PRICE OF THE DRUG MORE IN LINE WITH THE VALUE IT ADDS TO SOCIETY. >> SO, JONATHAN, THE NEXT QUESTION FOR THAT, HOW DO YOU THINK ABOUT WHAT YOUR SOLUTION WOULD MEAN FOR INNOVATION? >> IT'S A GREAT QUESTION AND ONE I'M ASKED ALL OF THE TIME AND ONE THAT I ADDRESS IN THE BOOK "JUMP-STARTING AMERICA" WITH SIMON JOHNSON. THE INNOVATION IN THE U.S. IS DRIVEN BY PRIVATE COMPANIES AND A LOT OF IT IS DRIVEN BY THE GOVERNMENT AND IF THE GOVERNMENT WILL HAVE TO SPEND $800 MILLION A YEAR ON THESE DRUGS THEY'LL HAVE TO CUT SPENDING ELSEWHERE INCLUDING IN THE VALUE GOVERNMENT FUNDING OF RESEARCH AND DEVELOPMENT. GOVERNMENT SPENDING ON THE NATIONAL INSTITUTES OF HEALTH IS INCREDIBLY VALUE IN TERM OF PROMOTING INNOVATION, AND IF WE CUT SPENDING ON NAH TO ALLOW SPENDING ON DRUGS AND TOTAL INNOVATION WILL FALL, NOT RISE. >> IN THIS CASE IN THE CASE OF GOP-1s. THERE IS SOME PRIVATE INNOVATION THAT THESE BIG DISCOVERIES COME FROM, RIGHT? >> OH, ABSOLUTELY. EVERY SINGLE DRUG THAT'S BEEN DISCOVERED IN THE PAST 40 YEARS AT ITS BASE HAS GOVERNMENT-FUNDED BASIC SCIENCE, BUT THE PRIVATE COMPANIES TAKE THAT AND THE KEY THING THAT'S NEAT ABOUT GOVERNMENT SCIENCE IS IT COMP LIMLIMENTS AND IT DOESN SUBSTITUTE FOR IT. I'M WANT CALLING FOR DRAMATICALLY LEFT RND. WHAT I'M SAYING IS THE COST OF ALLOWING PRIVATE RND IS STARVING THE FEDERAL GOVERNMENT AND NOT ALLOWING THE FUNDING FOR BASIC SCIENCE WHICH IS THE BASIC OF ALL SOURCE OF ALL DRUG DEVELOPMENT, THAT WILL MOVE US BACKWARD IN TERMS OF INNOVATION AND NOT FORWARD. >> I UNDERSTAND THAT YOU WANT TO MAKE THEM MORE WIDELY AVAILABLE, BUT WOULD THERE BE OTHER WAYS TO DO THAT BESIDES WHAT YOU'RE FROM POSING. MAYBE, COULD THE GOVERNMENT SUBSIDIZE THE COST, JONATHAN. COULD THAT BE AN OPTION? >> BASICALLY, OUR ESTIMATE COMES FROM WHAT WOULD HAPPEN IF THE GOVERNMENT DID SUBSIDIZE THE COST AND IF THE GOVERNMENT COVERED FOR MEDICARE AND MEDICAID, IF THE GOVERNMENT COVERS FOR PEOPLE ON THE HCA EXCHANGE AND GET SUBSIDIES AND THAT'S WHERE THE GIANT COST COMES FROM. BASICALLY, THE GOVERNMENT COULD DO THAT AND IT WOULD JUST BE INCREDIBLY EXPENSIVE AND THAT WOULD INTERFERE WITH A NUMBER OF OTHER PRIORITY WAS OF THE GOVERNMENT AND ONCE AGAIN, LOOK, BASIC ECONOMICS TELLS US THAT WE HAVE A WELL-FUNCTIONING MARKET LIKE FOR APPLE'S, WE SHOULD LET THE MARKET DETERMINE THE PRICE. WHEN THE MARKET DOESN'T WORK, WHEN CONSUMERS CAN'T SHOP EFFECTIVELY, WHEN THERE'S IMPERFECT COMPETITION THE GOVERNMENT NEEDS TO INTERVENE TO ENSURE THE PRICE IS SET PROPERLY. THAT IS THE CASE HERE. THERE'S NO CASE FOR FREE MARKET PRICING OF DRUGS. NO OTHER COUNTRY IN THE WORLD DOES IT. WE SHOULDN'T EITHER. >> JONATHAN, WHAT HAPPENED TO PRIVATE PLANNED PRICING IF THESE COMPANIES ARE, YOU KNOW, IF THEY HAVE TO NEGOTIATE WITH THE GOVERNMENT FOR MEDICARE PRICING. DO THEY TRY TO MAKE UP FOR THAT IN THE MARKET? >> GREAT POINT. THE EVIDENCE ON THAT IS KIND OF MIXED. THIS IS CERTAINLY A CONCERN. ONCE AGAIN, THE PROPER REGULATION WILL BE A SOCIAL REGULATION LIKE THEY DO IN EVERY OTHER COUNTRY WHERE THE REGULAR PRICE WOULD APPLY TO ALL PAYERS. IF THE GOVERNMENT REGULATES THE PRICE THERE ARE TWO THINGS THAT MIGHT HAPPEN, ON THE ONE HAND THAT COULD PUT PRESSURE ON THE RACE TO THE PRIVATE SECTOR. ON THE OTHER HAND, IT TURNS OUT IN MANY HEALTH CARE SECTORS PRIVATE PAYERS JUST FOLLOW WHAT THE GOVERNMENT DOES. PRIVATE PAYERS CAN JUST SAY NO. THE GOVERNMENT WILL PAY YOU THIS AND WE'LL PAY YOU THIS, AS WELL. >> WILOULDN'T THAT BE INTERESTI. THANK YOU FOR JOINING US. >> MY PLEASURE. >> COULD THIS MAKE IT COMPLY WITH THE NEW ANTITRUST LAW? WE'LL DISCUSS ON THE OTHER SIDE. >>> APPLE DEALING A BLOW TO EPIC GAMES. THE VIDEO GAME SOFTWARE COMPANY SAYING APPLE TERMINATED ITS DEVELOPER ACCOUNT PREVENTING THE DEVELOPMENT OF THE EPIC GAME STORE FOR IOS. HERE WITH THE DETAILS IS YAHOO FINANCE'S DANHOWLEY. >> THE DIGITAL MARKETS ACT FROM THE EUROPEAN UNION ESTABLISHING THAT THERE ARE KEY PLAYERS IN THE TECHNOLOGY SPACE AND BECAUSE OF THEIR SIZE THEY RHAVE TO ALLW FOR CERTAIN CAPABILITIES AND FOR APPLE BEING A KEY PLAYER THEY ESSENTIALLY HAVE TO ALLOW THIRD-PARTY APPS TO BUILD THIRD-PARTY APP STORES. THEY NO LONGER HAVE TO RELY ON APPLE'S APP STORE AND THE SOLE PLACE TO DOWNLOAD APPS AND APPLE HAS HAD A TUMULTUOUS RELATIONSHIP TO SAY THE LEAST AND APPLE PULLED FORTNITE FOR IOS AFTER EPIC IN A SHOWDOWN WITH THE COMPANY OVER PRICING FOR APPS SOLD THROUGH ITS APP STORE WENT AHEAD AND CHANGED PRICES ON ITS OWN AND ALLOWED A THIRD PARTY THROUGH THE APP STORE. ALL OF THIS IS TO SAY THEY DON'T LIKE EACH OTHER AND NOW EPIC IS CLAIMING THAT BECAUSE OF COMMENTS THAT CEO TIM SWEENEY MADE REGARDING APPLE'S UPCOMING CHANGES TO THE APP STORE IN EUROPE THAT IS SUPPOSED TO ABIDE BY THE DIGITAL MARKETS ACT, THE APPLE HAS GONE AHEAD AND POLLED THE ABILITY FOR EPIC TO BUILD ITS OWN THIRD-PARTY APP STORE AND PUT GAMES ON iPHONES. AND SO THIS IS A LARGER PROBLEM THAT APPLE WILL HAVE TO POTENTIALLY DEAL WITH WHEN IT COMES TO THE EUROPEAN UNION AND THE EUROPEAN COMMISSION AS FAR AS ANTITRUST GOES. IT'S CLEAR THAT EPIC IS NOT GOING TO STAND BY. IT'S CLEAR THAT APPLE IS NOT GOING TO ABIDE BY EPIC KIND OF, YOU KNOW, I GUESS RANCOR AND THEM AND SO NOW WE'RE GOING TO HAVE TO SEE WHAT HAPPENS WHEN THE TWO COME TO BLOWS. >> AND WHAT DOES THIS MEAN FOR EPIC IN THE LONG RUN? >> YEAH, I MEAN, LOOK, EPIC HASN'T BEEN ALLOWED TO SELL FORTNITE ON IOS FOR A WHILE AND THEY WEREN'T GOING TO DO THIS AGAIN AND NOT JUST IN EUROPE, AND NOWHERE ELSE, BUT IN EUROPE IN PARTICULAR SO IT MEANS THAT THEIR LOSS OF POTENTIAL REVENUE HERE THAT COULD IMPACT THEM OVER THE LONG TERM. >> DAN HOWLEY, THANKS SO MUCH. APPRECIATE IT. >>> THAT WILL DO IT FOR TODAY'S YAHOO FINANCE LIVE. BE SURE TO COME BACK TOMORROW AT 3:00 P.M. EASTERN FOR YOUR COVERAGE LEADING UP TO AND AFTER THE CLOSING BELL. HAVE A GOOD NIGHT. ♪ ♪
