Stocks claw back after brutal sell-off with Apple, Amazon ahead: Stock market news | Aug 3, 2023

[Music] thank you good morning it is Thursday August 3rd here in New York City this is Yahoo finance live I'm Julie Hyman Brad Smith is off today and here are three things you need to know this morning sour sentiments stock futures continuing their slump this morning with bonds coming further under pressure that was spurred in part by America's Credit and downgrade pitches shock downgrade of the U.S credit rating slammed the stock market yesterday in the S P 500 at its worst day since April markets are still under pressure with the selling spreading overseas contributing to losses for stocks in Europe and in Asia Anheuser-Busch reporting a big drop in profit for the second quarter as expected results in North America in particular suffering from boycotts of Bud Light sales have fallen sharply since transgender star Dylan Mulvaney made a social media post about a personalized can of the beer but overall worldwide operating profit actually improves by two percent after growing profits in every other region including a 47 jump in South America and we go for apple and Amazon app to close will be the next big hurdle for the Market's Tech field rally the state of the consumer business to business spending and cloud services artificial intelligence all of them will be in Focus Apple's stock has stored nearly 50 this year heading into this report and recently breached three trillion dollars in market cap and is trading near an all-time high for Amazon the bike Focus will likely be on the company's Amazon web services unit and whether or not both will de-accelerate at the cloud leader both stocks have been a key part of the s p 500's Advance this year but the question is can they feel further gains well as we mentioned Futures Under Pressure this morning still reeling from Tuesday's U.S credit rating cut is Fitch's downgrade the break that investors and markets have been waiting for cooling off a hotter run year to date where's the cut cause for serious concern with us now is BNP buried by a U.S Senior Economist Elena shilia alongside Yahoo finance his miles udlin Elena thanks for being here appreciate it um you know we're still The Fitch rating downgrade is sort of still percolating it feels like through everyone's brains as well as through the system and yes yesterday it felt like it was somewhat in reaction the action we were seeing in the market but it also felt like maybe a little bit of an excuse for markets to take a breather right and we were hearing from a lot of pundits that they were sort of confused by the timing of the downgrade at the very least how are you thinking totally uh the timing could have been very surprising coming uh you know more than a decade after this and be down great then two months after the debt ceiling debacle was resolved actually really so things are not looking that bad in the near term but this is definitely a long-term issue for the United States so the downgrade itself is not surprising given how unsustainable uh debt levels are and how it keeps growing at a very rapid pace and you know not even talking about the Govern governance issues so I think it's a long-term issue for for us and we will be talking about this decades and decades going forward if this unsustainable path continues this is something that future administrations will need to take care of and uh you know if if we don't we'll just end up paying such high taxes that we will not be able to afford anything else so I think it's an issue and it's not surprising that they did that the timing was a little odd do you think Elena that this brings the um kind of fiscal conversation into more focus in the US mostly because if you kind of go back to even 2016 when Trump was elected certainly the way that um you know both administrations coming out of covid have viewed the deficit which is you know it's fine I don't really care does this kind of get us back to maybe not the austerity enthusiasm we saw right after the financial crisis but more of that conversation because it does feel like for both parties the most important presidential candidates most important leaders have kind of said you know what we're just going to spend and kind of figure it out later look uh fiscal policy can and should work during the times of Crisis I am I strongly believe in that but you know when times are good you you should start thinking about how sustainable things are you know think entitlements nobody wants to touch that you know you have to address that one way or another and that's a reality that's not something that we will be able to avoid um the outcome of all of this yesterday or at least one of the knock-on effects was we're seeing bond yields start to move higher right there's some bid some selling in the bond market up you look like you're doing big side because because you don't think that that was the reason that we were seeing the action in the bond market or what do you think I think uh in short term you know what are you what else are you gonna invest in like treasuries is still the safest uh you know asset there out there so you you what are you going to replace it with that's why I'm saying this is not a short-term issue this is more of a longer term uh thing that we all have to uh worry about you know by the time we retire will we be able to afford you know the essentials or not even talking about some discretionary spending and overall how the the economy will do but it will uh will be a concern of each one of us I think all right so let's uh get to the week's main event tomorrow morning where you get the job support and just thinking about the state of the labor market right now in the context of an economy that continues to outperform essentially what most everyone thought we would see into 2023 how are you thinking about Friday's report both in the context of what it means for the fed you know might do next which is the primary concern all the time but just the general Arc right now of what we've seen in the economy the last six months so uh I would characterize it as gradual so why gradual because things are still very tight in the labor market you you still see uh jobless claims that the levels that are very low and there is no hint of any you know immediate crisis in the labor market but at the same time if you look at the jolts data that we received earlier this week you see a gradual slowing in hiring so it's not that people that companies are laying off workers it's the the the pace at which they hire new workers and and that is slowing that's it it's the at the lowest level since uh you know the expansion began so and back to pre-pandemic levels so job openings are falling as well and uh but you know if you look at the ratio of openings to unemployed it's still at a very high level and it's showing that demand continues to exceed supply of workers uh by a very large degree so you know things are cooling and this is what we uh are going to see tomorrow in our view despite the rebound that we are projecting we're at 225 slightly above consensus but if you plug that number into and do some arithmetics it's still below the the recent Trend the 12 six and three months average if you look at you know overall um Trend in the labor market so gradual cooling this is what I call it so then in thinking about the fed you guys are expecting a pause in September is September the end for for for you guys and and I guess you know my takeaway from the press conference last week was of course the FED forecast or the FED staff has cut their recession forecast does that change how you might think about the SCP in September and just where do you think the FED goes longer term from here I think the uh like first of all in terms of SCP and the the meeting in September we do expect a pause escape and in November it will probably be too late to raise rates because the economy will slow down in terms of SCP we think that the FED will revise inflation projections and they will probably revise growth uh to the upside so the FED is very high in terms of inflation projections in the in the latest ACP and it looks like things are slowing down much faster slowing down much faster but that's that's what is happening so inflation is falling much faster than they were thinking so and that will allow them to forego that September rate hike um yeah so I think for the FED uh they will refocus more on the labor market but for now we're really watching closely uh any inflation reading which we also expect to decelerate um so yesterday Bank of America said we're not expecting a recession anymore is the recession still coming I think it's too early to uh call it off I think in our projection I think there are a lot of headwinds that we will see going into the fourth quarter of this year so you see still see a lot of tightening in The Lending conditions we just got the senior loan of his opinion survey which is showing significant tightening in both commercial and Industrial sector in the consumer sector so that's one thing it's still present so for I think prior uh tightening from the FED is still percolating through the economy on top of that you'll get student loans um payment resumption in October that will take some steam out of consumer spending you have your excess savings uh um you know depleted by the end of the year this is our projection so there are a lot of things that will combine towards the end of the year to really put a break on economic growth though inflation will be a Tailwind well that's what I was going to ask because we actually have had some people come in the show recently and say they expect us to see an uptick in inflation towards the end of the year perhaps a little bit of a Resurgence or re-acceleration I mean if that happens at the same time as the stuff you're talking about that's not necessarily a good thing right well look so for now inflation is cooling so that is a little bit of a Tailwind for the economy for the consumer we could see some re-acceleration and inflation towards the end of the year just on the base of the base effects and energy prices but yeah that could well be another headwind if it really accelerates so I think it's still um it's still quite a a possibility that growth will decelerate quite significantly towards the end of the year and we may see a mild uh or moderate whatever you want to call it recession still which would mean there is some pickup in the unemployment rate unfortunately yeah well today we got that jobless rate what at 227 000 for the week so still pretty low level all right Elena thank you so much Elena vnp Barry by U.S Senior Economist good to see you thank you thank you let's get to some specific corporate results now qualcomm's results beating estimates in the second quarter but a disappointing forecast from the company is sending those shares sharply lower this morning by about 10 percent company blaming a slower recovery in China and a challenging macro environment for the disappointing guidance on the conference call Qualcomm executive they do not see an immediate Rebound in demand here and as we know Qualcomm has been trying to diversify its business but it still makes most of its money from selling chips to handset makers like apple which is one of its biggest clients and revenue from handset chips was down by 25 so not good yeah I mean I think ultimately um the chip story now has evolved a little bit in the last couple of days even you look at what AMD said I think it was just on on Tuesday afternoon um we're all kind of benchmarking too and video coming out the end of May and being like Oh raising our guidance by 50 and I think there's a realization perhaps that the chip cycle is always a cycle and continues to be a cycle and after kind of these huge inventory builds and we saw it across Industries but certainly chips you know was one of the more acute sectors that saw this massive run-up in 2020 and 2021 for all kinds of reasons you had the economy you know actually kind of doing this major surge out of the pandemic you had the crypto cycle there and now it's like well maybe AI will just make the Cycles go away and I think that's not quite the case certainly not the case you look at the stocks there I mean there's it's been a major bid certainly looking at the ETF level here because again it's like a very simple here's the AI story but you kind of go through the call and you see the commentary you know from Qualcomm specifically and I think their view on AI is there's a lot of I mean everyone's doing this they're walking back that it's going to happen today they're talking on the call about how cars are probably their most interesting application for AI but um you know you and I both Drive every day and you know cars are mostly still driving themselves so I think that kind of again pushes all these timelines a little bit out into this yeah I mean and also if you think about their mix and this is something they've been working on a while now some other chip makers have too revenue from handset chips five and a quarter billion dollars five and a quarter billion dollars Automotive Revenue 434 million dollars so yes they're trying to boost it up but it's still a small part of the overall and you also have to think that Nvidia which participates on the data center side of it like you know I I think there's this realization at this point that different chip makers make chips for different things and not all of them are going to be applicable to this huge AI thing right away it's certainly going to happen in stage and I mean we're talking specifically about the chip trade right now but ultimately this is the case for all sectors Whenever there is a bailout like AI right AI became a bailout for a number of different companies in a number of different Industries and for investors who were coming off a very bad 2022 it became very safe you can buy the ETF just buy everything in the basket and it'll probably do better than the market and now this feels like the quarter at least to me kind of going through all these different calls and seeing all these different results where it's like oh okay all right are we are we sure are we sure that's like a today story moreover if your stock is up 30 40 50 150 so far this year it doesn't take a lot for there to be a sense and you know maybe Qualcomm isn't quite fit in this basket but there doesn't take a lot further to be a sense from investors that you know I guess I should have read the call but before I bought the stock but hey it went up a bunch let me just get out of here live and like you know move on to the next one well there's another chip maker that we should mention that has been sort of even before the AI wave was sort of struggling to get back to its former self and that is Intel our Brian sassy had the chance to speak to Intel CEO Pat gelsinger um and so I was asked him you know where are you in this whole AI race and this is what Pat had to say okay Intel are you going to participate in that accelerator market and you know I'll just say we haven't been as aggressive out of the shoot as we should have been and now with our Gowdy product line really starting to get interest in the marketplace customer uh pipeline is a building very rapidly we're showing up yeah we're starting to make a impact in the marketplace but we have to prove it because we have a clear market leader who's executing very well so that's Intel's response there that they're you know kind of playing catch-up a little bit and we'll see if they manage to do that I mean I think at this point in the cycle it's it's one of the few times when it's it's never safe but it's like safe-ish to say we're behind we're catching up we're going to figure out our thing longer term and um you know we can kind of go all day on the strategy around your AI strategy but it feels like a little bit of the heat has come off the let me get the whole road map for the next five years today I mean think about in videos it doesn't reports till the end of the month so we gotta wait to see if they are really up to the expectations you know like that I mean them like Walmart's in this bucket of like they're lagged on the earnings kind of cycle at least all of the retailers are lagged like you get the other chip makers but and then there's Nvidia way at the end but the thing with Walmart and Nvidia is like Walmart becomes a Bellwether for the whole economy so you get through the whole thing and then Walmart comes out at the end and it's like oh you know actually it was good or actually it was bad and they had another month I mean their calendar is different yeah so okay all right uh shares of Av inbev or up slightly this morning up about two percent thanks to better than expected earnings the Bud Light owner beat forecast with a 7.2 percent increase in total revenue for the quarter it was boosted by strong overseas sales in the asia-pacific market but U.S sales did take a hit thanks to that boycott drama following Bud light's partnership with trans influencer Dylan Mulvaney Revenue in North America was down by 10 and a half percent ebitda was down by 28 so obviously a big tumble there but if you look at earnings and other regions here overall adjusted earnings were up five percent Brazil China and Colombia saw earnings rise 20 so this really was a U.S problem and I won't say just a U.S problem because U.S is a huge market for them so it's not like it's a small problem but it was a limited one but it is a relatively smaller problem for the overall ABM Dev portfolio than perhaps um it seems when there is almost well not almost there is weekly data that comes out on how much volumes are down for you know the Bud Light portfolio or the Budweiser portfolio is really the way it's phrased in the U.S us because it's about 18 percent by volume North America is about 18 of the overall a b inbev worldwide volume so uh nine and a half percent volume growth in its Asian market so that you know I mean overall volumes are down 1.4 percent in the quarter so you know against last year so you are still seeing an impact overall there but there are pieces of the business that I think investors can get themselves excited about certainly this morning and you know ultimately when you look at the way the stock has behaved this year um it has been a laggard in a market where everyone's getting excited about everything um and you are able to now maybe say we can we can make sense of what is happening in this pocket of the business we understand why the US business is going to be challenged in all these different ways but you know I mean another part of this you know portfolio in this trade is in the U.S what has been the Riser against Bud light's fall it's been Modelo well ABN Dev doesn't have the U.S distribution rights but they do have the rights in Mexico and so as the Modelo brand on a globe Global basis perhaps picks up some slack from Budweiser and Bud Light um and you know related kind of plays there they have the international play on that constellation gets the U.S benefit but internationally and you know ABM Bev called it out in their call they are getting some of that lift elsewhere well and the other thing I thought was interesting is they said that the market share losses in the U.S and but like pretty pretty much stopped at the end of April that April to June was steady so will they ever get that market share back maybe not but maybe it's also not going to get worse and you just have this resetting of expectations that are have been priced into the stock to your point yeah I mean I think um there's probably maybe it's it's kind of a two-part story now where investors say all right I I understand what happened to you I I can make sense of it as an investor I can get excited about those kinds of things you buy back stock pay dividends Etc et cetera um but there's an operational problem maybe where okay you had the number one beer in the U.S and now you'd have the third or fourth whatever it is um I'm not sure if there's you know segment or you know if you've seen some marketing exactly there are going to be ramifications I think at the corporate level but for an investor story for a stock that's down six percent when the s p is up against 20 basically so far this year um that impact perhaps has maybe been felt you know to the most extreme event for investors and then in the Fallout will kind of come elsewhere in the business my random thought of the morning from a marketing perspective how do you decide if you're going with light or l-i-t-e Allah I don't know the answer to that one that's been baked for a long time yeah the 60s or whatever when they made that decision okay I'll do that Warner Brothers Discovery is the latest media giant to report earnings announcing it lost 1.8 million subscribers across its Platforms in the second quarter following the launch of Max company also reported a 3 million dollar loss in its streaming segment after seeing a 50 million dollar profit in the first quarter Rich Greenfield light shed Partners a partner is joining us now Rich it's good to see you here so um what do you give us sort of your your big picture take first of all on these numbers look they are delivering on what they said in terms of free cash flow there's no doubt David zile's loving team are getting the cash out of this business they've dramatically restructured radically reduced costs they are generating far more cash flow than investors expected when this transaction closed last year I think the challenge and what you're seeing in terms of the Weighing on the stock today is the fact that the advertising environment is just not picking up you know you had a lot of media companies Legacy Media companies earlier in the year talking about sort of a second half recovery and that you'd see a ramp in advertising or Improvement and it's improving but off of a much lower base and you're still looking at pretty sizable declines in advertising whether we're talking NBC Universal whether we're talking Warner Brothers Discovery all of these companies are seeing the TV ad Market just be terrible recession or not well and it doesn't help if you're losing subscribers right I mean like how is Max is Max yeah like I wouldn't I wouldn't read too much into that okay no but I wouldn't read too much into that part of that is you know remember there's Discovery plus subscribers in that number and they folded Discovery plus into Macs so when HBO Max became Max it now includes Discovery plus and there were subscribers who took both services so I think some attrition is is not unexpected um they're still you know in terms of the size of Max relative to its peer group Max is doing just fine so I don't the stock is not down because Max lost a little subscribers I think of anything the max Rebrand has gone pretty well I think the service works better I mean if you've tried downloading a show on Max versus the old HBO the new interface is far better I think this is more about the guided to the bottom end of their you know they had a range of 11 and 11 and a half billion of ebitda they got it to the bottom end of that range they took down sort of their advertising guidance for the rest of the the calendar year I think that's sort of what's Weighing on wbd as well as the sector at large because the the headwinds facing Warner Brothers are no different than the headwinds facing Disney I mean you saw Iger on CNBC the other day this whole sector is facing very significant headwinds You Know Rich it got a little bit of a mention um in the release from Warner Brothers today of course the strike that we're seeing in Hollywood right now impacts may be mixed in the second quarter for a lot of these companies how are you thinking about that longer term for for the space look I'm just worried the strike is going to last until October November I mean I don't sense any real progress um yes talks are going to theoretically restart tomorrow with the writers but I I think you've got a long road ahead and from everyone I talked to in Hollywood I think people are sort of prepared that we may not be fully back in action until sometime in November even towards Thanksgiving and that's going to be very disruptive to the business of Hollywood in Q4 and look it also just drives consumers to watch more catalog to watch more overseas content to watch more YouTube like this is not the right time you know there's probably never a good time for a strike to be honest but I think given the Alternatives the consumer has today versus what they might have had 10 and 20 years ago this is far more devastating to this industry than I think both sides realize these different companies are navigating and I guess find what I want to ask about is leadership of the big media companies and Studios whether it's Iger whether it's zazlov whether it's backish like have these you know and whether it's the strike or the slowing ad Market how are these guys doing are they doing a good job navigating this look all of these companies were too late to embrace streaming right there's no doubt they waited too long to go to streaming they saw what Netflix was doing and they jumped on the bandwagon you know Disney was the one who really started it with Disney plus but then everyone else jumped on it now they're all realizing that their Core Business which is cable network broadcasts and cable networks they're all realizing those businesses are in secular Revenue decline advertising is going down Affiliates which is the fees paid by cable and satellite operators to cable networks those fees are now going down so the whole Top Line of this industry is in secular Decline and sports rights and costs keep going up and I think that's what spooking investors it's why Eiger is talking about spinning off linear TV needing partners for ESPN like this is the sort of the the um the sickness that sort of plaguing this entire Legacy Media industry and so you say who's leading I think all of these Executives have been called a little flat-footed I think you know Zazzle is probably one of the most upfront of the challenges and recognizing hey we got to cut this aggressively and you see that in the free cash flow I mean there's no doubt they are deleveraging faster than investors expected because he realized there is no growth story left in the linear business yeah and Rich I wanted to ask a little bit about the sports rights picture you know maybe a little bit smaller for Warren than some of their other peers but just where that fits in because as an outsider you know I see the salary cap going up for all the leagues I see the rights projections going way higher and yet you see the stocks and what's going on kind of the dynamic you're talking about doesn't really add up to me uh look you're seeing it in local right the local sports side is imploding if you look at Diamond Sports which went bankrupt it was owned by Sinclair broadcasting there's no doubt that local sports has imploded and you're seeing all of the after effects of that right now the question is going to be is the local sports problem going to play out in National over the next few years and look it's possible it doesn't because you have digital players like apple and Amazon and even Google that have come in you know Google Sunday Ticket Amazon's bought you know Thursday Night Football you know you're seeing Apple do MLS and probably do Pac-12 now but look all signs point to if you're if the way you pay for sports is advertising and affiliate fees meaning you know the cable and satellite fees if those are the way you pay for sports rights and those fees are going down it is hard very hard to comprehend how Sports rights keep going up and that's going to be the challenge and why the league so desperately need the digital players to step in because I don't think these Legacy Media companies are going to be able to keep paying more for rights as their revenues go down so rich circling back around to Warner Brothers specifically um Zazzle on the call was asked about the words you know he was asked about other things like the international push and Licensing content there's a whatever of these media companies you're talking about there's a lot of different facets right what does he need to be prioritizing for Warner Brothers right now look I think the question is how much Sports does he really need can he get out of you know the he pays a billion two a year for the MBA is there a way to create a smaller package where he you know reduces cost or at least holds cost I mean I think that's what investors are trying to understand you heard a couple of the questions about sports like I think everyone's trying to understand you know it's great that they're cutting costs right now how much control of the cost structure do they have looking out over the next few years as these Sports rights come up for bid and can they resist you know I think they're they're really going to look to zazlov and hold them to it can he resist overspending on Sports rights given what's happening on the top line it's a good question we'll see a little suspense here Rich Greenfield thank you so much always good to catch up with you light shed Partners thanks for having me thank you we got much more Marcus action ahead stay tuned you're watching Yahoo finance August tends to be the worst month for stocks at least if you go back the last several decades how's this one gonna go so I do think we're entering a seasonally week period for the markets and there seems to be a lot of complacency out there the vix is very low the put call ratio is very complacent uh the aaii survey it reached its top bullishness for the year so all of that suggests that markets seem to be the fear of missing out the Bears have thrown in the towel that makes me a little nervous [Music] thank you [Music] foreign [Music] [Music] foreign [Music] [Music] thank you [Music] [Music] foreign [Music] [Music] [Music] foreign all right opening bell on Wall Street taking a quick look at the markets as we get open for trade here on Thursday sponsored by tasty Travis the Dow off about three tenths of one percent NASDAQ uh and the s p both down about one half of one percent so not quite the tech lagging situation that we saw during yesterday's trading Julie Hyman no not quite the same thing but now we've got this two-day decline right sort of we'll see if it's a more fundamental break in the rally and the momentum that we have seen so the two-day chart here sir is a 1.9 percent decline in the S P 500 so we're going to continue to watch that action closely I also continue to watch what's happening in the bond market where we continue to see selling that is pushing yield higher the two-day increase in yields here seeing another bump up in yields to 4.18 that is the highest that we have seen in quite some time going back to at least last fall last winter fall for yields and that's something that was one of the things that was putting pressure on those tech stocks yesterday I also want to check what's going on in oil here this morning and that's because Saudi Arabia this morning announced that it is extending its million Barrel per day cut in production through September and so that is pushing Energy prices not that much higher right now only seeing again about six cents one percent but you see the action here on the chart where we saw the little bit of a spike upward when that came out looking at a little more detail into what we're seeing in stocks here today hopefully we will have cooperation here there we get it so as we look at the sectors here we've got real estate that is down the most followed by Tech and consumer discretionary energy along with oil prices as well as consumer staples are gaining the most in today's session and then as we get to the NASDAQ 100 to see here what kind of follow-through we've got from yesterday The Magnificent Seven they were all down considerably yesterday or eight whatever we're counting here um they are down again today but in much more moderate fashion here but you do see Amazon down 1.4 ahead of its earnings Apple down about six tenths of one percent both of those companies of course are reporting after the close of trading today so we'll continue to uh watch them closely as the day goes on Miles I'm just looking at this and it's feeling a little bit like I know that you look at Qualcomm it's like darker red yeah being down more I think it's like it should be cardinal red when it's down only a little and bright like fire engines you know because I'm looking at this I'm like oh my goodness what a terrible day for Tech and then it's like Microsoft is yeah you can see it in the left you can do it you can do an equal weight too and that gives us like PayPal down 10 so it's like now I'm seeing why the gradient exists but you almost wonder if you kind of invert them I'll talk to management about whether we should be Jared blickery waiting in the wings like listen guy yeah questions are aren't you management that's what everybody wants wow some people some people would say others no all right uh shares the doordash on the move this morning hitting a record total orders in the most recent quarter stock up about eight tenths of one percent company also went out and raised its full year forecast uh doordash a company that does the thing Julie that I like more than any other which is writing a nice letter to investors along with its earning release um founder Tony Shu out with a great letter where they kind of just talk I mean honestly it's just business Theory how he thinks about investing in businesses with the long-term value of their Investments might be and I think you know in this we get to the discussion of the marketplace business for doordash because we hear doordash and you think oh it comes to my door but them setting up the suite of services for companies they are now doing delivery they do point of sale um and that vertical for them really being the growth driver I think has been an interesting Revolution you know revolution in the company evolution of the company I should say um you know and getting away frankly just from the name that's on that's on the front door of the company right that it does not just doordash but like stack the stack is the tech stack for a restaurant operator and then yeah sure if you actually order the delivery you're hit with like seven thousand dollars worth of fees right but you don't have to just do that there are other ways for them to partner with restaurants that I think are a lot more palatable both for their consumers and for restaurants and that you know really is the growth driver and I think over time um there's never going to not be a delivery part of this business but you know if you can almost any you you get this theory in in the letter it's it's the classic kind of Amazon thought around well this is our best business now but what if it just wasn't what if we intentionally tried to make something that was better than what makes us money now and what would our company look like longer term and I think you start to see some of the outlines you know for a company that came public had a very positive reception had a lot of problems last year like everybody who was public in the stock market in this kind of General space and is now getting you know kind of on the other side of that and starting to really think about what does our life look like long term as a public company right so there's the sort of in technology and there's also the staff Beyond restaurants strictly speaking right delivering other stuff other whether it's other food or Sundries whatever you want to call it and it's it's hard to know if that's as big an opportunity as offering a bigger Suite of services to its customers I mean to bring Amazon back into it um The Experience on Amazon's retail site I think has been talked about enough but now they're remember they're the reporting was out yesterday that they're now changing that they're consolidating their various food things which makes sense because it's pretty dumb the way it is yeah so I guess you know all I was going to say is like I think there's been an opening here for other marketplaces of of any sort it could be food it could be Pharmacy it could be all kinds of clothing like there are there is an opportunity here for someone for many many players and we're seeing it you know across spaces um to offer a better let's say retail aggregation experience perhaps than the original yeah and then there's little players like go puff that are out there too doing grocery delivery yeah well I mean you know if you go through the letter they talk about the example of how much money they were losing on their delivery business but the unit economics were actually good problem is there's a lot of smaller players that have lose ton of money and don't have good unique on some of that delivery and so um yeah doordash has the advantage it's still we're still like in the zurp era of thinking in a lot of ways that makes sense interesting that does make sense all right it's tough times for pizza Papa John's International missing estimates in the latest quarter the company said it saw lower than anticipated comparable sales in the quarter cited a challenging operating environment the shares right now are down by five percent a North American comps down by 1.4 percent so International comps down by seven tenths of one percent uh so people not ordering as much Papa John's apparently you know another kind of pandemic um trade that has I mean it's the the heat has come off the pizza trade for some time and I think that you know looking at their pure dominoes that had a double has had a double interesting story a double interesting walk back let's say um go back in time five seven ten years uh like one of the people's favorite trivia things was you know what's the best performing stock over the last X number of years and over a lot of time frames it was Domino's I mean they had like double digit comps um double digit comp increases for I don't know 20 odd quarters in a row it was a long time that they were crushing and and had this you know they were the original Tech play in the food place or in the food space and I think you know you have the consumer concerns here certainly there's a pizza specific problem that some of these companies are dealing with and there's likely going to be you know from some corners of this trade a read through on you know what it means for the consumer and it probably says a little bit more about consumer preferences than it really does about the consumer health overall but I think that point can maybe be debated well and of course I I just wanted to talk about Papa John's as an excuse for us to talk about our New Jersey pizza preferences for people who haven't watched the show in a while miles and I live in a neighboring Town movable part of the show favorite no it's very useful information people um and there is a pizza a local Jersey pizza is very good I do not order Papa John's or Domino's or whatever else no disclosure I actually do not so yeah I don't either I ordered mild surprise to you we or not really we order Trattoria which is our local Pizza Factory in Maplewood that's right I usually do the summit location because it's a little bit a little bit easier to get is there one of South Orange Show where is this location it's right on the main drag wow he's packed with people especially on a Saturday night there's a trot in Maplewood and South Orange correct and there's enough for both of those business I know we didn't start we're doing star tab we've been to start Tavern I have gotten from Star Tavern right yeah it's delicious pizza yeah it's good it's it's a very like specific experience yeah you only get that kind of bar pizza in a specific um part of the world I guess even though it's only New Jersey I think they're telling us to move on well we still haven't gone to bunnies together so oh okay I know it's slightly problematic I guess allegedly but you know we'll get some Seton Hall kids and we'll just we'll do a big hang all right that was for all the Jersey rights for watching there's a Wayfarer in the meantime we're up 16 almost 17 this morning after storing past estimates in the second quarter despite seeing active customers fall the stock is up over 150 here today is way for a meme stock miles yeah definitely okay it was it was definitely in the memes like if you look at this on a five-year um you're gonna see a meme play there let's say um and I think it's fair to call it a meme stock I think if you're up a hundred percent so far this year yeah you you are officially it may just be a memes yeah I mean what's like so we just talked about them beating estimates here but Revenue was down 3.4 percent um average order size down seven percent um repeat there were repeat customers like some of this stuff looked decent but you know the we're seeing a number of companies this quarter being rewarded for not being as bad um and I guess Wayfair falls into that category we did there was an analyst uh call I think it was last week that said that the fundamentals in Furniture do seem to be bottoming or troughing and that things are going to get better from here so you know maybe Wayfair is going to lean into that short interest in the 20s to 30s percent depending on the data you're looking at stock you know go back a couple years stock was trading around 300 bucks a share and now it's at 80. so um I think you know it brings up and I know Jared's going to talk about it in a second but it brings up a fascinating question about where are we with that whole meme with the retail thought with with this momentum in markets this behavior in markets where um you clearly have a lot of money moving into very specific trades which essentially stocks down a lot that people have been shorting but I know it's a Target you know as a buyer and you know as someone running fast money it's like I know I can get a little something out of this and sure you're getting your pop today in wayfaring you know that's probably enough for a lot of people to come in move out yeah well I mean this is something you and I talked about on the side the other day that sort of anecdotally looking through our training ticker page there have been more and more Mimi type stocks cropping up and as you pointed out um and kind of implied in the comment you just made that's not all retail investors now no in fact there's a lot of institutional investors who have now jumped on that to try to you know get that marginal marginal benefit I mean look and to be clear it was never only retail investors wow but you know I mean like that was the Genesis of it I think absolutely reasonably arguing and I think as you know as we were saying too it's like you know there's so much in markets and in the economy it's like set it's like you know everyone gets paid you know these dates and then they go to their 401K sponsor and it's like I gotta buy a ton of spy or whatever it is um so the Flows In markets are pretty static ultimately overall if you really think about it so all these trades are made on the margins so it took so few retail Traders kind of piling in for there to be a noticeable difference and I think those trades and look short squeezes have always existed it's not like it's a new thing but there is certainly a speed around and a flexibility with which you know maybe you know the kind of the new pod shop model is able to operate and Retail Traders you know might not be like if you worked at a big bank for a long time and you have a personal account that's like in the tens of millions you're probably counted as retail like AI called you up but you're not really retail you're not dumb money like you know what you're doing but it's so cheap now to transact and so many people have the ability to move again just enough money in some of these names that it really makes a difference the bid's not that thick in a name like a Wayfarer it's not the s p so um it doesn't take a ton that's why the Stock's up 150 this year and look you started shorting at 300 who cares yeah you probably you've had to probably pay up a little bit over that you've probably tried to cover at some point like there's a cost to it but ultimately um there's a lot of wiggle room on both sides of this trade and so that's you know and that's how you get volatility is that it you sure you sure you don't want to like hang out I mean I don't know like you want to go back to their management day job the last time I was here by 9 45 we'd be in our fifth break so I don't know what I feel like I'm in the Twilight Zone here I don't know this timing but we got to talk a lot this was fantastic I'm just waiting for like the hook because I don't know how how it works anymore it comes now this is the hook but you're welcome to stay longer get him out of here get him out of here next time hey we got much more coming up you're watching Yahoo finance what are you hearing most from clients right now they continue to ask about the Federal Reserve and inflation that continues to be top of mind and as it relates to portfolio specifically they continue to wander about fixed income and more specifically when they should be lengthening the maturity of those fixed income portfolios what we call adding duration so when should they be going to longer term bonds as a potential to add value because what happens in a recession is bond yields fall and inflation Falls and that tends to be good for the price of Return of bonds so they're always debating when to do that foreign [Music] foreign [Music] [Music] foreign [Music] [Music] foreign [Music] [Music] shares of Robin Hood are on the move down by nine and a half percent after the company reported a decline in monthly active users and said the trading activity continues to slump Robin Hood did post its first profitable quarter which CEO of lad 10 have called a significant Milestone Yahoo finance Jared blickery has the details on this one and Jared this is interesting not just for the company itself but also as miles and I was just talking about kind of of what it tells us about the trading environment writ large yeah I think that's going to be important I'll take a look at the meme stocks at the end of this but I want to get straight to the numbers so Robin hoodstock trading down in the pre-mark by the most since May and by this is probably going to have to uh force that calculation a little bit farther back in time and this has to do with investors looking past the brokerage firm's first profitable quarter as you said Julie to the disappointment and monthly active new users which at 10.8 million was lighter than the 11.7 million expected but total assets that was a beat at 89 billion as was average revenue per user at 84 now those are the quarterly figures and here we have the annual numbers we can put those up going back to 2019 with 2023 and 2024 showing estimates you can see that the next year total assets in blue are expected to print a new high after the disappointment last year there we go monthly active users are not expected to recover as quickly now robinhood's revenue of 400 86 million for the quarter was a beat though crypto Revenue came in line at about 31 million net interest Revenue beat expectations printing 234 million dollars and if we look at the annual numbers estimates in this chart we can notice a few and four a few important Trends first of all interest income is expected to grow to more than 50 percent of 2024 Revenue a billion dollars which essentially assumes interest rates are staying higher for longer that's in line with what we think about the FED second options revenue is holding steady at over half a billion dollars this then appears to be a structural shift in the market towards more options activity that is expected to continue in the years ahead and here's what the charts are saying if I could get control back here I'm going to show us some heat Maps here's Robin Hood let me just chart what's going on this year you can see along with a lot of other stocks we had this great run-up in January disappointment into February and March that's when we had the internet Bank panic and then we just kind of took off in June and July but we're off sharply from those levels that's because of this eight and a half percent loss we're looking at here first I want to take a look at our brokerage heat map and this is year to date let me just sort by performance we can see Robin Hood is actually number one interactive brokers up number two that's that 25 percent Charles Schwab down 21 but a lot of these names have roared back to life over the last two months that's when we've seen the s p not 500 but 200 or 493 excuse me uh really catch up and so we're seeing a lot of this covered in here as well now another thing that's happened uh since we saw the S P 500 really uh including most of its members in the rally Is MeMe stock so here's over the last two months our leaders board meme stocks up 28 and if I actually put this on our memes board we can see this vast array of stocks that including Robinhood itself there's some debate over whether or not that's a meme stock but a lot of these stocks including coinbase and that's really an exchange not a brokerage firm so much that's up 40 percent we got carbon up 222 percent these guys are usually late to the game it doesn't mean necessarily that the market has to roll over when we see these guys piling on but sometimes towards the very end and last year this was a contrary signal when these guys were perking up in a big way you might want to watch out because if you're late to the game well that means the market might be rolling over just by the time you start buying so I think that's a little bit of what we're seeing right now but the big question is how much do we roll over in the major indices and then how much do meme stocks get crushed here this has been a surprising bull market for me personally because we started out at the lows last year in October with a very concentrated rally and now that it's expanded to include a lot of things um you got to wonder is this the new Norm or are we going to go back into sector rotation remains to be seen Julie it does really interesting stuff all the stuff about options that can be also interesting and I should note coinbase reports after the close today so that is the next Catalyst one way or the other you bet and we didn't even get into crypto oh there's always time there's always time thanks so much Sharon appreciate it well employers are cutting off insurance coverage related to the use of weight loss drugs as more and more people begin to use them spending on those drugs can cost as much as 1 350 a month for a patient and that's quickly jumped into the tens of millions of dollars for insurance plans when you look at an accumulatively and that's all according to the Wall Street Journal joining us now for more on this and all things Healthcare Megan Fitzgerald gray ghost advisors and a private Equity investor and a Columbia University healthcare policy Professor Yahoo finances Anjali kemlani is joining us as well so Meg um this really caught my eye this morning because we are at such an interesting cultural moment when it comes to these this new class of weight loss drugs which by the way aren't even weight loss drugs right this is an off-label use um so I just wonder kind of where we are in the usage cycle for them yeah I think we're in the early Innings I mean this is a this is a market and a class of drugs that could be targeted at half the population so we have a long way to go before everyone who wants and and more importantly needs these medicines get it we also have 10 to 20 drugs and development so there might be oral compounds before you know it here in the United States so what you're seeing is two things one now that we're scaling and we're getting into more and more going from thousands to hundred thousands now to millions of patients you're starting to see one more side effects and two more costs so small employers who you know were having costs and the hundreds of thousands a month you saw the University of Texas now has a five million dollar bill most of that bill is due to these medicines they quite frankly couldn't afford it and canceled the program so whether you're going to see more restrictions put on these medicines higher co-pays or just flat out we're not covering this um I think we're going to see more of that because of the expense being born by not only the employer but also on the patient side Meg let's talk about that because I know you and I can nerd about the nerd on about this all day but so we're seeing all these restrictions you've got the employers cutting off or restricting you so they insure themselves requiring either prior authorization or not covering it at all for obesity specifically that indication and then you've got a lot of other conversations like the potential to bankrupt Medicare Part D which some are saying is an exaggeration or on on par you've seen that in a market with all of this going on still a shortage of the drug what does that tell you about the demand and what we should be expecting if and when it gets covered yeah so I I think it's fair to think Medicare Part D if everyone eligible went on it there's been a few papers to show how much that would cost so I don't I don't think that is an exaggeration I think what's missing from the dialogue is the end benefit if you were able to get obesity under control for many of these patients what would you do for their cardiovascular health for those that have diabetes for those that are not exercising uh musculoskeletal benefits I think we need to have more data to show what it means to kind of get weight loss down in these patient populations but I think it's a fair question and point that you raise who's going to pay for it because it doesn't appear that the cost of the drug is coming down which means two people get to bear that cost either the pay or an employer or the patient themselves and right now we're seeing a lot uh put on the patient in terms of copay and it's becoming cost prohibitive one thing we don't also talk about is once you start these medicines you're on them for life as soon as you come off of them you rebound right back largely to where you were and you've also lost a lot of muscle mass so this is something that really needs to be part of a metabolic program one of the only programs I've seen in the nation so far has been Connecticut that is looking to employ Telehealth providers and the medicine as a holistic program to make sure you truly get the benefits of not just losing weight but you also address nutrition and exercise um Meg do we know what percentage of these drugs are being used just in a discretionary fashion for lack of a better word you know off-label for people who aren't obese who are using it for kind of run-of-the-mill weight loss and who bears that cost and then is the risk of a knock-on effect a negative effect for people who actually need this stuff yeah I mean that's what's going on right now all insurance that I've seen covers it when it's diabetes as it should however we've now crept into as you said off label use where people that don't have diabetes are running a script as if they were a diabetic and for those that are actually using it legitimately for weight loss are they really getting the drug based on just BMI so some good clinicians are actually doing a full workup to even look at waist circumference and What patients have used before in addition to BMI so I think there's a lot of leakage that we have a lot of patients who should not be on these drugs they went on them first and as a result patients that genuinely need them for obesity and more importantly desperately need them clinically for diabetes are not getting them because some people with cash and methods and ability to go up to a med spa or jump in the line and that that is problematic and I think that's really why you're seeing employers and insurers quickly jump in with prior authors or even possibly evaluating canceling the program I think it's very hard to discern who genuinely needs to be on this unless it's coming from a clinician and they're the ones doing the work up and that's not really happening across the board yeah it seems like that seems pretty obvious that should be happening but it's a shame it's not um in other Healthcare views Telehealth service Amazon clinic now available in all 50 states it launched last November it's a virtual platform for users to connect with Healthcare Providers to treat common conditions Meg I want to get your thoughts on this how it is competitively we have seen sort of pure play other Pure Play Telehealth Services kind of struggle or it's at the very least a choppy business do you think that Amazon's competitive here yeah I think some great uh reporting by uh Anjali showed you know this is Amazon getting closer to their core you know using Amazon as a service or something that looks more akin to you know AWS so they've gone from Haven to pill pack to one medical and now they're kind of saying hey we're going to access a provider for you on the Amazon platform and I actually went and used it I tried the text messaging for an asthma drug and I tried the medical video for a migraine drug and I found it to be very easy in terms of it gave me four providers that I could use it told me how much it cost the video was a little bit more expensive at 75 and the text messaging had a little bit more friction I I needed to produce a recent blood pressure reading I also needed to show uh what what my prior prescriptions were so there's a little bit of work on my part which I think people in the clinical field if I'm wearing my clinical hat that's a good thing we want to like make sure there is a screening that it's not so easy just to text message someone a product or a medicine that they don't deserve so I I think this is getting closer to what Amazon's core strength is around being one of the largest e-commerce providers in the nation um I think it's still unfolding I think the comments you made earlier about grocery now trying to get its footing by consolidating assets I think Amazon is starting to consolidate uh these Health Care assets around what it does really well and that really is more of of you know an online service and accessing their Prime Membership what's that tell you your experience says a lot about what we see right now with the service what does that tell you about who their core population is Target population is considering they do have the broad reach of their e-commerce platform but then simultaneously it's cash pay only they're not in with insurers and this kind of goes along the line of the criticisms that have built up over the years of Amazon not really being able to figure out the broader more complex Healthcare System do you think that there's still you know this is just going to be a version one and there's going to be a beta yeah I don't know it's a great uh point I mean that's that's a that's the most important point they don't accept insurance they said yet as if they would be planning to do that so this is still very much a cash Pay Market if you look at the 30 conditions they're the conditions that you often see in in younger people with with a little bit of um a chronic element to it whether it's allergies migraine rosacea Dermatology erectile dysfunction this really is a group that normally would be using Telehealth and and paying cash because they have the cash so I I think time will tell whether they're going to start to really hit the Medicare population or larger segments of the commercial Market where it would be expected you can use your insurance a side note though is at the end of the at the end of the process it does allow you to send the prescription to any pharmacy you want and use your use your insurance so I can send a prescription on to CVS then have my PBM benefit kick in I'm just not able to use my insurance for the actual clinical visit if you will even though it's electronic and virtual Megan Fitzgerald always great to get your perspective on all of these different issues and our Angelica Milani thanks to you both well sticking with the healthcare headline shares a modern Rising this morning about three and a quarter percent after the company hiked its full year outlook for its covered vaccine that's remember it's still its only marketable product it has a the company reported a quarterly loss and a sharp drop in Revenue moderna generated second quarter sales of 344 million dollars largely due to a 94 drop in sales of its coveted shot total revenue plunge from the 4.75 billion it recorded in the same period a year ago when of course coveted cases were still trending higher in the United States we have some economic data that we want to get you to right now here in the United States and that is ISM Services 52.7 is the reading that's a little bit worse than the 53.1 that was estimated by economists the prices paid component of this service is index actually ticking a little higher to 56.8 employment taking a little bit lower and new orders remaining relatively steady here when we look at the different parts of the stack and uh and what investors should be watching here so this has kind of in line with much of the economic data we've been getting as of late a little a few minutes ago we got the s p Services PMI and that came in at a similar reading of 52.3 so definitely still showing expansion but it is interesting to see the prices paid component going higher we still see a lot of demand for services right that we have talked a lot about that is a hotter part of the economy not seeing much a reaction right now in stocks but we'll keep watching it we'll watch what's going on the bond market as well and we will keep you posted we got much more coming up you're watching Yahoo finance now that Fitch has downgraded the debt of the U.S I'm I'm prompted to ask where you were when s p downgraded U.S debt in 2011 and kind of what your reaction was at that stage so I was in London working for a State Street Global advisors at that time and it was kind of just in the aftermath of the global financial crisis Lehman Brothers going out of business so the world was still exiting a very difficult period so I think today is a lot different the economy is growing and and times are a little bit different so the fact that we got downgraded certainly is a disappointment and perhaps not surprising but I do think times compared to then to now are a lot different [Music] thank you [Music] [Music] foreign [Music] [Music] [Music] [Music] foreign [Music] foreign [Music] [Music] [Music] a little bit after 10 a.m in New York City this is Yahoo finance live I'm Julie Hyman and we're about 30 minutes called 40 minutes into the trading day let's take a look at how stocks are moving here we do see declines for the S P 500 in particular down by about four tenths of one percent and this continues the two-day slump that we have seen on the back of Fitch's downgrade of the US's credit rating Wall Street also weighing a number of earnings reports so let's talk about a few of those shares of Clorox those Shares are trading up by almost 11 following a big jump yesterday on an earnings beat company reporting net sales of two billion dollars that's 12 growth since last year Clorox also projecting better than expected guidance for fiscal 2024. on the flip side we have Etsy those Shares are down by nearly nine percent on earnings despite a headline beat on revenue and profits third quarter Revenue guidance did miss the midpoint of the range Etsy projecting revenue of 610 to 645 million dollars Wall Street will look at was looking for 632 that is putting pressure on this stock and chairs of Conoco Phillips the oil giant those years little change down just about a half a percent second quarter profits missed estimates there adjusted earnings per share a buck 84 versus 1.93 that was expected that is down more than two dollars a share from a year ago well the latest Services data just out this morning as we were talking about seeing slowing last month in those Services numbers to some extent and still seeing a little bit of persistence in pricing which is interesting here 52.7 was the read from the institute for Supply management that was down 1.2 points so still expanding here but expanding at a slower pace and also the measure of employment at service providers showed there was not much hiring during the month interesting there let's talk about the bigger economic picture right now with Ludovic subraan who is Allianz Chief Economist Ludovic good to see you so looking at this Services data is actually quite interesting because you know we keep talking about sort of anecdotally how big Services is right now travel activities concerts Etc does this show that you know maybe that momentum can't last forever well I think one thing is sure is that that the excess savings that most American families have occurred during covet for not traveling not going on vacation not going out is actually coming to an end as early as this September so right in the back to schools time so I think that's a little bit what you start seeing in the services sector compared to what we saw in the ISM Manufacturing which was very good which is all about you know labor hoarding and the IRA and the cheap sacks and everything that has been happening to industrialize America at a very fast speed the physical biodynamics so Services you know you countify gravity for long because it's Leisure spending and we start seeing that you know the real disposable income of Americans is being indented by the still quite High inflation and the beginning of the monitor transmission into uh the the cost of debts you know cost of mortgage and so forth into their dissellable income well as you wrote in recent note you asked if we are seeing so-called Immaculate disinflation that is will we continue to see that trajectory of inflation moderating without the economy tumbling into a recession do you think we will is that what it's I mean that's what it's looked like kind of so far yeah it's super interesting to see you know how for example there was this big discussion of whether the FED at all is responsible for apparently disinflation we do believe that the FED is actually contributing to half of the disinflation so it's not that Immaculate it's not that coincidental the other part is really supply chain disruptions coming to an end it's really the softening of the momentum and so this is why the big question now is how long can the FED uh keep interest rate high and whether these could create even less growth going forward especially that's 24 is an electoral year so we know if you remember 2016 that is quite a metal Through Time right try to Purgatory for growth so the question here is whether this suffices to bring inflation down to two percent year on year you know by the middle of next year for example I tend to think it could actually because the the growth momentum is really getting going to that direction and all the other International pressures are coming to an end do you think the FED will raise again in September or do you think it's going to be patient here and see if all of this is making its way through the system that's a good question and I don't have my crystal ball but I believe they may have to do one last hike unfortunately uh why because there are still some sticky pressures on wages in the US and so the Q2 numbers were really high so I would be in the camp of a possible hike again in September uh but you know a lot can happen by then because you know you've seen what happened with the fishdown grade and there are a lot of um you know discussion now about what is good fiscal and and whether there's been not too much physical so far so so it's it's 50 50 but I would still think that one more High could be needed because of still the slightly overheated and the slightly you know risks of of having long-lasting inflationary pressures and we know how detrimental it is to the most vulnerable of Americans um in a recent note and I want to ask you about global economies in particular European economies because of course you're a global Economist and you were out with a note recently looking at the U.S GDP situation which has been quite resilient and the European situation which has been less so what does the trajectory look like there as we go through the next six to 12 months well I'm going back to my fiscal stimulus points you know what is fascinating is that the countries in Europe that have been plunged into recession like Germany are entirely due of an effort to consolidate spending whereas in the US you know there is this you know pro-launched you know Cloud9 period with the debt ceiling and so somehow there is a recession avoiding syndrome by spending more money uh and so this is really one of the major differences we see between the US and Europe now is of course we don't have the same reasons to worry I would say in Europe we still have this energy democracy sword and and the risk of having much more trouble uh you know as we don't have necessarily the right sources of energy but I would say the manufacturing sector is adapting fast we're all affected also by I would say a a sluggish you know Chinese uh demand but the big issue is we both the US and Europe have been shielding a lot of the growth of the bus I would say three quarters uh from very profligated fiscal and Europe is a bit more anal when it comes to reducing uh fiscal spending just because is we have a set of rules that have been changing but that are still there whereas America seems to be a bit you know on the way to elections again less you know concerned about those rules and so I think that's a major ingredient of growth that is different and that's why we are actually uh tiptoeing with recession all for the past you know a couple of quarters in in Europe whereas America is still you know surfing on a soft momentum-ish type of situation so so far not being anal like not having any limits at all really not really you know whether it's whichever party the administration is there they've thrown a lot of money at it do you agree with Fitch that that is a problem and if it is a problem you know people have been saying it's a problem for a long time and it hasn't yet been what would cause it to finally be a problem I you know look I think as long as people believe that the U.S treasury is doing their job of course the past you know few months have been a bit weird was this idea of you know the Republican Party even calling for an organized default right that that is the ultimate you know threat but I think every saver sees that the U.S uh treasury is easy safe asset so I don't believe in a big Armageddon when it comes to the trustworthiness of the US government so that's a little bit why there is no reason to consolidate for the sake of consolidating and we've we've been through that Europe with the austerity crisis of 2012 and we've been paying the high price for that one of the issue is of course the cost effectiveness of some of the spending uh one of the other issue is also how much more you know industrial policy can be funded by the public money without asking really about the direct effect on growth and private sector crowding in effect I think one of the questions now is that there's been a lot of money out of the door that continues to be quite a lot I mean the IRA is 500 billion over 10 years that's a lot of money and a lot of companies are banking on this is it right use of tax base money in America that's really the question one should ask so it's all about the quality of the spending and the crowding in effect from the private sector look you know climate change is a big problem so any money any dollar is a good dollar but I think there are ways to make sure this is not creating a lot too much inflation which is also what we've seen in the US in 2021 and 22. yeah most definitely and I think the execution of all of that deployment is going to be really fascinating as as it is given out Ludovic thank you so much good to see you Ludovic is Allianz Chief Economist thank you well Tech Giants apple on Amazon you may have heard they're set to report after the Bell today so what can we expect from two of the biggest names in the S P 500 I like our finkel's here she's in town hello hopefully enough hello so what are what should we be looking for from these guys so Julie I'm going to give you two key metrics to watch here one from each company right for Amazon it's Crystal Clear AWS sales is where it's at they're going to show us where the cloud slowdown is at and it's also going to tell us something about corporate spending in the macroeconomic sense this is going to be especially important I think in the aftermath of mixed Cloud results both from Google and Microsoft last week this is a chance for a land grab on Amazon's part I would say now for Apple also if there's going to be one number to watch it's going to be iPhone sales they account for half of Apple's Apple's revenue and they're going to say a lot about where consumer demand I think is really Landing there's a chance for a win here for Apple you know recently the conference board data did show the consumer sentiment is at the highest it's been in two years however there's those chances of a win are maybe Slim the projections are showing Apple Greening towards a third straight quarter of Revenue declines which is pretty staggering Julie yeah and it's really interesting when you heard from the likes of a Qualcomm saying that Not only was handset demand for handset chips weaker last quarter that they're also going to be weak for the full year and apple is a big big uh client of Qualcomm so you know you have to wonder what the read-through is you have to wonder what the read through is and Julie it's a really vulnerable time for Apple right they're diversing or buying their supply chain away from China and one of the interesting Fallout effects I think we're going to see here is there's going to be more pressure on that service's Revenue now Services revenue is Apple music Apple arcade and of course Apple TV and that Services Revenue has been growing however if iPhone sales are down that growth is really really gonna need to keep up in order for Apple to frankly keep meeting these incredibly high expectations that analysts have and that investors have right exactly I mean and stocks have done quite well particularly Apple running up to this report so it seems like your trillions are high three expectations expectations are high but that Revenue sliding Apple's gonna have something to answer for here if the numbers don't look good yes it will well that's what we've seen some of the other Tech big Tech firms well looking forward to the numbers looking forward to your coverage of them thanks so much Ellie garfingo appreciate it we got much more markets action coming up stay tuned you're watching Yahoo finance the Market's held up pretty well we're just coming off five straight up months for the S P 500 what could derail the bullishness I think the biggest risk to the market continues to be the Federal Reserve so Julie I think that the FED has engineered a soft Landing they should be taking a Victory lap but I actually think they're going to snatch defeat from the jaws of Victory by continuing to raise rates later this fall [Music] thank you [Music] thank you [Music] thank you [Music] [Music] [Music] thank you [Music] [Music] foreign [Music] [Music] [Music] [Music] [Music] [Music] and to check the market sponsored by tastytrade if we take a look at the major averages we see them still in the red the s p and NASDAQ both down about four tenths to a half and one percent the Dow off about a quarter of one percent still it seems a little bit of trepidation uh that was triggered by yesterday's downgrade that then seemed to trickle through into selling in the bond market we still do see elevated levels for treasury yields today the 10-year yield for example at about 4.17 percent well lights being released its quarterly earnings this morning the company saw 20 growth in Revenue year over year that was ahead of estimates Lightspeed developed software that assists small and medium-sized businesses and industries like golf restaurants Hospitality retail with point of sale and software Solutions so what can this tell us about the state of the hospitality sector and the consumer let's bring in JP Chauvet he is lightspeed CEO to talk more about this uh JP it's great to see you let's talk first of all about what you saw in your business during the quarter here um I know you saw an increase in your gross transaction volume here and I'm just curious your your big picture read on what you were seeing in amongst your clients yes thanks for having me Julie good morning uh well the we had a great quarter um we're seeing a lot of demand for our platforms we're seeing uh Hospitality raining very high in terms of people you know our dining people are going out and dining and we're also seeing certain verticals in retail do well uh especially uh you know luxury luxury apparel uh jewelry so it's been a good quarter for us and and we're very happy because we saw gpv which is our payments volume uh grow 54 year over year so a very strong quarter and uh what we're seeing for now is our strategy to go off to the more established Merchants is paying off it should be because you guys have a lot of insight into spending Trends average ticket traffic Etc if you are seeing any changes on the margins particularly because some of your clients are higher end luxury as you say are we seeing um people make change their spending decisions at all right now yeah I I think um and and when we were in New York together we talked about it a lot cost of Labor is going up the wages are going up you know cost of goods are going up so we're seeing that margins are tightening um and uh and and so ultimately what the merchants are trying to do is do more with less so they're trying to adopt technology they're trying to to adopt platforms that can help them make their people more productive and and so we're seeing that even in the in the high-end space I mean that I I don't think that the shortages in employment in retail and Hospitality are going to go away anytime soon so yeah and I think that's why we've seen a lot of demand for our Platforms in this world and and and are you seeing any kind of changes though among customer Behavior are you seeing people opt for the chicken instead of the steak for example when they're going out to eat for now we're seeing uh gmv in the hospitality space do really well and and I think it's pretty much the same comment I made last quarter which is what people need to wear to go out seems to be doing well so apparel and you know jewelry and and watches Etc and we're continuing to see very strong Demand on on the hospitality front for restaurants and high-end restaurants so for now we're not seeing slowdown but we are kind of cautious when we think about the next uh next few quarters in the year we think there might be at some point a bit of slow down um and when you talk about that cost of Labor that you mentioned of course tomorrow's the jobs report we got jobless claims this morning pretty much in line with estimates but um how acute is the labor shortage at this point and you know obviously the what we see on the wage front is different in different Industries in the industries that you're serving are we seeing the same rate of increase or is it just that wages are holding steady at a lot a high level no I think the salaries are going up but I think the real problem is pretty much every one of our customers are looking for staff members that they cannot find so I think there is a real shortage and it still is there and I don't think it's going away anytime soon and we're seeing wages go up I'm I'm also curious about the competitive landscape right now GPB you know we heard from doordash last night which also reported uh increases in its volume um and and I know that that's not sort of a direct competitor in many areas but it's also expanding what it does you have other competitors out there um so how's that landscape looking for you guys right now so you know the 65 million retailers in restaurants are on the planet we are really focused on the more established so the higher gmv smbs those that have more than one locations that do table service so in our space um we seem to be you know doing really well and I think the more up Market you go the fewer vendors you have and the bulk of the market is really Legacy systems that are underserving customers and I think uh we are hearing from our customers that more and more of those established restaurants and retailers know that they need to move to more modern platforms and I think this this spans well for light speed we've seen um maybe one thing we've seen is our close rates have been doing really well in the quarter and we've seen arpu which is the average revenue per customer go up so uh customers buying more technology and and sales Cycles are are in a good shape so we're seeing demand um and I don't know how our competitors are doing but I I'm certain for Lightspeed where you know there's a really strong match to what the market was copy that I'm also want to ask you and I think we've discussed this to some degree before about AI which is sort of less the topic du jour it's still very much a point of discussion but not quite as frenzied perhaps as last quarter but where are you guys with integration of that because I know you were excited about sort of the potential eventual applications for something like that in the software that you provide to clients yeah so nothing has changed we're now in a full implementation mode so uh we we have started to implement all the AI now for our support So optimizing support and and I think that's great because the cost serves is going down and and actually if you look at NPS or satisfaction rate of our customers is going up so that's that's a good thing we're using a lot of AI now in our development teams and you know we can gain 20 I mean we the numbers I heard from our CTO is 25 productivity gains when we Implement AI well for developers so that's pretty outstanding for us and again this tells us we can do more with less and then finally the last thing we're doing with AI is is more for our customers where we are we're basically analyzing you know we have 90 billion dollars of transaction volume and we're really trying now to to get a lot of insights and we with that in mind we just launched our new insights module in Europe uh which we think is gonna is gonna go really well but again how is that using AI we're basically looking at the macro to help merchants uh called better decisions and so we're going from a model where they're looking in the mirror and you know we're giving them analytics to a model where we're telling them what to do thanks to Ai and machine learning so a lot of great technology and and a lot to come but we are a full-fledged in implementation of all these uh these practices yeah that's really interesting an interesting point JP because obviously we have a lot of information the question is what to do with it so that's helping answer that question it sounds like JP Chauvet is lightspeed CEO thank you so much appreciate it thanks for having me Julie take care much more coming up you're watching Yahoo finance what do you do outside of work to help keep your head on straight I love to read I think anyone who's in this business just has to drink from a fire hose and read a lot and I'd like to try to read a lot of different things what are you reading right now so right now I'm reading David McCullough's book on Truman so I thought it was kind of an interesting and I swear I didn't make it so it was coordinated with Oppenheimer I promise but it was kind of an interesting period of time and Truman was an interesting character so a little bit of History right now and you saw Oppenheimer I did see it yeah I thought it was very good I don't know why anyone can't tell a story in under two hours but other than that I thought the movie was great [Music] thank you [Music] thank you [Music] thank you [Music] foreign [Music] [Music] [Music] [Music] [Music] [Music] [Music] stop foreign [Music] [Music] [Music] [Music] investors aren't toying around with Hasbro's stock today we are seeing it push higher after the toy giant announced its E1 film and TV business will be sold to Lionsgate in a 500 million dollar deal the company also lowered its full year guidance blaming the ongoing strike in Hollywood Hasbro CEO Chris Cox joins me now Chris always great to get some time with you here so I think the big news out of the gate is in fact the sale of E1 500 million dollars why did you make the deal now and where will you spend that money well we've been in at Brian first off thanks for having me uh we've been in a process with E1 for about nine months now we announced it back in November uh it was just the right thing to do for the company you know Hasbro has been become great because of play um and we're really refocusing on toys and games we'll continue to have a great entertainment presence but when we looked at E1 and we looked at the film and TV division in particular there was just a lot of brands that we weren't going to make action figures or board games for and we figured there was a better home for it does this deal Chris help you save money yeah you know from a from a high level perspective we spent about 600 to 700 million dollars a year uh in film and TV production uh of which you know from an operating cash flow perspective we fund about 50 to 100 million of that from Hasbro corporate so there will be that upside for us and then the margins inside of the film and TV division while it's profitable it's nominal so it'll be immediately margin of creative to us as well and then last but not least you know based on the proceeds of the sale we're going to be able to pay down a minimum of 400 million dollars of debt and accelerate our path to uh our long-term debt to ebitdo ratio of 2 to 2.5 got it I I want to make sure the investor base understands this is Hasbro out of the content game are you still playing you know you still have an eye toward bringing some of your biggest franchises to life on a big screen or streaming platform oh for sure yeah I mean the film and TV division is probably about 85 of our entertainment revenue from last year we still have huge Brands like Peppa Pig um a lot of Animation efforts and we have over 30 projects in development uh across live action and animation including future movies for Transformers GI Joe TV shows for d d Magic the Gathering as well as a host of projects for our board games including a movie that we're developing uh uh based on Monopoly with Lion's gate I think the big pivot for us is is we're going to be returning much more of an asset light model where we work with the best and brightest in Hollywood and leverage their distribution platforms and their content creation know-how and we'll focus on what we do uh what we do really well which is play yesterday Chris I had a I had a chance to catch up with Intel CEO Pat gelsinger and his company is also going through a transformation but he said something to me pretty powerful I think you know that green shoots in his business that started three months ago are now morphing into plants I think he meant the turnaround is starting to take shape where does your turnaround stand oh I think it's palpably taking shape you know we entered the year uh predicting our first half would be down 20 after T1 we said it would be down 16 and after Q2 we're down 12 our POS has been picking up through the year uh you know we're still not fully to Green but we're definitely seeing improvements in our toys segment and our wizard to the coast segment continues to be what in my opinion one of the best stories in all games uh you know we see that segment up minimally uh High single digits this year and that's on a track record of I think we have a five-year kegger of around 13 so there's a lot to uh focus on in terms of our turnaround story and in terms of our momentum around it what's next in your turn around story well I think for us it's really for a couple things on entertainment we're going towards an asset light model I think that's going to save us money it's going to raise our margins which is important for us I think in toys it continues to be driving the Innovation funnel of their working with our retailers to be the best execution game in town and then in games you know we're a toying game company but I really place the emphasis in games that's an incredibly high margin business for us a great growth business for us and I think you're going to see us lean in more and more there you know we've got a 2.1 billion dollar game portfolio with a better than 30 operating profit margin uh you know over the next five to six years I'd like to see us make some material progress and continuing to grow that and keep that bottom line super healthy Chris a lot of your biggest customers Walmart Target you name it are thinking about what games what toys they will put on the shelves this holiday season what are you hearing from uh for them right now because as we all know before we know it we'll be out shopping for gifts again yeah well you're seeing a couple of our favorites right here and some of our uh our Retail Partners favorites you know this little guy Furby um he yeah we sold out on initial allocations in the first 72 hours so we think that's going to be a a toy of the holidays uh we've got some great new Monopoly collaborations this one's uh based on Super Mario Brothers but we did one with NBA prism which basically vaporized in the first half of the year and probably one of the games I'm most looking forward to in the back half of the year is our first collaboration with Mattel on Barbie Monopoly so taking one of the biggest names in games with one of the biggest names in dolls and really having a nice uh giftable moment and then you know across the portfolio whether it's action figures with our hit movie for Transformers rise of the Beast or just other new games that we're doing like twister air I think there's a lot of uh reasons for optimism in the back half for us Chris you mentioned the Barbie movie and really it is it's sucked the air out of a lot of different things clothing at Gap at fast fashion retailers I do you think it has sucked the air out of just toys unrelated to the Barbie movie and does that hurt a Hasbro this holiday season no I mean what we're seeing is uh the toy category is starting to pick up a little bit you know uh rpos has been positive uh especially when you X Out kind of exited licenses for the past four or five weeks you know Transformers rise of the Beast we've had an 83 percent uh pickup in point of sale since the release of that movie Spider-man uh since across the spiderverse we've had a greater than 100 percent uh pickup and Point of Sales and then again you know we're we're selling new items like Furby which retails for around sixty dollars uh and that's selling out instantaneously so you know I give my congratulations to Mattel I think they really did a fantastic job with that movie and particularly the marketing campaign around it and I think if anything that movie isn't sucking the oxygen out of the category it's proving how vital the category is and how important the IP is what movies do you think will drive your business over the next 12 months I've talked to a couple analysts and I'm starting to hear a a change in tone uh in their voice uh Chris regarding potential franchises that may start to drive your business again outside of Transformers well I think Transformers has done a good job and I think we'll have a nice pickup in Holiday based on that Spider-Man across the spiderverts we'll have another pickup in holiday as well we're looking forward to a new Avengers movie next year uh we have another Transformers animated movie coming out next year and then you know uh I think video games is a big moment for us as well we've got a new video game coming out today from our partners at larion called Baldur's Gate 3. I mean that's going to be one of the biggest video game releases of the year on PC and Playstation should be a game of the year Contender and in terms of our DND business I mean that's a huge Catalyst for that business uh and an important partner for us that we wish all the best for Chris I figure well I have you here I might just admit to you I used to collect a couple Furbies you know I'm I'm All About full disclosure nice yeah I might have to get back into it I see that one continuing to look at me on the screen Chris Chris Cox hasbrosio good to see you I'll talk to you soon thanks Brian all right we'll send you a Furby okay all right Furby fan out more market analysis straight ahead on July 20th 32 Nations arrive in the land down under to compete when soccer's biggest stage here at Yahoo finance we're taking you beyond the beautiful game from sponsorships to broadcast sales and Merchandising finally the world is paying attention the Women's World Cup prize sits in 110 million dollars that's up from 30 million since 2019 as their fight for equality continues what will this year's World Cup do for that battle and what's the economic impact will it truly be one of the most watched sporting events in history discuss all this and much more on Yahoo finance [Music] foreign [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] foreign [Music] [Music] [Music] [Music] [Music] Traeger Shares are lighten up today after the grill maker handily beat Revenue estimates even though it did see a 14.4 percent drop in year over year sales the company also raising its Outlook now expecting revenue of 585 to 600 million dollars this year Jeremy Andrus is joining us now he's the CEO of Traeger and our Yahoo finance executive editor Brian sasi is here as well Jeremy um it's good to see you thanks for joining us um you talked a lot on the call and you have talked a lot about sort of where we are in the grill cycle right you are one of the many many companies that saw a pull forward of demand because of the pandemic and now there's this long tale of normalization and stabilization where are we it sounds like on the call that you hinted we could be getting to the end of that yeah it's uh it certainly feels that way um you know if you look at uh the industry in 2022 uh down mid High Teens uh you look at year to date 2023 down uh low mid single digits and so it feels like we are finding uh finding the bottom and the good news is that this is an industry that is resilient uh Americans have always grilled they will always grow in fact the grill owning households Grew From 75 to 76 million during the pandemic and so you know we're currently in this trough significantly below the size of the industry in in 2019 pre-pandemic it will recover it will grow it's just what Americans do Jeremy I was in Home Depot a couple months ago looking for a grill and I'm walking down the aisles and I see a griddle uh with it the Traeger name on it why did you get in this category and I thought trigger was supposed to be known for wood smoking you know Brian uh Traeger is known for bringing people together around these incredible food experiences our mission really is to help our consumer create bonds and memories in their homes and in their backyards um we built a griddle solution because we thought it was a perfect accessory to a wood pellet grill we thought it was a perfect compliment a wood pellet grill low and slow convection heat and a griddle hot and fast and you just cook differently sometimes you cook together sometimes you cook different foods uh Smash Burgers stir fries breakfast foods Philly cheesesteaks and so we went out and we talked to our consumers and we really built this phenomenal Innovation that is called The Flat Rock we love it it's so much fun to cook them um and as always the video that we showed during your segment is hello quite well right it is it is you know we we came at it uh from from a fairly disciplined point of view this is the first non-wood pellet grill cooking product that we've launched and um you know frankly we we launched it when we when we were in a high inventory position we said we're going to be very disciplined we're going to see how the market reacts to this the good news is we can't we can't build these fast enough and I'd sure rather fix that problem than a demand problem Jeremy I have a newsletter going out tomorrow morning around 7 A.M looking at you know what companies that have been working through Transitions and restructurings where they are right now a year later now your company has been going through a transition the past year cleaning up inventories starting to get margins back under control what inning are is you is your company in and trying to turn itself around it's a good question like I want to start by saying how proud I am of Team Traeger I have never seen such alignment on a team I've never seen such willingness to do the heavy lifting and work through what's been a tough environment uh good news is you know we grew ebitda year over year uh we we brought our inventory levels down Channel inventories are super healthy balance sheet inventories we brought down 26 sequentially from the last quarter and so I would say we have turned a quarter uh we truly have turned a quarter uh corner and and what I think is important to note is that we are in 3.5 of the 76 million households who Grill you look at our heritage markets like Utah where we're nearing 20 we are a disrupter we are a share taker we had to get healthy first from a balance sheet perspective we are healthy uh we will begin to lean into this now and we know that once a consumer comes into the trader hood that consumer is passionate and Evangelical so it's been 18 months of playing a little bit of Defense but we never took our Eye Off the Ball which is to play offense longer term and we've been making Investments behind the scenes that will help us win um I just love it so much that you call it the trigger Hood it gets me every time it is not a cheap club though Jeremy is it I mean it's gotten less expensive you've talked about how you've brought the pricing down a little bit from the pricing power that you had during the pandemic and so yes it's you've got a small penetration and a potentially larger penetration into the U.S Grill Market but you know how much are people willing to pay for a premium Grill experience you know what uh we've seen some interesting consumer disruptions in other categories over the last 10 years and I and I think those are important to note oftentimes what's what's happening in the category that's important to Consumers is that the consumers are being underserved there is not Innovation there's not a reason to pay more because the experience isn't improving uh this is you know in a prior life I built a headphone company and headphones consumers were spending you know dollars not hundreds of dollars we created a reason for a consumer to invest more to have a better experience grilling is a much it is an incredibly attractive category and we think the same thing has happened we think consumers have been underserved it's been a race to the bottom because it's been all about cost and price and we are bringing Innovation that a consumer is willing to pay for and when you think about you know what what do we do every single day we cook and we eat and that's something worth investing in you know I I would highlight Brands like Yeti I mean like you know this is this is a whole new category that Yeti created and it was uh it was just it was an innovation that consumers got excited about we aspire to really Inspire our consumers to have these incredible cooking experiences not only to create great food but to go from hating to cook to loving the experience of cooking and sharing with families and we think a consumer is going to reprioritize discretionary income and pay to be to pay to have the experience Gerald uh follow me on this one with costs coming down for a lot of companies I imagine uh coming down a little bit for you guys finally is there a way to make some form of Holy Grail barbecue four to five hundred dollars that does just absolutely amazing things blows people away because when I go into these stores and what I found is some of these prices on Weber grills blew me away I mean we're talking four burner grills fifteen hundred dollars and I don't see the any innovation in some of these products yeah look uh you get four four burners for uh low price point but then you have to taste propane when you eat um look the the uh The Innovation is is it's not free uh with that said we're building a business that allows us to create scale in Innovation and then we can we can progressively deliver more value to the consumer because we have scale in The Upfront development Innovation scale in in manufacturing as we grow our goal is not to be expensive to Consumers our goal is to be accessible and the more that we grow the better our team becomes the more we can deliver this incredible experience uh and just more value per dollar spent that is our ambition Jeremy it's great to catch up with you Jeremy Andrus Traeger CEO head of the Traeger Hood let's call him that as well Yahoo finance's executive editor Brian slawsy joining us as well happy grilling to you Jeremy well thanks for hanging out for that I'm a head of the tomahawk Club loving these barbecue oh I know you do love me some tomahawks all right we got a lot coming up on Yahoo finance live here's a look at what's on Deck no Grand Slam for Denny's the designer chain missing estimates in the latest border we're going to speak to the company CEO in our 11th hour and get up pulse on the consumer sassy loves the pun work over here sign it right there love me some Denny's and glass half full the Bud Light boycott cost a b in bath but not as much as expected customers though are not wearing beer goggles is the company doing enough to bring the brand back in good standing we're going to talk to two marketing experts and get their takes and we've been talking about it all morning the biggest test for the Market's gonna be after the belt today with Amazon and apple on Deck both stocks have been a key part of the S P 500 event this year can they fuel for their game Yahoo finance is the kiko Vegeta and Diane King Hall are gonna break those numbers bring a key analysis after the Bell it's gonna be a big day we gotta leave you here blickery's got you for the next hour training foreign [Music] [Music] [Music] [Music] [Music] [Music] foreign [Music] [Music] [Music] foreign [Music] [Music] welcome to Yahoo finance it's 11 A.M on the East Coast 8 A.M on the west I'm Jared blickery and here's what I'm watching today breakfast goers didn't overwhelm for Denny's this quarter maybe they just whelmed after earnings missed expectations we're going to speak with the CEO Denny's later on this hour and Anheuser-Busch reporting a big drop in profit for the controversial second quarter but the company's Fallout means for the future marketing efforts plus a challenging macro environment is hitting consumer wallets we're going to speak with direct to Consumer company solo brands on the back of its earnings this hour but first let's get a quick check of the markets and let's see what kind of day we got it looks like we are down again NASDAQ is the least bad at least dirty shirt in the house down 14 basis points the Dow is down 125 points and the S P 500 down about one third of what one percent and let's take a look at the treasury market as well we've seen that on the Move recently and we can see another update we have uh the 30 year that is just exploding to the upside up about 14 basis points to 4.31 percent higher now than the five-year that is a new development and look at the tenure at 4.18 percent that is up 11 basis points well the markets year to date rally was diverted recently by Fitch's cut of U.S credit as investors digest the downgrade could the Market's positive momentum further derail in August and as for a joins us now with a look at what we can expect yeah Jared and if we take a look at Trends all Trends point to perhaps a lackluster August a doldrum in the summertime let's say uh we took a look at Bloomberg data and also data from stock Traders Almanac which shows that August is the second worst month historically when you take a look at the last three decades for the S P 500 and we've got a chart to show you August performance also when you take a look at August when it comes to Performance in the NASDAQ the Russell 1000 the Russell 2000 also the second worth month now keep in mind last year the Dow Jones the S P 500 the NASDAQ were all down in August of course we were going through a bear market last year but dating back even further if you take a look all the way back to 1950 the S P 500 has historically generated average and median gains in August of zero percent to point six percent respectively and that's according to LPL Financial also we have to know that the August before presidential election also points to lackluster a lackluster month in fact all five indices that I mentioned earlier those declined in the last three pre-election years in August in 2019 in 2015 and 2011. and Jared you can pull up the Wi-Fi interactive to show what we have been up to in the last couple of sessions because we already are seeing a weak start to the first days in August a perfect storm as one of your guests said yesterday for a pullback now uh the market uh is overbought is what some strategists are saying you've got longer duration yields you have the 10-year yield that hit 2023 highs and also relatively weak seasonal Trends so all of this is pointing towards a pullback all right well we thank that thank you for that and by the way that was JC Perez who gave you uh that delicious quote yesterday with us thank you for that in this phrase now with the markets upward momentum momentarily derailed by a cut to the U.S credit rating what should investors look be looking to build or sustain with regard to wealth so joining me now is Anthony sicaro president of Providence Finance Financial Insurance Services thank you for joining us here um let's answer the topical question here with respect to a retirement please well I think that uh there's one thing that we have to be careful of and that is we're not out of the woods yet some of the conversations I've had with people clients is they feel like maybe we're not going to have a recession so I want to caution everyone first that that recession could still be around the corner we do have an inverted yield curve about how to build wealth with Investments uh is what I'm recommending to my clients is to focus on income producing Investments you know when you look at the market history the fact is there are long periods of time where the market has no growth followed by long periods of time where the market does really well and we've just come out of a 13-year period starting in 2009 when the Market's done really really well and a lot of analysts a lot of professionals including myself are thinking that the next decade may not be so good so you have to invest for what you know you can count on it and and that would be income dividends and interest if you have an income portfolio uh and it's Diversified with high quality companies you can count on your income if you're a senior living on your income you want to be living on the interest in dividend so you're not cannibalizing your principle and if you are in the accumulation phase of life growing your portfolio then the dividends allows you to get paid while you wait so you can grow your portfolio through dollar cost averaging the dividends back in it's a good strategy for saving for retirement and it's also a good strategy to reinvest dividends and interest back into your portfolio dollar cost averaging great strategy let me ask you uh does it depend on demographics here does it depend on your age how many years decades you have until your retirement is this a strategy for everybody no it's definitely well let me back up it's it does depend on your age yes 100 uh if you have 10 or more years of retirement you can be more aggressive you're going to have a higher Equity portfolio I would think that waiting for a pullback would be a good time I wouldn't get in everything right now but dollar cost average and if you have 10 years or less to retirement you need to start pulling back a big mistake retirees make as they wait until the day before they retire to make a change and for the last decade and a half they've gotten away with it but for the next decade and a half maybe not and if you are retired you got to really focus on income at least cover your income needs through dividends and interest and then you can invest the rest a little more aggressively if you want to makes sense um any assumptions here based on an interest rate that stays higher for longer and where I'm going with that is where markets are expecting the Federal Reserve to hold interest rates at these higher levels but for instance if we did get a market crash and we did end up cutting by 400 basis points as it's pretty customary during recessions what then yeah that's a big question uh that I'm having to address with consumers and it's likely that that's going to happen it's likely there is going to be a correction there could be a crash and I want my clients to be planned to plan for the worst case scenario and a mistake that I think a lot of consumers are making is they're jumping on the short-term bandwagon with long-term money uh they might be investing in a one-year CD at four or five percent or two-year CDF four five percent not realizing that what they're doing is they're going to enjoy that interest rate for one or two years if the market crashes we have a 400 bips drop on the feds and their CD matures in a year they might only be able to get one or two uh one or two percent on that CD so it's a great time to invest for fixed income because not only are fixed income Investments depressed at this point uh the most depressed they've been in over 40 years you can use fixed income as a capital appreciation play and lock in higher yields not just for one or two years but also for five or ten years so putting longer term money into shorter term CDs is a big mistake but I see that happening I caution consumers not to do that yeah well I was just remarking earlier I don't know if you want to go 30 years out on the curve but that is now paying higher than the five-year again that's probably a fodder for a different conversation but I want to talk about 60 40 last year was the worst year for 60 40 in decades what should investors be thinking about in terms of Market mix portfolio balance is it safe to go back to 60 40 or is that kind of a dead Paradigm given the new interest rate structure yeah great question 1640 has been talked about a lot I think the answer to that question really goes back to what we spoke about a few minutes ago and that is you know what stage of Life are you in the whole point of a 60 40 portfolio is if if uh the 60 drops the 40 goes up if the 40 drops the 60 goes up you've got this inverse correlation with bonds and stocks that is supposed to be the way it works but for the last few years it hasn't worked that way so 60 40 portfolio with interest rates going up and the stock market going up uh you know has has not really worked the way that investors have hope so it does depend on the phase of life that you're in the 40 provides more income if you're a little bit older I think flipping that around maybe even going a 40 60 portfolio 30 70 portfolio if you're living on your income and you got to be more conservative but if you're in that accumulation phase of life you can even go more aggressive than that 60 40. um want to talk about geopolitical uncertainties uh we have or we've had at least a war over in Ukraine with Russia we've had china reopening delayed uh we also have growing antagonism with respect to the tech culture between the U.S and China how should investors be thinking about this and navigating a less safe world that it seems that we've emerged in yeah it's a great question and I think part of that conversation comes back to AI too we're getting a lot of questions about this AI craze and a lot of investors want to know how do I get in on that what's the one company what's the Apple that I can buy in in 10 years is going to be you know take my ten thousand dollars and then make it you know millions of dollars like that would have been if you'd have bought Apple 30 40 years ago um and I'm going to just caution you don't chase a company you you want to consider Ai and what companies are doing with AI but uh you know you've got to be really careful when it comes to the geopolitical uncertainties that's another thing that you have to you know keep in mind as well but you can't avoid them you can't avoid the tensions we have with China I had a client come to me recently and said you know I don't want anything China well good luck you're not going to be able to invest in anything that's not going to be relevant to China so it's something in the background it's one of the pieces of the puzzle that you've got to consider along with interest rates along with potential recession um as along with investing for income so it's definitely a big piece of the puzzle yeah it seems the deglobalization trend is kind of beginning but we are still completely connected in the interdependent here really appreciate your insights thank you Anthony sakaro president of Providence Financial Insurance Services thank you Jared time for today's trending ticker PayPal down over 10 percent you can see almost 12 percent they're having the worst day since right after reporting disappearing uh disappointing gross profit and adjusted operating margins at 21 which was below expectations at Jeffrey's cut Jeffrey's cut its price Target at the payments firm which was founded by Elon Musk by the way decades ago to seventy dollars from 75 while maintaining a hold recommendation saying they don't expect a positive narrative until gross pop gross profit growth improves now likely in the fourth quarter UBS is maintaining its buy recommendation but lowering its price Target to 107 and that is all the way from 118 on margin and transaction take concerns firm is saying that the next Catalyst for investors likely to be their next CEO with that process underway now the stock is now trading at mid-june Price levels in the mid 60s and is now down 80 percent from its July I peaked two years ago in 2021 another pandemic high flyer that was brought down to earth and is just trying to find its footing now all your Market's action ahead stay tuned you're watching Yahoo finance August tends to be the worst month for stocks at least if you go back the last several decades how's this one going to go so I do think we're entering a seasonally week period for the markets and there seems to be a lot of complacency out there the vix is very low the put call ratio is very complacent uh the aaii survey it reached its top bullishness for the year so all of that suggests that markets seem to be the fear of missing out the Bears have thrown in the towel that makes me a little nervous [Music] thank you [Music] thank you [Music] thank you [Music] [Music] foreign [Music] [Music] thank you [Music] [Music] [Music] foreign [Music] let's do a quick check of the market sponsored by tastytrade we got the dial leading the way down low it's only off by almost 100 points S P 500 down a quarter of a percent in the NASDAQ down about five points or three basis points Denny's came out with its second quarterly earnings the company saw a Miss on its Revenue in EPS but its operating Revenue grew 1.7 percent and it's system-wide same restaurant sales grew three percent compared to last year so what can we glean from this about the state of hospitality sector and the consumer we're going to bring in Danny's CEO Kelly valade and also Yahoo finance's Brooke De Palma to discuss more thank you for joining us here Kelly um just please give us your rundown of your latest earnings yeah thank you thank you so much to me so I I'd be happy to it was an interesting quarter as you can see and as the headline reads we did have missed on some of the expectations that we had but we still had and reported three percent positive sales we reported um pretty decent earnings uh overall and we did beat the consensus on that so you know we sequentially improved throughout the quarter we felt good about that this is a time where we're seeing a lot of things work in our favor in terms of Commodities and disinflation hopefully eventually deflation but at the same time there's still some uncertainty from the consumer as gas prices go up and and sharply as of late we still see some reason to just be cautious the good news is and we told what we did talk about on our earnings call was just the incredible Playbook and the strategy that we've got for both of our Brands both the Denny's Flagship brand and then our new brand Kiki's Breakfast Cafe which will be a huge growth vehicle for us so we've spent a lot of time integrating that new brand into our portfolio we're thrilled with the progress that we've seen there and we're really excited by both what we have in front of us and in store for Denny's and Kiki's Breakfast Cafe good morning Kelly so great to be with you I mean really this past quarter you guys doubled down on strategy you return the Super Slam but break down for us exactly what you're seeing consumers spending habits change to this past quarter are they flocking to those value offerings and in turn are they then ordering less that's a great question I appreciate that so much there's so there's a lot going on there but what we do see when we return to our Super Slam offer was a 7.99 start point it's a fan favorite for us and we know our guests and our consumers need uh value they count on us for that right we have value leadership in the space that we play in so uh our fan favorite Super Slam did really well for us again sequentially we improved through the quarter um that had a a big part of it we're back on actually right now talking about our Super Slam offer and we'll continue to refresh that messaging with some Innovation as well we had a great bacon Obsession spot called baconalia that we also uh offered this quarter along with Super Slam so we had both things at play and what we saw was that the guest to your to the core of your question the guest did not trade down uh they actually um we we did well with our check our check growth was modest but we did well with check and so we saw people coming in perhaps because they saw a great offer on our Super Slam again a fan favorite but they came in and they were still talking about excited about some of the Innovation we had with our baconalia lto and speaking of bacon I mean we've seen bacon prices sort of fluctuate over the past year you alluded to it earlier but commodity prices coming down from 10 to 1 this past quarter what's costing more these days is it that bacon is it eggs and and where do you hope to see those go in the second half of the year we've got a lot of things locked in a lot in our Market Basket is locked in so we came at this promotion actually at a really good time for us so bacon prices and pork prices down egg prices had started to moderate prior to this so we had um we had some good good things working for us and again we we've expanded our margins uh this quarter at a time where you know others may have not but we expanded our margins and we were pretty thrilled about that um potatoes continue to be and that's something you see on a lot of our plates whether it's our amazing hash browns uh or our amazing wavy fries potatoes are still a commodity that has not yet come down while the other things in our Market Basket either are locked or have come down quite a bit hey Kelly you mentioned your acquisition of Kiki's a little bit earlier recent one and smallish in size about 82.5 million dollars I'm looking at uh what 52 domestic restaurants there tell us tell us please what you're thinking about is this a new Direction you want to go is this just um or is this just diversification of your offerings a bit diversification are offering a bit opportunistic really strategic play at a time where in family dining while there are a lot of mature Brands and family dining us being one of them we're celebrating our 70th Anniversary right now we're 70 years young and have so much potential ahead as I indicated in all of our strategies and the things that we are doing but the Kiki's Breakfast Cafe acquisition was a really great move into a different segment so we now have family dining and we now have what this breakfast day Parts breakfast cafes daytime eateries and they're only over seven and a half hours and for the Denny's Brands what we saw was a huge opportunity for a newcomer in the market in this segment uh to compete and really go head-to-head with others that are out there it's a fragmented segments this new am Eatery though there are probably a thousand new units in the space it's pretty fragmented so for us it was about leveraging what we know about breakfast but also our great franchisee Network and the fact that we are a model franchisor so we feel like speed to Market can be something that's really a strength of ours in acquiring The Breakfast Cafe and we've seen really great things so far we've got lots of interested Denny's franchisees we opened a restaurant last week we'll open one in uh next Wednesday another Breakfast Cafe so we're really excited with the progress that we've seen and the potential that this brand holds for us in terms of growth well the in-house coffee beans definitely sound like somewhere I need to go to and check that out at Kiki's Breakfast Cafe but when you're thinking about filling staff for these restaurants that are set to open I know that you noted in the call that wage growth has moderated we're seeing that particularly uh within Florida I know you mentioned where challenges are still there in terms of Staffing so break down how you ultimately aim to recruit and maintain Talent offering maybe you know the best in the market as we're seeing that labor recover absolutely so I think the way I phrased it in our call just uh just a couple days ago was the fact that though it's better and though there's been moderation certainly in wages you've still got different states taking pretty big wage jumps and so that's absolutely impactful for us we're really confident not only in our complete kind of employee value proposition we've added different levers as of late our gain program we actually announced that um we put a some a release out in regards to that because we're doing things that I think others aren't doing that we know others aren't doing and so it's yes it's about wages we've got industry-leading turnover we have industry leading turnover and great retention at our company restaurants many of our franchisees do as well but we're adding programs in like GED um uh the opportunity to get geds the opportunity to get college credits with going through our management training program we're doubling down on other offerings just to have a great value proposition you really do need to do that today it's incredibly competitive uh and so there's some shopping list state by state but overall we're really happy with the way we take care of our employees happy we live our purpose every day and happy they help us to deliver on a great guest experience and I think what's so fascinating about Denny's is that late night versus Day part and what I found so surprising this past quarter is that you guys did see a higher interest in coming during the day to Denny's then at night you know when you think about the consumer behavior in that way did that surprise you or is that a trend that we're seeing Yeah we actually still had really strong late night growth as we got back more restaurants back open to 24 7. so we actually we spoke about our 24 7A return to over at this point 75 of our system as a huge win there's no one else in family dining and I would dare say in even in Quick Service uh or fast food restaurants that has been able to get back open in those late night hours and at 75 we absolutely have secured again our position in the market as an industry leader uh and it's a core Equity of ours we know people want to count on us for maybe that great late night meal great night great late night option in a virtual brand so we're pretty pleased with that and we we saw Day part growth all throughout but um late night's still growing for us as well well I'm glad to see uh late night back 24 7. Just A Sign finally that nature has healed and happy birthday by the way 70 years for the company thank you for that Denny CEO Kelly valade and Brooke De Palma thank you so much all your Market's action ahead stay tuned you're watching Yahoo finance foreign [Music] foreign [Music] [Music] [Music] foreign [Music] foreign [Music] [Music] foreign [Music] [Music] [Music] foreign [Music] [Music] [Music] [Music] a b inbev dropped its second quarterly earnings this morning while its Global revenue and EPS weren't staunched its uh U.S sales they took a massive hit following a Dylan Mulvaney controversy let's bring it now Yahoo finances Brooke De Palma to give us some more insights Brooke good morning yeah lay the land here good to see you again lay on the land for sure I mean this was an hour-long call that really kicked off with that performance here in the U.S it was mixed results overall beating a beating analyst estimates for earnings but did fall short on revenue and here in the U.S once again top story their revenue in the U.S declined by 10 and a half percent in the months from April to June largely led by by that poor volume performance of Bud Light now Anheuser-Busch inbev CEO did kick off the call with this you know really a Frontline perspective or first Insight that we're really getting to the full breadth of the impact of that controversy I kicked off back in April and he did say that since April the brand has engaged with 17 000 consumers they said that of those that they served approximately 80 percent found that Bud Light is favorable or neutral and they also the consumer is at the focus and the center of everything that they do but he did mention three points of feedback that they've gotten take a listen one they want to enjoy their beer without the debate two they want Bud Light to focus on beer three they want Bud Light to concentrate on the platforms that all consumers love such as NFL Fords of honor and music we are taking the feedback and working hard to earn our consumers business every day across the world and now in terms of market share they did say that they're seeing a more stable scenario here in the U.S over the over the week of July 23rd market share was down 5.26 year over year but that's slightly up from month to date and the company really doubling down on beer being for everyone here beer being in terms of an entertainment business and really there for folks and in addition to that the company really you know doubling down on providing that supports their wholesale retailer wholesale Partners over these past few months and really focusing to move forward from this controversy and when it comes to margins and pricing we know that's always in Focus especially in the high inflationary environment that we remain in what can you tell us about that that was on the call and in the report yeah well they did say that they took two price increases last year given the size of inflation and cost but what I find most interesting here is that the company did say that those rebates that got a lot of coverage in the news over the last month or so was actually in line with seasonality it's something that they do over uh this time of year each year and so they said that they're seeing signals of improvement across their uh different stores and channels and in terms of really what we're going to see here in terms of promo they said that they're typically doing what they always do around this time of year in terms of seasonality and the summer uh promotions that they they do every year and so those rebates that were sort of pointed out in recent months weren't out of the normal according to Executives here all right Brooke stick around back in April of this year Beer Company Bud Light owned by ABN Bev they released new marketing material with transgender activist Dylan Mulvaney the backlash was instantaneous with customers boycotting the brand the disagreement about Bud light's next steps following the ad was also wrought with challenges as companies think about marketing during such a polarized time what light can be shed on the Bud Light backlash and what does it mean for marketing moving forward let's bring it now Drexel University associate professor of marketing Daniel cortion and University of Toledo professor of geography Neil Reed and staying with us right now of course is what Brooke De Palma Daniel want to begin with you this thing seems like it has some legs this is sticking around tensions have been raised and there could be some long-term consequences here what are your thoughts yeah thanks for inviting me uh the uh this is really sticking around a lot longer than we normally see for a boycott like this I mean usually these it these things kind of tend to Peter out even when they hit a political nerve like this but here we're seeing I mean there's a real uh galvanizing of uh support for this I guess we could call it a protest movement that's partly driven I think from some media channels that are you know reminding consumers that this is an important issue so it's it's it really has a lot more staying power than I expected but I think it's going to be going on for uh months if not years and Neil you know really what's so interesting here is that they're doubling down on saying that we're a beer company we're here to serve everyone do you think that's the right move to make here well yeah I think you know going forward they really got to think about you know the message that they send to Consumers and I think what they did with the mulvania incident is they kind of got out of their own life they got out of the lane when they think they've really got to get back into the lead and focus on the fact that this is a beer for everyone stay out of politics you know stick to the sports and the other types of advertising that uh we're familiar with and I think that's one of the keys going forward but uh like Daniel said I don't think they're going to get back these beer drinkers who have basically abandoned them from another another product and Daniel it seems that uh Bud Light a B inbev has kind of walked back some of uh their comments and at the end of the day they're a little bit indecisive just wondering how that fits in uh and how that's affected their marketing campaign in general does that put people off that's the worst place you can be is kind of stuck in the middle trying to speak to both sides and um that's been I think a big issue and it's a reason why um in this case even though they alienated some consumers they didn't pick up anyone on the other side because the people on the other side were upset that the company even apologized for having a partnership with a trans influencer so it's that wishy-washiness that consumers were picking up or at least that they were thinking that they were picking up and um and that wishy-washiness means that they don't really have a strong idea of what the brand is and I think that's what um they were saying in that announcement the quote that you played earlier that they need to focus on what the brand is about I don't think though that they can avoid politics altogether I don't think that that's you know in my research um you know I find that that's not a realistic way to go about about it the trick is to find the issues that make sense with the brand and here they overstepped a little bit and they they weren't explicit about how this partnership might relate to other things that people know about the brand and that is part of what caused this controversy to blow up so big Neil let's let's take a look forward here I mean we're on the Crux of football season Super Bowl right around the corner where does Bud Light and Anheuser-Busch largely go from here do they do they push more into those Sunday Night Football marketing and do they you know try to sponsor a little more you know come Super Bowl time of year where do they go from here and how do they ultimately gain back that share that they lost with this new reaffirmed key audience in mind yeah I mean I think as I as I said in my previous comment I think they continue to focus on those marketing types of efforts which have been successful with them before I mean we always look forward to uh you know the Super Bowl and and the uh the Budweiser ads and you know this connection with football has been in a very strong one for them but again going back to what I said before they are not going to get these drinkers back who abandoned them I mean beer drinkers are creatures of habit and so those who made that switch from say Bud Light to Coors white they're going to stick with Coors might and uh you know Coors Light is very similar to bottom light uh most consumers could not tell the difference in terms of taste uh pricing is very much the same so I don't think they can think about getting any of this these beer drinkers back I think the focus now is you know what kind of keeping out of those controversial topics or as Daniel said if they do connect end-to-end politics kind of thinking about it in a more holistic Manner and uh but I really think you need to stick with what they're good at which is you know producing beer and you know keeping on keeping on track with their with their their branding and Daniel when we think about the competitors in the field um first of all politics has really inserted itself in a lot of Brands but is that something that brands should necessarily avoid could it be a good thing because you take a look as you point out in your notes at their biggest competitor Modelo who's now gained and surpassed a market share well they're a little bit political absolutely they've been very outspoken on immigration uh from Mexico in particular and that's that's been a a positive point for them I think so uh it's so so again I go back and I'm you know I've studied this for for 20 years now and seen the development and um and I've what I've I'm seeing is that customers and employees too we shouldn't forget other stakeholders they're looking more deeply about what drives the company what their motivations are and they're trying to figure out um as Neil pointed out before there's there's a lot of parity in the market and when there's parity in in terms of quality people look deeper and what they're looking at is they're trying to find out what is it that makes this company tick so and politics is often it's a way of it's like a reflection of what's driving the company what they care about and what their values are and in terms of you know let's talk about uh sales returning as we Edge towards this summer I think you know this question really for for you Neil as you sort of double down on that consumer as you sort of say that you know we're going to stick to that do they try again to perhaps you know uh introduce more premium station options do they double down on maybe their uh you know different type of audience that wouldn't necessarily be this Bud Light Drinker or do you think that really the play here is to just stick to and not maybe sort of offer up a premium brand well you know within within the us we've seen this big shift in the last 20 years to watch craft right so there certainly is a a beer drinking segment there who's interested in higher quality product uh but I think in terms of and I was a bush they should again I say this they stick with with what has been successful for them in the past and again they can they can forget about getting these drinkers back so I think you know what they're now going to think about is how can they perhaps promote some of the other other brand beers and maybe try to gain some market share with them and I think that might be one possibility for them Daniel we got time for one more here uh briefly anything that we didn't cover in this discussion that you'd like to add to the conversation uh I I think we one thing that we tend to overlook as I mentioned just a moment ago is that uh the effect on employees and Distributors um that's something that that from what I've I've read I have no inside information but they um seem to be very aware of the Distributors and how they're feeling about this how it's impacting them they've done from what I've seen a pretty good job of addressing that employees is an issue that I have you know we haven't spoken at all about but these are people that are um you know if they if employees get turned off then they can be not as motivated at work maybe go to others and it could help recruiting so it's a much bigger issue than just the the consumers in the market share although of course um that's what is driving the revenue yeah employers employees are very big and important stakeholders as well thank you Drexel University associate professor of marketing Daniel Corson and University of Toledo professor of geography Neil Reed all your markets action ahead stay tuned you're watching Yahoo finance July 20th 32 Nations arrive in the land down under to compete when soccer's biggest stage here at Yahoo finance we're taking you beyond the beautiful game from sponsorships to broadcast sales and Merchandising finally the world is paying attention the Women's World Cup prize sits in 110 million dollars and that's up from 30 million since 2019 as their fight for equality continues what will this year's World Cup do for that battle and what's the economic impact will it truly be one of the most watched sporting events in history discuss all this and much more on Yahoo finance [Music] thank you foreign [Music] thank you [Music] thank you [Music] foreign [Music] [Music] [Music] [Music] [Music] [Music] directed consumer company solo Brands is in Focus today after posting an earnings beat in the second quarter this is despite showing a 3.7 percent dip in net sales year over year as it navigates a difficult macro environment John Mary's solo brand CEO joins us now and John thank you for being here today just give us a big picture overview of your company's earnings please yeah absolutely it's been you know really to plan exactly what we thought that was going to happen this year at the beginning of the year we talked about leaning into wholesale this year we expected some short-term pressure on our d2c businesses we as we sell in or load in uh to those retailers I mean that's exactly what's happening so front half of the year um we saw really meaningful momentum in our wholesale retail Partnerships and business really at a time that retailers and wholesalers have been talking about scaling back on inventory so they're loading in and sending us orders while they're still having to pair back inventory from other brands but meanwhile we have seen some pressure on our d2c businesses we've done so um interestingly enough uh while our Revenue pressure on d2c has existed we are seeing actually increases in order count in our d2c business so what we have intended to do was Drive customers from retailers back to our sites for accessory purchases our Mesa fire pit at solostove has been doing quite well for us so we're firing customers at a faster rate than last year but again as we sell fire pits into wholesalers as we're loading that inventory in it has has created some short-term pressure so overall we're right where we want to be for the back half of the year we see a lot of strength in Q4 as we approach holiday seasons we also have a big innovation pipeline in the back half of the year so right now we feel like things are teed up for for a good second half and a good full year I want to jump on that Innovation pipeline tell us what we can expect in terms of products in the coming quarters please yeah so it'll start here in the next couple of weeks um you know in Q3 we've got a really nice lineup we have not indicated or tipped our cards quite yet on exactly what that Innovation is but solo stove will lead the charge with a series of innovation uh that will come out that is all about creating good moments and Lasting memories and helping people enhance their experiences Outdoors so Q3 you'll see some of that Innovation come out it will continue through the first part of Q4 as we approach our holiday uh selling season Black Friday Cyber Monday so keep an eye out especially for solo stove uh when gifting season comes around we've got some new stuff coming out that I think you're going to really like all right keep an eye out I want to talk to some talk about something you alluded to earlier and that is the difficulty planning we have an incredibly challenging macro environment we're seeing things seem to change from week to week but it sounds like you're being a somewhat Nimble in fact you were just saying how you were able to get some incremental uh I guess uh sales from other people's customers as they dwindled their inventories just wondering what some of your strategies are around planning for the next six months for the year is that possible even yeah you know historically solo brands has been a really heavy direct to Consumer business even today this year we're 70 direct to Consumer and 30 wholesale retail there is easier planning to be done in your retail business because you're you obviously get POS you get orders you know before you're shipping them so you get visibility to the Future as we have navigated this and increased our wholesale business it actually is improving our ability to forecast and to to predict our business in the future direct to Consumer has been less predictable in the past so we like where we're at we think again this this transition to a more omnichannel approach a more balanced approach being where our customers want us to be increasing eyeballs On Our Brands is allowing us to be more predictable in our forecasting as we look to the back half of the year we feel very very confident in the in the in the guidance that we've provided for the year talk to us about some of the trends that you've noticed uh evolve and maybe change quite a bit over the pandemic changing consumer preferences we've had a housing boom a small bust and now looks like the housing market is on fire again but you got people locked in their homes because they got low mortgages they want to renovate what's going on what kinds of consumers are you attacking here yeah you're you're hitting on all the hot buttons for us um no pun intended uh with fellows though but um the reality is is that I think I think the biggest Trend that we're seeing and you're you're hearing this from others as well is that consumers care about value they're looking for brands that are going uh to give them the biggest bang for their Buck for their their hard-earned dollars they need those dollars to stretch what we've been focused on is is innovation that creates high amounts of value we are an experiential brand we're we're a house of brands that really help you create good moments and Lasting memories as I mentioned and so if you can trade down from say you know a five thousand dollar vacation to a backyard experience with friends and family and still create those same types of memories and put smiles on your faces um those are the types of activities that we see consumers attracted to and so right now that's what we're focused on is is creating an immense amount of value through the products and Innovation that we're launching and giving consumers something to be excited about and hopeful or this time where they need their dollars to stretch really interesting you're selling Goods but at the same time it's really experiential and we've seen the services side of the economy just really hold on here we got time for one more quickly uh anything that we didn't cover here give you the floor yeah absolutely I just we've got a lot of innovation like I've talked about you you kind of leaned into this back half of the year um but acquisition has been really interesting for us as well we we acquired a brand a couple months ago called terraflame it allows us to bring the the fire inside or bring s'mores indoors uh we're really excited about that and the trend that could create again back to to the value that we're trying to create for consumers but as we looked at this back half of the year I think it's it's the brands that win are going to be the brands that are really focused on delivering great customer experience and creating Great Value and that's that's what solo Brands is all about and of course you know for us being that we're still 70 or so direct to Consumer um just the free cash flow generation we're we're a business right now that's generating high amounts of free cash flow we're able to reinvest that Capital into the business for growth and into that Innovation and I think I think as you look at our story and continue to follow us that's that's the type of thing that you'll see us investing in s'mores indoors that's something I can get behind so thank you really great to talk with you John marris solo brand CEO thank you Hasbro stock is on the rise this morning on news the toy giant announced its E1 film and TV business will be sold to Lionsgate in a 500 million dollar deal the second quarter saw a strong growth across Brands like Transformers and Dungeons and Dragons but Hasbro warned that the year ahead won't be all fun and games thanks to the ongoing strike in Hollywood Hasbro CEO Chris Cox spoke with Yahoo finance editor executive editor Brian sazi in our last hour and here's some of that interview right now big news out of the gate is in fact the sale of E1 500 million dollars why did you make the deal now and where will you spend that money well we've been in it Brian first off thanks for having me uh we've been in a process with E1 for about nine months now we announced it back in November uh it was just the right thing to do for the company you know Hasbro has been become great because of play um and we're really refocusing on toys and games we'll continue to have a great entertainment presence but when we looked at E1 and we looked at the film and TV division in particular there was just a lot of brands that we weren't going to make action figures or board games for and we figured there was a better home for it does this deal Chris help you save money uh you know from a from a high level perspective we spent about 600 to 700 million dollars a year uh in film and TV production uh of which you know from an operating cash flow perspective we fund about 50 to 100 million of that from Hasbro corporate so there will be that upside for us and then the margins inside of the film and TV division while it's profitable it's nominal so it'll be immediately margin of creative to us as well and then last but not least you know based on the proceeds of the sale we're going to be able to pay down a minimum of 400 million dollars of debt and accelerate our path to uh our long-term debt to ebitdo ratio of 2 to 2.5 got it I I want to make sure the investor base understands this is Hasbro out of the content game are you still playing you know you still have an eye toward bringing some of your biggest franchises to life on a big screen or streaming platform oh for sure yeah I mean the film and TV division is probably about 85 percent of our entertainment revenue from last year we still have huge Brands like Peppa Pig um a lot of Animation efforts and we have over 30 projects in development uh across live action and animation including future movies for Transformers GI Joe TV shows for d d Magic the Gathering as well as a host of projects for our board games including a movie that we're developing uh uh based on Monopoly with Lion's gate I think the big pivot for us is is we're going to be returning much more of an asset light model where we work with the best and brightest in Hollywood and leverage their distribution platforms and their content creation know-how and we'll focus on what we do uh what we do really well which is play yesterday Chris I had a I had a chance to catch up with Intel CEO Pat gelsinger and his company is also going through a transformation but he said something to me pretty powerful I think you know that green shoots in his business that started three months ago are now morphing into plants I think he met the turnaround is starting to take shape where does your turnaround stand oh I think it's palpably taking shape you know we entered the year uh predicting our first half would be down 20 percent after q1 we said it would be down 16 and after Q2 we're down 12 our POS has been picking up through the year uh you know we're still not fully to Green but we're definitely seeing improvements in our toys segment and our wizard to the coast segment continues to be what in my opinion one of the best stories in all games uh you know we see that segment up minimally uh High single digits this year and that's on a track record of I think we have a five-year kegger of around 13 so there's a lot to uh focus on in terms of our turnaround story and in terms of our momentum around it what's next in your turnaround story well I think for us it's really for a couple things on entertainment we're going towards an asset light model I think that's going to save us money it's going to raise our margins which is important for us I think in toys it continues to be driving the Innovation funnel of their working with our retailers to be the best execution game in town and then in games you know we're a toying game company but I really place the emphasis in games that's an incredibly high margin business for us a great growth business for us and I think you're going to see us lean in more and more there you know we've got a 2.1 billion dollar game portfolio with a better than 30 operating profit margin uh you know over the next five to six years I'd like to see us make some material progress and continuing to grow that and keep that bottom line super healthy Chris a lot of your biggest customers Walmart Target you name it are thinking about what games what toys they will put on the shelves this holiday season what are you hearing from uh for them right now because as we all know before we know it we'll be out shopping for gifts again yeah well you're seeing a couple of our favorites right here and some of our uh our Retail Partners favorites you know this little guy Furby um he yeah we sold out on initial allocations in the first 72 hours so we think that's going to be a a toy of the holidays uh we've got some great new Monopoly collaborations this one's uh based on Super Mario Brothers but we did one with NBA prism which basically vaporized in the first half of the year and probably one of the games I'm most looking forward to in the back half of the year is our first collaboration with Mattel on Barbie Monopoly so taking one of the biggest names in games with one of the biggest names in dolls and really having a nice uh giftable moment and then you know across the portfolio whether it's action figures with our hit movie for Transformers rise of the Beast or just other new games that we're doing like twister air I think there's a lot of uh reasons for optimism in the back half for us that was Hasbro CEO Chris Cox with Yahoo finance's executive editor Brian sazi that is it for now I'm Jared blickery [Music] [Music] foreign [Music] [Music] thank you [Music] foreign [Music] foreign [Music]

Channel: Yahoo Finance

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Id: DokwjKJoxag

Length: 180min 52sec (10852 seconds)

Published: Thu Aug 03 2023