Stocks rebound as Amazon surges, labor market cools: Stock market news | August 4, 2023

good morning this is Yahoo finance live you're watching our special coverage of the jobs report for last month which of course comes in about five minutes I'm Julie Hyman alongside Gerard blickery and Brian sassy and let's just talk first quickly over the overall estimates for these numbers here we are looking for an addition of 200 000 non-farm payrolls in the United States for the month of July the jobless rate remaining steady at 3.6 that's what the average in this forecast is looking for an average hourly wages on a year-over-year basis forecast to have risen 4.2 percent that is a deceleration and one could argue perhaps a welcome deceleration for the likes of the fed and others who are have been watching the disinflationary trend that we have been seeing in the US economy so those are these sort of big headline numbers that we're going to be watching for but as always guys there is other stuff that we look at both within the report and sort of around the report to give us a fuller picture of what's going on in the economy Jared I'll start with you what are you watching chart wise I am watching construction jobs which are actually at a record high and this is on the Wi-Fi interactive if we can just cut to that I'm going to show these jobs going back to 1952. we're at 8 million and they're still increasing at the rate of I think two and a half three percent and that's the year-over-year figure construction jobs why am I looking at them because they are the Canary in the coal mine they tend to roll over before other uh before other groups men manufacturing would be another one so I'm going to be laser focused on that and especially looking at the reaction today in the bond market Jared is that you in the in the hard hat right I was wondering you can't see the sunglasses well the sunglasses the glasses but yes that is me okay I just want to click as for me uh I like that it's very good Jared I'm looking at uh jobs overall uh retail most specifically but notably uh what comes off uh after Apple you know Apple guys why don't that earnings call last night Tim Cook and CFO Luca Meister really talking about a how they have started to slow hiring and the chart we have here is showing the uh and thank you jar for pulling this chart really uh finding this one and this shows Apple's hiring last year when job growth was very strong but to hear Apple come up on on its earnings call and weave in this line that they have started to pull back on hiring really it sounds like across the organization I have to wonder is this the jobs report that finally misses consensus I think we've been programmed the past few months I think stronger reports a ADP coming out rip roaring jobs negative yeah well let's I don't think negative but still if Apple's pulling back on hiring what other companies are doing things like that too I don't know if I'm not buying it I'm not looking for a horrible report but when it's Apple I have to listen to this stuff they also called the Tim Cook said the economy is uneven uneven maybe we do get disappointing jobs report just try and tell both sides of the story I know I'm a guest today maybe yeah don't overstay you're welcome here um I although I'm also looking at signs of a weakening job market right it doesn't mean that necessarily today's report will be disappointing but just again a shot signs of cooling and the jolts report gave us a little bit of clue into that earlier in the week right so if you look at one measure within the jolts report 1.6 available workers for each open roll so this is the ratio of workers to open roles uh going back more than a decade here so we have definitely seen like a little bit of stabilization it's hard to see it on that chart but things are getting a little bit less bad on that front in other words the gap between open jobs and number of employed unemployed people is closing a little bit again another sign potentially of things cooling yeah and one of the things I was really concentrating on or I'll be actually watching for in a few minutes here is what kind of Market reaction there is because two months ago when we got the May jobs report on June 2nd that was when that was a day that the rally really began to expand that's when we saw the value in cyclical trade we saw Industrials move up strongly that day and that was a watershed moment for me just in terms of watching The Price action because before that we had seen it was a mega cap rally and that was really what we were concentrating on year to date so what does the market do is good news good news whereas good news bad news and in particular we've got to watch the bond market today there has been a monster climb in yields this week after the downgrade from Fitch and other factors including more treasury Supply coming to Market that we're going to talk about later so that's going to be key and whatever comes out of this report I think you can come away thinking the economy is still doing fine I was at a concert earlier this week and there were people leaving double fisting High noons I mean these things were 17 a pop people that that is not happening if we are in recession or the economy is slowing down the place was packed 17 bucks for a high noon I mean wow that is the Foreigner concert indicator coming to us from Brian sassy not Foreigner as in Foreigner but the band is what we're talking about all right we got the job support now uh watching for the numbers to come across here uh 187 000 a disappointing number 187 thousand jobs added to the U.S economy last month here the unemployment rate though falling to three and a half percent from 3.6 percent and average hourly earnings stronger than estimated Rising 0.4 percent month over month and 4.4 percent year over year I'm looking at also average weekly hours worked ticking down slightly to 34 0.3 percent the labor force participation rate still holding steady at 62.6 so again just to reiterate our top line numbers here 187 000 jobs added last month that is below the 200 000 that was estimated by economists it also is a slower addition lower Edition than the 209 000 from the prior month I'm still waiting for the revisions to come in though to get a fuller picture on that front the unemployment rate Falling by a tenth of one percent and coming in a tenth of a percent lower than estimates at three and a half percent and average hourly earnings rising at a faster Pace than estimated holding steady with the prior month uh on that front uh Rising year over year by 4.4 percent so really interesting stuff in here you guys um and unexpected I guess saws maybe uh the Apple indicator was a little bit more uh trusting what I'm talking about here right you know don't get crazy all right well I want to pull a couple call outs here because you know this report might start to Spur you know talk of the economy slowing down a little bit faster than people thought because of really the the FED series of rate hikes and a couple things that caught my attention manufacturing jobs little changed retail jobs little change transportation jobs little change really those are the four looking indicators uh in my view for the economy and then if you scroll down to the bottom of this release guys you saw some pretty sizable downward revisions to Prior month jobs data May revise down 25 000 June revised down twenty four thousand almost fifty thousand fewer jobs that the economy created according to this report so is the economy slowing sure it's falling apart definitely not let's do a quick check here the markets on the Wi-Fi interactive I'm specifically looking at S P 500 futures and the spoos we've seen a movement both up and down this is a Candlestick chart that goes back to midnight and you can see by this one right here we've simply we really haven't added that much to the previous candle there so still waiting on a more measured uh response and then in the 10-year treasury note yield or excuse me these are the Futures which is inverse to yield we see it moving up just slightly in fact here is the high in case you can't see it and it went all the way down so that wasn't an initial movement of yields spurting up and yes as you said um just minutes ago Julie the treasury market is really going to be key here we have all this new issuance we have the Japanese government and the bank of Japan considering wind down of yield curve control that has directly influenced the tenure in our markets but let me move on here and get some of the other Market action we have gold Futures those are slightly up after a brief dip into negative territory there and then and we'll also take a look at WTI Crude Futures those are up just very very slightly I think the bigger news of the day is what OPEC plus has decided to do that is continue just extend those production Cuts they've already instituted but let me go back to the S P 500 futures and just check out the NASDAQ again and really not seeing too much of a movement yet sometimes there is a knee-jerk reaction and then there will be a little zigzag and we don't really get going until 9 30 10 30 11 30 a.m so long day ahead awesome yeah definitely so with this 187 000 gain in jobs I've been trying to dig through the industries here to see where the shortfall could potentially be employment and professional and business services was down 8 000 in the month and temporary health health services temp jobs continuing to Trend down by 22 000 temp jobs are seen as a potential leading indicator for the rest of the job market that's something to continue to watch and then there was a little change and a number of other industry trees like mining which has been sort of morbone for a long time oil and gas extraction manufacturing retail trade as well and transportation and warehousing so some interesting Trends here that we are looking at in these numbers but let's get some perspective now on these we're now joined by Stephanie Roth JPMorgan Private Bank senior markets Economist and Aditya bhave who is Bank of America's senior Economist thank you so much both for being here um is it sort of a wash in a way did yeah I'll start with you because you did get that wage grit that was a little hotter but the overall number a little worse I think this is a solid jobs report the 13 000 Miss was relatively mild the 50 000 downward revision probably a little bit more significant but at the same time as you said wages were pretty strong and they beat expectations and the household survey also was solid I think it was up 268 000 unemployment rate down so we've been making the point for a while that the household survey has some catching up to do with the establishments of it the fact that's happening in the right direction rather than the establishment survey moving significantly downward towards the household survey again points to a solid job market so big picture we're still printing multiples of what Breakeven is which is about 75 to 100 000 which means we continue to tighten the labor market rather than ease it up Stephanie yeah totally agree there um the jobs Market was pretty pretty solid in the month the The Establishment survey was a little bit softer than the household survey um but overall the picture is pretty good and by the way we kind of want to see a softening in the labor market if that's what the FED is trying to achieve so the fact that we're con you know we saw a little bit of a Miss there is not necessarily A Bad Thing and on average hourly earnings it's not really the best measure of wage inflation we got you know ECI out just just a little while ago and that showed a labor market continuing to soften from a wage perspective so that's really the gold standard when it comes to wages average hourly earnings are a lot more noisy so I would say it's solid labor market but signs of cooling to some extent well then let me just ask you to follow up on that what do you think the FED is thinking right now Jerome Paul looking at these numbers I think he's probably feeling okay about that granted before the next meeting they have another two CPI prints and another payrolls print so this probably doesn't really change the the view from from what's going to happen at the next meeting they have a lot of data between now and then Stephanie is this a perfect job support for for the markets to me I'm I'm very surprised the markets have held up the way they have this week especially off that credit rating downgrade but not too hot not too cold yeah I think from that perspective it's a kind of a Goldilocks print outside of the average hourly earnings number which was a bit strong um the thing is what's been driving rates for much of this week has been the the long end selling off um unrelated to expectations of what's going to happen from the FED more about a term premium issue um your team made some headlines this week by changing your call for a U.S recession saying it's not you thought it was going to happen now you're looking more for a soft Landing um walk us through that and talk to us about whether this report helps support that thesis right so the simplest way to think about it is that several weeks ago we were looking at one percent roughly first quarter GDP and probably looking at another one percent in the second quarter then the first quarter got revised up to two percent and the second quarter printed at 2.4 percent so the Outlook has changed significantly we went from an economy that was clearly decelerating to one that's holding up just fine and potentially slightly accelerating with housing and Manufacturing potentially finding a bottom so for us it's always been the trade-off between uncertainty particularly around credit tightening versus very strong hard data and at some point as the hard data continued to impress and surprise us to the upside we had to put more weight on that rather than the uncertainty and I don't think this latest jobs report really changes our view we knew the labor market would decelerate as Stephanie said that's good news from the fed's perspective but it's certainly not rolling over 150 180 000 is perfectly healthy and as long as that continues we think the economy still can move towards the stoplight but does it continue to slow down from here next month are we at 100 000 or does it re-accelerate it probably continues to slow down it's of course the pace of the Slowdown that matters right if we quickly crater towards zero then it's a very different Outlook from what we expect which is a gradual slowdown towards 150 and then 100. now DJ what do you think about the yield curve the long end racing up we actually have a lessening of the spread between the two and the ten and the short end and this and the long end so the inversion is shrinking you think it's possible that the long end simply races up and I've heard some hedge fund managers some famous one on Twitter saying well we could eliminate the inversion just by the long end racing up do you think that's possible so that is is not the forecast of our rate strategist as Stephanie said the move in the long end this week has not really been related to Fed expectations or what's going on with the economy it's probably more related to the downgrade right but certainly obviously you've erased some of the inversion we never thought of inversion as necessarily a signal of recession more of a correlation story so again that doesn't really change the Outlook from our perspective of course if rates remain high for a longer period of time then I think that creates some rollover risk in terms of credit if we're looking at a few more months Stephanie of slowing job gains does it pay off now to get more defensive with your portfolio yeah we've been we've been we've been telling our clients to add to bonds but that doesn't mean that the client should be staying away from stocks too um there is we actually think that you you could get a continued grind higher especially uh in alignment with your view yeah that that actually the the potential for a soft Landing is getting to be a bit more a bit more significant so for clients to be sitting on the on the sidelines with cash doesn't really make sense so that we do think the clients should be adding it into equities here as well and we're we're a little bit more cognizant about valuation so we're talking more about mid cap equities where you have the potential for for upside and the valuations are a lot more attractive um guys we mentioned the downgrade sort of in passing and while I have you here I do want to get your take on it because here we are looking at a an economy that seems to be still growing might avoid a recession that's a scenario that gives us a little more leeway when it comes to things like U.S debt right and the scenario that Fitch painted this week but at some point the US economy will go into recession we don't know when but but inevitably it will and at that point then maybe it becomes a little more problematic the debt situation in the U.S like how should people be thinking about this we tend to be short-termest as humans and as investors but how do we need to be thinking longer term I'll start with you on this one right so there is a concern about the level of debt it's probably more of a medium to long-term concern but the good thing for the US is that ultimately the dollar is the world's Reserve currency and that doesn't look like it's changing anytime in the near future so betting against that will be very difficult from a market perspective but for sure deficits are blowing out we don't see any signs of that reversing and it'll get worse as and when we have a recession so it's something to watch for but I would say it's more of a medium or long-term concern rather than a near-term market concern what about the strengthening U.S dollar that pose a problem for you the strengthening of the US dollar is probably a function of the fact that the US economy is outperforming the rest of the world so it's probably a little bit of a headwind for the US economy but I would think of it more as effect rather than cause if you get what I mean well and on a strengthen right like what even in the face of that downgrade the action and bonds like what what is all of this telecast right so how can we be worried about the the dollar losing its Reserve status well at the same time the dollar is rallying so I I think this just tells us that investors are still flocking towards a safe haven which remains to be the U.S so the concern about the user losing that status I think is are overblown um and investors are have been telling us that this this week and in light of a Fitch downgrade the dollar is still rallying so yeah this is a this is a medium term concern this might slow out and crowd out discretionary spending um over that that Medium to longer term but it's not necessarily a concern for the next couple months and Fitch downgrading the U.S doesn't tell us anything we didn't really really know what do you think would take down stocks is there an event or something on the horizon you're looking at for that could lead to a pullback I mean now expectations are on the more optimistic side so it could be any small thing that would rattle investors you're starting to get sentiment moving towards that that optimistic side um what that might be I I think there's there's a long list of things that are potentially could surprise the markets and everybody in the markets are generally really quite complacent at this point so it could be sort of any negative news that would that would really scare investors and what about Market volatility yeah um please field this the the Vixen if we can go to the Wi-Fi interactive vix is elevated from its pretty low levels we had uh trading all the way down to a 12-13 handle you take a look at the bond market the ice B of A Move index that's finally ticking back up higher does this concern you especially given the fact that Bond volatility has been such a problem for risk markets when it's elevated right so volatility at least in the vix is still pretty low by historical standards um the move up is probably a function of you know the downgrade news so not hugely surprising again I mean if you step back and look at what's happened this year the move in markets has broadly been very constructive and I think it's consistent with the strength of the US economy potentially some good news on AI so not a huge concern from my perspective because from uh you know broader lens it really doesn't look very problematic so so to end this out here I want to Circle back around to jobs and look ahead um with the current framework that you have and with your revised forecast where is unemployment going to Peak out during this cycle do you think you first and then stuff we have it in the low fours around four three four four so pretty much around where it is very benign very benign yeah we have about four and a quarter so so very similar so we do think that the unemployment rate should rise that's what the FED is looking some softening but it's very possible we'll get that rebalancing with just a modest rise in the unemployment rate all right so not too much higher than where we are right now thank you guys really appreciate it it's Stephanie Roth JPMorgan Private Bank senior markets Economist and Aditya bhave a Bank of America senior U.S Economist thanks to you both appreciate it we got much more coming up stay tuned you're watching Yahoo finance [Music] will this most anticipated recession ever actually come uh I think so I think it's too premature to completely discount the recessionary fears I I think we're still seeing tightening and Landing conditions we're still seeing a lot of that percolating through the economy I think we will have a recession but it will be a mild one foreign [Music] [Music] foreign [Music] [Music] [Music] thank you [Music] foreign [Music] [Music] [Music] [Music] thank you [Music] foreign [Music] back to Yahoo finance I'm Jared blickery and let's go over some of the jobs numbers that we just saw released changing non-farm payrolls for the month of June was 187 000 expected was 200 000 so a shortfall of about 13 000 unemployment right that ticked down to 3.5 percent in average hourly wages as representing potential inflation is up 4.4 percent and that was a surprise straight only expected 4.2 percent well joining us now is Julia Pollock the ZipRecruiter Chief Economist and we want to stick with the jobs report what's your first blush impression of these numbers the Goldilocks report shows a graceful descent in the labor market to a sustainable cruising altitude around 150 to 200 000 jobs added each month is sort of a perfect number that will continue to keep unemployment low and uh keep job Seekers and even recently laid off workers uh finding new opportunities um Julia it's funny in your note uh looking ahead to the report you called it pleasantly uneventful likely to be pleasantly uneventful which I enjoyed that phraseology and looks like mission accomplished indeed it was sort of pleasantly uneventful or Goldilocks to put it another way what kinds of Trends are you all seeing in ZipRecruiter I mean one of the things that stood out to me in particular was the decline in temporary workers which tends to be a forward-looking signal so while we're seeing this graceful decline is it going to remain graceful so usually the decline in temporary help workers is a signal of a downturn but that number has been declining for months now and it's been declining from an exceptionally unusually high level what happened during the pandemic was that companies uh saw demand recover much faster than Staffing and so they had to rely unusually much on temporary help workers now they are increasing the ranks of their own staff they're hiring again they're actually seeing engagement on job postings rise they're finding a little bit easier to get candidates and to get higher quality candidates and that's allowing them to move away from using contract labor and to focusing on their in-house staff uh Julia we um we were talking earlier about how Apple said on its earnings call last night that they have now started to slow hiring and that really left an impression on me you don't normally hear that from a company of importance like an apple does that signal anything to you on where the jobs Market is headed later this year so apple is a notoriously Frugal and conservative Tech Giant they did not expand head count 50 like other tech companies during the pandemic and uh they're they're very focused on efficiency I think you have that earnings report contrasted with Amazons which saw a huge growth across pretty much all metrics and suggested that the U.S consumer is alive and well uh so you know part of what's happening in Tech is is a normalization uh that industry so boomed during the pandemic when everyone was stuck at home on their computers and their Nintendos and their phones uh and now you know people brought forward purchases of new devices and they don't need quite as many now and we also saw a lot of strength in the labor market that just gave people the option to jump ship if they want so I want to talk to you about the jolts report which came out the other day and as you're writing and I like that the U.S labor market continued its graceful return to more normal turnover pattern yet the numbers are they remain elevated here in terms of benefits toward job Seekers so why don't you uh just give us a breakdown of what you're saying please the labor market is still tilted towards job Seekers the quits rate is is now 2.4 percent down from a high of three percent uh but still above the pre-pandemic rate of 2.3 percent and of course not the you know not the whole economy is slowing down at once there are parts of the labor market where workers have retained their leverage and where turnover is still incredibly high like health care and Manufacturing all of those in-person jobs and low-wage jobs that have been particularly affected uh by by Staffing shortages continue to see very strong wage growth pressure and employers are still struggling to find candidates there particularly candidates with sort of five to ten years or 10 to 15 years of experience and with specific credentials so Julia are are we still seeing a lot of it sounds like yes are we still seeing a lot of so-called uh job hoarding if you will where work where employers are reluctant to cut jobs because they think it will be hard to rehire you know when things pick up again so I don't think firms are mostly hanging on to idle work because if you go around the country I think most people feel very clearly that the nation is understaffed go to an airport and there will be multiple you know TSA lines but only two in operation uh there'll be multiple check-in counters but only one or two uh with with humans behind them and uh and that's a testament to the fact that business activity has recovered to its pre-pandemic not just a pre-pandemic level but pre-pandemic Trend in many cases in some places even better and Staffing actually still has some catching up to do in many many Industries uh that said yes employers realize during the pandemic how hard it can be to replace workers and they are reluctant to let them go especially with these Tailwinds buoying the economy like real wage growth now turning positive uh like consumer confidence and CE confidence CEO confidence rebounding and the stock market rally that's also boosting companies strategic opportunities and uh and having a wealth effect in the economy when will the the feds rate hikes start to be reflected in the jobs report because here's another report 187 000 didn't beat estimates but still very solid and and I would argue maybe doesn't reflect the the the really the steady approach to raising interest rates by the Fed so what you see in the these reports instead of a tale of two economies one part of the economy is already feeling restrictive monetary policy and has been for months and that is areas like Tech and Mining and Manufacturing uh job growth in those three Industries has been weak or negative in in reports for several months now uh and um and will be likely until interest rates actually start falling Julia thank you so much for your perspective this morning as we look at the aftermath of jobs report Julia Pollock ZipRecruiter Chief economy thank you well just recapping the numbers once again here a 187 000 the addition of jobs in July and we did get a two-month downward revision to the jobs reports the prior jobs reports of 50 000 something to note as well unemployment rate ticking down to three and a half percent and we just heard two guests earlier saying they thought that unemployment rate would Peak out in the low fours at four percentage range and then speaking of four percentage range that's how much average hourly wages Rose year over year 4.4 we've got much more analysis coming up oh and guess what apple and Amazon also stay tuned [Music] on July 20th 32 Nations arrived in the land down under to compete on 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 at 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] foreign [Music] thank you [Music] [Music] [Music] thank you foreign [Music] [Music] foreign [Music] thank you hello hello it is 9 A.M in New York City you're watching Yahoo finance live I'm Julie Hyman that's Jared blickery in for Brad Smith and here are three things that you need to know July's non-farm payroll support coming in softer than expected in 177 000 jobs out in July that is less than the 200 000 estimated by economists overall it points to slower growth in the economy the unemployment rate though there was good news there ticked down slightly to three and a half percent so holding just above the lowest level since late 1969 another key number the labor force participation rate holding steady at 62.6 percent for the fifth month in a row Apple not setting the world on fire with its latest earnings report iPhone sales missing the street while Revenue dropped 1.4 from last year that marks the third straight quarter of decline the bright spot Services jumping eight percent from the year ago took period to an all-time high the report comes just weeks ahead of the launch of the iPhone 15. the tech giant being placed on City's upside Catalyst watch list ahead of that unveiling and the other big growth area to watch for apple is India the company setting a record for iPhone sales in that fast growing economy different story though over at Amazon the e-commerce giant showing the consumer is alive and well as a blue away analyst profit forecast for the second quarter a strong showing in online spending in particular coming despite a continued slowdown in sales of Amazon Amazon web services AWS did Beat the Streets expectations however as it continues to fight Microsoft and Google for market share the reaction since the results UBS and Morgan Stanley both raising their price Targets on the stock that is up over 50 percent this year well July's employment report was uh well a little bit better than expected some would say a Goldilocks report but as Powell reiterated last week the FED has plenty of other data to way before its September meeting will this morning's number move the needle in any direction with us now is Jennifer Sean Berger and Jennifer is this a Goldilocks report just what's the reaction here good morning Jared seeing cooling for the second month in a row in the job market after the Federal Reserve has hiked rates 11 times that Top Line number that you guys have been talking about on non-farm payrolls clocking in with a one-handle 187 000 that's down uh from the 209 000 that we saw the month prior and we also got revisions down as you guys have been talking about nearly 50 000 for the prior two months but that unemployment rate dropping to three and a half percent from 3.6 and wage growth coming in stronger than expected at 4.4 percent still a very strong number not in line with the fed's two percent inflation so a bit of a mixed bag here for the fellow Reserve certainly seeing cooling as I mentioned on the top line number but the wage growth still stronger than what the FED would like to see that said wages tend to lag prices and we are starting to see some cooling for inflation data based on the latest CPI and pce numbers so perhaps six months from now we could see wage numbers starting to come in a bit lower as well of course that will depend on the tightness of the labor market as well as the strength of the economy so uh now it does help the feds case to go a bit slower here and collect more data if anything else it certainly bodes for hire for longer we'll see what the data shows in the the upcoming months whether it we still continue to see job growth at these heightened levels it could push the FED to move faster if not perhaps continuing on a slower path now Austin Goolsby president of the Chicago Federal Reserve told me earlier this week that the FED is really striving to stay on what he called the Golden path which is to bring inflation down with not inflicting a recession and he's confident so far given the cycle that we have seen the job growth doesn't have to Sky our job losses I should say doesn't have to Skyrocket in order for that to happen I will have more insight on the jobs report in the next hour when I talk with acting labor secretary Julie Sue back to you looking forward to that thanks so much Jen appreciate it well Apple disappointing with its latest earnings report iPhone sales missed the street Revenue dropped 1.4 from last year that marks the third straight quarter of declines the bright spot with Services jumping eight percent from the year ago period to an all-time high the other big growth area to watch was India the company setting a record for iPhone sales there according to a Morgan Stanley note last month the nation is likely a Big Driver of five-year Revenue it could account for 15 percent of Apple's Revenue growth and it says overall Revenue growth could be 40 billion dollars over the next 10 years let's get to Yahoo finance's Ali garfinkel Ali what more can you tell us Julie Apple Services saving the day here right the segment actually grew yes Revenue surpassing 21 billion but I'd argue that's not what is most impressive here what is most impressive here is the profit margin numbers 71 I got to tell you I was in a bar last night I saw that number my jaw dropped the bartender asked if I was okay and we've got to remember what services is though right it's Revenue it's arcade it's Apple TV it's Apple card actually and in the end this is pure profit for Apple so if investors aren't paying attention to these numbers they should start paying attention because the reality is Deutsche Bank said it this should could even facilitate a re-rating of the stock that is how strong an investor should be paying attention to it but the comedy still makes much of its money from the phones come on it does it does but this is where the growth area is right now Julian again pure profit that's pretty compelling you gotta admit anything about the VR opportunity here I mean is that going any anywhere the v i mean we'll we'll have to see right I know I know our Tech editor Dan Howley absolutely loved the VR I mean the real place that things are going according to Tim Cook is India right and I think you know we saw all-time Revenue records there you know Apple market share is growing in India but remember it is still Android country right I'd say that's more where this is all headed Jared than VR um in the in the end I would say uh that's what that's what Tim Cook is believing in right now all right we want to get more on this apple story and joining us right now Martin Yang is the Oppenheimer senior analyst of emerging technology and services uh Martin just give us uh please your first uh impression to these numbers and the report yeah so at First Sight the results looks mixed because we're seeing consecutive quarters three year of your decline but when you put this in context when you put Outpost Revenue performance roughly flat for iPhone comparing to your Android you know anywhere between uh double digital High single digital decline year over year apple is still very very strong and also the service story is going to be the long-term growth driver for Apple uh not only in contributing to higher than uh corporate average revenue growth rate but also margin expansion opportunities for the very sustainable long term hi Martin it's Julie here certainly there are a lot of positives to see with apple whether it's Services whether it's the potential in India I guess my question is whether all of that is already priced into a stock that's trading near a record high um yeah I would argue that maybe in a new term Uh current multiple is uh closer to a peak before we see meaningful reconcileration in Eiffel growth so if you want to play the stock very tactically maybe you don't want to buy into the stock with a very short-term holding period I just asked one of our reporters here about the Apple Vision Pro in the market for it kind of Chuckles in the response because of course it's just in its infancy and we don't know that much about it but I'm just wondering is it filling is is there enough Buzz around it to fill the need for this one big next thing that the the market and fans of the company seem to be expecting someday um definitely so VR devices or any wearable devices that give you infinite amount of display area that's easy to carry with a very strong human factor has the potential to replace smartphones but based on Vision Pro or at least the current generation of Vision Pro we don't see that happening anytime soon but there's always hope that ultimately a head warm device ahead of a display will once they replace headphone will replace the smartphones in our hands um all of this is sort of like again distantly in the future something else maybe that'll be distantly more distantly in the future for apple is more of an AI integration which Tim Cook sort of you know it's a it's a sharp contrast with some of the other Tech Giants that we have heard from is Apple just drawing from its typical Playbook here where it's sitting back letting everybody else be the first mover and then at some point we'll come in with what it sees as a best-in-class product like what would that even look like what do you think that the Playbook is here sure uh when we think about adoption of machine learning techniques in a consumer product either as a hardware device or a software device I think the most critical uh piece is trust can you trust the AI either AI assistant or someone who can help you in productivity tasks I think apple is best positioned because it's Hardware devices is well loved it's known for a strong stance on user privacy so when it comes to trust when it comes to Consumer relationships apple is absolutely best positioned to put ai ai consumer AI product into you know hundreds of millions if not billions of users Martin it is jobs day we've been talking about Apple specifically earlier Brian sazi was on talking about the apple head count it's basically doubled from 2013 to last year's numbers in their 10K to uh what is it 84 000 164 000 excuse me and we're not going to get the current your numbers until another quarter but just any talk on the call around cost cutting pressures there with respect to wage growth anything like that yeah definitely um as according to the CFO they have slowed down hiring and you definitely see the growth year over year of our packs declining very consistently in the past four quarters and comparing to other larger Tech firms Apple has not announced any large-scale layoffs I think that speaks to uh number one the very durable profitability the rapple and number two how apple is maintaining its um a very strong graphs on apex um discipline yeah I thought it was funny you know you see the likes of an Amazon talk about expense management and and Market Falls all over itself but Apple making sort of similar comments and not seeing a similar reaction I guess because investors are more accustomed to Apple being more disciplined on that front right do you think that there's anything though more that Apple needs to do on the expense management side given that it looks like demand is moderating um yeah so first point I don't think any investors haven't come across many investors who are criticizing Apple for undisciplined spending either in pet count or in Tech that are not necessary and Apple has never spent uh you know large sums in Acquisitions so going forward I think um you know with a scaled back hiring that's enough and um Apple will continue to invest very heavily in uh you know Innovation and the future Technologies so I don't think there's a lot of um you know investor pushbacks on Apple's approach to Opex management uh Martin finally I want to ask you about the iPhone 15 and you know obviously if you look at Apple's revenue forecast it implies that it could continue to see declines but do you think the 15 is going to be a big product for them yeah I think iPhone 15 can be a very um Can itself be a milestone product because it's expected to have a USBC port instead of lightning so I think that can drive incremental switchers as well as early uh replacers to get higher end iPhone 15 and also iPhone 15 based on what we know will have very um you know unique features uh like using precious metal like Titanium on the high-end models that will also help to push the overall ASP higher for iPhone you know the uh the one of the bigger and maybe Under Pressure story for iPhone in the past a few quarters is that even even the overall iPhone Shipment has declined iPhone revenues is staying stable because Apple has the pricing power it is able to push more consumers to buy the high-end models and that pricing power sustained in my opinion for iPhone 15 generation Martin thank you so much Martin Yang Oppenheimer senior analyst of emerging Technologies and services good to get your perspective this morning thank you let's turn to the other big mover that is Amazon blueing past wall Street's estimates in the second quarter delivering the biggest earnings beat since February of 2021. the company showing Brazil resilience in its e-commerce business which had dipped into the red last year after massive growth during the pandemic under CEO Andy jassy Amazon laid off 27 000 employees which also had helped to boost results however not everything is Rosie for the tech giant AWS did grow by 12 but that is the slowest Pace on record it was better than estimated though let's digest all of this with Nick Jones equity research analyst at JMP Securities as Citizens company there's a lot to digest when it comes to Amazon which is an increasingly complex company let's get to the e-commerce surprise first though Nick because that did seem to be indeed the biggest surprise how sustainable is that in a slow and growth environment and that'll be the big question mark heading into the back half of the year uh we already saw they had the biggest Prime Day Ever So I think three excuse me know at least the prime day was strong a lot of third-party data like uh app Trends and traffic data suggests that consumer remains resilient all of that said personal savings are diminishing so I think that'll be a big Focus heading into the holiday season is how resilient can the consumer be so far they've been very robust and very resilient and Amazon is is benefited on the call artificial intelligence that key buzzword or Buzz phrase was mentioned several times what's your impression of how AWS and Amazon and is positioning themselves in order to capitalize on this trend yeah Amazon has been investing machine learning AI type technology for many years uh their results in this court were actually uh quite a bit stronger than I think the street was looking for particularly the commentary route what 3Q might look like which is stable to potentially even accelerating so what that suggests is they're squarely competitive with Microsoft within this space we think there's a long long runway for growth here this is very very early days we're really encouraged by uh the results in in the Outlook um what happens with AWS you know 22 billion dollars now but um seeing this slowing growth I mean is it is it a trough at some point in that growth rate uh we there there's there's potential for a nice um acceleration as we get into the back half and really into next year um as the macro situation continued to kind of pressure companies um a lot of the customers were focused on optimizations they're trying to cut costs get more work done with less um the commentary from the call was they're kind of working through that now and actually deploying more workloads into the cloud that would suggest uh building momentum with all this new technology and the focus on generative AI making a consumer facing helping internal operations at companies it would not be surprising to see a nice acceleration as we exit this year and into next year so um this could be a trough but we could be looking at a nice acceleration going forward and Nick I'd be remiss if I didn't ask you about head count on jobs day here especially within the broader context of cost cutting which you've touched on a little bit before but is Amazon doing what it takes I mean just reading some of the analysts reactions to it it would seem yes but can Amazon do more in terms of cost cutting I think it's a question I want to ask there's probably always more to do in cost cutting but Amazon is still very much a Growth Company um I think what they deliver on operating income this quarter and then the guide they get for next uh next quarter um really got the street excited we see it in the stock price uh you know there's always more to do um in terms of driving margins higher that said they have a long runway in e-commerce they have a long runway in advertising uh which accelerated this quarter uh from last quarter and year of year growth they have a long Runway and and Cloud so you know I think that's a fine balance that they'll continue to tow the line on um invest where there's returns um and drive margin expansion when it makes sense yeah that balance is always fascinating to me when it comes to Amazon in particular because it does throw a lot of money in other areas right where it does see that growth one of the other places where it is investing is in facilities particularly those same day delivery facilities do you think that that is the right place for them to be in investing that they're sharing suggestors um they could drive much higher utilization which can actually drive margin expansion by getting consumers to you know buy things that are going to come same day or next day they're very focused on driving fast delivery in a very strong uh consumer experience that's extremely compelling which is probably in part one of the main reasons they've been so resilient amid potentially a more pressured consumer so we think that's the right move they've always been focused on the consumer and providing a really convenient experience speaking of the consumer and a convenient experience one of the other areas in the past that they threw money at was grocery particularly Whole Foods a strategy that I think arguably has not turned out quite like perhaps they wanted there were some reporting earlier this week that they're going to be consolidating their different grocery efforts which as a consumer a whole food Shopper for example gosh that makes a lot of sense it's so silly that they have all these different grocery verticals isn't it like how big of it but how much upside is that going to afford them if they do that successfully yeah I think there's quite a bit of upside I think it's a little bit hard to quantify today uh but you know there's discrete uh products right there's non-perishable like can products uh package products that can be stored on shelves for a long time then there's produce that can perish very quickly so there's a lot of moving pieces there to try to get delivery uh consolidated there's definitely some upside but I think it's a little early to kind of quantify what the impact could be um I think the fact that they're focused on it would suggest they're going after a sizable opportunity otherwise they likely would not be pursuing that and Amazon has a sizable stake in the automaker EV automaker rivian how are those results being reflected in the current report I know it's caused some volatility in the reporting before but maybe a little bit less now what are you seeing yeah a little less now I mean we're going to keep an eye on it it's hard to kind of apply to how that's going to play out because it's tied to kind of how the audio industry um is performing which has been hyper volatile as well so we expect that to kind of ebb and flow with the Auto industry and we'll keep an eye on it all right Nick Jones thank you so much Nick Jones equity research analyst at JMP security is a Citizens company we've got all your Marcus action coming up stay tuned you're watching Yahoo finance 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 deals and Merchandising finally the world is paying attention the Women's World Cup price is at 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 we'll discuss all this and much more on Yahoo finance [Music] thank you [Music] foreign [Music] [Music] [Music] foreign [Music] [Music] foreign [Music] [Music] [Music] thank you welcome back let's get to some movers here investors are betting on DraftKings this morning after the company posted a sales beat for the second quarter and raised its full year forecast its unique monthly users also climbed 44 from a year ago those shares Are Climbing by 12 percent here this morning the loss that it is now forecasting for the year on a justice-based adjusted basis 190 million to 220 million that's before it's the equivalent of ebitda except a loss and that is a smaller loss than it had projected before here so it looks like it is you know there is always this like sort of market share battle when it comes to the sports betting companies so DraftKings versus FanDuel and it looks like DraftKings is doing okay here in terms yeah but still not crisis not quite at the top but um I do have some analyst commentary here's one from Morgan Stanley after hitting positive ebitda for the first time momentum should continue ahead of the key Nash National Football League season so that's something to look forward to the company this is a quote the company is not only proving out the economics of sports betting in eye gaming but also widening its competitive Gap here's something by good body the analyst firm highlights excellent Revenue growth and increased focus on profitability being well received however continues to lag FanDuel and bet MGM on profit guidance and let me just do a little thing with the chart here I'm going to show you let's go to this is a year-to-date chart you can see up 163 percent but I'm going to show you uh just this is a chart that reminds me of so many others here with respect to what happened over the pandemic and excuse me DraftKings after peaking in early 2021 lost something like what 80 90 percent of its value and now the year-to-date returns are impressive but this is essentially a broken stock you get back up to 40. that's when the rubber meets the road that's when you have all of this Supply in here coming in and investors like to get how to break even that's a big selling for us and we're not even there yet yeah really interesting I actually thought that that DraftKings was more short had more short interest than tests only about six percent afloat um because it just I don't know the moves sometimes feel a little squeezy but I guess sometimes necessarily let's move on to another uh another mover something tells me this one is a little squeezy as well actually I'm gonna I'm talking about Nicola but I'm going to call up the short interest real quick like here on this one that one's 23 so that one uh do maybe do see squeezes sometimes but not today the shares are down 11 results from Nicholas showing a beat on the top line the number of EVS produced and shipped fell uh probably also getting a lot of headlines today there's a new CEO at Nicola Michael lost sheller stepping down for family health reasons he's going to be replaced by chairman Steve gursky the company also winning shareholder backing to issue new stock that means it can now raise additional funds to help launch its fuel cell powered trucks on the other hand dilutes the value for existing shareholders if it is selling more shares I believe this is the fourth new excuse executive for this company in as many years if I'm not mistaken so this is you know a company that's seen a lot of turmoil it's quite storage turnover yeah gursky at least is familiar because he's the chairman of the company so he's yes a familiar name does it speak it as to does it speak to any kind of confidence in the company I don't think so you look at some of the numbers you know just Revenue alone 15 million dollars 15.4 million dollars excuse me estimate was for 14.9 million this is a micro cap company basically by these Revenue numbers um still really not getting into the full swing of their business so I don't know what to really make of the report itself but I can tell you what the stock action is doing all right two months it's up almost 500 percent that's impressive but you take a look at the year to date well it's up 57 but it had a huge drawdown here and then let's take a look at the max chart this is another one this peaked in 2020 in the middle of the year and it is down it was down 99 from there so I was commenting on the DraftKings here's the DraftKings and you can see we are up a lot more than Nicola that we see right here yeah interesting stuff um comparing the the two companies although nickel obviously much more speculative whereas DraftKings actually well they have they have real product they have a product there you go they have a product that's out there uh we're coming up on the opening bell on Wall Street in just about a minute's time um I just wanted to quickly recap the jobs numbers because it's been an interesting morning here I have to say full disclosure in our chatter sort of ahead of the numbers we thought we would get another hot report especially given that ADP came in earlier the week with a gain of what 324 000 and yet we saw a Miss at 187 000 for that Top Line number The Economist we spoke to earlier didn't seem terribly concerned they are still characterizing this as a healthy job market the unemployment rate sort of backing that up with that three and a half percent level but the Wages that's that's what came in hot um and that's really the most important thing from an inflation point of view it's not a leading indicator employment statistics are lagging but nevertheless that's going to get a lot of focus here we had an analyst early earlier in the day say Goldilocks a Goldie Locks report maybe not too hot not too cold yeah but it's uh and there we have we have the opening bell on Wall Street so let's do a quick check of the markets uh sponsored by tastytrade and it looks like we have a mixed market so far down S P 500 just barely in the green up about a quarter of a percent NASDAQ still waiting for that first print uh that down arrow is from yesterday so Julie I know you have these charts on the Wi-Fi interactive here I do I just want to dig into the opening Bill action as we get underway here this morning and let's start with looking at the Dow over the course of the week because it's been an interesting week here culminating with this jobs report that we got here today because right around midweek right is when we got that which downgrade of U.S debt and you can sort of argue over whether it was justified in the Curious timing of it Etc but it did serve as a sort of reset in the market not just in stocks but in bonds also on the same day that the treasury announced a big new sale of debt so more Supply coming to Market all of that serving to put pressure on bond prices this week making yields go higher and then sort of a knock-on effect that was somewhat negative for stock so that's what we have seen on the week today as Jared mentioned uh actually seeing the Dow up about a quarter of one percent we were waiting for the NASDAQ to open up it's now open it's up by six tenths of one percent and the s p up about a third of one percent so no huge moves right now on the back of the jobs report but I mentioned Bond so let's get it to the bond market here we are now seeing after that big build in yields earlier in the week we are now seeing a little bit of a pullback in yields down six basis points today but here is that surge that we saw in yields throughout the week that was putting some pressure on stocks then as we look at the opening prices um we can look and just going back over here to what we are seeing on the sector front for the S P 500 just out of the gate this morning at first blush and I'm on year to date so I'm going to go back over to intraday and here we have real estate that is uh down the most followed by Tech that is under some pressure today Apple undoubtedly part of the story there but then consumer discretionary up big here 2.6 today guess what Amazon's in that one so that's the tale of two individual stocks affecting their sectors and then we've got energy and communication Services also doing well today and just circling back around to those big two stock stories that we're watching today let's get a check on them as we open up here this morning Apple shares are down three percent here today keep in mind of course we've seen this big climb in the shares year to date and that this is near a record high for those Apple shares but on the flip side when we look at Amazon here today and the big nine percent gain that we've had yes those Shares are up even more year to date they're up by about 67 percent but if you take it back a year the shares are still down and if you take it back let's take a look at a three-year chart Amazon Shares are still well below their record high so just something to consider here as you look at the surge on the year and then again on the day for Amazon versus apple one of them is trading near a record high the other one is still well below Jared yes and we're also back to some of our tickers here booking holding shares they're climbing higher this morning we say we're in the pre-market and there we have up eight percent in the regular market and that's after its earnings beat expectations expressing a strong demand for travel despite inflation headwinds it's total gross bookings they jump 15 from last year and revenue Rose 27 seven percent this is another company that was uh that benefited from a pandemic Boom at one period in time and I'm just going to go to the Wi-Fi interactive see if I can pull up this on our trending tickers list uh it doesn't look like while you're while you're doing that why don't I talk a little bit more about what we're seeing and then we'll Circle back to that chart there so um one interesting thing about booking Holdings which operates six different sites under its umbrella is that it gets about ninety percent of its sales from International markets and we obviously have seen strong demand here from the U.S to International destinations but amongst International uh destinations as well and the CEO of the company Glenn Fogle saying in a statement that they're seeing robust Leisure Travel demand those strong Trends continued into July and they are preparing for a record Summer travel season in the third quarter so the current quarter here for the company so we'll see what exactly those numbers look like you know there have been some questions about the sustainability of all all of this but that does not seem to be affecting booking for the moment it's an impressive chart you see there from the lower left to the upper right and just real quick I do have a number of analyst calls in response to this who are upping their price targets booking they are raising it to 3 500 from uh excuse me 3 500 3500 from 3150 that's Deutsche Bank that did that and then a wed Bush they're raising to 34.50 from 3200 City 3425 from 3000 the list goes on so a positive reaction there and um you know you take a look at the chart that's another one this is a larger company more stable revenues didn't suffer the same dramatic drop that we did in years past so a little bit different there for booking Holdings and just getting back to the Wi-Fi interactive let me pull up a Max chart right there and you can see see lower left to the upper right this goes back about 20 years yes and you want the direction of that longer term chart to match the shorter one which is year to date and that's that's what happening here so let's take a take it from stocks to the bond Market here because a lot the last few days have shown the the impact that any sudden moves in the bond market can in turn have on stocks in the next few days a fresh supply of debt is going to pose new questions one of the things that we have talked about throughout the week is that you know with this downgrade perhaps one of the reasons that it is more muted now perhaps than it was in 2011 when s p downgraded U.S debt maybe in part has to do with the huge supply that is out there in the U.S treasury market but it can be sort of a headwind I guess it can be a dampener but also can be a headwind at times yeah it's uh it's tricking there's a lot of nuance here so I have a couple charts prepared let's pull up the treasury debt the issuance chart to just show you there's been a huge Spike if you'll recall recently we did have a debt ceiling debate and here's treasury sales this is over the pandemic this is when I can't annotate on this but this is when we issued all that debt in response to the fiscal needs at the time you can see we we have ramped right back up here and that's because into the debt ceiling debate the treasury could not issue debt it was up against that ceiling it's playing a game of catch up here and this has happened now the treasury has issued roughly 852 billion dollars of bills on net and plans to raise another 53 billion next week so issuance across the board is rising here I have a couple of uh of numbers here 67 billion and three-month bills that is 2 billion more than they were offering before 60 billion up in six months from 58 the list goes on here so treasury issuance is going up and then you have the debt downgrade and let's pull up the yield curve chart so I can show you what's happened with respect to the U.S the yields on U.S debt um here is our last so the purple line is uh the current quote and then here's where we were one week ago that cyan live we have really risen on the long end of the curve especially on the 30 year we're up 20 30 basis points a huge move there that puts pressure on debt so if the yields are going up that means people are selling the longer term debt maybe the they were spooked by the treasury announcement or the uh the debt announcement that they are downgraded also you take a look at what's happening in Japan that is a huge Factor uh if we can give me the Wi-Fi interactive and I'm going to go back to the tenure this move right here what really got the treasury market started yields punching to the upside one more time to four percent that was Japan that was the pseudo abandonment of yield curve control so I think that's a huge Factor because they are only at the beginning of that if the Japanese investors can get a higher yield in their own country their home country they don't need US dollars they don't need these treasuries so everything is kind of coming together on that front and one more thing I would mention here and this is something that Muhammad alerian talked about when we talked to him earlier in the week that I think is a great Point Everything's Relative when it comes to it's not relative as much when it comes to stock markets right but in the bond market in the currency Market it's all relative so in other words you look at the US versus Japan when it comes to currencies for example in other markets and many investors still judge the us as a place that they want to be yeah I mean a lot most currency movements can be described and can be represented by two things you have yield differentials right now the U.S is offering some of the highest yields in the world and so that makes people want to buy our debt to buy the debt you have to buy U.S dollars so people rush in you see the US dollar go up and you also see a yield stabilizer or maybe even go down because of all the interest in debt and so that's the theory there in terms of stabilization I think the argument for the overall risk Market picture here why does the bond market upset equities it's because it's highly leveraged and if you have a big movement in the bond market that means they get Bank big Banks which are the biggest holders of these debts and also hedge funds they get skittish and they don't have as much money reserved for other things and there are government regulations that really uh restrict the ability of banks to be able to buy these other risk assets so it's all intermixed and then you take into consideration what the Federal Reserve is doing they are still engaged in quantitative easing which is slowing which is actually shrinking the balance sheet so that just puts more incremental pressure on the need to stop up this cash and that's what's being done right now there's a lot of money sitting at the Federal Reserve that can be used for these debt purchases so it's not a dire situation just yet but we could get to the stage and we're probably approaching there where it's going to be affecting the markets so it's definitely something we need to keep in mind all your markets action ahead stay tuned you're watching Yahoo finance will this most anticipated recession ever actually come uh I think so I think it's too premature to completely discount the recessionary fears I I think we're still seeing tightening and Landing conditions we're still seeing a lot of that percolating through the economy I think we will have a recession but it will be a mild one [Music] thank you foreign [Music] [Music] thank you [Music] foreign [Music] foreign [Music] foreign [Music] [Music] coinbase reported a sixth straight quarterly loss in the latest quarter the company did beat Revenue expectations regulatory risks and lower trading volumes continue to weigh on the company let's bring in Lisa Ellis for more Moffett Nathanson partner and Senior Equity analyst Lisa it's good to see you here coinbase of course has been under Fire as it has been arguing with U.S regulators and then it comes out here are six consecutive quarterly loss Revenue down but beating estimates how how should investors even be thinking about this company at this juncture yeah look you're making an investment in coinbase uh over the long term um um for sure right the business is going to be volatile from quarter to quarter because it's subject to the vagaries of the overall uh crypto asset volatility and asset movements um but they are you know building a company for the long term that is an infrastructure provider for the crypto economy I mean uh some investors will say to me I'm making a Last Man Standing type of investment in coinbase which is one way to think about it which is that there's a lot of sort of Fringe players still in the crypto Market but coinbase is a player that's always operated within the bounds of Regulation within the bounds of Licensing and all of the compliance and if you do believe over time that this Market will mature will kind of move much more into the mainstream they're they're sitting there as you know sort of one of the kind of core major players and really from a stock perspective the only large cap weight to play this space and we like it for that reason well and keeping with the regulation talk that you were just mentioning Gary Gensler no no secret that he has come down heavily on the Crypt on the crypto industry but it seems like he's backed off a little bit recently and I go back uh last year especially with all the reports and investigations that are now out it seemed that there was almost an existential threat to coinbase at one time because Gensler was saying that only Bitcoin is not a security that could have been that could have been a nail but it looks like things are bouncing back SEC kind of backing off here what do you see in the future for the regulatory side of things yeah and I think you know they need Clarity and I know Brian Armstrong at coinbase says this over and over again the outcome can be whatever the outcome is but what we can't do is sit here in limbo right and have uh Garrett Gensler saying one thing having the head of the cftc saying something else right and it sort of leaves the whole industry including coinbase kind of stuck unable to move forward um uh but yeah where they're you know I I think what's happened on the the regulatory front in a good way which is that you know they're sort of honing in on the core issues it's not this sort of like well everything's a fraud and everything should be shut down it's it's much more narrowed in focused now to where they're really just simply debating different classes of crypto assets and how they should be treated from a regulatory perspective that becomes you know a very sort of like objective there's you know unemotional thing you're sort of Simply sitting there trying to figure out how you put the right um you know regulatory guardrails around it and and as you highlighted um the SEC has sort of moved at least it seems like to sort of put you know kind of move in that direction to being at least marginally more constructive um as opposed to just sort of the overarching kind of narrative that all of this stuff should just be shut down and which is good yeah and we're also seeing uh from a regulatory perspective these two critical bills advancing in Congress um they were passed out of subcommittee and will be going to the floor later this year which is um also at a really important step for the industry so just quickly though Lisa as we you know look at the issue of tokens let's put that aside for a moment and talk about the issue of staking if staking does go away isn't that a pretty big problem for coinbase I mean they saw revenue from staking rise and they get a decent chunk of revenue from it um yeah it's not it's only about um it's like single digits four or five percent of their net revenues um it's not so it's not you know catastrophic or anything to their business itself um but that said it is a really important you know so the their business would be fine and they're very very transparent about this but the reason that they're fighting it so hard um and they assert that the way that they facilitate staking they're not taking ownership of the assets for example they're simply administering um the process you know you sort of get into a lot of kind of debates about exactly how this is all done um but the reason they're fighting it so hard is because it is to your point actually a very important way uh aspect of how the crypto economy works right you need liquidity in the market in order to create that liquidity it's it's sort of Loosely analogous to like you need people to put their money in Banks so that the money is available there to lend out to other people right you need that liquidity and it's sort of an analogous thing in crypto so it's less about the revenue more about the functioning of the ecosystem um I want to move on to a crypto adjacent company shall we call it we're talking about block of course Jack dorsey's block beating estimates on the top and bottom line it raised its profit forecast for the year but the stock is taking a hit it's down about 11 it looks like there's some disappointment around the July gross profit growth forecast Lisa can you talk to us about that are you in agreement with what we're seeing in terms of stock reaction today yeah it seems a bit overdone to me but um but but no question the the uh you know the print was was mixed had some really good things had some things that were a little uh softer so yeah there was probably two things I'd highlight that the market seems to be reacting to one as you said the July numbers and they gave a pretty a pretty explicit outlook for 3Q and 4q um basically saying that their gross profit which is their sort of their version of net net revenue it's the Top Line number that you focus on um is decelerated from 27 into Q to 21 in July and they indicated that we should be expecting it will remain closer to that level like low 20s throughout the rest of the year uh the reason is um largely simply because they are lapping some unusual Dynamics from last year they had some pricing changes for example um that gave them some benefits last year there were some other like interchange changes more broadly in the in the industry so kind of discreet events it's not really affecting what I call like the unit volume but more like their top line numbers are decelerating um so everyone's had to sort of bring bring that back half Outlook down a little bit and then the other thing is that um underneath the covers in their two key results they're Square business which is the point of sale of systems the little white point of sale systems uh here in the U.S the growth rate there um was a little bit slower than folks were hoping for uh volumes were only 12 percent uh gross profits were up about 15 and that that's the same Market where players like toast compete Clover which is owned by Fiserv and the two cue numbers out of those other firms were stronger so it introduces a bit of nervousness that maybe square is sort of saturating the micro Market space that they play in and you know in that space is getting much more competitive and that maybe they're struggling um as they're trying to move up Market that's the other other factor that I think folks are reacting a little bit negatively to and Lisa just sticking with block here but getting back to crypto I was surprised at how big Bitcoin Revenue has become of the entire pie for the company 2.39 billion out of 5.53 billion that's up 34 year-over-year so that would seem to be especially in the face of what we've seen depressed crypto prices and given everything that's happened in the industry um surprising to me how about how about your reaction uh yeah you know it's a weird accounting thing I'll just point out um uh that that that block the way that they had they have to treat their their um the way a Bitcoin flows to their system they actually have to record it as gross revenue on the income statement so it's sort of optically always looks like oh my gosh you really just net it out so it's only really a net basis a couple percent but it has increased uh to your point and that is a reflection you know of cash app their digital bank which is um uh which is the competitor to something like a venmo or a PayPal um has just been an unbelievable success for Block um 54 million monthly active users here in the United States um two-thirds of them use the app weekly um it's become uh you know the the 20 million users there are using it truly as a digital Bank meaning they've got a debit card you know they're doing direct deposit um it's sort of quietly emerged post pandemic as by far the leading digital Bank in the United States and it's those users that are the ones that buy and sell uh crypto buy and sell Bitcoin and some other assets so it's it's that growth that you highlighted is reflecting the extraordinary growth that that cash app has had over these last couple of years so then the other question is Lisa if it is does have that status is it are there any signs of the same issues that PayPal talked talked about earlier in the week that is more I mean I I don't know if block does provisioning in the same way right but PayPal effectively signaling credit deteriorations are are worsening it is tightening its standards you know the same kinds of Trends we're seeing a lot of the banks how is that if at all filtering through to something like block um oh that's a really good question because you're right they do have very similar businesses both PayPal and block um have a couple of different forms of credit products they both have a form of banking license one where or another um and they and they do offer directly lend uh mostly to their small businesses um uh and then they do a little bit of you know the the like in PayPal's case like the buy now pay later style short-term consumer financing as well and PayPal as you highlighted they're seeing it this discrete weakness in their small business uh lending business uh they've had to tighten down credit standards there because they've saw an unusual um unexpected um a bump in Char in charge offs write-offs um in small business lending suggesting maybe that we're seeing a little bit of creeping in of some softness in the um small business land and this is really small businesses you're talking you know less than you know single location usually like kind of a mom and pop shop and I would just connect the dots there because as I was highlighting um part of the reason block stock is down today is because they're they're point of sale systems were weak that's exactly the same type of business it's they lend through that business and they provide kind of payments and lending and other banking products to these kind of micro businesses in the US interestingly you roll back the clock two weeks ago we saw American Express report um and then we also saw in visas numbers both of them actually also flagged weakness in the micro market so you know we've been one all you know for the last 12 months kind of saying like soft Landing soft Landing we're really not seeing a lot of signs of deterioration in the spending based economy that payments is tied to but just in these last couple of prints we've started to see what looks like a little bit of a pocket of weakness down at the very low end of the business world like down in the in the micro space so we'll call that maybe flashing yellow here really interesting thank you for connecting all those dots with us Lisa Ellis Moffitt Nathanson partner and Senior Equity analyst all your markets action ahead stay tuned you're watching Yahoo finance how worried should people be about to Fitch downgrade or how should people be thinking about it well you and I should be worried about it by the time we retire I think so but it's not an immediate concern I think it's uh it's gonna come and hit us at some point it's not an immediate problem for the next three months I would say [Music] thank you [Music] foreign [Music] [Music] [Music] thank you [Music] [Music] [Music] thank you [Music] [Music] [Music] we've got some great interviews on tap today and we're going to stay tuned for uh for Jennifer schonberger right she's talking acting labor secretary Julie Sue coming up in just a few minutes you don't want to miss that and plus America getting back on track well we're going to speak with New York Times opinion colonists Paul Krugman stay tuned for that in all your markets action is ahead stay tuned you're watching Yahoo finance on July 20th 32 Nations arrived in the land down under to compete on soccer's biggest stage here at Yahoo finance we're taking you beyond the beautiful game from sponsorships to broadcast deals and Merchandising finally the world is paying attention the Women's World Cup prize sits at 110 million dollars that's up from 30 million since 2019 as their fight for equality continues well this year's World Cup due for that battle and what's the economic impact will it truly be one of the most watched sporting events in history we'll discuss all this and much more on Yahoo finance [Music] thank you foreign [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] foreign [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] it is just after 10 a.m in New York City this is Yahoo finance live I'm Jared blickery alongside Julie Hyman we're about 30 minutes into the trading day and let's take a look at how stocks are moving uh looks like let's take a look at those stocks it looks like we do have the Dow up about one third of a percent right there we're also taking a look at the S P 500 up about 14 basis points the NASDAQ just barely positive there and stocks are looking to close out the week on a high as investors weigh this morning's weaker than anticipated jobs report also digesting earnings from the industry Titans apple and Amazon and let's get to some individual movers here we are watching shares of cloud cloudflare the software firm upping its forecast for the year ahead after delivering better than expected results for the second quarter on the earnings call co-founder and CEO Matthew Prince saying that while macro challenges Remain the economic environment is stabilizing the shares are up 11 and fubo beating the street with its latest numbers the streamer logging a second quarter net loss just under 50 million dollars much narrower than the 160 million dollar loss it saw the prior year another bright spot North American Subs jumped to 1.17 million in the period ahead of what the street had been expecting and shares of Tupperware Brands they're on the move again this time they're just 42 the iconic food container maker announcing a debt restructure agreement that would drastically improve the company's overall financial position back in April Tupperware issued a going concern warning that means it was saying it could go out of business so it looks like that this restructuring maybe forestalls that for a bit Tupperware um Jared has effectively become a meme stock here the old Tupperware is that I don't have any more actual tupperwares I just save I have some leftovers from the 1980s as a kid I had to sit through some parties it ended up in my cabinet to this day true story anyway enough about up over there the July jobs report saw the pace of hiring slow slightly coming in a tad below expectations though the labor market remains strong we're looking at in particular we're looking at jobs in construction now this is a Bellwether industry that has proven surprisingly resilient despite headwinds coming from elevated lending costs joining us now is Danny Romero and Danny I was I was looking at this report construction jobs are the Canary in the coal mine for me but still relatively strong here Jared these are really good numbers and it's still me this is good news for construction workers jobs in this sector grew about 19 000 in July if we take a look at those numbers one of the sour spots was residential construction more than 5 000 jobs were cut in July one Economist I spoke with said that this could be weather related which we're seeing some of those disruptions but on the positive side the report was boosted by non-residential construction building those are jobs that are meaning that build our hospitals and schools more than ten thousand jobs were added there another bright spot was the heavy and Civil Engineering also gained more than 2 000 jobs and those jobs are connected to our infrastructure building lastly specialty trade contractors saw overall positive momentum and if we take a look at those numbers non-residential specialty contractors took a hit more than 2 000 jobs were slashed and this could be another sign that it'll be a bumpy road for construction on the commercial real estate side some economists that I've spoke to expect that this spending for this area will actually weaken by about 40 percent but moving over there's still some positive side on the residential side they've added more than 13 000 jobs for specialty contractors that means more people are looking for to renovate their kitchen and bathrooms so overall a positive sign Julie and Jared you know it's interesting we I keep coming back to this interview we had on the show a couple of weeks ago with Bob Clark who is the chairman of pleco one of the nation's largest construction firms does a lot of commercial and Industrial construction and he still emphasized how tight that market is how hard it is to find skilled workers in construction you know when you're talking about the plumbers and engineers and electricians on all of these major projects so that sort of reflected in these numbers yes over on the residential side though we've been talking about how there is a shortage of Supply right in the residential Housing Industry so what does this tell us about that because you would think there would still be a big demand for residential construction yeah so in this report there was some weakness on the residential side but by no means does this mean that housing projects will be put on hold if anything more construction is about to begin we saw other data that showed that construction spending for residential uh grew in June both for multi-family and single family projects and we've also heard from the public home builders that they are continuing to build they're capitalizing on this housing shortage that the U.S is dealing with Julie okay really interesting stuff Dan thank you so much Danny Romero talked to us about construction jobs well shares of nerd wallet are rebounding today after the company missed on earnings but saw Revenue rise 14 year over year the personal finance platform also saw a jump in unique monthly users climbing to 22 million in the second quarter NerdWallet CEO Tim Chen is joining us now Tim it's good to see you let's start big picture here right because we are in an interesting moment if you will for people's personal finances right economists keep telling us student loans are going to have to be repaid people's excess savings is being wound down on the other hand the economy is held up relatively well so what are you seeing from your Vantage Point in terms of what people need right now yeah thanks so much for having me back um I'm incredibly proud of that team for delivering a strong Q2 when most of the industry were shrinking we grew 14 year over year and I think that's really driven by the consumer trust we've been building in the market share we've been taking uh to answer your question it is an interesting Paradox right um we're seeing a bit of weakness in areas like commercial real estate like you were just mentioning um and banks are actually getting more conservative with some of their lending as uh consumers are working through their pandemic Surplus there's concerns about the balance sheet in terms of commercial real estate and there's actually regulatory changes coming the Basel III in game that's going to increase their Capital ratios and regulatory requirements and that's causing them to be a little bit more conservative in terms of lending even in Prime areas like balance transfer credit cards where they might subsidize zero percent interest rates for a year or more when they bring on a new customer well let me let me stick with that for a second Morgan Stanley which recommends your stock with an equal weight they did lower the price Target to 12 from 13 but they're saying specifically we are now starting to see underwriting standards which have been tightening materially for subprime and near Prime consumers well they're beginning to impact Prime consumers so are we seeing a wholesale tightening of credit conditions here uh I characterize it a little bit differently so I'd say subprime and near Prime uh has been really tightening over the last three quarters uh we've seen incremental tightening every quarter since probably the middle of 2022 that was really driven by fears that unemployment would reach five or six percent exiting 2023 and I think the worst case scenario there has really proven to be a little bit better so that's that's actually getting a little better than people thought what's changed though is post SBB um banks have actually gotten more worried about the deposits that they're lending against right so as interest rates go up those deposits haven't been as sticky as Banks thought they would be a lot of people are turning to nerd wallet to find high yield savings accounts as an example and those deposits are leaving and so there's a bit of uncertainty around how many rate hikes are left and and some loan officers Minds there's also uncertainty around whether consumers are going to burn through the rest of those deposits in the coming quarters and that's what's driving that conservatism you mentioned high-yield savings accounts which of course we even hear from institutional investors who come on the show right things like that money market accounts Etc are still quite popular and there's the question of when that's going to shift but I am curious among your users where else are you seeing high demand what do people want to know about right now uh that's really the key area but you're also seeing a lot of people wanting to figure out what's going on with student loans there's been the Supreme Court ruling there's been additional proposals for different income-based repayments program from the Biden Administration and I think that's just driving a lot of confusion um I think all bets are off with some legal challenges out there and going into an election year next year as to what exactly happens there so we will just focus on continuing to provide guidance as the rules change and Tim uh when it comes to your growth strategy are you looking to grow more organically are you looking for Acquisitions where exactly is that fitting in well we we think we have a ton of growth left organically uh one that our first pillar of growth is land and expand and that for us that means more verticals and more geographies uh even within the United States there's areas like auto loans seniors Social Security Medicare A lot of sub-verticals of small business that we're expanding into from a content and product perspective another pillar of our growth is actually vertical integration and that speaks to uh you know areas where humans are involved Brokers agents advisors can we provide the digital concierge experiences to really help consumers and then lastly we're really focused on registering and re-engaging users using data so we want to nudge you when you should make a smart money move based on what we already know about you so those are really our pillars of growth um you were just talking about humans let's talk about non-humans AI is what I'm talking about because I know you guys have a beta AI chat bot what does it do where is it in its development stage in terms of whether it comes out of beta so nerd AI is trained on nerdwald's data and it can do things like summarize an article or it can figure out uh the better article to take you to or you can answer your questions directly based on synthesizing what is learned from our content um I think that's a pretty standard for what AI can do it's really democratizing this ability to summarize synthesize and translate content for users now the important thing is that it's reviewed by experts because AI can hallucinate and I think that's really where we're putting our Focus we really want this to work well and be accurate and that's where the the really tough challenges yeah definitely I think that's something that everyone is sort of uh trying to figure out right now Tim Chen good to see you CEO of nerd wallet thanks so much for having me thanks take care let's do a check of the markets now sponsored by tastytrade we are about 45 minutes into the session here and stocks are holding up holding steady with gains very modest ones however the s p the NASDAQ only up about a tenth of one percent the Dow is of about a fifth of one percent in some ways today's market is a tale of two companies and Amazon and apple apple and the downside Amazon on the upside and then of course throw the jobs report into the mix although it doesn't seem to have fundamentally changed the investment case here the case for the FED Etc yes the headline number missed estimates but the fact that you also had wage growth the fact that you also had an unemployment rate a little bit more mild that sort of offsets that it's the summer and I think it would take a tremendous amount it would take a really outlier number on one of the headline numbers just to throw the market out of whack this is nobody wants to come and to work on a Friday if you're a big hedge fund manager um thinking ahead to Labor Day maybe uh no I I'm not surprised at the reaction here very muted overall I think nobody wants to come into work on Friday period but we're here but we're here serving you all right we got all your markets action ahead stay tuned you're watching I'm Finance what is your favorite chart or indicator that you're watching right now well I think I'm watching jobless claims this is something that is very immediate and this is something that is really a good real-time indicator of what is happening in the labor market and the labor market is what we need to really focus on as inflation is declining the FED will be watching the labor market much more closely [Music] thank you [Music] foreign [Music] thank you [Music] [Music] [Music] [Music] foreign [Music] [Music] foreign [Music] [Music] foreign [Music] welcome back to Yahoo finance live I'm Jennifer schonberger here at the labor department that jobs report coming in a bit cooler than expectations 187 000 jobs created on that top line that is the second month in a row of slowing job growth for more insight on this joining me now is acting labor secretary Julie Sue secretary Sue it's great to see you thank you so much for joining us good to see you again so we got a second month in a row of cooling job growth though the job market hanging in despite the feds 11 raid hikes so far would you say that the strength of the job market is why the economy has remained so resilient and why we've been able to avoid recession so far yes so this is an example of the steady stable growth that the president talked about over a year ago that if we could adopt the right economic policies focus on building an economy from the middle out and the bottom up instead of the top down where we make sure that workers do well that will lead no one behind time that we could not only recover from the pandemic at a record rate which has happened but that we can transition to slow and steady growth which this number reflects and brings a total of jobs created since the president came into office to just about 13.4 million jobs we've really seen businesses hold on to workers even though there's been this this year of recession right this talk that it could be coming and I'm wondering you know some of these employers have been scarred by the labor shortages seen during the pandemic certainly we're seeing some still now if that's creating sort of a floor and keeping strength in the job market right so these numbers are not consistent with recession right we've continued to see steady growth it's also true that we are in a moment in a tight labor market in which workers have more power right workers have the ability to demand better working conditions to make changes to their jobs to to and that has resulted in you know we see power at the bargaining table but we also see real wages have increased for especially low and middle income workers which has helped this Equitable economy that the president talks about as far as how much longer this slow and steady growth can continue I'm curious what you thought about that manufacturing number clocking in at negative 2 000 last month how do you view that in terms of how it votes for your outlook for the job market at large do you think it's a canary in the coal mine no I think it's important to take a step back at the at what's been happening in the economy so the president working with Congress got some two trillion some dollars in investments in clean energy including in manufacturing in infrastructure and we are just seeing the impacts of those Investments on the ground and we're going to continue to see more of them for example one of the industries that did grow last month is in non-residential construction which means that we're building things again I was in Pittsburgh with the first lady a couple weeks ago at an airport modernization we're seeing things get done those are creating jobs in some sectors and if we build factories it'll eventually lead to more more of the manufacturing jobs that we want and Madam Secretary I'm curious we saw a Fitch downgrade the US's credit rating this week any impact that you perceive there are potentially on the economy on the job market and we haven't seen too much reaction in the markets obviously right we're not seeing that and as secretary Yellen said that felt arbitrary it feels out of step with what we're seeing in the economy so you know we are happy to see that the continued growth as we're transitioning to a place in which we believe that there could be sustainable growth and building a strong economy the same way the president talks about right centering workers or that employers do well and America is stronger for it the Screen Actors Guild has gone on strike that strike seemed to start just after the survey period was taken last month what impact can you see that potentially having going forward on future payroll numbers so as this president has said and as we've seen examples of the collective bargaining process is a way in which workers are powered the table and which Industries like employers and workers coming together can resolve issues that they face and and workers can exercise their rights including that right to strike as you noted those numbers will not be reflected in the the numbers that we're looking at now but overall I think that it's still a continued sign of what a worker-centered economy looks like as we saw with other outcomes right the teamsters and UPS the West Coast ports parties coming together to resolve their issues will result in better working conditions historic increases in uh in you know in wages and other protections and um you know and and we're gonna see how these play out in some of the other Industries well talking about playing out today there's a meeting between the Hollywood writers and the alliance of Motion Picture intelligent producers try to end the strike for the writer's side what are you hearing on that front I think whenever parties at the table it's a good thing right and again we have seen when parties come together even though it may take some time even though it doesn't always look pretty uh that that the outcomes are good for workers and for industry so we'll stay hopeful about parties coming back together I think that's always a good thing but we also believe as the president has said that as the most pro-worker pro-union Administration history we are we're seeing the impacts of that of of real bargaining power for unions are you prepared to intervene if you need to I think we monitor all of the uh you know all of the labor situations out there but as we've seen intervention is not always the right answer it depends on what the parties want it depends on a clear-eyed assessment of what is happening and if the parties can come together and resolve their issues we think that that's a win for everybody so right now no intervention that's right okay so before we wrap up I understand you've got a big regulatory agenda on tap for this month and the labor department is is set to unveil rules to expand overtime pay requirements for workers as well as narrow the definition of what it means to be an independent contractor versus an employee what can you tell us about these upcoming rules so our rulemaking agenda is meant to make sure that we are doing everything we can to protect working people across America which again is good for employers it creates a Level Playing Field and so we've seen we've done things to expand protections for construction workers to make sure that Mine Workers are not subject to totally preventable illness and disease and when it comes to overtime and misclassification we also want to make sure that working people have a safe floor that they can rely on that provides uh you know a floor under which nobody should have to live and work so what is the timing on these rules and when when can we expect them to be rolled out at this month right so that so all of the rules are on on different timetables but we are at work at the labor department to deliver for American workers and the American people and we've got the UAW coming up in September what are you doing on that front as far as that is concerned also you know we're paying attention to what is going on but the parties are at the table they're doing what they need to do and we remain hopeful that they're going to resolve their issues secretary Sue thank you so much as always for your insights great to see you so great to see you too thank you so thank you so much and we will be right back after this [Music] thank you [Music] thank you [Music] foreign [Music] thank you [Music] Fitch's U.S debt downgrade was met with more than a little confusion by some former treasury secretary Larry Summers labeled it quote bizarre with alian's chief economic advisor Mohamed el-arian he was puzzled we spoke with him about it this week and he asked a simple question why now what Fitch put in their statement has been true for a while so why now and that explains the reaction that I and many others have had which is first this is surprising second when you look at the reasoning the reason you scratch your head as to the timing of this another voice that's speaking out is Paul Krugman the noble Laureate and New York Times columnist he joins us now also with Yahoo finance's Rick Newman Paul thank you for being here today uh just your reaction to the debt downgrade you uh got the reaction by Muhammad al-arian what are your thoughts exactly the same I mean it's uh you know if you want to ask does the U.S have a long-run fiscal problem yeah we have had some you know it's not imminent uh our debt is still nothing like levels that we've seen in other countries in the past without any problems but we do seem to have some you know political deadlock that makes it kind of hard to get spending and taxes in line but why none of that is worse now than it was a year ago when Fitch gave the US a clean bill of health it's it's a very very puzzling decision uh Rick you also wrote about the debt downgrade um and you I don't know what your feelings are in the timing but you seem to think it was justified well it's a step aside from what the actual credit rating of the U.S should be I think what Fitch said accurately reflects the political dysfunction in Congress I mean you have a significant portion of the governing class in Washington Washington continuing continuously threatening to default so if you're if you're continuously threatening to default why should you do why do you deserve a top credits Rick credit rating I mean they only cut it by one notch it's still just one notch below the top level and uh you know Muhammad Al Aryan says why now you could also say why not now I mean maybe they should have cut it before the latest debt ceiling standoff or maybe they should have cut it a year ago and they're just late I mean standard and poorest cut it in 2011 that was 12 years ago so maybe it is the right time to do it and Paul we just got the latest figures from the Bureau of Labor Statistics indicating more job raises it was a little bit of a disappointment on the headline number but for all intents and purposes uh bullish numbers with respect to the U.S economy wage growth growing a little bit more than anticipated too your reaction please to the numbers oh I mean if you know the job growth was fine it was actually high for an economy at this stage of the cycle in economy that is at full employment arguably more of a full employment economy than we've had for 20 years uh to still be adding jobs at almost 200 000 a month is really amazing and I think you you want to just it kind of bears on the dead reading also if you were to go back to last year lots of people were expecting a recession lots of people were expecting a sustained slump would be necessary to bring inflation under control instead we have you know Immaculate this inflation inflation coming down without any bump in the unemployment rate with the job growth still continuing no hint of a recession which among other things that's not the most important thing but among other things is good for deficits it means that that we don't suffer the revenue losses to go with the recession so no this is this was really a kind of a Goldilocks jobs report and Paul as you wrote in your most recent piece um spending for lack of a better term is good in other words spending perhaps would have helped us more after a bigger spending perhaps would have helped us more after the financial crisis and spending government spending that is has put us in that Goldilocks position where we are today you would argue so how then do we contend with the debt part of that equation when and if if and when that presents a problem what would make it be a problem well it's it first of all I mean spending is good when the economy is depressed the economy is not depressed now so there's we don't need fiscal stimulus right now and that uh it would wouldn't hurt if we could find some way to you know raise more Revenue uh cut back I'm not sure exactly what we're going to cut back on but uh it's not a crisis level thing but you know this is not we don't need uh extra stimulus now the way we did arguably uh even when Joe Biden took office um but if if we're sort of uh you know uh trying to think uh forward I I think in the end we are going to have to reconcile you know what the public wants which is social security Medicare Medicaid uh with with the you know raising enough Revenue to pay for it but uh nothing nothing urgent nothing imminent oh there's an obvious challenge to the Biden White House which is that uh his popularity is really not moving even though we have a very strong labor market we've had a we've had a nice stock market rally this year inflation is coming down um we may actually be heading for a soft Landing do you understand why Americans don't seem to be giving President Biden much credit for this and do you think that's going to improve over the next year or so I mean the short answer is God knows right I mean it's uh uh it is really kind of mysterious uh but it's not if you looked at multiple surveys now where you ask people how are you doing and they say fine and you ask how's the economy doing and they say it's terrible and somehow or other you know blame the media blame partisanship uh just somehow uh it it's also not entirely clear that that's you know people will actually vote on that basis remember the midterris were supposed to be a democratic Wipeout because of inflation and they weren't but it is really kind of weird I mean lots of people uh think we're in a recession when in fact we're in an extraordinary jobs boom uh lots of people think inflation is accelerating um but you know this happens on other issues too oh you know during the Epic decline in crime that took place uh between around uh you know 1990 and 2015 steadily through that whole period people said crime is increasing so the idea you know we're we are somehow in a a nation in which people are doing fine experiencing good conditions but are sure that really bad things are happening to somebody else whom they happen not to know I mean I that when it comes to inflation if pace of increase is less I'm not tracking it if I'm buying stuff by the pace of increase right I just know I'm spending more on this thing than I used to be spending I'm not tracking it by percentage or maybe even dollars it's just more of a feeling right I mean so and this is something that Rick has sort of pointed to in the past as well that perhaps all of this public sentiment is pegged more to that price Vibe if you will rather than anything else well I mean historically if we think about you know if you go back to the last time we had a major inflation people gave Reagan a lot of credit for you know not necessarily correctly but people gave him a lot of credit for having brought inflation under control but you know prices never came down it wasn't as if the the level of prices went back to its level from the mid 1970s it was just that the rate of increase came down so why should the rules be different now uh that's really does not make a lot of sense what I will say is and to some extent a defense of public perception the Resurgence of inflation it comes a big shock people were not you know had had started to not think about inflation or actually hadn't been thinking about inflation for a number of years and so then all of a sudden we get about 18 months of serious inflation which was not on anybody's you know the dance list and that is a shock I think it wears off uh over time whether it's in time for the 24 election we don't know but you know that uh but that's the best explanation I can give aside from the fact that well you know if you were watching uh not this news source but certain other major news sources uh you aren't hearing any of the good news about the economy well we try to be fair there with respect to that I want to draw the viewers attention to a chart and you've been writing about this recently a new I'm a fan of technical analysis and this chart has a pattern which I haven't heard described before but it makes sense a frying pan and um if you squint there you'd have to draw on some lines basically we were on a certain trajectory before the global financial crisis got knocked off a little bit but now with the pandemic we've accelerated again and maybe we're back on track just give us your breakdown please yeah I mean what what we had during the aftermath of the last crisis in 2008 was a sort of Silent economic disaster uh we took a long long time to recover both in terms of employment in terms of output to the pre-crisis trend it was a it was trillions of dollars of wasted you know for of stuff we should have produced that didn't millions of person years of employment that we should have had that we didn't have this time around uh you know if people complain about the inflation people say Joe Biden overdid it but the fact of the matter was that faced with a horrendous crisis uh we staged a record-fast recovery and we're now you know by a number of measures we now have uh either the the closest to a truthful employment economy that we've had since the year 2000 or maybe the closest to a Full Employment economy we've ever had so this is this is a big difference the the reality if you look at the at the numbers is that we've actually had it you know It's a Wonderful Life we've actually had a terrific economic recovery oh these three bills that Biden has signed during the last two years uh two years infrastructure semiconductors and green energy uh this is a lot of money that's now starting to flow into the economy the uptake on the green energy subsidies is more than a lot of experts anticipated um is this going to move the needle in terms of perceptions about the manufacturing economy in the United States you know all the hollowed out towns that uh and those voters that Trump has been successfully appealing to is this going to change things in the Heartland or in those parts of the country or is it not that significant now it's pretty significant if you look at manufacturing construction spending which is sort of the uh the the number that comes in first uh the other thing the actual manufacturing employment will lag behind it it's just gone vertical uh we've just had a extraordinary increase so these policies have definitely given a major boost to manufacturing now that's not going to bring us back to the old days when manufacturing was you know a third of employment it's still going to be relatively uh we're still going to be a service economy but we are seeing a what looks like a manufacturer of Revival and all of this also probably I mean I I think of there being sort of four factors that are have helped us avert the recession that everybody was predicted was predicting it's uh it's uh the infrastructure Bill the chips act uh the inflation reduction act and Taylor Swift that's that all of those things make sense to us and we've talked about all of those on our program did Paul did you go see Taylor Swift no I I even I mean I've heard stuff is fine I have nothing against it but you know Mega venues are not my thing I'm uh I like the 500 person um then you were the 200 person venue uh not 80 000. yeah I I sympathize I share that view thank you so much Paul Krugman Nova Laureate and New York Times columnist our very own Rick Newman I don't think he's a Swifty either but we'll talk about that offline thanks to you both gentlemen very much yeah thanks a lot we got much more coming up you're watching Yahoo finance what do you make of the Taylor Swift economic effect I am too old for that right but in terms of the idea that you know the economic Boost from fans buying tickets but not only that you know really booing local economies spending a restaurant spending at hotels airfare all that just I think I get I I see a little bit of that people really really miss all this fun you know we we got stuck in our homes and we really want to go out there for me it's more like a Disney World effect quite frankly because I have young kids and this is what I want to do all the time [Music] thank you [Music] [Music] [Music] [Music] foreign foreign [Music] [Music] foreign [Music] foreign [Music] job sector added 17 000 jobs to the Leisure and Hospitality space this morning employment remains below its February 2020 level in Hospitality by about 2.1 percent let's dive into the restaurant industry in particular if returning from pandemic levels wasn't already hard enough restaurants faced numerous challenges in this inflationary period from worker retention to bringing back customers to in-house dining inflation has also had a significant impact not just on our wallets but also of course on menu prices and operational costs for any restaurant Big medium or small amidst all of this pot belly dropping at second quarter earnings yesterday a missing estimates on Revenue although that was still up 9.2 percent year over year comparable sales growth soup 12.9 percent for Potbelly so let's talk about the implications more broadly for the consumer and how restaurants are faring joining us now Potbelly CEO Bob Wright as well as Yahoo finance's Brooke De Palma to discuss more on all of this so Bob just give us big picture here what you are seeing from your consumers let's talk the demand side of the equation first of all here what you're seeing what you're seeing in terms of traffic in terms of people's willingness to spend and whether you're seeing any trade down yeah thanks it's great to be with you we uh we were thrilled this quarter for the second quarter in a row to have a significant sales growth but driven primarily by traffic the majority of our Top Line growth has come through traffic the last two quarters and as we measure things against the fast casual segment there's some shared stealing that's benefiting Potbelly as well more broadly though with the consumer I think one of the great things about the fast casual space is that we enjoy a relationship with a consumer that's at a little higher income they've got a little more disposable income and they certainly seem to be resilient even if they have a little pressure the other thing that fast casual is that the frequency is not as high as you might find in qsr and so you know if you're going to a qsr drive through two or three times a week and you're feeling a little pinch in your wallet you might dial one of those visits back if you're going once a week or a couple times a month to a fast casual you you won't see a little bit of inflation really affect your your patterns of behavior especially at that income level when we look at the internal data it suggests that that consumer in particular is doing really well and at Potbelly which we enjoy they're they're doing even better and we're seeing it in our traffic growth numbers so nothing on the horizon that has us terribly concerned about our ability to maintain this posture and let's talk about the back end of things Bob here I mean inflation's certainly taking a toll we're seeing lunch meats as well as flower prepared mixes continue to move higher year over year what sort of ingredients are you seeing sticky inflation for and what are you seeing improve in this second half of the year we have a category that we call grocery which just includes chips and a number of other of the smaller items that we use in our shops uh that that has continued to see some inflation our Meats uh have come back and a lot of that is driven by chicken we're lapping the bird flu from a year ago and seeing some benefits in the chicken prices but I'll tell you Potbelly in particular one of the things that we benefit from is a really broad-based supply chain we have Italian Meats we have beef we have chicken turkey avocados fresh produce soups so a number of different ingredients which means our risk is spread um we won't see those violent swings in food costs input costs at Potbelly like you might see at a you know a chain that's primarily selling hamburgers or chicken wings so it's really good when times are good but it can be very tough if you see that market moving in the wrong direction we've got a little more stability and let's talk about the Libra front bringing back to the jobs report out today I mean right now you have a little more than 400 locations but long term you aim to build a 2 000 location restaurant chain that's a whole lot of employees that have to fill the back end of that how are you recruiting and working with your franchisee operators to bring in recruit and maintain that sort of talent it you're so right and by the way it's the best part of the business our employees our Associates at the shop level they're the reason that we enjoy the success that we do I can tell you a couple of years ago I was talking about it being the worst employment environment in my 35 year history uh right now we're enjoying full Staffing in our shops we've got turnover that's um that's uh well below the fast casual average uh we're enjoying the benefits that go with that stable full Workforce in our shops and the thing that I think drives that for us in in many ways is that there's a uniqueness to the pot belly experience and we're leaning into that with our recruiting efforts we don't have late night hours yes we sell breakfast in some of our locations in our CBD or our city centers but we're not a breakfast brand where you have to be in at three and four in the morning to get open and get ready we don't have Friars uh we have a team that when you enjoy serving customers and you can work shoulder to shoulder across the counter from your customers every day that's a lot of fun um and we have that engaged experience that benefits our customers but it benefits our Associates as well and what we've done with our recruiting efforts is lean into that even with our franchising efforts this is a big topic of discussion with franchise candidates about when they're adding a brand to a portfolio or if they're entering the restaurant franchising space for the first time how easy it is or how relatively easy it is to operate as a big deal for them and we show really well in those spaces and I'd like to know about your investment in technology then it sounds like your employees are very Hands-On you value that experience and the interaction with the customers but a lot of places are looking to streamline operations develop efficiencies and they invest in technology artificial intelligence anything that you can tell us along those lines here is really important to us yes in fact when we rolled out our five pillar strategy that we're still operating under today at the end of 2020. the fourth pillar is all about digital and there's a number of fronts there but our our efforts go back to 2021 where we rolled out a new app and new web technology we did it completely new integration of all of our digital ordering channels we also uh we also elevated the ability for us to communicate with our customers through those digital channels digital advertising is what we do exclusively today uh so a ton of investment in that we're already into our third round of of uh enhancements to those digital channels with more announcements coming you've heard us talk about our pot belly digital kitchen which we're right on track with the implementation of that this year against our goal of about 100 shops this year we've made it the standard for all new franchise openings that digitize the back line in Potbelly so that when we receive those digital orders we're able to process them much more efficiently and our order ready on time scores our food quality scores temperature scores are all improving in the shops where we put popularly digital Kitchen in it also includes a an order taking tablet we call it an eye lot an inline order taking tablet that allows us to go deeper into the line start the cost order sooner and it's driving throughput in our Peak volume periods all that one very important thing it's not terribly technological but it's a it's a Powerhouse for us at Potbelly we have two lines in all of our shops they're originally built with the back line to serve catering the day all of our digital business runs off of that back line there are brands that are installing that second line so that they can keep up with the digital business we actually open it back up when uh when my Ops Team and I got here and we're using that for all those digital channels so even that last mile of execution makes digital work really well for the customer and speaking of digital you're really doubling down on your Perks program I know today's national cookie day so I saw on your website that if you order you get a free cookie what sort of foot traffic do these sort of promotions bring in and ultimately what's at the end of the day is the check size as a result of these incoming orders yeah thanks perks really is at the heart of that digital effort for us uh our uh our connection with our customer through those perks loyalty relationships continues to grow we don't publish uh the number of members or that penetration into our sales mix but I can tell you that with 38 of our business uh coming through our digital channels it's another record quarter for us in terms of digital sales in in Q2 uh that is being driven primarily by our own digital channels and perks is at the heart of it what we do with these big promotions like uh the first day of summer BOGO offer or the cookie promotion that you're talking about the underground menu that we've returned to Potbelly all that's done through the digital channel so that if you're a perks member you get those benefits first and foremost even when we're doing a a system-wide promotion using our digital advertising we drive people to perks to say that's the best version of the deal that you can get and we see the download spike whenever we have those promotions and we see the engagement in the penetration which is the mix of those perks orders uh increase every time we do that we reach a new plateau and we do it again and do it again and just continue to build the business we think it's it's got a lot of runway for us even from here everybody loves a free cookie it drives you to get the app yes cookies on the planet I promise all right all right we'll have to take up on that and give them a try Potbelly Co Bob Wright and our Brook to Palma thank you so much appreciate it thank you quick final check of the markets here all three major averages have taken a little bit of a leg up here uh from very modest gains too a little more solid the NASDAQ now up almost two-thirds of one percent the s p and the Dow up a half a percent each or so as we now are what uh two and a half hours on from that jobs report yes wow coming up our Women's World Cup special is finally here you don't want to miss it thank you on July 20th 32 Nations arrive in the land down under to compete on 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 at 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 we'll discuss all this and much more on Yahoo finance [Music] thank you [Music] [Music] [Music] foreign [Music] [Music] [Music] [Music] [Music] [Music] [Music] welcome to Yahoo finance it is 11 A.M on the East Coast 8 A.M on the west I'm Akiko Fujita Welcome to our Women's World Cup special beyond the game where we'll spend the next hour speaking with experts about all aspects of this year's tournament here's what we have on tap 32 Nations arrived on July 20th for this year's World Cup but from equal pay to their fight for recognition we're going to stick with one expert on what makes this year so different and women's efforts both on and off the field seem to be paying off with record viewership in the group stage games we're going to discuss what this means for The Knockout rounds to come but we'll speak with someone who knows this fight better than anybody two-time World Cup winner Brandi Chastain is going to be joining us later this hour a lot on tap but let's begin here with this year's Women's World Cup that has drawn eyes from all over the world after players fight for Equal Pay made headlines our next guest though says the Gap is closing both on and off the field setting up a totally different landscape for this year's tournament our deep country is CBS sports soccer writer she joins me now pradeep it's good to talk to you a lot of excitement going into the knockout rounds but let's talk with about the state of play right now FIFA already estimating 2 billion people watching this year's games that is roughly double what we had four years ago how much of that has translated at least on the the pay side of things in what has actually changed over the last four years um arguably everything um uh from you know the uswnt winning their equal pay battle to really just all across the globe you've seen different organizations sponsors put money into women's soccer and that has that money has directly gone to the players a lot of the time obviously from their own paychecks but really into you know resources and trading and other ways to professionalize the game that has seen the Gap close obviously in everybody's bank accounts but really on the field too how big of an uptick have we seen at least in investment when you think about the last oh my gosh yeah it's exponential um I I don't have the exact numbers but I mean FIFA has increased the prize money quite a bit for this world cup um you know like I said the US Women's National team has seen equal pay there are a couple other countries around the world that have it too now you know like Norway Australia um the Netherlands are on their way I think so it's that and then it's also different levels of investment at different levels of the game right so you have the league um in the states for example the nwsl there are more sponsors in that League than there were four years ago there's more eyeballs on it now so really just when I say across the board and I I really do mean it they talk about more eyeballs on the game uh 2 billion roughly is what FIFA is estimating in terms of viewership how has that shifted the way FIFA sponsors value the game I think the 2019 tournament sort of proved to excuse me a lot of stakeholders that there is money to be made here that people will watch it if they're given access points so you're seeing better TV deals or better broadcast deals and a lot of sponsorship and media deals that go with it um FIFA in particular really stepped up their game in between the last World Cup and this one by first separating the sponsorship structure um so now sponsors can directly invest in women's soccer if they want to Visa is the first company to sign on to that um and then they tried to find a broadcast deal in a lot of places specifically for the women's tournament because they decided oh this is going to actually make us like a different level of money than we originally anticipated they didn't quite get that deal across the line in every place around the world mainly Europe but they I believe reportedly value the women's World Cup rights at 300 million right now but that could change they expect it to change quite rapidly for the next one so that sponsorship structure change you just pointed to what does that mean in terms of additional money flowing into the game um so now FIFA has different brackets set up for um you know the level of sponsorship you can put into women's soccer specifically like the World Cup right so if you wanted to be you know a top tier sponsor would cost you a certain uh uh like certain million dollar range but that sort of separate sponsorship category did not exist before so any money that people is making through World Cups was brand saying okay we'll sponsor the men's and I guess technically you'll throw in the women's shoes we'll sponsor that um but like I said now Visa has come in as a sponsor of the women's tournament the New Zealand based software company zero has come on so now it's just a new Revenue stream for FIFA that they can put into women's soccer specifically uh finally pardeep you know American viewers at least looking ahead to this Sunday a lot of people are going to get up early to watch that match against Sweden there's some anxiety You could argue going into that given the performance of the US team so far what are you going to be watching for oh my gosh I think it's a really really big game for obviously the team as a whole the program as a whole but specifically the coach lot going inovsky I think this match could serve as a referendum on his entire tenure as the U.S women's national team coach it was his job to you know refresh the team after a bunch of uh retirement in between 2019 and now and while he did bring a bunch of new players to the team this team has obviously not lived up to its potential yet and he will be expected to do so and get probably every decision right keep our fingers crossed party of country CBS sports soccer writer get to talk to you today appreciate the time thank you for having me well the women's fight for Equal Pay has been a big conversation heading into this year's World Cup but when you break down the numbers the U.S may be in for a big pay bump even if they aren't the last ones standing Yahoo finance Julie Hyman joins us with the details well I mean Julie yeah well we should note also the US is not the only one that's having a fight with its soccer Federation or how to fight the one in the US has resolved many uh of the teams around the world the women's teams are fighting for higher pay but here's how it sets up overall not just for the us but overall the Women's World Cup in terms of total payouts that we are looking at we have seen FIFA increase the base of performance-based fund from 30 million dollars to 110 million dollars a big increase there the club benefits program to 11.5 million and preparation money to 30.7 million so total here we're looking at around 150 million dollars keep in mind however that compares with 440 million dollars for the men's World Cup so it's a big increase but it is still a lot smaller of course here in the United States we did see a landmark agreement between the Federation here and the women in order to split the pay equally between the men's and women's U.S teams everywhere around the world the first money goes to the local federations in the home countries then they decide how much they are going to pay out to the teams and to the players so that's how you look at the sort of tiered if you will the tier you see behind me and how the payouts work here the players share as you can see versus the per team share in each of these cases but then the percentages are also quite different for countries for countries again here in the United States we are seeing the U.S players get a minimum of around three hundred thousand dollars that is very much not the case in other countries and we're still seeing in countries ranging from Canada to England Jamaica Nigeria and South Africa who are still having arguments with their local federations to get more pay on the FIFA level the president Gianni Infantino has said that FIFA hopes to offer equal prize money looking ahead perhaps to 2026 or 27 but he's been sort of non-committal on hard commitments on this point Akiko so we'll see if that changes as we get through this year and Beyond yeah that fight for equality in the game so far from over Julie Hyman thanks so much for that well from equal pay to viewership Yahoo finance is Danny Romero standing by with some fun facts around this year's game Akiko we have soccer on our mind the Women's World Cup is making big moves the world's biggest soccer tournament is pulling in a big audience even though the women's team barely made the cut to that knockout stage what does this say about soccer fans well people want to see soccer especially women's soccer the numbers are proving it to be true for example the opening game for the U.S women's national soccer team against Vietnam on July 21st brought in about 5 million viewers that's a 99 increase from the team's Opening match back in 2019. now let's move on to the second game against the Netherlands on July 26th that brought in over 6 million views a 21 increase from four years ago and on Tuesday the USA team Advanced to The Knockout stage after tie game with Portugal and that game brought in over 1 million views but what's interesting is that most of these games are airing during the middle of the night and fans are watching them the popularity for women's soccer is growing globally and there's more sponsorships tv ads reasons why this year's prize money has nearly quadrupled to 110 million dollars let's go USA so set your alarms the next game is going to be early at 5 a.m against Sweden Akiko 5 a.m wake-up call on Sunday we'll all be watching Danny thanks so much for that well all your Market's action is ahead stay tuned you're watching Yahoo finance [Music] [Music] foreign [Music] [Music] thank you [Music] foreign [Music] let's do a check of the market sponsored by tastytrade we are seeing green across the board on this Friday as investors digest that jobs report that came in weaker than expected earnings also helping drive or push markets higher with the Dow up 165 points the S P 500 up 22 and the NASDAQ up 97. well the World Cup is in full swing and we are headed into the round of 16 this weekend the International Event has always brought in millions of viewers from around the world but the women's tournament is still in its relative infancy at least according to our next guest FIFA only began hosting the women's soccer tournament in 1991. that makes this tournament just the ninth one in 2019 1.1 billion people watched the broadcast this year it's only expected to increase as a coverage of the event is also increased let's bring in Wells Fargo International Economist Brendan McKenna to discuss the economics of this event uh Brendan you've put out a really interesting report around the economics of the Women's World Cup but let's start by talking about just how long this has been going on 1991 is what we said compare that with 1930 which is when the men's game began talk about the changes we have seen over the last nine tournaments yeah sure so you're absolutely right the women's tournament took about 60 years or so to actually come into fruition but now that we actually have some momentum behind the women's tournament we've actually seen a lot of progress so viewership has risen pretty substantially but also media coverage of the tournament has also risen pretty substantially as well and then just general popularity around the torment in a global Nature has also come through fruition as well so we're seeing in increased viewership from regions such as Asia Middle East North Africa Europe Latin America so the game has really exploded into popularity and of course that's come with enhanced media coverage as well so how is that translated into sort of the economic picture I mean you talk about this is a global game Europe of course has always kind of been leading the way at least when it comes to soccer but we've seen incredible growth in places like Asia yeah I think that really just speaks to how Global the game has become not necessarily just for the women's tournament but also for the men's as well we've seen this rise in global popularity around the sport of football and I think when you're thinking about just the Women's World Cup specifically close to 50 percent of the viewers are actually coming from Asia and the APAC region and a lot of those viewers are coming from China and coming from India so I think again it really just speaks to the global how Global the game has become and how Global the reach and the popularity of the sport has transitioned over the course of the last couple of decades or so so let's talk about the business side of things because there's obviously you know sort of the teams that have traditionally done really well but also where that viewership is coming in from how has that changed the sponsorship picture sure as far as uh where this where the viewership is coming from um again it's Global in nature but that also means that you're getting more Global types of sponsors so we're seeing sponsors come not just from the traditional Powerhouse regions like Europe and South America but we're also seeing more sponsorships coming from Asia and the Middle East as well we're also seeing some Caribbean sponsors come in and sponsors uh some of the matches and some of the individual teams coming out of the region so again it's not just Global's popularity and Global viewership we're also starting to see the business side of the sport become more Global as well so one of the interest ing numbers I thought you point out in your report is how these meteorites deal s they have been bundled together traditionally which has made it difficult to sort of value what the women's side is this year the approach has been a little different what does that tell you about how unequal the valuations are despite more eyeballs being on the game yes you're absolutely right historically FIFA has actually bundled the the media rights for the Women's World Cup and the men's World Cup together and to your point that's made it very very difficult to actually ascertain uh the commercial value of the Women's World Cup versus the men's tournament this year things are being done a little bit differently so they've unpackaged the men's rates against the women's rights but there is a very wide disparity between the media rights generation that has come out of the women's tournament as opposed to what the men's tournament has generated as far as revenues so for the men's tournament uh the men's media rights were a little over three billion dollars for the women's were just around 300 million dollars so there's this huge gap between the media Rising Revenue generation despite you know two billion eyeballs um you know watching the Women's World Cup Tournament so the pay gap between the men and women has been very apparent now that the media rights have been unpackaged and unbundled so what's that next step to change that if you think about sort of this long fight that has been going on within the game at least on equal pay talk about the media rights now that they have been unbundled we have seen the how unequal things are what is that next step to maybe narrow The Divide yeah I think it really comes back to more investment going into the women's game you know we spoke about uh sponsors sponsorships turning more Global in nature and hopefully that attracts new and maybe even youthful or into or Innovative sponsors to eventually come into the women's game you know two billion eyeballs that's a that's a lot of potential um you know commercial value coming out of the World Cup and hopefully again that means more sponsorships coming from different areas of the world and new investment following up uh into the Women's World World Cup Tournament so that would be one way to kind of narrow that Gap but even if we do get a little bit more progress on that front there's still a very wide disparity that needs to be narrowed over time and finally Brendan uh there's an interesting calculation here that you have put together in your report to determine who could potentially win this year's Women's World Cup what is that pointing to and how do you get there yeah so we uh we basically took a page out of our economics and financial markets uh toolkit to actually predict the World Cup uh winners and then also uh the teams that could Advance out of the group stage and it really comes back to econometrics really just using economic indicators other types of indicators uh to predict an outcome like GDP growth or inflation and we basically just use that same methodology for the women's football tournament so we took some indicators like the strength of some of the teams the team rankings the goal scored the goals allowed but we basically use this econometrics type of framework to come up with the winner now our winner is of course in an unbiased opinion the the US team they score very well on many of the indicators that we include in our model but we also have some Dark Horse themes as well like Columbia and some of the Latin American teams that could do very well over the course of the tournament as well so really it comes down to using the econometrics approach using the financial market analysis toolkit that we have again to predict the winner and teams that can do very well over the course at the the World Cup do you still feel confident in that prediction despite the U.S team's performance so far I think a lot of people are probably pretty excited that number that the US is still coming out on top I'm still confident you can you can certainly make an argument it's been a bumpy road in the early parts of the tournament but you know maybe this will be a little bit of a wake-up call for the U.S team that maybe they can draw on their experience and hopefully get the job done in the later rounds of the tournament so still pretty confident Wells Fargo vice president International Economist Brendan McKenna it's good to talk to you today I appreciate it thank you very much appreciate you having me well this weekend you may be tuning in to watch Switzerland play Spain or Sweden play the US in the backdrop though there's still a lingering issue around the game the gender pay discrepancy for women's national teams around the globe let's bring in Danny Romero back in again to help us break down what's been going on there Danny Akiko there's been a lot of discussion over equal pay especially when it comes to the U.S women's soccer team the national team has spent decades fighting over it they've gone to court in Congress they've had countless bargaining sessions in a bid for equal pay well guess what they won last May the team signed a deal that now pays them on par with the U.S men's team in every conceivable way but the fight isn't over many are still fighting for Equal Pay including players from Canada England Nigeria and Spain there are 32 teams competing at this year's Women's World Cup and 31 of them are paid less than their male counterparts an example of that disparity is the prize money this year's prize money of 110 million dollars is only a quarter of the men's prize money and the promotions of the two Tournaments has also had a big dollar difference but FIFA says it will allocate money for players and their federations separately this is a way for players to see a cut of the overall prize money Akiko but again set those alarms we got to watch that game against Sweden you got your blue on Danny ready to go for this weekend thanks so much well all your World Cup actions so much more ahead here stay tuned you're watching Yahoo finance live [Music] [Music] [Music] [Music] foreign [Music] [Music] foreign [Music] [Music] foreign [Music] [Music] the Women's World Cup is setting viewership records and as a hype around women's soccer grows advertisers are eager to score air time at revenue for the 2023 Women's World Cup is up 50 percent from the last event in 2019. that's according to Mike petruzzi Senior VP of sales for Fox Sports with more on that let's bring in Brooke De Palma who's been looking at some of those numbers for us Brooke good morning Akiko with the game cylinder way it'll be quite some time until we get a full picture view of just how much money companies spent to see their ads on the big screen but if you take a look back at 2019 when the U.S won the World Cup by the way 96 million dollars were spent on ads yet a year before that in 2018 350 million dollars were spent for ads during the the men's World Cup but the hype is growing around the women's game six big names are vying for air time during this year's tournament Adidas launch its ad called play until they can't look away we're at highlight the next generation of players it's Global comms director said this Summer's tournament feels like it's one that's really bringing us to a Tipping Point for the women's game record ticket sales bigger broadcast audience more committed fandoms and more emerging icons Coca-Cola has supported the event since the tournament began back in 1991 but this year maybe a bit different it decided to build on that relationship with its add calls believing in Magic showing the stars of the Women's World Cup as young players and Nike showing a son and daughter watching the 1999 games only to be propelled into an entirely different world today where a women's soccer has a new energy around the game the similar theme in all these commercials are reinvigoration around the women's game of soccer and which turned perhaps could lead some more money in Kiko so Brooke what could spur more money for ads yeah well when I spoke to Paul Verner an analyst at Insider intelligence and emarketer he said quote it's going to be gradual process but one moment that could change a lot here is the woman's broadcasting rights that are up for renegotiation and back in 2020 when the media writes for the national women's soccer league went up for 1.5 million dollars per year in a degree mode CBI spending a three-year period but if you take down and compare it to the 250 million dollars Apple recently spent for men's Major League Soccer that recently secured a deal spending the next decade that's about 160 times more than that women's deal that I just mentioned and Werner says that he thinks the Gap will start to close as we see brought this broadcast deal uh get renegoti renegotiated rather but he said it'll be a very very long way to go but higher pay for these broadcast deals could lead to higher sponsorships higher ad value and ultimately women at the end of the day getting paid more yeah chipping away at that existing divide Brook DePalma thanks so much for that well the Women's World Cup is well underway analysis from FIFA and Wells Fargo economics has predicted that just about a quarter of the globe will be watching the event in the background are the challenges that women in many Industries face that's pay gaps according to a recent article from Forbes the top women soccer players Alex Morgan and Megan rapino make about 7 million US Dollars the third most well-paid player Alexia puteas from Spain sees a sharp decrease only make around 4 million US Dollars now when you compare that to the men Cristiano Ronaldo Lionel Messi helium Buffet who have all made at least 120 million dollars over the last 12 months ending in May the difference seems very Stark even with women's sports viewership trending upwards the disparity still exists with FIFA the international governing body of football hoping to eliminate the wage Gap by 2027. and that's after the men's and women's U.S teams came to an agreement in 2022 that would equal the pay Gap from appearance fees performance bonuses and Commercial Revenue as well as all the World Cup prize money all your world cup action is ahead we've got much more on the other side of the break you're watching Yahoo finance live [Music] thank you [Music] foreign [Music] [Music] [Music] [Music] [Music] [Music] well there is no doubt the world's most recognizable brands have a big role to play when discussing equality women's sport the likes of Nike and Adidas are seen as pivotal and elevating the status of some of the world's top female athletes now much of the growth potential just needs to be Quantified enter four-time Olympian and gold medal winning Ice Hockey Star Angela Ruggiero for sports Innovation lab looks to Leverage The Power of fan data to help all the stakeholders around women's sports boost investment in this space Angela joins us now great to talk to you today let me first talk about your experience as an athlete what did you experience there that informed this path to found this company or the lab yeah thanks for the uh the opportunity I played in four Olympics I uh obviously knew there was an avid fan base that would follow me around this is I retired in 2011 before digital media really took off um but I saw that the avidity of these fans that wanting more access to me as an athlete um and and I you know over the last 10 years have really seen how the digital transformation of sport in particular and the adoption and awareness that we don't do enough to invest in women has created an enormous opportunity in the market uh to grow women's sports so started the company really saying could we bring more data to the ecosystem and let's objectively look at women's sports through that lens and show there's a real business case as opposed to what I heard time and time again oh it's a charity it's a nice thing to do we said at sports Innovation lab let's actually drive dollars into the ecosystem by bringing the data and that's what we've been able to do in the last few years and on that front we saw the sports Innovation lab announces Coalition earlier this year that essentially brings a lot of the big Brands and media together to increase investments into women's sports what did you hear from some of these Brands these companies about why they've held back some of those Investments well I think a lot of them increasingly is particularly more women which I think is a big big deal um at the helm Andrea brummer for example at Ally the CMO there pledged 50 of her marketing budget to women's sports there wasn't enough inventory and what I mean by that is when you go to broadcast networks some of them haven't bought the women's rights or they've been bundled with the men's right so it's been actually hard for those brands that want to spend more money think Google think Coca-Cola there isn't enough product uh that they can actually buy because again historically uh meteorites have been bundled with the men or uh or you know this isn't the same opportunity but what I'm seeing is again a lot of these companies are saying this is the right thing to do but it's actually really good for our business our bottom line and so this club the women's sports club that we founded with Ally was to hopefully drive more Investment Drive more awareness and to work through some of the ecosystem problems that exist so we can support one another as these Brands increasingly want to spend more money and do it in the right ways it just there's a little bit more heavier lifting and I think a big part of that is you might have a smaller sample size today in terms of of the the reach that you can create in this market but through investment you know again we're seeing an enormous amount of of change um the momentum score that we found 40 percent uh compared to the general sports fan the women's Market Drive so you have a market that is you know outpacing the men in terms of driving growth retaining their fan base and you see Brands paying attention and saying let me spend more money in this system yeah it feels like one of the big changes in driving that momentum you know has been the real estate that's out there I mean you mentioned social media as one just the digital landscape there's a lot more places for female athletes to get the word out to show their game I mean can you talk about how that has driven visibility and more importantly if we're talking about dollars how does that translate into ads and sponsorships yeah I think you nailed it on the head um athletes have the ability to go direct consumer now because of social media and increasingly the long tail of the sports ecosystem these Challenger leagues like the nwsl or even the WNBA um now don't just have to go through the broadcast networks um and where they usually don't get prime time um so they're able to go direct to Consumers through digital channels through the athletes themselves who are who are driving a lot of the awareness and visibility think uh Megan rapino Alex Morgan um and so there's new ways that fans can engage that's what we talk about every day at sports Innovation lab this fluid fan wants to connect to the athlete understand more than just the game they want behind the scenes they want storytelling and women's sports is very good at that women athletes are very good at that and so technology is now enabled this ecosystem to grow rapidly and in some ways uh surpass some of the men's ecosystems that again are are doing well top up line but they don't have the nimbleness that you see in the women's ecosystem so athletes are entertainers female athletes but tend to share more be more connected to their consumer they recognize they probably make more money off the field than on the field so there's an incentive for them to do that as well but that again creates organic uh genuine relationships that the brands want to be a part of they know that their brand has to connect to to Brit to to athletes and women's sports leagues and again athletes I think in this space are leading the way on that where are the biggest opportunities for monetization is it in women's soccer is it in women's basketball what are you saying yeah I would say I mean look at the nwsl we're talking about the World Cup right now they went from a two million dollar expansion fee a couple years ago to 53 million today 6th Street a big private Equity Firm uh just bought the rights to the the uh bay expansion team and others so you see a rapid increase in what uh you know sophisticated investors now want to buy women's sports assets for um you're seeing the same thing the WNBA raised 75 million a couple of years ago um they're you see I'd say basketball and soccer here in the U.S market growing increasingly and and you know our report recent report fanarchy 26 about a quarter of the U.S market wants soccer played soccer um so again that's a global sport but I think increasingly has an opportunity here in the US my sport hockey of course I would love to see more growth um and there's you know softball volleyball there's a lot of sports that again have been under invested haven't had the same visibility ability to say tennis or or soccer but the point of it is fans want more they want more access they want uh to consume and this isn't just female sports fans this is men and women saying give me great content but deliver it to me in a way uh that I consume today this fluid fan and they're in some ways they don't care about gender they just want really cool action with great athletes that are providing an entertaining ecosystem for them and they'll invest the fan will invest the brands will invest and now you're seeing increasingly the media side of the market say these rights are worth something so we're going to invest as well yeah nice to see those Sprites being made Angela Ruggiero Sports Innovation lab co-founder and CEO thanks so much thank you very much as the U.S continues on to the round of 16 somewhat controversial either fight for recognition has been around for decades while the current World Cup price sits at 110 million dollars this tournament a big jump from the 30 million in 2019 it's still just a quarter of the men's prize which sits at 440 million our next guest is someone who knows this fight very well let's bring in two-time FIFA Women's World Cup champion and Olympic gold medalist Randy Chastain Brandy good to have you on today um you know we've been talking so much about the business of women's soccer over the last hour or so but I let's talk about the game first because I know you have been pretty you're very supportive but you also been pretty critical of this year's uh us team and their performance um give me your thoughts around what has transpired so far this year in this world cup well I think first we all we must understand the landscape this is a tournament like no other tournament in the past it has 32 teams you know we have eight countries that have never participated in the Women's World Cup before I think to what Angela was talking about the growth of women's sports but soccer specifically as a global sport you know we we are just growing exponentially so you know in this tournament you could expect some surprises but I think what we've seen is that we have created a platform that is now showcasing some extremely phenomenal talent that we didn't have access to before and so whether that be in our team with young players like a Sophia Smith or it be in a Columbia and Linda casedo or be in a Moroccan team that just made uh The Knockout rounds or Jamaica for example these are teams that you know had not been there before so we are now to again to Angela's point we get to tell these stories we get to talk about what it is that really makes women's soccer unique and why Brands um are are and should be even more interested in women's soccer going forward you know when you when you talk about the new Talent that's been coming into the game it's so interesting to to trace that pipeline to pass World Cups to past games you know so many people grew up with that iconic moment back in 99 with you how much does that visibility matter what are you seeing when you think about the seismic shift that's happened within the game how much that has come along with the visibility of the game and more eyeballs yeah I think it's twofold I think one it's it's you know if you can see it you can be it so for the young girl who never has access to seeing anybody that looks like her is not encouraged to participate is a very it's a very tough road I would say for the players that played alongside me in 1991 we had no access to watching anybody who looked like us at all now I think we have streaming services as Angela said we can consume women's sports in a way we've never been able to do it before and I think on the other side it's just if the players have the opportunity they will show you the quality and that just also hasn't existed so again for the eight teams that have never been in the World Cup before the fact that they are now playing against the elite and Germany like almost what happened to the U.S getting knocked out in the group stage as the number two team in the world shows you that there is quality in a lot of different corners of the world so even though I'd like to say that we believe we are the leaders in women's soccer and we still are the number one team in the world and I I believe we'll showcase ourselves in a better light in this next game there is quality all over and and I think that is what's really exciting about women's soccer and while we've been talking about sort of the lack of Investments here in the U.S compared to the men's game you know the U.S still one of the leaders when it comes to the media Market you know the Investments that are coming into the game as you talk about this game being Global and having more visibility globally two billion people watching this year's Women's World Cup to what extent do you think that starts to level the playing field well it levels the playing field in just access to you know your brand getting out there you know like I'm gonna this is Shameless but I love my team and this is our Bay logo Bay FC and what we hope for this brand is that whenever you see it wherever it is you are around the world you'll understand what that culture is you'll understand the virtues and the ethos behind building a team and um what it is we not only want to achieve on the field but what it is that we feel that we can then put out into the world and that that is very critical for for us as as a team as us as a brand and I I feel that speaks to um it speaks to the consumer but it also speaks to the the the sponsorships and the media that it that are out there and again the stories and the connection and the relationships that these Brands want to have with with people and uh organizations like us because I would say that we're very unique we haven't exit nothing like this has existed before because there hasn't been space and now the space is there and we're going to very boldly bravely uh and um confidently move into those spaces Angela was talking about just to what extent social media has changed the game in terms of giving fans access directly to the game but I think I heard you say recently an interview that you're kind of glad you didn't play during those years when there was so so many other outlets um what does it mean for this generation though I mean is it ultimately a positive that there is that direct access when you think about the potential to grow this game I think the potential to grow the game is there and it is that access is phenomenal but I think it it comes with uh the need to be able to harness and um support and take care of those opportunities you can't say yes to everything uh you have to know what it is that that you're endeavoring into and so I think leadership uh is really important I think that's where our our club and the people who are in in those media spaces will help our players to navigate how to successfully um use social media for their own benefit but also for the club as a whole I think it's it's a very precarious place it could be virtuous and it can be really detrimental so we have to find that right balance just like we have to find that balance on the field we have we need this optimal arousal zone right where we're not too high Ai and we're not too low we're we're all working in concert together and then we can get some really good things done if done right and you know you were talking about Bay FC we have a tendency to talk about women's sports whether that's in in soccer or basketball to say well this is for women and for young girls but but what are you finding as the visibility expands in terms of the new fans that are coming into the game who are you seeing we're seeing everybody that's the great thing we're seeing you know obviously we have that Core group of young women who want to see people that look like themselves that's going to be inherent we have families because soccer is such a family sport it's something we grow up with our sons and our daughters go for me it's my you know now it's my granddaughter's go um I think we're also seeing people who haven't been invited to sports before and you know feel a little you know awkward maybe soccer is a perfect entry point because we can talk about analytics we can talk about you know how data shapes the decisions that are happening and and how you know that that appeals to a group that hasn't been invited before so I think there's a uh there's a lot of populations out there who will consume women's soccer absolutely differently and also I think we have a very unique situation we are nine counties connected by nine Bridges and we've got 150 languages and we have a we have a big job to embrace all those people and bring them together and say you matter you matter to our team your where you come from will influence how we deliver um what it is that we do best and we want to be aware of those things so I think we are a perfect market for um other um organizations Brands to get involved with because we really speak to the people we we have such a diverse population that uh we we can't go wrong uh finally Brandi there's a lot of nervous Team USA fans going into this weekend and then match against Sweden number one key to the match in your prediction um oh number one key um I'm going to say we have to stay together that seems so simple but I think you know in these big pressure moments we have to be able to rely on one another we have to we have to do our job but we have to rely on one another um secondary to that in my opinion is we have to Value the ball more we have to take care of it we have to um take the opportunities maybe with a a heightened elevated awareness that we might not get another chance so we have to be good in the moment and we have to bring that that that USA spirit and that Gusto and we have to suffocate the opponent and you know that in that way it's not always pretty but it's kind of our mentality and we have we didn't see that in the last game so I look forward to that the prediction uh it's a 5149 I I really think this is going to be one of the better games of the tournament and I'm hoping that the 51 is in the US's favor a lot of people hoping that as well uh Brandi Chastain it is so great to talk to you today two-time FIFA Women's World Cup champion and of course two-time Olympic gold medalists thank you oh we've got much more World Cup action ahead after this short break we'll be right back [Music] [Music] foreign [Music] [Music] thank you [Music] thank you [Music] thank you [Music] welcome back to Yahoo finance's Women's World Cup special beyond the game we've been talking so much about the business of women's soccer but a lot of questions out there going into this weekend's knockout rounds with the US early morning match against Sweden on Sunday Danny Romero joins us now with some of those questions from our viewers Danny Akiko a lot of our fans are getting into the spirit but one of those questions they have in mind is how do teams qualify for The Knockout rounds well it all depends on the results of each group game every team earns a certain amount of points three points for a win zero for a loss and one point for a tie game every team will play three group matches the two teams with the most points in each group will move on to the knockout round if two or more teams are tied or have the same number of points then they will go into a series of tie Breakers the USA team currently has five points and is in second place in its group bracket we'll have to wait and see what the results will be at this weekend's game so again set those alarms get into the team spirit Sunday at 5 a.m Akiko okay I've certainly got my alarm set by the way 2 A.M here on the West Coast 5 a.m on the East Coast Danny thanks so much for that that does it for our Women's World Cup special beyond the game I'm Akito Fujita thanks so much for watching [Music] [Music] thank you [Music] [Music] [Music] [Music] foreign [Music] [Music] [Music] [Music] thank you [Music] foreign [Music]

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Id: MkwdM8L7L5A

Length: 215min 52sec (12952 seconds)

Published: Fri Aug 04 2023