Stocks rise with Goldman out, Tesla and Netflix ahead: Stock market news today |July 19, 2023

[Music] thank you good morning it is Wednesday July 19th here in New York City this is Yahoo finance live I'm Julie Hyman that's cyan King Hall Brad Smith is off today here are three things you need to know this morning Goldman Sachs the last big Bank out of the gate and the results not great profit falling 58 from a year ago missing analyst estimates earnings taking a big hit from the bank's ongoing exit from consumer lending Goldman wrote down 504 million dollars of Goodwill related to its consumer platforms unit that unit including specialty lender greensky which Goldman just bought last year but it's in the process of reviewing bids from potential buyers for it the results are likely to intensify the scrutiny of CEO David Solomon who is wrestling from everything for partner unrest to concerns about strategy troubled used car retailer carvana reached a deal with bondholders in an effort to lower interest payments and put its business back on more solid footing the agreement reduces the company's total outstanding debt by over 1.2 two billion dollars it also eliminates more than 83 percent of carvana's 2025 and 2027 unsecured note maturities the company thrived during the pandemic when demand for cars surge but a lot of debt a big acquisition and falling used car prices sent the stock and the company Down a Bumpy path the company's Chief Financial Officer Mark Jenkins says this transaction will help quote Drive significant profitability and help carvana return to growth Shares are storing on the news and Netflix and Tesla are the first of the tech Giants fueling this year's Market rally to report second quarter results that comes after the close today Tesla Shares are up nearly 130 percent this year as investors have celebrated everything from the company's AI related hype to the rapid expansion of its supercharger Network the primary focus for Tesla will be on Gross margins as investors weigh how recent price cuts are affecting profits as for Netflix shares there just above 50 this year investors hoping they see benefits from the password sharing Crackdown and keeping a close eye for commentary from company Executives on how any Fallout for work stoppages in Hollywood could affect the company now Goldman Sachs is the last of the big Banks out the gate results indeed not great profit at the bank fell 58 from a year ago coming in at 308 uh per share as Investment Banking and trading fell the results are likely to intensify the scrutiny of CEO David Solomon who is wrestling with everything from partner unrest to concerns about strategy joining us now for a deeper dive is Devin Ryan of jmp's Securities analyst and Bill Cohen Puck news founding Partners so Devin and Bill thank you so much for joining us Devin I want to start with you with this analysis we knew there was weakness coming into this uh was there anything that stood out to you about where in particular that Goldman went wrong uh nothing worse to that I mean listen we knew this was going to be a tough quarter and it was going to be messy and I think that's exactly what it was um you know about five percent uh return on Equity uh drag came from all these kind of unusual items the the marks on green sky and Marcus and some other marks in their Equity book and asset management and so those are items that um you know hopefully we don't see every quarter and then you know really the story here is going to be one do the capital markets recover and we can talk about that but we are starting to see some green shoots so I think that's where the conversation is going to go as the day goes on here but you know it was a messy quarter directionally as expected but um you know they they have to I think own some of that and and so here we are here we are indeed hey Bill it's good to see you um it doesn't Devin doesn't sound that negative here I know there was a lot of pressure and discussion over David Solomon's leadership going into this as somebody who has tracked this company for a long time do you think he is in jeopardy well Julie uh it's nice to see you too um look when it comes to Goldman Sachs where there's smoke there's fire there's been a lot of dissatisfaction during the course of this year with David's leadership I think it's kind of crunch time I think this was sort of a a kitchen sink kind of corner where they took their right down on green Sky they took their right down on their commercial real estate holdings they've obviously dinged their net income significantly uh you know their revenues were down but their expenses were not down nearly as much so if David hasn't righted this ship uh in the third and fourth quarters you know everything that I'm hearing is is his tenure could be in Jeopardy but at the moment I think he's okay uh but he's got to get this thing back into a much more goldman-like framework uh in the next two quarters Devin I gotta ask you um you know you did give the caveat about Capital markets recovering and when do they recover but with Goldman in particular has it lost its Edge given these results or do we think this is kind of a one-off oh you actually peel back the onion and their market share is as good as it's ever been they're actually still gaining share virtually across every business and they're building um in in more stable businesses as well asset and wealth management they're still seeing nice growth there their financing revenues are growing which are your stickier um this is really a function of the capital markets have been shut for the last 18 months and Goldman is the most levered to that theme you know people quickly forget how good 2021 was and you know Goldman significantly outperformed and everything looked great we've been the opposite side of that trade for the last 18 months to give you just a couple stats you know Equity issuance uh if you just look at a long-term trend line Equity underwriting revenues uh would have to increase by about 60 to 70 percent just to get back to a long-term historical trend line looking at 30 years of data for m a advisory uh the long-term trend line of announcements relative to the first half of this year would have to increase by over 50 percent so those are two big businesses for Goldman it just gives you a little bit of an order of magnitude of how tough they've been but if those recover I think that takes care of a lot of this I'll call it noise on the outside you know it's just been a really tough backdrop and Goldman is entirely levered to you know essentially Investment Banking and in capital markets it is entirely levered to that but Devin it tried to be levered to the consumer as well and that seems to have been kind of a spectacular failure no yeah I mean I think it's definitely been a failure um it's a long conversation I think around what happened there uh I think the market mood changed you know consumer is a business that you know they probably would have had to build out for 10 years to get to the scale that would be relevant to Goldman and that's the journey they were embarking on when interest rates went from zero to five percent and there was no appetite in the market for companies whether it's within Goldman Sachs or a standalone tech company or consumer-facing company to lose money uh you know when that appetite changes you know you have to make decisions and so uh you know that was a big driver of kind of pairing it back and this was going to be a really long build in the market uh I think an investors lost appetite for that and and you know clearly I think some internal friction as well because Capital markets were performing uh so well and this was kind of dragging down overall results uh it's a small fraction of what Goldman Sachs is and would have been for a number of years so we're not losing sleepover you just need the capital markets to recover here and that'll take care of a lot of the issues uh bill I want to ask you what would it take to restore confidence in Solomon as a leader well I think you know Devin Devin is absolutely right I mean the capital markets have to improve uh Goldman is highly levered toward uh uh Investment Banking that market has been in the doldrums for the last year or so um you know he's trying to clean up the commercial uh the consumer banking uh foray I mean look I can't blame him for trying that uh the Goldman is sort of in a box with the Federal Reserve they can't really do what they need to do strategically because the Federal Reserve won't allow that kind of merger they really need you know a much bigger deposit base they need a bigger commercial uh balance sheet they need a lot of things they can't get just through organic growth so David was trying something uh you know he's gotten a lot of flack for his DJing and his use of private jets and sort of extracurricular activities that's probably unfair the stock is held up okay but I see here's the thing I think what we're seeing right now is a huge bifurcation in this market where you see you know know people with the big balance sheets JPMorgan Chase and the deposit based Bank of America you know throwing up pretty amazing earnings under the circumstances JP Morgan's net income was 14 billion I mean gold Goldman's was just a fraction of that I mean what you're seeing is this uh bifurcation where these companies that have a huge deposit base where they're paying nothing for those deposits can lend that money out of huge spreads with the rising interest rates and that's just gushing to the bottom line Goldman doesn't really have anything like that and even in markets they're paying up for those deposits much more than JPMorgan Chase or B of A is so uh you know they're in a bit of a box but David's got a couple more quarters to figure this out if he doesn't I think the you know the old guard is going to make a move um and Bill sort of On a related note like I remember when Goldman was the killer right um it was just sort of the bank to be feared and I guess that's a legacy of my coverage of them in particular during and after the financial crisis did they ever reattane that I mean Devin Devin is right I mean 2021 was an amazing year I mean more profits than you know uh you know you need to sort of look over two to three year period and then aggregate the profits I mean they sort of but brought forward a bunch of profits that they've been missing out on lately but in 2021 I think that you know Goldman used to be able Julie you're absolutely right I mean obviously I wrote a book about it they figured things out they've always been the best at figuring things out no matter the market conditions and I and I'm wondering if they are figuring this out at the moment that it seems to have lost its Swagger it's luster it's I mean still everybody wants to work there harder to get a job at Goldman Sachs than it is to get into Harvard but I mean still they're not as feared like they used to be uh you know people are fearing JP Morgan Chase at the moment they're they're one they're fearing what James Gorman has done at Morgan Stanley but if Goldman I don't know and it's not the Goldman it used to be can it regain itself can it regain it 2021 Swagger my bet is it can but you know time is running out on David really interesting perspective both of you thank you so much it's very helpful Devin Ryan JMP Securities analyst and Bill Cohen Puck news founding partner thank you thank you well Goldman Sachs week results were largely an outlier among the big Banks earnings in the financial sector have mostly been better than feared adding fuel to Growing sentiment that a recession may come later than economists had expected leaders of the biggest financial institutions in America are calling out a resilient consumer and economy in their earnings reports and commentary Yahoo finance this executive editor Brian sasi spoke with Bank of America chairman and CEO Brian Moynihan who is dialing back his expectations for a mild recession this year people are working and they're getting paid more and they're spending it's going to be hard to have a tough you know U.S economy because of the amount that's driven by that but I'm not surprised by the resilience of the consumer because when we looked at our customer data you can go back and track us talking quarter after quarter our customers still have multiples in their accounts those same customers over here in early 2020 today have multiples in their accounts than they did back then especially in the lower balance accounts and that's because they've spent some of the stimulus but they've been earning money and they've been managing in finance as well that doesn't mean certain ones are having difficulties and layoffs that are happening but in a broad context across 60 million customers across four trillion dollars of spending it's a pretty resilient group well that sounds like a Rosy picture while the ruining season has just begun it does seem like the Bellwether this quarter is shaping up to be the financials despite the sector's earlier chaos this year for more we're joined by Daryl Cronk Wells Fargo CIO of wealth and investment management and indeed it has been really interesting how well the financials let's leave Goldman aside for a moment but how well they've done and can we sort of extrapolate that out to the rest of earnings season at all I'd be careful probably about extrapolating it out I think financials have exceeded what I've had my eyes very closely on is both what Brian just referenced which is the consumer and the trends so the consumer has been resilient the consumer always remains resilient into a slowing economy in fact consumers often the last one to kind of give up the ghost if you will they will spend right up to the edge of potentially a recession and jump right over the cliff into it we're starting to see some of that in the numbers so if you go back to the pandemic huge amounts of transfer payments to Consumers who built Big savings balances they've ground through those savings balances or late last year earlier this year we saw big increases in credit card spending and now just in the last month or two credit card spending literally dried up like it went just dead silent which is often a very late cycle indicator because it means the consumer is kind of hitting the wall right if they don't have the savings anymore to spend and they can't use the plastic right then they stop spending at some point so I think it's a a really important Trend to watch we're seeing in just this quarter's earnings we're seeing credit card delinquencies rise from a very low level but rise nonetheless we're seeing Auto delinquencies rise from a low level but rise nonetheless so there are some Trends there that that bear watching I think directionally even though they're not at the normal magnitude you would expect in a late cycle event so I feel like that's kind of the glass empty or glass half empty side of the equation it could be the could it be though the glass half full side of the equation when you think about just the strength of the labor market backing up that spending that we're saying sure there's a little bit of tapering we have are seeing but again it's not the magnitude that you would expect in terms of like what we're seeing in the in the financials and how these banks are holding up we're also not seeing massive outflows what do you make of that yeah I think that's right Diana and and I think we've got this air pocket of Labor both firms have been resilient and not wanting to let go of their High valued employees but coming out of the pandemic we had 10 million job openings and 6 million unemployed workers right we've never seen an environment like that where there was that big of a mismatch so it's not surprising that labor has remained sticky now I think what you have to parse there is is it labor just being sticky and not rolling over or is it that companies are robustly out there hiring today we don't see the robust hiring side call it the demand side of the equation in fact what you really need for that to kick in is you need earnings growth and you need top line revenue growth right so we're going to be the second quarter in a row of negative earnings Revenue growth third quarter of negative earnings growth and the sixth quarter in a row where we've seen margins decline so if that environment happens and demand comes down and your single biggest cost on your income statement is labor you would expect that if if it's typical to a normal cycle in the coming months those layoffs would start to pick up a little bit but you're right the resiliency has been has been really strong but is it typical to normal so God the thing that kind of comes around to me as we go through each earnings season you know we kept talking about normalization coming out of the pandemic and then the conversation goes away but really we're still there I mean when you talk about the credit card delinquencies for example they're ticking up but they're still below where they were in 2019 which is remarkable to me um and it feels like there are all still these tension points in the economy that are not normal whatever normal even means anymore that's true right so so right Julie we're still what is that process still like and how difficult does it make your job and our job to try and figure out what's going to happen very difficult right because if you looked at a lot of the historical indicators and the fundamental indicators you would basically say the economy is very late cycle and probably heading to recession which is why you had 70 percent of economists claiming coming into this year that the economy was going to go into a recession that intense bed of liquidity that we just got talked got done talking about probably extended the duration of what how a number of those normally roll over and act but at the end of the day the the consumer is the engine of the economy right and and labor is what will matter there what's interesting is so we all know the feds started hiking interest rates in March of 2022 right uh very first hike 25 basis points the unemployment rate in March of 2022 was 3.6 percent the unemployment rate today is 3.6 percent right it hasn't moved notwithstanding the FED has increased interest rates 500 basis points right so does that mean labor is different this time or this time is different maybe I I where you see strength in the economy I think the important Point here is you have to parse is it Supply push or demand pull because they're two different things if it's so think about we've seen strength and labor we've seen strength in housing we've seen strength in travel and all those type of things so take housing for example people aren't lining up to buy two and three new homes right that's not happening today right why is housing strong it's strong because there's such a supply dirt right there's only been you know one percent of homes turn over this year right same thing with labor there's a dearth of Labor right it's not that companies are running out there to hire a whole bunch of new people same thing in travel right Airlines have done what cut the number of flights so if you want to go to Europe right this summer you're going to pay up because there aren't receipts in that case it feels like there's quite a lot of demand for travel though too there is there's pent-up demand from the pandemic right if people just wanted to get back out there and do their thing again but it's kind of colliding with this reduction in supply of what's available for seats if you go try to find a summer seat on an airline uh this summer best of luck to you right wow okay I have one more flight to get to yeah uh we want to Pivot and investors cheered last month's cooling U.S inflation data as an encouraging sign for the economy's recovery and a hint that we may be nearing the end of the federal reserve's rate increase cycle but our guest says inflation could actually get worse before the year is done and markets may be in for a shock we want to welcome back in Wells Fargo Daryl Cronk with us now so let's do a deeper dive of this you kind of teased us out we have some notes that you uh shared with us um we know inflation cooled but you your take on this is not so fast basically in terms of how we interpret this yeah if you look at past inflation Cycles right and I think it's true of this one too is you typically have a quick rise in inflation we saw that last year peaked at nine percent on the CPI in June of last year a quick fall in inflation and then often it bumps a lot along in a kind of a consolidation phase and then it rises again that's that's about how all of them have happened what's interesting is okay you start breaking down what are the components that drive inflation right so we saw inflation drop nicely last week and CPI came down from four percent of the headline to three percent right if you look at the back half of the year you say okay is that Trend going to continue which I think markets have bought into right this Immaculate disinflation and we're just going to go down to the feds two percent number and stay but think about it this way um just in the year-over-year comparisons which is how we measure inflation the rate of change you need oil prices to be at seventy dollars to keep inflation flat oil today is at 80 right so it needs to come down gasoline Futures and prices are up 20 percent in the last 60 days right so you think about inflation at the headline number energy and food right and then I get into the core number which is still sitting at 4.8 way above where the FED wants to be right what are the drivers of core shelter housing right we just talked about housing and the strength there so you need the housing market to kind of roll over you need wages to roll over and labor to roll over which so far has been sticky and hasn't happened yet so I think the risk here and again it's it's a risk is that in the back half of the Year inflation could actually tick higher it's not going back to nine percent but it could go from three percent back closer to four percent which then has the FED in a very different position the FED is not done in July then and needs to do more work later this year candidly even if it doesn't tick back up even if it stays around where it is right now we've talked to a number of investors who have suggested the market is wildly over optimistic and thinking the FED is going to be cutting next year because of a drop in inflation it sounds like you're in that camp as well yeah I don't I think it's tough to make the case for big massive Cuts you reverse engineer that argument and say why would the FED aggressively cut when they've been so diligent and so resilient on the inflation conversation well if the recession arrives and correlation goes way down yeah I mean basically the FED would have to do quick and emergency Cuts if the economy does the Thelma and Louise right off the cliff none of us want that and we're not predicting that but I'm just saying that's the recipe for why the FED comes back aggressively and says wow we've got a reverse course and and and add stimulus back into the economy right now they're talking about still tightening policy not easing policy and the market has perennially got this wrong the market has been pricing in Cuts pricing and cuts and keep pushing pushing pushing that out on the calendar now it's pushed out if you look at fed funds features out into kind of mid-2024. so are you so obviously the the vast majority expect next week that we're going to see a hike but many um industry experts that we talk to think is kind of going to be one more and done you're not in that camp I'm guessing yeah I think it's more that um to be honest Dan because again the data just doesn't suggest that that's going to be the case and what's interesting and this will be an interesting case in behavioral Finance or psychology that will get studied at business schools for years right which is the Fed has never wavered on their message right for the past 12 to 18 months Powell has been resilient in saying look we are going to see this through until we get to two to two and a half percent even if you assume inflation doesn't tick back higher like we just talked about three to two that last mile traveled is a really hard mile you've got a you've got a Titan policy aggressively even from here to get us to two in our opinions unless you drop into a recession which would be disinflationary or deflationary so we we think the FED probably does have more work to do that's not priced into the market today right the market has to reset that and that's going to probably create some volatility in the back half of the year so here at mid-year we'd kind of fade this big move in equities the 16 17 percent you know it's been all on multiple expansion nothing on earnings growth which has been well documented so you know what multiple do you want to pay for the next dollar of earnings do you want to pay 21 22 23 times in a slowing growth environment uh and an environment where policy is still tightening I would be careful there so it sounds so you're saying you think that stocks are going to come to that realization what's going to cause them to come to that realization right so what would change the the momentum is clearly the upside it is the pain trade is to the other yeah what's going to change that so what we'll change that will be inflation and fed expectations but more importantly everybody talks about what the fed's going to do with fed funds and you know there's been some out there saying the FED will need to take this to six percent or possibly even higher to ultimately arrest inflation what's interesting if you go back and watch Market action over the last 12 18 24 months every time the 10-year treasury the long side of the curve has gotten above four percent it's gotten really hard on equities we just experienced that uh earlier this year we experienced it in October of last year when you drop below four it's kind of party on right and everybody just believes that you know that low interest rate environment on the long side of the curve which is pegged to growth and inflation tells you that you know the FED has done its job and they've won the war um and and we're just not so convinced and history would be on our side of that which is it's not just easy to arrest inflation once once it goes higher right like I said it goes up quickly comes down quickly and then often has Resurgence periods of time so it if it were that easy we'd have Heroes for fat past Fed chair people right who have done this miraculously when the only one we probably lift up is Paul Walker who took interest rates all the way to 20 right to finally arrest inflation yeah I think people forget how painful yes it was to stop inflation then Daryl thank you so much really interesting Daryl cronkers Wells Fargo CIO of wealth and Investment Management thank you let us turn to carvana Shares are shifting into high gear this morning after the company announced a deal that would reduce its debt by more than 1.2 billion dollars yeah I can Finance is prosecutor money and joins us for the details and this is a bit of a complicated deal here with multiple parts so talk us through it he actually a very complicated Lifeline for the company I would say uh spreading an agreement with their bondholders eliminating around 83 of its debt due in 2025 and 2027 meaning its debt low it'll actually decrease by 1.2 billion and its interest expense will go down by 430 million over the next year so a lot going on there kind of huge for a company that was bleeding cash not too long ago for the bondholders the new Northwest secured higher up the debt food chain secured by assets and carvana and pedesta it's online auction business uh separately the companies filed a secondary offering to sell 35 million shares that are on raising around 350 million dollars so you know another move there and also kind of that that had a little bit of a a dollar pressure on the stock but not much and finally you know Carbon announcing Q2 Financial results vehicle unit sales missed estimates but revenue and profits topped Wall Street expectations well and I want to pick up on that process because you know there's carvana the fundamental business and then there's carvana the debt story right so today's more about the debt story but dig into those actual results a little bit more and you know we know that used car pricing has been moderating right what does the demand side look like what's the what does the prospect look like for a carvana you know I think one of the key kind of metrics that caught my my attention was you know so they didn't miss on the vehicle sales unit uh sales uh total but they actually increased their profit per sale by almost double to over six thousand dollars per car on average so that's really strong for them I guess the keys is can they bring down some of those operational costs it seems like they're selling cars once again at a profit so it seems like the demand is there pricing is pretty uh competitive with other offerings so I think that they're in the in a good driver's position here driver's seat here the question is can they bring down a lot of those uh structural debt costs and it sounds like they are doing that and I think for the bonholes they're they're happy to to take on this deal to get better uh a better situation from like a uh a credit point of view from a uh kind of a uh excuse me the asset point of view so I think it's a good win for both sides but I think you're right Julie it's a question can they again write the ship and become profitable at some point yeah uh we'll see and we'll see if they keep getting rewarded even when they're not Prof thank you so much appreciate it we got the opening belt coming up in a sec you're watching Yahoo finance will the S P 500 be higher or lower at the end of earnings season oh uh I wish I knew the answer to that definitively I guess I would say right now the momentum is obviously moving in the higher Direction earnings expectations negative seven percent growth year over year so the bar is still pretty low easy to get over it I guess if I have to choose one I'd say higher [Music] thank you [Music] [Music] [Music] [Music] [Music] [Music] [Music] foreign [Music] [Music] [Music] [Music] thank you [Music] foreign [Music] all right we just had the opening belt on Wall Street we want to do a quick check of the Market's early action this quick check sponsored by tastytrade we're looking at all three of the major index indices in the green this morning Dow better by nearly half a percent the S P's up I'm just shy of four tenths of a percent NASDAQ matching that on a percent basis let's get over to Julie Hyman at the Wi-Fi interactive no we've been talking about the momentum trade right the momentum that's behind stocks ever since earnings season began so let's take a look at the five day charts here and we have seen this surge in stocks two and a quarter percent for the Dow Jones Industrial Average which again just reflects really what we've seen from the financials by and large feeding estimates the s p over that period of time up about the same and the NASDAQ let's take a look they're up about three and a half percent so it's not been just the banks although there are some financials in the NASDAQ it has been this broader rally that we have been seeing so what does that rally look like in today's session if you take a look at the sectors here all of them are in the green here being led actually are we looking still at the yeah we're looking intraday real estate up one and a quarter percent interesting what we're seeing there Healthcare up by nearly one percent utilities higher um Industrials and materials lagging a little bit here in the financials up just about a quarter of one percent as we look what's going on I mentioned the NASDAQ leadership over the past five days and of course over the year to date as well so if we look at the NASDAQ 100 and the movers here we have seen the surge in some stocks in particular Tesla which reports after the close up two-thirds of one percent today up eight and a half percent going into that earnings report Netflix over here let's take a look at that up seven percent going into its earnings reports so that's something important to note and I want to take note of Microsoft as well now Microsoft getting a new deadline date to close on its acquisition of Activision to October 18th so push back uh several months here and at the same time the stock trading at a record just barely today but trading the record yesterday unveiled the pricing for its new AI powered Bing and that helped push those shares higher so that was an interesting thing to watch lastly just a quick check on the banks once again today as of course we are watching those reaction to Goldman earnings there's the five days so let's take it to today we are seeing just about a quarter percent pullback for Goldman Sachs as it reports its numbers and they are not quite as strong as some of the other banks that we have heard from yes speaking of banks let's get into some other banking stocks moving this morning U.S Bank Corps released its Q2 results today beating Street expectation but the stock falling after posting and narrow net interest margin due to higher deposit costs over debt ceiling concerns First Horizon National missed the street expectations on revenue and adjusted EPS but the bank released a profit posted a profit for a second quarter the increase from the year prior first Horizon said it grew the period it ended deposits by four billion dollars on a quarterly basis you're seeing the stock pop right now citizens Financial Group reported a profit that beat the street expectations now the bank lender saw a boost in net interest income that's a key line item analysts have been watching for thanks to high interest rates but the company expects net interest income to fall in Q3 and M T Bank beat Wall Street estimates the bank's total deposits Rose to 162.1 billion from 159 just 159.1 billion at the end of the first quarter so you're seeing a pop there because we know the deposit outfields I know there's a lot oh my God a lot of banks in there just now so we know that one of the lion items that analysts have been watching for is deposit outflows we've seen a little bit in some of these earnings reports uh you know but not worrisome when you think about some of them yeah and our alley Canal is with us again today to talk us through some of these movers so Elliot has been interesting here that so it feels like there were two really areas of concern for the Regionals are they going to hold on to the deposits and how much is it going to cost them to do so and by and large I mean at least the share price reactions have been positive yeah and I think a lot of focus were it was on the Banks's quarter given what we saw in the spring with the collapse of SBB a particular focus on the Regionals and by and large we see results that have come in mixed right you mentioned those higher interest rates helping to boost some of that profit there I think the key to the banks that have done well are the ones that have Diversified businesses because we're seeing those that heavily rely on Deal making heavily rely on investment banking case in point Goldman Sachs they have struggled a bit I'm curious so looking ahead to the quarter to come Q3 Q4 how will the pullback in consumer spending possible credit tightening a potential recession in the back half of this year how will that impact the banks I think there was so much emphasis on this quarter that you know better than feared yeah so far so good but I wonder what this means for the back half of the year yeah well we'll certainly be watching that I mean go ahead I was just going to say to that point we have seen some of the banks say the net interest income is going to not be as stronger the momentum will not be on their side in the second half of the year it seems like at least today for these regionals that investors are saying okay it was worth it to spend to keep those deposits yeah in many of these cases if you look at citizens as just one example The Wall Street Journal pointing out the deposit costs in the second quarter were up 40 basis points which you know is an increase however it helped them hang on to deposits and in fact increase their deposits so it seems like that's sort of the calculation here yeah indeed all right let's switch gears uh and look at another stock uh earnings and focus for Halliburton shares in Focus this morning after releasing its latest quarterly report card now it was a mix back for Halliburton earnings beat at 610 million 68 cents to share of 77 cents a share on an adjusted basis Revenue came up short at just under 5.8 billion so you're seeing the stock get dinged as a result of that miss their stock down a little over eight percent in terms of Halliburton so you know they have some challenges in front of them but I mean one thing that could be helpful in the long run is the price of oil yeah price of oil which is actually crude right now up on the month up about six percent so demand seems to be improving on that side one thing that stood out to me from this release was that North America Revenue fell sequentially two percent quarter over quarter to 2.7 billion while International Revenue actually increased seven percent led by improvements in Latin America Argentina and Max Mexico so more drilling overseas than in the U.S which makes sense given the forecast from OPEC you know which they predicted that demand would still be there and and Halliburton like the you know as an oil services company like the oil Majors is continuing to try to support its stock by returning cash to shareholders in its case it bought back 248 million dollars of stock during the quarter it also highlighted its free cash flow in the quarter of 798 million dollars so this is you know you could argue that this creates a floor under many of both the oil exploration production and oil services stocks that they continue to pay out to their shareholders finally a stock that's trending this morning elevance Health shares there are rising after the American Health Care company raised its full year guidance above what Wall Street had estimated quarterly earnings also beating on lower than expected medical costs at its health insurance unit and the stock is up by some seven percent today we have been watching the medical cost ratio right which ticked up at UnitedHealth right bigger competitor but yeah and look elephants also increased the cost of or the rate of Premium so it's you know that pricing helping elevance I mean this we know it's the artist formerly known as Anthem so yeah so we know that they just have that name strength there uh you know they have a strong position within that market and then they also saw membership growth in Medicaid Medicare and higher uh Pharmacy Revenue yeah that was definitely accretive and the street it's pretty positive right now uh there's some commentary from JP Morgan saying the beat and raise reflects strong fundamental performance and should help alleviate recent cost Trend and utilization concerns I think investors will be focused on those cost Trends and back half of the Year RBC Capital markets also called the results solid both of those banks have overrate ratings on them right now but I do think healthcare is having a bit of a moment right now right I mean between pickleball leading to more insurance claims we have those zempic craze we have the FDA approving the first over-the-counter birth control drug I mean there's a lot happening in this space right now and Julia as you were just saying the sector is up about one percent today so yeah it is although elephants has not done well this year it's down about seven percent or so I believe for the year to date so typically when you have people worried about the economy they go into a place like health insurance so maybe people aren't that worried right now we're not seeing that kind of surge into those kinds of stuff yeah we'll see what happens to it through the balance of the Year alley Canal thank you so much all right all your markets action ahead stay tuned you're watching Yahoo finance what sector is going to perform the best during earnings what sector is going to perform the best I would say probably not Tech this earnings season partially because it's run up already so far and the guidance needs to justify the valuations financials have done really well we may have already seen the best sector during earnings season I think energy actually has a good chance to do pretty well as as well [Music] thank you [Music] [Music] foreign [Music] [Music] [Music] [Music] foreign [Music] foreign [Music] thank you [Music] I always tell people that they should be maxing out their 401ks and if you can't Max it out start somewhere it doesn't matter if you start small and then you up it every single year even one percent [Music] there's no question that the current economic environment we're in with inflation running as hot as it's been for the last two years has caused people to be in more of a pinch than maybe they were before [Music] two ways to really build significant wealth one is through real estate great investment you get some tax advantages stocks are the other way for most people that's going to be the most viable way first you've got to have savings second thing you want to do is really maximize your employer plan you want to make sure you're getting the full match before you do anything else [Music] Kathy Woods Arc investment funds discarding more shares of Tesla and coinbase but still scooping up shares of twilio Yahoo finance is Jared blickery joins us now with the details Jared let's take a look at what she's selling here now by the way Kathy Woods operates some very transparent funds in terms of disclosing on a daily basis what she's buying and selling but the reason we don't know that much is a black box but here's what we do know uh coinbase there's been more selling overnight last Friday all of our funds put together sold about 50 million dollars worth well another 26.3 million dollars yesterday spread among her fintech Innovation Fung fund the flagship Arc Innovation ETF that's a-r-k uh investors know that and the Next Generation ETF as well now she's also selling Tesla Tesla 13 1.1 million dollars worth that is over her Innovation ETF and the Next Generation internet ETF as well but let's take a look at some of the charts here and just see what's going on I told you we don't know exactly why she might be selling why she sold before she said sometimes the price goes far enough fast enough that well she wants to take some of those profits sometimes she only wants she can only allocate a certain amount to any of these funds and so by her Disclosure document she has to sell a little if there's in other words if it becomes too concentrated but here's coinbase you can see coinbase also up a significant amount this is 212 percent year-to-date and what she's selling or excuse me what she's buying here is actually meta now if you take a look at this chart this is a hundred sixty percent year-to-date far and above uh what these other two are doing but she's adding to this position a really interesting chart for me on meta I haven't looked at this in a few weeks but this is almost a perfect from the lower left to the upper right chart here with very low volatility absent these few would look like a earnings announcement days in there so let's take a look now at the performance of her basket of funds these are all of her ETFs have eight of them year to date and the number one not surprisingly is uh centered around Tech in the U.S here's a year-to-date chart this is the next Generation internet ETF really took off in June Moon along with a lot of other things here that's when it broke through these highs that we got earlier in the year so that's up 76 percent the financial the fintech ETF also has a similar chart up just a little bit less and then you take a look at the Innovation fund the flagship fund similar story there too as I've been noting June was kind of a Bellwether uh event there was a Bellwether event at the beginning of the month that was non-farm payrolls changed the characteristic of the rally where we saw a lot of participation uh besides the mega caps that we'd seen so far we've seen a lot of other things get sucked up into the trade into this bullishness and arguably Kathy Woods funds are On The Fringe they're On The Fringe of these Investments a lot of these names were heavily shorted and it's because a lot of these names were just so battered and bruised last year that they have been the most ripe for short covering rallies so I think there's a little bit of all of that in what we're seeing here don't take too much in the daily sellings and buyings of these Innovation funds but you take a look at the net performance is undeniable that this is a bullish rally that we're in that is swept up finally The Fringe elements and that's really come to light over the last four to six weeks and just a quick note though when you look at RK if you can call it up again and do a five-year chart oh you're gonna you want the good one here let's relative performance right yeah still way down there that probably the lower the lowest decile and that's what I'm talking about these stocks that were beaten down the most they're going to have the biggest flashiest rallies but they're still if a stock is down 90 guess what you got to climb up about 900 to get your money back so it doesn't exactly work out sometimes the way investors hope yeah it's really fascinating because investors stuck with her on the way down but there's some reports now that she has seen some outflows even as the performance has well that's part for the course retail tends to get it wrong it's unfortunate but it's a maximum retail tends to get it wrong well hopefully they won't always all right not always there's always the future to hope for right yes okay well investors are eating up Chipotle's plan to expansion into the Middle East the Fast Cash oil chain has signed its first ever franchise deal to sell its burritos in the region as it looks to grow beyond the U.S Canada and Europe Peter Soleil btig managing director and restaurant analyst is joining us now Peter this deal caught our eye that chipotle is planning to expand there um how big a growth opportunity do you think that this is yeah great so thanks for having me on so look I I think this is a a great first move to expand in the Middle East uh for Chipotle uh kind of their first major deal in um going International look they've got over 3 000 restaurants here in the U.S there's really no reason uh based on what we've seen from other restaurant operators while an international markets in total can't be the same size as the domestic business I think they have aspirations in the US to get to 7 000 units uh my sense is the international over time many many years out could be just as large as the domestic business so think in total I would think you know you're probably 14 15 000 units in total if they eventually get to the the uh their aspirational goal of getting to around seven thousand units here in the U.S and uh Peter uh what are you expecting for Chipotle heading into its earnings I know it's they're out next week I believe it's next week uh what are you looking for from Chipotle look I I think we're we're looking for continued momentum especially on the on the traffic side if you had some positive traffic last quarter and that's what you saw really drive this stock materially higher I think the unit development continues to be solid in that 250 260 units a year uh my sense is that most the development that they're going to have this year is going to come from the Chipotles which are higher volume higher margin locations what I think investors should really start to focus their attention on uh really is the Restaurant level margins here for Chipotle uh we believe that we're starting to see some moderation in commodity prices uh and I think Chipotle should start to see that on the margins with margins outperforming especially if they have some positive traffic that they can get some leverage on so we're seeing some improvements on the commodity side we're also seeing a lot of improvements on labor availability and retention which I think is also another Hidden Gem that can really drive the margins higher for Chipotle um Peter speaking of those March and so and speaking of high volume there's also a report in the Washington excuse me in the Wall Street Journal that chipotle is also refocusing its attention on smaller towns right lower size markets and that would imply maybe they're not going to get that same traffic there do you think that's a good strategy yeah look I think most of their development is coming with chipotleans which are going into more existing markets so they're dipping their toe into some of these smaller markets we've heard that from several other operators as well uh look if you want to grow and you you want to be a national brand you got to go into a lot of these smaller markets um I think they're going to cherry pick some of the best locations but in total I do think they're they're the majority of their restaurant development is going to be in larger markets with Chipotles that can sustain you know higher volume so I I don't see this as a risk I see this as just another um uh length of the world strategy going forward Peter let's pivot to Pizza you're a fan of dpz uh and you set a price Target on it for 465. what's your case for this yeah so uh we raised our price Target this morning we raised our estimates we're about a dollar above consensus estimates for 2024. um we believe that same store sales can accelerate into the mid single digit range on the heels of the ubereats partnership uh that they that they just announced and will launch uh later this year uh again look I'm missed single digit comp benefit um and I think in in this environment we'll drive a lot of their delivery sales in addition we're also seeing like we just mentioned we're seeing Commodities coming in primarily cheese cheese is down around 25 percent uh so far this year uh and that is the bulk of their commodity bass it's about 30 35 of their commodity basket we're also seeing improvements in labor availability in terms of driver availability which they did not have last year last year they were closing stores early opening later because they couldn't fill the driver position this year they don't have that problem so they should have more operating hours as well so when you put all that together I think franchisee economics are improving that's going to drive accelerated development and I think that will drive the share the shares higher and do you think um when it comes to Domino's that they're really outplaying the competitors as well I mean their share price is up this year but it's not crazy up but if you look at some of the other Pizza stocks they have done worse yeah look I I think when you when you look at Domino's I think you got to compare them yes to other Pizza names but you also got to compare them to other large cap names uh if you look at the large account restaurant operators McDonald's yum Chipotle uh Darden they're all at or near all-time highs uh Domino's is about 40 off of its all-time high I still think in our view with this inflection that we think is coming over the next couple of um you know a couple of quarters we do believe that this stock can inflect higher and move in line with the rest of the peer group back up towards that those all-time highs so I think there's a lot more room for this stock to run um and um you know we're pretty confident that you know as same for sales improve you'll see that the profitability of the franchisees improve as well but Peter can comps hold up if there is I know there have been reductions in forecasts of a recession can the comp still hold up in the face of that well I would say in in an environment of a recession I think Pizza is probably the better place to be uh you can feed a family of four for 30 35 bucks can't really do that with any of the other brands so look in a recessionary environment that's driven by consumers uh consumer demand going down it's not good for anybody it's not good for any of these restaurants but I think Pizza would perform uh relatively better only because it's a cheaper more value-oriented category everyone loves pizza that's the bottom line Peter's delay it's always good to see vtig managing director and restaurant analyst thanks Peter thank you and let's take a look at one trending ticker that we are watching today shares a VMware getting a boost this morning after chipmaker broadcom 61.61 billion dollar bid to buy the company cleared another roadblock with the UK's competition regulator giving it the green light the final report from the competition in markets Authority will be issued on September 12th and those Shares are moving Higher by almost six percent all your markets action ahead stay tuned you are watching Yahoo finance thank you as you um pointed out in a recent note you've been doing this 19 years now I think you and I have probably been doing it about the same amount of time what is the biggest lesson the markets have taught you in that time that's a great question so I say this to kids that I Mentor all the time I say this to Young professionals the first crisis you go through the first bear Market you go through shapes you and the first one that I was really in it for was the 2007-2008 crisis so I am obsessed with credit I'm obsessed with spreads I'm obsessed with lending right and watching all of those indicators this particular Market cycle has taught me that although all of those lessons are still important and important to remember the investor base has changed and the reaction function the quickness with which we react to things has changed so you do have to continue to be moldable throughout your career no matter how much experience you have you have to continue to be moldable and allow for those changes in who is actually putting their money to work [Music] thank you foreign [Music] [Music] foreign [Music] [Music] [Music] foreign foreign [Music] [Music] foreign [Music] [Music] [Music] foreign [Music] [Music] [Music] it is just after 10 a.m in New York City this is Yahoo finance live I'm Diane King Hall alongside Julie Hyman we're about 30 minutes into the trading day let's take a look at how stocks are moving now the S P 500 notching again is this morning with earnings season well underway of the companies in the SPs that reported results so far 78 percent have exceeded expectations but we still have a long way to go indeed we do we are watching shares of Goldman Sachs on the other side of the Leisure the shares relatively flat right now the Wall Street giant missing on profit loss quarter thanks to Hitch from consumer lending and real estate to drop far from the surprise however Goldman did repeatedly warn of lackluster results ahead of the earrings also keeping an eye on Tesla earnings to come later this afternoon investors will be laser focused on the EV makers profit margins which took a hit last quarter on price Cuts now Tesla has enjoyed positive headlines of late including charging deals with auto manufacturers solid delivery numbers and the production of its first cyber truck and shares of Netflix they are down just about three quarters of one percent the streaming Giants set to report after the Bell today subscription gains from the company's password Crackdown will be in full Focus investors also watching for any insight on how ongoing Hollywood strikes could affect the company well Microsoft and Activision have secured an extension to close their 69 billion dollar merger deal amid talks with UK Regulators with more we're joined by our own Dan Holly this thing has had a lot of twists and turns and now it looks like they're getting a little more time yeah a lot of ups and downs here the original deadline passed yesterday that would have included a three billion dollar breakup payment that Microsoft would have had to pay to Activision Blizzard but we don't have a deal so now the companies have agreed to a new deadline that is going to be September 15th but there's going to be one in August for August 29th as well if they don't get the deal done by then it would be 3.5 billion dollars uh if it can't get it done by September it would be 4.5 billion dollars so a lot riding on this getting done within the next month and so you know overall both parties say that they're they're optimistic we have uh Activision saying the recent decision in the U.S and approvals in 40 countries all validate that the deal is good for competition players and the future of gaming and then Microsoft's Xbox Chief Phil Spencer basically saying look we can get the deal done now in the U.S technically while the FTC kind of does its own internal action but they want to just kind of wait get everything sorted out with the UK so does this mean the deal is going to go through we're still not 100 sure but it's looking more and more likely that this will happen it would be the biggest merger uh or acquisition in the gaming industry ever 69 billion dollars so absolutely massive and would put Microsoft as the third largest gaming company by Revenue in the world so just behind tencent and Sony it would be a big jump for them especially after you know years and years is kind of being like the not even second but third banana so it's you know all right well let's talk about something else in your wheelhouse we'll talk about the chip space chip equipment maker specifically asml reporting its results to Jay seeing orders surge amid Rising demand in China so what do you make of this especially when you think about the broader chip space Dan yeah so uh they raised full year sales growth forecast to about 30 percent that's up up from 25 percent in the prior forecast and you know it's it's interesting what asml is uh saying here is that it's not it's top top of the line equipment so asml just so everybody knows is an equipment manufacturer that provides the equipment that chip makers then use to build chips they're saying that their Ultra uh high-end stuff they're extreme ultraviolet systems uh the demand for that isn't exactly where they would like it to be just because companies like tsmc Samsung and Intel are building out the plants that will eventually need these kinds of systems to build chips meanwhile over in China they're still getting the Deep ultraviolet devices the systems that would put together chips they're not as high-end as the euv that's because of the whole sanctions and regulatory requirements now going through China so they're getting that second level kind of production cape ability they're seeing those pick up though and that's just because the demand as you said in China is rising and so what does this mean for the rest of the chip industry well we kind of have to see it means that you know obviously despite demand going up in China it's not going to be the super super high-end stuff from these companies so you know we'll see what it means for Intel Nvidia AMD Qualcomm you know all these other companies when they they report their earnings but you know on the the PC side of things where AMD and Intel have just been you know taking it like punches to the face uh there was report from Gartner saying that the downturn might be going up again so we might be seeing an end to that downturn uh though there's still a decline it could start to even out maybe around 2024 so still not great for the immediate future but eventually things will get better right at the end of the tunnel yeah yeah Dan appreciate you making time especially before your big trip you have coming up thank you very much right all right all right thank you so much big banks have delivered their Q2 earnings in the landscape is better than expected the higher interest rates boosted the bottom line for many large lenders though other income streams like Investment Banking took a sizable hit so what's the Smart Financial play for your portfolio John Curran uh principal Asset Management portfolio manager joining us now so what is the Smart play in light of all the results that we have received John well good morning it's great to be with you I think the the smart play here is to stay in the large liquid Diversified banks that have a nice blend of uh fee and uh interest income in their top line I think the results really highlight the importance of diversification and the big banks have shown themselves to be a bright spot and you know that they're resilient and they're Deft handling the deposit rates amidst the higher rates hey John it's Julie here so in your portfolio which of these do you hold the most of or what are you adding to right now well we work on the bond side and we look for the large liquid balance sheets uh good access to funding not just on the deposit side but on the access to the the debt markets and one of the big surprises this year one of the wild cards has been the the debt issuance which last year in 2022 January saw 29 billion dollars of debt issuance this January is 9 billion this quarter uh really is the first quarter of material Bond issuance and we've seen a lot of it so we're looking for the banks that have durable deposit bases but that also can access wholesale funding markets and and uh have the investor receptivity that they do and John then who would you be dumping in light of that when you use your investment thesis so I think General good diligence wins wins the day here when you're concerning Bank Investments it's really important to do your homework uh know the management teams know that they're making good underwriting decisions uh you know there are headwinds on the horizon uh the the recent fed loan officer survey did so show some contraction in lending standards and lending overall but the big banks have been very resilient in passing through some of those rates uh in you know in the form of loans to their customers while lagging the increasing deposits uh they can do that because they're blessed with these large deposit bases what about the non-big banks John um you know we heard from some of the Regionals today and it looks like that they are holding on by and large they're holding on or even in some cases growing their deposit bases they're having to pay up to do so is the debt of those Banks as attractive well I think I think you make a very good point I think the recent results of the big Banks really shows the widening Gulf between the Haves and the have-nots the the gigantic Banks the money center Banks which are positioned very well to withstand headwinds and any turbulence that may be coming down the pike and the smaller Regional Banks it was heartening to see some of the really large Regional Banks like PNC truest and U.S Bancorp come to Market in in uh June um that opened the gate for uh for regional Banks but we haven't seen Regional Banks writ large be able to access the debt markets yet so I think we need to just see a bit more earning stability and a little bit more How firm or how how well footed their deposit bases are before we get some sense that they can um you know persist uh with with success like their large Bank peers more regulation coming down the pike pretty much imminent are you expecting to see more consolidation and and who do you see um kind of in the you know like we saw JPMorgan Chase getting bigger recently because of that consolidation who do you see being a Target in that situation you know it's an excellent question to see where the next tie-ups will occur I think you have to look for symbiotic deposit footprints that are complementary in nature uh you you did see the 2019 uh merger between BB T and SunTrust that formed truest to have a transformational merger like that might make sense but it will it will depend on where the deposit concentrations are the largest but I think clearly the the large banks have shown themselves to be ones that can persevere through this environment so the larger the banks the more leverage they have to pull both in their Top Line and their funding businesses and just if you look at their concentration risks I mean commercial real estate is is one of the headwinds out there for these Banks but the large Money Center banks are much more insulated uh not impervious but more insulated than their smaller peers what about just a general headwind as well from decrease in lending demand um sort of across the board whether we're talking about businesses or individuals yeah I mean we did see the contraction in some commercial and Industrial as we like to call it the industry cni lending uh the recent fed loan officer survey I think that's clearly one of the headwinds that we've noted that's on the horizon nonetheless uh JP Morgan and Wells Fargo did say that their earnings they expect to make from from loans uh is increasing so um it's a bit of a um you know on the one hand there is probably some some contraction ahead and some credit tightening but on the other hand there is still demand uh City Citigroup actually posted a surprisingly large jump in in their credit card revenues near the bellwether the one thing you have to worry about or or just be cautious about is if the more uh the more borrowing that occurs on plastic the more the uh the banks have in terms of their loans so that's one thing we're watching Keeping a watchful eye on yeah and indeed we're seeing the provisioning for that kind of stuff start to creep back up once again John thanks for your perspective John Curran principal Asset Management portfolio manager appreciate it thanks very much we got much more coming up you're watching Yahoo finance what is your favorite chart or indicator right now favorite chart or indicator I mean it doesn't signal good things but I continue to be kept up at Night by the yield curve inversions they've stayed really deep they've been here for a long time they don't usually signal clear skies ahead so watching that for what happens when they start to re-steepen that usually does inflict pain on the equity Market foreign [Music] [Music] [Music] thank you [Music] thank you [Music] thank you [Music] [Music] [Music] foreign [Music] [Music] sponsored by tastytrade we are seeing all three major averages in the green not seeing huge gains today but the Dow leading the way here up about two-thirds of one percent couple things standing out to me uh Goldman Sachs which of course we've been tracking all day on earnings it was kind of wavering earlier in the day now it took about one and a half percent crude oil taking a leg up as well so some interesting different assets that we are watching in today's session quick what do you do in April 15 2024 hopefully not waiting until that day to file your taxes that's right we are halfway through this year and that means you should start thinking about the tax deadline don't stress though Yahoo finance Twitter poll found almost 60 of respondents have not thought about next year's taxes at all which is frankly surprisingly low to me I would have thought it would have been higher our next guest says it's worth doing a mid-year check so you are more prepared when the season rolls around Mark Stieber is a senior vice president and chief tax information officer at Jackson Hewitt Tax Service he is with us in the studio it's good to see you good to be here so what's the number one thing mid-year that you need to be thinking about when you're casting your mind to taxes next well a lot of people say at the end of December hey give me a tax tip I want to save on my taxes what's the thing and I say well if you talked to me in July I'd have given you four or five things these are the four or five things and I'll start off by simply saying if you weren't happy with last year's result on tax day if your refund one wasn't like you liked or yeah worst case it would have balance do or even worse you were expecting some money you know now is the time to take account on that Now's the Time to take half a year of your information just as simple as your pay stub multiply it by two look at your withholding multiply that by two adjust for other life changes and we'll get to that in a moment and kind of see where you are and odds are you're going to be kind of like last year so if you weren't happy last year you're probably going to be unhappy this year on the other hand if you're really excited and you got a great one last year you want to double check and make sure you're on track for that this year but just waiting and rolling the dice and saying it'll happen it'll happen that's not your best idea for your largest single financial transaction every year your tax return sure you buy a house sure you may get married or divorced or have a child but your tax returns here 30 40 50 years give it some best practice attention and you'll be happier they do always say I mean it's one of life's inevitabilities is taxes but so you mentioned a refund they you know Financial expert we talked to always say like you shouldn't be aiming for a refund what's I mean I've had this debate with many academics many philosophers many notable smart people and I tell you now as a 40-year veteran a big tax refund is a good thing it is not a bad thing if you spend it wisely you pay down debt you buy some of the things you celebrate it a little bit with your family but it is not a bad thing in fact for most Americans who can't put that 40 or 50 dollars aside they go to Starbucks they go to you know Twitter they Tick Tock or they spend it wherever having a three or four thousand dollar refund put aside for you is a good thing sure you don't have the use of your money but in recent days if you had it in the stock market you were losing anyway now granted we're up now but the point is it works for a lot of Americans and three out of four people have gotten a refund not out of ignorance not out of stupidity they did not know what was coming they like it that way now back in 2020 the IRS adjusted them down that's why we had a lot of refund disappointment refund shock and balance do trauma over the last two years they've released started to pull back on that thinking people would be better off I'm here to tell you many people are not better off we had a lot of people who couldn't pay or didn't have the money or were counting on the money and I saw the pain at the desk take account right now adjust your withholding change your W-4 it's pretty easy at most companies on your HR platform add another 25 or 50 dollars to your withholding it's a smart thing to do if it works for you now on the other hand if you're getting a big refund ten thousand five thousand you might be better used to that but the worst case is not knowing and just hoping that tax guy gets it right at the desk oh gosh I oh and I don't have it or I was counting on four thousand and I'm not getting it plan now plant the next five months it'll be here before you know it speaking of planning you mentioned before life events right that can affect your taxes getting married having a child buying a house how do you how should you be most of the time people don't necessarily think right off the bat about taxes like I just had a baby I'm thinking about my taxes yeah it's a deduction what what do they need to be thinking well the simple fact of the matter is we talk about tax changes and tax law changes and late changes Life Changes Drive bigger impact on your tax return each and every year than tax law changes first of all they're more common and secondly they don't get the high profile publicity getting married is huge if a man and a woman are two bit or whoever gets married and you add their incomes together it's not just one and one is two for your taxes you're generally going to a higher tax rate you may phase out of benefits you're generally in a much much different position so if you're thinking about getting married or you got married you really need to do a Ben year checkup had a child there's a dozen different tax benefits that you might not even know about and that can help you out education benefits you start a side gig we saw this in the uh in the pandemic a lot of people had to do it to make ends meet a lot of people found out they were good at it or they liked it or they're continuing to do it but when you've got a side gig it's a totally different animal than working for an employer who withholds the money you have to pay the FED tax the state tax the Social Security the Medicare and if you find out the tax desk you had a pretty good year but oh now 20 or 30 or 40 percent go to the man that's not a very favorable experience so anybody who had a life change big medium or small got married had children got divorced side gig cryptocurrency all of those have a big impact and generally a non-happy impact I like the cryptocurrencies I guess for some people it is I gotta ask you in terms of like what is the most beneficial move to make if you're trying to decrease the amount you owe like what is either the purchase you can make or contribution to like let's say your IRA what would you say that's a great question and the fact of the matter is there's dozens of best practices the one I always tell folks is if you're an employee and your company has a 401k and they have a matching which many do if you're not at least contributing to the 401K to the extent you get the match you're missing that benefit plus you're missing the tax deductibility of your contribution plus the tax-free growth so 401K as an employee and a similar thing if you're self-employed is a number one go-to but if you've got kids or dependents and you have Education costs there's a dozen benefits on education and if you're self-employed it's Katie bar the door there's so many benefits and a lot of people just track their money how much money how much money and they don't keep good track of their expenses and at a minimum you should have a journal and keep track of your expenses or an app is even better but I'm not going to ask a bridge too far keep track of your expenses it reduces your taxes and don't just try to remember them when you're with your tax person that's a poor way to go to cut your taxes and so self-employed 30 40 million people now after the pandemic doing it not all doing it good they too need a mid-year checkup when you talk about the mid-year tax checkup what is the best way to do it the beauty is it's whatever you like at a minimum you should take last year's tax return print it out take your June 30 pay stub right in the margin I made twenty thousand up to June a double at 40. adjusting for bonuses and other things I took withholding four thousand dollars through June double it eight thousand and you can kind of do it right in the margin of your paper tax return even use last year's tax rate just for a rudimentary one they're great tax engines on jacksonwit.com you can put all this in and see how it is but at a minimum you just plug in the big parts then go as big as you like I use an Excel spreadsheet I do a June 30 multiply it by two kind of adjust for other things kids have aged out no more dependent you know and see where I am and if it's where you are then fine if it's oh gosh that's not what I expect then you might need to escalate and get a pro to go well no you've misunderstood how that works or oh no good you do have a dependent you do get child credit dependent Care Credit uh you know earned income credit or whatever else might be adjusted for the life life changes that you've had if it's just vanilla which I'll tell you that's kind of like a elf riding a unicorn down the rainbow these days everybody's got Life Changes yeah figure what it looks like and avoid refund disappointment refund shock or balance do trauma we've seen all those the last couple years it's not fun all right Mark Stever oh we appreciate this so much chief tax information officer at Jackson Hewitt thank you so much thanks for having me good luck on that Powerball right exactly we need to do a pool all your markets action is ahead stay tuned you're watching Yahoo finance Barbie or Oppenheimer or both because there are some people who are doing both apparently yeah I like Barbie I'm a Barbie girl I've always loved Barbies even when I was little I had the Ferrari I had the pool and they were my favorite me too [Music] thank you foreign [Music] thank you [Music] foreign [Music] [Music] [Music] [Music] [Music] [Music] [Music] foreign [Music] well apparently the Bull Run for stocks won't last long at least according to our next guest City Group Scott cronard is maintaining his 4 000 year in Target for the S P 500 saying the AI growth move needs to be digested and establishes a stronger first half of 2024 with a 4400 Target he joins us now Scott so thanks so much for joining us first let's get into this target I mean we are a ways from that right now what is the trigger that starts that downtrend well I think going into the second half we've had this strong rally let's call it in the NASDAQ names and you know typically when you see a rally of that magnitude there is some point where you need to digest the move as you're waiting for the earnings revisions to catch up at the same time we've gone into the second half thinking that the probability of recession or recession characteristics kicking in in a response to the FED actions over the past year actually would end up putting a headwind on on earnings growth potential so the the Face-Off of those two basically said look at a strong move to start the year we think it's premature to say it's a new s p bull market we look for a pullback to about to buy into on the premised app as we look at this at the first half of 24 the picture begins to get much clearer in our view and so we can get more constructive at that point so colorus glass half full on the equity Outlook from here we're just preferring to buy more aggressively on pullbacks trigger those pullbacks so I mean listen we're only what a few days into the earnings season but so far if not sunshine and rainbows it's been pretty darn good right we've heard this sort of resilience language being used on the part of CEOs how do you think that's going to play out as we go through earnings season I I would say the earnings resilience concept is one that we've been using as well over the past year or so we used it last year we're still using it this year to kind of frame out how to think about recession risk but you know I think the underlying all of this is the fact is that the more you you run these stocks the the higher the implicit expectations become for companies to deliver incrementally from a fundamental perspective okay and I I and we don't doubt that AI is going to be a big thing structurally over the next several years it's just a question of navigating the shorter term lens where you've had big moves will the incremental data points on these uh heavy NASDAQ weights be sufficient to keep it going and I think that's sort of the rub now what this does is put a lot of pressure on our view next week actually when the bulk of these companies report so you know we'll be checking in on the other side of that but I think that's going to be the uh the next important set of data points for us so Scott if your thesis is correct in terms of where the S P 500 is headed what is the best defensive position for that you know um this is gonna sound crazy but the best defensive position in our view is offensive and namely what we've been you know uh suggesting for the past couple of months now is hold those big Tech names okay they're running uh again there's this new AI Catalyst that's unfolding here got that put new money to work on the cyclical side of the market as opposed to defensives so we're less interested in the traditional defensive calls that worked last year which were much more interested in putting money to work incrementally in areas such as Industrials materials and so forth and here what you get is again our ongoing resilience earnings resilience argument in those sectors but you also get um the the play that should recession continue to get pushed out or eventually become soft Landing ultimately these companies stand to benefit in aggregate the cyclical are up only a couple of percent year-to-date whereas the growth component of the Market's up 40 percent and so we're we're very confident that for new money you want to focus on the cyclical side of of the market um and what do you do with tech Scott what do you do with growth that area that has so outperformed and as you say we're coming up on those earnings as well you know I mean this is going to sound like a cop-op but you hold them I mean like I said I I do think that a longer term the way we're thinking about this AI construct and let's focus on that for just a second is that they're going to be companies that have a very clear revenue and earnings benefit from that as they launch new products specific to this generative AI construct okay on the other hand the broader Marketplace and broader economy may not be a revenue earnings beneficiary it may be a productivity beneficiary okay so essentially when it comes to these uh the mega cap growth names we're gonna see them launch new products you're beginning to see that already we want to be on board for that again acknowledging they've run maybe due for a pause or a pullback but longer term um you know we we think that it's pretty premature to say it's over for those names and I would just add the added element that we still think there's room for what what do you want to call it performance chasing or other areas of investor money to come into the market and so again it's a whole call doesn't sound super exciting prepare for a pullback uh put new money to work on cyclicals and prepare for in our view um a a bit more of a coast is clear heading into the 2024 time frame so so in in your notes you all say your base case for the second half of 2023 is bias toward a growth slow down with a lower probability of recession uh so how does is that is that the framework that we're speaking of right now and what sectors are you going in or focused in with that in mind yeah so this recession timing is the big issue in my mind apart from the mega cap growth AI related surge recession timing is the big discussion and you know a year ago at this time our view was that we would be looking at recession concerns in the first half of 23. we saw those on the manufacturing side of the economy quite honestly and you see many c-suites going back to Q4 and q1 reports on the manufacturing industrial side saying hey look it this looks and feels like recession conditions you did not see that and have not seen that as much on the services or uh consumer consumption side and ultimately when you look at what the fed's trying to do with its interest rate um you know hikes over the past year it's really the slow consumption in a way that essentially tames this inflation concern of theirs so as we go forward from here you know the question always comes up recession and my response is why do recessions matter recessions matter because they have an earnings influence or impact you typically get an interest rate response that leads to evaluation resolution in the marketplace and at this point what we're still debating is this notion of the FED slowing economic conditions getting it fully reflected in earnings expectations before we can begin to talk about the FED on the other side of the rate hike cycle so recession timing becomes a big deal city house view has been pushing out we were you know first half 23 then 20 half 20 20 second half 23 now they're out to the first half of 24. so we have this issue kind of out there lurking in front of us that we have to navigate while we're trying to you know also consider the possibilities of this this Mega cap growth regime shift No Sweat Right Scott groener thanks for being here Citigroup U.S Equity strategist good to see you my pleasure thanks guys got much more coming up you're watching Yahoo finance what sector is going to perform the best during earnings what sector is going to perform the best I would say probably not Tech this earnings season partially because it's run up already so far and the guidance needs to justify the valuations financials have done really well we may have already seen the best sector during earnings season I think energy actually has a good chance to do pretty well as as well [Music] thank you [Music] thank you [Music] all right [Music] [Music] [Music] foreign [Music] [Music] [Music] [Music] [Music] [Music] an indicator of U.S residential construction fell below Wall Street expectations in June the Slowdown was felt on new single ham family home sides dropping at 935 000 units job finances Danny Romero joins us more with what this means ahead of home builder earnings yeah this month was a slump compared to May's numbers Builders are sharply slowing down their housing starts which impacts both single-family units and multi-family units so if we take a look at the numbers the seasonal adjusted annual rate came in at 1.4 million units in June that is down eight percent from May's figure of 1.5 million units the biggest takeaway from this report though is the fact that single-family units are down about seven percent over the last month but building permits are up about 2 percent and that is an indicator of future housing starts there's still a lot of single-family and multi-family units under control instruction right now but not much of that supply has been added to the housing market the number of completed homes is still down is still down and Builders really do have an advantage right now in today's market despite mortgage rates hovering around that seven percent so speaking of home builders and what they've been doing we're going to start to hear from them in terms of earnings so what do we need to be paying attention to when it comes to the home builders and what they're going to say so there are three stocks that are on Deck we got Dr Horton Meritage and polti group so let's start with Dr Horton they're about to release their third quarter earnings tomorrow before the opening bell Wall Street is really looking for additional commentary on the current market so how is demand doing this summer what are the the starts Pace are there any impacts on margin given the prices of lumber and are there any shifts in appetite meaning are people buying or preferring to rent right now um but if we move on to Meritage the fifth largest homebuilder they're set to release their second quarter earnings next Thursday and analysts are keeping a close eye if that homebuilder actually met its targeted goals on their sales pace of three to four months this summer and any updates on pricing and incentives because that can also impact margins and any color on their progress of new developments and just to wrap it up real quick uh the next one is a polti group which is also set to release earnings next Tuesday and investors are really looking at the demand between specs or build to order progress there despite mortgage rates hovering around that seven percent nice and build to order maybe has better margins I don't know and that's an interesting aspect that a lot of investors are really looking at because specs are before they're even developed before they're even in the ground so it's good to see you know are people anticipate hating that rates will go down but also polti group is offering a mortgage you know rate buy down of about five percent right wow so there are some incentives there right now I just was taking a look at that earlier today right all right we got to put a pin in this conversation Danny Romero we appreciate both the information and I like the orange we've got the memo all right Danny thank you the return to office movement picking up steam as more companies mandate a return to in-person work but what does a recovery truly look like for the space all right Kiko Vegeta and Shawna Smith spoke to John Gates jll CEO of America's markets yesterday to get a pulse check on the industry here's what he had to say the thing about the recovery is it's been very very methodical right it owned a monthly or quarterly basis then we've had some cyclical challenges impact that as well the the secular change where everyone every office worker almost in the world went home in a span of two weeks was wildly abrupt unprecedented you know sort of an economic history so it's been very methodical but we do see positive signs in the data John do you think we're going to get back to those pre-pandemic levels and we talk about the timeline of that what does that then look like you know we're we're a couple years into it and I think it's perhaps another year you all decided the data where there's been actually closer to a million and a half office workers uh have had company policies change to return to office for portions of the time and another million yet to come this year that's a lot of space two and a half million workers and they're going to occupy at least a hundred million square feet at least a couple of days a week just as an example that's a very healthy uh metric and it and it helps um get closer to stabilized equilibrium markets as I said you've pointed to leasing activity picking up what what are some of these companies seeking I mean we have heard anecdotes about offices businesses for example you know considering short-term leases because yes they want employees to come back but they don't know how many will come back they don't want to go for the long-term leases that maybe would have persisted before the pandemic what are you seeing we're saying just about everything you could imagine you know business people are creative and so somewhat shorter term space almost universally uh new and highly amenitized space so the absorption figures and the leasing figures for uh Office Buildings that were delivered in 2015 or more recently have been actually pretty healthy the last couple of years it's the older product that's not as shiny it's not new and it's not as highly monetized unless it's been completely redone where they've really lost a lot of tenant base some do want shorter terms as you know uh commercial real estate assets are the capital stack is long-term capital so there's only so much room for a shorter term uh income streams around those assets so some of that gets done and then a lot of times if you want to be in the right building you're going to sign a lease that might be seven years or ten years or even longer John who who is signing these leases is it can you point to a specific sector where you're seeing the most activity where you're seeing Industries across the board bring their employees back both I mean you tend to see surges in Industry sectors right to your points so in q1 financials had a pretty big surge in Q2 energy and utilities have had a had a pretty good surge there's a nice uh in the scheme of the overall Market it's a little bit of a blip but it won't surprise you that we we're tracking uh over a minute and a half square feet of uh requirements for new artificial intelligence companies and about half of that is in the immediate San Francisco area so we we see all Industries methodically recovering but yes in any given quarter you absolutely absolutely see an industry surgeon that was our Kiko Vegeta and Shawna Smith speaking with John Gates jll CEO of America's markets travel is surging in the United States in the summer months but from Staffing shortages to funding challenges and severe climate related issues the Federal Aviation Administration is facing numerous problems that it must address and two separate FAA bills are hitting the house floor for a vote this week which are meant to address some of those issues they're both expected to be slowed down by a number of issues and with a significant amount of time built in for amendments to be added more than 300 amendments in fact are up for consideration let's bring in now Boyd Group International president Mike Boyd to discuss more there's a lot a lot to consider here Mike among things changing retirement age for Pilots changing the amount of time they can spend flying Etc when it comes to Pilots what do you think is most important here what are people paying the most attention to having any change in the pilot pilot hours rule of 1500 hours which makes sense except there's no responsibility for saying what that training would be but this this and both of the bills we've looked at both bills in detail 800 and some boring pages of them uh and you're looking at a lot of things in there that are just pork or things that don't make any sense uh you know some Congress people want to want to regulate the pay of the people who clean airports that's not even Aviation so cutting down to what I think we're going to have you know pretty much what we had before there's not going to be any major changes a consumer is going to notice well what is necessary to pass through I know there was also a letter sent from both the CEOs of Alaska Airlines American and United uh to the house saying they're concerned about the fa Bill concerned it's being derailed by kind of efforts to just change slot and perimeter rules what do you what do you think of that well the whole that's the issue of Washington Reagan National and how far you can fly and how many long-haul routes that shouldn't even be part of this right now that should be out of it that's a separate issue uh it's an important issue and everybody has an opinion on it but that should not do be in this bill to hold it up at all that should be looked at separately it's very parochial and quite frankly it's just really not professional um so what do you think is going to be the outcome of this bill when all is said and done given that there are all these maybe parochial things thrown in well you know for us mere mortals out here in TV Land it's not going to make a whole lot of difference one way or the other uh there's a lot of pork in it they're not changing the things they need to change like wasting money on Essential Air Service to fly to places people don't go anyway uh programs Grant programs like that but if you look through it there are so many little connoisseles and every Congress person seems has their own pet ones they're trying to slide into it so uh I think getting to better getting into conference on these two bills is really going to be quite an interesting shootout and Mike I want to ask you though about one of the challenges that you see as as a traveler and then us covering this we've seen a lot of issues with just the number of the reduction in the number of flights is there anything in these bills that addresses uh kind of opening up more airspace to these Airlines well they're not cutting back because of the lack of air space we've got lots and lots and lots of air space what's happening is they're cutting back because our air traffic control system is so poorly Managed IT can't handle the situation United has got 7 000 flights out of its Newark schedule for this fall because the air traffic control system can't handle it it's gotten worse and worse and all we get is pablum on that so that's not going to improve anything but it's not the airlines or air space it's the problem even Pilots it has to do with air traffic control system that just frankly is politically managed rather than functionally managed and how does one fix that you know we've talked to the Secretary of Transportation he's talked about the need to fix it so where does that need to come from in 1994 a partner nice testified to Congress on this and the discussion is still pretty much the same you know Buddha Jack comes out and talks about somebody's going to hire more people do this do that the real issue is we got to de-politize the FAA the last uh person nominated had no qualifications whatsoever we need to find someone who can really run the place and know the business but as long as politicians like Schumer and others get involved and try to put political hacks in there it's just not going to work we don't have a future for it uh one thing that we're I know this is not kind of as much a part of this conversation but it's something that uh you know that the uh Biden Administration has talked a lot about is the junk fees um like baggage etc etc uh has the government done enough with regard to that well they're putting out quite frankly jobs saying you got to disclose everything go on any website of any U.S carrier they disclose everything today before you hit that button so that argument that uh you'll get sudden fees that you didn't know about that's just not true I don't know why they keep pushing that out now there is a move to say let's take taxes out of that and I I agree with that let's show people what they're paying for air travel and then show them totally separately how much they're paying the government in taxes that would be a fair way of of making it happen a lot of politicians don't want to they don't want to posture taxes as taxes but it's part of the cost of flying being part of the cost of flying of course there's also what people need to pay the pilots what the various Airlines need to be the pilots we just had the United Union coming to an agreement now there are reports that American which was about to ratify its agreement is looking at United and saying wait a minute we want a better deal because of what they have um you know where kind of are we in terms of the balance of power between the pilots and the airlines well there is a balance it's not like one side of the having been involved in labor relations neither side holds all the cards and in the case of say Americans Pilots uh I think they'd rather you know Dive Into The Ocean than to go go on a strike but if they have to they labor unions will do that I think they'll settle obviously they'll go back to the bargaining table tweak things up to what United has then they'll sit there and hope somebody else doesn't come out with a richer contract they all have to go back remember United's contract is I think the second or third one they supposed to live agreed on so we don't know yet what about America Airlines and the potential for a flight attendant strike there what is that something that is seriously possible and what would that do would the ripple effect be to the industry well at this point in time uh it's it's part of the bargaining process you put that out say you know we're going to have a Strife open to get from a strike vote to a national strike you know there's a lot of moving Parts on that but it does show the the company that the flight attendants are saying enough of this we want to get down and get serious it's part of the program uh the last uh strike America with flight attendants was I think was 92. so I I don't think you'll see one this time they'll settle but I think that's part of the process of saying look we'll go to the wall if we have to Mike good to catch up with you is always a valuable perspective on all this stuff Mike Boyd Boyd Group International president appreciate it thank you sticking with Aviation cheers of Joby Aviation are plummeting today down 12 percent after JPMorgan downgraded the stock from neutral to underweight citing a quote largely overblown rally for shares of the electric aircraft coming they've been up over 160 percent year-to-date there's a little bit of a meme Vibe if you will that has affected Joby but the shares are down today and we've and we've had some big IPO so far this year Kaaba Savers Value Village there's another one that's coming today it is Oddity I know which raised 424 million dollars in its IPO so another one here and a lot what's been interesting a lot of these have been consumer facing right but the pace of IPOs is still lower than this it is it is although we were expecting the appetite to grow especially when you saw the demand in that Cava IPO and we um had and I had an interview with the president of the stock exchange this week and talked about kind of IPO activity and you know looking for that to to pick up so we're starting to kind of see that open up a little bit more I'm looking forward to your interview that you're set to do today I'm going to talk to the audio dcfo Lindsey Drucker man about that um that IPO today initially we did we are seeing relatively strong demand for that initially they marketed 10 and a half million shares at a range of 32 to 34 dollars each they ended up selling 12.1 million shares at 35 each so there they saw a higher demand but we'll see I don't think the shares were open yet but we'll see how they're doing on that first day of trading what is Oddity by the way it's a parent company of Il machiage and spoiled child which is a makeup brand and a skincare brand respectively and they're sort of claim to fame is they use AI in the discovery of molecules and the stuff that they're using I didn't realize I didn't realize that bit about AI of course I know IL machiage you know I'm a little bit into skin care so I haven't tried their products yet see if you can come back with some with some skin yeah so I mean this is il bakiage at one point was known for sort of its maximalist yeah look which has come out of Vogue a little bit but it has managed to um to keep up sales with products I should mention as IPOs go this company is a profitable one they already it's good because a profit uh 21.7 million dollars in an income income in 2022 so not huge but different than some of these different the kava I mean we knew that kava going into it was not profitable when it would be some time before they were profitable so definitely different base case for oddity and again this afternoon I'll be down at the NASDAQ uh stay tuned for our three to five p.m show I will be speaking with the CFO of Oddity followed that debut you don't want to miss that let's get a quick check on the markets before we leave you shall we as we see all three major averages that have been uh pretty steadily in the green here not spectacular gains but solid ones a little bit head throughout the session Jared Blick race gotcha for the next hour of trading stay with us [Music] foreign [Music] [Music] thank you [Music] [Music] [Music] foreign [Music] [Music] [Music] [Music] thank you welcome to Yahoo finance it's 11 A.M on the East Coast 8 A.M on the west I'm Jared blickery and here's what I'm watching today Goldman Sachs closed out big Bank earnings this morning and results were not pretty with profits tumbling 58 in the second quarter we're going to break down what else these big Bank results mean for the rest of the earnings season and the White House is taking new action to fight inflation by cracking down on mergers and Acquisitions we're going to explain this in the hour plus how Hollywood's strike is impacting streaming giants like Netflix we're going to give you the uh the finest from the picket lines and that is coming up but first let's take a quick look at the markets we have another update underway that Dow by the way is up to looks like it's going to be eight days straight and you can see up 151 points today not quite a half a percent S P 500 up less than uh three tenths of a percent and the NASDAQ up a quarter of a percent worth 37.8 points and let's take a look at the treasury market as well 10 engineer hasn't been knowing too much recently but we've seen it a Holden course well below four percent and you can see the tenure down about one basis point to 3.78 while the five year five years holding at four percent well profits plunged at Goldman Sachs during the second quarter the Wall Street Giants saw its Investment Banking Revenue declined 20 from a year ago and uh the impairment charges helped drag earnings down 58 to 1.2 billion dollars for the quarter so how does Goldman Sachs square up against some of the other big banks that we've seen this earnings season Yahoo finance is David Hollerith is here to weigh in David please take it away Jared um so uh you know the college is finished up and CEO David Solomon said that you know he pointed out that it's been a very tough quarter um but also did point to things uh to come that could be bright spots now the bank has been uh telegraphing that it's trying to Pivot its business it's moving away from its one-time efforts to uh get into consumer lending and trying to focus more on its Core Business now um how it stacked up this quarter to the other uh major Banks um just if we're looking at more of the uh Wall Street type revenues which is trading and Investment Banking in particular um Goldman is has shown better than expected results in trading and worse than expect or worse than expected results in Investment Banking that's compared to uh a year ago the drops now Morgan Stanley has shown uh the worst in trading uh so far um and Citigroup has had the highest loss or drop change uh from a year ago in Investment Banking as far as Goldman goes it also had nearly a billion dollars in um one what one time impairment charges or or what the the bank is trying to tell us has been a one-time impairment charge and that was a focus on the call analyst Mike Mayo with Wells Fargo was asking about that and really I think uh the question there is that is whether or not um uh Green's guide this this company this consumer lender that they purchased back in 2021 will be sold and it does sound like that is happening and that this will be sort of the the end of the markdown there are also Severance charges too um so Goldman obviously is moving away and is trying to grow its asset management and and wealth management businesses which uh Solomon had said will take uh years to grow Morgan Stanley obviously a close competitor has been building its wealth management um business for the past decade and that obviously cushioned their revenues a lot and it shows why they did not have quite the same amount of losses as Goldman has seen in this quarter yeah really interesting to track Goldman versus Morgan Stanley because both of them only became Banks over the global financial crisis but I want to move on to something else David as more smaller and mid-sized banks are reporting order earnings uh something to watch out for is higher Capital requirements Jamie dimon has been talking about that and Yahoo finance's uh executive editor Brian sazi spoke with Bank of America chairman Brian Moynihan and CEO there what he expects for this sector and let's take a listen to that if you do this across the whole banking system and that's why we're all awaiting these rules but we hope that as the rules come out they're balanced in terms of international competition in other words that right now America and Europe appear to have the same rules but they are Advanced and we're in standardized and if you listen they're saying well we're going to go away from the models and all those things that was the basis of Basel III to get to advance so our Advanced rwa are 1.4 trillion our standardized at 1.6 so we have to use a higher under America's rules that's not true in other locations and so we have to be careful about keeping the balance in a competitiveness the U.S banking system which is key not only to America honestly but it's key to the whole world because the strength of our banking system actually helps the world Prosper so interesting words there David uh your thoughts yeah I mean I mean I I think just to put it simply uh the the amount of uh Capital that banks have to hold um that obviously controls how much they can actually uh make use of their of their money as opposed to holding it on hand in case of uh you know deposit changes and I I think that um we're getting a lot of different um regulatory results with the FED stress tests that uh came out um a few weeks ago which sort of measured it tested a different thing that was more for how Banks held up during an economic uh recession and uh you know what what this is is this is uh more so a change for banks uh over a hundred billion dollars in assets uh to meet the standards the the biggest banks have and so I that's going to change a lot of what they can do with their capital and you know we have to expect something like a long period for this rollout um as with the big Bank regulations that have been set in place since uh I guess they were established in 2018 and are still being rolled out but you know the big banks are ahead as far as that goes and you know we're looking at some banks in particular that are right on the cusp like uh U.S Bancorp and you know they they're in a more difficult position to do it but there is a strategy for how they can sort of um optimize their capital in such a way that it doesn't so much reduce how much they can lend but that is obviously the concern here yeah it seems to me a lot of these big Banks CEOs not necessarily liking the new capital requirements but we'll see how it shakes out thank you for that report David Hollerith Bulls are running with the markets once again the Dow is leading eyeing an eighth straight win that's the longest stretch stretch since before the pandemic and that was in September of 2019 day after day stocks are putting on a hurt on the shorts and here to provide some perspective and precision to the current market environment as Brian Shannon found a founder of alpha Trends and author of Maximum trading gains with anchored biwap the perfect combination of price time and volume Brian we're going to get to v-wop in a second but uh you heard Brian here talk about some of the banks just your big picture overview I'm going to go to the Wi-Fi interactive I have some of the charts that you brought along today and I'm going to be annotating here's a three-year chart of the S P 500 let me just bring up your weekly chart of the Spy index here that tracks it we got some lines and some arrows why don't you tell us what's going on and what you think of this Market sure I mean we're clearly in a fantastic uptrend we're above all those moving averages you see there um we had undergone that period of accumulation which we broke out past in May and since then as we've made these higher highs and higher lows it's really been a very strong uptrend so we've got uh you know first up that first level 462. I think we might continue to see this rally run up to that level first maybe break above it a little bit and then perhaps we see a pause a rest and then we could uh you know hopefully recoil and head higher back up to the all-time highs in there we've got the semiconductors at all-time highs and they're not pulling back from there so that's really uh some great action overall yeah it's really fascinating to watch and just keep track of all the new highs I'm seeing Industrials also at record highs it depends on the index but semiconductors uh home builders and we were just talking about the regional bank so I do want to take get your take on kre this is a KBW original Bank index looking at a daily chart here and now maybe you can set up a v-wop for our audience here and anchored view up in these lines that we're looking at you know the volume weighted average price is a measurement of what is the average price over the course of the day adjusted for each share of volume when we take an anchor what we do is we say from a specific point we want to measure who has control so that first one that you have uh Circle the blue one that's from the beginning of this year and that blue line builds throughout the year and tells us the average price at that point so at the average price at this point now we're back above that anchored volume weighted average price meaning the average dip buyer who's been buying all year and is now making money the average short seller is losing money and they just regained control the last couple days the green one below that shows from the low and notice how when we saw pullbacks over the last couple months to that anchored B web from the low the buyers came in and defended it so you look at the the kre and this is where we had you know faster with major Banks failing and the resilience of the market in face of that has really kind of set the pace set paved the the courts that is for this continued rally in the broader markets the inability for them for them to drag the market down has been really impressive and now it looks like you know the worst is probably behind for the kre and even XLF looks uh like you know it's it's um got a solid base at least I don't think it's got big upside but uh I don't think it's got a lot of downside either well also taking a look at Tesla one of our top trending tickers seems almost every day they're announcing earnings after the Bell we're going to be tracking that for our audience live I have a three-year chart up on the Wi-Fi interactive here what are you seeing in Tesla it has come pretty far pretty quickly this year you can see it's up 142 percent year-to-date and just making higher highs yeah amazing run here for Tesla and you know the fundamentals are there to back it up we'll see tonight after we close if they continue to or if maybe the Market's gotten a little bit ahead of itself if we can continue to run I think that uh prior High uh late you know middle of last year at about 314 dollars if we run up through that that might be the place where some profit takers come in but you know right now it's up up and away I would just be a little bit concerned over the near term that we've run so far so fast and a lot of times we see that the good news gets sold into on the earnings so you know the trend is clearly higher I would not fight that Trend by any means at all and uh the name of the game is you know know where your stop is know what your risk is or more more important maybe for for people who are really bullish to stock know your points that where it pulls back down to you can perhaps add to your position if that's uh part of your strategy all right we got time for another one here Roku and I liked your comment in the chart as you were annotating it to me you sent this earlier if they don't scare you out they wear you out and I think what we're looking at here especially you take a look at three year chart this stock has just been decimated and you look at the year to date okay maybe that's a bit more impressive up 90 but on a three-year basis you can see see it's still mired in the very low end of its range here how do you approach a stock like this yeah so you know if they don't scare you out they wear you out I mean you can look at there's you know does you know scores of stocks that look like this you know PayPal you've got uh I can't think of them off the top of my head but there's a lot of stocks that have had that huge decline last year they've gone sideways and now they're just starting to peek back up so we've undergone the uh distribution a year and a half ago the decline and the accumulation now the buyers are back in control we're above a rising 50 and 200-day moving average that means institutional support is here for this stock and just on the shorter term time frame we had a nice rally the last uh you know week or so it's Consolidated I just got along the stock yesterday and I think it will continue to move higher as long as it can hold above uh basically the low of this week which is uh set you know 72 and a half or so this could be a stock big it might be a next uh you know reader going forward all right and we'll have you back to see how things are going always great to get your insights here Brian Shannon founder of alpha Trends and author of Maximum trading gains through anchored view well the perfect combination of price time and volume thanks Jared you bet Activision Blizzard is now down fractionally after reporting a second quarter beat on profits with EPS coming in at a dollar eight versus expectations of 88 cents net bookings also hotter than expected of 50 percent year-over-year uh to two and a half billion in dollars but the big news is the gaming company has given Microsoft another three months to close the merger agreement and clear any regulatory hurdles the agreement was set to expire tonight at midnight big breakup fee is now going to go up to three and a half billion dollars from three billion dollars that's after August 29th and then it jumps up to four and a half billion after September 15th the deal is already a year and a half into negotiations including talks with Anti-Trust Regulators in both the US and the UK and in an interview today the CEO Bobby kotec said he hopes to see resolution with the UK government in about 45 days and that Activision is committed to Microsoft 4 quote as long as needed all your markets action is right ahead stay tuned you're watching Yahoo finance will the S P 500 be higher or lower at the end of earnings season oof uh I wish I knew the answer to that definitively I guess I would say right now the momentum is obviously moving in the higher Direction earnings expectations negative seven percent growth year over year so the bar is still pretty low easy to get over it I guess if I have to choose one I'd say higher foreign [Music] thank you [Music] foreign [Music] thank you [Music] thank you [Music] [Music] thank you let's do a quick check of the market sponsored by tastytrade you can see the Dow in Bull territory up 150 points or so 43 basis points NASDAQ up a little bit more almost a half a percent up 69 points and the S P 500 right in right in the middle of 38 basis points recession fears appear to be easing somewhat for the moment but most investors are still looking for the best ways to help their clients construct their portfolios going into 2024 according to a survey from vetify 44 excuse me 40 of financial advisors are still concerned about a recession in the next 12 months and as part of the ETF report brought to you by Invesco QQQ let's bring in vetify chairman Tom Leyden to discuss how to be looking at fixed income ETFs and this is as there are proxies for long-term Investments Tom thank you for being here today always nice to get your insights in here we have an interesting Market the tape is saying something that maybe macro conditions aren't but we're in a big bull Trend how are you Pro preparing some of your clients for next year and the potentiality of a recession well absolutely uh you know we're gonna have Jared a meeting coming up next week many feel that that's going to be the last rate hike that we're going to see by the FED which is going to be very very welcome and most advisors as we survey them regularly feel it a year from now rates will be lower so it's nice that they have money on the sidelines there's a record 6.2 trillion dollars in Money Market funds it's paying four and a half to five percent but advisors and investors are going to be forced to get that money to work both on the fixed income side and the equity side so they're going longer duration they're going up the credit curve by going into corporates and I yields because if we actually do get a recession the FED then will be forced to get out the hatchet and start chopping rates and it's not going to be an orderly fashion of 25 bibs every month it may be as much as a hundred basis points at a whack so those are things that you don't want to miss out on you want to get back allocated especially if prior to two years ago you had a 60 40 allocation Tom I think you raised an important point so I just want to hammer that home a little bit the FED when it's raising rates tends to ratchet up slowly and very evenly quarter point quarter point or a half Point Half Point when it slashes and burns well it's doing that because of reason of a reason there's problems in the economy so if you're getting five percent in a government in a short-term government Security today that can quickly change overnight in six weeks when the FED potentially Cuts maybe 200 basis points across two meetings so how does this fit into your thinking about your preparation for the markets well absolutely I mean you think about it it's been emotional over the last couple years for sure and the fact that you're getting paid to have money on the sidelines makes you feel good especially advisors clients are saying I'm okay avoiding volatility which is the biggest concern for clients these days however you have to think about where the puck is going and advisors now are putting that money back to work not just in fixed income but also in the equity markets and when you look at the other side of the balance sheet for the first time in a long time in the last month and and three months we're seeing the Russell 2000 actually keep in line with the S P 500 which is really welcome as top 10 stocks in the s p has really dominated and pushed that index forward now we're seeing more of a broad-based rally not only here in the U.S but also overseas as well which is very welcome yeah we've seen Emerging Markets pick up we've seen Industrials pick up xli at a record High along with xlk I didn't think that would happen a couple months ago but here we are we have a very bullish tape and according to the survey we've been talking about and here's one of the questions uh vetify as financial advisors so people who are managing money what are you most concerned about over the next 12 months Market valuations comes in second 24 so in other words maybe stocks are too high that's what I'm thinking and then recession is 40 we talked about that but should should uh should clients should financial advisors be thinking defense at this stage when there's a huge amount of catching up it seems the market wants to do to these Mega cap leaders well there's a lot of money on the sidelines number one and also there's a lot of pent-up demand you're starting to see a bit fomo um both on the equity side and fixed income and we're seeing that in ETF flows all of a sudden this year we're seeing as much money going into fixed income ETFs as we've seen into Equity ETFs and that really hasn't happened for a long long time so the good thing is money is being redeployed back into the market on both sides of the balance sheet that's good at the same time what you don't want to do is find yourself with a big cash position a year from now with lower rates and and the bond market and the stock market continue to perform well and I think another concern of investors if they have this fomo and they start chasing the market right now well what happens then if the market rolls over of course that kind of thinking would have kept investors out of the market year to date but how how should investors be thinking about these kinds of defensive questions well a couple things look at valuations uh you know the s p the NASDAQ 100 is really expensive right now but if you go into areas like the Russell 2000 or overseas markets the PE ratios are 10 to 12 where they're 22 to 23 with the s p and a lot more with the NASDAQ 100 so you can basically get stocks half price if you shop around and diversify I mean look we saw out of the financial crisis it was really tough to beat the S P 500 and the the areas of the market that we're talking about now drastically underperformed eventually the pendulum will swing and we're seeing generational opportunities in those areas of the markets where people on Wall Street have been at it for a while are saying you just can't stay away and those that have been leaning in in the last three months have been well rewarded for that and Tom we got time for one more here looking at some of your ETF recommendations noticing you like a Vanguard ftse developed markets ETF that's interesting to me maybe explain some of the reasoning behind that and then also we talked about the Russell 2000 but then also the financial sector you have the spider ETF XLF so looking at vea and XLF yeah so uh with vea we've had a home country bias and if if advisors and investors look at their portfolio with 55 of market capitalization being outside the U.S we are underweighted it's been unloved but now we're actually seeing it come back and you're able to buy really good companies for good prices so this is the biggest International developed Market ETF you're going to get good representation there and as far as iwm that's the Russell 2000 the biggest representation in the ETF Marketplace uh where you can get it very very inexpensively and then finally you know there's a lot of news about financials and Banks they're really doing well they're beating expectations uh even with the unfortunate news on Goldman today but this also has other companies like Berkshire Hathaway Visa Mastercard and with higher rates these companies are really benefiting and will continue to benefit if we have higher rates for longer all right we're going to end it there always appreciate your insights thanks for joining us here Tom Leyden the vetify vice chairman I'll share it you bet all your markets actions remains ahead stay tuned you're watching Yahoo finance what sector is going to perform the best during earnings what sector is going to perform the best I would say probably not Tech this earnings season partially because it's run up already so far and the guidance needs to justify the valuations financials have done really well we may have already seen the best sector during earnings season I think energy actually has a good chance to do pretty well as as well thank you [Music] thank you [Music] foreign [Music] thank you [Music] foreign [Music] [Music] [Music] thank you [Music] Yahoo finance's executive editor Brian sazi sat with Bank of America CEO Brian Moynihan spoke about the bank's earnings results state of the consumer and the health of the U.S economy since last during his call we felt more comfortable that we'd have a better outlook for an eye in the second half of the year than we did then it had to be basically flat a flat-ish quarter to quarter between 14 2 and 14-3 and then be above 14 in the fourth quarter and that really comes from just the sheer power of our franchise whether it's for getting you know four percent annualized loan growth which is good on the commercial side especially we're seeing some car growth we're seeing the deposit saying in there even though you know because we have such excess funding position we're not competing for high cost deposits we put those customers money into the market and money funds and other things and we actually even raise money from our customers for other Banks to give them those rates because we don't have a use for the cash and so even with all that going on we feel good about the nii and that's that's basically due to the power of our deposit franchise is this Outlook Brian your way of signaling to markets that this economy is going to see a soft Landing from the various actions the FED has taken yeah it's a little chicken and egg we we build our Outlet based on the market expectation for rates but let me back up Brian and talk about we have you know our research team led by Candace Browning Platte that does tremendous work and they basically have a the first two quarters of 24 to be slightly recessionary negative one percent GDP growth rate in the first quarter to half a percent in the second course that's a that's a pretty light recession at this point and they moved it out from this year into next year and they've removed the direct they moved the duration to be shorter so as you as you think about it it's a it whether it's a soft Lane I mean it never goes negative or goes slightly negative I'm not sure people will feel the big difference and what we're seeing in our customer base is the economy the spending that goes on our custom base which is 4 trillion plus a year which was growing at 10 a year for all the year 22 over 21 for example is now slowed to five percent and that five percent is very consistent with a low inflation more normalized growth economy in the U.S kind of what it was in 17 or 18 or 19. and that you know that's good is frankly because that means the economy is getting back in line even though we haven't had massive dislocation of employment although employment markets are softer than they were a year ago at this time are you surprised surprised by this consumer resilience I'm not honestly and I've been we've been saying this for a long time this is going to be the fed's hardest job was to slow down the U.S consumer because the end of the day the amount of stimulus the consumer had the fact that unemployment you know is run as low as 3.4 percent the fact that wage growth you see a lot of talking about what's caught back up to inflation but if you go look at from the pandemic for the wage growth from 19 20 21 was very fast and then it fell behind inflation but cumulatively it's way it's ahead of inflation and so if people are working and they're getting paid more and they're spending it's going to be hard to have a tough you know U.S economy because of the amount that's driven by that but on the other hand you don't want them doing too much and feeling like they're getting behind on inflation therefore demanding higher wages to get in wage inflation spiral it looks like the feds uh was probably too late and they said it themselves of getting in the game and raising rates then they finally move very quickly and they've caused that to slow down and I think that's all good but I'm not surprised by the resilience of the consumer because when we looked at our customer data you can go back and track us talking quarter after quarter our customers still have multiples in their accounts those same customers over here in early 2020 today have multiples in their accounts than they did back then especially in the lower balance accounts and that's because they've spent some of the stimulus but they've been earning money and they've been managing their finances well that doesn't mean certain ones are having difficulties and layoffs that are happening but in a broad context across 60 million customers across four trillion dollars of spending it's a pretty resilient group do you think spending consumer spending Brian will surprise to the upside later this year I we are now finally starting to see inflation slow pretty dramatically in this country and looking at your results to your point you have a lot of people with a lot of money and savings and checking accounts that maybe they could get out there and spend in the back half of the of this year how do you see it well if you think about the last few years first it was good spending it bought things because they're pet up at a house and they just had money and they bought stuff and so they bought a new couch or new you know a new uh grill or things like that but you can only buy one of those so then they started spending on what we call experiences going out to eat going out to movies going on trips and you still see travels fairly strong and you can see the bookings I think all that you know once people have done a lot of that got a normal summer vacation in for their kids out of school you know I think it'll sort of reach what it usually does is sort of three four five percent going faster than you know the rate of inflation because the walls of the country grows and I think that's good now the the best news is that the credit worthiness of our customers is still extremely strong and people keep talking I get asked about why your credit card charger rate went up a little bit or your 90 plus delinquencies went up some but if you look at that number it's still far below where it wasn't 19 and if you are having this conversation 19 we'd be talking about you know 30 and four year 40-year record low as a credit card us in our company and that's a it's a we're normalizing to a very good place and and so I think that also means the consumer has some staying power the equity in their home and so you know in the end of the day if companies are making money and employing people uh even though it's not as aggressive out there in the markets today on labor you know people are going to have jobs and people get spent but I think they're slowing down their activities because frankly if all they read about the papers are going into recession that kind of has a effect and if things like a new car cost a lot more and interest rates or a new home mortgage rates above seven percent those slow down the activity but that's what the FED intended to do and Brian I think this is the recession that everybody's been calling for a while just it just may not happen but I want to go into commercial real estate I looked at your results when I see your results I don't hear you calling out big negatives on Commercial Real Estate why is that the case for a Bank of America but a completely different story uh over at a company like Wells Fargo well I I can't reflect other people but we disclose we it comes from what we call responsible growth for for a long time we've looked at in a commercial real estate business to keep that as a percentage of our loans at a size in total and even the office piece of that to work with great you know sponsors of people in the buildings great real estate owners and then frankly make sure the terms are reasonable fears of a recession still Loom on investors Minds with the next Federal Reserve meeting taking place next week according to the recent Global fund manager survey from Bank of America Market sentiment remains bearish sixty percent of investors are expecting weaker Global growth with only a mild recession while the concession on the when the recession may happen isn't so clear a definitive super majority 68 percent of the participants in the survey they thought there would be a soft Landing in the next 12 months another thing peaking investor sentiment is the AI adoption artificial intelligence given the leap in advancements in the technology that we've seen recently and now 42 percent of investors think that AI adoption will increase profits for businesses only one percent of participants however thought that AI would be able to add more jobs to the economy now all your markets action lies ahead stay tuned you are watching Yahoo finance I haven't seen you in a long time um I know you went to the Super Bowl because of your gig oh that's been a long time it has been a long time yeah but like what has that been like working for sofa getting to do stuff like that like going to the Super Bowl yeah well I make this joke all the time so if I was the fourth company I've worked for and it's the first one that's less than 100 years old so it was a pretty big transition and I went really direct to Consumer at that point so instead of being in the intermediary space or in the institutional space it put me right in front of the end investor and that has been so fun and again you know the investor base has changed and I've gotten to talk to younger investors and hear their questions and do a lot more educating for people that are getting started in their investing journey and it has been a lot a lot of fun [Music] [Music] thank you [Music] thank you [Music] [Music] thank you [Music] foreign [Music] foreign [Music] excuse me President Biden is telling voters he is a president for all Americans and that's a quote his support is praising him as a Centrist who could win swing voters just as he did in 2020. now let's bring in Yahoo finance's Rick Newman who has his eyes as always on the election there he is hey Rick what should we expect hey Jared uh I'm I'm uh monitoring all these all these messages from the Biden campaign and from the surrogates for the Biden campaign I started scratching my head a little bit when I saw uh all these claims that Biden is a moderate president a Centrist I guess you could say in terms of the things that he has actually accomplished yes there are some bipartisan and some things you could call center stair infrastructure spending for example that got bipartisan support the chips act to support the semiconductor industry got bipartisan support but also worth noting that Biden has tried to do a lot of things uh that the progressive or the more liberal part of the democratic party really pressed him to do and he simply has not been able to do it he tried he just couldn't get it done uh he tried to wash out a lot of student debt and last month the Supreme Court said no you can't do that so he has a much less ambitious plan now to uh to get rid of some student debt during the first two years years of his presidency he pushed a really big package of spending excuse me tax increases on the wealthy and on businesses along with a lot of new social spending and he just couldn't get the votes for it so um he has been he has been a pretty liberal president in terms of the things he has tried to do but he doesn't want voters to really remember some of that stuff because uh his team thinks that the way he wins in 2024 is he has to appeal to moderate swing voters uh who may not be affiliated with either party so that is the rhetoric you're going to be hearing from Biden and all his supporters for the next 15 months well Rick shifting gears a little bit The Wall Street Journal reporting that senators are introducing bipartisan legislation that would bar members of the executive branch and also lawmakers from owning individual names individual companies in stock please give us the details this feels like like a golden oldie yeah there have been many proposals to ban stock ownership by members of Congress I guess it's a bit of a new thing that they're now extending this to the executive branch there have been some expose showing it's not just members of Congress who may profit on inside information when they know something is about to happen and then either snap up a company's shares or sell the company's shares ahead of bad news apparently this happens to some extent among uh Regulators in the executive branch too and they know a lot of about um you know punishments for example or different types of regulations that might be coming out that might affect different companies differently the argument against this has been that um you know people in the government should be allowed to invest like anybody else in the United States they don't actually get paid a lot of money but I think there's a there's a valid counter argument which is to say these proposals would simply ban the ownership ship of individual stocks you could still buy mutual funds you could still buy ETFs and things like that so if you wanted to profit from insider trading as a government employee you'd still be able to invest in sectors or themes if you knew something was going to happen and you want to profit from your inside knowledge you just wouldn't be able to invest in individual companies I would add none of these has ever passed before there have been some limited rules that have passed but never a complete ban on stock ownership and I don't think that's going to happen this time yeah I don't see the public cry for that either just yet so thank you for that report Rick Newman she had Jared the White House taking a new action to lower inflation by cracking down on mergers and Acquisitions Yahoo finances Jennifer Schoenberger joins us now Jen hey there Jared good morning to you the President Biden convening a White House competition meeting later this afternoon as the administration seeks to put forth three new proposals to increase competition in an effort to bring down inflation amongst those proposals the Federal Trade Commission and justice department are announcing more than a dozen new guidelines for how to better evaluate a merger's effect on competition the Department of Agriculture has partnered with more than 30 State Attorneys General to combat price gouging on groceries and in a major change housing rental websites zillowapartments.com and affordablehousing.com have agreed to disclose all fees up front on their websites to prospective renters the White House says the change will offer consumers transparency into fees like the cost of applications or trash removal so they can better comparison shop for the lowest rent now these M A guidelines which include ensuring mergers don't significantly increase competition come one week after a federal judge blocked an attempt by the FTC to stop Microsoft from acquiring video game publisher Activision Blizzard Senator Elizabeth Warren applauding these M A proposals and this morning in a statement saying quote giant corporations and their armies of lobbyists will cry fell at the prospect of more competition but this action by the Biden Administration is welcome news for American small businesses workers and consumers now President Biden will convene the White House competition council meeting for the fifth time this afternoon at 3 pm attendees include agriculture secretary Tom vilsack acting labor secretary Julie Sue and FTC head Lena Khan this competition Council created two years ago by the president under executive of order in an effort to combat anti-competitive practices Jared thank you for that report there Jennifer schonberger all your markets action ahead stay tuned you are watching Yahoo finance as you um pointed out in a recent note you've been doing this 19 years now I think you and I have probably been doing it about the same amount of time what is the biggest lesson the markets have taught you in that time that's a great question so I say this to kids that I Mentor all the time I say this to Young professionals the first crisis you go through the first bear Market you go through shapes you and the first one that I was really in it for was the 2007-2008 crisis so I am obsessed with credit I'm obsessed with spreads I'm obsessed with lending right and watching all of those indicators this particular Market cycle has taught me that although all of those lessons are still important and important to remember the investor base has changed and the reaction function the quickness with which we react to things has changed so you do have to continue to be moldable throughout your career no matter how much experience you have you have to continue to be moldable and allow for those changes in who is actually putting their money to work thank you [Music] [Music] foreign [Music] [Music] [Music] [Music] [Music] [Music] foreign [Music] [Music] [Music] [Music] [Music] thank you [Music] thank you [Music] the Dow poised to hit an eight-day winning streak as stocks gain on strong Bank earnings for more on what we can expect this earnings season is Jill malandrino NASDAQ Global markets reporter hey Jill hey how's it going in second quarter earnings season is off to a strong start of the companies in the S P 500 that have reported results 82 percent have exceeded expectations according to facts that data for many investors the recent streak of gains bolsters the case for a soft Landing scenario it's an outlet that has gained traction after last week's encouraging inflation data and recent jobs data that suggests the labor market is cooling a bit looking ahead analysts still expect earnings growth for the second half of 2023 for the third quarter and fourth quarter analysts are projecting earnings growth of one tenth of a percent and 7.6 respectively for all of 2023 analysts predict earnings growth of six tenths of a percent investors are now shifting their focus to earnings from Big tech companies as their performance has been fueled by lofty expectations the market will be eyeing not if but to what extent artificial intelligence will dominate these firms forward-looking guidance generative AI may not have boosted second quarter figures but it may very well expand this quarter's product offerings and available Target markets which analysts believe that a new tech bull market is taking shape propelled by the AI Revolution they predict an above average second quarter earnings season for the tech sector in the coming weeks white bush also sees Enterprise I.T budgets showing signs of improvement in the June quarter with AI spending becoming a reality and not just type Jill I want to switch gears for a second and talk housing the number of available homes for sale hit the lowest level ever last month and that's according to Zillow what can we expect for the housing market in the second half of this year well it's a supply story is simply what it is U.S single-family housing starts which account for the bulk of Home Building dropped seven percent to a seasonally adjusted annual rate of 935 000 after surging in the prior month but permits for future construction increased solidly is a severe shortage of previously owned sales house sales supports new construction now housing Supply remains well below pre-pandemic levels driving groundbreaking on new projects a survey on Tuesday showed the National Association of home builders while Wells Fargo housing market index increased to a 13-month high in July to 56 with fewer Builders reporting offering incentives to attract buyers a reading above 50 is considered a positive sentiment Builders say low Supply in the resale Market is driving demand for new construction but higher mortgage rates and supplies like challenges continue to put pressure on the overall Market the average rate on the popular 30-year fixed mortgage cost over seven percent briefly in May and then again at the end of June it's only come down slightly in the last week those higher rates are straining affordability in the market where prices for existing homes are rising yet again due to inventory constraints making it difficult for people to enter the market especially first-time buyers according to KPMG roughly half as many homes for sale as their war in 2019 and even fewer listed for 300 000 or lower it's also important to note that a majority of homeowners are locked into sub 4 mortgage rates and there are unlikely to list homes unless there's a life event forcing them to do so so again more Supply constraint concerns that's right if you got that three or four percent mortgage sit on it you're you're doing yourself a favor thank you for that Jill malandrino Hollywood is still on strike with more actors joining the picket lines day by day what could this mean for Netflix's much anticipated earnings release after the Bell today we're going to jump Coast now to join Yahoo finance's Arleigh garfinkel at the picket lines in Los Angeles alley boots on the ground what do you see in there hi Jared so it's 9 A.M here in Los Angeles and the picket lines are just getting set up right outside Netflix's offices on one hand I'd say it's I'd say it's a social environment with some edges on one hand you have a lot of people drinking coffee shaking hands saying hello and on the other hand the LAPD he is here and the stakes are incredibly high now of course Netflix in particular has been a focal point of this strike remember Netflix has come to represent the streaming Revolution the change in the economics of entertainment that so many of these writers and actors are most worried about and of course let's not forget for Netflix itself the stakes are high remember the company spends about 17 billion annually on content at places like this one the one I'm standing behind Sunset Bronson Studios and today today's Netflix earnings and I would say that one of the key questions is whether Netflix is set to weather this strike and ultimately the answer from a company like Moody's is yes Netflix has a couple of key advantages one of them of course is that it has a lot of content and Investments internationally think about some of Netflix's biggest hits of the last few years for instance squid game shot in South Korea the other thing too is because they have that broad catalog that's both domestic and international they could be set to weather a bunch of different changes and lastly of course they have a profitable balance sheet so there is a lot of optimism that they are set to weather this strike however I would say there is one wrench Netflix is in the process of changing its business model right Jared there's the ad supported tier you've got you've got all sorts of stuff like that where you know for instance you have the password sharing Crackdown so in the end the industry-wide change that could come on the other side of this strike is actually what I think they should be worried about but that's down the line and it's it's going to be a long hot summer in Los Angeles Ali we got another minute here um I know you said it's only 9 A.M there on the west coast but have you had the chance to talk to anybody there and just get a feel for the sentiment uh and kind of the attitude that pervades right now so far this morning it is 9 A.M people are just coming by actually we have people walking by bus right now I I would say the sentiment is actually one of optimism right there's I was just talking to one of the organizers who said you know we are actually really excited we think we're asking for reasonable things we think we can get what we want and we think there is a lot of pressure on these companies so I would say the sentiment is one of optimism but make no mistake about it I think everyone is really hunkering in for a long haul the sense I got by the time I got here Jared everyone was already set up this is an incredibly organized Endeavor Long Haul well you heard it there Ellie garfinkel thank you for that report and let's do a final check of the market right now we are in rally mode and I'm looking at the Wi-Fi interactive we have the Dow and the NASDAQ and the S P 500 in positive territory Dow is leading up half a percent now want to check out the sector Action Real briefly we've had energy that has been and now real estate taking the Forefront but energy also up more than one percent materials and Industrials those are the two sectors mired in the red there we'll take a quick look at the bond market the tenure t-note yield by 3.79 percent it has not changed one bit on the day uh just taking a quick look at the 30 year that is down one basis point to 3.89 that's it for now I'm Jared blickery thank you [Music] foreign [Music] foreign [Music] foreign [Music] [Music] [Music] foreign [Music]

Channel: Yahoo Finance

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Keywords: Yahoo Finance, Personal Finance, Money, Investing, Business, Savings, Investment, Stocks, Bonds, FX, Currencies, NYSE, Equities, News, Politics, Market, Markets, Yahoo FInance Premium, Stock market, bitcoin, bonds, market, recession, inflation, Wall street, S&P 500, Airbnb (ABNB), Coca-Cola (KO), Consumer Price Index, jerome powell, Inflation, CPI, Bloomberg, food, energy, Forecasts, volatile, Housing, shelter, Goldman Sachs, cost of food, egg prices, used cars and trucks, airline fares

Id: UcarJmRimjo

Length: 180min 51sec (10851 seconds)

Published: Wed Jul 19 2023