It’s just an hour to the end of the trading day and the clock is ticking! Market Domination Hosts Julie Hyman and Josh Lipton guide investors through the home stretch all the way to the market close, breaking down leading market stories and top trending stocks.
Path Trading Partners Co-Founder and Chief Market Strategist Bob Iaccino provides context as to where oil (CL=F, BZ=F) and gas prices (RB=F) could be headed this summer due to OPEC+’s production cuts.
Apple (AAPL) is no short-supply of opportunities this week as Affirm (AFRM) is partnering with the tech giant to integrate buy now, pay later (BNPL) loans into Apple Pay. Needham Senior Media and Internet Analyst Laura Martin explains where she stands on Apple entering the AI race so late into the game.
This post was written by Luke Carberry Mogan.
Video Transcript
Hello and welcome to market domination.
I’m Julie Hyman.
That’s Josh left in live from our New York City headquarters.
We are giving you the ultimate investing playbook to help tune out the noise and make the right moves for your money.
And here’s your headline blitz getting you up to speed one hour for the closing bell rings on Wall Street.
A lot of noise, a lot of people have different expectations coming in.
But if you look at the signal away from the noise, you realize that this is unprecedented capabilities that Apple is gonna introduce and it’s going to integrate A I into everyday life.
The Fed I think is going to stay put tomorrow.
It’s going to be a pretty boring meeting.
Actually, I think it will be interesting to see the economic projections that come out and, and how they change if at all from the March projections, you know, but we really, as we get into 2025 we still have conviction the Fed is going going to continue to see disinflation towards their target.
So we’re able to invest in the business, we’re able to maintain a strong balance sheet and we’re able to return cash to shareholders.
So we’ve completed that private prior buyback authorization that we have done and pleased to announce that the board has just authorized another $6 billion in share repurchases that will commence beginning in the second half of 2024 one hour to go until the market close.
So, let’s take a look at the major averages here.
We have a mixed picture here today.
Right now.
The dow is lower by almost 120 points.
That’s about a third of 1%.
However, the S and P 500 the NASDAQ are higher for now.
We had seen the S and P lower from much of the session before peaking into the green here.
Any gain for either of these indices or both of these indices will mean another record close, both of them close to record yesterday.
So any again, today will mean another record close.
So that’s something to keep an eye on here today.
I’m also watching the bond market.
We are seeing yields fall prices rise and that’s after we had an auction of 10 year notes worth $39 billion that drew higher than expected demand.
In fact, the highest demand going back to February of 2022.
So that higher prices is pushing down yields here today, which is also sort of percolating through the market and of course, important as we are keeping an eye on tomorrow morning’s consumer price index report, consumer inflation, of course, and the results of the Federal Reserve’s meeting.
Uh Let’s also take a look at what’s going on with some of the other sectors that we are watching today.
Let me just get you to that.
Um So as we are watching sectors, when I talk about the percolation through the market, that’s what I mean here, for example, oh, we’ve got all kinds of interesting things happening here today.
Then I’m gonna try and fix.
We were looking at the sectors.
There are the se no, we’re still looking at market cap in the sectors and I don’t know how to fix that.
So I’m just gonna send it back to Josh.
We’ll take it from here.
Julie.
It’s the magic of live television.
That’s what we do.
We are an hour away from the closed stocks, climb back from sharp declines earlier in the session as investors are waiting on that key CP I print tomorrow.
It’s gonna be followed by the latest decision, of course from the Federal Reserve on interest rates and joining us now for what to expect and how investors can best position ahead of the news.
Let’s welcome in Omar Aguilar, Schwab Asset Management, CEO and Cio Omar.
Great to see you on set.
Yes, glad to be here.
Always be happy to be in New York.
Omar.
So let’s let’s start there.
The fed kick off the big meeting.
What do you expect to hear from Jay Pal Omar.
What, what are you gonna be listening for?
Well, it is a clear, you know, decision already that they’re not gonna make any changes to monetary policy.
And I think investors will basically be looking at the combination of the CP I report in the morning to also with just the, the, the language that the FED will use into their description of their, their decision.
And in in in many cases, in the expectations, you know, no matter what is that the fed continues to see that there’s this, this inflation trend that seems to be giving them enough flexibility.
And what that means is, you know, they still have the option to actually have a revised dot plots that will give them one or two rate cuts before the end of this year, every day.
We talk about this and we talk about whether the FED is gonna cut once or twice or none and when they’re gonna cut, what’s the timing gonna be?
How important is all of that when we’re trying to figure out the effect on equity specifically?
Well, you know, a couple of things, one is it is kind of an interesting that market expectations have been completely wrong for a while.
And what that means is that they, you know, at the beginning of this year, you know, the market had priced in six rate cars and not until recent, you know, there was enough discussion about the potential for even a rate hike, which is kind of like confusing in many cases.
So as you go through this, the strength of the US economy, when you act, see the strength of the consumer, the strength of the labor market seem to give, given a lot of confirmation of what the fed decision has been, which is being very data dependent and being consistent with their views that they will make the decision and they will make the move when the economy and the markets are ready for it.
What’s Omar right now, your base case for when you think the fed does cut?
Are you September, December?
Where are you?
You know, September seems to be the most likely scenario for many reasons.
One is we finally starting to see the effects of the lag effects of the federal decisions of rate hikes into the labor market.
We’re finally starting to see that crack when now we have unemployment at around 4%.
And what that means is that we’re starting to see people that are not quitting their jobs as quickly.
That’s based on the Joels report.
We’re starting to see that the fact that actually baby boomers are retiring and they’re not being replaced as fast as they used to be in the past.
And with those dynamics going forward, the potential for normalization of wage growth, not necessarily reduction in wage growth, but normalization of wage growth will provide the fed with enough ammunition to actually make, you know, the first cut and, and the second reason for that is that the FED is looking very closely as the real rates as inflation goes down and they don’t cut any rates.
The effect of real rates into the economy could have a more significant uh impact going into next year.
Josh, you’re gonna love this question.
Is the meeting tomorrow gonna be boring.
Like what, you know, when we don’t expect them to do anything in a meeting?
Yes, we’re going to get the dot Plot.
Look, what are you trying to pull out from Jay Powell?
What do you want to know tomorrow?
Yes, it sounds like boring is the word of the day, but it’s not boring.
I want us to make the argument.
It’s not boring.
Hopefully, I actually think that the meeting is going to be quite boring.
I do think that the market reaction may not be as boring and you can actually think that the combination of the CP I in the morning could make the market move and the fed decision could actually make it to go the other way.
And it’s quite rare, right, that you get them on the same day and that you could actually have pau reacting to.
Usually he might know some of the numbers but he can’t tell us and react.
So this is unusual.
This is, this is a very unique situation where they line up to be on the same day.
And I would imagine that they were probably prepared to say no matter what the CP I report, we’re going to already have this, you know, ready to go.
But, but that being said, you know, what has happened so far is that market reaction and market expectations and fed decisions, they have had a gap, they haven’t actually been aligned, you know, for quite some time.
So I think the expectation is that we’re gonna see some volatility throughout the day.
You know, that’s not gonna be boring.
The meeting might be boring.
All right.
Omar, for view for the viewers for this right now, they’re investors.
What, what are you screening for uh in, in the market right now?
What looks attractive?
Well, I don’t know a few things.
One is, you know, we, we’re starting to see this divergence in monetary policy around the world and, you know, for the longest time, you know, this is the first time what I said actually look at an international market seems to be the most attractive on both fixed income and equity market, developed markets.
And you actually see the UK and Europe when you actually look at their multiples, you know, the average stock is actually right at the long term average.
In other words, they’re fairly priced when you compare that to the US, you know, we’re basically already way ahead of our averages overall.
So relative valuation favors, you know, you know, international markets.
Secondly, when you actually think that the ECB and the UK and the Bank of England are already in the cutting cycle that actually provides a good tailwind for the potential um in a rise in their equity markets.
Again, the, the biggest question mark is the dollar because again, with the fed on hold, you know, or at least waiting for the first cut, you know, we are starting, see that, that effect.
But it’s, it’s interesting to actually look at those opportunities on the equity side in the US.
You know, we continue to um um say that, you know, being in the high quality part has paid off for the last year.
What does high quality mean to you, Omar free cash flow yield companies that, you know, generate enough free cash flows, companies with the stability of earnings and co companies that continue to have, you know, good dividend, potential growth.
They don’t necessarily have high dividend pays, but they can actually generate consistent dividends.
And if you actually look at that cohort that has outperformed the market by roughly around 10% over the course of the last year.
So stay in high quality right now with all the volatility with everything that hosts macro with companies, you know, in the process of generating free cash flow, it is a good way to, you know, invest for the next 12 months.
Omar I want to ask about another way to sort of slice and dice it and that is uh growth versus value, which is something we haven’t talked as much about recently, Bank of America.
That was out with a note where they pointed out the immense allocation that we have seen to growth as of late, we have a chart of it there where they say in ETF S, there’s a $75 billion gap between growth and value.
People own a lot more growth right now.
They actually think value and we’ve heard this for a while but they think value is gonna start to come back again.
Do you think that that’s in the cards?
Yeah.
Well, I, I would, I would actually tend to take a slightly different take on it because the definition of growth and value, it’s something that index providers have created based on what they think and in many cases tends to be related to price to earnings or price to book.
Uh, that in, in our view is not necessarily the way to think about, you know, investing for this.
So you, you know, the way we’ll take a look at it is that we still think that high quality growth, the Capex cycle is right into probably the second or third inning.
And if you think about all the money that is going into A I that has translated into potential, what is called growth to being, you know, that way.
And for us, at least for now, there shouldn’t be any catalyst that will potentially, you know, burst that at least not in the next 12 months.
As long as they continue to be stable, generate free cash flow and have a solid balance sheet.
You know, those sort of traditional or what is called growth, you know, companies will probably continue to do well.
Now on the other side, cyclicals which now are more like value type, you know, they are also attractive because of the expectations of of lower rates.
So what that means, materials, financials, you know, real estate, they could potentially have that early cycle benefit.
So which we will recommend that we will take, you know, a barbell approach where you don’t have to take your chips all from growth.
But then, you know, combine it with early cycle areas including which is a little more controversial small caps, which again, a lot of people are not comfortable, tough call this year.
It’s been a very tough call and people say, you know, it’s better, it’s better to be early than being wrong.
But it’s, it’s that thing of, you know, the waiting game where you actually get into small caps.
I guess it depends when you need those returns.
Omar, thank you so much and it’s great to see you in person.
Appreciate it.
We’re just getting started here on market domination coming up.
Apple soaring to new highs one day after unveiling its Apple Intelligence platform.
Despite the rally, we have one analyst next who says yesterday’s event was disappointing.
We’ll explain why ahead plus shares of General Motors riding higher after authorizing a new $6 billion share buyback program.
But it wasn’t all good news.
We’ll hear from the company CFO on the other side and software giant oracle set to report earnings after the bell.
Today we bring you the results and instant analysis in the four pm hour.
Stick around much more market domination.
Still to come.
General Motors improving a new $6 billion stock buy back the company noting its focus on the profitability of its ice business.
Yahoo Finance’s pro Romani and joining us here to discuss ice being the legacy business.
What does that stand for again?
Internal combustion engine?
Thank you.
Oh yeah, that makes sense.
I Yeah.
Uh so yeah, the gas power business still doing well.
Um They fully ramped up their hybrid business.
Yeah, it only one hybrid for sale but, but ev is also uh they, they were slow in the uptake but uh now actually doing quite well.
We’ll get into that in a little bit.
But first, you know that big $6 billion buyback program they announced today comes into in addition to the $10 billion share repurchase plan they had last year.
So really amping up their capital return plan shareholders.
I spoke to GM CFO Paul Json about that.
And what sort of was behind the scenes there for why they wanted to kind of increase those uh capital return policies.
We’re continuing to lean into our capital allocation policy and as the business has continued to perform and we’ve seen stable pricing, we’ve seen disciplined incentives uh from our team.
And we’ve seen a vehicle portfolio that is uh customers just love and uh all that spells a lot of success.
So we’re able to invest in the business.
We’re able to maintain a strong balance sheet and we’re able to return cash to shareholders.
So I mentioned that uh ev business earlier, uh they did get a slight update there and the fact that they want to build around 200 to 250,000 evs by the end of the year, a little bit of a lower upper bound amount than 300,000 they had projected.
So they’re trying to, they’re still ramping up evs just not at a higher uh high pace that they thought they would.
They did.
He did tell me they sold 9500 evs last month, which is a, a record for them and new cars coming online.
So they’re not shying away from it.
They’re just sort of easing into it and they’re gonna keep growing it and they’re not gonna pull away just quite yet.
Interesting.
All right, thanks pros, appreciate it.
Well, next Sarah Energy shares dropping after the company reported a lackluster 2027 forecast.
The company had a, an investor update today and said for 2027 which obviously is down the road, a bit adjusted earnings per share will be 385 to 432.
The estimate, uh, is 433.
So, um, and I believe fiscal 2027 is actually next year, if I’m not mistaken, the way that their fiscal calendar works, um, the shares are up about 19% year to date.
They’ve been part of this big utility rally that we’ve seen Josh.
Um and so this taking a little bit of error out of that.
Yeah, I just read, you know, some recent reports on other news they had made recently Julie on Friday, you know, headlines dropped development agreement to, to accelerate solar generation and energy storage projects with I guess energy.
Um you know, the stock is up about 20% this year, which is a, you know, nice run over the past 12 months.
It’s kind of actually in, in a red.
Um but, and down today obviously, right.
Well, it’s been part of that whole lift that we have seen for utility stocks linked to the demand for electricity, for data centers.
Iron Man, who was that?
That was, oh my gosh, who said Iron Man, oh, it was, it was Cantrow Michael Kantrowitz from Piper said that yes, offense defense because they do tend to be defensive but could maybe grow as a result of this.
Next s in particular is the um owner of Florida Power Light, which is one of the nation’s largest power companies obviously based in Florida.
But it also is the owner of Nextera Energy capital holdings, uh which is the largest generator of electricity from wind and sun in the United States, so big renewable energy provider as well.
And that for some of these companies who have made promises, some of these big tech companies who’ve made these sort of zero carbon promises or net zero promises that that is an important input for, for those kinds of companies place.
Yeah, exactly.
Moving on Scott shares of a firm as well.
They got a lift after Apple announcing a partnership with the Buy Now Pay Later platform.
So that was the news today says payment products, you would expect to be available to Apple Pay users in the US later this year.
So I guess it sounds like if you’re checking out online or an app with Apple Pay, uh then you can apply to pay over time with, with Mac Lef company.
Um I checked in with Dan Dole over at Miu Ho.
Um He told his clients, he saw this as a big positive.
So the stock traded down several times in the past.
He says when Apple would kind of announced it was moving in into Max’s market, uh says a firm strong brand though sophisticated underwriting technology have a moat that Apple likely could not replicate on its own where rates is buying.
Yeah, which is interesting.
You don’t hear that too often about various areas that, um, it gets into.
But indeed, this is why the stock is up today because it’s sort of a relief here.
Oh, it’s not even though Apple, it seems to me is still competing with them because they didn’t get rid of their own buy.
Now, pay later.
It’s just that this is an option on the Apple platform.
The stock is down as we just saw quite a bit here and a date about 33% in part because the because these concerns in part because of concern about regulation for buy now pay later, et cetera.
Um But so you also seeing some relief in the stock today, you know, after it has fallen, apparently, company does not think this is gonna have some big impact on revenue or GMV at least in fiscal 25 to your point, you know, the stocks pop and they al although you’re right, you pull back the chart.
It has been a rough start to the year for that company.
Yeah, but guess what?
We’re going to hear more about this story because you should tune into Yahoo Finances podcast opening bid on Friday at 8 a.m. Eastern.
Our executive editor Brian Sazi will be speaking to Ceo Max Leon of a firm to get more color on all of this.
Well, we talked about Apple here.
Those shares are rising to Intraday highs after as investors are digesting the tech giants announcement of its A I platform.
This comes as a reversal to declines in the stock after Apple’s keynote presentation yesterday.
For more on what can drive gains for Apple.
Let’s get to Laura Martin need and senior media and internet analyst, Laura, it’s great to see you as always, you were not terribly impressed by what we heard yesterday and I did think it was interesting that there was sort of this stock reaction and now the shares are rallying again today.
What do you make of it?
So, I mean, I think that they are, um, you know, they just talked for 65 minutes about new colors and emojis and capabilities.
And I felt like a snap CEO talking, like we’re gonna target 22 year olds um when their average owner, you know, smartphones in their forties and in the top, you know, 10% of, of incomes globally.
But, uh so I thought that was weird and then they did generative A I sort of in the last 20 minutes and I think Wall Street only cares about generative why?
Because Apple lot, like their revenue was down last year, 3%.
And this year we’re projecting 1% revenue growth, which is really uninteresting as a stock unless they’re gonna use generative A I to drive an iphone replacement cycle and iphones are over 50% of their total revenue.
So, and I just didn’t hear that yesterday.
So that means I didn’t change my estimate or the consensus estimate also didn’t change, they’re gonna grow revenue at 1%.
Like let’s go sleep guys and let’s put our money somewhere else.
So you saw selling throughout the keynote speech because we just don’t like, nobody’s changing their estimates today.
Based on gen A I and you have to wait a year.
They only do these upgrade updates once a year and they only do sort of product upgrades once a year.
So now we didn’t like what they said yesterday.
We’re gonna wait a year to figure out whether we like what they say next year about Gen A I.
Uh but Laura correct me from, you do have a buy on this name, right?
Yeah.
So how come, what, what are the, you weren’t excited by what Tim Cook had to see on stage yesterday, but you must be excited by something.
Laura, what are the catalysts ahead?
So, um let’s see.
Um Google which is alphabet, Amazon and Microsoft are all spending $100 billion building large language models for gen A I because they’re gonna take a 10% tithe on every dollar earned in their clouds on Gen A I.
That’s interesting.
Strategically, long term, really bad for the P and L. Your returns on capital are falling in those enterprises this year and next year and then they’re gonna dominate the world.
Apple sit with Apple.
Apple’s not, not raising their Capex guidance at all, not a dollar but they just announced $100 billion share repurchase telling you they don’t think they have anything better to do with their money than return it to us.
So while I just told you that our sales are gonna go up 1% their EPS is gonna go up 8% because they’re buying in shares, which is putting a floor under the shares.
So as a shareholder, you want to be in Apple this year while they’re returning share, you know, cash to you.
But in four years, you don’t want to be anywhere near the stock.
It is gonna be in a strategic box.
Whereas these other companies that have already spent the money four years from now are gonna be sort of riding the big wave of generative A I invasion.
Laura.
What I’m really curious about though, you know, as I heard Apple yesterday, even if you weren’t that excited by what they were saying, you know, in terms of generative A I and the role it plays in our everyday lives, it’s virtually zero.
Right?
Yes, I google something and it summarizes something with A I at the top page big deal.
I, I’m, I got my face in this thing all day long and now it’s gonna have A I integrated.
So isn’t this really gonna be most consumers first real opportunity to be convinced that they need A I functionality?
Uh No, I don’t think so.
I mean, I, I about half of my companies are using Generative A I today I was on a call and they’re gonna do panels.
They’re gonna make look alike.
I’m gonna call it people or proxies of people that looks like a Bulls fan.
And then they’re gonna run advertising by that generative A I panel to figure out before they actually run a test market in the real world, which is a million dollars to figure out which ad that’s gonna lower the cost of advertising.
I have companies not using an ad agency anymore because they’re having generative A I create the ad, put the music to the ad and, and create different slogans and put them different places with A B testing themselves.
Generative ads, you know, writes text, it writes headlines, it personalizes things all in real time at, you know, 1/10 of the cost of the old world.
So, no, no, I think generative A I is, is here to stay and they, a lot of companies are making a point of how they’re using generative I today, not tomorrow, not when they launch their next product in September or December.
Like Apple said they are using generative A I today and a lot of my companies are saying they’re going to cut cost 20 to 30% in areas where they’re using generative A I to replace people like in services or chat bots, which we’ve seen a lot of so far.
Laura, it is always good to have you on the show?
Thanks so much for making time.
My pleasure coming up.
What’s next for Eli Lilly after FDA advisors backed his Alzheimer’s drug.
We’re going to be speaking with an analyst on the other side.
Stick around more market domination.
Still to come.
Let’s check on oil prices.
Right now.
We have seen them edging higher and making up for some of the declines from last week and rising 3% yesterday.
Actually, this all coming after OPEC stuck to its demand forecast.
Joining us now, Bob, I, you know, co founder and chief market strategist at Path Trading Partners and co portfolio manager, the stock think tank.
Thanks for so much for being here, Bob.
So as we look at oil prices and as we saw OPEC stick into its guns here, sort of contextualize this, this for us.
What’s the significance of them not changing the forecast?
Well, first of all, Prince Abdulaziz said a couple of days ago when the market started to head a little bit higher off of this and then turn back lower that give it a few days, the market will get what they were trying to say.
And it seems to me what they were trying to say was, yeah, we’re willing to get rid of the voluntary production cuts in part because those production cuts are voluntary anyway.
And a lot of these countries specifically Iraq and some of the African producing nations weren’t really sticking to the voluntary section of the production cuts, but they didn’t say they would do it.
Now, a lot of oil analysts were saying this is the first sort of uh indication we’ve seen of more production and prices went lower.
But what we’re seeing on the other side of it is the demand side might be a little shaky in terms of those sort of level demand that we’ve had lately, the summer driving season seems to be getting off to a pretty good start.
You’re seeing that in the consumer data as well as a little bit of the travel data.
And also we have jet fuel shortages starting in Japan.
And if they were to get more jet fuel made, that would be taking crude oil away from other distillates, which means they need more crude oil, at least going into Japan, not a giant part of sort of supply absorption, but it would matter.
They’d either have to export more or disappoint the market which would increase the price of travel by air and increase the usage of people’s cars for travel during the summer driving season.
There’s a lot of moving parts here, but I think probably the most important one, Julie, to be honest is the US R cons have been going down basically since February of 2022.
And this past Friday, we have the lowest number since January of 2022.
That’s not really a good sign for supply.
So Bob bottom line for you.
Then I’m looking at oil here.
It’s trading just under 78.
Where do you think we are, Bob?
And, you know, three months from now, six months from now.
Well, that’s a tough question, Josh, and I’ll tell you why we’ve been in a downward sloping channel that you can see on the chart you just put up since about April.
Let’s call it mid April and we haven’t broken out in either direction.
And the thing is when you stay inside these channels, even if you continue to respect the upper and lower bounds of the channel price heads lower.
Uh The market tried to break out a little bit a few days ago and actually did end up closing above the upper side of that channel, but then broke back into it, reached down to the bottom and now we’re back up toward the top of it.
Even if we break out now, we’re about $3 lower than the breakout from a few days ago.
And there’s still some significant problems getting through to the upside.
So if you ask me six months for now, we’re probably a little bit higher in crude oil.
Remember, we still in theory need to refill the S pr so that puts a little bit of a floor in it, but it’s tough to say because it very economically dependent in terms of the data.
Does the data get better?
Does it continue to get stronger?
In the US and have that leak all over the globe or does it just kind of stay stagnant?
And the Fed doesn’t have to do anything that would basically mean slightly lower prices.
Well, I wanna ask you specifically about the read through to gasoline prices as well because AAA, what put the national average at $3.44 as of Monday, which is down, um, the biggest, actually week over week drop that we’ve seen thus far this year.
Does that last for the summer that we could see some relief on, on gasoline prices?
Probably not because obviously with the crude oil, I don’t want to call it a glut.
We’re oversupplied.
You could tell that in the price.
All right, that’s something that’s very good about people who are actively investing this crude in crude oil is it is a pure supply and demand market.
It really is.
You don’t have to worry about CEO scam or gap earnings or any of that.
It’s how much oil is out there and how much oil are, are people buying?
What’s the demand like?
And right now the supply has been exceeding the demand despite the OPEC cuts and those OPEC cuts are almost two years old now and they’re remaining in place.
So I would say that it probably doesn’t last through the summer because there’s a lot of moving parts like I mentioned, uh, airline travel may spike up a little bit and you could get, of course, geopolitical surprises.
So if you ask me by the end of summer, I’d say we’re probably a little bit higher at the pump than we are right now.
Bob.
Always appreciate you taking the time to chat.
Thank you so much.
Good to see you.
All right.
Let’s get to some calls the day now.
JP Morgan downgrading Cleveland Cliffs from overweight to neutral.
It also lowered the price target from 23 to 17.
Main reasons for the downgrade.
They say lower steel prices and higher spending.
You see the stock down about 3.5% in today’s trade.
So they were, that was really it ju they were talking to their clients about listen, rising cap X needs.
They called out, they see auto inventories are now replenished no near term growth projects.
They said the balance sheet does look cleaned up.
They like this greater focus.
I I guess shareholder returns, but they think most investors in their opinion would prefer cash accumulation for maybe some potential M and A rather than they say debt funded buybacks.
We see.
Yeah, I mean, they, they don’t seem to be, I mean, they’re just neutral so they don’t seem to be too negative.
A lot of the calls does seem to be besides what you’re talking about, about how they’re using their cash.
Seems to be more macro effects among the pricing pressures that you talked about is also that ev demand is just not fantastic.
And so that’s something that has been a head wind or at least a lack of a tailwind for demand and a lack of a support for pricing.
So that’s pretty much what’s going on there.
$17 is the price target.
They’re, they’re now putting on Cleveland Cliffs sentiment.
I mean, just fairly negative on this one.
Stocks now got hit some more than 25% this year.
And even then, I mean, most analysts still on the sidelines.
Yeah, let’s also talk about a call on Walmart, HS BC is raising its price on Walmart from $70 to $81.
It’s also maintaining its by rating the stock not doing a heck of a lot today.
It’s down about a half of 1%.
But basically this note is in reaction to the company shareholder meeting, uh which it held last week and among other things, um basically the analyst here is talking about a sort of a more nimble Walmart that it is expressing willingness to exit businesses that aren’t working, including that um health clinic business.
It said it’s gonna close them all after not working um for more than five years.
So that’s one of the things that they were pointing to um as a potential catalyst.
Yeah, I mean, there was a lot of it was interesting, I mean, just in reaction to that meeting, a lot of analysts in the street were, were sounding a lot of positive tones.
JP Morgan, for example, upgrade to overweight off that Walmart is winning over Wall Street.
So let’s continue that chat.
But the shopping giant will need results from its ecommerce business to maintain its position.
Brooke Dipalma who recently went to Walmart’s annual meeting is here to break down how it plans to turn its ecommerce business profitable.
Yeah, Walmart executives did note to investors that it thinks that it could turn the e commerce business profitable in the next 1 to 2 years.
And there’s three ways, some of the many ways that they plan to do this.
The three key ways that we’re identifying here is Walmart needs to play catch up when it comes to the A I game.
Amazon has been so ahead of that.
So earlier this year, Walmart did announce plans to use gen A I to personalize search.
So for example, you type in a birthday party, the Walmart come will then show you candles, decorations and cards and Walmart executives really saying here that this will allow them to get customers what they want when they want it.
And one executive telling Yahoo Finance that he believes that Wal Mart has the best data for A I models because of both in store and online business.
Now that brings us to the next point, it plans to leverage its physical store locations.
CEO Doug mcmillan did tell Y finance that OMNI actually is the preferred offer for customers.
They like going in stores, but they also like going online and e commerce has been a booming business for Walmart, but it hasn’t necessarily come at the expense of in store shopping.
We’ve seen growth there as well.
Walmart executives touting the fact that around 90% of Americans live within 10 miles of a Walmart location.
That’s more than target and more than Costco.
It also said that it can offer and charge customers for express one hour or three hour delivery using that store presence.
The last opportunity here guys is a new opportunity that it’s been growing lately.
That’s their Walmart Connect business.
It’s their ad business.
And what we know is that last quarter, Walmart Connect uh saw sales jumped 26%.
So now Walmart is really implementing those sponsored video ads at the top of those results uh online.
They’re also using in store advertisements and off site ads on tiktok as well as Disney Plus, I have to say that point number two there about leveraging the physical stores.
I’ve been hearing that song for a long time for the dance that they’ve been playing for a while.
We’re gonna leverage the physical stores.
Uh They haven’t done it so far.
So I pick up delivery is one way that’s really driving ecommerce growth.
And when I asked Doug MC Bill and the CEO there, if you know, they plan to continue grow stores, he actually noted that they plan to increase store locations where people have moved to.
So they’re gonna reassess their real estate strategy and take a look there.
They certainly want to be near every single American and still are they gonna catch up with Amazon?
Not quite yet.
Yeah, they’re still pretty far from where Amazon is.
If you take a look last year, Amazon brought in $47 billion in ad revenue, Walmart only 3.4 billion so a long ways away.
But experts telling me that Walmart needs to work on awareness first.
Not many people know that they have this quick, fast online delivery service.
Not many people know about the Walmart plus subscription.
So really marketing advertising that could be a key game changer for Walmart.
But they are ahead of where maybe Target and Costco are when it comes to their ecommerce growth.
Yeah, Costco has not emphasized that for sure.
Not at all.
Really thanks a lot, Brooke, appreciate it.
Well, Eli Lilly one step closer to getting its new Alzheimer’s treatment approved by the Food and Drug Administration.
Joining us now, Evan Serman VMO Capital Markets, Managing Director of Bio for equity research.
Thanks for being here.
Thanks for having me.
So get the company getting a big boost with the FDA panel saying, ok, this, we’re not going to do a black box and this seems to be a good alternative talk to us about how it’s going to fit into the marketplace for sure.
So right now the only approved anti A beta and body is by Janice size Lambi.
The sales haven’t been great.
It’s been kind of an anemic launch.
So investors have been hoping that the addition of another product, Lily’s danno could kind of help lift the entire market because having two products and basically three companies marketing, the class should accelerate uptake.
So that should be helpful.
You know, I expect that we could see, you know, approval near term, the outcome was pretty successful.
So hopefully, Lily will be off to the races soon.
And Evan I’m just curious, I mean, obviously, you you I’m sure a lot of these results and and results like this.
I mean, how big a breakthrough was this?
So these are these drugs are incremental, right?
They slow the cognition and function declines that we see when it comes to Alzheimer’s disease, you get about six months of kind of a benefit, which frankly, if your parent had it, that would be a really good thing.
I think the issue is kind of getting these drugs to the patients.
It’s infusions that are, you know, twice a month.
For example, it’s at the ho it’s delivered at the hospital, you know, it’s an infusion clinic.
So it is, there’s a lot of infrastructure that um but hey, it’s something that actually affects the disease.
So I think that’s what’s big here is, is this sort of difficulty or you know, the friction if you will of getting these treatments is that one of the reasons that Biogen ei hasn’t had more uptake.
There’s a lot of reasons I think a few, first of all, getting the diagnosis is challenging before these drugs were available.
You know, physicians had no incentive to diagnose someone with bio cognitive impairment caused by Alzheimer’s disease.
They were just kind of worried them.
So now they have to change that paradigm, get the diagnosis, get the pet scans and then get patients into the infusion chairs.
And they also have to make sure what that they even have the amyloids.
They have to make sure they’re amyloid positive that they’re even eligible to take these particular kinds of and then MRI S to make sure they’re not getting brain filling, which was the discussion during the outcome.
So it’s a lot of infrastructure um to get these patients, the drug when you and when you try to look at this, the market, these treatments for Alzheimer’s and you try to model it, like, how big is it?
Now, how big do you think it could be right now?
It’s, you know, like barely anything in PS PNL.
I think over time between these two products, it could be 1015 $20 billion but that’s gonna take a lot of time to get there.
You say a lot of time.
What, what would you, I mean, like five plus years just given how slow the B and E I launch has been hopefully now that BNS putting their reps in the field that should help and with Lily’s reps in the field that should help even further, you know, I’m really curious because we haven’t talked about this in a while because all of discussion around Pharma has just been swallowed up by the G LP one discussion.
And I’m wondering resourcing, what does that look like?
What is R and D funding look like in the industry?
Now?
Is a lot of it going towards that shiny new object?
Are we still see seeing funding for Alzheimer’s and cancer and all of these other important things to treat.
So it’s really interesting because we just had the big cancer in Chicago and Lily had an investor event that was focused solely on cancer and they have a lot going on.
So they are working in things beside Manja Z on which is important.
Um There is a lot of focus in obesity, but BioPharma is definitely not shying away from oncology, um Inflammation neuroscience, you know, we saw two takeouts um recently by Bristol with Karuna, um Abby with Seville in the psychiatric space.
So there is opportunity elsewhere outside of metabolic disease.
And, and finally, one, you, you just look at the stock and it’s just a monster.
It’s already about, you know, what, 50 percent this year you have an out perform though.
So, so what are the next catalysts?
Um Ey, you know, for viewers listening what do they, what do they have marked on their calendar?
Why do we, yeah, why do we keep liking the stock?
Well, first of all, I look forward to second quarter earnings in early August where we’ll get updates on their, um, you know, on the launch of Z bound.
Especially when it comes to supply, everyone’s favorite topic, supply of G LP ones.
Um, beyond that, hopefully, we’ll get an update to their label to include the OS A data, remember they had sleep apnea.
Um And then further on, we’re looking for updates from their oral product or for Glip Ron.
Um You know, that’s also been in focus recently, so they have more in the metabolic space and maybe an approval of the nap outside of, you know, ZEP bound Monro, right?
Yes, there’s other stuff going on.
There’s other stuff going on.
They’d be very happy that I’m reminding folks about that.
Yeah, Evan, thanks so much for coming in to talk to us about this.
Appreciate it.
Thank you.
Thank you.
Coming up.
We’re taking a deep dive into the evolving world of digital advertising in our investor playbooks.
A dramatic new development in the Paramount Saga.
Sherry Redstone’s National Amusements reportedly deciding to stop discussions with Sky Dance.
Yahoo Finance is Alexander Canal is always is on it.
What the Julie I sit over there and we knocked on.
What about this deal?
But yes, this is very surprising ending those conversations with Sky Dance.
According to the Wall Street Journal, Redstone will now like to pursue a sale of just national amusements.
National Amusements is the holding company that controls Paramount.
Shari Redstone is head of that.
That’s the voting share, that’s the power and that’s what she wants to sell prior, she wanted to potentially sell national amusements.
Then whoever bought that would merge with Paramount into another company, but she wants to keep it separate.
Now, when it comes to that potential sale of national amusements, we see several names emerge.
Stephen Paul, friend of Shari Redstone, also a producer.
He’s been a rumor name.
He’s reportedly offering her more money funded by the founder of patron Tequila.
There’s also been interest from media executive Edgar, bro, bro, so many personalities and he’s backed by private equity firm Bain capital, but take a look at shares right now, they are down about 10% because she keeps getting these offers.
She keeps finding reasons not to take them pretty soon.
She’s gonna run out of offers if she keeps II.
I don’t know.
I mean, isn’t that just?
And they have an analyst out there?
Rich Greenfield being one of them that he predicted from late check partners.
He predicted that there will be no sale by the end of this year that they’re just going to be in wait and see mode.
It’s interesting with the Sky Dance deal because this is a deal that Shari Redstone initially wanted she received some pushback from investors, Sky Dance went, they sweetened their offer multiple times.
It seemed like we were in a good space.
We had a positive share reaction on the heels of those talks developing and now we have the talks ending and, and you know, I thought something might be going on because when you hear no news for some time, she had the deal in her hand for about a week, didn’t indicate anything.
And you know, those employees were getting a little bit antsy here.
So now the question is ok, is she going to actually pursue a sale of national amusements or at this point?
Is she just gonna ride it out and see what happens?
You also wonder where the lawsuits fly.
I mean, that was a lot of money being offered 8 billion.
I know a lot of money being offered a, a high buy out if you were an investor of Paramount.
And yeah, you wonder at what point if you are a shareholder, do you get out of this name?
Because you just don’t know what’s, well, there are some people getting a lot of people getting out right now.
We’ll see where shares close.
We will.
Alec Thanks for keeping on top of it for us.
Can lions kicks off next week market, one of the largest annual gatherings in the world of ads.
The event coming amid a major ongoing shift in the world of advertising as linear TV, declines, streaming platforms are absorbing the revenue.
We’re looking at how to navigate the shifting landscape with the Yahoo Finance playbook and we’re joined by you got run in an analyst at city who’s going to that conference, by the way.
Good to see you all.
I’m so glad to catch up with you before you head to the French Riviera for that conference.
I, I’m just curious, what do you think is going to be sort of the main topic there?
Because we’re at this really interesting juncture here where consumer spending seems to be showing some cracks, you know, but I’m sure that there, there’s a lot of competition for those ad dollars.
Hey Julia, thanks for having me.
Yeah, I think, look, this is the, the pre eminent uh conference within the, the advertising and digital advertising world uh for, for the whole year.
Uh We’re, we’re gonna see likely a lot of news coming out of the conference.
Um, last year, coming out of the conference, we kind of felt like the uh environment for advertising was getting stronger.
I think over the course of, you know, the, the last year, uh the environment has gotten even stronger and stronger through to one Q results where really across the board, from top to bottom across digital advertising.
We’ve seen uh probably one of the strongest quarters we’ve seen in, in a number of years uh from, from digital adverts.
So, so far, uh no signs of any cracks within the ad market.
Uh It seems to only be getting stronger from, from here.
Uh And we’ll see what comes out of the conference next week.
So the conference next week you got, we also have, I mean, listen, we got the Olympics on deck.
We have the election on deck.
How, how big a driver of those?
How much are those tail winds for the online Adam market as well?
That they should both be a bi big tail end of political is expected to be a significant boost this year.
Uh You, you mentioned C TV and streaming uh that in particular is expected to be an area that sees a big boost from, from uh from political spending and, and, and Olympics as well.
It’s likely less of a boost but, but it’s certainly one that gets a lot of focus and attention and there are some deals around streaming uh with Paramount and NBC as well.
And so we expect a lot of focus uh on, on both of those things uh next week as well.
Um Igal, you cover a lot of the companies that sort of do help do programmatic ad buying online, et cetera.
And of course, there’s been a big shift in how we search for things because of the A I summaries at the top of Google search results, at least right now, how’s that gonna affect those companies?
And what do you think we’ll hear from folks at the conference about that.
Oh, that, that’s an area where there’s a lot of questions and, and uncertainty.
But so far we really haven’t seen any major shifts and I know it’s still really early and things can certainly change.
So, you know, what we’re starting to see is, is the A I uh company license deals for content, right?
The content is the data feed in, into the uh A A I engines and LL MS is incredibly important.
And so we’re starting to see more and more licensing deals uh for those uh for those a ill MS to, to, to, to feed off of.
Right?
And so the the the debate right now is whether the publishers are trading off uh near term uh near term fees essentially for, for traffic over time and, and if people are going to spend more time within, within the search engine and those uh A I generated answers versus shooting over back back to those publisher websites and spending time there, right?
So this debate between spending time in search and spending time across the open internet, I think that’s gonna take some time to play out.
But so far we’re seeing evidence that uh that generated, generated A I search results are actually pushing people back back to the to the publisher websites and it’s feeding the ecosystem the way that it always has historically.
Yeah.
Besides gen A I, I’m just curious when you’re talking to marketers and advertisers.
What else sort of, um what excites them, you all, you know, is it mobile display?
Is it, you know, is it video, is it live audio?
What do you hear?
Yeah.
There, there, there’s a lot of things that, that, that are exciting right now.
Um You know, we’ve talked about C TV, so that shift from linear to streaming TV, that’s uh 11 of the biggest, most important topics uh that we hear about and likely get a lot of focuses as well.
Uh And then, you know, retail media which is advertising on, on a retailer’s website or you think uh at Amazon and uh sponsored listings and that’s happening across multiple retailers right now.
That that’s a, that’s a big area of growth.
So A A I certainly will, will be a lot of focus C TV.
And then the shift away from third party cookies.
Um and, and privacy where first party data is coming in to take a bigger picture of that also feeds into this retail media story, uh advertising on a retailer website, attracting buyers kind of at the bottom of the funnel on their, on their shopper journey where they’re actually, you know, ready to make a purchase.
Uh Those are areas that are getting a lot of attention as well.
So new ways of being performing, performance related advertising, uh There’s a lot of evolution within that.
Um We think we’ll get a lot of focus in those areas.
And I just quickly what are some of your top picks in this space?
And so within my my coverage, the the stocks that really fit in.
Well to these themes are the, the trade desk.
They are, you know, the the largest demand side platform and independent demand side platform play a really significant role again in those pipes on C TV.
Um and, and, and within retail media and other areas as well.
But C TV has been the kind of core uh bread and other growth engine.
So that’s really one that’s at the top of the list.
And then cri has been really, has been kind of reinventing itself around retail media.
They’ve made a lot of progress there and they’ve become a really important uh ad tech player within retail media and they’ve been doing really well in their transformation journey as well.
Igal.
Good to see you and Bon Voyage.
Look forward to hearing about all of the takeaways from that conference.
Appreciate it.
Well, Yahoo finance is going to be on the ground there at Cannes bringing you coverage all next week.
We’ve got some big interviews lined up including conversations with the executives at Mattel and Pinterest.
Stay tuned.
Coming up next, we’ve got closing bell and market domination over time.
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