The countdown is on. Everything you need
to get the edge at the end of the market
day. This is the close.
Live from studio 2 at Bloomberg
headquarters in New York. I'm Caroline
Hi and I'm Bonnie Quinn and we're
kicking you off to the closing bell
right here in the United States. And
what a day. We had Fed chair Jerome
Powell speaking at Jackson Hole. So
let's get a check on where markets are
now Caroline as we approach the final
couple of hours before the last week in
August. The S&P 500 up more than one and
a half% as you can see a monster rally
after that speech. The Fed chair opening
the door wider in the words of Michael
Foli to a September rate cut. The Nasdaq
100 up 1.6%. We're bear in mind only
about 10 points off that S&P record. We
might even get there by the end of the
day. The 2-year yield plummeting down
more than 10 basis points and that's off
its lows. 36879. We saw that move across
the curve. Not so much in the 10 year
and the 30-year but plenty of buying in
the 2-year and the dollar as you can
imagine much weaker down 8/10en of a
percent. It is meanwhile Bitcoin on the
higher side. All of this of course funny
as the door is cautiously opened to rate
cut in just a few weeks time. Look
during his annual speech at Jackson Hall
symposium Federal Reserve Chair Jerome
Pal signaled the labor market it's
flashing signs a cut could very well be
on the table during the Fed's September
meeting. Take a listen. The stability of
the unemployment rate and other labor
market measures allows us to proceed
carefully as we consider changes to our
policy stance.
Nonetheless, with policy in restrictive
territory, the baseline outlook and the
shifting balance of risks may warrant
adjusting our policy stance.
Look, as Vonyie told us, Wall Street was
certainly a fan of the speech, selling
bonds and stocks absolutely surging. The
S&P 500 just on the cusp of a new record
high following a 5-day slide. And look,
we are actually seeing the NASDAQ higher
on the week. Let's dig into the dollar.
It slides. Risk assets like Bitcoin as
we see they're moving higher. Futures
traders also starting to price in that a
September rate cut is almost a complete
certainty. But look, while PAL's remarks
come at a time of unprecedented pressure
on the Fed from the White House, the
administration, well, it's been making
market waves of its own. This afternoon,
President Trump announced Intel has
agreed to give the US government a 10%
equity stake in the chipmaker. The move
marks a possible new policy stance.
Commerce Secretary Howard Lutnik
signaling this week that Trump wants to
see maybe some more direct benefits to
the US from funding these sorts of key
companies.
Giving Intel a little juice today. Mind
you, there are not that many stocks that
are lower today in general, Caroline, so
you'll have to see how things trade at
the end of August and into September. To
that end, I just want to point to the
market pricing of the Fed rate cuts by
the end of the year. So, we're getting
into nitty-gritty at this point, but
this was where we priced in a full rate
cut in September. It was 100% priced in.
traders were certain it was going to
happen and then they dialed them back
again as the data came in. Well, just in
the last day as you can see we are again
almost so about 85 to 90% pricing in a
full rate cut in September. So there is
a tiny tiny part of the door that is not
open if you like but basically traders
are thinking that September is almost a
done deal. And then you see this for
October and this for December because at
this point traders are moving on. Market
participants are looking to see what's
going to happen after September and just
how many more cuts we're going to get or
would we get a pause? Caroline, that's a
key question. Let's take it out to Bob
Dole, CEO and CIO of Crossmark Global
Investments. Look, take us to September.
Take us through the rest of the year. Is
it a done deal?
I think September's a done deal. I think
it became a done deal when we got the
earlier this month uh employment report
and that big revision for May and June
creating May, June, July is the worst
job ads in five years. I think that
sealed September. The this Fed as you
know is very data dependent. So uh let's
watch the data and we'll know. I think
there's a decent chance of December, but
lot can happen between now that now and
then as you know, Caroline,
and what is thus for being priced in
from your perspective, Bob? We've
already seen a market reaction in
anticipation. Is there any more Jews to
go?
Well, for September, not really. Um I I
think uh market participants, if they
didn't prior to today, believe
September, um everybody's there now. So,
uh tell me what inflation's going to
look like from now to the end of the
year, what the employment numbers are.
Look, the Fed chair was pretty clear.
The risks have shifted in his mind and
they're going to be fighting uh rises in
unemployment. Let inflation be what it's
going to be.
Yeah. The phrase he used, Bob, is that
it's a curious kind of balance in the
labor market. Both the supply side and
the demand side are seeing softness.
Just how concerned should we be about
this labor market? Are we going to have
a shocker of a report either next month
or the month after?
Not out of the question, Vonnie. Look uh
as as mentioned this the August report
and their visions were just horrible.
Another report like that um or two and
uh you know the Fed will be hard at
lowering rates and they'll have to be uh
look we know we know while the
unemployment rates not moved up it
signals that uh uh firings are not up a
lot and hirings aren't either. So I
think that tells us that businesses are
very uncertain and uh uh going to wait
and see which way to move. He also
outlined some other possibilities,
including that wage dynamics could
weaken and also including that inflation
expectations could move up again. I
mean, if all this happened together, it
would be a very nasty, perfect storm,
wouldn't it?
It would. And the market is kind of
between the rock and the hard place, as
is the Fed. The market is assuming
growth's going to be good. Earnings are
going to be just fine, and they have
been so far. The market's also assuming
inflation's not going to rise to any
significant degree and that tightrobe is
getting tougher to walk across.
Bob, take us to the inflationary outlook
because at the same time as the flood of
news that comes out of Jackson Hole, we
also hear that Canada's going to be
pulling back on its counter measures
when it comes to tariffs. More broadly,
what do you make of the tariff impact on
inflations for the inconsumer?
Uh, look, I think that there there's no
question somebody's got to pay this
tariff and that will be higher prices.
Now, we could debate is that a one-time
thing or is it going to last, but we
know that the uh target for the Fed is
2% and then we're no close to that. It
we're at a 3% inflation rate. Somebody
says there's that much difference
between two and three and I say it
depends on your perspective. Even stock
market investor, the fair PE
differential between two and 3%
inflation is about like six PE points.
That's major. Talking of fair or unfair
PE and indeed just valuations more
broadly, Bob, look, the NASDAQ's still
down on the week. I'm looking at
companies such as Palanteer that yes,
rally on this day, but valuations are
still extraordinary to put a finer point
on it when you're thinking about at
least 190 times it trades its future
profit expectations. Bob, how much is
too much enthusiasm around the AI trade
even at this point?
Well, it's look, AI so so far is a real
deal. We just don't know how fast it's
going to come in, how much a difference
it'll make. Let me answer it this way.
When the PE on trailing earnings is 27
and on forward earnings is approaching
24, the world better be close to
perfect. It may better better have found
something special i.e. AI and it better
work otherwise you can't justify the
valuations. Valuation is not a timing
tool but it does give you a sense of
riskreward. And beyond those parts of
the market, Bob, it seems like small
caps and and other sectors like autos
have just been waiting for this
announcement of a rate cut. Now, we're
still not there. We have to get to
September 17th, right? But the Russell
is up 3.8% today on those hopes. And if
you look at the autos index or the, you
know, housing index, for example, we're
seeing nice gains there, too. Can we
assume that this bleeds into those parts
of the economy and that at least we
might see silver linings there? I think
it's to assume it as a little bit much.
Should there be some logic to lower
rates benefit small cap stocks, the
consumer, other cyclicals? Yes. Um but
uh they're not exactly cheap as we
pointed out a second ago. So watch the
fundamentals carefully. They better be
there.
Better be there. We're very glad that
you were here with us. Bob Dole, CEO,
CIO, Crossmark Global Investments. Happy
weekend. Now coming up, we'll continue
the conversation on PAL and if a rate
cut at the September Fed meeting is
truly a certainty. David Kelly, chief
global strategist for JP Morgan Asset
Management joins us. Plus, we'll also
keep following the news on Intel and
what a government's stake in an American
tech company could mean for the broader
industry. We'll speak with Daniel
Newman, CEO of Futurum, and a broader
discussion on policies coming out of
Washington, what to expect next from the
White House, and James Lucia, founding
partner at Capital Alpha Partners. All
that and so much more coming up. This is
the close on Bloombird.
[Music]
Defense unicorn Seronic making waves
today. Laying the keel, cementing the
manufacturing process for a new
autonomous maritime vessel. Look, it's
set to be the startup's biggest
autonomous vessel. Yet, it's a niche but
growing segment of the defense market
where Seronic has positioned itself on
the cutting edge. I spoke with the
Seronic CEO and co-founder Dino Mavukas
earlier. Here's part of the conversation
from Louisiana.
Scale is what matters. When we started
this company, the very fundamental
principle that we started it with was if
we can't build hundreds or thousands of
whatever it is that we're building, then
we're not going to build it in the first
place. Let's talk a little bit about the
discrepancy that we have with the
Chinese. When we look at our primary
adversary in in the South Pacific,
really in the world today, when we talk
about not just militarily, but
economically as well, um what has
happened in the United States in terms
of ship building and what has happened
in China is completely bifurcated.
Right? You go back to World War II, we
built 18,000 ships or over 18,000 ships
at the peak. Last year, we built eight
or nine naval vessels and we have the
plan a plan to retire 19 over the next
12 months. China on the other hand over
the last 25 years has invested so
heavily in their ship building indust
industry they went from 5% of global
ship building capacity to over 50%.
Right.
They delivered 972
commercial ships in 2023. The United
States delivered seven.
So you want to go what? to deliver 50
unmanned vessels, ships per year as it
stands, just in this one Louisiana site.
That's correct. We're sitting in the
Louis Louisiana shipyard right now in
Franklin, Louisiana. That is a 100
acres. We're going to invest 500 million
to a billion dollars in this site alone.
We're going to build up the entire 100
acres and we're going to have the
capacity to build 50 ships per year.
We're going to rebuild the workforce,
training, production facilities, uh,
everything that's needed to do that. And
then on top of that, we're looking at a
secondary site called Port Alpha that'll
be 10 times larger than this site in
Franklin. We're talking about a thousand
acres, a mile of coastline, a
multibillion dollar investment over the
next five to 10 years to rebuild the
foundation of American ship building and
create what is literally going to be the
most advanced shipyard anywhere in the
world, all centered around maritime
autonomy.
VCs of what you used to actually be one
have rushed to get in to help with this
manufacturing, but the government is
also backing it. Has there been a change
of pace under the new administration?
There has been. And I'll tell you, you
mentioned earlier, I was in the SEAL
teams for 11 years. My last five years
were spent on SEAL team 6. That was from
2004 to 2015. I say that to say this,
this is the fastest that I've seen the
military and the government move to
adopt anything in my life. Now, that is
extremely encouraging from a business
and an operational perspective, but it
should also be concerning when we think
about why is that happening, right? The
potential threat with China in the South
Pacific. We need to move and we need to
move now. And that's why we're operating
so quickly here at Seronic. We're
investing private capital to build the
technology that our war fighters need
and get those solutions in their hands
as fast as possible.
What else do you need, Dino? You talked
about how you're building the
infrastructure and the talent, but what
is it that keeps you up at night that
stops and holds you back?
When we think about what we need, I
break it down to talent, customer,
capital. If you bring those three things
together,
there is a there's magic that is
happening here at Seronic. What do I
mean by that is we have a world like
truly world-class team. Our co-founders
come from phenomenal companies with
phenomenal backgrounds. We have over 800
employees now across the country and
actually across the world. We've opened
locations in Australia and the UK as
well. Capital, we have some of the the
world's largest and best investors. HVC
Andre and Horowits and the list goes on
and you got commercial customers as
well. Just to round things out, how big
a could that be in terms of demand?
I mean that we look at the commercial
sector as absolutely critical. I mean a
hundred billion dollar plus commercial
maritime market. And here's the here's
the thing that I point out to people
when you're focusing about on defense.
It's you need a strong commercial
industry to have a strong defense
industry. We build all of our products
for dual use defense and commercial.
What that let us what's that what that
lets us do is diversify our revenue base
invest more dollars into R&D to build
better solutions for the government
build robust and reliable supply chains
that can scale take advantage of
economies of scale like you have to
build for commercial use cases as well
the days of building one-off bespoke
solutions for the government are just
over
ships by the hundreds and boats by the
thousands and that's what we're doing at
Seronic and you've been able to make
your supply chain work to fit that at
the moment because with tariffs coming
in and a changing of the rules around
metals and supplies, how has that been
for you to navigate?
We we spend a lot a lot of time on
supply chain. We have two dozen people
that focus on nothing but supply chain.
But here here's the the beauty of what
we've been able to do at Seronic. We're
completely vertically integrated from
start to finish. When I say we're
building our own boats and ship, we're
building our own boats and ships, right?
We're contracting the aluminum and the
fiberglass. We're bringing in every
single component that is integrated onto
our platforms. We're doing final
assembly and we have the capital and the
team to bring things inhouse when we
find bottlenecks in that supply chain.
That's very rare and very unique and a
very very strong differentiator when you
talk about what it takes to actually get
to scale. Well, Seronic CEO and
co-founder Dino Mukus there. And Vony,
what's so interesting, he says he's got
the capital. They recently re raised a
series C, $600 million. They got a $4
billion valuation. But when we think
about valuations in the public market,
think of how Palanteer is up 100% this
year. People are desperate to get into
this defense narrative.
I was just going to say you reminded me
so much of the Alex Karp type narrative
in the sense that you're talking about
commercial and defense. The defense
industrial complex is really changing in
this country, isn't it?
It is. But what's so interesting is Dino
pointed it out. You had Palunteer, you
had SpaceX earlier on, then you had
Andreil come. Now there is a whole spate
of these new really interesting, really
exciting defense tech plays. VCs are
desperate to put their capital to work.
You got Caffeinated Capital, General
Catalyst, got A6Z and also 8VC as we
heard. But then so many more want to
start backing. The government's also
looking to spearhead this. I wonder how
much the public markets are really
trying to get behind some of these
companies that will eventually IPO
pretty soon, I Yeah, it's fascinating to
look at the website and they're actual
vessels, right? The spy glass and the
Cutlass and the Corsair.
They're cool. They're cool. And they go
from small mini almost jet size ski size
all the way up to the 150 foot one.
Well, I wouldn't mind being, you know,
in the driving seat, but I wouldn't want
to be.
You don't have to be a That's true.
Now, coming up, we got so much more to
talk about in terms of tech, haven't we?
Because look, Nvidia gaining that's
actually despite a potential crackdown
on chips in Beijing. We're going to dig
in there. We're going to dig into the
Intel news as well with Gil Lurria, DA
Davidson. He's going to share his views
on the company's earnings as well. Big
on next week invidia Wednesday. Stay
tuned. This is the close on Bloomberg.
Time now for our top calls. A look at
some of the big movers on the back of
analyst recommendations. First up, Ulta.
Barclay's finding beauty in the makeup
retailer boosting its rating on the
stock to overweight from equal weight
and upping its price target to $589 from
518. Analysts are quote highly
encouraged by positive changes from its
new CEO and the promise of margin
expansion. It also got a price target
boost to $600 a share from JP Morgan.
Shares, as you can see, up two and a
quarter%. Next in line, Paramount Sky
Dance. Guggenheim stepping aside after
the stock's significant rally, they say,
since the recent merger, taking its
rating down to a neutral from a bri and
just removing its $13 price target. Now,
analysts say it's showtime for the
company's new leadership. Get this pun,
but don't bet on further gains or until
some key strategic questions are
answered. Shares just flat on the day.
Don't bet on it.
Yeah. And finally, Roblox Wolf Research
says it's game on for shares, raising
its rating on the stock to outperform
from peer performance, setting a $150
price target. Analysts site so-called
flywheel effects from the company's
platform, including search improvements,
and they note the advertising revenue
potential is very nassent. Shares are up
almost 3% and those are some of our top
goals. Look, let's stick with tech
though because Intel shares sharply
higher after President Donald Trump
confirmed the company agreed to give the
United States a 10% equity stake. The
president also suggesting that this
won't be the only deal of its kind. This
as juggernaut Nvidia prepares to report
earnings Wednesday after the bell. Let's
do it all with DA Davidson's head of
tech research, Gil Laura. Gil, let's
just go to Intel first because the
precedent set here is kind of
extraordinary. We're not in an economic
crisis. We're not trying to bail out
anything, but this is of national
security. your read on it.
That's right. I mean, we have to go the
comparable is more World War II when we
needed to nationalize our weapon
manufacturing in order to be uh to make
sure that the government has everything
it needs. This is how we now see AI arms
race with China. It is a matter of
national security. We have the other
pieces. Nvidia, we'll talk about that in
a second. They're doing great. American
company, OpenAI, Anthropic, Google doing
great. They're doing their part to make
the US competitive in AI. We just can't
make our own chips. We need Taiwanese
companies and Korean companies to make
our chips. That's like building a
nuclear arsenal and having the shell
casings made in another country that by
the way is much closer to our adversary.
That's why this is the unique situation
where the government decided we need to
be more involved with Intel. If Intel
was able to do this by themselves, we
wouldn't be interfering. But Intel's
been fumbling and bumbling for years
now, and we need to get this right. We
need to be able to make chips in the
United States.
Sure, Gil, but explain to me how the
government helps. I mean, sure, it may
be able to help somehow building
factories in Cleveland, but what can it
do to make us the world leader in chips?
It it can lean on the scale. It can
create incentives for Intel to make
chips here. It's already been doing
that. It could also make it harder for
chip manufacturers from other countries
to send chips into the US. We're doing
that with tariffs. It can continue down
that path. But another very important
thing that's already starting to play
out is that the government can bring
other players to the table. Just two
weeks ago, we were talking about the
fact that Intel can't get its 14A
manufacturing ramped up because they
don't have customers. Since then,
they've signed up SoftBank as an
investor. That likely means ARM as a
customer. The the president has very
direct dialogue with Jensen Wong that
can make Nvidia customer. We're going to
put our finger on the scale to make sure
Intel is successful.
I like that you take us to Jensen
because he's been busy talking in Taiwan
as he's negotiating with TSMC on the
next Reuben innovation for Nvidia. But
we've got earnings next week and we've
also got this report out of the
information saying that maybe H20s are
just being put on ice in terms of the
supply chain right now. give us your
take considering Nvidia has responded
saying that we're always assessing our
supply chain and our needs.
China will contribute continue to be the
source of noise around Nvidia's results.
It's been the source of noise for
Apple's results for years and now that's
what Nvidia has to deal with. It's
literally every day that we get a news
story about whether or not we can sell
the H20 into China. Can't sell it. Will
there be a tax on it? Will the
government capture that? The drama will
not stop anytime soon because once we're
done talking about that, we'll talk
about are they going to be able to make
B30s? Are they be able to sell those?
How degraded are those that it's going
to add noise to Nvidia, but we're all
going to step back and say there is a
tremendous amount of AI demand right
now. The models have gotten so
competent, so useful to us that as
consumers and employees, we're using
them more and more in our daily lives,
creating all this inference demand, this
compute demand. That's not changing.
That's what's going to drive Nvidia's
results. China's just going to add
noise. It's a It's a very substantial
part of their revenue, but they will
continue to sell at least somewhat into
China, and while their sales in China
degrade, they'll probably be able to
make that up in other places.
Gil, thank you so much. Much much
appreciated. That is DA Davidson's head
of tech research, Gil Lura. And just
another few days for those Nvidia
earnings due out next Wednesday. Well,
coming up right here, right now, from
rate cut hints to tariff hits, David
Kelly of JP Morgan Asset Management
joins us next for a wide-ranging
conversation on what September holds for
investors. This is the close on
Bloomberg.
Just about 3:30 p.m. in New York. A
beautiful day. This is the countdown to
the close. I'm Caroline Hyde
and I'm Vonnie Quinn. Really something
to watch the markets today. It's the end
of August. You're expecting maybe not
that much is going to happen and
suddenly we're at records again.
Caroline,
uh, never try and fight what the Federal
Reserve is up to in the balmy months of
August because they cause a stir and it
seems as though it's up and to the
right.
It was a particularly odd day today at
being really Fed Chair J. Powell's last
Jackson Hall speech. So let's bring in
David Kelly, chief global strategist and
head of the global market insights
strategy team at JP Morgan Asset
Management to talk about it all because
again we are going to hear from him
obviously at FOMC meetings assuming he's
still in the leadership chair and he
gets to to to chair those meetings but
as of today are you suggesting that
September is definitely baked in and are
you changing your mind at all about
October or December?
Uh well first of all I think it's more
likely than not that we'll get
September. I mean I it's it's very
likely. The only thing I would say is we
do have another employment report. We
got another CPI report to come. So, you
know, maybe we get 25 basis points, but
maybe if the employment port is weak
enough, maybe they put some pressure on
them to to give us 50 basis points. So,
and and I think also we don't even know
in September whether we're going to get
some descents on both sides of this. So,
there's a lot I think September is going
to be one of the most interesting
meetings we've had in in years, just
seeing where where the Fed is. And
beyond the data that we get between now
and then, which is some inflation data
and a jobs report, we're also going to
get way more before October and even way
more before December. Yet, you're pretty
convinced at JP Morgan there's going to
be four rate cuts this year.
No. No. Well, I'm not not quite four.
No. Of course, we may we may differ
between us and the investment bank on
this, but I think we get a rate cut in
September. And then if you actually
listen to what Jay Pal is saying, he
really I don't think he even wants to
cut in September. He really doesn't want
to cut September and October and
December. what he's saying because if
you think about what he's saying is he's
saying look we think our baseline
forecast is that the tariff inflation is
temporary. When are you gonna know the
tariff inflation is temporary? You're
not going to know that until next
spring.
Mhm.
And there's a lot more to the story than
that. But if if if you're not going to
get an answer to that, then you should
move cautiously and slowly. And that
doesn't mean 25 basis points every time
you meet.
We seem to be putting far more focus on
the labor market. So therefore, how much
more focus do you give that August
number and any changes to previous?
Well, there is more focus on the labor
market, but as he said, we're in a very
unusual situation because we got a
problem with labor supply as well as
labor demand. They say that in the long
run, full employment is 4.2%. Guess
where we are today? 4.2%. We're at full
employment. Uh meanwhile, they say that
in the long run, they want to have 2%
inflation. And I think he's pretty
convinced that by the end of the year,
we're going to be at over 3% inflation.
So actually the inflation story is
getting out of hand much more than the
unemployment story so far.
I mean the elephant in the room is the
really unusual story is the political
influence that is going on and Lisa
Cook's head now being called for in
terms of seeing her leave the Federal
Reserve. How do you navigate that at the
moment in terms of just your forecasts
and how you see the Fed
with with great difficulty? Uh I mean we
have never in 113 years of the Federal
Reserve seen so much pressure put by an
administration so vocally on the members
of the Federal Reserve who I believe are
honestly trying to do the best job they
can. They do have a their mandate is to
try to get to maximum employment and
keep inflation under control. And if you
actually look at the story right now,
there really isn't much justification
for cutting rates at all. Inflation and
unemployment are both where they want
them right now, but they're both going
to go up and it's not the Fed's fault.
Um, so the so you know I think it's I
think you know J Pal and the rest of the
Federal Reserve I think they're doing I
don't always agree with them but I think
they are very honorable and I think
they're thoughtful and I think they're
trying to do the right thing but they
have they're under extraordinary
pressure from the administration
and he did give his base case today but
he also did give the other cases that
it's possible that you know there will
be lasting damage and that it could
stick around this inflation damage. He
also talked about you know wage
pressures potentially building and he
also talked about you know inflation
expectations getting on board and so on.
So there's a lot out there. What is your
probability of recession, stagflation?
What do you worry about most?
Well, I I think that's really
interesting point because he didn't give
two-sided risks this inflation thing. He
said all the risks seem to be on the
upside and I think that's honestly how
how he sees it right now. I you know I
think the economy is is is sort of I've
always thought of sort of a healthy
tortoise and it will tend to plow
forward slowly and I think that's still
what it's going to do. I don't quite see
enough downward trajectory to push to
cause a big spike in the unemployment
rate. We could get though, this is and
this is one of the things that's going
to happen between now and the meeting.
We could get a weak jobs report, but
we're also going to see a September 9th
down revision to all those payroll
numbers for the last year. So, it's
going to look like job growth is really
slow. The problem is labor supply is
really slow, too. So, maybe this is all
the economy can handle. But the other
thing is, no, we don't quite see a
recession this year. And and one thing
he didn't mention is we're going to have
a refund bonanza
in the first half of next year. And this
is deliberately baked into the OBBBA. It
was deliberately designed to push as
much sugar into the consumer economy as
possible in the first half of 2026. Now,
that's something pal hasn't even talked
about, but that I believe will sustain
inflation in the first half of next year
and actually prevent us from from to
toppling over into recession.
Well, and certainly if the equity market
keeps going the way it is, that's going
to be an additional factor.
There's absolutely there's a wealth
effect and you can see this in the
economy. I mean, it really is a K-shaped
expansion. You can see a lot of problems
with people paying bills dayto-day and
that's going to get much worse as these
this tariff inflation shows up because
it hits the pocketbooks of lower and
middle inome consumers. But meanwhile,
people at the top are have made a
fortune in the last three years in
particular, but really going all the way
back to 2019. We've seen a tremendous
increase in equity wealth and that is
sustaining part of the economy. So I
think there's enough demand to keep this
economy going forward at a 1 to 2% pace.
I don't think there's enough supply to
do any more than that. So, I don't see
why the Fed's changing policy at all to
be honest here, except for that
political pressure.
Well, let's go back to therefore the
asset effect here. Yeah, equities are
near record highs on the S&P. The
NASDAQ's had a bit of a brutal week as
we question valuations. Do we continue
to question the valuations going
forward?
We we should as investors, but recognize
that, you know, as many people have said
over the years, markets can remain
irrational longer than you can remain
solvent. I mean, there are legitimate
things to worry about in the equity
market, but for as long as the narrative
doesn't change a lot, people sort of
just shrug their shoulders and put more
money in, and that causes momentum
trade, which pushes this equity market
up.
I mean, honestly, the the fact that the
Federal Reserve is is sort of
capitulating here shouldn't be a reason
for the for the Dow to go up 900 points
because, you know, I mean, one there's
one thing that I think people are
missing here. If the Fed cuts interest
rates, you know how much it's going to
stimulate the economy? Zero. Not at all.
In fact, it may slow the economy down
because people are going to say, "What's
the Fed so scared about?" And by the
way, if I'm going to borrow money,
should I borrow today or should I wait a
few months? Well, I think I'll wait a
few months, right? Because if this We
never get just one rate cut. It's always
going to be a lot. So, why not just
wait? It tends to drag on the modern
economy. That's why the economy couldn't
bounce out of the the great financial
crisis um because because rates were so
low that it just discouraged people
investing and borrowing now. So, you
know, be careful what you wish for if
you're the administration. I think this
actually slows the economy down.
A reality check that we really needed
going into this weekend. David Kelly,
always great to have you here. Chief
global strategist. He's head of the
global market insight strategy team over
at JP Morgan asset management. Really
food for thought. Now coming up, shares
for workday. They are tumbling as the
whole software sector really has been
under pressure as of late. Today's stock
of the hour up next. This is the close
on Bloomberg.
Time now for our stock of the hour,
Workday. One of the few companies that
are on the downside at the moment in the
S&P or indeed the NASDAQ. Shares, you
see, off by three and a half%, let's
call it. Investors, they were
disappointed by the human resources
software company and its subscription
revenue guidance. It was unchanged in
the latest report. Many want to see it
up revised. Now, with the software
sector seeing significant amount of
pressure recently, I want to bring in
Ana Agrano with Bloomberg Intelligence.
So, interesting over in Europe, we've
seen a real jitter in software. people
worrying that generative AI was going to
eat its lunch. What were we seeing out
of workday and others in the software
space today?
See, I think that is a very big overhang
on the entire sector uh not just
software but consulting as well. But at
the end of the day, I mean the bottom
line is you're not seeing seat growth
which is the companies which where all
these software companies are selling
their software to whether that's workday
with their HR software or Salesforce
with the CRM software those companies
are not hiring at the pace that they
were hiring. So you know for a company
that was growing let's say for the sake
of discussion between 15 and 20% that
growth rate has come down and and
frankly speaking it has impacted lower
uh end companies or companies that sell
into the small and midcap or the mid
midm market more than it has somebody
like a workday which is selling to
enterprises. You know frankly speaking
we thought the results were very good
15% growth in backlog but it seems you
know that wasn't good enough. They
probably looking at 100 100 basis points
or so.
Yeah. What does it have above you know
say an in it or even an Adobe anorag how
can it maintain its moat
see Adobe is a very different animal
because that's where a lot of the AI
tools are generating some of the images
so there is an absolute you could say
you know paranoia on the street about
owning that stock but when you look at
somebody like an HR software like
workday you know that's a that's a
system of record that's where all of our
you know employment and all the you
history goes and I find it very
difficult a large company would just let
an AI agent do that without you know any
checks and balances. So we are not in
the camp that somebody like an a workday
or CRM is going to be disrupted that
easily. You know we have a similar view
on Adobe as well but Adobe has a lot
more to prove on their side than some of
these other vendors. It's interesting
just in it had a similar issue today
just to reference another company that's
on the downside in particular because
that's all about tax and that's all
about efficiency there but they too
didn't live up to expectations and a lot
of these companies valuations not as
much as in the hardware space but have
been priced to perfection a little bit
more people has been this weak in
general questioning valuations how much
is that speaking to the revenue growth
you need to see in earnings
frankly if you see somebody like a
workday or a salesforce they've already
seen a massive decline over the last 6
months. I mean and people have brought
in valuations a lot. You you had
mentioned Adobe. You I haven't seen that
valuation ever in that particular stock.
There was a time when it was trading you
know above Microsoft. So I think
valuations are already there. The
question is what is the catalyst that
moves the growth rate upwards and
perhaps you know a rate cut could be it.
I mean if we see a subsequent rate cut
if we see the tariff related
uncertaintity drop maybe in 2026 we will
see that seed growth everybody is
looking for and then a rebound in growth
rates and you know that's when the
sector recovers
huge competition for government and
education as well anorag can continue to
make advances there and maybe quicken
those up
yeah see one of the things is in certain
areas you don't have a replacement for
somebody like a workday workday is you
know north of 60% of Fortune 500
companies which is you really are not
seeing anybody else coming out and
taking market share away from them but
at the same time if you're already
growing 15% and the customers are not
hiring at that same page pace you're not
going to see that user count or the seat
count growth I think they've already
managed or executed very well compared
to you know some of the other companies
but at the same time you know you see a
slight hesitancy and the market's going
to punish you
just give us a read on therefore the
business desire to be put in more money
to work in software more broadly. Zoom
today having an actually lovely day
because more people are seeing that the
AI is giving them the productivity and
willingness to spend more on that
particular application. But we've been
questioning all along this week of the
MIT report and the fact that these AI
pilots aren't working. What do you think
Hannarag about the willingness of
service companies to spend right now in
software?
So when you look at it there is a
complete bif bifocation if you have an
exposure to AI infrastructure spending
you know if you are the likes of
Microsoft Oracle or core you are seeing
your fundamentals improve almost
everybody else is seeing fundamentals
decline because the nonAI tech spending
has been under pressure since beginning
of 2023 one of the stats we talk about a
lot is you know a company like Microsoft
over the last 3 years
they have increased their revenue 42%
but not so much the employee
All right, Anna Ragana, thank you so
much with Bloomberg Intelligence. Much
appreciated. This is the close on
The market is kind of between the rock
and the hard place, as is the Fed. The
market is assuming growth's going to be
good. Earnings are going to be just
fine, and they have been so far. The
market's also assuming inflation's not
going to rise to any significant degree
and that tightrobe is getting tougher to
walk across.
Bob Dole, CEO, CIO, Crossmark Global
Investments, kicking off the show
earlier, and now as we head towards the
close, less than 10 minutes, Funny.
Extraordinary that nearly every industry
group is in the green. All apart from
consumer staples on the day. We are on
record watch and not just for the S&P
500, Caroline, but also for the Dow.
Would you believe we're up 1.9 plus% on
the Dow, the Russell 2000 up almost 4%
at this point. The VIX just above 14.
Well, if you see the dollar index, it is
weakening and continuing to weaken that
2-year yield as well. A massive move
today, although we're off our lows there
just below 370. And more broadly, you
can see Bitcoin getting a nice push.
Look, risk assets are pushing higher.
Let's dig into which ones you should be
exposed to right now and overweight.
Kathy Antwistle's in the house, managing
director and private wealth adviser over
at Morgan Stanley. And it's interesting
for once we got a bit more breadth,
let's call it, other than just seven
names that have led most of the market
high for however long. Is this the
moment to start broadening out than just
being the max 7?
We have definitely been talking about
broadening out for a while now and that
that those seven stocks were, you know,
driving the indexes up and up and up,
but there are opportunities in other
names that have not participated in that
high growth. And so stock selection is
super important. Um, well, we can
discount Tesla because that doesn't
almost count anymore. But it has been
hardware. It's been chips. But now, is
it the time for banks? Is it the time
for the consumer or is that a little bit
too early?
I think in terms of the financials,
they've had a nice run as well. Uh, the
consumer is still a little worried about
tariffs and how that's going to affect
them and they're being a little bit more
cautious.
I mean, look at the Walmart numbers.
Look at the Target numbers.
Absolutely. So, for us, we're looking at
other things. We do think that
technology area is still a plus.
healthcare is a plus and uh industrials
even are a plus. It's areas where we
might see those investments that uh are
being made in companies that are either
very global and the dollar is not you
know affecting them or that they are
working uh or building at home and not
being affected by tariffs.
Fascinating. Well, it is the end of
August. Liquidity is a little bit
thinner than it normally would be. But
is it a little concerning that just
because we got the whiff that we're
maybe more likely to get a September
rate cut that this market is flying? I
mean, is it expecting many more rate
cuts? Is this the beginning of a rate
cutting cycle according to this market?
Yeah, I always say that what happens in
the market is really a lot about
perception and not necessarily about the
numbers. And so you're getting that
momentum buy right now where everybody
wants to get in before something happens
so that they get the upside to it
because by the time these changes are
made if you wait too long you miss that
those forward moving numbers.
So what do you do about the Treasury
portfolio in your portfolio? I mean
obviously you've missed out if you were
a bull in some you know parts of the
year. Is it too late? Do you just throw
in the towel now?
Well I think that in terms of we're
looking at the more of a duration. So if
you look at the shortterm numbers,
they've been very good for a very long
time. But if you stay short for too much
longer, whether it's treasuries or other
types of investments, you're going to
get punished for that. So if you've got
money that really should be in the
market or should be a longer term
investment, you have to start legging in
to longer duration. Intermediate is
where we like best. And we do like uh
invest in great corporates. We like
communities. There's a little concern
about maybe some of the healthcare
municipal municipal bonds uh just
because of some changes to support in
that area, but generally munis are still
quite attractive and for our higher net
worth, higher taxpaying investors, it's
a great way to get some yield,
stay high net worth and not pay taxes.
Yeah,
exactly.
Oh, wo bid us and the high net worth
individuals. I'm interested though about
we've spent this entire week actually
worrying about valuations, worrying
about the tech valuation space in
particular and some really retail love
names. I think of the day that Palunteer
is having after what has been seven days
of absolute grind.
What about the retail love names and are
they going to keep performing because we
have seen froth in the market more
broadly. You
know, retail has traditionally been
challenged with tariffs and other areas
of the market like we're in now. So, I
was a little concerned about going into
this week with the retail numbers and
and I think we've been seeing some of
that come to fruition. Um, it's all
about retail is all about the consumer
really and if the consumer is going in
and buying then we're in good shape. But
I still think they're being a little bit
more cautious. They're shopping a little
bit more on the like sort of value side
and those areas should do better and the
areas that are a little bit, you know,
it's almost like a tale of two cities,
right? the the lower end is is going to
do okay and the very upper end will do
well as as well.
Let's talk about size. I mean big caps
have outperformed small caps. I mean
having a lovely day on the Russell 2000,
but would you go into small caps more
broadly?
Well, you know, I do think it's
important for clients to have a little
bit uh of exposure to small caps and
midcaps as well. And one of the reasons
is because when we're coming out of a
market cycle like we've been in, we can
see some of those names start to show a
little bit more um you know growth. The
the issue with small caps is they're get
really getting hammered on a couple of
different fronts, lending, you know, and
and valuations and things like that.
They just don't have the opportunities
that larger caps do. Large caps has have
done very well and we think they will
continue to do well.
You know, earlier the ex-fill Fed
president Patrick Harker was on Bloomber
television. He was saying there's
something a little bit off about this
economy. It feels like it's in great
shape in some ways, but yet there's
something and we heard it from the
retailers, right? We know that all not
just low-end but high-end consumers are
shopping down. They're shopping at
Walmart. They're shopping at Target and
so on. So why is that not being borne
out in the data that we're seeing?
Because I think the data is usually
based on past and not on on future,
right? So we get the expected earnings
of course when they're when they're
talking about their numbers, but a lot
of times that's peppered in like a lot
of optimism can be peppered in there.
So, I do think that the tariffs and and
all of the different changes that are
going on will eventually play out unless
rates get cut and now the companies are
able to borrow at a lower price and then
there's ways to, you know, fill up those
earnings and that's another way by
reducing the bottom line.
Would you be rushing into things like
home builders and automakers at this
point?
I would not with my clients. No.
So, this is we're still way way too
early for that.
I think so. Yes. I think basics right
now and some of the um things like
software for technology things like that
should should do better.
All right Kathy thank you so much for
coming in at the end of August and
talking to us on this Jackson Hole day
in particular that is Kathy Entwistle
managing director and private wealth
adviser with Morgan Stanley and we are
definitely keeping an eye on these
market closes because we may just hit
records although it's looking a little
less likely as we approach the close.
Caroline, we're just off to our highs at
this point.
Maybe we take a bit of well risk off the
table as we head into a weekend and you
think about where you want to be exposed
in terms of stocks more broadly. NASDAQ
still down on the week as well actually.
So after managing to get a bit of a rise
higher on the optimism of a dobish tone
from the Fed still more broadly we've
questioned valuation in AI all week.
Absolutely. And you know maybe these
market participants are saying look you
know we've we've got our profits from
today. Let's just live to fight another
day after Labor Day after all. Right.
It's uh it's only one more week and then
we have the Labor Day weekend as well of
course but the VIX at just 14 I mean
really you would look at this market and
think oh it's fine there's no no reason
to panic and yet when we saw the tech
selloff it started to maybe look a
little panicky panicky but then you look
that palent is still the best performing
stock over the course of the year we're
still up 100%. Yeah, absolutely.
All right. Well, do continue to stay
with us. Closing bell coverage coming up
right now.
The closing bell. Bloomberg's
comprehensive crossplatform coverage of
the US market close starts right now.
About 2 minutes away from the end of the
trading day, Bonnie Quinn and Carolyn
Hyde. And here to help take us through
the closing bell, a global simal cast.
We're joined also by Tim Stanbec and
Nora Melinda in for Carol Masser.
bringing together our Bloomberg
television, radio, and YouTube audiences
worldwide to parse through the most
crucial moments of the trading day. And
what a trading day it was team.
Incredible, right?
Yeah. I mean, I think if we're talking
about crucial moments, there was one
moment and that was Fed Share JP's
speech and since then we've seen stocks
firmly in the green. A lot of people
obviously focused on the major indices,
the tech stocks and the S&P 500. But
it's the Russell 2000 that is the real
outlier today. really since around 11
o'clock when it seems like traders fully
digested those comments from the Fed
chair. It's been firmly hovering just
around 4% higher today. Nora,
absolutely. I mean, we were just
chatting about how there's so much
that's really happened this week, but
it's been such a flurry here on this
Friday. Crazy to think that we've been
talking about earnings earlier in the
week, but all eyes are really on
dissecting what we heard from Pal
earlier today, especially as it relates
to the dual mandate and what that looks
like for the Federal Reserve and what
they can do about the economy moving
forward. Well, at the moment, stocks
near all-time highs. We question all of
the week running into PAL valuations,
particularly on the generative AI front,
particularly on the Palanteer front for
once they actually catch a bit of a bid.
For me, one of the most key moments of
the day as well was Intel. We finally
get that focus that we are going to have
a 10% stake by the United States
government. That would be extraordinary
news on any other day if it hadn't been
Jackson Hall Day. And don't forget
Canada taking off some of those USMCA
goods tariffs as well. There was so much
going on today. and we we'll see you
know what else gets resolved through
next week. All right, we are going to
wait for these closing bells. Everybody
very happy at the exchanges because we
are finishing in the green. Let's take a
look at those numbers as we wrap up this
trading day.
All right, we have the Dow Jones
Industrial Average just so close to a
record which we haven't seen since
December, but up 1.9% 846 points there
at 45 631. The S&P 500 up 1 and a.5% so
well off its highs of the day but
nevertheless a nice gain to end the week
at 6466 and the Nasdaq of course up
1.9%. Those techs just continue to fly
again. Tim,
you say broad-based on a day like today
and then there's broad-based. This is a
day that is broad-based. 428 stocks in
the S&P 500 moved to the upside today.
Only 75 in the S&P 500 moved lower.
Let's just check in on industry groups
and more broadly what we've seen across
the board because well just consumer
staples in the red. Everything else is
in the green from once we have breadth.
But look, it technology still on for a
good run 1.3%. The NASDAQ is still down
on the week but we're up on the day.
Energy up 2%. Industrials it really
feels as though that's the air that gets
powered by the hint of rate cuts.
Look at all that green on the screen.
Scarlet Fu would call that a spinach
pizza pie.
I feel bad for whoever had to do
decliners today. That would be Nora.
Melinda. Nora, thanks for doing it.
You left me with the
the hard work. I did. I'm sorry about
that. Hey, um, look at the KBW bank
index up 3.2%. Interest rate sensitive
stocks surging today. Uh, this is the
highest close, first record going all
the way back to 2022.
First record for the KBW bank index, up
3.2% going back to 2022. All because of
what we heard from Jay Powell. traders
happy that he signaled a willingness to
cut rates next month, pointing to risks,
rising risks for the labor market, even
as worries over inflation remain. Also,
Caroline, you mentioned Intel. This was
certainly on my radar today for a
gainer. Intel shares absolutely surging
on the day. This after uh we learned
that the president said that Intel had
equity stake uh in the company. The
president casting the agreement as one
that would revitalize Intel, saying the
company would quote has been left behind
compared to competitors in the chipm
industry. Intel shares were up as much
as 6% earlier in the session and today
uh up by 5.6%.
Uh also on the day today, Apple shares
uh hitting session highs. This after
Bloomberg's Mark German reported
exclusively that Apple's in early
discussions about using Google Gemini to
power a revamped version of Siri's voice
assistant. It's a key potential step
toward outsourcing more of its AI
technology. Talk about strange
bedfellows. I mean,
it's a world of fremies, Tim. It's a lot
of enemies.
Can you believe that? I emailed Mark
German. It reminds me of that moment,
Caroline, like 10 years ago when there
was a demo. I think it was an iPad or an
iPhone demo and they invited Microsoft
to come on the stage to and and everyone
was like what are you this is Apple and
Microsoft these are two companies
to Apple all the time to be able to be
the number one search destination on
their phones. That's the one that has
been quibbled with by the government
thus far.
There it is. Frenemies I think is the
best way to describe that. All right,
Nora, you have the hard job. Take it
away.
Here we go.
So, let's take a look at some of the
decliners that we saw today. I'm going
to start out with the biggest decliner
in the S&P 500 today, and that was into
it. This has really been a stock that
has been in focus after uh the software,
the tax software company delivered a
tepid forecast, and this completely
overshadowed an otherwise strong fourth
quarter report. But we do have some
commentary out from Morgan Stanley. The
analysts over there saying that given
solid progress on core growth
initiatives and a history of
conservative guides, they would be a
buyer on weakness here. But of course,
we did see that the stock still ended
lower today, down about 5.1% for this
185 billion company. Shares are up about
5.4% year to date. Let's move over to
Workday Shares. This is a company that's
also been in focus. Investors were left
disappointed that the HR software
company left its subscription revenue
guidance unchanged, completely flat
here. Apart from a small boost that they
did have from the Paradox acquisition,
analysts on Wall Street are really
flagging concerns around AI displacement
continuing to linger here. Uh Barclays
is saying that the quarter was solid in
the slight beats uh on a couple things
like subscription revenue alongside with
meaningful outperformance on
profitability and cash flow would
usually warrant a positive response
here. But of course, we know this is one
of the decliners. So, here in the red on
this Friday afternoon, shares of Workday
are down about 14% so far this year. And
lastly, let's take a look at CSSX
of keeping an eye on a lot of those rail
stocks here. I'm looking at S15 Rail.
That index is down just a touch down
3/10en of a percent today. But this is
after we did hear that uh CSX and BNSF
announced a new intermodal service
products to ship between the western and
eastern US. A lot of people were really
looking for some sort of M&A here in the
space for the railroad industry. But
we're just seeing a partnership here. So
you are seeing that reflected in terms
of Wall Street sentiment here for this
stock.
Some lonely sliders there today. Well,
you know what else was down guys? Yields
were down. Look at that. It looks green,
but actually that is the buying of
treasuries, the dropping of yields, and
that 10-year dropped like a stone after
the Fed chair's speech was released down
more than 10 basis points to finish the
day at 369. The across the curve, you
could see there was lower, but obviously
towards the back end, not the huge moves
that we saw at the front end. In fact,
the 30-year yield there, finishing the
session at 48776. And that tenure glued
to the 425 mark, 42537.
But I do want to point out one thing.
Anna Wong from Bloomberg Economics is
out with a note suggesting that perhaps
markets are being a little bit too
sanguin here. That the speech was
actually peppered with hawkishness in
her words. She's saying he talked a lot
about labor market cooling. He didn't
signal the need for urgent action. So
maybe watch the space. Maybe we've all
sort of written off September as a month
where the rate cycle starts, the rate
cutting cycle, and maybe in the end it
doesn't happen, which would make for a
big reversal, I imagine. Yeah, actually
Nora Norah brought this up on our
program earlier. Is it going to be if
there is a cut in September, is it going
to be a hawkish cut or a dovish cut? And
uh yeah, I guess we we'll have to wait
and see. And there's plenty for us to
sort of digest between now and then on a
lot of data that comes between now and
then that could change the narrative and
and change the picture. Uh it's back to
school time, everybody. So, make sure to
go get the backpack and
the pencils,
pack up for the dorm rooms because it's
time to drop the kids off at college or
wherever they're going. What we're
learning now about this year in
university is it's quite a bit different
than previous years as a result of the
pressure that some of these universities
are feeling for a few different reasons.
uh one over the finances that have been
hit as a result of federal grants that
have gone away, but also the question
about who's coming from around the world
to universities that are traditionally
uh filled with students from many
different countries as a result of uh
the way they've grown in recent years.
That's a big question given the pressure
that the Trump administration has put on
these universities and also immigration
changes. Now, some of these colleges,
Nora, are actually tapping their weight
lists to fill spots before classes even
begin.
Absolutely. It's a really interesting
way that they're really trying to
grapple with a lot of these financial
pressures. Some of the top universities
that we're discussing here, Stanford
University, Duke, they're sending
acceptances to weight listed students
just weeks before. Of course, we know a
lot of these students are going to be
trickling into the classrooms here. So,
an interesting creative pivot, if you
will, as to what to do here in terms of
the financial landscape.
Not just sending acceptance letters all
of a sudden, but also little money often
times to sweeten the deal or to pay them
back if they've already given some money
to another college or also emotional
reasons apparently. You know, you can
get emotionally attached to the college
you're going to. So,
well, talking of sending money and
creative pivots, the weekend, it is the
weekend upon us. And can we talk about
the weekend? The artist a billion
dollars in financing backed by his music
rights. That's apparently what's being
negotiated at the moment. Lyric Capital
Group going out there saying, "Look,
maybe we could with your using
collateral of your music rights, of your
master records, $500 million in senior
debt, $250 million of junior debt, maybe
a little bit of $250 million in equity."
So interesting. Taylor Swift is buying
back all of these things. He's busy
trying to perhaps use it as collateral.
I want to know what he's going to spend
it on.
I would That's sort of like my question
is like, does he does he need the money?
Is he going to make another idol with
Sam Levenson? I'm just so curious when
he's going to go by cuz I mean what he's
switching his name to Abel, right?
That's his actual name. He's not going
to be called The Weekend anymore. So,
I'm curious when this is going to come
into play here.
But I was fascinated because if you look
at other artists that have sold their
catalogs like Bruce Springsteen 550
million, Bob Dylan 300 million, 1
billion for the weekend. But he is the
most streamed artist on Spotify. In
fact, he's 25 songs with a billion
streams. And that's at least seven or
eight more than Drake and Taylor Swift.
He's shaking up Atlanta right now. He's
out on the road. He's doing his thing.
go listen.
All right, we got to run. Go listen to
the weekend. Enjoy all of your weekends.
That is going to do it for our
crossplatform coverage of the market
close on Bloomberg TV radio, YouTube,
and Bloomberg Originals. We'll see you
on Monday, same time, same place.
Coming up, a look at all the market
action this week and what to expect next
week during the last week of August.
We'll have Nancy Tangler with us, CEO
and CIO at Laugher Tangler Investments.
Do stay with us. A lot to parse. The Dow
hitting a record today. The VIX at its
low of the year. This is the close on
Welcome back to the close. I'm Vonnie
Quinn. Let's take a look at where
markets closed out the day and the week,
particularly this Jackson Hole week. We
were so close to a record on the S&P 500
having had all of those days of declines
up one and a half percent well off the
highs of the day finishing at 6466.
Guess what index did hit a record
though? That was the Dow. Matt Miller is
going to be very very happy about that.
The Nasdaq 100 also up more than one and
a half% erasing its declines for the
week. Plenty of movement in the MAG 7.
They had a very very happy day. Yields
plummeting particularly the front end as
markets decide. Look, it's a done deal.
September is pretty much a 25 basis
point cut, but there are a few voices
out there saying, "Hang on a second.
Hold your horses." May not be fully the
case. Bitcoin, another risk-on asset, up
4% again today, back close to $117,000,
which it did top just a little while
ago. So, as you can see, all the risk
assets, and pretty much everything was
higher today except for the VIX. The VIX
was at its low of the year. Now, I want
to talk about some of the indexes that
did particularly well, and that would
be, as you might imagine, was lower
rates. the home building index of 5%.
Although we have had guests on the show
saying no, it's not time yet. It's going
to take a while for lower interest rates
if they even come in September to work
their way through the economy. But as
you might imagine, automobiles also
seeing a nice bounce today on the idea
that perhaps lower interest rates will
have people go out and maybe, you know,
kick the tires around again. Obviously,
the semiconductor index played a big
role in today's rally. There were no
members of that index that were lower
and the whole index is up 2.7%. And as
you might imagine, the one loser was
consumer staples down about a third of
1%. But you know, that could be a very
important indicator because there's lots
of froth in this market in lots of
places as we've been continuing to hear.
And maybe those consumer staples being
in the red is a little lesson for us.
Well, our top story this hour, Powell
opening the door a little wider to a
September rate cut. The Fed chair
unleashing the biggest crossasset surge
since April, driving stocks and bonds
sharply higher at the end of a very
volatile week. The S&P 500 rebounding
from a 5-day slide and now back near its
record high. Joining us is Nancy
Tangler, CEO and CIO at Lafer Tangler
Investments. Nancy, great to have you. I
was reading Matt Mey a little earlier
on. He's always great on these markets
and he pointed to the fact that the Fed
chair did mention, you know, growth is
slowing and we know that, right? We're
looking at a 1.2% 2% rate at the moment
and that that could be a warning for
companies. Do you anticipate that once
we get past the end of this earning
cycle that we should start to worry
about the next earning cycle?
Bonnie, it's so good to see you and
thank you so much for having me. Um, I
just learned about weekend so I've been
thanks for educating me on that. Um
yeah, I listen I think earnings were
pretty pretty remarkable and we heard a
lot from our companies that they were
raising guidance. Uh their margins were
not getting crushed like we all
expected. Uh and I think part of that is
what we've been talking about now for
almost four years, which is this analogy
to the 1990s when we had higher interest
rates, higher inflation, but we had a
productivity driven uh we had
productivity driven economic growth and
that that is where I think we are today.
So um will we get some pullback in
earnings? I mean we've seen it. Retail
had some problems. Some of the staples
certainly had problems. uh and and they
were like relief rallies after not s not
as bad as we thought earnings. Um but I
do think you continue to own the the
names that are driving this new fourth
industrial revolution and and the old
economy companies that are adapting to
it and so our poster child of that for
that has been Walmart and we think you
want to own those kind of names that are
embracing all of the new technologies to
drive margins and earnings. So then what
did you think of Doug McMillian's
comments that tariffs are seeping
through week by week and that will
continue to be the case right through
the end of the year?
Yeah. And and listen, I think a weak
dollar is also a problem because we're
importing inflation. So I I I guess I
would say this. One of the offsets to
tariffs that no one is talking about is
the benefits to that to corporations and
particularly the larger end corporations
from the one big beautiful bill act. and
that is 100% bonus depreciation uh
upfront expensing deductibility of
interest expense and um and R&D credits.
So that those things are adding about
$158 billion closer to maybe almost 200
to uh cash savings in S&P 500 companies.
majority of that or or a big chunk of it
38% is going to the hyperscalers because
they are investing and that's those are
going to be powerful offsets. Add to
that we haven't even factored in the
benefits of uh deregulation because it's
hard it's hard to quantify. I think that
we're going to continue to sail through
pretty nicely uh for the for certainly
for the second half of the year and we
think well into 2026. What do you make
of the idea though that there are all
sorts of risks out there that we don't
even know about yet in terms of even the
ones that are half on our radar like
more tariffs coming or you know the
possibility of deteriorating relations
with India for example or other chip
companies or the president deciding he's
going to take stakes in more companies I
mean there's lots to be concerned about
Nancy right would you take any money off
the table here
well I am concerned about some of these
things Bonnie I hate the idea of the
government um picking companies and
getting involved the export tax. Another
thing that I think is a bad a super bad
precedent. But we've been what we did
this year was in July we were trimming
our winners and this has been the case
almost every I think every summer for
the last three years. So we were
trimming the winners and then broadening
out our exposure. Uh and then this week
we added on on the real big selloff we
added to names like Palunteer in the 145
range and Crowd Strike. uh because we
want to own those names, but we we're
not willing to say that it's time to
take money off the table. The market's
always call climbing, you know, a wall
of worry. There are things that I hate.
Um and well, but does the market care?
Not so much yet, I don't think.
Really briefly, Nancy, I do have to ask
you if Palanteer were to have if
suddenly, you know, in a week or two's
time it's trading at $70, could you say
you were surprised?
Yes. Yeah, I mean I I think but but
remember this Vonnie, last year we were
buying, for example, Nvidia at $88 a
share this last summer. So these things
are pretty volatile. The question is
what's the long-term trend? And our
original position in Paloter is much
below the current level, but we wanted
to add and we got an opportunity. I I'm
I wouldn't be surprised though if we saw
the some of these companies have major
sell-offs in in the coming months, but I
don't think it's it's permanent.
All right, Nancy, thank you so much.
Tanganger, CEO and CIO at Lafer Tangler
Investments. This is Bloomberg.
Tonight at 600 p.m. Eastern, catch an
all new episode of Wall Street Week with
David Weston. Our very own Scarlett Fu
took a trip down to Dallas, Texas, a
financial hub that hopes to take on Wall
Street. Take a listen to part of that
conversation.
Dallas really is a place where the
American dream is still very much alive
and well and it's not rhetoric like we
really are a place where people can come
who are not from here. We welcome
outsiders. It's a place that that really
embraces energy and and hard work that
can do spirit we have. When we see
another folks we embrace it.
How long will it take for Dallas to win
as a financial center?
I think we're winning. I really think
we're winning now with the growth there.
there are still people that have not
been to Texas that might have kind of a
image in their head. So I think that
over the next 10 years as more people
understand the sophistication I think
that that image of Texas will continue
to change.
Well we go from Dallas now to Jackson
Hole, Wyoming where the Fed's annual
symposium is wrapping up but at least
the Fed chair's day in the spotlight. So
the spotlight lingering on Titan County,
a place where billionaires are edging
out the millionaires. Bloomberg's
Michael McKe sat down with a town
council member and a rodeo owner to
discuss the economic rise of the area.
The geographic isolation still really
affects who we are, our ecosystem, our
community, our sense of who we are, but
it has much less effect on our economy.
So now we have people from around the
world who come and live here part-time,
full-time, uh they work from anywhere.
So we've really become a hub of remote
work. For decades, it was New York
County, which is primarily the island of
Manhattan, that led the country in
wealth accumulation. But in the early
2000s, Teton County jumped into the
lead. That trend has rapidly accelerated
in recent years, and New York has
tumbled into fourth place since the
pandemic. Today, the average per capita
income in Teton County is about a half
million dollars a year.
It was a small town. Everybody knew
everybody here in this town at one time.
It was extremely western.
Philip Wilson is the great grandson of
Sylvester Wilson, who was the first
settler to bring his family to the
valley in the late 1800s. For Philip
Wilson, his family, and so many of the
other residents, the cowboy culture is
not just for show. they were born into
it. But he also says it's no wonder that
culture appeals to outsiders and
newcomers.
That's what draws people to Jackson
Hole. The people that are here are
friendly type people. They're uh they're
outgoing. They're friendly. That's the
only way they know how to be cuz that's
the way they they run their lives.
And you can catch more of Wall Street
Week tonight at 6 p.m. Eastern right
here on Bloomberg.
Sticking with Jackson Hole. The Fed
chair Jerome Powell carefully opening
the door to a cut in September. Take a
listen.
The baseline outlook and the shifting
balance of risks may warrant adjusting
our policy stance. Our policy rate is
restrictive modestly so in my view. The
stability of the unemployment rate and
other labor market measures allows us to
proceed carefully. While the labor
market appears to be in balance, it is a
curious kind of balance. Longerterm
inflation expectations, however, as
reflected in market and surveybased
measures, appear to remain well
anchored, we will not allow a one-time
increase in the price level to become an
ongoing inflation problem.
Joining us now is Bloomberg's Michael
McKe live from Wyoming. Michael, markets
all day took this as red that this was
going to be a September rate cut. We
were kicking off the rate cutting cycle.
We do have Bloomberg economics coming
out though and saying, look, take a step
back. There was plenty of hawkishness in
that statement. There was talk of
growth. There was talk of fragility of
this curious labor market and so on. Is
the market getting ahead of itself here?
Well, you could argue that the market
gets ahead of itself in the particular
levels it reaches on any one day,
particularly on a day when it's reacting
to news as it did today. But it's uh a
little harder to say that the Fed
doesn't mean it because JPAL and his
staff are smart enough to know that the
language he used was giving permission
for Wall Street to behave that way to
believe that the Fed is going to cut
rates. Now, if we got a really really
strong payrolls report, a reversion to
the mean on payrolls on September 5th,
that could change the Fed's calculation.
if we got a strong uh increase in
inflation in the CPI report, that could
also change uh their inclination. But
for right now, it appears their forecast
is we're going to get a moderate to weak
employment report and we will still see
some inflation in uh the from tariffs in
the CPI report, but it won't be that
much yet because it'll take time to get
into the inflation numbers and so
therefore they could justify cutting
rates. Michael, four big central bank
heads there, plenty more, I imagine, as
well. What is your sense of how people
are thinking about the global economy?
Are they generally more concerned about
labor forces and the health of consumers
worldwide, or are they generally more
concerned about inflation?
Well, it depends on the country you're
in. Uh Europe has 2% inflation. They're
at their target. The British have much
more inflation than we do. Uh and of
course, we're in the middle there. So it
it it varies country by country and the
impact varies country by country
depending on what you're tariffing your
own people on. Remember though the
tariffs are taxes on the people who live
in the country that's imposing them. And
so what we're getting is a stronger
dollar because more dollars have to come
in to pay for the tariffs. Other
countries are seeing an outflow of
dollars or they don't need as much and
so in their case they're seeing weaker
currencies. So it depending on which
country you're in, the central bank has
different options.
Michael, thank you so much. Looking
forward to hearing more of the chatter
next week and beyond. I do want to point
out that President Trump has said in
just in the last few minutes he's going
to do major tariff investigation on
furniture coming into the United States
and these stocks wayfair and RH trading
lower off the back of that.
Call it the melding of the MAG 7. Some
crossover among the market's biggest
companies this week as the AI story goes
from unmed to undeniable. You saw Meta
inking a $10 billion deal with Google
Cloud and poaching an Apple AI
executive. Now, Apple is exploring using
Google's Gemini AI to bolster Siri.
Let's get to Bloomberg's Mark German,
managing editor of Consumer Tech. So, if
this all turns out to be true and it
apples quickly, I know many Siri users
that will be very pleased. Mark, I
imagine that we're looking at sort of
dates and months when this might happen.
Yeah. So, Apple's holding what they call
a bake off internally where they're
trying to determine what's the best
direction for the future of Siri. Right
now, Siri runs on what they call Apple
Foundation models. In other words,
underlying technology developed by
Apple. Right? We know from experience
that in use, it's not always very good
or as powerful as the competition. And
so they're looking at what would it look
like if Siri instead of being powered by
Apple technology was powered by outside
technology. And so they have begun
talking in recent weeks with Google
about the prospect of using Gemini
models to power Siri. Previously they've
held very similar discussions with
Anthropic. They got pretty deep with
them and to open AI to a lesser extent.
So right now basically trying to
determine whether they should work with
OpenAI, Anthropic or Gemini or stick to
the status quo which is their in-house
model technology.
Is it going to be a cost decision or an
efficiency decision?
Uh it's a mix of everything anthropic
I'm told in the talks with Apple have
set a pretty high bar for pricing. Uh
Open AAI obviously are going public in a
couple years so they want to hold a very
high bar on pricing as well. Uh Gemini,
they have an existing relationship with
Apple in terms of the parent company
Google uh their larger $20 billion or so
a year search deal that could be upended
by the Department of Justice any week
now. Uh so there's a certainly a lot of
factors at play. I think if you ask me
personally that 99% of consumers don't
know or don't care who's powering the AI
technology on their devices. They just
want Siri to work. So I think at the end
of the day, Apple's going to do what's
best for the customer. But we shall see.
Yeah, I mean it really always is the
case, isn't it? You just want your
devices to work. Mark, thank you so
much. That is Bloomberg's Mark German.
Pivoting to another tech giant hitting
the headlines. Intel. President Trump
confirming the company agreed to give
the United States a 10% stake and
hinting it may not be the only deal of
its kind. Shares of Intel ended the day
pretty sharply, higher, higher even than
some of the other tech companies that
were rallying. For more and how this
could impact the rest of tech, let's
bring in Futurum CEO Dan Newman. Stan,
maybe an unusual arrangement. It might
help Intel build some factories. What
else can the US do for Intel, the
chipmaker?
I don't know that the US needs to do
anything else. I think it's this
signaling to the market that it
understands the importance that the
United States has its own US-owned chip
champion that can manufacture the same
type of chips that TSMC makes. And this
isn't because TSMC isn't a great partner
or that the relationship isn't
tremendous or that their technology
isn't the best because it is. And we
could easily continue our dependence on
TSMC. But the challenge is as we know
there's continuous conflict between
China and Taiwan. The US being entirely
dependent on TSMC for all the chips for
Nvidia, for Apple, for AMD and other
companies is not a great strategy going
forward. And Intel has not on its own
been able to buoy its foundry strategy.
And part of it's been able being able to
build the trust of those companies I
mentioned to use Intel. And I think the
US getting behind it is going to
accelerate that even if it did mean
putting their food on the stage.
Odd all the same, Dan. Right. I mean, a
lot of those things the government could
do without taking an actual ownership
stake in a company. I mean, it reminds
me of the GSSE in some way and look,
we're 17 years later and the government
still, you know, is right there in the
GSSE. Is that going to happen to Intel?
And and also, what does it do to the
exist shareholding the existing
shareholder base?
I think there's a lot to be seen there.
um as a taxpayer I can get behind the
idea of a passive investment meaning you
know non- voting shares which is what
I've heard and the idea that if the
investment just like Taiwan did in TSMC
in its early days by the way does end up
being very successful that the taxpayers
that are funding because what they're
talking about is taking the grant money
from the chips act which was going to be
given with a few strings but with no
direct intention to pay back at least if
this ends up being successful ful the US
is able to make its own chips and Intel
is able to return to prosperity either
as part of the entire Intel or as a
spin-off which could still happen. There
is a chance of either repayment or that
investment gaining value over time
because right now we were throwing money
at Intel and Micron.
Sorry, I I do need to interrupt one more
time because I still don't understand
the rationale behind it. I mean, if the
government really wants the US to be the
best chipmaker in the world, shouldn't
it allow talent, no matter where from,
to come in and, you know, be the best
chipmaker? How can it help a company
that is not there? It's not It's
obviously not competing at the top of
its game. It needs more talent. What
What else can the government do?
Well, the government can do a number of
things. It could potentially try to
form, you know, a JV. So, we've heard
that potentially they do entice TSMC
into partnering potentially by helping
drive some of the largest u chip makers
including Nvidia and AMD to build their
chips with Intel there could be some
collaboration that could help develop
the talent. Intel does have a lot of
talent though. There's a bit of a
misnomer there. there's been some
mismanagement and right now it needs to
actually anchor its talent and yes there
needs to be policy that helps bring more
of the best talent to the US and helps
them decide to work for Intel but us
deciding to let TSMC be the only
provider has put us in a difficult
situation and if we want the next
generation because they do not bring
their intellectual property here. So if
something was to happen and China,
Taiwan had a conflict and Taiwan was at
war or there was a significant conflict
that arose, we wouldn't be able to move
to the next node. We would fall behind
the world because TSMC is not building
their most advanced chips here even with
the most recent announcements of their
2nmter coming to Arizona.
Yeah. And I know Intel is a particular
example. It's been in the doldrums. It's
had a lot of trouble. But you do wonder
what is the bar now for the US deciding
it wants a stake and and will you know
is it is it if a company is not trading
at a multiple the US thinks is the right
multiple is a share price you know you
have to wonder is something like Nvidia
next for example okay sure it's doing
well but you know when will the US
government decide it's not doing well
enough so let's move to Nvidia we are
getting earnings next week do we see
margins in the mid70s like we've been
promised
I do think so I do think that in uh
Nvidia is going to be able to return. It
did take a period of time. There were
some costs in terms of calibrating for
the Blackwell generation, but we've seen
the ramp. Our channel checks suggests
that the Blackwell numbers could be even
a little bit better. And this has helped
like it did in the last quarter to
offset for some of the challenges and
the uncertainty around China. Uh that
China play and that put has continued to
be the uncertainty. I will say this
though, um, if Nvidia stumbles in any
way, even just a little bit, that
actually could be what creates a bit of
a break in the market. We saw the rally
today behind Powell's, uh, you know,
dovish sentiment. But I think the whole
market basically comes into this
expecting Nvidia to not only perform,
but outperform to show good guidance and
show some confidence in the outcomes
that will come in China.
Absolutely. And we keep getting sort of
conflicting reports and and maybe it
depends on what's going on in China, but
that, you know, things are fine and the
the US is allowing Nvidia make, you
know, less uh maybe less productive
chips for China and then suddenly China
doesn't want them and so on. So maybe
we'll get some clarity on the call at
least. But just in terms of Nvidia's own
numbers on the inside, has any of this
been a distraction for it or can it
continue to build out its other client
base?
Yeah, I think the demand and and we've
we've got the chip market sized and this
is palpable and it's going to continue
beyond China for a number of years
ahead. You know, we see a a multi-
double digit kagger that will go all the
way till the end of the decade for this
GPU market and Nvidia is expected to
keep in the '9s percentage. So, that's
even as we continue extend as AMD comes
into market, as Broadcom and these
homegrown chips grow, you're going to
see continued dominance from Nvidia. I
do think the China thing is a bit of a
distraction and I'll quickly add I think
China really needs Nvidia chips and they
will for the foreseeable future. I think
it's a mistake to underestimate China's
resolve and what it's doing with Huawei
and its interest in potentially being
able to build its own chips. But the
reason they want those deprecated
4-year-old H20s is because their
researchers and developers that are
building AI in China want to build on
Nvidia.
Amazing. Dan, thank you so much as
always for your thoughts. Futurum CEO
Dan Newman joining us there. Well, let's
take a look at some notable movers in
after hours trading. We're seeing
massive declines for Wayfair and RH this
after the Trump administration and
President Trump himself actually truthed
out that he was starting a tariff probe
into furniture imports. And of course,
that would very negatively affect those
stocks which were already, you know,
suffering under the weight of tariffs
and so on. Although Wayfair has had a
great run this year. It's up more than
70% year to date. And then I do want to
also mention this headline that's just
crossing the Bloomberg Starbucks
reducing a schedule at US coffee plants
in order to curb costs. So Starbucks
there also trying to curb costs like
many other companies in this
environment. This is the close on
On the tariff front, President Trump
announcing a tariff probe into furniture
imports, saying he aims to complete the
investigation within the next 50 days.
Also saying the exact tariff rate is yet
to be determined. We saw Wayfair and RH
take a big leg lower on this news in
after hours trading. And of course, this
all as Canada's Prime Minister Mark
Carney says he's lifting some
retaliatory tariffs on US products,
obviously seeking to lower tensions with
the White House. Joining us now to
discuss all of this is James Lucier,
founding partner at Capital Alpha
Partners. So, James, just on this most
recent truth where the president says
that he is going to investigate
furniture imports, explain it to me.
We're already looking at lumber tariffs.
We're already looking at just regular
tariffs, tariffs on goods that, you
know, transition between countries and
so on. Surely furniture imports are not
a national security threat, are they?
Well, they have to be a national
security threat to qualify for tariffs
under section 232. But what we're seeing
with President Trump is literally a new
tariff almost every day. Yesterday, the
new tariff was on wind turbine
components. So figure that out. And as
you noted, we don't know what the rates
are. It creates a tremendous amount of
uncertainty for people in the
marketplace because you've got all these
new tariffs that come in and no one
really knows how to gauge the impact.
least of all J. Powell. On Tuesday, we
had to digest the news of 47 additional
uh product lines for steel and aluminum
uh products being subject to tariffs.
And those are a lot of consumer
products. Everything from fire
extinguishers to baby strollers. So,
people are really scratching their heads
and wondering when this tariff nonsense
is going to stop. James, what are the
odds the courts strike down, as you're
calling it, his mega tariffs policy?
Yeah, that's something that investors
should be looking for literally in the
next week or so as we go into the uh
Labor Day weekend. The uh Federal
Circuit Court of Appeals has been
considering this case on an on an
accelerated basis. Two federal courts
have already ruled that the tariffs are
under IEPA which is a different law not
section 232. The tariffs under IEPA
according to two courts are unlawful and
unconstitutional.
Now there's a big appeals court
considering that question and it's
expected that they hand down the
decision pretty soon and they could be
the third federal court in a row. three
strikes uh calling these tariffs
unconstitutional and unlawful, which
means that the tariffs would have to be
refunded if the court goes through with
its order.
Yeah. I mean, that's so hard to imagine
everybody, you know, appealing and
applying for a refund. Where would you
even apply, you know, for your refund
to? But at the same time, if if it's
struck down, does the president have any
other avenues? Can he go against the
Supreme Court?
Well, he said that he'll take this all
the way up to the Supreme Court. And
it's important to note that just as
President Trump has been tweeting about
um about uh Fed governors, just as he's
been uh tweeting about Jay Powell, he is
also tweeting about the courts and
talking about how the courts will cause
a financial catastrophe on the order of
a great depression if they strike his
tariffs down. So, uh, just as he's been
chasing J Powell via social media, I
think we need to worry about President
Trump going after the Supreme Court,
heranging them to provide a stay that
would keep his tariffs in place in the
event that this new court, the federal
court, the federal circuit court um, of
appeals strikes them down.
We'll know, as you say, in the next
week, undoubtedly. Moving to Canada, did
the Canadian prime minister just take a
huge gamble by deciding that he wasn't
going to tariff some of the USMCA
compliant goods?
Well, I think he did. I mean, obviously,
this is a very sensitive question in
Canada, and I should say that I spent a
fair amount of time in Canada myself. My
father's family is Canadian. So I I I
think the Canadians, like our friends in
Europe, have been doing their best to
offer Trump consiliatory gestures, but
it just seems like nothing you do to
make peace with Trump is ever going to
satisfy him. So I give Mr. Carney props
for this, and I hope that we can begin a
process to to lower the trade tensions
between the US and Canada. Certainly, no
one on the Canadian side wants to see
this continuing. You would worry though
that you give an inch and and a mile
gets taken at some point. I mean now
that Canada has extended the olive
branch as it says on the on the uh
graphic that what what what will the US
do except ask for more?
That's the big problem and that's the
reason why um countries have invested so
much goodwill in u offering prompt trade
deals in going through negotiations in
offering big concessions and not doing
any retaliatory tariffs at all even when
we're hitting them with at least a 15%
tariff in the case of EU in the case of
Japan in the case of South Korea we're
hitting them with a tariff and yet They
are promising to buy American goods and
to invest more in the United States.
That's a big investment of goodwill. And
I think the president needs to be
careful not to squander that goodwill by
not taking yes for an answer.
Very basic answers here James needed
because we're out of time. But the
chances that we'll have a satisfactory
deal with China at some point and the
same for India.
Those are both very hard. Um in the case
of India, I think that the the AIPA
tariffs that the courts are going to
rule on in the near future is going to
be a big factor. Um I think that uh if
the uh Federal Circuit Court of Appeals
strikes down the AIPA tariffs in the
near future, it's going to complicate
prospects for trade deals with both
China and India.
All right, so sequence matters once
again. James Lucier, thank you so much
for joining us this Friday evening.
James Lucir is founding partner at
Capital Alpha Partners. Still ahead,
what investors need to watch out for
next week. This is Bloomberg.
Netflix is hoping to make history this
weekend, not on its streaming platform,
but at the cinema. Bloomberg's
entertainment reporter Chris Palary
joins us. We're watching um some
pictures here, Chris. So explain to us
what we are watching exactly.
Uh it's just about the hottest animated
musical film in the world right now.
K-pop Demon Hunters. It's uh was
released two months ago on Netflix. Very
unusual move. This weekend, two days
only. They're putting in theaters. You
know, Netflix likes to focus on its
streaming customers and ignores for most
of its films the box office, but making
an exception this weekend.
It looks fascinating. Are there any
American voices being used, for example,
or is it completely Korean cast?
Well, that's the surprising thing about
it is it is an Americanmade uh K-pop
film. Uh I when I first heard about it,
I was anticipating, you know, something
with dubbing and that uh it was made by
Korean Canadians for Sony, a Japanese
company, and they sold it to Netflix.
But in spite of all that
multiculturalism, it's it's very popular
in South Korea. It's uh the music is
very catchy. It's topping the charts,
Billboard and uh on streaming uh Spotify
and that and so it's just one of these
global phenomena.
And correct me if I'm wrong, but Netflix
does seem to do international
extraordinarily well. They had big hits
internationally around COVID and postco
too, right?
I mean, that's the thing. They can take
something globally without the big
promotion. I mean, what why most movie
studios release stuff in theaters is
because they have all that buildup, all
that marketing, and then obviously they
can make money off it. Netflix is just
like, we're taking it everybody all
around the world at once. And and that's
their model. And and it's working in
this case, too.
And I love how they really they shove
everything together. So everything that
seems to be working right now, so K-pop,
you know, the the the the idea that you
need to be hunting demons or some kind
of ghoul or zombie or whatever, but also
a musical, like they're literally just
saying, "Okay, this box, this box,
and a competition show, that's what it
is. It's a fictional K-pop female band
versus a boy band." And so, uh, yeah,
it's got all of these elements that are,
you know, pop culture at the moment. And
you know, it could have they could have
easily screwed it up, but the people who
who made it really uh tapped into the
authenticity of Korean families and and
culture and that and that what that's
what's part of what made it so
successful.
So, if we're, you know, all watched up
on our K-pop Demon Hunters, Chris, what
else is on at the cinema this weekend?
Well, it's it looks like it's going to
uh um displace weapons. Uh it's a slow
weekend. It's that that's a a horror
movie from Warner Brothers and and
that's in its third week. So, you know,
we're seeing the sort of summer doldrums
and that's that's that's why they're
doing this in part and why it's going to
do so well.
Can't wait to see the numbers on Monday
and Tuesday. Thank you to you. That is
Bloomberg entertainment reporter Chris
Palm Mary there joining us. So, we have
another week in August next week. Let's
look ahead to what else we're watching
over the next week because there is
going to be plenty to watch. South
Korea's president, for example, visiting
President Trump at the White House.
We'll get comments as well from Federal
Reserve officials John Williams and Lori
Logan. It will be fascinating to hear
what they have to say after this market
reaction. John Williams of course of the
New York Fed and you know keeps an eye
on markets very closely. Tuesday, US
durable goods, conference boards,
consumer sentiment data, which will be
really important to start watching now
in terms of inflation expectations.
Wednesday, of course, the big one,
Nvidia earnings. We're all going to be
on that call post the market close. And
US tariffs on India are set to double on
Wednesday as well. Don't forget to 50%.
Thursday, more Fed speak, this time from
Governor Chris Waller. And another read
on the US labor market with more jobless
claims. And then Friday, another big
one. We get inflation data. US PCE data
comes to us on Friday. And of course,
those dimminimous exemptions come to an
end. Let's take a look at some notable
movers in after hours trading. And we
have to concentrate on Wayfair and RH
down more than 7% a piece after the
president truthed out that he was
starting an investigation into furniture
imports. Now these companies have been
doing well year to date, but again not
taking to that announcement too well.
That does it for us. Balance of Power is
up next. Do have a great evening. This
is Bloomberg.