August CPI, presidential debate, GameStop: Morning Brief

US stocks (^DJI, ^IXIC, ^GSPC) were trading lower on Wednesday morning as investors digested August's Consumer Price Index (CPI) report. Morning Brief hosts Seana Smith and Brad Smith are joined by top Wall Street and economic experts to take in the fresh data print and observe market moves.

BMO Capital Markets senior economist Jennifer Lee and Yardeni Research chief markets strategist Eric Wallerstein sit down with the Morning Brief team to break down the CPI report. CPI was roughly in line with expectations, though the housing sector saw some “mysterious” stickiness, UBS senior economist Brian Rose tells Yahoo Finance.

Wells Fargo Investment Institute senior global market strategist Scott Wren says that with the Federal Reserve expected to cut interest rates next week, investors shouldn't get too caught up in the 25 or 50-basis-point debate.

After Vice President Kamala Harris and former President Donald Trump met on Tuesday night at the pair’s first presidential debate, Trump Media (DJT, DJTWW), bitcoin (BTC-USD), and solar stocks (FSLR, RUN, ENPH) reacted in response to the candidates' performances.

JPMorgan (JPM) and GameStop (GME) are among the top trending stocks on the Yahoo Finance platform, along with Manchester United (MANU) and Dave & Buster's (PLAY).

This post was written by Naomi Buchanan.

Video transcript

It's 9 a.m. here in New York City.

I'm Sean Smith alongside Brad Smith.

This is Yahoo Finance, the flagship show with the morning.

Good morning, everyone.

Let's get to the three things that you need to know today, starting with the market stock futures under a bit of pressure here.

Headline inflation matching expectations both on a monthly and annual basis, but stripping out volatile food and energy prices on a monthly basis, inflation rising 3/10 of a percent versus the 2/10 of a percent that economists were expecting.

Now, the annual figure it did come in in line with estimates traders as of right now, they're pricing in an 85% chance of a 25 basis points cut in September.

This is according to the CB fed watch tool, you shift that we're seeing here in reaction to that.

All right.

Well, the first and potentially only presidential debate between Vice President Kamala Harris and former President Donald Trump taking place last night for 90 minutes, the candidates went head to head on the economy, inflation and tariffs, I imagine and have actually a plan to build what I call an opportunity economy.

We've had a terrible economy.

We have inflation, like very few people have ever seen before and what we have done is clean up Donald Trump's mess.

Everybody knows what I'm going to do.

Cut taxes very substantially and create a great economy like I did before.

Well, let's be clear that the Trump administration resulted in a trade deficit following last night's performance.

The Harris campaign is now calling for a second debate and the debate sparking some market moves as well.

Shares of DJ T Trump media and technology group falling as much as 18% free market.

They're now off right now as well.

They've been continuing to be under pressure.

Bitcoin also has been tied into the Trump trade.

Bitcoin seeing some pressure falling as much as 2.5% but off of those overnight lows crypto is also seen as a Trump proxy because he's embraced the industry and spoken at a few conferences on the other side of the aisle, solar stocks seen as a potentially doing a better, potentially doing better under Harris presidency.

You're seeing those rise here on the day.

These are some of the largest by market cap and they're all seeing some gains here in extended hours right now.

Let's take a look at how the markets are digesting this morning's latest inflation data.

August CP I print was largely in line with expectations a month, over month, core CP I coming in a bit hotter than what the street had been expecting, rising 3/10 of a percent as a result.

We're seeing some pressure on the major averages here in the futures market.

At least you're looking at the dow on track to start the trading day in the red that along with the S and P 500 on the flip side, you got the NASDAQ 100 teachers training just around the flat line, searching for direction for much of the morning and taking a look at the action playing out in the bond market.

That's certainly to note here.

We saw that at the rally.

The recent rally in Treasury is that coming to a halt just a bit here in early action, you got the 10 year yields actually moving to the upside hovering just around that 37 level.

So prices declining there.

Certainly something to note here in early trading Brad.

Yeah, that's to check in on gold if we may some of the commodities that we've been keeping close tabs on here as we're taking a look at gold futures down just slightly by about 1/10 of a percent but holding steady above 2500 key psychological level there.

And this all as we've been tracking what the CP I print is doing in terms of the broader market reaction that we just laid out for you inflation.

We did mention this came in mostly in line with expectations.

We did see a slight tick up on a monthly basis at the core level traders now pricing in an 85% chance though of a 25 basis point cut here with more is Scott R senior global market strategist over at Wells Fargo Investment Institute.

So Scott, the probabilities according to the CB fed watch tool have shifted and now handedly looking at a 25 basis point cut.

So what is this set up for September and the pathway beyond that?

Well, Brad, uh, good morning.

And, you know, we had been in the, um, certainly looking for 100 basis points in cuts in these three meetings a month ago.

We would have said they would have done 50 here in September.

Uh, but I think the, the, the, the fed funds futures are right.

The chances are, is that it's going to be a 25 basis point cut.

Um, things like today's CP I data suggests that, you know, the fed can go at, at an even pace and, you know, the market's a little bit nervous when I looked yesterday at fed funds futures.

You know, there were, there were 10 cuts are more than 10 cuts priced in between now and the end of 2025.

I think that's too aggressive.

I think the economy would really have to, uh, tank to see something like that.

We're, we're expecting a soft landing where we're not looking for a recession.

So, you know, the market is going to be very sensitive to this.

But I think, uh, chances are that the fed, they lower 25 basis points in September, Scott, there's been so much made about 25 versus 50 basis points.

Does it matter?

I, I, you know, Sean, I don't think it does.

You know, we, we have, you know, we're catering to retail investors here and, and, you know, they are getting hung up on 25 or 50 basis points.

And I don't think that's really the important thing to focus on.

I think the important thing is that the Federal Reserve is, is just next week is going to begin a series of rate cuts.

Um, that's what we want our clients focusing on and, and of course, you know, the financial media, uh, there's news out there, there's time to be filled and the debate between 5025 has, has, you know, garnered a lot of air time, but in the whole scheme of things, we're going to have a lot of cuts here.

And I don't think that, uh, I don't think that investors should get 200 up on whether the first one's 50 or 25 and Phil slightly like a personal attack.

But, you know what?

You made a lot of sense with it, Scott.

So we'll let it slide here for today.

You know, all these things considered though.

I mean, if we were to see anything about and around 10 cuts, what does that put in your mind as a terminal rate that we should be looking out for once they begin the cutting cycle.

Well, you know, I, I, you know, we debate this in the investment strategy committee all the time because everybody has their own idea on what they think the, the neutral rate should be.

You know, in my mind, you know, it should be, you know, 375 to 4.

But some people think it's, you know, 3% or maybe even a touch lower.

So I think the fed probably if you try to pin them down on, on what the neutral rate or the terminal rate might be, you know, it would be, you know, somewhere between, you know, three and 4%.

So, um, you know, that's in the ballpark.

Um, you know, our theory is that they do want to get to neutral and that they're going to get there, you know, relatively slowly.

So, as I said, you know, we have 100 basis points penciled in for these last three meetings.

Uh, I think you can certainly safely say that we're going to see 75 and, and once again, um, you know, don't get too hung up on, on a quarter point here or, you know, we're going to see a series of cuts and that's going to positively affect what is likely to be a slower economy here as we move into 2025.

Well, Scott, as we know, everyone loves to weigh in on what the feds should and shouldn't be doing.

And there certainly has been no shortage of critics out there saying that the fed is behind the eight ball that they've already done more damage than you can tell right now to the economy.

When you take a look at the CP, I print at least the core print that we did get, does that really put that argument to rest?

Well, you know, I, I think the fed didn't do a very good job when they left rates too low for too long.

I think they've done a good job though.

You know, they raised rates, they raised it pretty quickly.

Um, you know, inflation is sticking around and you guys in your, in your last segment talked about shelter and housing.

Well, I mean, you know, that's a sticky component and that's going to be sticky next year as well.

So, I think, you know, it's tough to come up with new supplies of housing any time quickly, but I don't think the fed is behind the eight ball.

I think that, you know, we saw with headline CP I, and we've seen with the personal consumption expenditures.

PC, you know, inflation is moderating.

It's moderating slowly.

It's likely to do that at least into the first half of next year.

But certainly this housing shortage, it's not going to go away any time time soon and houses are gonna be expensive and rent's gonna be expensive.

Scott, just wanna get uh finally here actionable with some of the investors out there looking through this data point, trying to game out with the fed's pathway might look like and anticipate their actions.

What is the the top trade or portfolio positioning that they should be thinking about after a data point like this and going into that next meeting?

Well, I think this bond rally that we've seen uh in the long term, uh a long term 10 year treasury.

Uh, you know, these rates are low.

We don't think they're going to go much lower.

So what we've been recommending that our clients do really over the course of the last six weeks or so is to take money from bonds and move it into stocks.

So some people we use short term fixed income as a parking spot.

We had been overweight long term bonds.

Um, but, you know, we've seen a good rally.

So we would take money from bonds both short term and long term and we would move that into the S and P 500.

If you're underweight small Cap Russell 2000 stocks, we'd bring that up to a neutral weight, which is what we did.

We still prefer large over small.

And then if you're looking at sectors, industrials, materials, you know, energy looks attractive here, we don't think oil is going to trade much lower than where it is now.

Communication services, which of course, you know, has a couple of members of the, of the mag seven in it that looks pretty attractive here.

So I think there's some movement that you can do in your portfolios, but we've taken a step toward moving out of bonds after this big rally.

Um, we've tried to take advantage of lower stock prices and, and to, to buy some equities here because certainly, you know, we think the S and P is going to be near 6000 at the end of next year, we want to take advantage of any Pullbacks.

Um We don't think interest rates are going to go lower.

All right, Scott Brown, always great uh to get your insight here, especially on a day like today.

Thanks so much for taking the time to join us here.

Senior Global Market strategist at Wells Fargo Investment Institute.

Thanks so much, Scott.

Have a great day guys.

You too.

Another top story that we are watching the presidential debate, Vice President Kamala Harris and former president Donald Trump squaring off in Philadelphia, Tuesday night, the first and possibly only debate ahead of election day for 90 minutes.

The candidates went head to head on a number of issues including the economy.

We have inflation like very few people have ever seen before, probably the worst in our nation's history.

This has been a disaster for people, for the middle class, but for every class, his plan is to do what he has done before, which is to provide a tax cut for billionaires and big corporations which will result in $5 trillion to America's deficit.

Joining us now, we want to bring in EJ Dionne, he's Brookings Institution, senior fellow in governance studies and government professor at Georgetown University.

Ej I, it's good to see us.

Let's unpack what we heard.

There's lots to get into from last night, but let's start with that sound bite that we just heard on the economy on inflation.

Obviously, just a fact check to your pre uh former president Donald Trump's claims that this is the highest inflation we have ever seen.

Certainly is not true.

Although we did see a big spike during Biden's administration up to a peaking around 9%.

But I'm curious just first to get your reaction to last night, what your big takeaway was?

Well, I think she overwhelmed him is the bottom line.

And I think that's the overwhelming consensus.

This morning.

I saw a focus group this morning where by 23 to 2, the people in the focus group, these were undecided voters uh said that uh Harris won.

And I think there were several things that happened first.

She put him on defense right from the beginning when she went and he was just going to walk to the lectern.

Uh she extended her hand, he didn't want to shake her hand, but he had to and said, I'm Kamala Harris pronouncing her name.

Right.

And that ended up setting the tone for the whole night.

She was on offense all night and we had never really seen this in quite the same way in a Trump debate.

Trump was in the past master po, uh, particularly in the Republican debates back in 2016 with his little nicknames, like a little Marco.

And the, like in putting the other person on the defensive last night, she put him on the defensive, got under his skin and there were just many moments where most moments actually in the debate, he veered all of the message.

The clip you showed was really a rare point where despite the fact that he overstated it to be gentle to him, uh overstated what was happening with inflation.

Um That was one of the rare moments where he actually was on message last night.

Um He spread those false stories about immigrants, eating dogs and cats.

Um He exploded at various points.

Um you know, and looked snarly all night and she looked extraordinarily calm.

Um It's just hard uh to see that debate as any else but uh an overwhelming victory for her.

And again, I don't think, um I don't think that's an odd view.

II, a dissenting view.

I think it's the overwhelming view this morning among Republicans and democrats who watched that debate.

Egej, sorry, we have a couple more sound bites too here.

Uh Another topic talked about last night was the semiconductor industry.

Harris calling out Trump for chip policies during his administration.

I wanna play this clip and get your reaction.

On the other side.

He invited trade wars.

You want to talk about his deal with China?

What he ended up doing is under Donald Trump's presidency.

He ended up selling American chips to China to help them improve and modernize they're military.

We hardly make chips anymore because of uh philosophies like they have and policies like they have, I don't say her because she has no policy.

Everything that she believed three years ago and four years ago is out the window.

Now.

It's gonna be an amazingly important topic.

Of course, ej especially given where the industry is moving, you have NVIDIA talking about 1 million chip data centers.

We heard from Oracle and saying that they were gonna be using nuclear reactors to power data centers.

All these things considered.

Where did the can candidates lined up on this issue?

From your perspective?

Well, you know, I it's funny you, you have picked out to your credit uh relatively substantive uh moments uh in uh you know, a long debate, I think that what you're the, the difference is, I think to the extent that you could discern it from that debate, which I'm not sure you can.

Um you know, the um the Biden administration and Harris with Harris's support is, has invested a lot of money in domestic technology, including the chips industry.

I think if, you know, if Harris wins the election, I think you will have a continuation of where the broadly speaking, where the Biden policy is on this, on Trump.

It's hard to say from his answer because again, I think that clip was revealing in the sense that what Trump was moved again on the defense.

Uh And then he tried to flip it to a general attack on Harris and I think that was his problem all night is that um he'd reach, he, he'd get in a corner and then he'd reach back to some boilerplate attack to try to get out of it and it just didn't work very well.

Ej I also wanna ask about something that wasn't actually discussed last night and, and that was deficits, budgets.

I think it was only mentioned once and I bring that up because of the real issue.

A a and, and ultimately, maybe the risk or challenge of this clearly does pose many would argue opposes to the economy down the line.

Why from your view, since you've been covering this obviously for, for, for decades, for such a long time, why isn't it more of an issue, more of a focus in presidential elections?

And should it garner more attention?

Well, I think there are, I, I think that for one thing we got used to higher deficits during the pandemic and that we needed to pull ourselves out of the economic, uh you know, collapse that happened.

Well, with the pandemic, um, spent a lot of money, both parties voted for that.

Um, and the other thing I think you've seen is that for a long time, um, Republicans have made the argument that, well, if it's for tax cuts, if, if we are increasing the debt that for tax cuts, that's ok. Um, and the difference between the parties is now, uh, which party will increase the deficit, less the economists who do the numbers say that, you know, the Harris side is willing to increase taxes to contain uh the increase in the deficit.

But I don't think at this point, people feel the threat of the long term deficit because you know, the big news, you talk about a campaign getting good news.

The Harris campaign got Taylor Swift's endorsement last night and then gets this very good news um on the inflation rate uh this morning.

Um So at this point, I don't think people have felt the bite yet of the deficit and neither party sees any interest in making that the centerpiece of their campaign.

Ej Dionne, always great to talk to you.

Thanks so much for joining us here, Brooks Institution, senior fellow in governance studies and government professor at Georgetown University.

Thanks again.

Great to be with you.

Thank you, Brad.

Well, the presidential debate is moving some stocks this morning.

Let's take a look at shares of DJ T. They are down pre market by 15 nearly 16%.

And at this level, it will set a new 52 week low once trading commences, which also means this will be the lowest point that shares have hit since Digital World merger with Trump Media and Technology Group was approved, giving way to the DJ T ticker here.

So we'll continue to track that.

Also.

We're tracking Cryptocurrency, Bitcoin pairing back some of the earlier losses as well.

Let's take a look at Bitcoin and ultimately, as of right now, it's up by about 2/10 of a percent.

So maybe decoupling a bit from the Trump trade as of right now, we'll see.

And then lastly here, let's take a look at micro strategy as part of the broader crypto trade as well.

MST R. Of course, you will remember uh Michael Saylor who has tweeted about uh President Trump, former President Trump speaking at the crypto conference here.

But could that decoupling continue?

We'll see micro strategy down 2% Shana.

We're taking a look at a live view of the floor of the New York Stock Exchange preparing to hold a moment of silence in remembrance of the victims of September 11th.

2001.

Today marks 23 years.

Take a moment of silence and remembrance.

Now, time for some of today's trending tickers here and throughout the day, you can track the best and worst performing stocks of the session with Yahoo Finance's trending tickers page scan this QR code you see right there below to check out the latest here.

First up here on the day, let's check out gamestop.

That's uh yeah, G ma sinking right now by about 11% today.

After reporting sales that missed estimates and fell more than 30% in the price quarter, the company also disclosed and at the market stock offering of up to 20 million shares.

Uh So focusing in on the latter first, typically, this is the type of reaction that you would see in the stock when there's an at the market equity offering.

Because that just means there's a for the dilution of shares that are already in the market here.

But then looking into some of the fourth quarter, well, actually not the fourth quarter, but the quarter results here.

One of the huge things going forward from this juncture is just trying to figure out exactly how they're going to continue to move through a lot of the inventory that they have net sales.

Uh they were down and, and not even close to what the prior year second quarter was $1.164 billion last year, same quarter this year $798 million.

Yeah, certainly.

I think when you, when you see a drop like this, not necessarily a huge surprise, we talked about the fact that many times this stock trading uh unrelated to fundamentals.

Although it looks like when you take a look at the stock reaction here today, you can see how far and even further out.

Many are many analysts or some of the analysts, few analysts that still cover gamestop would argue that gamestop is still trading well above where it should be on a fundamental basis.

But again, chair sliding on the disappointing report bear in that the results demonstrate the ongoing quote unquote challenges to the company's retail business model also went on to say that they also have limited confidence in games sot's ability to restore growth and improve profitability.

Not exactly too new of a uh too uh different of an opinion that we've heard from some of these analysts over the last couple of quarters.

Let's keep an eye on some of the bank stocks here, JP Morgan leading the route as the biggest bank in the US, tempers it's revenue optimism and saying the forecast for net interest income aren't realistic.

That was the president making those comments.

Uh during a conference yesterday, we're looking at a further decline of just about 2/10 of a percent, but yesterday's drop shares falling the most that we saw in just about four years following those from their president, Dan Pinto.

He also went on to say right now, the current uh net interest income estimate of 89.5 billion is quote unquote, not very reasonable.

The figure quote unquote will be lower.

He said, and remember that Pinto wasn't the only one that was uh raising some red flags or ringing some alarm bells yesterday.

And over the last couple of days on Monday, we heard from Goldman Sachs Ceo David Solomon.

He uh made the admission or was basically warning that trading revenue at his firm was on track to drop 10% in the third quarter.

We also heard from Ally Financial yesterday and the auto delinquencies and net charge offs were up more than expected.

So again, some of that optimism that maybe we have seen priced into some of these stocks, some of these executives warning that, hey, maybe it isn't as rosy as what has been priced in up until this point.

Yeah, it seems like for Goldman, it was the unwinding their consumer business as was part of that $400 million hit that they were disclosing.

And then additionally here thinking back to JP Morgan and I, I think you laid it out quite well on what they're expecting.

Uh One thing that we're also expecting is to hear a little bit more about who the next leader of this company is gonna be.

And you mentioned Daniel Pinto, don't be surprised if you continue to hear that name over the coming quarters here as Jamie Dimond was speaking as well on that.

Um Just talking about uh Dan Daniel Pin and the succession plans here.

Here's what Jamie Dimond said yesterday.

We all wanna get that.

Exactly right as talking about the extremely qualified people.

Uh He said this at an event in New York.

Um and most notably here, he said that Chase President Daniel Pinto could run the bank tomorrow.

And so with that in mind, you, you've got a host of names that are very close to Jamie Dimond within the organization that uh would all be within the realm of possibility of taking over the top job.

Uh, and we'll see exactly who ultimately gets the nod, but that's a, that's a high vote of confidence coming from Diamond right now in Penn.

Yeah, it certainly is.

And there's a number of names that Jp Morgan is rumored to be considering.

And also remember that the timeline of this is really what is in question because Diamond has signaled that it's no longer something that I was talking about in five years, but it could be something in 2, 2.5 years.

So again, the focus on that succession plan, given the fact that he's been at the helm of the bank since 2006, certainly a massive focus here for investors and obviously those inside the bank as well.

Absolutely.

All right.

Let's stay with the banks.

Why not XL F?

It's Big Bank energy here this morning, sticking with banks, Morgan Stanley cut to neutral by Goldman Sachs saying the bank has less recovery than peers in the investment banking decis or divisions and citing some downside risk to estimates for 2025 wealth net interest income here.

The shares of Morgan Stanley took her some MS, they are down by about 1.7% here.

Uh and just thinking through how the banks are navigating what's been a massive week for announcements from basil three all the way through how they are working with their wealthiest clients for some of those extremely high net worth individuals.

Portfolio rotation right now has, has seemed to not just go towards what some of the most popular instruments have been and making sure that they're over indexed in um things like and have exposure to some of the sexiest elements of the market.

Uh but also having cash that is sitting on the sidelines too so that they can deploy and, and look at some of the dip buying opportunities and so that potentially could be a a hit in the near term to that ultra high net worth individual or some of the wealth management divisions if you have more people that are saying, ok, keep some dry powder in the coffer right now because we're gonna be wanting to hop on some of those opportunities that, that, so that's revenue that this company is not gonna see at least in this near term period of time.

Yeah.

And that was part of the analysis here, taking a look at the wealth management division specifically suggesting that 3% downside risk to the bank 2025 estimated net interest income also a 40 basis point merging downside compared to the street's expectations.

And, and then beyond that, some of the concerns here was for valuation here.

When you take into account where Morgan Stanley is trading relative to peers here.

Today, we haven't seen much, much in over the past year.

It's up nearly 14%.

But again, Morgan Stanley cut to neutral by Goldman Sachs and they're seeing reason to stay on the sidelines for now.

All right, here, you're seeing a live shot of the New York Stock Exchange.

That is the opening bell and you've got 911 or ringing the opening bell at the NYSC and at the NASDAQ, you've also got a shot of the opening bell.

Ringers, Tuesday's Children ringing the opening bell there.

That was the opening bell here in the US and taking a look at where trading commences here on the day.

We've got a look at the Dow Jones industrial average is of course a big economic data points day with CP I.

We brought you special coverage here and they came in line lead year over year with estimates, uh, slight rise that we had seen versus the expectations on the month of month core.

But all things considered, you're seeing some fractional market activity, the Dow Jones industrial average right now down by about half a percent.

Let's give you a chart to look at a fancy chart here on the day.

Actually, let me go back here, just populate this chart and we'll give you a week long view just to see how things have been shaping up over the course of this week.

So it still net positive over the past three days here.

Um But ultimately, as of right now, we're seeing a move to the downside out of the gate for the Dow Jones industrial average.

Now, is that composite that's up fractionally by about 1/10 of a percent.

We'll see if we can hold on to those gains.

And then the S and P 500 out of the gate right now, it is down by about 2/10 of a percent.

And then just lastly, let's load you up with some heat maps as you begin your trading session here.

I heard you like colors.

So we've got plenty of them here.

Uh As long as we can toggle over there seems we can't.

So we'll keep a close eye on those 11 S and P 500 sectors as we move on throughout the rest of today's trading activity sea, we will be keeping a very close eye on those sectors and the action that we are seeing.

All right.

Keep right here on Yahoo Finance's Morning brief.

You got much more on the other side.

We'll be right back time now for today's strategy session, us stocks fluctuating at the open as traders.

I just today's CP I print showing a surprise acceleration in consumer prices, at least on a core basis.

Joining us now we want to bring in JJ Kinahan, he's IG North America's CEO and JJ.

When you take a look at the stocks reaction, we're not too far from the flat line, but I'm curious what your first take is of this inflation print and maybe what it tells us about what we'll likely hear from Powell and Team next week.

Well, II, I don't think it really changes their, uh you know, assessment of things.

It seems that the market has already basically built in shaw of the fact that they are gonna take 25 basis points.

Uh, I think those who have been talking for 50 basis points or a certainty around, you know, three or four rate cuts before the, well, I guess it would have to be three for the end of the year that I think is still a little bit perhaps overstretched.

And so, you know, this, this was a bit of, uh, I don't want to say nothing burger, but it kind of was in the fact that I don't think it gives us any clarity one way or the other.

The one thing that does stand out to me on there, however, is that the core prices for food and energy really didn't move.

And I think that that's one area where the average person would really like.

I like to see things move.

Now, we may see the energy prices next month come down as we have seen crude oil as you know, and report on every day, crude oil sell off quite a bit over the last uh week or so.

And so that may just be a delay in how, you know, timing of the survey or whatever it may be.

So there, I think is where we need to see things start to come down before it truly helps the economy.

JJ as, as we think about not just the data that really keys up or, or, or tees up rather this cutting cycle more broadly, the out performers that tend at least historically to do well in cutting cycles.

Technology, but technologies run so fast and, and so far so quickly, when you think about what the set up is for technology in this next cutting cycle, do you expect that historical element to reign through and again, or are are you expecting some type of repositioning here?

Well, you know, it, it, I think Brad the so many times people over the last couple of years have said, oh, you know, the tech stocks cannot continue to carry us et cetera and they've proven everybody wrong every time now.

We have seen NVIDIA, you know, come into some troubles recently, but I think you have to keep that in perspective that the stock is still up over 100% year to date.

And so I think any stock and any CEO in the world would be like, oh, please let me run into trouble.

Up 100 percent on the year.

And so, you know, overall, I, I think it's really uh sort of short sighted to say that technology will not continue to lead us the one area of technology that's starting to be questioned and I think will be something that they do have to prove.

However, going forward is all the spending in the A I and how they can really monetize it.

You know, if you think about NVIDIA, what they're actually doing, if you compare them to a gold rush, they're the ones selling the shovel very wise because it doesn't matter if the other people make money or not.

But long term, they have to in order to keep buying your shovels.

And so with that, what we've seen in the last round of earnings calls really for the first time was analysts asking the CEO S ok, how are you going to monetize it?

I do think you're going to start to see a lot more pressure there because we've seen hundreds of millions of dollars spent on A I.

That to me will be the key of whether we can continue the rally or not in a bigger way.

Uh You know, one of the things I think many of us were hoping is that fin the financial sector would pick up this and, and continue to lead us.

So you could have tech and you could have finances go, financials going together.

Obviously in the news that we've seen over the, you know, last couple of days and you guys just reported on the financial sector really having a bit of a tough sled right now.

And so I think it's gonna be very difficult, a rate reducing environment for them to really get back on track in terms of their earnings.

Also JJ, we talked to a Scott runner over at city yesterday and he was making the case that NVIDIA is just becoming a quote unquote.

I think he said just another large cap growth name.

Do, do you share in that sentiment?

Just in terms of the fact that we are seeing the sentiment on the street shift away from technology, it may be so much emphasis isn't going to be placed on NVIDIA and those A I names that you were just talking about.

Uh I I think it's we're not there yet, Jonah, because when I look at the retail client right now and I look at our clients trading through Tay trade, NVIDIA is still the name that you know, different stocks go through this at different times.

For how many years was it?

Apple?

I think NVIDIA has taken the place in terms of a confidence monitor if you will.

So as people get more confidence in the market, more people start to buy NVIDIA, you know, this is a stock that's al al almost always a bullish play for our clients overall.

And I think for the street overall.

So, uh you know, maybe you could make the case that it's starting to become just another stock.

But there is a confidence that goes with NVIDIA when it's doing well, that gives their average retail clients some confidence also that, like I said, Apple, we needed somebody to fill that void.

And NVIDIA has certainly done that over the last year and a half.

We'll see what the next stock is that does it.

But for right now, I really feel NVIDIA will continue to do that for at least the next six months or so.

And so if that's where your clients are signaling, they're the most bullish, where are they signaling?

They're the most bearish right now.

Well, there, there, there's a few other stocks they bullish on right now can also uh Ulta and UPS are two that I think are really interesting.

But on the bearish side, you know, Lululemon is one that we've started to really see a lot of bearish activity over the last uh couple of weeks and one related directly to technology Qualcomm and particularly through the, you know, many people seeing that it could go back down and test that 150 area.

We've seen a lot of 150 puts over the next month and a half bought in Qualcomm.

So that's one I definitely have my eye on.

And then the third one may be a surprise to many people, Disney.

Uh I don't think what's going on with direct TV right now is helping them because so many clients are shut out from the Disney channels, et cetera.

I'm sure you guys saw, you know, a lot of people online, particularly with Monday night football.

The other night people were not happy about the fact that they could not watch it.

So, uh, what we have to see what happens on that one because I think that's turned a lot of consumers sour recently on that.

So those are three stocks right now that I find uh ve very interesting that our clients playing to the downside.

But Qualcomm probably the one that's most interesting to me to watch because again, it relates directly to where we started this conversation.

JJ Kenna, who is the IG North America CEO.

Thanks so much for taking the time here with us.

J Have a great day guys.

You too, coming up, everyone.

Hurricane Francine is set to make landfall in Louisiana today.

The weather event already taking a toll on Gulf production and oil prices worldwide will take a closer look next on morning briefing oil rebounding this morning from its lowest level since December of 2021.

Traders weighing concerns about looming oversupply and tracking impact from hurricane Francine which is expected to make landfall in Louisiana today.

So maybe offsetting some of the losses that we saw earlier this week.

We wanna bring in Tom Kloza.

He's OPUS global head of energy analysis.

Tom it's good to see you.

So, we certainly have concerns about oversupply that had been weighing on the oil markets.

Now, we're turning our focus to the threat of the hurricane.

It may be exactly what that means for the energy market here in the US.

Do you see this movement, the slight movement higher that we're seeing this morning?

Have we seen a floor in crude?

Well, we're gonna see a floor, uh, at some point here, but uh I'm not so sure it's now and, and by the way that uh hurricane uh Francine is really not a major event.

It's speaks to the issue that every hurricane that makes a landfall on North America destroys demand.

It's really the rare 11 out of 50 or so that destroys supply.

And this one based on where it's entering is not gonna really destroy any supply.

It does bring uh kind of a microscope to the fact that we've got a lot of deep water and Gulf of Mexico crude, including probably close to a half a million barrels a day of additional crude coming out from those sectors in the next few years.

So, uh oil is a problem.

This has been a very, very bad week for all the oil analysts, for companies, countries that are in OPEC and for all of the entities that try to measure the temperature of crude.

And so with that, you mentioned in your notes to us, there's lots of diversity in the prices.

But recent months have demonstrated some deflation in gasoline, not a not enough to make up for severe inflation and the cost of lodging.

So, yy, you know, all these things considered, how is what we're seeing in the oil prices and, and the broader oil price action that has seen some new 2024 lows and even crack through December 2023 lows.

How's that playing through throughout the rest of the areas of the economy where oil is one of the key cost inputs.

Well, here's where everyone was caught sleeping.

Uh, the actual physical demand for oil in August was probably the highest month ever.

You know, the greatest, I wouldn't call it a shortage but relatively tight supplies of, uh, physical oil.

What happened this summer and what continues to happen is that you do not have speculators, buying futures and options contracts anymore.

Uh, instead of being 1015 to 1, uh, of people who are buying crude on the auspices that prices are going to move higher.

You, you're seeing no bias whatsoever.

That's gonna be, uh, you know, something that people have to get used to the fact that we didn't see more speculative money or more investment money come into the market when we had everything going on in geopolitics from last October 7th, you know, that might represent a real sea change for oil because a lot of the price of oil through the years has been the physical market, but a huge portion of it is also in the sentiment in the position.

And right now, financial participation in oil markets is probably as low as it's been since oil really became an asset class.

So Tom, what could turn the tables if we're looking for events, something like that, that could shift the sentiment that we are seeing or demand here that we are seeing for crude or mainly more specifically supply.

What should investors be keeping a close eye on?

Well, I think there's a few things and some of them have been happening.

We need to watch the drones through the next few months that are being flown from Ukraine into Russia to attack Russian infrastructure and refineries.

The world still needs Russian crude oil and it needs Russian refined products.

Maybe Europe doesn't get them anymore, but you know, Europe has to get product from other places that used to be supplied.

Uh The other thing that can happen is obviously there could be tougher suppression on crude oil exports from Venezuela and Iran.

That might happen, for example, on a short term basis if we get a Trump 2.0 presidency and then you know, the final thing is, is OPEC, I mean, OPEC is really whiffed on this one.

Uh They need to cut more oil as opposed to restore some of the production cuts that they made in 22 and 23.

And right now they're ready to pump a few 100,000 barrels more on December 1st.

You know, it's interesting that you mention, um who and the presidency itself as we're staring down a general election in less than 90 days here.

Uh And, and, uh, yeah, ultimately many of the American public watching the debate last night here and we were paying close attention to what the candidates had to say about energy last night.

Harrison Trump certainly had conflicting views on the sector.

Wanted to play a quick clip and then just get your reaction on the other side.

Tom.

Sure, my position is that we have got to invest in diverse sources of energy.

So we reduce our reliance on foreign oil.

We have had the largest increase in domestic oil production in history because of an approach that recognizes that we cannot over rely on foreign oil.

But if she won the election the day after that election, they'll go back to destroying our country and oil will be dead, fossil fuel will be dead.

We'll go back to windmills and we'll go back to solar where they need a whole desert to get some energy to come out of.

Uh So Tom just, just help us make some sense of this and, and what the candidates even as they were sparring yesterday evening last night, which of these candidates would actually be better for the energy sector if there is a clear indicator uh uh or in either or in this situation.

Well, it's a mixed bag.

I mean, whoever gets elected in November is going to be very, very fortunate and that they're going to be dealing with some of the most serious energy deflation since 2014 or since 2020.

Uh Kamala Harris is accurate in that.

We've seen an explosion of crude oil production, natural gas production in uh you know, the Biden years.

The problem is these are global markets and globally, if you have a fairly high price of oil, which is what we've had and you have tremendous advances in technology, you're gonna see more of oil.

Come on.

I certainly don't agree that the day after uh the Kamala Harris election that we would see see oil and fossil fuel dead.

I think the more likely thing is that we're gonna see much more modest prices next year.

And, uh, you know, we'll see oil trade a lot in a lot quieter terms than we have for the last three years.

Ukraine War, uh the uh the COVID lockdowns and so forth.

Those are the big things that shaped oil prices in the last four years.

Yeah, our, our own Ben works show our Washington correspondent calling it one of the few substantive policy exchanges during the Tuesday night debate uh and talking about oil in the energy sector here, Tom, thanks so much for taking the time here with us to break down all things oil in the energy sector.

Thanks for having me.

Appreciate it.

We've got all your markets action ahead.

Stay tuned.

You're watching the morning Brief now.

Time for a closer look at some of the top trending tickers moving the market here.

Yahoo Finance makes it easy to track the best and worst performing stocks of the session with our trending tickers page.

You can scan the QR code on the screen to connect to our site and check out the latest and let's check out a closer look at Yahoo Finance's trending tickers, three names to watch.

First of all, we've got Manchester United, then we've got Dave and Buster's and then Rental Kill.

That one's gonna be a new one for you.

But first, let's go to Manchester United here.

30 seconds on the clock.

Take a look at chairs.

They're down by about 8% right now, man, you moving lower following the earnings release.

The club hosted 1/5 consecutive year of net losses here and there.

You're taking a look at shares of uh tip symbol conveniently titled Ma nu uh down by about eight, almost 9% here uh within the release here and I only have about 10 seconds, but within the release here, one of the things that they also mentioned to revenues are contributing to what they said was a record 2024 total revenue driven by record commercial and match day revenues.

All I make it, I know you said that you had 10 seconds like a lot longer.

Let's take a look at the Buster is moving higher after the company posted higher profit and revenue during its fiscal second quarter.

Looking in gains of just about 7% that jumped to the upside.

We had seen shares up as much as 17% earlier in the trading day.

Actually, the biggest intra day move to the upside that we've seen since June of 2023 in just over a year.

But we are back below those highs when it comes to these results that we are getting from Dave and Busters William Blair saying that it did overshadow softer than expected comp sales during the quarter there.

So a bit of weakness there for Dave and Busters.

But again, the street looking at this through an optimistic lens.

Yeah, I get to work on that company's IP O exciting times.

All right.

Also, uh shares of rent to kill and we said this one would be in one for you plunging down nearly 20% after the pest control business warned that a slowdown in its North American market will hit profits over the second half of 2024 shares right now.

They're down.

Yeah, about 20%.

They clearly uh haven't done much research into the total addressable market here in New York City because otherwise they would find plenty of pests and rodents to go after.

Um But ultimately here we'll see how they're able to turn this business around.

All right, we keep right here on Yahoo Finance, we're just getting started coming up next.

What does this morning's inflation data?

Tell us about the feds path forward.

We're going to dive into that next on.