Bank earnings, spot ether ETF, US labor data: Market Domination

The weather is sweltering today, but equities are still thriving (^DJI, ^IXIC, ^GSPC) Julie Hyman and Josh Lipton monitor the latest market movements and report on the biggest industry stories heading into Tuesday's market close.

Mizuho US chief economist Steven Ricchiuto joins Market Domination to talk about what he is seeing in US labor and employment data and what it could mean about the supposed cooling economy.

Bank earnings continue to roll out with Bank of America (BAC), Morgan Stanley (MS), and Charles Schwab (SCHW) reporting results today. CFRA director of equity research Ken Leon comes onto the program to discuss prevalent trends in Big Bank earnings and the direction investment banking businesses could head in the latter half of 2024.

Ahead of Netflix's (NFLX) earnings due out on Thursday, July 18, Bloomberg Intelligence senior media analyst Geetha Ranganathan comments on the "very, very high" expectations for the streaming giant that it very well could live up to and even surpass for its past quarter.

Other top trending stocks on the Yahoo Finance platform include UnitedHealth Group (UNH), Warner Bros. Discovery (WBD), Adidas (ADS.DE, ADDYY), and cryptocurrency ethereum (ETH-USD) around the expected launch of spot ether ETF products.

This post was written by Luke Carberry Mogan.

Video transcript

Hello and welcome to market domination.

I'm Julie High and that's Joli in live from our New York City headquarters.

We are giving you the ultimate investing playbook to help tune out the noise and make the right move for your money.

And here's headline blitz getting up to speed one hour before the closing bell rings on wall.

So I think the consumer though is slowing.

We're seeing that trade down from steak to hamburger already take place and you're seeing more importantly, the retailers are responding, they're cutting prices, right?

So you're seeing it across in products and services that said, I think it's important to remember that the fed is not focused on 2024.

They are focused on their own calendar, which is the easing cycle which they already told us is going to take 2.5 years.

The consumer is holding up well and is not falling off a cliff as some analysts had feared, you know, the economy was very strong in the second half of last year.

And the big debate in the first half of 2024 was, were we seeing a sharp slowdown in the economy or a moderation into more modest sustainable growth.

We haven't had a major iphone upgrade cycle since iphone 12 and now that there is a sense that there's enough new functionality and uses for the phone that we will have an upgrade cycle which could last for a year or two that warrants this excitement around the stock.

We got one hour to go until the market closed.

So let's take a look at the major averages today being driven once again by some economic data, a little more favorable or namely retail sales coming in pretty well above estimates, particularly if you back out gasoline and autos, we saw an increase of 8/10 of 1%.

Now, futures and swaps pricing in a 100% chance that the rate cut is coming in September and that in turn seems to be fueling some of the action that we socks today.

Yeah.

No, it's interesting because, you know, Julie, uh, we've gotten kinda used to this drumbeat of sort of softer than expected economic data today and, and to your 0.1 the IMF comes out and says, you know, what us time is gonna grow 2.6% this year and that was a tick down from their prior forecast.

But I think a lot of investors probably thought, you know, what decent and certainly look around the rest of the other parts of the world.

That sounds pretty good.

And then to your point, June retail sales coming better than expected.

And, and maybe that gave people a bit more confidence, confidence about where the consumer is at right now.

And that if the fed is cutting, it's not because things are falling off a cliff perhaps, but more because they're normalizing.

And if, and when they do cut the sense that they're not cutting into an economy that's rolling over.

Exactly.

So that's definitely evidence by the Dow today, which is the out performer.

It's up more than 700 points, 1.8% another record for the Dow today.

Well, above 40,000 approaching 41,000.

In fact, the S and P 500 also on track to close at a record today.

That wasn't the case yesterday.

Remember?

So this would be the 38th straight record that we have seen thus far this year.

And the NASDAQ also not on track to close at a record today.

Um, but it is gaining in today's session, although it's gaining the least of the major averages here.

It's up just about 1/10 of 1%.

Something else I noticed today with these rate cut hopes coming back to the floor.

So 2000 just keeps out perform.

I mean, the large caps, it's up another 3% of it.

But there's a couple of things I want to check on Josh, first of all, since the Dow is where we're seeing strength today, I wanted to look at the Dow and what we're seeing.

And of course, banks are part of the gains that we're seeing today also something like United Health Earnings.

So earning part of the story, we're gonna get more into that later.

Um, but it seems like there's just this confluence of factors today that's driving the dow between earnings, those rate cut, um, expectations and the economic that all and, and just going back, I thought what you saw in, in the small caps is just really interesting.

If I said interesting, then remember Bespoke Paul kick, he corrected me.

He said, no, Josh, the move you're seeing is fascinating, fascinating.

And so, you know, you can sort of understand it.

Listen, if you think, I guess Julie that, you know, I, you're gonna bet the Feds cutting and you're gonna bet that Jay Powers stuck the soft landing.

Why not move into the small caps?

Now, the question becoming, you know, what does it actually mean for the broader market?

Yes, it's true.

One more thing I just wanna touch on here today looking at the leader board.

This is one of Jared B Lick's favorites all the way from the left there.

You see the XHB, which is the home builders, home builders in particular are doing really well today, even though the National Association of Home Builders Confidence index came out, still showed weakness, but that's gaining on these rate cut hopes and the economic data, regional banks.

The Kre also doing pretty well today.

And by the way, you could actually think of some of the home builders too.

They actually would kind of roughly fall into that pint sized trap category as well.

All right, let's get more on this joining us now for more on the Fed and the latest market moves, Amy Kong, Korean partner, Amy.

Um You actually want to start right there.

You, you heard Julie and I talk and you know, you look at the, the in indexes showing green today, but small caps, Amy, that is a subject of a lot of conversation.

They are working again.

What does it tell you, Amy?

Just about the broader market here?

Yeah, Josh is a great question and I appreciate that.

I think we're basically seeing another episode where investors are more risk on uh hopeful that the FED is going to cut this year.

Uh And in, in essence, we've seen that episode play out a few times uh starting from the beginning of the second quarter where investors have been uh really just wavering back and forth in terms of what the fed is likely to do and how soon they'll do it.

Um Whether or not this is a sustainable rally, that's thing that I would be continuing to watch.

Essentially, you've got small caps and some of the cyclicals performing better in recent days.

But I think the fed continues to be super data dependent and while the fed is likely not going to cut in July.

We are talking about September.

There are still two more inflation data points to come between now and then.

And if any of those data points start to either plateau or reverse to any degree, I think the fed starts to hesitate a little bit again.

So whether again this is a sustainable rally, I would, I would say just be mindful uh watch it carefully and not necessarily.

Um you conclude that this is more sustainable than not.

So this is a really interesting point because the market now seems to be ok, September, it is and your message is let's not get ahead of ourselves, right?

That, that it's not a certainty even though the market is pricing it in that way.

I, I think that's a fair statement, Julia and, you know, all this year we've seen that happen not so much in the first quarter, but in the second quarter, the market's focus has again, just been back and forth, whether it's on monetary policy, it was offset by a decent earnings season.

And now as we're getting closer to whatever the fed said, um more recently about, you know, not having to wait for the data points to hit 2% maybe they'll cut a little bit sooner than that.

You've got also um a lot of other central banks um already cutting rates around the globe, there's pressure on the Fed.

And so again, that momentum is shifting more to monitor policy.

I would also add too as we're heading closer and closer to November.

There's a third dynamic which is the political season and Americans investors.

Obviously, it is a very sensitive issue for many.

They're likely to be more volatility from my perspective, uh in terms of where the market's direction will, will likely go over the next couple of months because we've had strategists come on who almost suggest they think September is a lot at this point.

So if they, if, if the market didn't get that cut in September, how do you think the market reacts?

It really depends on what the fed messaging is.

Um So when you saw the fed readjust their um summary of expectations and the projections going into next year, while they did reduce the number of rate cuts for 2024 what they did was they added that rate cut if you would or the number of rate cuts, um while they reduced it this year, they added it on to 2025.

And so from my perspective, the market kind of took that as a, a neutralizer or a non event because it's not necessarily saying not gonna cut, it's just pushed down the, the way a little bit.

And from that standpoint, the market didn't see too much of that.

So going back to your question, you know, when it comes to September, if the messaging is, hey, the data is still kind of fluctuating back and forth.

We're on a path to where we think the goal would be.

I think the markets would be ok with that to a degree.

But I think the messaging, if it starts to turn the other way where they're saying, oh, hold off the market, the data is becoming a lot hotter than what we're thinking.

Maybe we won't cut or any of that type of commentary.

The markets in my pers personal opinion could again, um turn the other way around.

I mean, and it's been so long since we've had that kind of a turn, at least on a single day, right?

As you pointed out in your notes to us, it's been a year since we've seen a drop of 2% in a single session, which is unusual to see that span of time.

So the fed is, and, and the timing of the rate cut, one of the potential triggers, what are the other sort of game your signs or risks that you're looking for in the market right now?

I appreciate that question, Julian.

It's spot on when we think about valuations for the market um to your uh comment, the S and P has not retreated more than 2%.

And now over a year, I'm thinking it could be as much as 18 months I have encountered, but in general, it's been a very long streak.

And when you think about the, the, the streak being this long, it's natural to think that perhaps a breather is likely to happen or some kind of, um, you know, uh, pull back to an extent and we haven't gotten there yet.

So now that we're entering this next earnings season and we're starting to see some of the bellwether report while some of those data points have been reasonable.

We're gonna hit tech, which is the heart of earnings season in the next couple of weeks and then retail towards the back end, that could be one of the factors that decides is the market going to pull back a little bit.

You've got the S and B now trading at, you know, 20 times forward earnings.

It's at a 10 year high not to say that we're looking for any kind of major pullback, but any kind of soft pull back just to reset expectations, in my opinion is normal.

Is, would you add there if that happens, depending on where the Pullbacks are?

We're very mindful.

I'm very mindful of concentration risk.

So to the extent that some of the tech uh companies which have done very well and have reported decent, um, especially the ones that are exposed to a i exceptional results, they start to pull back.

You wanna just be careful just knowing that they have just done so well.

They make up as a group of 10, make up close to a third of the S and P maybe not so much there, but looking for those other 490 companies that have not broken out yet.

Maybe there's opportunity there.

We're starting to see that this month.

It's nice to see the equal weighted S and P index actually outperform uh for a long time, you know, for once in a long time.

That's great.

We really need to see that happen more and more sustainable in order to really call this rally a sustainable rally.

Amy.

thanks so much for coming in.

Appreciate it.

We're just getting started here on market domination.

Coming up.

Shares of Charles Schwab are sinking as the company plans to downsize while Bank of America and Morgan Stanley are jumping on their latest earnings.

We'll check in on the banking industry on the other side.

Plus Netflix is set to report results.

This Thursday will be joined by analyst later in the hour to preview what to expect from the streaming giant.

Stick around.

We've got much more market domination.

Still to come the CME fed watch tool now, fully pricing and a cut in September.

But some economists are now calling for a cut at the meeting later this month, but be careful what you wish for at least.

That's according to our next guest.

Joining us now is Steven Raso Mizuho, us chief Steven.

It's good to see you.

Um Actually I wanna start Stephen with, with the economic news we got this morning.

I just wanna curious to get your take there that June retail sales data we got Steven is better than expected.

I'm curious to, to hear what you made of that report and just more broadly where you think the American consumer is at right now.

Yeah, I think the retail sales number today, you know, moves the series back to what you would expect given where the payroll employment numbers are the income generation coming off of that and the industrial production coming off of that, this is an economy that is still very, very resilient.

The US consumer is resilient.

And although we like to talk about og the labor market is becoming more balanced, you know, we're going from an exceptionally tight labor market condition of 3.7% to 4.1% unemployment.

And that's still below what we economists typically believe is the neutral rate of unemployment.

So it's still a tight labor market.

The fact that the consumer is, you know, resilient as a result of that should not be a surprise, Steven.

Um I believe you were one of the folks coming into this year who said, maybe we won't get any rate cuts.

Um When the rest of the market was quite certain that we would get many, I'm curious where, where you're at now?

Given, you know what we heard from J Pal the other day, given the latest inflation readings and given the retail sales numbers today.

Yeah, you're asking a really good question.

I mean, I think that the, the point here is we've been data dependent all along.

We came into the year suggesting that there would be a transition in the economy from above trend growth to trend growth.

And then along with that, we'd see some modest easing up of the labor market conditions and, but inflation would get stuck at around the 3% level as opposed to the 2% level.

And largely that's still case.

Um You know, the economy looks as if it's gonna average 2% over the first half of the year, which is trend, it's not below trend.

Uh It looks as if the uh labor market is eased up a bit but really not a lot.

Uh In addition to that inflation is in this 2.6 area and given the the benchmarking or the base effects, we're likely to move higher as the balance of the year progresses.

So you've kind of got the best period of economic information to say we should be cutting rates.

But the reality is you haven't quite hit that test yet of where you should be to really cut rates and the market wants to adjust so aggressively that it's creating a financial market environment that I think is providing extra stimulus to the economy.

And that could very well preclude a rate cut.

I'm interested even to um your thoughts general on the labor market.

Obviously, we've s seen signs of cooling there, Steven, but beyond cooling are, are you seeing any signals that concern?

You worry you, I mean, iii I don't see anything that's worrying.

Uh Yeah, there has been some cooling, but we have to ask yourself a question is the cooling really real.

And that's, that's an unfortunate question.

We have to ask yourself.

When you look at the rise in the unemployment rate, we've seen two things happen.

We've seen the participation rate rise and we've seen the household employment numbers really stagnate.

Meanwhile, all the payroll employment numbers are growing at a very healthy 200 to 225,000 a month pace.

Now eventually the household employment numbers always catch up to the payroll numbers.

And when that happens, we could very well be looking at a drop back in the unemployment rate to lower levels or we could sit at this level for a very long period of time.

The other reason why I question whether or not the labor market has really become easy is because the number of people being laid off, whether it's the continuing claims numbers, the unemployment claims numbers or whether it's the unemployed numbers themselves from the payroll employment from the household based survey.

People are not getting laid off and that's what shows you what a labor market is easing up.

You know, if we're in a situation where people just aren't getting hired according to the household survey, that could simply be because we're not finding it hard to find qualified workers um in those areas that are covered, maybe that's not an indication that there really is slack developing in the labor market.

That's indica indication of a problem within the labor market.

Um We have been talking a lot with market participants about the upcoming presidential election, the effect it could have on the markets.

I'm curious how you're thinking about it and its potential effect on the economy or are you kind of waiting until we get closer to start to frame that out?

Well, no, I mean, I think what you're looking at for either individual, um you know, you're looking at additional fiscal stimulus and the economy is already dealing with a $2 trillion budget deficit.

Uh So we're likely to be dealing with a 2.5 to $3 trillion budget deficit and, and I'm afraid that kind of budget deficit is going to require higher long term interest rates.

And our risk has been all along that the yield curve eventually steens from the long end, not that it steens from the front end the way everyone wants to believe and has been betting all year that it would happen.

And the reality is long term rates are today even today after this recent rally, still higher than they were when we began the year by almost 50 basis points.

Steven.

Great to have you on the show today.

Appreciate all that insight.

Cheers.

Let's take a look.

Now at some of the training takers on Yahoo Finance Day.

First up, we've got United Health Group I mentioned at the top because it's one of those dow components that is helping boost that index today.

The shares are up 6% reversing course after a mixed second quarter report left investors concerned about higher costs in the wake of a cyber attack on one of its affiliates change health care.

Now, when you're talking about the um health insurance companies, you're talking about not just their earnings per share, you want to talk about their medical loss ratio.

What percentage of are they goes out the door to cover costs?

And that number was not quite as good as had been anticipated, but it looks like investors were sort of putting it down to those one time costs associated with the cyber attack.

And that's one of the reasons that they're giving United a bit of a pass.

Yeah, I I reached out to Ben Hendricks over at R BC.

He covers his name, get his take.

Ben told his clients he put it like this.

I think it kind of speaks to what you just said, Julie, he said, listen so adjusted EPSB.

He called this an atypically kind of noisy quarter.

But as we believe the added headwinds were well signaled by management and should serve as a clear event for investors.

Looking ahead to 2025 looks like just based on the reaction investors agree with that.

Yeah, and other insurers were also moving higher on those numbers.

In addition to that, the CFO said that the medical loss ratio should be at the upper end of its projected range so that perhaps giving a little bit of reason for optimism.

All right, our next trending ticket.

Let's check out this one Adidas company raising its full year earnings guidance after a better than expected quarter its second upgrade.

by the way, this year, weaker sales from rival Nike.

One of the factors helping boost the German footwear brand.

So they did raise their annual profit target second time in three months.

Julie, what is driving this?

It sounds like fans like those classics but also more sales from its stockpile of, of Yeezy Footwear too.

Yeah.

And we're showing there the German shares, the uh US shares which were open when this came out are seeing a little bit of a boost here.

The Ad Rs, they're not super highly traded in terms of all, but they do reflect some optimism from this uh target and the company um has been raising the targets.

Some of this has to do with just the hotness of Sambas right now that uh you know, I don't know about other parts of the country, but when you walk around New York City, you're seeing an awful lot of those triple triple stripes.

Um Sambas gazelles.

Um you know, some of their models are sort of, yeah, the classics are back.

The stock, by the way is up more than 20% year to date.

Nike shares, by contrast are down more than 30%.

So some of it just, you know, sometimes just has to do with what's cool for whatever, whatever drives that I'm not smart enough to know.

All right, finally, let's take a look at Charles Schwab, uh, that stock is sinking today after a mixed earnings report and the CEO warning the company is gonna have to downsize in order to maintain profitability.

And when we're talking about downsizing here, um, shrinking the lines of business it sounds like could be part of this.

Um, the company did see new brokerage accounts in the quarter up to 985,000.

That is an increase, but it's short of what analysts had been anticipating and Schwab has sort of never necessarily gotten its groove totally back after we had the sort of SVB blow up and the regional banking concerns because this was one of the companies that seemed to be infected by that.

Yeah, I mean, you looked through the metrics and you were calling out the right ones really.

I mean, adjusted, you know, earnings per share did beat consensus but other metrics not as good total net new assets.

Uh, new brokerage accounts fell short there and you can see the reaction and we've down about 10% of today's trade.

Yes, let's talk about some other financials as well today, the bigger ones, Bank of America Morgan Stanley, adding to the upbeat trend in investment banking, specifically, both banks seeing big gains in that business.

A similar tone from Piers Jp Morgan, Citi and Wells Fargo.

Yet with fed rate cut expectations still unfolding, there are challenges ahead peeking through for big banks.

CFR A director of Equity Research.

Ken Leon is joining us now to discuss Ken.

Um normally we've been starting sort of big picture here, but I wanna zoom right in on Bank of America because you downgraded that stock to a sell today in the wake of these earnings, even though the shares have been doing pretty well, their highest, in fact, in about two years, uh they gave a forecast for net interest income that was above some estimates.

What didn't you like in these B of A results?

Yeah, it's great to be with you.

So, so I think Bank of America is, it's a 15 year high.

So that's pretty good.

Um rates outlook and the economy are good.

Uh So all the financial stocks, large bank stocks are doing great.

Um But for Bank of America, um the performance in the second quarter was like the first quarter.

Uh we had flat no growth in loans, no growth in deposits, no growth in credit card income, which is significant and we saw a decline in net interest income.

So a lot of the storyline on the call which I think analysts kind of liked was that even though you had negative net interest income, which is 54% of your total revenue.

Uh it's gonna get better in the second half of this year.

Uh because in the second quarter deposits uh decline for consumers who had a pay taxes.

So it's kind of weird to see the stock up, but I think that's more to the macro core financials and banks.

Uh I thought Bank of America underperformed compared to JP Morgan Goldman Sachs or Morgan Stanley.

That.

And how could you, you know, you do move to a cell there, Ken.

Um when you were talking to your clients, how could you be wrong, Ken?

What, what are the, the upside risk to that call?

Well, there's always respect that, you know, we're all students of the market.

So, uh what we do, of course, on any recommendation um is make a judgment call based on our insights, our, our views of the fundamentals and of course our experience.

So, um you know, CFR A is the largest independent research firm in the world and we make independent calls and that speaks to your question.

Um You mentioned Morgan Stanley and its numbers today um saw some strength in investment banking.

That's what we saw um for many of these banks, particularly in the capital markets, business as well.

Um How sustainable do you think deal volumes are gonna be going into the second half of the year, particularly with the election coming up.

Sure, it's a great question and, uh, we hit the trough for investment banking fees last year probably in July.

Uh, we're still at just the beginning of a rebound.

Uh, but setting that, uh, the first quarter, first half of this year, uh, record results for debt cap, debt underwriting, but equity underwriting and IP OS, um, are still really the earning early endings of recovery.

And keep in mind there's two major source for deals.

One is obviously Corporates, but the one that has not been participating as it tries to figure out valuation with rates is financial sponsors.

Uh That's the old industry that I cover, which includes companies like Blackstone KKR A and many others.

So that's $1.2 trillion in their investment side that has to be monetized.

Uh Otherwise their wealthy limited partners around the world from the mid east or Singapore wherever aren't going, going to go into new funds.

So that is a major opportunity uh for Morgan Stanley Goldman Sachs and each of these firms also are participating uh in the old investments as well.

Ken, I'm curious too, you know, it is an election year.

Politics are front and center.

Are you getting questions from clients about how you think this election uh could play out and what it could mean for the sector you cover?

Yeah.

So you know, my good colleague for many years, Sam Stover Equity strategist, uh, is all over this along, uh, with, we have four great research teams.

One is Washington analysis, uh, that they have actually reversed and see, uh, a higher probability of Trump getting elected.

But things can change.

Generally in answering this question, my view is watch the fed and watch J Pal, J Pal as you all know, um, was interviewed at the Economics Club, um, and was leaning to, uh, a fed rate cut in September, maybe another one later this year.

I think that matters more than us playing hand of who's going to be in the White House and who controls Congress.

But of course, Sam Stole has all that data going back to 1940.

Let's get your view on that rate cut.

Then when it, when it ever does happen on balance, is it better for the banks when the fed begins to cut rates?

No, I I love the question because um the answer is it depends.

So in research that we publish, I have a chart I've used for years that looks at the mechanics of how rates impacts uh net interest income which we did speak about or loan volume.

So the, the the direct answer is so long as we have a stable or strong us economy in particular, uh then if rates are coming down 50 basis points, but the volume of um of loans grows doesn't decline.

Um Then it's kind of to me going to a rate cut regime is is neutral, it's not negative but I guess that that latter part is the important part is the loan book declining, right?

What are we seeing among uh among consumers in terms of that loan demand right now?

Sure.

So we look, we look at all the loan components quarterly for every bank and then also look at delinquencies and provisions for loan losses.

And so far to my point, I underscore a strong us economy.

We are seeing increases in transaction volume and loan act.

No, it's mostly the upper income or the baby boomers that are driving this economy that are mostly have portfolios in the market.

Those who are suffering out there in the US are lower income or middle class where it's hard to pay their bills with higher health care and food costs.

Ken, thanks so much for joining the show today.

Thank you.

Coming up.

Former president Trump has named JD Vance as his running mate the 2024 election.

But what kind of market impact would Vance have?

Should the pair win to discuss on the other side when market domination continues?

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You can catch capital gains on all your favorite podcasts and streaming platforms.

You can't afford to listen, Ether building on gains as the crypto market may be looking at another win this year spot Ether ETF S could reportedly launch as early as next week according to Reuters, with more on the crypto action.

Let's get to Yahoo Finance's.

We've been waiting for this for a little while.

The drum beat has been going on.

Oh, we have and I mean, we waited a long time for those spot, Bitcoin ETF S and I think it took 10 years if memory serves.

But anyway, uh next Tuesday, your calendar, July 23rd, that should be the date when we get, I believe it's seven or eight brand new Spot Ether Etfs and this would complement the existing Spot Bitcoin Etfs and there are already Ether Etfs that use futures.

So we have those as well.

But I thought it would be interesting to plot the price action, just kind of remind people what happened, what happened with what happened with Bitcoin and maybe something similar happens.

Let's just check out the one year chart because it was last September October.

That Bitcoin really started coming alive with the rumors about these, uh spot Bitcoin ETF S then when they came in the middle of January, that's that red dot There, we got a little bit of a sell off and that was pretty anticipated.

People said sell the news event.

They took a little profits, but then it was back off to the races.

And after about a month, we found ourselves kind of building the current range and that has occurred over the last few months and we've dipped under it a couple of times here most recently, just a few days ago, but we managed to bounce back.

And that is very constructive.

And all of this I should say is going or I was going on in the midst of the German authorities releasing 50,000 Bitcoins that had been in custody.

So there were a lot of bearish forces but nevertheless, Bitcoin prices survived.

They managed to rally here is Ether.

Now, this is also a one year chart and you can see the consolidation area is quite a big, quite a bit bigger here for Ether.

It's more volatile but similar to Bitcoin.

It is rallied off the bottom end of the range.

Now it's right smack dab in the middle.

So what might happen next Tuesday?

Are we going to get a sell the news event?

Well, probably too hard to I said, I say it's a little bit too uh too early to say.

However, things get really interesting if either shoots back up to about 4000, right in the middle of its current trading range, doesn't really matter too much what it does.

But if it goes back up to 4042 100 that's where things get interesting.

And then you got to ask yourself.

Well, what's the next catalyst?

Wall Street has been tripping all over itself to get behind Bitcoin.

Only recently, Larry Fink, head of Blackrock, one of the biggest ETF providers in the world drew back, walked back some of his very harsh statements of Bitcoin that he made five years ago.

So Wall Street is behind this.

Uh the money is there.

You just need those flows and we've seen the ETF flows from investors.

We just haven't seen them from investor 401k just yet.

That's kind of a critical component.

Jim Bianco of Bianco Research has been all over that, but again, uh at least investors can look forward to another crypto date in the near future.

All right, Jared, thank you.

Let's get to some calls.

The day B of A securities is lowering its price target on Warner Brothers Discovery from 14 to 12 ra rates its buy rating on the stock.

The note signing that exploring strategic options for WBD would create more shareholder value.

So interesting note, Julia do read or buy, they do lower their target to 12 and they did that by the way, because given what they call unrelenting secular headwinds decline in pay TV, subs challenging advertising environment.

Um And they go on to tell their clients that in our view, the current composition as a consolidated public company, it's not working Julie, it's just not worth it, not working at current levels.

We argue that exploring strategic alternatives such as asset sales restructuring and, or mergers would create more shareholder value versus this status quo.

Yeah, I mean, this is not a shocking view that it's not working, right.

We've seen WBD um has um you know, it hasn't performed that well versus what perhaps there were hopes that it would do.

It's down 30% just this year and so perhaps not surprising here.

But the question is, what would all of that look like?

I mean, there has been some chatter this year that maybe there's gonna be some more deals, some more remaking of the various streaming companies.

Um They don't really opine on who, what that would happen.

They, they get into a little bit like whether and they're gonna lose NBA broadcast rights, what effect that's gonna have, who maybe they would sell the whole company, maybe they would merge with the broadcast network.

They don't seem to mention um, suitors necessarily, they just talk about the different, um, sort of v variations on, on the theme here of them breaking up, telling assortment of assets is how they put it Julie and for whom the is undemanding.

Yes.

Yes.

Well, we'll see what happens.

All right.

Meanwhile, Td Cowan is outlining the risks and upside in markets following Trump's pick of JD Vance as his running mate, running mate, the firm taking a look specifically at crypto financials and housing.

And what I thought was interesting about this note is the analyst um uh here sort of acknowledges and it's Jarrett Seberg, by the way over at TD Cowan, he says, normally we assign limited significance to the selection of a vice presidential candidate.

He doesn't usually matter change significantly how people change.

But he says, yes, we believe Donald Trump's selection of JD Dance may be the exception.

He, he talks about how Vance represents the more populist wing of the GOP.

And that means that maybe he'll have a little bit more influence.

Uh They talk about specific examples here.

He's a sponsor of the Credit Card Competition Act and that's the one it could be potentially negative for Visa and mastercard.

He um has been more resistant to M and A than others in the party as well including Bank M and A um which he talks about here specifically, but also Tech M and A is something that he's actually been um complimentary of Lina Khan, which is quite rare, pretty good job.

Yes, exactly.

His relationship with tech is gonna be really interesting to follow because as you said, he comes from the populist wing of the party that's not a wing Julie that has a lot of good things usually to say about Big Tech, I think we can say.

Um So that's on the other hand though, with the flip side of the coin, you know, Vance worked as a venture capitalist and he knows Silicon Valley, he knows all those players, he knows Thiel he knows David Sachs.

Um, we recently had, um, you know, venture investor, Joe Lazio on the program thinks very high even.

So, how that relationship play out exactly is gonna be really fun to watch.

Is he gonna, you know, anger those buddies of his, if he does indeed, if you're a venture investor, you put money to work in companies that you wouldn't, you wouldn't mind having big tech.

Maybe they could play for.

Yeah, maybe not.

All right, we are gonna take a quick break here.

Coming up, Netflix is reporting its results later this week.

We've got a preview of everything investors are looking out for next on market domination.

Big moves for Elon Musk, the billionaire announcing on X that he plans to move the headquarters of both the social media Network and X that is and spacex to Texas from California Musk saying that X will move to Austin while SpaceX will now be based in star base Texas in his posts, Musk citing crime rates and recent California laws for the move.

It's unclear particularly in the case of spacex which has big operations in California, whether he's just gonna re domicile it and still have operations there or also move most of his workers there.

That's not clear.

Yeah, so Ellen has been in the news a lot.

So we got going all in on Texas, all in on Trump.

You saw that the journal headline he's coming around.

Uh What was it 45 million a month, this new pro Trump super PAC.

Although we should know he, then Elon Musk posted a meme kind of shooting that down.

Right.

Exactly.

But regardless, this is so sort of all of a piece with what he has been doing as, as of late.

Right.

Also, um, is redic selling Tesla, right?

And, um, even though it's registered in Delaware, he's talking about now re registering that in Texas.

So this is a trend that we have seen.

Um So we'll see how quickly it does it and uh what shareholders have to say about it.

Although space X next, that's not relevant, I guess.

All right, gold getting lifted to a record high amid rising rate cut hopes.

However, despite the high rate environment, the precious metal has soared nearly 20% this year for more on the runway ahead for gold, we've got Bill Baru Blue line futures president.

Um Bill.

It's interesting here because um you know, on the one hand, we see so called digital gold, crypto Bitcoin surging.

Um But that's more because a Trump administration is seen as being more favorable to it.

Gold is just gold as it's seen as a haven.

So I talk like what is going on here?

Explain it to us.

I mean, you're getting the some, some of that haven uh as some economic data has begun to deteriorate, I think the latest push on the heels of the CP I data that, that did so show a little bit of disinflation.

Um Now I, I think too as the fed is being priced to cut rates, I've been seeing three cuts pretty much all year and you're starting to see that third cut appear with a better than 50% probability.

Once they start to cut, they typically kind of uh stay at it.

And gold has averaged a 6% return within the 1st 30 days of a fed cut.

So I think we're starting to see maybe some of that pulled forward a bit.

But listen, with, with Trump probabilities of taking the White House improving and becoming the favorite.

You know, some of the policy we could see is a, a uh you know, trying to weaken the dollar and if that's the case, gold is priced in us dollars and, and at least the way we're looking at it and that would increase the price.

So I think that's also a tail wind, maybe a tailwind for Bitcoin, but I think it's also a tail win for gold right now can actually be.

I'm just curious, you know, we're talking about the metal.

What, what do you see with the miners as well?

This is the miners are trading at two year highs.

I mean, they're really starting to uh starting to move pretty nicely.

I'm liking what we're seeing in uh in the mining space to um you know what the energy space saw in 2021 the summer, 2021 when crude oil finally got back above $70 a lot of the energy names were really lagging and, uh, and once they woke up, I mean, it's been a terrific move across the energy space in the, in the names, um, over the last couple of years and I think that we, we're about the onset of that time now it's finally kind of coming out of the doldrums.

The mining, the mining stocks are waking up and there and there really could be a uh a long lasting bull market at the moment.

Um Bill, one of the other things you've been watching is the ratio of gold to silver here.

And so um we have a chart of that as well and largely, um you know, we have seen gold sort of outperforming for most of the year here.

Um What is that?

How do you look at them relative to each other?

And what does that tell you?

Yeah, that gold chart is, is gold with silver as the denominator.

So as silver improves at a faster pace than gold, you're going to see that chart show weakness.

And that's actually a good thing for gold and silver because, you know, when silver is, is woken up and it, it maybe not leading, but when it's trading, well, uh that's, that's really bullish for the complex.

Uh Over the past few days we've seen gold diverge a bit and, and take the strength and that's why we've seen that chart kind of rebound.

Now, within that breakdown in May is when silver tested $33 ultimately, silver is really um trading, you know, trading on a lag to gold more than anything.

I mean, it's had that, that really that rush of uh above 30 where it tested 33 middle early part of May.

But I, I think gold should, I mean, silver should be trading 35 to $40 with gold, what it's doing?

So there could be a bit of a catch up trade here.

And that's really how they work best is when they're working together.

So if silver can really wake up a bit and uh and play a little bit of catch up, get to $35 we have at that point would certainly have a clear break out of gold.

And some of my technicals looking back at this decade long consolidation and gold can really say that that gold should be testing 28 $2900.

Uh when this move is said and done, Bill, you know, we're talking about different variables affecting, affecting the medals here.

What about seasonality bill?

Is this generally, you know, uh typically a supportive time for medals?

Yeah, absolutely.

I mean, you look at the prior month finishing up in June is, is some a, a lagging time for medals and, and uh they don't perform.

But when the onset of July takes place.

It's usually game on and we can see, uh, seem really strengthened into the autumn.

And I think that's something that we've begun to see the precious metals.

But he looked more industrial copper hasn't performed very well.

It's really struggled.

Um, some of the others like platinum and P pla certainly aluminum is looking pretty ugly right now.

I think they all can turn one of the reasons why the more industrial space is lag is look at Chinese GDP earlier this week on Sunday night, us time we saw Chinese GDP miss expectations and the Chinese yuan is continue to weaken against the US dollar.

It's certainly sort of exporting deflation from China in a sense and that's weighs on the metals, specifically, the industrial metals which also more than 50% of silver's use is now industrial and although it is a precious metal and follows gold, you know, copper has fallen pretty sharply from where it was about, you know, two months ago, a month and a half ago.

And um you know, right now that's been weighing on, on silver relative to gold bill.

Always great to have you on the show.

Thanks so much for making time for us.

Thanks for having me.

We'll call in all streaming bowls.

Netflix is set to report results Thursday after the close and Wall Street's expectations are high analysts at Bank of America Morgan Stanley Moffett Nathanson, they've all raised their price targets on the streaming giant just yesterday ahead of the print.

Joining us now is Geeta Ragan Ain or Bloomberg Intelligence, senior media analyst to talk to us about what to expect from Netflix.

And um get that those shares have been performing well, they're up about 35% this year.

So there is that optimism going into the print.

What numbers are you watching most closely?

And do you think Netflix is going to meet those high expectations?

Yeah, expectations, definitely very, very high Julie.

And I think what is really ironic though is, you know, they are actually trying to move away from subscriber numbers.

They, they said that they're going to stop disclosing subscriber metrics altogether starting in the first quarter of 2025.

But I think all of this optimism that we're seeing kind of heading into this second quarter earnings is actually off of subscriber numbers.

So we know that they reported really high subscriber growth in the first quarter, 9.3 million new subscriber ads.

And while the consensus for the second quarter is around 4.7 million, I think the street very much expects something much, much higher, maybe something to the tune of 6 to 7 million.

And I think what's gonna be even more interesting is if we see 2024 actually come out as one of the record years for net uh new subscriber ads for Netflix II, I think right now the way that they're going, they could very well report close to almost 30 million new subscriber gains just in 2024 which will be their, one of their highest ever outside of, of course COVID and G, there's also gonna be a lot of focus, of course, on the ad tier.

What do you expect we're gonna hear from there.

Yeah.

So, so far, you know, it looks like the momentum with advertising, of course, it's, it's kind of been a little bit slower than what we'd anticipated.

So one of the numbers that they did disclose Josh at their upfront was which was held in May was that they have about 40 million uh active users monthly, active users.

We don't know exactly how many subscribers they have because they haven't disclosed that publicly, but we estimate that it's close to about 20 million subscribers.

But again, what they're doing right now is while they haven't actually given us an ad number in terms of the amount of revenue that is generating, they are introducing a lot of programming that is kind of going to be very, very uh appealing to advertisers.

So, uh you know, some of the deals that they've done include uh WWE which they're going to start streaming starting in 2025.

But much more important than that is the two NFL games that they're going to have on Christmas Day, which is going to be super, super appealing to, to advertisers and, and we think it's going to be a big bump for their ad business.

The um Nielsen was just out with its monthly numbers on, on streaming traffic.

And I thought that some of the stuff was really interesting here, Netflix saw the biggest increase in market share, but it's still overall share in June was lower than that of youtube, which we don't tend to talk as much about because it's not a pure play.

But I'm curious how you're thinking about competition um for Netflix or sort of where it, its weaknesses are at this point.

So in terms of that, that's a great point, Julie.

So I think in terms of streaming competition, uh I, I think at this point it's safe to say that Netflix has pretty much won the streaming wars.

Of course, we talk about youtube, but that's a little bit of a different animal.

I mean, that's a lot of user generated content and it's going to kind of be hard to get, you know, the level of eyeballs, obviously, they have 2 billion uh viewers that they reach every day.

So it's, it's on, it's on a completely different scale.

But I think what's really positive for Netflix is that they still have only less than 10% of total TV viewing time.

And if you kind of just look at their catalog, uh it has really, really broad appeal.

Uh and the one metric that we really look at when, when, when it comes to Netflix and when it comes to all streaming players is engagement and engagement is very, very high for Netflix.

It's higher than almost all of its other competitors.

We're seeing 2, 2.5 hours spent on average per day by a user.

And, and we've seen that across the board.

Uh you know, even if you look at some of their biggest performing titles in two Q, you know, you look at Bridgerton about 1 billion hours streamed of just that one title alone in toy.

So we're seeing engagement numbers that are extremely strong.

So, so when we kind of think about the competitive landscape, I think Netflix is in the best position that it's ever been competitively and also financially as well as fundamentally.

So they're really firing here on all cylinders, Keitha, do you think price increases could be on the way?

I know that's a bet some, some analysts on the street are making it it, you know, they haven't raised prices, Josh for about two years now in the US on their standard tier, it's been stuck at about $15.5.

So if they're absolutely due for a price increase, the reason they didn't do that is because they were introducing two new initiatives.

One was that password sharing crackdown, the other was the advertising tier.

So they obviously didn't want to rock the boat then.

But you know, all of their competitors have raised prices.

We definitely think they will raise prices a little bit later this year.

All right, Netflix earnings Thursday.

We'll be watching.

I know you will as well.

Githa, thanks for joining us.

Thank you.

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