Jobless claims rise, Bud Light struggles: Asking for a Trend

On today's episode of Asking for a Trend, Host Josh Lipton breaks down some of the biggest stories hitting the market, from Donald Trump choosing Ohio Senator JD Vance as his vice president to Bud Light struggling to regain consumer favor.

Former President Donald Trump has picked Senator JD Vance (R-Oh.) as his 2024 running mate. Axios chief economics correspondent Neil Irwin explains that while Trump likes to tout populist ideas on the campaign trail, he has had a different view in the White House. While Vance has his own ideas, it is unknown if his sentiments will translate into policy in his vice president role. He says, "[Trump] also loves talking to CEOs and loves talking about how he's so great for business. He just floated cutting the corporate income tax rate again. He cut it from 38% to 21% when he was in office, he wants to go down to 15% now, he says. So look, there's a lot of things Trump would like to do that are certainly business priorities and things that big business would like to see. And Vance as vice president would just be one voice at the table, kind of trying to shape those policies."

Yahoo Finance markets reporter Josh Schafer analyzes the latest market trends for July 18, as US weekly jobless claims rose more than expected, the healthcare sector (XLV) slumped, and the small-cap (^RUT) rally has begun to stall.

More than a year after a boycott against the brand, Bud Light continues to struggle to regain consumer favor. The Anheuser-Busch InBev (BUD) fell to third place in sales, trailing behind competitors Modelo Especial and Michelob Ultra when it comes to dollar share, according to Bump Williams Consulting and NielsenIQ data. Yahoo Finance senior reporter Brooke DiPalma breaks down the movement.

Meanwhile, Domino's (DPZ) reported its second quarter results, missing same-store sales expectations and revealing a stunt in international growth. Placer.ai head of analytical research R.J. Hottovy explains how companies have been rolling back prices and offering value meals, calling it the "summer of value wars." He adds, "I think it really speaks to the idea that consumers are looking for value, and that's front and center for them."

Finally, Market Domination Host Julie Hyman breaks down the latest chart from Apollo Global Management chief economist Torsten Slok and how increasing CEO confidence could weigh on the Federal Reserve's interest rate cuts.

This post was written by Melanie Riehl

Video transcript

Hello and welcome to ask me for a trend.

I'm Josh Lipton for the next half hour.

We're going to be breaking down the trends of today that will move stocks tomorrow.

There's a lot to keep track of.

So we're focusing on what you need to know to get ahead of the curve.

Here are some of the trends.

We're going to be diving into another steady day of tech declines weighed on major indices but the fall extends beyond just the one part of the market.

The health care sector wasn't the worst performer in the S and P 500 with shares of Eli Lilly continuing Wednesday's declines plus ushering in the new era of Republican leadership.

Trump's running mate, JD Vance took the RNC stage last night, laying out an economic philosophy that differs sharply from the conservative establishment.

We're going to have more on what his ascent could mean for party policy and the value wars.

March on Domino's CEO today saying Americans are still searching for value after the pizza giant forecasted slower comparable sales in upcoming third quarter were diving deeper into the value trend with Placer A I later this hour, Ohio senator and now the Republican candidate for vice president JD Vance speaking last night at the Republican National convention striking a populist tone which he is known for.

But it's a stark contrast to some of the traditional economic policies.

The Republican party is well known for and join me.

Now is Neil Irwin Axo, chief economics correspondent, Neil is great to see you and, and it's perfectly timed, Neil because I think today a lot of traders, investors, business people, Neil who are watching this.

Um They're trying to make sense Neil of what a Trump Vance White House would mean in terms of economic policies because you would traditionally as a Republican administration Neil, of course, you think low taxes, less regulation, business friendly.

But then you heard Senator Vance last night, Neil, that wasn't so friendly.

That was pretty tough on business, tough on multinationals, tough on Wall Street.

What are we to make of it all, Neil?

Yeah, he, he's been at kind of the front edge of a shift within the Republican party that has traditionally, of course been, the party of business has been the party of business interests and has wanted to, you know, cut the corporate income tax rate, has wanted to encourage kind of pro growth tax policy.

And of course, there's plenty of overlap between the v worldview and that more traditional Republican worldview deregulation those areas they're very much aligned.

But when it comes down to it, what Vance emphasizes is trying to get wages up for workers, trying to put in place tariff barriers that can really help workers potentially in his arguments but not necessarily be good for businesses that have to import.

So, you know, you can see some areas where there are real fault lines that might emerge.

And look, I talked to ceos all the time.

A lot of them are not very happy with the Biden administration.

They see the approach as being overregulated, but they do have some risk if the Trump Vance administration comes to be that they will have some, some real real problems to deal with as they deal with that incoming administration.

It's interesting uh Neil though because you know, I if Trump Vance ticket it, if this really takes the White House, Trump's the president Trump sets the economic policy, I mean, do we have any line of sight into how much um former President Trump agrees with Senator Vance on some of his, his perspective and vision when he's talking about um business and multinationals and Wall Street Neil.

Yeah, look, Trump kind of has it all.

He likes to talk about some of these same populist ideas of focusing on restricting immigration, deportations, tariffs, obviously, those record his political identity, but he also loves talking to ceos and loves talking about how he's so great for business.

He just floated cutting the corporate income tax rate again.

He cut it from, I believe 38% to 21% when he was in office.

He wants to go down to 15.

Now he says so, you know, look, there's a lot of things Trump would like to do that are certainly business priorities and things that big business would like to see.

And Vance as vice president would just be one voice at the table, kind of trying to shape those policies that said, you know, if you think about how parties usually evolve, the sitting vice president.

And again, we're in a scenario where Trump Vance wins in November is, you know, the first, the front runner to be the next nominee.

So you can imagine that this is part of a shift in kind of who the Republican base is and what Republican party priorities are.

I find, you know, just the shift that we're watching.

I think it's just fascinating and when you listen to these sort of, you know, I guess populist conservatives Neil, like Senator Vance are there areas where in economic policy they can almost in some sense overlap with more left of center economic views and policies.

Oh, definitely.

Yeah, I think a lot of what you hear from Senator Vance around, uh, around workers and wages and, and trying to encourage, for example, trying to encourage productivity gains by having higher wages and labor scarcity.

That's a concept that I first heard, you know, years ago from, from left of center economists now, something that Vance talked about in, in an interview with the New York Times last month.

So, you know, I think there is a kind of a changing of the guard of, of where parties line up on different issues.

And it also intersects with these culture war issues where, you know, Senator Vance views, attacking big companies for their diversity initiatives, for example, as a, as a winner for him, um you know, it's hard to disentangle what economic policy would look like and some of the cultural war stuff that that really is part of the Republican party going after big business.

Such a big complicated, interesting topic, Neil.

Thank you so much for taking the time to walk us through it.

Appreciate it.

Thank you, Josh, the NASDAQ closing the trading day lower as investors exit tech stocks while the dow falls more than 500 points in today's trade with more on the trading day takeaways.

We have Yahoo finance his very own, Josh Shaffer Josh.

Yeah, Josh, we're gonna start with the economy first.

We had weekly jobless claims out this morning at 830 they came in higher than expected, hitting the highest level since last August tying a report from earlier in June to hit that two or 243,000 number.

You can see here the big uptick that we had this week and kind of a couple takeaways from this chart.

One being clearly you can see the trend has been higher right over the last couple of weeks and really the last couple of months, that's what has some economists concerned about what's going on in the labor market saying, OK, this is fine for now.

But if this keeps happening, it's gonna be a problem for F for the Fed.

And it's one of the things people are listing is kind of the reason to cut whether it be July or September.

But you can also see because we have a nice long term chart here.

Jobless claims usually go up in the summer.

There's, it's called seasonality, right?

And they come up a lot in the summer.

Part of the reason they rose last week, some economists suspected was a recent hurricane.

We had that displaces workers, then they might file for unemployment benefits.

So it seemed like a, a report where you can take a little bit into the, ok.

I can see why we're talking about the labor market softening but also not to panic.

And I think that's sort of an important thing to point out here with the chart as well.

Yeah, it's so interesting because you're right.

We've had so many economists come on the show and they look at the labor backdrop and it gets them kind of nervous, you know, they see reasons concerned.

Then again, we just had, um, Thomas Honig on the show, like former Kansas City fed president and we asked him about the labor market.

He, he was not concerned, says unemployment rate still historically low.

He, you know, he looks at the labor force right now says it's stable, you know.

Yeah, there's a couple of different ways, ways to slice the pie.

Right.

And it seems interesting, I think going forward the question is just how much more does it keep going up?

Right.

Yes, it's fine now.

But that unemployment rate is ticking up and I think economists mainly just want to see the fed cut before it gets too loose.

That seems to be sort of the point that we're at thus far have to talk about health care, health care did not have health care, did not have a good day in the stock market today.

Josh.

So let's take a look at it.

Let's look at the sectors first.

You'll see health care here falling more than 2%.

Remember this was a sector we talked about the last couple of days.

I was getting a little bit of a ketchup trade.

Health care hasn't been a great performer in the S and P 500 over the last couple of years.

But really the big driver was E I Willy.

So I wanna get to that stock because I think it's telling us maybe a little bit about the Willy story, but probably a larger thing about the market right now.

E I Willy, if we look over the last year, it's the G LP one trade, right?

It's been a theme and it looks like an A I stock, right?

But instead it was weight loss, but it was one of the kind of key themes E I will is one of the biggest stocks in the S and P 500.

And it's been helping.

It's one of the key contributors to the rally thus far this year, right?

To make the A I comparison too because besides A I, it was one of the, one of the biggest teams investors want to talk about.

And so it had this big run up, right?

And now what does it look like?

I mean, if we were to, I don't have any of the A I stocks next to us right now, but it kind of looks like some of the tax names, right?

You're seeing people pull out of stocks that have done really well to this point, either rotate into something else or sit on cash and decide what to do with it.

But I don't think you, I think you can look at Eli Lily in sort of a similar vein to some of the tech stocks in that sense of the stock has done really, really well.

And now people are wondering, ok, should I take some profits here and move it somewhere else deployed somewhere?

You can kind of call it the rotation trade, maybe to some extent there as well, which I think is sort of a different way to frame it and our third take away small caps talking about them all week.

Right.

We had that historic run to start the week and then Bespoke Investment Group was just out pointing out.

Basically, we've erased the gains that we saw from Monday to Wednesday.

We were talking a lot about that rally and I'm gonna get over to the rest of the 2000 here and you'll see that.

We really just didn't have, it was down over 2% today.

If I can find it.

Where's IWM?

You might go right there right there.

Go for it.

Josh, right there.

Nearly 2%.

Give it, give it quick.

I feel like I'm, I'm getting, I, I don't know because we wanna get to this right.

We can see that small CS had this big rally and then they started to come back down.

And I just think the broad question right now is we've seen this a lot as we've been talking about, will the Fed cut?

We've had a big rally in small caps, then it sort of falls back.

We had that last year.

We had that earlier this year and very quickly, is this gonna say when you talk to smart people, what are they saying?

Smart people say once the fed cuts is when they feel more confident, confident in small caps note, the Fed has not cut yet.

People are just pricing in ex pricing in expectations for them to cut.

They think once that first cut comes is when people are gonna feel more confident and maybe we'll see more consistency in this chart movement.

All right, Joshua, thank you more.

Ask me for a trend on the other side.

It's been over a year since Bud Light faced a boycott that has left the company struggling to find its way back to the heart of consumers.

Yahoo Finance's Brooke Dipalma joins us now with the details.

Brooke.

Yeah.

Good afternoon, Bud Light still taking ahead following that controversy that now is over a year ago and competitors like Mielo Bolter and Molo especial continue to climb up in the ranks here.

And if you take a closer look at dollar share, Bud Light is now in the third spot when it comes to overall dollars share for the beer market.

And that's largely because of that lapse that we're seeing that marketing controversy that happened last April.

And the big question was if a year later, it would still hold on to those losses and it looks like it still has based on the latest data from Bob Williams consulting Mielo Bolter climbing to that second spot.

And that's largely because consumers are really playing into the idea of a healthier lighter calorie, like your carb beer catering to athletes and to drinkers who really looking for a healthier alternative when it comes to drinking on the weekends.

And that top spot, we saw molo especial gain this top spot when it comes to dollar here last June and it's been able to hold on to that.

And there's two reasons why Molo especial comes at a premium price point.

So consumers are paying more when it comes to that brand.

And in addition to that, it's also gaining more display space, it's gaining more distribution and availability.

Also seen this rise of popularity when it comes to Mexican imports.

So that's been good news for Old Molo and other brands like Corona.

But the real truth here, the real full look at a year later, what really happened when we see A B and Bevis, that's uh Bud Light's parent company results.

They're coming out on August 1st.

So when we hear Q two compared to last Q two, we'll really get a full look at big picture how Bud Light currently stands.

All right, we'll be watching.

Thank you, Brooke.

Appreciate it.

Now from beer to pizza.

Domino's reporting second quarter earnings this morning.

The results mixed with us comparable store sales growing slightly less than estimates stock down more than 13% at the close.

For more on what's going on in the fast food sector.

We bring in RJ.

Hot head of analytical research at Placer A I RJ.

Good to see.

Let's see.

Let's start there with Domino's RJ because they report investors not happy.

I I thought this was pizza was the place to be RJ.

I thought, you know, you buy a pie feed the family pretty good value.

What happened here?

Yeah, I think on that and you're exactly right.

I think if we look at the numbers for just the US alone, pretty strong numbers, you're talking about a high single digit comparable sales, comparable source sales growth and that carry out business continues to do.

Well, they're seen success, the New York Pizza, they're seen success with more visit frequency because of Domino's rewards.

Um, you know, yes, the third quarter is going to be a little bit lower than the second.

They talked about that.

Uh There are some issues with some of their international markets.

But I think if you take the foundation here right now, you're exactly right.

It's all about value for Qsr consumers and Domino's seems to be striking a chord with them.

So maybe a bit overblown.

I do realize there are concerns about the international franchisees, but I think the US business is really signing its solid footing, particularly as it rolls into the Uber partnership and other things like that, as you just mentioned, RJ, consumers are looking for value right now.

We see a lot of promotional activity in this space.

Um How is that actually faring?

What's been the kind of effect RJ is that, is all that promotional activity actually driving traffic?

Yeah, it really is.

I mean, I think this is going to go down as the uh the summer value wars for uh for the QSR sector.

And really it goes back to, even as far back as May, we saw both Chili and Buffalo Wild Wings get pretty promotional.

Buffalo Wild Wings had an all you can eat promotion on Monday and Wednesdays.

Um, you know, Chiles had a three product, you know, promotion and so they kind of won the month of May put the calendar.

We go to June, Burger King and Arby's and Jack in the box and Wendy's all try to front run mcdonald's with a bundled value meal.

All of them saw accelerating visitation trends throughout the month as those things were released.

And now we get to, um, July and mcdonald's rolls out their $5 meal deal and we've seen exactly that we, we do have to strip out last year's grim shake.

That is distorting the numbers a little bit.

But once we do that, um, you, you seen some pretty strong trends here.

And so I think it really speaks to the idea that consumers are looking for value and that's front and center for there.

And if you can do with some innovation too, like we talked about dominos and new products and other things like that, that's all the better.

That's what really striking a chord.

Am I getting something different?

But at a competitive price?

Another thing I wanna touch on with you RJ while I got you is deals.

Uh, Darden buying Chewy's, I'm interested one RJ.

What do you think of that deal?

Does it make sense to you strategically.

And two just more broadly, you think that's gonna be a theme that continues to play out in this space more M and A. Yeah, another year, another deal for Darden here and I think this one makes a lot of sense for them too.

Not only does it fill a gap in their portfolio, um you know, Olive Garden and Longhorn Steakhouse and capital growth.

They got some well established concepts.

This gives them the number one player in the casual dining Mexican space at this point.

So really interesting in our data doesn't show a lot of cross visitation between that.

So what does that mean?

It means a lot more incremental visitors with this particular acquisition.

So I think it makes sense from that end.

Um It's also a growth vehicle and obviously, there's not as much of that in the casual dining space, a lot of white space for this brand.

And so I think that's a great pick up and then like anything else, I mean, you're going to get some scale particularly on the real estate and the purchasing side.

And so I do think this will probably not be the last deal we see.

I think we're probably going to see more consolidation in the space.

It's gotten more expensive for restaurants to operate and how do you offset that you build scale?

And so you do things like make an acquisition and improve your negotiating leverage So I think we're going to see more deals.

Um, you know, probably both across casual dining and quicker.

I think there's going to be a lot more deals to come this year.

Rie.

Always great to have you on the show.

Nobody knows the space better.

Thanks for joining us.

Appreciate it.

Thanks, Josh.

Stay tuned more.

Ask for a trend on the other side.

We're looking at the ongoing uptrend in the CEO Confidence and what that means for interest rates.

Our chart of the day, Yahoo Finance is Julie Hyman joins me now with a closer look.

Yeah, this coming to us courtesy of chart of the day MVP to Slack of Apollo who sends out a chart every day.

And this one is particularly interesting here.

It looks at CEO confidence in three lines here.

Look at current economic conditions of versus six months ago.

That's the purple line.

The blue line looks at expectations of, of how conditions are going to be six months from now in one's own industry.

And then the orange line looks at how the conditions are going to be six months from now in the economy as a whole bottom line.

They're all going up, right.

They're all improving after we had a peak after the pandemic coming out of that, they slumped again and now they're coming back up and looks at this as yet more evidence that the fed is on the wrong track.

He is in the same campus, Thomas Ho, who we talked to earlier today, who said that the fed should not be too hasty to cut rates and that its messaging on rates has been a bit of a mistake.

Now, ho said that in part because he says they're still too far to go before we get to the feds inflation target of 2%.

He also point that because of the feds messaging, we've already seen a loosening in financial conditions that could then result in a resurgence in inflation.

And slack is saying something similar here.

He says the market is making the same mistake it made in January when it priced in six cuts.

And he says the up trend in ceo confidence shows there's no reason for the fed to cut interest rates any time soon.

In other words, things are still too hot in his view was one of the earliest economists to come out and say the fed was not going to necessarily cut rates at all this year.

And that was a time when everybody thought they were gonna cut multiple times.

So we'll see if he is still correct here, although the fed's messaging has certainly changed on this front.

All right, thank you Julie.

And that is a wrap.

Uh Today's ask for trend, be sure to come back tomorrow at 4:30 p.m. Eastern for all the latest market moving stories affecting your wallet.

Have a great night.