Mortgage rates, Lumen CEO, Good Buy or Goodbye: Market Domination

Stock market indexes (^DJI, ^IXIC, ^GSPC) and sectors are holding steady in positive territory ahead of Thursday's market close. Julie Hyman and Josh Lipton provide coverage of the top industry stories and interview economists, market strategists, and CEOs in the final trading hour of the day.

Lumen Technologies (LUMN) CEO Kate Johnson sits down with the Market Domination team in-studio to discuss the telecommunications provider's AI partnerships with various mega-cap tech companies.

Summit Global Investments CIO Dave Harden joins the program for its latest installment of Good Buy or Goodbye to talk about which Magnificent Seven tech name he is seeing opportunities in and which other he is avoiding.

Other top trending tickers on the Yahoo Finance platform include Under Armour (UAA, UA), Zillow Group (Z, ZG), McKesson Corporation (MCK), and Monster Beverage Corp. (MNST).

This post was written by Luke Carberry Mogan.

Video transcript

Hello and welcome to market domination.

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

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

And here's headline blitz getting up to speed one hour for the closing bell rings on Wall Street.

Well, I think it's a relatively solid number and it offers an indication of still positive conditions in the labor market helping to offset some of that rising concern that circulated through investors and the marketplace.

In the aftermath of a less than solid July employment report, we always talk about, you know, drugs that are used.

Once patients have already been diagnosed with something in this case, they're, they're preventative in many ways.

Plus you get, you know, 15 to 20% weight loss in less than a year.

I just feel like so much more of the population is interested in this.

Beyond just obesity, the challenges continue and linear television is still the biggest driver of this company's profit.

And as we all know that the pressure on the ecosystem, given court cutting, given us linear advertising challenges is weighing on the company.

We have got one hour to go until the market close.

So we're taking a look at the major averages here, Josh and we are seeing a rally occur here up 1.7% on the dow more than a 650 points.

The NASDAQ up 2.7%.

I'm gonna try and find the S and P 500 somewhere in here.

But we are seeing the S and P rise the most.

Initially, we're seeing it rise the most since February at one point during the day.

Now we are seeing it rise more than it did in February here with this 2.22% gain.

So it's the most at least a year that we're seeing this climb here and it's a broad based gain.

So small caps are up about the same now there, which is quite interesting to see.

And then if you look at the groups in the S and P 500 they are all up as well.

Nothing but green on the screen here.

It all got kicked off this morning with a better than estimated jobless games report, jobless claims, not usually a huge market.

I know uh the the thing was that initial claims, it was interesting because I saw some, some smart economists and they kind of looked at that print.

They said, you know what?

To me, that's sort of consistent with slowdown, not brewing downturn.

At least for right now, I think it is interesting Julie because you don't associate initial plans with like a market mover.

But at a time when the question, we're all trying to figure out is the overall healthy economy.

It's also August, you're trying to, you're trying to grab it on to any data point you can right now and there's just not a lot of data this week.

So that was the, the thing that people sort of seized upon.

I will say the group that's doing the best today is tech, right?

The XL K that's also reflected in the strength of the NASDAQ 100.

And you see an awful lot of green on the screen.

I'm gonna equal weight this for a second because in the NASDAQ 100 there are one too, not many.

Um It keeps moving around on me less than 10.

Let's call it stocks that are down.

Everything else is up today within Big Cap tech.

All right, good day for the Bulls.

Let's get more on this uh latest moves.

We're gonna welcome in here, Eric Ditton, president and managing director at the Wealth Alliance.

Eric's good to see you.

So I don't know if you heard Julie, you know, we were talking there, we did get some economic data today.

Eric initial claims, another data point on the labor market as investors are trying to figure out Eric, you know where this US economy is and where it is headed.

What do you think, Eric, what, what are you telling your clients?

Well, first of all, uh thanks for having me here today.

Uh Julian Josh, and uh I made sure that today was a big update.

So this would be an easy interview.

So, um you're welcome.

Uh So, uh I actually think um look, Jay Powell wanted 2% inflation, careful what you wish for when you want 2% inflation and you raise rates 11 times the economy is gonna slow.

And at some point, you're gonna have to pivot.

So we saw at the end of last week, a number of really, you know, weak numbers P PM I manufacturing uh down four out of five months in a row, down 20 out of 21 and PM I Services services, 76% of, of uh of consumption turned uh negative uh into contraction and that spooked the markets plus the payroll number.

So I really, I really believe Jay Powell should have cut uh last week.

He didn't and I think the markets are starting to get very comfortable with.

It could be a 50 basis point cut.

Uh in September.

Um the fed is behind the curve.

Uh I there's not an imminent recession.

We just had 2.8% GDP economy looks pretty strong.

We're 4.3% unemployment.

That's a, that's a very reasonable solid number.

But let's remember, we, it's almost 1% point higher from where we were not long ago.

So the trends are, what are spooking the market and the Fed needs to act?

Um, well, it seems like the Fed is going to act in September, right?

I, I guess the question is uh with the, with the market up today is the spooking done?

No.

So what, so what does that process now look like?

This is, um, the Fed has said forever that it's data dependent.

And uh not long ago, Jay Powell said, hey, uh if inflation is at 2% and uh unemployment at 4.2 fed fund should be somewhere around 2.8.

Hey, we're north of five and we're at 2.5% inflation.

So we're almost there.

We're almost at his target and we just tipped above his uh unemployment number.

Uh and he's still sitting uh on north of 5%.

So I don't think it really matters.

There's enough in the numbers for the Fed to cut and they will.

We're also in the middle of an election year here.

Eric uh politics, front and center Trump.

Of course, speaking today, I'm interested, you know, when your clients are asking you how you're thinking about that, you know, as a market pro as a strategist, what do you tell them?

Don't get caught up?

Uh um First of all, there's no clear winner right now.

So a few weeks ago, you really could talk about the Trump trade uh Trump had just tremendous momentum versus uh Joe Biden, but obviously that's done.

And uh Harris is a contender.

So you don't want to make a bet on either side.

Um Despite the volatility and the nervousness every four years, the election year tends to be uh a good year in the market.

Uh And the last thing you wanna do and I've had some client calls say, hey, maybe we should just move to the sidelines.

There's a lot, there's a lot, we don't know.

No, don't do that.

Look what happened when Trump was elected, the markets had a big sell off in the futures overnight.

And by the end of the first day, the market was up huge.

So you don't want to play that, that game and uh and we don't stay invested.

And so what do you invest in?

What are you recommending clients stay invested in right now?

Yeah.

So, so that's the tricky part here.

Um We need to just look at what's happening in the market here.

We have gotten incredibly, incredibly concentrated.

You, you've heard people talk about it but understand that to have uh Microsoft NVIDIA Apple free stocks out of 500 accounting for 20% of the S and P that has never happened before.

Five largest stocks, 27% of the S and P, you go back to the tech bubble and at the height, the five largest stocks were 18%.

So we are concentrated and what you want to see in a healthy market is diversification.

So we actually go through long periods of what I call concentration cycles and diversification cycles.

And they tend to each last around a little over 10 years.

This concentration cycle is the longest in history.

It's coming up on 18 years.

So what we're not doing, we're not loading up on big tech, do we own it?

Of course, you have to own it.

A I is real big tech is profitable.

They're growing earnings fast, but you don't wanna own it the way the S and P owns it and be that concentrated.

So during diversification cycles, which we're overdue for the laggards outperform.

So, whereas you wanted to own the market cap weighted S and P 500 through this concentration cycle, you're gonna wanna own the equally weighted S and P 500 through the diversification cycle.

It has outperformed through every one of those cycles.

You're gonna wanna own small cap stocks.

Understand that in the last three years, people don't realize this.

The Russell 2000 has a negative annual return.

Everyone thinks it's a rip roaring bull market, negative annual return.

Whenever we've had subpar returns from small caps the next three years, they're up 99% of the time with an average return of 16.7% per year and they're trading in 15 times earnings.

So I like those.

I like dividend stocks if you believe rates are coming down.

You wanna own dividends.

Dividends are, they're like bonds.

Uh, they don't mature and they also, many of those companies raise their dividends every year.

So if I'm a retiree or pre retiree, not only do I want income, I want a rising stream of income.

So, if we believe rates are gonna fall, I believe they will.

Um, we want to own those dividend stocks and, um, of course, value, stocks, value is underperformed uh growth through this cycle for a long, long time.

You wanna own value.

If rates are coming down, the dollar is gonna weaken, that's good for international and emerging market.

And um you wanna own both of those as well?

All right, lots of choices and options there.

Eric, thanks a lot.

Appreciate it.

Happy to be here.

We're just getting started here on market domination.

Coming up.

Shares of lumen technologies have been on a wild ride this week following its second quarter earnings report.

We're going to speak to the company Ceo Kate Johnson on the other side, plus relief for the housing market.

Mortgage rates falling to their lowest level in over a year.

So does that indeed mean good news for home buyers.

And at 330 it's edition of our series.

Goodbye or Good by.

We're taking a deeper dive into two stocks to help you make the best moves for your portfolio state.

T more market domination coming right up.

Mortgage rates falling.

This week to their lowest level in over a year.

Yahoo Finance's Danny Romero joins us now with more.

We've been waiting for some kind of decline like this break it down for.

It's finally happening.

Good news for potential home buyers and even homeowners themselves.

Uh, the mortgage rates fell to the lowest level in over a year.

Freddie Mac reported the average rate on the 30 year fixed mortgage rate dropped to 6.47% from 6.73%.

Last week.

The drop in mortgage rates does come as there is expectation that the fed will cut rates this fall next month, uh which has brought long term bond yields to fall, which is also pushing mortgage rates down.

Now, remember the FED doesn't uh set mortgage rates but its policies do influence the direction of where mortgage rates are going.

But this has been an opportunity for potential uh home own buyers that to come out of the woodwork.

If mortgage rates continue to keep falling.

We've already seen that the refinancing activity has come up.

We've seen a boost last week, about 16% applications to finance.

That's what mortgage Bankers Association reported now.

But we also have seen the housing market kind of turn the other way in favor of the buyer and the seller.

We've seen the total number of homes actually increase about 36% in July.

That's what realtor reported.

And some industry experts say that the housing market could be normalizing soon.

So given all that, Danny, what do we see the home today?

So home builders, a handful of home builders have reported second quarter earnings over the past few weeks.

Now, home builders are expecting that mortgage rates to come down, but that doesn't mean that they're going to take the pedal off the incentive levels that they have been offering.

The most popular.

One has been the mortgage rate, buy downs.

That's when the builder upfronts the cost to lower the rate on the loan that's not going anywhere.

And especially now that inventory is rising on the resale side of things.

There's more competition for them.

So more of an incentive to keep those incentives on the table, especially for uh cautious buyers that are really looking to get into the housing market.

Bottom line mortgage rates is a positive thing for the home builders and we're seeing some of those stocks pop about 2% today on the heels of the of mortgage rates coming down.

All right.

Thank you.

Appreciate the update.

Moving on.

I'm taking a look at today's trending tickers and Zillow shares.

They are climbing after being estimates on the top and bottom lines.

The company also appointing a new chief executive officer.

So lots of moves for Zillow got changed in the C Suite Julie Rich Barton steps down.

Uh He's not gonna become co executive chair, Jeremy Waxman steps in long time.

Uh Zillow exec was the coo I like this note from ever.

Cos Mark Mahaney, friend of the show, Mark title of his Not Shelter from the storm.

That's what Mark goes with RRR form does take his target to 55.

Mahany says the upcoming interest rate cuts will help unlock pent up demand while Zillow continues to show promising potential with its new product cycles and cost discipline.

Yeah.

And there also seems to be some comfort level on the part of analysts and investors with the CEO transition.

For example, Daniel Kos over a benchmark said that the CEO role is transition to somebody who's been in charge of a lot of the operational improvements at the company.

So that seemed to be encouraging to invest investors.

By the way, the stock is still down 15% here today even with the pop it seeing today.

So the sentiment going into this has been pretty underwhelming Zillow has been very slowly trying to claw itself back from its eye buying misstep which by the way, Rich Barton came in, came back to the company.

This is a second stint as CEO, he came oversee that effort and then ended up abandoning it.

Remember when Zillow was buying homes itself and then reselling them and that did not turn out to be a good business move for the company.

And since then, it's been trying to sort of get back on track.

Are we talking to a Zillow executive?

Soon we're talking in fact to the new CEO tomorrow.

Well, I won't be here but you'll be here, be here and you're here in spirit.

I will be, oh, I'm entering this one too.

Look at that for me.

Moving on to under armor, sportswear company.

Beating revenue estimates with better than expected North American sales under armor.

Also lifting its profit forecast for fiscal year 2025 shares.

Look at that surge up about 20% in today's trade.

So raise its annual forecast just at eps to as much as 22 cents a share street was closer to 20.

Uh So investors like that returning founder Kevin Plank saying there's not a lot of high fives yet, Julie, but there's definitely a sense of what we accomplished today.

Yes, speaking, people coming back to the company for a further stints here.

He is still embarking on more cost cutting initiatives.

It sounds like they're not going to cut any more people but they are going to cut skews.

He says under armor has too many products and his plan is to cut the number of products available by about 25%.

He also says they want to cut down on discounting that they have done too much of that and that should help margins.

So that's something that looks like investors are also looking forward to and most of the reaction to this report has been positive, there is still a little bit caution I saw on the part of some analysts, they're still waiting for a little bit more proof that this market.

Yeah, absolutely.

Um Speaking of a competitive market, energy beverages, let's talk about monster beverage, those shares are sliding.

A Ceo Rodney Sachs announced slowing growth due to lower consumer spending coupled with less foot traffic in convenience stores.

We also have seen other companies like Celsius say they're taking market share.

Rodney Sachs said on the call, we are a blue collar brand and our consumers are more hard pressed than consumers in other categories.

Um So slowest pace of revenue growth since the second quarter of 2020.

Analy Bloomberg, by the way, just saying us energy drink sales, they are under pressure from a more price conscious consumer is how they put it.

And then also as you point out, it's not just macro is just a tougher competitive environment too.

How much is a can of monster cost?

I don't know.

I have no idea.

I don't know.

I'm not anti monster.

I've just never tried it.

I don't, I'm not an energy drink Red Bull kind of guy.

Yeah.

How much is, how much does that set you back?

It's not, you know, you gotta want it, you gotta want, I really want it and you're not a blue collar monster.

Gu I guess.

All right.

Well, another top training ticker on Yahoo Finance, not just today, but really this week has been lumen technologies.

Thanks to the surgeon A I and a new deal with Microsoft Luman has watched its stock soar over 200% in the past year.

The communication services provider reported second quarter earnings on Tuesday here to discuss those results.

And these new deals is Kate Johnson Luman technologies, CEO thanks for being here, appreciate and for people who Luman has been around for a little bit.

But during the century link is what Luman used to be.

So telecom company, fiber optics connectivity is what you guys do.

So how much of what you will be doing is linked to A I versus sort of more traditional telecom.

Yeah, our pivoted growth is really all about networking.

We're a networking company.

We run a very significant portion of the world's internet traffic on our backbone.

And uh what you've been hearing about in the market is really a massive expansion of our network and the internet at large uh to start building the infrastructure for the A I economy.

I I know Kate, you know, we gave that guidance.

I know some of the street um had questions just about sort of how sustainable you think the pace of that free cash flow guidance was not just for 2024 but beyond how do you answer that?

Yeah, so the 5 billion basically got us anointed as the trusted network for A I.

It's a a composition of deals.

It was not one deal, it was more, it was diverse it's more than 15 companies in, in that uh that billion with several more on the horizon that we're working with and, and pursuing uh to build cost and private networks for and uh and so it's an injection of cash into the company for sure.

Now, which gives us free cash flow stability, uh which will in turn, enable us to really accelerate our transformation.

We're building a digital platform to make it super easy, quick, secure, effortless to consume network services and nobody else is doing that.

So I guess to sort of build on what Josh was asking how much runway, you know, what is that?

Free cash flow sustainability going forward as a result of of what you're doing.

We're right at the tip of the spear.

This is the very, very beginning of what we think is gonna be a three phase process of building out this A I backbone.

The first phase is hyper scalar technology companies, cloud companies.

Um All of the companies that build A I models and train them are seeing the proliferation of data and they're seeing that the internet of yesterday does not serve the A A I of tomorrow.

And so they're saying, hey, we need you to help us connect our data centers A I requires data, lots of it, lots of data requires lots of data center growth, data center growth, we gotta connect them and that's what we're in the process of doing.

That's just the first phase, the second phase is really about enterprises when they start using those models, inference.

And uh and we're starting to see the early signs of uptick in enterprises needing more networking capacity in order to use those A I models.

The third phase is when A I is a little bit more inculcated into our everyday living is when A I talks to A I.

And we think that the data proliferation during that phase goes through the roof.

This is about the next couple of decades and is building critical infrastructure for decades.

It's OK because as we, as we I made our way through this earnings season, you know, and, and you saw not just the hyper scalar report, but then the reaction you saw this thing, it just seemed like investors, there was this new kind of skepticism I think about at least some right, like OK, spend, spend, spend, where's the return?

I'm just curious how you think about that dynamic.

Every single new piece of technology goes through J curve.

I mean, you know, the just because the big companies are well capitalized and have a ton of cash doesn't mean that they have to produce, you know, return on the first dollar spent there is AJ curve.

And these companies, what they're seeing is this need for a different level of infrastructure, higher bandwidth, thicker pipes, faster pipes and they're committing the capital to build out this critical infrastructure for decades.

To come.

So the volatility of this week associated with the health of the economy, you know, the questions around, are they getting the return right now or not?

The companies that I'm working with that my company, we we are dealing with every single day are looking at this as a 10 and a 20 year plan.

Um I also wanna ask you about your legacy business here because looking at the news about the deal knowing that it's associated with A I I was then looking at the revenue projections for the company and revenue is not growing revenue is, is still falling and it's expected to fall for the next at least a year or so.

Is that because the legacy business and what do you do with the legacy business?

For sure Telco is experiencing secular decline and has been for quite some time.

And the reason why there's so much skepticism, you know, in, in, in the story here is because we're doing something completely different than what everybody else is doing.

Uh secular decline, you harvest for cash and you pay a dividend.

That is not what we're doing.

We're harvesting for cash and we're building a digital platform to pivot to growth.

And that's the difference between the two, all, all this growth and opportunity.

You see Kate does that mean a lot more hiring for you all to meet those kind of meet that growth, to meet that demand, to meet those construction requirements or no, that's third party.

It's a great question.

So obviously, we have supply chain.

Um You know, we outsource things that aren't your to our skill sets.

But overall, this company is going through a huge transformation and we're shape shifting, right?

So we're upskilling reskilling.

We're redeploying people away from lower value, work towards higher value work.

And of course, we're switching out the composition of our skill sets on a, on a fairly regular basis and, and at the, the legacy business, which you said, where you're harvesting the cash.

So then in this growth business, so it sounds like you wouldn't want to divest that business because you are using it for that cash generation.

Is that absolutely?

But I think about it as customers who are going to be participating in the A I economy and they're on legacy technologies and they need to be moved to modern technologies and that's what we're in the process of doing Kate.

Great to have you on the show today.

Thank you so much for having me.

Appreciate it coming up.

It's late edition of our series.

Goodbye or goodbye.

We are taking a deeper dive of the two stops to help you make the best move to your portfolio.

Stay tuned.

What's more market domination coming right up.

It's a big noisy universe of stocks out there.

Welcome to.

Goodbye or goodbye.

Our goal to help cut through that noise to navigate the best move for your portfolio today.

We're looking at the magnificent seven stocks, of course, after falling under pressure amid A I spend concerns and the broad market sell up.

What's the best way to play it now?

I'm here with Summit Global Investment Cio Dave Harden.

Thanks for being here.

Appreciate it to be here.

Thank you.

So we're looking at the magnificent seven.

Let's talk about the one that you like, first of all and that is Microsoft Microsoft obviously has had quite a run already, although it's come down along with the recent market sell off here.

And it's interesting because you pinpoint one of the reasons you like it is the strong earnings performance here, even though the market, you know, reaction to some of these magnificent sevens was not necessarily so fantastic.

Sure, I think everybody wants them to be off the charts, right?

Like what we've seen recently over the last 18 months and in one year, but the reality is it still performed very well.

It's still outperform earnings analysts expectations.

So I think it really does show that the operation at Microsoft, the organization as a whole is doing really, really well right now.

And so we can't ignore that just because we have some high lofty expectations and we can't talk about Microsoft without talking about A I and that opportunity, of course, and one of the other reasons that we did not necessarily see a lot of enthusiast for the earnings is this A I monetization question, right?

What is the return right now on this A I investment?

How do you think about that question?

And I would say right now there there isn't a lot of return, right?

I think Microsoft has the biggest potential, how they execute on that?

And do they get the return they need?

That's still yet to be determined.

But if you're looking to invest in A I, you cannot ignore the opportunity that Microsoft has, right?

And there is huge potential.

And if everybody looks at the money that Microsoft is gonna make in A I I think they're underestimating that potential.

That's why I like that stock.

Where do you think that biggest potential is just quickly within Microsoft?

It's, it's, it's in their word and powerpoint and Excel.

This is used through about business all over the place and to be able to think if you were in a Microsoft word document instead of going to Google to search you just search right in your document.

What if you had, you know, chat G BT right?

Inside that document that would make it very powerful and people would pay $10.20 dollars a month and switch their subscriptions right back to Microsoft.

Interesting.

OK. And then finally, there's the enterprise and cloud strength which I guess is A I adjacent, but this is pre existing anyway.

Yes.

Correct on its own.

It is strong, it's doing well and it's continuing to build market share and do really well in that space.

So those are three reasons why I really think Microsoft is a great buy right now, especially when you see some of the weakness.

Well, we have to talk about risks, we always do in this segment to this potential here.

And you know, I think that there are some questions more recently about how this A I profitability runway is going to look and perhaps that's a risk for Microsoft.

Sure.

I think if you, if you think about the A I for just a second, that is the opportunity, but it's a two edged sword.

It's their biggest risk if that takes too long.

If Google figures it out before they do with, with, with their product or Amazon, etcetera, that's going to hit some, some real bumpy roads from Microsoft.

Ok. And before we move on to the stock that you don't like as much do you own Microsoft?

I do.

Ok.

So let's get to the one you don't like as much.

That is Tesla, this I have to say is one of the least loved members of the magnificent seven right now, I think safe to say and their core business is struggling as we know, there's just not as much demand.

Yes, they have been struggling for a while.

This is nothing new.

We've had them on the, if you will avoid list for some time now over a year.

And I think that's really important.

We need to see some more, um, opportunity there and it's a crowded space.

Others are doing really, really well.

I know they've had some good sales with their, or, you know, selling their truck, but I haven't bought it yet and many of my friends haven't bought it yet.

And the market analysis says I'm not the only one that's more of a niche product, I guess.

Well, you know, we were just talking about A I with um Microsoft and of course, Elon Musk has famously said, if you're gonna buy this company, you're not gonna buy it for the autos, you're gonna buy it for the other stuff, including A I.

So why aren't you buying it for the A I?

Well, I think they have a longer time frame.

Microsoft can mono monopolize on that a lot sooner than Tesla.

I think there's a good opportunity here, but I don't see, they see the UR returns here for a good six, maybe even 10 years.

So we're looking in the 20 thirties for A I with Tesla now.

I don't think very many people want to bet against Tesla.

I just think that you don't go with it right now.

Got you.

And then finally, there's Musk himself, right?

And there's still these questions about his pay, even though that now seems to be by the wayside for the moment.

But is that still a uh you know, some, some people say it doesn't matter.

But I guess you think it matters.

Well, I think the reality is, it's not necessarily his pay that bothers the normal person in the world.

I think, I, I think it's his volatility.

What is he gonna say?

And when is he gonna say it?

And let's say, let's just put it this way.

I don't think any of us know what he's gonna say and when he's gonna say it, that creates risk to the average investor.

And so the reality is, is we'd like him to continue to lead.

We love his leadership, but in the sense of volatility, maybe he becomes a little bit more stable.

That's hard to do, especially when he has a personal megaphone on another one of his ventures that he owns X. Um let's see what could go right for.

Maybe he could, you know, maybe magically he will change and he, he'll stop tweeting.

Um or we could see uh pick up an ev demand.

What do you think is the likelihood of either of those?

Well, probably the last, right?

So clearly, um it's still a car at the end of the day, it has a ton of technology, but they need to sell vehicles.

So if we see more sales for those vehicles, that's gonna make me much more positive with Tesla.

Ok. And do you have any position in Tesla?

I do not.

Ok. Well, thanks so much for joining us, Dave.

Good stuff and thank you so much for watching.

Goodbye or goodbye.

We'll be bringing you new episodes at 3:30 p.m. Eastern Crypto executives were attending a video call with top White House officials today discussing concerns with how the current administration treats the industry.

Yahoo Finance's David Hole and Ben Wo join us for more guys.

It is good to see you.

Uh David, I'll start with you.

What was the point of this meeting, David?

What, what was the goal here?

Well, Josh, uh you know, uh the crypto industry has been calling for a reset um under the current administration.

And uh I, I think there's also the element of, of the uh presidential campaign at play here.

And also the fact that um uh Donald Trump has come out in support of the sectors really embraced it in the last last several, I, I guess a year you would say.

So this is really um industry executives meeting with current administration officials.

Um and, and also a representative for Vice President Harris and go ahead, go ahead.

Sorry, Dave.

Yeah.

So no, but the point was really for them to, to air out their grievances under the current administration.

Uh the industry and uh certain regulators, the sec uh uh most prominently have been at odds um in some disputes.

And that was, it was about airing out those concerns and then also moving forward into ways that the industry can feel more supported if that makes sense.

Well, and Ben.

What's interesting here too is there is so much speculation about the presidential campaign and their relationships, the candidates, relationships with the crypto industry, but this seems like it was, didn't have anything to do with the Harris campaign.

Yeah, I mean, the way I would look at it is kind of a first step.

This is kind of a, a multi pronged, call it a charm offensive, call it whatever you want between crypto and the Democratic Democrats.

Well, we had this meeting this week.

We also have a meeting coming up next week, which is a larger crypto for Harris.

We've seen all these zoom, these big zoom meetings since Harris got on the race, black women, Harris, white dudes for Harris and now next week we'll have crypto for Harris.

So I think, I think this will continue to evolve and this was a kind of, as Dave said, was a kind of first step in airing of grievances with the White House side that we'll see.

Continue in the weeks ahead.

David.

I'm curious, did Sesesec chair Gensler come up on the call at all?

Do we know he, he did, we, we know at least from a source familiar with the matter that at least one person on the call brought that up.

And generally, um how, how uh the federal securities regulator has sort of been working with the sector or, you know, aggressively been cracking down on it by the industry's perspective, largely um was brought up and addressed.

And so what was the um banking regulators positioning on crypto for, for banks uh crypto banking partnerships are obviously um uh highly scrutinized at this point.

All right, Ben and David, thank you both.

Really appreciate it and looking forward to uh continuing coverage of this issue coming up.

Shares of Eli Lilly surging on stronger than expected sales of its weight loss drug.

We're taking a look at the best ways to play the trend and next on market domination.

It's a jam packed hour mckesson corporation chairs are sliding the prescription drug distributors revenue forecast for the year falling short of analyst expectations.

And in particular here also even last quarter, if you look at a couple of its different areas, medical surgical solutions, the revenue there up 1% but it fell short of estimates and prescription G solutions revenue uh down 2/10 of 1% and missing estimates and that it seems like that's kind of Josh, what um what uh analysts were highlighting those couple of areas where there were some more weakness.

Yeah, the real I I think people made a beeline really for that revenue in the company's prescription technology solutions segment because that includes the G LP one drug patient services and that did come in light 1.24 billion that misses the street.

Want to see something close to 1.46 billion.

So some disappointment there and this was another name, by the way that obviously investors have, you know, piled into as well.

Yeah, I mean, and the company also announced a buy back, by the way $4 billion buyback authorization.

But that didn't help to your point, the shares up about 17% this year, even with that, that pull back that we saw today.

All right.

Well, Tale of two weight loss drugs in the second quarter, sales of Eli Lilly's Blockbuster drug Z Bo came in higher than expected, prompting the company to raise its full year sales guidance.

While Novo Nordisk slashing its profit outlook after will GOBI sales fell short of expectations around.

Take a look at how to best play the surging demand in G LP ones in our Yahoo finance playbook with more on how to play the GOP one hype Moritz Pot team at ET F's founder and co joins us now, Morris.

Good to see you.

Good to see you.

Thanks for having me on the show today.

So we were talking to off camera awards about how a lot of times I think people, they think about G LP ones, the trend and, and investors excited about it.

They often frame it is like there's just these two giants, there's Lily and there's Novo right more.

So you say it's not that simple, there's others we should bro broaden the horizon a bit.

That's a great question.

So the industry today is defined by two horses, the horses you mentioned Lily Novo.

But we think actually over time, this is gonna be a 4 to 6 horse race because right now you only have one in one device which is injectable going after one, which is weight loss.

We are seeing innovation in parts of the market.

We are looking at people looking at oral instead of injectable, people are looking at applications beyond weight loss.

Could it be used in Alzheimer's?

Could it be used in sleep anemia?

Could it be used in oncological disorders and heart disease?

And then also you are looking at how can you make the patient experience better to reduce side effects to reduce frequency of dosage to ultimately increase the continuation rate after 12 months.

A challenge.

Today is one the affordability but to also the accessibility, there's a big drop off after 6 to 12 months.

How do you ensure that people stay on the drugs for longer?

And so how do you do that?

And then how do you invest in that idea?

So rati these are big Capex cycles with big R and D budgets.

I mean Eli today mentioned that it took them eight years for trying to basically get approved to where it is today.

They first got their stage one approval in 2016.

That kind of gives you an idea.

This is an eight year journey.

So we think again that there is a number of competitors but you need big balance sheets, you need to obviously have like the the ability to actually run the trials and actually like develop and on the trials.

And this is not going to be straightforward.

So we've seen Eli Lily now moving with a cai oral drug into phase two is also progressing another oral drug outside of the world they are doing with Cai we're seeing Viking moving an oral drug into phase three last month.

So there's a number of players that are in the space you've seen also the readout from Roche last month on their Caramel acid, which they bought last year in Q four.

So there's a number of people in the space, Anthony, there's only two drugs approved today in the US.

We think it's not going to be a question of this year, maybe next year before we see more drugs approved, but we do see more innovative innovation beyond just weight loss and beyond just injectables and two other names in your product TF more.

So, I mean, obviously, besides uh Lily Nova, you've got Alnylam and Amgen.

Why are those two in there?

So we think Amgen is very interesting working on a lower frequency of dosage approach and is taking a more genetics approach, which again is, is unproven.

But the early data is pretty promising.

And looking at the way you could use genetics to actually treat or to address the underlying obesity issue is a challenge that not many people are focused on.

But obviously, if there is clear data there, that would be very promising.

So we really try to invest in both the established leaders of today, which is Lily Novo.

But also thinking who could be the 3rd, 4th, 6th horse in this race, given that we strongly believe this is not going to be a two horse race over time.

I'm also interested to see in the two names that have been hurt by all of this.

I'm talking about Dexcom and insulate, which are more diabetes um providers here because the thinking was if fewer people are suffering from diabetes because they're taking these drugs, they won't need those products.

So how do how do they fit in?

So the a like, you know, the the direct inference is that well that if people, you know, there's less obese people, then there would be less demand for these medical devices, but there are anti the medical devices also treat other ailments.

And there's also second order effects from basically taking weight loss drugs, for example, one being like muscle loss.

So we think that actually while the contra view is not is to own Dexcom Edwards, especially after the drop of the past month, we actually think they are quite attractively priced because the concern with some of the GOP one players is the valuations that a lot of concern we see.

So we think actually the runway for Dexcom Edwards will change with GOP one but it's actually still very interesting, especially these valuations.

I mean, I'm curious sports when you and your team think about this, the GOP one market broadly.

How big is that market?

So today, the biggest estimates from Goldman are about 100 and 30 billion a year.

By 2030 we think this could be half a trillion dollar market.

Why, how do you get, how do you get there?

So we get the room three ways one.

Today we see a billion obese people in the world today.

Based on the latest data from, from imperial, we that's estimated to go to 2 billion people by 2032 people.

Thing about weight loss drugs today just in the comments of weight loss.

But if you think about GOP one as a drug that could also address other disorders, whether it's neurological disorders, oncological disorders or even cardiovascular disorders like heart disease.

Then actually you see a much bigger time.

So simplistically, we just think about, let's say there's just a billion people.

Let's say that 20% of people by 2030 are on a drug today.

That's 2%.

So that's 10 extra penetration from today.

And let's say pricing drops by 60% below $5000 a year.

Based on those numbers alone, we get to about a half a trillion plus market.

So we think this is a market which is only going to grow.

So far, estimates basically are doubled every 3 to 6 months and we may be early, but we think this is a half a trillion dollar opportunity by 2030 unless we see something change in one regulation, two, something in prevalence or three, we see that there is a better drug that looks beyond GOP one which we don't see today.

There was a really interesting report out from Charles River Labs, um which is a drug development company which basically said sales are not going to expand this year.

It's seeing a big drop in drug development interest from pharma companies.

One of the reasons it blames was the Inflation Reduction Act.

Um and sort of Medicare negotiations.

How is that going to affect if at all the GOP one universe.

So price is definitely coming down, prices are already coming down.

Novo yesterday said as volumes go up, price will come down and obviously as reinsurance reimbursement increases, actually the net back to manufacturers will further decrease.

But given the scale of the challenge where we have a billion obese people in the world today, Nova nor does estimate that only 2% are being treated that shows you just how big the market t is in terms of volume.

So even if it's a volume game, not a price, it's a volume game, not a price game.

And ultimately understand the government wants to make these drugs more affordable and also more accessible, which means that pricing has to come down.

So we think that pricing will come down, pricing may come down more than we expect depending on whether you're looking in insurance coverage or non insurance covered space.

But we think that's ultimately, it's a good thing for patients.

We think that the demand is so big and frankly, it is outstripped by supply that we don't see that as a challenge.

And thirdly frankly, that will also allow more people to get access to the drug earlier.

The challenge today is supply.

If you look at the NOVO results yesterday, they weren't bad results.

But what they really underscored is that Novo is just struggling to keep up with the demand they are getting for their drugs.

And Novo is very focused on making sure that people who start on the sequence of GOP one on we go, we can actually finish it and, and the challenge today is that frankly, if, if you could start on it, but you can't get supply to continue on it.

Then frankly, what is the point of starting in the first place?

M you know, you mentioned regulation, you mentioned government, we have an election coming here, right?

Um Are you all in your team trying to game out potential impacts, you know, Trump versus Harris administrations on this market.

So I think both sides of the political spectrum believe that affordability should increase availability should increase.

So both of them, both parts as the party will advocate for lower pricing at the same time, I think both sides of the political also believe that this is a major issue which obviously affects patient lives but also has societal implications, societal costs.

So our view is that there is going to be a general consensus around how do we improve the access to availability, affordability of these drugs?

The question is how much of that will be covered on the Medicare?

And obviously we we go over years is starting to be, but there's still obviously a question on insurance coverage.

So we think that the political will to expand access will increase the political will to basically drive innovation or to support innovation will increase.

The question is what will be the insurance coverage and to what extent will that come from Medicare?

So we don't really see the upcoming election as a challenge.

We actually think this is one of the few areas where both parties are pretty united, not just on general drug policy, but specifically on GOP one drug policy.

One of the few areas you actually see right and left coming together, maybe correct.

We'll see Moritz.

Thank you so much for joining us.

That was great.

Thanks for having me moving on here.

Delta is now detailing the financial impact of the crowd strike outage the airline in a filing saying it expects a $380 million revenue hit in the current quarter from the incident that grounded flights for days.

It estimates the total impact will costed some $550 million.

Delta also reiterate it is pursuing legal claims against crowd strike for that incident, Julie.

Yeah, we've been waiting for sort of the filing to get more details on this, but this has been reported on that.

This was going to be an issue for the company here.

The stock has come down quite a lot since um the outage happened.

But even before that, we had seen Delta sort of peak and start to come down.

It looks like its high was back in mid May.

Um And there are some broader questions about travel demand right now and then pile this on top of it.

I mean, I think also why it has been so surprising to investors is most of the folks we talked to who cover the airlines, see Delta as best in class.

You know, when Southwest experienced its troubles, it was sort of, you know, didn't necessarily tarnish an image of a perfect airline in Delta.

It seems like it was happening.

The outage, you know, it did hit various sectors and verticals and including the airlines Delta did seem to really take it on the chin a little harder, more so than its competitors as well.

All right, we are counting down to the closing bell on Wall Street as stocks are soaring the S and P 500 on track for its best day since January 2023.

The dow is up more than 600 points, about 650 points right now.

And it is a broad, broad based rally, all sectors participating.

All right, while we are wrapping up today's market domination to anywhere.

We've got you covered with all the action on the closing bell, including the latest earnings from Paramount.

Stay tuned for market domination over the time.