Recession outlook, tech trade, Zoetis CFO: Market Domination

US equities (^DJI, ^IXIC, ^GSPC) are holding on tightly to Tuesday gains in their recovery from the widespread sell-off that kicked off the trading week. Market Domination hosts Julie Hyman and Josh Lipton guide investors through the final trading hour of Tuesday, August 6, talking to top economic minds and leading Wall Street experts.

Rosenberg Research founder and president David Rosenberg discusses why he believes a recession is "not too far away" after the stock market reacted the way it did after last week's July jobs report.

As part of today's installment of Good Buy or Goodbye, Thornburg Investment Management portfolio manager Emily Leveille lays out the arguments for her latest stock trades: buy Globant (GLOB), but avoid LVMH (MC.PA).

Zoetis (ZTS) CFO Wetteny Joseph joins the Market Domination team to talk about the pet health company's latest earnings and how pet owners are choosing to spend for animal healthcare costs.

Other top trending stocks on the Yahoo Finance platform include Kenvue (KVUE), SunPower (SPWR), and Lumen Technologies (LUMN)

This post was written by Luke Carberry Mogan.

Video transcript

Hello and welcome to market domination.

I'm Julie Hyman that is Josh left in live from our New York City headquarters.

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

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

So what you're seeing now is a little bit of a, of a kind of a reality check of maybe that actually the economy concerns are not as bad as had been expected, but you do still have some of the technicals unwinding and you mentioned the carry trade before that's probably got a little bit further to go.

Um, the key thing for markets.

So always for anything is the speed, the kind of the ferocity of any kind of moves.

And I think that was what was damaging.

Um, over the last 48 business hours, they tend to be three waves or five waves.

And in the middle of that, you get these relief rallies, so it's perfectly natural that you have a very aggressive downside, a little bit of short covering which creates a rally which is probably what we're now, if I look at our sort of market timing, fear and greed models, the market is pretty fearful and may get a tiny bit more in the short term.

So I wouldn't be surprised if you get a wave two relief rally about but don't get suckered in by.

It is the point.

There is a lot of question marks around A I, we've had those for a long time.

And really the issue is use case like what is the benefit of A I, I think we can all argue in the long term, there's likely to be some benefits, but it's going to take a while to develop.

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

Let's take a look at the major averages.

You just heard sea sha they talking about the velocity of the last 48 hours because we're up again today, 560 points in the dow 1.5%.

But of course, if you look at the two day chart, you have the big drop yesterday, followed by the game today.

That's the same for all the major averages.

The S and P 500 down very sharply yesterday.

But today, we're up almost 2% here and the NASDAQ is the same, we're covering about 2%.

So not back to the levels where we had been, but still we're covering a lot and then the one other move that you got to point out is what's going on in the vics today under 25.

Yeah, back under 25 after seeing a record one day increase yesterday, I believe today might be a record one day decrease from those levels, at least at one point during the session.

Yeah, so we're bouncing all over the place.

Lots of green bulls back in charge and yet a lot of the issues we were talking about yesterday.

Of course, still with us, right.

We're still talking about the overall health of the US economy.

Is it cooling or going cold?

I'll remind our viewers we had Claudia Sahm herself on Ya.

Finance said she was very concerned.

Her words about the risk of a recession.

Still questions about the fed.

Are they behind the curve?

Right?

When they do cut?

Is it a traditional 25 or they go super size 50?

So a lot of still questions.

But today we're getting a nice bounce.

Yeah, we are getting a nice bounce.

Nvidia coming back by 6%.

So a lot of big tech is recovering today.

The exception there of Apple, which is still down a little bit in today's session.

It does feel like the majority of folks that we've talked to a majority of the research I've been reading says we're not headed for a recession, things are slowing but not enough to tip us into a recession.

There does seem to be a relative level of confidence that when the fed does step in and cut that, that will be enough.

And we're seeing a little bit of a pullback in the sentiment that there would be an emergency cut.

Right.

For a, for a quick second.

There, it seemed like that, that Muhammad yesterday in our show said, very skeptical, very skeptical, just signal panic.

Exactly.

Exactly.

So a little bit more calm today.

But will it continue?

You know what?

Perfect.

Yes.

To answer that question, we have the perfect the economist strategist uh while stocks are rebounding today, our first guest sees these gains as just a brief counter trend in response to yesterday's sell off for more on what the latest moves mean for investors.

We want to welcome in David Rosenberg, Rosenberg, research founder and president.

So uh David, we are bouncing today green all over my screen.

You say though, David, this is a brief counter trend trade.

How come David?

Well, a lot of this is just uh purely algo trading and uh a uh oversized uh reaction to the oversized negative reaction that we got in the past couple of days.

The market has become unhinged uh in the past, not just the past few days, the past week, the volatility has been off the charts and, and not just daily but uh but hourly.

So, you know, from my perspective, um you know, you got the vic hitting 60 after, you know, a, a monumental decline over a couple of days and you would expect that, you know, you would get a technical bounce off the oversold levels that we had.

But to make anything over and beyond that, uh I think is, um, not a wise thing to do.

The market was starting to look wobbly even before what happened yesterday or, or Friday.

And the last I looked nice bounce today, the dow was still off nearly 2000 points from the high, nice bounce today.

The S and P of 100 is still down about 7% from the high.

Uh So there's a lot of technical damage that was done and, um, technically we're reversing course right now, but this market is definitely not out of the woods.

Um, Dave, let's also talk about the backdrop for at least one of the reasons why the sell off has been occurring and that's concerns about the economy.

You probably just heard us saying that it seems as though the consensus is coalescing around the idea that the economy is slowing but perhaps not into recession.

I have a feeling you're on the other side of that.

So I if we are either already in a recession or rapidly approaching one, what is sort of the, um, engine of that recession if you will or what is the engine that is sputtering in the US economy?

Well, you've got, uh, the housing market, uh, has turned down again.

Uh, and even with the fall off in mortgage rates.

The housing sector uh has um started to uh falter in a very significant way.

So that's point number one and housing of course, is a quintessential leading indicator.

On top of that.

Look at the information we got on Friday from the non-farm payrolls, we had flat uh factory employment, a big decline in hours worked and in overtime that transcended, you know what we're seeing uh out of the hurricane.

So it looks like industrial production is starting to roll over again.

Um But the elephant in the room always and everywhere is employment.

And and of course, that has a coincidence, a lagging indicator.

But you know, in taking a look at 100 and 14,000 non-farm payrolls, of course, over half that number was the birth death model.

But in the context of the size of the labor force that is basically insignificant.

Uh and the household survey employment is actually now running flat year over year.

So you're looking at the whole gamut of employment indicators, you look at non farm payrolls, you look at the household survey, you look at the jolts, look at the jobless claims and what's happening in the backlog of continuing claims.

Uh And you could see that cracks are starting to emerge in the labor market.

And that's why the stock market uh was selling off on Friday, why the bond market was rallying on Friday.

Then, of course, you know, we got hit with this, um you know, reversion of the uh yen carry trade.

And that was mostly yesterday's story, but Friday's story of cracks emerging in the labor market uh that hasn't gone away.

Uh And so the fact that we don't have any more fiscal stimulus uh that the household savings file from the prior pandemic stimulus has run dry.

And now, you know, you talk about a cooling in the labor market, but the household survey is actually flat year over year.

And in the past, going back to 1950 when you flatten out on the household survey, you're either getting into recession already in one or crawling out of one.

So I still think that the recession is, um, you can argue that it's not here just yet, but I, I think that it's not too far away.

Let me ask you, David, what do you think the response of the fed here is, you know, we did have Julie was mentioned, we had.

So some folks, some economists saying, you know, inter inter meeting, uh, cut by the fed.

Not out of the question.

Are you in that camp?

And, and what do you expect in September?

I, I, well, look, the, the inter meeting move was, uh, a knee jerk reaction to what happened on the stock market.

And you can argue, I guess in the credit market yesterday.

But, uh, that was never gonna happen unless the stock market continued to go on a free fall or you had to freeze up in the credit markets.

Um, they were not gonna move inter meeting, um, just based on what happened on one day, uh, with the equity market, uh, that said, will they cut rates in September?

Yes, they will.

Uh, will it be 25 or 50?

Uh, well, I think that's the debate but remember just like a month or two ago, everybody was debating whether the fed would go a go at all in September because the November election was right around the corner and now a September rate cut, whether it's 25 or 50 is basically baked in the cake.

Now, frankly, I don't care so much about, you know, whether they go in meeting A B or C, they skip a meeting both 50 basis points at a certain meeting.

To me that's, that's noise.

I guess that you could trade around the noise.

I just know what the destination is.

Ok.

I know that Powell gave us a ton of information at the podium last Wednesday uh at the press conference after the FO MC meeting where he used the term normalization to describe the economy in the labor market no fewer than 11 times.

And he had mentioned that the last time that we had normalization was in 2019 when, by the way, he cut three times all the way to 1.75%.

He didn't have to mention 2019 he didn't have to mention any year at all.

He talked about how the inflationary backdrop and the labor market is where it was in 2019.

Well, 2019, the appointment was 1.75 here.

He's talking normalized 11 times and the only that hasn't normalized is the fed funds rate.

So whether they go into a meeting or don't go into a meeting or whether they skip a meeting uh between now and the end of the year, so on and so forth.

By the end of this year, I think the funds rate is gonna be anywhere between 175 and 275.

So I'm more comfortable talking about the destination than I am about.

You know, whether they're going to go 2550 or in a meeting you by the end of this year, Dave next.

No, no, by this time next year, I was going to say that would be quite dramatic.

Um Finally, I want to ask you about what all of this implies for stocks going forward.

I thought Goldman Sachs had an interesting note today where they were sort of breaking down the sell off and trying to figure out what was coming.

They did point out that typically when you see a 5% pull back in the S and P 500 in the one month, three months, six month, 12 month period following, you tend to have positive returns.

Um So, you know, we've had this 5% pull back, maybe it'll keep going.

Um But then what do you think happens?

You know, II I don't even know what to call that is, is that called analysis?

Uh I, I mean, you could give that as a homework assignment to a university to a high school student that if the market goes down this, this is what happens.

80% of the time.

Look, the, the question is uh as an equity investor, do you wanna pay to take on equity risk or get paid to take on equity risk?

And I respect something called math.

In other words, the equity risk premium, the spread between the earnings yield in the stock market and the yield that you can get in the 10 year treasury note uh and the equity risk premium.

Uh I mean, it has gone up uh during this corrective phase and bond yields coming down but it's still around 100 basis points.

Where's the long run mean closer to 300 basis points?

So I just, I still don't like the math.

I don't like the math behind uh the stock market.

I like to invest with uh tailwinds, not head winds.

And right now if you're taking a look at risk, reward attributes, uh actually the treasury market offers better relative value on a risk adjusted basis than the equity market does.

And that's just basically that's doing homework.

That's not like, oh, you're down 5% and then you do this.

I mean, that's, um, I, I would never recommend anybody invest with that sort of logic.

The, the, the issue here is you have AAA P multiple on a foreign basis, still flirting between 2021.

Uh, at a time when the 10 year treasury note is yielding you close to 4%.

Um, the stock market is just not compelling when you look at it in terms of what you can get in the risk free rate.

And that's the point that I've been trying to make and I still make the market still just too, it's just too expensive and I know valuations are not a timing device obviously.

Um, but they tell you whether or not you're investing with the wind in your face or the wind at your back and I think that the wind is in your face right now.

We shall see, Dave.

We shall see.

Thank you so much for joining us.

Appreciate your time.

Hey, take care.

We're just getting started.

You on market domination.

Coming up with big tech being hit hard as of late is a time to go bargain hunting for top names.

Well, David Rosenberg would say no, but we'll talk about the sector with We Bush and I, I think he's on the other side, that trade and be sure to stay tuned after the closing bell today, we've got another full slate of earnings set to drop will be covering the latest from Air B and B Super Micro computer, Rian and more stick around market domination continuing right after this.

It's been a rough few days for the markets and big tech is not immune, but our next guest thinks now is the time to go bargain hunting for top tech names here for more.

On this week's move, we got Dan Ives Wedbush Securities managing director and senior equity research analyst.

Dan, Always good to see you my friends.

So uh let's start big picture, Dan, you look at big tech and, and many of these names you cover, you know, them very well, Dan and, and you know, from Apple to NVIDIA, you know, they'd be getting whacked.

I'm just curious to get your take big picture Dan on the moves we've seen and whether you think uh that selling pressure is it justified, Dan.

Yeah, look, it's a great point.

I mean, look, I'm ironically here in Tokyo.

Does the yen carry trade change?

The A I revolution?

No, you know, like my point is we look at what's happened from modernization in a once in a 40 year cycle.

This is unique and that's why for big tech, these are the buying opportunities.

That's how we've always navigated these global sort of, you know, white knuckle moments, you buy high quality large cap tech and, and now to what we were telling our investors the last 24 48 hours and how are they receiving that, Dan, I'm just curious.

Right.

Because we do have this turmoil that's been hitting the market volatility hitting the market, whether it's because of the carry trade or, or because in some cases, there are some real concerns about the pace of economic growth here reflected by the uptick in the unemployment rate, et cetera.

So, are they, are they reassured or is there still a lot of concern out there?

I ju I'd say probably like my conversations over the last week, especially over the weekend and going into yesterday, probably some of the nervous FC ambassador since COVID was in terms of March 2020.

But then you look at the fundamentals.

I mean, we just came through a tech earnings season that was actually pretty robust relative to I think big tech cloud and A I look at pound here last night, just another, you know, monster performance.

So we're kind of looking at what are the fundamentals look like here in Asia.

We don't see any issues in terms of demand.

And I think we hear this from NVIDIA in the next few weeks.

These are the opportunities if you're a believer like we are and this is not ending the tech bull market.

But again, I was, I was getting nervous, you know, hearing from a lot of bears, I haven't heard from them in 18 months.

It was good to make sure that they were good hearing from them.

The last week.

Now let's get some other names.

I know you cover Uber is another one right report this morning investors like what they heard clearly, look at the stock, it's up about 12% right now here to get your thoughts on that name, Dan.

And also do you think there's a positive read through here to lift?

Which reports tomorrow?

Look, uh this is a stock that I think got just massively hit.

I think some worries about Robo taxi and then just others in terms of the macro look as Julie's question.

When you talk about indicators, what we're seeing in terms of the consumer and just the overall environment.

I mean, this is very bullish for Uber.

I thought Dara is doing a great job, not just on top line of profitability, you know, and then you look going forward, actually, they're getting more and more market share and that goes back to the Lyft, not necessarily, I mean, obviously a decent read through, but Lyft continues to be that little brother to Uber.

And that that's why we continue to like Uber over Lyft.

Something else that I know that Uber emphasized here is the autonomous drive, you know, the Robo Taxi business that they're already getting.

And I find this a really fascinating theme here, Dan because um you know, Tesla talks all about autonomous driving, but there are actually companies doing it and they're not getting as much attention.

And so I thought it was interesting that Uber sort of emphasized that aspect.

Yeah, I look, and I thought that's not coincidental.

I mean, they wanted to make sure, don't forget about us in terms of what's happened.

Uber.

Look, look at wea, I don't think alphabet's getting any credit in terms of that, you know, in terms of what they're doing.

But look, this all comes down to r attacks today.

1010, I mean, what Musk and I think tests are gonna come out with, I think could be eye popping and I think it's really gonna put more and more pressure on Uber on the overall industry to accelerate.

Now, what I ultimately view is of the autonomous future, let me get you Dan your quick take on, on that Google News.

A a as well, the monopoly ruling.

I'm just curious how you're thinking through that and maybe the effects, the impacts you get.

Are you getting questions from clients and about what that means for Apple potentially?

Yeah.

And look, we put a note out basically putting scenarios, they'll clear appeal.

This will go through the process.

I believe it's gonna be probably somewhere less onerous, you know, where they're going to try if ultimately they do not win their appeal to do something with Apple in some sort of way that I don't think is gonna be necessarily that money that they pay Apple just going away.

A a and even though this has been there for the last few years we've seen before, from Microsoft to Apple to Amazon to others.

I, I do think you gotta be cautious here in terms of the overall regulatory but not necessarily view this as sort of gospel.

In other words.

I think there's a lot of things that could happen here, which is why we didn't view this for alphabet perspective as necessarily the the game changer.

Um So Dan to circle back around to the beginning here.

Um I'm just curious if you're uh we know you're still a bull on, on most of these, these big cap tech stocks.

What brings the market back to stability and rally mode?

Do we have to wait until NVIDIA at the end of the month?

Is there something else that you think could be a potential catalyst?

Yeah.

Well, clearly NVIDIA that's gonna be huge in terms of demand and just overall what we're seeing no different than Microsoft and some of these other things that we've seen from conference calls and then it comes down joy.

It's like show the monetization.

I mean, you look in the Dell they talked about, we should probably see that by the end of this year, potentially into January, you see more and more data points supporting that numbers go higher for 2025 still that soft landing environment.

And I also think, you know, an advertising rebound, you're now gonna start to see that 2nd, 3rd, 4th river Bay, I think pound here is a good example.

Start to now play out in this market and many have been wanting to get these stocks at lower prices and these are the opportunities on these macro white knuckle moments in my opinion, Dan, good to see you.

I hope you can get some sleep over there in Tokyo.

Thanks a lot for joining us.

Appreciate it.

Let's get to some trending tickers right now.

Telecom provider, Luman technology stock soaring after announced $5 billion in new business due to increasing demand for IA I connectivity.

This has been a crazy year for Luman in that regard, the stock um up more than 100 and 50% on the year.

And basically we have seen um these kinds of whips on moves.

Listen, some of us has got to be short covering more than 10% of this uh company's float is shorted, so partially it's that, but this is a networking provider here.

And so part of the thinking here is that they're gonna benefit from the connectivity demand linked to you.

Guessed it A I, what else could it be?

Yeah, they say A I demand has driven 5 billion of new business could be a further 7 billion impossible sales.

Uh CEO talking about Ceo uh Kate Johnson, the A I economy she says is changing business operations and companies are recognizing they need powerful network infrastructure to manage the unprecedented data flows today.

And the demand in the future.

You could see that stock ripping, by the way, analysts do not like this stock.

There are no buys on the thing.

Seven holds and six sells.

Uh One of those holds, by the way was a sell until today city upgraded it as a result of this announcement.

Oh, by the way, the report earnings after the close.

Wow.

So interesting that they came out with this.

That is and then the earnings will come in closer.

We'll see what they show.

Switching gears to Ken view.

The consumer health company surpassing Wall Street expectations in the second quarter can view saying it's on track to deliver its financial targets set for 2024 shares climbing there.

You could see climbing surging today's trade 14 percent.

Uh so owner of brands, jewelry like Tylenol, Neutrogena Port sales that beats organic sales rose 1.5%.

The estimate on the street was a 1.1% decline stock is higher today though.

Let me pull back.

The charts been kind of rough going.

That stock was down about 15% this year through Monday's close.

And I think part of the reason it's popping too is that it's sort of counter to some of the other uh consumer staples names that we've heard from like Procter and Gamble that have been more disappointing.

Also, of course, that set up as you pointed out.

Um The company also said that China did well in the quarter.

That was one of the things that contributed to its growth here.

Um Skin care is not doing great for Ken view anywhere it seems like.

But in China, some of its other products did do well.

And again, that's sort of a counter trend to what we've heard from some of the other retailers.

Um and now taking a look at Sun Power, those shares are dropping after the solar solutions company filed for bankruptcy.

Solar Sunpower is planning to sell its remaining assets.

And this, you know, this is an unfortunate story.

This was one of the solar panel pioneers.

The company was started in 1985.

It was viewed as one of the really solid players in the industry and then it really um aggressively expanded into rooftop installations when that was seeing a boom.

But then, you know, rates going up some of the changing regulations in California really ate away at that business.

So I reached out to our friend Pavel Molchanov over at Raymond James get his take.

Here's what, here's what he tells me.

Pavel says a sad ending for a company to your point, Julie whose history dates back to 1985 but it was simply too difficult.

Pavel says to recover from some of the prior management team's decisions particularly he says vis a vis the balance sheet out of this, by the way, which I thought was interesting said sun powers travails are emphatic a company specific issue and should not be seen.

Pavel emailed as a comment on the underlying demand for us re residential solar.

Very interesting.

Their problems are their problems.

So Pavel says coming up, it's the latest edition of our series.

Goodbye or goodbye.

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

Stay tuned, more market domination.

So to come, it's a big noisy universal stocks out there.

Welcome to, goodbye or goodbye.

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

We're looking at companies with roots from outside of the US.

I'm here with Thornberg Investment Management portfolio manager, Emily.

Thank you so much for being here.

Appreciate me, nice to be here.

So I have to admit this.

I don't know if this is a goodbye or goodbye.

Goodbye.

Goodbye first, I have not heard of the company.

That is your good, but let's get to it.

It's Globe Bent.

Um This company about up about 6% over the past 12 months.

I believe it's domiciled in Uruguay, but it also has headquarters in Argentina.

So I was not terribly familiar but does do it consulting here and you say you one of the reasons you like it, it's a beneficiary of A I walk us through that.

Sure.

Absolutely.

Well, um maybe a better place to start is those of you with kids, Disney plus is probably a big part of your household.

One of the companies helping to bring you the magic is actually Glob Band.

Disney is one of their largest clients.

They've been working with them throughout their digital transformation for many years.

We like Glob Band because we think Glob Band and it services businesses in general are a key enabler of A I transformation at an enterprise level.

We also think that, you know, the stock price has suffered over the last couple of years as there's been a lot of debate around whether or not it services companies would benefit from A I Global has been using A I.

They've been at the leading edge of this for many, many years.

We think they're gonna help companies transform.

We think this is a business that can grow 15 to 20% eps for many, many years to come.

This is a big tan, these guys are only doing $2 billion in revenue.

This is a $300 billion plus global market so they can just gain share execute.

And again, they're trading at valuations that are really reasonable now.

So for a 20% times time earning business, you're looking at a mid twenties price earnings, multiple so really reasonable for the growth.

Um And let's talk about the industry more broadly here because you point out they're growing faster than their peers, who should we think of as their peers and then their growth relative.

Yeah, it's a really fragmented market.

You can think of accenture as probably the best known sort of large pier, but there's also a lot of other smaller names out there that are focused on different parts of the industry, infosys in India, Tata Consultancy, eam.

Um And Dava, these are all sort of, you know, very niche um parts of the business glob in particular is really strong in consumer entertainment in that um sort of front end digital transformation helping to bring the customer along a digital journey.

They've been really transformative in the Parks of Disney as well.

So that's really where they shine is really in that front end digital transformation and sort of come back to that point you were making, they're growing faster than peers, you say, but their valuations are, its valuation is lower than that of peers.

Yeah, they, they traded a little bit of a premium to accenture, but relative to its history, valuation is compressed by almost 50% from what we saw in sort of 2021 2020 peak.

And you know, we don't really see any change in the earnings power or the duration of earnings for the business.

We think again, they're gonna continue to be real enablers, helping enterprises transform their businesses, transform their data, utilize A I in order to save costs and generate a better experience for consumers.

Well as always when we do this, we like to point out what could go wrong or what are some of the risks here?

And so it's just, you know, obviously there are a lot of growth concerns that are cropping up right now.

Absolutely.

Um, so how much do you sort of take that into account?

You know, that's one of the things we really like about where glob on is right now, we think the downside is pretty de risk given, you know, you're also starting to see, um, a recovery and spend in cloud services in the non A I part of the business.

So you had, you know, big digital transformation during COVID, they were a big beneficiary, then you had a little bit of a hangover where, you know, spend in digital transformation slowed.

Now you're starting to see signs of a recovery, accenture, increase their guidance.

They talked about A I, they talked about stable and non A I spend, we're seeing the same thing for GLO band.

So we think the risks are pretty well b or we think that the, the risks are um are, you know, less than the reward at this point.

We think valuations really de risk some of those the downside scenarios.

But you could see, you know, if you got a, a really big macro slow down if you had companies really pulling back on spend.

Um But A I is really strategic.

People are really thinking about how do we transform our businesses for the next 35, 10 years?

How do I save some money.

Uh So let's get to the stock.

You don't like as much.

This one is LV.

Mh.

And this stock is already down more than 20% 0 over the last year.

If you look at the French shares.

Um And here, you know, even if we're seeing an economic slowdown, it's probably gonna be, you know, PC, if you will and already LV MH has sort of talked about the consumer being weak in, in some areas they have, they have.

So, you know, you probably know LV Mh from the eponymous uh Louis Vuitton or LV hand bags, speedy bags are, you know, everywhere in New York, everyone's using them at the beach, they're bringing them in their, their laptops to work.

Um We really love Lb Mh over the long run, they're an incredibly managed luxury business, but we think Lb Mh was a big beneficiary during COVID.

They took a lot of price and, you know, now we're starting to see signs especially in the United States, but also in China, the consumer has been weak for a while.

About a third of their business is exposed to China and, and you know, most recent earnings confirmed an incremental slowdown of growth in the organic part of the business, particularly in the fashion and leather goods, part of the business, which is the highest margin part of the business.

So we think that there's probably a couple more quarters, at least of slow down in their business on an organic basis.

And, um, you know, therefore we wouldn't be buyers right now.

We would wait, got you.

And let's get to the valuation as well.

And the estimates for what people are expecting out of LV.

Mh.

Do you think they won't be able to match?

Exactly.

So, I think expectations for the back half of the year probably need to come down.

You know, they did very low single digit organic growth.

The market expects them to accelerate to a higher single digit growth based on the trends we're seeing in the market based on some of the consumer data we're hearing from, you know, companies across the spectrum in the United States and also what we're seeing in China, we just think that there's a higher likelihood that estimates need to come down, you know, eventually we think they will rebound.

But we think that estimates are still too high.

And then finally, um they raised their prices a lot during COVID benefiting from demand.

But you say that means the entry level consumer can't, there's no accessible luxury, I guess.

Exactly.

So, you know, in China, they actually saw their consumer base shrink for the first time.

And you know, I think you, you've seen a similar dynamic here where, you know, maybe somebody get graduated from college, they got a new job, they got a great bonus, they went to buy a handbag.

But, you know, Louis Vuitton raised prices and the whole luxury industry raised prices significantly.

So I think that they need to provide a consumer with the uh the consumer needs to adjust that entry level price might be a little bit too high now for your new buyer.

And that's really, you know, that's really how you cultivate that customer journey, that buyer over a long period of time.

So I think they're gonna have to adjust, I think they're gonna have to come out with some, you know, new and innovative products and really sort of excite the, you know, the new buyer, the aspirational buyer and the market is a little weak right now.

People are thinking, you know, maybe I'm not gonna buy that extra handbag at Christmas or when I get my bonus, maybe I'm gonna save it because I'm not sure what's gonna happen with the elections with the economy and then if something was going to go right here, it would be that China would recover.

Absolutely.

Yeah.

So I think, you know, China recovering maybe the US consumer rebounding being a little bit stronger than we expect.

But I think probably in the near term, you know, your biggest incremental change is going to be you really start to see a recovery in the Chinese consumer that's been weak.

We've had a number of false starts since, you know, since 2021.

And at some point, we do believe the Chinese consumer will recover, but we just don't have visibility on when that's going to happen.

When you start to see that happening.

LB mh I think is going to do really well.

They're going to regain that traction in the economy there.

All right.

Well, thank you so much for coming in.

Thanks for having me and thank you for watching.

Goodbye or goodbye.

We'll be bringing you new episodes at 3:30 p.m. Eastern after suffering through its worst sell off since FTX collapse in 2022.

Crypto bouncing back today alongside the broader market.

Joining us now is Kavita Gupta Delta Blockchain Fund General partner, Kavita.

It's good to see you.

So, um you know, Bitcoin under real pressure yesterday, Kavita uh today bouncing back uh well, in the green, what do you make of these moves, Kavita and I I'm interested in what you see ahead and kind of the near to intermediate term here.

I think what happened to the market yesterday was the combination of bunch of factors Friday.

It kick started on Friday when we have an unexpected lower performing job report from us.

Then secondly, the unexpected yen uh the increase in the rates, it basically had a lot of margin calls, people who have borrowed from yen and being crypto being the most liquid.

So a lot of funds who had crypto so basically liquidated it very quickly with the the having one of the biggest liquidity available around and also the idea that you can liquidate it take care of your margin calls and you can come back and then buy back into it.

And I think that's what we have started seeing already.

Once people have balanced their books, we are seeing the percentages and the volume slowly flowing back in.

Now, liquidity overall has been an issue out here because for a couple of months, uh the expected fed rate cut which we were expecting in last couple of months that hasn't really happened in us.

The escalation of political tensions in Middle East has basically also have the anticipation of whether things are going to go in the right direction.

And I think there's an overall um uh there's an overall feeling that are we heading towards depression uh overall in the Wall Street.

But I do feel like that September rate cuts and the policies now from Vice president and the presidential candidate Kamala Harris are going to be the part defining moments for us to have more liquidity in the space.

Kavita.

I, I guess I struggle existentially a little bit with uh Bitcoin at a time like this and crypto more broadly at a time like this because one of the main um definitions of it from folks who hold it is that it's a store of value.

Well, we just saw all this turmoil in the market and in fact, it wasn't a store of value.

It was a source of liquidity to your point.

So then what's the thesis, I guess like why hold it then at a time in t of turmoil, I feel like that is the definition of a stored value.

Right.

First of all, I think only Bitcoin is considered as a store value.

I've always said Bitcoin is a digital gold and Ethereum is a digital oil because you do need it to run your operations on Ethereum Blockchain.

Now, coming back to the question on store value, when we think of gold as a store value, we always think when it comes to push comes to shovel, you are able to sell gold and have the liquidity and take care of the issues that you have in hand.

And that's exactly what Bitcoin and a lot of these currencies were used for to basically have the liquidity and then take care of any of the liquid crunch.

But at the same time, within a day, we are seeing a lot of buying back opportunities back there.

So I am, I feel like as the political system and overall liquidity in the market, including the technical uh the tech stocks, liquidity will increase.

We will see much bigger liquidity coming into the crypto space, Kavita.

You know, we have an election here just to talk politics.

Trump has obviously positioned himself as very pro crypto.

We've had a lot of fans of the asset class on here and they like what Trump has to say, you know, let let's say he didn't win in November though, Kavita that it was Harris.

What kind of impact do you think that has on the market?

I think we have to see.

That's why I said we are really looking forward to see what a presidential candidate Kamala Harris has or what's her position or her uh agenda on crypto regulations and Blockchain regulations right now.

It's a white blank slate.

And if they don't take a definitive and hopefully positive uh uh clear remarks or agenda before the election, they would be losing a lot of single issue agenda, voters to the Republican candidate.

They would also be losing a lot of these under 40 young, intelligent, very well, very well read and studied technical brain with money to also the Republican candidate.

And I don't think that's what Democrats really want at this point of time.

We shall see Kra.

Thanks so much.

Appreciate it.

Thank you.

Coming up, Disney and Warner Brothers Discovery both set to report earnings tomorrow.

We'll take a look at what to watch from the media giants on the other side.

Plus the details on Disney raising prices on its streaming services.

Get ready to pay more for some of your favorite streaming services.

Yes, again, here with more is Yahoo finances, Alexander Canal all Josh another day, another streaming price hike and this time it's Disney and we're seeing various price hikes across the board up to 25% more than where pricing currently is today.

So let's start with that flagship Disney plus the monthly cost of that A here, it's going to rise by $2 to 999.

While the ad free version will also take higher by two bucks to hit 1590 Hulu.

It's going to be a similar story there $2 more for the A supported version which brings us to 999 a month while the ad free version is going to rise by one buck to 1899.

Now there were also the increases for ES PM plus along with Hulu plus live TV, and those Disney bundles.

And this is an interesting one here because the company seems to want to be driving consumers to the bundle as opposed to encouraging people to subscribe to individual plans because if you want the bundle version, both Disney plus and the Hulu A tear, that's just going to be 1099 a month.

So much more attractive price point for consumers still $1 more than previous.

But it's clear that Disney is really leaning into the bundle, not just within its own company but really with competitors as well.

We have the Disney who max bundle, we have that joint sports streaming venture between ESPN Fox and Warner Brothers discovery that set to come later this fall.

We're just seeing increased bundling across the board as these continue to rise there.

Now the prices are set to take effect on October 17th which is one year after the last round of price hikes for Disney, except at that time, they only hike the prices of their ad free version.

And now we're seeing the ad supported, tears start to get some price hikes and you wonder what that means for some of the other competitors, especially like Netflix, for example, which is yet to touch.

It's a supported here.

It's one of the cheapest on the market right now at 699 but maybe this is a sign of more price to come there.

And I have so many comments, but myself and ask you about Disney earnings reporting on Wednesday reporting on Wednesday before the bell guidance is going to be really critical here, especially when we think about streaming and the parks business, the parks business, you're looking for a rebound where streaming, you're looking for some profitability, right?

And in the last earnings report, we did see Disney turn a profit for the first time in its entertainment section, but they did warn that results would once again be in the red and we get those earnings tomorrow morning.

We also don't have profitability across the board here, which is another issue for this company.

But Disney has consistently maintained that we will see profitability by the fourth quarter of 2024.

So that's something to watch there.

And then on the park side, Disney has admitted that they've seen slowing demand that operating income for the segment should be quote roughly comparable to the prior year.

So that spooked investors quite a bit analyst that they're saying that we should continue to some of that softness, but they're not worried about the long term prospect here because Disney is committing $60 billion to its parks over the next 10 years are launching new cruise ships.

And there's hope that, you know, we'll see some momentum grow there because parks is really the bright spot for this company.

We've also seen bright spots across theatrical right with inside out to Deadpool and Wolverine and although that's great incremental revenue, a lot of the analyst that I've been speaking with said it's not really a profitability driver like it was in the past.

So really the focus here is on streaming the parks.

That's what analysts are going to be taking to you on the call.

Looking forward to it.

Well, shares a veterinary drug makers, the wet us are on the move today higher by 6% the animal health company raising its full year guidance after beating across the top and bottom lines in a strong second quarter.

And so what a CFO Whitney Joseph is joining us now to discuss the latest earnings print.

We, it's great to see you again.

Thanks for being here, Julie.

It's awesome to be with you again.

Thank you for having me.

So I was looking across where you guys were seeing increases.

You saw increases in revenue in the us internationally among pets for livestock as well.

So talk to me about what was really driving demand.

It seems like it was pretty diversified.

Yeah, the demand is broad based and diversified.

As you said, we, we're seeing it across the board.

Really.

The US grew 12% on the quarter and international grew 10%.

Our companion animal business, uh which is about two thirds of the company uh grew 12% as well operationally.

And, and not only at the top, uh we saw really strong growth at the bottom uh with adjusting that income growth of 18% operation only.

So this is an outstanding quarter and quite frankly, a terrific first half uh for the company and the momentum continues, uh which is why we were able to raise guidance for the second time uh in terms of what we're expecting for 2024.

So, so we're very excited and our colleagues across the world are hard at work uh innovating and delivering for our customers.

And I couldn't be more pleased Whitney, you have, I want to get your take on the consumer as well because you have some unique insight there.

How does the consumer uh look to you, Whitney, how healthy, how strong.

So the consumer, very healthy uh in animal health, the industry at large is very resilient.

And what we're seeing is that the consumer particular pet owners see pet health as very essential.

If you go back uh across, you know, uh different economic times, you go back to 2008, 2009, the industry still grew about 3%.

And what's happened since then is the human animal bond has gotten so much stronger and it's propelling the entire industry and they see pet health spend as essential.

We've, we've done market studies and we asked consumer, if you had a 20% decrease in your budget, what would, what would that do to your spend on your pet health?

And the answer is nothing they would continue to spend because they see that.

And I think our innovation when we're addressing such chronic conditions in a neris pain or dermatology and so on, uh is really a strong reason why the consumer, the pet owner because they see the pet as a member of their family, they don't want to see him suffering from these things.

And so that tends to be very sticky and they see that as an essential part of it, they'll cut back on other things.

They may cut back on some of the toys and some of the other uh areas, but they see the pet health as being very essential.

Well, and I'm so it sounds like Whitney, even as you know, as you're aware, we are seeing this turmoil in the market right now.

There is new debate about whether we are entering recession.

Are, are you seeing any signs in your business?

Any places where folks are, are opting for a cheaper medicine.

For example, any kinds of those choices.

Now, look, if you look across the board, Julie, uh our Dermatology franchise posted 18% operational growth on the quarter.

Our Sym Perica franchise 22%.

This is parasitic uh, protection, uh, which is a complete solution that we have triple uh combination product, osteoarthritis pain products, which is the latest innovation from us, uh potentially the next billion dollar franchise for us and that grew 100 and 42% on the quarter.

So everywhere we look, we see the strength and I think if you look at the pet owner, it there, it's younger, you have millennials and gen Z as well as more affluent pet owners that make up the majority of pet ownership in the US.

And you see that follow in terms of what they're how, how essential they see their pet spend and, and, and what they're spending on them.

So, so we continue to see strength across the board across different markets and geographies as well.

Uh Speaking of the geographies, ri I know China, you know, represents a relatively smaller part of the business, but I I I'm just curious what are the trends you're seeing there with the Chinese consumer?

Look, we see we've seen came coming into this year, we expect the China to be soft on the back of, of consumer backdrop there and that remains the same as we as we saw it coming in, that hasn't stopped us from delivering 12% operational growth so far on a year to date.

We think as we exit the year, particularly some of the comps will get a little bit easier for us.

And so we expect that to normalize in terms of the negative impact that it has.

We factored that into the guidance raise that we gave today.

So no different than what we expected in China.

I would say though, speaking of innovation, and if you look at a Dermatology franchise, we've seen really nice strength there.

So there's some green shoots, I would say in some areas, particularly given again, innovation in the area of, of unmet need in that market where again, we're delivering for a pet owner who sees again, pet health as essential.

So it's been a drag for us not enough to, to deter uh from the uh outstanding uh start on the year.

Uh And, and we'll see how that looks as we get into next year.

And beyond one more question I wanted to ask you is about pet insurance, which has been a growing trend here.

I'm just looking at some figures from the North American P Pet Health Insurance Association which says uh that we've been seeing this big increase.

Um an average what of 17% this year over 2023 or that's been the average growth over time.

So I imagine is that a tailwind for you too.

And do you think that there's a lot more um, sort of growth opportunity because more people are insuring their pets?

Well, pet insurance has been growing rapidly.

It's still relatively small, Julie.

If you look across the US, it's around 3% of pets that are under pet insurance.

So the pet owner is definitely looking at optimizing their span in terms of across different channels.

They're using the vet clinic, they're using online, they're using different areas that we see strength uh for us across those, those areas.

And as I mentioned earlier, very resilient span in terms of animal health because they see it as very essential.

And so pet insurance is a small part of the picture.

If you look at the US, there are part, there are markets outside the US that might get up to as much as 20%.

But overall, it really hasn't been a needle mover for us across the board.

There are some wellness plans that they'll get into that can help manage some of those.

But again, our innovative solutions uh tend to grow regardless of, of that area because of the essential nature of uh pet ownership and and seeing them as a member of their family, Wendy.

Thanks so much as always for joining the show.

Appreciate your time.

Thanks Josh and Julie.

And while wrapping up today's market domination, don't go anywhere.

We've got you covered with all the action following the closing bell coming up next.