Tech Hits Stocks as Nvidia Extends Selloff | Bloomberg: The Close 6/24/2024
♪ >> THE COUNTDOWN IS ON, EVERYTHING YOU NEED TO GET THE EDGE AT THE END OF A MARKET DAY. THIS IS "THE CLOSE." ROMAINE: WHO NEEDS AND VIDEO WHEN YOU I'VE EVERYTHING ELSE? LIVE FROM STUDIO TWO. ALIX: HAPPY MONDAY. ROMAINE: WE HAD A BIT OF A RALLY. ALIX: IF YOU ARE LONG NVIDIA, IT IS NOT THAT HAPPY. THE S&P IS GOING NOWHERE FAST. BUT THAT ASIDE.
THE STOCKS INDEX LED LOWER BY NVIDIA, SUPERMICRO AND D, DOWN BY 2% WAITING ON THE OVERALL INDEX. ON THE FLIPSIDE, THE ENERGY SECTOR OUTPERFORMING BECAUSE CRUDE IS GETTING A BID, UP BY 1%. AND LOOKING AT DOLLAR-YEN. WE WERE LOOKING AT 160 DESPITE THE TOP CURRENCY OFFICIAL SAYING THEY WOULD HAVE TO STEP IN AND MAYBE INTERVENE. BUT THAT DID NOT HELP. NEVERTHELESS, WORTHY TO PAY ATTENTION TO THE DOLLAR-YEN. ROMAINE:
INTERESTING PRICE ACTION ON THE S&P. DESPITE THE S&P BEING FLATLINED, 400 OF THE STOCKS ARE IN THE GREEN. IT IS POTENTIALLY SETTING US UP FOR THE BROADEST ADVANCE SINCE MARCH. THE S&P EQUAL WEIGHT INDEX OUTPERFORM ITS CAP WEIGHTED BIG BROTHER FOR FOUR STRAIGHT SESSIONS WITH A TINGE OF OPTIMISM THAT THE RALLY CAN GO ON EVEN WITHOUT NVIDIA.
>> ALL YOU LONG PEOPLE HAVE BEEN WAITING. I THINK THERE IS GOING TO BE SOME MORE CONVERGENCE. IF TECH CONSOLIDATES -- ROMAINE: ONE STOCK IS RESPONSIBLE FOR 30% OF S&P GAINS . NVIDIA HAS SLID 11% SINCE ITS
LAST RECORD HEIGHT INCLUDING TODAY'S 4% DROP. ONE OF ONLY TWO DAYS THIS YEAR THAT NVIDIA HAS UNDERPERFORMED THE ROD OR MARGIN DO SUCH AN EXTREME. WE ARE ALSO LOOKING AT CRYPTO. BITCOIN COMING OFF TWO WEEKS OF LOSSES. THE FAILURE TO SET NEW HIGHS AFTER THAT HAPPENED IN APRIL PUSHING OUTFLOWS FOR BITCOIN UP-AND-DOWN. $1.2 BILLION IN TWO WEEKS, THE MOST SINCE THE U.S. ETF APPROVALS IN JANUARY. ALIX:
THE OVERALL MARKET AS WELL AS NVIDIA. THIS CHART SETS YOU UP. FIRST YOU HAVE A GREEN LINE WHICH IS NVIDIA SHARE PRICE. THE WHITE LINE IS A RATIO OF THE S&P EQUAL WEIGHT IT INDEX VERSUS THE S&P. A HIGHER A GOES THE BETTER THE
PEOPLE WEIGHTED INDEX GOES VERSUS THE S&P. THIS IS WHAT WE ARE SEEING. YOU HAVE NVIDIA FALLING THEREFORE THE S&P GIVES UP SOME OF ITS GAINS BUT THE EQUAL WEIGHTED INDEX ADDING AN OPPORTUNITY TO MOVE HIGHER. THE QUESTION BECOMES IS LIFE WITHOUT NVIDIA THAT BAD? DOES THAT MONEY GO OUT OF STOCKS INTO OTHER AREAS OF THE MARKET WITH THE -- WITHIN THE S&P? OR IS THIS ALL END OF QUARTER REBALANCING AND WE NEED TO WAIT UNTIL NEXT MONDAY? ROMAINE: THAT IS A BIG QUESTION. THE CHIEF OF INVESTMENT STRATEGY AND RESEARCH OVER AT GLEN REED JOINS US. YOU I'VE BEEN BUSY THE LAST FEW
WEEKS AS I'M SURE ALL OF THOSE QUESTIONS THAT ALIX HAS BEEN ASKING ME, YOUR CLIENTS ARE ASKING YOU. DO YOU HAVE ANY ANSWERS? >> THIS IS A ROBUST MARKET AND ENVIRONMENT THAT WE HAVE BEEN THROUGH. THE QUESTION COMES UP QUITE OFTEN FROM OUR INVESTORS. THE STOCKS HAVE GOTTEN TO BE A LARGE PORTION OF THE MARKET AND PEOPLE WONDER WHAT THEY SHOULD DO. SHOULD SHOULD THEY OWN MORE OR
LESS? OUR APPROACHES TO REMAIN DILIGENT IN REBALANCING YOUR PORTFOLIO. WHEN THESE STOCKS ARE UP A LOT, AND THE REST OF THE MARKET ISN'T, THERE ARE ANOTHER 400 93 STOCKS ON THE S&P 500 THAT YOU SHOULD OWN A GOOD SHARE OF. KNOW THAT THE MARKET NATURALLY REBALANCES OVER TIME. THAT DOESN'T MEAN SELL IT ALL . ROMAINE:
WILL WE SEE THAT KIND OF CONVICTION? YOU UNDERSTAND THE FEAR ON THE MARKET. NVIDIA AND BIG TECH HAVE WORKED SO FAR. IT WILL TAKE A LOT. JASON: I AGREE BUT I DISAGREE. EVERY MARKET HAS THESE SITUATIONS WHERE INVESTORS WANT TO CHASE THE WINNERS.
THAT IS A NATURAL TENDENCY IN MARKETS. AT THE SEAM TIME, THERE IS A LOT OF OPPORTUNITY THAT EXISTS ON THE OTHERS. AN EXAMPLE OF EVERY ECONOMIC CYCLE IN INNOVATION THAT WE HAVE BEEN THROUGH SHOWS WE HAVE SEEN PERIODS OF HYPE FOLLOWED BY ROUNDS OF DISAPPOINTMENT FOLLOWED BY EVENTUAL ROUNDS OF ACTUALLY MEETING THEIR PREVIOUS EXPECTATIONS OFTEN ON A DELAYED PATTERN RELATIVE TO WHAT WAS ORIGINALLY EXPECTED WHICH PROVIDES OPPORTUNITIES FOR INVESTORS. INVESTORS WILL SEE ACCESS VALUATIONS AS AN OPPORTUNITY TO SHIP MONEY INTO LOWERED ALL YOU ASIAN ITEMS SO THEY CAN PARTICIPATE LONGER-TERM. ALIX: WHERE? JASON: THE OTHER 493 STOCKS.
WHEN WE HAVE HAD PAST TECHNOLOGICAL CYCLES, WE HAVE FOUND THAT THE OTHER COMPANIES FEED OFF OF AND IMPLEMENT THE TECHNOLOGY CREATING EFFICIENCIES AND THEIR BUSINESS DRIVING THE OVERALL MARKET ECONOMY HIGHER. IT IS INTERESTING TO SEE FOLLOWING THE INTERNET BUBBLE, IF YOU LOOK FROM ABOVE FOR THE RUN-UP, THE BEST PERFORMANCE OR ALMOST EQUAL PERFORMANCE CAME FROM THE OTHER SECTORS IN THE ECONOMY OTHER THAN TECHNOLOGY FOR ABOUT A 10 YEAR CYCLE. WHICH IS FASCINATING. ALIX: IS IT A SMALL-CAP CAP THING OR A LARGE CAP THING? MIKE WILSON SAYS ANY ROTATION WILL BE LIMITED BECAUSE WE WILL FOCUS ON GROWTH RATHER THAN INFLATION. JASON: I AGREE THAT WE ALWAYS FOCUS ON GROWTH. BUT GROWTH CAN EXIST IN DIFFERENT POCKETS. WE HAVE BEEN FOCUSING ON THE
OTHER 493 STOCKS IN THE S&P 500 AND NOT GETTING RID OF THE SEVEN BUT MAKING SURE WE DIVERSIFY. NUMBER TWO, OWNING SMALLER CAPITALIZATION SECURITIES. THAT VALUATION IS MORE REASONABLE. IF YOU LOOK AT THE PROJECTIONS, YOU ARE EXPECTING SMALL-CAP EARNINGS TO CATCH UP WITH THE S&P 500 WHICH IS AN INTERESTING PHENOMENON WE HAVEN'T SEEN FOR TWO YEARS. AND INTERNATIONALLY THERE ARE INTERESTING OPPORTUNITIES.
BEHIND THE SCENES JAPAN IS GENERATING AS MUCH EARNINGS GROWTH AS THE S&P 500. ON THE WHOLE JAPAN IS CONSIDERABLY MORE DISCOUNTED IN DIE UH IN'S AND HAS AS MUCH ATTACHMENT AS WE HAVE TWO OFFICIAL INTELLIGENCE. ROMAINE: WE HAVE HEARD THAT FROM OTHER GUESTS. JASON: BROAD BASKET WORKS. STRATEGIC CAN WORK AS WELL. WE WOULD SAY IT IS VERY IMPORTANT TO USE A DIVERSIFIED INVESTMENT PLAN AND THAT IS IN TUNE WITH JAPAN. IF YOU DON'T HAVE THE RIGHT MANAGER TO USE, I'M NOT A JAPANESE STOCKBROKER, THE ROD MARKET WILL DO IT FOR YOU.
ROMAINE: IT GETS TO THE BROADER QUESTION AS WE LOOK TO OTHER PARTS OF THE WORLD FOR VALUE. IT IS NOT ALWAYS EASY TO DO THAT, INVEST DIRECTLY IN THOSE COMPANIES. I'VE ETF PRODUCTS IN THE U.S. THAT ALLOWS THOSE VEHICLES. -- YOU HAVE ETF PRODUCTS IN THE U.S. THAT ALLOW THOSE VEHICLES.
SHOULD THEY JUST LOOK TO U.S. STOCKS AND HAVE A LARGE PRESENCE -- THAT HAVE A LARGE PRESENCE IN THOSE COUNTRIES? JASON: WE THINK A PORTION OF THE ALLOCUTION SHOULD BE GENERALLY IN INTERNATIONAL STOCKS. 20%-30% OF A TOTAL PORTFOLIO SHOULD BE INVESTED INTERNATIONALLY. ISN'T LIKE 45 PERCENT OF THE BROAD INTERNATIONAL, GLOBAL MARKET -- THE U.S. DOLLAR RAISED AN INVESTOR, THE MAJORITY OF YOUR ALLOCATIONS ARE IN THE U.S. DOLLAR AND YOU ARE EXPOSING YOURSELF TO CURRENCY RISKS. BUT DOING IT TO A CERTAIN
DEGREE MAKES SENSE BECAUSE IT DIVERSIFIES YOU. ALIX: THE OTHER TOP STORY IS WHAT IS HAPPENING IN CRYPTO. IS THIS PART OF YOUR PORTFOLIO AT ALL? JASON: AT THIS POINT IT IS NOT. WE CONTINUE TO THINK THAT ASSET CLASSES IS TOO VOLATILE WHEN YOU MIX IT IN WITH OTHER ASSET CLASSES. ANY TIME I'VE LOOKED AT THAT, IT HAS TOO MUCH VOLATILITY FOR THE RETURN IT ADDS TO THE PORTFOLIO. ROMAINE: GREAT STUFF, JASON AND BITCOIN DID BREACH A LINE IN THE SAND FOR A LOT OF TRADERS.
JASON PRIDE FROM GLENN REED AS WE COUNT YOU DOWN TO THE CLOSING BELL. WE WILL SIT DOWN IN JUST A SECOND WITH THE CHAIRMAN OF ROCKEFELLER INTERNATIONAL AND FOUNDER AND CIO OVER AT BREAKOUT CAPITAL. HIS THOUGHTS ON THE FUTURE OF CAPITALISM. ALIX: AND TOP CALLS. A MOVIE THEATER OPERATOR GETS AN UPDATE. ROMAINE: THE TIME OF THE YEAR TO START TRAVELING.
AIRFARES REMAINING SKY HIGH. A DISCUSSION WITH CLINT HENDERSON AT THE POINTS BY. ALL OF THAT AND MORE COMING UP. THIS IS "THE CLOSE" ON BLOOMBERG. ♪ ROMAINE: SOME BREAKING NEWS THAT JUST CROSSED THE BLOOMBERG TERMINAL. THE U.S. FEDERAL RESERVE HAS RECOMMENDED POTENTIAL CHANGES THAT COULD WALK BACK KEY PROVISIONS OF THE BIDEN ADMINISTRATION'S LANDMARK PROPOSAL. WE HAVE MORE FROM OUR WASHINGTON OFFICE.
WALK US THROUGH THIS. WHAT IS THE PROPOSAL? >> THE STATE OF PLAY RIGHT NOW INCLUDES WHAT IS KNOWN AS A DOCUMENT THAT THE FED HAS CIRCULATED TO OTHER REGULATORS I HAVE VOTE ON THE PLAN TO SAY WHAT POTENTIAL CHANGES COULD BE ACROSS VARIOUS ASPECTS BUT PARTICULARLY THE COMPONENT OF THE PROPOSAL THAT RELATES TO MARKET RISK. WE KNOW IT WILL ALSO ADDRESS POTENTIAL CHANGES TO OPERATIONAL RISKS WHICH IS A KEY PART OF THE PUSHBACK THAT A LARGE SWATH SAID THEY WANTED UNDONE.
AND GENERALLY WHILE THERE ARE NO SPECIFIC TARGETS THE FED HAS MADE, SOURCES WE HAVE SPOKEN TO SAY OF THAT HAVE ALL THE CHANGES IN THE TERM SHEET WERE TO TAKE AFFECT WE COULD SEE A HIKE AS LOW AS 5% AS OPPOSED TO THE 16% ACROSS-THE-BOARD. ALIX: WE LOOK AT THE INDIVIDUAL BANK STOCKS AND THE BIG RINGS WERE ALREADY UP. CITIBANK, AND OTHERS MOVING MATERIALLY HIGHER. HOW MUCH MORE MONEY COULD THEY KEEP, DO WE KNOW? >> THE BANKS ARE KEYED TO THE PARTICULAR MARKET RISK COMPONENT. WE ARE TOLD THAT BANKS WITH
LARGE TRADING DESKS ARE LIKELY TO SEE CHANGES TO THE ASPECTS OF THE PROPOSAL TIED TO HOW THEY EVALUATE RISK PARTICULARLY AROUND THEIR INTERNAL MODELING BUT WE DON'T KNOW WHAT THE HYPE WOULD BE FOR THE LARGEST BANKS WHICH I THINK WAS 16% ACROSS-THE-BOARD BUT AS HIGH AS 19% FOR THE BIGGEST BANKS. THAT IS YET TO BE SEEN. THERE IS NO AGREEMENT AMONG THE THREE AGENCIES. THERE IS CONSTERNATION AMONG
THEM ABOUT HOW FAR IS TOO FAR. THEY HOPE THERE ARE BROAD CHANGES THEY CAN GET ACROSS THE FINISH LINE IF THEY WERE TO COMPLETE THE PLAN BY THE END OF THE YEAR. ALIX: THANK YOU FOR JOINING US ON THE BREAKING NEWS. THERE WAS ALSO NEWS IN THE WORLD OF HEDGE FUNDS. BOBBY JAIN HAS GATHERED FUNDING. THE BIGGEST FUNDRAISING DEBUT SINCE 2018 AND IS EXPECTED TO START TRADING ALIVE FIRST. WE
HAVE THE DETAILS. TELL US ABOUT THE ENVIRONMENT THIS IS GOING DOWN IN AND IS ANY OF THIS SURPRISING TO YOU? >> IT IS A DIFFICULT FUNDRAISING ENVIRONMENT AND THEIR ARE A FEW THINGS MAKING IT MORE CHALLENGING. INTEREST RATES ARE HIGHER WHICH MEANS THE BAR FOR IMPRESSING INVESTORS IS HIGHER. PRIVATE EQUITY DISTRIBUTIONS ARE SLOWER SO INVESTORS ARE MORE MINDFUL ABOUT WHERE THEY PUT EVERY DOLLAR.
YOU ARE LOOKING AT COMPETITION AMONG THE BIG MULTI-STRATEGY FUNDS. YOU ARE LOOKING AT COMPETITION FROM PRIVATE COURT -- PRIVATE CREDIT. 5.3 BILLION DOLLARS IS A SIZABLE LAUNCH IN THIS ENVIRONMENT. ROMAINE: WANT TO TALK ABOUT THE CHART ON THE SCREEN THAT BREAKS DOWN THE STRATEGY. I THOUGHT THE MULTI-STRATEGY MODEL WAS STRUGGLING. WHY WILL HE GET THIS RIGHT?
>> MULTI-STRATEGY IS WHEN YOU INVEST IN ALL OF THE STRATEGIES THAT ONCE AT THE SAME TIME. HE IS TRYING TO LAUNCH A FUND THAT DOES THIS AT THE SAME TIME. BUILDING OUT CREDIT AND EQUITY AND QUANTS. HE IS FOCUSING ON ARBITRAGE
WHICH IS WHEN YOU HAVE A SPREAD BETWEEN DIFFERENT THINGS LIKE SRT'S, INDEX REBALANCING, FIXED INCOME LIMITED VALUE. INVESTORS WILL BE WATCHING FOR PERFORMANCE CLOSELY AS THE FUND GETS GEARING UP. ROMAINE: THAT IS A LOT OF TECHNICAL STUFF. HE HAS TO HAVE THE PEOPLE BEHIND HIM TO EXECUTE THAT. >> IT IS A BIG FEET. -- FEAT. HE HAS ABOUT 40 PORTFOLIOS, PORTFOLIO MANAGERS ON THE TEAM. THEY HAVE BEEN BUILDING OUT THIS COMPLEX.
AND IT IS GOING TO BE EXPENSIVE. IT IS TIME CONSUMING. SOME OF THE STRATEGIES MAY TAKE LONGER TO BE FULLY BUILT OUT AND ABLE TO WORK. THIS FIRST YEAR WILL BE WHAT INVESTORS WILL BE WATCHING CLOSELY. ALIX: WHO ARE THE INVESTORS? >> THE ABU DHABI'S WEALTH FUND.
YOU ARE LOOKING AT SOME OF THE BANK WEALTH OF PLATFORMS LIKE GOLDMAN SACHS, MORGAN STANLEY. SOME SIZABLE INSTITUTIONAL NAMES ARE WATCHING THIS FUND LAUNCH. JAIN WAS THE FORMER CO-CEO AT MILLENNIAL MANAGEMENT. ROMAINE: A GREAT PEDIGREE. NO ONE SURPRISED HE WAS ABLE TO RAISE THE BILLIONS HE DID. IN A DIFFERENT ENVIRONMENT HE WOULD BE ABLE TO RAISE MAURY. RAISING NOW 5.3 BILLION DOLLARS
FOR HIS NEW MULTI-STRATEGY HEDGE FUND. I AM CONCERNED THOUGH ABOUT THE MARKET PERFORMANCE. WE HAVE HAD HER ON TO TALK ABOUT OTHER MANAGERS STRUGGLING. I KNOW HE IS CUT FROM A DIFFERENT CLOTH. ALIX: IT DEPENDS ON THE MACRO ENVIRONMENT AND HOW YOU TIMED IT AND GETTING LUCKY. I THOUGHT THE SAME THING, I THOUGHT MULTI-STRATEGY WAS DEAD. ROMAINE: HE WILL PROVE US WRONG.
I THOUGHT MOVIES WERE DEAD BUT THEY'RE STILL GOING. ALIX: HAVE YOU SEEN INSIDE OUT 2 YET? ROMAINE: THANKFULLY I PASSED THOUGH STAGE OF WATCHING ANY ANIMATED MOVIES. IT IS NOT JUST THE MOVIES BUT CINEMARK ITSELF. IT IS PART OF OUR TOP CALLS AND IT IS NEXT. THIS IS BLOOMBERG.
ROMAINE: LET'S GET A VIEW FROM THE SOUTH SIDE ON THE TOP CALLS. WE START OFF WITH THE FIRM, GOLDMAN SACHS ANALYST WILL NOUNS AFFIRMING -- HE CITED THE COMPANY'S DIFFERENTIATED UNDERWRITING AND VAST DISTRIBUTION NETWORK WHICH HE SAYS CAN SUPPORT SUSTAINABLE 50% PLUS GROWTH. SHARES HIGHER BY ABOUT 13.5%. LOOK AT CARRIER, AND HVAC COMPANY. THE NEW ANALYST SAYING CARRIER HAS BEEN MORPHING INTO A BETTER BUSINESS BY LEANING INTO HIGH-GROWTH AREAS INCLUDING HEAT PUMPS THAT USE ELECTRICITY RATHER THAN OIL AND GAS. HE SAYS THE TRANSITION SHOULD BE WRAPPED UP HEADING INTO NEXT YEAR LEAVING ROOM FOR FURTHER UPSIDE. HIGHER BY ABOUT 3%. AND TAKE A LOOK AT SIRIUS XM.
THE VIEW THAT THE SATELLITE RADIO COMPANIES SUBSCRIBER BASE CAN STABILIZE IN 2025. THE ENDLESS SEES IMPROVING FUNDAMENTALS DRIVEN BY A RECOVERY OF USED CAR SALES. INVESTORS ARE NOT REALLY LIKING IT TODAY, DOWN BY ABOUT 7%. THOSE ARE SOME OF OUR TOP CALLS. TAKE A CLOSER LOOK AT MOVIES
AND THE BOX OFFICE. A NET POSITIVE PERSON MARK ACCORDING TO ROTH AND KM WHICH UPGRADED THE STOCK. ERIC CANDLER, MEDIA AND ENTERTAINMENT ANALYST AT ROTH M KM. WE KNOW THE THEATERS HAVE BEEN STRUGGLING A BIT EVEN PRIOR TO THE PANDEMIC. BUT WE HAVE HAD BIG RELEASES ALREADY THIS YEAR. IT SEEMS TO SHOW THAT THERE IS STILL AN APPETITE FOR FOLKS TO GET BACK INTO THE THEATER. WILL THERE BE SOMETHING THERE
FOR THEM TO SEE? >> I THINK THE WORST OF HOLLYWOOD'S IMPACT FROM LAST YEAR'S STRIKE IS OVER. WE ARE GOING TO START SEEING A BIGGER SLATE OF FILMS STARTING IN THE SECOND HALF OF THE YEAR. WE ARE GETTING A GOOD START RIGHT NOW WITH INSIDE-OUT 2, WE START THE THIRD QUARTER WITH DESPICABLE ME FOUR AND THEN TWISTERS AND THEN DEAD POOL AND WOLVERINE AND THE FOURTH QUARTER IS LOADED WITH A JOKER SEQUEL, AND OTHERS.
THERE IS A LOT THERE. THAT SETS THE STAGE FOR WHAT SHOULD BE A VERY STRONG TWO-YEAR CONTENT CYCLE. ROMAINE: I HEAR A LOT OF SEQUELS IN THERE AND I KNOW THIS IS THE HOLLYWOOD FORMULA WHEN THEY FIND SOMETHING THAT WORKS THEY MILK IT. IT RAISES THE QUESTION, WHY SHOULD I GO THE FIRST WEEKEND OR SECOND WEEKEND TO SEE THIS MOVIE INSTEAD OF WAITING A MONTH OR SO TO WHEN IT WILL COME OUT ON THE STREAMING SERVICES? IS THERE ENOUGH INCENTIVE TO GO OUT AND DO THAT? >> MOVIES CAN STILL CREATE A LOT OF WATERCOOLER BUZZ. THERE IS EXCITEMENT AROUND THESE MOVIES.
THERE IS GOOD ADVERTISING AROUND THEM AND PEOPLE WANT TO BE THERE FOR OPENING WEEKEND AND THEN TALK ABOUT THEM ON SOCIAL MEDIA AND THE WATERCOOLER. IT CREATES A LOT OF EXCITEMENT. YOU CANNOT NETFLIX AND CHILL 52 WEEKENDS A YEAR GOOD PEOPLE WANT TO GET OUT OF THE HOUSE AND MOVIES ARE STILL A RELATIVELY LOW COST OF ENTERTAINMENT. ROMAINE: YOU HAVEN'T MET MY UNCLE BUT THAT IS ANOTHER CONVERSATION.
ALIX: I WILL DEFINITELY BE CALLING OUT WHEN DEAD POOL AND WOLVERINE COMES OUT BUT THAT IS ANOTHER STORY. IS THERE A GOOD AND BAD MOVIE CHAIN? >> I STILL LIKE IMAX A LOT WHICH IS DIFFERENT. THEY ARE NOT A THEATER CHAIN. THEY ARE AN ENTERTAINMENT TECHNOLOGY PLATFORM. I DO HAVE A SELL ON AMC BUT THAT IS MORE OF A BALANCE SHEET, LACK OF CASH FLOW ISSUE. YOU ARE LIMITED IN YOUR OPTIONS RIGHT NOW.
CINEMARK AND IMAX ARE THE BEST WAY TO PLAY THE BOX OFFICE. ALIX: DO YOU FEEL WE ARE GOING TO SEE THE STOCKS MOVE NEXT YEAR? WHEN IS THE TURNING POINT GOING TO BE? >> I THINK INVESTORS HAVE THE STOCKS ON THEIR RADAR SCREENS NOW. THEY TEND TO MOVE AHEAD OF THE ACTUAL BOX OFFICE MOVES AND PEOPLE ARE POSITIONING THEMSELVES NOW. BOTH CINEMARK AND IMAX ARE IN EXPECT -- ARE IN EXNEXPENSIVE NAMES.
STILL ON THE LOWER HALF OF THE RANGE. FIRST CINEMARK, IT IS MORE THAN THE BOX OFFICE. NEXT YEAR THERE WILL BE A DELEVERAGING PLAY.
THEIR TOTAL DEBT WILL GO BACK DOWN TO PRE-PANDEMIC LEVELS AND THAT LEVERAGE TO ABOUT TWO TIMES. AND FROM THERE I THINK THEY REINSTATE CAPITAL RETURNS THEN BRING BACK A DIVIDEND AND MAYBE EVEN HAVE SHARE BUYBACKS. ALIX: THANK YOU, ERIC CANDLER AT ROTH MKM. I GUESS YOU WON'T BE PARTICIPATING IN THE MOVIE MOVE. ROMAINE: YOU ARE A PARENT SO YOU KNOW THAT SOMETIMES YOU GET DRAGGED TO SOMETHING YOU DON'T WANT TO GO TO BUT THERE ARE A LOT OF SEQUELS. I LIKE MORE ORIGINAL STUFF.
I GET IT, EVERYONE LOVES DEADPOOL AND TWISTER AND OTHERS. ALIX: DEADPOOL AND WOLVERINE. ROMAINE: ARE THEY FIGHTING EACH OTHER OR ARE THEY FRIENDS? ALIX: THEY ARE FRENEMIES. ROMAINE: THEY ARE KIND OF WORKING TOGETHER BUT BEGRUDGINGLY? ALIX: THERE WILL BE SOME VIOLENCE AND SOMETIMES THEY WORK TOGETHER. WE KNOW THIS. RUCHIR SHARMA HAS INSIGHTS ON THE U.S. ELECTIONS AND SHOULD THEY AFFECT THE MARKETS.
ROMAINE: JUST ABOUT 3:30 P.M. HERE IN NEW YORK. THIS IS THE COUNTDOWN TO THE CLOSE. ALIX: IT IS GOING TO BE AN INTERESTING RAMP UP OF THE SECOND QUARTER. IT FEELS LIKE VOLUMES LIGHT, THE NASDAQ GETTING HIT. ROMAINE: MAYBE WE ARE STARTING TO GET A
LITTLE ROTATION EVERYBODY SAYS WE SHOULD HAVE GOTTEN A WHILE AGO, A BROADENING OUT OF THE RALLY LEAVING NVIDIA BEHIND. THIS IS WHAT A LOT OF PEOPLE THOUGHT COULD HAVE BEEN HEALTHY FOR THE MARKET. THE PROBLEM IS IN THE NEXT SIX MONTHS THERE ARE A LOT OF POTENTIAL CATALYSTS THAT COULD KNOCK THIS RALLY OFF. ALIX: ONE OF THEM COULD BE THIS WEEK. THE U.S. ELECTION HEATING UP, ONE OF THE MAIN EVENTS THIS WEEK IS PRESIDENT BIDEN AND DONALD TRUMP DEBATING ON THURSDAY. THE FIRST DEBATE IN 2020
ATTRACTED ABOUT 73 MILLION VIEWERS. DO YOU WATCH THIS TIME? ARE YOU GOING TO? ROMAINE: EVERY TIME THESE,, NO -- THESE COME UP, NO, I DON'T. ALIX: RUCHIR SHARMA IS CHAIRMAN OF ROCKEFELLER INTERNATIONAL AND FOUNDER AND CEO OF BREAKOUT CAPITAL. HE ALSO HAS A NEW BOOK OUT CALLED WHAT WENT WRONG WITH CAPITALISM. GOOD TO SEE YOU. HELP ME UNDERSTAND HOW MARKETS SHOULD BE LOOKING AT THE U.S.
PRESIDENTIAL ELECTION. RUCHIR: THE MARKETS ARE BROADLY IGNORING IT FOR TWO REASONS. ONE, THEY KNOW PRETTY MUCH WHAT BIDEN IS GOING TO DO. TWO, AS FAR AS TRUMP IS CONCERNED, IT IS SO UNPREDICTABLE THAT THE MARKETS ARE NOT FOCUSING ON IT. ONE OF THE THINGS I ARGUED IN MY BOOK IS IF YOU LOOK AT TRUMP'S PREVIOUS TRACK RECORD, ON KEY ISSUES IN TERMS OF WHAT HE SAID AND WHAT HE DID, THEY WERE SO DIFFERENT. ONE OF THE BIG ISSUES I HAVE WITH CAPITALISM TODAY IS THE AMOUNT OF REGULATION THIS COUNTRY FACES. TRUMP PROMISED THAT WHEN HE
CAME TO POWER HE WOULD BRING DOWN THE REGULATORY STATE. FOR EVERY REGULATION I PUT INTO PLACE, TWO WOULD GO OUT. WHAT WAS THE TRACK RECORD? IN HIS FOUR YEARS HE PUT IN AS MANY REGULATIONS AS OBAMA OR CLINTON BEFORE HIM. BASICALLY AN AVERAGE OF 3000 NEW REGULATIONS A YEAR. THAT IS ONE OF THE FUNDAMENTAL
PROBLEMS OF AMERICA TODAY, THAT THE REGULATORY STATE HAS GROWN SO MUCH, IT IS SO COMPLEX. YOU GET THOUSANDS OF PAGES OF FURTHER CLARIFICATION. THE OTHER ISSUE FOR AMERICA TODAY IS THE DEBT AND DEFICITS.
BOTH THESE LEADERS DON'T HAVE ANY PLAN TO ADDRESS THAT. AND YOU HAVE KEY SUPPORTERS WERE TELLING THEM, ON BOTH SIDES, THAT DEBT AND DEFICITS DO NOT REALLY MATTER. WE HAVE BEEN CRYING WOLF ON THIS FOR SUCH A LONG TIME, THEY HAVE THE CLOCK ON TIMES SQUARE, THESE THINGS DON'T MATTER. ALIX:
IT FEELS LIKE NO MATTER WHO WINS, TWO THINGS WILL BE THE SAME. FISCAL DEFICIT WILL GROW, AND THERE WILL BE HARSH POLICIES AGAINST CHINA. IS THAT FAIR? RUCHIR: YES. BUT THERE A DEEPER PROBLEM. THE FACT THAT NO ONE IS ADDRESSING WITH THE CORE ISSUES ARE, THAT CAPITALISM SOMEWHERE HAS GONE OFF THE RAILS. THIS IS NOT THE SYSTEM THEY HAD IN MIND.
YOU ARE CORRECT THAT IN TERMS OF FOR PEOPLE TO GET MORE ECONOMIC FREEDOM TO DO WITH ISSUES OF INEQUALITY, I DON'T THINK ANY OF THIS IS GOING TO BE FUNDAMENTALLY ADDRESSED BY EITHER OF THE LEADERS. IF SOMEONE WAS TO PUT IN A BILLIONAIRE TAX, SOMEONE WANTS TO DO THIS, NONE OF THAT IS PRACTICAL. THAT IS WHY THE MARKETS HAVE BEEN SO OBLIVIOUS ALMOST OF THE POLITICAL DEBATE IN AMERICA. ROMAINE: IT IS JUST WINDING THE NOT EVEN TIGHTER. -- WINDING THE KNOT EVEN
TIGHTER. TRUMP RODE THE WAVE OF CAPITALISM. HE DIDN'T OFFER A SOLUTION, BUT PEOPLE SAW A SOLUTION IN HIM. WE SAW A SIMILAR THING IN THE U.K. WITH A BREXIT. NOW WE HAVE A SIMILAR THING GOING ON OVER THERE.
ANOTHER ELECTION HAPPENING THAT ARE EXTENSIVELY NOT JUST ABOUT THOSE CURRENTLY IN OFFICE, BUT ABOUT THE PREVIOUS 30, 40, 50 YE ARS OF POST-WORLD WAR ECONOMIC POLICIES. RUCHIR: THAT IS CORRECT. IN THE LAST 30 TO 40 YEARS, YOU HAVE SEEN A DECLINE IN THE APPROVAL LEADER -- APPROVAL RATINGS OF LEADERS IN THE WESTERN WORLD IN PARTICULAR. PEOPLE ARE UNHAPPY.
AND EACH LEADER WHO COMES TO OFFICE BECOMES MORE AND MORE UNPOPULAR. THE PROBABILITY OF THE INCUMBENT WINNING REELECTION KEEPS GOING DOWN. IN PLACES LIKE AMERICA, MUCH OF THE WESTERN WORLD, IF YOU WERE THE INCUMBENT, THE PROBABILITY OF YOU WINNING THE NEXT ELECTION WAS PRETTY HIGH. AT TIMES 70%, 80%. THAT PROBABILITY HAS NOW GONE BELOW 50%. IT IS ALMOST AS IF BEING IN OFFICE IS A DISADVANTAGE.
THAT IS WHY WE ARE SEEING SO MANY LEADERS AROUND THE WORLD BE UNPOPULAR AND LOSING ELECTIONS. THAT IS WHY TODAY, EVEN THOUGH SOME PEOPLE SAY HUNTER BIDEN THE -- SAY UNDER BIDEN THE ECONOMY IS DOING OK, BUT MOST AMERICANS STILL FEEL THE ECONOMY IS MOVING THE WRONG DIRECTION. ROMAINE: WHAT IS THE SOLUTION? TO QUOTE ONE OF MY FREE MISS -- IT'S EASY TO SAY CAPITALISM MIGHT BE FLAWED OR EVEN BROKEN. IS THERE A SYSTEM OUT THERE THAT COULD REPLACE IT WHICH WOULD ADDRESS SOME OF THESE ISSUES? RUCHIR: WHAT I SAY IN THE BOOK IS THAT CAPITALISM DID NOT FAIL, IT WAS RUINED.
WHAT HAS RUINED IT IS THAT IT'S BECOME SOCIALIZED RISK. THE RISK HAS TOTALLY BEEN SOCIALIZED, AND THE PEOPLE WHO ARE MOST ADVANTAGED BY THE SYSTEM ARE TYPICALLY THE RICH. EVERYONE THINKS THEY DESERVE A BAILOUT. YOU HAVE THIS INCREDIBLE REGULATORY HEGEMONY.
AND THAT IS FACILITATED A LOT IN TERMS OF BY BIG BUSINESSES. WHO BENEFITS? IT IS THE ENTRENCHED, BIG BUSINESSES, BIG TECH COMPANIES, THEY HAVE LOBBYISTS. THEY BENEFIT THE MOST FROM THE SYSTEM. ROMAINE: AS THAT SHOWN UP IN THE NARRATIVE -- IN THE NUMBERS? I HAVE HEARD THIS NARRATIVE THAT THE INCUMBENTS ARE SO ENTRENCHED THAT IT TAMPS DOWN. RUCHIR: IT HAS BEEN DECLINING.
IN THE PANDEMIC THERE WAS AN ARTIFICIAL INCREASE. BUT GENERALLY TREND IN NEW STARTUPS IN AMERICA HAS BEEN A 30 YEAR, 40 YEAR DECLINE. IN AMERICA TODAY THE ECONOMIC AND SOCIAL MOBILITY IS AT RECORD LOWS. SO THERE IS A FEELING THAT IS NOT INEQUALITY OF OPPORTUNITY.
UNDER CAPITALISM THERE WAS ALWAYS GOING TO BE INEQUALITY. IT WAS SUPPOSED TO BE DUE TO MERITOCRACY. AND THAT WAS OK BY MOST PEOPLE. NOW THERE IS A FEELING THAT THERE IS INEQUALITY OF OPPORTUNITY BECAUSE THE ENTRENCHED AND THE EXISTING PEOPLE HAVE SUCH AN ADVANTAGE GIVEN THE CAPITALIST SYSTEM BEING DISTORTED TODAY THAT NEW BUSINESS IS BEING CREATED, THE SMALL AND MEDIUM-SIZED BUSINESSES, THEY FIND IT VERY DIFFICULT TO THRIVE IN THIS ENVIRONMENT. THE AVERAGE EMPLOYEE FEELS SUFFOCATED. THERE ARE SO MANY FAMILIES IN
AMERICA TODAY DOMINATED BY JUST ONE COMPANY. 20 IS DOMINATED BY JUST ONE COMPANY, THE AVERAGE PERSON VIRTUALLY HAS NO BARGAINING POWER. THESE ARE SOME OF THE DEEP FUNDAMENTAL ISSUES AND OVER THE LAST 100 YEARS, PROGRESSIVELY WITH EACH DECADE, THE ISSUES HAVE EXACERBATED. ROMAINE: WE ARE GOING TO HAVE TO LEAVE IT THERE. RUCHIR SHARMA HAS A NEW BOOK OUT CALLED WHAT WENT WRONG WITH CAPITALISM, CHAIRMAN OF ROCKEFELLER INTERNATIONAL AND CIO OVER AT BREAKOUT. THIS RAISES A LOT OF QUESTIONS. OBVIOUSLY THIS WILL NOT BE
SOLVED IN OUR ELECTION IN NOVEMBER, BUT IT GETS TO THE QUESTION, HOW MUCH LONGER CAN WE GO LIKE THIS BEFORE WE JUST GO OFF THE RAILS IN TERMS OF WHO WE VOTE FOR AND WHY. ALIX: I HAVE TO FEEL LIKE WRITING THAT BOOK, THAT MUST HAVE BEEN REALLY HARD TO WRITE A BOOK ABOUT HOW EVERYTHING WAS GOING REALLY WRONG. RUCHIR: THE FIRST STEP TO A CURE IS TO DIAGNOSE THE PROBLEM. THAT IS WHAT I TRIED TO DO. IT'S AN ODE TO CAPITALISM. IF YOU GIVE PEOPLE ECONOMIC
FREEDOM, CAPITALISM WORKS IN THOSE COUNTRIES. IF YOU GIVE PEOPLE ECONOMIC FREEDOM. IF YOU TAKE AWAY THEIR ECONOMIC FREEDOM, YOU HAVE A VERY DISTORTED FORM OF CAPITALISM. ROMAINE: WELL SAID, RUCHIR SHARMA THERE HELPING US COUNT YOU DOWN TO THE CLOSE. A BROADER LOOK AT THE WORLD, A
MORE NARROW LOOK AFTER THE BREAK, A LOOK AT CRYPTO. BITCOIN DIPPING BELOW 60,000 FOR THE FIRST TIME SINCE MAY. THAT IS COMING UP NEXT ON BLOOMBERG.
♪ ROMAINE: TIME FOR OUR STOCK OF THE HOUR AND WE ARE LOOKING AT MULTIPLE STOCKS. DIGITAL TOKEN STOCKS HAVING ONE OF THE WORST WEEKS SO FAR THIS YEAR INCLUDING MARATHON, COINBASE AND THE OTHERS. A LOT OF CRACKS IN THE CRYPTO SPACE. BITCOIN DIPPING BELOW $60,000 FOR THE FIRST TIME SINCE MAY. ABIGAIL DOOLITTLE JOINING US NOW. WE CAME OFF THAT HALVING IN APRIL AND EVERYONE SAID WE WERE GOING TO SEE BITCOIN GO TO THE MOON, BUT LOOKS LIKE A LOT OF THAT WERE PRICED IN BEFORE THAT.
ABIGAIL: YES. THEY SOLD BITCOIN DOWN SO NOW WE ARE BELOW $60,000 AND PUTS THE PRESSURE ON 56,500. IF BELOW THAT LEVEL -- THAT IS THE TECHNICAL LEVEL. IF BELOW THAT LEVEL THE SELLERS
ARE LIKELY TO LET THIS THING REALLY DROP DOWN TO $40,000. THE REASON THAT IS INTERESTING IS THAT IS THE EXACT LEVEL OF WHERE A TREND IS FOR BITCOIN. WHEN YOU HAVE TWO DIFFERENT LEVELS COMING FROM SEPARATE WAYS OF LOOKING AT THE CHART, IT TENDS TO CONFIRM IT. YOU HAVE THE WEEKLY RSI ROUNDING DOWN TELLING YOU THE MOMENTUM IS NOT VERY GOOD. THERE IS AN OFF CHANCE WE WILL SEE BITCOIN GO BACK INTO THE RANGE, MAKE ANOTHER TRY AT $70,000.
BUT AT SOME POINT THIS YEAR WE ARE GOING TO SEE A MOVE TOWARDS $40,000. SOMETHING INTERESTING HERE IS WITH BITCOIN DOES NOT HAVE BIG FUNDAMENTALS OUTSIDE OF THE HALVING, WE CAN LOOK AT IT AS A BAROMETER FOR RISK-ON, RISK-OFF. THIS SUGGESTS THAT WE ARE VERY UNCERTAIN WHICH IS NOT SURPRISING EVEN THE GEOPOLITICAL UNCERTAINTY AROUND THE ECONOMY AND POLITICS. ALIX: NVIDIA'S DOWN TOO, AND I'M
WONDERING HOW MUCH OF THAT WILL BE END OF COURT OR REBALANCING. WINNERS ARE GOING TO SELL WINNERS, ETC. ABIGAIL: THE THING I THINK ABOUT WITH NVIDIA AND BITCOIN, NVIDIA'S FIRST BIG CLIMB UP WAS ON BITCOIN BECAUSE THOSE CHIPS WERE BEING USED FOR MINING, BUT THEN THAT FOCUS WENT AWAY AND THE FOCUS WENT INTO AI OBVIOUSLY. I WOULD SAY THE CORRELATION, THE DIRECTIONAL CORRELATION IS PRETTY INCREDIBLE ON THESE. THEY HAVE BEEN IN LOCKSTEP WITH EACH OTHER UP UNTIL JUST RECENTLY, WHERE NVIDIA HAS CONTINUED TO GO SKY HIGH BUT BITCOIN HAS REVERSED.
MAY BE SUGGESTING THAT AS A RISK-ON, RISK-OFF BAROMETER WE ARE GOING TO SEE A RECONNECTION NVIDIA FOLLOW BITCOIN LOWER. I THINK INVESTORS ARE TAKING PROFITS IN THESE BIG RALLIES. THIS YEAR ALONE AT THE BEGINNING OF THE YEAR OUT OF THE PANDEMIC WE HAD NVIDIA UP -- RIGHT NOW NVIDIA OUT OF THE PANDEMIC ROSE 21%. BITCOIN UP 1000%. I THINK WE ARE GOING TO SEE THAT GAP NARROW. ALIX: THANKS A LOT, REALLY APPRECIATE IT. ABIGAIL DOOLITTLE JOINING US ON BITCOIN.
IF YOU TAKE A LOOK AT NVIDIA, YOU HAVE MICRON STILL GETTING AN UPGRADE, AND YOU HAVE IBM ALSO. IBM, BIG BLUE? ROMAINE: SOMEBODY ELSE IS TO BENEFIT FROM THIS. I DON'T KNOW. I FEEL LIKE IT IS SOMEONE THROWING SPAGHETTI AT A WALL. REMEMBER THOSE OLD DAYS WHEN WE WOULD HAVE BULL MARKET RUNS, AND HAD A CHIMP OR SOMETHING THROWING FECES AT THE WALL STREET JOURNAL? THOSE ARE THE GOOD OLD DAYS. ALIX: ON THAT NOTE, WE ARE GOING TO COUNT YOU DOWN TO THE CLOSING BELLS WITH ED CLISSOLD.
THIS IS BLOOMBERG. >> THIS IS A PRETTY ROBUST MARKET ENVIRONMENT WE HAVE BEEN THROUGH. OUR REPORT -- OUR APPROACH HAS BEEN REMAIN DILIGENT AND REBALANCE THE PORTFOLIO. WHEN THESE STOCKS ARE UP AND THE REST OF THE MARKET IS NOT, THERE IS ANOTHER 493 STOCKS OF THE S&P 500 THAT YOU SHOULD OWN A GOOD PORTION OF. TAKE THE WINNINGS, PUSH INTO THE ONES THAT HAVE BEEN LAGGING BEHIND, AND KNOW THAT THE MARKET NATURALLY REBALANCES OVER TIME. ROMAINE:
CHIEF OF INVESTMENT STRATEGY AT GLEN MEAD HOPING TO KICK US OFF TO THE CLOSE ABOUT ONE HOUR AGO. ROMAINE BOSTICK ALONGSIDE ALIX STEEL. A MIXED DAY WITH THE S&P AND NASDAQ DEEP IN THE RED, THE DRAG OF NVIDIA. ALIX: HENCE THE REBALANCING COMMENT HE WAS TALKING ABOUT. YOU HAVE NVIDIA GETTING HIT, BRINGING DOWN THE TECH INDEX, BUT IBM IS UP 2%, MICRON GETTING UPGRADE AS WELL.
GOLDMAN SACHS HAVING A $200 PRICE TARGET. IS IT ROTATION'NEATH THE SURFACE OR JUST A ONE-TIME REBALANCING AT THE END OF THE QUARTER? ROMAINE: I WANT TO BELIEVE THIS IS REAL ROTATION BUT I FEEL LIKE WE HAD THIS CONVERSATION THREE OR FOUR MONTHS AGO AND THEN WITHIN TWO WEEKS EVERYONE GOES RIGHT BACK TO NVIDIA AND MICROSOFT AND EVERYTHING ELSE. LET'S POSE THAT QUESTION TO OUR NEXT GUEST. ED CLISSOLD JOINING US, CHIEF U.S. STRATEGIST OVER AT NED DAVIS RESEARCH.
MAYBE YOU CAN GIVE US THAT RESEARCH. YOU ARE ALWAYS GOOD AT THESE PARALLELS. YOU LOOK AT THE LACK OF MARKET BREADTH, IS SOME OF THE PRICE ACTION WE HAVE BEEN SEEING OVER THE LAST FEW DAYS AND WEEKS, IS THAT INDICATIVE OF A REAL ROTATION OR IS EVERYONE JUST TAKING THEIR PROFITS AND ONCE JULY COMES BACK AROUND IT IS ALL BACK INTO NVIDIA AND BIG TECH? ED: HEY. YEAH, THE STORY THIS YEAR HAS BEEN ONE WHERE THESE ROTATIONS HAVE NOT LASTED ALL THAT LONG. IF YOU TAKE A STEP BACK A LITTLE FURTHER TO THE START OF THIS BULL MARKET THAT STARTED IN THE FOURTH QUARTER OF 2022, YOU HAVE HAD A FEW OF THESE THAT HAVE LASTED A LITTLE BIT LONGER. WHAT IT HAS DONE FROM A
TECHNICAL PERSPECTIVE IS IT HAS NOT ALLOWED THE MARKET TO GET TO NARRATIVE -- GET TOO NARROW. YOU DON'T WANT TO SEE FIVE OR SEVEN STOCKS DOMINATE FOR SO LONG THAT SAY ONLY 40% OF STOCKS ABOVE THEIR 200 DAY MOVING AVERAGES. INSTEAD WHAT WE ARE SEEING IS MOST STOCKS REMAIN IN LONG-TERM UPTREND. ABOUT 64% OF STOCKS RIGHT NOW
ABOVE 200 DAY MOVING AVERAGES. THAT IS PRETTY HEALTHY. TO GET A PERIOD OF ROTATION BACK-AND-FORTH IS GOOD ENOUGH TO KEEP THE LONG TERM TECHNICALS HEALTHY AND THAT IS WHAT WE WOULD LIKE TO SEE FOR THE BULL MARKET TO CONTINUE. ROMAINE: WHAT IS THE BIGGEST RISK YOU SEE RIGHT NOW FOR THE REST OF THE YEAR? ED: IF I WERE TO CATEGORIZE THE RISK I THINK REALLY MORE ON THE MACRO FRONT THE FED IS TRYING TO THREAD THE NEEDLE. WE THINK THEY'RE GOING TO BE ABLE TO DO IT. THEY ARE GOING TO CUT RATES ONCE THIS YEAR STARTING IN DECEMBER AND MAYBE A COUPLE TIMES NEXT YEAR.
INFLATION REMAINS TOO STICKY, THEY ARE NOT GOING TO BE ABLE TO DO THAT. THEY HAVE TO MAKE SURE THE ECONOMY, WHICH IS STILL TRYING TO GET THROUGH SOME TERTIARY EFFECTS FROM COVID, DOES NOT WEAKEN TOO MUCH. WE HAVE SOME OTHER CONCERNS BUT I WOULD FOCUS ON THE MACRO FOR MAJOR CONCERNS. ALIX: MORGAN STANLEY'S MIKE WILSON WAS TALKING ABOUT THE RISK, FOCUSING ON GROWTH VERSUS INFLATION. YOU WILL STILL WANT HIGH QUALITY LARGE-CAP AND NOT THE RISKY SMALL CAPS.
I PUT THAT QUESTION TO JASON PRIDE AND HE WAS LIKE, NO, I LIKE THE SMALL GUYS. HOW ABOUT YOU? ED: IF YOU HAVE A LONGER TERM VIEW, I WOULD FOCUS ON THE LARGER NAMES. YOU ARE GOING TO GET ROTATION HERE AND THERE. I THINK THE BEST OPPORTUNITY
FOR SMALL CAPS IS GOING TO COME WHEN THEY ACTUALLY START TO CUT RATES. IF YOU LOOK AT WHAT HAS HAPPENED HISTORICALLY, THE RUSSELL 2000 OUTPERFORMED THE RUSSELL 1000, BUT NOT UNTIL THE FED CUTS. GOING INTO IT IS STILL LARGE CAPS.
ESPECIALLY A SLOW CYCLE WHEN THE FED IS CUTTING EVERY OTHER MEETING OR EVEN LESS OFTEN THAN THAT. ECONOMIES ARE DOING WELL. THE ECONOMY CAN AFFORD TO GO SLOWLY. THAT TENDS TO BE GREAT FOR SMALL CAPS.
THAT IS PROBABLY THE BEST WINDOW FOR SMALL CAPS OUTPERFORMANCE, WHICH WE THINK IS GOING TO BE A FEW MONTHS DOWN THE ROAD. ALIX: WHAT THE UNDERPERFORMANCE LOOKS LIKE UNTIL THEN, CAN YOU HAVE GUYS LIKE SUPERMICRO GOING INTO THE RUSSELL 1000 AND NOW THE RUSSELL 2000 WHICH SOME SAY IS GOING TO MAKE THAT GAP WITH THE S&P EVEN WIDER. WHAT KIND OF UNDERPERFORMANCE ARE WE GOING TO SEE UNTIL WE GET THAT CATALYST YOU ARE TALKING ABOUT? ED: IT CAN BE SEVERAL PERCENTAGE POINTS, ENOUGH TO WHERE YOU WANT TO MAKE A TACTICAL ALLOCATION MOVE IT WILL BE WORTH IT TO GO AHEAD AND HAVE THAT NET LARGE CAP BALANCE. I ALSO REMIND YOU THAT IT USED TO BE FAIRLY COMMON BY THE TIME WE GOT TO JUNE. THERE WERE SEVERAL STOCKS IN THE RUSSELL 2000 AND S&P 500 BECAUSE THESE SMALL COMPANIES HAD GROWN SO MUCH AND THEY GRADUATED. IT IS JUST OVER THE PAST 10 TO 15 YEARS IT HAS BEEN RARE BECAUSE COMPANIES STAY HIGH LONGER, THEY BECOME PUBLIC AS A HIGH CAP OR MID-CAP, FOR THEY BUY A LARGE-CAP COMPANY BEFORE THE EVEN BECOME PUBLIC. SO THAT IS THE REAL CHALLENGE
FOR SMALL-CAP INDICES LET THE RUSSELL 2000, TO THE LESSER EXTENT THE S&P 600. THERE NOT THE GREAT GROWTH COUNTRIES -- COMPANIES IN THE SMALL-CAP WORLD TO JUSTIFY ONLY THOSE INDICES OVER THE LARGE CAPS. ROMAINE: IT GETS TO A QUESTION OVER THE SUPPLY OF NEW ISSUANCE AND A LACK THEREOF. THE IDEA IS AT LEAST IN TERMS OF THE TOTAL NUMBER OF INVESTABLE NAMES, THAT HAS BEEN STAGNANT FOR A FEW YEARS. IS THAT STARTING TO ASSERT
ITSELF? IS THAT MAY BE AN EXPLANATION AS FOR WHY WE SEE MORE CROWDING IN SOME OF THE BIG NAMES? ED: I REALLY THINK IT IS. IF YOU LOOK AT THE RUSSELL 2000, I AM SURE A LOT OF PEOPLE HAVE SEEN THE STATS, ABOUT 40% OF THOSE COMPANIES ARE UNPROFITABLE. THE REASON IS 25 YEARS AGO THERE WERE ALMOST 9000 PUBLICLY TRADED COMPANIES. THE SMALLEST STOCK IN THE RUSSELL 2000 WAS STILL IN THE TOP THIRD OF ALL PUBLICLY TRADED COMPANIES. NOW THERE ARE ABOUT 5000 AND A LOT ARE NOT EVEN OPERATING COMPANIES, THEY ARE SPAC'S OR SOMETHING LIKE THAT. THE BOTTOM HALF OF THE RUSSELL
2000 ARE THINGS THAT ARE NOT REALLY INSTITUTIONALLY INVESTABLE COMPANIES. AND THAT IS PART OF THE CHALLENGE HERE. IRONICALLY I THINK WHAT MAY HAPPEN, THIS MAY TAKE A FEW YEARS TO UNFOLD, BUT IF RATES STAY HIGH, YOU ARE A COMPANY LOOKING TO GO PUBLIC, DO I GO WITH THE DEBT OR EQUITY? RIGHT NOW DEBT HAS BEEN A CHEAPER COST OF CAPITAL. IT MAY BECOME MORE ATTRACTIVE AT HIGHER RATES TO GO AHEAD AND GO PUBLIC AND THAT MAY BE WHEN SMALL CAPS BECOME MORE ATTRACTIVE. IT WILL TAKE A WHILE FOR THAT TO PLAY OUT. YOU HAVE A PRIVATE EQUITY SPACE DOMINATING THAT.
THE UNATTRACTIVENESS OF GOING PUBLIC IS PART OF THE SMALL-CAP PROBLEM. ROMAINE: GREAT STUFF. ED CLISSOLD, CHIEF U.S. STRATEGIST AT NED DAVIS RESEARCH HOPING US CLIMBED DOWN -- COUNTDOWN TO THE CLOSING BELLS. THE S&P AND NASDAQ HITTING FRESH SESSION LOWS. ALIX: THE DOW STILL OUTPERFORMING. DID YOU SEE THIS ONE?
THE LABOR MARKET IS NEARING INFLECTION POINT. IF THINGS GET WORSE IT COULD MEAN HIGHER UNEMPLOYMENT. I WONDER IF IT IS THE GROWTH STORY NOW. ROMAINE: IT IS INTERESTING HOW THE MARKET WANTS TO DIVORCE ITSELF FROM ECONOMICS BUT AT SOME POINT THAT HAS TO CONVERGE.
AS WE MOVE CLOSER TO THE CLOSING BELLS, AN EYE ON ALL ASSETS. FULL COVERAGE STARTING RIGHT NOW HERE ON BLOOMBERG. >> THE CLOSING BELL, BLOOMBERG'S COMPREHENSIVE CROSS-PLATFORM COVERAGE OF THE U.S. MARKET CLOSE STARTS RIGHT NOW. ROMAINE: AND RIGHT NOW WE ARE ABOUT TWO MINUTES AWAY FROM THE END OF THE TRADING DAY. ROMAINE BOSTICK HERE WITH ALIX STEEL TO TAKE YOU THROUGH THE CLOSING BELL.
IT IS OUR GLOBAL SIMULCAST THAT BEGINS. SCARLET FU JOINING US IN THE TV STUDIO. CAROL MASSAR LOST IN SPACE ALONG WITH TIM STENOVEC IN THE RADIO BOOTH. HERE ON THIS MONDAY AFTERNOON.
CAROL: CAN WE GET SHUT OFF YOU ARE MIC? CAN WE DO THAT? ROMAINE: WHAT'S WRONG WITH HER? [LAUGHTER] CAROL: THAT WAS MEAN? TIM: HE SAID LOST IN SPACE BECAUSE YOU SAID DANGER WILL ROBINSON EARLIER. ROMAINE: I USED TO LISTEN TO YOUR SHOW, BUT NOT TODAY. TIM: HE WATCHES, HE LISTENS. CAROL: DID I SAY THAT? OK, I TAKE IT BACK. LET'S TALK ABOUT MARKETS. SOME OUTPERFORMANCE.
BANKING STOCKS OUTPERFORMING THE BROADER TRADE, POP ABOUT 1.7%. YOU SAW THE STORY ABOUT FOLKS IN THE NO SAYING THE FED HAS SHOWN SOME REGULATORS MAY BE SOME CHANGES TO THE BANK CAPITAL OVERALL. MAYBE IT COULD BE MORE POSITIVE TO BANKS BUT BANKS HAVE BEEN UP MOST OF THE SESSION. I AM TRYING TO COME BACK HERE. TIM: NVIDIA DOWN 6.66%.
INTERESTINGLY ENOUGH, NOT DRAGGING DOWN THE ENTIRE INDEX ALTHOUGH THE NASDAQ KIND OF GETTING PUMMELED. THE S&P 500 ONLY DOWN .2%. SCARLET: YOU WONDER WHAT IS GOING TO BE THE CATALYST THIS WEEK. WE SEE ON FRIDAY BUT UNTIL THEN IT SEEMS WE ARE KIND OF JUST DRIFTING. ROMAINE: AS WE GET THE CLOSING BELLS IN NEW YORK. SOME WEIRD PRICE ACTION ON THE DAY AS YOU ARE SEEING TRANSPORTS , INDUSTRIALS AND CYCLICAL NAMES. EVERYTHING ELSE IS KIND OF ON
THE BACK FOOT. THE DOW JONES UP BY ABOUT .7% RIGHT AROUND THE 39,400 MARK. S&P 500 ONLY DOWN ABOUT .3%. A BIG DRAG TODAY COMING FROM NVIDIA AND A COUPLE OTHER BIG TECH NEEDS INCLUDING AMAZON AND MICROSOFT. THE NASDAQ ALSO FEELING THE PAIN FROM THOSE SAME NAMES.
THE RUSSELL 2000 A RELATIVELY DECENT IT ON THE DAY. UP .4% ON THE DAY. CAROL: LET'S GET TO THE S&P 500 A LITTLE MORE. MOST NAMES ACTUALLY GAINING GROUND TODAY. 353. THREE UNCHANGED.
SCARLET: I'M LOOKING AT THE SECTOR PERFORMANCES AND NINE OUT OF 11 GROUPS ARE IN THE GREEN. IT DOES NOT LOOK THAT WAY ON THIS MAP BECAUSE TECH IS DOWN MORE THAN 2% THANKS TO WEAKNESS IN SUPER MICRO COMPUTER AND NVIDIA. THE BIGGEST GAINERS, ALL 22 ENERGY NAMES GAINING AS OIL PRICES REBOUND. UTILITIES AND CONSUMER STAPLES ALSO ENJOYING BETTER THAN 1%. CAROL: LET'S GET TO INDIVIDUAL GAINERS. KIND OF A MIXED BAG. AN ISLAND PHARMACEUTICALS IN OUTPERFORMER.
THIS IS AFTER ONE OF ITS DRUGS SUCCEEDED IN TREATING A PROGRESSIVE AND DEADLY FORM OF HEART DISEASE. THIS WAS A BIG GAINER TODAY. COCOA EASING. YOU HAD NAMES LIKE HERSHEY UP ABOUT 2.9% TODAY. MONDELEZ UP 2.9%.
SOME OUTPERFORMANCE IN THOSE NAMES. WE DON'T TALK ABOUT THIS A LOT, OUR EXCEL, THIS WAS UP ABOUT -- RXO. THEY AGREED TO BUY COYOTE LOGISTICS IN A DEAL THAT ADDS SCALE ACCORDING TO ANALYSTS. TIM: I GET THE DECLINERS. NVIDIA FELL 6.7%, CLOSING WITH THE BIGGEST DROP IN TWO MONTHS.
DOWN FOR A THIRD DAY IN A ROW, CLOSE TO 13%. EFFICIENTLY IN CORRECTION. LOST ABOUT $430 BILLION IN MARKET CAP THE LAST THREE DAYS.
IT IS NO LONGER ANY $3 TRILLION PUB WHEN IT COMES TO MARKET CAP. IT IS UP NEARLY 140% SO FAR THIS YEAR THOUGH, SO. ZOOMING OUT, THE STOCK HAS HAD INCREDIBLE PERFORMANCE. THE LAST THREE DAYS HAVE BEEN TOUGH FOR SHAREHOLDERS, ESPECIALLY IF THEY JUST GOT IN LAST WEEK. RESMED SHARES, THE WORST PERFORMER IN THE S&P 500.
MAKERS OF DEVICES THAT TREAT SLEEP APNEA TUMBLED TODAY FOLLOWING CLINICAL DATA THAT SHOWED ITS WEIGHT LOSS DRUG REDUCED SEVERITY OF SLEEP AT YOU. WE SAW SHARES OF COMPANIES THAT MAKE DEVICES THAT TREAT SLEEP APNEA FALLING. COINBASE AND CRYPTO COMPANIES FALLING. COOLING DEMAND FOR BITCOIN. I WANT TO TALK ABOUT ADR'S OF AIRBUS CHECKING IN ON THOSE. DOWN MORE THAN 6%.
THIS AFTER THE COMPANY CUT EARNINGS INTO AIRCRAFT THE LIVERY GOALS FOR THE YEAR. SUPPLY CHAIN ISSUES CONTINUING TO DEPRIVE THE COMPANY OF COMPONENTS. IT IS A SETBACK FOR AIRBUS WHEN DEMAND FOR THEIR JETS ARE AT A RECORD. STILL HAVING SUPPLY CHAIN ISSUES WHEN IT COMES TO GETTING CRITICAL PARTS FOR THE AIRCRAFT. ALIX: THE BOND MARKET, IT IS BACKLOADED.
I WANT TO POINT OUT, 4.186 ON THE 10 YEAR. IT IS NOT WE ARE THAT FAR FROM THAT LEVEL. WATCH THAT AS WE GET INTO HEAVY ECO-DATA ON FRIDAY. ROMAINE:
SPEAKING OF ECO-DATA, MAY BE A POTENTIAL READ ON CONDITIONS. THE DOMINANT SELLER OF POOLS JUST REVISED ITS GUIDANCE FOR THE QUARTER LOWER BY A SIGNIFICANT AMOUNT. IT NOW SEES NEW POOL UNITS FOR THE FULL YEAR DOWN 15% TO 20% AND SAYS IT IS SEEING REMODELING ACTIVITY OVERALL IN HOMES DOWN ABOUT 15%, COMPARED TO A PREVIOUS ESTIMATE OF FLAT TO DOWN 10%. THE NET EFFECT IS THE EPS RANGE, THE GUIDANCE IT IS GIVING FOR THE FULL YEAR, $11 A SHARE. ITS PREVIOUS GUIDANCE WAS $13 TO $14 A SHARE. AGAIN, LESS A CONCERN MAYBE ABOUT POOL CORP AND MAYBE A READ ON CONSUMER SPENDING.
SHARES ARE HALTED RIGHT NOW, WHICH IS WHY THERE UNCHANGED. CAROL: PERSISTENTLY WEAK DEMAND FOR NEW POOL CONSTRUCTION. PEAK SELLING SEASON COMPLETE. REMODEL ACTIVITY DOWN AS MUCH AS 15%. IS IT JUST THAT EVERYBODY HAS DONE IT OR PEOPLE ARE PULLING BACK IN GENERAL? ROMAINE: HAVE YOU SEEN THE COST OF A POOL? CAROL: IT IS NOT INEXPENSIVE. SCARLET: WHAT IS INTERESTING IS THEY SAY MORE THAN 60% OF DOES THIS COME FROM RECURRING REVENUE AND IS GENERALLY NOT IMPACTED BY MACROECONOMIC CONDITIONS. THESE ARE CUSTOMERS WHO WOULD NORMALLY SPENT A LOT AND ARE NOT SPENDING AS MUCH. ROMAINE:
IT IS ALL THE ACCESSORIES AND STUFF. WHEN MY UNCLE GOT A POOL, ALL THEY DID WAS COMPLAIN ABOUT HOW MUCH IT COST TO MAINTAIN IT. TIM: THE BEST THING TO HAVE AS A FRIEND WITH A POOL, NOT AN ACTUAL POOL. ROMAINE: IT IS ALSO GOOD TO HAVE A FRIEND WITH A BOAT. CAROL:
I HAVE NO IDEA WHAT YOU'RE TALKING ABOUT. ROMAINE: LET ME INTO THAT YACHT OF YOURS. [LAUGHTER] CAROL: LET'S TALK ABOUT SOMETHING NOT GOING ON ANYMORE.
DO YOU GET YOUR SHOES SHINED? ROMAINE: OK, GO AHEAD. I DO. YOU KNOW I DO. CAROL: YOU ARE PRETTY DAPPER. IT HAS BEEN A STAPLE OF NEW YORK FOR DECADES. NOT EVEN JUST WALL STREETERS, BUT EVERYBODY. I HAVE DONE IT, IT IS KIND OF FUN. BUT IT TURNS OUT AS THE WORLD HAS GOTTEN MUCH MORE CASUAL, UNFORTUNATELY THESE GUYS, THEY DON'T HAVE A LOT OF BUSINESS ANYMORE. ALIX: YOU KNOW THAT TIM IS WEARING
SNEAKERS IN THE OFFICE. TIM: IT IS NOT JUST ME. JAMIE DIMON IS NOW WEARING SNEAKERS. ROMAINE: IT IS LIKE GOLDEN GOOSE. $400. EXPENSIVE. ALIX: THEY ARE NOW TRYING TO CLEAN SNEAKERS. THAT IS TOUGH IF YOU ARE WEARING GOLDEN GOOSE. ROMAINE: I JUST GAVE YOU AN ANECDOTE. I GET MY SHOES SHINED AROUND THE CORNER FROM HERE.
THE WOMAN WHO USED TO DO IT IS NO LONGER THERE. I DON'T THINK SHE GOT AS MUCH BUSINESS ONCE THEY REOPENED AFTER THE PANDEMIC, SO UNFORTUNATELY SHE MOVED ON. SORRY TO END ON THAT SAD NOTE. ALIX: LET'S GO TO SOMETHING ELSE KIND OF FUN. THAT APPARENTLY IS THE SO-CALLED OZEMPIC REVOLUTION HAS WIPED OFF BILLIONS OF FOOD AND DRINK COMPANIES. THAT IS WHAT THEY ARE CALLING
IT, OZEMPIC REVOLUTION. THEY ARE BOOSTING SALES OF YOGURT. YOGURT. THIS IS A NEW THING. ROMAINE: DOES THAT HELP YOU LOSE WEIGHT? ALIX: I THINK MAYBE YOU GO FROM CHIPS TO YOGURT? SCARLET: IT IS HIGH-PROTEIN AND IT IS NOT TOO FILLING, BECAUSE OZEMPIC REDUCES YOUR CRAVING. BUT YOU GET THE PROTEIN.
THAT WAY YOU GET THE PROTEIN, BUT IN A SMALLER PACKAGE. ALL THE YOGURT COMPANIES ARE LIKE, WE ARE SEEING A LOT OF DEMAND, DELIVERING A LOT MORE VARIETIES. TIM: A FEW MONTHS AGO WHEN EVERYONE WAS CONCERNED ABOUT THE PACKAGED FOOD COMPANIES STRUGGLING AS A RESULT OF OZEMPIC? WE ALL KNEW THEY WOULD JUST CHANGE WHAT THEY WERE SELLING AND GET PEOPLE TO BUY WHAT THEY WERE BUYING BEFORE, OR WHAT THEY ARE BUYING WHEN THEY ARE TAKING OZEMPIC. ROMAINE: IT IS NOT JUST YOGURT. THEY WILL BE A DEBUT IN A COUPLE OF WEEKS, DOWN AT GENERAL MILLS I GOT TO INTERVIEW THEIR CFO AND THEY WERE TALKING A LOT ABOUT ALL THESE NEW PRODUCTS THEY ARE COMING UP WITH TO ADDRESS WHAT YOU ARE TALKING ABOUT.
WHEN YOU ARE ON OZEMPIC, YOU NEED A DIFFERENT KIND OF PROTEIN OR SOMETHING. SO YEAH, ALL THESE FOOD COMPANIES ARE WORKING TO TRY TO HEAD THAT OFF AT THE PASS. CAROL: TIM, THAT MEANS NO MORE SANDWICHES. ROMAINE: CEREAL -- TIM: CEREAL AND YOGURT IS FINE. ALIX: TIM IS A BIG PB&J GUY. ROMAINE: DOES HE TAKE THE CRUST OFF?
CAROL: NO. THAT'S A WRAP. WE WILL SEE YOU AGAIN TOMORROW. ROMAINE: STICK WITH US. A LOT MORE COVERAGE COMING UP HERE ON THE CLOSE. A CLOSER LOOK AT SUMMER TRAVEL AND AIRFARES, WHICH ARE STILL SKYHIGH. THIS IS BLOOMBERG. ♪ ALIX: WELCOME BACK TO THE CLOSE. ROMAINE: LET'S TAKE A LOOK AT HOW THE MARKETS ENDED ON THE FIRST TRADING DAY OF THE WEEK. A DOWN DAY FOR THE S&P AND
NASDAQ, DRAGGED DOWN BY BIG TECH. MAYBE WE ARE SEEING A ROTATION AWAY FROM NVIDIA AND BIG TECH NAMES INTO SOMETHING ELSE. WE SAW THE DOW JONES INDUSTRIAL AVERAGE AND RUSSELL 2000 GET A DECENT BID ON THE DAY.
RISK SENTIMENT HAS BEEN HIT IN A COUPLE KEY AREAS. BITCOIN BELOW $59,000, AND THE PHILADELPHIA SEMICONDUCTOR NEXT DOWN 3%. IT WAS NOT JUST NVIDIA, WAS IT? ALIX: IT WAS A BIG PART OF IT. NVIDIA DOWN FOR A THIRD STRAIGHT DAY. IT HAS ENTERED A CORRECTION, MEANING IT IS DOWN 10% FROM ITS RECENT HIGH. IT IS LOST OVER $400 BILLION, PUSHING ITS VALUE BELOW $3 TRILLION. IT IS NOW BELOW MICROSOFT AND
APPLE AS WELL. COULD IT BE AI FATIGUE? MAYBE. IS IT BECAUSE THE RALLY WENT TOO FAR TOO FAST? MAYBE. CHIPOTLE ALSO DOWN FOR A THIRD DAY, ALTHOUGH THE LOSSES HAVE MODERATED A BIT. LAST WEEK IT CLOSED AT A RECORD HIGH. ANALYSTS SAY NEWS THAT THE U.S. SUSPENDED NEW AVOCADO SHIPMENTS FROM MEXICO MAY HAVE WEIGHED ON THE STOCK, BUT ANALYSTS ARE NOT CONCERNED ABOUT THIS PARTICULAR ISSUE. NILA PHARMACEUTICALS GAINING 35% TODAY, IT SOARED AFTER HIS DRUG SUCCEEDED IN TREATING A RARE AND PROGRESSIVE FORM OF HEART DISEASE, POTENTIALLY OPENING UP A NEW AVENUE. TEST RESULTS WERE A BEST CASE
SCENARIO FOR THE COMPANY. LET'S MOVE TO OUR TOP STORY THIS HOUR. SUMMER IS IN FULL SWING, WHICH MEANS PACKING YOUR BAGS AND GETTING READY TO TRAVEL. AAA PROJECTS A RECORD-BREAKING 70.9 MILLION PEOPLE WE'LL OUT
OF TOWN FOR THE FOURTH OF JULY HOLIDAY, AN INCREASE OF MORE THAN 8.9% OVER 2019 WHICH WAS BEFORE COVID. STRONG GLOBAL DEMAND COUPLED WITH A SHORTAGE OF NEW AIRCRAFT WILL LIKELY KEEP AIRFARES LOFTY. WE WILL SPEAK TO THE MANAGING EDITOR OF THE POINTS GUIDE ABOUT STRATEGY AND PREVIEW QUARTERLY EARNINGS FOR CRUISESHIP OPERATOR CARNIVAL. ROMAINE: LET'S START IN THE AIRSPACE HERE, PARTICULARLY AIRFARES. WE ARE GOING TO START YOU OVERSEAS, BECAUSE ASIA'S BIGGEST LOW COST AIRFARE GAVE A WARNING SAYING THERE IS NO END IN SIGHT SOME HIGH TICKET PRICES. HOWEVER, THE AIR ASIA CEO SAYS THERE COULD BE A LITTLE REPRIEVE NEXT YEAR.
THOMAS BLACK JOINING US FROM OUR DALLAS OFFICE TO EXPLAIN TO US WHY ARE WE NOT GETTING THE REPRIEVE RIGHT NOW. I WANT IT NOW. THOMAS: YOU MIGHT HAVE TO WAIT A WHILE UNTIL BOEING AND AIRBUS CAME CRANK OUT PLANES LIKE THEY SHOULD BE ABLE TO. THEY ARE HAVING SUPPLY CHAIN TROUBLES, AND OF COURSE BOEING IS HAVING PARTICULARLY BIG TROUBLES, ESPECIALLY AFTER IT HAD THAT ACCIDENT IN JANUARY WHERE A DOOR PLUG BLEW OUT WHEN THE AIRCRAFT WAS IN THE AIR.
SO THEY ARE NOT PRODUCING AS MANY AIRCRAFT AS THEY SHOULD BE. IN FACT, AIRBUS JUST CUT ITS FORECAST FOR AIRCRAFT PRODUCTION THIS YEAR TO 770 AIRPLANES FROM 800. SO IT IS GOING IN THE WRONG DIRECTION. SCARLET: WE KNOW AIRLINES ARE NOW LEASING MORE OLDER PLANES THAT ALSO HAS A COST TO IT WHICH TO SOME EXTENT CONSUMERS END UP PAYING, RIGHT? THOMAS: THAT'S RIGHT. YOU HAVE TO REPAIR THEM MORE OFTEN AND THERE IS A SHORTAGE OF MECHANICS. IT ALSO PUTS THE AIRCRAFT ON THE GROUND WHICH IS NOT A SITUATION AIRLINES LIKE. THEY LIKE TO HAVE AIRPLANES
FLYING. AND WE ARE SEEING MORE FLYERS. WE ARE FINALLY SURPASSING 2019 LEVELS. THE INTERNATIONAL AIR TRANSPORT ASSOCIATION IS PREDICTING WE ARE GOING TO HAVE 5 BILLION PASSENGERS THIS YEAR.
THAT BREAKS A RECORD AND IT IS HIGHER THAN ABOUT THE 4.5 BILLION THAT WERE IN 2019. WE ARE HAVING TWO THINGS AT ONCE. INCREASED DEMAND AND LESS SUPPLY. THAT IS NOT A GOOD THING FOR AIRFARE. ROMAINE: THOMAS BLACK AS WE FOCUS ON WHAT IS GOING ON IN THE TRAVEL SECTOR PARTICULARLY WHEN IT COMES TO AIRFARES. CLINT HENDERSON JOINING US NOW FROM THE POINTS GUY.
THERE HAS TO BE SOME REPRIEVE OUT THERE. YOUR WEBSITE IS TELLING ME THAT MAYBE I SHOULD BE LOOKING FOR CHEAPER AIRFARES. CLINT: WE ARE SEEING NORMALIZATION OF AIRFARES IN THE U.S. INTERNATIONALLY THAT -- ROMAINE: DOES NORMALIZATION MEAN CHEAPER? CLINT: YES. COMPARED TO 2022, 2023, WHEN DEMAND EXPLODED, THERE WAS NOT ENOUGH AIRCRAFT RECEIPTS. THE AIRLINES HAVE NORMALIZED.
THEY HAVE ADDED FLIGHTS. WE ARE SEEING DEALS, EVEN LAST NIGHT, FOR PEAK SUMMER TRAVEL. THEY HAVE ADDED A LOT OF SEATS TO YOUR SPECIFICALLY. WE'RE ARE ALSO SEEING THE PARIS OLYMPICS. I THINK THEY OVERSHOT EXPECTATIONS AROUND WHAT DEMAND
WOULD BE LIKE. ROMAINE: I TRAVELED A LOT DURING THE SPRING AND I NOTICED EVERY FLIGHT I WAS ON WAS JAMPACKED AND IF YOU TRIED TO CHANGE A FLIGHT, FORGET IT. HAS THAT EASED UP A LITTLE? WHEN I GET ON THE PLAINS THIS SUMMER DO HAVE A CHANCE NO ONE WILL BE SITTING NEXT TO ME? CLINT: NO. PLANES ARE TOTALLY FULL. WE HAVE SEEN PRICES DECREASE BUT DEMAND IS STILL AT PEAK LEVELS. ALL THE BUSINESS TRAVELERS ARE
STILL BACK IN THE AIR SO WE HAVE SEEN ALMOST A COMPLETE RECOVERY IN BUSINESS TRAVEL. IT IS A REALLY INTERESTING COMBINATION OF FACTORS. BUT PRICES ARE DOWN TO WHERE THEY WERE IN 2019 AND YOU CAN FOUND LAST-MINUTE DEALS, EVEN TO EUROPE. SCARLET: WITH BUSINESS TRAVEL, IT HAS ALSO BEEN NORMALIZED WHERE PEOPLE CAN TAKE LOCATIONS AROUND BUSINESS TRAVEL. YOU MENTIONED PARIS. WE KNOW THE OLYMPICS ARE COMING UP. I THINK ABOUT HOW TV HAS
OVERTAKEN OUR CULTURAL LIVES AND THE WHITE LOTUS, AND OF COURSE GAME OF THRONES TAKING PLACE IN CROATIA. SICILY AND CROATIA HAVE BECOME MUST-SEE DESTINATIONS, AND F BECOME OVERRUN WITH TOURISTS. CLINT: THIS IS THE SET JETTING TREND. WHITE LOTUS SEASON THREE IS GOING TO THAILAND. BUT GO TO PLACES THAT MAY BE HAVE NOT BEEN COMPLETELY DISCOVERED. THE U.S. DOLLAR IS VERY STRONG RIGHT NOW. IF YOU HAVE EVER THOUGHT OF
TRAVELING INTERNATIONALLY, NOW IS THE TIME TO DO IT. SCARLET: SAN FRANCISCO HAS BEEN BRANDING ITSELF AS A COOL PLACE TO BE TEMPERATURE-WISE BECAUSE EVERYONE IS TRYING TO ESCAPE REALLY HOT DESTINATIONS. CLINT: COOL-CATIONS. SCARLET: THAT IS A THING NOW. CLINT: IT REALLY IS. PEOPLE GOING TO PLACES LIKE ESTONIA. SAN FRANCISCO IS GREAT IN THE SUMMER. ALSO SAN FRANCISCO, BECAUSE IT HAS HAD SO MUCH NEGATIVE MEDIA ATTENTION, PRICES ARE REMARKABLY LOW FOR EVEN FIVE-STAR HOTELS, FOR EVEN $200 A NIGHT. ROMAINE:
OUR EXECUTIVE PRODUCER WENT TO ALBANIA OR SOMETHING. HE'S THE ULTIMATE JET SETTER. WHO KNOWS. I CAN'T KEEP UP. I WANT HIS LIFE. I'M CURIOUS ABOUT PLANNING
TRIPS. A LOT OF US ARE PRETTY BUSY. PARTICULARLY WHEN YOU ARE TRYING TO PLAN FOR YOUR WHOLE FAMILY AND EVERYONE HAS A DIFFERENT OPINION ABOUT WHERE TO GO. IT IS A PAIN IN THE BUTT. NOW PEOPLE ARE TELLING ME I CAN USE CHATBOTS AND AI TOOLS THAT CAN MAYBE STREAMLINE THE PROCESS. IS THAT EFFECTIVE? CLINT: WE HAVE REALLY TRIED TO USE AI, IT IS JUST NOT READY FOR PRIME TIME. YOU ARE GOING TO MORE LIKELY SEE IT ON THE BACKEND, WHERE THIRD-PARTY BOOKING SITES ARE USING IT. BUT FOR THE AVERAGE CONSUMER IT
NOT READY YET. WE TESTED IT. IT DID NOT WORK OUT WELL FOR US. BUT IT IS COMING, DON'T GET ME WRONG. ROMAINE: WHAT ABOUT THE FUTURE WHEN WE TALK ABOUT JUST PLANNING TRIPS? MOST OF US ARE LEFT TO OUR OWN DEVICES AND WE JUST HAVE TO DO INTERNET SEARCHES OR TALK TO FRIENDS OR COWORKERS ABOUT WHERE THEY GO. WILL IT BE SOMETHING MORE
STREAMLINED IN THE FUTURE? CLINT: TRAVEL AGENTS AT THE HIGH-END ARE MAKING A COMEBACK. FOR THE VERY WEALTHY, THEY'RE GOING TO CURATE A PERFECT TRIP FOR YOU. FOR THE REST OF US, GOOGLE DOES A GOOD JOB. GOOGLE EXPLORER, YOU TYPE IN
YOUR HOME AIRPORT, IT TELLS YOU THE CHEAPEST PLACES YOU CAN GO. IT WILL GIVE YOU AIRFARE TO BERMUDA THIS WEEKEND FOR $300 OR WHATEVER. SCARLET: THAT IS GOOD AS LONG AS YOU ARE WILLING TO PAY FOR IT. YOU ARE THE POINTS GUY. IN TERMS OF VALUATIONS OF THOSE POINTS, ARE THERE SOME THAT YOU HAVE TO USE FASTER THAN OTHERS BECAUSE THEY HAVE BEEN DEVALUED? CLINT: SOME POINTS TO EXPIRE, BUT MORE AND MORE THE BIG PROGRAMS ARE NOT EXPIRING EVER. YOU DON'T NEED TO WORRY ABOUT THAT.
BUT YOU WILL BE ABLE TO STRETCH YOUR VALUE WITH A CREDIT CARD CURRENCY THROUGH CHASE OR AMERICAN EXPRESS IF YOU TRANSFER IT TO AN INTERNATIONAL PARTNER LIKE AIR FRANCE FLYING BLUE. MAYBE YOU CAN GET A BUSINESS CLASS FLYING TO PARIS. SCARLET: THAT IS EXTRA WORK FOR ME, AS OPPOSED TO CALLING THE CHASE TRAVEL CENTER WHERE I CAN BOOK DIRECTLY. BUT I HEARD THOSE FLIGHTS ARE PRICED HIGHER THAN IF YOU WERE TO GO TO THE AIRLINE WEBSITE. CLINT: THEY ARE USUALLY NOT PRICED HIGHER, BUT YOU ARE GOING TO GET BETTER VALUE IF YOU DO THAT. ROMAINE: I WANT TO SQUEEZE IN ONE MORE QUESTION.
I SAW SOMETHING IN YOUR NOTES. PEOPLE ARE LOOKING AT TRAIN TRAVEL A LITTLE MORE. MORE EXPERIENTIAL TRAIN TRAVEL, NOT JUST GETTING ON THE MTA. CLINT: SUPER, SUPER HIGH-END LUXURY TRAINS. THINK THE ORIENT EXPRESS. BUT FOR MOST OF US NORMAL
PEOPLE, AMTRAK IS A GREAT WAY TO SEE THE COUNTRY. ROMAINE: I SECOND THAT. I USED TO LOVE RIDING ON AMTRAK. ONE OF THE BEST TRIPS WE EVER TOOK, IN SWITZERLAND BEFORE THE PANDEMIC, WE TOOK A LONG TRAIN RIDE THROUGH THE ALPS.
IT WAS PHENOMENAL. SCARLET: TRAINS IN ANY OTHER PART OF THE WORLD IS FANTASTIC, JUST NOT IN THE U.S. CLINT: EVEN HERE WE HAVE THE EMPIRE BUILDER IN MONTANA THAT GOES TO SEATTLE, AN AMAZING JOURNEY THROUGH GLACIER NATIONAL PARK.
SCARLET: I HAD NOT THOUGHT ABOUT THAT. CLINT: AMTRAK THOUGH, PUT YOUR EXPECTATIONS WITHIN REASON. SCARLET: CLINT HENDERSON, THANK YOU SO MUCH, MANAGING EDITOR OF THE POINTS GUY. I'M TRYING TO THINK THE LAST TIME I HAD A TRAIN RIDE THAT WAS GREAT, AND IT WAS IN JAPAN ON THE BULLET TRAIN. ROMAINE:
YOU MENTIONED WHEN YOU GO OVERSEAS, ANYONE WHO KNOWS YOU ARE IN THE U.S., AMTRAK IS FINE, BUT YOU GO TO EUROPE ON THEIR TRAINS AND YOU ARE LIKE, WHY CAN'T WE HAVE NICE THINGS LIKE THIS? SCARLET: WE DON'T LIKE TO PAY FOR NICE THINGS. COMING UP, WE HAVE THE TOP THREE WHERE WE FOCUS ON THE TOP THREE MOVERS AND SHAKERS. THIS IS THE CLOSE ON BLOOMBERG. ♪ SCARLET: IT IS TIME FOR THE TOP THREE WHERE WE NAME DROP THE PEOPLE DRIVING SOME OF THE DAY'S MOST TALKED ABOUT STORIES. FIRST UP A SEAN EVANS, HOST OF
THE POPULAR YOUTUBE SHOW CALLED HOT ONES. THE FUTURE OF HIS SHOW IS UNCERTAIN BECAUSE BUZZFEED IS STRUGGLING TO SELL THE COMPANY THAT OWNS THE SHOW. UBS IS RUNNING A FORMAL SALES PROCESS AND ASKED FOR MORE THAN $70 BILLION AND IT HAS YET TO FIND A BUYER. ROMAINE: THIS WAS OBVIOUSLY A HIT FOR A WHILE. THIS WAS MUST-SEE TV.
IT SEEMED LIKE HE BUILT A BIG RANT. I HEARD A PODCAST WHERE HE TALKED ABOUT THE ECONOMICS OF HOW HE BUILT THE BUSINESS AND KEPT THE COST LIEN. THAT IS WHY THEY ARE JUST IN A DARK ROOM, AND HE GOT ALL THESE CELEBRITIES TO COME ON, IT WAS GREAT. SCARLET: IT DOES GENERATE $30 MILLION IN
ANNUAL REVENUE AND IS PROFITABLE. BUT HE DOES NOT HAVE A LONG-TERM CONTRACT WITH THE COMPANY, SO THEY ARE LOOKING COMMITTEE SO THAT UP. ROMAINE: ANOTHER PERSON I'M LOOKING AT IS THE OWNER OF THE CAROLINA PANTHERS. PITCHING A 1.3 BILLION DOLLARS STADIUM UPGRADE WITH CITY COUNCILMEMBERS EXPECTED TO VOTE ON THE PROPOSAL TODAY. WE ARE TALKING ABOUT CHARLOTTE, NORTH CAROLINA. A LOT OF FOLKS ANYTIME THESE
BILLIONAIRE OWNERS COME ASKING FOR BILLIONS IN TAX DOLLARS TO DO SOMETHING FOR THEIR PRIVATELY HELD BUSINESSES, SOMETIMES IT BECOMES AN ISSUE. SCARLET: VOTERS ARE INCREASINGLY UNWILLING TO PAY FOR THAT BECAUSE THEY ARE LIKE, HOLD ON, YOU PROMISE ALL THE STUFF AND IT DOES NOT COME TO FRUITION. VOTERS IN MISSOURI REJECTED A FACILITY FOR THE -- IN ILLINOIS THE GOVERNOR CALLED THE BEARS PLAN TO BUILD A NEW STADIUM AND NONSTARTER. ROMAINE: HE CALLED THEIR BLUFF ON THAT.
THE THREAT IS ALWAYS WE WILL GO TO A NEIGHBORING CITY. BUT THERE ARE ONLY SO MANY PLACES YOU CAN GO. AND LEAVE THE BEARS ALONE, PLEASE. SCARLET: THE THIRD PERSON I'M WATCHING IS TRAVIS KELCE. ROMAINE: WHO IS THIS? SCARLET: HE IS THE TIGHT END OF THE SUPER BOWL WINNING CHIEFS. HE JOINED HIS GIRLFRIEND TAYLOR
SWIFT ON STAGE LAST NIGHT IN LONDON. HE WAS ON DURING A TRANSITION BETWEEN SONGS. HE CAME ON TO HELP HER WITH A COSTUME CHANGE. HE CARRIED HER ACROSS THE STAGE AND HELPED HER TOUCH UP HER MAKEUP. ROMAINE: I SMALL -- I SAW A SMALL CLIP OF THIS AND I WAS TOTALLY CONFUSED. WHAT IS HE DOING? SCARLET:
IS THAT HOW YOU SUPPORT HER. I THINK HE ASKED TO DO IT. ROMAINE: I NEED SOME YOGURT. SHE'S LIKE MARIANA GRANDE. SCARLET: APPETITE FOR A VEGAS RESIDENCY REACHING NEW HIGHS REMINISCENT OF THE 1950'S, 1950'S, 1960'S, AND 1970'S. LAST YEAR, SIN CITY WELCOMED MORE THAN 40 MILLION VISITORS UNFOLD MORE THAN 3 MILLION TICKETS FOR CONCERTS AND LIVE EVENTS MAKING IT A PERFECT MARKET FOR ARTISTS TO PROFIT FROM THE HIGHEST TICKET PRICES IN THE U.S. JOINING US NOW IS ACTUALLY CARMEN -- ASHLEY CARMEN. WHEN YOU LOOK AT LIVE CONCERT EVENTS, IT USED TO BE A LAS VEGAS RESIDENCY WAS SOMETHING MAYBE HAS-BEENS DID.
IT HAS TURNED INTO SOMETHING MORE. >> TOTALLY. I THINK CELINE DIONNE CHANGED THE GAME. SHE ESTABLISHED THE RESIDENCY
THERE IN THE SENSE OF A MODERN IMMENSELY TALENTED ARTIST SETTING UP SHOP. NOW YOU SEE ALL SORTS OF ARTISTS. THESE ARE HUGE NAMES PEOPLE CURRENTLY VERY MUCH WANT TO SEE.
IT IS EASIER ON THE ARTISTS. ROMAINE: IS IT EASIER ON THE FANS AS WELL? I KNOW THE FANS MAY HAVE TO TRAVEL TO THAT LOCATION. TWO SCARLET'S POINT, I WAS IN BIG HIS EARLIER THIS YEAR AND SURPRISED AT THE ARTISTS.
>> VEGAS IS SUCH A DESTINATION. THERE ARE ALL SORTS OF DIFFERENT REASONS TO GO. WHEN YOU HAVE THIS WIDE RANGE OF ARTISTS, IT MAKES IT MORE OF A DESTINATION. IT IS JUST FUN. SCARLET: TALK ABOUT THE FACILITIES. YOU HAVE INTIMATE VENUES LIKE WHERE CHRISTINA AGUILERA IS PERFORMING AND THEN YOU HAVE THE FEAR -- THE SPHERE WHICH IS THIS MASSIVE DOME. YOU COULD NOT SLEEP. ROMAINE: DID YOU HAVE A QUESTION?
[LAUGHTER] SCARLET: TALK ABOUT THE FACILITIES AND HOW THAT CHANGES THE GAME. >> YOU HAVE A VARIETY OF OPTIONS. YOU HAVE MEGA THEATERS WHERE YOU CAN DO AMAZING SET DESIGNS WHICH IS PART OF THE REASON PEOPLE WANT TO DO A VEGAS RESIDENCY. YOU DO NOT HAVE TO HAUL YOUR
STUFF AND STAFF AROUND THE WORLD. INSTEAD, YOU CAN BUILD AN ELABORATE STAGE SETTING THAT IS THERE EVERY DAY. THE SPHERE HAS BECOME A TALKING POINT AND DESTINATION. ROMAINE:
DOES IT STILL WORK FOR ARTISTS? WAS USHER, THE CHEAPEST TICKET WAS $700 OR $800 TO SIT IN THE BACK ROW. IF THEY WENT ON TOUR TO BIGGER VENUES, THEY COULD GET MORE FOLKS IN AND IN THEORY HAVE MORE SPECTRUM ON PRICING. DOES THAT NOT MATTER TO THEM? >> THE THING WAS TOURING ECONOMICS IS AFTER THE PANDEMIC, INFLATION AND STAFFING BECAME MORE EXPENSIVE. PEOPLE WERE FLYING PRIVATE JUST TO GET AROUND THE COUNTRY. THAT IS WHERE THEY CAN SAVE ON THOSE COSTS. IT IS SORT OF THIS DESTINATION TRIP.
THEY HAVE AN OPPORTUNITY TO DO THAT. ROMAINE: DO YOU HAVE ANY CONCERTS YOU ARE LOOKING FORWARD TO? >> I REALLY WANT TO GET TO ANTHONY'S SHOUT. ROMAINE: ASHLEY CARMEN JOINING US. WHERE ARE YOU GOING? SCARLET: I AM GOING SOMEWHERE DOWNTOWN WITH A CURFEW. I THINK THE THOMPSON TWINS ARE PLAYING. ROMAINE:
WOW, THAT IS A BLAST FROM THE PAST. I HAVE TO CHECK THAT OUT. FROM CONCERTS TO CRUISES, CARNIVAL CRUISES SET TO REPORT EARNINGS TOMORROW. WALL STREET IS FOCUSED ON THE ABILITY TO SUSTAIN BOOKINGS AND PRICING.
EVERYBODY IS ALWAYS TELLING ME THE COMPANIES HAVE TOO MUCH OF THIS AND THEY ARE STRUGGLING. IT IS A CRUISE SHIP. PEOPLE WHO LOVE CRUISES ARE ALWAYS GOING TO GO ON CRUISES. LITERALLY, THEY CAN GO BANKRUPT AND FIND ENOUGH MONEY IN THE CELTS CHRISTIANS -- COUCH CUSHIONS TO GO ON A CRUISE.
>> I THINK YOU MAKE A GOOD POINT. PEOPLE WANT TO GO ON CRUISES AND THEY WILL SPEND. CRUISERS WANT TO CRUISE. IT IS THE NEW TO CRUISE THAT IS
THE QUESTION. PEOPLE ARE GOING ON CRUISES AT A HIGHER RAT
2024-06-25 22:30
