Consumer trends, Walmart, Chinese economy: Catalysts

On today's Catalysts, co-hosts Seana Smith and Madison Mills explore the latest trends in consumer behavior, retail sales data, and this morning's top-moving stocks.

The focus is on consumer spending after Walmart (WMT) reported second quarter earnings that beat expectations for both revenue and profit. Fortune tech correspondent Jason Del Rey joins the program to comment on how Walmart's positive results might signal a weakening consumer landscape.

The show then covers a range of trending stocks, including Ulta Beauty (ULTA), Robinhood Markets (HOOD), and Dutch Bros. Inc. (BROS), which is receiving positive attention following a UBS analyst upgrade to Buy.

Lastly, the recent appointment of former Chipotle (CMG) CEO Brian Niccol as the new chief executive of Starbucks (SBUX) is reviewed. His compensation package, valued at $113 million, positions him among the world's highest-paid CEOs.

This post was written by Angel Smith

Video Transcript

Just after 10 a.m. here in New York City.

I'm Shana Smith alongside the Madison Mills.

Let time into the catalyst moving markets today.

The news is good news for the markets today.

Stock still con continue to move to the upside after jobless claims came in lower than anticipated and retail sales came in higher even broader concerns about a potential economic slowdown markets.

Now pricing in less than 100 basis point of cuts from the FED this year and Walmart earnings adding to the consumer resilience narrative, the company beating estimates and raising its outlook.

It's a catalyst for the stock.

You got shares hitting a record high today.

Here's what Walmart CFO John David Rain.

He told me about the health of the consumer.

There was no step down in July as some had expected and that's generally our outlook for the year.

There's certainly um reason to be measured in the outlook when you consider that we have an election coming up in the US.

You've got unrest overseas, but uh the consumer is still hanging in there.

They're being choiceful, they're being discerning, they're looking for value and focusing on those things that are essentials versus the discretionary items right down the move higher in the stock and also discuss how Wal Mart's earnings compare with some of its competitors and some drug prices are going to be moving down from Medicare recipients.

That comes after Medicare was able to negotiate with drug companies on the prices of 10 separate drugs.

We're going to speak with the director and deputy administrator for Medicare about those negotiations.

But first equities posting their strongest positive reaction to retail sales data in six months this morning.

As the print indicates strength in consumer spending.

All the headline sales number came in squarely above.

Estimates could markets be getting ahead of their skis here to discuss?

We got Angelo, he is Ward Jones, Senior Investment strategist and Angel.

It's great to speak with you.

So we talked briefly about this before our show, but let's put a button on it.

Did we do it?

Are we at the soft landing?

Is it happening?

Yes.

So today we got a nice upside surprise in retail sales and a downside surprise in jobless claims exactly what was needed to put some of the recession fears to bed.

So think about the consumer that's resilient, the US economy, that's resilient.

Plus we have inflation moderating and coming closer to the fed's target.

That is a recipe for a soft landing.

Of course, there's a flip side to that coin that's interest rate expectations, but that's, that's the poo I'm interested in what you thought about the retail sales data because if you take a look at discretionary spending under the hood, we are seeing a little bit of a retracement there and consumer slowing down ever so slightly.

Is there any chance that the market is overthinking the headline and ignoring some of the details underneath the hood that could be more indicative of the consumer?

No doubt there was a boost from very strong vehicle sales.

We had back in June an incident with a cyber attack on auto dealerships.

So this month in July, uh we did see a strong rally, I mean reversion from that.

But beyond auto sales, we did see a broad advance in retail sales with 10 of the 13 categories being higher.

Uh So I would say the message is undoubtedly a strong one for the consumer, but bear in mind that retail sales only give us a part of the story.

It only shows spending on consumer goods.

We still don't have a good sense of spending on services, which that's the area we are seeing a little bit more of a slowdown as consumers spend less on travel than they used to.

But overall, I think the consumer remains resilient and is doing what they know to do best and that's to spend and that's the biggest driver of the US economy.

So the kind of wrapping that up and going back Mr Matty's first question there when we were talking about the risk of a recession.

What is your assessment then?

In terms of where we stand?

Because yes, there is, uh, it's almost like you, you can pick and choose what data points you want to focus on to support whatever argument you are trying to make.

And it certainly seems like at least from the, uh, research reports that I've been reading over the last several months that that continues to be the case.

Yes, I think the broader theme, if we take a step back is that the economy is slowing, but it's still growing.

And that's very important distinction.

We're not talking about a contraction.

As was the fear.

After the last jobs report, the economy continues to add jobs.

Uh real earnings are positive after inflation and have been for the last 14 months.

Uh Plus we have lending conditions that are easy while at the same time, the Federal Reserve is about to embark on a multi year rate, rate cutting cycle.

So putting everything together, things are not.

We're in a different economy than we were last year.

Things are not.

We are transitioning from a 3 to 4% type of growth world into 1 to 2%.

Uh But that doesn't mean that something worse is ahead of us and still the Pullbacks and volatility that we have seen more recently can be thought as taking place within the confines of an ongoing bull market.

And I want to talk about how your positioning around that thesis right before we saw that volatile week with the sell off, the new narrative was one of a market rotation out of Big Tech and into the other 493.

Does today's data support a continuation of that rotation and is it into 493 or is it into small caps in the Russell 2000?

Yeah, I think so, the broadening of market leadership will remain a prevalent theme in the remaining months of the year.

We have the resilient economy which means that there is still growth and we know there's a big valuation gap between the 493 and the Magnificent seven.

And we look at when we look at earnings, which is one of the fundamental drivers of stock prices, the gap between the Magnificent Seven and the rest of the market is starting to narrow, especially as we look at Q three and Q four.

And that's part of tough comparisons for the Magnificent Seven plus.

For the remainder.

Companies, we have uh uh still positive economic growth and after earnings stalling for more than a year now they are bouncing back with the rebounding margins are some of the price pressures are easing.

So, Angela, what do you think that tells us then about the likely action we're going to see as we look ahead to.

Obviously, we typically do see a little bit more volatile volatility leading up to the US election.

How should investors or what should investors then be doing over the next several weeks to better position their portfolios, post election.

Yes, I think having the the right expectations about returns in volatility is important because we are, as you mentioned in a seasonally silenced part of the year, thinking about late August September, October, especially in an election year, we tend to see volatility looking at the fixed index spike.

But that spike, that uncertainty that is associated with the the election we have seen historically very quickly subsides.

So if we do have an election driven pullback inequities, given the relatively favorable backdrop, we would use those Pullbacks as an opportunity to to either diversify, deploy some, some, some capital uh and be opportunistic while this, this happens and going back to the point about small caps, I think mid caps is a compelling part of the market.

It is more leveled, more exposure that has more exposure to post economic surprises and has evaluation advantage over the large caps.

But at the same time, it is higher quality than, than some of the small cap stocks.

All right, Angela Kirkoff, it was great to have you.

Thank you so much for joining us here this morning, Edward Jones senior investment strategist.

Thanks Angela.

Thank you.

The consumers still spending as retail sales soared last month and that's not the only sign of a strong consumer, Wal Mart out this morning with its earnings results.

Shares are actually hitting a record high.

The company raised its guidance for the year.

Here's what Walmart CFO, John David Rainy told me last hour about the health of the consumer.

There was no step down in July as some had expected.

And that's generally our outlook for the year.

There's certainly, um, reason to be measured in the outlook when you consider that we have an election coming up in the US.

You've got unrest overseas but uh the consumer is still hanging in there.

They're being choiceful, they're being discerning.

They're looking for value and focusing on those things that are essentials versus the discretionary items.

Joining us.

Now, we want to bring in Jason Del Rey.

He's the author of the book Winner Sells All Amazon Walmart and The Battle For our Wallets, Jason, it's great to have you here.

So I'm curious, just give me a sense of wrap this all up for us and tell us maybe what we could expect going forward because we got retail sales out this morning.

Very strong.

You take a look at Walmart's guidance here.

The fact that they raised it obviously a good sign here for consumers.

What does that ultimately tell us just about the catalyst?

Maybe that we could see or that the consumer is going to provide here for the economy going forward?

Yeah, I mean, obviously a great sign that we did not see a weakening here.

I think consumers are still working hard to find value.

I think we talk about Walmart's great quarter.

Um, all things considered and that's driven in large part by being aggressive on value discounting rollback.

But also the convenience measure, I think a lot of consumers while they're trying to, you know, just make their budget work, they've been trained to expect convenience as well.

And so Walmart's investments in pickup delivery and the like, um, I think are paying off, talk to me about Jason kind of the headline that you took away from the earnings when it comes to the consumer because sometimes when you've got better earnings from a Wal Mart, it can indicate that wealthier consumers are starting to trade down as the CFO loves to say for the second quarter in a row they are trading in, is that potentially a sign of consumers struggling?

Yeah, I mean, I've thought about that a lot and, and that is, you know, that is something I'm thinking about, obviously, you know, a wor worse result for Walmart, I think would have been worse all around.

But I do think the fact that high, you know, high income consumers are still looking for value as Walmart says, the value convenience combination, I think that says we're not quite out of the woods yet.

Um, store brands are still really popular.

Um, and so I think that's indicative that, um, other than the very, very, um, wealthiest consumer, um, people don't feel comfortable yet with where we are and I think people are just continue to looking for value.

Jason.

What does it tell us about?

Are, are we going to see further divergence in between the segments or the sectors of winners and losers?

Listen again, I'll, I'll go back to the value and convenience combination.

I think obviously, you know, I cover Amazon very closely at, at Fortune Magazine as well.

And, um, they're pushing in both of those directions at the same time, Walmart, um in their own ways, pushing both value and convenience.

I think there are very few companies that can do both very well, can invest in both price cuts and, you know, express delivery and great pickup offerings.

And so yes, I think, you know, beyond those two, there are not many mass retailers that can really provide both.

Um and I think that's what consumers are still looking for, especially in a market, you know, in an uncertain market like this one.

Let's happen to your expertise, Jason on Amazon because one big question for Walmart is whether or not they'll be able to really start to compete with Amazon as a distribution center moving forward.

What are your sources tell you about the likelihood of that?

And is anyone in Amazon worried about it?

Sure.

Just to clarify, you're you're talking about on the, on the logistics and shipping front or you're talking about something else?

My apologies, the logistics side.

Yeah, I mean, I, you know, in my book, I traced a long history of Amazon worrying about, um, Walmart's logistics might.

And I, I think, you know, Walmart is still years behind in matching Amazon's fulfillment offerings in matching some of their, um, B to B delivery delivery and shipping offerings.

But I think you can never ever count Walmart out.

I think Walmart under Doug mcmillan the last decade has proven that they will find ways to invest and at a minimum, stay ahead of the rest of the pack beyond Amazon.

And so, you know, Amazon constantly Trump.

It's not paying attention to, to competitors, but I, I think they continue to watch Walmart very closely and um they are a formidable foe in this, in this space as well.

All right, we're gonna have to leave it there, Jason, thank you so much for joining us, Jason Del Rey with fortune turning now to big news in the health care space for the first time ever.

Medicare was able to negotiate pricing with manufacturers for 10 drugs.

The new prices released this morning will be taking effect in 2026 and show up to 79% in discounts compared with 2023.

Joining me now to discuss we got our very own on on joining me here for an interview with the director and deputy administrator at the Center for Medicare and Medicaid Services station Money, Doctor Mina.

Thank you so much for being here with us this morning on the heels of this negotiation.

So I just want to start on getting some color from you about what these negotiations were like, particularly given that many of the companies involved are currently suing the government amid the negotiations, calling the pricing discussions quote unconstitutional.

So what were these discussions with them like under those conditions?

Well, and thank you for having me.

Um I will say these really were good faith negotiations that really were a robust exchange of data talking about, you know, the clinical benefits of these drugs and other factors as laid out in the prescription drug law.

Um You know, the team that uh was negotiating includes clinical pharmacists, drug pricing experts, people who had done negotiations for health plans for drug manufacturers.

So really bringing that expertise to C MS to stand up this historic program because as you mentioned, first time that Medicare has negotiated directly with uh pharmaceutical manufacturers for the price of 10 of the highest cost drugs in the Medicare program.

I wonder, you know, considering that the response on Wall Street is muted, we haven't really seen the stocks move as a result.

We know that Wall Street did kind of price it in a bit.

And then in addition to that, you know, there's criticism that this could then change the shift the cost burden on to patients as insurance companies look to, you know, figure out how to how to recalculate as well as PB M limiting access.

Is this truly a win then for the government.

Well, um the me, the negotiated prices we estimate will save the Medicare program $6 billion.

So if these prices were in effect in 2023 we would have saved $6 billion and $1.5 billion for people in the Medicare program who have prescription drug coverage.

So they would save $1.5 billion out of pocket with the better deal that we have gotten with negotiation.

I also wonder with all the information you've now had access to our privy to when it comes to the way that drug prices are set in this country.

We know it's a very opaque process.

Your process in itself was also some o take because we do not know the net prices that Medicare pays.

So I want with all that you've learned, how can we translate this maybe for the general public to understand in how these prices are set?

Is there a sort of percentage range that they are marked up based on the cost?

Have you learned other information that could help broadly with drug pricing and negotiations maybe in the private market?

Well, transparency is very important and I think that has been the main goal of standing up this program, you know, in the spring, we will be publishing justifications for these prices and talking about the data that went into this understanding and respecting that proprietary information, as you mentioned, um confidential But right now, everybody now knows these negotiated prices and others can take that information into account.

And as we went through the process of standing up this program, we engaged everyone.

We had 10 patient focused listening sessions so we could incorporate the patient voice talking with health care providers, with health plans, with drug companies, multiple opportunities for comment on our guidance, you know, and information collection requests to stand up this program.

and we want to continue that moving forward.

We are have asked for comment for our guidance for the next cycle of negotiations where we can take the lessons learned here.

So really being able to incorporate real world evidence, incorporate data into understanding how drug pricing works and to be able to make sure that we are achieving our shared goal of access and affordability for the kinds of innovative cures and therapies that people need.

I want to look ahead to November and talk about potential policy changes, the Trump campaign's project 2020 25 in particular calls for a repeal of the IRA could that potentially jeopardize the work that you're already starting for the next round of negotiations.

From the day that the Inflation Reduction Act, the prescription drug law was passed.

We have really engaged in being as thoughtful as possible in implementation, you know, talking with health plans as we were putting into place the $35 insulin copay cap $0 vaccines.

You know, I was talking to the health plan CEO saying we have to work together because the law passed in August and this went into effect in January just a few months later, you know, to the standing up the negotiation program, really incorporating all of the feedback from everyone who is involved and is impacted by drug pricing supply, et cetera in the United States.

And I think what you see today with the results of the negotiation program, really demonstrate the thoughtful pragmatic nature that this program has been stood up and that, you know, we will continue in the future.

And finally, doctor, I wonder when we're talking about the impact to patients you've mentioned out of pocket cost in the 6 billion in savings of the congressional budget office has estimated that the program could save as much as 100 billion by 2031.

That looks like a pretty large gap to fill in the upcoming negotiations.

Where do you see room for maybe more aggressive negotiating to get greater savings?

Well as laid out in the law, the number of drugs that Medicare negotiates will be going up.

So it was 10 do 10 drugs for this first year, it becomes 15 the next year and it goes up to 20 so over time, additional drugs get negotiated on top of the ones that have already been negotiated, which translates to increase savings in Medicare.

And I think to come back to a point that you all raised about the transparency.

This also has been a great opportunity to have a robust data driven discussion about the benefits that drugs provide really incorporating how drugs impact people's lives in the communities in which they live because people don't live lives like a randomized control trial and being able to incorporate the perspective, for example, of caregivers and how you know how drugs can impact someone's health can affect, you know, downstream health care costs.

All of that has been very important to include and I look forward to that robust discussion continuing as the number of drugs are increased that are negotiated.

Thank you so much for joining us, Doctor Mina Sesan.

I should also thank Angeli Kamlani for bringing us the interview.

Thanks so much.

We're going to have all of your markets action ahead right here on Yahoo Finance.

You're still looking at gains across the board, the NASDAQ up 1.7% in the S and P holding on to gains above 1%.

So stay tuned for more of that market action.

You're watching Catalyst.

Let's take a look at some trending tickers shares of old top up by over 10% after be half way to close new stake in the retailer.

This comes in the 13 FF season in which investors managing at least $100 million have to disclose their holdings.

Now, we know that B holds nearly 700,000 shares of all and that is worth over $260 million as of the end of June for the retailer.

And it's interesting, given what we've heard about old time, it's obviously had a very successful run in steady revenue growth.

But there have been concerns of course about old broader outlook for the year back in March, in particular, with their earnings cycle, they did talk about a disappointing outlook and said that there were elevated supply chain costs and increased promotions that were hurting its margins in the stock in 2024 has lost about a third of its value.

You can see there on your screen that it's certainly been under pressure over the last six months on.

It seems like Berkshire is buying the Berkshire is buying the debt.

They love to buy stocks that are being down for a while.

So they're seeing some opportunity and some real reason to like Ulta Beauty at these current evaluation levels.

Oppenheimer was out in reaction to this and that they view this development.

No surprise here as a vote of confidence here for the company longer term prospects.

We talk about the growth opportunity for Ulta going forward.

They also went on to say that it further validates the company's significantly discounted valuation.

So going to back what to what you were just saying, Mattie, the underperformance that we have seen from Ulta going back to the start of the year and even beyond Berkshire really liking.

Uh its current valuation right now and really seeing reason to buy again shares off, I believe just around 33%.

What is that over the last six months here off?

Just about 31%.

Let's take a look at Robin Hood because shares are rising.

Deutsche Bank upgraded the stock to buy from hold to the bank.

Appraising Robin Hood's focused on cost control noting that the company has cut adjusted expenses by nearly 25%.

Looking at gains here on the back of that bullish call of just about 6% right now.

They argue for the fact that they see upside here for the or they argue that it looks like among the best of the E brokers here over both the near and longer term.

They also went on to say that Robin Hood joining Charles Schwab is a buy here for them in terms of ratings, they see more of a 20% upside potential for the stock.

That's when you take into account the price target and where the stock closed in trading yesterday.

So again, they like how they are positioned.

I think this is also probably a valuation call given how Robin Hood has been trading.

But again, you're looking at gains just about 6% today.

Ma Yeah, it's interesting that they specifically cite some of the company fundamentals for Robin Hood expansion into some additional financial services efforts and just to run through a couple of these initiatives they talk about the company's 24 hour stock trading initiative, an expansion of retirement account options with matching contributions.

They're also looking to expand internationally uh specifically off a crypto trading service in Europe.

But we also know that they recently purchased an A I platform and through that purchase, they were able to bring on the executive with that company that they were working with called Pluto.

And that could be a move to expand into a I powered trading, which is certainly something that Robin Hood is positioned to capitalize off of.

Given how ahead of the curve they really been in terms of adding fintech and digital assets to their own platform for consumers.

Look at another trending, take your shares of Dutch bros moving to the upside after a bullish upgrade from U Bs from saying investors should buy the dip in the coffee chain, citing energizing growth potential, the analyst upgrading shares from neutral to buy it up about 6.5, nearly 6.5%.

But this is interesting given that the street really punished thats for their latest earnings print of those shares were significantly down about 28% over the course of this month, I believe.

And remember this is a company that some had compared to, you know, potential Starbucks competitor and then their earnings print definitely through cold water on that idea.

But just in terms of what you s is saying here, talking about mobile order and pay menu innovation, loyalty gains, which of course, analysts love to talk about and improved productivity from the store and you can see definitely a recovery in the stock price off of that.

Yeah, we know our very own Brooke Dipalma just did a great deep dive on Dutch bros. And what makes their culture so, so great and, and what it makes it, I guess just really stand apart from some of their competitors out there.

When you talk about some of the momentum that it had had in their business, when you take a look at the stock chart, especially year to date, telling a bit of a different story there.

But again, this is a company that certainly has showed a lot of momentum here in terms of trying to gain market share, trying to get an edge across some of its competitors there.

But again, not exactly translating, I guess into the stock performance here as we're looking at a loss of just about 26%.

But again, still reason to like it at these levels with U BS upgrading shares uh to a by saying that they think now is the time to get in on this name because of some of that momentum, you've got shares trading just above 32 bucks a share.

All right.

Well, coming up, we've got new data giving more of an insight into the strength of the labor market.

We'll dig into the implications for the Federal Reserve, next fewer people filing for unemployment claims last week.

The lowest level actually that we've seen since early 2023 it's the latest sign that the jobs market is far from the fears of a massive slowdown and that was a fear that swept Wall Street following the most recent report that we got on jobs.

Now, this morning's data also countering some of that worry of a hard landing and easing recession, anxieties here to unpack what this means for the broader economy.

We want to bring in AD T above a Bank of America, a senior US analysts and Aitia.

It's great to have you here.

Thank you so much.

I I believe a senior us economist.

Sorry about that.

But Aitia, let's talk about what we are seeing here in the broader economy because we are getting some conflicting signals just about the slowdown in jobs, especially when you look at the latest uh July numbers versus maybe what we're seeing in the continuing claim.

So talk to me about whether or not we are seeing that weakness and ultimately what that tells us about the chances and risk here of recession.

Good morning.

Thank you for having me.

So obviously, as you said, the risk after the July Jobs Report, the concern was that we were headed for a hard landing.

We maintained the view that the labor market is normalizing.

We are not heading into a recession and that the July data were somewhat idiosyncratic.

The recent decline in jobless claims.

It is not just one week, it's the last couple of weeks that has been encouraging, that has been consistent with our view.

And then that goes hand in hand with solid retail sales today because remember it's a little bit chicken and egg between the labor market and the consumer.

So what you really want to see is both of them doing well hand in hand.

That's what we saw this morning.

And that's why equity markets said, you know what the fed might cut less, but good news is good news.

So we are happy about these data.

Is there anything underneath the hood in some of the data that you're looking at that could indicate still some cracks in the consumer?

Right?

So things are slowing down.

We grew at 4% last year.

That was never sustainable.

So it was inevitable, 4% in the second half of last year.

That wasn't sustainable, right?

So the question is, are we now headed back towards kind of trend like 2% growth?

That's very much what the latest data look like rather than a harder landing.

And we're not really seeing that hard landing in consumer spending.

Retail sales were a little bit soft earlier this year.

But then the last three months they have bounced really nicely.

Services are holding up.

Yes, there is some concern about discretionary services losing some steam.

But again, I would view that as normalization because you have this big acceleration in discretionary services as kind of the last leg of reopening post COVID demand and that was bound to fade.

So our broad view is that yes, you'll have ups and downs in the data, certain sectors might look soft for a few periods, but things look solid and very trend like right now.

So what does this all tell us about the chances of a rate cut next month, the size that we're going to get?

And then ultimately looking past the September meeting, what we'll likely see between now and your end, right.

So we are of the view that the data flow both on inflation, which was just a little bit stickier than the FED would like in housing as well as activity labor market.

All of that suggests that the fed can cut and it will cut in September in our view by 25 basis points.

But there isn't a need right now for super size cuts or accelerated cuts, namely once per meeting.

Now, obviously, if inflation were to cool off significantly, if the labor market were to weaken further, the next step, the more do step relative to what we're expecting is that they cut every meeting rather than every quarter.

So 25 in September 25 in November 25 in December, but that's not our base case for.

Now.

Our base case is 25 per quarter going forward at least through the end of next year.

I'm just curious what you look at to us out the health of small businesses and the economy.

We know that there are some of the primary drivers of consumer spending due to their overall impact on hiring.

I know we've got the small business optimism numbers and they are looking good.

But should I be trusting that data?

There's something better I could be looking at.

I think that's a pretty good data source.

There is also the data that break out hiring by small versus large businesses obviously doesn't always correspond that well with non farm payrolls.

But it is true that small businesses are the most impacted by rate hikes, right?

Because they, they can't lock in lower rates by issuing that they have to borrow kind of at current policy close to current policy rates, right?

Plus some spread.

So small businesses are at risk.

But unfortunately, the problem for the fed is that monetary policy is a blunt instrument.

They have one policy rate that they are trying to use to affect so many different things in the economy.

So there will be some winners and losers and the best they can do is target economic aggregates.

And so far those economic aggregates are holding up pretty well.

DJ.

I'm curious how much focus are you placing on the latest inflation brands versus what we're seeing in terms of some of that softness within the labor market and, and then I guess just extrapolating from that, just ultimately what that tells us about how the FED is thinking about the current economic landscape, right?

So if you think back to a year, year and a half ago, the FED was 100% focused on inflation, right?

As other mandate really was kind of set aside.

Now, we are in a world where the FED is looking at both mandates, it's looking at the inflation data for confirmation that even if we aren't at 2% right now, we are headed in the right direction and that's good enough to start cutting rates.

So you will remain restrictive for a while.

Even if you start cutting rates, we think the inflation data has met that bar and while we still expect a soft landing in the labor market, there are enough signs that things are a little bit softer that again the FED can start cutting and it's probably to start cutting.

It just isn't prudent to panic yet for the Fed.

That's why we don't think that they will be cutting by 50 or cutting every meeting unless the data deteriorate further.

All right, we're going to have to leave it there, but we've got to bring you back soon if you will join us again.

Thank you so much.

A Ba Bank of America's senior US economist.

Another economy we are looking at is China still struggling despite recent efforts from the government to boost consumer spending, new data including new bank loans in July hitting a 15 year low that has critics calling for more economic stimulus in the world's second largest economy here.

With more.

We got Yahoo finance is a hi there many so much of the data is being watched closely because what you mentioned it is the world's second largest economy.

What happens in China trickles out to so much of the global economy and the latest tranche of data that we got this morning pointing to continued struggles for China.

Let's take a look at some of those numbers fixed asset investment, slowing posting growth of 3.6% year on year.

But it was the slow down in the property sector that was especially pronounced.

And as you know, this has been the continued continued pain point for the Chinese economy, property investment fell 10.2% with the decline in home prices accelerating that was down more than 5% in major cities compared to the same period a year ago.

And the new home sales that number right there down nearly 26% in July year on year.

You take a look at industrial output that expanded 5% in July, but that was still slower than the this month.

And then unemployment in major cities ticked higher to 5.2%.

The one rare bright spot here coming through from consumers, retail sales were up 2.7% in July year on year that did come in higher than expected.

All combined the data points to continue challenges for the Chinese economy in a year where Chinese officials have cited 5% growth as the key goal and there are increasing concerns that not likely to be reached at least on paper.

Now, the PB OC and Chinese officials have pushed to stimulate the economy although not on the scale that some think that needs to be done.

Most recently, they introduced a rescue package.

This was providing up to $42 billion in funding to Chinese banks to spur lending.

But the Wall Street Journal reports, banks have only fulfilled about 4% of that quota and not a lot of take up on from the PC cut its key interest rate last month to push spending on services.

But that has done little to improve consumer consumer confidence.

And the reality is here that Chinese officials simply don't have the appetite to go for this Bazooka style stimulus, especially given the country's debt picture, something we've talked about for some time, the debt to GDP ratio for the Chinese economy.

Now.

Well over 250% and Chinese officials in recent meetings have sort of signal that the new focus on consumer spending particularly because that makes up about 50% of the Chinese economy for.

So look out for some additional stimulus potentially on that front, but don't expect the kind of stimulus that we have seen in the past Chinese officials simply not going there at least just yet.

All right, Akiko, thanks so much for bringing that down for us.

Certainly something that we will continue to watch you right here on Yahoo Finance just about an hour and 15 minutes into the trading day.

We're off the highs of the morning, but you're still seeing that momentum carry over.

We initially saw it following the jobless claims numbers that we got this morning also better than expected retail sales data.

The fact that we saw that 1% rise, soaring past expectations, really supporting the narrative that we could be on track for a soft landing.

And the markets taking good news in the economy is good news for the markets.

You're looking at gains across the board, the NASDAQ up nearly 2%.

We'll be right back crypto getting support from lawmakers at the opening crypto for Harris event us Senate majority leader Chuck Schumer voicing the real possibility of a crypto law passing the Senate this year.

Now this is during, like I said, during an event that was drumming up support for vice President Harris and her bid here for the White House.

But the reason why this is so significant, we know that Senator Chuck Schumer has come out in support for crypto that isn't necessarily new.

But to the degree though in terms of the ringing endorsement that he did offer across the board to digital currencies yesterday that has gone further than many had expected, maybe to initially hear from him.

So that is why this is such a big deal.

Went on to say that crypto is here to stay no matter what.

So Congress must get it right.

And we initially saw a bit of a bump here across the board when it comes to the move in cryptocurrencies.

I believe you have Bitcoin still trading to the upside here.

But Mattie, there's lots of debate about whether or not this is something that both sides of the aisle are going to be able to agree upon before the end of the year.

Just given the massive divide that we do have inside the beltway right now.

But again, it looks like Senator Chuck Schumer here also siding with some of his Republican colleagues calling for some sort of regulation to be passed sooner rather than later and not necessarily indicating which of the bills under consideration that he is going to be fully supporting.

But to your point, sha I definitely being bullish on regulation as a concept moving forward for crypto just in terms of the impact on the presidential election here, Vice President Kamala Harris has not come forward with specifics about many policies but also specifically a Cryptocurrency regulation.

We do know from certain interviews that representatives like Rohan, I have spoken with her about that legislation.

I asked Michael Saylor, the Chairman of Micro Strategy and well known Bitcoin activist about whether or not he had spoken with Trump or Harris about crypto moving forward.

And all I got out of him was that he did attend the crypto conference.

The biggest of the year that we know former President Trump was speaking at as crypto has kind of solidified itself as this political football that both campaigns seem to feel they can easily kind of throw their weight behind as a way to get some more votes.

Heading into November.

We're gonna move on to two different stories.

We're getting out of Chinese e commerce this morning, Alibaba missing earnings estimates on JD dot com's profit nearly doubled.

Both the commerce giants are dealing with increased competition from new owner PDD.

It's interesting to see the kind of reversal in the tickers here.

You had Alibaba under pressure after their earnings print.

Now moving to the upside and same with jd.com after their positive earnings print.

I do want to note something that came up in the filings of Michael Burry adding to his position in jd.com in Alibaba.

Rather so interesting to kind of take a look at that in terms of the potential impact on what we are seeing in the stock price.

Again, Michael Burry hedge fund manager, he's very famous for betting against the housing market back in 2020 or 22,008, increasing his stake in Alibaba, but slashing his overall equity portfolio reporting $11 million position in Alibaba in the quarter.

But again, when you take a look at the reaction, this is a stock that had been under pressure in pre market.

We're now looking gains of 2%.

So a bit of a reversal there that might be on the back of the stronger than expected results out from competitor jd.com.

But since we have Alibaba, let's focus on that because there was some weakness within the quarter.

They talk about the fact that the Chinese consumer remains very cautious, this increase of of competition that you were just talking about with jd.com and also Pinduoduo, that is something that it continues to weigh on the company here.

More broadly speaking, it's a theme that we have heard over the last several quarters coming out of Alibaba.

I also do want to point out that the company though in terms of some of the bright side and what they are seeing what they are optimistic about, they see quote strong and sustained A I demand in spending which will not be affected by any of their short term econom economic to win.

So that of course, is something that investors like to hear there.

So a bit of a tail wind there may perhaps for the company going forward.

But again, we're looking at gains here just about an hour and a half into the trading day up just about 2%.

And really interesting to note just because so many retailers stateside are also impacted by Chinese consumer demand as well.

Well, coming up, we are discussing three trending stories for you next right here on catalyst taking a closer look at some trending stories on Yahoo finance and we're going to do it in 30 seconds each.

Starting off right here in New York City Columbia University President resigning on Wednesday.

She's now the third Ivy League leader to do so.

This year, this comes amid college campuses seen widespread protests over the Israel Hamas War.

The president saying in a statement about her departure, that quote, this period has taken a considerable toll on my family as it has for others in our community.

In the summers, high heat could hurt Kraft Heinz's signature ketchup.

The company's California tomato harvest will not be collected until mid October and experts are now saying it will almost certainly be hit.

Patrick Sheridan.

He's Kraft Heinz is vice president of global agriculture and sustainability saying that some experts see up to 20% hit to the crops.

The company would have to tap into reserves of its famous tomato paste if that were to happen.

Clearly a concern here for craft time.

So we will see how this all plays out.

Also.

It looks like Starbucks incoming Ceo Brian Nichol is in for a big payday.

His total package is worth up to $113 million and that includes a $10 million signing bonus, $75 million in stock grants and $1.6 million annual base salary.

And also up to 8.8 million in annual cash incentives, new package could make him one of the highest paid CEO S in the US.

And also not too much to worry about if you're the outgoing CEO without cause.

But also according to his 2022 offer letter, it's likely that he's going to be leaving with a payout of nearly $10 million as well.

So good day for both of them.

Certainly a better one for the individual here, Brian Nickel getting that $113 million deal again, putting him among the highest paid CEO in the world.

And I don't think this is necessarily a surprise when we broke this news earlier this week.

I think a lot of people just given Nichols track record at pole.

Remember this is a stock that is up, nearly eight 100% have been up nearly 800% since he did take the helm.

Clearly, he would have to be paid and paid a lot here in order to entice him to leave Chipotle where he has seen much success and go to a company that is struggling right now to gain some traction.

So again, this is a huge payday for Brian Nichol, but I don't think necessarily a surprise, but I think when you see numbers like this, it just proves how valuable and, and how much trust people have in Brian Nichol given his track record, not only Chipotle but going back to Taco Bell and his extensive experience within the business within the sector.

We had uh the Ceo Brinker International on the program earlier today.

And our executive editor Brian Sazi was asking him just about any insight into Brian Nichol.

And he was talking about just how much of a wonderful leader he was, how much he had learned personally from him working together in the past.

So this is someone that has clearly revolutionized the business of so many companies that he has been to in the past.

But remember a lot is riding on this pay package.

He certainly has a lot to prove there are many challenges out ahead of him.

So we will see because it seems like at least from our conversations, Anna's reaction is a bit mixed just in terms of how confident maybe they are in one person really being able to write the ship there.

But we shall see, right?

Is it the company fundamentals or is it something broader real quickly want to mention though?

And you pointed this out, Shana that he will be able to work remote.

So just a dream job is out there for folks, 100 and $30 million package and a remote work.

It's out there.

I'll be working long hours though at that remote desk.

All right, let's do a quick check of the markets 90 minutes into the trading day.

We're just shy of the highs of the session.

You've got the dow back up over 400 points.

You got the NASDAQ leading the way up nearly 2%.

The S and P also pushing further above 5500 level.

So keep it right here on Yahoo finance coming up next, we got wealth that's dedicated to all of your personal finance needs.

Brad Smith has you for the next hour.

We'll see you tomorrow.