ETF approval, housing shortage, e.l.f. CEO : Asking for a Trend

On today's episode of Asking for a Trend, Host Josh Lipton explores three markets — cryptocurrency, housing, and the beauty market.

As the crypto world eagerly awaits the decision on the approval of an ether ETF, the show welcomes BitGo Go Network Head and Managing Director Matt Ballensweig who offers his expert perspective on why he believes the SEC will ultimately greenlight this investment product.

Yahoo Finance's Julie Hyman takes a deep dive into the housing market, exploring the persistent supply challenges faced by homebuyers despite the easing of mortgage rates.

Finally, E.l.f. Chairman and CEO Tarang Amin joins the show to discuss the beauty giant's impressive fourth-quarter earnings beat and his outlook on the company's growth trajectory.

This post was written by Angel Smith

Video Transcript

Hello and welcome to Yahoo Finance's brand new show.

Asking for a trend.

I'm Josh Lipton for the next half hour.

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

There's a lot to keep track of.

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

Here are some of the trends.

We're going to be diving into the crypto clock is ticking the securities and exchange commission set to make its decision soon on a spot at the ETF we dive into the implication for the broader crypto market.

Next plus home boy home buyers rejoice, 30 year mortgage rates falling below the 7% threshold for the first time in more than a month.

But can the moment to continue?

We check in the trends at play in our chart of the day and the beauty industry faces an ugly reality over concerns that consumers are pulling back their spending.

When a talk with the chairman and CEO of Beauty on the consumer trends that brand is seeing, we're awaiting a decision here from the securities and exchange commission on a spot, Ethereum ETF for more.

We're bringing in Matt BSW managing director and go network head at bit.

Go Matt.

It is good to see you.

So let's just get right there.

Spot Ethereum, ETF S Matt.

What do you think?

Are they gonna get the green light?

Thanks so much for having me on.

Uh Great to be here.

I uh I do think they're gonna get the green light here.

I mean, I will say, uh you know, I'm, I'm actively watching Crypto Twitter as we speak and I'm hearing rumblings that this might happen.

Uh You know, right after 5 p.m.

I've heard all the reports that it might take still a few hours but all all signals point to that this is getting uh approved today.

Can I tell you, Matt if this gets approved?

I was dead wrong because I really thought I'm interested to get your take.

I really thought se C chair Gary Gensler.

I mean, he did not want that spot Bitcoin ETF.

He, he had to be dragged to it.

Matt, it took a lawsuit.

I, I honestly thought there was gonna have to be another lawsuit if you were gonna green light a spot, a theorem.

ETF maybe you saw it differently.

Matt look, I'll, I'll say this from, from a traders perspective and, and from the institutional side of crypto, I think we were all very, very shocked to see how fast things have developed this week.

Um You know, especially just to your point knowing the pace at which the Bitcoin ETF uh you know, unfolded.

So hearing the news earlier this week that the SEC was asking some of these ETF issuers to amend their 19 B four filings in preparation for an ETF spot approval was very, very surprising and was not priced into the market at all.

I mean, the theory was trading around 3000 flat and immediately has spiked now up to 3700.

Um you know, and it's not just the the E ETF approval, but you know, there seems to be, I think an intentional pivot by the current administration to signal really a support for, for digital currencies.

We saw the Senate overturning saab 121 last week, which would have made it really hard for banks and large dealers to hold the crypto on their balance sheet.

Obviously, that still has to get through the president, but there was also a landslide approval yesterday in the House of uh in the House of Reps for Cryptos Financial Innovation and Technology Bill the 21st century um which, which had both Democratic and Republican support.

So, you know, that Baton is now with the Senate, but whatever the catalysts may be, um you know, it's becoming clear that I think Congress wants to be on the right side of history here uh and have the us really be at the forefront of this, of this movement with, with, you know, innovations in finance and tech globally like we always have been.

So I think this clearly matters to voters.

Uh we also have an upcoming election.

So, you know, whatever those catalysts are, I think everybody in the institutional crypto world is, is very surprised at how, how this has progressed.

Um But but very happy and Matt, let's say you do see the the spot.

If your ETF S get the green light, they're approved.

What do you think Matt take out the crystal ball?

What do you think demand is like?

And where do you think demand comes from?

Yeah, it's, it's a great question.

I mean, I think you can use, you know, the Bitcoin ETF as a proxy and kind of, you know, guide to understanding this at some point.

And if you just look at the flows of the Bitcoin ETF in the first few months here of trading, you know, it's been a funnel of capital into the ecosystem.

Uh We've seen, I think we saw 1.1 billion of net flows in just the last five days.

Uh and about 13.5 billion of net new demand holistically for the asset.

Um So there's obviously a tremendous institutional uh I think, you know, demand pool out there and, you know, Ethereum is gonna be something similar to that, you know, it maybe it'll be some fraction of that.

Um But obviously, I think there are a lot of interested parties that now have the Rails needed to add Ethereum as, as a part of their portfolio.

Um But even more importantly than just being, you know, the actual funnel of capital into the asset.

I think it's really the initiation of uh really a whole new class of investors becoming educated on the ecosystem.

Uh You have folks, you know, you had folks like Larry Fink, right, explaining the value crop of Bitcoin as a decentralized, right, non sovereign internet based inflation resistant currency and what that means.

And now, you know, investors are gonna have to go a little bit further down the rabbit hole to understand.

Well, what what about the Ethereum ecosystem?

You know, what are, what is smart contract for programmability?

How do decentralized exchanges work?

You know, what are the other uh alternative layer ones out there?

And how do you balance things like consensus with speed?

So all of these questions that you know, us in the in in the institutional crypto world have been exploring for some time will now become mainstream.

And I think that's gonna be a huge benefit to not just e but a lot of the other layer one protocols out in the space.

Um you know, over time and I do think we're gonna see a lot of capital come into the crypto crypto ecosystem as a result of this Ethereum spot ETF approval and Matt, I'll get you out of here on this.

Let's say we do the, we do see a spot.

Ethereum ETF, it's approved, it gets the green light.

How does that in kind of impact and influence the price of Ethereum Matt?

What's your guess?

I mean, 12 months out.

Give me a target.

Yeah, all 1212 months out.

Um, I think, I think e will, will certainly challenge if not hit all time highs.

Uh, so wouldn't, wouldn't shock me to see a 5000 handle, uh, on e 12 months out from now.

Um So I'll, I'll, I'll stick with that.

Matt.

Thank you so much for joining the show today.

That was great.

I appreciate your time.

My pleasure.

Thanks so much for having me on a wild day on Wall Street stocks close in the day lower even as the NASDAQ and the S and P 500 hit record highs earlier in the session, Jared Blier is here with the takeaways of the trading day, Jared.

Thank you, Josh.

I'm gonna start with the flash PM is that we got at 9:45 a.m. Usually not a market moving report, but we did see it move the market this morning, mainly the bond market and we saw yields which were negative on the day down a couple of basis points surge 45 basis points.

So I an interesting quote here from the purveyor of the report.

This is S AND P. What's interesting is that the main inflationary impetus is now coming from manufacturing rather than services, meaning rates of inflation for costs and selling prices are now somewhat elevated by pre pandemic standards in both sectors to suggest that the final, the final mile down to the Fed's 2% target seems elusive.

So we're talking about, we've been talking about manufacturing strength, kind of yielding to services strength.

And now with the latest few reports here, we do see the good sector picking up again.

So what's the FED to do?

This is the question.

So that was my question.

Do you see this Jared as sort of, was it kind of one more data point to the to you of?

OK. Getting back to Jay Powell's 2% target, maybe a tougher slog than some people had expected.

I think a lot of the evidence nowadays is pointed to that one hiccup after another.

Now the city economic surprises, those have been trending down.

So us economic data has been a little weak and that has kind of buoyed the notion that the fed can cut rates.

However, we keep seeing these outliers and this one was a big one today just judging by the market movement.

All right, let's get to the next Jared Blier bullet point here.

You bet we're looking at the vics here and I'm gonna put up a chart of the vics.

Now we open the day at the lowest point of the year.

This is a three month chart.

I'll put a year to date chart on, this was the lowest point of the year.

And so the VICS when you have a lower amount, that just means there's a reversal there.

Yes, this is a big reversal.

Let me just put a two month chart.

So you can see this candle here.

That's a pretty big candle.

Now, the reverse, the vix is often times the reverse of the equities market.

So if we look at the S and P 500 the benchmark Stock Index there is that big red candle.

This was a record high.

Sometimes you gap to a record high and that just means you open at a lower at a higher price than the day before and then you trend down.

Well, this can be a reversal signal.

Um Here's another year to day chart.

You can see we had one of these candles after it wasn't a record high, but it was a very similar situation.

So we've seen this before.

A lot of times these candles happen at highs.

I don't want, I don't want to raise the alarm bells too soon because it depends on what happens tomorrow and the next day.

But could be a top here short term.

That was my question is you look at that chart, Jared, what is sort of the signal that's sending to viewers right now?

This is a yellow flashing signal to me.

So this tells me that I need to be on alert the next couple of days for some more down action because we may be in a distribution top right here similar to what we saw.

Now, this doesn't mean that we're going to enter a bear market and that's a whole other conversation because this was definitely not a bear market.

But all I'm saying is that after a run up like this, we might be due for a pause and then just based on what we saw in the semiconductors, we can take a look at that in a second.

Well, it's just kind of more evidence for that.

Let's go to the next bullet point.

Let's go to the semis, you bet.

So I've been watching actually today is 1/100 market day of the year.

And so what I'm looking at copper and chips because both are actually up 23% this year.

So I'm gonna show you a chart of both put together.

And it's funny because chart because uh copper and chip stocks, they kind of go together.

We saw this recent run up in copper and here copper is in light blue and here the Philly, the Philly semiconductor index is in purple.

But you can see both of these have ended up on the same price.

That's just coincidence or the same return amount for the year.

That's just a coincidence, but they are related.

And so I thought this, there's a relation.

So you're saying there's a relation between the red metal and the semis because copper goes into chip stocks, not chip stocks, copper goes into chips themselves.

It goes into the architecture, you know, the backbone, you need wires to conduct uh to conduct electricity.

So copper is a basic building block of chip of chips and also the infrastructure of how information is transmitted.

So uh they're kind of uh hand in hand here.

I think the secular term, the secular trend is that we're going to see material prices go northwards.

Uh, but what was interesting about this today too.

And here's another side point is that we did see that drop in the socks, but we saw copper take a big hit.

Yesterday are the two related, I think it's too early to tell, but I'm gonna be paying attention to chips and some of the raw materials and those prices in the future.

All right, Jared Blicker.

Thank you, my friend.

Appreciate it.

Coming up a look at the trends driving the housing market as mortgage rates fall below seven per 7% for the first time in more than a month.

More.

Asking for a trend.

On the other side, home buyers rejoice, 30 year fixed mortgage rates fell below 7% for the first time in more than a month.

This week.

It's corner Freddie Mac.

Now we're in the spring home buying season.

Of course, historically busiest time to grab a new home, but sales have been low this year as higher rates take their toll.

So what's the supply picture really look like Julie Hyman takes a closer look in our chart of the day.

Julie know someone on the other side of the camera there.

Who's that, who's participating in that spring buying season?

But be that as it may, home buyers may rejoice at those slightly lower mortgage rates but not at the availability of homes for sale on the market.

And the start coming to us from U BS is John, the who tracks publicly traded home builders, but this right here is existing homes on the market for sale, the supply of those existing homes.

And we did see that number improve a little bit.

The inventory approve a little a little bit in April up 9% on a month over month basis.

But still, as you can see here is very depressed.

Ok, so what if you want to buy a new home?

You lay that on top, you're still seeing it a pretty historical lows.

Although if you can see, we are seeing the margin gap up a little bit.

In other words, we are seeing home builders build more homes because they see an opportunity here as there are fewer existing homes on the market.

So a little bit of a wider margin than you have seen in recent years.

And then there is as Lavalla points out the historical perspective here.

So what you're seeing is this dotted line is the historical average going all the way back to 1982.

Now, you can probably see that this is way above where we are right now.

And not only that, it is 1.6 standard deviations below that, this is one standard deviation.

What does that mean?

It's just a math term to say we are way below the average in terms of the housing supply that is out there, Josh and Julie, you know, we were talking off camera about this.

Not so surprising, right?

Because we were discussing if you were locked in at 3% 4% you're not moving.

I mean, what would be, you know, you would really need a strong motivation to move because you're gonna be probably swapping your three or 4% for something closer to seven.

Well, guess what the motivation is price, Josh in many cases because as we know the median home sales price in April ticked up to $407,600.

So that's what we are seeing that inventory will do that.

That'll do that.

Now for, from Lolo's perspective, all of this is fairly positive for home builders because again, they're seeing an opportunity here but for people who are still trying to buy a home, this is not a very encouraging picture yet.

No, you just have to be really desperate like your co actor Julie, that's uh that's the move.

I'm not gonna say that but you, you can describe yourself that way if you thank you, Julie Thank you coming up, the beauty industry in store for a slowdown.

I'm gonna speak to the CEO of Elf beauty on the other side, we're asking for a trend still up beauty crossing over 1 billion in sales for the first time ever in its fiscal 2024 continuing trend of rapid growth.

The cosmetic brands fourth quarter revenue and profits surpassing Wall Street forecast though a less ambitious outlook for revenue in the upcoming year sparked fears of the consumer slowdown could be around the corner.

Here to discuss is Tang Amin Elf Beauty chairman and Ceo Turang.

It is good to see you.

So you report your Q four results, be investors like what they heard, Tang your tax surges almost 20% in today's trade.

Let's start there, Tarang walk us through what drove the business in the quarter?

Well, I think it's a combination of our exceptional consistent category leading growth and the consistency.

It's our 21st, first consecutive quarter of net sales and market share growth.

We finished the year our fiscal year at 77% growth in net sales over 100% growth and adjusted EBITA and we picked up 300 basis points of market share.

So I think it's a combination of that consistency and leading growth as well as the white space.

We still see ahead of us.

We feel we can double our share in color cosmetics.

We have two of the fastest growing skin brands in skin care and we have major white space opportunity internationally.

So I think the combination of two things is what inspect investors are appreciating.

Hey, Terran, it's Julie here.

How much of your continuing success also has to do with the price point at which you sell your products, which is below uh many other competitors.

And what does that say about where the consumer is right now?

Well, I'd say definitely value is one of the things we're most known for our ability to make, take the best of beauty and make it accessible to every eyelid and face.

We have a unique ability of having prestige, like quality, these extraordinary price points and that certainly is resonating now, but it's resonated throughout the 21 quarters.

I'm talking about whether the pandemic or the category is strong or container imbalances, it doesn't really matter.

Uh Our community is responding to our value proposition, our powerhouse innovation and our marketing engine that knows how to engage and entertain our community.

And Tang, you mentioned the opportunity you see overseas internationally where exactly Tarana nationally?

Uh do you see the most opportunity?

What, what looks especially attractive here?

Well, you know, in the last quarter, we grew our international business 100 and 15%.

Primarily.

It was from the first two countries we entered Canada and the UK where we continue to increase our rank as we think of international expansion.

First priorities on Western Europe.

A few months ago, we entered Douglas Italy, we quickly became their number one brand.

Last month we entered Ethos in the Netherlands quickly became their number one brand.

What we're seeing is there's pen up demand in these countries before Elf gets there, primarily given the strength we have in social, in the US.

Consumers know about Elf.

Well, before we're there and we're definitely seeing that in terms of how much the brand resonates.

I also want to ask you about the so called lipstick index, right?

This thinking that even if economic growth slows that people are willing to spend on little luxuries like lipstick.

Now, in that situation, how do you guys do?

I mean, is there a risk that people actually would, if they're not spending on more expensive items, maybe that they would trade up when it comes to their makeup or what have you seen?

Well, we've seen uh strong growth across the board with prestige as well as the mass side.

And so that effect is it is a small luxury that is so important to be able to express yourself.

The great news for Elf is we've seen strong growth with the economy was bad or the economy was good.

And I think the real insight here is uh you used to have to pick, you'd either do prestige brands, but it cost you a lot of money or you had kind of value uh the best what else really offers is that prestige quality, these incredible value equation.

So uh consumers are telling us, you know, Elf is actually better than prestige.

So why am I spending so much more when I can get Elf and, and, and, and these incredible products that we have?

Tang, I want to switch gears a little bit because you guys started a bit of an unusual marketing campaign recently where you were pushing for more board diversity with a very catchy tagline among others.

Too many dicks, meaning too many Richards, white men named Richard, perhaps on a corporate boards and talked about needing more board diversity.

You know, right now, we are seeing a lot of companies sort of lean back from pushing these kinds of initiatives.

Why did you guys decide to go and go, you know, pretty provocatively in that direction?

Well, it's something we really believe.

And if you look at our success, yes, we just talked about how great our products are the value equation, our innovation, our marketing pro probably the biggest driver.

Our success is our team and our culture.

And we're very intentional in terms of how diverse our team is.

75% women, 65% Gen Z and millennial, 45% diverse.

We feel our, I mean, our employees are the community that we serve.

We feel it gives us a leg up and it's not just our employees, we're one of only four uh corporate boards in America out of 4200 that have two thirds women and one third diverse representation.

We feel it's been a major driver of our success and we wanted to do our part, not only the right thing to do but also as good corporate citizens to shine a light on.

Uh And, and the tagline is so many dicks, not enough of everyone else.

And by the way, there's nothing wrong with being Richard Rick.

Did you guys have one on your board?

Right.

We do.

And he's a phenomenal board member.

So this has less to do with not wanting them.

It's more to do with, you know, the uh Richard Rick Dick.

I think there are twice as many as Hispanic women directors in the US, uh almost as many as black directors in the US.

So it's more about really encouraging and shining a light of including others and we've seen that to be a major benefit for us and we want to do our part and make sure that others know that they can call us.

Uh We, we're also partnering with the National Association of corporate directors to sponsor 20 women and diverse candidates for their accelerate program to be able to get them.

And, and we really want, it's, it's part of what we really believe.

We, we serve a diverse community and it's important that our community actually really appreciated this campaign that, you know, you're standing up for something that a lot of companies don't stand up for.

Uh but it's it's core to our values and our purpose, Tang.

Thanks so much for joining the show today.

Appreciate it and thank you Julie as well.

That is a wrap on today's ask for trend.

Be sure to come back tomorrow at 4:30 p.m. Eastern for all of the latest market, moving stories affecting your wallet.

Have a great night.