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FOMC meeting, Ford vice chair on hybrid growth: Morning Brief

On Tuesday's episode of Morning Brief, Yahoo Finance's Alexandra Canal and Madison Mills break down the market open and the trading day's top stories, from the Federal Reserve's pending interest rate decision to auto industry growth.

The major indexes (^DJI, ^IXIC, ^GSPC) inched lower after the S&P 500 and Nasdaq Composite reached new record highs in Monday's session. Apple (AAPL) stock is on the rise after its "Apple Intelligence" showcase at its Worldwide Developers Conference (WWDC) on Monday. The tech giant revealed a partnership with OpenAI to integrate ChatGPT into Siri. D.A. Davidson Managing Director Gil Luria is bullish on the announcement, believing the new technology will be a catalyst for iPhone sales.

The Federal Reserve is kicking off its two-day Federal Open Market Committee (FOMC) meeting, with Wall Street eyeing rate cuts by the end of the year. Yahoo Finance Senior Reporter Jennifer Schonberger explains the details of the Fed's "dot plot" and how it views recent inflation data ahead of the interest rate decision on Wednesday. Franklin Income Advisors chief investment officer Ed Perks believes "there's a fair amount of just normalization in rates that can occur," adding that the Fed will likely leave rates unchanged.

The auto industry is making moves as General Motors (GM) has authorized a new $6 billion share buyback program and raised its quarterly dividend by 33%. Meanwhile, Ford (F) saw May sales grow 11.2%, largely driven by a near 65% boost in hybrid sales from a year ago. Ford Vice Chair and CFO John Lawler explains, "Ford+ strategy is really about focusing on our customers and their needs. And you start to see that really come through in the segmentation we did in that Ford Pro customers are distinct from Ford Blue customers, which are distinct from our electric vehicle customers and how we're progressing our strategies in each of those spaces, how we're providing them value, choice, and we're moving the business forward."

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This post was written by Melanie Riehl

Video Transcript

9 a.m. here in New York City.

I'm Brad Smith alongside Alex and you can.

Now this morning, this is Yahoo Finances flagship show.

The morning brief brought to you by invest stock features slipping a bit this morning as Wall Street awaits the start of the Feds two day June policy meeting treasury yields are also moving to the downside.

So let's get to it with the three things you need to know this Tuesday morning as you prep for the trading day, yah Madison Mills and Jennifer have more.

That's right.

A mild reaction from investors to Apple's worldwide V conference on Monday after new features did not meet high expectations dubbed Apple Intelligence.

The iphone makers.

New A I features include an upgraded version of Siri and to deal with open A I to harness chat GP T for use on the iphone ipad and mac products.

Introducing Apple Intelligence, the new personal intelligence system that makes your most personal products even more useful and delightful shares of Apple, mostly flat market.

A little bit of pressure there after closing down 2% following Monday's announcement and Elon Musk has privacy concerns about Apple's use of open A I on its devices.

And he's making it known most Musk posting on X formerly Twitter Monday night, quote, if Apple integrates the open A I at the O level, then Apple devices will be banned at my company.

That is an unacceptable security violation.

Apple says Siri voice assistant will be able to tap a chat when helpful, the users will be asked before any questions are sent and privacy protections are built in for users who can access.

The chatbot must co founded open A I back in 2015 but stepped down from the board in 2018 and has since grown critical of co founder and Ceo Sam Altman alleging open A I has gotten off its mission to develop A I for the benefit of humanity.

And the FED kicks off its two day policy meeting here in Washington this morning, the central bank widely expected to hold rate steady in the range of five a quarter to 5.5% as it has done since July of 2023.

But all eyes will be on the f so called Dolo which will give investors insight into just how many rate cuts the FED is looking at this year.

The do plot is released four times per year and investors expect that the fed will scale back the number of rate cuts to two or one from three previously projected Wall Street pricing in a less than 50% chance for the first rate cut in September.

Let's get right to our top story this morning.

It is Apple.

After almost two years of sitting out of the artificial intelligence frenzy, Apple finally made its big splash.

The company announcing a slew of A I tools coming to its platform.

So let's get to Yahoo finances, Madison Mills who has the ultimate guide for all things, Apple this morning.

Hey, Matty.

Hey, Brad, it's definitely all about Apple.

As you said, here are three things that you need to know from Apple's big announcement.

First of all A I announcement, it's getting personal.

The theme was A I for the rest of us.

But what does that mean?

Right.

Well, it's going to prioritize messages, notifications and offer proof, reading, writing tools.

You can suggest a theme, a tone change, for example, that also result in a major upgrade for Siri Apple's virtual assistant.

Apple calling this the year of the start of a new era for Siri.

Now, number two, all of this is going to be made possible with Apple's new partnership with Open A I that is going to allow the company to integrate chat GP T into the iphone via Siri, which will lead to all kinds of A I empowered features.

For example, it will allow users to integrate A I into Siri and the photos that you could take a picture of your living room and get Decor advice.

Thanks to A I and the company did promise that it will ask user permission every time chat GP T is involved, which is going to be critical for number three here.

The key issue privacy, it's all about privacy.

That was definitely a theme throughout the announcement.

Out of position the new A I features as privacy oriented.

The company says its architecture enables it to be aware of your personal data without outright collecting it.

But as investors are for now, not seeing a lot of their expectations met off of that news, those high Wall Street expectations for the announcements appear to have been missed, the shares under pressure this morning looking like that at the flat line here after closing down over 2% yesterday.

Thanks ma Well, despite the lackluster investor response, our next guest is feeling bullish, upgrading the tech giant from neutral to buy and raising his price target from 200 bucks a share to $230.

GD A Davidson managing director joins us now with more G let's start with the share price action.

We saw shares closed down about 2% yesterday were pretty muted right now.

Is this is all the news even or what do you think was missing here for investors?

Well, I think there was a lot of noise.

Uh A lot of people have very strong opinions about Apple and its products and were maybe had expectations for something that would blow them away and be unprecedented.

That's not what Apple needed to do Apple, what they did yesterday was exactly what you described.

They took all this technology that's been delivered developed over the last year and a half and integrated and personalize it into their platform.

What that means is that a lot of this functionality that right now we have to use away from our uh uh other applications.

We have to go outside of our application to go to Cha GP T or perplexity or claw will now be seamlessly integrated into the applications we already use.

That means we're gonna go from hundreds of millions of people using generative A I to billions of people as soon as this is introduced.

And that's what's gonna drive an iphone upgrade cycle for the first time in four years.

That's what's important here.

A lot of noise, a lot of people with different expectations coming in.

But if you look at the signal away from the noise, you realize that this is unprecedented capabilities that Apple is gonna introduce and it's going to integrate A I into everyday life.

And I mean, even as we're thinking about the iphone and what this new kind of super cycle is that could be driven because of generative A I being integrated into this consumer technology products.

It also comes back to where this is going to create a new base run rate for services.

How do you see that playing into the revenue model there?

That's right.

The services.

This is already growing double digits because Apple can offer more and more things to its installed base.

But that hasn't been enough for more than low single digit growth.

The last couple of years for Apple, the stock to work growth has to accelerate from here.

And the only way that happens is if iphone sales accelerate the last time that happened was iphone 12.

Why?

Because they introduced five G capabilities which were compelling and it wasn't backward compatible.

The stock tripled around that introduction and it's been practically flat for the last three years since then.

Now we finally have something that's compelling the functionality yesterday.

When consumers have it in their hands are gonna be very excited about it and it's not backward compatible.

You have to have at least iphone 15 pro or newer in order for it to work.

So as people buy new phones this holiday season, they're going to see this great functionality, they're gonna show their friends and family and the product I upgrade cycle will happen over the next few months and quarters.

So gil you see this driving the upgrade cycle, where do you see that growth potentially topping out?

Well, we think that the consensus estimate was for iphone to grow about 5% next year with the year that includes the new iphone 16, we actually increased our numbers to 10%.

The growth for iphone 12 was far higher than that.

We think 10% reflects the fact that this is compelling and that you will need to use a new phone in order to be able to use all these A I capabilities that are now interwoven in the entire iphone experience.

Gil I mean, it's been a struggle bus for Apple so far this year.

Uh just recently flipped into positive territory for the year to date.

So is the trough behind us for Apple for right now?

Now that they finally announced some of what they're going to do with artificial intelligence, it looks like it, the stock's been flat because there hasn't been revenue growth at Apple.

Now that we think that this will allow Apple's overall growth to accelerate from the low single digits into the mid maybe even high single digits over the next year or two.

That's what can drive Apple stock at 25 times.

It reflects little to no growth.

We think it go, go up to as much as 30 times earnings based on an accelerating growth rate.

Again, reflective of the last time the stock work, which is around the other meaningful iphone upgrade cycle iphone 12 and Gil post this event.

How do you think Apple is positioned when you compare it to some of the other competitors in the race?

For A I?

We think it took the lead because again, everybody else has to try to fit their solutions elsewhere or it really doesn't have access to the consumer and the consumer information.

Apple has our information.

Some of the demos yesterday were as we were hoping for when you can tell the device.

Hey, when is my dad landing?

Where can I take him for lunch?

Those are things that only Apple can do.

And if they indeed roll out these capabilities this fall, which is what it's looking like this fall and winter season, which is what it's looking like.

The they're gonna take the lead over everybody else that all they can do is chat bots, image generation summarization.

Some autocomplete Apple is gonna build all that into our experience and allow these experience to leverage our own information in order to execute tasks as an agent that puts them in the lead.

Gil Luria D A Davidson, managing director, Gil, thanks so much for taking the time here today to talk all things Apple.

We're gonna be uh tracking up against some of your targets here.

Thank you.

Thanks.

Well, there was one person in particular who wasn't too happy with Apple's announcement, Elon Musk, the Tesla CEO making a post on X following Apple's WW DC saying quote, if Apple integrates open A I at the OS level, then Apple devices will be banned at my company that is an unacceptable security violation.

He says end quote there.

You're seeing the post.

Ok.

There's a few things here.

Number one, there's a broader move that we had seen towards bringing your own device or even for companies that would just said.

All right.

Yeah, you can use your own phone or you can use your own laptop as long as we can install our own security software and patches on there and whatnot.

Great.

If he doesn't wanna allow that, then he can just go about making a different purchase order, sweeping purchase order for the devices that a lot of companies had said.

Oh, yeah, just use your own phone and we'll make sure that you've got all of the necessary apps and everything to make sure that we're secure and at least how you're operating with our information on there too.

Right.

And Brad, let's take a step back and think about who we're talking about.

Right, Elon Musk.

He doesn't necessarily follow through with all his threats or all his promises.

Also, he has some skin and game here.

He invested 6 billion into his own start up Xa I that's going to take on open A I chat GP T all those other competitors.

He's also long feuded with Apple.

Remember Apple pause their ads on X following the endorsement of the Anti Semitic post that the post exactly last year.

So, so there's some drama here already.

All that being said though, the private concerns, it is important.

It's top of mind for consumers.

Apple has said it's not going to be sharing data, it's not going to be training A I models and open A I with this data.

We'll see though how it rolls out.

But remember this is Elon Musk and you have to take what he says with, with a little bit of a grain of salt because in Silicon Valley, all his headquarters, everyone has this.

Everyone's coming in with an iphone.

What?

You're gonna just lock up everyone's phones, I guess.

Give, give your own phones to them.

I just, I just don't, I don't get the long term trajectory there.

Wealthy man's feels wrong.

Yeah, so that's right.

Well, the, the fed is looking to kick off its two day June policy meeting today and although investors are pretty sure the fed will hold rates steady, they're more focused on rate cut timing for the rest of the year here with more is Yahoo Finance's Jennifer Schonberger.

Good morning lie.

That's right.

The Federal Reserve kicks off its two day policy meeting here in Washington where it's widely expected to hold interest rates steady in the range of five and a quarter to 5.5%.

But all eyes will be on how the outlook for the rate path could change this year.

Officials are expected to scale back the number of rate cuts to two or one from three previously projected.

New projection on Wednesday will come in the form of the so called dot plot A chart updated quarterly that shows each fed officials projection about the direction of the fed funds rate.

Be officials have warned in recent weeks, they're looking to hold rates at current levels for longer after a scare that inflation may be stalling or re accelerating in the first quarter.

But the latest readings on inflation confirmed prices are not accelerating though they may be moving down slower than thought.

We'll get a fresh reading on the consumer price index for May Wednesday morning ahead of the decision that Chair Powell has made very clear, he thinks the FED will need more than a quarter's worth of data to make a judgment on whether inflation is decisively falling toward the central bank's 2% target before cutting rates along with a new round of interest rate projections.

Wednesday's meeting will bring fresh forecasts for inflation, the economy and unemployment.

Powell will also hold his regular press conference.

Powell is expected to reiterate that rates will need to be held higher for longer to gain confidence that inflation is falling.

Investors are looking to see whether Powell encouraged it all by the latest on inflation though, that will be contingent on Wednesday morning's release of CP I.

If CP I comes in as expected, falling 1/10 of a percent from the previous month.

Frankly, guys, that's not going to be enough to inspire confidence for the fed back to you.

All right, Jennifer, I'll be sitting on the end of my ergonomic chair waiting for your email that the meeting has finally started there.

Thanks so much Jennifer.

We're just getting started here.

On the morning, brief investors feeling bullish on Eli Lilly after an FDA advisory board recommended its Alzheimer's drug.

We've got some top trending tickers next and our very own pro superman.

And if you're wondering where he is, want to know more.

He's live on the ground at Deutsche Bank's Global Auto Industry conference.

Stay tuned for his conversation with Ford vice chair, John Lawler later on this hour plus Apple's announcements didn't do much for investors.

But what do shareholders need to hear to change that?

We'll discuss that during our 10 a.m. hour of catalysts all this and much more.

You're watching Yahoo Finance time for some trending tickers, Eli Lilly shares moving higher after a panel of FDA advisers recommended the company's Alzheimer's drug, moving it one step closer to full FDA approval.

Yahoo Finance's own Angeli Kla is here and she's got the details.

Hey, an, hey, Brad.

That's right.

Yesterday, we heard the unanimous vote from the FDA panel recommending that the FDA does go ahead and approve Eli Lilly's Alzheimer's drug.

Dan.

This drug has been facing a little bit of troubles.

It did initially get rejected by the FDA for accelerated approval but they went back and did the full study.

They did see a result of reduced decline in a cog cognitive decline for patients by 35% over the 18 month period.

This is a drug that's given through monthly IV infusions just like the only drug on the market right now, which is Biogen and a size Lambi.

So this would be competing in that space if approved.

The study also looked at those who are 60 to 85 year olds with mild dementia, a little bit more acute than what we saw with the Lambi trial, but still within that mild dementia parameter.

What we do know is that if it does get on the market, it would have a little bit more access analysts looking at the fact that it doesn't have the onerous sort of testing criteria that Lambi does, which has slowed down its uptake in the market.

So Eli Lily well placed if the FDA does go ahead and approve this drug.

Thank you and and more good news for NVIDIA Oppenheimer raising its price target on the chip maker from $110 to 150 bucks following its stock split, the analyst behind the call saying in video has several tail winds driving quote sustained outside top line growth and brad, this is one of several price target raises that we saw analysts at Goldman Sachs.

Also our research raising their respective price targets.

Now are saying that there's continued moment that we could see for video shares in 2025 after strong growth in 2024.

So, you know, this is a stock that has just been on such a tear of about 150% year to date.

And now all of these analysts seeing a lot more room to run as they go beyond just the data center, but also opportunities in some of their other areas of the business ever.

I I Goldman, they had been out with their notes early to start the weekend and last week as well here.

So all of these things considered a lot more affordability perhaps on the mindset of retail investors in NVIDIA, especially as it's been talked about by Goldman Sachs as the de facto A I play.

More generally speaking now, it's more uh increasingly about where they can continue to see some of that chip demand, especially as the rest of the market is trying to move towards application.

And what that means is the applications sitting on top of the models that then sit on top of the chips.

And so if you've already got the chips and the chips are gonna continue to grow out, you think about the inferential technology that these companies were talking about a computex a couple weeks back or just two weeks ago, as everyone was saying, sure we have 60,000 chip data centers right now that could easily get to a 1 million chip data center that continues to benefit NVIDIA.

That's why we have analysts come on our show talking about how yeah, this market cap that we've seen it get to this three trillion could just be the still starting point, which is crazy.

And especially after the 10 for one stock.

But one question I had was how we have, we reached the ceiling.

Where is there more room to run here and consistently, we've heard from guests that aren't our show analysts.

They're saying that there is more room to run.

Gaming, automotive, there are two areas of the business that there's some potential growth opportunities there.

Yeah.

And Vinia getting the best positioning stature from Oppenheimer on this, from the full stack A I hardware networking and software solutions here.

So we'll continue to track shares of NVD A throughout the week here.

But uh simpler T or simple GM General Motors authorizing a new $6 billion share buyback program and raising its quarterly dividend by 33%.

The automaker saying in a statement it's quote growing and improving the profitability of its EV business allowing it to return cash to shareholders.

Now, for anyone that can remember back to last year, there have been a few different uh accelerated share repurchases.

Uh November 2023 even the company noting this in 2023 they had announced that $10 billion accelerated share repurchase continuing to have approximately $1.4 billion in remaining capacity under that prior share repurchase authorization as well.

Uh And they have also been purchasing throughout Q one of 2024 as well, about uh $300 million worth of shares purchases and expecting to exhaust the remaining 1.1 billion before the end of the second quarter.

And look the share repurchasing narrative, the dividend story, it's one that we've seen from these big companies since the start of the year and this is a fun stat.

42 other S and P 500 companies have announced buybacks this quarter.

So continuing to return that value to shareholders, Bank of America also came out with a note saying that they expect continued pick up And that corporate client buybacks just last week were the second largest in its weekly tracking history since 2010 with 70% of year to day S and P 500 buybacks being in the tech and communication services sector.

So this is something that we're consistently seeing and for GM in particular comes on the heels of the growth of that EV business, which we know came a little bumpy at the beginning for them, but they're, they're committed to this market.

It's gonna be a big update.

July 23rd, 2024 is when they release their next quarter earnings results.

We got a little bit of time until then, stay tuned for wealth.

Our very own pro superman and will join us live from Deutsche Bank's Global Auto Industry conference for a conversation with GM CFO, Paul Jacobson.

You won't want to miss it.

We're just minutes away from the opening bell.

We're taking a look at how the trading day is shaping up as the fed meeting kicks off later today.

That's right after the break.

All right, we're approaching the opening bell here just seconds away.

Can you feel the energy here coming off of some new records that we saw just yesterday records for the S and P and the NASDAQ?

Specially since most of the day, we were under pressure yesterday, but we got those new highs for those two indexes.

We'll see if we can potentially reach new records today.

Absolutely.

We're taking a look at the futures here.

We are down across the board.

As of right now.

We'll see what the opening cross holds for us.

See if we can see some flip activity into the positive territory here.

Of course, a large trading session ahead of us, especially with the beginning of that two day fed, meeting our own Jennifer Schonberger.

She's gonna shoot us that email once they begin and ultimately, we'll see what tomorrow holds when that decision comes forward.

It's gonna be an interesting one though.

You got CP I out tomorrow morning, the plot, a lot of things happening and there's the opening bell.

Yes, you got first horizon man, the great folks there ringing the opening bell at the Nysct symbol, Fhn Fun Kind and Confluence.

They're ringing the opening bell at NASDAQ.

You're watching the morning brief, everyone brought to you by invest.

Let's do a check of the markets now that the fun Fetti is in the air and markets are moving everywhere.

All Right.

Dow Jones industrial average right now begins the day to the downside by about 4/10 of a percent.

You're also seeing a move lower for the S and P 500 that beginning the day down by about a quarter of a percent here.

So ultimately, for the Dow the NASDAQ, now that's calibrated, that's down by about 2/10 of a percent as well.

So fractional declines across the board all, let's take a look at some sectors here very quickly.

I think I had them pulled back.

Hey, there we go.

All right.

Not looking good, not looking good.

And I'm curious how Apple is going to do throughout the trading day, we saw them close down about 2% yesterday, on the heels of that big event, unveiling Apple Artificial Intelligence, we were pretty much fly in the pre pre market trading.

Uh We'll see it might be under trenders too.

Yeah, let's take a look at the NASDAQ that you got Apple, right?

You go.

So about up about 1% at this point.

So we'll see throughout the day if that changes as investors really start to digest the new features and announcements that we got.

Yeah, just getting back in deposit territory over the past few weeks on the year to date scale.

So we'll continue to watch that for shares of A APL we've also got Jared Blicker, Jared Blicker.

What is moving markets today?

Well, I'll tell you what it's what's not moving.

Let's answer that question.

The markets have been kind of quiet lately.

So here's the S and P 500.

I'm going to show you a year to date on the wi I interactive.

Now, as you said, we are just coming off record highs here.

So this is not a bearish warning, but I would note that volume has been drying up.

I think three or four out of the last five of the lowest volume days in spy, that's the S and P 500 ETF the biggest in the world have been the lowest of the years.

So volume and com volume is low, complacency is high.

And that's a setup.

You see sometimes when markets want to throw you a curveball.

Here is the Vix.

Vix is also pretty low.

You can see we got just a 13 handle on it right now.

13.08 that is in the lower end of a historical range.

But let's go through some of the sectors.

Now.

It was interesting.

Here is the NASDAQ 100.

You can see more red than green, but I was tracking tracking tech early just before the market opened.

Tech was the worst performing sector now.

It's the least bad.

But as you can see everything is under water here and utility is taking it the most to the downside that's down about one and a third percent been interesting to track the movements in the bond market.

But I do want to get over to our leaders here because what you're going to notice at the very bottom, the only dark square there is GB that is my crypto proxy.

So let's take a look and see what is going on with crypto here.

We've recently had some big days, but yesterday was a pretty big down day.

In fact, it was the worst in about a month and here's a year to date.

And what this simply shows is Bitcoin has been consolidating near its highs and until it breaks out either to the upside or the downside here, not really having much to talk about guys.

All right, Jared.

Well, hopefully we have more to talk about later in the trading day.

Thank you so much for that and treasury yields edging lower with investors looking to two crucial tests for the markets.

This week, the consumer price index for May will be released tomorrow morning, followed by the Federal Reserve's policy decision in the afternoon.

So what's the best way to position your portfolio ahead of these two big events?

Let's bring in Franklin Templeton, Income Advisors, Chief Investment Officer.

And thank you so much for being here.

I want to start on fixed income.

You're overweight on fixed income, so bullish on bonds.

Why do you view that as an attractive asset class at this point?

Especially ahead of that CP I print tomorrow and the fed decision.

Yeah.

Hi, thanks.

It's great to be with you.

Um, I think first, you know, as we look at fixed income markets, it's just such a different landscape today than it's been, you know, for really much of the last decade, if not even a little bit longer.

So, um, just the outright attractiveness of yields for anybody seeking income.

Certainly that's a game changer from, from what we've experienced now, you know, I think as we look, uh, year to date more recently, uh, as you just said, we're kind of around 4.45%.

That is kind of towards the upper end of, of where we've been here a year to date.

Really the last year, uh, briefly just ticked up a little bit higher than that.

Um, you know, so that it actually has been a bit of a headwind for bonds.

But we really see that dynamic changing as we get through, uh, in, into the back of the year and into 2025 the Fed, uh, cutting, even if just modestly, we see the headwind debating and, and possibly even turning into a tailwind for, uh, for bonds.

And so with regard to that, how aggressive of a cutting cycle are you anticipating as you look into and through the bond market?

Yeah, you know, we still think there's a fair amount of, of just normalization and, and, and rates that can occur.

So, you know, the fed I think is, is gonna stay put tomorrow, it's gonna be a pretty boring meeting.

Actually, I think it will be interesting to see the economic projections that come out and, and how they change if at all from the March projections.

Um you know, but we really, as we get into 2020 five, we still have conviction the fed is gonna get, gonna continue to see disinflation towards their target and that, that will allow that normalization more towards the neutral rate.

And I know we can debate whether that's uh three or 3.5, but that's a long ways from, from where we sit today.

So right now, not a lot priced in for 2024 but we think that accelerates as we get into the back end of the year and the expectations for the first half of 25 you mentioned those economic projections.

Part of that is the Federal Reserve's dot plot which maps out where fed officials think interest rates are going to be heading in the future.

Do you expect more volatility in those dots?

And there's also that overhanging question of should markets put so much weight in the dots considering that it is just a forecast.

Yeah, you know, I i it's great to look at on the chart but uh you know, ultimately we try to throw out the uh the highs and the lows and see a little bit more where uh you know, where the broader consensus is on the FO MC.

And I think that's a bit more, bit more telling.

We don't really expect a huge change.

Uh The data was, you know, the economic data earlier this year into their last meeting was a bit, we've seen a little bit more uh balance to arguably even a little bit softer uh broad economic data, the, the, the past uh month, month and a half or so and that we had a good non farm payrolls.

But uh there's been other stuff in the labor market that shows a little bit more balance as well.

Certainly Ed while we have you here, I mean, when we're thinking about where some broadening could take place in this market, where does it seem like there's a ripe opportunity for investors?

Yeah, I mean, we think it's, you know, it's very much a market of, of haves and have nots, we know the haves have been the A I leaders.

It's a very narrow market.

I think we saw something earlier today about the top 10 waiting more than three quarters of the total return of the S and P 500.

It's, it's not quite the magnificent seven anymore, but uh it's maybe a little bit more of the one and only if we're talking about NVIDIA and its contribution to the S and P returns.

When we look at kind of the average company, there hasn't been a lot of, of performance, arguably have gotten a little bit more attractive for the average stock, uh, certainly of this past year, the probability of a recession has come significantly down and I think that improves the outlook.

So, you know, we are looking at that kind of broader cohort of, of companies that are not a 52 week guys, they're, um, significantly often a lot of really quality companies that we've found for our income strategies.

Uh, so these are dividend payers that have, um, you know, as we look something more in that 16 to 18 times uh earnings expectations, so pretty, pretty reasonable.

So what uh companies or sectors that you're talking about, would you be putting money to work right now?

Yeah, that's, I think another really interesting part is that it's been kind of across sectors.

So, um you know, it a name like air products um earlier this year.

Um you know, really kind of disappointed and we're kind of seeing this overreaction to, to companies Coca Cola is another company that, that came down pretty meaningfully even within technology, if we go back earlier this year, you know, when Google first launched their A I initiatives, you know, it kind of fell flat a bit, the stock came down, it, it's now kind of recovered and I think there's a little bit more confidence that they'll, they'll write that ship.

So all of these have kind of created opportunities um within the market pretty broad range of companies.

One right now that I think looks interesting is is Home Depot where, you know, you're well off of the 52 week high and, and with this broader backdrop and the expectation that you know, into year end into next year rates will be coming down that could be supportive of the housing market.

And that's a stock that we think uh investors should maybe take a look at here at Perks, Franklin Templeton, Income Advisor, Chief Investment Officer.

Great to have you on the show.

Thanks for kicking off the session with us.

Thank you.

Coming up, we go live to Deutsche Bank's Global Auto Industry Conference where our very own process of Romanian will be joined by Ford vice chair, John Lawlor.

You do not want to miss it.

Welcome back to the morning brief brought to you by Invesco Ford reporting sales growth of over 11% in the month of May driven by a nearly 65% boost in hybrid sales from a year ago.

But with overall electric vehicle sales raising concerns about a possible slowdown.

What does this mean for the auto giants moving forward?

Yahoo Finance's pros superman and is standing by live in living color at Deutsche Bank's Global Auto Industry Conference with Ford vice chair, John Lawler for more.

Hey pros.

Hey, thanks, Brad.

Yeah, we are here at the Deutsche Bank Global Autos Conference and John Lawler, New Ford Vice chair here.

Congratulations on the new role.

So I know you're gonna be presenting soon here.

Give us some updates on what you're gonna be talking about here.

What are some of the new projections potentially for Ford right now going into 2024?

Well, we had a good start to the year with Q one and we'll be talking about where we're headed with the business.

You know, Ford Plus strategy is really about focusing in our customers and their needs and you start to see that really come through in the segmentation we did in that Ford Pro customers are distinct from Ford blue customers, which are distinct from our electric vehicle customers and how we're progressing our strategies in each of those spaces, how we're providing them value choice and we're moving the business forward.

You know, you guys had may sales recently very strong month, both not just ice traditional icicles, but also hybrid.

And ev let's talk about hybrids.

Did you guys envision that, you know, a year ago, we were talking to you guys at the delivery four plus uh uh conference ebs are a big push.

Look at hybrid sales.

How do you explain that?

Yeah.

So when you think about hybrids with Ford, we've been in hybrids for over 20 years.

We're number three in the US in hybrids right now.

Now, our hybrid sales grew 40%.

They're gonna grow 40% this year.

You can't just turn that on with a switch.

So all the narrative and hype had been around evs but we never walked away from hybrids.

We always had those in their cycle plan.

They were always funded.

And you're seeing that now is the demands increased.

We have the capacity to provide uh for consumers and you're seeing that take place.

So we're really pleased about our, our, our choice that we have for customers across gas, hybrid, as well as electric vehicles.

I think the Maverick in particular has been the sort of a focal point here with the co uh uh uh compact sort of a pick up, but then also being provided with hybrid power, which I think was interesting when it came out pivoting to evs now.

So we're also seeing, you know, we've, we've seen the EV sort of demand story kind of slow down a bit but ev sales into For Ford quite strong still.

What's your kind of take on that?

And how do you kind of bridge the gap to when those vehicles are profitable?

Right.

So the way we think about evs, it's not a matter of if it's when and how fast.

And so we did see a slowdown relative to what people expected, but I think there was a false signal coming out of COVID is how quick the demand was gonna grow.

And that was because the early adopters, they were really excited about having the choice of vehicles, electric vehicles.

Then we get to the early majority, they're not willing to put up with some of the other issues that you might have with an ev around range, et cetera, like those types of things.

So choice is important and it's coming through where you have hybrids, where you have plug in hybrids, other technologies are coming along as well that I think will help that transition.

So I think you're going to see the growth continue.

It's going to be a little bit slower than what we've seen in the past.

Now.

Of course, for us getting to profitability is key with our segmentation, you can see exactly how we're performing in the EV space.

And we have plans to improve that primarily with our second generation of vehicles where we'll see step function changes in cost and performance of the vehicles.

And that's where we think we'll really start to gain traction from a business standpoint for our electric vehicles.

So really profit may come in those second gen software defined type of evs exactly.

So the second gen vehicles not only will the software capability of those be so they'll be connected digital devices, but as well as the cost structure of those vehicles is going to improve dramatically through battery technologies efficiency of design, etcetera.

Because our first generation vehicles to get the market quick, we converted gas vehicles into electric vehicles.

These are ground up platforms designed specifically to be evs.

So you know, you mentioned um pivot back to sort of the guidance here.

You're talking about how 2024 is looking, shaping up strong sales so far, you can still see that 10 to $12 billion adjusted EBITA kind of guidance that that target there.

So when we came on a first quarter, we had guided uh that we would be at the high end of that range.

And so, you know, that's where our guidance sits right now.

Yeah.

Um I want to talk about your new role as vice chair.

You know, I know you as CFO grinding those numbers, but now it's more about sort of the strategic part of the business and how you kind of leverage relationships.

I know you used to work in Europe and Asia and you're gonna kind of go back to those roots, right?

What's the new rule gonna entail and how do you kind of make Ford more efficient from that point of view?

Right.

So it's, it's really around strategic initiatives.

The level of change in this industry is unprecedented right now.

You have the propulsion changes, you know, moving from gas to electrification and electric is going to take many forms as we're starting to see, develop, you also then have the digital technologies in the platform.

So I'm going to be focusing on which technologies we're going to move into alliances.

And as you said, partnerships are going to be key because one of the issues with this industry has been capital efficiency in a way you work through more capital efficient structures is through partnerships and sharing some of the capital footprint.

So we're going to focus on that.

And then of course, you know, I've worked all over the world.

I spent six years in China.

I've worked in Europe, I've worked in Japan and I think I can add a lot of value working with governments uh and, and their leaders on the policies and how Ford can help and how Ford is going to interface in those markets around the world.

Just real quick on China is Ford still kind of focused on that.

Is it more of a AJ D type situation?

Well, we've always had joint ventures in China.

We have two joint ventures in China, one more commercial vehicles, one for passenger vehicles.

Um Yeah, the they're really important partners for us.

I love our strategy in China.

It's capital light.

Uh we're profitable in China.

We're exporting from China, we're growing from that market base.

So we have a lot of possibilities in China and I'm excited about the future there, John, thank you so much.

I appreciate your time, China 2024 all that stuff going on right now, back over to you guys or back over to break more.

You can find us live after this as investors await more guidance from the FED on Wednesday in their meeting.

Once that press conference happens, every piece of data will be evaluated for hints about the path of the FED moving forward here for our next guest.

He's arguing that there are clues within the data that indicate buying opportunities this summer.

For more.

We welcome in Falciani, who is the Bank of America Chief Technical strategist.

Great to have you here in Steve.

Thank you.

Great to be here.

Absolutely.

So, first and foremost, I mean, investors are just looking for signs right now.

Are there kind of glaring signals right now that that are telling us that there are buying opportunities that could be had this summer?

I think there definitely are look, you know, from a technical lens, you know, we're less worried about uh the headlines and, and the macro and, and the issues at hand because price tells the truth.

And when we look at charts of like the 10 year yield, for example, and we practice some of our typical, you know, trend following methods, we believe with a strong conviction that last year in October 10 year yield peaked at 5% and we've begun a cyclical bull market in us treasuries.

Uh We saw a 10 year yield slide from 5% to about 378 last uh ending last year and they've risen back to about 475 this year.

So we think that point of this year just before Memorial Day was actually the peak and 10 year yields likely for the year.

And we're gonna buy the dip markets for the next corrective leg lower in yields.

So where do you see the yield going to, obviously, there's been some volatility.

We saw a 14 basis point jump after that hot jobs report down about two basis points.

Now, could we get 5% this year or, or do you see that as sort of?

Yeah, you know, short term technical patterns are always developing which could indicate uh move back up to 475 maybe approaching 5%.

And what I love about that actually happening is then we would be able to form a big top in the 10 year yield chart, which we don't have yet.

But I think if we just kind of look through the, you know, forest for the trees, kind of bias and technicals here is if we're up around 460 or so in the 10 year, we should be nibbling long.

If we're retesting the year to date high in 10 year yield of 4.74% we should be buying.

If we're above that, we should be loading the boat long because the second half of this year and our technical methods look much different than the first.

I, I'll be honest with you.

One of the questions that I get over the course of the weekend from time to time from a few friends, uh who were good viewers of the show, they ask.

All right, what is the strength of the dollar right now?

Especially in correlation to what we're seeing in the jobs economy even, you know, how do you kind of run that correlation?

So two things on that one interest rate differentials are certainly driving FX markets a little crazy, uh especially as more kind of macro geopolitical headlines get into the mix.

Um So you know, that stuff kind of aside which is a little bit harder to forecast.

I think the jobs market in a way is a lay up for technicals because it does represent a lot of the basic methods that technicians tend to use.

And I think the unemployment rate isn't a great example of that.

You know, more recently, the US unemployment rate reached a two year new high, right?

A two year new high in the US unemployment rate.

That's the worst labor market in two years now, labor market is by all means not bad right now.

Right?

It's a, it's a pretty strong labor market out there, but we're trending in the wrong direction.

So here's a chart of the US labor market double bottoming in uh the middle of last year now, at a uh four higher highs and three higher lows, right?

That's the basic definition of a technical uptrend, which to me means the labor market is potentially on the cusp of weakening more than priced.

So do you think the markets are under pricing?

A potential hard landing moving forward?

Yes, I do.

That doesn't mean I'm calling for a hard landing, but based on how market are priced they're essentially priced soft landing, maybe no landing and hard landing is basically zero, right?

So there's a saying in markets hedge when you don't need to, um, now might be a decent time to think about that.

All right.

Well, hopefully that doesn't come to fruition, Paul, but thank you so much, Paul Zion of Bank of America, Chief technical strategist.

Appreciate your insight.

Pleasure to be here.

Of course, this morning brief brought to you by invest go and let's take a quick look at markets.

You're seeing red across the screen right now.

The down the dow is down about 370 points or almost 1% as the 500 down about 5/10 there.

And then the NASDAQ, the tech heavy.

Now that they also in the red today coming up, Apple's big A I announcement didn't move Wall Street too much but could it for a rise in sales for the next iphone will discuss plus from copper to municipal bonds will dive into some alternative investments.

You may want to keep your eyes on.