Novo Nordisk soars, Biden vs. Trump, French Markets: Market Domination

Shares of Nvidia (NVDA) are rebounding in Tuesday's session after a three-day sell-off, while shares of Novo Nordisk (NVO) are soaring to an all-time high after its popular GLP-1 weight-loss drug Wegovy was approved in China. Meanwhile, shares of SolarEdge Technologies (SEDG) are falling after one of its customers, PM&M Electric, filed for bankruptcy. The company has announced that it expects negative free cash flow of $150 million. SolarEdge is also planning a $300 million convertible note offering, diluting value for existing shareholders.

President Joe Biden and former President Donald Trump will face off in the first presidential debate on Thursday, June 27. Both are expected to present their plans for office. Yahoo Finance Senior Columnist Rick Newman joined the show to explain how US presidents exercise less control over the economy than most people realize. China Beige Book International Managing Director Shehzad Qazi joined the show to discuss the two leaders' policy positions on China and what to expect from US-China relations in the next year.

French President Emmanuel Macron called a snap election after dissolving the country's parliament. According to Interior Minister Gérald Darmanin, the vote could cause civil unrest in the country. Fed Watch Advisors Founder and chief investment officer Ben Emons joined the show to give insight into the European markets ahead of the French election.

For more expert insight and the latest market action, click here

Video Transcript

Hello and welcome to market domination.

I'm Julie High, and that's Josh.

In live from our New York City headquarters, we are giving you the ultimate investing playbook to help tune out the noise and make the right moves for your money.

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

I would look at this as an opportunity, meaning, Take your time, be strategic.

If you see further weakness, it's OK because this is a this is about.

This is a long term story about the future.

This isn't about today or tomorrow.

We do think inflation is coming down.

But Secretary Yellen also noted in her interview that a lot of the stickiness about inflation was centred around housing and housing related costs.

Um, those are likely to be elevated for some time, but directionally yes, we think inflation will come down.

We we do think it opens the door for a gradual rate cut cycle later this year.

Employment numbers have been mix of payroll has been very strong, but if you look at unemployment claims, they're almost at cycle high.

I think consumer and employment goes together.

When you feel secure in your job, you tend to spend more.

We're seeing both of those start to break down.

My view is that a recession is a when not an if at this point, are we at a recession today?

Are we slowly, no, but we're slowly approaching one and maybe fourth quarter of this year.

First quarter 2025 we will probably be in that recession.

We got an hour to go until the market closed, so let's take a look at the major averages.

Right now.

We have a divergence state, but it's going in the opposite direction that it has been recently.

In other words, in recent days we've seen the Dow gain while the NASDAQ loses.

Today, they flip flop.

So what we've got today is the Dow down about 277 points, about two thirds of 1%.

Call it the S and P 500 up about a third of 1%.

And then you've got that strength in the NASDAQ up by 1.2% and basically you have a rebound after some recent weakness.

Did anything in particular catalyse it?

Perhaps not, but We're going to talk more about that in a minute.

Uh, as we get to what's going on sector wise here today, it's obvious what's working and what's not.

What's working is tech and communication services.

As I said, sort of bouncing back here.

If you look at the so, for example, here it's up 1.5% today.

If you look at the five day you see the declines before today's rebounds, that decline of about 2.3%.

Real estate materials utilities, though, are dragging on the major averages.

So that sort of broadening that we had been seeing in the ra uh, rally over the past few days, where the S and P equal weight was keeping pace.

Are we seeing that in today's session with the S and P?

As I mentioned up a third of 1%?

Uh uh.

The S and P equal eight, is now down about three quarters of 1%.

And then there's another thing I want to talk about, of course, and that's the other big thing that wasn't working the past few days, and now it's working again, talking about NVIDIA.

Of course, it still has not jumped back up in market cap above that of Apple and Microsoft.

However, the shares are up 6% today.

It too had been sort of anguishing for a few days and now is rebounding once again.

Josh.

Thank you.

Julian Vidia is on track here for snapping three straight sessions of losses.

For more on what this does mean for investors, we're now gonna bring in.

Steve Sosnick, chief strategist at Interactive Broker.

Steve, Great to see you on set.

Yeah, I love being here.

Josh.

Um, let me ask you this, Steve.

So, uh, Peter Bova today, who was a very smart strategist like yourself telling his clients this morning, He said for the past month or so, Steve, that NVIDIA is what he's been making a beeline for.

Not not the tenure.

He goes right to NVIDIA.

Sort of.

His gauge, his general barometer.

Is that what you've been doing?

Steve, are you as focused on NVIDIA Jetson, Wang's company?

For better or worse, I have no choice but to be.

Why do you say that, Steve?

Because it's NVIDIA's market, and we're all just trading in it.

I mean, realistically, um, it's been dragging us higher and, you know, you could see now we're in a bit of an interesting little cycle.

Where where the The index.

You know, if you look at if you look at the major industries and I'll define them as S and P 500 NASDAQ 100 they move with NVIDIA and, you know, yesterday, for example, they sold off.

Not, you know, S and P. Not in a major way, because the difference was the advancers on the NYSE outpaced decliners 2 to 1.

Today it's the opposite.

So you've got NVIDIA and the Big Cap te pulling the market higher.

Um, whereas most of the stocks are lower.

So it's this weird NVIDIA and friends vis a vis everybody else.

And it's a strange dynamic right now.

Now it's interesting because, um, I know you saw the piece that our Josh Schafer highlighted today with some research from BlackRock saying that tech tech, uh, mega caps leading is not necessarily a bad thing because their earnings are doing well.

So it's not as though they're leading with sort of nothing behind it.

Is that how you see things, though?

Yes, but I I mentioned I happen to see Josh on the way in.

He might have told us that, Yes, but And my and my reason, the reason is you know, I'm not gonna contest the data, you know, and and and I guess that there, you know, it is not necessarily the death if it's a if it's a narrow rally.

But just something nags at me that, you know, because if everybody's trying to crowd into one particular sector, what happens if they try to get out?

And that becomes very problematic.

We didn't see that become a problem yesterday.

I think that's because of end of the quarter factors, um, making it more of a rotation.

Yes, these companies do do earn very good money.

And someone asked me today, you know is NVIDIA Would you buy NVIDIA at these levels?

And my my comment was kind of neither here nor there, because it's it's not cheap, but it's not expensive, either, because they do earn ridiculous amounts of money.

It's just how much growth is priced in.

And if if they meet their growth targets, if they continue to grow at this exponential rate, it's not.

It's not an expensive stock.

If there's the slightest stumble.

They are priced to perfection, and that's where the risk comes in.

But are you?

Are you surprised, though?

Because obviously this has been the big theme.

The rally has been, you know, narrow, right?

Are you surprised that it's been narrow because some would say Steve of of course, this.

These are the companies that are leading these are, you know, So the argument will go our biggest, most innovative, dynamic, disruptive companies out there.

Of course they should be leading.

They should be leading.

But you know, the to what?

To what extent should they be just leading and leaving everybody else behind is more the question.

You know, uh uh, one of my themes for the year to date so far has been weaponized Fomo.

And I think that's really what's driven a lot.

What do you mean by weaponized fomo fomo being fear of missing out?

You know, it's something that we all have.

You know, we you know, just go on instagram one day and you'll and you'll get it when you see what one of your friends is doing.

But in reality, for institutional portfolio managers, it's the real deal and the reason being is they can't be behind their peers, right?

So you know, if if, if some if you know that guy over there is making a tonne of money in a video or that guy's making it in Gamestop, OK, I'm not.

I may not be.

I may not have put all my chips on the table.

That's fine.

But if I'm an institutional investor, I can't professionally be in that bottom quartile.

I can't miss this rally.

I don't I can't hear from my from my investors and what are you doing out there?

So I think what happens is that's where the piling on effect comes in and we see it.

Some of them are, you know, heavily weighted in in in the, uh, stocks themselves.

Some of them are using options because they may not want to put all their eggs in one basket so they'll buy call options, which which give them the exposure to the upside while limiting the while limiting their downside risk.

I'm glad you mentioned that because I wanna highlight a chart that came to us from Deutsche Bank today for Jim Reid, highlighting it as his of the day, where he's looking at call option volume in mega cap growth in Tech, which is all the way on the right side of your screen.

It's hard to see, but there was a big spike in that versus the rest of the S and P 500.

Now Deutsche Bank is arguing that maybe that's reason for a pause now in that upward momentum, I don't know if the last few days already qualified as the pause, but what do you think?

How do you read that?

That huge spike in activity?

This is where I start to get concerned, that it's what you know.

It's what we call a blow off sometimes when you just really get everybody piling in because it can't go down because we're just gonna get on on one side of the trade.

Um, that's usually when these things have a have a weird ending parabolic moves, and we've seen one in NVIDIA end in very unpredictable and often nasty ways.

I'm not saying that this means NVIDIA is going to hell in a hand basket, but what it means is when that big big upsurge ends that's usually accompanied by a lot of volatility because because there's a lot of disruption when, when When the sure thing pans out.

If everybody buys it, who's left to keep buying it?

That's kind of the problem.

I wanna switch gears a bit.

Some economic data tap P CE Steve, how important is that?

Is that print gonna be for the market?

Very.

Um, and and so I'll give you more than a one word answer.

Um, you know, I, I think if we're if we're talking about a very data dependent fed and we are, um, you know, the market's pricing in a year over year rise of 2.6 which I believe is because of a 1.1% rise anticipated so in.

That is definitely helping the disinflation argument.

Um, now 2.6 is not two II.

I don't know if they need to really get to two.

I think they seem to be towing the line about We need to get to two, barring some economic hiccup.

Um, so I think any number that diverges from that will change the narrative about Fed policy.

A a higher reading.

I think people will get a little freaked out and say.

All right.

Well, maybe this You know, maybe the idea of two rate cuts this year 1 to 2 is is should be 0 to 1 or or or not at all.

On the other hand, if the number is very encouraging, I think you'll hear a lot of talk about, you know, fed cutting sooner and quicker.

Uh uh.

By the same token, you know, we've talked to a lot of folks lately who say it doesn't really matter that much this year.

If it's one, if it's two, if it's if it's none in terms of the market act.

Ultimately, where the markets in the year has it mattered that we went from expecting 67 rate cuts to 1 to 2.

No, it hasn't made a difference.

Part of that is because the economy helped.

I mean, you, it was inconceivable that we would have a ST a solid economy and 6 to 7 rate cuts.

They're they're mutually exclusive.

And I think I've said to you before that you know, I, I if given the choice, I'll always take the stronger economy.

Um, but you know, so if the if the terminal rate at the end of the year is, you know, instead of five and a quarter.

If it's five, if it's even 4.34 and three quarters or you know, 4.5.

Really, what's the difference?

It's not a big deal.

You you know that you'll still have probably some sort of positive real rate of return.

Um, you know, on on the risk free assets called T bills.

Um, and so it doesn't change the narrative all that much.

But I think markets wanna see the direction, and they really I will say to this point, they haven't cared that the direction hasn't been in their favour.

It hasn't made a difference, can I?

Can't let you get out of here without talking politics, Steve.

You know that.

It's the rules.

Thursday, presidential debate.

Biden Trump as a strategist.

What are you watching for?

What are you listening for?

I'm listening for something that will sort of disrupt the 5050 ness of the race.

Um, you know, some, You know, either one of these guys is, you know, is is gaffe prone.

Um, I'm not, you know, I'm I'm you know, I think just, you know, will one of them say something that'll move policy one or the other?

Um, you know, I think Biden's policy announcements have been more, um, consistent, Let's say than than his challengers.

Um but I think really, just something that something that really is an out of out of the box, um, circumstance that we talk about.

I think if they just sort of get through the debate without too many fireworks, one way or the other, Uh, we muddle on until until the next debate or until November.

Yeah.

All right.

Thanks, Steve.

Good to see you.

Thanks for coming in, Steve Sosnick.

And we're just getting started here on market domination coming up.

Shares of No, No higher today after securing Chinese regulatory approval for its weight loss drug will get the latest and check in on some of the other trending tickers from Yahoo Finance on the other side, plus President Biden, former President Donald Trump, as we've just been talking about there in the political spotlight this week.

But what topics really matter for voters will discuss that, and FedEx said to report earnings after the bell today will break down the numbers as soon as they cross stick around, much more market domination Still to come.

Let's get to some trending tickers now.

Carnival stock.

Those shares are hired by almost 9% after the company second quarter earnings topped sales targets.

The cruise line are also increasing its full year profit forecast.

And interesting.

Here is also the debt position of the company because there reports raised the company's debt rating now to double B after the numbers, so it's still below investment grade.

But it's only two notches below investment grade.

Yeah, the the CFO talk about Julie saying how the company is managing down debt and interest expense, saying they have prepaid 6.6 billion of debt during the last 12 months.

Um, also some very confident sort of optimistic comments from CO Josh Weinstein, saying, We are very pleased, he said, with the continued acceleration of demand for 2025 and beyond, and clearly investors were too.

Yeah, and all of this is is we are seeing just blockbuster demand continuing.

For the cruise line operators, the company is also, um, booking ahead to next year.

People booked their cruises way in advance, so they're booked for 2025 already.

And the bookings for 2025 are ahead of where they were this year.

Um, at the last year at this, uh, at this time, Um, the stocks, though, haven't done that.

Great.

With the exception of Royal Caribbean, it's done well this year.

It's not more than 20% but the other two ocean cruise liners.

Now we have Vikings.

So now we have to say ocean cruise line line companies.

Uh, they're down this year.

Yeah, we got a little bit of I saw a lift for Royal and Norwegian today.

Sort of like, you know, rising tide.

Yeah.

There you go.

Moving on to Novo Nodes.

Let's check out that stock soaring all time high today after its popular weight loss drug wago was approved in China.

Yahoo Finance's Angelique Kamlani has been tracking the news and joins us now, Ange, that's right.

Of course, we know China, the biggest market for any drug company and no, no different here for Novo nodes.

The company is rising on the news that was go was approved, which opens it up to the private market in China.

Uh, no news on what the price will be over there, but we already know Ozempic has already been approved.

Now this win could be short lived.

That's the only downside to the news, which is that, uh, they already have a patent fight going on se semi glue tide is going to expire in 2026 protections there in China, which is much earlier than the rest of the world.

So, uh, China, already gearing up for competition for the these two drugs.

And so while it is good news, Novo does have a handle on the manufacturing and does have a head start.

It is also looking to face competition much earlier in that country.

And so that would be generic competition.

Then once that expires, Um, that's really interesting.

How does China sort of get away with those shorter?

Just because they can?

Because they can, because it's a It's a market that you have to play with the government, right?

It's different than in other countries where you do Still, you know, there are, of course, other countries we know, especially in Europe, where you do interact a lot more with the government.

But it's not the same as in China, which is a little bit more controlled as we know.

So, yeah, thanks a lot.

Appreciate it.

We are also watching shares of solar Edge.

They are trending, but they're going in the wrong direction.

If you're long the stock, Um, one of its customers, PM and M Electric, filed for bankruptcy.

The company solar edge that is revealing that in a filing and solar edge by we also saying it now expects negative free cash flow of about $150 million in the current current quarter.

On top of all of that, the company is also planning a $300 million convertible note offering, so that'll be convertible into shares that will dilute the value for existing shareholders.

All of that combining into a big tumble for those shares.

Yeah, I reached out to Jordan Levy at truest, and he covers the name.

Here's what he told his clients.

Uh, after this news, he said, Listen, the free cash flow items he told them was was, uh, that was offered was considerably below his call, his forecast saying that, um does not expect liquidity to be a concern here, Julie, but said the negative for cash flow guide likely represents another proof point, he said, of continued market challenges and inventory overhang sticks with his, uh, hold rating for now in the name Yeah, definitely.

And those shares really tumbling here.

By the way, that customer that went, UH, that is filed for bankruptcy owes solar $11.4 million so it's unclear how much of any of that they will get.

There you go.

All right.

Moving on.

President Joe Biden and former President Donald Trump will meet for their first debate on Thursday with a focus on topics such as the economy, gas and oil prices, as well as each of their views on the rest of the world.

But after the election is over, how much control does the president actually have over these topics?

Yahoo Finance's Rick Newman joins us now with more Rick.

How much control, Rick?

Not as much as most people think, Uh, and you know, this is nothing new in 2024.

Presidents always say I'll be better for the economy.

Uh, and voters more or less buy it, uh, voters.

Clearly in their minds, they associate, uh, the state of the economy and their overall sense of well being with whoever happens to be president at the time.

But there's honestly not much any president can actually do to affect the economy.

And if you doubt it, look at inflation under Joe Biden.

If if Joe Biden had the if there were some button the president could push in the Oval Office, Biden would have pushed it.

He would have prevented inflation from hitting 9%.

Trump would have pushed it to prevent a covid recession.

Both of them would have pushed that button to keep the national debt by rising by at least $8 trillion under each president.

And every president who's ever been in office during a recession obviously would have tried to prevent that recession.

The Federal Reserve is the most powerful financial institution in the world.

I mean, everybody on Wall Street, I think, would agree with that, and even the Fed can't prevent recessions, and the Fed could not prevent inflation from hitting 9%.

So, uh, it's a little bit if you back away from it to think that the president has all these powers he can use, he doesn't.

But that's not going to change the conversation.

I mean, the president gets credit or blame for what happens in the economy, and that's going to be the case in 2024.

Well, let's back up a little bit, Rick, because there certainly have been a lot of folks who have argued that the immense stimulus that was pumped into the economy was a contributing factor to inflation.

So I'm putting stimulus in a different category.

Julie.

Um, 1st, 1st of all that's in those are emergency measures.

Uh, and that's not something the president does alone.

Uh, all of this.

Well, let's see, we had four major, uh, fiscal stimulus bills during covid.

Three of them were bipartisan.

Uh, that, uh, got that.

Congress passed when Democrats had control of the house.

So Democrats had to vote for that bill and President Trump signed them.

And then we had 1/4 bill that was somewhat partisan.

That was Biden's American refuge plan in 2021.

Uh, and then we had the fiscal, uh, sorry.

The Federal Reserve that did tonnes of, uh, monetary stimulus.

That was at least as important as all that fiscal stimulus.

That's why interest rates on on mortgages went below 3% so I'm kind of leaving that aside because those are emergency things that tend to happen on a bipartisan basis.

Even back in 2009 during the financial crash, we had bipartisan, um, bipartisan stimulus that Congress passed.

But that's the point, though, that is bipartisan, that not something that the president can do on his own.

And when you get the whole of the government behind something, yes, that can be extremely forceful.

Uh, but that's not something the president does on his own.

So So, Rick, you know, as you point out, if if presidents don't have relatively too much impact and influence here, um but as you also rightfully point out, it doesn't really matter.

They're getting the credit of the blame either way.

So what is Biden's kind of game plan, then?

Rick, if you if you know inflation is top of mind, Um, is he sort of handcuffed?

There is the game plan.

Basically OK, I'll just I just gotta hope inflation continues to moderate into November.

BNS game plan is to take credit for the things that are going right and blame that things are going wrong on other factors.

So we can break this down.

So it's correct that Biden is right when he says we've had record job growth during his administration, almost 16 million new jobs.

That is not because of anything Joe Biden did.

That's because Joe Biden came into office in 2021 just as all of these stimulus measures were gathering force.

And by, by the way, as usual, when we have some kind of global downturn, the America sucks less.

Uh, we we suck the least, So America is the place where everyone should be.

Everybody wants to be, whether you're an investor or business owner or even a worker during a downturn.

So you know, United States attracts all this, and that's why we've had this record job growth under Biden.

And then Biden also says, Uh, inflation predates me.

There's a lot of truth to that as well, because the forces for inflation were basically in the pipeline when Biden took office again.

That's all that stimulus spending.

It's the huge shift in demand, from services to goods that happened during covid supply chain snafus and then the whips off.

In fact, as we went back to services, which is where where all the inflation is right now.

My contention is that if Trump had won a second term, we would have had about exactly the same amount of job growth and about the same amount of inflation, which would have changed in area.

That's counterfactual.

That's We're not going to be hearing much about that in the debate.

But Biden just has to hope that inflation comes down enough by Election Day and everything else.

Job growth and economic growth stay solid enough that voters start to feel a little bit better about we call the Biden economy.

Either that or everyone will read your column and they'll realise that he doesn't they, neither of them has that much control.

They have control over other stuff they have.

They have control over immigration regulation, uh, to some extent, abortion policy.

Those are things.

Yes, the president makes a difference.

What, what what's gonna happen with taxes?

That makes a difference.

But the overall economy is a beast of its own.

Rick, Thank you, Hi guys.

And there's also the matter of control over this next topic that we're going to discuss President Biden and former President Donald Trump in the political spotlight this week, both preparing to take the stage in the 1st 2024 presidential debate on Thursday.

And while Biden and Trump go head to head on their economic agendas, they share one area of common ground that is stricter trade barriers with China here with more on US China relations.

We have Shahzad Kazi, China Beige Book International managing director.

Good to see you.

So they both agree in terms in vague terms, right about some level of protectionism with China.

The magnitude, however, is quite different, right?

Because we have heard President President Biden has put on some new tariffs on China.

Former President Trump has talked about really expansive tariffs.

So what are you going to be listening for?

Yeah, I think we know that the Trump team and specifically President Trump, you know, he's talking about 60% tariffs on China and double digit tariffs across the board, generally getting the country out of, uh, you know, ending the PNTR status with China, the permanent normal trading relations and maybe even pulling the US out of the WTO altogether.

Now the reality is in a debate format when you have two opposing sides standing you know, they're just going to try to outdo each other.

You'll put 25% tariffs.

How about 250 and tariffs, right?

So the idea is, can they actually get any of this agenda of theirs accomplished when they are in office?

How realistic are the trade policy promises that they're going to be making the American workers predominantly?

And and and And how are they going to protect American farmers and so forth as they lay out their agenda on and sort of like, regardless of who wins in November?

What do you think that relationship between the US and China looks like?

You know, in kind of a near intermediate term here have been rising.

There's no question about that.

And I think specifically as we get into 2025 regardless of who is president, we are going to see that trade war part I play out.

What is that?

A trade war?

Part two?

What does that actually look like?

Well, I think what that looks like predominantly is figuring out additional industries on which there are going to be more tariffs.

Getting really strict, I think, are stricter about export controls maybe finally becoming a little bit more serious about curtailing outbound investment in strategic sectors in China.

So the various aspects of US China trade and a relationship that we've seen, I think getting stricter on all of those will be absolutely in play.

Have the tariffs that have been put in place accomplished what they set out to accomplish.

Yes and no.

We don't have any Chinese electric vehicles on our streets today and Republicans in Congress and also tell you to tell you that because of what President Trump did when he was in office.

Um, we're not sure that's about it, but But there is an example there that said, Look, we know that trade.

The trade deficit, of course for us only grew in the aftermath of the of the Tariffs, and now we know that trade is being simply rerouted through Southeast Asian and and Central American countries.

Uh, so we really haven't.

If the idea was to bring down that bilateral trade deficit in a straight form format, perhaps some years you can show them it's been diversified at the very least, right?

That's exactly it.

That's absolutely it.

It It's impressive, too, How This seems to be the one issue China really that Democrats Republicans actually seem to agree on in Washington.

This is the one issue where so much of the wre seems to be China is not just a competitor anymore.

But this this rhetoric, you know, China is actually an adversary.

Are you surprised by that?

This is so the one almost issue.

People see, uh, and Capitol Hill can agree on.

You know, this predates, uh, President Trump, uh, coming into office.

It was gathering semen, Of course.

He just accelerated this.

And yesterday in Washington DC.

I can't go from one office to another Republican or Democrat without talking about this exact issue.

China as an adversary.

What's happening and what is making it difficult for markets to track this is there's a lot of rhetoric.

There's a lot of talk, but the action isn't always there.

And it's become impossible almost on certain days and weeks to figure out how tough is this action actually going to be?

What are the loopholes in all the executive vote you've seen coming down?

So it gets really murky when you start when money depends on, you know, tracking these policies.

Something else I'm also curious about is that while there is this bipartisan tone, certainly with regard to China, we also know that former President Trump is, shall we say, or has been friendlier with Vladimir Putin, who is now in turn getting friendlier with China.

So how does that, then?

How could that potentially affect the relationship?

I think a lot of it will come down on personnel, and there's a lot of infighting that has, I think, begun in terms of who really is telling or would tell the president what to do.

Some of it is, quite frankly, TBD, but at the end of the day, I don't think a lot of people have made money.

Trying to predict exactly what President Trump would do comes down to the man himself.

I think Do you think for American executives and CS who are listening to this right now, how should they think about China as an opportunity?

Is it still as big as maybe they once imagined 10 years ago or no looking forward?

It's an opportunity, but it's going to be different.

It's going to be smaller.

Yeah, so, first of all, world's second largest economy not going anywhere.

It's about becoming smarter on China.

Finally, you can take it for granted that the regulatory environment, the hard time is over.

Now we can go back and play again.

It will be fine.

No.

You have to track the regulatory environment in China very, very carefully.

You can assume that when the economy is in a little bit of trouble, the government will step in and and and shove a bunch of money in to the system to propel growth.

It doesn't work that way anymore.

The economic model has changed.

Um, so it's about tracking the economy as closely, um, and as intelligently as you possibly can.

And and quite frankly, the street isn't used to doing that.

And so what, I guess kind of Where is China Freight that now, then, right?

We had all these sort of fits and starts that may be more of a recovery that hasn't materialised, but maybe is starting to materialise.

Yeah, I would say the first quarter the economy kicked off on a fantastic start compared to where we had been.

Um, And as we look through now, coming into the summer, uh, you know, I think there's probably a lot more resiliency in the economy that is being broadly recognised under the hood.

I think some of the data, especially in terms of retail spending and all that will likely remain choppy.

We're looking at the property market very with a lot of focus.

Um, and and our view is that, um, you know, probably second half of this year, we get a cyclical bottom in the Chinese property market.

Specifically, I should say the housing.

If that happens, the overall economic story in in China may be a lot more positive than I think.

Currently, investors anticipate and just quickly judge your base case, though for growth this year.

What does it look like versus last year?

Last year, they claim they hit 5.2 and they claim they're going to expand over that this year.

I don't think they beat last year's growth level, but they get close to that.

So I think the picture overall is not nearly as depressing as some some would have you believe.

Not nearly as depressing.

We'll take it.

Shazad.

Thank you so much.

Appreciate it and coming up.

We are checking in on some of the top analyst calls the day, do not go anywhere.

More market domination on the other side, consumer confidence levels ticking down slightly in June as Americans continue to show some unease about the state of the economy.

That's according to the Consumer Board's monthly numbers.

Joining us now is Ian Wyatt, Huntington Commercial Bank director of economics and commercial market strategist.

Thanks for being here.

Thank you for having me.

So I'm curious.

You know, we're all trying to get a handle on the consumer now, and it does seem like there are cracks, particularly at the lower end.

But what what are you seeing?

Yeah, I think I think that's very much correct.

I think at the higher end, when I talked to, say boat dealers, for example, even our RV dealers.

So we have a big lending business in that space.

They're saying you know, the top end products.

They're still able to sell the really high ticket stuff where it's some retiree with a big equity account and says, you know how much money?

Yeah, I mean, you spend it or at some point, or you're gonna die with a lot of money.

So might as well, spend it.

I think it's more in the value oriented products where they're seeing and when you're financing the debt where you're seeing a little more hesitation, especially given current interest rates, I mean, how do you see the consumers sort of holding up, you know, beyond just today more, you know, near intermediate term.

What are you looking for?

Yeah, I think one funny thing is we definitely have this again, that debt aspect where I think if it's a product where you're borrowing to spend on it, you're gonna have a different experience than than talking about experiences right now.

If you look at say, you know, Taylor Swift is not just Taylor Swift.

It's sporting events.

It's, you know, Caitlin Clark obviously driving the B NBA when you saw the other day, MLB had their best attendance weekend, and I think about 17 years and you know, people are out there travelling the TS a air travel data.

If you check that.

Seven of the 10 busiest air travel days in US history have been since May 23rd.

Yeah, so people are getting out there and they're they're spending money on that, even as maybe they're still squeezed at the grocery store.

They're still feeling a little.

I mean, what does all of this tell us about inflation and how reassured or not you are that we're gonna continue to see it moderate?

Well, I think also there's high end consumers to keep is a lot of them have owned their houses for a long time.

They refinanced in 23%.

You're feeling good.

Exactly.

I mean, I gotta say anecdotally if I may.

I mean, we bought our house not even four years ago, but rates have changed a lot, even if they haven't owned them for a really long time.

Rates have changed a lot in a short period of time.

Yeah, and your house payments may have gone up a little with property taxes, and insurance obviously has gone up.

But the reality is that owner equivalent rent, which is such an important part of CP I for those two thirds of Americans who own their house is more a theoretical thing.

It's Yeah.

Your payments have not gone up nearly as much as inflation says housing costs have gone up.

So you're out there spending you're feeling pretty good about yourself.

You're hitting the road travelling and and you're kind of I think Americans are still in that post covid almost euphoric reaction to I was tired of sitting at home.

I wanna get out there and hit the road and we're travelling internationally.

I think we're about 20% year on year international travel.

We're seeing it in domestic travel.

We're seeing that.

But I think, yeah, at the lower end, the consumers who rent the consumers who were for a while getting the biggest raises.

Um, about 2015 to 2023 you were seeing the bottom 25% of Americans.

We're getting the largest percent increase in wages.

Um, they are feeling some stress.

We're seeing a little bit of cracks or maybe just some normalisation there.

You know, we had very low defaults in 2020 2021 amongst that consumers.

I think we're seeing a little more stress there than we were I And how do you you know, it's interesting because we we're talking about the consumer and they're hitting Taylor Swift shows.

They're hopping, you know.

They're going with the kids hopping on the plane to Disneyland, but then we also have Ian.

All these polls, all these surveys which show people when you ask them about the economy, they don't feel so good.

How do we square that?

I think you know, we saw confidence come out today.

You were mentioning that.

Part of it, I think, is is our confidence has become so political.

If you look at you know what what party is in the White House almost determines how you feel about the economy.

If you're, you know, a Republican, you feel bad.

You're a Democrat.

You feel good.

If the parties switch, you're gonna see that flip the other way.

Uh, and I think there is this.

It's funny how much of a disconnect I feel like we're seeing.

You know, consumers say they're gonna spend less on restaurants, but we look at the card, spend data from something like F serve last month.

It's up.

Restaurant spending is up.

So there there's a very much do do as I say, not as I do or look at what I do.

Not as what I say.

Yeah, well, so in addition to consumer, you also deal with a lot of companies, right?

And you deal you deal with lending to companies in construction and other you know, across the spectrum.

Here.

So what are you How are they feeling?

What are they doing?

I?

I think you know, I. I don't think they're quite as at the beginning of this year when I talk to manufacturers across especially.

We have a lot of manufacturers in the Midwest.

Um, and we're expanding into the Southeast.

When I talked to them, they were a little more bearish at the beginning of this year.

They saw some softness in their demand.

Uh, I think now they're probably as as the economic picture has gotten a little worse from a data perspective from a Wall Street perspective, Maybe they haven't gotten as negative.

I think they've sort of stayed medium while though, you know, we've had some highs and lows.

Those of us who study the data so intently, they're more.

We're looking at their sales data, their inventory data.

They're seeing some.

OK, stability.

OK, demand.

Um but it also depends on the segment you're in.

Uh, if I'm talking, I was talking to an electrical contractor in the Midwest and they were saying because of data centres and this is an electrical contractor with large scale revenues.

This is not Mom and Pop.

And they were saying 50% growth in revenue they expected this year because of data centres.

So we're seeing in, you know, Columbus, we have the huge intel plant down in the Southeast.

We have the battery plants, we have the new auto plants going in in Columbus.

Uh, I mean, sorry.

In Columbia, South Carolina, not Columbus, Ohio.

Savannah, um, Toyota going into North Carolina.

There's a lot of really large infrastructure happening.

There's a lot of, uh, manufacturing plants being built.

And so what I thought was gonna be a weakness, which is construction as we saw pull back and just sort of the standard distribution warehouses have gone a ahead of themselves in terms of supply, pull back and multi family has not been.

And they're still saying, you know, it's a tough labour market up there for that kind of space.

If you're looking for electricians, you're looking for machinists, tool and dye makers.

Those are tough, you know you want to staff a gas station.

That's gotten easy, I think.

And so I've heard really a mixed picture on the labour market from our clients.

And that's still some good advice for perhaps new high school grads who are looking go looking to go into a train, looking, trying to figure out where to locate geographically, I guess.

I think, you know, if you go into the trades, the trade school world, I think there's there's a lot out there.

There's a lot of jobs out there looking for work, looking for skilled labour.

Um, I would say, You know, skilled is the important part of that always, Um, but you've always looked I started my career at BLS, used to study this data, talk to kids and tell them like Look, you look, there's a decent cohort of high school grads who do pretty well, but normally they've gotten some other education.

But it's just not the traditional college path, right?

Exactly, and thank you so much, really appreciate it.

I appreciate it.

Thanks.

Well, let's also get to some other train ticket and calls that we're watching.

Shares of Pool Corporation falling today after the company revise it 2024 earnings guidance it say it slower than expected demand during the summer swimming pool season and this hit, not just pool it hit.

I was joking earlier.

It created a real ripple effect.

I'm sorry to repeat that.

Very bad joke, but it was not just other pool supply companies.

PTA, um which apparently is a, um, distribute gives Pool Corp chemicals that then distributes.

I noticed Home Depot was lower today.

There's really this big group that was lower on this commentary here, Um, that, you know, because the forecast from the company, they slashed it a lot.

They slashed it to the upper end at 1144 from four.

19 a share for the full year.

That is a big, big cut to earnings guidance.

Yeah, I thought this line from pool really stood out to me when they said the discretionary components of our business, which are the most affected by general economic conditions, have been challenged by cautious consumer spending on big, big ticket items like swimming pools and outdoor living projects.

So, just as we were just talking there to E and Y you do you do have consumers here at least some consumers who seem to be prioritising more You know what they need rather than what they want well.

And also, if you think about, for example, a vacation, right?

He was just talking about a vacation or people who are in retirement who are buying a boat who don't have to finance it.

A pool is probably a financed project, and as rates have remained high, that's right.

Exactly.

So maybe that's the the differentiator for sure.

Let's get to some other calls a day Here.

Jeffrey is raising its price target on Chewy from 26.

They go up to 31 there, and I know analysts signing sponsored ads as a driver.

Uh, so Jeffrey is a fan of chewy.

Chewy is starting to show signs of scale, they say, with marginal profit dollars flowing through at a higher rate.

They talk about how sponsored ads as a driver, but operational improvements are also part of the story.

Julie Well, and what's interesting about that is because of those operational improvements.

Jeffrey says the company can deliver better earnings without an improvement in pet spending trends.

I mean, for a while you would see chewy move because of the big pet adoption boom during the pandemic.

Then that started to reverse and chewy reacted to that.

So he's sort of saying it doesn't matter if they're getting more profit out of each.

You know, they call them pet parents on chewing your we're not pet parents.

And that goes on.

He also notes, share gains, pet spending.

He he does argue.

Listen, they're gonna eventually rebound, offering long term upside balanced risk reward.

He's arguing to his clients at these levels.

All right, let's get to another call that we are watching.

Truest.

Initiating coverage on Celsius holdings with the hold rating a $60 price target.

Bill Chappell is the analyst over there, saying the company is poised to post outsized growth.

However, uh, the company basically says that the street, I should say.

He says the street expectations are ahead of the company's position and that growing from here and more market share gains are gonna be challenging.

And this was an interesting note.

He looked at some of the other big, um, energy energy drink companies here.

He looked at Monster, for example, um, and compared it with Red Bull and talked about their market share and that they're sort of dominant and that Celsius is gonna have to kind of claw to get additional market share from here.

It was an interesting note because he actually long term.

He likes this story.

I mean, he's constructive.

He says, Listen, they've got you know, the brand has a differentiating message.

Uh, targeting.

They're targeting a new broad demographic strong partner to expand distribution.

I think the money line here and why he's initiating with the hold is we just worry.

He says that the street expects the story to move up into the right for the foreseeable future.

And we have never seen a hyper growth story progress in the street line.

Never have enough energy drinks.

I think Brian Sazi would say that, I, I wouldn't say that, but all right, we're less than five days out from a consequential French election that's already fueling volatility in European markets.

How can investors play the political change in their portfolio?

We will discuss next.

A consequential French election kicks off over the weekend and the outcome could have big implications for broader European markets.

We're looking at how US investors can navigate the big picture with the Yahoo finance playbook and we're joined by Ben and founder and chief investment officer at Fed Watch Invir.

Good to see you then.

So the set up here is that a Manuel Macron of France has called this snap parliamentary election a Really.

It was a surprise for pretty much everyone in France, including those in his own party.

But it looks like what could happen as a result is that particularly some of the right wing in French politics could gain some ground.

We've already seen a lot of volatility in French assets.

How should investors be be thinking about this situation?

Yeah, I think, uh, Julie, it's It's once again a story about France being in trouble with its, uh, its its management of his debt.

You know, the the the European Union Market Union has certain specific rules around deficits and debt, and these right wing and left wing parties have a very different view about it.

They view that we shouldn't really be following those rules.

And since they have so much in the polls and and that has broken up Macron and he called of snap elections, investors suddenly are aware of like, Wait a minute, there's a again this this euro risk now centred in France and people are maybe looking at this, too, as a sense of like what happened with the UK years ago, the Brexit, that this becomes this idea of Frexit now I think what really happened, though, Julie, is that there was an initial reaction in the in the C AC 40 index quite sharply, And that sort of recovers, I think, to play as investors that this election will be really about a new coalition in the in Parliament.

And it then depends a bit on how the coalition formed what the ultimate outcome will be for investors of Will France really tilt to a site where it doesn't follow the rules or it's still some compromise looks like from the price section some compromise.

So it looks, too, that the initial reaction quite sharp.

It was made.

I think some of the European tax stocks as well as small caps relatively attractive to to US small caps and tax stocks.

So So you're suggesting Ben, um, despite all these headlines that what's happening in France here, this could be for investors an opportunity here.

I think it is because you know, oftentimes, when you get these geopolitical tensions around a certain subject like this case.

Uh uh, you know, political issue.

It seems that the populists don't really get much anywhere, right?

They they may get reelect or get elected, but they can't form a government or trouble to form a government, and therefore not all the plans materialise.

And so, as you're getting this adverse reaction in the stock market seems to have overshot to the downside because the the new future government cannot do much, and then therefore it becomes an opportunity.

So I think this is an opportunity to take risk.

It is an opportunity.

How would you do that, Ben?

Would you get into equities in France, or would you be looking at debt?

What's what's the best way?

I, I think both Julie because, um, you know, French bonds.

If you think of it that you know, these are the more safer assets in in the eurozone compared to say, in Italy or or or Greece and because of the E CBS, you know, major influence on these markets with rate cuts already coming through.

Those bonds look interesting, but French stocks to an extent too.

I mean, what has really sold off are the French banks.

Those are well capitalised institutions now, so it looks really overextended.

So I think you could play both French stocks and bonds going into the election.

What about Ben?

I if you have thoughts as well, you know, UK elections, um, set for early July.

Um, any thoughts there, Ben?

How do you think about that?

As as an investor as a strategist.

Yeah.

I think those elections are similar although different issues happening there.

But, you know, in the UK, it's been all about inflation.

That's like we have Our election here will be much centred around inflation.

And I think there is a different story.

It's more about if, if we're getting a different government, it probably would more be about Will this government actually tackle austerity?

Which the UK tends to be more focused on bringing the deficit down.

But what will happen to inflation?

That's not clear, if anything, if there's going to be a lot of confusion about what fiscal policy will do, inflation picture may not necessarily change.

And yet the Bank of England is sitting there trying to cut rates at some point.

So I think UK is a little bit in flux here.

Currently, I don't think there's a clear opportunity there compared to the situation in France, which looks much more of an overreaction to these these geopolitical headlines.

You know, it's interesting then, because in general we have seen some of the right word leaning parties gain ground in Continental Europe.

Uh, in particular, outside of France.

Are there other areas where you think things have been sort of mispriced?

Do you think there are opportunities?

Well, we have a very subdued volatility environment.

Uh, Julie, And so it has made some of the opportunities a bit limited.

I think that what happened over the last sort, maybe weeks, two weeks in our own market, in the US you get suddenly a stock like NVIDIA really drawing down by 50% and it pops 7% higher today.

It's sort of like you reach short term opportunities.

Um, I think we have to wait and see what happens with our election in particular.

What will be the dislocation coming from that the presidential debate that comes up now maybe the first catalyst for markets start thinking about, like, who really has the best shot here If it's going to be tariffs and tax cut, or it's gonna be again more fiscal spending.

So I think in the next two days we're getting maybe this mis pricing more clear here in terms of in the US markets, for example, more opportunity to see if there's opportunity to take risk.

All right, we'll be watching Ben, thank you so much for for joining the show today.

Appreciate your time and insight.

Thank you.

And we're wrapping up today's market domination.

Don't go anywhere.

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