Stocks Rise as Oil and Treasury Yields Fall | The Close 8/25/2026

>> THE COUNTDOWN IS ON. EVERYTHING YOU NEED TO GET THE EDGE AT THE END OF THE MARKET DAY. THIS IS "THE CLOSE." ROMAINE: OIL RETREATS, CONSUMER CONFIDENCE STUMBLES, AND EQUITY TRADER TRY TO CAPITALIZE ON IT ALL. FROM BLOOMBERG HEADQUARTERS IN NEW YORK, I AM ROMAINE BOSTICK. >> KICKING YOU OUT TO THE CLOSING BELL HERE IN THE U.S. ON A DAY WHEN WE ARE 24 HOURS AWAY FROM THE KEY EARNINGS REPORT FROM NVIDIA. WE ARE SEEING EQUITIES HIGHER. S&P 500 UP 0.3%. AS OIL FALLS, AS BRENT IS DOWN 4%. SPEAKING OF DOWN, YIELDS ARE MOVING LOWER. THE SECOND DAY IN A ROW TO SEE THAT 10-YEAR YIELD MOVING DOWN. 4.6%. IT COINED AS WELL, SOMETHING TO HIGHLIGHT. IT DID TOP 80,000 FOR THE FIRST TIME IN QUITE A WHILE. IT'S IN THE GREEN BUT COMING OFF OF THE SESSION HIGHS. ROMAINE: THE BACK DROP IN OIL PRICES. SPEAKING OF THE DROP IN TREASURY YIELDS, PROVIDING A BOUNCE FOR STOCKS. VOLUME IS EVEN WEAKER THAN THE DAY BEFORE. BREATH EVEN NARROWER. CALL IT MORE OF A HOLDING PATTERN IF YOU WILL HEAD OF A CONSEQUENTIAL THREE DAYS UP AHEAD. STARTING TOMORROW MORNING, THE PCE REPORT PREDICTED TO SHOW STAGNANT INCOME GAINS, SLOWING HOUSEHOLD SPENDING GROWTH, AND CORE INFLATION STILL PINNED ABOVE THE FED'S 2% TARGET FOR THE 65TH STRAIGHT MONTH. THEN ON WEDNESDAY WE HEAR FROM NVIDIA, WE GET THE EARNINGS COME AND GET A READ ON THE SUSTAINABILITY OF THOSE AI INVESTMENTS RESPONSIBLE FOR NOT ONLY DID U.S. STOCK MARKET GAINS, BUT CLOSE TO THREE QUARTERS OF U.S. GDP GROWTH. ADDING TO THE CAUTION WAS A CONSUMER CONFIDENCE REPORT WE GOT THIS MORNING THAT SHOWED FOLKS OUT THERE, TODAY, SAY THE ECONOMY IS TOLERABLE, BUT THEY THINK TOMORROW WILL BE WORSE. IT IS NOT ALL BAD OUT THERE, YOU HAVE PHENOMENAL EARNINGS GROWTH FOR THE S&P OUTPACING THE ADVANCE IN THE INDEX ITSELF. ELEVATED DEALS ARE STILL NOWHERE NEAR CRISIS LEVELS. WHILE THE AI SPENDING MAY FEEL OUT OF CONTROL, SOME OF THE PROMISED PRODUCTIVITY GAINS AND ROI ARE STARTING TO MATERIALIZE. I WANT TO GO BACK AND TAKE A QUICK LOOK AT THE CONSUMER CONFIDENCE DATA. WE WILL HAVE THE CEO OF THE CONFERENCE BOARD IN A MINUTE. THERE IS AN INTERESTING DIVERGENCE HERE. THE IDEA THAT PEOPLE ARE FEELING CONFIDENT ABOUT THE HERE AND NOW BUT NOT SO CONFIDENT ABOUT WHAT IS AROUND THE CORNER. AND THAT IS THE SIMILAR BACKDROP WE ARE SEEING PLAY OUT IN THE MARKETS. YOU SEE THAT IN THE PRICE ACTION. A LOT OF OPTIMISM ABOUT THE SHORT TERM, BUT A LOT MORE TREPIDATION ABOUT THE LONG TERM. ABBY JOSEPH COHEN HAS SEEN QUITE A FEW ECONOMIC AND BUSINESS CYCLES, A LEGENDARY ECONOMIST AND FINANCIAL ANALYST, NOW AT THE COLUMBIA BUSINESS SCHOOL, CHIEF U.S. STRATEGIST OVER AT GOLDMAN SACHS. I WANT TO TALK ABOUT WHAT THE MARKET IS TELLING US. WE TALKED ABOUT EQUITIES STILL CAMPED OUT NEAR RECORD HIGHS, BUT THEN YOU LOOK AT SOME OF THE MOVES WE HAVE SEEN IN TREASURY YIELDS WHICH SEEMS TO SUGGEST, AT LEAST AMONG BOND INVESTORS, THEY ARE LESS SANGUINE ABOUT THE LONGER-TERM PICTURE. WHAT TO WE PAY ATTENTION TO? ABBY: ROMAINE, YOU HAVE LAID IT OUT QUITE WELL IN YOUR INTRODUCTORY COMMENTS. BASICALLY, THIS IS AN EQUITY MARKET THAT IS BEING DRIVEN AT LEAST RIGHT NOW BY VERY FERAL THE EARNINGS OUTLOOK. WE HAVE HAD GREAT REPORTS. THE EXPECTATION IS THAT MANY OF THE LEADING COMPANIES WILL CONTINUE TO BE VERY PROFITABLE, STRONG MARGINS, STRONG RETURNS ON EQUITY. HOWEVER, WHEN WE LOOK AT THE REST OF THE ECONOMY, THINGS ARE LOOKING OK BUT NOT GREAT, AND THAT IS WHAT THOSE CONSUMER CONFIDENCE NUMBERS ARE SAYING TO YOU. WE BASICALLY SEE, FOR EXAMPLE, MIDDLE INCOME CONSUMERS ARE NOT FEELING ALL THAT GREAT ABOUT EITHER THEIR OWN FINANCIAL SITUATION OR PROSPECTIVE EMPLOYMENT AND WAGE GAINS, AND THAT IS SOMETHING THAT IS QUITE TELLING. AMONG THE THINGS TO BE LOOKING AT, BY THE WAY, IS A REAL TIME METRIC TO CONSUMER CONFIDENCE, AND THAT OF COURSE IS CONSUMER SPENDING. BACK TO SCHOOL SALES WILL BE IMPORTANT, BUT LET'S KEEP IN MIND THAT MANY OF THE RETAILERS ARE TRYING TO JUICE UP THOSE SALES BY DOING THEIR HALLOWEEN OFFERINGS VERY EARLY. SO THAT IS SOMETHING THAT WILL MAKE THE YEAR ON YEAR COMPARISONS A LITTLE BIT DIFFICULT TO READ. WE ARE ALSO LOOKING AT A SITUATION WHERE THE CONSUMER BALANCE SHEET IS LOOKING MORE AWKWARD THAN IT HAS IN THE PAST. WE SEE AN UPTICK, FOR EXAMPLE, IN SUBPRIME BORROWING, FOR AUTOS, FOR EXAMPLE, AND LET'S NOT FORGET WE ARE SEEING THE PINCH FROM SOME OF THOSE CHANGES THAT WERE MADE IN THAT BIG OF THE MOST BILL PASSED IN JANUARY 2020 FIVE. WE KNOW THAT MANY LOWER AND MIDDLE INCOME HOUSEHOLDS HAVE LOST THEIR MEDICAL INSURANCE COVERAGE, AND THAT OF COURSE SAYS SOMETHING ABOUT WHETHER THEY CAN AFFORD TO BE SPENDING ON OTHER ITEMS. ROMAINE: I WANT TO GO BACK TO THE CONSUMER SPENDING, AND DISCUSS TWO QUESTIONS ABOUT THE ECONOMIC DATA WE GET, HOW RELIABLE IT IS IN THE MOMENT. I WAS LOOKING THROUGH A LOT OF THE CORPORATE EARNINGS WE HAVE HAD, PARTICULARLY AMONG SOME OF THE FOLKS IN THE RETAIL SPACE. THEY HAVE NOT NECESSARILY BEEN GOOD. WE WILL TALK LATER ABOUT DICK’S SPORTING GOODS, WHICH MISSED BECAUSE OF HIGHER PROMOTIONS IT HAD TO MAKE TO GET PEOPLE BACK IN STORES, WALMART POSTED ITS LOWEST COMP SALES GROWTH IN SIX YEARS, ON HOLDING, UNDER ARMOUR, YOU NAME IT. A LOT OF THESE COMPANIES HAVE SUGGESTED A CHOOSIER CONSUMER, AND FOR SOME OF THEM, A CONSUMER THAT IS NOT CHOOSING AT ALL. SHOULD WE PAY ATTENTION TO WHAT WE HEARING FROM THESE COMPANIES RATHER THAN WHAT THE OFFICIAL ECONOMIC DATA SAYS? ABBY: I THINK IT'S IMPORTANT TO LOOK AT BOTH. THOSE RETAILERS THAT YOU CITE ARE VERY IMPORTANT BECAUSE THESE ARE THE LARGE PUBLIC COMPANIES, BUT ONE OF THE THINGS THAT THE AGGREGATE DATA FROM THE COMMERCE DEPARTMENT PICKS UP IS WHAT IS HAPPENING FOR MOM-AND-POP RETAILERS. WHAT IS HAPPENING FOR THOSE RETAIL COMPANIES NOT INCLUDED IN THE MARKET INDICES. THOSE NUMBERS DON'T LOOK PARTICULARLY GOOD EITHER. WE SEE THAT PERSONAL CONSUMPTION SPENDING IS JUST ABOUT 2%, 1.8%. THAT IS NOT AS ROBUST AS WE MIGHT LIKE. WHEN WE LOOK AT AGGREGATE GDP NUMBERS, WHERE IS THE VIGOR COMING FROM? A LOT OF IT IS FROM BUSINESS INVESTMENT, AND PRIMARILY EQUIPMENT, WHICH IS GROWING SOMEWHERE AROUND 11% TO 12% ON AN ANNUALIZED RATE. BUSINESS FIXED EXPENDITURES FOR STRUCTURES, BUILDINGS IS ACTUALLY DOWN 4%. SO THIS IS AN ECONOMY THAT IS VERY UNEVEN IN ITS GROWTH. MIDDLE INCOME, LOWER INCOME CONSUMERS ARE NOT WHERE THE VIGOR IS, NOT AT ALL. EMILY: THIS IS ALSO AN ECONOMY WHERE WE ARE SEEING SO MUCH SPENDING ON THE BUILDOUT OF ARTIFICIAL INTELLIGENCE INFRASTRUCTURE. HOW DO YOU SEE THAT WEIGHING ON PRICING PRESSURES AND ECONOMIC GROWTH GOING FORWARD? ABBY: THERE ARE SO MANY DIFFERENT WAYS TO SLICE AND DICE THAT, I'M GLAD THAT YOU ASKED THE QUESTION. FIRST OF ALL, THERE IS THE ACCOUNTING QUESTION THAT IS VERY COMPARABLE TO THAT CROSS HOLDINGS SITUATION IN JAPAN IN THE 1980'S, WHERE THERE IS THE CIRCULARITY TO A LOT OF THE ACCOUNTING. DIFFERENT COUNTRIES IN THE INDUSTRY OR RELATED INDUSTRIES ARE BASICALLY BORROWING AND LENDING MONEY TO ONE ANOTHER, AND IT SHOWS UP IN SOME CASES AS EARNINGS, IN OTHER CASES AS PROSPECTIVE REVENUE. SO THAT IS ONE THING TO KEEP IN MIND. THE SECOND THING TO KEEP IN MIND IS WHETHER THERE IS, IN FACT, A SUSTAINABILITY TO SOME OF WHAT WE ARE SEEING, PARTICULARLY WHEN IT COMES TO GROWTH IN DATA CENTERS, ALSO GROWTH IN EXPENDITURES ON SOME OF THE CHIPS AND SO ON. I AM NOT AT ALL SAYING THAT THERE IS NOT SOMETHING VERY UNIQUE HAPPENING, STRUCTURAL CHANGE AS IT RELATES TO AI AND SO ON, HOWEVER, WE ALSO HAVE TO KEEP IN MIND, SOME OF THE SPENDING WE ARE SEEING AND SOME OF THE ACCOUNTING WE ARE SEEING MAY NOT BE SUSTAINABLE. EMILY: TALK A LITTLE BIT MORE ABOUT THAT. IS IT ALREADY CLEAR TO YOU WHAT SECTORS, WHAT COMPANIES ARE STARTING TO BECOME THE WINNERS VERSUS THE LOSERS OF THIS AI RACE? ABBY: THERE ARE THE PEOPLE WHO ARE VERY CLOSE TO THE SITUATION WHO HAVE IDENTIFIED WINNERS AND LOSERS. I THINK WE LOOK NOT JUST AT THE COMPANIES, BUT WE ALSO HAVE TO LOOK AT THE GEOGRAPHIES. WHICH ARE THE COMMUNITIES, WHICH ARE THE COUNTRIES THAT ARE LIKELY TO DO QUITE WELL IN THIS ENVIRONMENT? AI HAS MUCH PROMISE TO IT. WHAT WE HAVE NOT YET SEEN IS WHETHER THERE HAS BEEN A BOOST IN LABOR PRODUCTIVITY. THAT CERTAINLY HAS NOT COME THROUGH, AT LEAST TO THIS POINT. MAYBE IT IS TOO SOON. THAT IS NUMBER ONE. NUMBER TWO, WE SEE THAT MANY OF THE COMPANIES THAT HAVE INVESTED HEAVILY AS CUSTOMERS IN AI SAY THEY ARE CONTINUING TO SPEND, BUT THEY HAVE NOT YET SEEN THE BENEFIT TO THEMSELVES. TO ANSWER YOUR QUESTION, AT THIS STAGE, WHICH IS PRETTY EARLY STILL, WHEN YOU TALK ABOUT A TECHNOLOGICAL INNOVATION THAT IS HOPEFULLY GOING TO HAVE A POSITIVE IMPACT THROUGHOUT THE ECONOMY, THE BENEFICIARIES THUS FAR HAVE BEEN THE SUPPLIERS AND PROVIDERS, AND WE HAVE NOT SEEN IT IN TERMS OF AN ECONOMY WIDE PROCESS. ROMAINE: WHEN DO YOU THINK WE WILL START TO SEE THAT GAP BETWEEN THE AI INVESTMENT AND THESE PRODUCTIVITY GAINS? PAST CYCLES WE HAVE SEEN THIS BEFORE WHERE THE SPENDING FAR OUTPACES THE RETURNS. EVENTUALLY IT CATCHES UP. WHAT IS THE LAG TIME HISTORICALLY, WHAT DOES THAT TELL US? ABBY: THE MOST RECENT PERIOD OF COURSE WAS THE 1990'S WITH THE SO-CALLED TMT, INTERNET, TELECOM, MEDIA COMMUNICATIONS, AND SO ON. THE LAG TIME THERE WAS ON THE ORDER OF TWO OR THREE YEARS. WE ALSO HAD TO KEEP IN MIND THE ECONOMIC DATA DID NOT KEEP UP BECAUSE MANY OF THE ECONOMIC STATISTICS WERE TRACKING SOME OF THE OLDER COMPANIES THAT WERE NOT PARTICIPATING. BUT THERE IS SOME FASCINATING WORK GOING BACK IN ECONOMIC HISTORY, LOOKING AT THE CANALS OF THE 1820'S, OR THE RAILROADS OF THE 1840'S, 1850'S, ELECTRICITY GENERATION IN THE LATE 19TH AND EARLY 20TH CENTURY AND SO ON. VERY OFTEN, THE LAG WAS MEASURED IN TERMS OF MANY, MANY YEARS. I DON'T THINK IT WILL TAKE THAT LONG THIS TIME. I THINK WE ARE LOOKING AT IN TERMS OF ONE OR TWO YEARS. IF THE HEAVY SPENDING DOES NOT LEAD TO PROPITIOUS RESULTS FOR A PARTICULAR COMPANY, ONE CAN ASSUME THEY WILL CUT BACK OR AT LEAST TRY TO RATIONALIZE THE SPENDING THEY HAVE BEEN DOING IN THIS CATEGORY. ROMAINE: PROFESSOR, I WANT YOUR THOUGHTS ON THE JACKSON HOLE MEETING WHICH KICKS OFF THIS WEEK IN KEVIN WARSH'S SPEECH ON FRIDAY OSTENSIBLY ABOUT FINANCIAL INNOVATION PAYMENTS. I ASSUME PEOPLE WILL BE LOOKING FOR SOMETHING DIFFERENT THAN WHAT THAT HEADLINE SUGGESTS. YOU STARTED HER CAREER INSIDE THE FEDERAL RESERVE. I'M CURIOUS, WHEN A NEW CHAIR STEPS UP TO THE PODIUM FOR THE FIRST TIME, WHO ARE THEY SPEAKING TO? ARE THEY SPEAKING TO THE AUDIENCE IN THE ROOM, THE MARKET, WHOM? ABBY: HOPEFULLY, THEY ARE SPEAKING TO ALL OF US. MR. WARSH, AS YOU KNOW, DID NOT GET RAVE REVIEWS FOR THE MARKETS WHEN HE DID HIS FIRST POST FOMC MEETING PRESS CONFERENCE. THE ARGUMENT AT THAT TIME ON THE PART OF MANY WAS THAT HE REALLY DIDN'T PROVIDE MUCH INFORMATION OR GUIDANCE. THE SORT OF GUIDANCE THAT THE MARKETS ARE LOOKING FOR IS NOT TO BE TOLD, GEE, WE ARE GOING TO DO THIS OR THAT TO INTEREST-RATE AND A VERY SPECIFIC TIME FRAME, BUT AT LEAST TO UNDERSTAND WHAT THE VARIABLES ARE THAT HE IS MOST INTERESTED IN LOOKING AT. I DO THINK WE WILL BE HEARING MORE OF THAT, IF NOT SHORT-TERM, AT LEAST WHAT HE IS LOOKING AT INTERMEDIATE TO LONGER-TERM, NUMBER ONE. NUMBER TWO, ALSO STRUCTURE IT. HE HAS SPENT A GOOD DEAL OF TIME THUS FAR AT THE FED THINKING IN TERMS OF WHETHER THE FED IS HANDLING IT SELF APPROPRIATELY WHEN IT COMES TO THINGS LIKE COMMUNICATIONS, REGULATORY OVERSIGHT, DATA COLLECTION AND SO ON. I HOPE THAT WE HEAR MORE ON THAT. BUT THIRD THING, TOO, THE ATTENDEES OF THIS MEETING COME FROM ALL OVER THE WORLD. I'M HOPING PEOPLE HAVE AN OPPORTUNITY NOT JUST IN THE PUBLIC SPEECH, BUT OF COURSE, BEHIND THE SCENES COME IN PRIVATE MEETINGS WITH OTHER CENTRAL BANKERS, FOR THEM TO COME TO SOME KIND OF UNDERSTANDING ABOUT WHAT THEY ARE ALL LOOKING AT, WHAT THEY ARE CONCERNED ABOUT, AND HOW THEY THINK THEY CAN DO BETTER MOVING FORWARD. WHEN I SAY BETTER, I'M TALKING IN TERMS OF COORDINATION, COMMUNICATION, AND ALSO, DARE I SAY IT, RISK CONTROL. ONE OF THE THINGS THAT THE CENTRAL BANK IN ANY NATION HAS AS ITS RESPONSIBILITY IS TO THINK ABOUT WHAT TO DO IF THINGS GO WRONG. THAT MIGHT BE A VERY LOW PROBABILITY SCENARIO, BUT IT IS SOMETHING THAT WE EXPECT THE CENTRAL BANKERS TO BE PREPARED FOR, NOT JUST IN THEIR OWN COUNTRIES, BUT ALSO AS THEY WORK WITH ONE ANOTHER. AS THE FED HANDLES THE CENTRAL BANKING FOR THE WORLD'S LARGEST ECONOMY AND LARGEST BANKING SYSTEM, WHAT MR. WARSH TELLS EVERYONE TO LOOK BEHIND THE SCENES AND IN FRONT OF THE CAMERA IN THIS REGARD IS REALLY INCREDIBLE. ROMAINE: APPRECIATE YOU JOINING US, ABBY JOSEPH COHEN, ONE OF THE GREATEST MINDS IN THE WORLD OF BUSINESS AND FINANCE. PROFESSOR NOW AT THE COLUMBIA BUSINESS SCHOOL HERE IN NEW YORK. COMING UP, WE WILL TALK ABOUT THOSE CONSUMER CONFIDENCE NUMBERS, AND A BIT OF A CRISIS IN THE CONFIDENCE. WE WILL TALK TO THE CEO OF THE CONFERENCE BOARD ABOUT SOME OF THE DIVERGENCES WE ARE SEEING IN THAT DATA. EMILY: FROM PUBLIC SENTIMENT TO PRIVATE MARKETS, WHICH KAPLAN SIFTS THROUGH THE IPO PIPELINE AND LAYS OUT THE NEXT PHASE FOR ALTERNATIVE ASSETS. ROMAINE: WE WILL TALK ABOUT AI, BUT ON THE IMPACT OF EDUCATION. MCGRAW-HILL, REMEMBER THEM? THEY HAVE A NEW CEO. HE WILL BE JOINING US ON THE PROGRAM TO TALK ABOUT HOW THE TECHNOLOGY IS FINDING ITS WAY INTO THE CLASSROOM AND ONTO HIS INCOME STATEMENT. ALL OF THAT WERE COMING UP HERE ON "THE CLOSE'" RIGHT HERE ON BLOOMBERG. ♪ ♪ ROMAINE: WELCOME BACK TO "THE CLOSE." MARKETS TRYING TO REBOUND A LITTLE BIT FROM SOME OF THE DOLDRUMS WE SAW THE LAST TWO DAYS OR MAYBE A BIT OF A HOLDING PATTERN AS WE AWAIT QUITE A FEW CATALYSTS FOR THIS MARKET OVER THE NEXT FEW DAYS. EMILY: YEAH, NVIDIA IS WHAT A LOT OF ANALYSTS ARE WAITING ARE. ROMAINE: WE’LL SEE. WE SHOULD ALSO POINT OUT AS WE’RE SPEAKING NOW, ALSO ON OPENAI THEIR HEAD OF DATA CENTERS CHARISMA LOAN LEAVING THE COMPANY. QUITE A FEW DEPARTURES FROM OPENAI OVER LAST FEW MONTHS. SOMETHING TO WATCH AS THEY IN THEORY PREPARE FOR AN IPO. MAYBE THIS YEAR, MAYBE NEXT YEAR? WE ARE GOING TO HEAR FROM NVIDIA AND I’M INTERESTED TO HEAR MORE OF WHAT JENSEN HUANG SAYS ABOUT LONG-TERM AND THE COMPETITION IN THE CHIP SPACE. IT’S NOT HIS WORLD ANYMORE. EMILY: THEY WERE THE POSTER CHILD FOR THE AI TRAILED BUT THEY ARE LAGGING NOW, ONLY UP LIKE 15% YEAR TO DATE. SOME OF THE OTHERS ARE FROM TRIPLE DIGITS. ROMAINE: NVIDIA TRYING TO SNAP A SEVEN-DAY LOSING STREAK AHEAD OF ITS EARNINGS REPORT TOMORROW. DICK’S SPORTING G GOODS NEWS WASN’T GOOD. CONVERSATION ABOUT THAT COMING UP HERE ON "THE CLOSE." ROMAINE: LET’S GET TO OUR TOP CALLS, THE BIG MOVERS ON THE BACK OF ANALYSTS’ RECOMMENDATIONS. AMD, TOO STRONG BUY, THE PRICE TARGET GOES 241. IT IS BETTER EQUIPPED TO CAPTURE THE GROWING MARKET FOR C.P.U.’S AND INTEL. MORGAN STANLEY UPGRADING TO OVERWEIGHT SAYING THEY’RE BENEFITING FROM THE HEALTHIEST MARKET FROM SO-CALLED OBSERVABILITY SERVICES SINCE 20 2. THOSE SHARES UP JUST OVER 2%. SHERWIN-WILLIAMS IS BOOSTING EARNINGS WITH NO HELP FROM THE HOUSING MARKET. SHARES UP 1% ON THE DAY. LET’S GO TO DICK’S NOW, ONE OF THE BIGGEST DECLINERS ON THE DAY. A HUGE PLUNGE DOWN 30% AFTER THE ATHLETIC SALES RETAILER CUT ITS SALES OUTLOOK OVER PRESSURE FROM THE FOOT LOCKER CHAIN IT BOUGHT EARLIER IN THE SUMMER. THEY CLOSED THIS DEAL ABOUT ONE YEAR AGO, SEPTEMBER 8 BUT WHEN THEY ANNOUNCED THAT DEAL IT WAS WIDELY DERIDED. DICK’S WAS PRETTY HEALTHY COMPANY ON ITS OWN. FOOT LOCKER WAS STRUGGLING. BIG-BOX STORE VERSUS MALL STORES THAT FOOT LOCKER HAD. WHAT’S GOING ON? >> IT’S VERY SIMPLE. THEY NEVER SHOULD HAVE DONE THIS DEAL. PERIOD, FULL STOP AND FOR A NUMBER TO HAVE REASONS, FIRST OFF, WHY BUY THE COW WHEN YOU CAN GET THE MILK FOR FREE? FOOT LOCKER HAS BEEN BLEEDING MARKET SHARE TO DICK’S FOR YEARS AND WOULD HAVE CONTINUED TO DO THAT. SECOND OFF, EVERYTHING THEY WERE DOING WAS WORKING. CONTINUED TO GAIN MARKET SHARE, HAD ALL BIG BRANDS SO THIS DEAL WAS NONSENSICAL. IT WAS JUST A MATTER OF TIME BEFORE IT BLEW IT SPECTACULARLY AND THAT’S WHAT WE SAW TODAY. ROMAINE: IS THERE A PATH WHERE WE CAN RIGHT THIS SNIP IS IT JUST CLOSING MORE FOOT LOCKER STORES OR IS THERE SOMETHING ELSE THEY CAN DO? ANTHONY: THAT’S A GOOD QUESTION. I’M NOT SURE I HAVE A EDUCATE ANSWER. CERTAINLY CLOSING MORE STORES. FOOT LOCKER HAS STORES IN 20 DIFFERENT COUNTRIES, 20, AND THEY HAVE FIVE DIFFERENT CONCEPTS. IT’S NONSENSICAL. WHEN DICK’S REPORTED EARNINGS LAST QUARTER AND FOOT LOCKER ACTUALLY HAD POSITIVE SALES AND THEY INCREASED THEIR TARGET FOR THE YEAR, THEY SAID WE’RE PROBABLY NOT GOING TO CLOSE AS MANY STORES AS WE ORIGINALLY THOUGHT. YES, CLOSING STORES IS DEFINITELY A PART OF IT AND PROBABLY GETTING RID OF A CONCEPT OR TWO. EMILY: WHAT ABOUT MAYBE CONSIDERING GETTING RID OF THE BUSINESS ENTIRELY? IS THAT ON THE TABLE? ANTHONY: IT’S NOT ON THE TABLE RIGHT NOW. I CAN ALMOST ASSURE YOU IT WILL BE ON THE TABLE AND BY THE WAY, FOR THE RECORD, YOU BROUGHT IT UP, NOT ME. THE REASON THAT I SAY THAT IS THAT I’VE SEEN THIS MOVIE BEFORE. THIS IS DOLLAR TREE BUYING FAMILY DOLLAR BACK IN LIKE 2014. WITHIN A YEAR AND A HALF OR SO IT WAS CLEAR IT WASN’T WORKING. YOU KNOW WHO BASICALLY SAID THEY SHOULD SELL THAT BUSINESS? THIS GUY. IT TOOK THEM A LOT LONGER THAN ANTICIPATED TO DO IT BUT THAT’S WHAT ULTIMATELY HAPPENED. I DON’T THINK IT’S GOING TO HAPPEN ANYTIME SOON BUT HONESTLY I BELIEVE THAT’S THE END GAME. ROMAINE: I KNOW WE’RE PINNING EVERYTHING ON THIS QUARTER ONTO FOOT LOCKER BUT INTERESTING TO SEE A LOT OF THE PIERCE IN THIS SPACE GET DRAGGED DOWN. SHOULD WE NOT READ ANYTHING INTO THE DECLINES WE’RE SEEING SOMEBODY ANTHONY: THERE’S PROBABLY A LITTLE BIT OF A READ. ONE OF THE THINGS THEY SAID WAS THERE WAS THIS BUILD-UP OF INVENTORY IN THE CHANNEL. BUT WHEN YOU LOOK AT REDUCTION OF GUIDANCE FOR THE FULL YEAR IT REALLY WAS IN FOOT LOCKER. THEY TRIMMED THEIR EARNINGS NUMBERS A LITTLE BIT IN THE CORE DICK’S BUSINESS BUT I THINK IT’S FAIR TO SAY THERE IS SOME READ THROUGH TO A DECKER’S, A NIKE, TO TAN ACADEMY SPORTS. RILEY I’M SORRY, I WAS FURIOUSLY TRYING TO FIND YOUR NOTE FROM BACK IN MAY OF 2025. SORT OF LEFT YOU SCRATCHING YOUR HEAD WAS WHAT THAT SAID. IS THAT WHY YOU LOST ALL YOUR HAIR, ANTHONY? HALF LAUGH ANTHONY: BEING IN THE RETAIL INDUSTRY FOR 20 YEARS IS THE REASON I LOST MY HAIR. BEFORE THAT I HAD A FULL AFRO. RILEY ANTHONY FROM LUKE CAPITAL MARKETS. THIS IS BLOOMBERG. ♪ ROMAINE: 3:30 P.M. HERE IN NEW YORK. THIS IS THE COUNTDOWN TO "THE CLOSE." I’M ROMAINE BOSTICK. EMILY: AND I’M EMILY GRAFFEO. ROMAINE: WE STARTED THIS MORNING WITH A LOOK AT CONSUMER CONFIDENCE. 10:00 A.M. NEW YORK TIME AND IT WAS HARD TO KNOW EXACTLY WHAT TO MAKE OF IT. ON THE SURFACE IT DIDN’T LOOK AWFUL. THE CONFIDENCE INDEX DID DETERIORATE SLIGHTLY. AND THE CONSENSUS WAS IT WAS GOING TO INCREASE SLIGHTLY. I WAS A LITTLE MORE INTERESTED IN THE DISPARITY BETWEEN HOW PEOPLE FEEL ABOUT WHAT’S GOING ON NOW AND HOW THEY FEEL ABOUT WHAT THEY THINK IS AROUND THE CORNER. EMILY: RIGHT BECAUSE THEY FEEL PRETTY GOOD ABOUT RIGHT NOW. DESPITE RISING ENERGY PRICES, CONSISTENT INFLATIONARY PRICE PRESSURES. IT JUST GOES TO SHOW WHAT DOES THIS MEAN FOR THE MONTHS AHEAD? ROMAINE: ABSOLUTELY. WHO BETTER TO ASK THAN THE CEO OF THE CONFERENCE BOARD STEVE JOINS US NOW. I WANT TO GET RIGHT TO IT. PARTICULARLY WITH THE NUMBERS WITH REGARDS TO EXPECTATIONS. PRESENT SITUATION, THAT INDEX ROSE 6.8 POINTS TO 121 AND CHANGE BUT THE EXPECTATIONS INDEX FELL BY SIX POINTS DOWN TO 68 AND CHANGE. THAT’S A PRETTY HUGE DISPARITY, WHY? STEVE: THE CONSUMER INDEX IS MADE UP OF THOSE TWO COMPONENTS. HOW ARE PEOPLE FEELING RIGHT NOW AND WHAT ARE THEY EXPECTATIONS FOR THE NEXT SIX MONTHS? INTERESTINGLY THEY’RE FEELING KINDS OF OK NOW. THERE’S RELATIVELY FULL EMPLOYMENT. THEIR WINGS ARE GOOD, THEY’RE RISING. THEIR PAYCHECKS ARE COMING IN, THEY’RE MAKING THEIR MATES BUT THEY’RE WORRIED ABOUT FUTURE. THEY SEE THIS I NATION COMING AND IT’S STARTING TO WEAR ON THEM. IT’S GAS PRICES, FOOD PRICES AND AS WE KNOW, OIL IMPACTS NOT ONLY GAS BUT RUBBER, MAKEUP, 6,000 DIFFERENT CONSUMER PRODUCTS AND THEN THE TWO WARS GOING ON IN UKRAINE IN IRAN WITH SEEMINGLY NO END. TRADE ISSUES. IT GOES ON AND ON SO THEY’RE WORRIED ABOUT THE FUTURE AND THAT’S THE BIG DISPARITY. OK, WE’RE GOOD NOW BUT WHERE ARE WE GOING? ROMAINE: IS THIS SORT OF A REAL TURNING POINT IN WHAT TO EXPECT OUT OF CONSUMER BEHAVIOR OR IS THIS MORE PEOPLE’S ANXIETY BEING REFLECTED IN THOSE NUMBERS RIGHT NOW? STEVE: IT’S A REALLY GOOD QUESTION. AS WE KNOW, 70% OF OUR ECONOMY IS BASED ON THE CONSUMER. RIGHT NOW THE DEBT LEVELS AT 1.3 TRILLION ARE AS HIGH AS THEY’VE EVER BEEN. THE MAJORITY OF CONSUMERS WILL SAY THAT BORROWING COST ARE GOING TO GO UP. THEY THINK INTEREST RATES ARE WILL RISE WHICH MEANS THEIR CREDIT CARD RATES WILL GO UP, THEIR MORTGAGES, THEIR CAR PAYMENTS. WHEN YOU HAVE ABOUT HALF THE COUNTRY LIVING PAYCHECK TO MAY CHECK, IF THIS DEEPS GOING, INFLATION KEEPS GOING, THEY’RE NOT GOING TO BE ABLE TO AFFORD THINGS. EMILY: DO WE HAVE AN INDICATION OF HOW THIS TRICKLES DOWN INTO CONSUMER SPENDING INTO ECONOMIC GROWTH BECAUSE A LOT OF TIMES WHAT CONSUMERS SAY IS NOT NECESSARILY WHAT THEY’RE ALWAYS DOING. STEVE: IT’S TRUE BUT THESE ARE ECONOMICS. THEY’RE COMING TO THE END HERE OF THEIR FLEXIBILITY WITH DEALT. THEIR COSTS ARE GOING UP. WHEN YOU HAVE PEOPLE LIVING PAYCHECK TO PAYCHECK AND THE HUGE NUMBER OF HOUSEHOLDS THAT ARE DOING THAT. THERE ISN’T A LOT MORE HERE SO IF THIS KEEPS GOING, WHAT’S GOING TO HAPPEN? WE CAN DEAL WITH IT THE WAY IT IS RIGHT NOW BUT IF INFLATION STARTS GOING ANY MORE THAN WHERE WE ARE, IF INTEREST RATES RISE ANYMORE, THEY’RE IN TROUBLE. THAT’S WHAT THEY’RE TELLING US. EMILY: THE CONFIDENCE WAS HIGHEST FOR SURVEY RESPONSIBILITIES UNDER 35. WHAT DO YOU MAKE OF THAT? STEVE: I THINK THAT THOSE PEOPLE ARE LARGELY IN SINGLE-PERSON HOUSEHOLDS. TAKING CARE OF THEMSELVES, A LOT OF THEM ARE LIVING AT HOME. IT’S A DIFFERENT GENERATION AND THEY DON’T HAVE THE SAME KIND OF WORRIES. THEY DON’T HAVE FAMILIES AND MORTGAGES AND SCAR PAYMENTS, THE SAME AS PEOPLE WHO MAY BE -- THAT’S WHAT WE CAULK IT UP TO MORE THAN ANYTHING. THERE ARE REGIONAL DIFFERENCES WHERE THE COSTS ARE HIGHER. YOU SEE THAT ON COAST. THEIR CONFIDENCE IS LOWER PUT THAT IS AN INTERESTING POINT AND WE’LL SEE HOW THAT PLAYS OUT. THEY AREN’T THE BIGGEST SPENDERS OF ALL THE GENERATIONS. RILEY WE HAD YOU ON THIS PROGRAM THREE WEEKS OR SO AGO TO TALK ABOUT C.E.O. CONFIDENCE WHICH WASN’T GREAT BUT IT WAS RISING BACK ABOVE THAT 50 LEVEL. DOES IT MATTER THAT WE’RE SEEING C.E.O. AND CORPORATE CONFIDENCE GOING IN ONE DIRECTION AND CONSUMER CONFIDENCE GOING IN THE OTHER? STEVE: CONSUMER CONFIDENCE HAS BEEN DRIFTING DOWN SINGS THE END OF 2021. C.E.O. CONFIDENCE TOOK A BIG HIT WITH THE WAR AND THE SITUATION WITH OIL, SUPPLY CHAIN AND SO FORTH. C.E.O. CONFIDENCE IS BARELY ABOVE NEUTRAL AT 52 AND NOW WE’VE GOT THE CONSUMER CONFIDENCE STILL DRIFTING DOWN. IF THE CONSUMER CONFIDENCE CONTINUES TO DRIFT DOWN AND YOU SEE THEM CUT SPENDING THEN YOU WILL SEE C.E.O. CONFIDENCE GO DOWN BECAUSE, OF COURSE, THEIR SALES WILL GO DOWN SO THIS IS ALL INTERTWINED. ROMAINE: MAYBE YOU COULD PUT YOUR OLD RETAIL C.E.O. HAT BACK ON. OFFICE DEPOT AND AUTOZONE PROBABLY MACHINE NECESSITY THAN DISCRETIONARY FOR A LOT OF FOLKS OUT THERE BUT WHEN YOU LOOK AT THE REPORTS HEADING INTO WHAT IS SUPPOSED TO BE THE TIME OF YEAR WHEN MOST RETAILERS DO PRETTY WELL DO YOU LOOK AT THIS REPORT AND THINK TO YOURSELF AS A C.E.O. I HAVE TO CUT PRICES OR CUT INVENTORY OR DO SOMETHING TO ADJUST? STEVE: MOST RETAILERS ARE LOOKING AT THE HOLIDAYS. SO EVERYTHING HAS BEEN ORDERED. I THINK YOU’RE GOING TO SEE PEOPLE GOING OK, WELL, IF THIS IS WHERE WE’RE AT, WE’RE GOING TO HAVE TO START PROMOTING FASTER AND EARLIER. SO I THINK CHRISTMAS IS GOING TO START IN OCTOBER THIS YEAR AND WE’LL SEE. YOU’RE GOING TO HAVE SALES ALL THROUGH -- ROMAINE: STEVE, THEY HAVE TO GET THE HALLOWEEN STUFF OUT OF THE WAY, FIRST. WHICH, BY THE WAY, IN MY NEIGHBORHOOD IS ALREADY UP IN SOME OF THE STORES, FOR SOME REASON. STEVE: YEAH, IT’S A GREAT AMERICAN HOLIDAY RIGHT NOW AND A WONDERFUL RETAIL HOLIDAY. YOU’RE GOING TO HAVE TO WATCH RETAIL MARGINS THIS HOLIDAY SEASON. RILEY I FEEL LIKE THE LAST COUPLE OF YEARS THE CHRISTMAS STUFF WAS OUT WAY EARLY IN ALL THE PROMOTIONS. WE’LL SEE WHAT HAPPENS THIS YEAR. WHEN WE COME BACK HERE, WE’RE GOING TO UNPACK WHAT’S BEHIND SOME OF THE SUPER MOVES IN SUP SUPERMICROCOMPUTER. 9% JUMP ON THE DAY. THAT’S COMING UP HERE ON "THE CLOSE" ON BLOOMBERG. ROMAINE: STOCK OF THE HOUR IS SUPERMICROCOMPUTER. THE SHARES UP ABOUT 8% ON THE DAY AFTER CISCO SAID IT WOULD PARTNER WITH THE COMPANY TO USE ITS COOLING HARDWARE IN ITS NVIDIA POWERED INFRASTRUCTURE STACK. JOINING US IS OUR GUEST FROM BLOOMBERG INTELLIGENCE. THIS IS A STOCK THAT HAS HAD UPS AND DOWNS OF 10% OR MORE ON LIKE 20 DIFFERENT OCCASION THIS IS YEAR ALONE AS IT’S WORKED THROUGH A LOT OF ISSUES. BUT EXPLAIN EXACTLY WHAT CISCO IS DOING HERE AND WHY THEY WOULD CHOOSE SUPER MICRO? >> THANKS, ROMAINE. ESSENTIALLY CISCO IS LOOKING FAR SERVER PARTNER TO GO WITH THEIR NETWORKING GEAR. YOU’RE ESSENTIALLY PAIRING UP THE LARGEST NETWORKING VENDOR GLOBALLY WITH ONE OF THE MARKET LEADERS IN THE AI SERVICE SPACE. EMILY: WHAT IS IT BRINGING THAT CISCO COULDN’T PROVIDE ON ITS OWN? >> CISCO HAS A VERY SMALL SERVER BUSINESS BUT IT DOESN’T HAVE THE SCALE AND MANUFACTURING CAPACITY AS SUPER MICRODOES. CISCO’S SERVER WIZ IT IS REALLY NOT A LINE ITEM ON THEIR INCOME STATEMENT BUT SUPER MICROIS ON PACE FOR $65 BILLION TO $72 BILLION FOR FISCAL 2027 SO THERE’S A MASS AMOUNT OF SCALE THAT SUPER MICROCAN PROVIDE. ROMAINE: IN THE PRESS RELEASE CISCO WAS TALKING A LOT ABOUT THIS IDEA OF MANAGING COSTS AND CONTROLLING DATA. MAYBE YOU CAN GIVE US A PICTURE OF WHY THIS IS BECOMING MORE IMPORTANT AND OPENS UP THE APERTURE FOR COMPANIES BEYOND THE CORE ONES LIKE NVIDIA AND SOME OF THESE OTHER PLAYERS. >> THAT’S A GREAT QUESTION, ROMAINE. IF YOU THINK ABOUT HOW THESE SYSTEMS ARE STARTING TO BE BUILT OUT, YOU CAN CREATE QUITE A BIT OF SPRAWL, THAT’S ONE AND NUMBER TWO, NO TERMS OF DATA MANAGEMENT AS WELL AS NETWORK CONNECTIVITY, CISCO IS A MARKET LEADER IN TERMS OF THAT. ONE OF THE THINGS CISCO HAS BEEN REALLY TRYING TO DO IS LEVERAGE THEIR SOFTWARE TO HELP MANAGE THE DATA AND HELP CREATE THE SINGLE PANE OF GLASS OF DATA OCEANS FOR THE NETWORK OPERATORS INSIDE THE CORPORATION. SO CISCO, AS AN ENTRIES I.T. LEADER THEY WANT TO PROVIDE THAT MANAGEMENT LEADERSHIP THAT SUPER MICRODOESN’T PROVIDE RIGHT NOW. EMILY: THERE ARE SOME CONCERNS ON WALL STREET OF AI CIRQUE LASH FINANCING OF MAYBE TOO MANY PARTNERSHIPS. AI INFRASTRUCTURE SPENDING GETTING AHEAD OF DEMAND BUT DOES IN PARTNERSHIP SEEM SUSTAINABLE? >> RIGHT NOW IT’S JUST A PARTNERSHIP. AT THE END OF THE DAY AND WE’LL SEE WHERE THE PIMM TAKES THEM. I’VE SEEN PARTNERSHIP ANNOUNCEMENTS COME AND GO BUT IN TERMS OF WHO THEY’RE TRYING TO SERVE, THEY’RE TRYING TO SERVE THE NEO CLOUDS AS WELL AS THE SOVEREIGNS. WE KNOW THAT CISCO HAS POINTED OUT SOVEREIGN WINS ON THE NETWORKING SIDE AND SUPER MICROHAS DEALS IN CLOUD AND SOVEREIGN SO THIS COULD BE SUSTAINABLE. ROMAINE: WE TALK ABOUT A STOCK THAT IS TRADING ABOUT 1/3 OF WHERE IT WAS A LITTLE WHILE AGO, OBVIOUSLY BECAUSE SOME OF THE ALLEGATIONS SURROUNDING SOME OF ITS BUSINESS PRACTICES. WE LEARNED A FEW DAYS AGO ON THAT INTERNAL COME APPLIANCE REVIEW. IS THIS A, BEING PUT BEHIND THEM AND MORE IMPORTANTLY, ARE INVESTORS WILLING TO GIVE THEM A PASS ON SOME OF THIS AND FOCUS MORE ON THE POTENTIAL GROWTH OPPORTUNITIES? >> THERE ARE TWO SEPARATE ANSWERS TO THAT, ROMAINE. FROM A CUSTOMER STANDPOINT, CUSTOMERS ARE NOT GOING TO LAY OUT $62 BILLION TO $72 BILLION IN REVENUE IF THEY THOUGHT IT WAS A CONCERN. BUT FROM AN INVESTMENT STANDPOINT, VALUATIONS ARE STILL QUITE LOW RELATIVE TO G.P.E. SO INVESTORS ARE STILL CONCERNED. ROMAINE: THANK YOU. SUPER MICROSHARES ARE UP ABOUT 8% ON THE DAY. MEANWHILE, FRACTIONAL GAINS FOR MOST OF THE MAJOR INDICES. WE’LL CATCH UP WITH CRISTINA HOOPER WHEN WE RETURN AFTER THE BREAK. ROMAINE: JUST ABOUT 10 MINUTES UNTIL WE GET TO THOSE CLOSING BELLS. I DON’T KNOW IF YOU CALL HAVE A REBOUND FROM SOME OF THE DOLDRUMS, FRACTIONAL BEGINS. VOLUME IS INCREDIBLY LIGHT. THAT MIGHT CHANGE TOMORROW MORNING. EMILY: AND IT MIGHT CHANGE INTO "THE CLOSE" TOMORROW. WHEN WE GET THE ALL-IMPORTANT NVIDIA EARNINGS. EVERYONE WAITING TO SEE WHETHER THIS AI COMPANY CAN KEEP GAINS CONTINUING. LOOK AT HOW MARKETS ARE DOING RIGHT NOW. S&P 500, IN THE BETWEEN, .3ING. OIL IS DOWN IN A BIG WAY, ABOUT 5%. DRAGGING TREASURY YIELDS LOWER FOR THE SECOND DAY IN A ROW AND BITCOIN IS LOWER NOW BUT IT DID TOP 80,000 EARLIER IN THE TRADING SESSION SO A LITTLE BIT OF RISK ON THERE BUT IN THE RED RIGHT NOW. RILEY TOMORROW COULD BE A CONSEQUENTIAL DAY AND DON’T FORGET WE GET THE JACKSON HOLE SPEECH FROM KEVIN WARSH ON FRIDAY. YIELDS DRIFTING LOWER FOR A SECOND STRAIGHT DAY DESPITE A LOT OF THE CONCERNS RIGHT NOW ABOUT THE FISCAL SITUATION IN THE U.S. AND A LOT OF TALK ABOUT THOSE ATTEMPTS BY THE TREASURY SECRETARY SCOTT BESSENT AT LEAST FOR RIGHT NOW TO TRY TO PUT A CAP ON SOME OF THOSE MOVES. AND WE HEARD FROM SCOTT BESSENT’S MENTOR. PROBABLY ONE OF THE MOST SUCCESSFUL INVESTORS OF OUR GENERATION OUT WITH AN ON I WOULD TODAY BASICALLY SAYING THIS IS NOT GOING TO WORK AND HE TALKED ABOUT THE IDEA OF LETTING THE BOND MARKET SPEAK. PRICES ARE HOW THAT INFORMATION REACHES DECISION MAKERS AND THAT THE LONG-TERM TREASURY YIELD IS THE MOST IMPORTANT PRICE IN THE WORLD. IT’S THE ONLY FISCAL DISCIPLINARIAN THAT THE U.S. HAS LEFT. ON THAT NOTE, WE WELCOME KRISTINA HOOPER. THE CHIEF MARKET ANALYST AT -- GROUP. HE REALLY DOES BRING UP SOMETHING IMPORTANT, WHICH IS ABOUT THE IDEA THAT THE MARKETS OFTEN ARE A PLOT MORE PRESS SHONE ABOUT -- PRESCIENT ABOUT WHERE THINGS ARE AND WHERE THEY’RE GOING. IS THERE ROOM RIGHT NOW DO YOU THINK FOR THE MARKET TO ACTUALLY BE HEARD GIVEN SOME OF THE MOVES THAT BESSENT HAS MADE EFFECTIVELY AGAINST THAT? KRISTINA WHAT’S BEEN DONE THUS FAR IS NOT VERY SIGNIFICANT. THERE CERTAINLY IS ROOM NOW. BUT IF WE WERE TO SEE CONTINUED OPERATIONS, SOMETHING MUCH LARGER, I THINK THAT WOULD BE EXTREMELY PROBLEMATIC. ESPECIALLY SINCE WE HAVE A NEW FED CHAIR TO BELIEVES VERY MUCH IN A LAY STAY FAIR APPROACH TO MARKETS AND HE’S SED HE WANTS THE MARKETS TO TELL THE FED WHAT TO DO, NOT VICE VERSA SO THAT’S GOING TO BE PROBLEMATIC IF WE HAVE THE TREASURY DOING ONE THING AND THE FED ANOTHER. ROMAINE: THAT’S INTERESTING. I WONDER IF THERE COULD BE A CONFLICT BREWING BETWEEN THE TREASURY AND THE FED BUT ALSO THIS IDEA, A GUEST WE HAD ON EARLIER, THEY BASICALLY SAID THEY SENT SCOTT BESSENT AN INVOICE, LOOK, WE’LL BUY, HERE’S THE PRICE. WHAT CAN YOU DO TO PUSH BACK ON THAT? KRISTINA IT’S HARD TO AND I THINK THE TRAJECTORY IS HIGHER. I THINK THAT INVESTORS ARE GOING TO DEMAND MORE AS WE MOVE ALONG JUST BECAUSE THE DEPARTMENT OF SITS AREN’T GOING TO GET SMALLER. OVERALL DEBT ISN’T GOING TO GET SMALLER AND YOU ALSO HAVE ALL THESE OTHER ISSUES GOING ON AT THE SAME TIME. I THINK FOREIGN INVESTORS HAVE TO VERY MUCH BE WORRIED ABOUT RISKS THEY MIGHT NOT HAVE EVEN THOUGHT ABOUT IN THE PAST. IS THERE THE POTENTIAL THAT ONE DAY THEY COULD AINGEER THE U.S. ENOUGH TO HAVE THE U.S. STOP PAYING INTEREST ON THE TREASURIES THEY HOLD? THERE ARE SO MANY DIFFERENT -- THE BEAUTY OF THE CONCEPT OF TERM PREMIUM IS THAT IT IS INCREDIBLY AMORPHOUS. THERE ARE COMPONENTS THAT ARE EXPECT ED BUT THEN THERE ARE COMPONENTS ON DIFFERENT REASONS WHY AN INVESTOR WOULD WANT TO AND NOT WANT TO. NOW THE RISKS ARE GROWING. EMILY: DO YOU THINK THAT INFLATIONARY PRESSURES ARE MAYBE NOT AS RELEVANT TO TREASURY YIELDS. IF WE CONTINUE TO SEE THAT TRAJECTORY IN THE LAST MONTH OF INFLATION READINGS IS NOT GOING TO DO ENOUGH TO BRING YIELDS DOWN. KRISTINA: I THINK IN THE MAR JINX AND ESPECIALLY LONGER TERM IT COULD BUT IN THE SHORTER TERM WE’RE GOING TO SEE YIELDS GO HIGHER IN THIS ENVIRONMENT. KEEP IN MIND WE CONTINUE TO HAVE AI-RELATED CORPORATE DEBT. THAT IS ALSO TAKING AWAY SOME OF THE POTENTIAL BUYERS FOR TREASURIES OR AT LEAST FORCING UP YIELDS FURTHER. EMILY: WHAT DOES IT MEAN FOR THE FED? UNION: THAT’S A FAR MORE COMPLICATED REQUEST AND ANSWER. WE JUST DON’T KNOW. PERHAPS WE’LL GET SOME OF THAT IN THE JACKSON HOLE SPEECH THIS FRIDAY BUT RIGHT NOW WHAT IT SEEMS IS THAT THE FED IS LOOKING TO MARKET -- AT LEAST THE FED CHAIR IS LOOKING TO MARKETS TO TELL HIM WHAT THEY BELIEVE IS HAPPENING BUT WHAT WE HAVE IS A NUMBER OF FOMC PARTICIPANTS WHO SEEM READY TO HIGH GRADE IF -- HIKE RATES IF INFLATION REMAINS AT THIS LEVEL OR MOVES HIGHER. I THINK IT’S BEEN STUNNING IN TERMS OF THE NUMBERS THAT ARE PREDISPOSED TO HIKE RATES. RILEY WHAT DO YOU THINK -- I GUESS WHAT DO YOU WANT TO HEAR FROM WARSH ON FRIDAY? YOU MAY NOT GET IT AND ARE YOU CONCERNED HE MIGHT MAKE A MISTAKE COMMUNICATION-WISE? KRISTINA: I’M NOT CONCERNED THAT HE MIGHT MAKE A MISTAKE. THESE WORKING COMMITTEES, I THINK HE REFERS TO THEM AS FANTASTIC FORCES, WERE ONLY PUT TOGETHER SEVERAL MONTHS AGO. IDEALLY IT WOULD HAVE BEEN NICE TO HAVE HIM COME BACK WITH RECOMMENDATIONS, POLICY PROPOSALS, THE MECHANICS OF HOW HE WANTS TO "MODERNIZE" THE FED. I THINK THAT’S UNREELISTIC TO ANTICIPATE DRIVEN THE SHORT TIMELINE. HE COULD BE LAYING OUT SOME BROADER POLICY GOALS. IT COULD BE SOMEWHAT SIMILAR TO HIS SPEECH AFTER THE FOMC MEETING. WE COULD GET SOME SPECIFICS LIKE THAT BUT I THINK IT’S GOING TO BE A VIEW FROM 40,000 FEET. RILEY KRISTINA HOOPER, CHIEF MARKET STRATEGIST AT MAN GROUP COUNTING US DOWN TO THE CLOSING BELLS. STOCKS UP FACTIONALLY. YIELDS DOWN, SO, TOO, IS OIL. A FULL BREAKDOWN OF ALL THE CLOSING BELL, STARTS RIGHT NOW. ROMAINE: AND RIGHT NOW, DR. WELCOME TO OUR AUDIENCES ACROSS OUR BLOOMBERG PLATFORMS. FRACTIONAL GAINS ON THE DAY FOR THE MAJOR U.S. INDICES. TIM STENOVEC WITH YIELDS DOWN AND OIL DOWN AT THE DOLLAR FLAT ON THE DAY. TIM: OIL IS EXACTLY WHERE I AM LOOKING. BRETT DOWN ABOUT 5% RIGHT NOW. 4.5% LOWER FOR WTI BUT WE WERE TALKING ABOUT GAS PRICES. STILL HIGH RELATIVE TO WHERE THEY WERE A FEW MONTHS AGO. YOU SAW THE BENCHMARKS UP MORE THAN 40% THIS YEAR, AND THE AAA GAS PRICE AVERAGE OF TWO $4.10 RIGHT NOW OR CLOSE TO IT. THAT IS SOMETHING PHOTO WATCHING CLOSELY AT OF THESE MIDTERMS. NORAH: ANOTHER THING THEY ARE WATCHING CLOSELY IS THE AI TRADE WITH FOLKS LOOKING AHEAD TO NVIDIA EARNINGS. TIM AND I TALKING ABOUT THE FACT THAT THIS USED TO BE A MARKET SUPER BOWL. STILL A CONSEQUENTIAL EARNINGS REPORT, BUT WHEN YOU SEE A LITTLE LESS CONCENTRATION, YOU START TO SEE INVESTORS LOOKING OTHER PLACES AS WELL. LOOK AT THE INDEX INTO THE CLOSING BELL. ROMAINE: JOE WIESENTHAL HAD A WATCH PARTY SOMEWHERE, SOME BAR. NORAH: I BELIEVE IT. TIM: IT WAS A DIFFERENT TIME. NOW THERE ARE A LOT OF WAYS YOU CAN LOOK AT THE AI TRADE. NORAH: ABSOLUTELY. ROMAINE: YEAH, SURE. TIM: I AM ALWAYS HERE WORKING. I AM NOT PARTYING. ROMAINE: WE WILL GET EARNINGS FROM THE SOFTWARE SIDE. BOX SET TO REPORT. WE WILL GET YOU THE NUMBERS AS SOON AS WE GET THEM. MEANWHILE, THE NUMBERS FOR THE BROADER MARKET MOSTLY GREEN ON THE DAY. THE DOW JONES INDUSTRIAL AVERAGE, THE S&P 500 EACH UP 0.3% ON THE DAY. THE NASDAQ COMPOSITE AND THE NASDAQ 100 EACH UP 0.6% ON THE DAY. THE RUSSELL 2000 GETTING IN ON THE ACTION ON THE DAY, ABOUT 15 POINTS OR ABOUT HALF OF 1%. WE ARE GETTING A FEW EARNINGS OUT RIGHT NOW. INTUIT CROSSING THE WIRE. ITS MOST RECENT FISCAL QUARTER COMING UP AT $3.45 BILLION. THAT APPEARS TO BE A BEAT BASED ON THE AVERAGE ESTIMATES COLLECTED BY BLOOMBERG. BUT HERE IS YOUR FORECAST GOING FORWARD. THE COMPANY SAYS FOR THE FULL FISCAL YEAR THAT ALREADY STARTED, 2027 FISCAL YEAR, REVENUE WILL BE AROUND $23.51 BILLION. THE LOW END OF THE RANGES AROUND THE AVERAGE OF STREET ESTIMATES. AVERAGE OPERATING INCOME FOR THE FULL YEAR, 8.06 TO 8.15. THAT IS WELL BELOW WHAT THE STREET WAS LOOKING FOR. THEY WERE LOOKING FOR $27 A SHARE. TIM: THE STOCK TAKING A HIT IN THE AFTER HOURS. I MEAN, THIS IS A COMPANY DOWN 46% SINCE THIS YEAR. A CONSEQUENCE OF THE SO-CALLED SAAD APOCALYPSE THAT -- SAAS APOCALYPSE. EMILY: TAKING A LOOK AT HOW SECTORS FARED, IT WAS MOSTLY GREEN WHEN YOU LOOK AT THE IMAP AND S&P 500. COMMUNICATION SERVICES, MATERIALS WITH THE LEADERS IN TERMS OF THE S&P 500 GROUPS. WHAT WAS LOWER? ENERGY. OIL DOWN. STAPLES AND INDUSTRIALS ALSO LOWER. TIM: A FEW MORE EARNINGS INCLUDING ZOOM AND BOX. WE WILL BRING THOSE TO U.S. SOON AS WE GET THEM. WHAT ARE TAKING THE CAP STOCKS THAT WERE HIGHER TODAY. THE S&P 500 BEST PERFORMER WAS MODERNA UP 14%. SHARES CRUISING HIGHER THIS YEAR BUT STILL DOWN ABOUT 60% FROM THE 2021 HIGHS, ALL-TIME HIGHS IN THE COVID WORLD. SHARES MOVED HIGHER TODAY AS A RESULT OF WHAT HAPPENED LAST WEEK. WHAT RESEARCH OUT WITH A NO UPGRADING THE COMPANY CITING THE SUCCESS OF ITS MELANOMA VACCINE TRIAL. THE ANALYST SAYING THE POSITIVE TRIAL RESULTS DE-RISK THE PLATFORM FROM INTERNET. SHARES OF BUGONIA UP, THE BEST -- SHARES OF MODERNA UP, THE BEST OF THE S&P. NVIDIA UP BY 14% THIS YEAR SO OUTPERFORMING THE S&P 500. UP 2.2% TODAY. THIS IS THE BIGGEST INCREASE -- EXCUSE ME, THIS IS AN INCREASE BASED ON TODAY'S MOVE, UP MORE THAN 2%. THE BIG QUESTION TOMORROW, WHAT IS THE STATE OF THE AI INDUSTRY? THERE ARE OTHER WAYS WE CAN LOOK BUT NVIDIA IS STILL THE BIG PLAYER. WHAT ARE THE COMPANY EFFORTS TO REMAIN AT THE CENTER OF THE AI FRENZY? FINALLY, ONE OF THE MOST ACTIVELY TRADED STOCKS TODAY, RESOLVE AI. SHARES WERE UP MORE THAN 21% TODAY. WE CAN ROUND THAT UP. THE COMPANY SAID GOOGLE SELECTED ITS PROPRIETARY DISTRIBUTED DATABASE TECHNOLOGY FOR DEPLOYMENT AT THE INFRASTRUCTURE LEVEL WITHIN GOOGLE CLOUD. DEPLATFORM'S FIRST DESK AT MARK'S DEPLATFORM -- IT MARKS THE FIRST FOR THE COMPANY. NORAH: FOLLOWING THE CLOSING BELL, I AM TAKING A LOOK AT SHARES OF DICK’S SPORTING GOODS. A BRUTAL DAY FOR THIS COMPANY. SHARES OF THE COMPANY DOWN 31% ON THE DAY, THE WORST EVER FOR DICK’S SPORTING GOODS, AND ITS LOWEST LEVEL SINCE 2023. THIS IS AFTER THE FOOTLOCKER CHAIN IN ACQUIRED LAST YEAR SHOWING IT IS CONTINUING TO STRUGGLE IN RAISING BROADER DOUBTS ABOUT THE SNEAKER MARKET, THE SNEAKER INDUSTRY. THE COMPANY SAYING THE FOOTWEAR MARKET HAS BECOME INCREASINGLY PROMOTIONAL LAST QUARTER AFTER BRANDS WERE DISCOUNTING ON THEIR OWN WEBSITES. THE COMPANY SEEING A SHIFT TO BRANDS. TAKE A LOOK AT SHARES OF NIKE ALSO FALLING DOWN ABOUT 3% AFTER THE CLOSING BELL. NIKE IS A SUPPLIER TO DICK’S SPORTING GOODS AND FOOTLOCKER, SO CERTAINLY SEEING SOME INVESTORS SHIFTING OUT OF THAT NAME. ROMAINE: WHEN WAS THE LAST TIME YOU WERE IN A FOOTLOCKER? NORAH: I CAN'T MEMBER THE LAST TIME I WAS AT A FOOTLOCKER OR THE LAST TIME I WAS IN A DICK’S SPORTING GOODS. ROMAINE: WOW. TIM: DICK'S IS NOT HUGE IN NEW YORK. ROMAINE: IT IS BIG. THE COMPANY WHEN THEY MADE THE EARLY AND EARLY 2025, AND WAS WIDELY DERIDED. DICK'S WAS GROWING. FOOTLOCKER WAS SHRINKING. A NEGATIVE SIGN IN FRONT OF ITS SALES NUMBER. EVERYONE SAID, WHY DID YOU BUY THIS COMPANY? HERE WE ARE MORE THAN A YEAR LATER AT THOSE QUESTIONS ARE STILL BEING ASKED. WE HAD SOMEONE ON FROM LUKE CAPITAL WHO WAS PRETTY BLUNT. HE BASICALLY SAID, I DON'T KNOW WHAT THE HECK THEY ARE DOING. NOT CLEANING IT UP -- AND I'M CLEANING IT UP, FAMILY-FRIENDLY. EMILY: HOW MUCH OF THAT IS DUE TO THE WEEKLY CONSUMER? WE HAVE SOME EARNINGS TO GET TO. ROMAINE: LET'S DO BID ON ZOOM COMMUNICATIONS IN THE BEST RECENT QUARTER. MOST OF THE METRICS CAME IN AT ESTIMATES OR SLIGHTLY ABOVE. THE STREET WAS LOOKING FOR 1.27 SO IT'S LIKE BEAT -- SO A SLIGHT BEAT. LET'S GO STRAIGHT TO GUIDANCE FOR THE FULL YEAR. FOR THE FULL YEAR, THE COMPANY SAYS FOR THE FULL YEAR REVENUE, LOOK FOR $5.10 BILLION. THE PREVIOUS GUIDANCE WAS FOR ROUGHLY $5.09 BILLION SO RAISING IT A BIT. A RANGE OF 2.07 TO 2.08, SO THE TOP END OF THE RANGE COMING SLIGHTLY ABOVE THAT. MOST OF THE NUMBERS TRACK IN THAT SAME VEIN. BASICALLY EITHER ABOUT STREET ESTIMATES BY A FEW DOLLARS OR MAYBE RIGHT IN LINE. SHARES LOWER BY 4%. TIM: I AM WATCHING WHAT IS HAPPENING WITH BOX IN THE AFTER HOURS. THE SHARES FOR BOX DOWN ABOUT 8% IN THE AFTER HOURS. TAKING A LOOK AT THE COMPANY'S LATEST REPORT. THE OUTLOOK SEEING ABOUT $1.54 ADJUSTED EARNINGS-PER-SHARE. THE ESTIMATE WAS FOR $1.58. SHARES DOWN 6.4%. IN ADDITION TO THAT, THE COMPANY SEES FISCAL REVENUE COMING IN AT $1.29 BILLION. THE ESTIMATE WAS $1.28 BILLION. AS FAR AS THE OUTLOOK GOES, A BEAT OTHER TOP LINE BUT A BEST ON THE BOTTOM LINE -- AM MISS ON THE BOTTOM LINE. SECOND QUICKER REVENUE COMING IN ABOVE ESTIMATES. THE COMPANY SEES THE Q3 GAP EPS THAT MATCHES EXPECTATIONS. SHARES DOWN 4.5% IN THE AFTER HOURS. ROMAINE: SOME QUESTIONS WHEN YOU LOOK ABOUT AND ZOOM AND INTUIT. THREE DIFFERENT COMPANIES BUT ALL DEALING WITH SOME OF THE SAME ISSUES WITH AI AND SOME OF THE NEW TOOLS THAT ARE OUT THERE THAT TO A CERTAIN EXTENT CHIP AWAY AT SOME OF THE MOAT THEY MIGHT HAVE HAD. I DON'T KNOW HOW FAR THIS GOES. WE HAD A GREAT ANALYST ON FROM GOLDMAN YESTERDAY WHO TALKED ABOUT THIS IDEA THAT THE SAAS-POCALYPSE IS OVERDONE AT SOME OF THIS AI BUILDOUT WOULD END UP BENEFITING THEM AS IT WILL INCREASE USAGE ON SOME OF THEIR PLATFORMS. TIM: WE HAVE HAD SOME FOLKS TALK TO US ABOUT THAT AS WELL BUT WE ARE NOT SEEING THAT PLAY OUT IN THE PUBLIC MARKETS YET. EVERY COMPANY IS DIFFERENT. ROMAINE: EVERYONE IS TALKING ABOUT YOUR TOMORROW. WE GET SALESFORCE -- EVERYONE IS TALKING ABOUT NVIDIA TOMORROW BUT WE GET SALESFORCE TOMORROW AS WELL. TIM: SHARES THIS YEAR HAVE TAKEN A BIG HIT, DOWN 22%. ROMAINE: YOU ARE A SLACKED GUY. TIM: NO. I HAVE SLACKED BEFORE. NORAH: ONE IS A SLACKED? TIM: GUYS, WE HAVE TO GO. WE WILL SEE YOU TOMORROW. THAT WILL DO IT FOREVER ACROSS PERFORM COVERAGE. WE WILL HAVE NVIDIA EARNINGS TOMORROW AND ALSO SALESFORCE EARNINGS TOMORROW. WE WILL SEE YOU SAME TIME, SAME PLACE. ROMAINE: OUR COVERAGE CONTINUES HERE ON BLOOMBERG. WE WILL TALK ABOUT WALL STREET AND WHETHER THEY ARE FIGHTING THE WRONG BATTLE WHEN IT COMES TO RETAIL INVESTORS. MITCH CAPLAN WILL BE JOINING US ON "THE CLOSE" RIGHT HERE ON BLOOMBERG. ♪ >> THE COUNTDOWN IS ON. EVERYTHING YOU NEED TO GET THE EDGE AT THE END OF THE MARKET DAY. THIS IS "THE CLOSE." ROMAINE: WELCOME BACK TO "THE CLOSE." THEY CLOSE LOOK AT HOW WALL STREET FINISHED THE DAY. FACTIONAL GAINS WITH THE S&P, DOCUMENT -- DOW, NASDAQ 2000. THE NASDAQ BIOTECH INDEX UP ONE POINT IT PERCENT ON THE DAY. PART OF THE UPSIDE IN EQUITIES BECAUSE OF THE DOWNSIDE WE SAW IN YIELDS AND IN CRUDE OIL. BRENT CRUDE PRICES DOWN 6% ON THE DAY. FLIP UP THE BOARD AND TAKE A LOOK AT SOME OF THE INDIVIDUAL GAINERS ON THE DAY. NVIDIA SNAPPING THE SEVEN-DAY LOSING STREAK, UP TO PERCENT AHEAD OF THE BIG EARNINGS REPORT ABOUT 24 HOURS FROM NOW. AMD ALSO GETTING IN ON THE ACTION, UP 5% ON THE BACK OF AN UPGRADE AT RAYMOND JAMES THAT SAYS AMD, NOT, HAS A BETTER -- NOT NVIDIA, HAS A BETTER CHANCE OF CAPTURING THE MARKET. DECKERS OUTDOOR'S SHARES DOWN BECAUSE OF DICK’S SPORTING GOODS. TARGET WITH ANOTHER MISSTEP IF YOU WILL, DOWN 4% ON THE DAY. WE MOVE ONTO OUR TOP STORY OF THE HOUR. A BACKDROP FOR MARKETS. YOU HAVE AN S&P THAT REMAINS RANGE BOUND DESPITE A RELATIVELY ATTRACTIVE VALUATION AND ROUGHLY 20 TIMES FORWARD EARNINGS. BENCHMARK TREASURY YIELDS OFFER COMPELLING COUPONS, BUT THE SAME TIME ARE OUR FLASHING YELLOW LIGHTS OF CAUTION. THE TIGHTEST CORPORATE DEBT SPREADS IN YEARS THAT WOULD SUGGEST CALM BUT ALSO ATTRACTIVE ENTRY POINTS. AND YOU HAVE AI INVESTMENT THAT GOLDMAN ESTIMATES WILL EXCEED $1 TRILLION IN 2026. THAT REPORT MAKES NO MENTION OF WHAT AND WHEN THE RETURN ON THE INVESTMENT WILL BECOME A SO WHAT IS AN INVESTOR TO DO OUT THERE? I WOULD JUST NOW RUNS THE PRIVATE MARKETS INVESTING PLATFORM. WHICH CAPLAN JOINS US NOW TO TALK MORE ABOUT ALL OF THIS. I WANT TO START WITH WHAT WE HAVE BEEN SEEING IN THE MARKETS LATELY BECAUSE IT HAS BEEN ALL OVER THE PLACE AND I AM CURIOUS HOW INVESTORS PARTICULARLY ON THE RETAIL SIDE BEHAVE IN THESE SITUATIONS. IS THERE ANYTHING WE CAN READ INTO IT? MITCH: YEAH, GENERALLY FROM MY EXPERIENCE ALL THE WAY BACK AT E*TRADE, INVESTORS ARE LOOKING FOR WAYS IN WHICH THEY CAN INVEST FOR THE LONG-TERM. YOU HAVE YOUR GROUP OF INVESTORS WHO ARE HYPERACTIVE TRADING. YOU SEE IT ON SOME PLATFORMS THAT STILL EXIST IN A BUT GENERALLY WHAT WE SAW WAS THE EVOLUTION OF CUSTOMERS TRYING TO FIGURE OUT HOW THEY BUILD WEALTH. WHETHER THEY ARE THINKING ABOUT WAYS TO BUILD A DIVERSIFIED PORTFOLIO IN PUBLIC MARKETS, PRIVATE MARKETS, THERE IS A LOT OF NOISE OUT THERE. THAT IS THE PART THAT CONFUSES RETAIL INVESTORS. ROMAINE: WITH REGARDS TO HOW PEOPLE ARE PETITIONING AND ALLOCATING PARTICULARLY IN LIGHT OF SOME RECENT DEVELOPMENTS WITH REGARDS TO THE TREASURY DEPARTMENT AND THE MOVE IN YIELDS, WE HAVE TALKED A LOT ON THIS SHOW. OBVIOUSLY, THE TRADITIONAL 60-40 WAS PUT TO BED A LONG TIME AGO. THERE IS A LOT FOR ALLOCATION TO PRIVATE ASSETS. DO YOU SEE PEOPLE PARTICULARLY ON YOUR PART FOR REACHING MORE FOR SOME OF THOSE PRIVATE ASSETS GIVEN WHAT WE ARE SEEING IN PUBLIC BOND MARKETS AND THE EQUITY MARKET FOR THATFOR SURE. I THINK GENERALLY, MY EXPERIENCE IS THAT, YOU KNOW, WHEN IT COMES TO OUR PLATFORM, INVESTORS ARE REALIZING THAT IF THEY DON'T THINK ABOUT PRIVATE MARKETS, THEY ARE MISSING OUT ON THE OPPORTUNITY TO BUILD LONG-TERM WEALTH, RIGHT? IT IS JUST THAT SIMPLE. AND WHILE THE MARKET HAS BEEN ON FIRE, AS YOU GUYS HAVE BEEN TALKING ABOUT ALL THE TIME, FOR A LONG PERIOD OF TIME IN THE S&P AND OTHERWISE, IT IS STILL TRUE THAT IF YOU ARE TRYING TO THINK ABOUT THE DIVERSIFICATION AND BUILDING UP FOR A ONE-YEAR, THREE-YEAR HORIZON OF A FIVE-YEAR, 10 YEAR HORIZON, YOU NEED TO HAVE THAT STEP NOT ONLY FOR PUBLIC MARKETS BUT FOR PRIVATE MARKETS. ROMAINE: I'M INTERESTED IN THE COMPETITION BETWEEN YIELDS. I GUESS THAT IS THE UPSIDE, AT LEAST PRIOR TO TODAY, THAT WE SAW IN YIELDS, YOU GET PRETTY HEALTHY COUPONS, IF YOU SOMEONE WHO'S GOING TO BUY AND HOLD, WHY NOT LOGIN 4.7% ON A 10 YEAR YIELD? THAT ALSO PUTS UPWARD PRESSURE ON PRIVATE ASSETS AFTER THE RETURN. ULTIMATELY, PEOPLE ARE BUYING THE RIGHT OR AT LEAST LOOKING AT THE SPREAD FOR A WHILE. IF WE ARE IN A HIGHER FOR LONGER RATE ENVIRONMENT WHEN IT COMES TO TREASURIES AND BENCHMARK RATE HERE, HOW MUCH MORE DOES PRIVATE CREDIT AND PRIVATE ASSETS HAVE TO OFFER? MITCH: YEAH. I AGREE WITH YOU COMPLETELY. YOU HAVE TO OFFER THE PREMIUM FOR THE ILLIQUIDITY, AT THE END OF THE DAY, THAT IS ULTIMATELY THE ISSUE BETWEEN PUBLIC AND PRIVATE MARKET. BUT GENERALLY SPEAKING, WHEN YOU SEE BEHAVIOR WITH RETAIL CONSUMERS, SO THEY ARE MOVING POTENTIALLY AWAY FROM PUBLIC EQUITIES TOWARD FIXED INCOME, BECAUSE THEY WANT THE COUPON, THE SAME THING HAPPENS IN PRIVATE MARKETS. YOU WILL SEE A MOVE BETWEEN WHAT WOULD BE TRADITIONALLY PRIVATE EQUITY INTO PRIVATE CREDIT, WHETHER IT IS YIELDS, AND THEN THERE IS THE PREMIUM, AS YOU WERE INDICATING, THAT YOU ARE GETTING PAID FOR FOR THE ILLIQUIDITY. I THINK IT'S ALSO TRUE INVESTORS REALIZE THEY ARE GREAT COMPANIES OUT THERE THAT ARE CHOOSING TO STAY PRIVATE FOR MUCH LONGER, SO IF THEY WANT EXPOSURE TO THE CREDIT OF THAT COMPANY COME AND THEY ARE NOT PUBLIC, THE ONLY WAY TO DO THAT IS IN THE PRIVATE MARKET. EMILY: WHY ARE THEY DOING THAT -- ROMAINE: WHY ARE THEY DOING THAT? I UNDERSTAND WHY THEY WERE DOING THAT A COUPLE OF YEARS AGO, BUT THE IDEAL MARKET HAS PRETTY MUCH OPENED UP. WE ARE PROBABLY GOING TO ECHO DOWN IN 2026, PROBABLY ONE OF THE GREATEST YEARS FOR CAPITAL MARKETS IN QUITE SOME TIME. WHY CHOOSE TO STAY PRIVATE IF YOU DO HAVE THE OPPORTUNITY TO GO PUBLIC RIGHT NOW? MITCH: IT IS INTERESTING, YOU KNOW, I REMEMBER YEARS AND YEARS AGO, IN THE BEGINNING OF MY CAREER, BUT I WAS BUILDING THE BANK AT TELE BANK, EVERYONE WANTED TO GO PUBLIC, AND IT WAS A MARKET SUCCESS. TODAY -- AND ONE OF THE TRUISMS WAS YOU HAVE A LOWER COST OF CAPITAL. I'M NOT SURE THAT IS TRUE TODAY. SO I THINK YOU HAVE A UNIVERSE OF COMPANIES WHO FEEL LIKE REMAINING PRIVATE LONGER PUTS THEM IN A BETTER POSITION. THEY CAN STILL GET ACCESS TO VERY INEXPENSIVE CAPITAL, AND ALLOWS THEM TO CONTINUE TO INVEST IN THE BUSINESS IN A WAY THEY BEST SEE THAT FIT OVER THE LONG-TERM. SO I THINK YOU SEE IT. I THINK THERE IS A UNIVERSE OF COMPANIES, AS EVIDENCED BY THIS SORT OF MOVEMENT TODAY AND ALL THE HOT STOCKS THAT HAVE GONE PUBLIC AT GREAT DEVALUATIONS IS BECAUSE THEY HAVE SAVED PRIVATE FOR SO MUCH LONGER AND ARE SO MUCH FURTHER ALONG AN ADVANCED IN THEIR LIFECYCLE AROUND EARNINGS AND OTHERWISE. SO IT IS WHY THEY ARE COMMANDING THE KIND OF PREMIUMS THAT THEY ARE. ROMAINE: I'M CURIOUS ABOUT THE DURATIONS ISSUE WITH REGARDS TO THE LOCK OF SEE IN THE PRIVATE SPACE. IF PEOPLE IN THE PUBLIC MARKETS ARE KIND OF SHYING AWAY FROM DURATIONS, CERTAINLY IN THE PUBLIC DEBT MARKET, AND YOU ARE SEEING THAT TO A CERTAIN EXTENT IN THE EQUITY SPACE, WHERE PEOPLE ARE MOVING AWAY FROM THE LONG-DURATION TRAITS, DOES THAT BECOME AN ISSUE FOR PRIVATE MARKETS, IF PEOPLE ARE SKITTISH OVER ALL ABOUT WHATEVER THE BROADER ECONOMIC MARKET SITUATION, MAYBE THEY DON'T WANT TO LOCK THEMSELVES AND FOR FIVE,, SI SEVEN YEARS OR WHATEVER IT IS -- FIVE, SIX, SEVEN YEARS OR WHATEVER IT IS? MITCH: I AGREE WITH YOU. WHEN YOU SEE THE MOVEMENT AROUND REDEMPTION A PRIVATE CREDIT, I THINK YOU AND I WERE STAYING AT THE TIME, IT IS NOT A CREDIT ISSUE, WHICH PEOPLE WERE WORRIED ABOUT AT THE TIME, IT'S A LIQUIDITY ISSUE, BECAUSE THERE'S A MISMATCHED EXPEDITION ABOUT WHAT LIQUIDITY MEANS. I THINK YOU'VE SEEN IT, EVEN IN THE LAST FEW WEEKS, YOU'VE SEEN ASSET MANAGEMENT FIRMS, ONE IN PARTICULAR THAT FILED WITH THE SEC, TO CREATE ENHANCED LIQUIDITY. THERE ARE PARTNERSHIPS BEING BUILT WITH COMPANIES TODAY IN THE ASSET MANAGEMENT SIDE AND NASDAQ AND USING TECHNOLOGIES. I THINK JUST AS I SAW THE EVOLUTION AT E*TRADE OR PUBLIC MARKETS, YOU WILL SEE IN PRIVATE MARKETS, WHERE THERE REALLY IS GOING TO BE ENHANCED LIQUIDITY CREATION AS AN OPTION, PARTICULARLY AROUND INTERVAL FUNDS FOR RETAIL INVESTORS WHO WANT TO HAVE ACCESS TO PRIVATE MARKETS. ROMAINE: I WANT TO ASK ABOUT THIS EXPANSION OF PRIVATE MARKETS TO THE INDIVIDUAL INVESTOR, INTO 401(K)S, THE NEW DEAL AT THE DEPARTMENT OF LABOR. I ALSO JUST WANT TO BRING TO YOUR ATTENTION A REPORT THAT JUST CAME OUT, I THINK IT WAS ON AUGUST 14, OUT OF VANGUARD, WHERE THEY BASICALLY RECOMMENDED AN ALLOCATION TO PRIVATE EQUITY OF ZERO. I AM A LITTLE CONFUSED BY THAT. I MEAN, I UNDERSTAND THE RISKS ASSOCIATED WITH THAT, BUT YOU BUILT A COMPANY ON THE PREMISE THAT THERE SHOULD BE MORE OF A MEANINGFUL ALLOCATION TO THAT. WHY DO YOU THINK THERE WOULD BE SOME RETICENCE TO ACTUALLY RECOMMEND THAT BY -- AND LET'S FACE IT, YOU KNOW, VANGUARD IS THE BIGGEST ONE OUT THERE WHEN IT COMES TO MANAGING FOLKS' RETIREMENT MONEY AND THEIR LONG-TERM CAPITAL. WHY DO YOU THINK THEY WOULD BE A LITTLE MORE RETICENT? MITCH: WELL, REMEMBER, AT WILLOW, OUR PURCHASES ARE ACCREDITED INVESTORS, SO BY DEFINITION, WE ARE SERVING A SEGMENT OF THE MARKETPLACE THAT WANTS ACCESS TO PRIVATE MARKET AND HAS ENOUGH WEALTH EITHER IN THE FORM OF INCOME OR NET WORTH TO BE ABLE TO BEAR LOSS. AND SO I DO UNDERSTAND. LIKE, I DO THINK AS YOU START OPENING PRIVATE MARKETS INTO 401(K)S, YOU ARE REALLY REACHING INTO WHAT WE SERVED AT E*TRADE, MORE, YOU KNOW, THE MAIN STREET AND MASS AFFLUENT CATEGORY. AND IT IS TRUE. . I THINK THERE IS A LEVEL THEY ARE WHERE YOU HAVE TO BE MUCH MORE CAUTIOUS AND YOU HAVE TO REALLY LEAN INTO EDUCATION, SO THAT THE END CONSUMER REALLY UNDERSTANDS THE ILLIQUIDITY OF THE INVESTMENT AND WHAT THE IMPLICATION IS, RIGHT? FOR US, IT IS SLIGHTLY DIFFERENT, BECAUSE WE ARE SERVING A DIFFERENT SEGMENT OF THE MARKETPLACE. ROMAINE: WELL, AS YOU SERVE THAT SEGMENT OF THE MARKETPLACE AND THIS WHOLE CONSUMER MODEL, YOU DON'T HAVE THAT COMPLETELY TO YOURSELF. YOU'VE HELPED TO DEFINE IT. BY YOU SEEM BLACKSTONE, APOLLO IN THIS SPACE, NOW LOOKING A LITTLE BIT DOWN THE LINE HERE. DOES THAT WORRY YOU AT ALL? ARE YOU GOING TO BE COMPLEMENT RE-? YOU ARE SHAKING YOUR HEAD, "NO"? MITCH: NO. LISTEN, I SAY THIS ALL THE TIME, THE BIG PART OF THE AMAZING SUCCESS WE SAW AT E*TRADE AS YOU SAW US AND SCHWAB AND FIDELITY, AMERITRADE, AND ALL THE OTHERS REALLY TRYING TO BUILD A CATEGORY AND BUILD INDIVIDUAL BRANDS WITHIN THAT CATEGORY. AND WHEN YOU ACTUALLY HAVE OTHERS PARTICIPATING, IT REALLY VALIDATES THE SPACE, AND IT OFTEN MAKES IT MUCH EASIER TO BE ABLE TO GROW YOUR BRAND, SPECIFICALLY WITHIN THE CATEGORY THAT IS BEING ESTABLISHED. AND SO I SORT OF WELCOME THE OPPORTUNITY FOR MORE PEOPLE TO ENTER INTO THE SPACE. ROMAINE: ALL RIGHT, MITCH, ALWAYS APPRECIATE IT. MITCH CAPLAN, CEO OF WILLOW WEALTH, FORMER CEO OF E*TRADE. COMING UP LATER THIS HOUR, WE WILL TALK ABOUT THE RISE OF AI AND HOW IT IS FUELING FEARS . A CONVERSATION WITH THE CEO OF MCGRAW-HILL ABOUT HOW IT IS IMPACTING THE EDUCATION SECTOR. ♪ ROMAINE: WELCOME BACK TO "THE CLOSE." TAKING A LOOK AT SOME OF THE AFTER HOURS MOVERS. A BIT OF DISAPPOINTMENT OUT OF EARNINGS FROM THREE COMPANIES HERE, INTUIT, ZOOM, AND BOX, INTUIT, OF COURSE, MAKES TAX PREPARATION SOFTWARE, DOWN ABOUT 7% AS WE WAIT FOR THAT CONFERENCE CALL TO START. WE WILL TALK ABOUT THIS IDEA OF AI AND HAVE NEW AI TOOLS ARE STARTING TO EAT INTO THE BUSINESS OF SOME OF THESE COMPANIES CAN EARNINGS MORE IMPORTANT, THE GUIDANCE WE GOT FROM THE COMPANY NOT ALL THAT REASSURING COULD WE WILL HEAR FROM THE CFO AND CEO ON THE CONFERENCE CALL ABOUT THE LONGER-TERM STRATEGY. ZOOM IN A LITTLE BIT BETTER SHAPE OF STILL DOWN ABOUT 4% IN THE AFTER HOURS TRADE. BOX NOW UNCHANGED. SOME OF THE METRICS DID BEAT ESTIMATES, BUT, AGAIN, WE ARE TALKING ABOUT SLIM MARGINS AT A TIME WHEN EXPECTATIONS ARE HIGH. THAT IS WHAT WE SAW IN THE AFTER HOURS TRADE DURING THE PAST SESSION, OF COURSE, THERE WAS A LOT OF TALK ABOUT THE REBOUND WE SAW TODAY IN TECH STOCKS THAT INCLUDE BIOTECH, BUT MORE IMPORTANTLY SOME OF THOSE CHIP STOCKS. THAT HELPED TO LIFT THE S&P 500 BY ABOUT 10%, BUT A BIG DROP IN YIELDS FOR THE SECOND STRAIGHT DAY AND A BIG DROP IN CRUDE OIL. BRENT CRUDE DOWN ABOUT 6%. THE START OF THE SHOW TODAY COME IN OBVIOUSLY GOING TO BE THE STAR OF THE SHOW TOMORROW, IS NVIDIA. THOSE SHARES SNAPPING A SEVEN-DAY LOSING STREAK. THEY WERE HIGHER IN THE CASH SESSION COULD YOU CAN SEE OVER THE LAST THREE MONTHS, THEY BASICALLY GONE NOWHERE, AND THAT IS THE BIG CONCERN. A LOT OF QUESTIONS ABOUT WHETHER NVIDIA'S EARNINGS ARE GIVING ANY REAL INDICATIONS HERE ABOUT EXACTLY WHERE SEMICONDUCTORS DEMAND IS. DO YOU BELIEVE SOME OF THOSE LONG-TERM, PIE IN THE SKY METRICS THAT JENSEN HUANG LAYS OUT THERE -- WHY WOULD YOU -- BUT AT THE END OF THE DAY, WE ARE STARTING TO SEE THE STRAIN AND SOME OF THOSE CUSTOMERS AND MORE PORTLY HOW SOME OF THOSE CUSTOMERS ARE FINANCING THESE YIELDS. WE WILL HAVE FULL COVERAGE ON THAT TOMORROW, ABOUT 24 HOURS FROM NOW, WHEN THOSE EARNINGS DROP. MEANWHILE, WE HAVE A LOT MORE TO COVER HERE ON "THE CLOSE." WE ARE GOING TO TALK ABOUT AI, BUT WE ARE GOING TO DO IT THROUGH THE LENS OF EDUCATION DID WE WILL TALK TO THE CEO OF MCGRAW-HILL PHILIP MOYER WHEN WE COME BACK AFTER THE BREAK. THIS IS BLOOMBERG. ♪ ROMAINE: WE TALK A LOT ABOUT THE AI DISRUPTION GROUPING INDUSTRIES OUT THERE AND AMERICANS AS WELL. THERE WAS SOMETHING FROM PEW RESEARCH SHOWING CONCERNS RISING WITH THE YOUNGEST MEMBERS OF THE WORKFORCE INCREASINGLY SKEPTICAL THAT THE ADVANCES IN THE TECHNOLOGY WILL LEAD TO WIDESPREAD JOB LOSSES. WHEN IT COMES TO EDUCATION, OUR NEXT GUEST SAYS AI WILL SKILL TEACHERS, NOT REPLACE THEM. PHILIP MOYER JOINS US, THE CEO FROM MCGRAW-HILL. JUST TOOK OVER EARLIER THIS YEAR. MCGRAW-HILL A STORIED COMPANY IN THE EDUCATION SPACE. I AM OLD ENOUGH TO REMEMBER WHEN IT WAS JUST BOOKS, PHYSICAL BOOKS, AND OBVIOUSLY IT HAS EVOLVED A LOT SINCE THEN. YOUR BACKGROUND IS IN TECH. IS THIS TURNING INTO A TECHNOLOGY COMPANY? IS IT ALREADY A TECHNOLOGY COMPANY? PHILIP: WE SERVE 100 MILLION CURRICULUM LICENSES AROUND THE WORLD. WE ARE ONE OF THE FEW COMPANIES THAT SERVES BOTH SIDES OF THE EDUCATION SPECTRUM. IN CERTAIN CASES YOU NEED BOOKS. IN CERTAIN CASES YOU NEED TECHNOLOGY. WE ARE ONE OF THE FEW COMPANIES THAT PROVIDE BOTH ON A GLOBAL SCALE. ROMAINE: FIRST OF ALL, I HAVE TO ASK YOU, THIS IS BACK-TO-SCHOOL SEASON, AND A LOT OF SCHOOLS HAVE STARTED AROUND THE COUNTRY ALREADY. IN THE NEW YORK AREA, THEY WILL KICK UP IN THE NEXT WEEKS. GIVE ME A SENSE WHAT YOU HAVE SEEN WITH REGARDS TO WHAT PEOPLE ARE LOOKING FOR. WHAT ARE THE SCHOOLS LOOKING FOR? WHAT ARE THE PARENTS AND STUDENTS ACTUALLY NEEDING IN THIS PARTICULAR ENVIRONMENT? PHILIP: IT DIFFERS STUDENT BY STUDENT AND GRADE BY GRADE. YOU CAN EXPOSE A CHILD TO MORE SCREEN TIME THE MORE SELF-REGULATION THEY HAVE. IN THE EARLY GRADES, WE ARE FINDING IT IS NOT GREAT FOR CHILDREN. IN THE K THROUGH FOUR SPACE WHEN YOU ARE TEACHING LITERACY, YOU WANT A FEW MINUTES A WEEK, 7% A WEEK, MOSTLY DONE FOR ASSESSMENT TO GET EXPOSED TO A SCREEN. AS YOU GET MORE SELF-REGULATION IN THE HIGHER GRADES, YOU USE IT FOR STUDY TOOLS. WITH MEDICINE AS AN EXAMPLE, YOU CAN INTERACTIVE CLINICAL SIMULATIONS. THINK ABOUT A LENS OF A CAMERA THAT CAN OPEN TO THE WORLD OF SCREENS THE DEEPER YOU GO. ROMAINE: THERE HAS BEEN A LOT OF TALK ABOUT JUST TEACHING FOR THE NEW GENERATION. WE REMEMBER WHEN CHATGPT AND ALL OF THAT CAME OUT. IT SEEMED LIKE EVERY SCHOOL OUT THERE TRIED TO SHUT IT DOWN. HIGH SCHOOLS, COLLEGES, EVERYWHERE SAID WE WILL NOT ALLOW IT. A COUPLE YEARS LATER, TEACHERS AND PROFESSORS WERE INTEGRATING THE AI TOOLS INTO THEIR CURRICULUM. HAS THE TIME SHIFTED WHERE THE EDUCATORS, ADMINISTRATORS, AND THE PARENTS SEE SOME VALUE IN INCORPORATING THAT INTO THE EDUCATION PROCESS? PHILIP: ABSOLUTELY. THE MOST IMPORTANT THING IN EDUCATION IS THE PRODUCTIVE STRUGGLE. IF YOU OFFLOAD THAT TO AI, IT IS NOT A GREAT LEARNING EXPERIENCE. FIRST AND FOREMOST, THE EDUCATORS NEED TO BE EDUCATED IN HOW TO USE AI AND THE APPROPRIATENESS FOR ASSIGNMENT. THIS ASSIGNMENT, YOU CAN HAVE AI DO SOME IDEATION WITH YOU. THIS ONE CAN CORRECT YOUR WORK. IN THIS CASE, YOU SHOULD NOT USE IT AT ALL. WE HAVE TO TEACH THAT WHEN THERE IS PRODUCTIVE STRUGGLE AND WEATHER IS NOT. ROMAINE: I HAVE TO ASK YOU SPECIFICALLY ABOUT THE BUSINESS AND HOW THE EMBRACE OF AI FOR MCGRAW-HILL -- ONE THAT REALLY STARTS TO CONTRIBUTE TO THE BOTTOM LINE AND MORE IMPORTANTLY TO REVENUE GROWTH IN A MORE MEANINGFUL WAY. PHILIP: WE ARE EXCITED BECAUSE IT IS ALREADY STARTING TO CONTRIBUTE. WE HAVE TO TEACH WERE SUBJECT TO MORE PEOPLE IN MORE WAYS THAN EVER BEFORE. I LIKE TO SAY THAT HUMAN INTELLIGENCE HAS NO TERMINAL VALUE. WE WILL BE GROPING FOR A LONG TIME TO COME. FOR US -- WE WILL BE GROWING IT FOR A LONG TIME TO COME. FOR US, WE ARE ABLE TO ASSESS A STUDENT AT A MUCH MORE GRANULAR LEVEL. WE COULD TELL YOU WITH 25 QUESTIONS THE 400 SKILLS OF ALGEBRA ONE PRECISELY WHERE THE STUDENT IS. OR IF WE HAVE TO DO SOMETHING COMPLEX LIKE INTERACTIVE SIMULATIONS, WE ARE DOING AI TODAY. IT IS CONTRIBUTING TODAY. ROMAINE: YOU ARE BUILDING YOUR TOOLS TO BE DEPLOYED. ARE YOU DOING THAT IN PARTNERSHIP WITH ANTHROPIC AND APPLE AI -- AT OPENAI AND SOME LARGE LANGUAGE MODEL COMPANIES WERE COMPETING AGAINST THEM? PHILIP: WE ARE DEFINITELY IN PARTNERSHIP. THIS QUARTER I ENTERS THE FIRST AGENTIC -- YOU CAN WRAP A PIECE OF CURRICULUM AND JOIN ANY CHATBOT. IN THE FUTURE IT WILL BE LIKE AN APP STORE. KNOWLEDGE WILL BE LIKE AN APP STORE. I WANT TO LEARN BIOLOGY, ALGEBRA ONE, SOMETHING. MCGRAW-HILL WILL BE ABLE TO JOIN ANY CHATBOT CONVERSATION. WE HAVE A LOT OF EXCITEMENT ABOUT THE AGENTIC CURRICULUM AS WE ARE CALLING IT. ROMAINE: TO BE CLEARROMAINE:, WHAT PRODUCTS YOU ARE WHAT ALLOWS SOMEBODY TO GO THROUGH MCGRAW-HILL RATHER THAN DIRECTLY TO CHATGPT OR CLAUDE OR WHATEVER THERE LARGE LANGUAGE MODEL OF CHOICE IS? PHILIP: YOU CAN DO THAT BUT FOR A LOT OF THINGS, ESPECIALLY WHEN EDUCATING A CHILD, YOU WANT TRUTH, HUMAN GUARDED CONTENT, AND PROFICIENCY SCORING. IT IS NOT JUST ENOUGH TO GET SOME KNOWLEDGE. DOES THE CHILD UNDERSTAND IT? IS THERE COMPREHENSION? WHEN WE DO MEDICAL GRADE, WE HAVE TO MAKE SURE THE TECHNOLOGY WE ENTER WITH ANSWERS THE SAME WAY EVERY SINGLE TIME OR ELSE WE ARE NOT DOING EDUCATION PROPERLY IN THE MEDICAL FIELD. ROMAINE: THIS GETS TO THE SCREEN TIME ISSUE. ITEM THERE IS A DISPARITY BETWEEN THE YOUNGER STUDENTS AND THE ADULT STUDENTS IN COLLEGE AND GRAD SCHOOL. WHEN WE TALK ABOUT THE AMOUNT OF TIME THEY ARE USING TECHNOLOGY, SCREENS, ETC., TO DO THEIR STUDY OR WHATEVER THEY ARE DOING, IS THERE A BALANCE THAT YOU FOUND THAT IS MAYBE THE RIGHT SWEET SPOT? I KNOW IT WILL NOT BE THE SAME FOR EACH AGE GROUP. PHILIP: WE ARE AT AN INFLECTION POINT BECAUSE PARENTS AND EDUCATORS, THEY ARE DISILLUSIONED WITH SCREEN TIME. THE AVERAGE SCHOOL HAS 2400 LEARNING TOOLS AND WE ARE DEALING WITH PROFICIENCY RATES BELOW WHERE WE WANT THEM TO BE SO THERE HAS BEEN A BACKLASH. OVER 25 STATES HAVE RULES AGAINST SCREENS IN THE CLASSROOM. THE MORE STUFF IGNITION YOU HAVE, THE MORE SCREEN TIME YOU CAN BE EXPOSED TO. WE JUST CAME OUT WITH AN EDUCATION REPORT WHERE WE TALKED ABOUT THE FACT THAT 81% OF EDUCATORS WHAT SCREEN TIME AND AI EMBEDDED IN THE TWO WAS THEY ALREADY USE IN THE CLASSROOM AS OPPOSED TO A SEPARATE TOOL. ROMAINE: OK. BUT WHEN WE TALK ABOUT THIS BACKLASH, IT IS PRETTY SEVERE. YOU HAVE PARENTS SAYING WE WILL NOT LET OUR KIDS USE ANY SORT OF TECHNOLOGY BEYOND WHATEVER IS ABSOLUTELY ESSENTIAL. YOU HAVE KIDS THEMSELVES GOING MORE ANALOG IF YOU WILL WITH CAMERAS AND THINGS LIKE THAT. ARE YOU WORRIED THAT BECOMES MORE OF A LONG-TERM TREND AS THE FEARS ABOUT AI AND TECHNOLOGY ARE ENVELOPING EVERYONE'S LIFE? PHILIP: IT DOES NOT UPSET AT ALL. AND STRENGTHENS OUR BUSINESS BECAUSE WE ARE ONE OF THE FEW COMPANIES THAT PRINCE GLOBALLY -- PRINTS GLOBALLY. WE ARE SHIPPING TO INDIA, SAUDI ARABIA, LATIN AMERICA, ALL OVER THE UNITED STATES AS STUDENTS ARE COMING BACK. WE ARE ALSO ONE OF THE BIGGEST DIGITAL PROVIDERS IN THE WORLD. WE WILL SERVE WHATEVER THE CLASSROOM NEEDS. ROMAINE: WE HAVE TO END THIS. JUST CIRCLING BACK TO THE GUIDANCE, THE FACT THAT YOU DID NOT RAISE IT AT THE MOST RECENT EARNINGS REPORT, AND THE IDEA OF WHAT THE RUNWAY IS. I KNOW YOU HAVE ONLY BEEN THERE SIX MONTH BY WALL STREET ANALYSTS ARE PRETTY DEMANDING CREATURES. WHEN WILL YOU SEE MORE OF THE STOCK PRICE BACK TO THE IPO PRICE? PHILIP: WE ARE REALLY EXCITED BECAUSE WE HAVE BEEN HITTING AND EXCEEDING OUR GUIDANCE WE GAVE ALL THE WAY BACK AT THE IPO. IT HAS BEEN FOUR STRAIGHT QUARTERS SINCE WE HAVE BEEN PUBLIC. WE HAVE HAD 40 STRAIGHT QUARTERS OF GROWTH IN OUR HIGHER ED BUSINESS. WE WILL LOOK TO GIVE A GOOD VIEW OF THE HORIZON BUT WE SEE A LOT WONDERFUL OPPORTUNITIES ON THE HORIZON TO CONTINUE TO INCREASE. ROMAINE: REALLY APPRECIATE YOU JOINING US. PHILIP MOYER IS THE CEO OVER AT GROH HILL. WHEN WE COME BACK, WE WILL TALK ABOUT THE U.S. AND CANADA TARIFFS, THE TIT FOR TAT HAS OFFICIALLY STARTED. WE WILL CATCH UP WITH THE NATIONAL PRESIDENT FOR UNIFOR TO TALK ABOUT THE AUTOMOTIVE TARIFFS UP NEXT RIGHT HERE ON "THE CLOSE" ON BLOOMBERG. ♪ >> I TOLD THE PRIME MINISTER DEAL IS BETTER THAN A BAD DEAL -- I TOLD THE PRIME MINISTER NO DEAL IS BETTER THAN A BAD DEAL. WE HAVE TO GO DOLLAR FOR DOLLAR, TARIFF OR TERROR. HE AN ATTACK ON OUR SOVEREIGNTY, COUNTRY. WE ARE SO INTEGRATED. WE ARE BOTH EACH OTHER'S NUMBER ONE CUSTOMER, AND IT JUST DOES NOT MAKE SENSE TO ATTACK EACH OTHER. ROMAINE: THE ONTARIO PREMIER DOUG FORD ON THE ESCALATING TRADE WAR BETWEEN THE U.S. AND CANADA. YOU CAN HEAR MORE OF THE COMPETITION ON "BALANCE OF POWER" AT THE TOP OF THE HOUR, BUT I WANT TO FLAG EXACTLY HOW WE GOT HERE. PRIME MINISTER MARK CARNEY EARLIER TODAY MATCHING PRESIDENT TRUMP'S TARIFFS, ANNOUNCING A 50% TAX ON U.S. DAIRY AND STEEL. THE PRIME MINISTER ALSO ANNOUNCED A NEW SUPPORT PROGRAM FOR SEVERAL CANADIAN BUSINESSES HURT BY THE ESCALATING TRADE WAR. THERE ARE A LOT OF QUESTIONS AND CONCERNS ABOUT WHERE WE GO NEXT, WHAT THE U.S. DOES WITH ITS PROPOSED INCREASE IN TARIFFS, AND WHETHER CANADA STICKS BY ITS GUNS. LANA PAYNE JOINS US NOW, THE NATIONAL PRESIDENT OF UNIFOR, CANADA'S LARGEST PRIVATE SECTOR UNION WHICH COMBINES INDUSTRIES. YOU HAVE ALREADY BEEN DEALING WITH THE TARIFF SITUATION SINCE THE PRESIDENT,, RETURNED BACK TO OFFICE -- PRESIDENT, PRESIDENT TRUMP, RETURNED BACK TO OFFICE A YEAR AND A HALF AGO. HOW MUCH WORSE DO YOU THINK IT CAN GET, AND HOW PREPARED ARE YOUR UNION MEMBERS FOR IT? LANA: IT HAS BEEN PRETTY BAD SO FAR. THAT IS THE REALITY. WE HAVE BEEN 18 MONTHS DEALING WITH THIS RIGHT NOW. WE HAVE PLANTS THAT HAVE BEEN IDLE. WE HAVE LOST SHIFTS. AS HAVE WORKERS IN THE UNITED STATES. THIS IS WHAT MAKES SO LITTLE SENSE ABOUT THIS ENTIRE THING. THE PEOPLE THAT ARE BEING HURT BY THE TARIFFS ARE WORKERS ON BOTH SIDES OF THE BORDER AND THE COMPANIES THEMSELVES. THE COMPANIES THAT ACTUALLY MANUFACTURE IN CANADA AND IN THE UNITED STATES. ROMAINE: SO GIVE ME A SENSE ABOUT THE MANUFACTURING. THERE IS A LOT OF MISINFORMATION OUT THERE AS TO WHAT CANADA RELIES ON THE U.S. FOR, MAYBE WHAT THE U.S. DOES NOT RELY ON CANADA FOR, SO THAT'S TAKE AUTOS HERE. WHEN WE TALK ABOUT THE 50% TARIFF ON AUTOS, WHAT EXACTLY ARE WE TALKING ABOUT? LANA: WELL, RIGHT NOW IT IS A 25% TARIFF WITH U.S. CONTENT IN THOSE VEHICLES BEING CARVED OUT. THE THREAT IS THAT WILL MOVE TO A 50% TARIFF IN JANUARY, BUT IT WOULD ALSO INCLUDE AUTO PARTS. IF WE GET TO THAT PLACE, I CAN GUARANTEE YOU WITHIN 10 DAYS THE ENTIRE NORTH AMERICAN AUTO INDUSTRY WILL PROBABLY BE SHUT DOWN. IT IS SUCH AN INTEGRATED INDUSTRY THAT WE HAVE AUTO PARTS THAT CROSS THE BORDER BETWEEN CANADA AND THE UNITED STATES ABOUT EIGHT TIMES A DAY. IT IS DIFFICULT TO EVEN KNOW WHAT IS A U.S. PART AND WHAT IS A CANADIAN PART. WE HAVE BEEN DOING THIS KIND OF INTEGRATED AUTO SECTOR FOR 40 OR 50 YEARS. UNSCRAMBLING THAT EGG IS EXTREMELY PAINFUL AND CAUSING PAIN IN TERMS OF JOB LOSSES ON BOTH SIDES OF THE BORDER. THAT IS WHY YOU HEAR YOU HEAR POLITICIANS IN MICHIGAN AND OTHER PLACES SAYING, "THIS HAS TO STOP." ROMAINE: IN THE OLD DAYS, I USED TO COVER TIMBER PAPER COMPANIES AND THE IDEA OF WHAT GOES BACK AND FORTH ACROSS THE BORDER BEFORE IT GETS TO A FINISHED PRODUCT I THINK WOULD MAKE SOME PEOPLE'S HEADS SPIN. IT ALSO MAKES MY HEAD SPIN AS TO HOW WE EXECUTE OURSELVES FROM THE SITUATION. TALK ABOUT MARK CARNEY. WHEN HE CAME INTO OFFICE IN 2025, HE MADE IT CLEAR HE WAS GOING TO STAND UP FOR CANADA AND PUSH ON WHAT THE U.S. IS DOING. DO YOU HAVE THE ECONOMIC LEVERS TO DO THAT, TO HELP YOUR INDUSTRY SURVIVE THIS, ASSUMING AN AGREEMENT IS NOT REACHED? LANA: YES, WE DO. WHAT YOU ARE SEEING TODAY IS WHAT COULD BE THE FIRST PART OF AN ESCALATION IN A TRADE WAR, OR IT COULD BE THE THING THAT ACTUALLY BRINGS THIS TO A HEAD, SO THAT SANER HEADS PREVAIL HERE. THE REALITY IS WE TAKE AN APPROACH IN CANADA, AN APPROACH WHERE WE TOOK MOST OF THE RETALIATION OF THE U.S. WAS GIVEN, A NUMBER OF CONCESSIONS WE'VE BEEN TALKING ABOUT TRYING TO BUILD, AND HAVING AN ECONOMIC AND SECURITY AGREEMENT AS WELL IN WHICH WE WOULD INCREASE IN ENERGY EXPORTS TO THE U.S. THESE ARE THINGS THAT THE U.S. OBVIOUSLY NEEDS FROM CANADA. OIL GOES INTO YOUR REFINERIES, TO HELP BUILD PRODUCTS THERE. OUR ALUMINUM IS VERY IMPORTANT TO THE U.S. ALL OF THESE THINGS BECAUSE WE BUILD THINGS TOGETHER, CANADA AND THE UNITED STATES. AND WHEN YOU THINK OF THE AUTO SECTOR AS AN EXAMPLE, RIGHT NOW, BY PUTTING THESE TARIFFS ON U.S. AUTOMAKERS, THE ONLY WINNERS IN THIS ARE THE CHINESE AUTOMAKERS, WHO ARE OUT TO BASICALLY CONTROL THE WORLD WITH THEIR AUTO MAKING, AND I THINK THE REALITY IS, THE FOCUS IS IN THE WRONG PLACE. CANADA IS NOT THE PROBLEM. THE PROBLEM IS COME IN THE CASE OF NORTH AMERICA RIGHT NOW, WE HAVE A SHARED PROBLEM. IT IS 5 MILLION IMPORTS OF CARS COMING INTO NORTH AMERICA THAT ARE NOT BUILT IN NORTH AMERICA, AND THERE IS NO SUPPLY CHAIN AROUND THESE VEHICLES IN NORTH AMERICA. THAT IS WHERE THE FOCUS SHOULD BE, AND THAT IS WHAT WE SHOULD BE LOOKING AT IN TERMS OF HOW WE BRING SOME OF THAT WORK TO THE UNITED STATES BUT ALSO TO CANADA. ROMAINE: WITH REGARDS TO SOME OF THE RELIEF MEASURES THAT HAVE BEEN ANNOUNCED, I MEAN, OBVIOUSLY THE COUNTER-TARIFFS, BUT WE TALK ABOUT 7.5 BILLION CANADIAN SUPPORT FOR CANADIAN BUSINESSES. LIQUIDITY SUPPORT FOR SMALL AND MEDIUM-SIZED BUSINESSES, GRANTS TO SPEED UP PROJECT FOR SOME OF THOSE BUSINESSES HIT BY THOSE TARIFFS. EMPLOYMENT ASSURANCE PROGRAMS, ETC. IS THERE SOMETHING MORE? IS THAT ENOUGH? IF YOU COULD GO TO CARNET, WHAT WOULD YOU ASK FOR, IN ADDITION TO THAT? LANA: YEAH. ABSOLUTELY, I THINK THERE ARE A NUMBER OF THINGS WE CAN DO, YOU KNOW, THE GOVERNMENT OF CANADA AND ALL OF OUR PROVINCES CONTROL A LOT OF MONEY IN TERMS OF PROCUREMENT. THEY NEED TO GET THAT PROCUREMENT OF THE DOOR AS QUICKLY AS POSSIBLE, SO THAT MORE CANADIAN WORKERS ARE BUILDING THINGS FOR OUR GOVERNMENT. THAT IS ONE THING WE SHOULD DO. WE SHOULD BE MAKING A CALL ON CORPORATE CANADA RIGHT NOW WHO ALSO BUYS A LOT OF STUFF IN THE WORLD, AND MAKING SURE THEY ARE PRIORITIZING, YOU KNOW, CANADIAN BUSINESSES, WHEN THEY ARE BUYING THINGS FROM TISSUES TO TRUCKS. YOU FIGURE IT OUT BUT MAKE SURE IT IS CANADIAN. AND I WOULD SAY, YOU KNOW, GETTING IN LINE ON INDUSTRIAL POLICY, WHICH IS PRETTY CLEAR RIGHT NOW. WE ARE GOING TO HAVE TO DO MORE OF THAT AND QUICKLY. BUT ALSO MAKING SURE WE ARE NOT JUST DOING AI OR -- E.I. OR EMPLOYMENT INSURANCE PROGRAM, WE ARE DOING THINGS TO GET PEOPLE WORKING. THAT IS TO BE A PRIORITY, SO WE ARE KEEPING THIS PRODUCTION THAT IS GOING TO BE SO KEY WHEN WE GET THROUGH THIS TRADE WAR, AND THAT WE ARE NOT LOSING ANY OF THESE IMPORTANT JOBS FOR THE LONG TERM. ROMAINE: ALL RIGHT, LANA, WE HAVE TO LEAVE IT THERE. WE WILL TALK AGAIN I'M SURE. I DON'T THINK THIS IS GOING AWAY ANYTIME SOON. LANA PAYNE, NATIONAL PRESIDENT OF UNIFOR, CANADA'S LARGEST TRADE UNION. COMING UP NEXT, IT'S A BIG ONE, THOSE EARNINGS FROM NVIDIA. THIS IS BLOOMBERG. ♪ ROMAINE: LESS THAN 24 HOURS UNTIL THE MAIN EVENT. WE WILL HAVE SPECIAL COVERAGE STARTING TOMORROW COME AROUND 4:00 P.M., ON THOSE EARNINGS OUT OF NVIDIA. THE CHIPMAKERS SNAPPING A SEVEN-DAY LOSING STREAK, THOUGH AS YOU CAN SEE THE SAGA STILL DOWN, AND FRANKLY, THEY'VE GONE NOWHERE SINCE THIS LATEST REPORT. THE MANAGING DIRECTOR OF EQUITY RESEARCH AT WEDBUSH SECURITIES JOINS US NOW. REVENUE WILL BE PHENOMENAL. WE ARE TALKING BASICALLY GROWTH, SIMILAR STORY ON THE EPS SIDE, MARGINS ARE CREATED. WHAT EXACTLY ARE INVESTORS -- I FEEL LIKE THERE'S NO WAY THEY CAN SATISFY INVESTORS, MATT, WHAT ARE YOU LOOKING FOR HERE? MATT: THAT'S BEEN THE STORY LAST FEW QUARTERS, RIGHT? THEY KEEP COMING OUT WITH NUMBERS, AS FAR AS I CAN TELL, THE STOP DOES NOT DO ANYTHING. I STILL THINK OVER THE NEXT COUPLE OF QUARTERS, AND I'M NOT SURE IF IT'S THIS PRINT OR THE NEXT PRINT, THEY ARE GOING TO BEAT EXPECTATIONS AGAIN. PEOPLE ARE GOING TO REALIZE THAT NVIDIA IS TRADING CLOSE TO 20 TIMES AND GROWING AT CLOSE TO 100%, AND IF THOSE TWO THINGS DON'T MAKE SENSE, I THINK AT THAT POINT, THE STOCK TAKES OFF, AND THAT'S WHY MY PRICE TARGET IS NORTH OF $300. IT IS JUST, FROM MY PERSPECTIVE, WIND IS THAT REAL ISSUE KICK IN? I DON'T SEE ANYTHING STOPPING NVIDIA'S PRINT. ROMAINE: GIVE ME A SENSE OF WHAT THE NEXT LEG OF GROWTH SEEMS TO BE. BECAUSE THAT SEEMS TO BE SOME OF THE CONCERN, YOU KNOW, THIS IS GOING TO SLOW DOWN. THEY OBVIOUSLY HAD EFFECTIVELY A MONOPOLY FOR A WHILE IN THIS HIGH-END CHIP SPACE. NOW YOU HAVE PEOPLE MOVING AWAY FROM GPU'S, EMBRACING CPU'S. WHERE IS NVIDIA GOING TO FIT INTO ALL OF THAT? MATT: YEAH. YOU GOT CPU'S, YOU GOT APPROVAL WITH PEOPLE YOU' -- PPU'S, MORE COMPETITIVE PRODUCT FROM AMD. IT'S REALLY HARD TO TELL IN WHAT YOU ARE SEEING PRODUCTS DEPLOY FROM MY END, RIGHT? YOU'VE GOT GOOGLE OR AMAZON TAKES A PRODUCT, PUT IT IN PLACE. THAT'S THE THING. REMEMBER HERE ON THE SUPPLY SIDE, THOUGH, TO SOME EXTENT, AT THIS POINT, IT'S NOT ABOUT TECHNOLOGY. WE HAVE SO MANY SHORTAGES, DRAM, OPTICS, IT IS TO SET UP SUPPLY CHAINS, AND I THINK NVIDIA HAS DONE THE BEST JOB. THEY HAVE GOT IT SET UP WHERE THERE'S ALL THIS DEMAND. YOU CAN GLUE THESE PARTS TOGETHER, AND I THINK NVIDIA'S BEST POSITION. ROMAINE: I'M GLAD YOU BROUGHT UP THE JALAPENO. WE HAD ONE OF THE PRODUCT HEADS EARLIER ON, ON BLOOMBERG TELEVISION, TALKING ABOUT THAT. WE DID NOT HEAR A LOT ABOUT THE ACTUAL ROLLOUT OF IT. THERE'S THIS, AND BASED ON WHAT THEY SAID, THE PERFORMANCE IS NOT MATCHING, CERTAINLY CLOSE TO IT COME ABOUT WHAT IS THE ABILITY TO SCALE UP A NEW PRODUCT LIKE THAT, WHETHER IT IS JALAPEÑO OR ANYTHING ELSE? MATT: YOU HAVE CEREBRUS, THEY DON'T HAVE THAT CONSTRAINT, BUT FOR MOST OF THESE COMPANIES, IT IS REALLY HARD TO GET DRAM, IT IS REALLY HARD TO GET SUPPLIED. AND I THINK FOR AN OPENAI, IT IS GOING TO BE HARD TO SCALE THE FIRST GENERATION. AND THAT IS NOT EVEN ACCOUNT FOR THE FACT THAT YOU LOOK AT ALL OF THESE DEVELOPMENTS. AND, LOOK, GOOGLE WAS NUMEROUS GENERATIONS IN BEFORE THINGS WORKED. WITH AMAZON, YOU'RE REALLY TALKING ABOUT SECOND, THIRD GENERATION PARTS OR TAKEOFF. CERBERUS, SAME THING, THEY ARE ON GEN 3. IT TAKES TIME. ROMAINE: ALL RIGHT, MATT, WE GOT TO LEAVE IT THERE, MATT BRYSON, MANAGING DIRECTOR OF EQUITY RESEARCH OVER AT WEDBUSH SECURITIES. MEANWHILE, WHAT TO WATCH OVER THE NEXT 24 HOURS, THERE'S A FEW OTHER THINGS GOING ON BESIDES THAT. IT'S BEEN QUITE A FEW INTERESTING COUPLE OF WEEKS WHEN IT COMES TO A LOT OF THE CONSUMER RETAIL COMPANIES. WE HEARD FROM DICK'S EARLIER TODAY. IT'S NOT GOOD. WE ARE GOING TO HEAR FROM MORE TOMORROW MORNING HERE THAT INCLUDES KOHL'S, ABERCROMBIE & FITCH, BATH AND BODY WORKS, WILLIAM SIMONA -- SO NOMA, AND KOHL'S MIGHT HAVE GOTTEN ITS MOJO BACK. AFTER THE MARKET, WE WILL HEAR FROM NVIDIA, BUT THERE ARE OTHER NAMES. SALESFORCE WILL BE CONSEQUENTIAL, CROWDSTRIKE, HP INC., AND OTHERS SET TO REPORT AS WELL GET ON THE ECONOMIC FRONT, WE WILL GET THEIR WEEKLY IN MORTGAGE APPLICATIONS, AND WE WILL GET PCE REPORT, PERSONAL INCOME AND SPENDING, THAT ALL-IMPORTANT KEY MEASURE THAT THE FED LOOKS AT, THE CORE PCE INFLATION DATA. WE WILL GET SOME FED SPEAK OUT OF RICHMOND FED PRESIDENT TOM BARKIN. WE WILL HAVE TOP TO BOTTOM COVERAGE FOR YOU OVER ALL OF THAT, STARTING WITH "BLOOMBERG SURVEILLANCE" IN THE MORNING, WRAPPING IT UP WITH "THE CLOSE." PLEASE DO JOIN US. IN THE MEANTIME, "BALANCE OF POWER" IS UP NEXT. ♪