Stocks Rally but End a Volatile Week Lower | The Close 8/21/2026

>> THE COUNTDOWN IS ON. EVERYTHING THAT YOU NEED TO GET THE EDGE AT THE END OF THE MARKET DAY. THIS IS "THE CLOSE." ROMAINE: WOBBLY WEEK COMING TO A LOPSIDED END. LIVE FROM STUDIO TWO, I'M ROMAINE BOSTICK. SALLY BAKEWELL: AND I'M SALLY BAKEWELL. LET'S GET A CHECK ON THE MARKETS ON THIS LAST DAY OF YOUR TRADING WEEK. THE S&P WITH A RELIEF RALLY AMID ROBUST ECONOMIC DATA WITH A CONTRACT TO AND THAT THREE WEEK WINNING STREAK. THE NASDAQ ALSO UP, BREAKING FIVE DAYS OF DROPS. BRENT CRUDE IS HIRING -- HOVERING AROUND $90 AS MARKETS WAIT FOR THE D-DAY THREAT ON TRADING PARTNERS. LEVELS SPOOKED INVESTORS EARLIER THIS WEEK. ROMAINE: GOING BACK TO THE TOP OF THAT SCREEN, GREEN ON THE SCREEN FOR EQUITIES. WE SHOULD POINT OUT THAT FOR THE WEEK, MOST OF THE S&P STOCKS OUT THERE, WHAT HAPPENED IS THEY WILL END THE WEEK IN THE RED AND HALF OF THAT HALF ARE GOING TO BE DOWN BY 3% OR MORE AND HALF OF THAT HALF OF THAT HALF ARE GOING TO CLOSE BELOW THAT 50 DAY MOVING AVERAGE, STALLING THE S&P THAT LOOKED LIKE IT HAD BROKEN FREE A WEEK AGO. CONSEQUENTIAL QUESTIONS OUT THERE, STARING US DOWN AS SALLY MENTIONED, IN THE FED JACKSON HOLE MEETING. THE WEEK THAT WAS, MY BEST BE REMEMBERED FOR THE BIG SWINGS IN TREASURY SPARKED BY A BIG SWING FROM SCOTT BESSENT TRYING TO CAP THOSE YIELDS THAT POKED UP PAST ON MONDAY, HIGHEST SINCE 2007, ALL ABOUT THE TOOLS HE MIGHT REACH FOR NEXT AND IF THOSE TOOLS WORK FOR HIS COMPADRES AT THE FED IF THEY WOULD OR COULD BACK HIM UP. >> WHAT BESSENT IS DOING IS GOING TO HELP VERY MUCH AT THE MARGIN, BUT REDUCING THE AMOUNT OF LONG-TERM TREASURY DEBT OUTSTANDING, YOU KNOW, IT'S WORTH BASIS POINTS, IN TERMS OF THE LEVEL OF INTEREST RATES, SO IT'S REALLY TACTICAL RATHER THAN STRATEGIC AND YOU HAVE TO FUNDAMENTALLY ATTACK THE BUDGET FISCAL PROBLEM. THAT REQUIRES A LOT OF HEAVY LIFTING. ROMAINE: THAT FISCAL PROBLEM THAT BILL DUDLEY WAS REFERRING TO IS CORE TO THE MARKET SKEPTICISM AND IT'S ONE TRADERS ARE TALKING ONCE AGAIN ABOUT THE SO-CALLED DEBASEMENT TRADE THAT SHUNS CURRENCIES VULNERABLE TO INFLATIONARY FISCAL ACCESS IN THE DOLLAR WEAKENING AGAINST EVERY MAJOR CURRENCY THIS WEEK. SPOT GOLD RALLYING FOR A THIRD STRAIGHT WEEK WITH BITCOIN PUTTING TOGETHER ITS STRONGEST FIVE DAY STRETCH OF GAINS SINCE MARCH OF 2023. THAT IS HOW WE CLOSE OUT THE WEEK AND GIVING US A SET UP FOR NEXT WEEK AS WE HEAD TO THE JACKSON HOLE MEETING. LET'S BRING IN THE HEAD OF RESEARCH AND CIO OF ACTIVE INVESTMENTS OVER AT PROSHARES. GREAT TO HAVE YOU BACK ON THE PROGRAM. I DON'T KNOW HOW MUCH YOU WERE ABLE TO SQUINT AND SEE THE CHART ON YOUR SCREEN. NO ONE SANG THE TRADES IN FULL SWING BUT NOW THAT WE ARE CHATTERING ABOUT IT SIMILAR TO WE WERE A YEAR AGO OR SO WHEN EVERYONE THOUGHT IT WAS THE DIRECTION, IS THIS SORT OF REAL? IS THIS SOMETHING THAT CAN BE REVERSED? >> IT IS REAL. THE DEBASEMENT TRADE IS THE THEME OF THE WEEKEND IT'S A WEEK OF MARKET TENSION. THERE IS STILL SO MUCH FOCUS ON THE SPECTACULAR EARNINGS SEASON THAT WE'VE SEEN ECONOMY WIDE WITH TECH CONTINUING TO LEAD AND EVALUATIONS COMING DOWN BECAUSE EARNINGS HAVE BEEN SO STRONG. NOBODY IS PAYING ATTENTION TO WHAT IS ACTUALLY HAPPENING IN THE OTHER ASSET CLASSES AND YOU ARE ABSOLUTELY RIGHT. IT'S A LACK OF CLARITY IN TERMS OF GUIDANCE FROM THE FED. INDICATIONS FROM THE TREASURY DON'T HELP WITH THE STABILITY OF BOND YIELDS AND WHAT WE ARE SEEING IS THAT TOXIC COMBINATION OF RISING BOND YIELDS, GOLD UP, DOLLAR DOWN. WE THINK THAT THIS IS LIKELY TO CONTINUE, BUT WE WOULD CLARIFY THAT YES, UNDERWHELMING FIXED INCOME MAKES SENSE BECAUSE TO BEGIN WITH THIS IS AN ENVIRONMENT WHERE YOU WANT TO CONTINUE TO BE OVERWEIGHT EQUITIES WHERE EARNINGS ARE RUNNING 30% TO 40% YEAR ON YEAR. >> EXPLAIN THE OVERWEIGHT EQUITIES PART OF THAT. UNDERWEIGHT FIXED INCOME, THAT I UNDERSTAND, WHY UNDERWEIGHT EQUITIES? >> EARNINGS ARE RUNNING AT 35% YEAR ON YEAR. WE ARE NOT SEEING THE END OF THAT EARNINGS CYCLE, NOT AT ALL. YOU ARE IN AN ENVIRONMENT, HOWEVER, WHERE CREDIT SPREADS ARE AT NEARLY ALL-TIME LOWS ACROSS ALL CREDIT SECTORS. FROM THAT PERSPECTIVE THINK ABOUT THE STANDARD 6040 REFERENCE BEING UNDERWEIGHT CREDIT AND OVERWEIGHT EQUITIES. MAYBE EXTENDING A LITTLE BIT OF THAT DURATION IN THE FIXED INCOME PORTFOLIO WOULD HAVE BEEN A NATURAL TRADE. WITH THE CURRENT MARKET DYNAMICS AROUND THE BASEMENT AND A BOND IS RISING, THERE IS A CASE TO ALLOCATE AWAY FROM FIXED INCOME ADDITIONALLY INTO ALTERNATIVES LIKE GOLD. SALLY: ON THE EARNINGS GROWTH, IS THAT ENOUGH TO SHIELD US FROM THE VOLATILITY WE HAVE SEEN IN TREASURIES? >> CERTAINLY. THAT EARNINGS GROWTH, I BELIEVE, JUSTIFIES BUYING THE DIPS AND EQUITIES. THE TYPICAL MECHANICS THAT YOU SEE ARE WHEN BOND YIELDS SPIKE WITH BAYER STEEPENERS AND THE CURVE. EQUITIES TEND TO SELL OFF IN THE IMMEDIATE RUN BECAUSE OF THE DISCOUNT FACTOR GOING UP. BUT THEN EQUITIES ARE AN INFLATION HEDGE. EQUITIES EVENTUALLY PROVE ON A MEDIUM TO LONG-TERM BASIS TO HAVE THOSE INFLATION PROPERTIES BECAUSE MOST COMPANIES HAVE THE PRICING POWER TO MAINTAIN THOSE PROFIT MARGINS. THAT IS WHY WE BELIEVE EQUITIES ARE STILL THEY BUY THE DIP APPROACH. SALLY: ARE YOU A BIT SURPRISED THAT THE HIGH YIELDS WE'VE SEEN ARE NOT WEIGHING ON EQUITIES A BIT MORE? >> THE HIGHER YIELDS? IT'S INTERESTING TO SEE THAT THERE IS SO MUCH FOCUS ON INFLATION, BUT BREAKEVEN INFLATION IS VERY STABLE. REAL YIELDS, REAL TREASURY YIELDS ON THE 30 YEAR ARE AT 12% . THAT IS TYPICALLY A NEGATIVE, BECAUSE IT FLAGS A HIGH COSTS OF CAPITAL. BUT DOES IT TELL US THAT PRODUCTIVITY IS REALLY STRONG? I TEND TO LEAN ON THE LATTER WHEN I SEE THAT EARNINGS GROWTH IS RUNNING AT 35%. SO, YIELDS HERE ARE MORE OF A SYMPTOM OF STRONG PRODUCTIVITY THEN LOTS OF CONFIDENCE IN THE TREASURY MARKET. >> I'M CURIOUS THAT WHEN WE TALK ABOUT EQUITIES, IT'S KIND OF INTERESTING TO SEE THE FADE IN THE CHIP STOCKS AND THOSE LONG-DURATION HIGH VALUATION NAMES. WE HAVE SEEN OUTPERFORMANCE THIS WEEK IN THE EQUAL WEIGHTED S&P 500. THE RUSSELL KEEPS PACE WITH THE BROADER MARKET. IS THAT A SIGN OF WHERE INVESTOR HEADS ARE AT HEADING INTO THE NEXT COUPLE OF EARNINGS SEASONS AND WHETHER THAT IS AT THE EXPENSE OF THE BIG CAP NAMES? >> I THINK THAT THE OUTPERFORMANCE OF SMALL, MID, VALUE CYCLICALS IS REALLY SOMETHING THAT REFLECTS THE PAST YEAR, WHERE THOSE WERE THE EARLY CYCLES. WE HAD EARNINGS GROWTH BASICALLY JUMP IN THE MATTER OF A YEAR FROM LOW SINGLE DIGITS TO 35%. I THINK THAT IS STARTING TO GO IN THE REARVIEW MIRROR AND MY INCLINATION HERE WOULD BE THAT WE PREFER BEING OVERWEIGHT THE QUALITY STOCKS WITH HIGH PROFIT MARGINS AND HIGH PROFITABILITY. IN TECH, COMMUNICATIONS SERVICES, PAIRING IT WITH CONSUMER STAPLES, UTILITIES, DEFENSIVE NAMES. IT'S AN ENVIRONMENT WHERE BOND YIELDS HAVE SOMEWHAT PEAKED. IF YIELDS HAVE PEAKED, WHICH I THINK IS A CASE, A ROTATION INTO TECH, INTO QUALITY NAMES SEEMS APPROPRIATE TO ME. >> HOW DO YOU THINK ABOUT EXPOSURE OUTSIDE THE U.S.? EUROPE IS A BIT VULNERABLE TO WHAT'S HAPPENING, BUT WHAT DO YOU SEE AS INTERESTING THERE? >> TWO THINGS ARE STRIKING TO ME. ONE, WE ARE ALMOST UNNOTICED. WE HAVE HAD A SECOND CONSECUTIVE YEAR OF INTERNATIONAL MARKETS IN OUTPERFORMING U.S. EQUITIES DESPITE THE PHENOMENAL AI TRADE, SO TO SPEAK. THAT NEEDS TO BE TAKEN INTO ACCOUNT. DOLLAR DEPRECIATION WILL CONTINUE TO PROVIDE TAILWINDS TO INTERNATIONAL EQUITY MARKETS. AT THIS STAGE? NOT SO CONVINCED ABOUT THE TACTICAL PERSPECTIVE, BUT I BELIEVE THAT THE TREND OF DOMINANCE OF U.S. EQUITIES IS COMING CLOSE TO AN END. ROMAINE: ALWAYS SMART, GREAT TO HAVE YOU. HELPING US KICK YOU OFF TO THE CLOSE HERE ON THE FINAL TRADING DAY OF THE WEEK. WHEN WE COME BACK, A CLOSER LOOK AT COMMODITIES REELING ON TREASURY MARKETS AND RISING U.S. IRAN TENSIONS. WE WILL BE LOOKING AHEAD WITH THE GLOBAL HEAD OF COMMODITIES RESEARCH AT GOLDMAN SACHS. FROM CRUDE OIL TO WATER, LIQUID DEATH TO BE SPECIFIC, WE ASK THE CEO HOW THE CANNED WATER BRAND IS PUSHING ITS WAY INTO THE CONVERSATION ABOUT AI DATA CENTERS. AND NOT ONE, BUT TWO HEAVYWEIGHT LEGENDS WILL BE JOINING US LATER. LEIGH STEINBERG WILL BE TALKING SPORTS VALUATIONS AND BOXING LEGEND MIKE TYSON IS GOING TO TALK ABOUT THE PATH FORWARD FOR HIS CAREER IN HIS LATEST BUSINESS VENTURE. ALL OF THAT AND MORE, COMING UP IN JUST A BIT RED HERE ON >> I THINK THAT IN THIS SPEECH I WOULD GIVE SOME PHILOSOPHICAL BUT I MIGHT DO A BIT OF FOR ME, AND YOU MAY NOT FOLLOW THIS, I MIGHT INSERT FOUR SENTENCES TO EXPLAIN WHY WE MADE THE JULY DECISION THAT WE MADE. >> FORMER DALLAS FED PRESIDENT ROBERT KAPLAN, NOW THE VICE CHAIR OVER AT GOLDMAN SACHS, TALKING ABOUT WHAT HE MIGHT DO IF YOU WERE THE ONE HAVING TO GIVE THE SPEECH AT JACKSON HOLE COMING UP IN JUST A FEW DAYS. DIANE JOINS US NOW, CHIEF ECONOMIST OVER AT KPMG. THAT'S WHERE I WANT TO START WITH YOU, DIANE. THIS IS SUPPOSED TO BE ONE OF THOSE WONKY SPEECHES THAT WON'T BREAK ANY NEWS AND FOCUS ON THE TASK FORCES AND ALL OF THESE OTHER MECHANISMS ABOUT WHAT IS GOING ON BEHIND THE SCENES, BUT AS I'M SURE YOU KNOW THE MARKET WANTS TO HEAR SOMETHING MORE DIRECT. DO YOU THINK WE ARE GOING TO GET IT? >> I THINK WE'VE GOT TO GET IT. WE HAVE HEARD REPORTING THAT KEVIN WARSH HAS SAID THAT HE WANTS A RESET AFTER THE JULY PRESS CONFERENCE THAT DIDN'T GO AS WELL AS HE WOULD HAVE LIKED AND I THINK THAT WHAT WE NEED TO HEAR FROM KEVIN WARSH IS, ONE, FED INDEPENDENCE IN TWO, A COMMITMENT TO BRINGING DOWN INFLATION. THREE, WE NEED TO KNOW SOMETHING ABOUT THE DECISION RULE. IT DOESN'T HAVE TO BE FORWARD GUIDANCE BUT HE DOES HAVE TO GIVE US A SENSE OF IF THIS HAPPENS, WHAT WILL THE FED DO? WE ARE STARTING TO HEAR THAT ALREADY FROM WITHIN THE FED TO. THE PCE INDEX, FOR INDEX, EVEN WILLIAMS WHO IS MORE DOVISH HAS SAID THAT IF WE CONTINUE TO SEE IT GO UP AT MORE THAN .2% IN A MONTH, IT IS NOT SOMETHING THAT'S SUSTAINABLE, IT IS TOO STICKY AND I THINK THAT THAT IS EXACTLY WHAT WE WILL SEE NEXT WEEK WITH THE PCE AND THAT IS BEFORE WE SEE THE FULL EFFECTS OF THE REBOUND IN ENERGY PRICES WE HAVE SEEN. DIESEL COSTS ARE REALLY PICKING UP QUITE DRAMATICALLY. WE ALSO HAVE SOME REFINERIES THAT ARE NOW FULL OUT AT CAPACITY WITH IMPORTS FROM CANADA SLOWING DOWN BECAUSE OF SCHEDULED MAINTENANCE. THIS IS REALLY GOING TO BE A TOUGH TIME FOR THE FED AND HE'S GOT TO LOOK SHORTER, GET TO THE POINT, BE INDEPENDENT, BUT ALSO GIVE US SOME CONTEXT FOR HOW THE FED IS THINKING ABOUT WHERE WE ARE RIGHT NOW. ROMAINE: THAT REPORT, COMING UP A COUPLE OF DAYS BEFORE HE'S SCHEDULED TO GIVE HIS KEYNOTE SPEECH. RAISING A QUESTION AS WELL ABOUT HOW MUCH HE'S GOING TO HAVE TO CHANGE, HAS HAD TO CHANGE HIS SPEECH, THE WRITTEN PORTION, AND MAYBE CHANGING IT FURTHER, HEADING INTO A WEEKEND WHERE WE ARE SUPPOSED TO COME BACK ON MONDAY AND WE WILL HEAR FROM SCOTT BESSENT ABOUT ECONOMIC SANCTIONS ON IRAN AND OF COURSE, EVERYTHING THAT BESSENT DID THIS WEEK WITH REGARDS TO TRYING TO CAP DOES THAT MAKE KEVIN WARSH HIS JOB THAT MUCH HARDER? DIANE: ABSOLUTELY. THE FEAR IS THE CONCERN -- GIVEN THE AMOUNT OF PRESSURE WE'VE SEEN FROM THE ADMINISTRATION IN TERMS OF INTEREST RATES AND EFFORTS BY THE TREASURY TO TRY TO REDUCE INTEREST RATE COSTS, IT REALLY IS ONLY A COUPLE BASIS POINTS HERE OR THERE. IT IS NOT CHANGE THE EQUATION MUCH BECAUSE THE TREASURY MARKET IS TOO BIG. BOTTOM LINE IS THAT IS NOW OUT THERE. THE FACT IT IS OUT THERE, KEVIN WARSH NEEDS TO PUSH BACK AGAINST IT AND BE COMPLETELY INDEPENDENT AND PUT HIS MONEY WHERE HIS MOUTH IS AND SAY WHAT HE DID IN HIS EARRINGS WHEN HE BECAME FED CHAIR. THAT IS TO MAINTAIN THE FED'S INDEPENDENCE. >> I WANTED TO ASK YOU ABOUT AI BECAUSE KEVIN WARSH HAS LEANED ON THE IDEA THAT AI WILL BE THIS DEFLATIONARY FORCE, BUT WITH THE MASSIVE INVESTMENT IN INFRASTRUCTURE PUSHING UP TO PRICES AT ENERGY PRICES, HOW DO YOU EXPECT HIM OR DO YOU EXPECT HIM TO SQUARE THAT CIRCLE AND ADDRESS THAT? DIANE: I THINK IT IS A HARD ONE. WE HAVE HEARD HIM TALK ABOUT PRODUCTIVITY GROWTH BUT WE KNOW GROWTH ENGINE -- RAISES THE INTEREST RATE, THE SPEED LIMIT OF THE ECONOMY. AND THAT COULD MEAN THE CURRENT FED FUNDS RATE IS ACTUALLY TOO LOW AND MORE ACCOMMODATIVE THAN IT NEEDS TO BE GIVEN THE INFLATION WE HAVE. WE KNOW THERE'S A SEQUENCING PROBLEM WITH AI. WE HAVE THE COST FROM ALL THAT INVESTMENT SHOWING UP FIRST, PRIOR TO ALL THE BENEFITS IN TERMS OF PRODUCTIVITY GROWTH. I DO BELIEVE WE ARE IN A PRODUCTIVITY CYCLE THAT HAS PICKED UP. WE HAVE SEEN A PICKUP IN PRODUCTIVITY GROWTH. IT IS NOT AI DRIVEN ENTIRELY RIGHT NOW. A LOT OF IT IS DUE TO THE FACT WE HAVE LEARNED TO USE A LOT OF THE TECHNOLOGY WE DIDN'T KNOW HOW TO USE THAT ALREADY HAD IN PLACE PRIOR TO THE PANDEMIC. WE LEARNED TO USE ALL OF IT DURING THE PANDEMIC AND THAT DID BOOST PRODUCTIVITY GROWTH ALONG WITH THE LABOR MARKET. WE SAW PEOPLE JOB HOPPING LIKE CRAZY. THEY MOVED INTO MORE PRODUCTIVE JOBS WHERE THEY GOT HIGHER PAY. THAT LIFTS PRODUCTIVITY GROWTH AS WELL. THOSE ARE THE REASONS WE SAW A GROWTH INCREASE THUS FAR, AND WE MAY SEE THAT PRODUCTIVITY FROM AI IN THE NEXT COUPLE YEARS BUT THE PROBLEM IS IT IS ALSO BOOSTING THE SPEED LIMIT AT WHICH THE ECONOMY CAN GROW WHICH MEANS A HIGHER NON-INFLATIONARY RATE, WHICH MEANS THE FED'S CURRENT RATE IS PROBABLY TOO LOW. ROMAINE: AS WE SORT OF GET OUT OF THE FED MEETING -- OUT OF JACKSON HOLE AND LOOK AHEAD TO THE ACTUAL FED MEETING AND GET BACK TO THIS CONVERSATION ABOUT WHAT THE OTHER FED MEMBERS THINK, WHAT THAT DEBATE LOOKS LIKE BEHIND CLOSED DOORS AND WHETHER THIS LEVEL OF DISSENT IS GOING TO HAVE ANY REAL MATERIAL IMPACT ON THE COMMUNICATION THAT WARSH MIGHT BE TRYING TO HAVE EITHER IN FULL OR NOT WITH THE MARKET? DIANE: THE BOTTOM LINE IS IT IS HARD TO PUT THE GENIE BACK IN THE BOTTLE, EVERYBODY TALKING A LOT AND BEING MORE TRANSPARENT AT THE FIT. HE NEEDS BUY-IN FROM HIS COLLEAGUES WHICH IS WHY YOU HAVE TASKFORCES BUT ALSO HAVE TO HAVE TASKFORCES THAT ENGAGE THEM. HE HAS GOTTEN THE DIVERSITY OF OPINIONS. IF HE PROCEEDS IN A WAY THAT IS VERY METHODICAL, HE WILL GET BUY-IN. THE QUESTION IS HOW MUCH AND WHAT WILL THE FINAL DECISION BE? THAT IS SOMETHING PEOPLE TEND TO FORGET. OUR CENTRAL BANK REALLY IS, THAT DECISIONS ARE BY A COMMITTEE AND THEY ARE NOT DONE BY ONE PERSON. THAT HAS ALREADY BEEN THE CHALLENGE FOR KEVIN WARSH. HE'S GOT PEOPLE ON THE COMMITTEE THAT HAVE PUSHED REALLY HARD TO DISSENT AGAINST HIM, AND HIS SECOND MEETING, THREE DISSENTS. THE MINUTES FROM THE MEETING REALLY REVEAL MOST PEOPLE WERE WILLING TO HOLD UP A LITTLE LONGER BUT NOT EXACTLY THINKING ABOUT RATE CUTS. THIS IS A VERY DIFFERENT SCENARIO THAT I THINK HE THOUGHT HE WAS WALKING INTO BACK WHEN HE FIRST AUDITIONED FOR THE JOB. ROMAINE: ALWAYS A PLEASURE, DIANE SWONK OVER AT KPMG. A CLOSER LOOK AT THE JACKSON HOLE MEETING WHICH KICKS OFF NEXT WEEK. WHEN WE COME BACK TO CLOSE OUT THIS WEEK, WE WILL TALK ABOUT AN INCREDIBLE WEEK FOR BITCOIN. A LOT OF QUESTIONS ABOUT THE CRYPTO COHORT AND WHAT IS DRIVING THE LATEST LEG UP. DAN DOLEV WILL JOIN US AFTER THE BREAK RIGHT HERE ON BLOOMBERG. ♪ ROMAINE: TIME NOW FOR THE TOP CALLS FOR THE BIG MOVERS ON THE BACK OF ANALYST EXPECTATIONS FOR WE START WITH THE WORKSPACE SYSTEMS. HAVING THE PRICE TARGET DOWN TO ABOUT $17 FROM $38 AND DOWNGRADING THE STOCK TO NEUTRAL FROM OVERWEIGHT. NEVERTHELESS, THE SHARES ARE UP ON THE DAY. STILL DOWN FOR A NINTH STRAIGHT WEEK AND NOW TRADING AT LESS THAN A THIRD OF ITS IPO PRICE. NEXT, OI GLASS. AN INTERESTING MOVE. CITI BOOSTING IT TO NEUTRAL TAKING, THE PRICE TARGET TO NINE DOLLARS FOR THIS TALK MEANINGFULLY OVERSOLD AFTER THE HUGE DRAWDOWN IN FEBRUARY. THE SHARES HEADING FOR AN 11% GAIN ON THE DAY. LET'S TAKE A LOOK AT TERADNYNE. DOWNGRADED TO NEUTRAL. SOME NEAR-TERM PROFIT-MAKING IS IN ORDER, CITING A LACK OF NEAR-TERM CATALYSTS. THOSE ARE SOME OF THE TOP CALLS FOR LET'S GO TO THE GREEN ON THE SCREEN WHICH INCLUDES THE CRYPTO SPHERE. BITCOIN WITH A THIRD STRAIGHT WEEK OF GAINS AND LIFTING ALL OF THE CRYPTO NAMES OUT THERE. CIRCLE, COINBASE AND STRATEGY, JUST TO NAME A FEW. DAN DOLEV JOINS US NOW. WHAT IS DRIVING THIS? IS THIS ABOUT REGULATION, THE DEBASEMENT TRADE? IT SEEMS LIKE EVERYONE LEFT CRYPTO NOT FOR DEBT BUT DEFINITELY DORMANT. WHAT HAPPENED? DAN: IT HAPPENED WHEN NOBODY EXPECTED IT TO HAPPEN, RIGHT? WE ALL THOUGHT IT WAS DEAD AND NOW IT IS COMING BACK. I DO THINK IT IS THE MONEY SUPPLY. THE FED SAID THEY WILL START BUYING BACK TREASURIES. I THINK THAT IS WHAT SORT OF TRIGGERED THE WHOLE THING. AND YOU SAW THAT CORRELATION. THERE IS A MASSIVE CORRELATION BETWEEN M2 MONEY SUPPLY AND BITCOIN AND I THINK THAT IS WHAT IS DRIVING IN RIGHT NOW. >> IF IT IS THE TREASURY BOND BUYING THAT IS PUSHING PEOPLE INTO RISK ASSETS, AND IF THAT IS WHAT HAS TRIGGERED THE RALLY RATHER THAN CRYPTO FUNDAMENTALS, AS SOON AS THE BOND BUYING RALLY ENDS, DOES THAT MEAN IT IS OVER FOR BITCOIN AS WELL? DAN: THAT IS WHY I WOULD NOT GET TOO EXCITED. I THINK IT IS TOO EARLY TO TELL WHERE IT IS ACTUALLY HEADED. THINGS LOOK GOOD RIGHT NOW. IT LOOKS AWESOME FOR ROBINHOOD. IT LOOKS GOOD FOR COINBASE, MICROSTRATEGY. I STILL THINK WE SHOULD FOCUS ON THE FUNDAMENTALS AND WE SHOULD LOOK AT AREAS OUTSIDE OF CRYPTO. FOR EXAMPLE, ROBINHOOD WHICH HAS LESS THAN 20% OF CRYPTO EXPOSURE TO THE REVENUE AS A BETTER BET THAN A PURE CRYPTO BUYING SPREE RIGHT NOW. ROMAINE: WHEN WE START TO TALK ABOUT WHAT MAKES THIS STICK, WE SHOULD POINT OUT WE ARE STILL WELL OFF THE ALL-TIME HIGHS ON BITCOIN. BUT THIS IDEA OF THE COMPANIES THAT ARE BENEFITING. WE ALWAYS LOOK AT THE PURE PLAY CRYPTO COMPANIES BUT TALK TO ME ABOUT THE STABLECOIN ISSUERS. YOU MENTIONED ROBINHOOD WHICH IS WELL DIVERSIFIED FINANCIAL COMPANY AT THIS POINT. IS THAT MORE THE LONGER TERM BENEFICIARY HERE RATHER THAN A PURE PLAY STRATEGY, ETC.? DAN: 100%. I LIKE STRATEGY AND I LIKE ROBINHOOD. OUTPERFORM ON BOTH. I WOULD SAY THAT ROBINHOOD IS SO WELL DIVERSIFIED. IT IS RALLYING TODAY AND STILL UPSIDE TO MY PRICE TARGET. IT IS LESS THAN 20%, MAYBE LESS THAN 15% OF ITS REVENUE IS TIED TO CRYPTO. THEY ARE LETTING YOU TRADE CRYPTO AT A VERY LOW TAKE RATE. THEY ARE A SHARE GAINER. IF CRYPTO DOES NOT WORK, THEY WILL CONTINUE TO WORK. THEY ARE GETTING INTO EUROPE AND ASIA. THAT IS YOUR BEST HEDGE TO BENEFIT FROM CRYPTO BUT NOT TO GET HURT WHEN CRYPTO IS NOT HAVING A GREAT TIME LIKE THE LAST SIX TO 12 MONTHS. ROMAINE: ONLY ABOUT 30 SECONDS LEFT BUT ANY CONCERN ABOUT THE INTERPLAY BETWEEN THE CRYPTO SPACE AND WHAT'S GONE ON IN THE TREASURY MARKET AND THE DOLLAR? DAN: I THINK THE NOTION THAT THE DOLLAR IS GETTING WEAKER, I THINK, IS VERY GOOD FOR BITCOIN. IT IS VERY GOOD FOR CRYPTO. I THINK THAT IS WHAT'S DRIVING IT. IF THAT TREND CONTINUES, YOU SHOULD SEE CONTINUED MOMENTUM IN THIS WHOLE CRYPTO MARKET WHICH IS GREAT FOR MICROSTRATEGY, GREAT FOR ROBINHOOD. WHY NOT? ROMAINE: DAN DOLEV, HAVE A WONDERFUL WEEKEND. ROBINHOOD SHARES, JUST TO CHERRY PICK, UP 13% NOW. HEADED FOR THEIR BEST ONE-DAY GAIN SINCE EARLY FEBRUARY. WHEN WE COME BACK, WE ARE SEEING GAINS IN THE OIL SPACE. A LOT OF GEOPOLITICAL RISK AND A BIG SPEECH PLANNED BY SCOTT BESSENT ON MONDAY REGARDING ECONOMIC SANCTIONS ON IRAN. DAAN STRUYVEN OVER AT GOLDMAN JOINS US AFTER THE BREAK. ♪ ROMAINE: 3:30 P.M. IN NEW YORK, THIS IS "THE COUNTDOWN TO THE CLOSE." GREEN ON THE SCREEN FOR MOST EQUITIES ON THE DAY. READ ON THE WEEK. A LOT OF TALK ABOUT THE MOVES WE HAVE SEEN IN COMMODITIES. A BIG PICTURE -- MIXED PICTURE WHEN IT COMES TO OIL AND GAS, WE WERE TALKING EARLIER ABOUT GOLD WITH ALESSIO. SALLY: IT'S LOOKING INCREASINGLY LIKE A SAFE HAVEN BUT THE INTERESTING THING ABOUT OIL AND IRAN IS THAT THE U.S. THREAT IS UP TO FOUR DECADES OF PUNISHING THE COUNTRY, WHAT MORE CAN HE DO? ROMAINE: GOOD QUESTION AND SHE IS REFERRING TO THIS PRESS CONFERENCE THAT SCOTT BESSENT IS SAID TO BE GIVING ON MONDAY PUT TO POTENTIALLY EXPAND SANCTIONS ON IRAN, A NEW SORT OF ECONOMIC TACTIC ON THE WAR THAT'S BEEN DRAGGING ON FOR SIX MONTHS. THE HEAD OF GLOBAL COMMODITIES RESEARCH AND OIL RESEARCH AT GOLDMAN SACHS JOINS US NOW. GOOD TO HAVE YOU HERE. YOU STOCK THE EXPANSION OF EXPANSIONS ON COMMODITY PRICES? DAN: IF THE ACTION WAS MODEST. IT WAS SOMEWHAT HIGHER ON OIL, BUT AS LONG AS THE ARABIAN BLOCKADES STAY IN PLACE, THE IMPACT OF FURTHER SANCTION TIGHTENING IS LIKELY TO BE INCREMENTAL BECAUSE THE KEY DRIVER OF EXPORT REVENUES, OIL, IS ALREADY NOT GETTING OUT OF THE COUNTRY. SO, IF THE BLOCKADE WERE TO BE LIFTED FOR SANCTIONS TO GET BY MORE SIGNIFICANTLY, ONE WOULD HAVE TO TIGHTEN POLICIES VIS-À-VIS CHINA, WHICH CAN CREATE OTHER CHALLENGES IN THE CHINA U.S. DÉTENTE AND THE TRUMPET VISIT LATER IN SEPTEMBER. I THINK THE MODEST MARKET REACTION MAKES SENSE IN THE MORE THAT THE ECONOMIC WORKFORCE STRATEGY IS PURSUED, PERHAPS A LESS LIKELY IT IS THAT YOU SEE CONNECTICUT MILITARY ESCALATION, MAKING THE NET IMPACT SOMEWHAT MIXED. WE HAVE SEEN OIL IN PRIVATE -- OIL PREP -- ROMAINE: WE HAVE SEEN OIL PRICES CREEPING BACK UP RECENTLY, BUT AT THE SAME TIME, TAKING A LOOK AT THIS I WANTED TO MAKE SURE I GOT IT RIGHT, GLOBAL REFINERY RUNS ARE DOWN YEAR-OVER-YEAR, ONE OF THE STEEPEST DECLINES WE HAVE SEEN IN A WHILE. YET WHEN YOU LOOK AT THE ACTUAL PRODUCT MARGINS, THOSE ARE AT ALL-TIME HIGHS AND AS I'D LIKE TO POINT OUT, $90 PER BARREL, DIESEL PRICES ARE ACTUALLY HIGHER THAN THE PRICE OF OIL. WHAT'S GOING ON? DAAN: USUALLY REFINERY RUNS IN PRODUCT MARGINS GO TOGETHER IN THE SAME DIRECTION AS YOU FOLLOW THE MATH. HOWEVER, THE REFINING SECTOR IS UNDER SIGNIFICANT SUPPLY CONSTRAINTS BECAUSE OF THE MAJOR OUTAGES IN THE MIDDLE EAST AND RUSSIA. AT THE MOMENT, GLOBAL REFINERY RUNS ARE DOWN 8% YEAR-OVER-YEAR, DESPITE THE FACT THAT U.S. REFINERIES WERE NOT CONSTRAINED BY DRONES OR STRIKE ATTACKS AND ARE RUNNING AT 97, 90 8%. INCENTIVIZING THE REFINERIES OUTSIDE OF RUSSIA IN THE MIDDLE EAST TO RUN AS HARD AS POSSIBLE, THE STRONG MARGINS ARE REQUIRED TO PREVENT LEVELS FROM FALLING TO CRITICALLY LOW LEVELS. EFFECTS YOU MENTIONED CHINA, ONE OF IRAN'S BIGGEST TRADING PARTNERS. WHAT OPTIONS DOES CHINA HAVE IN THIS SCENARIO, PARTICULARLY BECAUSE THEIR OWN STATE BANKS HAVE A HISTORY OF COMPLYING WITH U.S. SANCTIONS? DAAN: CHINA IS PLAYING A KEY STABILIZING ROLE IN THE CRUDE MARKETS BY ESSENTIALLY REDUCING THE IMPORTS OF CRUDE BY 3.5 MILLION BARRELS PER DAY ON A YEAR-OVER-YEAR BASIS BECAUSE THE CHINESE CREW DEMANDS HAVE BECOME VERY PRICE-SENSITIVE WITH A LOT OF FLEXIBILITY ON THE DEMAND SIDE AND STOCK MANAGEMENT AND ONE OF THE REASONS WE RECOMMEND INVESTORS WANT TO HEDGE AGAINST THIS ESCALATION TO GO LONG WITH DIESEL LENGTH, CHINA IS NOT PLAYING THE STABILIZING ROLE IN THE NATURAL GAS MARKET AND IN THE PRODUCTS MARKET, WHEREAS IN THE CRUDE MARKET THEY ARE A BIG SWING IMPORTER THAT PUTS A DAMPER ON THE UPSIDE AND DOWNSIDE OF PRICES. SALLY: THAT'S VERY INTERESTING. WHEN WE LOOK AT GOLD, OF COURSE, DO YOU THINK THE GOAL RALLY IS TEMPORARY IF THE BOND BUYBACKS BY THE TREASURY HAVE ONLY PROVIDED THEMSELVES A KIND OF TEMPORARY RELIEF? DAAN: WE THINK THAT THERE ARE THREE COMPELLING REASONS FOR GOLD, WHICH WERE PREFERRED COMMODITIES FOR SEVERAL YEARS NOW. CENTRAL BANK BUYING OF GOLD IS STRUCTURALLY HIGHER AND RE-ACCELERATING, PROVIDING A BOOST TO ANNUAL GOLD PRICES BY ABOUT 10% PER YEAR, THIS STRUCTURALLY HIGHER DEMAND. SECOND, ECONOMISTS EXPECTED NO FED HIKES, WHICH SHOULD BRING BACK RATE SENSITIVE ETF DEMAND. IN THE BASE CASE THEY RISE BY THE END OF THE YEAR BECAUSE OF A RETURN ON INVESTOR DEMAND FROM STRONG CENTRAL BANK BUYING. THIRD, WE ALSO THINK THAT GOLD IS A VERY VALUABLE INSURANCE AGAINST WHAT I WOULD CALL DEEPER MACRO POLICY DEAL RISKS RELATED TO MARKETS BECOMING CONCERNED ABOUT FISCAL SUSTAINABILITY, CENTRAL-BANK GOVERNANCE IN THE FUNCTIONING OF G10 BOND MARKETS AND IN THE SITUATIONS WHERE THEY BECOME WORRIED ABOUT DEEPER TAIL RISKS AS WE HAVE SEEN THIS WEEK WITH A SHARP RALLY, GOLD PROTECTS YOUR PORTFOLIO AGAINST LOSSES ON THE LONG-DURATION SIDE. ROMAINE: TELL ME ABOUT THIS RESEARCH, YOU HAD SOMETHING LIKE 32 TONS OF GOLD MOVING TO LONDON IN JUNE AND YOU CAME TO THE CONCLUSION THAT IT WAS CLEARLY NOT FOR SELLING, THAT IT WAS FOR CUSTODY. ARE YOU OUT THERE WITH A TRENCH COAT AND SUNGLASSES TRYING TO FIGURE IT OUT? WHAT'S THAT EFFECT -- WHAT IS THE DETECTIVE WORK? >> WE DO TRY TO HELP VALIDATE THE VIEW THAT CENTRAL BANKS ARE NOT BUYING. OUR CONFERENCE -- CONSERVATIONS ARE VERY MUCH SUGGESTING THAT CENTRAL BANKS ARE IN A MULTIYEAR STRUCTURALLY HIGHER BUYING SPREE BECAUSE THEY WANT TO DIVERSIFY THEIR RESERVES WITHIN THE DIRECTION OF GOLD. WHY? TO REDUCE GEOPOLITICAL AND SPECIFICALLY SANCTION RISK. IN 2022 WHEN THE RUSSIAN CENTRAL BANKS RESERVES WERE FROZEN, IT MADE A BIG IMPACT ON THE RISK-MANAGEMENT MINDSET OF CENTRAL BANKS, SO WE SEE THIS INCREASE IN BUYING AS STRUCTURAL. ROMAINE: YOU MADE THE CASE FOR WHY THE CURRENT FED VIEW WILL BOOST THE PRICE OF GOLD. I'M CURIOUS ABOUT THE ACTUAL INVESTORS, INDIVIDUAL INVESTORS, NOT THE CENTRAL BANKS. ARE WE SEEING THE RIGHT ACTIVITY THERE FROM HOUSEHOLDS, FROM INDIVIDUAL INVESTORS BUYING INTO THE GOLD ECOSYSTEM IN SOME WAY? DAAN: MOST PURCHASE ETF INVESTMENTS, IT'S FAIRLY SIMPLE. WE SAW A SIGNIFICANT RISE IN ETF HOLDINGS LAST YEAR AND AT THE START OF THIS YEAR. BUT THEN WHEN THE MARKET BECAME FOCUSED ON POTENTIAL FED RATE HIKES, THE ETF INVESTOR DEMAND CAN DOWN SOMEWHAT. BUT OVER THE LAST MONTH OR SO WE HAVE SEEN IN THE RALLY DRIVES A PICKUP IN RETAIL INVESTOR ETF INFLOWS AS SOFTER U.S. INFLATION JOBS DATA REDUCED MARKET PRICING. ROMAINE: WITH YOUR YEAR-END TARGET? DAAN: IT'S ON UPSIDE RISK. OUR ASSUMPTION THAT THE MACRO POLICY HEDGE OF THE DEMANDS WILL BECOME MODERATE IN WE'VE SEEN A BIG PICKUP OVER THE LAST COUPLE OF WEEKS AND IF THAT CONTINUES, YOU KNOW, WE WOULD OVERSHOOT ALL THINGS EQUAL. ROMAINE: GREAT TO HAVE YOU BACK ON THE PROGRAM, DAAN. WHEN WE COME BACK AFTER THE BREAK, WE TURNED BACK TO EQUITIES AND WE TURN TO, WHO ELSE, THE BIGGEST MARKET MAKER OUT THERE. OFFLOADING ABOUT 80% OF THAT RISK. WHEN WE EXPLAIN THAT HE EXPLAINED WE COME BACK, RIGHT HERE ON BLOOMBERG. ROMAINE: HEDGE FUND SITUATIONAL AWARENESS IS BACK IN THE NEWS. THIS TIME BECAUSE KEN GRIFFIN IS OUT WITH A LETTER TO INVESTORS SAYING HIS FARM OFFLOADED 80% OF THE RISK ASSOCIATED WITH THE BETS IN SCOOPING UP SOME OF THOSE ASSETS FROM THE EMBATTLED HEDGE FUND SITUATION. ALL RIGHT, SO WHAT WE KNEW WAS LET'S JUST SAY THAT LEOPOLD ASCHENBRENNER GOT IN A BIT OF TROUBLE WITH SITUATIONAL AWARENESS AND KEN GRIFFIN CAME RIDING TO THE RESCUE LIKE HE'S DONE IN THE PAST AND BOUGHT UP SOME ASSETS, WE DON'T KNOW WHAT, PRESUMABLY AT A DISCOUNT, AND NOW HE HAS A LETTER SAYING HE OFFLOADED 80% OF THE RISK. WHAT DOES THAT TELL ME? HE IS GOING TO MAKE A BUNCH OF MONEY? >> BASICALLY. HE BOUGHT THIS AT A 10% DISCOUNT IN THESE WERE ASSETS THAT HAD ALREADY FALLEN IN VALUE, ADDING A DISCOUNT TO THAT, SELLING A GOOD PORTION OF WHAT HE BOUGHT TO THE MARKETS. SOME OF THOSE ARE BLOCK TRADES. AT LEAST 4 BILLION DOLLARS WORTH. WE DO SEE HIM LIKE LOCKING IN THE GAINS, SELLING HIM AT A PREMIUM TO WHATEVER HE BOUGHT THEM AT, WHICH IS WHAT HEDGE FUNDS DO, AND MAKING A SIZABLE CHUNK OF MONEY OFF THE BACK OF THE DEAL. SALLY: DO WE KNOW HOW SIZABLE? ARE YOU ABLE TO TALK ABOUT HOW IT BOOSTED RETURNS? CLICKS IN THE MONTH OF JULY IT MADE AN ADDITIONAL 6% IN GAINS. MORE THAN IT MADE IN ONE YEAR IN ONE MONTH ALONE OFF THE BACK OF THE DEAL. THE FUND IS NOW UP 12% YEAR TO DATE, WHICH IS A GREAT TURN OF EVENTS IN TERMS OF GOING FROM BASICALLY DOUBLING THE RETURN IN JUST ONE MONTH ON THE BACK OF WHAT HAD BEEN A GREAT DEAL FOR THEM, FOR SURE. ROMAINE: CITADEL HAS THE BIG POCKETS TO SWOOP IN LIKE THIS BUT THEY COULD NOT HAVE BEEN THE ONLY FIRM OUT THERE LOOKING TO FIND A BARGAIN. DO WE KNOW ANYTHING ABOUT ANYONE ELSE WHO MIGHT HAVE GOTTEN A PIECE? BECKS THERE WAS A BIDDING WAR TO GET SOME OF THOSE SITUATIONAL AWARENESS ASSETS AND SIT ULTIMATELY WON THE WAR GETTING A CHUNK OF THE STOCK AT A 10% DISCOUNT. OTHER PEOPLE WHO WANTED A PIECE WHERE JANE STREET AND MILLENNIUM. KEEP IN MIND THEY ALSO HAVE A HUGE PRIVATE PORTFOLIO, SO WE SAW MORE VENTURE AND PRIVATE ULTIMATELY, SITUATIONAL WOULD NOT WANT TO SELL THOSE COVETED ANTHROPIC STAKES SO IT WENT WITH THE CITADEL DEAL. CITADEL GOT THIS DEAL AFTER BIDDING WITH THE FIRM OVERNIGHT. THEY WERE WORKING ON IT STRAIGHT OVERNIGHT TO GET THIS DEAL WHICH WORKED OUT WELL. ROMAINE: IS THERE A MOVIE SCRIPT IN THE WORKS? HEMA: THERE SHOULD BE SOMEWHERE. SALLY: TALK TO US A LITTLE BIT ABOUT WHAT THAT ENDEAVOR IT IS TO SELL, TO OFFLOAD A STAKE THIS BIG. HEMA: WHAT IS INTERESTING ABOUT THE NEWS THAT CAME OUT TODAY IS THAT THEY MADE 100 BLOCK SALES IN SELLING OFF A MARKET VALUE OF $4 BILLION. BLOCK SALE IS WHEN YOU ARE SELLING AN ASSET, YOU WANT TO SELL A CHUNK OF IT TO A BUYER DIRECTLY. WHEN YOU SELL IT TO THEM, IT CAN THEN SPIRAL THE PERFORMANCE OF THAT ONE ASSET SO YOU SELL IT IN CHUNKS. THE FACT CITADEL SOLD 100 BLOCK CHANGE TO THESE INDIVIDUAL BUYERS, ABOUT 10 OF THOSE POSITIONS WERE THE BIGGEST INTRADAY BLOCK SALE FOR THAT DAY. ROMAINE: WE WILL HAVE TO LEAVE IT THERE. AFTER THE SHOW, WE WILL WORK ON THAT SCRIPT TOGETHER. HEMA PARMAR, SURROUNDING SOME OF THE TROUBLES OVER SITUATIONAL AWARENESS. WE COUNT YOU DOWN TO THE CLOSE TO END OUT THE WEEK WITH JEREMIAH BUCKLEY AT JANUS HENDERSON. THIS IS BLOOMBERG. ROMAINE: WE ARE ABOUT 10 MINUTES FROM THE WEEKEND, 10 MINUTES FROM THOSE CLOSING BELLS. IT IS, AT LEAST FOR THE DAY, GREEN ACROSS THE SCREEN. SALLY: LET'S TAKE A LOOK AT THE MARKETS IN THESE FINAL MINUTES OF TODAY'S TRADING FOLLOWING A SELLOFF THIS WEEK AMID SOME OF THE ISLAND SWINGS IN THE TREASURY MARKET. THE S&P STAGE A COMEBACK ALTHOUGH ON TRACK TO GIVE UP THREE WEEKS OF GAINS. THE NASDAQ IS UP BUT STEPPING A FIVE DAY DROP IN ADVANCE OF NVIDIA'S EARNINGS NEXT WEEK. BITCOIN HAS STAGED QUITE A RALLY. WITH BRENT CRUDE, TRADERS ARE WAITING FOR DETAILS ON WHAT THE U.S. THREAT OF AN ECONOMIC D-DAY TOWARDS IRAN AND ITS TRADING PARTNERS MIGHT MEAN. AND THEN LOOK AT THE 30 YEAR, THAT HAS CROPPED UP BACK TO THE MULTI-DECADE HIGHS THAT EARLIER SPOOKED FINANCIAL MARKETS AND INVOKED A BIT OF CHATTER ON THE DEBASEMENT TRADE. ROMAINE: IT WAS THE BIG STORY OF THE WEEK, AND MAY BE A BIG STORY NEXT WEEK DEPENDING ON WHAT WE LEARN FROM KEVIN WARSH AT JACKSON HOLE. NVIDIA A SET TO REPORT EARNINGS ON WEDNESDAY. THE BIGGEST OF THE BIG AI NAMES OUT THERE AND A LOT OF QUESTIONS ABOUT WHETHER IT KEEPS AI TRADE GOING. JEREMIAH BUCKLEY JOINS US NOW OVER AT JANUS HENDERSON. THAT IS WHERE I WANT TO START. NOT SO MUCH WITH THE EARNINGS THEMSELVES. WE KNOW THEY ARE PHENOMENAL. THEY WILL MORE THAN DOUBLE IN A YEAR ON YEAR BASIS BUT MORE IMPORTANTLY ABOUT THE INVESTABILITY OF THE STOCK ITSELF. WHETHER YOU ARE TAKING A MICRON, SANDISK, NVIDIA, GOOGLE, AMAZON, ETC., DO YOU STILL LOOK AT THESE NAMES, THE CURRENT PRICE LEVELS IN MULTIPLES AND THINK THAT IS STILL ATTRACTIVE? JEREMIAH: WE DO. NVIDIA IS STILL OUR LARGEST POSITION IN THE PORTFOLIO. WITHIN THE COMBINATION OF EARNINGS GROWTH AND THE VALUATION WE ARE SEEKING ON THE OUT YEAR NUMBERS STILL MAKES IT ATTRACTIVE FOR OUR PORTFOLIOS. THEY HAVE ALSO INCREASE THEIR CAPITAL RETURN TO SHAREHOLDERS WITH A SIGNIFICANT INCREASE IN THE DIVIDEND. WE CONTINUE TO BELIEVE GIVEN THE GROWTH OUTLOOK WE HAVE FOR AI SPENDING, AS WELL AS THE RETURN ON THAT SPENDING, THAT NVIDIA CONTINUES TO BE AN ATTRACTIVE OPPORTUNITY FOR OUR SHAREHOLDERS. ROMAINE: I WANT TO TAKE THE FLIP SIDE OF THIS BECAUSE ON THE SAME DAY OF NVIDIA -- WE WILL HEAR FROM SALESFORCE AND THERE'S A LOT OF TALK ABOUT AI EATING THE LUNCH OF ALL THESE TRADITIONAL SOFTWARE MAKERS. WHEN YOU LOOK AT THE SOFTWARE SPACE, PARTICULARLY THE SOFTWARE AS A SERVICES SPACE, DO YOU FIND ANYTHING ATTRACTIVE THERE? HAVE WE MADE TOO MUCH OF THEIR DEMISE? JEREMIAH: I THINK SO. I THINK IT'S A GOOD TIME TO LOOK AT SOME OF THESE NAMES. THE MULTIPLE CONTRACTION THAT WE'VE SEEN IN THOSE NAMES AND THE RESILIENCE OF THEIR BUSINESS MODELS, WE THINK A LOT OF THEM, LIKE SALESFORCE, IS ADJUSTING TO THIS AI WORLD AND INCORPORATED INTO PRODUCTS. WE THINK THAT THEY WILL BE RESILIENT AND THEY WILL CONTINUE TO GROW. THEY HAVE BEEN TARGETING AND ACCELERATING GROWTH OF THE YEAR SO IF THEY WERE ABLE TO ACHIEVE THAT, I THINK YOU CAN SEE SOME NICE MOVEMENT. WE HAVE BEEN NIBBLING AT THE SOFTWARE NAMES BUT I THINK WE NEED TO BE CAREFUL BECAUSE THERE'S A LOT OF UNCERTAINTY ON WHAT THE FUTURE IS WITH THE COMPETITIVE DYNAMIC BETWEEN AI AND THE HIS HISTORICAL LEGACY SOFTWARE NAMES. SALLY: THE MARKET WAS ABLE TO ABSORB THE SPACEX AUDIO -- IPO, WHAT WOULD IT MEAN FOR THE MARKET TO HAVE A POTENTIAL EVEN BIGGER IPL WITH ANTHROPIC? DO YOU THINK IT CAN ABSORB THAT? JEREMIAH: YEAH, TO BE ABLE TO ABSORB THAT, WE NEED A SIGNIFICANT AMOUNT OF CASH THAT IS SITTING ON THE SIDELINES TO COME TO THE MARKET AND HOPEFULLY ATTRACT INVESTORS. HE CERTAINLY NEED SOME TRADING OUT OF THESE MEGA CAP NAMES AS WELL AND MOVING INTO NAMES LIKE ANTHROPIC. IT IS ALSO GOING TO BE A SPECIFIC TYPE OF INVESTOR SO MORE OF THAT AGGRESSIVE GROWTH INVESTOR THAT IS WILLING TO FOCUS ON THE FUTURE EARNINGS GROWTH AND CASH FLOWS OF ANTHROPIC. SO, I AM MORE OF A CORE INVESTOR. WE WON'T SEE AS MUCH DISRUPTION IN OUR NAMES, WE THINK, BUT THERE WILL BE SOME SUBSTITUTION. WE HAVE TO MAKE ROOM FOR THEM. YOU HAVE SEEN THAT IN THE BOND MARKET AS WELL AS WE'VE HAD MORE ISSUANCE OF AI ORIENTED DEBT THAT HAS PUT PRESSURE ON SPREADS AND THE OVERALL YIELDS. SALLY: SPEAKING OF AI ORIENTED DEBT, WHAT DO YOU THINK ABOUT THE IDEA OF NVIDIA AND OTHER TECH FIRMS ACTUALLY BECOMING LIKE BANKS? HELPING LOWER FINANCE COSTS FOR THE WHOLE INDUSTRY. DO YOU THINK THIS IS CONCERNING? JEREMIAH: I THINK IT IS SOMETHING WE NEED TO WATCH. WE WANT AND VIDEOS SHAREHOLDERS TO BE VERY DISCIPLINED WITH HER BALANCE FEET. THEY HAVE IN A VERY -- INCREDIBLY STRONG BALANCE SHEET. THEY WILL HAVE GREAT CASH FLOW GOING FORWARD BUT WE WANT THEM TO BE DISCIPLINED. IT IS IMPORTANT FOR THEM TO SUPPORT THE GROWTH OF THE INDUSTRY. BUT WE NEED TO BE CAREFUL AND COGNIZANT THAT THEY ARE GETTING RETURN ON THAT AND NOT TAKING RISK ON THE BALANCE SHEET. I THINK IT IS IMPORTANT THEY ANNOUNCED SOME THIRD-PARTY FINANCIAL SPONSORS TO PARTNER WITH THEM AND I THINK THAT WAS AN IMPORTANT DEVELOPMENT. WE LOOK FORWARD TO THAT. ROMAINE: WE WILL PEEL AWAY FROM AI. THERE HAS BEEN SOMETHING ELSE GOING ON, ON A WEEKLY BASIS, THE BEST PERFORMERS, YOU WILL NOT REALLY FIND AN AI NAME. MODERNA AT THE TOP OF THE SCREEN. YOU HAVE ESTEE LAUDER, COMMODITIES COMPANIES. IT IS A MIXED BAG WHICH WE'VE SEEN FOR THE LAST FEW WEEKS. THE STOCKS THAT ARE GETTING THE BIGGEST BIDS AREN'T THE ONES TIED TO THE AI TRADE. WHAT DO YOU SEE? JEREMIAH: THAT IS WHAT GETS ME EXCITED ABOUT THE MARKET GOING INTO THE YEAR END AND INTO 2027. THE MARKET IS BROADENING OUT. WHEN I LOOK AT OUR PORTFOLIO, THE MEDIAN'S EARNINGS GROWTH IS 15%. SO, AND IT IS A VERY DIVERSIFIED PORTFOLIO. I THINK THERE ARE OPPORTUNITIES IN AREAS LIKE HEALTH CARE, THE HEALTH CARE EQUIPMENT AND TECHNOLOGY PART OF THE MARKET. I THINK FINANCIAL SERVICES, WE HAVE SEEN ESTIMATES GO LOOK FOR FINANCIAL SERVICES FIRMS. MULTIPLE CONTRACTION IN A NUMBER OF NAMES. WE LIKE NAMES LIKE GOLDMAN SACHS AND AMERICAN EXPRESS. ON THE HEALTH CARE SIDE, WE LIKE STRYKER. WE THINK THIS BROADENING OUT IS HEALTHY FOR THE OVERALL MARKET AND IS CREATING GOOD OPPORTUNITIES FOR DIVERSIFIED INVESTORS. ROMAINE: I DO HAVE TO ASK YOUR THOUGHTS ABOUT THE FED, JACKSON HOLE SYMPOSIUM, AND THE FED MEETING COMING UP IN SEPTEMBER. ANY CONCERNS ABOUT HOW MONETARY POLICY COULD, IF AT ALL, UPEND THE RALLY? JEREMIAH: IT IS SOMETHING WE NEED TO BE AWARE OF. WHEN I THINK ABOUT THE RISE IN YIELDS AND RATES, IF IT IS DRIVEN BY STRONGER ECONOMIC GROWTH, WHICH IS WHAT IS DRIVING AND WHAT WE'VE SEEN. AGAIN, WE ARE SEEING SUBSTANTIAL EARNINGS GROWTH. IN MY 28 YEARS, I'VE NEVER SEEN THE S&P 500 UP 30 PLUS PERCENT LIKE WE WILL SEE THIS YEAR. SO, GIVEN THAT THE INCREASE IN RATES AND YIELDS IT HAS REALLY DRIVEN BY ECONOMICS GROWTH AND EARNINGS GROWTH, I'M OK WITH IT BUT WE NEED TO MAKE SURE THAT CONTINUES TO BE THE CASE. WHEN WE GET INTO SITUATION THAT IS DRIVEN BY INFLATION AND NOT GOOD REAL GROWTH, THAT COULD BE A CHALLENGE. ROMAINE: JEREMIAH BUCKLEY OVER AT JANUS HENDERSON, HELPING US COUNT YOU DOWN TO THE CLOSING BELLS. JUST ABOUT TWO MINUTES AWAY. GREEN ACROSS THE SCREEN ON THE DAY, RED ON THE WEEK. OUR GLOBAL SIMULCAST STARTS NOW. >> THE CLOSING BELL, BLOOMBERG'S COMPREHENSIVE KLOS -- CROSS-PLATFORM COVERAGE OF THE U.S. MARKET CLOSE STARTS RIGHT NOW. ROMAINE: AND RIGHT NOW, WE ARE TWO MINUTES AWAY FROM THE END OF THE TRADING DAY. ROMAINE BOSTICK ALONGSIDE SALLY, TAKING YOU THROUGH TO THE CLOSING BELL. CAROL MASSAR US FROM THE RADIO BOOTH. EMILY GRAFFEO IN FOR TIM. CAROL: NOT LETTING HER GO. ROMAINE: WE PARSE THROUGH THE MOST CRUCIAL MOMENTS OF THE DAY. WHAT DO YOU WANT TO TALK ABOUT? CAROL: STOCKS WILL AND LOWER FOR THE WEEK OVERALL. SOME BUYING AND SOME RISK ON TRADE, BUT IT HIDES WHAT WE'VE SEEN IN TERMS OF SOME WICKED VOLATILITY ESPECIALLY ON THE TREASURY SIDE OF THINGS THIS WEEK. A LOT OF MOVEMENT. EMILY: A LOT OF BUYING OUTSIDE THE BOND MARKET, PERHAPS TO HEDGE, PERHAPS THE FINE SAFETY BUT WE ARE SEEING GOLD HIGHER AND BITCOIN HIGHER AS WELL. SALLY: SALLY: WE ARE LOOKING FOR SIGNS OF THE DEBASEMENT TRADE EVERYWHERE WITH CAPITAL LOOKING PRETTY AGGRESSIVELY ROTATING OUT OF BONDS AND INTO HARD ASSETS AND STRUCTURAL GROWTH EQUITY AS WELL. ROMAINE: IT WAS A QUIET WEEK WHEN IT COMES TO EARNINGS THAT WILL CHANGE. WE GET NVIDIA ON WEDNESDAY. THE OTHER BIG CATALYST NEXT WEEK WILL BE THE JACKSON HOLE SYMPOSIUM. CAROL: EVERYONE IS GOING TO BE LISTENING TO WHAT FED CHAIR KEVIN WARSH HAS TO SAY. DOES HE GIVE US SOME METRICS, THINGS TO WATCHIT'S A BIG QUESTION. ROMAINE: BIG QUESTION INDEED. SPEAKING OF, FOR OUR VIEWERS RIGHT NOW, CROSSING THE WIRE IT INVOLVES ANTHROPIC, THE COMPANY WE ALL ASSUME IS GOING TO GO PUBLIC SOON WITH A VERY LARGE VALUATION. THEY TEND TO MAKE NEWS ON THE STACKING SIDE, COOL CHIP BETTERING AS IT PUSHES INTO HARDWARE. GREAT ON THE SCREEN WITH THE MAJOR INDICES IN THE UNITED STATES AND WHAT WE SHOULD POINT OUT AS CAROL POINTED OUT, ALL THE MAJOR INDICES ARE FINISHING THE WEEK IN THE RED. FOR THE DAY, THOUGH, THE DOW ADDS 5000 POINTS OR 4%. THE S&P 500 ADDS .4%. THE NASDAQ COMPOSITE IS UP ABOUT THE SAME. THE NASDAQ 100 IS UP .3% WITH THE RUSSELL 2000 CLOSING OUT THE DAY HIGHER, .9%. CAROL: GETTING BACK TO THE S&P 500, SALLY, 330 NAMES HIGHER IN THE S&P 500. BUT ONE IS UNCHANGED. SALLY: THAT'S RIGHT, HEALTH CARE IS ONE OF THE BIG DRIVERS TODAY, HELPED A LOT BY MODERNA WITH COMMUNICATIONS SERVICES DOING PRETTY WELL AND FINANCIALS WITH INFORMATION TECHNOLOGY, UTILITIES, AND ENERGY TO WRITE THINGS DOWN. CAROL: GETTING TO OUR NUMBER TWO GAINER IN THE S&P 500, IT'S THE TOP GAINER IN THE S&P FOR THE WEEK OVERALL, I SHOULD POINT OUT, UP 129%, MODERNA. MAN, THIS ONE HAS BEEN ON A MOVE , ADDING ANOTHER 9% TODAY. WE SAW THE STOCK SOAR ON WEDNESDAY. A RECORD MOVE, THERE, ADDING THAT DAY ALONE, $44 BILLION IN VALUE IN GIVING SOME BACK YESTERDAY WITH ANOTHER MOVE TO THE UPSIDE. TOP PERFORMERS IN THE S&P. SHARES WERE UP FOR THE WEEK OVERALL, UP 400% YEAR TO DATE. 13% OF THE FLOAT IS SHORT. A LOT OF NUMBERS, JUST A LOT OF SUPERLATIVES FOR MODERNA. EARLIER IN THE WEEK WE HAD EXCITEMENT WITH A PERSONALIZED VACCINE DEVELOPED BY MODERNA AND MERCK DECREASING MELANOMA IN LATE STAGE TRIALS, RAISING EXPECTATIONS FOR TREATING THE DEADLIEST FORM OF SKIN CANCER. TAKING A LOOK AT SCIENCE WHEN IT COMES TO USING THE IMMUNITY OF THE BODY WHEN IT COMES TO FIGHT DIFFERENT THINGS IN DIFFERENT DISEASES, THAT KIND OF GAVE IT THAT THINKING AND STRATEGY BOOST. I SHOULD POINT OUT THAT MERCK ALSO HIT AN ALL-TIME HIGH TODAY IN THE SESSION AS WELL, STOCK UP AT THE CLOSE, 2.4%. TAKING A LOOK AT RETAIL, LOTS OF RETAIL EARNINGS ARE COMING YOUR WAY. RUST DOORS, THE STOCK IS UP 4.4% AT THE CLOSE. THE OFF-PRICE RETAILER PURSUED IN EARNINGS-PER-SHARE FORECAST FOR THE FULL YEAR AFTER SEEING STRENGTH THROUGHOUT THE SECOND QUARTER WITH COMP STORE SALES GROWTH SHOWING AN INCREASE IN NEW CUSTOMERS WITH HIGHER ENGAGEMENT FROM EXISTING CUSTOMERS, TO -- TWO PRETTY STRONG TAILWINDS FOR THE COMPANY. SAYING IN RETAIL, BJ'S WHOLESALE CLUB. ROMAINE: SORRY, WHAT? CAROL: WHAT'S THE MATTER? YOU'RE GOING TO MISS ME, IT WILL BE AWAY FOR TWO WEEKS. ROMAINE: IT IT ALL IN. TWO WEEKS? I NEED YOUR CONTRACT. CAROL: YEAH. BJ'S IS UP FIVE POINT 6% HERE, RISING AFTER THEY ADJUSTED SALES AND EPS FOR SECOND-QUARTER QUARTER EXPECTATIONS WITH MANAGEMENT RAISING EARNINGS GUIDANCE, LIFTING COSTCO, WHICH WE SAW MOVING A BIT HIGHER IN THE SESSION AS WELL, THAT NAME WAS UP 1.5%. KEEP IN MIND THAT ONE REPORTS RESULTS ON SEPTEMBER 24. EMILY, ALL YOURS. EMILY: DECLINING, THE REMORA E*TRADE GETTING CRUSHED -- THE MEMORY TRADE IS GETTING CRUSHED. MACRON IS THE POSTER CHILD HERE, FINISHING THE DAY DOWN .7%. THIS STOCK HAS BEEN RIPPING FOR THE FIRST HALF OF THE YEAR. IT STILL REMAINS ONE OF THE TOP PERFORMERS IN THE S&P 500 YEAR TO DATE WITH SHARES WAY OFF OF THEIR HIGHS, GETTING CRUSHED TODAY. ALEC YOUNG, CIO AND CHIEF INVESTMENT STRATEGIST THERE, A QUANT RESEARCH FIRM TELLING BLOOMBERG THAT THE SMART MONEY IS MOVING ON FROM THE MEMORY TRADE. THE FACT THAT THEY ARE GIVING UP OUR RECENT BALANCE SHOWS A LOT OF WEAK HANDS AND WE ARE SEEING THAT WITH CHIPS AS WELL. NVIDIA LOWER, NOT A LOT OF FUNDAMENTAL NEWS RIGHT NOW, BUT REALLY JUST THAT KIND OF MOMENTUM JUST GETTING THE AIR TAKEN OUT OF IT. BOSTON BEER, TICKER SAM, A BEER COMPANY WHOSE BRANDS INCLUDE INTERESTED -- TWISTED TEA, SAM ADAMS BEER. DID YOU WANT TO SAY SOMETHING, ROMAINE? YOU KNOW ALL THESE? ANGRY ORCHARD, DOGFISH HEAD, CRAFT BREWERY STOCK FALLING, CLOSING DOWN 3%. THEY ANNOUNCED THAT THEIR CHIEF FINANCIAL OFFICER WILL BE LEAVING THE COMPANY ON THE 14TH OF SEPTEMBER TO ACCEPT A NEW SHAREHOLDER OPPORTUNITY. ANALYSTS DIDN'T LIKE THAT. CITIBANK SAID THAT THE EXIT IS A MEANINGFUL LOSS TO THE BOSTON BEER GIVEN HIS KEY ROLE IN THEIR MARGIN RECOVERY PROGRAM. SO, I GUESS GOOD FOR DIEGO BUT MAYBE NOT SO GOOD FOR SHAREHOLDERS AND THE COMPANY HERE. FINALLY, UBIQUITY. ROMAINE: FINALLY. EMILY: YEAH, I GOT THREE. HE'S TRYING TO THROW ME OFF MY GAME. [LAUGHTER] I'M GOING TO BE HERE NEXT WEEK. ROMAINE: EVEN BETTER, I'M CUTTING YOU OFF AND WE HAVE TO GO EARLY. I WANT TO GIVE AT LEAST SOME TOXINS. NO, NO, DID YOU SEE THIS STORY? THIS IS IMPORTANT. WHEN WE TALK ABOUT WHAT'S MOVING TO THE TOP OF THE LEADERBOARD, FORGET MODERNA AND ALL THAT, IT'S TOXINS. FOR THE LAST SEVERAL YEARS THE NUMBER ONE BREED OF DOG OUT THERE HAS BEEN FRENCH BULLDOG, BUT RISING UP THE CHARTS, THE SLEEPER IF YOU WILL, THE SANDISK, THE MICRON OF THE DOG BREED WORLD, TALKS AND. NUMBER FIVE LAST YEAR AFTER BEING NUMBER 10 A COUPLE OF YEARS AGO. COULD OVERTAKE CAROL: IT. LOOK AT THOSE LITTLE LEGS. TALK TO VERONICA NICK UP. SHE'S GOT TWO, SHE USED TO HAVE ANOTHER ONE. MAN, SHE LOVES THESE DOGS AND THEY ARE JUST ADORABLE. I SEE THEM ON THE STREET AS WELL. ROMAINE: THEY SAY THEY ARE LIKE THE PERFECT CITY DOG. SMALL, RELATIVELY QUIET. CAROL: BEFORE I GO, BECAUSE I LOVE AND ADORE YOU, I WANT TO MAKE SURE THAT THE NEXT TIME YOU TAKE A VACATION THAT YOU ARE THINKING ABOUT LEARNING SOME SKILLS, PERHAPS, ROMAINE? THEY ARE DOING LUXURY TRASH WILL -- LUXURY TRAVEL TRENDS WHERE YOU CAN LEARN A SKILL. ROMAINE: THAT SOUNDS AWFUL. CAROL: I'M JUST SAYING, IF YOU WANT TO ADD TO YOUR REPERTOIRE. SALLY, I DON'T KNOW HOW YOU DO IT. LOOK, YOU CAN LEARN ANCHORING, BROADCAST JOURNALISM. LOVE YOU. ROMAINE: YOU NEED A DOCKS AND. CAROL: THAT'S THE RAT. YOU'VE GOT WORK TO DO ON YOUR SIDE. ROMAINE: I DO. SERIOUS WORK. IT'S "THE CLOSE." CAROL: RADIO, TV, EMILY, BLOOMBERG ORIGINALS, WE CALL IT THE CLOSING BELL IN WE HAVE FUN AS YOU CAN SEE. SALLY AND ROMAINE CONTINUING ON TV, EMILY BACK HERE ON "BLOOMBERG BUSINESSWEEK," SOME OF US ARE BACK ON MONDAY. ROMAINE: RELATIVELY QUIET DAY ON WALL STREET WITH ACTIVITY PICKING UP IN A BIG WAY NEXT WEEK WITH CHIPMAKERS SET TO REPORT EARNINGS, INCLUDING NVIDIA. WE TALKED TO A CHIPS FACE LEGEND AFTER WE COME BACK FROM THE BREAK, RIGHT HERE ON BLOOMBERG. >> THE COUNTDOWN IS ON. EVERYTHING YOU NEED AT THE END OF THE MARKET DAY. THIS IS "THE CLOSE." ROMAINE: WELCOME BACK TO "THE CLOSE," THE S&P CLOSING OUT THE DAY UNDER 7700, .4% OF AGAIN ON THE DAY. SIMILAR STORY FOR THE PHILADELPHIA SEMICONDUCTOR INDEX, DOWN FOR THE DAY IN THE WEEK, BUT THE BIG STORY ALL WEEK LONG WAS THE BUMP UP THAT WE SAW IN TREASURY YIELDS, GETTING OUT AT 5.3% TO START THE WEEK WITH BIG MOVES BY SCOTT BESSENT TO TAMP IT DOWN. NEVERTHELESS, DIVESTMENT TRADE TAKING OVER WITH GOLD RALLYING TO ITS HIGHEST LEVEL WE'VE SEEN IN SOME TIME WITH BITCOIN NOW UP FOR A THIRD STRAIGHT WEEK, WOKEN FROM ITS SLUMBER ON AN INDIVIDUAL BASIS. ROBINHOOD, UP 14% YEAR TO DATE, THE BEST THAT STOCK HAS HAD GOING BACK TO FEBRUARY. MEANWHILE, TESLA WITH ITS BEST WEEK SINCE MAY. EARLIER TODAY WE LEARNED ABOUT NEW APPROVALS FOR THOSE AUTOMATED TAXIS, NOT JUST TESLA BUT THE COMPETITORS AS WELL AND THAT'S A BIG MOVE FORWARD IN THAT FRONT. MARVELL TECHNOLOGY'S IS DOWN ON THE DAY WHEN WE SHOULD POINT OUT THAT THEY ARE ON A THREE WEEK RUN IN TERMS OF WEEKLY GAINS, REPORTING EARNINGS ON THURSDAY WITH EVERYBODY FOCUSED ON NVIDIA. THE SHARES HAVE BEEN ON A SIX-DAY SLIDE, THE LONGEST LOSING STREAK WE HAVE SEEN FOR NVIDIA ON A DAILY BASIS GOING BACK TO 2022. BRINGING US TO OUR TOP STORY FOR THE HOUR, THE COUNTDOWN TO THE MARKETS NEXT BIG TEST. NVIDIA EARNINGS. REVENUE AND PROFITS FOR THE MAKER OF AI CHIPS PROJECTED TO ALMOST DOUBLE FROM A YEAR AGO. IT WILL BE ITS 13TH STRAIGHT QUARTER OF EITHER THREE DIGIT OR HIGH DOUBLE-DIGIT PERCENTAGE GROWTH FOR THE COMPANY. AS A BECOMES ESTABLISHED AS AN INDUSTRY, MICRON AND SK HYNIX BECOME THE FATTEST OF THAT CASH COWS. MICROECONOMICS SUGGESTS THE EXTRAORDINARY GROWTH WILL ATTRACT NEW ENTRANTS. OTHER CHIPMAKERS LIKE INTEL AND AMD ARE TRYING TO STEP YOUR GAME UP. EVERY HYPERSCALE ARE OUT THERE IS SET TO BE WORKING ON THEIR OWN PROPRIETARY CHIPS. CHINESE COMPANIES LIKE HUAWEI AND CX S AND T ARE MAKING CHIP ADVANCEMENTS THAT ALREADY HAVE EVERYONE TALKING. OUR NEXT GUEST IS A PIONEER IN THE SEMICONDUCTOR SPACE, PREVIOUSLY THE DEAN OF THE UC BERKELEY COLLEGE OF ENGINEERING, IF YOU HAVE A MOBILE PHONE YOU PROBABLY HAVE A CHIP THAT SHE HAD A HAND IN DESIGNING AND SHE'S NOW THE PRESIDENT OF THE NATIONAL ACADEMY OF ENGINEERING. DR., GREAT TO HAVE YOU ON THE PROGRAM. STARTING SPECIFICALLY WITH NVIDIA, FOR A WHILE IT'S BEEN THE ONLY GAME IN TOWN FOR THESE ADVANCED AI CHIPS, BUT THOSE CHIPS ARE PROBABLY ONLY AS GOOD AS WHAT TSMC CAN MANUFACTURE AND I AM CURIOUS ABOUT WHAT YOU ARE SEEING IN THE MANUFACTURING SPACE RIGHT NOW AND WHETHER NVIDIA DOMINANCE IS INDEED SET, POTENTIALLY, TO ERODE. >> THANK YOU SO MUCH FOR HAVING ME ON YOUR SHOW AGAIN TODAY. IT IS MY PLEASURE TO JOIN HERE. LOOK, AS CONTEXT, THE SEMICONDUCTOR INDUSTRY IS SEEING HISTORIC GROWTH THANKS TO THE GENERATIVE AI SUPER CYCLE AND THERE IS NO INDICATION THAT SOCIETY, COMPANIES, OR GOVERNMENTS ARE GOING TO BACK OFF ON INCREASING THE USAGE OF AI AND COMPANIES ARE RESPONDING BY INVESTING IN GROWING AI COMPUTE CAPACITY BOTH FOR MODELING AND FOR INFERENCE. WITH REGARDS TO NVIDIA, YES, IT'S A LEADER RIGHT NOW IN AI ACCELERATING COMPETING CHIPS. IT DOES RELY ON CUTTING EDGE TECHNOLOGY TO ACHIEVE THAT MARKET LEADERSHIP. BUT I THINK THAT THIS IS SO LUCRATIVE, IT'S WHY YOU SEE OTHER COMPANIES COMPETING FOR A BIGGER SHARE IN THAT MARKET. IN THE U.S. THEY ARE INVESTING TO ENSURE THAT MANUFACTURING, CHIP MANUFACTURING, LEADING EDGE OF IS IN THE U.S. GOING FORWARD AS IT HAS BECOME CRITICAL FOR ECONOMIC PROSPERITY AND FOR NATIONAL SECURITY IN THE LONG RUN. ROMAINE: I'M CURIOUS, THIS AI BUILDOUT, AND THE DATA CENTERS, COLLIDING WITH A POWER GRID THAT ISN'T READY FOR IT ALL, THAT SEEMS TO BE THE CONSTRAINT EVERYONE TALKS ABOUT. IS THAT SOMETHING THAT WE COULD ONE, ENGINEER OUR WAY OUT OF WITH MORE EFFICIENT CHIPS, AND IF SO, HOW CLOSE ARE WE TO DOING THAT? DR. LIU: ABSOLUTELY. THE SOLUTION IS MULTIFACETED. ONE SOLUTION IS FOR RESEARCHERS AND THE INDUSTRY TO WORK TOGETHER MORE CLOSELY TO ADVANCE INNOVATIONS TO DRAMATICALLY INCREASE THE ENERGY EFFICIENCY OF THOSE CHIPS. MICRON ANNOUNCED THIS WEEK THAT THEY ARE INVESTING 10 BILLION IN THE FUTURE OF A NEW RESEARCH LAB SIMILAR TO TO ENSURE THAT AI CAN CONTINUE TO GROW AND WILL NOT RUN OUT OF ELECTRICITY. YOU SEE PEOPLE INVESTING IN A GREATER DIVERSITY OF ENERGY SOURCES. TO SUPPLY WHAT IS NEEDED FOR ALL OF THE AI DEMAND. ROMAINE: I AM CURIOUS, I TALKED ABOUT HOW IF YOU HAVE A SMART PHONE IN YOUR POCKET YOU PROBABLY HAVE A CHIP THAT YOU HAVE YOUR FINGERPRINTS ON. FORGIVE MY EXPLANATION OF IT. I DO WONDER ABOUT WHERE THE INDUSTRY IS MOVING ON THE POWER SIDE. THE IDEA TO DO THIS ALL AROUND. BACKSIDE POWER DELIVERY. THIS IDEA OF WHETHER THAT IS DONE WITH. WE HAVE EXHAUSTED THAT. OR HAS IT MORPHED INTO SOMETHING DIFFERENT? >> I AM IMPRESSED THAT YOU KNOW THESE TECHNICAL TERMS. THE TRANSISTORS ARE THE MINIATURE SWITCHES ON THESE COMPUTING CHIPS. TODAY THE MOST ADVANCED CHIPS MANUFACTURED BY TSMC FOR NVIDIA HAVE BILLIONS OF THESE TINY TRANSISTORS ON THEM. IN THE FUTURE THE INDUSTRY HAS ALREADY STARTED TO REVOLVE INTO YET ANOTHER ADVANCED TRANSISTOR DESIGN. THIS WILL TAKE SOME TIME FOR THE LEADING TECHNOLOGY TO BECOME AS COST-EFFICIENT. BECAUSE OF DEMAND, I HAVE NO DOUBT THAT WILL HAPPEN. THE PRESSURE ON BUILDING THIS NOW EXCEEDS OVER $20 BILLION. THAT HAS CAUSED MORE INNOVATION TO FIND WAYS TO DRAMATICALLY LOWER THE COST OF CHIP MANUFACTURING. SO I AM VERY OPTIMISTIC. I AM OPTIMISTIC THAT ENGINEERING INNOVATIONS WILL PROVIDE WAYS TO LOWER AND IMPROVE ENERGY EFFICIENCY. TO MAKE ELECTRICITY AVAILABLE. ROMAINE: I WANT TO GET YOUR THOUGHTS ON SOME OF THE GOVERNMENT POLICIES. WHEN IT COMES TO CHINA AND THE U.S. THE TRUMP ADMINISTRATION HAS DONE A LOT TO TRY TO BAN CHIPS OR KEEP THEM FROM GETTING RELICENSED. THERE HAS BEEN A LOT OF SPECULATION. ABOUT THE ADVANCEMENTS THAT CHINESE COMPANIES HAVE MADE. WHEN IT COMES TO THESE COMPETITION BEFORE NATIONS, WILL THAT HINDER THE PROGRESS OR IS THAT MAYBE CODE? OR DOES THAT GET US TO WHERE WE WANT TO GO MUCH FASTER? DR. LIU: THAT CAN BRING AN EXPERTISE FROM ACROSS THE NATION. WE FOCUS ON ADVISING THE POLICYMAKERS. THEY LOOK AT THE BIG PICTURE. THE EVOLVING GEOPOLITICAL LANDSCAPE. IT IS A FINE BALANCE. IF WE CONSTRAIN COMPANIES TOO MUCH FROM MAKING A PROFIT, THEY WILL NOT BE ABLE TO ADVANCE AND STAY AHEAD OF CHINA. THIS IS WHY WE HAVE EXPERTS. ROMAINE: JUST VERY QUICKLY, WHAT ABOUT THE HUMAN ASPECT OF THIS? WHAT IS THE HUMAN PIPELINE OF ENGINEERS AND TALENT? DR. LIU: THANK YOU FOR ASKING. THIS IS A CRITICAL RESOURCE. WE NEED MORE TECHNICALLY SKILLED TALENT. ENGINEERS AND RESEARCHERS. THE SHORTAGE OF THE TALENT IS 100,000 JOBS EVERY YEAR. IT PROVIDES FUNDING. THEY ANNOUNCED MEMBERS OF THEIR ADVISORY BOARD. WE ARE WORKING TOGETHER AS A NATION TO ADDRESS THIS NEED FOR TALENT. WE CANNOT WIN THE TECHNOLOGY RACE WITHOUT HUMAN TALENT. ROMAINE: WE REALLY APPRECIATE YOU JOINING US. THE PRESIDENT OF THE NATIONAL ACADEMY OF ENGINEERING. WHEN WE COME BACK, WE WILL KEEP OUR EYES ON THE AI TRADE AND TAKE A LOOK AT A RELATIVELY NEW STARTUP CALLED LOOP THAT IS TAKING A LOOK AT SUPPLY CONSTRAINTS WITHIN THE INDUSTRY AND HOW AI MIGHT ACTUALLY IMPROVE IT. THAT IS COMING UP RIGHT HERE ON BLOOMBERG. ♪ ♪ ROMAINE: KEEPING OUR EYES ON EVERYTHING GOING ON IN AI. OUR NEXT GUEST HAS AN INSIDE LOOK AT THE SUPPLY CONSTRAINTS WITHIN THE LOGISTICS SECTOR, NOTING THAT THE CHIP AND MEMORY CARDS IS EASING FASTER THAN THE TIMELINE MOST EXPECT. HE IS THE CEO OF LOUK. HE JOINS US RIGHT NOW. I'M CURIOUS ABOUT YOUR COMPANY. I USE TO COVER TRUCKING AND SUPPLY CHAIN SPACE PRETTY EXTENSIVELY. THERE WERE A LOT OF BINDERS FULL OF PAPER AND SCRIBBLES WITH PEN AND INK. WHEN YOU TALK ABOUT USING AI AND TECHNOLOGY TO IMPROVE, THIS IS ABOUT HOW YOU GET ALL THE DATA IN WRITTEN FORM AND PUT IT INTO SOME KIND OF FORMAT WHERE IT CAN ACTUALLY BE PARSED IN A MUCH MORE REASONABLE WAY. ARE WE THERE ALREADY? >> WE ARE GETTING CLOSE. WE ARE DOING OUR JOB TO MAKE IT HAPPEN. MOST OF THE SUPPLY CHAIN DATA LIVES OFF-LINE. DARK DATA THAT COMPANIES REALLY DO NOT HAVE ACCESS TO. WHEN THE SUPPLY CHAIN IS MOVING AS FAST AS IT IS RIGHT NOW, YOU NEED THAT DATA ONLINE AND CONNECTED AND YOU NEED THE ABILITY TO MAKE DECISIONS WITH THAT DATA. CERTAINLY WE SEE THAT EXACTLY. THE INDUSTRY IS CERTAINLY TRANSFORMING. THE AI CAPABILITIES ARE HELPING ACCELERATE THAT AS WELL. CHRISTINE: I AM TOLD THAT YOU ARE IN THE MIX OF SOME OF THE SUPPLY CHAIN ISSUES GOING ON. WITH THE AI BUILD OUT. WE KNOW THERE ARE A LOT OF BOTTLENECKS IN THAT SPACE. WHERE YOU SIT IN THAT AND WHAT YOU ACTUALLY SEE? >> WE GET TO SERVE THE MOST IMPORTANT COMPANIES IN THE AI SUPPLY CHAIN BUILDOUT. THE CHECK COMPANIES THEMSELVES, MOST OF THE COMPANIES YOU TALK ABOUT YOUR ON THE SHOW. ALSO THE DATA CENTER COMPANIES THEMSELVES THAT ARE ROLLING OUT THESE CAPABILITIES. IN ADDITION TO THE POWER SUPPLIERS THAT ARE HELPING BRING THE POWER ONLINE. ROMAINE: ARE WE CLOSE TO THAT? WE WERE HAVING THAT CONVERSATION EARLIER. IT SEEMS LIKE THERE ARE STILL SOME ISSUES. >> WHEN YOU LOOK AT THE REAL CHALLENGE HERE, AI IS A SUPPLY CHAIN CHALLENGE. WE ARE SO COMPUTE CONSTRAINED. WHEN YOU LOOK IT OVER THE NEXT FIVE YEARS, WE NEED TO BRING AT LEAST 150 GIGAWATTS ONLINE. THAT IS A MASSIVE CAPEX INVESTMENT. ONE OF THE LARGEST SINCE THE RAILROAD. IT COMES TO $5 TRILLION. IT IS A MAJOR INVESTMENT. TO MAKE THAT HAPPEN WE HAVE TO BRING ALL OF THE SUPPLIES TOGETHER IN AN INSTANTANEOUS TIME TO MAKE THIS POSSIBLE. AS SOON AS YOU HAVE ONE SUPPLY CHAIN CHALLENGE SALTS, YOU MOVE TO THE NEXT ONE. WHAT WE ARE SEEING IN OUR DATA WAS SOME OF THE LARGEST COMPANIES IN THIS SPACE IS THE CHIP SHORTAGE IS ACTUALLY STARTING TO SUBSIDE AND THAT IS MOVING THE CONSTRAINT DOWN TO A POWER SHORTAGE. I BELIEVE JUST IN TEXAS THERE ARE 474 GIGAWATT BACKUP DEMAND OF POWER. SO THIS WILL BE A MAJOR ISSUE. THAT WE WILL FACE OVER THE NEXT YEAR OR SO. ROMAINE: I WANT TO GO BACK TO THIS IDEA THAT THE CHIP AND MEMORY CRUNCH IS EASING FASTER THAN EXPECTED. IF YOU TALK TO THE COMPANIES THEMSELVES, THEY ARE BASICALLY KIND OF GUIDING OUT TO 2030 AND SAYING THIS GROWTH RATE WE HAVE BEEN USED TO FOR THE LAST COUPLE OF YEARS WILL CONTINUE. IS THAT MAYBE A LITTLE BIT OF A MISCHARACTERIZATION? IS THERE A SPEED TO WHICH THIS MEMORY CRUNCH IS EASING? >> IF YOU LOOK AT THE LAST FEW YEARS, CHIPS HAVE LARGELY BEEN THE CONSTRAINT. WHEN THERE IS A CONSTRAINT THAT APPEARS IN CAPITAL MARKETS, CAPITAL EMERGES AND YOU GET NEW ENTRANTS. THERE ARE SO MUCH DEMAND THAT THESE COMPANIES WILL CONTINUE TO GROW AT AN ACCELERATED RATE. AS THESE CHIPS AND DATA CENTERS COME ONLINE WHICH WE ARE STARTING TO SEE NOW AND WILL SEE OVER THE NEXT YEAR OR SO, THAT MOVES CONSTRAINTS TO POWER. HOW DO YOU POWER THESE DATA CENTERS THAT ARE NOW COMING ONLINE? I STILL THINK YOU WILL SEE AN ACCELERATED GROWING DEMAND FOR CHIPS BUT THE CONSTRAINT WILL MOVE DOWN TO POWER. ROMAINE: WE HAVE TO LEAVE IT THERE. UP AGAINST THE CLOCK. WE HAVE TO GET YOU BACK FOR A LONGER DISCUSSION. THAT IS AN INTERESTING BACKDROP TO WHAT WE WILL LEARN NEXT WEEK OUT OF NVIDIA WHICH REPORTS ON WEDNESDAY. THERE ARE A SMATTERING OF OTHER TECH COMPANIES IN THE SPACE WHICH WILL BE REPORTING. WE WILL HEAR FROM THE SOFTWARE SIDE INCLUDING FROM INTUIT AS WELL AS SYNOPSYS AND SALESFORCE. OUR WEEK IS NOT OVER YET. THERE IS STILL A LOT OF TALK ABOUT AI AND DATA CENTERS AND THE GROWING BACKLASH TO IT ALL. FOR ONE COMPANY, THEY ARE FINDING A HUMOROUS WAY TO MAYBE JUMP INTO THE CONVERSATION. IT IS A LIQUID DEATH. THEY JUST HAD THAT VIRAL COMMERCIAL WITH JASON KELCE DOING WHAT YOU THOUGHT HE WAS DOING. WE WILL TALK ABOUT THAT WITH THE CEO WHEN WE COME BACK FROM THE BREAK RIGHT HERE ON BLOOMBERG. ♪ >> OUR CIVIL SOCIETY SHOULD NOT GIVE UP ON AI. WE NEED THE VOICES, WE NEED THE COLLECTIVE GOVERNANCE BUT LET'S NOT THROW OUT THE BABY WITH THE BATHWATER. THE GOVERNMENT SHOULD NOT BE LET'S STOP AI BECAUSE THIS IS A TECHNOLOGY THAT CAN DISCOVER CURE FOR DISEASES. RIGHT NOW, WE ARE IN A VERY MESSY PERIOD. ROMAINE: THE GODMOTHER OF AI WARNING THE TECH COMMUNITY NEEDS TO DO A BETTER JOB OF COMMUNICATING THE BENEFITS OF ARTIFICIAL INTELLIGENCE. WHY? WELL, BECAUSE WE ALL SEEM TO BE FOCUSING ON THE NEGATIVE ASPECTS. THE BIG BACKLASH GROWING AROUND DATA CENTERS WITH CRITICS RAISING CONCERNS ABOUT ITS IMPACT ON WATER, ENERGY, JOBS, ETC. CELEBRITIES AND BRANDS ARE JUMPING INTO THE CONVERSATION. JASON KELCE AND HIS COMPANY TEAMING UP WITH LIQUID DEATH ON NOW THAT VIRAL COMMERCIAL. THE FOUNDER AND CEO OF LIQUID DEATH JOINS US NOW TO TALK ABOUT THIS. WE HAVE TO PUT THE ASTERISK THAT PROBABLY EVERYONE WATCHING THIS NETWORK HAS LONG THE AI TRAIT AS AN INVESTMENT, LET'S TALK ABOUT THE SENTIMENT WHICH IS RELATIVELY DOUR. YOUR VP TALKED ABOUT THIS, THAT ANGER IS ONE THING THAT WILL BRING ALL AMERICANS TOGETHER. REPUBLICANS AND DEMOCRATS, WE ALL WANT TO, LET'S SAY, PUT OUR LIQUIDS ON THESE DATA CENTERS. WHY DID YOU DO THIS? IT IS FUNNY, IT CAUGHT A LOT OF ATTENTION. WHY? >> LIKE ANYTHING THAT IS IN POP CULTURE, NOTHING IS IMMUNE TO MAKING FUN OF IT. WE ARE NOT MAKING THIS AD BECAUSE WE ARE TRYING TO PUT A STAKE IN THE GROUND THAT WE ARE ANTI-AI. THIS IS A TOPIC THAT HAS BEEN OUT IN THE WORLD AND DISCUSSED AD NAUSEAM. WE THOUGHT THIS WOULD BE A FUN WAY TO KIND OF MAKE FUN OF IT AND, YOU KNOW, TAKE THE YOU KNOW WHAT OUT OF IT A LITTLE BIT. YEAH, I THINK THE OTHER PART OF IT IS THERE IS A REAL PROBLEM THAT PEOPLE ARE LOOKING AT ABOUT THE WATER USAGE OF THESE AI DATA CENTERS. IT IS NOT A MADE-UP THING. EVEN WHAT THEY CALL THE CLOSED LOOP DATA CENTERS, A HUGE AMOUNT OF WATER IS EVAPORATED AND IT IS STILL TAKING IT. IT IS STILL A PROBLEM THAT NEEDS TO BE SOLVED. WE ARE NOT CLAIMING PEOPLE SHOULD ACTUALLY SEND THEIR PEE TO THESE DATA CENTERS BUT THERE IS SOME SCIENCE BEHIND USING RECYCLED WASTEWATER FOR THINGS LIKE COOLING DATA CENTERS IS NOT A CRAZY IDEA. ROMAINE: YEAH, AND I DON'T WANT TO BELITTLE SOME OF THE REAL AND LEGITIMATE CONCERNS OUT THERE. WE HAVE SEEN OTHER BRANDS JUMP ONTO THE ANTI-AI SENTIMENT. POLAROID RAN SOME PRETTY CREATIVE BILLBOARDS. WE SAW A LOT OF POLITICIANS IN THE MIDTERM SEASON NOW SUDDENLY AGAINST DATA CENTERS AS WELL. HOW QUICKLY DID THIS AD COME TOGETHER? DID YOU ALREADY KNOW JASON AND THE TEAM OVER AT GARAGE? DID YOU JUST CALL THEM UP AND SAY LET'S DO SOMETHING FUNNY? MIKE: WE HAVE KNOWN THOSE GUYS FOR LITTLE WHILE NOW. WE ARE VERY KINDRED SPIRITS IN TERMS OF LOVING TO MAKE PEOPLE LAUGH AND HAVE THE WORLD MAY BE TAKE ITSELF TOO SERIOUSLY. YEAH, WE JUST KIND OF CAME UP WITH THIS IDEA. AND, YEAH, EVERYBODY WAS EXCITED ABOUT IT, THOUGHT IT WAS FUNNY AND WE PUT IT OUT IN THE WORLD. ROMAINE: WE PLAYED THAT CLIP AHEAD OF YOU FROM FEI-FEI LI. WE HAVE HEARD FROM OTHER PIONEERS. THIS IDEA THAT AI HAS A MARKETING PROBLEM RIGHT NOW. IT WAS KIND OF OVERSOLD TO A CERTAIN EXTENT IN TERMS OF PROMISES. THERE WAS NO REAL DISCUSSION OF THE NEGATIVE ASPECTS. NOW WE HAVE A PUBLIC THAT IS SEIZED ON THOSE NEGATIVE ASPECTS AND NOT NECESSARILY FOCUS THINK -- FOCUSING ON THE POTENTIAL UPSIDE. IS THAT SOMETHING THAT CREATIVE MESSAGING CAN TURN THE TIDE ON THAT AND CHANGE PERCEPTIONS ABOUT WHAT AI MEANS FOR OUR FUTURE? MIKE: POTENTIALLY. I THINK IT IS MORE ABOUT MOST BRAND-NEW THINGS THAT PEOPLE DON'T FULLY UNDERSTAND, THERE IS AN INSTANT BODY REJECTING THE ORGAN KIND OF THING. I THINK IT IS MORE ABOUT THE LONGER IT IS AROUND, THE MORE PEOPLE UNDERSTAND IT, THE MORE YOU ARE SEEING HOW IT IS BEING USED AND NOT BEING USED, PEOPLE'S PERCEPTION WILL EVOLVE. BECAUSE IT IS SO NEW AND EVOLVING SO QUICKLY, IT IS KIND OF A CRAZY FOREIGN OBJECT TO SO MANY PEOPLE. THERE IS A LOT OF BAD THAT CAN HAPPEN WITH IT. THERE'S ALSO A LOT OF GOOD, BUT I THINK PEOPLE LEAN MORE TOWARDS WELL, WE DON'T UNDERSTAND THIS AND IT SEEMS LIKE IT IS BAD SO LET'S NOT DO IT. ROMAINE: I WONDER IF AI IS AFFECTING YOUR BUSINESS. WE TALKED ABOUT HOW AI HAS USURPED CERTAIN TYPES OF SOFTWARE FUNCTIONS THAT YOU WOULD HAVE SUBSCRIPTIONS TO. YOU WRITE YOUR OWN IN-HOUSE AD AGENCY. THERE IS A LOT OF TALK ABOUT HOW AI IS COMING FOR THAT INDUSTRY. WHAT IS THE RELATIONSHIP RIGHT NOW BETWEEN ADVERTISING AND ARTIFICIAL INTELLIGENCE? CAN THEY COEXIST TOGETHER? MIKE: I'D LIKE TO THINK OF IT AS, AI IS REALLY JUST A TOOL. AND IT'S NEVER GOING TO REPLACE SOME OF THE TOP TIER TRUE HUMAN CREATIVITY. IT DOES HELP WITH A LOT OF THE MUNDANE THINGS. I LIKE TO SAY ALMOST AI WILL MAKE MEDIOCRITY OBSOLETE. IF YOU ARE JUST NOT VERY GOOD AT WHAT YOU DO FROM A MARKETING OR ADVERTISING STANDPOINT AND YOU WANT SOMETHING THAT'S A CHEAPER WAY TO DO SOMETHING THAT IS JUST OK, YEAH, AI IS A GOOD SOLVE. BUT AI WILL NOT COME UP WITH SENDING PEE TO DATA CENTERS THAT HAVE A THIS USUALLY SUCCESSFUL, HILARIOUS VIDEO. ROMAINE: I AM CURIOUS ABOUT THE DISTRIBUTION OF THAT. THAT WAS BASICALLY A TV AD. IT SEEMS LIKE ANYTIME YOU TALK TO AN AD PERSON, IT IS HOW WE GET ON THE SOCIAL PLATFORMS. IS THAT THE WRONG WAY TO LOOK AT THIS AD? MIKE: THIS AD IS ONLY LIVING ON SOCIAL. I THINK MOST BROADCAST NETWORKS WOULD NOT LET US SHOW JARS OF PEE. ROMAINE: WE HAD A LONG DEBATE ABOUT WHETHER WE WOULD SHOW IT. YEAH, WE TEND TO BE A LITTLE STODGY. IT GOT A LOT OF LAUGHS AND A LOT OF ATTENTION. BEFORE I LET YOU GO, I HAVE TO ASK YOU A SERIOUS QUESTION ABOUT YOUR BUSINESS ITSELF. YOU HIRED A CFO FROM PEPSI. THERE HAS BEEN A LOT OF TALK ABOUT THE IPO WINDOW AND WHETHER YOUR COMPANY MIGHT DECIDE TO ACTUALLY JUMP THROUGH THAT. ARE YOU STILL PLANNING TO GO PUBLIC ANYTIME SOON? MIKE: I MEAN, WE ARE REALLY FOCUSED ON BUILDING A LARGE, PROFITABLE BUSINESS. THAT IS OUR NUMBER ONE FOCUS. WE ARE NOT FOCUSED ON WHAT'S THE EXIT, WHAT'S THE IPO? FOR US, WE WILL HAVE A LOT OF OPTIONS GIVEN THE TYPE OF COMPANY WE ARE AND STAGE OF COMPANY WE ARE AT. WE ARE REALLY JUST FOCUSED ON THE BUSINESS ITSELF. WHEN THE TIME COMES, WHEN THERE'S AN OPPORTUNITY, WE WILL LOOK AT ALL OF THEM AND CHOOSE THE BEST ONE. ROMAINE: MIKE, GREAT TO CATCH UP WITH YOU. THE FOUNDER AND CEO OF LIQUID DEATH, AND ONE OF THE PEOPLE BEHIND THAT VERY VIRAL AD WITH JASON KELCE AND AI DATA CENTER SENTIMENT. WHEN WE COME BACK, WE WILL TALK THE BUSINESS OF SPORTS LIKE NO ONE ELSE CAN. WE HAVE A CHANCE TO CATCH UP WITH TWO HEAVYWEIGHTS IN THE WORLD OF SPORTS. LEGENDARY AGENT LEIGH STEINBERG AND THE FORMER UNDISPUTED HEAVYWEIGHT CHAMP OF THE WORLD MIKE TYSON. THAT'S COMING UP AFTER THE BREAK RIGHT HERE ON "THE CLOSE." ROMAINE: A LOT GOING ON WHEN IT COMES TO THE WORLD OF SPORTS. THE SAGA OVER THE LOS ANGELES LAKERS STILL NOT RESOLVED BUT ONE WAY OR ANOTHER, IF THIS DOES TRANSACT, THIS TEAM WILL SELL FOR A RECORD. IT IS AT $12.5 BILLION IN RAISING A LOT OF QUESTIONS EXACTLY ABOUT THE VALUATIONS OF SPORTS TEAMS AND ALSO HOW MUCH THE PLAYER SHOULD BE SHARING IN THAT. LEIGH STEINBERG, A LEGENDARY SPORTS AGENT, THE REAL LIFE INSPIRATION FOR JERRY MCGUIRE. AND A BIG CHAMPION FOR YEARS IN ATHLETES GETTING A BIGGER SHARE OF THE PIE. I GOT A CHANCE TO CATCH UP WITH HIM AND TALK ABOUT THOSE VALUATIONS IN THE ROLE OF PRIVATE EQUITY. LEIGH: SPORTS HAS BECOME THE NUMBER ONE FORM OF TELEVISED ENTERTAINMENT AND THE ARE SO MANY INSULARITY -- ANCILLARY REVENUE FLOWS, WHETHER IT IS GAMBLING OR MERCHANDISING OR NAMING RIGHTS, THAT THE VALUATIONS THAT BLASTED THROUGH THE STRATOSPHERE. WHEN I BEGAN BACK IN 1976, TWO TEAMS, SEATTLE AND TAMPA BAY CAME IN THE NFL. THEIR PURCHASE PRICE WAS $16.5 MILLION. JUST A YEAR AGO, THE LAKERS SOLD FOR $10 BILLION. A YEAR LATER, $12.5 BILLION. A FOOTBALL TEAM, SEATTLE, SOLD FOR $9.6 BILLION. IT SHOWING THE HEALTH AND THE FACT THERE'S A FINITE AMOUNT OF THESE TEAMS. IT IS A ROBUSTLY PROFITABLE AND FUN BUSINESS TO BE IN. ROMAINE: THERE IS CERTAINLY A SCARCITY PRICING AFFECT. WHAT ABOUT THE OTHER SIDE OF THE EQUATION WHICH IS ALL THE NEW INVESTORS SEEMINGLY COMING INTO THIS SPACE BECAUSE SOME OF THE INVESTMENT RULES HAD BEEN LOOSENED, MOST RECENTLY FOR THE NFL, THE MLB HAS OBVIOUSLY BEEN A PIONEER IN THAT SPACE, THE NBA AS WELL. NOW YOU THINK OF THIS OWNERSHIP GROUP OF JOSHUA KUSHNER AND BOB IGER, WHO RAN DISNEY FOR SEVERAL YEARS, NO STRANGER TO THE SPORTS WORLD. WHAT DOES THAT SAY ABOUT THE COMPLEXION OF THE TYPES OF PEOPLE WHO ARE BUYING INTO THIS? LEIGH: THEY USE THE TERM MIDDLE-CLASS BILLIONAIRE. THE NEW OWNERS ARE NOT MIDDLE-CLASS BILLIONAIRES. THEY ARE MULTIPLE BILLIONAIRES AND THEY HAVE BEEN SUCCESSFUL IN ANOTHER FIELD. AND THEY LOOK AT THIS AS A CONTENT PLAY THAT GIVES THEM MORE REVENUE STREAMS COMING IN FROM ALL SORTS OF WAYS, AND THE ABILITY TO DOMINATE. SO, YOU HAVE -- THESE ARE NOT FAMILY OWNED FRANCHISES ANYMORE. THESE ARE PEOPLE WHO MADE THEIR FORTUNE IN THE ROUGH-AND-TUMBLE FREE ENTERPRISE SYSTEM. NOW WHEN THEY HAVE BILLIONS, THEY WANT TO HAVE A FRANCHISE. ROMAINE: I SIT HERE IN NEW YORK CITY AND THE CITY WAS ELECTRIC A FEW MONTHS AGO WHEN THE KNICKS WON THE CHAMPIONSHIP. IF THE LAKERS COULD COME IN $.5 BILLION, AN UP TO SAY THE KNICKS ARE ON SALE, IS THAT THE FLOOR FOR THE NEXT BIG MARKET TEAM? LEIGH: I THINK IF YOU GO BACK INTO THE NFL, THE COWBOYS ARE VALUED AT $13 BILLION. I THINK THEY MUST'VE BEEN JUMPING FOR JOY IN EVERY MAJOR SPORTS COMMISSIONER'S OFFICE TO LOOK AT THESE VALUATION PRICES BECAUSE EACH ONE WILL BUILD ON THE LAST ONE AND WILL HAVE 15 MILLION, 20 BILLION. THIS WILL CONTINUE TO EXPAND OVER TIME. ROMAINE: JUMPING FOR JOY CERTAINLY. I HAVE TO ASK ABOUT WHERE THE PLAYERS FIT INTO ALL THIS. AFTER ALL, THEY ARE THE ONES WHO EFFECTIVELY BUILD THESE FRANCHISES. THEY ARE THE ONES WHO GET THE BUTTS IN THE SEATS. SALARIES ARE CAP AS A SHARE OF REVENUE, CERTAINLY IN THE NFL AND OTHER LEAGUES. FRANCHISE APPRECIATION IS NOT REVENUE. IS THIS NOW A TIME WHERE WE NEED TO START HAVING A MORE FORMAL CONVERSATION ABOUT HOW THE ATHLETES, IF AT ALL, SHARING SOME OF THESE FRANCHISE VALUATIONS? LEIGH: THERE IS A REVENUE SPLIT FROM ALL THE DESIGNATED GROSS REVENUE THAT COMES INTO A SPORT LIKE FOOTBALL. IT IS ABOUT 53% FOR MANAGEMENT, 47% OF VOTERS. I DON'T THINK IT IS GOING TO TAKE PLAYERS ASSOCIATIONS VERY LONG TO SAY WE'RE THE KEY TO BUILDING THIS GAME. IT IS US ON THE FIELD. SHOULDN'T WE ALSO SHARE IN SOME OF THE EQUITY APPRECIATION? ROMAINE: SO, THIS NOW BECOMES -- IN NEXT BIG LABOR FIGHT, YOU THINK THIS WILL BE ABOUT NEGOTIATING TEAM LEIGH: I CERTAINLY THINK THAT WITH THE KIND OF LIQUIDITY WE ARE SEEING IN THE RECORD SALES PRICES THAT PLAYERS WILL WANT A PIECE OF THE PIE. ROMAINE: IF YOU HAVE NEGOTIATED AGAINST OWNERS FOR DECADES FOR YOUR PLAYER CONTRACTS. HOW RECEPTIVE DO YOU THINK THESE OWNERS AND THE LEAGUE FOR THAT MATTER WILL BE ONCE THIS ACTUALLY DOES SHOW UP ON THE NEGOTIATING TABLE? >> NOT VERY RECEPTIVE INITIALLY. OUR JOB IS TO CRAFT WIN-WIN SCENARIOS WHERE BOTH PARTIES WILL BE FULFILLED. ROMAINE: PRIVATE EQUITY IS A BIG PART OF U.S. PORTS NOW. CERTAINLY IN THE NFL. IT FEELS LIKE EVERY TIME WE TALKED TO SOME RANDOM PERSON ON WALL STREET THEY HAVE TAKEN A MINORITY STAKE IN SOME TEAM OR ANOTHER. IS THIS INSTITUTIONAL CAPITAL GOOD FOR THE SPORT? >> I THINK IT IS FINE. IT IS ECONOMICS. WHEN YOU LOOK AT SOMEBODY WHO RUNS A HEDGE FUND LIKE MARK WALTER AND WHAT HE IS DONE WITH THE DODGERS, THEY HAVE JUST WON BACK TO BACK WORLD SERIES AND THEY ARE PROBABLY HEADED TO ANOTHER ONE. THEY HAVE BEEN SUPERB. A TEAM LIKE THE DODGERS THAT HAS SUPERIOR SCOUTING AND PLAYER DEVELOPMENT AND STABILITY, AND A GREAT CULTURE. NOT ALL PEOPLE INVESTING FROM THE HEDGE FUND WORLD ARE EQUALLY COMPETENT AS MANAGERS. BUT THE FIRST ONES WE HAVE SEEN SURE ARE. ROMAINE: I WANT TO TALK A LITTLE BIT MORE ABOUT THE PLAYERS AND SPECIFICALLY COLLEGE PLAYERS. WHEN YOU ARE OUT THERE WITH CONTRACTS THE BIG DAY WAS WHEN THEY SIGNED THE BIG CONTRACT. NIL HAS CHANGED THAT IN A BIG WAY. THERE ARE COLLEGE PLAYERS WHO ARE MILLIONAIRES. BY THE TIME THEY ENTER THE PROS THEY WILL BE MILLIONAIRES. >> SOME PLAYERS ARE. THERE IS A SPECTRUM. IN IL -- NIL HAS CHANGED EVERYTHING ABOUT COLLEGE SPORTS. IT HAS TURNED 17 EUROS AND THE FREE AGENTS. YOU HAVE A SECOND BITE AT THE APPLE WHICH IS THE TRANSFER PORTAL. YOU HAVEN'T PLAYERS MOVING IN EVERY DIRECTION. LAST YEAR THE BEST QUARTERBACK COMING OUT OF HIGH SCHOOL WENT TO LSU AND I THINK THEY OFFERED HIM $4 MILLION. AND THEN ALONG CAME A BIG MICHIGAN ALUM WHO OFFERED HIM $14 MILLION. AND HE TRANSFERRED TO MICHIGAN. IT IS A MATTER OF UNINTENDED CONSEQUENCES. I AM ALWAYS IN FAVOR OF PLAYER COMPENSATION BUT TO FIX THE PROBLEM WHICH WAS PLAYERS ON A COLLEGE CAMPUS WHO WERE BEING LEFT AT A LOWER STANDARD OF LIVING THAN THEIR NONATHLETIC PEERS WHO COULD WORK TO SUPPLEMENT THEIR INCOME. THEY DID NOT MEAN $15 MILLION. THEY WOULD'VE BEEN HAPPY WITH $10,000. BUT THE NCAA HELD ONTO TIGHT AND THAT WE HAVE A SYSTEM THAT IS THE LAW OF UNINTENDED CONSEQUENCES. THERE ARE NO GUARD RAILS. THERE IS NO UNIVERSAL FORM OF REGULATION. THE MARKETING DIRECTOR IS THAT THE PLAYERS ARE HIRING MIGHT NOT BE QUALIFIED AT ALL. THEY DO NOT HAVE TO BE CERTIFIED. CHRISTINE: THE INSPIRATION FOR THE OSCAR-WINNING FILM JERRY MAGUIRE. WE WANT TO STAY IN THE BUSINESS OF SPORTS RIGHT NOW BECAUSE MIKE TYSON WHO MADE A LOT OF MONEY IN THE RING IS FIGHTING SOME CREATIVE WAYS TO MAKE A LOT OF MONEY OUTSIDE OF THE RING. IT IS NOW FROM THE GROCERY AISLE. HE HAS TEAMED UP WITH SUGAR FACTORY ON HIGH-PROTEIN SLIDERS THAT WILL BE SOLD AT GROCERY STORES AND YOU CAN EAT THEM AT HOME. I HAD A CATCH UP WITH THE CHAMP A WHILE AGO TO TALK ABOUT THIS NEW PARTNERSHIP. >> I HAVE KNOWN HIM OVER 30 YEARS. HE WAS DISCUSSING MY WE NEVER DID THIS BEFORE. IT WAS HIS IDEA. I THOUGHT IT WAS A NO-BRAINER. ROMAINE: YOU GO DOWN THE GROCERY AISLE, THE FREEZER AISLE, THERE IS SO MUCH TO CHOOSE FROM. WHY DO I STOP AND BY THE SLIDERS? >> THEY HAVE SEED OIL. SOME OF THEM ARE NOT HEALTHY FOR PEOPLE. HE WAS ONE OF THE PEOPLE RESPONSIBLE FOR KEEPING AMERICA HEALTHY. ROMAINE: SO ARE YOU WORKING WITH THE HEALTH AND HUMAN SERVICES SECRETARY? >> YES. ROBERT KENNEDY. ROMAINE: SO ARE YOU GOING AROUND THE COUNTRY TALKING TO PEOPLE ABOUT IT? >> ABSOLUTELY. EATING PROPER MEALS. ROMAINE: WHAT IS YOUR DIET THEN LIKE OVER THE YEARS? I KNOW WHEN YOU ARE FIGHTING THERE WERE A LOT OF RUMORS ABOUT HOW STRICT YOU ARE WITH YOUR DIET. >> I WAS WHEN I FIRST STARTED. I WOULD NOT EAT ANY FOOD. I WOULD FAST AND ALL THAT STUFF. AS I GOT OLDER, I WAS COUNTING BAD CALORIES. I WAS TAKING BETTER CARE OF MYSELF. I DRINK MORE WATER. I AM RUNNING AND WALKING. I'M ALWAYS IN THE GYM. ROMAINE: YOU STILL LOOK LIKE YOU ARE IN GOOD SHAPE. YOU JUST TURNED 60 WHICH IS HARD TO BELIEVE. YOU BARELY LOOK AT 40. >> HOW MUCH DO YOU WANT ME TO PAY? [LAUGHTER] ROMAINE: YOU CAN PAY ME AND SLIDERS. I DO WONDER, YOU TALK ABOUT EATING HEALTHY. AS WE ALL GET OLDER YOU START UP A LOT MORE ATTENTION TO YOUR HEALTH. IN TERMS OF WHAT YOU EAT. THE PRODUCTS YOU ARE ALIGNING YOURSELF WITH AND WHAT YOU ARE DOING WITH THE U.S. GOVERNMENT NOW, IS THAT PART OF THIS PUSH BY YOU? >> ABSOLUTELY. 100%. THE GOVERNMENT IS WHAT I MEAN, THE PRESIDENT IS A DREAM OF MINE TO MAKE AMERICA HEALTHY AGAIN. ROMAINE: SPEAKING OF YOUR HEALTH, I HAVE TO ASK YOU, WERE YOU SUPPOSED TO DO AN EXHIBITION WITH FLOYD MAYWEATHER WHILE BACK AND I KNOW YOU HURT YOUR HAND. >> MY HANDS ARE DOING GREAT NOW. I BELIEVE IT IS STILL ON. I'M LOOKING FORWARD TO IT. I SAW THAT CHAMP THE OTHER DAY. HE LOOKED GOOD. I'M SURE HE IS READY. ROMAINE: DID HE LOOK AS GOOD AS YOU? >> I DON'T THINK SO BUT HE DID LOOK GOOD. ROMAINE: THAT WAS PART OF MY CONVERSATION WITH THE FORMER UNDISPUTED HEAVYWEIGHT CHAMPION OF THE WORLD, MIKE TYSON. WE WILL BE BACK IN A MOMENT SETTING YOU UP FOR WHAT TO WATCH ON A VERY BUSY WEEK FOR INVESTORS. ♪ ♪ ROMAINE: LET'S SET YOU UP FOR WHAT TO WATCH OVER THE NEXT WEEK. THE FINAL FULL TRADING WEEK IN THE MONTH OF AUGUST. THINGS TO PICK UP ON TUESDAY. WE WILL GET SOME DATA OUT OF THE CONFERENCE BOARD. AN UPDATE ON NEW HOME SALES. IN A LOOK AT HER EARNINGS FROM DICK’S SPORTING GOODS AS WELL AS INTO IT. WEDNESDAY WILL BE THE BIG DAY. WE WILL GET EARNINGS OUT OF A LOT OF SOFTWARE COMPANIES. WE WILL HEAR FROM SYNOPSYS AS WELL. THAT MORNING WE WILL GET THE U.S. PCE DATA. A KEY FUNCTION OF HOW THE FED DECIDES. THAT FED DECISION IS STILL A FEW WEEKS AWAY BUT WE DO HAVE THAT JACKSON HILL SYMPOSIUM. WE WILL GET EARNINGS. FRIDAY IS A BIG DAY FOR THE MACRO TRADE. KEVIN WARSH DELIVERING THE KEYNOTE SPEECH AT JACKSON HOLE. IT HAS GOT A LOT MORE INTRIGUING. THAT WILL DO IT FOR US. WE WILL BE BACK ON MONDAY.