On today’s episode of the Morning Brief, co-hosts Seana Smith and Brad Smith explore the latest jobs report, company updates, and Nvidia’s (NVDA) upcoming stock split.
The US Bureau of Labor Statistics released May’s jobs report, which showed stronger-than-expected job growth with 272,000 positions added. The show breaks down which sectors saw the most job gains, and Franklin Templeton Institute head Stephen Dover joins to discuss what this means for potential interest rate cuts by the Federal Reserve.
The show then analyzes stock reactions and updates on companies such as GameStop (GME), Taiwan Semiconductor (TSM), DocuSign (DOCU), and Lyft (LYFT). The episode takes a deep dive into the $34 billion in short bets against Nvidia ahead of the company’s 10-for-1 stock split.
This post was written by Angel Smith
Video Transcript
Happy Friday.
It’s 9 a.m. here in New York City.
I’m Brad Smith alongside Sean Smith and this is Yahoo Finances flagship show.
The Morning Brief Future is falling on the back of another hot jobs report us economy adding 272,000 jobs in the month of May.
So let’s get right to the three things that you need to know your road map for the trading day.
Yahoo Finance is Josh for Madison Mills and Jared.
We have more investors are digesting the latest read on the labor market.
The US economy adding 272,000 more jobs in May increasing significantly from April while the unemployment rate ticked higher to 4%.
The Bureau of Labor statistics reported on Friday.
Economists had been expecting 185,000 jobs to be added.
The data signaling that the hot labor market remains resilient and shares of gamestop whip on this morning after the company announcing earnings earlier than expected that stock moving to the downside here down almost 20% in the free market trade.
The company finally sell up to 75 million class a shares, their shares again on a terror earlier this week up as much as 37% after you to account, believed to be tied to keep, also known as Roaring Kitty posted a live stream scheduled for today at noon, Eastern Plus Invidia shares are about to become more affordable.
The tech giant will complete its highly anticipated 10 for one stock split where investors will receive nine additional shares for each share.
After the closing bell, the stock would be in trading at the split adjusted price on Monday, June 10th.
Good Friday morning.
Everyone futures are slipping right now after the US added 272,000 jobs during the month of May.
That is more than the 180,000 that was anticipated.
Why are the markets upset?
You may ask yourself, Yahoo Finance’s Josh Schafer is here with more.
Josh, why so sad?
Well, this is not the soft economic data.
We’re gonna get a rate code in September print that we had been following for the last month, right?
If you look at sort of what the markets had started to shift and price in over the last month, it had really been a shift to softer economic data is good because it means we’re gonna get fed rate cuts.
You’re looking at the numbers on your screen right now.
272,000 job additions compared to estimates of 180,000.
You also have average hourly earnings.
We know that sort of factored into potential inflation risk increasing, that had been decreasing, that was down last month.
So you have some concerns here when it comes to what it means for the fed.
And then I think when you take a look at the market Brad and sort of what’s moving the most right now its future to the Russell 2000.
Right.
We talk about this all the time.
Small caps are sort of what to look at when you’re wondering how markets are thinking about fed rate cuts in the 10 year, up about 12 basis points.
The last time I looked, people are pricing out that September cut.
And so the riskier areas of the market like small caps are getting hit.
Yeah, exactly.
And we were just talking to Robert Slain of cities, global economist there and asking him just about what essentially this means for the timing of a rate cut.
And also just the position that this leads the fed in right now.
And they’re walking, what is a very narrow, they’re walking a tight road, right?
Because they at one point they cannot cut.
Because when you take a look at that wage growth number, when you take a look at the fact that the jobs market remains very tight that there have been signs of cooling ahead of this print, they’re not in a position to cut.
You don’t think a July cut obviously is still on the table.
And then on the flip side, the risk then of holding rates at these elevated levels for too long.
And ultimately, the damage that that could essentially in the end cause the economy to this point.
It feels like the Fed has talked a lot about the strength of the labor market being a reason they can hold on.
Right.
And it feels like that this report certainly feeds into that narrative, right.
Which is ok, we can hold higher for longer because the job market still in good shape.
Yes, you have the unemployment rate tick up a little bit.
And that will be interesting to follow going in next month.
Right.
Do we continue to see an increase there?
I think will matter a lot.
But yeah, Sean, I think overall you had a lot of people when we were talking about the soft data over the last week, Bank of America’s Michael Hartnett strategist this morning saying you don’t want too much soft data.
That’s not a, that’s not a good thing.
Right.
That’s a risk.
And I think that’s always important to remember when the market falls on a hot jobs report.
Maybe it’s still, there’s, there’s something good in the fact that America is adding jobs and the economy is doing well.
Yes, it might mean that your fed rate cut gets pushed out.
But we’ve been talking to strategists for months that say that this market might not need rate cuts at all this year just to add one other number on this because I hadn’t refreshed my screen from yesterday in the CME fed watch tool projections for September.
I got a lot of tabs.
That’s my issue.
We don’t have to air that out here or just.
But anyway, now sitting at about 51.6% so considerable lower here this morning off the back of it.
I think it was at 69% yesterday.
Really?
69% at one point pretty big move from in one day.
All right, Josh Shafer.
Great stuff.
Thanks.
Well, meme, so continuing to shake up Wall Street and another big story that we’re tracking here this morning.
You’ve got shares of gamestop.
Now off today, 18% of reversal from the massive gains that we saw yesterday.
Now the move lower today coming after the company saw revenue declined, more than expected, also filed to sell up to 75 million of its shares, more of its shares.
When you take a look at this here, Brad, I think the big question obviously not really a question.
My takeaway here from this is we have seen a lot of excitement surrounding gamestop.
We have seen a lot of excitement surrounding the meme stocks when it comes to gamestop.
All of that mo most of that being driven by obviously posts that we have gotten from roaring kitty here over the last several weeks.
Going back to that first uh post that he had on X just about a month ago, when you see the results here that the gamestop had for the open, you can tell fundamentals haven’t changed if anything, they’ve gotten worse yet.
We’re still seeing some excitement surrounding this name.
So again, shares under pressure here today, but still they’re not giving back the gains that we saw yesterday.
All the glasses for this one.
Honestly.
Like what do you even say the company is so detached from fundamentals, we knew that they would probably do this similar to what we’ve seen other meme meme stock style uh companies do.
It’s make sure that they can capitalize on when traders are hot to trot on their ticker symbol.
And so what did they do during that time?
And this is a button that gamestop has hit before they tap the markets for more liquidity and that just gives them even more of a lifeline to say, oh yeah, deliver on some lackluster results for future quarters as well as long as they can stay in business.
But one thing that I will note within this first quarter overview that they did post this morning net sales came in at $882 million for the first quarter.
You compare that to and this is decline that you were talking about the prior year, first quarter, 1.27 or $1.237 billion in the comparable first quarter for last year.
So that was down significantly.
You also see them right now in this effort to actually get some more liquidity, their cash and cash equivalents and marketable securities sitting at about $1.083 billion at the close of the quarter.
It’ll be interesting to see what this does in terms of uh the issuance of 75 million more shares in trying to beef up some of their own liquidity coffers as well.
Um but the long term debt remains limited to low interest, fortunate for them.
So they won’t have to pay too much uh interest on it compared to what they could or should be paying.
So we’ve got the meme.
So that’s been a focus here of the street lately.
And then we also had that hotter than expected jobs print that’s really the driver in today’s early market action.
When you take a look at that hotter than expected print coming in at 272,000, a little over 49% of traders.
Now that rate cuts are still coming in September down from over 55% in the prior reading to break it all down what this data means for equities.
We want to bring in Steven Dover.
He’s the head of Franklin Templeton Institute chief Market strategist.
It’s great to talk to you.
So I guess first just how would you sum up the print that we got this morning and what essentially it means for the markets?
Well, I think you got to say, hey, it’s hot, hot, hot, right?
It’s not only way above consensus, it’s above the highest number that economists thought were gonna happen.
The FED is in this predicament.
This is an important number for the FED.
Why?
Because they have this balance between unemployment and inflation.
This is a number that kind of indicates both here, we have this last week where there’s sort of an indication inflation is down.
Um, interest rates might drop and then we have this number this morning, which is a reverse one number doesn’t show everything.
But um it’s pretty important in indicator that the economy is still very strong, makes it difficult for the fed.
Steven.
We raised this question to Robert Sin of City earlier and I’ll raise it to you too.
Does the FED run the risk of remaining higher for too long?
Well, of course, that’s a possible risk.
I, I think um I’m more a strategist.
I’m not an economist.
I’m trying to think how does this impact investment?
How do I look at this going forward?
And ultimately, the way we think of interest rates is how we use them for discounting investments.
And I think the implication of this could very well be that the long term interest rates that the, the rate at which the fed is going to keep interest rates over the next, I don’t know, 335 years is probably higher than we thought it was before.
Um and so that’s gonna infect, affect all sorts of different investments.
Um, I’m not worried right now, um, that the fed is keeping interest rates too high because this morning’s numbers indicate that the fed is, the current interest rates are not really pushing the, let me down the feds dealing with a car that it’s got 1 ft on the gas and 1 ft on the brakes, the feds trying to slow things down, the fiscal stimulus is trying to speed things up.
And so this makes the fed’s job very difficult.
Yeah, certainly.
And, and I guess the reason why I asked that question to you even knowing that you’re not an economist, but it all so impacts portfolio strategy.
If you have a fed, that continues to say the same thing for long enough, that means that the market may look at that and say, ok, there’s after a while we can start to, to fade the importance of that and it puts more focus on other parts of the market.
And, and how would you evaluate that?
Where would you perhaps institute any type of rotation in that manner?
Well, I think that the first, um, rotation you have to make is that a little bit less focus on these weekly and all these numbers that are coming out, they’re just swinging us back and forth and trying to think where are we going?
And I think where we’re going is probably rates over the next 35 years are not going to drop all that much.
So we’re talking about whether we’re going to rate cuts this year.
But the real issue is where are we going to end up when rates finally do drop?
There are some big changes.
Just this week, Europe dropped interest rates.
The differential between the US and foreign rates is growing, that’s going to have a big impact on the dollar that’s going to be, have a big impact on how we look at international investments.
I think one of the biggest opportunities potentially over the next few years is when the dollar finally drops and we see a AAA rematch between valuations in the United States and overseas.
But today moved in that opposite direction, strong for the dollar.
So even when it comes to those investment opportunities, then down the line, given those expectations and kind of this reassessment that we’re seeing play out in real time on the street.
How would you advise investors to position themselves at this point in the game?
So first of all, you got to look at um most investors, maybe not the ones on this show, but most people out there, a lot of companies have a lot of cash.
They’re trying to make that decision when they move that cash into fixed income.
We’ve been advising people to move out of cash into fixed income.
Today is a little mixed, right, kind of well, rates might stay a little higher for longer.
It’s maybe ok to be in cash, but we still think that the economy is going slightly slow down, rates are gonna go down and it makes sense to move out of cash into fixed income within fixed income spreads are very tight.
This is not gonna help that at all.
So, um you need to probably make your fixed income decisions more around duration and a little bit less um on spread within equities.
Um This is large cap positive, small cap negative.
So, um you know, there is a real bifurcation between those two those two areas.
So um hard on, hard on small cap companies.
And then, as I mentioned, um globally, um Japan’s cheap, other countries are cheap but they’re gonna be cheaper after the end of the day because uh that differential in interest rates is strong for the dollar Steven Dover, who’s the head of Franklin Templeton Institute’s Chief Market Strategist.
Thanks so much.
We appreciate it.
Thank you very much.
Bye bye.
Certainly.
We’re also watching shares of NVIDIA this morning ticker symbol NVD A the chip giant stock about to get a little bit more affordable.
The company is set to complete its highly anticipated 10 for one stock split after the market closes today.
Yahoo Finance’s Jared B Bookery here to track the moves ahead of the split.
Hey, Jared.
Hey Brad.
Uh this gives us the opportunity to do some fun math.
Uh Fortunately, it’s pretty easy.
Uh If you’re an NVIDIA shareholder and you hold one share on Monday morning, you’re going to have 10 shares.
If you own 100 it will be 1000.
But if you take a look at the share price right now, that’s going to be lopped off by 10.
So 102 109 98 that’s going to become $120 actually $121 because you’d have to round it up.
So the share price will be adjusted such that the total market capitalization should not be affected.
But here is a five year chart of NVIDIA.
They already did one stock split a few years ago.
It was a four for one split in 2021.
That’s this line right here and I’ll put a line chart on so you can see this a bit better after they announced that and they did that at their may shareholder meeting.
Uh when they announced their earnings there, the stock doubled in price into the end of the year.
And then what happened after that?
Well, the world fell into a bear market and uh NVIDIA actually got uh two thirds of its share price just lopped off.
That was a pretty big hit it.
But once it found its footing in late 2022 until the current day, that is a 10 times increase in share price.
So forgive the handwriting there.
But that is 1000% of what it was.
That’s pretty impressive.
Now, I think we can also look at some of the other people, other members in the semiconductor space.
This is actually our mega caps.
But this gives us an opportunity to show how Nvidia’s ranking has changed over the few years.
Now, NVIDIA right here is number three and you can see it’s sitting right next to apple, it has changed places with apple a little bit and it’s also closed above $3 trillion.
Once a couple of days ago, we have to see if that can be repeated.
But I remember when NVIDIA was all the way over here or all the way up here and it’s been impressive to see this meteoric rise.
I don’t think a share company has ever increased in value this quickly before at these levels.
All right, Jared.
Thanks so much for breaking that down for us here.
We’re just getting started on a morning brief.
Coming up Wall Street is bullish on lift following its Investor Day.
We’re going to break down those calls next and us jobs for blowing past expectations.
We are going to hear from acting labor Secretary Julie su plus our executive editor, Brian saw the speaking with the Ceo of Campbell.
So getting his take on the state of the consumer state.
T that’s the next hour, 10 a.m. hour of catalyst.
We got all that for you and more.
You’re watching Yahoo Finance Time for some trending tickers some more positive news in the chip sector as we’re taking a look at shares of Taiwan Semiconductor.
They’re seeing sales climb 30% in May as artificial intelligence boosted demand here.
So not the best year over year change over the course of this year for the company but still very positive up 30.1% to be exact in terms of the net revenue that they saw uh during the month of May.
They did have a booming month, last month during April where net sales moved higher about 59.6% here.
And remember that this is the biggest chip maker for Apple and for NVIDIA.
So the reason why this is such huge news is really what this signals for the broader market and really detailing that A I demand and exactly where that stands, we can take a look at these numbers clearly that A I boom is still intact, not showing really ma many signs of slowing down.
And it’s also very similar to some of the conversations I had with CEO S and CFO S out of of America’s tech conference earlier this week when I spoke to the CFO of Super Micro.
When I spoke to the CFO of Lamb research, they were really telling me just about that unrelenting demand that they’re seeing for their chips for their supply networks.
And the fact that that is not slowing down any time soon, the massive growth that they had seen over the last several quarters for their products.
That is something that they see remaining intact now for some time to come.
When you take a look at this report, it’s not only really what’s being fueled in the chip space, but also what we’re seeing for smartphones as well and the demand there obviously for chips there.
But more specifically that demand rebounding for smartphones is one of the areas that had lagged over the last over quarter.
So we’re starting to see that recovery play out.
And as a result, clearly a name like TSMZ, the chip maker there rising with sales here up 30% in the month of May alone.
Yeah, look, it’s been a big week over this past kind of two week period, even as you think about what’s taking place at Computex where a lot of companies and Ts MC included for uh a lot of the different announcements that we’ve seen come out from NVIDIA from uh Intel, from all of the CEO S that took the stage trying to joust right now for attention within the generative A I chip demand landscape for TS MC.
And I’m gonna nerd out here for a hot second here based on what I’ve learned from uh the good over at trend for us as they’ve been kind of keep Tinu to keep tabs on this and pulse of it.
Um tsmzn three E that essentially went into production fourth quarter of 2023.
And then you’ve got one of the other major efforts that they’re having going forward here.
The yield performance is close to that of A N three E while the customer product designs have already been taped out.
So what does this mean?
They’re continuing to innovate at the same pace and rate that many of the others who are trying to make sure that they can get the design, the fabrication and uh ultimately bring all of this to market and put it in data centers.
Um They’re, they’re not falling in a ditch here.
They’re clearly continuing to try and maintain mar fabrication market share as a lot of these other major players are certainly getting some eye popping attention uh as Computex just wrapped up, I believe yesterday.
Um capping off this week here.
All right, let’s take a look at docusign.
It’s another trading take here on Yahoo Finance share sinking after its billings guidance for the second quarter coming in below expectations.
The company though did see revenue in the first quarter climb about 7% from a year ago.
We are seeing some pressure on the stock here this morning with shares off nearly 8%.
When you take a look at the analysts commentary here, Morgan Stanley saying that docusign results and guidance obviously coming in below expectations management, pointing to several encouraging the demand trends near term, expressing its medium term optimism around intelligent agreement management.
One of the products there.
So even though this was a disappointing report on many fronts, there is some reason at least management trying to express that clearly to the street reason to be optimistic in the medium term here.
And again, you’re looking at a three month chart here with gains of just around 4%.
But again, the early reaction to this ahead of the opening bell, you’re looking at losses of just over 7%.
Yeah, just a question of, you know, what is the next iteration of growth look like?
Does it need to be acquired?
I mean, did they, did they did just announce um and of course, the Lion acquisition after Q One docusign closed that acquisition of, of docus Smartt um Lion essentially, which is uh what they call a leader in A I Based Agreement technology uh and trying to automate workflows and such.
So does that actually move the needle for getting more of the remaining performance obligations of the RP OS are building out uh the customer book and pipeline here?
And I think the jury is still out if you ask a lot of the investors here today, especially if you’re looking at shares right now down just shy of 8% here pre market.
All right, let’s take a look at Lyft because it’s another trending ticket here in Yahoo Finance, a top trending taker this following the investor day that we brought you yesterday.
The reason why we’re talking about this today is because we’re starting to see some analysts upgrades in reaction to what we heard.
So the ride sharing company getting an upgrade here from loop capital from hold to buy and a double upgrade from Bank of America.
They went from underperform to buy.
And then as far from the only uh more bullish commentary that we’re getting here from the street outside Gordon uh Haskett there, analyst Robin Robert M uh Mullins saying that investor skepticism on financial targets offers low risk, high reward, a call option there.
So again, reason to be a bit bullish here on these prints when it comes to the B of A specifically that double upgrade that I just mentioned, they were saying that this Investor Day providing 2020 seven targets well above the streets expectations, increasing confidence in that longer term trajectory.
And I think that was really one of the questions going into this Investor day was the ability here to try and recapture some of that market share from Uber.
Yeah, and, and loop capital’s Rob Sanderson essentially saying this could be a successful turnaround for the company and a lot of optimism here that he’s putting forward looking at this percent, compounded growth rate, gross bookings through 2027 is what that was based on.
Uh And then you look at some of the margin expansion 4% of those bookings.
So ultimately just remarking on it and having a lot of optimism going forward from here.
And so it really does come with question of where, where else, uh, Lyft and Uber, both of them are navigating or that might be pushing back on the wide prices that they are seeing too.
Um, and, and that is something here, especially in New York where thank goodness for the congestion pricing just being pushed out a little bit because we would have directly had the hit of that.
Yeah, I mean, you’re exactly right to bring up that point too.
Right.
When you talk about the congestion pricing, I’m talking about too.
But more broadly speaking, consumer spending, if consumers are under pressure, if they’re pulling back, then maybe they’re not gonna be hailing as many Ubers as many as I hop on my bike.
Exactly.
So that is a real risk here.
At least in the short term when you’re talking about some of these consumer facing games, I should probably be on my bike more anyway, up next.
Everyone.
We’ve got the opening bell on Wall Street.
We’re riding straight towards it.
Plus after our hotter than expected jobs, data prints, we are speaking to the acting Secretary of Labor Julie Sue on the strength of the labor market.
I mean, we should just give her the job by now anyway, that’s right after the break.
Stick with us.
Oh, yeah.
Let’s go.
Opening bell on Wall Street and in Times Square at the NASDAQ where they’ve got the fun fetti on stacks there.
All right.
I just wonder where, like who sources that funfetti.
Anyway, way, start ringing the opening bell there.
They get some little orange confetti flakes that continue to rain down from the sky.
And then you’ve got quadratic, oh man, PTSD from my high school days there.
Quadratic ringing the opening bell at the nyse talking math.
Everyone here.
Uh, they probably do something else.
But anyway, we’re taking a look at the opening there on Wall Street and in midtown, let’s get to it with the market open.
We got some declines across the board after this hotter than expected inflation, print investors not happy that this could signal FO MC that decides to push out to those rate cuts.
Yes, it is a bit worrisome here, at least for the street.
That’s how the street is looking at this.
Obviously a hotter than expected inflation or a hotter than expected.
Excuse me, jobs for pointing to a strong us economy in the market though viewing that as a negative just in terms of that timing for that first rate cut.
When you take a look at those expectations, those are now being pushed out beyond the summer.
So again, we’re see that reflected in the major averages.
You’ve got the dow now off just around 91 points, you’ve got the S and P off about 3/10 of a percent.
But a lot of the action coming in the bond market here today, we’ve got this boost in yields.
You got the 10 year yield now at 441 up 13 basis points of this dramatic move higher.
Also the two year really moving here on the heels of this print and then also breaking it down by sector action.
We’re seeing red across the board in terms of the worst performers, real estate materials, the utilities here, you got real estate off just about 1.6%.
Not exactly a huge surprise given the uh the dynamics of the market right now.
And also real quick, let’s take a look at the NASDAQ and take a look at NVIDIA.
You’re looking at NVIDIA opening off just around 1.7%.
So again, take a look at this, not only because it crossed that three trillion in valuation, but also ahead of the stock split 10 for one stock split that’s going to take effect after the market closed today.
Well, the main jobs appear to coming in hotter than expected.
The US adding 272,000 jobs that was well above expectations for more on the state of the labor market.
Yahoo Finance is Jennifer Schonberger is standing by with acting labor Secretary, Julie Su Jennifer.
Take it away.
Hi, thank you so much as I am here with acting Labor Secretary, Julie Su for more on this morning jobs report secretary who always great to see you for to thank you the report stronger on many metrics but the unemployment rate taking up to four percent.
We haven’t seen that level since January 2022.
The same time the labor force participation rate fell and the household survey showed a drop of 408,000.
So, are these signs of weakness to come?
I don’t think so.
Jennifer, you know, the numbers speak for themselves, right.
272,000 jobs created last month and the unemployment rate is still at or below 4% for the longest stretch since the 19 sixties were 30 months straight now.
And to be honest, many people thought that even 4% was too low to get to, we would never get there.
Certainly not as quickly as we got there and not for as long of a time and real ages are, you know, continue to be very solid and the prime labor force participation rate take up a tiny bit.
And you know, again, overall just a very solid month ainu was of a very solid year and a very solid economic recovery.
What about the fact that where we look at the job growth and where it’s coming from?
It seems to be the government sector, health care sector month after month.
What is that saying about the job?
So remember the each month it has been very broad based across many sectors.
So yes, health care, yes government, but also professional services, also construction, also leisure, hospitality, the overwhelming majority of growth that we’ve seen has been in the private sector.
And so there’s just, it’s just overall, such a strong, steady, stable, you know, continued growth that I think this is certainly the coveted soft landing that many people said wouldn’t happen.
And again, just going to none of this was promised, none of this was inevitable.
It happens because of steady leadership.
And that is what, you know, President Biden’s economic agenda has always been about this broad based growth, investing in America, creating more good jobs, creating more opportunity.
And we are seeing the results of that in the numbers.
So you think we are here, we have gotten this off landing.
Yes, I mean, you know, it’s such a hard answer just because we’re always keeping an eye on what’s going to happen, right?
We’ve got to continue to do the good work.
We’ve got to continue to, you know, invest in good jobs.
We have to continue to make sure that there’s safe roads and bridges and bring manufacturing home.
All of this work is the continued work of this administration.
But yes, I don’t think there’s any way but to say that the numbers don’t lie and say that, you know, this is a soft landing, strong job growth, low levels of unemployment, high labor force participation rate, all the things that you would want, how much of this is to immigration and Golden Sachs had some stats out this week.
They said they think that 80,000 jobs per month last year were owed immigration this year, they expect to tell one of around 50,000.
How much do you think immigration is adding to the story?
Well, immigration has always been a part of our, our labor force, right?
Part of our talent pool that’s been throughout history and certainly immigrant workers are part of the story too.
Now, the majority of the jobs that have been created have gone to native born workers.
So I think that’s important too.
And what it really tells us is instead of an economy where we have a shrinking pie that has to be divided up among more people.
We are seeing a bigger pie overall.
That’s what the job growth demonstrates, right?
That’s what the over 15 million jobs created since the president has come into office.
The most of any president in that same time period tells us when you create a bigger pie, there’s more for everybody.
How do you see President Biden’s new executive order on the border impacting the labor force?
Well, we don’t really see an impact in the labor force at all.
I will just say as the acting labor secretary, I think it’s important to emphasize that all workers regardless of status have the protections of labor laws.
And that’s why we keep talking about good jobs that we want everybody to have a good job.
That’s why this summer I’m going to, you know, I just launched our good job summer tour, going to cities across the country to talk about the jobs that are being created to talk to working people and their families about the impacts of those good jobs.
And to really highlight that this is fundamental to the President’s vision of how we build a strong economy and strong communities.
One major highlight of this report is the women’s participation in the workforce hitting another record high for a second month in a row.
Secretary, what is this to?
I know we’ve talked about this year that women have in so many ways powered the economic recovery that we’ve seen.
And as you said yet again, the labor force participation rate for women reached another all time high.
This is the highest since this data was collected first in 1948.
And as you also noted the second time, the second month in a row and actually the third month total since this president come into office.
So this is what an equitable recovery looks like.
This is what it means to create opportunity for all.
And historically, we know that women come into the labor market when there are supports for them.
And one of those supports is when the wages are higher and that you know that there are good jobs of women, women look for work and they’re finding it.
And if we were to have a child care were more affordable in this country, when we see even higher numbers.
And what would that mean for economic growth?
Yes, I mean, I, you know, I also will never get tired of citing, we did a study here that demonstrates that if this country invested in child care, like, truly, you know, affordable, reliable child care, which we know remains a challenge but also good jobs in child care, which would help with the supply of child care.
Then it would allow about million more women to come into the labor force and that would generate $775 billion of economic activity a year.
So I always say, you know, we can’t just talk about can we afford child care?
We have to recognize that.
How can we afford not to invest?
Secretary?
Thank you so much as always.
So great, so wonderful.
That’s acting Labor Secretary Julie.
So you’re watching Yahoo Finance, we will be right back after this Gamestop shares halted amid volatility in the stock of shares uh halted right around of a drop of 5.5%.
Yeah, just around 5.5%.
So pairing some of those earlier losses have been off over 15%.
The company announcing its plans to sell another 75 million shares also releasing some of the latest uh sales figures there showing a decline worse than expected.
Uh really showing the fundamentals clearly have not changed with the company.
No surprise there, but again, increased volatility surrounding this name.
We also were in Katie Keith Gill expected to speak right around noon Eastern time today.
So that of course led to the rally that we saw in shares yesterday.
So again, Gamestop halted uh for volatility in early trading.
I mean, it’s basically a blizzard of different events that are taking place here.
You have share price solution with the additive 75 million shares that are gonna be introduced into the market.
Then you have the fundamentals that are continuing a trend of being bad.
But the year over year decline from uh $1.237 billion in the prior year, first quarter now to $882 million in net sales for the first quarter.
And that based on the stats that the company released this morning and then, oh yeah, you’ve still got a ton of the retail trader activity that’s really going to be prominent and potential uh to really move the stock around in, in many different directions.
I mean, as you mentioned, we’re gonna be standing by for one potential major announcement over youtube.
Uh We’ll see what that is or just an update.
Uh We’ve gotten yellow updates from an account believed to be Keith Gill posting to this juncture.
So uh all of these things considered you’re seeing yet another trading pause.
We had already seen this happen four times in one day during May as well.
So all that considered we’re continuing to track shares of GME everyone.
We’ve got all your markets action ahead.
Stay tuned.
You’re watching Morning Brief Pune shares have been on a tear this year.
The stock up just around 40% since the start of the year driven by excitement surrounding the A I boom.
An exclusive interview with Yahoo Finance, Palun Ceo Alex Carp discussed the company’s A I platform and ultimately what it means here for customers and investors take a listen.
What they’re going to find is the large language model is much more like a chemistry experiment.
The outgrowth of which is a something that is useful when refined where we impose the logic of your business on the large language model in the security and intellectual logic of your business.
And this is transformative and what it means for investors and others is there is value in this market.
People, you can identify where the value is very easily joining us.
Now we want to bring in Brent, Phil.
He’s a Jeffrey’s senior analyst, Brent, it’s great to talk to you.
So taking a step back here when you take a look at Palantir shares are up just around 40% since the start of the year.
Lots of questions just around the hype surrounding the stock.
Clearly, it’s been a wild run for some investors.
I’m curious just your take on the current position of Palantir right now.
I believe you still have a hold rating on the name.
Yeah, good morning.
Uh Fundamentals.
Are are obviously improving at Punier.
Uh What holds us back right now is valuation.
It’s the single most expensive name in our coverage universe.
Uh So great companies with great uh momentum uh sometimes are look expensive uh on the opportunity set.
And we, we obviously believe that opportunity set is enormous for Pune and A I.
Uh but we believe there’s going to be better entry points for the stock.
Uh the fundamentals, they’ve done a really nice job, you know, the beginning of last year, but basically 75% of the year they didn’t produce anything.
And then in Q four things started to turn, they really cleaned up all the, the bad execution, uh last year in Q four and then in Q one, they had a really good number.
So you’ve had two good quarters.
I think they got in front of the A I uh wave better than others.
Uh Clearly A I is really an infrastructure.
If you look at what’s happening with NVIDIA and all the other names, it really hasn’t come to the software layer.
Um Palantir is bucking that trend.
They have seen great momentum uh in, in their suite and customer adoption has been, has been good.
So give them credit where credit’s due.
They’re doing a fantastic job there.
But uh again, you go back to multiple being the, the single richest name and in software.
So you have valuation risks right now.
You don’t have fundamental risk fundamentals are, are really good.
Yeah, I mean, it’s particularly interesting too when we hear Alex Carp talk about the biggest use cases and, and how important their company is and their estimation or calculus for what they believe the world could move towards unfortunately, and, and it, it really is trying to figure out which governments, which companies are best, trying to position themselves.
If we do see even more geopolitical tension, how much of that can be part of the, the thesis into why palant would succeed rather than other factors.
It, it helps.
So, you know, half their business is government, half of its commercial uh commercial business is doing really well.
The government business isn’t doing as well, but is, is, is still a AAA bright spot.
Uh And so certainly more tensions, you know, effectively need software to effectively do scenario planning, to do disaster planning, to understand uh you know, what assets you have, where they should they be.
Uh So they’ve always thrived, you know, in, in that uh in, in that, that part, I think that the cha the challenge for investors on the government business is one, it’s hard to really talk to the CIA or whoever has the software to really actually see what it’s doing and does it work?
Right.
So what we’ve said to investors is the government business is really difficult to analyze because it’s hard to talk to most of those governments.
They don’t want to talk to anyone about how they’re using it.
It’s very secretive.
So you effectively cannot predict what happens in the government business.
On the commercial side.
We can do a better job of that.
And I think that’s where we’re seeing great success.
United Airlines.
Uh a handful of the other great case studies that they’re getting you.
Those are real case studies on supply chain, aircraft maintenance.
Uh They’re doing a really nice job there.
So the government business has been in, in, in, in our opinion, it’s, it’s, it’s gonna be a great, it’s great, but uh you’re really be able to do the work in the commercial business and the commercial inflection is happening.
And I think this is the area that needs to continue to improve because the government piece is just unanalyzed.
You don’t know when it lands, they’re big deals.
You don’t know when one country is going to buy the product or another.
And they, they tend to be massive deals.
They tend to not, you know, be little deals or they’re huge deals.
So when they land, um it’s just, it’s difficult on timing.
Uh So no, no doubt it will help them.
And I think their position in A I and the success stories that they’re getting now are really gonna be what’s gonna keep exci investors really excited, which is when they launched this company.
It was like when Musk launched uh the, the Tesla, it was unaffordable for 90% of the population.
Now, nurses and interior designers and accountants can buy the Tesla because they brought to the mass market and pune bringing this now to the mass market.
That’s what is exciting me the most.
At the beginning, it was really built again for special people uh that have special budgets and, and now they’re, they’re trying to eventually change that by saying, hey, you can go into a boot camp, you can buy this product for your supply chain, you can get it up and going and in a month or two get value and then build into it if, if you get success.
Um That’s a great call.
We love that strategy.
That’s the same playbook that Elon Musk ran.
Uh So, you know, hats off to them.
Uh You know, we missed part of the move in the stop but, but I also think, you know, you can be patient given, given some of the valuation concerns that we have.
All right, fair enough.
II, I wanna switch gears here just a bit and, and talk about Microsoft because we have regulators here continuing to crack down on big tech.
Now, the DOJ and the FTC reportedly planning probes into NVIDIA Open A I and Microsoft.
But let’s focus on that Microsoft part of it here because when it comes to your coverage here, the questions surrounding regulators and an impact that that is going to have here on some of these larger cap names and, and Microsoft’s uh partnership with Open A I already facing probes uh overseas in the UK and the EU how big of a risk do you see this as a risk here for the company?
I don’t see it as a risk at all.
Uh because all regulatory overhang concerns have always been bucked by big big Cap tech.
If you were worried about Meta or Google or Amazon or Microsoft, you missed the picture, you missed it.
And none of these issues have been an issue.
The regulators do what they do is to protect you and I’s consumers and, um, it’s their job to investigate, uh, ultimately how Microsoft and these companies deal with it, I think is, is an important thing which is they’re adding value to how we work every day.
And if they did it in a legal compliant way, uh, then there’s no issue.
So, um, I don’t, I don’t see an issue.
There hasn’t been an issue and the, the playbook and tech is on the best tech names, regardless of what regulatory or anger is.
And that’s worked.
And that’s been my thesis for many years and I think it’s worked.
Um, so now in the age of a, I, I’m not sitting here saying, you know, things shouldn’t be regulated.
That’s not what I’m saying.
What I’m saying is we should have clear laws and rules, but you can’t regulate when there’s no rulebook.
And this goes back to when Facebook was $100 a share.
And Zuck got investigated and I’m like, there’s no playbook or no rulebook.
So don’t make up the rules and apply, set the rules and then they didn’t follow them, then they’re in trouble.
But you can’t make up rules in A I when there is no rulebook.
Right?
So we need a rulebook.
We need regulation, we need to protect all of us.
And I think ultimately, Microsoft is a company for the last 20 years.
I’ve covered, they only want to help consumers.
They’re not going to launch something that’s gonna hurt us.
It’s, it’s gonna help us.
So as long as they follow that playbook, we’re fine.
Keep owning these stocks.
Any regulatory uh pull back in the stocks, you, you, you, you, you buy, you buy the weakness.
All right, good to hear that Microsoft is not gonna hurt me going into the weekend.
Brent.
Still, Jeffrey senior analyst, Brent.
Great to see you.
Thanks so much.
Thanks.
Let’s talk a little NVIDIA here.
NVIDIA briefly topping Apple as the world’s second most valuable company this week.
But could the tech darlings run soon hit the brakes?
According to S3 partners, there are about $34 billion in outstanding short bets against the chip giant.
That’s about the same amount short sellers have bet against Apple and Tesla combined though according to data analytics firm.
So ultimately, this is all coming ahead of Nvidia’s big stock split where if you look at some of the historical performance 12 months after and this is according to B of a research, 12 months after you see a stock split, they tend to beat the index.
The company uh initiating the split tends to beat the index here.
And the return is typically about 25.4% versus the 11.9% return of the S and P 500 here.
But the shorts certainly are adding up at least in this near term period of time.
The shorts are adding up.
And this is gonna be interesting to watch here when you take a look at NVIDIA following a suit of some of the other uh larger cap tech names in uh splitting their stock here over the last several years.
I believe it’s the fourth uh magnificent seven name to split their stock over the last several years.
So you can take into account exactly what this will mean for shares.
Ultimately, in the short run, it could be a little bit of a boost.
It could provide a little bit of uh a gain here for shares.
But like many of the strategists that we have talked to over the last couple of weeks since this was initially announced.
They, they’re not exactly expecting this to be the main driver here of the stock and any sort of movement that we are going to see, it’s gonna seem gonna be more of a blip than anything else.
But again, the data from Bank of America was interesting just in terms of that out performance.
But when you take a look at their full chart there, you can see there is clearly a discrepancy when you break it down by decades and the out performance versus in a performance of what we had seen.
But overall that average was just around 25%.
So clearly outpacing those that did not over the last several years.
I know you’ve seen me grinning sometime and it’s probably just ignites fear because it’s just like, what the heck is he about to say?
But I would say this if Jensen Wong and NVIDIA are able to deliver another goldilocks report after this quarter, he needs to take a page out of Elon Musk’s playbook and just go after some of these, these short sellers and start selling some all leather shorts but short shorts, like the ones that the guys are wearing out this summer here just uh I won’t go into too much, but ultimately, maybe, maybe he shorts are in.
Is that my takeaway?
I don’t, I don’t know, I don’t, I’m not saying they’re in, he just wears leather jackets, wanna have some leather shorts that go with it, some, you know, leather short shorts we’ll see maybe on to something Elon did that.
All right.
Well, coming up, we dive deeper into the May jobs print and what it ultimately means for the fed, our executive editor, Brian Zazi, also speaking with the CEO of Campbell’s Soup.
When we talk about the consumer, we’ve got all that and more on catalyst.
Next.
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