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Nvidia saves the day! At least for a little while. · The Financial Exchange Show

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Speaker 2: Chuck Mike Tucker with you here today on what might
1:16
Speaker 2: be the one and only ever Jobs Thursday. As we
1:22
Speaker 2: we have the jobs data for the month of September.
1:25
Speaker 2: It was released at eight thirty am Eastern and well,
1:29
Speaker 2: it is, you know, an extra month out of date.
1:32
Speaker 2: I do think it still is, you know, worth discussing,
1:34
Speaker 2: just because it gives us a more current picture of
1:36
Speaker 2: the labor market than the August data. What we saw
1:40
Speaker 2: was one hundred and nineteen thousand jobs added for the month.
1:44
Speaker 2: Despite that the unemployment rate ticked up to four point
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Speaker 2: four percent, and actually the unrounded number just a whisker
1:49
Speaker 2: shy of being four point five percent, Say a whisker, yes,
1:55
Speaker 2: the unrounded number was four point four to four. So
1:58
Speaker 2: you were quite literally one hundredth of a percent away
2:02
Speaker 2: from it being four or five. And so I think
2:06
Speaker 2: it's something where it's a jobs report that has something
2:09
Speaker 2: for everyone, depending on what your point of view is
2:12
Speaker 2: on the economy. If you believe that, if you want
2:17
Speaker 2: to believe that we're starting to see an inflection up
2:20
Speaker 2: in job growth, this gives that to you. This also,
2:24
Speaker 2: by the way, matches what we have seen from ADP.
2:30
Speaker 2: Who remember, ADP is now publishing weekly four week moving
2:35
Speaker 2: averages of what they expect job growth to be. And
2:38
Speaker 2: ADP also showed an uptick in job growth towards the
2:41
Speaker 2: middle and end of September as well. So this matches,
2:45
Speaker 2: you know, pretty closely what we saw from ADP. Subsequently,
2:48
Speaker 2: ADP's numbers have worsened in recent weeks, but it's a
2:52
Speaker 2: couple different sources telling you, yeah, there might have been
2:55
Speaker 2: something going on in September that helped job growth. The
3:00
Speaker 2: other side of the story is, okay, so you had
3:03
Speaker 2: this job growth, but the unemployment rate ticked up to
3:06
Speaker 2: four point four percent. If you're someone who believes, hey,
3:10
Speaker 2: the economy is weaker and the Fed should be cutting
3:13
Speaker 2: more rapidly, that jump to four point four almost four
3:16
Speaker 2: point five percent gives you some data in your camp
3:22
Speaker 2: where you can say, yeah, maybe the Fed should be
3:24
Speaker 2: cutting in December instead of trying to put the brakes
3:26
Speaker 2: on it. So I think overall, you know, again, even
3:30
Speaker 2: just in the headline numbers unemployment rate and jobs added,
3:33
Speaker 2: you get, you know, some different pictures in terms of
3:35
Speaker 2: what this report is saying.
3:37
Speaker 3: You do.
3:37
Speaker 4: I think a few things to really stress about this report.
3:40
Speaker 4: First and foremost, the data collected sixty to seventy days ago.
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Speaker 4: It is fairly stale at this point. It is pretty
3:48
Speaker 4: old data that we are talking about. When it comes
3:50
Speaker 4: to this Job's report. It would have been released about
3:53
Speaker 4: forty days ago, but again government shutdown. This data is
3:58
Speaker 4: fairly stale in terms of looking at But to your point,
4:02
Speaker 4: we saw a reversal in job creation which had been
4:05
Speaker 4: excuse me, had been really weak throughout the summer. The
4:09
Speaker 4: unemployment rate piece, you know, when you pair that with
4:12
Speaker 4: a strong job creation number, does not concern me all
4:16
Speaker 4: that much. Right If this had been twenty thousand jobs
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Speaker 4: created and unemployment taking up to nearly four point five percent, yeah,
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Speaker 4: you start to get a little bit concerned. With one
4:24
Speaker 4: hundred and ten thousand jobs created an unemployment at four
4:27
Speaker 4: point four percent, I'm not immensely concerned about it. To me,
4:31
Speaker 4: this Job's report one because of its you know, because
4:35
Speaker 4: of the fact that it's old. Two because of the
4:37
Speaker 4: fact that it was not dramatically bad. I don't think
4:42
Speaker 4: does much to change anybody on the federal reserves opinion
4:45
Speaker 4: of where this labor market is and therefore what they
4:47
Speaker 4: should be doing at that December meeting.
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Speaker 2: Seeing me FED fun futures basically have moved a little
4:53
Speaker 2: bit today, going from a thirty percent chance of a
4:56
Speaker 2: rate cut at the December meeting to a forty three
4:58
Speaker 2: point eight percent champs of a rate cut at that
5:00
Speaker 2: December meeting. So the market kind of saying the same thing, like, yeah,
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Speaker 2: maybe there's a little bit of a stronger chance, but
5:06
Speaker 2: not much. Look, here's here's the thing. Let's actually get
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Speaker 2: more into what this report said and then we can
5:14
Speaker 2: talk about the FED after. So in terms of stuff
5:17
Speaker 2: under the hood again, let's kind of do good news
5:20
Speaker 2: bad news. This is good news. Long term unemployment in
5:23
Speaker 2: September dropped by one hundred and sixteen thousand people. Unequivocally
5:27
Speaker 2: good news. Yeah, like you don't want to see people
5:30
Speaker 2: unemployed for longer periods of time. That is good. Also
5:35
Speaker 2: part time for economic reasons, basically people who are part
5:38
Speaker 2: time because they could only find part time worker their
5:41
Speaker 2: business was not giving them enough hours. That dropped by
5:44
Speaker 2: one hundred and seventy thousand people. Again, unequivocally good news.
5:48
Speaker 2: Fewer people saying that they're part time involuntarily is a
5:51
Speaker 2: good thing. Bad news. Unemployment rate for women rose zero
5:56
Speaker 2: point four percent for the month.
5:58
Speaker 5: It's a big jump.
5:59
Speaker 2: I don't really know what to make of that. That
6:00
Speaker 2: is a massive jump in one month, and we're gonna
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Speaker 2: need to see how the next couple months come out,
6:06
Speaker 2: because you don't normally see a move like that, So
6:09
Speaker 2: that's a little unusual on that side. Another one that's
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Speaker 2: kind of like, you know, eyebrow raising. You look at
6:15
Speaker 2: it and you go, Asian unemployment jump by point eight percent
6:19
Speaker 2: for the month. Doesn't quite like like, that's that's a
6:24
Speaker 2: huge jump in a month. I went from three point
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Speaker 2: six to four point four percent. Yeah, so let's you
6:29
Speaker 2: know again, I know that these smaller subsets can be noisy,
6:32
Speaker 2: but you know, okay, you look at those and you're like, okay,
6:34
Speaker 2: what's what's what's going on here? This is this is
6:36
Speaker 2: a little little strange. Other things that still aren't great news.
6:40
Speaker 2: Manufacturing employment fell for another month, down six thousand jobs
6:45
Speaker 2: over the course of the month. So despite the push
6:49
Speaker 2: to try to, you know, really revitalize American manufacturing, it's
6:54
Speaker 2: not showing up in the jobs data here, right. Other
6:58
Speaker 2: things that are notable in here when we look at
7:01
Speaker 2: aggregate payroll growth basically the combination of how many more
7:05
Speaker 2: people are working and how much more are they making.
7:07
Speaker 2: It's running at four point six percent year over year.
7:10
Speaker 2: That is fine. My general metric is as long as
7:14
Speaker 2: it's above four in below six, you're in a pretty
7:17
Speaker 2: good spot where growth is going to be strong enough,
7:19
Speaker 2: but inflation is unlikely to be too high. And so
7:23
Speaker 2: four point six is towards the lower end a little bit.
7:26
Speaker 2: But it is something where again, like you look at
7:30
Speaker 2: the trend that we have here on this series, because
7:35
Speaker 2: again the trend is what matters, like how are we
7:37
Speaker 2: moving directionally? And there was a little bit of a
7:39
Speaker 2: downtick over you know, from April through August where it
7:42
Speaker 2: went from like five and a quarter down to four
7:44
Speaker 2: point five percent aggregate payroll growth. This bumps that back
7:49
Speaker 2: up a little bit and maybe says, okay, could you
7:51
Speaker 2: find a bottom in the you know, the mid fours,
7:54
Speaker 2: that would be totally fine. Likes, that's good news if
7:57
Speaker 2: you end up seeing a bottom there. But this is
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Speaker 2: one data point. So I think that aggregate payroll number
8:04
Speaker 2: is good to see that it didn't worsen like it's
8:06
Speaker 2: it's good there. Uh U. Six the underemployment rate dropped
8:13
Speaker 2: from eight point one percent to eight percent. Again, another
8:17
Speaker 2: good piece of data there that there are fewer people
8:21
Speaker 2: saying that they are under employed. This largely is pulled from,
8:25
Speaker 2: you know, people who are part time for economic reasons
8:27
Speaker 2: and things like that, so you know, it includes those
8:30
Speaker 2: people that we've already discussed, but still good news to
8:33
Speaker 2: see and put a ratio on it so that we
8:35
Speaker 2: can see what's going on there. So overall, I think
8:38
Speaker 2: that the takeaway from this September report is, yes, it
8:42
Speaker 2: is stale. There's more good than bad in this And
8:47
Speaker 2: if we get another like as an example, if you've
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Speaker 2: got five more reports so that you have a six
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Speaker 2: month period that looks just like this, you probably look
8:55
Speaker 2: at this and say, yeah, we'll take that. That's that's
8:57
Speaker 2: it's it's not the best, you know, jobs numbers that
9:00
Speaker 2: we've ever seen, but it puts to bed the idea
9:02
Speaker 2: that you're seeing anything bad going on in the labor
9:05
Speaker 2: market if you were to get more reports like this.
9:07
Speaker 4: So help contextualize this, because you know, when I sit
9:10
Speaker 4: down with when I sat down with a few clients recently,
9:13
Speaker 4: they're pointing to the Challenger Gray and Christmas data of
9:15
Speaker 4: the most announced layoffs that we've ever seen. I keep
9:18
Speaker 4: hearing from people that they expect the labor market to worsen. Again,
9:23
Speaker 4: this data is stale. It is sixty days old. Now,
9:28
Speaker 4: how should we contextualize this? When you continue to hear these,
9:33
Speaker 4: you know, weakening data points about the labor market, whether
9:36
Speaker 4: it's you know, weak seasonal hiring or layoff announcements that
9:40
Speaker 4: we haven't seen in a decade or more. I guess,
9:44
Speaker 4: how should we take this in the context of that
9:46
Speaker 4: additional data.
9:47
Speaker 2: A couple things. First, you know, again, this is stale,
9:50
Speaker 2: so you know that you've said that already. Second piece,
9:52
Speaker 2: the Challenger Gray and Christmas numbers. They're the employment firm
9:55
Speaker 2: that reports, you know, the number of announced layoffs in
9:57
Speaker 2: any month. Remember they don't like or small companies, and
10:01
Speaker 2: small businesses employ most of the people in the United States.
10:05
Speaker 2: And so I think that overall, like those announced layoffs,
10:10
Speaker 2: it's not really worth your time to pay attention to
10:13
Speaker 2: the Challenger Grand Christmas numbers. Quite honestly, like, there is
10:17
Speaker 2: no serious person in the investment world that uses that
10:22
Speaker 2: as a reliable signal, agreed, because it's not like it
10:26
Speaker 2: It doesn't mean anything about where things are going.
10:28
Speaker 3: To go.
10:28
Speaker 2: It's not predictive of anything, and so it's not a
10:32
Speaker 2: useful signal in any way, shape or form when we
10:37
Speaker 2: look at, you know, the concern that people have it
10:42
Speaker 2: still is this is reflected in the economic data as well,
10:45
Speaker 2: and that it's a really low hiring environment right now.
10:49
Speaker 2: And so even though we are not seeing a broad
10:54
Speaker 2: based increase in you know, the number of in unemployment,
10:59
Speaker 2: and look, you can even make a case that we
11:00
Speaker 2: are seeing, you know, something in unemployment, and I'll discuss
11:03
Speaker 2: that even though you're not seeing like a ratcheting up
11:07
Speaker 2: in unemployment, you know, and on a non linear fashion,
11:10
Speaker 2: you like, you're not seeing it moving up exponentially, it
11:13
Speaker 2: still is really hard to get a job right now
11:15
Speaker 2: because the Jolts data and the Indeed data tells us
11:19
Speaker 2: that hiring is really slow. So I think that this
11:23
Speaker 2: data is consistent with an economy that is slow to
11:27
Speaker 2: hire but generally has been fairly slow to lay off.
11:31
Speaker 2: And remember this report also pre dates some of a
11:35
Speaker 2: large number of the layoff announcements that we have seen,
11:38
Speaker 2: right and so it may not incorporate whether or not
11:42
Speaker 2: there has been an uptick in the layoff rate or
11:44
Speaker 2: the discharge rate.
11:46
Speaker 4: I think my main conclusion, if I'm looking for one
11:49
Speaker 4: solid piece of information here, this is a significant reversal
11:53
Speaker 4: from the last four months of job creation. The last
11:56
Speaker 4: four months of job creation may through August average somewhere
12:00
Speaker 4: around twenty thousand jobs. Yep, So this is we got
12:03
Speaker 4: over one hundred thousand, yes, five x that number. This
12:06
Speaker 4: is a big reversal from that four month trend over
12:08
Speaker 4: the summer. If you stick with it, then we do
12:12
Speaker 4: not really have concerns over the labor market. As we
12:15
Speaker 4: always say, don't take one data point to mean all
12:18
Speaker 4: that much. And also recognize we're not getting another data
12:21
Speaker 4: release on this stuff for quite some time, and the
12:24
Speaker 4: one we do get will be incomplete.
12:26
Speaker 2: So let's take a quick break. When we return, let's
12:28
Speaker 2: talk a little bit about what that data release schedule
12:31
Speaker 2: looks like and what this means for the FED.
12:33
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13:35
Speaker 2: So yesterday the Bureau of Labor Statistics published their updated
13:40
Speaker 2: release States for a whole bunch of data. Obviously, today
13:44
Speaker 2: was the September Employment Situation Report that was originally going
13:48
Speaker 2: to be published on October third, so that was published today.
13:51
Speaker 2: The Producer Price Index that was scheduled for Thursday, October sixteenth,
13:56
Speaker 2: that's going to come out next Tuesday. Okay, so hey,
14:00
Speaker 2: here's like a little prize before Thanksgiving. The Producer Price Index,
14:03
Speaker 2: which no one knows what to do with anyways, generally true,
14:06
Speaker 2: we're gonna have that, you know, the day before, you know,
14:09
Speaker 2: everyone's traveling for Thanksgiving and everyone's going to try to
14:12
Speaker 2: read into like what this would have meant for September PCE,
14:18
Speaker 2: which the Census Bureau produces. I think it's the Census Bureau,
14:22
Speaker 2: and so like we're just not going to like know
14:26
Speaker 2: what to do with ourselves on this. The September Jolts
14:29
Speaker 2: report canceled, not happening. October Jolts Report is going to
14:34
Speaker 2: come out on Tuesday, December ninth instead of Tuesday December second,
14:38
Speaker 2: so a one week pushback there the October employment report.
14:42
Speaker 2: So the October jobs report was supposed to be two
14:45
Speaker 2: Fridays ago canceled, but some of the data, the establishment data,
14:51
Speaker 2: is going to be included in the November report that
14:55
Speaker 2: will be published on Tuesday, December sixteenth, which is two
15:00
Speaker 2: weeks late, a week and a half late.
15:04
Speaker 5: Yeah.
15:04
Speaker 2: Now why this matters is that the FED meeting is
15:08
Speaker 2: going to be on December ninth and tenth, and so
15:12
Speaker 2: before we go any further, I do need to make
15:15
Speaker 2: one thing very very clear, because the idiots have been
15:20
Speaker 2: idioting over the last twenty four hours about this, and
15:25
Speaker 2: specifically like I've seen all kinds of people being like, oh,
15:31
Speaker 2: like the BLS is gonna like they they deliberately schedule
15:34
Speaker 2: this after the FED meeting, which is kind of like okay,
15:39
Speaker 2: so like that would not make any sense for a
15:42
Speaker 2: whole number of reasons, namely because a that report could
15:47
Speaker 2: end up being really good and so why would the
15:49
Speaker 2: government cover up good news about the labor market other
15:52
Speaker 2: things we've been getting, you know, other alternative data that
15:56
Speaker 2: you know is now kind of being confirmed by what
15:58
Speaker 2: the BLS has shown, So it's not gonna show is
16:00
Speaker 2: anything else there. But again, the BLS is trying to
16:05
Speaker 2: play ketchup now with a huge lift in terms of
16:07
Speaker 2: trying to get this November data, which they were supposed
16:11
Speaker 2: to be collecting for the last couple of weeks. They're
16:13
Speaker 2: trying to get that done as quickly as possible. There's
16:17
Speaker 2: nothing nefarious about this in any way, shape or form.
16:23
Speaker 2: So I just I it boggles my mind when people
16:28
Speaker 2: immediately are like, oh, they deliberately scheduled this after the
16:32
Speaker 2: FED meeting in order for you know, to let the
16:35
Speaker 2: Fed like do you know what they're they're gonna do? Well,
16:37
Speaker 2: the only way that that you know, to let the
16:39
Speaker 2: Fed cut It's like Okay, so that means that you
16:41
Speaker 2: think the economic data is stronger than you know what
16:44
Speaker 2: what otherwise would have been in the canby then, Like,
16:48
Speaker 2: it just doesn't make any logical sense. So let's like,
16:51
Speaker 2: let's get rid of the idea that the BLS is
16:53
Speaker 2: going to be manipulating this release date to benefit the FED,
16:57
Speaker 2: because I saw a bunch of that crap yesterday and
17:00
Speaker 2: I just have to call it out for what it is.
17:01
Speaker 5: Yeah, it's silly.
17:03
Speaker 2: The other piece, though, that is interesting to me, yep.
17:06
Speaker 2: And I don't know that this. I don't know if
17:08
Speaker 2: this has ever been done before. Would the Fed ever
17:12
Speaker 2: consider pushing their meeting back by a week so they
17:16
Speaker 2: can have this data in hand when they make their decision.
17:20
Speaker 4: I don't see why you would, if you, I mean,
17:22
Speaker 4: I get why you would, but frankly, in times where
17:27
Speaker 4: data has come out that's changed your opinion, what do
17:30
Speaker 4: they do? They just call an emergency meeting and change
17:32
Speaker 4: their mind. Right, So I don't see.
17:35
Speaker 2: The purpose, but it would be a bad So here
17:37
Speaker 2: here's the upside in doing so. The betting market not
17:41
Speaker 2: betting market. It's like the FED fund's futures market right
17:43
Speaker 2: now is saying it's more likely than not that the
17:46
Speaker 2: FED is not going to do anything. Yes, it would
17:49
Speaker 2: be a really bad look for the FED if they
17:51
Speaker 2: did nothing after cutting twice and then had to call
17:56
Speaker 2: an emergency meeting a week later to cut. It's kind
17:59
Speaker 2: of like, Okay, so you guys didn't know this a
18:03
Speaker 2: week ago, And so that's why I raised the question.
18:07
Speaker 2: I don't think they will. I guess, would you push
18:10
Speaker 2: the meeting back by a week? Because if the FED
18:13
Speaker 2: doesn't cut in December, to me, it's a really tough
18:18
Speaker 2: putt for them to say they're gonna cut in January then,
18:21
Speaker 2: because then it's an acknowledgment that they made a mistake
18:23
Speaker 2: in December.
18:25
Speaker 5: Yeah, I guess back and forth.
18:28
Speaker 4: Has anything other than something like nine to eleven ever
18:31
Speaker 4: caused the FED to delay a meeting, because that's the
18:33
Speaker 4: only event in modern history I can think of that
18:36
Speaker 4: would have potential and I don't even know if they
18:38
Speaker 4: did but potentially have caused them to delay a meeting.
18:41
Speaker 5: So I can't imagine doing.
18:42
Speaker 4: So over a delayed data release, But stranger things have happened.
18:47
Speaker 5: I suppose.
18:48
Speaker 2: The other piece on this is I gotta say, after
18:51
Speaker 2: getting this report with the unemployment rate rise. And remember
18:53
Speaker 2: the Fed looks at the unemployment rate. They don't look
18:55
Speaker 2: at jobs created because they can't control the size of
18:58
Speaker 2: the labor force. Unemployment rate has now gone from three
19:02
Speaker 2: point four to four point four percent in the span
19:04
Speaker 2: of about two and a half years. It's gone from
19:06
Speaker 2: four to one a year and ago to four to
19:07
Speaker 2: four almost four or five. Now, that's a pretty strong
19:11
Speaker 2: case in my opinion, for the Fed to cut in December.
19:16
Speaker 5: Markets aren't buying it.
19:17
Speaker 2: I know, I know they're not, but uh I on the.
19:21
Speaker 4: Opposite side of that, that inflation at three percent in
19:23
Speaker 4: markets surging again tells me no cut.
19:28
Speaker 2: Quick break here. Wall Street Watch is next. Then we're
19:31
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20:00
Speaker 3: Well, it may be late in November, but the September
20:03
Speaker 3: jobs report is finally here, and it came in stronger
20:05
Speaker 3: than expected. One hundred and nineteen thousand jobs were added
20:09
Speaker 3: in September, higher than forecasts of fifty one thousand. Wall
20:13
Speaker 3: Street's also reacting two solid third quarter results in revenue
20:16
Speaker 3: forecasts from AI Giant in Nvidia, in addition to earnings
20:21
Speaker 3: from consumer spending Bell Weather, Walmart. Right now, the Dow
20:26
Speaker 3: is up one point four percent cent or six hundred
20:29
Speaker 3: and thirty nine points, SMP five hundred up one point
20:33
Speaker 3: eight percent or one hundred and twenty points. Tech heavy
20:36
Speaker 3: NASDAC surging nearly two and a half percent, or five
20:40
Speaker 3: hundred and forty two points. Rusted two thousand also up
20:42
Speaker 3: over two percent higher, tenyure Treasure reeled is down one
20:46
Speaker 3: basis point a four point one one seven percent, in
20:49
Speaker 3: crude oil up over one percent higher, trading just above
20:52
Speaker 3: sixty dollars a barrel, and Videos jumping four percent after
20:57
Speaker 3: the AI chip maker saw its revenue serge sixty two
20:59
Speaker 3: per per year on year and issued stronger than expected
21:02
Speaker 3: fourth quarter sales guidance. Other chip makers also seeing gains
21:05
Speaker 3: in reaction to in Video's earnings. Chuck and Mike will
21:08
Speaker 3: have more on in Video's earnings coming up here in
21:11
Speaker 3: a matter of moments. AMB shares of climbing two percent
21:15
Speaker 3: after the Commerce Department approved a deal that will allow
21:17
Speaker 3: US companies to sell advanced chips to the Middle East. Meanwhile,
21:22
Speaker 3: the country's biggest retailer in Walmart, posted solid quarterly results
21:25
Speaker 3: and raised its outlook. Walmart also reported a four and
21:28
Speaker 3: a half percent increase in comparable sales in the US
21:32
Speaker 3: during the quarter, driven by consumers seeking value, Walmart rallying
21:36
Speaker 3: six percent elsewhere. Verizon announced it will cut more than
21:40
Speaker 3: thirteen thousand jobs and its largest single layoff as it
21:43
Speaker 3: works to reduce costs in restructure operations. Shares are up
21:47
Speaker 3: nearly one percent. Palo Alto Networks announced it will require
21:51
Speaker 3: cloud management company Kronosphere for three point three billion dollars.
21:55
Speaker 3: The cybersecurity company also saw better than expected quarterly result, However,
22:00
Speaker 3: that stock is down by about two percent and shares
22:03
Speaker 3: in Bath and body Works sinking twenty two percent after
22:07
Speaker 3: the self care and home products retailer posted third quarter
22:10
Speaker 3: results that underwhelmed, where it posted a drop in quarterly
22:14
Speaker 3: net sales and income. The company also slashed its annual forecast.
22:19
Speaker 3: I'm Tucker Silva, and that is Wall Street.
22:21
Speaker 2: Watch Mike, before we touch on in Vidia earnings or
22:25
Speaker 2: we'll do more than that. We'll cover them pretty in depth,
22:27
Speaker 2: because you know, biggest Company in the World Report's earnings.
22:30
Speaker 2: You got to do a little bit on them. We
22:31
Speaker 2: did also get weekly jobbles claims data. The Department of
22:35
Speaker 2: Labor has backfilled all the data for like the six
22:37
Speaker 2: weeks that were missed. Quite honestly, I'm not even going
22:40
Speaker 2: to go through every week. There was nothing particularly outstanding
22:43
Speaker 2: in them. The most recent week now, which is through
22:48
Speaker 2: November twelfth, I think it is. Let me see. Hold.
22:53
Speaker 2: On November fifteenth, the initial claims came into two hundred
22:56
Speaker 2: and twenty thousand, a modest decrease of eight thousand from
22:59
Speaker 2: the week before, So still nothing happening on initial claims
23:02
Speaker 2: at the moment. Continuing claims moving up a little bit
23:06
Speaker 2: to one point nine seven to four million. So continuing
23:09
Speaker 2: claims are, you know, continuing to show about a four
23:12
Speaker 2: to five percent gain over last year, which is not
23:16
Speaker 2: great but not hugely problematic. If you start seeing that
23:18
Speaker 2: number moving to like a ten percent year over year
23:21
Speaker 2: growth rate, that's usually where it starts to, you know,
23:23
Speaker 2: move upward quickly after that. But we're just not seeing that.
23:27
Speaker 2: So the jobless claims data continuing to tell us that
23:31
Speaker 2: despite the concerns that are out there, there's nothing there's
23:35
Speaker 2: no meaningful shift that's happening in the labor market. It's
23:38
Speaker 2: just a continued slowing, which look continued slowing forever is
23:42
Speaker 2: not good. But there's no there's no like intensifying deterioration
23:47
Speaker 2: that's going on. It's just a continued slowing.
23:50
Speaker 4: Yeah, and again to your point earlier about what does
23:53
Speaker 4: the FED do here, I'll acknowledge that I think the
23:55
Speaker 4: FED is more likely to cut than the odds are
23:58
Speaker 4: saying right now. But you know, if I'm in charge,
24:02
Speaker 4: I've got jobless claims numbers that are not of concern.
24:04
Speaker 4: I've got a job's creation number that came in better
24:07
Speaker 4: than expected, a slightly concerning unemployment number.
24:10
Speaker 5: Markets at all time highs.
24:12
Speaker 2: Look at the jobs creation number, though.
24:14
Speaker 5: Hey, look at the unemployment rate. I get it.
24:16
Speaker 4: But taking all in the aggregate, I too would pause
24:21
Speaker 4: the rate cutting that we're doing. Acknowledging for a minute
24:24
Speaker 4: here chuck that they will look foolish if they have
24:26
Speaker 4: to go do so, if they have to go cut
24:28
Speaker 4: rates again in January. But yeah, we're I in charge,
24:31
Speaker 4: I don't think I'd be cutting rates at this next meeting.
24:32
Speaker 4: And I think once again, at this meeting, we will
24:36
Speaker 4: get people on both sides wanting to do something different
24:41
Speaker 4: than what the FED decide. Right the last meeting, we
24:44
Speaker 4: had descents towards lower rates and assents towards no rate cuts,
24:50
Speaker 4: which is pretty rare.
24:52
Speaker 2: Let's talk a little bit about nvidio earnings, which, like
24:55
Speaker 2: Mark Fandini and I were talking about this in the
24:57
Speaker 2: run up to it, and we came to a couple inclusions. Mike.
25:00
Speaker 2: The first is neither of us expected to see any
25:03
Speaker 2: weakness in in video earnings yesterday, because everybody else that
25:07
Speaker 2: buys their chips has already reported well. And also the
25:11
Speaker 2: concern that people have out there is not that people
25:15
Speaker 2: are stopping buying in vidio chips right now. It's that
25:18
Speaker 2: companies are buying way too many of them and they
25:20
Speaker 2: won't be able to figure out how to be profitable
25:22
Speaker 2: after buying all of them. Sure, right, Like you don't
25:25
Speaker 2: have a bubble when companies say no, we've got enough, Right,
25:29
Speaker 2: you have the bubble when companies say, oh, we can't
25:33
Speaker 2: figure out how to monetize this, and now we're going
25:35
Speaker 2: to start canceling future orders. So like I personally didn't
25:39
Speaker 2: have any thought that you were going to see any
25:41
Speaker 2: you know signs of weakness in this because the stuff
25:45
Speaker 2: that's been concerning markets has been Oracle borrowing a bunch
25:49
Speaker 2: of money to go buy in Vidio chips, Meta borrowing
25:52
Speaker 2: a bunch of money to go buy in Vidio chips. Well,
25:56
Speaker 2: if that's the case, why would you be concerned about
25:58
Speaker 2: in Video's earnings for this quarter?
26:00
Speaker 5: Right?
26:00
Speaker 4: The other thing that has been concerning to investors has
26:03
Speaker 4: been the roundabout deals. Right, here's a bunch of money
26:08
Speaker 4: that we are going to invest in you, and that
26:11
Speaker 4: investment is going to be contingent upon you turning around
26:14
Speaker 4: and buying our chips. For a while there you were
26:16
Speaker 4: able to point to these deals and say, oh, that's
26:18
Speaker 4: not the case. It's not exclusive. The recent deals have
26:21
Speaker 4: been exactly that, Hey, here's a bunch of money from Nvidia,
26:25
Speaker 4: and they're only going to invest it if you turn
26:28
Speaker 4: around and go buy the chips that you can't otherwise
26:30
Speaker 4: of Forde. So that's been another concern. But again, none
26:33
Speaker 4: of that would hit at in Vidia's sales numbers, and
26:36
Speaker 4: they didn't. They reported fifty seven billion dollars worth of revenue,
26:40
Speaker 4: beating expectations once again.
26:42
Speaker 2: And let's let's talk a little bit just about what
26:45
Speaker 2: we're seeing here in terms of the numbers. So yeah,
26:47
Speaker 2: you know, north of fifty seven billion in revenue. They're projecting,
26:52
Speaker 2: you know, somewhere in the mid sixty billion in revenue
26:54
Speaker 2: for the next quarter. And I just want to point
26:57
Speaker 2: out that in Vidia first crossed and annual revenue in
27:03
Speaker 2: Q four of twenty three. Now they're doing it quarterly,
27:08
Speaker 2: and now they're doing it quarterly, So like, again, there's
27:11
Speaker 2: some pretty impressive stuff that's here. The questions, as I've
27:15
Speaker 2: laid them out, are going to be, Hey, show me
27:17
Speaker 2: what happens to company's appetite for spending twelve to twenty
27:23
Speaker 2: four months from now, once they have to finally start
27:26
Speaker 2: having this depreciation from all this capex hitting their financial statements,
27:31
Speaker 2: and then we'll get a sense of whether they want
27:35
Speaker 2: to continue. Those are questions that are going to linger
27:39
Speaker 2: like and Nvidia can't answer those questions with this report.
27:42
Speaker 2: All they can tell us is what we know, which
27:43
Speaker 2: is that companies continue to buy these chips like crazy,
27:47
Speaker 2: and until we hear from companies that they're going to pivot,
27:52
Speaker 2: I think the expectation should be that companies continue to
27:55
Speaker 2: do exactly this.
27:58
Speaker 4: Am I wrong, No, I think that that is the
28:00
Speaker 4: case until that narrative breaks, and we saw signs that
28:04
Speaker 4: it might be starting to over the course of the
28:06
Speaker 4: last few weeks. But if it does, you won't see
28:09
Speaker 4: it show up in Video's earnings until quarters later.
28:12
Speaker 2: And ultimately, it's it's going to depend like the long
28:16
Speaker 2: term success of in Vidia stock, because that's what we're
28:21
Speaker 2: talking about here. We're not talking about the company, like
28:22
Speaker 2: the company quite honestly, like I think they're gonna be like, okay,
28:28
Speaker 2: like they they they're you know, they're pretty smart people.
28:31
Speaker 2: We're talking about the stock here. It's it's going to
28:33
Speaker 2: depend on will their customers continue to place orders year
28:38
Speaker 2: after year in increasing numbers for these chips. And that's
28:43
Speaker 2: going to be determined by whether companies and individuals start
28:47
Speaker 2: to pay up for AI in the numbers needed over
28:52
Speaker 2: the next couple of years. Because all all the all
28:56
Speaker 2: the free riders that are you know, using the free
28:59
Speaker 2: version of Chat and Gemini, man like you, you're not
29:06
Speaker 2: contributing anything to the continued success of.
29:08
Speaker 4: Those platforms, no to you know, use the example that
29:12
Speaker 4: I use the other day as well, my wife creating
29:16
Speaker 4: a picture of our dog and cat who despise each other.
29:20
Speaker 4: Snuggling using chat GPT is a real big money loser
29:24
Speaker 4: for chat GPT, and that's a lot of the uh processing,
29:29
Speaker 4: Like I really wonder how much it costs open Ai
29:34
Speaker 4: to create the image that it did for my wife
29:36
Speaker 4: the other day, which is completely useless, because that's what
29:40
Speaker 4: is happening right now. And the question is our business
29:44
Speaker 4: is like ours and others out there going to find
29:48
Speaker 4: a way to monetize this stuff, and will businesses like
29:50
Speaker 4: ours be willing to pay for this stuff that right
29:53
Speaker 4: now is useful in some key areas but not fully
29:58
Speaker 4: monetizable yet.
29:59
Speaker 2: And stuff it's even like useful but still requires like
30:03
Speaker 2: some work, Like as an example, I was working on
30:06
Speaker 2: something yesterday, just trying to organize a bunch of zip
30:08
Speaker 2: codes and ended up being like forty five hundred zip codes.
30:12
Speaker 2: And I'm looking into this thing. I'm playing around with
30:14
Speaker 2: it and Excel trying to like do text to columns
30:16
Speaker 2: and this and that, and I'm like, Okay, this isn't working.
30:18
Speaker 2: Let me see like what artificial intelligence can do with
30:21
Speaker 2: these zip codes. And I said, look, I need you
30:25
Speaker 2: to group this into these buckets, like based on geographic
30:28
Speaker 2: regions and then I need you to like spit out
30:31
Speaker 2: a CSV that does this so that I can like
30:34
Speaker 2: see what I'm looking at. And a couple things like
30:37
Speaker 2: when I actually pulled the list of zip codes, it
30:39
Speaker 2: did a pretty darn good job of organizing them. They
30:42
Speaker 2: ended up being thirty four hundred that it categorized, but
30:45
Speaker 2: in the bucket report that it generated for me, like
30:47
Speaker 2: how many are in each bucket, it had forty four hundred.
30:50
Speaker 2: So I literally asked it. I'm like, what's with the
30:52
Speaker 2: thousand record discrepancy? And it's like, well, some of these
30:55
Speaker 2: might have been cleaned up in this that I'm like, okay,
30:57
Speaker 2: well why'd you give me, you know, the raw? And
31:00
Speaker 2: if you don't worry about it, it said, hey, Chuck
31:04
Speaker 2: pound somebody, Yeah, I know where you're typing this from.
31:08
Speaker 5: Chuck, don't ask questions you don't want answers to, so.
31:11
Speaker 2: Like I in any case, I'm like, okay, this is,
31:15
Speaker 2: you know, fine. But then I start going through and
31:17
Speaker 2: I find two zip codes that it decided to one region,
31:20
Speaker 2: and when I actually plug them into USPS, those zip
31:24
Speaker 2: codes don't even exist, and so I'm kind of going, okay,
31:29
Speaker 2: so yes, it might be like ninety five percent accurate.
31:34
Speaker 2: But is that five percent a problem enough to where
31:37
Speaker 2: I can't use it for what I want to And
31:40
Speaker 2: I'm just not sure yet. And this, by the way,
31:43
Speaker 2: was with the newest Gemini three version that Google's been
31:46
Speaker 2: all bally who and you know, hub ub about the
31:48
Speaker 2: last day or two and don't give me So I
31:54
Speaker 2: tried this in chad GPT and the result was horrendous.
31:58
Speaker 2: I just did to like give me mappings of these
32:00
Speaker 2: regents and it put like four of them in the ocean. Yeah,
32:02
Speaker 2: like it just was not working. So there's there's still
32:07
Speaker 2: some work that needs to be done to convince me yes,
32:09
Speaker 2: I should be paying for this, because if I paid
32:12
Speaker 2: an intern who generated you know, hey, the Boston region
32:17
Speaker 2: is in the middle of the Atlantic. You fired that intern.
32:20
Speaker 2: Doesn't have a future at my company.
32:23
Speaker 5: You know.
32:23
Speaker 2: If I had someone who was just making up ZIP codes,
32:27
Speaker 2: that's probably not a great employee. Like you have to
32:29
Speaker 2: be able to trust them. So can I pay artificial
32:34
Speaker 2: intelligence to make those mistakes? If I wouldn't pay an
32:36
Speaker 2: employee to make those mistakes, I don't know. Let's take
32:40
Speaker 2: a quick break when we return Walmart earnings after this.
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Speaker 2: Mike. Walmart reported earnings. What do we see from them?
34:21
Speaker 4: Just a DPS coming out sixty two cents a share,
34:24
Speaker 4: beating estimates, revenue beat estimates, e commerce sales grew by
34:29
Speaker 4: double digits once again.
34:31
Speaker 5: Stock is up big.
34:33
Speaker 4: I think, honestly, the only thing that you can criticize
34:35
Speaker 4: about Walmart right now is kind of similar thing you
34:38
Speaker 4: can criticize Nvidia about, which is your stock is priced
34:42
Speaker 4: for perfection? Can you keep getting perfection? Because I mean,
34:47
Speaker 4: did you see anything out there from analysts that was
34:50
Speaker 4: an area of concern? The only thing I saw was
34:53
Speaker 4: somebody right about was how Sam's Club was a slight
34:55
Speaker 4: drag on their business, whereas everything else was near perfection.
34:59
Speaker 4: But to be clear, the pe ratio on Walmart. Now
35:02
Speaker 4: you're talking about price to earnings of forty forty, like
35:05
Speaker 4: that's pretty high. I mean again, I'm not an analyst
35:09
Speaker 4: that covers consumer staples by any stretch, but.
35:14
Speaker 5: It's being priced for perfection. It seems as though.
35:18
Speaker 2: I guess I look at a company like Walmart, and
35:20
Speaker 2: the question that I ask is, look, if you are
35:22
Speaker 2: a buyer of Walmart at this price, what would ever
35:25
Speaker 2: make you a seller?
35:26
Speaker 5: Yeah?
35:27
Speaker 2: Because like, here's the thing in our lifetimes, Michael, what
35:32
Speaker 2: are the odds of Walmart going out of business? They're
35:38
Speaker 2: more entrenched than a company like Sears ever once yeah,
35:41
Speaker 2: close to zero. You know. It's like it's.
35:44
Speaker 4: Although, yeah, I mean, we say that, but right, if
35:49
Speaker 4: you had asked this question about Sears back in nineteen
35:51
Speaker 4: eighty five, what would the answer have.
35:52
Speaker 2: Been it still took thirty years for that to happen,
35:56
Speaker 2: did Yeah? You know, and look Sears golden age, which
36:00
Speaker 2: was still like, you know, fifty sixties, right, So it
36:03
Speaker 2: was like, okay, if it takes fifty years to happen, right, yeah,
36:06
Speaker 2: there's decent chance I might be dead by then.
36:07
Speaker 5: Right, yeah. Yeah.
36:09
Speaker 4: Walmart stock continues to just defy all expectations. They're attracting
36:14
Speaker 4: new customers. They are the go to play still for
36:18
Speaker 4: where I find where you find discounts, and it's showing
36:20
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36:23
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37:35
Speaker 2: Mike, do we want to talk groceries or mass retailers
37:38
Speaker 2: trying to predict what's going to happen for holiday shopping?
37:41
Speaker 5: I want to talk grocery stores.
37:42
Speaker 2: Yeah, yeah, So we've got a The nonprofit Consumers Checkbook
37:47
Speaker 2: went through a bunch of New England supermarkets and evaluated
37:51
Speaker 2: them based on quality and pricing, and I don't think
37:57
Speaker 2: that the results are particularly surprising. On the pricing side
38:01
Speaker 2: of things, all the Market, Basket and Price Right came
38:05
Speaker 2: in as best of the bunch for New England, while
38:08
Speaker 2: Roach Brothers, Donolan's and Whole Foods came in at the
38:12
Speaker 2: highest cost. What was interesting to me, there's a been
38:14
Speaker 2: a thirty percent difference between those from a pricing perspective,
38:18
Speaker 2: in you know, when you're looking at it from most
38:20
Speaker 2: expensive to least and if you're comparing the other way,
38:23
Speaker 2: like how much does it cost to go from you know,
38:26
Speaker 2: a a market basket to a whole foods it's almost
38:30
Speaker 2: a fifty percent jump, So like big pricing range quality
38:36
Speaker 2: bigger ranges. Yeah, well, how does one measure you know, quality?
38:40
Speaker 2: I guess is an interesting question, but in any case,
38:43
Speaker 2: Roach Brothers and Trader Joe's coming in Best of the
38:47
Speaker 2: Blue there and Wegmans quick Break here, hour two and
38:50
Speaker 2: just a bit