GameStop (GME) shares soared in early trading after "Roaring Kitty," identified as Keith Gill, posted a screenshot implying he has a $175 million stake in the company. On Monday's Morning Brief, Interactive Brokers Chief Markets Strategist Steve Sosnick warns investors to question the poster's motives. "At some point, is whoever's controlling this account doing this in your best interest or their best interest? And really, you should think that one through because to me, it's pretty obvious whose interest it's in," Sosnick says.
Another big mover on Wall Street is Nvidia (NVDA), which unveiled its next big AI platform, Rubin. I/O Fund Lead Tech Analyst Beth Kindig says to expect these sorts of product announcements to happen more frequently as the battle for AI chip dominance heats up.
Yahoo Finance's Seana Smith and Brad Smith take a closer look at what is driving some of the day's top trending tickers, including GSK (GSK) and Boston Beer (SAM), Alexandra Canal talks the latest on the Skydance/Paramount (PARA, PARAA) deal, and Ines Ferré discusses what the latest OPEC+ decision means for oil prices (CL=F, BZ=F).
For more expert insight and the latest market action, click here
This post was written by Stephanie Mikulich.
Video Transcript
Is not here in New York City.
I'm Sean Smith alongside Brad Smith and this is Yahoo Finance flagship show the morning Brief with the first trading day of June.
And now that features there in the green driven by gains that we're seeing in the chip stocks.
Now, this follows big announcements from NVIDIA and A MD and it's a big week of economic data out this morning PM.
I will get a read on the US manufacturing sector for the month of May and we'll see Tuesday A P employment on Wednesday weekly, jobless claims Thursday, all culminating in that big May jobs report on Friday investors tracking all of this data to see how it plays into the feds, thinking around weight cut.
So let's get right to it with the three things that you need to know this morning, your road map for the trading day, Yahoo Finance Jared Josh Shaper and as for a have more.
Thank you, Brad.
Competition in the chip space is heating up in video and A MD higher this morning on new product announcements out of a tech conference in Taiwan in video announcing its most advanced A I chip to date nickname Ruben, which is expected in 2026.
This comes just months after the company unveiled its Blackwell chip and we're also going to see another version of Blackwell in 2025.
Meanwhile, and A MD unveiled a new A I accelerator which it plans to make available in the fourth quarter of this year, as well as new mobile and laptop accessories.
And the return of the meme craze is here again, shares of Gamestop skyrocketing on speculation.
Keith Gill known as Roaring kitty may have a big position in GME.
Roaring kitty is the trader known for starting the 2021 meme frenzy around he allegedly posted on Reddit Sunday night.
A screenshot of what people think could be his investment portfolio showing 100 $75 million of share ownership and call options.
We could not independently verify this post and plus is agreeing to extend most of its oil production cuts into 2025.
However, the Oil alliance said it will begin unwinding some additional voluntary reduction starting in October.
The decision over the weekend was met with mixed reactions from Wall Street with some analysts predicting unwinding any cuts this year would be bearish for oil prices.
Others see the impact as neutral.
The production curves are intended to ensure prices stay higher amid demand and inflation concerns.
Well, good morning, everyone futures are mixed this morning ahead of the first trading session in June 2024.
We're taking a look at some of the major averages here as we're uh zeroing in on the dow as of right now, the futures flat just barely to the downside of the NASDAQ 100 futures pointing higher by about half a percent to begin the month.
And the S and P 500 futures also pointing a little bit higher as well here, an interesting dynamic that we're tracking a lot of focus on chips and the waiting there as well as the re or at least some of the downdraft that we've seen in software that's really led to that waiting being more prominent in chips.
Yeah, you're exactly right.
When you take a look at the early sector action, we are seeing technology uh real estate amongst those, the out performers there, we mentioned the chip stock, some of the big drivers here of the market.
And this morning, I don't have to look any further than NVIDIA up another three plus percent here this morning.
And again, when you take a look, even the last five days, you have seen this uh trend higher here up just about uh 5.5 percent over the last month, you're looking at gains of 26%.
And like we've been talking about now for quite some time, you're talking about that year to day gain of over 100 and 20%.
Now, new chips out from NVIDIA that were just announced and also a MD are looking at gains of just about 1.8% here in early trading year to date uh gains there of about 13%.
So some competition intensifying among those leaders within this space.
And then Brad, we also got to take a look at the meme trade because that's really what is catching a lot of our attention here this morning when you take a look at some of that and some of the uh gains that we've seen specifically with gamestop up on the top left of your screen there.
I think just off the highs of the session here this morning, at least the future session have been up over 100%.
We're now looking at extended gain of just about 72%.
So again, it's reigniting some of that meme frenzy that we've seen over the last month.
Let's talk about that because we got the meme stock rally coming after a reddit account linked to Keith Gill, also known as Roaring Kitty.
He posted what appears to be a significant amount of shares and call options of the stock.
Now, we could not independently verify this post, but Gill is widely credited for influencing gamestop's 2021 short squeeze for more on this.
Yahoo Finance is there on Josh Shafer standing by in the newsroom with the latest on that, Josh, hey, Shanny Gamestop shares rising over 70% this morning in free market trading.
That's after a reddit account.
Using the user name of Keith Gill, also known as Roaring Kitty posted a screenshot showing 100 and $75 million position in gamestop that includes about 5 million of regular shares and 120,000 call options that are set to expire on June 21st.
Now, what's most interesting about this right now that we're watching is we haven't actually heard from Gill himself yet.
You remember back a couple of weeks ago, his Twitter account started tweeting for the first time since 2021 Gamestop shares took off on that last night.
We have this post on Reddit from his old account.
But again, we have not been able to verify whether or not this is actually Keith Gill behind these posts.
If you think back to 2021 he sort of was most famous for posting videos of himself.
He was always on the camera talking to other people and we have not seen that part of this yet.
So be interesting to see if we eventually do hear from Keith Gill himself and what he has to say about this return of the meme.
Absolutely, Josh, thanks so much for teeing up the conversation here this morning to really break down what this means for the wider meme rally.
We've got Steve Sosnick, who's the interactive brokers chief market strategist here with us, Steve.
Thanks so much for kicking off the week with us.
I mean, I thought that we'd be talking about this massive week, the, the luge of data that we're gonna get on the jobs front.
But no, we're, we're focusing in on what's taking place with a potentially revived meme trade here.
Wonder what you make of it.
Morning, Brad.
Well, we're talking about the really important stuff.
Right.
Sarcasm intended.
Um, you know, I mean, we've got a very consequential week as you and Sean are laid out at the open, but here we are talking about meme stocks.
Once again, you know, my basic premise here is meme stocks are just there.
They're a sign of the froth that's going on in the market.
There's, you know, activity in penny stocks, there's activity in meme stocks.
And, um, you know, Josh just raised a very interesting point.
Do we even know that at this point that that roaring Kitty's account is actually controlled by Keith Gill or, you know, or can we verify those, those positions that were placed there?
But obviously it doesn't take much to get the faithful excited in this stock and they are excited once again, Steve does this just reaffirm what we have been talking about time and time again, that this story is here to stay and when we talk about the retail trader and some of the excitement that we've seen and clearly uh playing out through the some of these mean trades, it doesn't seem to be going away anytime soon.
No, it does not Shawna, it's, it's going to be here as long as we have a market that is um, exuberant enough, happy enough, whatever the right adjective is to sustain this.
And, and as of now we can, um, you know, think about it, the meme stock phenomenon sort of died out most of 2022 and a good portion of 2023 because we didn't have the euphoria across the board that we have now, individual investors are back in general.
That's a very good thing.
Although I'd rather they focused on more, um you know, shall we say, you know, value oriented types of names rather than just pure speculation as it is.
In this case, you talk to me a little bit more about that and when you take a look at the names that we even have up on the screen right now, clearly, we're all seeing this move higher.
How does that then, or does it then get mirrored into some of that broader market action?
Um I think they're related.
II, I think that, that, you know, uh you know, the meme stocks are sort of the, you know, the tail, the, you know, the flea on the tail of the dog, although they're very interesting one, but it's not really what's driving the market, what's, what's driving the market is, you have, you know, individual investors who, who in terms of investing in good stocks have made lots of money and things like NVIDIA and a MD and stuff that you talked about at the top of the show, um, those names are continuing to work for them.
So at some level they're playing with house money and it, and it does embolden people again.
I, I'm, I'm not upset if people are making money in stocks that are, that aren't making money.
Um, this is a bit speculative and in this case here a bit, I'm trying to think of the right word.
Manipulative is the wrong word.
But, but, you know, at some point I, I is, is whoever is controlling this account doing this in your best interest or in their best interests.
And really, you should think that one through because to me it's pretty obvious whose interest it's in, I mean, yeah, a a and a position of this size, especially Steve considering in the past what the actual thesis of the, the setup was going into it.
You had a, a stock in, in gamestop and then a MC as well that were shorted and, and more than 100% shorted essentially.
So it was a squeeze of epic proportions that they were really trying to and successfully enacted.
What's the thesis this time around, to whatever extent we can gather.
Honestly, I think it's, you know, try to try to suck in the people who are, who are following here in this case.
Now, if, if indeed he owns 100 and 20,000 of those.
Ju June 21st 20 strike call options.
It's possible, but that's out of an open interest of 100 and 45,000.
So that's, that's a huge percentage of that open interest.
So you need a rally like this to be able to sell those out or, or perhaps, um, exercise them.
It depends what I'm sure.
You know, it's hard to say which, which he'll choose at this point.
But, you know, there's an old saying in poker, if, if you don't know who the sucker is at the table, it's probably you and you're not in on the inside of this, you're, you know, if you're chasing the stock up here, you're the sort more likely than not the source of liquidity for whoever's controlling this account to, to sell into your enthusiasm.
There's still the enthusiasm to get ordinary people to buy and then they can sell into it if, you know, I can't imagine if you looked at this account, if they would even show it tomorrow or Wednesday that it would, that it would have anything close to the long positions it would have today because they'd be, they would be nuts not to take profits into a, into a rally of this magnitude.
I guess my question to you is more of a regulatory question and I not necessarily weighing in on what should be done, what shouldn't be done, but this does draw some attention to regulations or lack thereof.
Surrounding social media.
And of course, when you compare it maybe to analysts notes that are out on the, on the short and long side as well, you, you can make the case that it's not too different.
But do you think, or will we likely see maybe more scrutiny when it comes to social media posts, especially market moving ones?
We um I'm neither a regis legislator or a lawyer.
So I'm gonna have to say, I don't know, I doubt it because, you know, there's other, it's, it's hard enough to get, to get lawmakers to agree on pretty much anything.
Um, in terms of should they?
Yeah, probably, you know, as someone who works for a registered firm, I have very strict um rules and regulations about what I can say and what's perceived as manipulative, that sort of thing.
Um You know, in terms of social media, it's not, now, I will say here who whoever's doing this is actually very clever because they really haven't been um, you know, overtly touting the stock.
I mean, the original meme was, you know, a guy leaning forward in a chair.
This is just posting a position and showing an uno card.
Um, you know, obviously this one is a bit more uh obvious because the uno cards a reversal but none of it is specifically, um you know, touting the stock.
So, so from a regulatory point of view, it, it, it's murky but I do think that, you know, that it's not a level playing field because, you know, on social media, if you get enough of a following um and are not actually registered with, with all the, the various, you know, multi letter authorities.
Um You can, you're much less fettered to say things than you are if you know, if you're in a position where you, where you're subject to having Finra or the NASD come in audit you, Steve, I, I think you mentioned something very key as well and it's a decision that a lot of traders or investors are really weighing to begin this week's trading session.
Do I chase GME?
Just because roaring kitty posted something or do I chase NVIDIA or some of the chip names out of Computex and nvidia specifically ahead of a 10 for one stock split that happens next Monday.
Um Well, Brian Ch Chase is always uh you know, not necessarily the best word for me in the case, in the case of, you know, in, in via you, you are buying into a, a certain amount of froth here, especially Revo resolve revolving around the 10 for one split.
And I do get, get a bit nervous that that may be a by the rumor, sell the news type of event.
But ultimately, the thesis is there.
So, you know, you can treat that as at least you can analyze this as a normal situation and say, ok, it's getting it, it may be getting a little extended but there's, you know, the earnings of this, the expectations of that gamestop has none of that.
You know, it's not, it, it, it's, it's, it was overvalued at, at, at 20 yet, you know, on Friday and it's overvalued at 40.
It's double is overvalued at 40 today.
So, II, I think in general chasing is a terrible strategy.
Uh, you know, because you're not in control of the situation, you are just, you know, it, it's where momentum trading sort of morphs into the greater fool theory.
Um And I think we have to be very careful of that.
I actually wrote a piece more or less entitled uh with, with that title last week.
Um And I do do wonder that, you know, if you're getting, if you're the, if you're the one buying gamestop simply because you saw something on reddit, you know, that's one of those where I think you're just, you really do.
Do you are engaging in a fairly dangerous chase if you're, you know, trying to do some analysis on a stock, it may be extended et cetera, but at least there's something there and that's, but even there, I don't want to see people caught up in enthusiasm.
You know, I, I tend to be more of a by the dip uh person than a, than a chase.
The rally type of person makes a lot of sense.
I have a lot of sense when you got the stock up just around 70% right now at the open Steve Snick.
Always great to get your insight.
Thanks so much for talking to us here this morning.
Thank you, Shana.
Take care.
Well, the chips war is heating up once again this time, A MD and NVIDIA both pushing higher after announcing new next generation A I chips over the weekend, Nvidia's Ceo Jensen Wong touting a new chip called Ruben, which he expects to release in 2026 A MD announcing a next generation A I chip for laptops with its CEO Lisa Su saying that A I is the company's quote number one priority for more on what this means for the space and some of those investment opportunities we wanna bring in.
Beth Kendig, I owe a fund lead tech analyst, Beth, it's, it's good to talk to you here.
So first when we see some of this excitement once again playing out in uh early uh market action here this morning, both A MD and NVIDIA shares pushing to the upside.
What do you make of the announcements that we got this weekend and where it really tells us about the fact that we're still, it sounds like very early within the cycle.
Yes, early in the cycle is a great way of putting it.
Thanks for having me on uh basically a couple of weeks ago, we had written that um in a Forbes analysis that uh the product roadmap is the first line of defense is really important to understand that by speeding up the product release cycle from two years to one that companies that were previously very cyclical, uh you had to be very careful about your timing are now becoming more secular.
So in this A I battle this A I competition between A MD and NVIDIA, uh what we're seeing is something that has never been done before at the data center level.
They're basically going to be releasing these every year.
As you said, there's Blackwell by the end of this year, Blackwell Ultra Ruben Ruben ultra.
And within that, there's additional variations within Blackwell, there's A B 100 A B 200 A GB 200 NVL 72.
So within even that product release cycle of every year, there's a additional variations that are coming out.
What that means for investors to understand is that previously cyclical companies are becoming more secular.
And then when you add on the software layer that's really gonna address at home secular gains.
Yeah, and that, that certainly mirrors kind of the tone that we heard at Computex from the NVIDIA Ceo Jensen Huang where he was talking about accelerating everything.
And so how does the mindset and an operation of accelerate everything translate through to market cap and valuation for the company from your perspective and, and really kind of ramp up where this could continue to move towards and this astronomic growth we continue to see we have a $10 trillion market cap uh target for NVIDIA by 2030.
And I will be Candid and tell you, I think it's too low.
Uh The reason is that already we see right now about 60,000 GP us in the data center.
Uh Jensen Wang said on stage that we will go toward a million GP U data center at some point.
So 10 trillion could even be too low.
And here's why one generation which is Hopper gave us a 1.5 trillion push.
So now we have four additional generations that they've laid out for you over the next 4 to 5 years.
Now, you got to add on software and you have to add on something like the Omniverse platform, which is how all robotics likely a near monopoly of robotics will be developed because they're the simulation company coming from gaming routes.
They basically have an engine and a software platform that will allow uh robotics that is so far ahead that other people, other companies are going to have a hard time competing and that comes from uh you know, simulation routes already.
So when you combine now you have software to think of, you have automotive, to think of, you have robotics to think of a a and that's already, you know, pushing us easily past 10 trillion by 2030.
Of course, when, but just quickly on what kind of market share are we talking here because I mean, there is a competitive landscape where we gotta imagine that, you know, none of the other chip companies are just gonna fall in a ditch.
I estimate that A MD is capable of taking somewhere between 10% to maximum 20% of the market.
This is based on the gaming competition.
These two companies have had for some time, Intel, they are moving well past 20% Intel is an easier competitor than NVIDIA.
I think NVIDIA clearly is going to be a tougher competitor for a MD.
So I would say, you know, 10 to 20% A MD on GP us when you take a look, Beth, at least Nvidia's valuation right now, the massive run up that we've seen in the near term.
Do you see, I, I know you're seeing obviously a huge opportunity here over the next several years, but in the near term, do you see any sort of the fact that the valuation could be stretched at all?
That is probably the most important question, which is not, where will NVIDIA be in 2030?
But are we buying now?
And it's not actually a valuation concern because we're talking a company that has gone up, you know, 6 700% on the bottom line.
So evaluation actually is quite reasonable because of all these raises and beats what NVIDIA is going to need is broad market participation.
And if you look at the broad market, things are a bit weak.
So what the the best time to buy a stock in our opinion is when broad market is participating, which means can NVIDIA withhold or can NVIDIA hold off on a broad market, sell off?
Can it um sustain?
And that's the question that tech investors need to understand is that at times it has nothing to do with the stock, it has nothing to do with the individual management team or these amazing fundamentals or the valuation which we are calling eerily low.
What it has to do with is broad market and sentiment.
All right, Beth Kay, great to have you.
We look forward to hopefully having you back here on Yahoo Finance again soon.
I will fund a lead tech analyst.
Thanks so much, Beth.
Thank you.
Well, be plus agreeing to extend most of its production cuts into 2025 in a move to support oil prices.
The country is also extending additional voluntary cuts of 2.2 million barrels per day until the end of September of this year.
And S fry is standing by with more details on that for us.
Hey, hey, Shanna and OPEC Plus put out a very detailed plan regarding its production cuts.
Now keep in mind that most market watchers had expected its production cuts to be extended through the end of this year.
So basically what the Oil Alliance has said is that it is going to extend its general production cuts.
Its official crude cuts into 2025.
And then there are voluntary cuts which are about 2.2 million barrels of output cuts that those would be extended in the third quarter.
But then they would start to out on a month by month basis into next year.
So they would be restoring these barrels going into the market.
Now, what have oil prices done because of this?
Well, they have kind of been very choppy over the last 24 hours or so.
Goldman Sachs is saying that this decision is going to be bearish given the recent increase in inventories when it comes to oil Third bridge is saying, look unless you see an up side in demand, lifting, the lifting prior cuts is going to be premature for the markets and then you have JP Morgan, that is saying that this is going to be market neutral.
Jp Morgan is seeing bullishness going into the third quarter for demand largely because of bullishness and demand in the third quarter of this year.
But then that you may see demand soften in 2025.
And this is really the tricky balance that OPEC plus has had to do is just balancing this demand and supply uh in the markets and given the expectations for demand going into next year and also given the spare capacity of some of these OPEC plus members and OPEC plus members that don't want to be losing market share to the US and others, which is what they have seen over the last year, guys, all enough.
Thanks so much for bringing that story down for us.
We're just getting started to hear on the morning brief coming, Paramount chairs are rising after sky and reportedly revising its deal.
We've got the details on that report next and for the Jim Farley telling Yahoo finance is Brian.
So there's quote mutual respect with Elon Musk.
We will bring you more from that interview later this hour.
Plus the mean rally will certainly on this morning, we're going to break down what this means for the broader market that's coming up in the 10 a.m. hour of catalyst.
We got much more over the next couple of hours here on Yahoo Finance will be right back.
Let's take a look at some trending tickers here this morning shares of GSK.
They're plunging after a court ruling stating the drug maker must face trials over claims that its heartburn medication, Zantac causes cancer.
You're taking a look at shares down about 8% here on this news despite year to date, the company being up by about 19% at least here in 2024 and over the past 52 weeks being up by about 30%.
This could mean a potential hit financially.
Ultimately, we'll see what the proceedings look like here and where the ultimate damages could net out at for GSK here.
Yeah, exactly.
I think that's a big question at this point.
Here, we are looking at shares under a bit of pressure here, at least in the early action, you're looking at where it closed on Friday and that one year gain that we've seen of just over 30%.
But again, when it comes to this ruling, exactly what this means here for the company going forward.
Lots of questions here, shares are off just around 8%.
So off the lows of the morning had been off just over 10% shortly after this news broke.
But again, this is a stock that Wall Street, there's 10 holds on this right now.
Only three sale ratings compared to 15 buys.
So many are still optimistic just about some of the longer term trends that we'll see from GSK.
But obviously when you see a move to this extent here, like we're seeing today, there are some concerns at least in the short term, what exactly this is going to mean for a Glass E Smith client's business.
Yeah, GSK expected to appeal and also they had put out a statement saying that the epidemiological studies got that one right.
Looking at human data regarding the use of RD and can't get them.
All the scientific consensus is that there's no consistent or reliable evidence that it increases the risk of any cancer.
We'll see how much that defense holds up, you know, I mean, just call me Smith MD.
All right.
Let's talk about Paramount shares are moving higher after Sky Dance Media and Paramount have reportedly agreed on merger terms.
This is according to a report out from BC Yahoo finances, Alexander Canal has the details.
Hey John, yes.
According to that C NBC report, A Sky and Paramount deal is expected to be announced in the coming days with an equity check that totals $8 billion.
Now leading up to today, we've heard previous reports of a sweet and deal offer from Sky and now the details of that offer are coming to light according to the journal and now C NBC, the new deal allows Paramount's non voting shareholders to cash out at a premium of around $15 share while also giving shareholders the option to roll out into the new deal.
Now, based on Friday's closing levels that represents about a 26% premium, although those shares as you're seeing are up about 8% in pre market trading this morning.
Now it's still possible that deal negotiations could fall apart as the Sky Dance offer is a bit complicated.
It would involve Sky Dance purchasing a majority stake in national amusem*nts.
This is the holding company that controls Paramount and is headed by Shari Redstone.
Once that happens, Sky Dance would then merge its studio business with Paramount.
So a bit of a two step deal there, the journal added that Sky Dance plans to inject at least 1.5 billion into Paramount's balance sheet to help pare down some of its debt.
Last week, an independent committee reportedly gave the thumbs up to the to the revised deal.
But again, still the possibility that the company could potentially seek out other offers or require approval from non voting shareholders in order to go forward with the trans.
So by and large still up in the air, but it seems like it's more and more likely that Paramount will be sold shares again up about 8%.
All right.
Thanks so much.
A lot to continue to track around Paramount.
Going into the start of today's trading activity.
Speaking of which, we're about 40 seconds off from the first trading session here in June, I'm excited.
You're excited.
My gosh, look at the futures.
They're excited too.
The dow uh the least of the excited though flat just barely to the upside S and P 500 NASDAQ gains.
They're coming into the start of the trade.
I just learned that you uh have to say rabbit, rabbit, rabbit um on the first of months.
Now, you, you educated me on that.
I'm learning so much this morning.
I'm learning about Nim, NVIDIA.
Nim.
It's the inference micro services.
They talked about it, compute you can go on and on and it's only 929.
We're not even at the opening ball.
It's a wealth of knowledge here this morning.
Still got 30 more minutes of learning to do during the show.
It's going to be incredible.
It all to you guys and take a look.
Opening bell here on Wall Street, you got sketchers at the New York Stock Exchange kicking off this first trading day of June.
That's a good one.
Kicking it off with sketchers up to the races.
NASDAQ.
Not to be outdone releases fun.
Betty immediately upon hearing sea to say sketchers kicking things off and there, you're taking a look at both opening bells there.
I was trying to figure out who was up there with sketchers because it seems like there's always with the footwear companies, somebody who's up on the podium with them, given some of the uh sponsorships that they have.
Uh I can't remember.
I can't see it.
But anyway, no doubt, great bunch of folks that's up there beginning today's trading activity here on the day there.
You're taking a look at some of the averages out of the gate here.
We got some green across the screen for the uh opening cross.
We certainly do.
When you take a look at some of that sector action, you've got chips stocks leading the way that's pushing technology higher here.
Big reason why you're looking at the NASDAQ leading the charge as we wait for it to calibrate just a little bit here, but leading the charge at least at the open as opening trades shake out over the next several minutes.
But again, you got the dow just above the flat line.
You've also got the S and P getting closer and closer back to that 5300 level.
Let's sit over to Jared Bucker standing by who has a closer look on some of those movers here at the open Jared.
Yes.
Let's look up the Wi fi interactive behind me.
I'm taking a look at the Dow and the Dow has been lagging the general market but not Friday.
When I say the general market, I just made the S and P 500.
But this was the very end of the day.
We got some of today's action there on that rightmost candle.
But we did see a bang into the clothes which I haven't seen in quite a while.
Now, here's what the NASDAQ is doing today and you can see up its gap a little bit there.
But I want to focus on the S and P 500 compare what we normally look at.
This is the market cap weighted index.
And here we have these record highs and we're actually pretty close, not far off from them.
But you take a look at the equal weighted and that's a different method calculation where everything is equally weighted, every stock gets one vote, whether it's Apple or waste management.
And here we see that this peak was not able to exceed the one from earlier in the year.
So this is a form of divergence at traders track potentially until it's resolved.
You got to think, well, maybe we could go down a little bit from here.
I also want to check in on the 10 year tino yield that along with the dollar and I'll throw the vix in there and I'll also throw in the, I'll put those three together.
All three of those are down from last week highs.
So that's kind of a tail wind for the markets and real quickly.
I just want to take a look at the sector action tech is the only outperformer today.
But what I've been tracking pretty closely is software versus semis and I'll give you a look at today.
Well, you can see that semiconductors are once again outperforming and here's a year to date where you can see semiconductors really close to those record highs while software just flagging a bit.
All right, Jared.
Thanks so much for bringing that down for us.
Of course, some traits to keep in mind here as we kick off first training day of June.
Well, we got much more of your market action.
Hey, keep right here on Yahoo Finance.
We'll be right back.
You're watching the morning with chips socks leading the rally this year.
And so far the sector overtaking software and being the heaviest weighted sector in the S and P 500 to break it all down where you can cash in on the A I hype.
We wanna bring in young Yu Ma BMO, a wealth Management, us, Chief Investment Officer here.
Yy.
I it's great to see you again.
So let's talk about some of that excitement that we're seeing play out from a broader markets perspective here.
When we look at the A I trade, it seemed to be losing a bit of steam going back to last week when you saw the reaction to Dell when we heard about some of the concerns here from sales force and the fact that hey, maybe demand isn't going to be living up to expectations here, at least in the short term.
And now here we are Monday morning and we're seeing that excitement return once again when it comes to the A I trade.
What are you seeing just in terms of whether or whether or not you think this rally has legs?
Yeah.
Thanks Sean.
It's great to be here.
Uh We do think it has legs, but we do think the enthusiasm for A I is gonna come and go in ways and when the news and new information comes out, that sort of sparks new investor enthusiasm or renewed enthusiasm, it's very difficult to predict.
But over the medium term, we do think that the productivity gains and the benefits from A I will be apparent enough that the rally can continue and continue to increase spending in these areas that will help the companies that feed into this.
So overall, we're positive on A I, but we do think it's gonna be a choppy, uh, path forward.
And so all of these things considered, where do you think we'll continue to see overcrowding in certain trades or, or even some profit taking in their term?
Yeah.
In the very short term it's, it's a little bit difficult to gain.
I think that's a tricky play here because, uh, there is a lot of enthusiasm.
It's already baked into some of these A I stocks here.
And I do think that the trends for A I are positive in the medium term, but you know, when there's too much froth and when that sort of deflates a little bit and then re reflates is very difficult to play out here.
But we do think, uh the medium term is quite favorable and you, I wanna bring up our chart of the day from our morning brief newsletter here this morning and talking about the fact that that broadening out that we had seen, uh very briefly, uh earlier this year and also at the end of last year that that's starting to lag just a bit and especially lagged in May.
It's like over the last several weeks when you take a look at that, some out there, some strategists have been saying that, hey, this is a bit worrisome, given the calls that we started the year with and the importance here in order to see more of that rotation.
Are you at all concerned by some of the patterns that we've been seeing it is concerning, it's certainly concerning in the short term that we're seeing a relatively narrow market and that narrowness has been increasing recently and really driven by fewer stocks.
So, you know, that's not what you want to see for market health.
We have seen at least uh recently last week as well.
A little bit of pick up in the small caps, which was nice to see.
So there are few areas of this sort of monitoring, but we don't want to see much more deterioration from here in terms of that breadth of the market and the, the sort of underlying fundamentals of the rally.
So it, it is concerning, but it's not something that right now would lead us to shy away from the market overall.
You know, as you kind of think and, and assess the earnings season that we, we've in large part made through.
I mean, there's a couple more retail companies that are gonna trickle out over the course of this week and a few B to B companies crowd strike later on this week as well.
All those things considered, looking back at how some of the companies that have missed on earnings have been punished more than the historical averages and, and even those that have topped out, they're not getting rewarded to the same extent that we've seen before.
What's that set up for the rest of the year as we go through the future earnings cycles.
Yeah, there was just a lot of enthusiasm coming into the earnings season.
And as you mentioned, you saw huge punishments for, uh, companies that didn't meet or exceed expectations by a sufficient amount.
Um, I think it depends when we go into the next earnings cycle, how it plays out going into them.
Is there a big enthusiasm ramp up pre earning cycle that then the earnings, uh, announcements really have to meet and exceed or do we see some muted expectations going in?
So I think it's really about where we started the cycle and then how things play out and you have to take those two things together.
So I think it remains to be seen what the next month or two will be like if we get a renewed bout of enthusiasm that could uh set us up for very high expectations going into the next earning cycle.
Is it, is it clear though that artificial intelligence can't just be the silver bullet that that gets deployed by companies at this juncture?
Well, I I think artificial intelligence intelligence is gonna be a big productivity enhancer over the medium term, but when that actually shows up in the date is gonna be quite some time, probably a 2025 story.
Is it a silver bullet?
It can be a silver bullet.
Uh But that's something that plays out over time.
That's not going to be a silver bullet over the next month or two So, you know, we're going to get data, we're going to get information.
Uh We saw another announcement by uh NVIDIA recently about the launch of some of its new and enhanced chips.
So this date and information is going to come and go in ways and that's going to create different bouts of enthusiasm in the market.
Uh in the medium term, we're very optimistic in the short term.
It's just a lot of uh choppiness and, and uh inflation and deflation that we have to uh deal with in the markets.
Young Yuma BMO Wealth Management, us, Chief Investment Officer.
Thanks so much for kicking off the week with us.
Thanks Greg, thanks.
Coming up everyone, Ford, Ceo Jim Farley telling Yahoo Finance, there's quote mutual respect with Elon Musk.
We'll bring you more from that interview.
Next competition, the auto sector is heating up as the industry transitions to evs in an interview on Yahoo Finance's opening bid.
Ford, Ceo.
Jim Farley laid out his company's future plans.
Very own executive editor, Brian Sazi.
Joining us now, Brian, it was a great conversation between you and Jim.
So what were your key takeaways from that discussion?
Well, first and foremost guys, it really, it was uh Jim Farley's thoughts on EV si should note this uh uh interview for opening bid uh took place inside Michigan central station which it reopens today $1 billion investment from the 14th refurbish this iconic train station, but it was in there.
I asked Farley his views on EV is a division that might lose close to $5 billion in operating profits this year.
We really believe in the consumer experience for an EV.
And so we want the next ones to be more affordable.
And that's why we're investing in more affordable evs in the next cycle of products that people see in from Ford in the next couple of years.
We're number two in evs in the US behind Tesla a long way behind, but we're still there and people love their maquis and Lightnings and they're gonna like the new ones even better.
Um It is what's hard about it is making the physical changes to be profitable to bring the cost down.
So Farley, I think is very focused on getting that division to profits.
Now, I pressed him if he has a date on when that EV division might hit profits.
Didn't want to share that date.
My quick takeaway is maybe it's a few years from now.
But nonetheless, you heard Farley mention uh Tesla.
Now Farley has embraced uh Tesla and Ceo Elon Musk both publicly on Twitter.
Uh but also just operationally as well working last year or signed a deal with Tesla to get uh adapters for his electric vehicle so they could be charged at Tesla Supers uh super chargers.
I asked Farley uh about that relationship and where it stands.
I think it's been largely positive relationship.
You know, we, in 100 and 20 years, we've been through a lot as a company.
Like we know when what a partnership should be and what's realistic to expect out of a partner.
You know, we compete, I mean, Macky and Mata Y they're in the market competing every day.
So we're realistic.
But um so far the partnership has gone well and we have a professional relationship.
It was funny to hear.
Uh Farley, he also mentioned in the interview that they need 90,000 more adapters from Tesla.
And he said he texted Elon the day before this interview and I asked him, well, did you text them?
Did he text you back?
I don't know if he texted him back right away, but there is, there is a, a relationship here between these two titans of the auto industry and there should be, I mean, uh this is probably good business for both companies.
Well, yeah, I mean, the North American Chargers standard is what Tesla had been trying to get every automobile manufacturer on.
It was their way of cementing their own kind of key or key cog within the broader engine to the EV landscape at a whole.
So I I'm I would hope that he got his text back.
Um I I'm sure I'm sure Elon texted it back.
We'll wait for uh Elon to respond o over to us on, on X but I do.
It's interesting because you hear uh Farley talk about, he's very focused on profitability now, adding more hybrids to the mix.
GM has taken a little bit of a different tact than Co, uh, Mary Barra.
They remain, I think laser focused on getting these electric vehicles to market at any cost, even if it means losing money, how they've been, uh, have, how they've been able to offset those.
Uh, EVs is cutting a lot of costs throughout their organization buying back a lot of stock.
That's why you see GM Stock uh having outperformed the likes of Ford in the past year.
All right.
Yeah, seriously.
Uh great interview there.
You can watch the full interview Ryan Zazi and Ford's Ceo Jim Farley on Yahoo finance.com.
Well, as we were just discussing Ford, CEO Jim Farley laying out in that interview to Yahoo Finance's plans to make electric vehicles more affordable.
Well, all the other auto companies follow suit and what would this mean for the auto space as a whole?
Tom, the Ryan, who's the R BC capital markets?
Global autos analyst joins us now, Tom, great to see you here this morning and, and thanks for jumping on with us on Yahoo Finance.
Let's start there.
I mean, if we did see a more affordable electric vehicle from Ford, what would the rest of the industry be prompted to do?
Yeah, I think this is actually where the industry is headed.
You know, a lot of folks focus on charging infrastructure is the real hurdle for ev adoption.
It's not, it's really pricing.
We have enough charging infrastructure actually and the pricing is just too high right now, especially all the early adopters that kind of gobbled up the expensive evs.
Uh now we're in the mainstream consumer, right?
This is where you have the Cold Culture Wars issue.
So once pricing comes down, we think the whole industry will follow suit.
But a big driver of that as, as Jim Farley said in your guys' view was battery pricing needs to come down and guess what it is?
Those raw materials have come down a lot.
And I think that's why you're going to see a lot of lower priced evs hitting the market.
And as early as 2025 how much lower Tom when it comes to pricing?
I guess.
What's that key critical level that these vehicles need to get under in order to see that mass adoption?
Yeah, that's a great question.
I mean, I think it has to be at the same price pretty much as an I CE car, right.
So, you know, the average price ears though have gone up quite a bit, right.
So they're almost like, you know, $40,000 in the United States.
Um, you know, an EV is probably more like 50 to 50 to 60 when you get the IRA credits, which is $7500 off that the battery prices come down if you can get them in that 30 to $40,000 range, I think they get more interesting and you definitely have that push right to get the 20 to $30,000.
Um ev that will come, it will be a little difficult to get there.
I mean, Chinese already have that in Europe and in, in China.
But in the United States, I would say that 30 to $40,000 change when you include everything together, Tom, when it comes to what's next here for this model E division, what exactly the uh uptake rate is going to look like Sazi asked Jim Farley about profitability that timeline there and Jim Farley declined to really give a timeline.
But I'm curious from your perspective, from a perspective.
Is this something that you think is a couple years out or what do you think is realistic?
Now, this is the real big question for Ford, right?
Because there are other business units especially pro is amazing.
Um And so this business is losing, what $5 billion a year?
Um I think folks are more looking at the inflection, meaning lower uh losses.
We didn't really see that in Q one results because the, because the units that they sold were too low.
So people want to see more of an inflection where losses are declining.
I don't know if folks are really saying, when are we going to get break even a profitability?
It probably could be a couple of years um to get to, to that, to break even, certainly profitability.
It's, it's unclear.
The ev slowdown really is, has, has impaired things.
They, they thought, I think they were going to get contribution margin positivity by the end of 2024.
That may be slipping a little.
So there's a lot of variables that are there.
I think folks, I really wanna know the inflection of losses stopping as opposed to when are we gonna get to, to break even?
And, and with that in mind, Tom, how, how much does the network also need to improve for charging?
Because I mean, that is the the common thought.
What is the mileage?
What's the range that I get in comparison to the ice engines that we were talking about earlier?
Yeah, you know, and we've done a lot of work on this using our uh we have an internal data science team called R BC elements that looked at all the charging infrastructure in the US.
Um And did it looked at like how many evs are there on the road?
How many charging points compared it to I ce cars and petrol pumps?
Actually, the infrastructure is quite good because it's just not that many evs on the road.
So it's more of a psychological issue for people who are just scared, they have range anxiety.
Um And that's not going to go away.
It's just unfortunate reality.
We do need to build the infrastructure out but that's really not the real problem.
It's just a psychological problem.
The real reason is the pricing, the pricing needs to come down.
EV are too expensive.
We also need more models that fit to what Americans want.
Right.
They want suvs and right now suvs that are EVs have very little range because they're on aerodynamic and they're really heavy.
So you need a bigger battery and that costs money.
So, battery prices need to come down and we need more suvs maybe pick up stuff that Americans want.
Right?
All we have in the evs right now are like crossovers and some sedans.
And uh so we need the form factor to change and the pricing to come down.
Uh I'd be, I'd be just fine with a, a live wire motorcycle, Tom and maybe a little sidecar for, for the golf clubs or for whatever else I need to throw in to that.
Uh Tom, thanks so much for taking the time here with us today.
Tom Nayan, who is the R BC capital markets, global autos analysts.
Great to see you coming up.
Airlines are expected to reach almost $1 trillion in revenue this year.
But how is the profit margin on that?
We'll give you the details when we come back.
You're watching Auto finance Airlines are expected to bring in $996 billion in revenue this year.
That's according to the International Air Transport Association, but with all that revenue coming in, the profit margins remain thin with an expected year end profit of $30 billion.
That's up from the previous estimate of $25.7 billion or just $6.14 per passenger.
So ultimately, we're taking a look at some of these figures and the year over year, the return on invested capital in 2024 as well.
That was an interesting figure to me that's expected to be 5.7%.
That's below the average cost of capital as well.
Uh And the operator profits, even though they're supposed to be up, we're gonna reach $59.9 billion is what they're anticipating.
Um That compared to what we saw last year, $52.2 billion which if you remember 2023 was the first year that we surpassed some of those pre pandemic markers for traveler uh at least passenger throughput via TS A. Yeah.
And I think when you take a look at the regional basis and some of those expectations there, that's also interesting when you take a look at the out performance.
When it comes to North America, they're expected to be the biggest here to industry profits for this year.
And comparing that to Europe, that's gonna contribute about 9 billion in North America, which is just around just shy of 15 billion.
And then following Europe is the Middle East notice, I didn't say Asia when we talk about some of the underperformance, there are a lot of that being attributed to China and some of that weakness there will be holding back the recovery within that region.
So Asia demand remaining subdued yet again, still expected to be below those PRE COVID level.
So a bit different when you compare it to some of the trends in demand that we're seeing elsewhere around the world.
Yes, slowing growth, youth unemployment and the relative strength of the service sector they mentioned are some of the risks that should be closely watched there.
All right, let's take a look.
We're gonna switch years here in industries.
We're gonna take a look at a trending ticker and that's Boston beer shares are plunging after some Tory denying that it would be making an offer to purchase the beverage giant.
Another company telling Yahoo finance quote, there is no fact that we are in any negotiations with Boston beer.
And you can see that reflected in the stock price this morning under a bit of pressure and remember that this comes after the stock uh shot higher on Friday following the report that was initially reported here from the journal when it comes to analysts reaction.
And what the quick take was Bernstein was out saying that that the deal might actually look good on paper, but a transaction is not devoid of challenges, talking about limited synergies, which I think was one of our first questions here outside some of those one off brands.
When it comes to a twisted tea, they do have limited synergy.
So I think when we talk about some of the projections there, what exactly that could look like is one of the questions here for analysts.
But again, giving back though some of the gains that we saw on Friday on the heels of the fact that they're saying that actually they're not in talks to acquire the company.
Yeah, absolutely.
This is one of the companies we're gonna be watching over the course of this week as well.
You do have some earnings that are gonna be coming out, um, this week from this industry.
And, uh, I think notably Beam and Tourist to be reporting earnings this week as well.
Uh, so that, oh, excuse me, Brown Foreman is reporting earnings.
So, all right.
Anyway, we'll be tracking the liquor space.
We will be tracking the liquor space on this Monday morning.
All right.
Well, coming up next, we've got some breaking manufacturing data right at the top of the 10 a.m. hour hour.
We're gonna dive into what exactly this means for the fed and for the markets plus our very own.
Brian Zazi is sitting down with Marriott, the CEO to discuss the state of luxury travel about all that and more un catalysts.
Thanks.
