Friday jobs data, Nvidia stock split: Market Domination Overtime
On today’s episode of Market Domination Overtime, Yahoo Finance’s Jared Blikre and Julie Hyman break down the market close and the trading day’s biggest stories.
The major indexes (^DJI,^GSPC, ^IXIC) closed largely unchanged on Thursday as Wall Street awaits the May jobs report releasing on Friday morning. The jobs report will be examined by the Federal Reserve as it weighs its next interest rate decision. As the European Central Bank cut interest rates for the first time since 2019, former Kansas City Federal Reserve president Esther George believes the move reflects the fact that inflation was “really a global phenomenon” with distinct regional dynamics.
As the tech industry continues to be a key catalyst for the economy, Nvidia (NVDA) remains a top player. The chip giant will execute a 10-for-1 stock split on Friday after the closing bell, and recently crossed $3 trillion market capitalization. Jennison Associates Head of Global Equity Mark Baribeau says the company has an “amazing story,” with a never-before-seen revenue growth. He adds that Nvidia will remain a “distinct leader” in this fourth era of computing with generative AI.
Finally, Jared Blikre gives an overview of what to watch on Friday, June 7th, highlighting “Roaring Kitty’s” livestream set for noon Eastern time — his first livestream since the 2021 GameStop (GME) short squeeze.
This post was written by Melanie Riehl
Video Transcript
That’s the closing bell on Wall Street and now it is market domination over time.
We’re getting you up to speed on the action from today’s session.
So let’s start with where the major averages ended on the session pretty much where they were last time.
We checked them about an hour ago.
Not much movement in the last hour of trading here with the dow finishing higher by about 1/5 of 1% around 79 points.
The S and P down very slightly a little more than a point, not even 1/10 of 1% there in the NASDAQ down just about 1/10 of 1% about points on the day.
Uh Jared really a story today perhaps of people kind of waiting for the jobs for tomorrow, waiting for the next big market council.
We saw a lot of big moves on the individual stock level, which we’ve been talking about, but not as much on the sort of macro level today, the indices, the bond with the world of bonds, also the dollar, everything pretty quiet here.
So let’s go to the Wi Fi Interactive.
Just take a quick look at the sector action, consumer discretionary.
That was the best performing sector day XL Y.
Up about three quarters of a percent followed by energy, health care staples, real estate materials and communication services.
All of those outperforming the S and P 500 to the downside utilities, the biggest loser down 1%.
And we’re gonna take a look at the NASDAQ here and, uh, guess what I’m gonna do, I’m gonna put market cap numbers on.
So once again in NVIDIA, switch a switch from yesterday, uh, down a little bit ending the day down for apple a little bit lower and also off that $3 trillion mark elsewhere in mega cap and we see Amazon up 2% as it’s flirting with its record highs cost go up 1% but not a lot of out performers or underperformers for that matter.
It looks like Arc is in the lead here among my leaders in sentiment.
Uh, markets also American U Internet, uh, Korea stock gambling but not seeing too many outliers.
I will check in on Arc innovation.
So we got Tesla up over 1.5% today.
Hood, one of their holdings that’s up 6.5%.
Uh, all in all.
Uh, looks like a better day here for disruptive tech.
Where did gamestop end?
Oh, are we still doing?
Main stop?
Yeah, money too.
All right, here we go.
Here’s our main stops up 47%.
I’m gonna show this is the intraday chart.
We had a number of halts today but guess what, ending near the highs of the day in, put this into context, this is the highest close of the year and probably in several years, you have to go all the way back to about late 2021.
If I put the five year chart on, you can see this latest peak, well, still has a ways to go to get to anything we saw in 2021.
But hey, it’s a start.
We’ll see if Keith Gild tries tomorrow in his live stream.
Yes, we’ll have to find out.
Well, let’s back it up and talk about the big stuff here.
S and P 500 NASDAQ slipping for records as traders look ahead to the May jobs report.
Investors are weighing economic data amid growing hopes for interest rate cuts for more.
Let’s bring in Mark Barbe Bar, Json Associates, head of GLO Global Equity Mark.
Thanks for being here.
Um So just give us big picture first of all, as we await tomorrow’s jobs report.
Um Do you um have a read on the economy that we are going to sort of like bump along here and then get cuts later this year?
Yeah, that seems to be the pace uh that we’re moving at.
You see, the ad P number was a little bit slower than expected.
We’ve seen retail sales reports that have slowed down.
So I think the feds getting largely what it wants.
Uh Core inflation has been trending down again.
Uh So, um I think the market is correctly viewing rate cuts as a distinct possibility later this year.
And Mark I’m interested in your take on a couple of mega caps here.
NVIDIA leader of the year.
It’s down a little bit today and we got that big stock split tomorrow that investors are gearing up for.
Also though, Amazon, this is a stock that’s on my radar.
It’s, it’s uh right around its record highs.
It was up 2% today, but it hasn’t broken out yet.
We’ve seen another of uh another uh a lot of its cohorts to that, but it hasn’t done that yet.
So NVIDIA and Amazon, please.
Yeah.
Well, NVIDIA, uh what an amazing story, right?
Their data center business uh was at $15 billion.02 years ago, 48 billion last year.
Consensus says that above 100 billion this year, you know, never in the history of mankind if we’ve seen a revenue ramp like that.
So we’re in the fourth era of computing, we’re moving to generative A I, it’s gonna change the way computing works.
Uh uh the way uh software works uh e everything we do.
So uh every uh big shift in a technology paradigm always has that singular leader who defines the shift.
And NVIDIA is that uh distinct leader.
So, you know, as long as the data center uh spending continues, not at the torrid pace, obviously, of this year and last year, but at a more normal pace the next couple of years, uh I we think the company is gonna do extremely well.
Um And, and it’s interesting because there is that the big question overhanging, not just NVIDIA, but the whole kind of A I concept has been the sustainability of that when it comes to the growth trajectory.
But it sounds like you your belief, even if it doesn’t continue quite at the same pace, the idea that there’s still gonna be growth in that area.
Oh, absolutely.
I mean that look, the size of the installed base of data centers is uh just over a trillion dollars.
And um you know, not all of it has to convert to quote unquote accelerated computing architectures, but most of it will over the next several years.
And the company that’s gonna gain the lion share of the of the market share is likely to be NVIDIA because of its competitive advantage in scale software and networking.
So, um there’s real reasons why they’re, they’re the big winners so far.
So it, you know, that that’s uh just such a big large addressable market that it’s, it’s, it’s hard to discount um uh uh them not being successful in the next few years.
Let’s talk about another large addressable market.
But this time in health care and we’re talking about uh being overweight and also diabetes.
We’ve seen Novo Nordisk, we’ve seen Eli Lilly surge in various fits and starts.
Uh, but this seems like we’re still in the opening innings here.
Where do you see these companies going?
Where do you see the whole movement going?
Well, I mean, the, the numbers are staggering, uh, the, the consensus revenue estimates, I think were Novo Nordisk, I believe are $50 billion by 2027.
And, and for, uh Lilian Nor Nordik, uh by 2030 the industry could be at $100 billion.
That’s, that’s the revenue estimate you see emerging now as a, as a consensus.
So these weight loss and uh type two diabetes uh treatment, drugs uh are a paradigm shift and uh two companies are gonna largely split that market.
So it’s a huge, huge opportunity.
Um And what we’ve seen so far is good revenue growth from both companies, but very constrained because they, they don’t have the manufacturing capacity to keep up with demand.
So the gating factor here is really supply, it’s not demand, the consumer demand is off the charts.
These really are consumer products that makes them very unique in healthcare.
Um versus, you know, something you would take to treat uh high blood pressure or cancer or, or, you know, something very serious like that.
Uh these are, these are consumer products.
So um they do have enormous potential and as manufacturing capacity comes online, you’ll see revenue uh growth continue to accelerate.
So that’s, that’s the, um, the backdrop for that industry.
It looks very, very healthy.
It’s really interesting.
I think the A I story is pretty well well, if not understood, then people have certainly bit up the stocks, the weight loss thesis pretty well understood.
Where are the areas that you’re seeing a sort of emergent growth or what do you think are, are areas that are not as well understood right now?
Oh, there’s a, there’s a few, I mean, one of our favorites is in uh if you look at what’s going on in emerging markets, particularly in Latin America is the uh boom in uh technology platforms that are addressing not just ecommerce but financial technology.
You know, there’s huge unmet need in the marketplace in Latin America for low cost credit, access to banking services.
Uh so did through digital banks, um access to goods and services through uh ecommerce platforms.
And, and so it’s the uh technology platforms that are really delivering the goods and services.
It’s not coming through traditional industries.
So, you know, like a mercado Libra in Latin America is, is one of our favorites.
Um growth, there is very, very robust and momentum seems to be improving.
Um And it’s not just in their ecommerce business, it’s also in their fintech business where they do supply credit um and other uh financial services to their ecommerce customers, to their uh online merchants and to people off platform.
So very very compelling offering and it and the their uh services are throughout Latin America.
Their big markets are gonna be Brazil and Mexico.
All right, Mark, we gotta leave it there but really appreciate your insights and stopping by here, Mark Barrio.
Thank you.
Thank you.
And artificial intelligence hype is driving tech giants to new heights with NVIDIA recently touching that $3 trillion mark and us regulators, they want to say over keeping A I markets competitive.
Now, the Federal Trade Commission and Department of Justice recently reported uh reportedly reached an agreement to investigate Microsoft NVIDIA and open A I and with more on this, we’re joined by Alexis, Keenan and Alexis.
This is, these are the uh the big three names here.
So uh what are the, what are the details?
So this is kind of a drip, drip.
We know that there has been interest in the A I area and the companies that power A I.
But what this is is an agreement really in principle for the US regulators to divvy up the investigative work when it comes to the antitrust front, you have the DOJ agreeing to take on NVIDIA and you have the FTC going to look at Microsoft and Open A I.
Now no one has been sued yet.
There’s no complaints on the table and we really don’t know what the focus of these investigations are.
So we have to hypothesize a little bit, but we know there’s been concern over the dominance of too much control of the A I stack.
So what’s in that stack?
You have to think about things like the high performance chips, NVIDIA, uh you cloud resources, training data and software.
And also then those end consumer products like those large language models of chat GP T for example.
Um So why would the regulators be looking at NVIDIA?
Well, they control the design of these high performance chips, they have approximately 90% market share there also controlling the chip hardware as well as the software.
So really vertically integrated and why then open A I have dominance there in generative A I, those LL MS uh also uh they’re using Microsoft’s resources, uh their computing resources to power their technology.
So you have to look at open A I and Microsoft is kind of this coupling and then you on top of it have Microsoft investing $13 billion in open A I and also paying $650 million for a licensing agreement to resell inflection A is products and also hiring their staff most of their staff.
So that’s looked at as perhaps we don’t know, but a deal that’s maybe masquerading as a purchase, an acquisition as opposed to just paying for those services.
Now, certainly when resources like and videos chips, let’s say when any resource becomes what’s considered kind of indispensable, everybody’s got to have it like a smartphone, 100,000, right?
So that’s when you have regulators stepping in and having concerns.
So it’s not too much of a surprise if you’re willing to put Nvidia’s chips in that basket for the moment to say they’re going to want to make sure that enough companies, enough people have access to this technology.
You know, as you’re talking, it reminds me of something that we said yesterday, which was yesterday was five months to the day until the president election.
These are really complex investigations that both the doj and the FTC have undertaken, not just in this case, but in a lot of big tech cases is the clock ticking like they gotta get it done before.
I mean, you know, if there is an election, if there is a change in administration wouldn’t, some of these investigations potentially end it could potentially be dropped.
We don’t know, but look the case that’s pending against Google that were, there was a big trial, right that we’re waiting for the, the judge’s decision there in DC.
So that was brought by the Trump administration.
So there all these cases aren’t necessarily as much as we hear about the Biden administration’s push on both the DOJ side and the FTC side to go after big tech.
Uh, it’s not necessarily going to get dropped just because another administration steps in.
Very good point.
CBD and good point about that Google case and when it was originated.
Thanks Alexis.
I appreciate it.
A safe landing in the Books for Boeing’s new star liner capsule after launching successfully on the United launch Alliance Atlas V rocket, the space vehicle with the two member NASA crew docks with the International Space Station today.
This first crude flight test comes after various delays.
It was scrubbed twice due to technical issues but Boeing successful mission turning up the heat with competitors such as Elon Musk’s SpaceX Boeing starliner joining spacex’s dragon capsule endeavor in the space race.
Coming up the Fed’s monetary policy under the microscope after the ECB cuts interest rates, we’ll discuss next on market domination over time.
Investors waiting on the job support tomorrow.
And of course, it comes ahead of the Federal Reserve decision next week.
The backdrop for central banks around the world, the rate cutting cycle has started led by the Bank of Canada and the European Central Bank.
Joining us now is former Kansas City Federal Reserve President and Ceo Esther George.
Thanks so much for being here.
Appreciate it.
Nice to be with you.
So let’s talk first about the jobs report here and sort of put it in context.
It seems to me that the FED is still really focusing more on the inflation data, but what should be sort of the read through from something like the jobs report?
Well, of course, the jobs report is going to be very important to this committee because they do have a dual mandate.
They focus both on inflation and on unemployment.
But this committee has been quite clear for some time because they, that we’ve had an inflation problem in the country.
And right now, even though inflation has come down quite dramatically over uh the last year, it remains well above this committee’s target.
So I think inflation is still the key uh indicator right now, even though both of those things, I think pretty soon will be coming into better balance for what they’re looking at.
I’d like to get your thoughts and comments on the ECB decision this morning European central bank cut rates by 25 basis points as expected.
Uh But they were the first to do it here among the developed countries.
Um And it’s not often it’s been a long time.
Another guest pointed out it’s been uh years decades since the ECB kind of led the charge that way on the way down.
What do you read into this?
Uh just as a former central banker yourself?
Yeah, I think, you know, first of all, I think about how inflation has really been a global phenomenon coming out of that pandemic with the supply shock, we experienced the world experienced an inflation problem and each country’s dynamics are a little bit different as we have come through that period.
And so in the case of the ECB, uh you look at Europe was really affected more around its inflation dynamics with energy, for example.
And so as they make their assessment of confidence in where they are in their inflation fight.
Obviously, they signaled sooner and earlier that they would be in a position to cut.
And we saw that today, I think the same is true with Bank of Canada, their dynamics a little bit different.
And so the Federal Reserve um is in a place right now where given its economy, given the amount of fiscal stimulus that is there, how the economy is performing, I think has indicated they’re at a peak interest rate right now.
And we’ll be looking to the future of where those rate cuts come and are really in a wait and see mode right now.
And I think that will probably be true as they come out of their meeting next week.
Well, and you um just said a few moments ago that you are pretty confident that things are coming back into a better balance.
It feels as though the the data recently has been a little less even or at least less clear that it was all going in the same direction in terms of moderating inflation while the economy was holding up pretty well.
So I I’m curious what data points you’re focusing on that gives you that confidence.
So I have for some time been thinking a lot about consumer spending and the job market.
And I think in both of those, we are, we are seeing some moderation.
The good news is the economy looks uh pretty, pretty good right now.
That there is growth uh consumers.
Although some of the retail numbers have come in slower, are still spending, the employment rate remains low.
But there are some factors around the job market that show it is beginning to come into better balance as it relates to the quits rates.
For example, the number of job openings, businesses reporting that they’re having an easier time hiring all of those things I think will be important to see where they come out tomorrow to see where the may data uh positions the job market and particularly with wages.
So all of those indicators show, I think welcome moderation, whether it is enough to continue the progress of inflation uh down in a timely fashion in a way that this fed is looking for, I think is really too early to tell exactly when that’s gonna come about looking past the jobs report and and also inflation reports.
What other economic reports do you focus on to try and give you an overview of where we are, where the American consumer is, where the American economy is?
Well, I think one thing that’s always interesting to look at is consumer confidence and how people feel about their current situation.
And we know that inflation has really clouded how Americans feel about uh their prospects even though we have really historically high employment in the country.
So I think consumers as they judge their optimism uh or lack of that uh on the economy does have the potential to affect how they spend when they begin to pull back.
So I think looking at how consumers feel, given that that is such a large part of how the economy performs is always important.
Looking at manufacturing, how are businesses feeling about uh their prospects in terms of capital investment and other things?
And of course, the other indicator, I think so important right now with inflation at the levels it’s at is to see what the expectations are both from the market and from households about the future of inflation.
So all of those indicators, I think right now are in play in terms of providing really a a totality as the fed chairman has talked about in data that the committee will be considering as they look and see whether their policy settings continue to be appropriate.
Um I share your sort of fascination with where the consumer is going here and it seems as though there have been a number of different elements that have um combined to support the consumer, particularly higher end consumers.
One of those elements ironically is the fact that rates are where they are because there’s a lot of money in money market funds.
For example, that folks are then getting a return on stocks are rallying which is also helping uh wealthier Americans.
So there has been this idea floated that cutting rates ironically might reduce that spending power of the wealthiest cohort.
Do you think that that holds water, that argument.
Well, you have to remember and this is, this is true.
Always.
The FED has one blunt instrument called interest rates and it affects different parts of the economy in different ways.
And of course, that interest rate as a macro tool is designed to suppress demand.
And that’s why right now, I think you could argue in some sectors of the economy, people are feeling the pinch of those higher interest rates even as other parts, as you noted are maybe benefiting in other ways from that.
And that is, that is always true.
I think in terms of how this interest rate policy lands, what will be important for the FED though is in a macro sense, they will have to see the economy slow in a way that allows inflation to continue to come down.
And I think there are reasons to think that could happen.
I think first quarter reminded us it may not be a straight line in terms of how that inflation comes down.
So keeping um a restrictive policy, being confident that that policy is gonna have the desired macro outcome um is really the goal for this committee.
All right, it is a big, big economy with lots of cohorts.
That’s my takeaway here.
Really appreciate your time.
Thank you, Esther George.
Thank you.
And now it is time for what to watch Friday, June 7th.
We’re going to start off with jobs, the monthly jobs report for May is coming out at 8:30 a.m. Eastern.
The expectation is that the economy added 190,000 jobs last month, an increase from April slower than expected gains and the employment rate expected to hold steady at 3.9% which would extend the streak below 4%.
Something not seen since the early 19 fifties and hourly wages are expected.
Wages are expected to tick up slightly from April.
Meantime, in video will complete its 10 for one stock split after the market closes tomorrow, meaning each share the shareholders own will be split into 10 shares.
Trading for video stock on that split adjusted basis is scheduled to begin when the market opens on Monday.
Now the move doesn’t change the valuation of a video as a company but the shares will have a lower price price each making them in theory more accessible to investors.
And finally the main stock rally it Rs on keep G also known as Roar Kit is set to host a live stream on his youtube account at 12 pm Eastern shares of gamestop.
They shot the session highs on the news closing higher by 47% and briefly causing trading of the stock to be halted because of volatility.
Imagine something similar could happen tomorrow in terms of those volatility, how we shall see that’ll do it for today’s market domination over time.
Be sure to come back tomorrow at 3 p.m. Eastern for all of your coverage leading up to and after the closing bell, but don’t go anywhere on the other side of the break.
It’s asking for a trend.
