May’s PMI data and OPEC’s production cuts: Catalysts
On today’s episode of Catalysts, co-hosts Seana Smith and Madison Mills delve into various pivotal market developments, dissecting the ISM’s manufacturing PMI data for the month of May, oil price dynamics (CL=F, BZ=F), and the top trending stocks.
The Institute for Supply Management’s (ISM) manufacturing Purchasing Managers’ Index report revealed a slight decline in May. Saxo Bank Chief Global Equity Strategist Peter Garnry joins the show to provide insights on how markets are digesting this print and its implications for future interest rate cuts by the Federal Reserve.
Meanwhile, OPEC+ extended its oil production cuts until 2025. Bob McNally, the founder and president of Rapidan Energy, joins the show to discuss the impact of this decision and delve into the macroeconomic factors currently influencing oil prices.
Shifting gears, the show dives into the stock reactions of Yahoo Finance’s top trending stocks, including tech titan Nvidia (NVDA), music streaming platform Spotify (SPOT), and aviation giant JetBlue (JBLU).
This post was written by Angel Smith
Video Transcript
Here in New York City.
I’m Sean Smith alongside of Madison Mills with di into the catalyst.
Moving markets today stocks are mixed ahead of a packed week of economic data.
Starting with those manufacturing prints coming out right now.
We’re going to get to that plus a slew of key readings on the jobs market to come throughout this week.
We’re going to tell you what that data could be for markets are in the mean.
So are rallying another social media post, the link to the meme trade superstar.
He y sparking a surge in game of shares.
We’re going to discuss what this tells us about the in the market and plus agrees to extend production cuts into next year.
The sparking debate over the outlook for the oil market.
We’re going to dive into concerns around supply and demand for the energy sector.
Let’s get to some breaking news that we have out here this morning and that is the latest data coming out in the manufacturing index that is a manufacturing falling to 48.7% that’s coming in below expectations.
When you dig into this report, some of the key to it that we want to here, you’ve got prices paid that actually fell from 60.9 previous month of 57 flat.
When you take a look at some of those other tidbits here, inventory falling to 47.9.
But employment rising to 51.1.
Now, that is actually the highest level that we’ve seen since August of 2022.
And Matt, we take a look at some of the reaction that we’re seeing play out in the market now.
Yeah, it’s interesting to see some of the moves, particularly when you look at the bond market, we’re seeing that yields are plunging off of this data.
I want to take a quick look at some of the actual moves that we’re seeing in the five year.
You’re seeing that coming in at around 44 in the two year.
You’re seeing that coming in around 48.
I’m also seeing the movement in the 10 year hitting a little bit below that 44 mark here.
So seeing a lot of movement there, we’re also seeing movement in the dollar some softness there coming in off of this ism data missing the estimates that we’re seeing.
We don’t, we’re not seeing a lot of reaction when it comes to the stock market, not much reaction there.
So it could mean that we’re seeing some movement particularly in tech and utilities kind of boosting the overall market here, seeing the S and P coming off just a bit from its highs but not a ton of movement there, Shana.
Yeah, certainly.
Again, it’s gonna be interesting to bits to watch here just in terms of the impact that this is going to have.
Obviously, this is the first read.
So as traders digest, we’ll see whether or not this initial reaction holds here throughout today’s trading day.
And as I mentioned, stocks are mixed that manufacturing data showing some growth in the latest readings.
This comes as PC inflation rose at a slower rate in April.
But this data potentially reigniting hopes that the FED could cut rates this year.
Joining us now to discuss, we’ve got Peter G, he is Chief Global Equity strategist at Sao Bank.
Peter, thanks so much for being here.
I know you’re just getting in this data as well.
But what is your initial reaction about what this could mean for equities moving forward?
Well, I think that it confirms that the manufacturing sector is just hobbling along around slight expansion.
In this case, there are some bits that are contracting, but we are facing a world where China is pushing on an export string and that’s really pressuring manufacturing both in Europe and the US.
And one of our main thesis is that the harder China is pushing on this export policy that they are pursuing with very heavy government subsidies, the harder the push back will be from the US and Europe.
So in the short run it could cause lower goods inflation in the global economy, but longer run, the goods inflation will be higher because it will force the US and Europe to be more protectionist trade policies and put up tariffs around their economies.
And that and also re show manufacturing maybe to, you know, friendly countries, but maybe even within the US and Europe and that could push goods inflation up.
But I would also say that for us, the main, the main thrust in the economy both in the US and Europe right now is the services sector.
And that’s also the potential cause for these inflation dynamics to persist for longer than expected.
The labor markets are still tighter in the US and Europe than they were prior to the pandemic and wage wage growth, it’s coming down but it’s still pretty high.
Um So, and I think when you sum it all up, I think, you know, our equity outlook is still positive and it’s driven by the services sector which is the dominant part of the economy.
So your outlook is positive here, Peter, what do you think gains are going to potentially look like?
And how much of it when we talk about that catalyst here for future growth, how much of that is dependent on that first rate cut?
I think.
So this is where it is getting really interesting.
I think we have an economy right now that can best be described as a two lane economy, you have a part of the economy that is interest rate sensitive consumers that need short term refinancing on consumer credit, high yield financing, corporations, etc car manufacturing, car manufacturers, that part potentially lower interest rates.
But then you have a I related the technology part of this sector, healthcare, pharmaceutical obesity, drug manufacturing, that part of the economy is powering on.
So that’s the conundrum that the central banks are facing because inflation is not where they want it to be.
And you have this two lane economy.
I think the rate cuts, we will get one from the here on Thursday.
Then the big question is whether they will pursue more rate cuts.
I think it’s pretty doubtful because the growth is coming back in Europe in the US.
I think the rate cut will come later this year in the short run.
I think that we can best be described as an environment of low inflation, the outlook for companies look pretty stable and there is so much fiscal deficit and fiscal impulse coming into the US economy and it is also being cranked up here in Europe because of increased military spending due to the war in Ukraine.
All of these things point to a positive outlook and I think we need to get on the other side of the US election in November to really see the next pivot in markets and in sentiment.
How big a role do you think the election will have in when the fed decides to cut rates.
Well, I think, I think what plays out the biggest potential fragility to the US economy is that the government has played a huge role in this enormous growth that is ushering over the US society or the US economy because of that fiscal impulse that is unsustainable in the long run.
And I think it has been addressed and mentioned by many people in the States, but also here in Europe that we need to address the fiscal situation and it will not happen on this side of the US election.
So the US election will be quite crucial.
Um There will be obviously details depending on whether it’s Trump or Biden that wins the election.
I think a lot of the things are still set in stone in the US.
Um you know, their relationship and the frictions that they see towards the Chinese economy.
Um So, but yeah, I I think it’s too early to speculate.
We’ll have to see what happens after the after the election.
All right, Peter Garry, thanks so much for taking the time to uh join us here this morning.
Saxo Bank, a chief Global Equity strategist.
Let’s turn to a big story that we are tracking here this morning.
That’s the rally that we’re seeing in meme stocks.
You have gamestop shares are surging after a REDDIT account linked to the meme trade influencer.
Keith Gill posted a screenshot showing a massive stake in the company.
We could not verify the post here, but gamestop sparking a surge in other meme stock names.
You can see that excitement on the screen right now.
The games are well off the highs that we saw free market here.
So pairing some of those earlier gains even after the opening trade was halted earlier due to volatility.
So what does this tell us about what the action we could see in the broader markets we want to bring in James Gellard.
He’s rapid ratings, International CEO and executive chair James.
It’s good to see you here.
So let’s talk about this excitement that we’re seeing back once again within the markets all being driven by this post that we think is from Keith Gill over at Reddit, the, the account uh linked to Keith Gill in the past.
What does this tell you just about the current investor sentiment right now?
And whether or not uh these, this type of behavior is here to say when you get someone like Keith Gle posting about that opportunity that he at least sees in games stuff.
Well, I think it indicates we’re in a frothier market again when we have a Frothy market.
When we have a lot of exuberance, there’s there are momentum players, particularly from the retail side that are prepared to come in and throw money.
In some cases.
It’s, it’s new money that they’re investing in some cases.
It’s gains from other places.
That they have made bets over the last, uh, over the last year to a few years.
But you don’t see this kind of a reaction unless there is real excitement and exuberance going on.
Otherwise you just can’t see the jumps in stock price in a, in a company like this that still has a lot of fundamental issues to solve unless, unless there’s just a ton of eagerness in a group of investors to be involved kind of at any price.
Well, given that I want to get your take on what we’re seeing today versus what we saw in 2020 we spoke with we Bush analyst, Michael Factor about what roaring K 2020 move on GM me meant and why it sort of made sense at the time.
Take a listen to what he had to say more than 100% of the share short.
And he made that obs observation, it was astute, he rallied uh retail investors, redditors, you know, Reddit Raiders to, to buy into the stock.
So he’s talking about that 2020 move sort of making sense given what he was seen in the shares, this astute observation here, given what you just heard compared with what we’re seeing today, are investors more likely to lose this time around.
I think a lot of investors have lost pretty consistently along the way.
And when you take a company like gamestop that has capitalized, you can argue well and appropriately or inappropriately.
But the company that capitalizes on this kind of momentum by issuing new stock is fundamentally diluting the holdings of everyone who has invested to date.
So when gamestop issued at the market equity just a few weeks ago, they were effectively diluting the value of each share that each holder had prior.
So irrespective of what the share price was, there were more shares and therefore everyone held a little bit less.
So you’ve got this phenomenon going on as well in almost each one of the rallies that we’ve seen, they are coming off.
We’re not holding the highs even today.
We haven’t held the on gamestop.
No one loses, no one wins without someone else losing in a case like this.
So there are definitely people with axes for, for momentum and they are pushing the stock and a lot of people are jumping in, but not everyone is getting out at a time when they can make a profit, James from, I know you’ve dug into just the fundamentals of this has anything changed in that part of the story when it comes to gamestop.
Well, so the financial health rating at rapid ratings is entirely empirical.
We look just at the financial statements of companies and analyze the companies against millions of company years that have come prior across industries.
And with gamestop, we see them now rated at a 50 on 100 point scale.
So it is right in the middle of our medium risk territory.
That’s the short term risk.
The financial health rating, the core health score is currently rated at 26 core health score looks out multiple years at how fundamentally strong or weak a company is.
So what you’ve seen with gamestop over the last few years is a minor uptick in the financial health rating, but actually a decline in the core health score.
And for any company that looks like this, what that’s essentially saying is that the fundamentals of the business are not improving or slightly deteriorated, but the liquidity of the business is propping it up in the short term.
And that’s what you see mirrored in the fact that they are able to periodically raise more equity and therefore cash.
They don’t have a lot of debt that speaks well for them.
They have been pairing their losses that speaks well for them.
They still haven’t been profitable in about five years that doesn’t speak well for them.
So the real question here from a fundamentals perspective is, does gamestop have a plan and is the plan one that they can sell to a more sophisticated, consistent institutional audience?
Not the moment of retail players?
Because that plan needs to show that the company is on track to be better at some point in the future when liquidity isn’t quite as easy to get.
And when that fuse life actually burns out, taking a step back, James, I wonder, you know, if you look at the Yahoo finance trending tickers platform right now, you can see the Blackberry is trending far above even a name like NVIDIA.
And it makes me wonder if there is an opportunity here for investors to sort of get an edge with some of the me names in the space.
When you’ve got a big tech powerhouse, like in video, that one could argue is already getting a lot of attention.
and as higher valuations, is there an opportunity for a potential edge on these names?
Well, there’s an opportunity but you have to question what the opportunity risk ratio is and there’s no question that people can make money in these stocks because they are moving so much in a short period of time.
The question really is, are they prepared to take the risks of losing a significant amount of principle in the case that the volatility turns against them?
And that’s what we’ve seen time after time, but there is definitely upward movement in each one of these.
But people have to be prepared to be in and out and certainly no one Gill or anyone else is touting a position and saying I’m holding this position for five years or some longer term period that would suggest a buy and hold strategy.
Everything that is around the meme stocks is about getting in and getting out or squeezing shorts or doing something that is a shorter term activity, even the even the options position that I believe he posted or has attributed to him posted in the last 24 hours is a relatively short term contract.
So it needs to have momentum in order to be in the money and to be sold, which is undoubtedly a real reason why someone would want to inject more momentum in if you want to ride along for, for the gains that you may get in that process.
I think that’s a totally reasonable thing to do as long as it’s done with a conscious understanding that the potential to lose money is significant.
All right, James Gellar Rapid Ratings, International, CEO and executive chair.
Thanks so much for jumping on with us here this morning.
Want to turn to oil lower this morning, Brent crude briefly trading just below.
It’s, it’s still right above 80 bucks a barrel here.
You’ve got crude also off just around 2.5%.
We’re seeing this reaction after OPEC Plus agreed to extend a group wide production cuts into next year as it attempts to support prices.
Joining us now, from the outlook of the crude market we want to bring in Bob mcnally.
He is the founder president of Rapidan Energy.
It’s good to have you, Bob.
Let’s talk about some of that, the market reaction that we’re seeing here in the oil market.
You’re looking at this.
It almost seems like the, the street at least is looking at this from a bearish perspective is that the right reading, you know, uh good to be with you.
I don’t think so, but you know what reasonable people can differ.
Yesterday’s decision had a lot of moving parts.
Some of them were supportive of price like extending 3.7 million barrels a day of cuts that would have expired in December 24th through 25.
So that was unambiguously bullish.
But they also came out and said, look, here’s our schedule for tapering about 2.2 million barrels a day of cut.
They were extended from June to October.
So the appearance of a detailed monthly tapering schedule over 12 months that I think, uh caught folks by surprise and has the bears thinking, uh oh, they’re gonna be adding back barrels in my view.
OPEC is willing and able to pause or reverse any tapering.
I don’t think they’re gonna let the bottom out of this price accrued, but it’s understandable why folks are some folks are taking it bearishly today.
So what would you say to those folks in terms of your number that you think that we’re gonna get in terms of per barrel moving forward?
And what do you think the biggest catalyst for that is going to be?
So, you know, we’re telling clients, we’re in a range, we’re in an 85 $90 average Brent range.
Uh The downside risk and the pressure on the markets clearly from macro, you know, everybody has to be a fed watcher these days.
Uh huge macro risks on demand, demand has not been great this year you just saw the PS MP S PM.
I came out diesel demand, which is the economic fuel, not good.
China weak.
This is why OPEC Plus had to extend these cuts.
So look, there’s real downside risk and pressure on the price of oil mainly from macroeconomic conditions and your upside risk is mainly from geopolitics in the near term.
So far, the market has shrugged off disruption risks, whether it’s Ukraine or Israel.
Iran related.
I still think there’s, there’s risk particularly with regard to Israel and Iran.
But for now the markets in show me the barrels mode.
So I think we’re range bound with macro pushing prices down and geopolitics posing some latent bullish risk.
Bob, why do you think the geopolitical risk has been shrugged off what you were just saying?
And I guess what is going to then be the differentiating factor for the market to react to some sort of development.
You know, traders are in a boy who cried wolf mode right in 2019, Iran attacked Saudi Arabia massive disruption, largest ever open on a Sunday for crude oil, but they didn’t last that long.
Then when Russia invaded Ukraine, everyone thought we’re going to lose Russia.
We roofed, we saw record gasoline prices in the United States didn’t have a disruption in Russian oil and Iran has been hitting boats and ships from time to time without any lasting disruption.
So the market I think is like, you know, I’m just not going to believe it until I see it.
Uh And even when Israel and Iran traded blows direct attacks recently, again, those did not escalate into a material disruption of Arabian Gulf flows.
Finally Red Sea.
Yeah, it’s bad.
No, LNG is moving through the Red Sea but the market is optimized.
We’re diverting around it.
After all, the Red Sea is just a shortcut and you can avoid a shortcut.
Bob.
You are the former White House energy adviser.
You’ve said that rising oil prices are understandably an existential crisis for politicians.
If you were in that role today and given that President Biden is also in the middle of an election cycle.
What would you be advising him?
Well, you know what, what I learned in the White House and I would advise any president is the biggest thing you can do is not make mistakes and one mistake would be to spill more strategic petroleum reserve barrels.
That’s just a bad idea.
I commend the Biden administration for trying to refill the S pr which they’re doing.
That’s the right thing to do.
Don’t take the bait and use the S pr to try and control gasoline prices as the president has done.
Unfortunately.
Second, he’s gonna be getting a lot of bad advice if oil prices goes up, go up.
That includes to restrict exports of refined products.
Like we export a lot of gasoline and diesel, including to our allies and friends.
Some protectionists will say, hey, let’s cut off those exports and keep them at home.
Really bad idea.
You’ll get about two days of relief at the pump and then we’ll be worse off because you’ll have less investment and higher prices.
So avoid mistakes.
That’s my main, my main advice.
All right, Bob mcnally, Rabi Dan, uh energy founder and president.
Thanks so much, Bob.
Thank you.
We want to get to some breaking news.
The New York Stock Exchange investigating a reported technical issue.
It’s impacting some stock prices.
We’re seeing massive moves in a number of stocks here this morning.
Now that trading was halted for a number of those names, looks like New York Stock Exchange is investigating that and we will bring you any update that we get.
All right, coming up next here on a catalyst, we got much more of your market action.
Had our executive editor Brian Si sitting down with the CEO of Marriott.
They’re going to discuss all things travel.
Next numbers are still spending especially on travel.
Marriott is expanding its luxury hotel portfolio with three new locations in the U SI have Anthony Capuano Marriott, CEO with me in our Yahoo Finance New York studio.
A always good to see you.
Good to be back.
So talk to us.
Uh let’s start on the on the demand for leisure travel uh what are you seeing from consumers?
You know, I think coming out of your most recent quarter, things may have slowed down a little bit.
But what are you seeing now?
I, I mean, a little bit but what was encouraging to me when I looked at the data in the first quarter, not only did we have continued strength across geographies but across segments.
Uh, group continued to be the standout rev par was up about 6% in the quarter.
The leisure was still up 4% and that’s building on historic highs.
So we continue to see strength in leisure.
And then when we look into the summer leisure season, uh we’re up a couple points on forward bookings for Fourth of July here at home.
That’s us.
But then when you look at outbound into especially Western Europe, France, Italy, Spain Greece last summer was a record summer and we’re up 7% on forward bookings.
How do you explain?
We just heard some really bullish indicators from uh some of the airlines coming out here with good results.
How do you explain this continued strength in travel in the US?
Well, I I think even prior to the pandemic with some of the younger demographics, you saw this spending shift away from consumption of hard goods towards experiences and it certainly appears when we look at that credit card spend data that the pandemic acted as an accelerant for that trend across demographics.
My you know, if I play amateur sociologist, I think people during the pandemic recognized, I haven’t bought another watch or pair of shoes or handbags and that’s ok.
But I sure miss travel and I’m gonna prioritize my disposable income on experiences.
Whether that’s vacations, family reunions, visiting friends, immersing yourself in new cultures.
There is a, a strong, an almost insatiable appetite for those sorts of experiences.
So, given that, uh, given that outlook, where are you building some of your most important hotels or converting them?
Yeah.
Well, everywhere, I mean, we had a couple really exciting announcements at the luxury end of the market just this week.
Uh We’re converting the Turtle Bay Resort on the north shore of Oahu, which is a stunning hotel.
Uh Blackstone put did a massive renovation of that hotel before they sold it to host, host, will convert that to a Ritz Carlton and then in uh southern California in Newport Beach.
Uh We’re very excited.
We reached a deal with the Irvine company and Donald Bryn to convert the Pelican Hill Resort to a Saint Regis.
So we’re seeing lots of resort activity, lots of conversion volume.
Um But at the same time, we’re recognizing there’s a value focused customer at the other end of the spectrum.
And so we are rolling out uh additional platforms in the mid scale tier.
What does pricing look like those value ends of the spectrum?
I think there’s so many people focused on inflation and how everything seems to be going up.
Uh What does the pricing look like?
Well, it’s, it’ll be the most moderately priced range of products we have across our 30 plus brand portfolio.
And so we’ve got four points Express rolling out across em right now.
Uh We’ve got City Express, the acquisition we did down in Latin America.
Uh I was at the groundbreaking for the first studio res here in the US, which is an extended stay focused mid scale platform.
And then we’ve got a code name here for uh uh project mid tier which will be a transient focused uh mid scale tier.
There’s been some chatter um in the various lodging publications of how interest rates at still at these levels um are impacting development but they also can impact once loans on hotels come due.
Now you have decades of experience in in development.
How do you see this playing out?
So, on the development side, it’s interesting.
Uh You and I have talked about this in the past, the vast majority of our owners and franchisees are long term investors in the sector.
They understand that it’s cyclical.
I don’t think they are hesitant because of interest rates to be sure that squeezes the returns.
But their bigger challenge is just accessing debt.
The debt markets for new hotel construction are very constricted in the US.
And in Western Europe, there’s plenty of available debt capital for existing assets.
Um But the irony is when you talk to these lenders, especially regional lenders, their hospitality portfolios are the best performing assets in their commercial real estate portfolio.
The issue is they’re all one wondering what’s gonna be imposed upon them by basel three in mid 25.
And so they’re hesitant to do a lot new origination.
A lot of new origination, our company group bookings have been very important.
Very strong, Marriott, what do they look like in the back half of the year in front of the election?
So in the first quarter, we were up uh 6% year over year.
We’re uh approaching double digit growth as we look into the back half of the year.
Uh And I was, this is anecdotal, but I was just at an event we hold every year called the Association Masters.
We had about 400 Association meeting planners and it was fascinating almost to a person.
Their frustration was finding dates and space.
Uh They were saying to our teams, can we book 78, 10 years out, 10 years?
I I know it’s uh it’s remarkable but what it speaks to is the strength of that group demand.
Uh You’re a world traveler.
Uh You, you’re just, you’re basically live out of a out of a suitcase since we last spoke, the Biden administration, put new tariffs on China when you go to China and talk to your customers over there.
How are American companies viewed?
Are they getting concerned about any potential change in the White House.
Well, it’s, it’s, um, I was in China just a couple of months ago.
Uh, us political scene is about the only topic anybody wanted to talk about.
I wanted to talk about demand.
I wanted to talk about two ways to get inside the room with.
They all wanted to talk about, uh, you know, my perspective on the election, um as we’ve discussed in the, in the past one of the really great things about our China business, which is our second biggest market.
We have a little over 500 operating hotels, another 400 in the pipeline.
Almost the entirety of that portfolio is Chinese owned.
And so it is um I think it insulates us a little bit from some of the friction that exists between the two governments.
Do they still have confidence in the US?
They do.
It’s good to hear.
All right, Marriott, Anthony Capuano.
Good to see you.
Good luck with the Hospitality week.
All, appreciate it.
Thanks.
All right, Madison, back to you.
All right.
Thank you so much for bringing that to us.
Brian Sali, really appreciate it.
We’re gonna get to some trending tickers.
We are watching this morning.
We gotta start with the big guy here in via those shares are up a little over 3.5% this morning after the company announced new A I Chips Bank of America.
Moving on this news raising their price target on the stock to $1500 a share that is up from 1320 this is now the highest call on the street.
Now, Shana, not only getting news from NVIDIA this morning, A MD also announcing a new chip at this tech conference.
This and A MD is kind of the closest thing, NVIDIA has to a competitor, but I just pulled this stat that shows how far ahead NVIDIA is from A MD.
They grew sales by $100 billion in A I chips in the past year.
A MD is expected to do 4 billion.
So you really can’t compare.
That’s 1 25th in terms of the comparison.
Exactly.
You talk about just the sheer dominance that NVIDIA has had over the market up until this point and you talk about the new chips, what they have in the pipeline.
Clearly a lot of excitement surrounding what we heard from Jensen Wong over the weekend.
And that’s why you see in video once again, a thought that had already been up 120 plus percent heading into the weekend, up another 3.5 to 4% here today.
So you talk about that runway for growth and I think a lot of that optimism was reflected in this new uh price target that we’re getting out here from Bank of America earlier this morning.
1500.
That’s up from 1320.
And why were they bullish here just in terms of where we are in the sector.
Uh They’re still saying that we’re early in the cycle here for the sector, a it wins and solid free cash flow.
They see near term, it might be a bit stretch, but the semiconductor cycle has legs for another 12 to 18 months.
So again, when you take into account that 1500 call, that’s about 35 37% upside from where we are today.
So still many analysts on the street remaining extremely bullish on this day, you can see investors clearly getting excited by some of the announcements that were made over the weekend.
And still, it just really shows that we are maybe, in fact in the very, very early innings of the A I adoption cycle and the A I investment cycle when even comes to some of those caps as well.
Absolutely.
All right.
Well, let’s turn to another trending ticket here at Yahoo Finance and that Spotify, it’s moving higher up nearly 5% after the company announced that it’s increasing the cost of its premium subscription plans in the US.
Now, this is Spotify’s second price hike in a year.
Yahoo Finance’s Alexandra Canal has the details for us.
Yeah, we’re seeing shares of about 5% shares were up as much as 6% earlier today after those fresh batch of price hikes that we’re getting to those us subscription plans according to Spotify, prices will rise between 1 to 3 bucks a month.
Beginning in July, the family plan, that’s all the largest increase with prices rising to 1999 a month.
That’s up from the prior 1699 to a plan that allows two users to be on the same account.
Those subscription plans will increase by $2 to 1699.
And then Spotify premium subscriptions will now cost 1199 a month, which is an increase of $1.
Now in a blog post spot.
I said that this is due to the fact that wants to keep continue to innovate and offer the best possible experience for consumers when it comes to not only audio but also music and audio books and different initiatives there.
Spotify did boost the cost of certain subscription plans last summer and previously hinted that they want to offer more flexible subscription plans down the line as Ceo Daniel.
He confirmed that an audio book only here will be coming to the platform as well as the music specific tear.
So this is all part of a group push to really increase profitability, boost margins of the stock is up considerably higher compared to the year ago period, up, more than 100% of about 60% year to date.
And if you think about where this company was even a couple of years ago, they’ve made significant strides analyst on the street, they’ve been consistently bullish on the move saying that this is an effort for the company to really boost that top line growth.
So, you know, I’m not surprised to see that these prices are coming.
Now, of course, just another added thing for the consumer though.
It feels like the latest price hike from one of my many subscriptions.
Right.
Just another bad news for the consumer.
But if you’re shareholder pretty happy with the fact.
Yeah.
Exactly.
Exactly.
And, and again, that’s the run up that you were just talking about from me.
Right.
Right.
And, and we saw them spend so much money on the podcast boom.
And now they’re being a lot more strategic with how they’re spending it.
This is just a consequence of that.
All right.
Well, thank you so much as always for bringing us the news.
We appreciate it so much.
We’re moving on to another trending taker here.
Waste management will buy medical waste disposal company, Stericycle in a deal that is valued at about $7.2 billion.
Now, shares of Stericycle jumping this morning after the deal as much as 15% shares of WM though moving to the downside hitting just under a downside move of 3% off of this move.
Now, this may be putting some downward pressure on the waste management stock, which is positioned to become kind of a leader in the US medical waste management space after this move here.
But we’re seeing that downward potentially because Stericycle latest earnings prints were not very successful.
They had some earnings compressions, some limited synergies between the solid and medical waste businesses that Stericycle has to offer as well.
So potentially the street viewing this as a negative move, I would be surprised to see that it’s because of the dollar amount at 72.2 billion, though maybe that is considered as expensive.
And that’s why we’re seeing some downward pressure on that stock but still remains to be seen.
C saying this morning that this could really position WM to be a leader in this space.
That’s such a big leader in moving forward.
Yeah, when you take a look at some of the reaction that we are seeing here or at least what comparing the reaction that we’re seeing to what ma waste management thinks as a real opportunity within this space.
And you take a look at the fact that waste management sees is adding to earnings and and cash flow growth within one year of the close.
And again, this is expected to close as of the end of the year, so as early as the fourth quarter of this year, so again, there’s viewing as a strategic move.
That makes sense clearly, that is why they are buying this company and quick analysts action.
You’re saying that such a deal would allow waste management to leverage its scale and also national platform to generate some of those quick synergies on improved route density and also accelerate some of that ongoing consolidation within the smaller players of this space.
So again, we’re seeing that reaction in in shares of Stericycle that’s hitting a new high here, waste management shares off the lows of the session, but still under early pressure here today.
Yeah, and ST both of those names hitting our trending tickers list on the Yahoo finance platform as well.
We’re gonna have all of your markets action ahead.
Stay tuned for more.
You’re watching Catalyst ev sales growth is slowing this year, prompting auto giants to scale back and adjust spending plans and many to reduce cost.
Tesla.
One of those names forced to cut about 10% of its global staff in April mi concerns around that softer demand.
Yahoo Finance executive editor Brian Sazi spoke to Ford Ceo Jim Farley in an interview about ev demand and what are some of the trends that he’s seeing?
Let’s watch.
We think almost half of Americans would save money by buying an ev take the politics out of it.
You know, we think for customers, they love the flexibility, they love not having to go to the gas station.
Uh They, they love having a full tank every morning.
They like having a digitally enabled car that normally comes with the NEV V. There’s a lot of incredibly attractive consumer aspects of an EV I think it, it it started off as an expensive technology and one that was really dominated in the urban world where, you know, politics play out and of course, with the charging infrastructure and building a whole new infrastructure outside of gas stations, it was bound to be, you know, politicized but that’s what we’re focused on.
It’s a company we’re focused on the, the customer, we’re seeing customers who buy a maki or lightning.
They don’t go back to an ice vehicle.
They, they, it’s like a different experience for them and they don’t want to go back to the other experience.
I do like smelling gas.
I mean, that’s just me.
That’s my thing.
I mean, in the last of a generation maybe you understand where I’m coming from.
You race cars, you get it.
No, I, I think there’s room for plenty of us.
Um, but there’s a lot of people like, you know, who don’t like going to the gas station at two in the morning.
A lot of people who like the comfort of knowing they’re filled up every morning.
A lot of people who, who take comfort, forget about the green aspect of just instantaneous acceleration.
You’re on the highway, you wanna pass someone.
It’s an EV is just amazing experience.
Um, what is it hard to stay committed to ev, si mean, for your public company, Ford has said it’s going to lose four or $5 billion whatever it is on evs this year.
Is it hard to stay committed to that vision when these losses are happening?
And how long do you stay committed to it?
Well, I think first of all, we’re not gonna invest in the future of evs unless we’re convinced we will be profitable.
So I’m not gonna, that’s my job.
I’m not gonna allocate capital to my leadership team or anyone in the company if, if we don’t think we’re gonna be profitable in the next cycle of product.
So, you know, that aspect is, is kind of undeniable.
It’s unnegotiable.
Um You know, we, we really, 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 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, to have large unit castings to really change the way we engineer the vehicle uh to minimize that size of the battery because the battery is so expensive and such a big driver of the cost.
So the hard part for us is delivering and executing on affordable evs that make money just like Henry Ford did with model T. All right.
So Jim, why you were just breaking down um EV production a little bit.
Why are EVs still so expensive?
You know, the reason is the, the um NCM batteries that have cobalt and lithium and nickel in them are very expensive and they’re very heavy uh on a lightning that battery could be 30 $40,000 a combustion, you know, at scale of combustion uh drive train is gonna be, you know, a 10% of that.
And so really, it’s the batteries and the one time investment for building the battery plants and the manufacturing facility and engineering these very different kinds of vehicles.
The the actual engineering of the vehicle, the the parts that require to build an EV are totally different than a internal combustion engine vehicle.
You have inverters and, and you have uh electric motors and they have to all be integrated and there’s high high voltage uh electricity uh that has to be managed, there’s fire risk in the NCM and all that adds cost.
What’s exciting.
And we’re the first one to invest in these lower cost batteries in Marshall, Michigan is there’s battery chemistry out there.
Uh iron phosphate that’s much cheaper like half the cost.
And we’re gonna be the first ones bringing, bringing that to us customers.
And that’s just the beginning.
We’re gonna have a whole low cost platform and what we’ve had to do is completely change our execution.
We had a, a very American uh idea, the skunk works team in California, filled with a lot of Tesla and Apple people who don’t have the prejudices that I would as a old school car person.
And they are engineering a completely different approach, a different product at a different cost with a much smaller battery and different chemistry that we’re very convinced it will be not only of uh profitable, but it will be affordable for most Americans and it will be fully competitive with the best in the business, which we think are the Chinese.
When does, when does Ford make money from evs?
Is there a date on the calendar?
There is any date a couple of years is it, do you go from losing what 5 billion to maybe like 2 billion and then break even?
And then I think the first generation, we have a lot of opportunity improve our losses.
But until we get to the second generation, which we start to roll out in the next couple of years, that’s when things turn around and as those products scale and become a bigger part of our EV business, you’ll see the business turn around.
Why is China so good in some of these things?
The software autonomous, what are, what are we not doing as a country?
I a couple of things, I mean, they really bet on evs you know, the government got completely behind this technology many years ago and they supported the companies with tax advantages and registration advantages and free subsidies for, for the customers.
Um They invested in battery technology like Catl, which is the leading battery company in the world is Chinese.
I think what we have to do is take the IP S and develop there and localize and get close to it and learn how to do it ourselves.
That’s what we’re doing in Marshall, Michigan, I think they, they made a strategic bet.
Um and it paid off so far.
But after 100 and 20 years, we’ve seen a lot of competition.
We’ve seen competition from every country around the world and there’s always gonna be someone new.
And I think what I find it forward is there are times when the company really rejuvenates itself like the eighties and nineties, like the fifties, like the thirties.
And I believe this time uh in the mid twenties, we’re gonna be revitalized again with a whole new commitment to cost and quality and innovation.
Uh not to be a total name dropping, but, but we got to spend some time with the president on the day.
He announced tariffs on China.
Will those tariffs on China help Ford?
I think tariffs are um are an important part of leveling the field for time frame.
But ultimately Ford has to be fully competitive on cost and quality with whoever we compete with, including a Byd or the Chinese players.
And we have a plan to do that.
In the meantime, the government has a job to do just like we face competing in China as an American company.
They have very strict laws around privacy.
You know, you saw Elon have to go there to get permission to have his self driving system approved by, by their government, you know, they have policies where the government requires.
Um you know, all the privacy data not to leave China and and we need this reciprocating policies around privacy and national security for these vehicles that can be autonomous.
Thank you, Brian.
So for bringing us that interview with Jim Farley.
Now you can catch that full interview with Ford CEO on Yahoo finance.com.
And of course, on the opening bid, we’re going to have all of your markets action ahead right here on Yahoo Finance, you’re looking at a mixed picture across the major industries of the S and P slipping in negative territory, but the NASDAQ holding on to games, we’ll be right back with more jetblue shares are gaining this morning after noting healthy demand lifting at the bottom end of its revenue guidance for the second quarter.
Now sales are now expected to fall between 6.5 and 9.5% might not sound too rosy, but that’s actually better.
It was actually compared to its previous forecast of a decline of up to 10.5%.
So we have this pent up demand for travel.
We heard from the CEO of Marriott earlier on in the program talking about this willingness to spend of travelers are out there.
They want to take those trips.
Clearly, the airlines are benefiting from this as well when it comes to some of that out performance there.
This is also coupled with some of the data that we’re getting out from the International Air Transport Association today saying that they expect 2024 to exceed those initial expectations and for net profits expected to reach just over $30 billion.
So again jetblue benefiting from those lower fuel costs costs that we’ve been talking about able to cut some of those expenses.
And as a result, lifting the bottom end of their sales range and lifting a lot of airline stocks with them right now, interesting commentary from vital knowledge this morning saying this is obviously positive news after American Airlines last week, cut their forecast that put a lot of downward pressure on several stocks in the airline sector.
Taking a look at the S and PS, the S and P 500 super composite airline index that slumped as much as percent off of that American Airlines news last week this morning, that exact index that super compos airline names is up a little over 1.5% at one point this morning off of this jetblue news.
So certainly welcome information for a lot of these airline stocks.
But vital knowledge does continue to note that this is not exactly a material change on an absolute basis.
The changes here are minor for jetblue still looking at some in the quarter when it comes to their revenue outlook.
That is not the case though, for every single stock across the board, we continue to hear great news for Delta Air which is seen a little bit of downward pressure today maybe is coming off of its highs but see some upward pressure for some of the names that have upward movement and momentum rather for some of the names that have seen some pressure as of late like the jetblue is the American Airlines of the World, Shana.
Yeah, jetblue has just been in a tough spot ever since its bid to buy out an acquire Spirit was blocked uh several months ago.
So they’ve been trying to figure out how they are going to compete with those other larger name names.
Some of the names that you just mentioned there within the sector, especially those domestic players are trying to be competitive on price.
Also, we have this talk about the supply issue that is impacting not only jetblue but many of these airlines as well just in terms of getting the flights in the air that are needed to meet that demand.
So again, lots of questions about what exactly the short term is going to look like, especially for a name like jetblue, but lifting the lower end of its guidance.
So maybe it won’t be as bad as investors had initially fear.
It’s a great point to about Jet Blue, the spirit of deal because it points out that it’s not always macro news only for the airline.
Sometimes it’s company specific.
Well, coming up here, we are going to get to wealth dedicated to all of your personal finance needs.
Our very own Brad Smith is going to have you for the next hour.
He discuss how we traders can play the meme stock rally.
Stay tuned for more.
