Advertisement
New Zealand markets closed
  • NZX 50

    12,134.97
    +76.68 (+0.64%)
     
  • NZD/USD

    0.6119
    +0.0022 (+0.36%)
     
  • NZD/EUR

    0.5609
    +0.0003 (+0.06%)
     
  • ALL ORDS

    8,206.10
    +72.70 (+0.89%)
     
  • ASX 200

    7,959.30
    +69.70 (+0.88%)
     
  • OIL

    82.22
    -0.40 (-0.48%)
     
  • GOLD

    2,416.30
    -5.60 (-0.23%)
     
  • NASDAQ

    20,331.49
    +120.13 (+0.59%)
     
  • FTSE

    8,252.91
    +29.57 (+0.36%)
     
  • Dow Jones

    40,000.90
    +247.15 (+0.62%)
     
  • DAX

    18,748.18
    +213.62 (+1.15%)
     
  • Hang Seng

    18,293.38
    +461.05 (+2.59%)
     
  • NIKKEI 225

    41,190.68
    -1,033.34 (-2.45%)
     
  • NZD/JPY

    96.5890
    -0.2560 (-0.26%)
     

Consumer confidence, Nvidia rebounds, space regulation: Catalysts

The Conference Board reports that June's consumer confidence print peaked just above expectations at 100.4 against forecasts of 100.0. Consumer confidence has fallen from May's print of 101.3. Nuveen CIO Saira Malik joins the show to discuss the current state of the economy and whether the US is headed toward a recession. She also explores how Thursday's debate between President Joe Biden and former President Donald Trump will impact markets.

Nvidia (NVDA) and bitcoin (BTC-USD) are rebounding after dropping in Monday's trading session. With Big Tech companies like the "Magnificent Seven" seeing significant gains in the last year, Josh Schafer investigates whether this market concentration is a flaw or merely a feature of the current market.

Goldman Sachs has launched coverage on entertainment powerhouse Walt Disney Company (DIS). The investment firm has initiated a Buy rating on the stock, coupled with a bullish price target of $125 per share. Oracle (ORCL) has warned that the proposed TikTok ban could negatively impact the company's operations and revenue. The tech giant provides TikTok with cloud infrastructure and services.

China's Chang'e 6 lunar probe recently returned from the far side of the moon with rock samples. As competition for space resources heats up, questions about regulation and international cooperation are particularly salient. Space Foundation space commerce and entrepreneurship vice president Kelli Kedis Ogborn joined the show for Yahoo Finance's Space Week to give insight into the space industry and potential regulations.

ADVERTISEMENT

For more expert insight and the latest market action, click here.

Video transcript

Here in New York City.

I'm John Smith alongside Madison Mills.

Let's dive into the catalyst moving markets today.

Consumer confidence data is crossing the wires right now.

That's going to give us a fresh read on how consumers are feeling about this economy.

We're going to bring you those latest numbers as they come out here and in video today leading the market higher shares founding following a three day sell off, that was $420 billion from its market cap.

Now that was the biggest three day value loss for any company in recent history.

According to latest that out from Bloomberg, we will discuss what this all signals about the momentum of the A IR and the EU continues its focus on big tech now charging Microsoft with antitrust violations for bundling teams with other applications.

This comes just a day after the regulator hit Apple with another charge.

We're going to discuss what those charges in totality could mean for you and your tech investments want to get to some breaking news out on consumer confidence data coming out now coming in slightly higher than what the street had been anticipating.

Although it is lower down from the previous reading in May showing the consumers do remain concerned about the future right now that continuing to weigh on confidence and Mattie this comes as prices, obviously, inflation, we have seen some improvement.

Although overall remaining extremely sticky has been a pain point for millions of American consumers here over the last several months, several quarters here.

So again, it is coming in slightly above expectations, but ticking lower from that previous reading.

Yeah, the confidence pulling back in June, but remaining within kind of that same narrow range.

That's according to Dana Peterson, she's the chief economist at the conference board.

I want to take a look though at that board that we just had up.

Let's pull that up again so that I can check the broader market here.

You're looking at games still across the S and P and the now that the S AND P up over 1/10 of a percent, the NASDAQ up 6, 10 of 10 of a percent that's likely led by that tech rebound that you were talking about earlier in the show.

We're seeing the NVIDIA story kind of turning around here, not as much movement so far off of this Consumer Confidence Index coming out here again, falling to 100.4 versus one on 1.3 from the prior month.

Also, the median inflation expectations are important to point out within this snow coming in at 4.3% that was following 4.4% the prior month.

Consumer confidence expectations falling to 73 versus 74.9 last month, we're going to get to it with our next guest on what that latest data alongside recent pressure and some of the big tech names means for markets.

Joining us now to discuss, we've got may like new Chief investment Officer here with us on our stools.

Thank you so much for coming in.

We appreciate it that consumer confidence data doesn't seem like it's going to be a huge catalyst for the market today.

So I want to dive in on the tech story we're seeing in video turning around a little bit here.

One of the movements that you're seeing in in video and even Bitcoin tell you about this market rally right now.

What's the broader thesis you can drive from it?

The recent moves in NVIDIA, Bitcoin are telling us that investors are becoming a little bit more cautious under the surface.

I think there are cracks in the economy that we need to be concerned about from weaker consumer data to employment markets that are starting to show signs of weakness in video.

Though bigger picture, it's just back to its early June levels.

If you look at it versus the semiconductor index, it's actually not an expensive stock, it trades at a discount to the index.

So longer term, I think the trend is still in place.

It's going to increase productivity for companies.

But as of last week, tech was looking overbought, the amount of flows that had gone into the sector.

The market had been eight out of nine days in a row.

It's time for a healthy bit of a sell off in that area.

But I think longer term, the fundamental drivers in NVIDIA and A I are still intact.

So then should this be viewed as a buying opportunity?

Some of this recent weakness?

Well, it's hard to tell in the short term swings in stock prices of where you would catch the bottom?

Are you catching a falling knife?

Really hitting the bottom here?

You know, we can watch technicals to try to figure it out.

That's a bit tough.

I think the catalyst for tech will be second quarter earnings though in a few weeks, if NVIDIA can continue to beat that hurdle, beat the bar for earnings, I think the stock will recover until you get to their earnings number though.

Is there a lot to say, where's the bottom?

And NVIDIA?

That's tough because that's trading on momentum and investor flows right now.

So last question I have for you on NVIDIA, at least what settles this stock, right?

What would be the catalyst to put it in a range?

That's a little bit more based on the fundamentals based a little bit less on, you know, seasonality and trends like the fact that we're heading towards the end of the month.

What will cause the stock to just settle a little bit here.

What's been the driver for mega cap tech earnings has been, has been quarterly earnings.

If you look at first quarter earnings, Tech drove earnings.

So we need to get to those earnings numbers.

You saw that last quarter with Meadow which put up very strong numbers.

Even Apple starting to settle on earnings was the beginning of the rally for Apple in video.

Same thing we need them to keep beating and raising and people will then say, ok, the stock is worth more than where it's trading today.

Until then, I think it can remain more in a trading range or even a soft because it's just trading on people's momentum and flows in and out of the tech sector.

Sarah going back to what you just said a moment ago when you talked about some of the cracks that are starting to form within the economy, talk to us just about what exactly signal or what signals that sends to investors right now or maybe what investors need to keep in mind given some of the risk associated with that, the two areas we're starting to become concerned about.

That's the consumer and the job market.

So first with the consumer, we've seen it in weaker retail sales data, fast food discounting, even retailer foot traffic starting to slow employment numbers have been mixed of payrolls have been very strong.

But if you look at unemployment claims they're almost at cycle highs.

I think consumer and employment goes together.

When you feel secure in your job, you tend to spend more.

We're seeing both of those start to break down.

My view is that a recession is a, when not an, if at this point, are we at a recession today?

Are we slowly?

No, but we're slowly approaching one maybe fourth quarter of this year, first quarter of 2025 we will probably be in that recession.

I was going to say so what exactly is going to be the catalyst?

Because I, I think so many people have been a little bit surprised or very surprised, quite frankly, just about the resilience here of the consumer.

And even though we are starting to see some weakening, it doesn't seem to be drastic, I guess up until this point.

So what is going to change some of that, the resilience of this economy in the face of higher interest rates and inflation has been surprising.

Many investors thought 2023 it would be the the recession.

But now we're starting to see what needs to break down.

The employment markets are the main catalyst that need to break down and if they're still reasonably healthy and then the consumers need to slow.

I think consumers showing more signs of slowing than the employment market and that slow decline will be eventually what takes us into that recession.

Now, of course, many hope that the fed will cut rates in time to save us.

I think the fed will eventually start cutting rates, but I don't think it will be enough for us to just stave off any form of a recession.

Does that indicate to you that the fed is already too late?

I think it's tough for the Fed because they're in a tough spot.

They want to maintain their credibility by not cutting too early.

They've been clear they will not cut interest rates until inflation shows signs of moderating and approaching their target just last month.

Inflation numbers were the first ones that were coming in under consensus.

We need multiple data points before they can cut.

Inflation was just re accelerating earlier this year.

So if the FED cuts too early and causes the acceleration of inflation, we have another problem.

So that's a balance for them.

They need to cut in time to save off, try to minimize the impact of a recession, but also make sure they don't cause inflation to pick up again.

You know, I'm curious what you make of the inflation trend that we have seen because uh Treasury Secretary, uh Jenny Yellen was on with Jennifer SCG on Yahoo Finance yesterday saying that she remains confident that we're going to get to that 2% target next year.

Is that realistic?

Or I guess how much, how does the fed then balance?

What you about the tough spot that they've been put, and they don't want to cut too early and, and, and risk reigniting that inflation rate versus seeing enough progress but not waiting too late.

Sure.

And I don't think we'll hit 2% inflation in 2024.

We do have a chance of getting there next year.

It's going to depend on some of these areas like autos which have been inflationary health care insurance.

Also in the PC number this week, we'll see financial services which will likely remain strong and with an inflation because of the market rally, which tends to inflate that number.

So the fed has to balance that.

But also what's the economy doing?

So you could see them start to cut before we hit 2% if the economy weakens enough and that's going to be their balance.

You know how, what is the economy doing versus what is inflation doing?

What are the risks of cutting and re accelerating inflation versus the risk of not cutting and causing a deep recession is a recession, a requirement for 2%.

I don't think it has to be a requirement, but I think it's most likely, I think the consensus view that somehow we get through this period of high rates, high inflation and we just have this beautiful soft landing is kind of a tough one.

The markets are pricing that in, that's where I think the challenge is you're going in the second half of this year while key to earnings should be strong.

We do have to worry about volatility around the election and the slowing in the economy.

It's going to be a tougher second half in the first half since you mentioned the election.

We've got the debate coming up on Thursday.

I want to get a sense from you.

How much you think that could be a driver of the market's ability to price in what the outcome could potentially be on November 5th?

Do you think that events like the upcoming debate are going to impact the market's view?

I don't think a specific debate will impact the market's view as much as what are earnings doing for the second quarter.

What is the next economic and inflationary data point?

You know, markets don't like uncertainty.

What is certain is we do generally know who our two candidates should be um in, in an election year.

Good news and bad news.

Good news is, markets tend to go up about 11%.

We've already experienced that good news, bad news is volatility tends to go up too.

That's what I expect to happen in the second half of the year.

And remember this isn't just a US election year.

There are 77 countries going to the polls this year.

That's 60% of GDP.

So this will be a global volatility event.

And we're already seeing that in places like South Africa, India, France and all these other areas of the world that are already experiencing elections and seeing some volatility.

But just one debate later this week, I think that's going to have less of an impact than P Ce Will on Friday.

Sarah Mallick.

Great to have you here, especially in studio.

Thanks so much for taking the time to join us here at the top of the show.

Naveen is Chief Investment Officer.

Thanks so much, sir.

Thank you.

I let again on NVIDIA.

It's actually moving higher this morning, gaining about 3.5% recouping some of the losses that we've seen over the prior couple of trading days.

The stock actually falling 7% yesterday, 13% overall from when a after it briefly became the world's most valuable company earlier uh last week.

So for more on this and where we had from here, we want to bring in Dan Flack Berger Berman, senior research analyst, Dan.

I it's great to talk to you.

So when you take a look at some of the price action that we've seen surrounding NVIDIA, lots of questions about whether or not maybe this is a start of some unraveling when it comes to the A I trade.

But here we are today looking at gains 40 minutes into the trading day.

What does that signal to you?

Good morning.

I think the media remains attractive with a 12 to 24 month horizon.

Clearly in the near term, I would expect the stock to remain volatile.

The key longer term though is really this continued execution on their product cycles.

You saw that with Hopper in the data center Blackwell announcing Ruben for 2026.

And so this this execution on the product road map is really foundational to driving growth over the next couple of years.

And the other important piece of the equation is really a vibrant ecosystem.

They continue to attract developers who want to write and invest in the NVIDIA platform.

And so we continue to like the name, but again, do expect it to remain volatile in the near term.

So if you're expecting it to be volatile in the near term, what kind of math and models should analysts, investors be looking at to suss out the degree of Invidia success heading into the next quarterly earnings print here because I think there is a lot of confusion from the street about how to run the numbers on a company that is growing so quickly.

There are a number of factors.

When we model the company, we go through each one of their businesses.

The most important one is the data center business where you're seeing very, very strong demand for their for their systems.

Also on the networking side, growth is very, very healthy there as well.

And so you're trying to balance healthy demand with of course supply, which is constrained.

Now, the supply chain and NVIDIA and its partners to continue to make progress on improving supply over the next several quarters.

But that is a gating factor when thinking about the July quarter results which will get announced later in August.

But the key is if they're able to continue to execute on the product road map, I think estimates will move higher over the next 12 to to 18 months and that can help support the stock and drive out performance.

Dan, what does it tell you?

Does this tell you anything just about that broader A I trade and the excitement euphoria that has certainly swept the markets here over the last couple of quarters.

Has that narrative changed at all?

Clearly, there's still reason obviously to be excited, but in terms of the leadership and who exactly is positioned best has that at all changed?

The environment remains very fluid.

But what we focus on is companies that have distinct intellectual property ability to execute on product road maps and really the ability to invest throughout what of course remains a very, very difficult period.

NVIDIA, I think remains very well positioned in the data center in the mobile market.

Think about all the devices, cars, smartphones, of course, fact all of these different environments they require low power solutions.

So a company like Qualcomm is an example, is incredibly well positioned in terms of its intellectual property and product road maps.

I think Apple has a very important role to play.

We saw recently Apple Intelligence, I think they are setting up for an attractive product cycle ramp with iphone 16 and iphone 17, Microsoft in the data center, as well as Amazon Web services, Google Cloud.

These platforms are really about empowering other companies and individuals to be successful and that's what we're focused on when we look for growth opportunities.

Well, speaking of growth opportunities, I know there's a theory from your house Dan that hardware is going to outperform software because creating software is going to become really cheap with A I as a tool in that space.

If that does become true, what happens to the software trade?

Not in the next six months, but 10 years from now software companies and Microsoft is a very good example.

Oracle is another good example.

The software companies have to continue to innovate to invest to really help their customers transition into the cloud and leverage new tools and capabilities like generative A I to create value on top of what they're already doing.

We're seeing early signs that that companies like micro off with copilot are doing just that.

And so I think there's a very attractive growth opportunity in select software names.

I do think the economy and some of the slower enterprise spending is having an impact but the structural growth story in the cloud and the build out of artificial intelligence on top of that over the next several years, I think it remains intact.

Dan, let's talk about what is going on more broadly speaking within the space.

Another regulatory crackdown here today, we're back in the spotlight.

You just mentioned Microsoft today we have the eu filing antitrust charges against the tech giant over its teams bundling.

My question to you is the market doesn't seem to be too, too worried about this.

Investors have seemed to brush off some of these concerns within the past.

Is this signal though something a bit more worrisome or riskier here for investors down the line.

I think the eu discussions and engagement with Microsoft with Apple, really with all of the technology platforms will continue.

I think at times it will remain an overhang in a particular stock or the broader sector.

The more important thing from my viewpoint is that these companies while engaging with the regulators, they have to, they have to be a little bit more transparent in terms of how their businesses work, how their business models are evolving.

At the same time, they have have to innovate and they have to invest because the technology landscape is changing so quickly.

So I continue to think Microsoft is attractive.

They'll have to navigate the dynamics with the eu and other regulatory bodies.

But that in my view is a part of what all the platforms have to do, navigate and engage while continuing to invest to drive growth.

All right, Daniel, we're going to have to leave it there.

Thanks so much for joining us that it was Daniel Flacks.

He's a senior research analyst.

Thanks so much.

Now, in video alone has been responsible for about a third of the markets rally so far this year.

The big question is that a bug or is it a feature of this market joining us now to discuss, we've got our very own Josher who reported on this for us, Josh, I know you've been speaking with sources about all of the movement that we've been seeing in, in video.

What are they telling you about how to read this moment?

Yeah, I mean, market concentration is bad if you're a bear and it's probably good if you're a bull, right is sort of the way I think you could simplify it down to that.

And most people are arguing right now that it's a feature of this market.

So Blackrock was out yesterday with the chart pointing out that the concentration that we've seen in tech and the gains that we've seen in tech over the last year has really been a feature of this rally, not necessarily a bug you're looking at it here.

S and P 500 tech is in purple.

Uh The normal S and P 500 is in light blue and then your yellow chart there is the S and P 500 X tech.

So if you didn't have all those gains in tech, the market wouldn't be up nearly as high.

And I think sort of the take away from this chart for me is, yes, you can worry about it all day long.

Right.

But at the end of the day it's what's helping you if you're an index investor, sort of get these gains.

And it is part of the good part of the S and P 500.

Ben Snyder at Goldman Sachs, who they've recently just upped their target to 50,600.

He called it the beauty of the S and P 500.

Right.

The fact that when large companies outperform, they can pull the index up for you and those companies have had strong earnings too.

So I don't think there's a lot of people clamoring necessarily that these big tech companies, the ones we're talking about, right, are rising for no reason, the earnings are coming up significantly, that's dragging the index up.

And right now people feel relatively solid about that.

Yes.

And there's also, and you also have this in your piece too, just about some of the number crunching that Mike Wilson has done over Morgan inland just in terms of when we do see narrow breath within the market, some of that future performance or gains that we have seen as a result over the three or six months.

This is so the Chief investment Officer over at Morgan Stanley, Mike Wilson had an interesting point on this.

He said market bread right now, he measured it based on how many companies in the top 500 are outperforming the index.

It's at about 20% over the last month on a rolling one month basis, which is the lowest we've seen since 1965 about 60 years.

So, if you just look at that chart in a box, that's scary.

Right.

There's not that many stocks.

We, but he points out when we get below 35%.

So when we get in this narrow breath range, actually, the returns for the next six months are about 4%.

And if we went up 4% from here, would anyone really complain?

Probably not.

Right.

So essentially saying that it doesn't necessarily mean that the rally just sort of falls off a cliff because we are in a narrow regime.

There are different ways that you can get higher, right?

And some strategists have argued that it might actually would be the mo the most beneficial scenario for the S and P 500 could be the narrow market rally continues.

Maybe it isn't that worrisome overall or making a whole to do out of nothing is we gotta talk about something we do.

All right.

Thanks so much.

Well, coming up next here on catalyst, we're gonna talk some bullish calls on Disney and Gap break it all down for you as well as some of the other top trending tickers on Yahoo Finance for 50 minutes into the trading day.

We'll be right back time now for some trending tickers, Goldman Sachs initiating coverage of Disney with a buy rating and 100 and $25 price target saying mid term growth will be driven by its content.

And Sean Goldman noting that the media industry is still in flux while shifting to direct to consumer growth.

But saying quote, competitive modes and high growth, visibility given name like Disney more room to run here.

And so it's interesting, I know you're going to talk about this too, but it's not just Disney there also being rated in terms of Comcast and Fox.

Uh and they've also got paramount as well on the list of names here.

But again, saying that the industry is in flux.

However, they do see potential room for growth on adjacent businesses that are less impacted by cord cutting and that is specific to Disney Comcast and Fox.

Yeah, it certainly is.

And what struck me also about this note was the price target and exactly what they're coming out in terms of that bullish call here for Disney, you see the 23% upside from the previous close that price target of 100 and 25 bucks a share for Comcast.

It's 14% upside for Fox 22% upside.

So taking into account what you just said, just in terms of the fact that the media industry still is in flux as it shifts here, it's focused on profitable DTC growth while trying to manage some of the declines that they're seeing across the traditional linear aspect of the business.

They do see reason to be optimistic.

And I think that that has been really the debate here across the street over the last several quarters when it comes to so many of the traditional and now streaming players here, how they are going to have or what the ability is for so many of these names to offset some of the declines within their traditional business and really focus on some of the growth or profits here that are coming from the streaming business and how to do that in a way that isn't spending too much.

And, and I think that's a very, very tough line when they're trying to close the gap with a leader within this space like Netflix.

When they have so much content they need to spend, we've been seeing more and more bundling and it looks like that that is starting to pay off here or could pay off down the road.

But again, interesting call here just in terms of why they are still bullish or the fact that they are bullish on the Disney Comcast and Fox.

And then of course, also want to bring up that sell rating that we also got here from Goldman when it comes to Paramount.

Very important to note as well.

Absolutely.

All right, let's take a look at gap because shares are moving higher after TD Cowan upgraded the stock from hold to buy, raising its price target from 28 bucks.

A share to 30 bucks.

So not a huge move to the upside, we're seeing gains of just under 2%.

The firm saying that the company's earnings growth potential is cool under appreciated.

And I think that has really been the story surrounding gap.

Exactly what gap is going to do in order to get that competitive advantage, don't turn to some of those near term catalysts to watch the analyst.

There are highlighting Old Navy's improving product assortment, particularly surrounding that important back to school season, obviously very important for uh retailers across the board.

Also collaborations at gap that are going to drive some drive some of that cultural relevance, at least TD Cowan making that argument.

So because of some of those near term are using that as a reason to upgrade the stock to buy today.

Yeah, and it's not just gap like you mentioned, it's those other names like Old Navy, they're seeing some bullish signs ahead to your point with the product assortment.

Also looking at a letter saying that they think the comp sales numbers are going to improve and that's going to bode well for the second quarter of 2024 see trends in that period improving as the brand introduces newness and going against easy comps in the 3rd and 4th quarters here.

So again, not a huge price target, but it is indicative of something that the CEO has spoken about right here with you guys on Yahoo finance about just the product mix, the transformation that the company continues to go through in terms of its offerings and really finding ways to meet consumers where they are with the types of apparel that they're really looking for.

This call.

Kind of giving credence to that idea from the executive suite as well.

Forget.

All right.

Well, Uber is also getting a bullish call this morning from Piper Sandler.

The firm reiterating its over weight rating on the stock raising the price target from 86 to $88.

They say Uber is a sleeping giant and this comes aside some additional big news for Uber also expanding its deal with Aurora innovation that is in an effort to haul freight autonomously and they expect that to be coming in later this year.

Now, Sean, it's interesting because these were kind of former rivals in the space.

So interesting to see them attempting to have this fully autonomous freight travel.

This would be the first fully autonomous truck offering both of these companies again, driverless truck offerings from Uber and Aurora.

These rivals coming together to potentially push forward the self driving trucks again.

They're saying that could come later this year.

Sometimes those announcements end up having delays, but that's what the companies are saying right now for their potential timeline.

And this also coming after Uber had sold off its autonomous vehicle unit to Aurora back in 2020 they spent a billion dollars on it now restarting that relationship, Shana.

Yeah.

And in a recent interview here with Uber's uh freight head of autonomous trucking, making some interesting comments when it comes to pricing saying that Uber doesn't plan to lower freight prices on the route despite going driverless.

Also saying that Uber had picked aurora partly due to its safety record.

Obviously a huge focal point and top priority here for so many of these companies as we talk about this shift here to driverless.

Now going forward saying that no injuries were reported in the seven incidents aurora recorded since 2021.

And also the fact that this deal really underscores Uber shift from developing its own self driving car to the more cost effective option of opening its platform to other companies.

It's something that some analysts have talked about in the past.

Just what exactly that opportunity looks like going forward.

So again, this deal here between Uber and Aurora is really what seems to be driving the stock at least today.

Absolutely.

All right.

Well, coming up, we're gonna have more from Yahoo Finance's exclusive interview with Treasury Secretary Janet Yellen.

So stick around for more on that after the break.

Treasury Secretary Janet Yellen shared her economic outlook in an exclusive interview with our very own Jennifer Shaber yesterday and she joins us now to discuss the takeaways, Jennifer.

Thanks so much for being here and bringing us this exclusive conversation.

What out to you?

Good morning.

Mattie.

Thanks so much.

That's right.

Treasury Secretary Janet Yellen told me in an exclusive interview Monday that she doesn't see a recession on the horizon and believes that inflation will fall back to the fed's 2% target by next year.

I do expect inflation to come down.

And as we get into next year, I believe that inflation will uh go back to uh the Fed's 2% target.

Her outlook is more upbeat than that of the Federal Reserve, which doesn't see inflation hitting 2% until 2026 with central bankers only penciling in one rate cut this year.

A big reason Yellen expects inflation to cool further has to do with housing costs which have been running hot even as other prices.

She specifically pointed to existing rental contracts that haven't seen the drop in rental pricing that new contracts are seeing.

She says she's confident rental prices will come down over the next year and keep moving lower helping to bring overall inflation down.

Meanwhile, she doesn't see a downturn happening.

I think we've got a good, strong economy.

This is a 50 year, a record in terms of the strength of the labor market, households, consumer spending remains healthy.

Investment's been strong.

I don't see uh the basis really for a recession in the outlook.

And as Americans struggle with the high cost of housing, Yellen rolled out new initiatives to help with affordable housing including a brand new Treasury program that would allocate $100 million over the next three years to help finance affordable housing.

These are things that are in our power now with the tools we have that I think will be helpful, but I don't want to say that there's a silver bullet.

Um I think we look to Congress to do much more.

Uh President Biden has proposed uh program that would lead to the construction of 2 million um new housing units which um it would really make a sizable dent in the problem that we face.

But we want to use every tool that we have when asked whether tax credits should be used to get more supply of homes on the market.

She pointed to the low income tax credit, something that the House has passed and something that the administration is urging the Senate to pass when it comes to the middle class, she pointed to a proposal from President Biden to offer a tax rebate for first time home buyers.

Of course, there is still a glut or, or lack of homes of supply on the market.

Something when it comes to tax incentives that Congress is probably going to be able to be the only one to fix guys.

All right, Jennifer Schomer.

Congratulations.

Great interview there yesterday with Treasury Secretary Janet Yellen.

Thanks so much, John.

Thanks so much John.

All right, let's take a look at Oracle, the software company warning in its annual report yesterday that A tiktok ban is going to hurt its business.

Oracle provides cloud infrastructure services for Tik Tok.

Tik Tok has over 100 and 50 million users here in the US are talking about the significance exactly the impact that this is going to have on oracle.

Some of those details do remain unknown.

Oracle has not disclosed the details of its financial ties to tiktok.

But back in April, this called my attention ever Corp had estimated that if Tik Tok is generating sales of about 16 billion in the US per year.

With me here, it could be spending 3 to 5% of that revenue on cloud infrastructure w which will work out to anywhere between 480 million to 800 million.

So a very wide range here, but that does put some numbers into context here just about the impact that a Tik Tok Ban is going to have or could potentially have on oracle specifically.

And of course, we know that this has really been a top priority for the Biden administration as well as former president, Donald Trump had been very critical of this issue although he has flip flopped uh just a bit.

But the Biden administration, uh President Biden signing a bill demanding that China's byte dance does sell to if it does want to avoid a ban in the US.

Yeah.

And Sean and to your point about the note from T DC and also several analysts have mentioned that oracle is heavily used by Tik Tok.

Tik Tok using Oracle cloud infrastructure to store and process us data.

Tik Tok is considered to be one of oracle's biggest customers across several of these notes.

One from Evercore estimating that the annual revenue coming from Tik Tok to Oracle could be anywhere between 480 to 800 million dollars from Tik Tok specifically.

So potential $800 million annual revenue driver for oracle could be washed away if Tik Tok does get fully banned.

Now, they could still use oracle, particularly if they do get sold off.

It doesn't seem like if there is a sale, there would be a huge push to switch cloud can compute offerings for the company moving forward so it could they could stick with oracle moving forward.

But the company warning that that is a potential risk to come.

Now coming up, could China be pulling ahead in the space race?

We're going to discuss the latest developments and what that means for regulators as part of Yahoo Finance space race week.

That's coming up next.

NASA was once the leader in space exploration, putting the first people on the moon.

Now billionaires are heading the journey to the next frontier.

Yahoo finance is here to give you the latest on the billionaire's leading space race starting with Jeff Bezos.

He founded Blue Origin in 2000 with a mission to establish an industrial base in space because it's a private company.

We don't know that true valuation of blue origin.

But we do know as of 2017 Bezos was selling $1 billion of Amazon stock a year to fund his space ambitions.

The company has also received billions of funding from NASA and other government programs and is now competing with spacex and United launch alliance for a $5.6 billion.

Pentagon rocket program origin launched its first rocket powered test vehicle, the Goddard rocket in 2006.

Since that first launch, it has seen over 30 test flights lift off with Bezos himself.

Of course, going along for the first crude mission.

The second billionaire on our list, Richard Branson, founder of the Virgin Group, Virgin Galactic, the space focused arm of the holding company was founded in 2004 and is focused on popularizing space tourism.

It's the only public company we'll be talking about in this video with a market cap just under $300 million.

The company just implemented a 20 for one reverse stock split in order to increase the per share market price of virgin galactic's common stock to meet the minimum bid price requirement to stay listed on the New York Stock Exchange on July 11th.

2021 Virgin Galactic became the first space flight company to independently launch a founder of the company into space with Richard Branson and crew going above the 50 mile mark on flight unity 22.

Virgin Galactic's first commercial flight took place on June 29 2023 when three outside passengers associated with the Italian Air Force took a 70 minute mission.

Virgin Galactic already has sign ups open for regular people to get on the wait list to fly on its spacecraft.

When more commercial flights take place, the company reported that over 600 passengers had already signed up with prices at $450,000 a person as of August 2021 last but certainly not least.

Our third billionaire is Elon Musk.

SpaceX is just one of many companies.

The eccentric billionaire runs, of course, he also heads X known as Twitter and Neuralink Musk founded SpaceX in 2002 becoming the company's CEO and chief engineer.

The latest estimated valuation for SpaceX was around $200 billion.

Based on a Bloomberg report, Musk's goal for the company reducing space transportation costs and developing a sustainable colony on Mars SpaceX had a rocky start with its first few launches failing but has since seen success.

In 2020 SpaceX launched it first crude flight becoming the first private company to place astronauts into orbit and dock a crude spacecraft with the ISS SpaceX is also extremely successful with its low orbit satellite division starlink.

Earlier this month, SpaceX launched its massive starship rocket test mission from its development facility in southern Texas called Starbase.

All three billionaires are years away from achieving their full space exploration dreams, but each launch gets them one step closer.

It's not just the billionaires racing to achieve new heights in space, the Chinese spacecraft landed carrying what they say are the first ever rock samples from the far side of the moon.

Could China be pulling ahead in the space race?

And ultimately, what does that mean here for the US joining us now as part of Yahoo Finance's Space Race Week, we wanna bring in Kelly Kiss Ogborn, our Space Foundation's Vice president in a Space Commerce and entrepreneurship.

It's great to have you here.

So let's just take a step back and talk and starting with the news of the day here today, we have trying to take an important step forward.

What does this ultimately mean though in this race back to the moon and, and where the US stands uh today versus some of the other nations who are, who have made significant steps?

Yeah.

Well, I wanna thank you for having me and it certainly is the, the topic Du Jour and the, the question Du Jour, I think that there is certainly this urgency and necessity around the moon, but I think it's also too important to remember that the moon is no longer just for countries intuitive machines, for example, became the first private company to accomplish a lunar landing last year.

And so lunar engagement looks very different now than it did during the Apollo era because we are now having very real conversations about ac lunar economy and new scientific endeavors that surpass the once ultimate goal of national posturing or a show of technological prowess on a basic level though, you know, nobody owns the moon.

So instead of talking about regulation of it or pulling ahead or pulling behind, I think we should really look at the means of engagement and one of the best um records that we have for that is the current Artemis Accords, which has 43 signatories as of this month, which really lays out a common set of principles for peaceful engagement in outer space and really the role of international partnerships in achieving a sustainable presence on the moon.

But I think your question is really an interesting one because I truly believe that while history doesn't necessarily repeat itself, it does rhyme and it is often difficult to decouple the birth of our space industry with how it began as a space race.

But the paradigm we are moving into now has countries, companies and private citizens engaging in space.

And so that framework of thinking really needs to shift and evolve.

So Kelly, what should that look like?

Particularly given?

I know we started the conversation talking about China, which is a country under leadership that we don't have a lot of visibility into consistently.

So what can we be doing in terms of policy in response to other nations efforts when it comes to space given that we don't have a transparent look into the overall global goals that various nations have.

Yeah, I mean, so we are certainly at an evolutionary moment in space.

You know, there's significant growth, significant demand, significant engagement, there's about 92 plus countries that currently have an active satellite in orbit.

And so when you look at space operations, there's civil commercial and national security, all sort of mixing in one pot which really demands ongoing conversations about the regulatory environment and really space policy considerations.

But from that stance, we can really only work with what we have and what we know right now with keeping an eye toward other activities.

So really understanding how we are engaging in space and where we need to regulate and put all of our efforts and right now that's really launched satellite operations and human space flight.

Um And so it's, it's sort of a mixed dance um of being able to do what you can do at the moment, but then also monitor but a lot of space, you know, is commercial activities, but also it signals sometimes posturing, it's just hard to decouple and with regulation within the space sector was just up on the screen here just a moment ago, Kelly, when you take, when you look forward and, and you talk about how this space age right now is so different than what we have seen in the past, how do regulations need to evolve or how have they evolved?

And what does that tell us then about future growth or ambitions when it comes to space and what is achievable versus what is not?

No.

Absolutely.

So as I mentioned, there are the ways that we engage in space now, but there are also all of these future use cases that are not yet at a scale that should be examined for their regulatory implications in the future.

So as you just showed on the screen, you know, right now the US has this sort of patchwork, regulatory responsibilities across the US government anchored in the Outer Space Treaty.

But then the FAA no A and the FCC also regulates different aspects.

So it's really looking at who has the regulatory authority and at what point in the value chain.

And I think what is possibly the most challenging thing right now is that there isn't one coordinating body and while agencies do have their processes for tracking compliance with guidelines, there really is no enforcement mechanism which can create a bottleneck and ambiguity for the commercial industry.

And also um questions about how existing frameworks extend.

I think one of the things that can be done is just let the technology flow to allow us to know what the regulatory and policy needs are going to be.

There are arguments on both sides whether the regulation is good or bad.

I think at some point, the government should put some sort of framework and guardrails around the regulatory aspect because if you're going to create a scalable and sustainable business model, we do need this set of standards and norms that companies can engage with, especially as our mission sets become increasingly more global and increasingly more integrated with infrastructure.

All right, Kelly, we're gonna have to leave it there.

Thank you so much for joining us this morning.

That was Kelly Keti Ogborn Space Foundation's Vice President of Space Commerce and entrepreneurship.

Thank you.

Now, coming up, we're gonna have all of your markets action ahead as well as our key takeaways from the trading day.

You're looking at gains in the S and P 500 at about 2/10 of a percent.

The NASDAQ up 7/10 of a percent.

You're watching Catalysts.