Jobless claims data, WBD stock falls further: Morning Brief

The US equity market (^DJI, ^IXIC, ^GSPC) and bitcoin (BTC-USD) in the crypto space both aim to start the trading day off right, bouncing back from this week's sell-off. Morning Brief hosts Seana Smith and Brad Smith monitor market activity while tracking the top industry stories and moving stocks.

Stifel chief economist and managing director Lindsey Piegza joins the program to discuss whether recent US employment data could be enough to sway the Federal Reserve to initiate interest rate cuts.

Warner Bros. Discovery (WBD) shares move lower this morning after the media company missed on second quarter revenue estimates and wrote down its linear TV assets in a $9.1 billion impairment charge. MoffettNathanson senior research analyst Robert Fishman highlights how WBD's troubles with possibly losing NBA streaming rights could hurt their affiliate fee revenues.

Other top trending tickers on the Yahoo Finance platform include Boeing (BA), Under Armour (UA, UAA), and Nvidia (NVDA)

This post was written by Luke Carberry Mogan.

Video transcript

It's 9 a.m. here in New York City.

I'm Brad Smith alongside Shana Smith.

This is Yahoo Finances flagship show.

Good Morning Brief.

You've got stock futures rallying here this morning.

The 10 year yield back above 4% after weaker jobless claims easing some fears of a recession, treasury yields here like I just said higher here.

Now, just below that 4% level.

Let's get right to the three things that you need to know to start your trading day.

Yahoo Finance, Josh Shaper Jared and now can have more stock futures and treasury yields are higher after an initial jobless claims clocked in at 233,000, less than the 240,000 economists had expected and less than the previous week's revised levels.

The new data providing a counterpoint to signs of weakening labor market.

This comes after July's jobs report came in much weaker than expected.

With the unemployment rate jumping to its highest level in nearly three years.

The jobs report partly responsible for a global sell off exacerbating fears that the US economy is slowing and invest.

Investors are keeping a watchful eye on the tech trade shares of video regaining some of its losses this morning after falling more than 5% on Wednesday, the sell off in NVIDIA and other chip names came despite a bullish note from Piper Sandler analyst published Wednesday pointing investors to a quote tremendous opportunity to buy some chip names following the sector's recent sell off and shares of Warner Brothers discovery are tumbling.

The stock is down more than 10% after the streaming giant took a massive $9.1 billion impairment charge on its cable business in the second quarter.

The company also reversed earlier profit trends in its streaming business despite adding nearly four million subscribers overall, the future remains unclear, especially after the company lost a key media rights deal with the NBA Wall Street is warning that the loss of those rights will impact the future success of its streaming service max and will likely quick in the demise of its linear networks which are already in free fall stock futures higher this morning after initial jobless claims came in lower than expected.

The data comes after last week's July Jobs report and that came in much weaker than expected which drove up recession fears and prompted traders to price in a bigger rate cut at the fed September meeting here to break it all down.

We've got Yahoo finance markets reporter Josh Schafer.

Hey Josh.

Hey Brad.

Yes.

So weekly jobless claims coming in at 233,000 that is below the 240 that was expected below the 250 that we saw last week.

And largely, I think it seems like investors are just taking a deep breath after this.

After all the discussion, after the July Jobs report about slow down in the labor market, I think really the risk here was that this number was gonna come in hotter than expected and the market might freak out based on that there's potentially even another read through here.

Just thinking about this report, the fact that NASDAQ futures went from flat to up 1% on a highly volatile weekly economic data set that comes out every week and is almost always revised.

Maybe the take away from this report is just still that we are in a very volatile unsure market right now.

I think that's something that I'm sort of thinking about as we digress on this George.

What do you also just, just thinking about that vol volatility theme here real quick as you look ahead to next week when we get more prints coming on inflation, just taking a look at how volatile and how I guess the dramatic reaction to this print was.

What does that then tell us?

And it's something that strategists have been talking about especially here this week following what played out on Monday.

But really what that tells us maybe about how large some of the swings could be in the markets here in the coming weeks.

Yeah, you guys had Stewart Kaiser on from city yesterday.

He tracks this pretty closely and he said that the options pricing headed into today was about in line with next week's CP I report Jackson Hole when uh Chad Fair Powell is gonna speak.

And then also in video earnings.

So that gives you an idea of just how volatile things feel right now.

That again, a weekly data set is basically in line with CP I and I think Shana looking forward to next week.

Again, this is not normally it, it is in focus because we're talking a lot about the labor market, we're talking about a slowdown, but the actual weekly numbers are not always the most reliable numbers.

And so I think when you look at something like CP I, that's gonna obviously have a lot more waiting on.

It normally has a lot more waiting on how investors react.

And right now it feels like we just stopped talking about inflation for the last two weeks, maybe rightfully so put, you certainly have a lot of risks around that, right?

We're at a point now where it feels like we're talking about a labor market slowdown and inflation is just simply coming down and we're back to that place where everyone just assumes inflation is falling.

That doesn't mean that we can't have one print that comes in slightly above expectations and you get a freak out.

So I think that is one of the larger things going into next week when again, we have more actual data.

This was the only real economic data point we had this week outside of services on Monday.

So that's why everyone the move in the markets too.

Yeah.

And it also explains then why we're seeing such a dramatic move.

We haven't stopped talking about inflation.

Josh, I mean, we've been having some CEO S from big retail companies, household and old names like Edgewell.

We were speaking with their CFO just a day ago and talking about what they've needed to do ultimately to make sure that they're kind of offsetting some of their own expenses right now.

And so that's the big conundrum that corporations are facing knowing that they might still be part of the inflation problem if they need to pass on price where volumes right now are sputtering even as well.

And that's what investors are paying close attention to too.

Yeah, I mean, inflation is going to continue to be part of this story.

Right.

I think the trend there needs to keep falling for people to be able to focus on the labor market as much as we have over the last week.

All right, Josh.

Great stuff.

Good job breaking all this down.

Exactly what this means for our viewers.

We appreciate it.

All right.

Well, let's stick with this top story of the day here.

The latest print that we're getting on jobs, jobless claims coming in just lower than expected.

It's all some relief to the market.

You can see that playing out on the screen right now.

You've got the NASDAQ features up just around 1.2% here ahead of the open.

We wanna bring in Lindsay Pi, she's Steve Falls, a chief economist and managing director, Lindsay.

It's good to see you.

So let's focus on the economic side of things.

Obviously, when you take a look at this print, maybe offering some relief, especially on the heels of what we saw last Friday.

What's your first take?

Well, I think it's a relatively solid number and it offers an indication of still positive conditions in the labor market helping to offset some of that rising concern that circulated through investors and the marketplace in the aftermath of a less than solid July employment report.

Now that being said, even when we look at what we saw in terms of the non farm payrolls report last month, we're still talking about relatively positive job creation.

Now, there's no doubt that conditions in the labor market have cooled from earlier peak levels.

But this morning's report suggests that that may be more of a normalization in terms of conditions as opposed to an indication of outright weakness lurking around the corner.

Ok. And so around the corner from here, we're also waiting to see what type of uh steepness we get to a fed cut and what that policy uh going forward looks like.

What are you anticipating.

Well, it's gonna come down to the inflation numbers.

It's going to come down to whether or not the fed gets that needed confidence to justify a rate reduction near term.

But right now, looking at that July statement, it's clear the fed is not at that point, the fed does not have confidence that we are on a sustainable disinflationary trend.

So the next several inflation data points are going to be key, but it does appear as if the onus is on the data not to uh to convince policymakers not to cut rates.

So meaning if we did see a minimal 1/10 of a percentage point decline in some of these key price metrics, I think that may be enough to justify the fed to move in September at a very tempered 25 basis point clip.

But even so if it takes just one data point to get that confidence, I don't see the fed acting aggressive going forward, meaning it's likely that we see a very slow, controlled pace of reductions, keeping the level of fed funds well above neutral out beyond 2025 Lindsay, we've been talking to a number of economists really over the last several weeks, but in particular, this week and some have been very critical of the FED saying that they should have cut at the last meeting that some of the data points that we've got here most recently, once again, prove maybe that the fed is behind the eight ball on this.

What do you think?

I don't think the fed is behind the curve at all.

I I think the data has improved but when we look at inflation, we saw several months of head fakes at the start of the year throughout the first quarter.

And with April little change, June and July are really the only data points that the fed has as of late to suggest, we're back on a downward trend in terms of price pressures.

And two data points fall short of the fed's threshold of many data points needed to instill that level of confidence to justify a policy change.

So, no, I don't think the fed is behind the curve.

The fed is beholden to that threshold that they set of many good months, they're waiting for the data.

And if the data cooperates, if the data comes in under expectations or as expected in terms of improvement, they will continue to move forward.

If it doesn't, the FED is willing to remain on hold beyond investors' expectations.

How much for the fallout do you think that means for the labor market?

Well, the labor market again is still very solid.

When we look at the average pace of 2024 we're still talking about creating over 200,000 jobs on a monthly basis.

And yes, the unemployment rate has ticked up as of late, but at 4.2% and we're still well below the fed's lower bound of what they designate as the full employment range.

Wages are still solid up near 4%.

And so we're still talking about again, labor demand, outpacing labor supply, perpetuating tight ish conditions, slightly less tight but still tight ish.

So the labor market is still faring very well providing support to the economy, the consumer and making it difficult for the Fed to justify a more aggressive move to the downside in terms of rate cuts.

Lindsay Piazza, who is the steel chief economist and managing director Lindsay.

Great to see you.

Thanks so much for taking the time.

Let's take a look at the mag seven trade.

We're seeing green on the screen here today or free market.

Some of those stocks getting a boost with the markets this morning.

The A I darling NVIDIA might be a free market, but it's certainly a laggard this week, the stock is off more than 15% last five trading days and the shares were hit in the broader sell off in addition to news of a delay in its Blackwell A I chips, but the stock had already been trending lower NVIDIA off more than 20% in the past month.

And between investor hesitation around high valuations and the sell off, it's at Wall Street wondering if we'd see a big buy the dip mentality, but we're certainly not seeing that reflected in the share price, at least right now there, you're taking a look at where things ended the day yesterday.

As of right now, we're actually seeing things free market moving higher by just a little bit for NVIDIA and hovering around that $100 mark, which of course is a psychological level, at least at this juncture for some investors, perhaps who had remembered that, that's what the stock essentially was brought down to once that 10 for one stock split went into effect.

And so now is a larger question of will $100 be an attractive entry point for those investors that are already not part of the long term thesis for NVIDIA at this juncture.

Yeah, I I think we've heard from a number of analysts on the show even over the past two weeks that that NVIDIA looks a lot more attractive at these levels.

You just had Piper Sandler come out yesterday saying after the sell off right now, they think NVIDIA is very well positioned.

But when you take a step back, aside from some of the calls that we're getting from Wall Street and just take a look at the moves and specifically what we saw yesterday because actually when we were on air, we actually saw NVIDIA trading the upside and then quickly gave up those gains shortly after we uh got off the air and then those declines continued into the afternoon and closed off just about 5%.

And big reason for that was not specific really to NVIDIA.

But what we're seeing more broadly play out across the chip sector.

And yesterday we heard from Super Micro Computer actually, they reported be uh after the bell on Tuesday, the move was yesterday though and they, they those shares plunged on disappointing earnings.

So we saw a bit of a ripple effect.

It dragged down NVIDIA, but that's not closing lower.

Also weighed on a name like Intel, which has been struggling uh for quite some time, but especially ever since we got that earnings report uh just last week.

So again, I I think there's a couple of things that play when you talk about valuations.

When you talk about some of the weakness more broadly playing out within the chip space, you also take it, you factor in that information report over the weekend that we could see a delay in Blackwell chips.

Yes, that has been contributing to the declines that we've seen in NVIDIA.

But at least when you take a look at the streets reaction consensus seems to be that NVIDIA does look attractive from these prices, not to say that we aren't going to see more pressure on the stock given the massive runoff that we've seen year to date also what we've seen over the last year.

But again, there does seem to be a lot of reasons, a number of reasons to remain optimistic on this name in the future.

Yeah, certainly.

Uh of course, that earnings report gonna be coming out August 28th.

We'll see if it's the bell with that.

It's been in the past for earning seasons as well.

Yeah.

And many are saying that that's actually going to be the catalyst for this time.

All right, let's talk about Warner Brothers.

Discovery shares are sinking this morning off while just about 10%.

Now in pre market trading.

Second quarter results showing that it took a 9.1 billion dollar impairment charge related to its TV Networks unit.

Yahoo Finance's senior reporter, Alexandra Canal has the details and all it doesn't look good, it doesn't look good and really, it's that 9.1 billion impairment charge that sticks out here and the timing of this, it shouldn't be all that surprising considering we have the loss of those NBA media rights.

This was something that was brought up on the call although management didn't get too in the weeds there considering WBD is currently in that lawsuit with the NBA WBD did, did sue the over what it described as quote unjustified rejection over its matching rights for proposal.

But the CFO did call out a number of triggering events in the second quarter that led to this charge including that uncertainty related to affiliate and sports rights renewals like the NBA.

Also the difference between the company's market cap and book value along with continued softness in the US ad market.

He did go on to say that this charge also represents the value shift across the business model towards street along with the studios business.

And this is something that we've heard from multiple companies this earnings season, especially those legacy media giants, this clear transition from cable to direct to consumer.

But that transition is costly.

And if you have a company like Warner Brothers Discovery, which is just drowning in debt after its murder, the longer that it takes to deliver that balance sheet, the more unhappy investors are going to be, it might also impact credit ratings which is something to watch moving forward.

But you know, analysts on the street out there, they think the stock could be trading at a discount.

There is a general vibe that things are going to improve.

In 2025 key bank analyst, Brandon Ns Bell, he reiterated his outperform rating on shares maintained his $11 price target and says he believes that things are unlikely to get worse at this point.

And you also have to keep in mind and this is being a bit overshadowed in this report, but the streaming side of the business is doing pretty well so far.

They added nearly 4 million subscriber in the quarter, their strength in direct to consumer advertising that's offsetting some of the accelerated losses that we've seen in linear.

And on the call, David Zao said that they uh believe that subscribers will continue to improve.

They think that they will reach $1 billion in segment EBITA by 2025.

So, you know, there's there's positive catalyst in the future, especially if you think about that sports streaming JJ V the bundling opportunities.

But these are challenges that are really being felt across the industry.

I know and, and we, and we have paramount after the bell today.

You see what is the consensus is there consensus about what is going to happen with this company, whether or not it is going to break up, what exactly that is going to look like whether or not there's even gonna be appetite or demand for what they wanna do.

And you talk, talk about that impairment charge and that's really at the heart, maybe of some of that confusion or maybe unknown at this point as to what exactly the direction looks like.

There's been a lot of chatter on Wall Street, a lot of analysts have come out and said, look, maybe you spin off, maybe you could buying certain business days on the call.

They addressed this.

They said, look, we know that there are rumors out there.

They talked around it a lot and they said at the end of the day, they wanna operate as a One Warner Brothers discovery, but as a publicly traded company, they have a responsibility to deliver value to shareholders.

So it seems like this is something they're internalizing, they're thinking about no plans yet.

But I think we're going to see some sort of move in the next year or two we will say.

All right, Ali, great stuff.

Thanks so much.

Thank you.

Coming up.

We're gonna take a look at Eli Lilly shares.

They're surging on strong demand for its weight loss treatments.

We're gonna break down some top movers on the other side of the bridge.

Eli Lilly shares surging this morning after its second quarter earnings and revenue handedly beat expectations.

The company also boosted its full year revenue outlook on strong demand for its weight loss treatments.

Yahoo Finance senior health care reporter Angelique Kim Line joins us with the details.

The breakdown here, I mean, if you had a penny for every Monro reference that they made you could retire pretty much.

Yeah, listen, and this is the second time this year they've had to upgrade their guidance that just tells you how well they're doing and this is different from what we saw yesterday with no novo who I'm sure wishes they had this type of earnings to report.

So up 5 billion in guidance for the year.

But let's take a look at what came in for the quarter.

So 11.3 billion for the actual revenues versus the estimates of 9.98 billion.

That is a 13% increase and take a look at adjusted EPS.

That is a 45% increase from uh the versus the actual and this is all being credited to Monro and Z bound, zep bound really on a, I mean, it's, it's a rocket ship, that one because the, the amount of time it's taken to reach a billion dollars is much shorter than any of the previous G LP ones.

We've seen that and we know that the sales, in fact, uh follow that, I mean, 800 million was the estimate and they came out at 1.2 billion just for Z bound.

So taking a look at that.

Meanwhile, Monja 3.1 billion versus the estimate of 2.4.

So that is an indicator of what to expect for the rest of the year.

Don't know what is.

Uh we also know that they have finally gotten off the shortage list.

So both drugs are no longer in the FDA shortage list, which means that we know that the supply constraints are a little bit easier for the year.

Lily also had a couple of other sort of interesting notes, not directly tied to revenue just yet, but some milestones to keep a lookout for.

Because now with this supply constraint issue under wraps and expanding into global markets, the company is now looking at expanding the label just like we saw for Wigo and Novo.

So they are looking at sleep apnea, they filed for that both in the US and the and in Europe, we also know that they started their Alzheimer's uh therapy Kuma.

So that's going to be out on the market as well soon and they've also started looking at the oral therapy that's also further down the line.

Uh So, you know, little bits and pieces being put together to make this uh really just a a bull case for the company.

All right, we're gonna be getting analyst reaction coming up in catalyst too.

But again, when you take a look at the reaction lots to be excited about and like you said, it was pretty amazing all the times they were and it makes sense, right?

They wanna brag about it.

It's almost like the A I kind of key word here for the Pharma industry and it's paid off.

I mean, people wanted to know like portable form too.

It seems like that.

I mean, that's what I'm not joking.

No, the oral form of it is like one of the key things that we're gonna be seeing whether or not the market it is there for that and because the efficacy could be less.

In fact, Ceo Dave Ricks did say it could be less.

So that's gonna be the question.

Do people want something that's easier to carry around and easier to take or they're gonna want something that's more efficacious and depend on, you know, on how long they're gonna stay on that, that's something that's, we're gonna have to watch.

I need something on the opposite end, something's portable that helps, you know, retain or put on more like, you know, just secure the gains or something like that, you know, an alternative to, to to muscle milk or something.

All right, thanks so much.

Let's take a look at shares of Under Armour.

It's moving higher on signs that it's restructuring efforts are paying off the retailer raising its adjusted eps forecast with its newly reinstated Ceo Kevin Plank saying he is quote encouraged by early progress.

So he's trying to take the wins where he can.

This is a company that has been struggling for quite some time.

Lots of questions about the turnaround that or what action I should just say taking a step back, what the direction of Under Armour is ultimately going to look like now that it's back underlying questions about whether or not the turnaround is going to be as successful as is hoped right now from the street.

This is a stock clearly that has underperformed now for quite some time over the last three months, still in the right year to date.

You're looking at losses of just over 25% but at least today, Brad, the street is encouraged by what they heard.

Ok. Well, they really tried to put some lipstick on this one saying that they're encouraged by the early progress in the efforts to reconstitute the premium positioning for under Armour brand.

Please.

With the f first quarter, 2025 results ahead of expectations.

Expectations must have been pretty low because ultimately North America revenue that decreased 14% wholesale revenue that decreased 8% and then apparel revenue that also decreased 8% footwear revenue that was down 15% need.

I go on here.

There's a lot that still needs to take place for the turnaround here.

And I don't know, maybe they need to lean more into and especially in a year where you've got the Olympics taking place.

You also have a lot of fanfare that is being drummed up around athletes across sport right now.

This is a prime opportunity for any of the athletic apparel and footwear manufacturers to really lean into some of those key athletes that they do have.

Steph Curry is one of them for under armor and we're still waiting to see what the next iteration of kind of the Curry brand development looks like going into later this year.

Um I I wish that it had taken off more or done more in golf, especially, you know that I love being out there in nature and just yelling to this guy sometimes on weekends.

So at the end of the day, there is so much that they've done on Curry brand in basketball and branch that out into golf successfully.

I would love to see what that does in other sports kind of like Nike is doing with Jordan brand trying to take that.

You're just laughing at me.

Now, I'm laughing that you equated golfing to being out in nature.

You are in nature unless it's TGLTGL is doing the whole indoor simulator thing, Tiger Woods, Rory mcilroy.

Big investment.

We'll see if that works out.

Say someone's a big nature person.

If they're out there on the golf, I'm a big nature person.

I'm, I'm not saying you're not a big nature person, but I don't know if, if you're on a golf course lends to that discussion for another time.

Sure, you make a fair point.

Let's take a look at Chairs of Boeing here.

We're watching that stock.

It's up just about a half of a percent Ceo Kelly or beg taking the helm.

His first day is today, he wrote an email to employees and in that memo or beg telling staff that the company has quote a lot of work to do to restore trust.

And I think that puts a lo a couple of things that stuck out to me within this memo was the fact that he went on to say I will be transparent with you every step of the way, sharing news on progress as well as where we must do things better.

Also saying we clearly have a lot of work to do in restoring that trust.

And he's confident that working together, we will return the company to the industry leader that we all expect.

He's expected to tour the main factory floor near Seattle today on his first day.

He's also planning I believe, to relocate to the city to Seattle, which we know is at the heart of uh Boeing's activities here in order to try and kind of recoup some of the uh lost trust there.

When you talk about the manufacturing, what exactly takes place in Seattle.

So he's reaffirming his commitment to that city.

He's laying out his plan for the company going forward.

And I think at this point, investors have been encouraged, we encouraged, you saw that from the share price reaction once Kelly Ortberg was named as the new CEO and now obviously, he's facing a tremendous amount of pressure to right the ship and do it quickly.

Yeah, I mean, when you're on I five, can't miss Boeing's manufacturing operations.

They used to do tours over there in Seattle too.

Uh I hope they started to bring that back.

It was kind of a COVID thing, uh, that forced them to kind of shut that down.

But this, of course, the first day where it's really going to be a larger question of how much can the corporate culture under a new leader change and a new leader that's going to have to steer in a spirit arrow systems as well as part of being able to kind of bring even more control to the operations in the manufacturing procedures here.

All right.

So Boeing a name to watch today.

All right.

All your markets action.

We've got that coming up the opening bell on Wall Street again, you're looking at gains across the board following that jobless claims number coming in just below the streets expectations, reassuring some of the skeptics that maybe the labor market isn't as weak as fear.

We've got more when we come back.

All right, that's the opening bell on Wall Street.

And in midtown Manhattan at the NASDAQ at the Nyse, you got Goldman Sachs Asset Management and at the NASDAQ looks like you've got the great folks from, uh, Arak Life.

Uh, is that A B, it's a B A back of life ringing the opening bell at the NASDAQ.

All right, we are off to the races here on the day.

Yeah.

Hit that button.

Let's officially gonna start things as Fetti rains down at the NASDAQ.

Let's take a look at the major averages here and the NASDAQ, the S and P 500 the Dow right now, uh, the Dow and the S and P 500 opening higher here right now.

And we're waiting for that NASDAQ to calibrate here.

You're taking a look at some of the activity that we've seen yesterday and now there you go.

You're taking a look at a calibrated NASDAQ on your screen.

It's up by about 1.4% to start off the day.

All right, let's head over to Yahoo.

Finance's Jared B book is closely watching some of the gains that we're seeing here at the Open Jared.

That's right.

Uh I'm trying not to get too excited about some of these fluctuations we have had elevated volatility recently and I'll just show you a picture of the S and P 500 a three month chart shows you that, uh, we're back to the flat line number one.

But we've seen these candles get bigger and bigger on the way down and that is just a bigger range in price action every single day.

Uh, and we take a look at the 10 year t note yield.

We can see that has been climbing back up and I'm gonna put a year to date chart and show you.

Uh Technically, it has climbed, let me draw that one more time.

It has climbed right back in to an important technical level.

So we have to see uh if that acts as resistance or we go back into the range.

Uh But the point is that we could see an inflection to the downside and rates just here.

And before I leave the screen, I want to check in on the vix, which has been uh quite elevated itself recently, you'll see that's a year to date chart.

That's huge spike is what happened just a few days ago.

I'll dial this down to a two month chart and you can see it's kind of consolidating in a little wedge there.

A lot of times what happens is uh it'll just consolidate, it'll break to the upside or the downside.

We don't know which uh but we'll have to wait and see uh what comes of that now.

Let's take a look at the sector, action, sector, action, tech and health care are the out performers today.

Each up about 1.5% utilities staple and real estate.

The defensive sectors are the one in the red.

So pretty bullish outlook for the day.

Uh Let's take a quick look at the NASDAQ 100 lots of green here, NVIDIA up 2% Broadcom up 3%.

So it looks like semiconductors.

Ok. And I want to get a check.

I was looking at consumer discretionary versus consumer staples.

And this is over the last month.

What you're gonna notice is staples here in the blue line.

Uh, that is positive.

That's up 1%.

It's consumer discretionary where you see everything from Target to Tesla, that is down 9.6%.

So that's kind of one of those, uh, orange warning signs that we got to pay attention to in the market.

If we see consumer discretionary reassert versus staples, that kind of puts us and keeps a bullish theme intact guys.

All right, Jared.

Thanks so much for breaking that down here.

Again.

Stocks moving to the upside here this morning.

Jobless claims coming in lower than expected.

That was the catalyst here to the market in pre market trading.

It's easing some of the fears that we saw creep up in the streets surrounding recession.

Now, this comes following last week's jobs report that really pointed the picture or painted the picture I should say of a weaker labor market than maybe the street had initially factored in and that contributed to that massive sell off that we saw starting on Friday, carrying over into Monday.

Many factors are contributing to that.

So let's talk about what all of this means and where we could be headed for that.

We have Kevin Gordon, he's Charles Schwab's director and senior investment strategist Kevin.

It's good to see you.

So at least let's start with today's reaction, right?

Because we are seeing some optimism maybe returned to the market, the jobless claims number there, reassuring maybe some skeptical investors out there that the labor market wasn't as weak as maybe initially feared.

What's your take?

Uh Yeah, I mean, I think it's definitely probably because it was the only major data point this week.

It was a pretty thin week for data.

So, you know, I think it's understandable why so much attention has been put on on the claims number, you know, very good, definitely not consistent with, you know, the sort of weakness and payrolls that you would typically see in a recession.

Um Definitely not consistent with even the uptick that we've seen in the unemployment rate.

But, you know, to your point about this weakening jobs picture, uh what was sort of amazing to me, especially on Friday and over the weekend was the sudden realization on the part of a lot of pundits and strategists that all of a sudden the labor market is weakening.

Um, you know, a lot of these trends have been in place for a while, whether it's a slow down in wage growth or whether it's this drift higher and the unemployment rate or even just the monthly change in payrolls, which has been decelerating.

Um, I think probably the miss in expectations for payroll is coupled with, you know, that, that two, the 20 basis point jump in the unemployment rate was probably where a lot of the fear started to kick in.

But even if you look at some of the innards of the unemployment rate itself, um triggering the so rule, yes, a bad thing.

But if you start to look at things like the employment to population ratio, even for the prime age group, it's still rising.

Um There's still a lot of inflows, the labor force and it's expanding.

So those things are not yet consistent with what you would typically see at the beginning of a recession or the economy already being in a recession.

I think that's an important distinction to make, especially because, you know, we know that the cycle in many ways has been incredibly unique, especially when it comes to labor is the rebound fully in effect at this juncture or do you think there's more slippage that we could see?

You know, I'm not sure we've fully gone through the process of, you know, kind of get oversold, rally a little bit, then you have some kind of a retest and then you get some sort of a bread thrust.

We're probably in the middle of that 2nd and 3rd stage.

Um, because you definitely got to oversold in, in many areas specifically tech related.

And anything if you're using the sort of the NASDAQ 100 as a, you know, as a benchmark for that, I, I think the more important story in this entire sell off has been the fact that there hasn't necessarily been this, you know, outright collapse or weakness.

Um And, and certainly they haven't been the laggards, the cyclical parts of, of the market.

Um So even if you go back to the, the past peak for the S and P mid July, uh the, the only two sectors that are under performing the index are tech and consumer discretionary.

Clearly, there's a consumer weakness play, I think with, with the latter, but tech has been definitely the culprit there.

If you look at some of the more traditional cyclicals, whether it's financials or even energy, um, they're still down, but they're, they're still outperforming the index.

And of course, there's been a little bit more of a traditional defense play um, with utilities and staples doing relatively well.

I didn't know Jared was just showing that, that chart with staples outperforming.

But I, I don't think that if it, if it was this declaration on the market's part that we were definitively going into a recession and the labor market was, was falling off of a cliff.

I think those areas of the market would be doing much more, uh, you know, much worse.

So, the fact that it's more concentrated in a sector like tech at least tells me that it was part of more maybe of an over leveraged or overcrowded trade.

Kevin.

I'm curious what you make about the reaction that we've seen so far this earnings season because those that are beating are actually getting rewarded relatively well, those that are missing.

We're seeing this downward pressure.

What do you attribute that to?

And I guess what does that then tell us maybe about some of the behavior, some of the leadership, maybe more broadly that we could then see in the coming quarter.

Yeah, the beats have been uh rewarded, you know, and I, I stress the on average part because especially within this earning season, there's a huge range between, you know, the companies that even, even if you are beating some, some of them are not faring as, as well, especially if they're not beating on the sales side and if they're not having guidance, that's, that's relatively strong.

So I think that's probably more important.

But even within some of the sectors and even though we talked about staples outperforming, that's actually been one of the worst sectors so far for companies um that are, that are actually missing, whether it comes to earnings or sales because that's a sector that's been really under pressure from pricing power.

Um And especially with this level shift in inflation now, having largely played out, you know, we're still positive year over year and we're still positive month, over month for inflation metrics, but it's not as extreme as it once was.

And we know that consumers have continued to sort of trade down and be a little bit more selective when it comes to where they're putting their money.

So I think you have to be maybe a little bit more granular when it comes to sector by sector or even company by company because you can get, you know, great beats even in the tech world, a lot of the mega caps that reported, you know, over the past couple of weeks, you can get some really solid data.

But if there's a miss maybe on Capex where they're spending too much or if there's a miss on what the guidance looks like, um then you can kind of get into, into some trouble, especially when uh uh you know, a sector like that has become so highly correlated with the momentum factor this year.

Any unwind that you get in that factor tends to ex you know, accelerate to the downside and it, you know, uh fairly emphasized to a pretty significant degree.

And of course, that's what we've been seeing.

I hope you had your best ginger tea on deck this week because you certainly needed it.

Kevin Gordon Charles Schwab, director and senior investment strategist.

Thanks so much for taking the time here.

Good to see you.

Good to see you too.

Coming up everyone.

The state of streaming shares of Warner Brothers Discovery sinking on the back of its earnings here, we'll have analyst reaction.

On the other side of this break, shares of Warner Brothers Discovery are sinking on the company's disappointing results.

The streaming giant took a massive $9 billion impairments charge related to its TV networks unit.

Now for a deeper dive into the results, we're joined by Robert Fishman Moffett Nathanson, senior analyst here.

Great to have you here.

Just wanna get you a read in on the report from Warner Brothers Discovery and how investors should be kind of keeping the context, the context around this name uh alive or at least in their thesis.

Sure, good morning and thank you for having me.

Um So yeah, I mean the the print last night um was, was not not a great print to, to say the least.

Um you know, basically the the challenges continue and linear television is still the the biggest driver of this company's profit.

And as we all know that the pressure on the ecosystem, given court cutting, given us linear advertising challenges is weighing on the company and and given the leverage that they have with the elevated level of debt that becomes an even more difficult situation to, to be in So Robert, then what does that tell us about where Warner Brothers is headed from here?

Because I do think there might have been split reaction.

I don't know if it's fair to say that.

Yes, there were many concerned about what was in this report, but there also seemed to be some optimism just about the recovery in the studios business was that may be able to offset some of that concern that we did see in the ugliness of this quarter.

Yeah.

Listen, I, I think that there's a few big questions that still need to be answered for the, the future of this company.

Um You, you gotta start with what's going on with the NBA front and center.

Uh There's lots of potential implications if they do end up losing, they're, they're in the middle of a court case right now in terms of their matching rights.

So if they end up losing that case or, or dropping case um and, and moving forward without the MB A, it brings up a lot of questions to your, to your point about what the future of this company looks like in terms of their linear affiliate fee negotiations.

Clearly, they're doing a lot to try to capture as much sports rights out there from, from others um to, to help us set the, the potential loss of the NBA.

But in our opinion, um it, it's still not likely to be enough.

So there will be pressure on future affiliate fee negotiations um that come up as early as the end of this year or into next year for, for the Turner portfolio discoveries at the end of this year.

So we'll see how uh widely this this does um become a negative for, for the company in terms of the the future negotiations.

But to your studio point, that is a AAA real potential upside, it is a hit and miss business as we all know.

And when the movies are coming in and doing well, that that's a great thing like, like they had with Barbie last year.

But when you have uh misses uh as as they have recently and the video games have not gone as well as last year.

So that there's a lot of different moving pieces within this studio line that the upside potential in the second half of the year is going to be uh the return of the television studio and licensing after the strikes.

So again, lots of different questions, lots of different moving pieces here, Robert going back to what you just said a minute ago about the loss of the NBA rights and the pressure, maybe that's going to add to or going to put on add an affiliate revenue.

Have you modeled that out?

Iii I guess how big of an overhang maybe could this be for Warner Brothers at least in the short term?

So in the short term, um they, they're pretty locked in through 24.

So, so we're not going to see that in the next couple of quarters.

The, the question is what happens when they negotiate.

Um As I mentioned, the discovery portfolio at the end of this year, if that's able to stay separate and not get impacted, if, if they've lost the NBA by then, um then allies, what will turn to the turner negotiations and they have some bigger deals coming in 25.

So short term that they're still largely protected.

Um The the bigger concern in the short term is going to be that us linear television impact.

Um And what we've seen, I think now eight quarters of double digit decline.

So it, it's, it's again and unfortunately not a very pretty picture on the advertising front and then on the affiliate fee front.

Um We're, we're gonna still have to wait to see where these deals end up and, and how negative it could end up being, but it also is dependent on what other sports rights they're able to, to capture.

Yeah, Rob, I was looking at some of your analysis and the comparison of time spent on streaming and direct to consumer content platforms, all of them compared to Netflix and how many of them are lagging and, and it's not even close here.

So is there a clear vertical within direct to consumer or, or genre that you expect Warner Brothers discovery to lean into that could help them close that gap a little bit.

That's a really interesting question.

Um Clearly a as part of Mac, which used to be known as HBO Max and, and known as other iterations OV over many years.

Um But, but we're down to, to max.

Now that the key question that, that you're alluding to is HBO content as you're showing here um is still the, the the premium content that the premium driver for Mac as House of the Dragon is going on, right?

That that's gonna capture new eyeballs, new, new users, new sign ups.

So HBO is still going to be the the leading driver of Mac.

They put it together with the discovery portfolio, but uh unfortunately, it still hasn't really completely uh expanded to, to a broader audience.

So you, you bring up the question, what else can they do?

And to us, I I think that there's gonna be an openness or, or at least look to explore potential licensing deals.

Uh Obviously, uh Paramount and given the uncertainty there, what you might learn a little bit more uh after market close today with their earnings.

But if Paramount's open to licensing some of their content, you would expect Max to at least explore that the other way.

Uh Max and Warner Brothers Discovery is approaching this question is by bundling with, with other other streaming services.

So they just recently launched a bundle package with Max and Disney Plus and Hulu.

All right.

I guess we're all just waiting for the, the next white lotus season to come about then Robert next year.

All right, I'll be watching it.

We'll, uh, we'll have our own think pieces on it.

Southern, the stuff.

What I know.

I know.

I gotta get, yeah, I gotta jump on the bandwagon.

I haven't watched it yet.

All right, Robert, great to have you.

Robert Fishman.

Moffett Nathanson, senior analyst.

Thanks so much.

Thank you.

Well, Bitcoin is regaining some of its losses after Wednesday's volatile trading session.

You're now looking, it's just about a half of a percent, but it's back above 57,000.

Jared B Booker has been closely tracking the movement that we've been seeing this week in crypto Jared.

Yes, Bitcoin got swept up in the risk off risk on daily fluctuations along with everything else.

Here we see, Bitcoin is up half a percent and what you're looking at here is the last 10 days and here is that steep decline looks like it could low.

A lot of times you have a retest of it.

So, not necessarily see that just yet, but just throwing out possibilities.

Just spending a little bit of time on the technicals.

Here, we are in a short term or to medium term downtrend.

You see these lower highs and lower lows, but on a five year chart, it's just a little flag there and the trend on the longer term is still up.

So we're just looking and searching for direction here in the short to medium term, long term, we'll have to see.

But 60,000 is a big level to me.

If Bitcoin can reclaim 60,000, then it has another shot at its record highs around 73,000.

And from there, we know the sky is the limit.

We did get some interesting news on court cases today over in Bitcoin Alameda Research and FTX ordered to pay over $12 million by a judge.

But you'll notice here, I'm looking at ripple.

This is a separate court case.

The SEC had sued ripple and there's a settlement announced for 100 $25 million or excuse me, a judgment for 100 and $25 million.

Uh The SEC is expected to appeal so looks like this is not over, but this chapter is over.

Uh So here's a five year chart and I'll just bring this down to a year to date.

So you can see, got that nice little spike up here but still basically underwater for the year down about 4%.

Uh Just looking at the crypto space in general.

I want to show you an equal weighted.

You can see how the winners and losers shake out.

Um, pretty evenly matched here, not looking particularly bullish or bearish, but when I put the 10 day on, you can see that there's a lot of, uh, a lot of, uh, red to be worked up here guys, Jared.

Thanks so much.

Uh keeping tabs on all things crypto right now.

Also coming up on the other side of this short break, bumble shares are plunging.

We discuss why and what other tickers are trending on Yahoo Finance.

We've got that for you right after the break.

You're watching the morning brief and we're taking a closer look at what's trending on Yahoo Finance and those are, get it.

Bumble Kristy Cream.

Oh, yes.

And Robin Hood, let's start things off with bumble shares.

They are plunging after slashing its full year revenue outlook.

The company now expecting a gain of 1 to 2% in its revenue in its 2024 revenue.

That's down from the previous expectation of growth of as much as 11%.

Take a look at these shares right now.

They're down by 38% here on the day and just looking at where that compares to how they performed on the year to date scale here.

Uh That should be a new year to date or 52 week low for the company and for the stock at least right now.

All right, let's take a look at Krispy Kreme.

Those shares are rising.

People are loving their doughnuts, the doughnut chain expansion efforts in the US and also a broad pushing sales to the upside in the second quarter.

The company lowering though its full year guidance to reflect the sale of its majority stake in insomnia cookies.

It's cookies cookie delivery arm.

Despite that though, you're still looking at gains of just about 14%.

The company also went on to say that their innovative specialty donut collections are continuing to resonate with consumers and drove the increase DFD deli delivered fresh daily and digital sales in the quarter.

Like I mentioned there revenue coming in better than expected.

Total revenue was up just about 7% from a year ago.

When you take a look at the US specifically sales there up 8%.

You guys laugh at me when I circulate my Krispy Kreme stories.

But you'll, you'll find out it's an economic indicator.

You do.

All right, Robin Hood shares.

We're also tracking that here today.

It was up after earnings right now, just barely holding on to some gains of about 2/10 of a percent.

As you see there on the screen, we did see a touch negative territory.

Here's what's happening.

Revenue from the Cryptocurrency and options trading, driving its second quarter revenue surge and it's also seeing a rise of customers sign up for new products like its credit card and subscription services.

Hey, guess what?

We'll also be diving deeper into this report with the Robin Hood, Ceo Vlad Tenev in the Show Wealth at 11 a.m. You do not want to miss that.

Um All right, they told me to wrap.

So you'll have that 11 a.m. Eastern time.

Looking forward to that interview.

I keep it right here because between that time, we've got catalyst, we're gonna take a look at the games that we're seeing across the board in the markets again, looking at the me drivers, you're looking at green across your screen now, got the dow up, look at that 440 points.

The NASDAQ also up just over 1% as well as the S and P 500 that moved to the upside off the back of better than expected labor market data claims coming in just lower than what the street was expecting.

We'll discuss how long we can expect the rise to last in the market.

That's the big question is asking that's coming up next on Catalan.