Market open, Disney CFO talks earnings: Morning Brief

US equities (^DJI, ^IXIC, ^GSPC) appear cheery heading into the trading day after shaking off a multi-day sell-off on Tuesday. Seana Smith and Brad Smith welcome investors to start their day off right with the Morning Brief, tracking leading market trends and talking to top Wall Street experts.

Disney (DIS) CFO Hugh Johnston sits down with Yahoo Finance executive editor Brian Sozzi to talk about the media giant's fiscal third quarter earnings and the strategy around its streaming and theme park businesses.

Novo Nordisk (NVO) CFO Karsten Munk Knudsen comes onto the program to talk about the pharmaceutical company's earnings, including how it is trying to meet demand for its GLP-1 weight-loss drug Wegovy.

Other top trending stocks on the Yahoo Finance platform include lodging platform Airbnb (ABNB), ride-share giant Lyft (LYFT), hotel chain Hilton Worldwide (HLT), hardware designer Super Micro Computer (SMCI), and AI company Upstart (UPST) after all reported earnings.

This post was written by Luke Carberry Mogan.

Video transcript

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

I'm Shana Smith alongside Brad Smith and this is Yahoo Finance's flagship show the morning Brief, Good Morning Everyone.

Stock Futures rise as a double tone from the Bank of Japan.

Spurs investor confidence that the worst could be over for the market.

Sell off.

So let's get right to it.

The three things that you need to know to start your trading day.

Yahoo finances, Madison Mills, Josh Lift and Jared.

We have more.

That's right.

Brad Stock features in the green after a three day ended in a $6.5 trillion market wipe out magnificent seven names recovering from a $650 billion loss in market cap early this week.

Adding back over $150 billion in value on Tuesday, primarily driven by in video games.

Now, one driver of the recovery is hedge funds.

According to Goldman Sachs, the big question is, will the buying continue in today's trade?

And we discuss that right here on set with City head of equity strategy, ST Kai and Disney shares are moving to the downside on the back of its third quarter results.

Despite beating on the top and bottom line, the results were overshadowed over continued weakness in its parks division.

Disney expects consumer demand to moderate towards the end of the quarter overall.

The report was positive.

The entertainment giant reporting its total streaming division did turn a profit for the first time overall.

It seems the company's price hikes are paying off and there's even more on the horizon with new increases set to take a in October and investors are keeping a watchful eye on the A I trade this morning shares of Super Micro, they are plunging after the company missed Wall Street expectations and reported a wider than expected margin for the fourth quarter.

The company is remaining optimistic that Super Micro issued upbeat revenue guidance for the current quarter and announced a 10 for one stock split amid growing demand for a hardware company says it's expecting trading on a split adjusted basis to start October 1st.

Our top story this morning stock futures higher after snapping a three day losing streak markets looking to recoup the losses though from a global sell off peg to a weak jobs report in the US.

Plus, you've got the unraveling of the N the N carry trade.

The Bank of Japan noticing the volatility and acknowledging it says its central bank will not raise interest rates while there's instability in the markets.

Those comments pushing a further weakening in the yen against the dollar.

Yahoo finances markets and data editor, Jared Bry has more on the moves.

Jared.

What are we saying?

That's right.

A little bit of a reprieve with respect to the yen.

And you can see that the yen, the US dollar has actually gained almost 2% versus yen.

That means the yen is weakening, that is going in the right direction for risk investors because arguably this whole Maelstrom was kicked off last week when the BOJ raised rates to 0.25%.

And if you'll recall us, rates are north of 5%.

So that's a big difference in that interest rate differential has been leading people to short the yen and buy assets elsewhere that carry trade has been unwound over the last few days.

And the big question is when is it going to end well here, this little movement off of the lows here that is potentially a reprieve.

Well, that is a reprieve, but it's potentially the beginning of the end of this episode, this deleveraging event with respect to the, with respect to the yen.

I also want to show you a heat map of all the different uh four X crosses and four X is for exchange.

Um All this red means that the yen is weakening with respect to these currencies.

You can see it's down 3% with respect to the Mexican peso, a very volatile pair.

But you contrast this with what we've seen over last year.

A lot more green and uh we'll have to see how this plays out in the days to come guys.

All right, we certainly will, Jared.

Thanks so much for bringing down the moves that we're seeing here ahead of the open.

Like Jared was saying stocks moving higher this morning on the back of Dovish commentary from the Bank of Japan.

So what could this ultimately signal for global central banks and also markets moving forward?

We want to bring in Stuart Kaiser, he's head of the US equity trading strategy at Citi and Stuart.

It's great to have you here.

So as we stand today, we're looking like we're going to open here to the upside coming off of yesterday's gains.

I guess the question most investors are asking is the worst over.

What do you think?

Uh you know, look, we, we, we think the market overreacted a little bit to the jobs data on Friday.

So I think the market is kind of digesting that fact that, you know, the data was weak but it wasn't horrible.

Uh We got a bit of a pull back on Monday.

Um I I would kind of put those in separate categories.

Yeah, the market responded to the data and then you have something that was a little more yen carry slash positioning driven, the positioning part of it seems to have calmed down a little bit, you know, the data part is gonna be ongoing.

Uh You know, we have jobless claims tomorrow we have to see how that prints.

The fact is we are in a period of slowing us economic growth and the market is constantly debating right now.

Is that kind of soft land or hard land?

And how do I tell the difference between the two in real time?

So I think what you saw Friday is people got a little bit, you know, shocked or, or, or scared out by, by that weak labor market report.

Um And that's just a good an ongoing process.

I think over the next kind of 2 to 3 months claims on Thursday, important, jobless uh jobless data uh uh uh uh payroll state, excuse me in early September will be very important too.

So that's, that's an ongoing issue.

I mean, we saw sweeping deris during that sell off here.

What type of risk appetite should investors still be considering?

At least as we're seeing some, some stalling out to the declines right now.

Yeah, look, I think what you saw early Monday and a little bit yesterday was a little bit of opportunistic buy and kind of favor stocks.

So, you know, I don't think this is the case where you just go all in back on risk.

I think this is the case where you have a stock or a sector, a market that you were sort of predisposed to own anyway.

And, and now you potentially kind of kind of buy into that.

And I think that's what we're seeing.

I think kind of what happened on Monday, you did get a little bit of opportunistic buying, but a lot of the portfolio managers we talked to were kind of asking the question.

Am I missing something like, you know, I didn't expect the market to react as strongly and it did.

And I think, look when people get a little bit confused or a little bit uncertain, they tend to pull back on risk appetite and I think that's what happened.

It's just gonna take a little time for things to calm down and get people re engaged, sir.

What do you think when, when, when you take a look at the dramatic move that we saw on Monday, how much of that is a result of the growing popularity of options trading?

And I guess to that and then how much does that ultimately need potentially introduce more risk to the market going forward?

Yeah, look, I don't think the move Monday had a lot to do with like zero data and tactical option trading mostly because it was coming off a weekend, right?

So your Friday one day options had expired the Vicks when it got to 60 that was pre market open.

You couldn't even really trade that if you were a retail investor.

So, you know, I think what it did is it probably put people on edge and got a little bit worried that this could kind of cascade but um, you know, I don't think like the, the short term tactical, uh, retail options trading had a whole lot to do with Monday just because it was coming off that weekend.

But does it add more risks to the market potentially going forward?

It doesn't, it doesn't, I mean, by definition, a zero day position is over at the end of the day.

So if you, if you lost money on a zero day option on Monday, it's because you made the decision on the open to sort of purchase that um there has been a lot of vol volatility selling in the market in general.

You know, you have zero day, you have one day overriding ETF S, you have a lot of selling ETF S. So I think there is some concern that if you get a large surge in volatility, that position, it kind of needs to rebalance itself and can cause a little more short, short term dislocation.

But if you look at Monday across the space, it was really the V that looks like the outlier, you know, the Vicks up to 60 was highly unusual compared to the moves we saw in other parts of the market.

I think that suggests you might have had some positioning dynamics on the VIC specifically uh that were going through the system.

Some industry colleagues of yours over at Blackrock were pointing to the China data coming out this week and trying to get a sense as many investors are right now of how much or what type of outsized impact international data can have on us market.

It's right now through the end of the year perhaps.

Yeah, it always matters.

I mean, China is a large economy and if that economy is slowing, it becomes an issue, I do think that over the last couple of years though people have kind of stepped away from from from China equity exposure just because there's just been ongoing, ongoing challenges there.

So I think it matters.

But I think honestly the US data has going to have more impact on the rest of the world.

The rest of the world data is going to have impact on the US from an economic perspective.

The stuff going on in Japan is unique because that carry trade has been built over a multi year period, right?

You don't, you don't rebalance a multiyear trade in two days so that risk still exists.

And I also think it sends a message to the market that when you paradigm shift economic and monetary policy that can sort of have some unintended consequences.

And that happened when the FED started raising rates off of zero.

And I and now it's happening to the BOJ raising your rates off of zero and there's some concern, what does it mean when the fed starts cutting rates?

Because that is also a paradigm shift.

So a lot of policy uncertainty out there that I think the market is trying to digest.

So when you take a look at what the market is pricing in right now, obviously, the rising risk of recession.

I'm curious from your view.

Have you been a bit surprised by how quickly that's been priced in?

And what do you think the probability of a recession is at this point?

Very surprised by how quickly the market started the price recession risk last week.

Um Just because that Friday, the payroll data for July was a little bit weak.

It was actually almost right in line with the average July payrolls from 2009 to 2019.

So I think what you're getting here is the first half of the year you were trading, what I would call a higher for longer trade growth was surprising to the upside generally and rate cuts are being pushed out the last month or two.

You're now pricing a slow down in growth.

And the debate is, can we soft land or do we hard land?

And to me like we've, we've been on the record as saying, we think that soft landing outcome is really poor risk reward because as the growth is slowing, you don't know, is it good a soft land or is it good a hard land?

Our economists make the joke, every hard landing started as a soft landing.

So look the odds of recession, I mean, our, our economists have that as a base case in the back half of the year.

So you have to, we, we respect that, you know, the the odds of a recession are higher than they have been, but I don't think the data that we got last week was negative enough to kind of start that trade going on.

I think what it points to is clients are really on edge here as growth slows and are wondering, did the fed over tighten or are they going to get this sort of immaculate, you know, soft landing and, and the hard part with that is the trades you have on in those two circumstances are very, very different.

The risk reward for the equity market is very, very different.

So you're kind of nearing a borderline with, you know, with, with a very sharp intersection effectively Stuart, great to see you here in studio this morning.

Thanks so much for joining us Stuart Kaiser, who is the head of us equity trading strategy at Citi.

Thanks so much.

Thank you.

Well, taking a look at the magnificent seven trade this morning.

We're looking at green on the screen right now.

Pre market stocks looking to recoup losses tied to a global sell off altogether.

The mag seven stocks added over $150 billion in market cap on Tuesday, but that's not quite recovering from the $650 billion plunge on Monday, but certainly pulling them on the road to recovery.

NVIDIA, the leader again today, that's up around 2.5%.

Of course, NVIDIA, uh name in the MAG seven that doesn't report until later on in the earning season.

August 28th is when we're gonna be watching for that report.

And particularly here, looking through some of the expectations going into that.

Uh Morningstar actually saying that they're encouraged by the management's commentary to uh commentary.

Uh that demand for its upcoming Blackwell products should exceed supply into calendar 2025.

And they see no signs of A I demand slowing either.

But remember earlier this week, DD A Davidson was also commenting on that same matter in the Blackwell chip and really making sure that it was well known that that's likely to be a short lived uh and have limited type of impact on the stock right now.

Yeah, it's interesting.

I just got uh Piper Sandler's uh note here this morning in my inbox on NVIDIA and they're still remaining optimistic.

They're saying that the recent pullback that we've seen in NVIDIA and even after yesterday, some of yesterday's buying action, they're seeing an opportunity given that recent pullback.

And they mentioned the fact that they believe that NVIDIA, regardless of the fact that maybe we are going to see some sort of delay in Blackwell chips.

That fundamentally, they say NVIDIA remains the strongest player in the A I accelerator space with an estimated share of 80% of the merchant market by 2028.

So I, I think that line right there just really encapsulates how big of a, how much of a dominant player NVIDIA has been continues to be, is expected to be here over the coming years in the A I space.

And then also speaks to a lot of that excitement or validates some of that excitement that we had seen.

Obviously a lots of excitement, I guess in the stock over the last couple of quarters.

So again, yes, we have seen a pullback obviously from those highs.

Yes, we did see some buying action yesterday.

And I think the note here from Piper Sandler kind of goes with what you were just talking about where many on the street are advised or at least to see this recent pull back as a buying opportunity just given the fundamentals of Nvidia's business and the expected demand of what that trajectory of growth uh looks like here over the coming quarters.

All right.

Well, Disney results giving a mixed picture for the third quarter.

The company posting a profit in streaming for the first time ever, but it's us theme parks business missing estimates for sales and profit.

Yahoo Finance's executive editor, Brian Sazzy spoke with Disney CFO Hugh Johnston earlier this morning.

Here's what he had to say.

I think investors are trying to figure out how to take this quarter.

There are a lot of wins, no doubt about it, but there were a couple I would say squishy parts.

One of those areas we're starting to see a little early uh focus on Hugh.

Is it the experiences or the parks business sales, up operating profits down?

But what you noted about moderation of consumer demand at the end of the quarter towards the end of the quarter, I guess that last month, Hugh.

What exactly did Disney see?

Yeah, Brian, great to be with you guys and good morning.

Um You know, in terms of the the parks business, I, I do think people need to focus on the fact that uh the business grew in the quarter.

Uh and the, the business is a little bit different construction than it was in the past right now.

40% of the business is not domestic parks, it's either consumer products or international parks.

Now, within that, that remaining 60% that's domestics parks.

Uh We had attendance flat and we actually saw per caps up a little bit.

So in a growing business, we have a little bit of inflation and as a result, the O I was down and with that weakening, I think we, what we're saying is, hey, probably gonna see another few quarters uh of that and then we expect the business to, to bounce back to, to closer to where it was.

So, you know, that the more important point here I think though is the portfolio for Disney is working really, really well.

Uh Obviously, the numbers were great, you know, 4% revenue, 35% eps growth, 30% guide.

Uh but the entertainment business profitability tripled.

And we've been talking a lot about, you know, the creative engine getting back on track and that's what we've also seen over the course of the last three months.

Uh We've had the three biggest movies in, in, uh May, June and July.

Uh and as a result of that, that great performance, obviously, that the entertainment numbers are terrific and that's really the heartbeat of the company.

That's the one that pumps oxygen into the rest of the company.

So we feel good about that.

And obviously the streaming service, we did what we said we were gonna do and we did it a quarter early.

So we feel good about that as well here a couple more, uh, on the, on the parks business.

I definitely wanna talk about that turnaround in the creative studios because that is, uh, I think that is a real, obviously c of your business, but a very important to the investment thesis on Disney is in the US parks business.

Are consumers behaving in a recessionary way?

That's the first part.

And then secondarily, what actions are you taking in the parks to, to get that business back on a growth plan?

Yeah.

No, we, we certainly see consumers behaving in a way.

I wouldn't call it recessionary necessarily.

Uh, they're, they're watching their pennies a little bit more.

So the things that we're doing are the things that, that you would logically do.

Number one, we, we are putting a tight clamp on our cost management.

Um We're, we're usually good at that in the parks and we're taking it up to another level.

Number two, we're being very selective about creating value offerings for certain consumers that, that are more sensitive to value these days, but doing it in a responsible way, not in a way that's gonna be disruptive to the financials of the company.

And when you put those things together, uh the strength of the IP that we have given that people do tend to protect their vacations more than other types of spending.

Uh We, we tend to get hit late, we tend to get hit less and we tend to improve more quickly than others.

And that, that's the expectation we have based on the history.

We've studied how soft is that China Parks business because, you know, we've been talking to a lot of consumer companies of late something's going on in China, Hugh.

Um which, you know, of course they report GDP growth numbers but a lot of consumer companies are calling out weakness there.

Yeah.

II, I would characterize it as, as very mild.

I, I wouldn't characterize it as, as a big issue by any stretch of the imagination.

We just see less people traveling into Shanghai from elsewhere in the country, but again, relatively mild in the overall scheme of things you mentioned here, the, the Renewed Creative uh engine or strength at the studios business.

What have been some of the biggest changes that have been driving that because I wouldn't say it has come out of left out of left field, but a lot of investors forgot, I think, uh you know, how powerful those creative creative engines that Disney could be when they're all aligned and rowing in the same direction.

Yeah, it's a great question, Brian, you know, uh 11 of the things that, that our Ceo Bob Iger and the team have been really focused on is really taking us back to the days of excellence when we were producing multiple billion dollar movies every year coming out of the studios and the, the focus has been on not not being satisfied until we achieve that, that standard of excellence that, that really is what Disney is all about and if something isn't ready, we'll delay it by a couple of quarters.

If a project looks like it's not going well, we'll actually cancel a project.

And as a result of that, the, the products that you see coming out in the form of terrific feature films are truly, truly excellent.

And that, that has been a notable change and one that we've been talking about, but now you're seeing the evidence of it.

And my expectation is as we move forward to Mufasa and as we move forward to Moana too you're actually gonna see more and more of, of that positivity showing up in the results.

I don't view these as one offs.

I view these as the start of a, a significant trend.

Uh You see the same thing happening in the TV studios with, with obviously all the Emmy nominations that we've received with the Bear and Shogun and Abbott Elementary and only murders in the building.

A real focus on excellence out of the Creative Group, which is sort of the heartbeat of the company and really sort of drives the rest of the company is, I think what we should, we should be expecting going forward.

Is it fair to say, Hugh that Disney is just back to making higher quality content within the movie business?

And it's ok if you don't churn out a large volume of titles just to, to satisfy a number on a budget line.

I think that's exactly right.

I, I think to some degree when we, when we got into streaming, uh we got a little too aggressive on quantity.

Uh and it's difficult to expand capacity that quickly and, and to some degree, it perhaps the quality suffered a bit uh in today's world, particularly trying to get people to go to movie theaters, you need to deliver a super high quality product.

And as Bob came back, that was one of the things he immediately diagnosed and, and focus the team on.

And as a result you see that happening right now.

Now it takes a while to do that and we've been talking about it for a few quarters, but now you're seeing it in action and I do believe you're gonna see super high quality product coming out of our studios.

The creatives are doing a great job.

Uh It was mentioned on the earnings release, of course, combined profits at the streaming business for the first time is Disney making money and streaming.

Is that the new normal from this point forward?

Absolutely.

That's exactly it.

So we, we said we were gonna do it in Q four.

We've achieved it in Q three.

I would expect to see us continue to do that.

What's driving that is that cost containment.

It, it's really a combination of a, a large number of things.

Certainly cost is one of them.

In addition to that, the advertising model has been been terrific as we've improved the product, we're seeing churn go down, we're seeing engagement go up.

And in addition to that, you're just seeing more and more of our own IP really high quality IP attract more and more subscribers.

So it growth is certainly a factor.

And then of course, pricing is a factor.

Um And, and we've taken some pricing and because we're putting so much value into the service, I expect we'll continue to take some pricing over the course of time.

So all of those factors are, are weighing its way into the, into the, the outcome.

I mean, we were losing not too long ago, a billion dollars a quarter.

Now, now we made 47 million and I expect we're going to continue to go up.

I'm sure you've been watching the, the high drama playing out with uh Paramount.

Some folks that I've talked to have said that deal price for them wildly too cheap.

But that whole situation has it made Disney rethink what the end game is for its linear TV network.

Does it make more sense to just keep these amazing assets like an ABC instead of just selling them at, at rock bottom prices just to remove uh various expenses from the lines?

Yeah, that, that's the perspective I've had all along since, since I got here and, and studied it in the initial months is these are good assets.

They produce a lot of cash, they have very, very high household penetration and they're part of the ecosystem that delivers uh terrific entertainment to people and obviously they do it in a profitable way.

So, you know, Brian, it's interesting right now, we we're about 5050 between delivering entertainment through streaming and delivering entertainment through linear.

And as consumers make that shift, we'll certainly make the adjustment.

But we have, we put high value on the linear business, very high value.

You mentioned, uh Hugh Bob Iger, of course, do you think his successor will be announced before your end?

Or the, the company needs a little more time to, to really finalize or lock in on that, that best possible candidate.

Yeah, that, that's a great question and it's an excellent one for the board.

Not for the CFO.

Uh I, I would tell you, I, I know Bob is here through, through the end of 26 and that, that's been widely reported.

Uh Beyond that.

I, I really don't know what the timing is.

All this.

All right, thanks to Brian Sazi and Disney CFO Hugh Johnston for that interview coming up, Novo Nordisk is seeing strong demand for its weight loss treatments, but you're looking at the stock falling just about 5.5%.

We're going to hear from the company's CFO next Nova Noda shares off just about 5.5% in the pre market.

The company trimming its operating at profit outlook for the full year, but it did raise its sales guidance and that was boosted by strong demand for its weight loss drugs.

Our health care reporter Angeli Kamlani has been tracking this joining us now with more.

Hi.

Hey, Shana.

That's right.

We know that of course the results are out and the company did report for 3.8 billion in revenue compared to the estimates of 4.1 billion.

And that miss came from Miss and we go sales and to discuss all of that we have on with us, the CFO of no, no Carsten Monk news and Carson, really good to see you again.

Really kind of a mixed picture with this quarter.

I know the stock, you know, the, the Wall Street is clearly reacting one way about it.

You've called this a blip in the quarter based on rebates, manufacturing constraints as well as competition and pricing for sales.

What can you tell us, you know about how you think about Wall Street reacting to this good morning and thank you for having me on your show.

And, and yes, I called a blip and, and, and the starting point on our side is that we believe we deliver a really strong set of accounts for the second quarter.

We are growing the company 25% in the first half, which is the top end of the industry and we raised our full year outlook, top line wise also by a couple of percentage points.

So, so all the performance of the company really strong and yes, then the market took our shares down linked to even higher expectations for we go in the quarter.

And the reason why I called the blip is that the underlying trends are really strong and with the raise of full year outlook, then investors should be very comfortable in the performance of the company.

You've also pulled back on label expansion for we go, that's just another hit for the product itself.

I know that there's also, you know, a delay on that respect how is that going to impact longer term revenue?

And how should we be thinking about that for will be sales?

Well, right now, demand is greater than supply for Vigo at all for the obesity market.

Given the significant unmet needs, we are scaling vivi as we speak already significantly.

So we have, we have doubled the number of doses we are supplying into the market compared to the beginning of the year.

So significant scaling taking place and now we have launched in 12 markets outside North America.

So we are gradually rolling out.

And the fact that we resolve our capacity constraint means that the delay on the heart failure data which are really compelling does not have any material impact because we had a dialogue with the.

And based on that dialogue, we have decided to pull our file order to have additional data based on hard end points from some of our other trials.

So we will be resubmitting the file in the beginning of next year and it's not going to have any impact on our top line given the current situation.

And we have also got new concerns from North Carolina asking the US Health Department to license your products, the GP one products in particular, in order to help ease the constraints on access and help bring more affordable options to market.

I know you've already been facing the compounding problem in light of the fact that you're still facing shortages.

Does this sound like an option that no would be willing to consider.

So first of all, this really starts with the premise that the innovation generated by researchers years ago are really making a significant difference for the large unmet need and the large number of patients suffering from obesity and that granted us patent protection according to the general rules.

And we are maxing out in terms of supplies.

So we are really supplying as much as we are able to produce.

And no, we are not interested in licensing.

And even if we did the time to construct any alternative measures would not be faster than what we are already doing in terms of constructing additional capacity.

So we don't believe that that is an appropriate way forward.

Yeah, definitely.

And then finally, you do have a another area where the US government is looking at you and that is on the uh pulling leir the insulin product off the US market.

I know it's been down really quarter over quarter and year, over year, down, 31% there.

So what is the message to lawmakers?

I know Novos had a, a meeting set up with them.

First of all, continuity of care is a key priority for known worse care.

So patients relying on known worse medicines for their outcomes is a key priority for this company.

So we don't take any portfolio choices lightly.

In the case of L in the US, we are in a situation where the product has been marginalized over the last 5, 10 years through aggressive price demands from payers.

So pricing has really come down.

Market share has come down.

So the products market share is now below 10% in the basal segment.

And then with a lot of other products available in the segment, our choice was to discontinue the product in the US in order to use our resources both in the market and supply chain wise even more productively.

So this allocation means that we will be able to reach even more patients than the alternative.

And we work with the portfolio.

So we have a number of alternatives in our own portfolio.

And competition also offers products for that market segment and I would say finally, Levi is out of patent.

So, so now, now, now, now you spoke about the license.

So, so if if anyone would, would be up for producing Levi, then it's, it's, it's off patent definitely.

And, and to your point, the numbers make sense and tell the story.

We'll have to leave it there, Carson, but really a pleasure speaking with you again.

Thank you so much for joining us today.

Carson MN CFO of Nova Nordisk.

Thank you for having me back to you guys.

All right.

And Jake so much for bringing us that interview.

I wanna get to the opening bell on Wall Street here we are today a second day in a row where we are looking at gains at the open.

You've got the dow now up just over 200 points, the S and P up just about 1%.

You've also got the NASDAQ nearly 2%.

And Brian, when we talk about a bit of the, um, I don't know if you would even call it optimism, but the opportunity that investors are seeing right now to buy from those depressed levels coming off of Monday's sell off, especially when you take a look at some of those tech names.

We saw massive outflows of the mag seven.

As we started the trading week, we saw a bit of inflows yesterday.

That looks like at least at the open that's carrying into today.

And as you go through some of the strategist notes here that we're getting this morning, it seems like at least right now we started to hear this, I think Monday afternoon carried over into yesterday and then into this morning that maybe it was a bit of an overreaction, the drop that we saw in the markets on Monday and investors once again, then putting some money to work uh coming off the sidelines and finding reason to buy here at the open.

Yeah, it wasn't advice or tips that we were giving folks out there watching, but it was some sense of being connected with the investor out there and knowing that if you've been paying close attention that you might be on Monday might have been sha sharpening that Ticonderoga number two pencil or just getting your pens ready to go through that list of as Stuart Kaiser was telling us earlier, some of the riskier names and identifying where the pullback presented an opportunity for a longer term position.

Given the historical element of markets over long term have had the propensity to go higher.

But of course, it depends upon what your time horizon looks like there.

So we'll add that little note and nugget.

But at the end of the day, as Stewart was mentioning, there was a massive de risking, it was fast and furious.

But now I think there are a lot of and this activity over the past two days is showing that there are investors coming back in nibbling at some of these levels right now here.

Let's also get on to Yahoo Finance's Jared Blier.

Uh We're gonna take a look at what's moving more broadly here, Jared.

Well, thank you, Brad.

Just look at all the green on the screen behind me, South Africa, notwithstanding.

Uh, but we've got the dow up, uh, two thirds of a percent and that's actually the laggard of the day, NASDAQ flying high up 1.6%.

Russell 2000 up over 1%.

And let's take a look at the week that has been in the S and P 500 still under water by about, uh, 86 basis points right there on the week I want to point out something, this is a stat that comes via Ryan Dietrich.

And he is saying S and P 500 down at least 1% on Thursday, Friday and Monday pretty strong returns across the board.

Three months later, higher, 90% of the time up nearly 10% on average year later, up 18 of 21 times 22.5% on average.

So good chance those times felt pretty bad also.

And just kind of acknowledging that it always feels bad in the moment when you're down 10%.

Uh but sometimes you see the turnaround and I just want to point out something happening in the Russell 2000.

This is a fairly bearish pattern that has emerged and I'm going to put a longer term chart.

This is a five year.

You can see we had a break out a false break to the upside in 2021.

It looks like we just repeated the same pattern here in 2024.

So not looking the most bullish for the Russell 2000, but the other indices actually haven't seen as much damage.

Uh I just want to point out today tech is leading XL K up 2.3%.

Only health care is lagging today down half a percent and that's just going back to the NASDAQ real quick.

You can see the mega caps in line here in tow all green uh Broadcom standout up over 3% a SML up three and I'll just put the semis close on that.

A lot of dark green there guys.

All right, dark green.

Good thing, Jerry Booker.

Thanks so much.

Appreciate it.

We've got all your market's action straight ahead.

Stay tuned.

Stay tuned.

You're watching Morning Brief Pennsylvania, man.

We got stocks moving to the upside again.

It looks like investors are buying some of that action that we have seen coming off of Monday's sell off.

You got the dow now up 255 points.

You've also got the S and P and NASDAQ trading to the upside when you take a look at the out performance, at least what we're seeing here in the first couple of minutes of trading.

You've got the NASDAQ outperforming there up nearly 2% I believe.

But still you can see that five day number on the top right corner of your screen still off just about 5% over the past five days.

We wanna talk about where markets are headed for that.

We want to bring in our next guest.

We have Brent Shy, he's Northwestern Mutual Wealth Management's Chief Investment Officer, Brent.

It's great to have you and, and, and I believe last time we talked to you, we were talking about maybe some worry that we could see here of a recession.

Exactly.

Maybe the risk that that could pose here to the market.

So, so it looks like Friday might have confirmed that.

So are, are we in the midst of a recession?

How should investors be thinking about it from your view?

You know, I don't know for sure.

I think over the last few years, people have been able to shrug off any economic fears and any of those indicators that I pointed to over the last year that have happened before, before recessions because the labor market was still strong and people believe the labor market was still strong, even though there were signs, it was weakening.

The last thing that people kept pointing to was the s rule which I'm sure you've all heard about that was actually broken on Friday.

And that's where I think people started realizing that perhaps the labor market is weakening.

If the labor market is weakening, then that means the fed is likely too late, too late, even if they do cut in September.

And that's where I think the recession fears are starting to leak back in.

So with that in mind, what is the, perhaps if you are kind of leaning towards us seeing a higher probability of a recession, what, what is the counter that you expect from the Fed?

And how would the markets react then?

Well, I think the fed will cut rates if they see labor market weakness.

So I don't think September is a guarantee yet, at least not a 50 basis point cut.

I think that would have to be a weakening labor market in August.

We'll see if inflation is actually dead.

We've only had two good inflation prints after four bad ones.

And certainly the FED was head baked last year when inflation started going down and then it came back pretty, uh, you know, viciously this earliest year.

And so to me, we'll see, look, the reality is the Fed has cut before the last four recessions, they typically cut because the labor market is weakening and even though they've cut before the last four recessions, we've still had recessions.

And so it is by no means a guarantee, but there are risks that are out there.

And my message is only that investors need to pay heed to those risks and not be overweight equities and just make sure they're comfortable with days like Monday because those could happen again in the future and I don't want them panicking at that time.

Yeah.

But, well, I guess what is the main, take away your main takeaway from the action that we saw Monday and even what we saw?

I, I think starting on, on Friday.

Is this something that investors should be bracing for?

It?

Sounds like you think maybe we could see the dramatic moves on Monday play out once again.

Yeah, I mean, you have a market that's expensive.

So the S and P 500 trades of value du situations that it typically does late in an economic cycle, like late 1999 late, 050607.

And so it's, it's got a lot of positive expectations of a soft landing baked into it.

And so to me, when you see the market move like it did on Monday, when you see the VIC spike, typically volatility clusters.

And that to me is a sign of a market that has some potential weakness in the future.

And that's where I think it could happen again.

I suppose we'll see what happens tomorrow.

I think the important data points tomorrow are the market to the jobless claims initial and both continuing.

If those continue rising like they have, I think the fear of a recession amplifies again tomorrow and we'll see what actually happens in the market thereafter.

Brent, we got 15 seconds.

What is the recession portfolio playbook?

Then that investors would be wise to at least kind of try to put together some type of framework around.

I mean, I take it back to what you said before, just make sure that the prior guest I heard from yesterday talking about making sure that you own stocks for the long term thinking about not being concentrated and being diversified and not being too far over your skis if you're uncomfortable, do something now don't do it if the stuff hits the fan because that's exactly the wrong time to be selling and so have a balanced portfolio, make sure you're comfortable with risk uh and don't lean too far into any one particular segment of the market such as mag seven or whatever it may be, may be.

Stay, uh, stay diversified.

All right, one more of those mag seven names gonna be reporting later on this earnings season here.

And NVIDIA, uh, Bellwether we've seen in earning seasons past Brent Shy, who is the Northwestern Mutual Wealth Management, Cio Brent.

Good to see you here today.

Thank you, Rob me.

Thank you.

We've got all your markets action straight ahead.

Stay tuned.

You're watching the morning greeting Super Micro shares are plunging and just about 13%.

4th quarter results, fiscal fourth quarter results falling short of expectations.

The company announcing a 10 for one stock split that's set to take effect October 1st that we have weak profit.

That's really overshadowing the sales outlook that we're getting here from the company.

Despite all that though, when you take a look at the commentary within this release, when you take a look at the commentary on the earnings call, they still maintain that they're well positioned to gain from A I investments, they talk about the jump in demand from equipment that's powering the A I Intel, the Artificial intelligence software.

They expect that to continue to drive sales.

And Brad, this reminds me of I, I was able to speak with uh the CFO of Super Micro earlier this summer and we were talking about the opportunity that he sees for Super Micro right now and he was once again, kind of banging the table about the fact that he thinks that it is a massive opportunity given that huge demand, the outside demand that we are seeing for A I the fact that companies that are spending, they're allocating their Capex spending towards A I.

And he actually told me that a growing backlog because of the fact that we're bringing really good products to the market, that really is the issue that they are seeing and it's really still a supply constrained market.

So I think that speaks to the demand that they are continuing to see.

So yes, a bit of a disappointment there.

But remember this is a stock that has run up and we take a look at valuation levels.

Lots of questions about whether or not maybe the massive move to the upside has been, yeah, 100%.

And as we're taking a look at this stuff chart over the past year, yeah, over the past year, still holding on to gains of 50%.

So not too shabby and up over 87% during 2024.

So investors still have a lot to kind of hang their hats on if they've been in this name since the start of 2024 the quarter itself, just to put some numbers on what you were mentioning in the weaker than expected, even uh profits that came through the adjusted EPS that was shy of the $8.25 estimate by $2.

I mean, that was well off of what the street was looking for there and revenue just shy of estimates there as well.

And then also just looking at some of the adjusted gross margins here, the estimate was for 14%.

It came in at 11.3%.

Anytime you do that, it's gonna, it's gonna require the street's attention to really try and uh, re regauge exactly what type of um valuation they should be giving to this name, especially post earnings here.

And so that's all it is, especially as they're looking out to the future and still recognizing some of the opportunity that still baked into this year to date activity here.

Also, let's get a lift shares of Lyft here sinking this morning after boosting gross bookings for the second quarter that came in on the low end of its projected range.

The ride sharing giant also giving guidance for the third quarter that fell shy of expectations.

Shares.

They're slipping right now.

They're down by about 18% here.

Um Here's what was interesting and there's gonna be even more conversation um to be had around this for over a year.

David Richard Ceo saying for over a year, you've heard her say that customer obsession drives profitable growth and they said in Q two, they delivered and drivers and riders are choosing Lyft in record numbers here.

Um They did say that they achieved all time high active riders and rides here.

Uh, and that seems to be something, at least in the growth propensity, uh, that we've seen exhibited by Lyft as well as Uber and the results that we got this week as well, that seems, uh synonymous or a common denominator for both of these companies here.

Yeah, exactly.

I mean, take a look at the fact that they did, like you were talking about record driver supply, record riders.

They managed to grow profit.

They had a profit of post quarterly profit by metrics here of just around 5 million.

Although they don't expect to be profitable on an annual basis for some years.

And that was something that was able to achieve last year.

So I think again when you stack up these results from Lyft and you compare to what we saw from Uber, which overall was a pretty strong report.

It just shows maybe the widening gap or the gap that still remains between Uber, which is the leader, the dominant player in this space and Lyft which is struggling to gain or regain some of that market share that they did lose.

But again, underneath the surface, even though they didn't meet expectations, the fact that they are trending in the right direction when it are growing riders about that, they did see a 16% jump in rides to and from restaurants, bars, entertainment venues compared to last year.

I think that maybe shows that consumers are still willing to spend on experiences.

But again, just missing what the street was looking for.

And that's a big reason why you're looking at shares under a bit of pressure today.

You thought I was joking yesterday when I said people are getting more designated drivers via these ride hailing apps.

I mean, that, that's where they're going proof in the money right there.

The number 17%.

All right, let's take a look at CV S because we're also watching shares of that company, it's off just about 2%.

They slash our full year earnings outlook.

The health care giant also announcing a $2 billion cost cutting plan and the departure of its president of the Aetna Insurance Unit.

So again, a shake up there in the C Suite.

When you take a look at the fact that CV S once again falling to the downside here following their earnings results, they've had some trouble in the health care benefits.

Business, pharmacy and consumer wellness segments also struggling their total revenue and same store sales in both of those divisions missing expectations.

If we wanna maybe a positive spin on this, if we can, the drop that we're seeing today pales in comparison to what we saw last quarter when we saw a drop of just about 17% following their earnings.

So again, this did disappoint but the move to the downside much smaller than what we saw just about three months ago.

Yeah, way to find a bright spot within this year, especially for a company that is doing some good work and making sure that people get serviced on the health care and benefits management side the business.

But all in there's a lot of work to be done, I think from what investors have continued to track over the course of this year with CBS.

I don't know if we could toss up a long term chart on this one as well, but taking a look at the stock right now over the year to date, it's been down 29%.

So there's still a lot to be answered for, from the investors.

The call, I believe either just Raptor is ongoing right now, uh, that conference call.

So we'll see what more the company has to offer.

Uh going forward about its own strategy for A CV S and really kind of the marriage of both retail that we've seen here as well as the health care side of the business.

Uh So that is CBS here on the day tracking that coming up though.

We've got even more.

We're gonna be looking at Air BNB shares are sinking after giving a stark warning about demand in the US.

We've got that story for you next.

Let's take a look at three big market movers on Yahoo, finance.com, Airbnb, Upstart and Hilton.

We've got them all for you.

First.

Air BNB shares are sliding here this morning.

The travel company lowering its guidance, citing some slow us demand and shorter booking windows here.

Discussed on the call last night, you're seeing shares down right now by about 14.1 14.2% here.

All in there are a few things that really jumped out to me.

Number one, they did mention this, that this softness they talked about in long lead trips here.

So basically, the lead time to which you would actually book a trip is narrowing.

Uh Also North America was softer than anticipated in the second quarter to discuss that.

And so uh there also it seems like baking into the equation some perhaps deceleration in the forecast as well.

A bit worrisome for consumers out there.

I mean, what this tells us about spending you, there's also gonna be market more.

Um and they, that was something that slipped into the earnings release too.

And so if marketing expenses actually exceed the revenue growth rate, that's something investors might have to really take into account.

All right, that's a good point.

Let's take a look at upstart because shares are rallying.

Take a look at this move.

We're looking at gains of nearly 30% improved artificial intelligence model driving its guidance boost.

Also second quarter earnings coming in ahead of expectations.

If you're not familiar with this company, it's a fin tech company, it's an A I lending platform and the CEO really saying that a comeback is underway, taking a look at the quick analyst reaction to this better than expected.

Print Piper Sandler's commentary stuck out to me saying that they think that the revised second half forecasts are quote very encouraging.

You also have Mizuho's Dan Dole saying that the report quote starts a new cycle here for the company.

And key positives include a strong outlook for the third quarter and the remainder of the second half of the year.

So big winner here in early trading.

I mean you met the 30 seconds.

I didn't even try Hilton shares.

We'll see if I get another shot here.

Hilton shares ticking lower the hotel giant raising its guidance as strong international travel offset losses from weak us men sense of theme.

We heard that from airbnb shares right now for Hilton down by about 2.5%.

Uh a few call outs here from the report that came out this morning.

Number one system wide revenue per available room that increased by about 3.5% currency neutral there.

They also let's think about this capacity.

A lot of the hotel operators are trying to bring on more capacity, trying to bring on more unique experiences.

Uh and they're actually approving 62,700 new rooms for development during the second quarter total pipeline.

Now a record 508,300 rooms uh as of June 30th 2024 there.

So uh we'll keep a close eye on chairs here again.

I didn't meet the 30 seconds.

All right, we'll keep it right here.

We've got a lot more for you coming up.

Take a look at where markets are trading.

30 minutes, almost 30 minutes into the trading day.

You're looking at gains across the board.

When you take a look at where we are seeing some of that leadership here, the rotation out of growth into value.

So that seems to be faltering just a bit and quickly after it started, you've got the NASDAQ now up just over 1.5% nearly 2% gain off the highs of the session.

You've also got the dow up now just about 400 points.

We'll be right back.