Is the Market Turning? Apple Production Cuts & Fed Drama Explained

[music] Hello and welcome to Market Domination. I'm [music] Bri Mama and we are live from our New York City headquarters. There is just about an hour to go into the closing bell and stocks [music] are looking to close out the week on an upbeat note. I do want to bring in Yahoo Finances Annette Beret. I I know that you're watching closely the Mag 7. Also, Delta was down with the earnings this morning. We're also watching energy prices ahead of the close as we're getting some potential headlines about the war in Iran. >> Yeah. So, let's take a look first at the MAG7 because we have been watching a little bit of a mixed picture when it comes to the Mag 7. You can take a look at our Wi-Fi interactive and you'll see that Microsoft is up today more than 2%. Uh, a new fast decision-making model was introduced today in mic at Microsoft. Also, you're looking at Tesla that's uh 2% higher. They had some positive China EV delivery data for September showing a 5% year-over-year increase there. And then also just pointing out that we are seeing that Meta shares had been positive throughout the session earlier but then turned negative. This is after Hunterbrook Capital said that it is short the stock. So it sent the stock into uh negative territory uh this afternoon. Taking a look at Delta as you had been mentioning uh Delta we've been watching because that stock had been lower earlier in the session. It's down uh less than 1%. This is after the company uh has cut its guidance given the higher fuel costs. So we have been seeing that the of course these higher fuel costs have been having an impact on yields globally. Uh there is a headline that just came out that President Trump has struck a deal with uh Vladimir Putin of Russia to supply Russian diesel to the US and to global markets. So we have seen a move lower uh when it comes to crude oil. You can see WTI down at around $91 a barrel. Brent crude going down to $103 a barrel in these last few minutes of trading. >> And Frey, thank you so much. Appreciate it. you. >> President Trump is renewing his effort to remove Federal Reserve Governor Lisa Cook, forming a new committee to investigate mortgage fraud allegations against her. Y Finance's Jennifer Shamber has the latest. Jen, hey there, Brooke. Yep, that's right. President Trump has formed a committee to investigate whether Federal Reserve Governor Lisa Cook made false statements about two mortgages she took out before being appointed to the Federal Reserve Board of Governors. Now, this committee is to report to President Trump whether he has legal cause to fire Cook. Trump originally fired Cook in August of 2025, claiming she committed mortgage fraud by making misrepresentations on loan documents years before her appointment to the Federal Reserve. Cook, who was a Biden appointee, has denied any wrongdoing and sued. The lawsuit has gone through multiple court rungs until it reached the Supreme Court earlier this year. The Supreme Court ruling in June that Cook can continue serving on the Federal Reserve Board of Governors while this litigation plays out, but they did not rule on the mortgage fraud allegations. Now, section 10 of the Federal Reserve Act maintains that a Federal Reserve governor may serve for 14 years unless sooner removed for cause by the president. Now, this committee is composed of three political appointees, three members of the administration, including National Economic Council Director Kevin Hasset, the chairman of the Equal Opportunity Employment Commission Andrea Lucas, and Office of Government Ethics Acting Director Keith Sonderling. Now, key here is that the president is pursuing removing Cook again, but using due process, something that was not used in the first goarounds when he tried to fire Cook and something that the Supreme Court had objected to. Now, the White House will hold a or I should say the committee will hold a hearing on November 5th. Cook will be allowed to submit a statement before that as well as after that hearing by November 10th. And in his memorandum, President Trump says as soon as is practicable following November 10th, that committee should turn in a verdict to the president on whether he has legal cause to fire Fed Governor Lisa Cook. >> Now, Jen, like you said, we we've seen this in the past from Trump. So, what are the chances here that the president does succeed in this intention that he has? I think the chances are high that the committee the president has formed will find legal cause for the president to fire Cook. I mean, this committee is composed of three members of the administration, including some of the president's closest allies and adviserss, Kevin Hasset and Keith Sonderling. And this memo has clearly stated that they should consult the Department of Justice and other agencies on this. So, the president is very serious about this. Now, if the president does end up getting cause and does proceed with firing Cook, I fully expect that Cook will fight this with a lawsuit. And so, we will see this continued mired in litigation. This will be drawn out. At the same time, I think this puts the issue of Federal Reserve independence back onto the front burner, especially at a time when the central bank is raising interest rates, something the president voseiferously is opposed to. And I think that former Fed chair Jay Pal, now serving as a governor on the board, has said that he wants to remain on the board to serve as a checkin balance on Fed independence. And I think this means maybe he digs his heels in a little bit more on that for longer. >> Jennifer Sher, thank you so much for breaking it down. I'm excited to follow along, see what happens next. So I appreciate your time. [laughter] >> Well, the economy is in focus as the latest reading on consumer sentiment falling to a fivemon low. This all comes as frustration over the cost of living continues to build for everyday Americans. Joining me now is Thomas Simmons, Jeffrey's chief US economist. I mean, Thomas, where do we begin? This fivemon low comes at a time where these higher borrowing costs, higher costs when you go to the grocery, it just keeps adding up. And now Americans are saying that they feel even worse about the economy. So, what was your take on this report out this morning? Yeah, you know, it's pretty remarkable data when you, you know, not only is it a fivemon low, but it's just above, I think it's the second lowest print ever. Uh, you know, I mean, we were just barely above these levels in June of 2022, which is concurrent with the peak in CPI inflation, over 9%. Uh, and the previous low, I think, was like 52 back in 1980 when inflation was running at double-digit percentages, uh, those years as well. So, I think it's really reflective of just a long-term fatigue. It's not just that inflation has been, you know, above target for some period of time, but it's all these accumulated gains in prices that even if the Fed is successful in orchestrating a lower inflation policy over time, uh, is not going to bring prices down necessarily, just going to slow their growth. >> Yeah. And Thomas, all of these things are making it feel like it's impossible to get ahead. We had Kyla Scalen on yesterday and she said that it's becomes more and more frustrating when you feel like you should have reached this point by now being able to own a house, get ahead in life. So what is your take on Americans feeling like they just can't get ahead right now? >> Yeah, it's a very valid concern. Um I think that there is an expectation that things happen very quickly. I think that it's reflective of the way society has evolved in general, right? with so much on social media, you're so much more aware sort of of what other people are doing and you make your own sort of judgments on whether or not there's a fairness with it. So, and you don't know if somebody who, you know, owns a home uh is, you know, just barely scraping by, really probably shouldn't have taken out the mortgage or if they own it comfortably. Um, and similarly, you have no idea what anybody's sort of stock portfolio really looks like unless they show it to you. So, I think that there's an assumption that, you know, you you may be falling further behind. Uh, in some cases it's probably true. Uh, but in many cases it's probably not quite as as bad as you might think. It's just that again it's kind of in your face all the time. >> Thomas, I love that the sort of psychological take on on what exactly is in Americ's minds heads right now. I do want to get your take on this because lower income consumers, those as you mentioned maybe a smaller stock portfolio right now also feeling the pressure the most. So is this just an ongoing story of that K-shaped economy because we thought it was going away earlier this year. Yeah, I mean we saw some good news in the labor market data earlier this year. You know, non perils picked up, but there's been some, you know, kind of potholes along the way. Uh some really strange uh movements in labor force participation amongst prime age workers, specifically in the uh in their 20s, the 20 to 24 and 25 to 29 age group. Um they they've been kind of bouncing back and forth. That could be that they're giving up on looking for a job and going back to school. Could be that there's some, you know, noise in the data related to immigration. But whatever the case, uh you're right. I mean, this this momentum has kind of uh petered out. So, if it's difficult to get a job or if you don't want to quit because you think it's going to be hard to get a new job, so you don't ask for a bigger raise and all these things just kind of stack up on top of you. Uh yeah, all these incremental increases in prices are going to feel that much more painful, especially when 6 months ago, you know, even if it wasn't necessarily the labor market, but it looked like inflation was heading more in the right direction as well. uh with oil prices that were you know roughly 50% lower than they are now. >> I do want to get your take on that because we do have a new CPI print coming out next Wednesday. So what is your expectation there and will we continue to see these higher energy prices really being the story yet again? >> Definitely. I think that we saw that more or less in the August CPI data. The CPI in August was a little higher than expected. We got a contribution from gasoline prices and some weird one-offs related to wireless telephone services. you're not going to get the, you know, wireless telephone service thing again, but gas prices typically go down in September. It's kind of the end of the summer driving season. People don't travel as much and uh we're not quite into home heating season in most of the country, too. So, because they went up, that means that the recorded seasonally adjusted CPI inflation data on gasoline is going to be really, really big. It's probably going to be close to 9% month over month. So, we're looking for a 6/10 increase in the headline and a 2/10 increase in the port. Um, and that's going to present the same sort of difficult choice that the Fed had at its September meeting with uh the meeting coming up in October. I know that the market isn't really pricing in too much of a chance of another hike in October, but if we start to see more bleed through of the energy inflation into the core or into food uh or if we see bleed through from AI related computer components uh into finished electronics, then you know we might be looking at a very different situation that the Fed is going to respond to. >> Really quickly, Thomas, we did hear from Delta this morning. It seems like what we can expect is higher airfare prices. It seems like Americans are shrugging that off. They're willing to pay the higher prices. So, what can we expect there? And are you surprised by that? >> Surprised by it. I mean, I do think that you know, Americans have a strong propensity to travel. That's, you know, definitely uh, you know, kind of part of the culture. And I think a lot of travel comes down to things that are viewed as being sort of non-negotiable. like uh some of the younger workers in the office the other day were talking about how expensive it is to fly to their homes for Thanksgiving and for for Christmas and um I'm guessing that they're going to end up paying uh at some point and the airlines are of course still filling up their seats uh pretty easily. So I think it's just a number of things there that have really kind of coalesed into a difficult situation for the airlines too. Uh not only we have these high jet fuel prices, uh limited traffic through Newark kind of disallows the expansion of schedules and spirit isn't there anymore to provide competition with low cost fairs in a lot of markets too. >> H the demise of spirit it always comes back full circle. I want to get your take quickly on AI just being a part of this economy. We heard from Bank of America today that the largest wage growth is happening in fields like construction, mining, mining and logging as well as utilities. So what is your take on how AI is really playing a key part in this economy right now? >> Yeah, it's riding the most massive wave of capital expenditure, you know, investment that I think I could have ever conceived of. And when you have businesses that have easy access to capital, even though it's expensive, they're still borrowing quite a lot. And we're coming up on some binding constraints in the labor market in certain areas. It's not so much that the entire labor market is overly tight, but there are certain specific sectors, specific skills that are, you know, more and more scarce over time. And with aging demographics, we're getting, you know, especially in physically demanding uh areas of the labor force, you may be finding just further and further reduction of available supply. And businesses that with high returns on their invested capital are are happy to try to pay up a little bit more to uh to compete. It does squeeze out some of the other areas of the labor market. uh you know it does make things more difficult with businesses that maybe need more help but can't afford to pay more workers. Um and then you know hopefully that means that the product of this AI investment will actually help them out sometime soon as well. >> All right, sometime soon. I'll hold you to it. Thanks so much Thomas. I appreciate your time. >> Thank you. >> And coming up, a new report highlights signs of weak demand [music] for Apple's new iPhone and the stock because of that. Well, it's under pressure. So, let's take a closer look after the break. >> [music] >> Apple shares under pressure after reports the tech giant is cutting iPhone 18 Pro orders by as much as 20% amid weaker than expected demand. For more on this, we're bringing in Bob O'Donnell, president of Technalysis Research. Bob, I want to s first start on that weakening iPhone demand because what exactly is driving it? Is it higher cost? Is it perhaps that duo coming out maybe? >> Yeah, you know, Brooke, first of all, thanks for having me. And yeah, I mean, look, this is the first year that Apple is essentially competing with themselves, right? Because the Duo, I think, is actually going to be a bigger deal than a lot of people initially gave it credit for. I've been using foldable phones, the Samsung foldable phones, for literally seven years now. And once you get used to a foldable phone, they are hard to go back to. A lot of people I think are excited about it. You know, here's the other thing to be aware of. Every year there's you hear these stories. Oh, iPhone demand isn't what what quite what they expected. It seems to come out all the time. So, you always have to take those with a grain of salt. It could be a lot of things. Maybe people don't like red as much as they liked orange. I don't know. You know what I mean? Sometimes it's sort of silly stuff, but I think fundamentally the biggest issue in my mind is more on demand, potential demand from the Duo, because a $100 price difference, if I'm paying $1,200 for a phone that people are trying to say is the primary reason for this just doesn't make a whole lot of sense to me. >> How much of this also maybe has to do with just the lag time between signing up to get the iPhone and then eventually getting it? Are people just not willing to wait with these other new products in mind? Well, I mean, I think that's certainly some of it. I mean, the other thing, too, look, you know, let's be honest, iPhones since the iPhone 10 have all looked pretty much the same again, other than the color, but, you know, the basic specs improve every year, but they're not dramatically different. The Duo is the first really dramatically different iPhone we've seen in a very long time. So my guess is we're going to see some pent up demand for that and that is actually taking away perhaps from some of those folks who may have considered going with the Pro or the Pro Max. >> Okay. But Bob, is there a world where we could see people have iPhone duos on the subway everywhere? Will it become mainstream? I do you think that it has that sort of power behind it? >> No, it's not. Look, to be clear, it's not going to become mainstream, but maybe it becomes 10% of the high-end Apple line, right? And that is so if they cut back their 18 pro orders there some people are saying by 15% but let's say it was 10% but that actually is made up for by the fact that people are buying uh duos which by the way cost more and make more money for Apple then in the long run they do okay. So we'll see what happens. I think really duos are not going to be for the mainstream but certainly for those higherend Pro Max kind of customers um I think it is a very interesting option. >> Yeah that price tag certainly hefty. I've seen reports about $2,000, even upwards of maybe 3,200. So >> pretty pretty happy. >> Yeah, if you Yeah, if you could figure it completely. That's true. You're right. It does get up up there. >> Okay. I want to get your take on something else because we are do have an Apple event coming up again on Tuesday and that's expected to be more of a home event. So what exactly can we expect from there? >> Well, you know, the big thing is there's going to be apparently new HomePods, which is their home speakers, and other home related accessories. apparently some of them being done in conjunction with LG. That's what the rumors have been, which is a very interesting twist. But Apple has had a really hard time. Both Google and Amazon have done much better in terms of doing home devices and having the ability to have all these various devices, security cameras, doorbells, thermostats, all those kinds of things connected into a home ecosystem. So Apple, that's this is the one area they really have not taken the world by storm as they have in most other places. So it's going to be interesting to see exactly what they do there. But that's the expectations uh for the event next Monday. >> Speaking of Amazon, how do we expect them to compete with this? Because we saw that they're sort of it seems like sunsetting those Fire tablets. >> Yeah. Well, you know what? I got a chance to actually play with those new Amazon tablets. I got to see him in advance and I got to tell you they are by far some of the nicest Android tablets I've seen anywhere and you know Amazon figured out look we can't do our own Fire tablet and Fire OS and those kind of things. This is a pure Android tablet with the Google Play Store beautifully designed new screen technology but you know look they got to compete with the iPad and that's tough. There's no question about it. But I think what we're seeing Amazon do on the devices side, we saw new Fire TVs, new Fire TV remotes, we've got the tablets, the rumors of other product categories coming as well from them, they're really trying to address things in a different way. You know, Pont Spanet, who used to do the Surface over at Microsoft, went to Amazon a couple years ago, and he's really been trying to invigorate that company in terms of the types of offerings they have for the home. And they have the Alexa piece, which they've really improved on over the last year. So, it's going to be interesting to watch how they continue to evolve that story. But I have to say these tablets, if you're into Android tablets, these are absolutely really nice ones. >> Bob, sort of left field here, but I have to get your take on SpaceX making big slashes say moved to buy Spectrum. What do you make of it? >> Look, this is a really big and very interesting deal. However, it doesn't turn SpaceX automatically into a competitor to Teemo and Verizon and AT&T. The thing with satellite coverage is it gives you coverage, not necessarily capacity. What that means is you're not going to be able to get super high-speed uh transfers. And even with this 800 megahertz block of spectrum that they bought, which by the way is only 7 megahertz in each direction, you're not going to get kind of the high speeds that people are used to. It does help to be honest help help create the elements that they need to put together a full network because to do a full network you can't do satellite only. You're not going to get you know the kind of coverage you need inside buildings and in urban areas. Um so they needed more spectrum and 800 meghertz gives them that long distance spectrum but not at very high speeds. They have some 2 GHz, but the bottom line is they're going to have to spend a lot of money on things like towers and everything else. And and people think that, oh, well, Starlike broadband is super fast. Why wouldn't it work on a phone? Well, the issue is if you had a 6-in satellite uh antenna attached to your phone and you didn't move, yeah, that would be great, but you can't do that with mobile phones. So, it doesn't necessarily translate perfectly into the mobile phone era. So, there's a lot more work uh that has to be done there. >> All right. Well, I guess we will wait and see. Baba Donald, thank you so much for joining us. I appreciate it. >> Thanks, Brooke. >> Coming up, we are watching the oil market. That's next. [music] [music] >> [music] [music] [music] >> Hey, hey, hey. >> [music] [music] [music] [music] >> President Trump says he struck a deal with Vladimir Putin to bring millions of tons of Russian diesel back to global markets. Joining me for more is Rob DML, senior portfolio manager and managing director at Tortoise. Rob, I want to start with there because what exactly does this additional supply mean for the global market here today? Well, what it means is I think we're going to bring some more diesel to the US and and it's in badly need of diesel. As you know, the the diesel is a really important component of and fuel uh and fuel supply for for for all consumer products because diesel is kind of that last mile fuel that goes in all the trucks and and and and uh in delivery vehicles basically that that provide really all the consumer products. And so uh the market's been under supply. The the diesel market's been under supplied. we've had growing demand and so what you've seen is rising rising uh diesel prices and and so uh now uh we will get an additional supply of of of diesel from Russia which I think will help uh alleviate some of the imbalance. It's not going to re alleviate it all but it's going to alleviate some of it and and maybe push diesel prices down or at least moderate and stop them from going up so much. Rob, with that being said, President Trump within this post untruth social said that prices, lower prices for Americans, especially our great farmers, ranchers, and truckers, is the greatest priority here. What could that timeline look like for this to eventual eventually trinkle down? Because right now, we're still looking at diesel prices around $6.30. So, it's almost at record highs. >> Yeah. No, it is the record highs, Brooke, you're exactly right. uh you know it often prices react uh you know with with you know market news and um it's going to take a obviously take a little while for those exports to get here. Um but what people need to realize is this this is a small piece. This isn't this isn't a complete solution. This is just a oh I don't know I think maybe a band-aid a little bit of a to to to a larger problem. So we need more diesel. We need more refining capacity. That's going to take a lot longer. Um, this is not going to dramatically change the price of diesel, but I do think it will push the price of diesel down um, you know, over the next at least few weeks. >> How does how does this hold a stake within Americans bills that they pay at home? Because I think that we forget that this really is a cross function of not only what we're paying at the pump when it comes to gas prices, but also what we're paying for our food, maybe energy bills. So just walk us through what is this full scope of just how large of an impact this has on everyday prices for Americans. >> Yeah, Brooke, I think we're all figuring that out right now. We most mostly think about oil. We mostly think about energy. We most think mostly think about gasoline. And we entirely forget about diesel. And I think with these high diesel prices, you've you you've seen the the the cost of of of a lot of consumer products increase. And that's because of that because of the the critical role that that that diesel plays as a transportation fuel. um that that's that's an embedded cost in every single consumer product. So th those those higher costs of transportation are generally passed along to the to to the consumer. And so so if we see higher diesel costs, we'll probably see that passed along to the consumer. Uh and and then that just is another form of inflation. uh hopefully with this release of of additional uh volumes of diesel from Russia over the long run will be able to slow down and uh that that that inflation that's happening right now in diesel prices. >> At the same time we're hearing of this potential ban when it comes to diesel exports. So walk us through that. >> Yeah. So right now as you can imagine with the the significant refining margin that can be made on producing diesel, US refineries are producing you at at maximum levels of of really all uh refined products where there's diesel, jet fuel, gasoline. Um now if you decided if we decided in the US that we would ban diesel exports um that would would cause probably higher diesel prices because what you would do then is effectively take more supply more diesel supply off the global markets. Diesel is a global product. Um the US has been uh uh one of uh the the countries around the world that's been beneficial um in in helping keep the markets a little bit well not as under supplied as it could have been. Right. And so so as a result of that if we would ban US exports of diesel that just reduces that supply source and probably pushes diesel prices up even higher. >> Rob I want to get your take on something that's happening in real time. we have this hurricane hitting uh you know the the Gulf here in America and I'm curious what that impact would have because it seems like a majority of refineries down there of oil production is being paused because of this hurricane. So what are the implications? >> Yeah, we're watching that pretty closely. We always watch the hurricane season really closely at tortoise. Um for the reason that you just articulated there, you know, there's a significant amount, you know, probably over a quarter of the refining capacity resides in that Louisiana uh Gulf Coast region. If those refineries have to get shut down, usually that's just for a short period of time. So that's usually not big of a that that big of a deal. Now if the refineries do uh have to shut down for longer periods of time that does cause some issues to to the entire refining system because uh we don't have a lot of spare capacity and and so in fact we have no spare really spare capacity and so as a result of that uh longer durations of of of uh refineries being out of service then then you have to deplete inventories a little bit more of gasoline and diesel and jet fuel across the US because demand doesn't stop but and then then that just usually results in higher prices. Let's hope that for everybody's sake um including all of us as consumers and and of course the safety of everybody on the Gulf Coast that this uh uh that this doesn't turn into too big of an of an event on the Gulf Coast. >> Yeah, I cannot agree more. With this all in mind, what does this mean as we head into the winter with those colder months in mind? What are the implications? Yeah, that's really more of a natural gas question than than an oil or diesel question because uh because you're right because natural gas is the primary source of of of of heating and heating oil, I guess, in the Northeast as well. Um heating oil, which is kind of tied to diesel prices as well. Uh now, if you use heating oil in the Northeast, your prices are much higher. It's going to be a more expensive winter. If you use natural gas to heat your house and you have a furnace that uses natural gas, not heating oil, well, you're going to be pleasantly surprised because natural gas prices in the US because we have so much natural gas that we produce in the US have remained relatively low. they haven't spiked with uh gasoline and diesel and oil prices and so so frankly from a natural gas perspective and and and its role and that it plays in heating uh there won't be any price increases uh at all really because because the prices have been pretty stagnant they're they're about the same as they were last year. >> All right, Rob, some good news for homeowners with gas in their house. Thank you so much for breaking it all down. I appreciate it. >> Thank you. Coffee giant Starbucks reportedly explored a potential takeover of fast casual Mexican chain Chipotle. Yahoo Finance executive editor Brian Sazi discussed the chance of the merger going through with city restaurant analyst John Tower. >> We think it's highly unlikely, but is there a chance? Yeah, in the words of Lloyd Christmas, yeah, there's a chance. So, I I wouldn't completely dismiss it. Even the press reports last night in terms of the response from the company at Starbucks to uh some some publications, they didn't outright dismiss it. So, I can't either. And Brian's got a history here, right? He knows both companies intimately. He understands the opportunities. He understands what needs to be improved. Um, and I just he grew up in a brand at Yum that was multibranded or a company that was multibranded. uh that was and is a successful company globally. Obviously, they've decided to make some changes recently with Pizza Hut, but I can't outright dismiss it. I don't think it's likely, but I I can't put it to a zero. >> Why, John, why should this happen? Why does it make sense? >> I don't know if it makes sense. I mean, but if you put just the two P&Ls together, you would get one of the largest earning companies in the world. And if Brian wants to run one of the largest restaurant companies in the world, this would be a way to do it. Um, you know, I you could get some synergies in the back office, right? Corporate GNA spending, probably some supply chain savings, albeit they don't necessarily do the same things as you pointed out here, but you could probably see some synergies on technology, on purchasing, and certainly with respect to the corporate GNA side. Um, and ultimately when you think about the businesses too, you know, Starbucks has a global reach. Chipotle is very domestic. They've made uh some inroads internationally, but it's still very early days. The idea of growing that business internationally through Starbucks network of licensed partners. I mean, maybe that's an attractive piece of the puzzle here that Brian's looking at uh as a way to accelerate that brand's penetration globally. >> But John, you know, do investors want to see this? because you know Brian has won back a lot of investors since I don't know came in 2024 whatever it is on the notion that he's going to bring more operationally focused. He got rid of that China business. He's going to try to improve Starbucks's store and you know the couches and the plants and this flies in the face of of all that and and frankly I've known Brian for like I don't know over 10 years like everything he stands for. >> Yeah. So you're correct. I don't think investors are really on board with this right now. However, they haven't heard a pitch from Brian um as to why something like this would make sense. Obviously, that's if something were to happen. Um so, I think it would be up to him in terms of convincing investors, but he has done some remarkable work at both brands, right? He >> was able to get Chipotle up and running after a big food scare and turning them into one of the best performing stocks out there in the market over his tenure. And now Starbucks, he's, you know, turned around the business and had a phenomenal 2026, uh, and has long-term, you know, path here to try and continue to win share globally, uh, and and domestically, uh, with with their stores and what they're doing with beverages. And it looks like Mau moving a little bit more towards food. So, I I wouldn't want to doubt Brian because he has done a phenomenal job of getting businesses turned around and going, and maybe he could make something like this work together. >> Yeah. after I get off of you real quick. Uh John, um stick around though. We're going to I'm putting uh big news today. Brian Nickel on my new uh wall of titans. He will be joining Dr. Lisa Sue at AMD. Um but you know, I look at restaurant brands. You know, that stock has never really I don't know, for for lack of better terms, sizzled. I mean, they own all these brands. Like why don't investors necessarily like these multibrand concepts? >> Um so, you know, there have been successful multibrand concepts. I'd point you directly to Darden, right? and they're in a different subject or in full service. >> Longhorn. Yeah. Love Longhorn. >> Yes. Exactly. Um but within the, you know, limited service space, it's been harder to do, right? You've seen Yum has been successful uh globally in terms of building their business. One could argue, you know, restaurant brands has struggled, but they're slowly getting their strides. And look, they've had some very strong success certainly with expanding Burger King internationally. They're still early days with getting some of their other brands going uh across the globe, but yeah, the landscape has not been particularly good with M&A tie-ups between these major brands. Um so yeah, that's why I think many investors are sitting here on on pause uh looking at this skeptic. >> Isn't the other maybe perhaps bigger takeaway from this? Isn't this a reminder to investors that there might be opportunities for consolidation in the restaurant space? I look at a Shake Shack. I mean, Wendy's, I I can't get behind Wendy's. I mean, that that brand is like totally just falling off the map. But I'm looking down to Shake Shack. I'm like, "Wow, there's a great concept that perhaps might be undervalued." Yeah. Look, I I'm not going to comment on any specific names, but there are names across the landscape that have hit multi-year lows, uh, have faced some challenges with respect to their business and operating trends. you know that the question is for the industry are we overtored certainly within certain subsectors um you know with population growth in the US in particular potentially stalling out per CBO data uh over the next you know 5 10 years will the demand landscape look like it did over the past 5 and 15 years probably not so you're likely going to see more consolidation going forward across the industry and or you'll see the brands that are strong and have strong financial positions today, you know, lean into that and be able to grow into the future because they're able to reinvest back into their businesses. >> John, earlier this week, I put I added my second member to my wall of underperformers list. I have Titans, I have underperformers, and that's McDonald's CEO Chris Kamchinsky. Uh, frankly, uh, he's earned it. Stock price performance, operations. What is up with McDonald's? >> Yeah, so look, as I mentioned earlier about the population growth in the US, I think that's been a real headwind for the limited service industry. um has the you know McDonald's itself I believe the franchise system has taken a little bit too much pricing during the co window related to labor uh you know as a reminder franchiseors cannot dictate pricing for franchises so you know they can control they can make suggestions but they can't tell them exactly where they can price so that I think really turned a lot of consumers off to the category and meanwhile full service got much better uh in terms of everyday you know low prices entry-le price points. Um, so you've seen a nice little rebound in full service and limited service has been more challenged. I think specifically for McDonald's, I actually like what they're going to do and they're doing it from a position of strength. Now, their comps have not been as strong as I think everybody would like them to have been over the past year plus in the US and globally, but more the US. I think by them investing into the business, you know, they're talking about $1.2 $2 million or so per store in terms of remodel costs. They're going to set the business up for the future and the future of the consumer. Meanwhile, their competitive set won't be able to keep pace at all. Their franchises are much better positioned with respect to the finances and their balance sheets. McDonald's is better off with their balance sheet that many of their direct competitors uh and frankly they can make a return on these investments that their peers cannot do. And I think as we're, you know, looking out the next 5 to 10 years, there will be further consolidation across the industry, meaning store closures, and McDonald's will be there still standing with their lights on, growing their sales, and frankly doing quite well in that environment. So, I I actually like what Chris is doing and his team at McDonald's. I think they're going to be winning share at an accelerating rate over the next 5 years. >> And coming up, a closer look at the big declines in telecom stocks [music] today. And it's thanks to SpaceX. We'll break it down after the break. [music] SpaceX rattling telecom stocks today as it bought Spectrum to close the technical gap to building a mobile network. But my next guest says the competitive threat to Verizon, AT&T, and T-Mobile, well, it won't happen overnight. Joining me now is Walter Pisc, partner and TMT analyst at Lightshed Partners. Thank you so much for being with us because what exactly major reaction this way? Why are you so surprised at this sell-off that we're seeing today? >> I mean, I'm surprised because it was talked about before. The president of SpaceX, Gwen Shotwell, has referred to building network. We've written about it. We're not the only analysts that's written about the potential for SpaceX to build a terrestrial network. But, you know, with Elon, Elon says a lot of things. A lot of them tend to be, you know, u motivational, I think, to the to the workforce. maybe they'll they'll get delivered exactly in the time frame that he initially says. So I think as a result people kind of discount you know if the company's going to do certain things so that when they actually announce that they put you know a fair amount of money on the table to buy even more spectrum to be used for terrestrial meaning like a network on the ground as opposed to being used in the satellites. It created more credibility about them going to this market. This follows a period of time where you had the CEOs of some of these major telos, you know, basically downplaying it. The physics don't work. We don't really, you know, we're not really worried about this guy. And and you know, there was a period of time where I think people almost forgot about the fact that SpaceX, you know, has these plans. And you know how stocks work, right? They're they're discounting not necessarily the things that are going to impact you tomorrow. Meaning like SpaceX is not hurting AT&T, Verizon, and T-Mobile. this quarter, next quarter, probably most of the quarters even of next year's next year. But it is that overhang, that longer term risk that people have of, you know, SpaceX entering this market and obviously taking customers in what's already a very mature market where there's not a lot of growth. >> So, in real terms, how exactly does SpaceX plan to use this spectrum? Like, what can people expect in the near term? Because it seems like we're not really going to see much. >> Well, they have to. It's going to take time to buy it. Then it's going to take time to build it. But the way it gets used is no different than how your cell phone works today. It's it's the stuff that sits on cell towers or antennas on the tops of buildings that your phone connects to and provides you for that capacity. What's different about the SpaceX proposition is when they're building this network, they're going to have this large layer of the LEO satellites that are going to sit above you to that hopefully provide you with better coverage. Now, a lot of people have talked about this, you know, what's the demand in the middle of Utah, but you know, for those of you that live in the suburbs, I'm up here in Westchester County in in New York, there's areas of Bedford, you go to a soccer field, you have no coverage whatsoever. So, it's not only coverage, you know, in the middle of of the of the Utah desert. It's it's it's it's the coverage issues that we all have in our day-to-day lives where where you know telecom companies in many cases because of nimi right people that don't want cell sites built in these areas have have prevented coverage. So SpaceX can use their brand they have this the ability to deliver this type of coverage now they can build the terrestrial network to provide the basic services. Again, all of these things are going to take time, but that's the proposition that I think these stocks are reacting to today. If if if and when Elon can execute on that type of opportunity, >> it seems like almost SpaceX would do it differently, though. I can't picture them maybe building out a typical cell tower like we'll see from another carrier. So, what could a SpaceX tower look like? Would it be outer space? >> I mean, of course, it's going to be different, right? And you know this this industry is 30 plus years old and and the way you use spectrum today which is this is the land what you build the network on is much more efficient than it was 20 or 30 years ago. The way radios um work and and are are you know how much they cost. I mean you look at the the the the stalwarts in the old days er no you know Qualcomm and where those stocks are today because it's a whole new architecture on how these things are built. However, for this spectrum today, you're talking about using it, you know, terrestrially on Earth. So, with antennas on towers now, you know, Elon has talked about something called FEMTO cells. That's a smaller version of it. So, they'll they'll be a hybrid approach, but like anything, you know, they're going to take their these very smart engineers and and figure out the most efficient way. So when someone says, "Well, it's going to cost a hundred or $200 billion." I don't really think that number is in the ballpark of what SpaceX would need to spend in order to deliver, you know, this initial service. Or if you say, "Hey, we've invested all this money. If we're AT&T, Verizon, T-Mobile, we invested all this money. We have all this spectrum." Like, but yeah, you're servicing 80 or 90 million customer. These guys are starting with zero, >> right? So that their need for some of that initial capacity is is not as great. And certainly I think their ability to to build a a network a lot more efficiently than what companies were spending 30 years ago. I mean think about that right 10 20 30 years ago. How much technology has changed to argue that it's going to cost the same to build that network is is kind of silly. >> I wonder how long exactly this would take to build out and what sort of threat does that present and who would be the most exposed to that. I mean that's an important point and it's not you know it's going to take time right there's you first of all you have to get they don't own the spectrum right there's a process to to buy it then you have to design then you have to build it obviously they're going to do their unique way of building it but you know it's not as I as I started out something that you're going to see them offering you know the full suite of services within the within the near term you know meaning like not you know through the end of 27 probably not even into into 28 there are ways ways that they can use, you know, other networks that are out there to go to market uh and to deliver services ahead of some of these things getting built. And and I'll just take you back to the days of T-Mobile when they had, you know, legendary CEO John Ledger when they, you know, when Deutsche Telecom was was starving that company of of cash. They wouldn't let them buy spectrum and they wouldn't invest in network. So finally Ledger gets in there, convinces Deutsche Telecom to let them invest and starts promising customers this best network before it's actually built. So you're basically, you know, what do you say? Fake it till you make it. So I think there's an there could be an opportunity um for SpaceX, you know, through some new relationships um to enter the market early before some of these pieces fall in place. But to your point, you know, it's going to take some time for them to build a lot of the infrastructure that is truly going to deliver the differentiation that I think Elon and Gwen Shotwell, I think, um, you know, think that they can deliver in the market. >> Walt, we will have to wait and see for all this and I know we'll be talking to you until this actually does happen. So, thanks so much. I appreciate your time. >> You bet. >> Top AI leaders seemingly preparing for the worst case scenarios when it comes to AI. Here with an inside look at the game plan is Axios tech policy reporter Maria Cury. Maria, thanks for being with us because what exactly does this worst case scenario look like? You basically have top officials in OpenAI and Anthropic and in other AI companies mapping out a worst case scenario where there is a cyber attack that can lead to, you know, the shutting down of water supplies, of energy supplies, of the internet. Um and so these are catastrophic risks that they are kind of preparing for in the next six to 12 months. And a lot of these uh tests and these scenario plans are done by companies, also by relevant government agencies like the Pentagon. But what's really different and notable about this is that you hear these top officials talking about it as if it were inevitable. They fully expect that this is something that will happen and that Washington's reaction won't come until after. >> We've heard so much about these rogue these bad actors, these rogue AI agent or AI agents going rogue. So is that what would lead to these worst case scenarios and are we already seeing some signs there like we saw with hugging face? >> It could be um AI agents going rogue. it could be a bad actor getting their hands on an open- source model which is you know available to the public in ways that some of these closed source models are and that's one of the key things to remember here is the open-source ecosystem could be a way for danger to increase in this sense but it's also um the way that a lot of leading cyber security experts say AI should be policed is through the use of open source models and so it's not necessarily that one is more dangerous than the other I think all eyes are on Washington now and what the reaction is going to be from regulators. >> One question that has been coming up more and more recently is who's to blame within this? Is it the individual companies? Is it the government? Who is responsible when one of these things end up do happening? Liability is a huge question in all of this and we have increasingly you know heard about Democrats once they take control of Congress um whether it's the House or the Senate or both um wanting to increase oversight onto the AI CEOs themselves the leaders uh of these companies that are really um continuing to develop these technologies at breakneck speed all in the name of a race with China. It's a position that is very much supported by the Trump administration and you do have Republicans and Democrats also echoing the sentiment that the United States should be the leader in artificial intelligence. But when it comes to the most advanced models and the risk of catastrophe um whether there should be government intervention or not, that's where uh the parties start to differentiate and it's not clear what the industry wants the government to do. And so I do think that the CEOs are going to be front and center when it comes to this question of liability and who there is to blame. Um as well as uh Congress in and of itself and regulators that did not act uh quickly enough. >> Maria, you referenced this within the article and incident where a hacker from China allegedly used AI tools from Chinese uh developed models including DeepSake. They essentially stole data from tens of thousands of Bing customers. now seem like they use clawed code in order to do that. So, how concerning is that to you and also to the experts that you speak with? >> It's concerning if that's something that only one person is able to do. I mean, it also kind of highlights this question of liability. Again, who's at at fault there? Is it the hacker? Is it um Claude? Is it, you know, Claude Anthropic? Is it Deepseek? Uh this is kind of an age-old question in technology. you know, who is to blame. It it points back to section 230 and liability laws around social media. And it's very much an active debate that is happening in Congress right now. Um, in terms of what the government can or cannot do, but those more tricky liability questions uh aside that then have to do with the First Amendment and protecting speech, there are other, you know, basic things that could be happening now. I mean, this entire story and the reporting behind it, it's premised on a catastrophe happening in Washington reacting afterwards, but it doesn't have to be that way. Um, there are certain solutions that when I talk to outside advocacy organizations, safety groups, and even people within the companies themselves, transparency measures, you know, just when these incidents happen, having more people have visibility into what went down and so that you can prepare uh defenses in a better way. We don't have those basic transparency measures now. And what these top officials at the these labs predict is that we won't even have those basic measures until after a catastrophe. >> Maria, really quickly, we're 25 days away from the midterm elections. What would a change both the House and the Senate mean for AI? >> This is not an issue that cuts across party lines. I think beyond uh what the makeup of the new Congress is, uh what a lot of these CEOs are pointing to because of the inaction in Congress is a catastrophic risk sparking action versus a Democratic majority in the House. >> Now, at the same time, Warren has been critical on the export of chips to China of US chips. So, could this intensify? Yes, I think there are other ways um and specific areas in which lawmakers like uh Senator Elizabeth Warren and others are honing in on including sending advanced technology to adversaries um abroad, namely China. Um again, that doesn't really get at the question though of for example the international collaboration that might be needed in the case of catastrophic risk uh the things that might happen that will impact all of us uh regardless of whether or not you are in the United States. >> Maria, great reporting. Thank you so much for joining us. I really appreciate it. >> Thanks for having me. >> Coming up, we have you covered through the closing bell on Wall Street. [music] Don't go anywhere. [music] [music] Heat. [music] [music] [music] Heat. [music] Heat. [music] Heat. Heat. [music] Heat. [music] >> [music] >> Hey, [music] hey, hey. >> [music] [music] [music] [music] [music] >> It It has been a volatile week on Wall Street, but the S&P is back near a record high. I want to bring in Anes Fay. She's been watching this all closely, but it looks like we're closing out on a weekly gain. Anz? >> Yeah, that's right. A weekly gain for all three major averages. And as you noted, the S&P 500 within striking distance of a record high. I mean, just take a look. It's at 7811. Uh that's about eight points uh lower than its previous record high from earlier this week. So, this has been a volatile week. It has been a week that's capping a a volatile week for the day, I should say. But with a nice little bump that we saw today with the S&P 500 up about 6/10 of a percent, the Nasdaq also up about 610 of a percent and the Dow up above 8.8%. Just taking a look under the hood where we're at uh for the day, you did see some defensive plays here. So, you got some real estate and also healthc care, consumer discretionary, but I'm going to pull up a 5-day chart so you can see where we're at for the week because we have seen for the week you're looking at technology that's slightly in red territory. But look again, it was just a volatile week. And staying on this 5-day chart, you can see that over on the NASDAQ 100, Nvidia down for the week, but the rest of the MAG 7 saw some gains. You got Microsoft that is up 3% for the week. Amazon also higher, Tesla also higher. We did see some weakness when it comes to the semiconductor space, especially uh yesterday, we saw some of that weakness bleeding through. So for the week, this is the semiconductor space um chart for uh the last 5 days. And then just finally just pointing out where we're at with oil because we have seen some volatility when it comes to oil prices. elevated levels still when you're looking at WTI that's up around $91 a barrel. Brent crude at 104. But do want to mention that President Trump came out today on social media this afternoon saying that he struck a deal with Vladimir Putin of Russia and that Russia is going to be releasing diesel supplies to the US and the global marketplace. We saw oil take a little bit of a dip off of that headline, but right now around 104 for Brent Brooke >> and Fay, thank you so much for bringing it all down and happy Friday. You too. >> Joining me now is Mel Casey, FBB Capital Partners, senior portfolio manager. Thank you so much for being with us. I want to start with what we're seeing within this end. Ended up being a weekly gain really supported by the mag seven strength. Are you surprised given where we started earlier this week? >> Hey Brooke, thanks for having me on today and happy Friday to you. And not not hugely surprised if you think about where we're positioned. you know, we're we're heading into earnings next week and we're going to get a lot of information um across several different sectors as we get into that first leg of earnings. So, it's not hugely surprising um although to see it led by technology to led by the AI stocks and suggest maybe you know there's not broad-based confidence in in in what those earnings portend but um but but a good week for sure um and as as observed pretty close to all-time highs here. I want to take a look or maybe you know get your outlook on that upcoming earning season of course kicking off with financials. Now they have declined but you believe that this could be a strong outlook as they are set to begin next week. >> Yeah the the decline in financials has definitively been as rates have increased um in in the last month or two. So that's understandable. Uh but if you actually look at what happened last last uh quarter, really strong earnings not just for big banks but even the smaller ones as well. And that suggested a lot of like really good economic growth, a lot of lending activity, a lot of business activity happening across the country and and and and kind of good good signs the rest of the economy. So if that story remains untacked uh when we when we start getting the the particular the the money center banks reporting starting on Tuesday um that should that should provide support for the overall market you would think. >> At the same time I mean analysts have high hopes here. According to some Bloomberg Intelligence data analysts expect a roughly 25% increase in third quarter S&P 500 profits from a year earlier. A pretty standout number there. Do you think that we can continue to see the same earnings momentum that we saw earlier this year? >> Well, it's the point what you make is a good one. It's all about beating the expectations. The expectations are high. Uh but what's worth pointing out is there was a lot of onetimes in that last quarter. And so, you know, when we when we take those out, it's that it's the core operating that really the the analysts we most focused on. So, um it it's probably just a small number of companies that are driving most of it. uh which is not you know not a not an exciting thing to to see but um uh you know the devil will be in the details here. Uh we had some one-times like with Alphabet last core that kind of drove the whole market forward. The one-times aren't as exciting as the actual recurring events. >> Do you think that this market is still heavily concentrated or overconentrated rather in tech in this AI boom this momentum? Seems like that's still the narrative heading into the back half of the year. There's no doubt like the composition of the markets have changed you know it is a 40% technology of course that's pretty concentrated the and that that mag seven effect you talk about we've seen more of that the last couple of months the first half of the year saw a broader distribution of turns of returns and so the interest rate move has actually pushed us back into this lower breadth kind of situation so that's not particularly exciting but at the same time on the positive side the valuation story is a pretty good one. You know, we we've kind of lost two turns of valuation. Earnings have grown more than the stock market o overall is up. So, we've gone from 22 times to 20 times. And some of the biggest growers in the market like an Nvidia for example, pretty reasonably valued company or 20 times is growing was it it's it's growing a lot more than the market, but it's valued the same as the market. So, uh the valuation is is the thing to really hang your hat on in a market like this. At the same time, we're seeing that US Treasury yields potentially move even closer to six for the first time since 2000. But you say that this could be an opportune time in the bond market. So, what's the opportunity there? >> Well, it's the best time in 25 years to put fresh capital into into uh bonds. And by bonds, we're talking about treasuries. We're talking about uh investment grade corporate bonds and you know, some other tactical opportunities. the best time in two and a half decades that we've seen that. And so depending on where you are in your in your uh uh life cycle is where uh you know increasing bonds right now, stocks aren't super expensive, but they're certainly not cheap. Bonds are by any metric you could argue they are cheap right now. Uh you might see yields continue to climb higher, but I wouldn't get too cute right here. We are we are active in this market and uh we think it's a great opportunity to to to get a lot of lower volatility return for clients than we would see from uh poop stocks. >> You also had noted that rising interest rates have really narrowed market breath here. What are the opportunities that you're looking at especially as we do head into that last quarter of the year? >> Well, the first half of the year gives us a little bit of clue as as to what what could happen if we actually see a reversal in this. We one of the best uh performers in the first half year is actually small cap. Small cap's very interest rate sensitive because a lot of their earnings are kind of promised in the future and so the discount rate you put on that rises and falls with interest rates. So we saw a big reversal in small cap for example uh because of that and so that that everyone's the flight to safety and I hate saying that but the flight to safety has been back to like the hyperscalers and those large tech companies with a lot of you know enormous cash flow. Uh but some of those other parts of the market could come back to life pretty quickly uh if we do see things tempered down particularly on the longer end uh with the the the 10year as opposed to the um the shorter end curve. >> Mel Casey thank you so much. Happy Friday and enjoy your weekend. >> You too. Thank you. >> Thank you so much. Coming up, MetaMuse versus OpenAI Dots. The race to build [music] your next per personal AI assistant. The race is on and we'll dive into it all after the break. [music] [music] >> [music] [music] [music] [music] [music] [music] [music] [music] [music] [music] >> Heat. Heat. [music] [music] >> [music] [music] [music] >> Oh, heat. >> [music] >> Down. [music] Down. >> [music] [music] >> Down. [music] >> [music] [music] >> Video game console sales, well, they're taking a hit, falling to their lowest August level in 13 years. And a big question now is whether the highly anticipated, so I've heard Grand Theft Auto 6 can turn things around. Yahoo Finance's tech editor Dan Howie joins me with more. Dan, say it. And so break this down. What's driving this lower demand? >> Yeah, it's basically just people not being able to kind of afford the consoles as they are. Prices have increased dramatically since the consoles were initially launched. If you had bought a PlayStation 5 or an Xbox Series S or Series X uh in 2020 when they launched, I mean, they were very hard to come by, but you know, 2021 maybe your console would now be worth more than it was uh today than it was back then because now they're going for prices that are $150, $200 above their initial launch price. Now, we're 6 years into a console cycle for those two consoles. That's usually when you start to see the prices decline. You start to see bundles with games or controllers as a way to goose sales at the the tail end. But we haven't seen that because of two things. Initially, President Trump's tariffs uh last year. And then to compound the problem is the data center buildout, which has made storage chips and memory chips a lot harder to come by and therefore a lot more expensive for these companies. And just like Apple, just like Samsung, HP, Dell, they have to pass on the increase to consumers to a degree. And that's where we're seeing these big price jumps. So, it's kind of a mix of two kind of problems coming together. Those tariffs uh and then the price increases from the the RAM and memory. Now, Nintendo, they've also raised the price on their uh consoles, but not by as much. They raised the price on their original Switch, which that came out in 2017, pretty old at this point, but they've raised the price on that so that they wouldn't necessarily have to have as much of an increase on their Switch 2 console, which just came out last year. But they still had to raise the price on that by $50 when uh President Trump had introduced tariffs on consoles made in China. And so all across the board, we're seeing these increases, but it's most acute when it comes to those kind of high-end consoles like those PlayStation fives, like those those Xbox Series X's. And look, if you step up to something like a PlayStation 5 Pro, which is the the creme de la creme of their offerings, you're going to have to pay close to $700, $800. >> Dan, but from what I understand, you need one of these consoles in order to play Grand Theft Auto 6. So what exactly does this do? Does this lift demand then for consoles? Will people not only splurge on the game but also on the console? >> That's kind of the hope here. You know, uh Grand Theft Auto uh is one of the I mean the biggest uh media franchises in in history. Uh and so we could end up seeing a boost in sales because of it. I mean the the last time uh I remember checking uh GTA 5 had made $6 billion and that was a few years ago. Uh this is a long time coming. This game GTA 5 uh came out when the PlayStation 3 was still around and were on the PlayStation 5. So, it skipped an entire console generation. The hype is is massive for this. It could end up boosting sales for these consoles and then that could cause kind of a ramp uh as we go into the next year as people, you know, continue to buy uh and then start to see games. A a big thing here in the gaming industry is that you've seen developers push their games in either direction to avoid kind of the blast radius of of Grand Theft Auto 6. So they've released them sooner than they may have wanted to or they pushed them just into 2027 saying, "Look, we don't even want to mess around with that. We we know we're going to get dominated by this. There's no sense on on launching these games." the ones that were pushed into 2027, if we do see a boost in console sales from GTA, we could then see that continue into 2027 if those games uh are are as appealing. You know, I think one of the things I was speaking to uh analyst Matt Piscatelli over at Circana, he had pointed out a lot of people that if they don't have consoles already and they're not necessarily, you know, these kind of core gamers or or more frequent gamers, they're going to get some sticker shock when they walk in thinking, "Hey, maybe I'll be able to pick up a console for two, three, maybe $400." Instead, they're having to pay out five, six, seven, $800 in some instances. So, you know, it's going to be an interesting dynamic here when Grand Theft Auto does launch in November. >> All right, Dan, I won't tell my fiance who uses a PC. I won't tell him all about this. We'll just put that question aside. Dan Hi, thanks so much. I appreciate it. >> The race to build your next personal AI assistant, well, it is heating up. Meta's Muse and Open AI's dots promise to do everything from booking travel to managing your workday. I now have finances new show in the loop. Eaz Amadine put Muse to the test. So, I was stranded in this airport and I brought up Muse and I said, "My flight's been delayed 7 hours. Can you file for compensation for me in exactly 5 minutes, I had $250 worth of Delta credits for future flights in my account." That is wild. For more, we're bringing in Meredith Whan, chief research and data intelligence officer at IDC. Meredith, you just heard it for yourself. $250 in credit within minutes, it seems like. Are you surprised? What do you make of that? >> Well, well, this is the dream of of AI agents and we're we're going to get there. It's not going to be consistent at this point. Um, but this is what consumers are starting to experience and as they experience this, they're going to eventually bring that into the enterprise as well and that's going to help to fuel the adoption in the enterprise as well. It feels like right now Meta is really focused on maybe more of an everyday user and also it's free it seems like as of now. So once you have to start paying, do you think that they'll be able to hold on to this momentum they have right now? >> Yeah. Well, you know, our research shows that about 30 to 40% of consumers already pay for AI services. And we're foring that consumers are going to spend $50 billion on AI services next year. And so for all of these AI agent platforms, the goal right now is to really build the consumer habit of using the agents. So therefore, right now it's really about driving early adoption across use cases and then building on that habit that the consumers established. Once they establish that habit, then you bring in the price and whoever can subsidize that user and can wait this out really has the advantage. And Meta's massive advertising engine really gives them the luxury to subsidize user habits today. >> Yes, city had this wild stat. They said that they think Muse could generate more than 27 billion a year by 2030. So it'll be interesting to see the way this plays out. But in big picture here, how much of a gamecher is this uh not only for Meta but also for AI and what sort of pressure does this put on the others? Yeah. So, you know, but Meta is really tackling the consumer and they've got that distribution channel and so that's really working um and opening up a big opportunity for them. You know, ChatGpt is what you know turned AI from something that experts were mainly talking about into something that millions of people are using every day. And so this is really o opening up that consumer habit because as consumers use this at home and then they start to get the experience. Um they're going to feel a lot more comfortable coming into the workplace and using agents as well. Now the enterprise has its own challenge of what they need to do in order to build out agents at scale. But they are all pursuing it equally as aggressively. When you think about who exactly they are looking at it, it seems like this thought of OpenAI, those dots, it does seem like it's it's catering more towards an enterprise consumer. So, will they sort of see Meta and now try to reverse course here? Could we see them try to cater more to the everyday consumer? I mean, who could win in this battle? Yeah, I think we're gonna see um Open AI continue to really focus on the enterprise. Um the enterprise, you know, they have a lot of strong momentum there. When you look at um Meta owns really that distribution channel. So them getting small businesses to adopt a standalone app like dots is going to take a lot of work for Meta's Muse. You know that it already is sitting right inside where many small businesses already work. You know where they're running their solutions on Facebook. So I think they're Meta is going to have a lot smoother path to getting to the small businesses. >> Now we saw Metamuse become one of the top downloaded apps. Is that the metric to see who's winning here? what is the metric that we should be watching out for? >> Yeah. So downloads, you know, measure curiosity, but the stickiness really comes from the agent sitting inside the workflow. And so for a consumer, that workflow may be renewing your insurance policy, you know, finding a best price on a TV and buying it or booking a doctor's appointment because these are tedious tasks that we all want to take off our our plate and we value that. Um and so what um today consumers really in our research they characterize their AI assistants and they're calling them assistants but once you bring in agents then the agents really turn this into this you know personal chief of staff and that becomes a lot more valuable to consumers. >> You just mentioned some things really particular you mentioned making a doctor's appointment booking travel all of this requiring me to pass along a lot of private information. So, how important is trust at the crux of this? And and do you think we're already there with that? >> Yeah, trust. Trust is what this is all about when it gets into agents. And so, to become this household name around agents, you're going to have to build that trust incrementally. Okay. So, our research today shows that consumers are comfortable um taking on low risk uh like price comparison or shopping or appointment scheduling um but they're not ready to hand over higher risk things like financial transactions or medical decisions or contracts. And so at this point really most consumers they're just not comfortable either when defaulting for this wholly autonomous process yet. And so what you see both Muse and OpenAI doing is that they're still keeping like that human approval in the loop if you want that especially when it comes to these consequential actions and then that's how trust is going to get built because then consumers are going to be more likely to hand over more once they see that agent asking for that first. >> This will be really interesting to see how this all plays out. Meredith, I really appreciate all your insight and your time. Thank you so much for joining us. >> Thank you. My pleasure. Time now for what's to watch for the week of October 12th. First up, Apple set to unveil its latest push into the smart home market on Tuesday. The tech giant [music] is expected to introduce an AIdriven smart home hub. That's alongside updated versions of the HomePod mini and Apple TV that includes faster processors designed to power its Siri assistant. [music] Next on deck, earring season kicks off with big banks reporting quarterly results. JP Morgan, Wells Fargo, City Croup, and [music] Goldman Sachs all reporting on Tuesday ahead of the opening bell, followed by Morgan Stanley and Bank of America on Wednesday. [music] Bank stocks have been hammered recently by rise in rates, and investors will be looking to see what exactly the deal pipeline looks like. [music] And turning now to the economy, we're getting a fresh inflation data on Wednesday with September's consumer price [music] index. Economists there forecasting headline and core CPI to rise in a month-over-month basis. >> [music] >> Investors will be looking for any signs on whether persistent inflation could change the path forward for interest rates. And that's a [music] wrap on today's show. Thanks so much for watching and have a wonderful weekend. [music] Heat. [music] Heat. [music] Heat. Heat. [music] [music] [music] Heat. Heat. [music] [music] [music] [music] Heat. [music] Heat. [music] [music] Heat. [music] Heat. N. 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