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Hello and welcome to Market Domination. I'm Broo Pomman. We are live from our New York City headquarters. There's just been an hour to go until the closing bell and stocks are well off of the lows of the day, but Anes is sticking by with two key factors and investors are closely watching. We have oil prices and bonds, but also we're seeing a major chip selloff as well, Anz. >> Yeah, that's right, Brooke. And in other sessions, we've talked so much about the rising bond yields. We'll take a look at Wi-Fi Interactive, and you can see the 10-year Treasury yield that has stabilized. So, it's been easing throughout the session. Yet, you're seeing the NASDAQ that's been falling. And part of this has to do with the chip selloff because look at this map right here. You're looking at Nvidia that's down more than 3%. Broadcom lower, AMD lower. Granted, AMD and Nvidia are coming off all-time highs, but still you are seeing a pretty hefty sell-off. Part of this has to do with an FT report about lagging revenue at OpenAI. And so that calls into question uh the spending on AI. So any whiff of any type of slowdown of spending, you could get this type of reaction where you see chip stocks falling these the AI trade really getting hit. Taking a look also at the sector action, we're seeing energy stocks that are higher, up almost 3% for XLE. Part of this has to do with the fact that we've seen oil prices today rising Brent at 105, then trimming those gains after President Trump said that the US would not be attacking Iran before the midterm elections. But still, you're seeing energy that's seeing a bump today. And if I just pull up a year-to- date chart, you can see that energy year-to- date has been the outperformer, followed by technology. One other note I want to make is also on the NASDAQ 100. You see here quite a bit of red, but take a look at Apple. Apple up more than 1%. Apple sort of being one of those mag seven players that has been more immune to that AI trade. >> And that's right. Thank you so much for breaking all down. Appreciate it. I want to stick with that because tech stocks are in a bit of a roller coaster ride this afternoon. Beyond just broader market weakness, a report from the Financial Times earlier said that OpenAI's annualized revenue was approaching $50 billion as of September. Now that is about $20 billion less than what was signaled about a month ago. Joining me now is Dan Ies of Yorkville Ives partner and senior managing director. Dan, thanks for being with us. I do want to start with that report from the financial times because to you does this sort of concern you as a sign of a slowdown or is this sort of hard to understand considering the fact that opening eye is still a private company? >> Yeah. And that's why these reports I think it's always you know I think it's it's dangerous a slippery slope to always go down every report you know that that that's negative cuz if you go back the last year and a half two years you know how many negative reports there were out there which ultimately didn't really end up materializing and in my opinion everything I see in the AI revolution it goes counter to that actually things are accelerating so to me these are buying opportunities not the time to be skittish >> with that in mind I mean we are seeing some a bit of a slide here when it comes to OpenAI's partners, Microsoft, Oracle, Broadcom, Nvidia reacting to this news. So, is this once again, as you're noting here, a sign of the market being on edge or does this sort of raise those financial circul or circular financial uh concerns yet again? >> I think, look, it's a great point. I think part of it is just on edge is that any breadcrumb that could be viewed negatively a report there circular financing or whatever it may be it's going to you know make investors nervous and you're going to see these reactions you know in terms of these stocks but my whole point is we're going to go through earning season and this is accelerating in terms of the AI revolution I think we're going to look at opportunities like this just like we've looked at the last three six months nine months you know SAS apocalypse and others and these are buying opportunities. We are a third inning of AI revolution. >> At the same time we are expecting these IPOs anthropic seemingly coming sooner than open AI. Does this concern you at all when it comes to these IPOs? I mean is it no longer safety concerns or this the next wave of what could raise red flags for investors heading into those as maybe one would out win out over the other? Yeah, I think appetite's going to be strong relative to the epicenter of the AI revolution is anthropic is open AI. Some of the safety concerns obviously raised and there's those guardrails need to get put in place while that's going to be a self-regulation. But the reality as this all plays out for every dollar spent on Nvidia chip there's an 8 to10 multiplier across the rest of tech and the model players are going to be centering that. Now, I still believe in terms of sovereign AI and the data debate, you're going to see more and more of the winners outside the frontier models, whether that's Palanteer, Snowflake, and others. >> Dana, speaking of Palanteer, I want to get your take on that because Goldman Sachs did upgrade the stock today from neutral to buy. You have an outperform rating. For those skeptics who are worried that most of the momentum from AI is already priced in, what would you say for Palunteer? I'd say Palunteer we think is a trillion dollar market and I think as it plays out investors continue to underestimate the scale and scope not just the Palunteer but I think what we're seeing across the whole tech landscape. It's great to see more you know analysts and more investors sort of better understand what Palunteer is doing. But I I I think this is just part of what we're seeing in this market. the narrative sometimes could easily dictate sometimes you go down a negative path whether it was Palunteer whether it was Microsoft we go back to so many of these names but that creates opportunities I think I think more and more investors recognizing Palanteer are still early stages of what I view is you going to be a trillion dollar market cap >> for for Apple it seems like the narrative was that they were falling behind the AI arms race now it seems like they're getting in now they're launching this new duo phone you also like this stock. So, what is the opportunity ahead for that company? >> Yeah, because my view on Apple is like they're going to be a toll collector on the consumer AI highway. Now, have they stumbled with AI? No doubt the last few years. But when you have 1.5 billion, you know, iPhone, 2.5 billion iOS devices, you could be late because that install base is unrivaled. And I just think on the consumer side, we think it could add $75 per share of the stock. >> Okay. So, one to watch for sure. I also want to get your your take on SpaceX because it seems like investors are starting to come around on that story as well when it comes to their space literally within the AI race as well. But also, there is some concern because we're not yet back at that IPO price. But SpaceX I really view as more of a hyperscaler in motion in terms of what they're building. You saw the Nvidia report in terms of what's happening there. And I think more and more this becomes a data almost hypers scale AI play. And it's also my view over the next 12 to 18 months there's over an 80% chance that SpaceX ultimately merges with Tesla. And this is kind of the grand vision for Musk as he builds out. I think this this sort of data vision things like lockups and others, you're clearly gonna get some nervousness and for good reason. But but in our opinion, that's why we're bullish on SpaceX. This is still just the beginning of what's going to be a multi-year journey. Now, you mentioned it as well, but speaking of that news today, we do know that SpaceX is now in talks to raise roughly $40 billion of debt to buy yet again that word Nvidia chips for its AI data center. So, once again, no concern here over circular financing >> because I view it as you're building the Vegas strip 1955 and everyone understands you got to have a spot on that strip otherwise you'll be in Reno. You'll be left out. And that's why in this arms race, that continues to be where we are. We are year three of a 10 12 year buildout. And the bears that have called 10 of the last two downturns, they can't see that in the spreadsheets. >> I want to get your take on those safety concerns again, but in particular around what we're seeing as far as cyber security stocks. Again, you like crowd strike. So, how long does this momentum last? You even call it the golden age for cyber security stocks. So how long could this golden age exist or last with this buildout? >> I think a few more years cuz surface era is going to increase significantly. Agents are going to expand. That's why we've seen crowd strike, powato, zcale among others. And I think there's even names like rubrics, checkpoint for net that could be beneficiaries. And I think this is really going to change the cyber security industry. We think it could go from 5% of budgets to 10% IT budgets over the next few years. But it's a good example. Second, third, fourth derivatives playing out in the AI revolution. >> When you're listening to this upcoming quarterly results and you're looking for key metrics to watch, one of the analysts told me yesterday, it's all about margins in this upcoming quarter. So, what will you be listening for to make sure that this story does play out? How do we get to that fourth inning? >> Yeah. And I'm not worried about margin. I mean, to me, I'm focused on what does backlog look like? what is conversion in terms of these AI strategic projects focus on because margins right that's great in the near term but this is about growth stories and I think now we're going to see across tech earnings this is going to be sort of the next stage of AI breaking out I think investors underestimating tech earnings by probably 20% going into next year >> what's the one company that you think will be a telltale sign of how this entire AI trade is doing >> they're in Redmond MSFT Microsoft because that's the one best barometer in terms of what we see on the enterprise. >> All right, Dan I thanks so much for joining us. I appreciate the breakdown. >> Thank you. >> And coming up, we're taking a look at the airline sector ahead of Delta earnings. Stick around for much more after the break. Heat. Heat. Airline earnings are about to take off with Delta reporting on Friday. Travel demands remain strong and ticket prices, well, they're holding up, but rising fuel costs are putting pressure on profits. For more on the sector, we're bringing in Savvi Scythe, managing director at Raymond Jeans. Savvi, thank you so much for being with us. With Delta in mind, what exactly is the indicator that you're looking for that maybe might be a telltale sign for the rest of the airliners? >> Hi, Ver. Thanks for having me here with Delta. But I think we're all looking for what their unit revenue uh looks like here in in the fourth quarter. Um you know, fuel is high. Uh it's it's going to be hard for a lot of airlines and these fuel price levels. Even Delta um while they will be profitable, it's you know, it's it's not where they want to be. Uh but what we're going to look for is what's their unit revenue. You're getting to a point where industry capacity is stepping up. Your comps are getting tougher. So if they can show that unit revenue is similar to uh improving from 3Q levels, I think that will be a very good sign for the industry. >> Now Jeff Fuel, I mean that seems like it's going to be a big narrative this upcoming quarter. Yet at the same time, it likely means that they have to raise prices. So how much pricing power do these airlines still have right now? >> Yeah, the good news is the economy is strong um and and consumers so far are healthy. Um, so that is the good news for airlines, but you know at these levels it it get starts to get really difficult to to kind of fully push through this pricing without doing more heavy lifting. I think you can try to continue to kind of increase prices for consumers, but at this point I think you need to start kind of adjusting capacity and maybe stop flying some seats that are just not going to be profitable. Um, the good news is that I guess the silver lining is that this kind of fuel price surge is happening at time that the airlines are looking at 2027 capacity plans. I I don't envy them because there is a sense that this level of fuel is is probably not going to be sustainable, but also there is an understanding that fuel is probably going to be higher for longer. Um and therefore I I think there'll be some very conservative planning going on as you look into 2027. >> So could that mean these companies would offer guidance that have maybe less less routes, maybe less destinations? What could that look like next year? >> Yeah, I think we'll still see capacity growth. Uh but I think what you will see is less than they would have otherwise hoped to do in 2027 even couple of months ago. Uh ju just because you know fuel does look like it's going to be elevated and and there just some routes just that cannot support this level of fuel. >> And it seems like this whole entire year we've been talking so much about those premium seats, those premium travels, highinccome cohorts really propping up this industry. So is that going to be the case again? And how does this sort of give us an insight to the K-shaped economy that we're seeing right now? >> Yeah, I mean I I think that it's just a real premium push and it it's coming in different in in an angle that where kind of passengers are saying we want uh we're willing to pay a little bit more for a better experience. So, you know, it's it's definitely premium, but it's all uh kind of gradients of premium in the the first class that Delta offers is not the same as a first class that a Frontier would be offering. So, um it's it's premium, but it's also kind of people willing to pay up a little bit more for a better experience. Um and and you're right, everybody's kind of leaning into that. That's where the strength is. Uh but this kind of year, you've seen main cabin pricing strengthening as well. Uh but that's probably a reflection of the supply demand in the main cabin uh getting rationalized rather than you know a real big strengthening in the kind of the lower end uh uh kind of price sensitive passengers >> and it seems like this whole entire ecosystem just continues to be built around that exact customer because we're seeing lounges getting built out these credit card offerings loyalty programs. So, how would you say that these sort of opportunities, these sort of revenue streams really do impact the company's profits at the end of the day? And what opportunity do airliners have around these more luxury experiences? It's it's definitely what they want to talk about and they are spending a lot more. And if you look at the last few years, that's really where the demand growth has been. There hasn't been as much growth in kind of the main cabin side of the business, but there's been a lot more growth in in folks demanding extra leg room seats, uh business class seats, that lounge experience. So, um again, not everybody wants all of it, but there is kind of a higher demand for uh some of that extra experience. So, there is a lot of kind of investment going into expanding that um into kind of increasing loyalty. Uh but that said, like a lot of these airlines are also making investments in the kind of the main cabin as well. Uh it just doesn't get as much flare as uh as some of the premium measures that are being taken. Savvi, this morning we had a whole entire debate in our meeting about whether or not we like to use Wi-Fi on a flight or for the kind of customer who wants a lowfi experience. And we're seeing all these different airlines really invest in this, especially when it comes to Elon Musk's Starlink. Of course, now he's sort of putting a bit of pressure on Ed Bastion over there, Delta CEO, who sort of said that they teamed up with Amazon. They stuck by it, and now he's giving them a bit of a hard time. Even some saying that he's bullying them into this. So, what's the take here? How much of this are we going to see in terms of demand? Who's going to be the winner here when it comes to this this Wi-Fi partnerships that we'll see on flights? >> Yeah, I think Wi-Fi has become table stakes uh in this industry and and Delta saw this early on. I mean to be fair, JetBlue is the first to kind of introduce kind of free Wi-Fi, maybe not across their whole fleet. Uh Delta was the first to kind of introduce I think free Wi-Fi across the fleet uh back to kind of 2023 time frame. Uh so so they saw that that this was kind of you know on the horizon that it was something that people were expecting especially the younger generation wants to kind of remain connected. Um, and they've made those investments. And quite frankly, you know, as much as uh there's kind of a lot of uh fanfare about United and Starling, you know, I I flew on four flights on United in in September and only one of them had Starling. So, it's not still a consistent experience, whereas when I'm on Delta, I had all my flights on on free Wi-Fi. And so, um, it is though as you get to the end of next year, uh, something that you're going to, you know, that maybe we'll see if that's going to have an impact. But to your point, I think not everybody want needs that extreme level of uh kind of internet connectivity. Um, and so I I'm not sure it's going to be the kind of dominant factor. And if Delta does have kind of maybe a product that's not as competitive, it might be for a short time until Amazon can kind of bring out their product. >> Interesting. So, we'll sort of see how this all plays out. It seems like Savvi, while we have you, I do want to get your take on what exactly this holiday season could look like because gas prices are now going somewhat head-to-head with airline tickets. You're trying to understand where exactly you're going to guess the best bang for your buck. So, what are you seeing so far just in terms of what consumers are looking at in terms of cross comparison, where they're going to get the best deals? >> Yeah, I mean, I think the the same rules apply. Unfortunately, I think um you're going to see pretty high prices here. um it's going to be hard for airlines to kind of do a lot of discounts. Uh but the same rules apply if you have flexibility on when you fly, you're probably going to get a better deal. Uh if you can, you know, go in those uh periods where it's not around a school break or, you know, just not around a holiday, you're probably going to find some good deals. And then look at destinations. You know, go to places where uh people aren't traveling as much during that time period. Uh so I I think that's where kind of deals are going to be. But, uh, in this kind of a fair fuel environment, kind of the deals are going to be few and far between. >> But needless to say, it seems like if you flew before, you're going to plan to fly again >> hopefully for this industry hopefully. And as far as what we can see, uh, that's what what we seeing. The demand is still there. People still want to fly. U, they might be shopping around a little bit more, but they're still buying. >> Very good insight. Thank you so much for joining us, AI. I really appreciate it. >> My pleasure. and President Trump disclosing hundreds of new stock trades including investments in Microsoft, Nvidia, and SpaceX. Joining me now is Yahoo Finance's Ben Works. Ben, what can you tell us here? Yeah, well, we had a kind of an interesting ju justosition today with President Trump and his relationship to corporate America. On the one side, as you mentioned, there was disclosure of these new stock tradings. over 500 new securities trades from President Trump um alongside an appearance where the president was with many of these same CEOs that showed up in this report. On the on the disclosure side of it, um the heavy heavy um concentration from Trump in his portfolio on tech. This has been a trend from Trump all year. We see thousands of trades from the president since the start of the year. A lot of them in big tech. The biggest transaction was in Meta, a purchase of between 5 and $25 million in meta stock. a number of meta purchases showed up amongst these disclosures. We also saw a number of of million dollar plus purchases in in companies like Microsoft, McDonald's, um SpaceX bonds was was in there amongst the president's disclosures showing showing how how active the trading is. Um one one note here is that president's Trump is his account is managed by the Trump organization. They claim that neither Trump nor his family has any dis has any has any involvement in the trades themselves. But the reason folks give to ban stock law lawmaker and policymaker stock trading is the appearances that this creates. And we saw that kind of on full display today with the president just a couple hours ago appearing at what what he called a golden age summit with six different CEOs all of whom showed up in in his trading disclosures. Elon Musk, he purchased President Trump purchased Tesla and SpaceX um SpaceX bonds. Elon Musk was there, Nvidia was there. All these different companies, Microsoft was there. These same companies that President Trump is is trading in or at least his account is trading in are are on the stage with Trump. Trump even gave different medals to these these CEOs today as part of as part of a science medals that you that he was giving out. So, no evidence that these two sides are linked, but it just shows that President Trump is pushing forward both on his embrace of big tech. He's appearing with CEOs, Jensen Long, folks like that nearly every week at these points, but also his outsized trading. Bloomberg recently calculated that President Trump, his trading alone is more than all of Capitol Hill, all 535 members put together. >> Ben, you're also taking a look at America's reliance on foreign chips. what can you tell us there and how integral is it to the story that's going on right now? >> Yeah, so what we got is new trade data this week and it shows how foreign semiconductors are really a really a big factor in the in the AI data center buildout and in the US trade deficit. The overall trade deficit jumped this week to over hundred billion dollars. This is the highest level since before liberation day. Um and the the driver there was semiconductors but computing related resources that we saw we've seen really jump in in in over the course of this year largely going into data centers. Um one way to think about it is semiconductor imports. The first eight months of this year January through August the US imported more than 90 billion worth of semiconductors. That is more than twice it was almost twice as much as it was at this point last year. imports have grown, but as you can see on this graphic there, this is the trade deficit. And it has just been almost straight down over the course of this year after even being in a surplus a few even just a few years ago. So it shows how our reliance on foreign semiconductors persists even though that's been a major issue here in Washington. We saw the chips and science act and we've seen progress. The US of course still designs many semiconductors. It shows that especially for these advanced chips to fuel these data centers, the US is still very reliant on overseas producers. >> Ben Worshklo, thanks so much for all the insight. I really appreciate it. And coming up, all right, get this. Starbucks reportedly eyeing a takeover of Chipotle. We'll break down what it could mean for both companies after the break. feel. All right. Heat. Heat. Reports of a restaurant mega deal has industry experts sounding off the Financial Times reporting that Starbucks has explored a takeover of Chipotle, a deal that would not just be a massive in the industry, but also re reunite Starbucks CEO Brian Nickel with the burrito chain Chipotle that he once led. For more, we bring in Jonathan Mays and former Connect's food service editor and chief. Jonathan, thanks for joining us. I really appreciate it. I guess we could start here. What would be the synergies between these two companies and what's your take? Could this actually happen? I mean, it could happen. Uh, it was a it's a very credible report. Um, I mean, obviously, this is something that they're definitely looking at. Uh, Starbucks could do it in a probably in a combination of debt and stock. It could happen. Uh, as for the synergies, I have no idea. Um that's I I I mean the supply chain synergies are you know a little you know they're two different companies so you'd probably have to see some sort of synergies among the uh in GNA costs and in corporate overhead and stuff like that and and I always tend to think that a lot of those synergies tend to be overrated anyway uh and a little bit difficult but it definitely could happen. >> I I want to lean into you for for your knowledge of Nicholls experience. Of course, he led Chipotle for quite some time. So many are saying, well, hey, he knows that business in and out, so maybe it wouldn't be all that hard. What's your take on that? >> Well, that's one of the big reasons to believe in this, right? It's he knows that business. He turned it around. If you go back to 2018 when he took over as CEO from uh after, you know, leading Taco Bell, he did a tremendous job there and and Chipotle was really struggling. It was having a tough time kind of coming out of the E.oli situation that they dealt with and he he pretty much brought it back uh to where it had been uh which was a long shot at the time. So he knows that business and that's one reason to believe this was a very is very credible and that it could happen and you know if this is again this is a very credible report there's no reason not to believe it that's one reason to think that there is some sort of plan here to make this work together in ways that I think a lot of us can't At the same time, it seems like Starbucks was in this midst of a turnaround. We just heard about those store closures. We heard about layoffs. Is this the right time for Starbucks to take this on right now? >> That's a really big question. Um, you know, it's a giant giant question. Um, they've seen sales really improve largely declared Starbucks back, but then they closed 250 more stores. So that's that's a big question and I think that the the the people they're going to have to convince are Starbucks shareholders because it's easy to see how Chipotle would benefit, right? Chipotle could benefit by Brian Nickel coming back, injecting the company with energy. You know, they're the smaller brand here. Um, you know, Starbucks, it's a lot less clear what the benefit to Starbucks is in joining with Chipotle. Starbucks is a massive company. It's the second largest restaurant chain on the planet. It doesn't need to buy Chipotle unless there's a reason why Brian thinks that they need to buy Chipotle here. So, that's the people they're going to have to convince and the stock is down today. That tells you everything. >> Yeah. And and I want to lean into that idea that Chipotle could benefit even more because I was reading a note from William Blair analyst Sharon Zakia and she said that Chipotle could really lean on Starbucks international presence. So, could this be a massive opportunity for the company, for the burrito chain? >> I mean, I think that's probably where Starbucks sees the real advantage here, cuz Chipotle hasn't really done much internationally at all. Uh, and they've been trying to go international for years. So, if you look at Starbucks as a way for them to do that, because Starbucks has the infrastructure to expand internationally that Chipotle doesn't really have yet. Um, not even close. Uh, Starbucks has done this as primarily a company operated operation in the US and and and really did it mostly through um through operators outside the United States. they know how to do this and they could help uh Chipotle expand internationally very well. Uh but again, I mean that's where the benefit is is definitely uh you could all see all sorts of benefits for for Chipotle in a merger like this. >> Jonathan, you know, we talk all about these different day parts within this business. It seems like Starbucks owns the morning, Chipotle maybe owning more of lunch and dinner. So, could that be an opportunity for Starbucks? Could this help them get more into the afternoon? Especially as we're seeing Brian Nickel introduce more lunch options. He's rebringing back the seats. I've seen more people at my local Starbucks there at night. >> Yeah, I don't know if I see, you know, that happening. Really, if you're going to have a something like this, these chains probably need to operate more or less separately. You're going to have to give Chipotle and Starbucks, they're going to have to have sort of their own leadership with with Brian up in at the top. and they're going to have to be able to do things their own way rather than trying to sort of make things work between the two. Um, so it's hard for me to imagine, for instance, a co-branded Starbucks and Chipotle. And it's really difficult to see where, you know, Chipotle could show Starbucks how to to build business in the afternoon. Um, there, you know, there are it's they're two completely different concepts. They're not even I mean not even really that close. Uh so I I don't really necessarily see that as a potential benefit to Starbucks. I mean outside of really the big benefit is they're going to get the benefit of Chipotle's growth. You Chipotle is a much smaller chain both in the US and internationally. And you know that's going to give that combined company just more growth potential down the line. Uh, but that's that's really the only real benefit that I could see to Starbucks on this one. >> Yeah. And Brian Nickel seems to be this common thread uh throughout this all. But Jonathan, you've seen you've seen it all. You even saw, you know, McDonald's once at one time owned Chipotle. You've seen other acquisitions that maybe didn't work as well. You have Jack in the Box and Del Taco a lot of people are thinking about when it comes to this. So why didn't those work? And is there a good chance that we could see that sort of play out again in this narrative? it does didn't work because it's really difficult to operate two chains at the same time when you do not have an established infrastructure to do so. >> Uh and you have to have a strategy. The companies that do this best were were mostly created to do it. Uh and most of the time this doesn't work. The Jack in the Box Del Taco example now that's much smaller scale. Uh, but you had a lot of challenges. It really shortly after Jack in the Box bought Del Taco, Del Taco sales really tanked. You know, they lost a number of different executives. They made changes to the food to try to take it. They wanted synergies and and a lot of those synergies didn't work for Del Taco. Uh, and the result and then of course Jack in the Box kind of took its eye off the ball and Jack in the Box sales worsened. So, and all this came during a difficult time. So, it was really, really problematic for Jack in the Box, but we've seen this over and over again. I mean, you just look at Young Brands just sold Pizza Hut after trying for literally decades to try to figure out what to do with that particular chain. It's not easy to operate uh multiple concepts at the same time. >> Uh and and then, you know, Wall Street starts asking questions and and and that's where really the danger here is. I mean, you have Starbucks that is really starting to get a lot of excellent momentum. Their same source sales were 7.9% last quarter. Um, you know, they figured out China, you know, they've they've really got the ball rolling here. I mean, they've they closed some locations, but, you know, they've they really did some good things. >> Yeah. And the risk here is that they're going to take their eyes off the ball to to with this massive massive massive acquisition. By the way, this is three times as large as any other acquisition we have ever seen adjusted on an inflation basis. So, it is a massive deal. It's really complicated, >> right? >> There are all kinds of risks for Starbucks on this one, >> but we'll never say never. So, we'll have to wait and see. Jonathan Mays, really appreciate your time. Thank you so much for joining us. Thank you for having me. >> Of course, the US national debt is now above $40 trillion. Kenneth Rogoff, a Harvard University professor and former chief economist at the International Monetary Fund, discussed why he's concerned about a potential US debt crisis. Well, I mean, I think it would take a shock like a bigger war than we had in Iran. Uh say chai uh Taiwan uh something happening uh a cyber attack uh some out of the box shock. The problem is we're not resilient. The debts, depending how you measure it, hitting an all-time high, going much higher. Interest rates have come back, I think, to normal. And suddenly debt servicing costs are second on the budget on its way to first according to the CBO. And politically we're sort of like a deer caught in the headlights. I mean I think I don't know about 20% of the members of Congress think there's a problem but don't think they can do anything about it. I mean it's it's a worldwide problem. I mean look at the France, look at the United Kingdom, but the US is the biggest debtor and so it's the most vulnerable to this rise in interest rates. >> Uh you and I have probably been talking about the America's debt crisis, potential debt crisis for years and ballooning debt. Every every second the country's debt goes up. What let's say something is triggered. What does that mean for the person on the other side of this camera watching this while they eat Froot Loops? Well, just to be clear, I haven't worried about a debt crisis in the US until very recently. Until my uh recent book, I started thinking about it. I worried the debt would weigh on growth. Uh we'd be forced to use financial repression. We wouldn't be as active as we were. Things like that. I mean, look at Japan. Look at Italy. Look at other countries that have really high debt burdens. You can look at a long history. But now the you know the the various elements of having a crisis as we say are there uh what it looks like depends on what hits us who's in charge. It can take a lot of dimensions. I mean inflation's an obvious one and you can say the Fed would never allow that. Well, in an extreme situation, they would uh there's financial repression, which is basically what Japan did where you kind of corral everybody, particularly the locals, into holding more debt, your insurance companies, your pension funds. France has done that a lot. In fact, one of the reasons they're at the end of their rope is they've tried all these tricks. uh you could cut spending or raise taxes, but I I think until we have a crisis, the voters not going to go for it. If you listen to where the energy is in the Democratic party today, it sure as heck isn't towards cutting the budget, a little bit of raising taxes on billionaires, a lot of spending on everything else. So, that's where we are. And maybe nothing will happen for 15 years. Maybe we'll get lucky and AI will take over everything we do. But I think we're a long ways from that. I want to say about AI, if it did come in big, it's going to keep raising interest rates. The debt is already, you know, over 100% of GDP. So every time the interest rate goes up a percent, you might get more revenue, but you got to pay just as much or more on your debt. >> Ken, uh, you I haven't seen you in person for a while. Um, I have a new set, so I'm sounding I have sound effects. I'm sounding the alarm because I mean that is that is some that that's some scary stuff. So you mean to tell me AI would only fuel a US debt crisis? >> I mean I don't think AI is going to solve it uh is what I'm saying. Uh so there are lots of reasons for that. I gave you one. First and foremost I believe the interest rate will go up at least as much as the growth rate. And importantly we already owe 100% of GDP. If we didn't, it would obviously be great to get the revenue. Second, uh AI benefits capital for the foreseeable future. That's been going on for 25, 30 years. Uh computers, the internet, all have lowered labor share. Labor is easier to tax than capital. I mean, many of your listeners may be very happy about that. That's fine. But capital is more mobile. It's more politically powerful. Elon Musk would not have gotten to be a trillionaire if he was paying the same tax rates as your typical listener. >> Yes, we have uh a diversified audience watching watching Sazi Unleashed. We got the wealthy folk, we got the average investor. Um you know, on the AI on the AI front, Ken, are you amazed that given some of the things you're talking about here, we've got the stock market near a record high and it's concentrated in seven AI stocks. I mean, if you look historically when the railroad boom comes on, when you know there are these other great technologies, we see this. This is pretty extreme. I I mean, I don't know what's next any better than you do. But what I do see is that there are a lot of companies I you were talking about it just before I came on that are not benefiting as much and they're still paying the interest rates. Their consumers are paying the interest rates. There are a lot of countries that are in that position. uh some are benefiting but a lot aren't and they're in trouble and not just are the debt a problem. the AI companies ultimately undermining their growth strategies like what about India with outsourcing I mean they're very creative they'll find other things but uh you know it's it's a double-edged sword it and it's not just a few stragglers that are going to get hit I think a fair amount of the economy what are the politics surrounding that oh my god look at France today you know that could be other countries the UK even the United States in the notsodistant future >> you wrote this uh story or this uh this post uh somewhere in I believe in the past three or four months and the headline was this will the AI economy create a permanent underclass. Can you answer that for us now? Does it create one? >> I'll tell you everyone in Silicon Valley which is basically vomiting cash at the moment. You talk about the billionaires but a lot of them didn't get in the right company at the right time and they think in three or four years no one will want them. there'll be poppers. Uh that's extreme, but certainly uh I think it's going to in into the foreseeable future exacerbate inequality. I mean, growth does that. I don't think that's a curse in itself, but I don't know what the political backlash from that. Again, that's been going on for a long time. That's part of the populist backlash we see both on the Democrats and the Republicans. But I mean, let's face it, AI accelerates it both directly through the economics, indirectly through how it affects social media and, you know, how how fake ads, fake news, etc. So, yeah. No, I I think we're entering a very volatile period. It's so amazing to me that so many top economists, I would say most people on Wall Street, central banks, you know, this thought we'd be in this calm period forever. Interest rates would be zero. debt would be a free lunch. You could just predict everything. I can't tell you how many people thought that confidentally, even arrogantly. We are in for a volatile period. They're great opportunities, but you know, certainly the risk side of things is up and we're going to see some action around the world. >> I love how you put it and you're right. Silicon Valley is vomiting cash and to that extent that they continue to vomit cash should they be helping or paying towards the I guess the displaced worker like what is the responsibility of these companies to compensate the people they're firing and who people who may not be able to get another job for the next 25 years. >> Yeah. Well, I mean, you know, almost anyone you talk to in Silicon Valley talks about universal basic income, you know, giving uh people money different ways, but I think if you ask them, well, how much are you willing to pay for this? Nothing. >> You know, what are you willing to do? Yeah. I mean, there's going to be a tension there that's going to get sorted out uh maybe over 20 years. I don't think it's going to get sorted out in just one election. >> Ken, before I let you go, what is really keeping you up at night? We're we're going into the midterm election season, you know, like we've talked about here, uh, high levels of debt. We got we got the 10-year yield approaching 5.5%. These things aren't great. >> Yeah. I mean, you know, I'm trying to write another book. I don't know if I'm going to have time to finish it before a crisis hits. So, uh, I wouldn't say that's keeping me up. >> Well, let's hope you don't finish that book for another 15 years. I don't want a crisis. I don't want a crisis. Ken, >> it'll take me a few. >> All right. Well, good to see you. Coming up, the holiday shopping season. Well, it's almost here and we're unpacking the consumer trends on the other side of this break. Heat. Heat. While budgets for the holiday season are nearly back to where they stood two years ago, Americans are planning to shell out even more on the holidays in 2026 compared to last year. Here with a closer look on spending plans is Naveen Jaji Jill, president of retail advisory services. Thank you so much for being with us. I appreciate it cuz we were just talking about this. We're hearing the consumer say one thing yet they're expected to spend even more. So what's driving that spending? >> So first of all, it's the holiday season which is the biggest holiday which is the biggest spending season of the year. So they're excited about spending. But when it comes time to go shopping, I think the reality will start sinking in. I think the reality will be when you start taking a look at all the costs that they're having to bear this fall, energy costs, rent costs, health costs, all that stuff. When it comes time to shop, we'll be seeing a different kind of shopping. What we're hearing now is that the shopper wants to spend money on experiences, concert tickets, going out for a big nice dinner, having experience with the family as opposed to more things, more goods. So, there's a shift in the kind of spending. They'll spend a lot of money. They'll spend a fair amount of money, but they'll maybe go to Walmart or Target and get a lot of the basic necessities every wants and then spend the rest of the money on experience. Let's go to a concert. Let's go to a show. Let's go to the theater instead of just more stuff. >> Okay. So, a lot of gift cards, plans for experience, things like that. maybe things that later on they'll end up, you know, paying even more for when they're there, the popcorn and everything. But I want to guarantee because we did just have Amazon Prime Day wrap up. We also had all these deal days like from Walmart and Target especially. So, what do you expect when it comes to just the cadence of how they're shopping? Cuz did we see people maybe pull forward some purchases now or are they waiting for maybe even bigger promotions to come later on down the line? >> So, we're starting to see heavy promotions in October already, not surprisingly, right? So the retailers realize that the consumers taking a lot of hits lately, right? Energy cost being the primary thing. So how do you get their attention back to the store as opposed to the gas tank? Let's give them a sale or two or three. >> Hey, it worked for me. I'll admit, >> right? So as a result, we're going to start seeing promotions heavily in October. And so consumers have to decide, do we take the advantage of that promotion today or do we wait until Black Friday or do we wait until December? One of the risks you do that with is shortening of inventory, the stuff that starts running out. Retailers learned during 2020 in the pandemic. Don't over buy for your shelves. Be careful. You may get left with a lot of stuff no one wants. So the promotions get moved in October into November and less product for you to choose from when you get to December. >> Are there certain items that maybe you should be holding out for bigger sales later on the down line. You hear like electronics, things like that. >> Yeah, I think electronics will always be something be on sale. So you buy computers, electronics, cameras, but when you look at soft goods, 70% of the transactions that take place in a mall are soft goods, apparel, right? Those things will always be on sale. So go find the color you want, the size you want, get it early. >> Get it early. I do want to get your take on that because it seems like the malls are back. I mean, we're hearing that more and more. So what is behind this comeback in the malls? >> Some of it is the fact that we've probably demolished around 500 or 600 malls over the last 10 years. So we've gone from 1500 malls to roughly 950 malls. So when you get rid of the bad malls, what do you have left? The good stuff. That's the first thing. Second thing, there's been a bit of a culture shift, right? So for about 20 years, malls was the thing. So you think back to the 80s, right? So fast times of Ridgemont High and movies like that talked about malls then malls kind of on the on the downs slope over the last 10 years some of the best mall operators Mitch and Simon spent a lot of money billions of dollars making their malls attractive so attractive that nowadays the 13 the 14 the 15y old kid >> mall's a cool place to go let's go to the mall so that's what we're hearing the return of the mall which I think is actually a testament to the fact that malls actually are great places to shop eat entertain movies you can do it all in one stop the owners of those malls have spent billions to make it the place to go. That's what malls are back, >> right? And you also found within your report that people are eating more at malls. So, are the food courts just better? What's changed recently? Because you are spending a lot of money while shopping. What's making them say, is it mean just pure convenience that they're just stopping in for food or is this >> better options? So, the mall operators have put better food options on a mall. It used to be a food court like you said, right? Back the classic mall from anymore. >> No, we don't see food courts anymore. Now, we see actual curated food options. Cheesecake factories, >> could be a cheesecake factory, could be in Italy, could be in many different these Moxies of the world, Canadian brands as well that put great food offerings in the malls and that's what consumers want at the end of the day. Consumers generally speaking eat out quite a bit. In the USA on average, the average household eats out four times a week. Wow. >> So think about that across the board. So whether eating out at a fast food or a fast casual or a nice restaurant, give people options for eating out. They will eat out and they'll stay longer. of what's interesting is we're talking about this in-person experience and so with that being said, you can't help but think of that non-inperson experience, maybe the planning you do ahead of that inerson experience and that has to do with AI. >> Absolutely. >> How much planning is going into the use of AI? How many how much people are maybe price comparing? What are certain ways that you can maybe plan your holiday budget using AI? >> AI is a great tool, but at the end of the day, what do consumers want? They want a great product at a great price, at a convenience way. So, what do they do? They think about AI as a way to think about what they want to buy and where they want to get it. But once you get to the mall or once you get to the shopping destination, you're not looking for AI answers. You're looking for the thing that gets your eye, gets your attention. Hey, do I eat there? Do I buy there? Do I stay there? Do I play there? If you can get all those experiences in one place, what we call dwell time. Dwell time is what really captures the attention of a consumer. And the longer we have you stay, the more money we're going to get out of you. >> Okay. And and where are we at with just the experiential economy just in terms of in store? What does that look like now? How is it different? And then also, we're hearing so much about an analog holiday. People sort of going old school, less tech. So, are you seeing that, too? >> I think retailers have figured out that the store needs to be a place where you feel engaged, better experiences when you walk in. You don't need to see 25 colors or 30 colors, but the most attractive colors. AI helps retailers design each store inventory-wise by what the consumer buys in Texas versus Miami versus Michigan. Let's face it, you don't need really thick sweaters in Michigan and Miami versus Miami, but you do need a good assortment. So, AI helps the retailer make good inventory decisions. Now, when it comes down to what they're going to buy and how they're going to buy it, it's about making that attractive product look so good that you'll stay in the store longer. And the longer you stay in the store, the better it is for the consumer to say, "I want to stay here for longer to buy more things." >> Okay. So, the longer they're there, the more they're buying. >> Absolutely. There's a direct correlation between dwell time, how long I stay there, and how much money I spend. If I stay in a destination for more than 60 minutes, there's a 25 to 30% increase in the amount of money I will spend at that location. >> Oh boy. All right. Well, I better keep track of how much time I'm spending in the stores this holiday. Thank you so much for joining us. I really appreciate it. >> Thanks, Brooke. >> Thank you. And coming up, we have you covered through the closing bell on Wall Street. Don't go anywhere. Heat. Heat. Heat. Heat. Heat. Heat. N. Hey, hey, hey. Heat. Heat. Heat. Heat. Sound. Stocks ending the day mix as AI jitters are keeping investors on edge. Anes I know you're standing by with the recap. We continue to see this narrative of oil rising, the Nasdaq leading the Dow, S&P 500 all lower this afternoon. >> Yeah, that's right. So, we did end the session mixed because we actually ended the Dow slightly in in green territory. So, the Dow up onetenth of a percent, but nonetheless, you are seeing that the Nasdaq was the one hit the most, down 1.2%, 2% the S&P 500 down about half of a percent as you had mentioned Treasury yields which we've been watching throughout the various sessions those actually eased today so we did see the 10-year Treasury coming down to 523 the 30-year also coming lower but the much of the damage was really in the semiconductor space these AI jitters that you just spoke about part of that has to do with that FT report on lagging revenue at open AI and so that's why you are seeing the semis really kicking it on the chin and every really part of the semispace. So you're looking at Nvidia down 3%, AMD also lower, but you've also got the memory makers like Micron down more than 4%. Looking at the sector action, we did see energy stocks today going higher and part of that has to do with the move in oil that we've been watching. Oil this morning for Brent went to $105 per barrel. You had WTI that was around $92 a barrel, but then you saw these oil prices easing just a bit after President Trump said that the US would not be attacking Iran before the midterm elections in November. So, still you have these elevated oil prices and technology was the underperformer today. >> That's right. Thank you so much for breaking all down. I appreciate it. Joining me for more is Marta Nordan, Empower chief investment strategist. Marta, thanks for being with us this afternoon because there is just so much to break down. I I do want to start with that report around Open AI. Financial Times reporting that their revenue was approaching $50 billion at the end of September. That would be less than the 70 billion previously reported. Now, we're seeing some of their partners fall on that, including Microsoft, Oracle, Broadcom, Nvidia. So, how big of a narrative is this going to be moving forward? Does this show you a slowdown right now? Well, I mean, we really have two stories, right? We have the open AI story and we also have the anthropic story. And if we're looking at the trend line over the course of 2026, we've seen surprising strength or acceleration for anthropic and of course a bit of faltering for open AI. So, I think this data somewhat confirms that, but I I think it also confirms just how directionless the AI bet is right now. It was only a few days ago where we were talking about the strength of the hyperscalers and the conviction in AI as we deal with higher yields and then today we're questioning the spending again and I think it just shows the uncertainty of the moment particularly as it comes to something with as long a tale as as the AI buildout. How worried are you right now especially as we make our way towards earnings results to hear more about just how much these companies are spending and the debt that they're taking on. I mean I think that is always going to be in this environment the primary concern what the spending looks like what how they're financing it what's happening to cash flow and then of course what the monetization is now what we saw in the past quarter where the cash flow was really drying up the spending seemed to be accelerating but so was the monetization it really allows people to kind of interpret the story however which way they want to interpret it but the reality is a lot of these companies the big spenders at least at least They're well priced from a valuation perspective. They're a lot more approachable than other areas of the AI supply chain. So I think that gives them a little bit more of a margin of safety. >> At the same time, you wrote in your note that Q3 was bumpier beneath the surface than the headline had suggested. So So what exactly drove that volatility and can we expect more of that? Especially we have so much uncertainty still in this market and the midterm elections coming up. >> Yeah, there's a lot going on. When we look at Q3, there was just so much une unevenness. You you had this strength in some areas like energy, but then you had broader weakness outside of kind of the AI theme outside of the energy area. And I think that speaks to this idea that when we're looking at an environment that's characterized by higher yields, that's something that really can weigh on the market. And to your point, we're still contending with those yields today. We're still contending with geopolitics. and we have the midterm uncertainty that's an overhang for the next few weeks. I guess my expectation when we look at where valuations sit and where fundamentals sit is a lot of the good news is priced in and we still have to contend with some of these risks that are beginning to to show themselves. So from from where I sit today, I don't know if I see a huge acceleration through the end of the year. >> What's your take on when you think about upcoming earnings and you think about the the sheer volume or sheer opportunity around earnings specifically? You said it within your note that Q4 still does have substantial earnings air cover and many analysts on the street are still expecting strong earnings results, strong uh adjusted earnings growth. So, what exactly is your outlook when it comes to growth and and do you think that we'll see even a bit of a slowdown compared to what we've seen in the prior two quarters? >> Well, what's interesting is Q3 and Q4 look like they're following that same trend line of very very strong earnings. Now, a lot of that is concentrated. It's concentrated among the tech names around the AI names around energy. You see a bit of a tail when you get to other sectors, financials for example, healthcare. But what people are pointing to with Q3 is that we've seen analysts actually adjust their estimates higher. So in the near term for Q3, for Q4, there still is this massive earnings momentum that I think really is centered around what we've seen in Iran and the effect on energy and then the AI narrative. And the big question is what happens in 2027 because markets are forward-looking and the expectation is for some measure of normalization. So what I think people are really going to focus on in this earnings season is what the guidance is telling us about upcoming quarters. >> Do you think that this earnings quarter could or rather these results could show us more clarity, more direction because there's so much uncertainty right now. So what metrics will you be watching for to provide that sort of clarity within this market? Yeah, I mean it really feels like we're walking through a very dark tunnel with a small flashlight, right? We're just being able to see like the next step in front of us and that's kind of what I expect from this upcoming earning season that we just have a little bit more clarity on how AI is trending. Now, I think Anthropic and that IPO, you know, depending on when that happens, could also provide some clarity on how AI is evolving, but a lot of what folks are going to watch, I think, are going to be some of the same things that they've watched before. It's going to be a focus on cash flow. It's going to be a focus on monetization. I think what people want to see is how the consumer is doing. So, a read through on um what we see from the banks and then of course the broader consumer sector which the consumer has held in a lot stronger than people had anticipated. So, are we going to see that in the earnings results? So, I think a lot of the narrative just continues and we just get that smidge more of information. What we've been hearing over these past few months, past few quarters is just this worry of AI's impact especially around software and also we've al seen the interest in cyber security. So how does this ripple effect of AI sort of play its way through other sectors? >> Well, the software area is the area that I find to be the the area of opportunity in 2026. We had that massive selloff in February and then there was just kind of this slow bleed. Of course, we've had the rally back since, but when you think about where does AI go from here, a lot of the supply chain seems to have, you know, every bit of return rung out of it, but something like software is an area where maybe we haven't seen the same kind of strength of rally. While we know that AI can enhance a lot of those software applications. So, I think that's one of the areas that's pretty interesting and to your point, it is a ripple effect of the broader AI splash, right? It's one of those areas that's adjacent to AI. Cyber security the same though maybe you could argue a little bit less attractive on a valuation basis. >> When you think about small caps and the outlook for that, it seems like it's getting more and more attention as of late. So what will you be looking out for Q4 in order to see this momentum perhaps change or or turn the narrative here? >> What we saw with small caps is really kind of an abrupt halt of their strength somewhere around mid August. And when we think about how much small caps are exposed to floating rate debt, for example, or how indebted they are in general relative to their large cap peers, it would make some sense that nervousness around yields, nervousness around rates would be something that would hold the small cap area back. And of course, there's also the macro sensitivity. So, you do want the valuation in your favor, but you're also going to want an attractive uh economic environment, and you're also going to want an environment where at least you're seeing stable and potentially declining rates. And I think those things just are not coming together right now for small caps. Now, if we do see a pullback in yields, potentially we could see that area rally a bit more. >> Marta, thank you so much for breaking it all down. I appreciate it. >> My pleasure. >> Coming up, buying a house in this economy. We're checking out the latest mortgage rate data and Kyla Galan joins us on the latest on her book. Stick around to much more. Hey. Hey. Hey. Heat. Heat. The latest data from Freddy Mack shows mortgage rates are stuck at their highest. highest level in nearly 3 years with the average 30-year fix rate now rising to 7.4%. Joining me for more on this is Yahoo Finances Claire Boston. Claire say it isn't. So, break it down for us. >> You know, Brooke, it is not good news, but I think it could be worse. 7.4% is quite high, but uh so far Treasury yields have been fair in a fairly narrow range, and that is really what has been driving mortgage rates recently. So, I think there is a little bit hope in the market that maybe this sort of three-year high that we're at will be a little bit of a ceiling for now. But, of course, no one can predict what rates will do. And it has been a really, really rough run for anyone who's hoped to buy a home in the past month or so. >> It certainly has. I can attest to that personally. Claire, you're also watching though a potential influx of homes coming to the market in the next decade. Of course, it's a long time away. There's a lot of time between now and then, but for potential home buyers, could this be good news? What are we seeing there? >> Definitely. So, one of the major issues we're having aside from mortgage rates is the fact that our housing supply in this country is simply so low. And there is a little bit of hope that as some of our older generation ages, eventually they will need to sell their homes because they're moving into a rental or in with family or to a care home. People are calling this the silver tsunami. And realtor.com had a very interesting report where they calculated that in the next decade around 13.9 million homes should free up in this way. And of course the question is you know how much is that really going to help people? How many of these homes come to market? But we have a big housing shortage. And so 13.9 million is meaningful. Uh the one other slight issue though is that our older generation they've had long lives. They've been successful. Many of them are in beautiful large homes. And what many first-time buyers want are smaller starter homes. So, we're potentially looking at a bit of a mismatch in this transaction between what buyers who are coming in for the first time want and then what these sellers are selling. That being said, potentially in more supply in that kind of move up category could be really good news for those buyers, you know, who are already in their starter homes and are looking to add some bedrooms because they're having kids or just want more space or things like that. Claire, trying to step into this housing market right now is actually impossible. So, I hear you. And the people leaving the homes obviously have been able to build up their assets over time, including that home equity price. So, thanks so much for breaking it all down. Hopefully, some good news on the back end of that. So, thank you. Is the vibe session making a comeback or did it ever leave? AI is creating enormous wealth, but many Americans still aren't feeling great about the economy. Joining us now is the one who coined the term vibe session, Kyla Scalin, author of In This Economy, now out on paperback. Kyla, I have the book in front of me. And I think what is so interesting is not only are you relaunching this in paperback, but you also added this afterward, and it's called The New Economy, and you wrote after the great moderation, you went on to say just really that focus on tariffs, on AI. So, what made it so important to relaunch this book with that addition in mind? Um, so the book came out in May of 2024 and a lot has changed since that time. And so the goal of the book with this afterward that we just added is to address some of the things that didn't really exist in 2024, which is the advent of AI, the new introduction of many, many different types of tariffs. So the book now is more reflective of the economy. The book is mostly an intro guide to economics, but now we have some real-time information about some of the stuff that's been changing so quickly and has been impacting the overall economy. >> And Kylie, I really love the way you you break down all these big concepts and make them easier to understand for for everyday people. And and I love this recent video that you made because you compared AI to a bakery and to cupcakes. And so from that video, what was the biggest takeaway that you learned? What is the biggest misconception about this AI momentum that we're seeing right now? >> Yeah, I mean everyone's talking about AI, right? But I think the biggest thing is, you know, basically I compared the data centers to bakeries and the final product of AI is these cupcakes, right? And so we're not really sure how many cupcakes people want, but we keep on building all of these big bakeries. and we're not totally sure if we're going to be able to plug the bakeries in uh you know power the bakeries to eventually make the cupcakes. So there's a lot of questions about the underlying infrastructure. How are we going to power it? And then also a lot of questions about the demand. So how many cupcakes, how many outputs of AI, however you want to think about it, are going to be wanted by the general public and uh you know are we perhaps building too many bakeries, >> right? And it's all this wait and see kind of momentum. But you also recently highlighted just how this wealth around AI is also fueling what you call the luxury housing boom. So is this sort of telling a tale of the K-shaped economy? Is that what you're seeing as well? >> Yeah, I think the K-shaped economy has been a big question mark for a long time because a lot of spending is supported by household stock market wealth. You know, a lot of people are able to spend quite a lot because they're making quite a bit on the company's doing so well. Um, so I think that we're seeing more and more disconnect between how some people are able to exist in the economy and how others are not able to keep up. You know, especially with interest rates going up with the Fed raising rates, you know, borrowing money has become more expensive and that's putting people who need to borrow money to get by in a tougher and tougher spot. I want to talk about the impact that those higher borrowing costs are having on everyday uh Americans because we see it impact generations differently. So from your perspective, how is it impacting different generations so vastly differently? >> I mean, a lot of younger folks will lean on credit cards and pretty much everybody, I think, leans on credit cards, but I think it puts younger folks in a tougher spot. You know, you had a housing analyst on who was talking about how housing has gotten so expensive. And if you're trying to enter the housing market right now, if you're a younger person trying to buy, it's very difficult. It's, you know, mortgage rates above 7% are extremely challenging. If you're trying to buy a car, it's really expensive. And so I think there's just more and more economic headwinds and those do hit younger folks because they're, you know, financing certain parts of their lives via credit card. They're trying to enter the housing market. Maybe they're trying to buy a car and they have all these things working against them. >> And something interesting too that you pointed out as well is how so many are saying, okay, these younger generations are turning to these sports betting platforms and they're spending all their money on there, but yet they're not able to jump into this market. and you kind of alluded to the fact that it sort of is this windfall, this backdoor approach to maybe even thinking that you can get into this housing market. So, walk us through that sort of psychology that younger Americans are thinking right now with everything being so expensive. >> Yeah, I think a lot of people view prediction markets as an alternative to investing in the S&P 500. I think that we see a lot of people taking on an enormous amount of risk to try and get by. there's a lot of worries about displacement in the labor market. So it seems like well if I just win it big via prediction markets or sports betting that'll help me, you know, land safely. Uh so I think that's definitely some of the risk appetite that we're seeing. >> Now you did say that you still have a lot of questions around these AI agents from your perspective. I mean I have to ask what is your take on Meta's Muse on all these other AI agents coming out and how people genuinely are turning to them for their everyday needs? Yeah, I I think the agents are very interesting. I'm not totally sure on data privacy how that might work. Uh but I think that it's, you know, it makes a lot of sense that we're eventually going to change how we buy things, how we interface with various companies and the agents seem like a logical next step there where you have somebody acting on your behalf or you know computer acting on your behalf. Um you know I'm a bit worried about the use cases. I'm not totally sure again on the data privacy, you know, Amazon blocked Meta's assistant Muse from accessing the platform. So, it seems like we'll sort of see these modes get built around it. I'm not sure if we're going to have to talk to like 100 different AI assistants to get anything done. But, it is an interesting next iteration of what this technology could look like. Now, you're now you're going around and when you're touring with this book, you're I'm sure meeting a lot of folks on the road, but this second iteration especially. So what has changed just in terms of your audience attention over the past 2 years? >> Yeah, I mean I think there is a lot more uncertainty, there's a lot more fear. Uh people are wondering, you know, what's a safe path for me to go down? When do I get my chance to start climbing the economic ladder? I think we've seen consumer sentiment pretty much collapse. It's at all-time lows. I think a lot of people are feeling pretty bad about their chances within the economy. And so it feels like we are sort of continuing from 2074, but we have all of these other forces, high energy prices, AI, high, you know, high interest rates that are really complicating the economic picture and really making it very very confusing for people. So I hear a lot about that. >> Yeah. >> When when you think about your audience, I'm assuming a lot of them might be Gen Z, maybe even some Gen Alpha looking to to get ahead. But when you think about just the challenges that this younger generation is up against, those higher uh housing costs, student debt, other just higher borrowing costs like we were just talking about, do you feel like the younger generation genuinely is just in a worse position that they're not even able to get financially ahead right now? >> I think there's a lot of I mean, every single generation, just to be clear, has things working against them. there's always been some headache and some factor that is really complicated uh path for younger folks. So, I think it's always just generally quite hard to be young. I think that we never really recovered from the pandemic. You know, inflation never really came back down again after that. I think the labor market has been really complicated by AI and the things that we told people to do like get a computer science degree that turns out to be not so good advice. Um, and then I think that also with home prices being so expensive, what we really tell people, you know, within the United States is like the way that you become successful is if you buy a home, right? And so I think you have these sort of rungs in the economic ladder that are getting harder and harder for people to reach and it becomes more and more frustrating when you feel like you should have reached them by now. And so I I think that's definitely something that a lot of people are really having a hard time with. Kyla to bring this full circle and be end where we began vibe session. I mean at what point does this end up turning into a recession or can we just continue on? >> I mean it seems like we can continue on. I think the VA session has been a phenomenon for so this disconnect between how people feel about the economy. So consumer sentiment and economic data there's been a huge huge disconnect for the past four years and it's only gotten worse. And I think right now, you know, it's a little complicated because AI is such a big part of the economy. It's such a big part of the stock market that and the way that that is messaged is that it is going to take people's jobs. It is going to take over. And then I think that explains a fair amount of the consumer sentiment being so negative. But um yeah, it seems like the Bob session, the low consumer sentiment, we don't really have many solutions for it yet, which is very unfortunate. And so until we have some sort of solution for it to help people feel a bit better within their economic circumstances um which is there's a lot that we could do there. Um it seems like it's um unfortunately here to stay. Yeah. >> All right. Well, we'll linger on. We'll keep vibing. I appreciate your insight so much, Kyla. Thank you so much. >> Thanks for having me. >> And time now for what to watch for Friday, October 9th. Gosh, can you believe it's already Friday? Kicking off the economic front. The University of Michigan will release its October consumer sentiment index on Friday with analyst forecasting that number to come in at 47.6. Now, that's down slightly from September's number. The report offering a key pulse check on households confidence heading into the fourth quarter as those high borrowing costs and persistent inflation continue to weigh on family budgets. And speaking of where econ Americans are choosing to spend their dollars, travel remains a key focus with Delta earnings announcing results for its third quarter before the markets open on Friday. Analysts expecting adjusted revenue to come in at 17.6 billion, and that's up 15% year-over-year. Investors will be watching whether strength and travel demand and pricing power continues to cushion the carrier with the industry fighting against rising fuel costs. And that's a wrap on today's show. Thank you so much for watching. I'll be here again tomorrow. I'll see you guys then. Heat. Heat. Heat. Heat. Heat up here. Heat. Heat. Hey, hey, hey. Hey, hey, hey. Heat. Heat.