Investors slash Fed hike bets ahead of PCE, Micron earnings, Apple’s CEO shake-up | The 8:30

[music] Welcome to the 8:30. We have some economic data that's just going to be coming out in a few actually right now. Um PCE um up 3/10en [music] of 1% that is in line with estimates. Uh the core PC uh price index month overmonth up 0.2% which is a little milder than economist estimates and year-over-year up 3%. So just to put this in context, why are we starting the show today with PCE? This is the Fed's preferred inflation gauge for a long time and so there's usually a lot of attention on this. It is a derivative, right, of consumer prices and producer prices which we already have. So usually there are not huge surprises in here. Um and we still have that core PCE index uh which is at 3% which is above the 2% target that the Fed has set. In terms of this being a little milder than estimated, it is largely because every once in a while you have the Bureau of Economic Analysis rejiggering how it calculates this number. And it this is one of those times when it has recalculated that number. And it's changed a couple of things here. First of all, they've revised the series for computer software and accessories and portfolio management fees and legal services. for computer software. It seems like they are integrating other things that weren't in there before, including gaming pricing that was not in that series before. So, that's the reason why it looks a little bit lower than estimated. Um, personal spending is the other thing that I really was paying a lot of attention to. It was up 0.9% which is a significant reaceleration. These are all August numbers by the way. That's a significant reaceleration from July. real personal spending adjusted uh inflation adjusted up 610 of 1%. >> Yeah, that's right. And what take a look at what the market's doing right now. Yields across the uh across the curve kind of pulling back a little bit at the front end. Two's down four basis points to 483. The 10-year holding at 52, 30-year holding at 555. So, you're not getting a lot of relief there, but you're getting a little bit. This data also comes after we got a significant amount of Fed speak this week. >> Yeah. most notably from New York Fed President John Williams who spoke and said in his comments that one more move, one more rate hike from the Fed may be appropriate later in the year, but he's not seeing the impetus for an October move. After that that comment, uh odds uh bets on an October move fell from about 70% to about 50%. Um really taking that back, there have been questions of whether the Fed would be willing to hike into the midterms. John Williams and a few others have come out and said, "Look, we're not political. We're not worried about that. But he's not the only one who you've seen say if the data keeps going okay with the move we've already done in September. We're looking like we're okay to hold off until December. Though the market is still very much pricing in about 90% odds, we do get that second hike in December. >> Right. But the rate but the after he spoke yesterday, the odds changed quite a bit for October specifically. They fell more like to 50/50. >> 50 from 70% to 50%. That's right. >> Little bit cooler here, right? the report kind of maybe takes the weight off of a hike in October, but still it's still what what the the real or sorry the the regular PC 3.4% way still way above the the target. That's right. So, you know, it's you can see it going both ways. I mean, uh hard to say, but the William stuff is interesting. >> Yeah. I mean, I thought what was most interesting was his use of the word urgency. >> Yes. He said there is no need for urgency and we have time to gather more information and there's nothing in these reports that would ratchet up the urgency. You know what I mean? Um so that is also significant. The other thing I see in here is that second quarter GDP was revised higher. Um this is the third read I believe on second quarter GDP. They do like four reads of these things. Um 2.2% was the read on second quarter GDP. That's a revision higher from 1 and a half%. It's pretty significant revenue. >> Yeah, that is pretty big. >> Yeah. I mean, so when you look at what the Fed is trying to achieve, which is to cool the economy enough to bring down inflation, that that kind of a number would seem to indicate maybe they made the right choice. >> That's right. Because if you look retroactively at how um much the economy was growing and that that is a feed through to inflation like you know yes of course you have what's going on with energy prices but you also have the underlying economic growth that is spurring inflation >> and if you look back at kind of the year we've had we've had an oil shock an energy shock we've had a rates shock we have not yet really had a growth shock and that data is going to support the idea that the Fed's trying to push forward. We see Kevin Worse trying to push forward as chair of the Fed saying, "Look, we can grow our way out of this. The economy is still running hot. The economy is still doing well. We are not yet worried about culling growth just because we issued one hike. Does two or three hikes change that?" Maybe, but that's to be seen. A lot of this is going to ride though on what starts in just two weeks, which is the next earning season. That's where a lot of the signal we're going to get on how this looks. You also have the fact that like we have weak confidence numbers, right, yesterday very weak. >> Um oil, right, coming back coming back down a little bit but still elevated and people aren't happy about this. We're seeing still seeing reports about diesel uh the administration asking the eur the Europeans to release diesel fuel from their reserves. Like this is still a concern. So the question is you know what how does that enter the mix of the Fed's sort of thinking, right? That's right. >> Well, what we continue to have and this is something that um BCA research pointed out in their morning. Like you still have this issue where people feel terrible. >> Yeah. Right. >> But they're still paying. They're still >> lives are bad, but you're spending money, >> right? Like if you look at these spending numbers that we just got for August with that personal spending up 9/10en of 1%. Um that is strong spending especially given what we got yesterday from the conference board and that consumer confidence. >> Well, I got to say I bought my Thanksgiving me flight over just yesterday. >> Oh, you did? You had your nose and bought it after all? [laughter] I use miles. >> Hey, there we go. Miles, it was too much money. It was too much money. >> This is Austin, right? You were heard you you were talking about in a market hang, I think. That's right. >> Yes. Yes, I was. [laughter] But yeah, I mean, I'm I'm joking about that. But I mean, prices are insane. Things still like air for has not has moderated yet. Uh I'm curious, you know, this is interesting that that that rejiggering of of the PC equation. Uh, I wonder if that then flows down to like does GDP get rejiggered, you know, that how often does that sort of happen that >> I think they're separate. >> Yeah. Two two separate things, right? Right. >> Um, yeah, but they I mean all of this stuff gets looked at periodically. >> All the data flows together. >> Yes. >> The gaming edition is funny because in November you're going to have a big spike in gaming spending. >> That's right. >> You will. But gaming pricing, I mean, it's, you know, I don't know how they adjust when for new games. [laughter] Well, I just saw our producer Dan Nelson out in the newsroom. He's very excited about the the new games. He's like >> out the higher priced uh special editions and things like that, you know, >> boost that >> I do want to come back to your point on the energy shock. We've seen there's some good data out uh kind of taking two sides of this coin. First, Goldman Sachs >> uh estimating that energy and commodity costs could add three to five basis points to monthly core inflation for several months. >> That's not a huge bump, but their point is the data could look worse before it eventually gets better. But there's another side to this coin. BMP Parabah's team, uh, James Egohof and Andrew Husby, the two lead economists there, coming out and saying not only do they see three hikes as the minimum floor for a return to return policy to neutral, but that, and I want to quote here, counterintuitive counterintuitively, excuse me, an end to the Iran conflict could end up meaning more Fed rate hikes. And what they pin that to is that lower oil prices help purchasing power, help confidence, help investment. And so even if the war stops, that's not going to slow down the economy. That's not necessarily going to bring down the investment in the spending. And so their argument is look, policy is too loose regardless of the war. We need to raise it to get back to normal. >> That is very interesting. >> It's a great argument that you don't see a lot of people making. >> There was also, by the way, the argument that Lisa Cook made that um AI isn't only inflationary because of higher memory chip prices, etc. It's also inflationary because of the wealth effect. That's right. >> Because so many people are invested in AI stocks. They feel wealthier. They're spending more as a result of that. Um I also want to note it being the last day of the quarter. I was I was just glancing at some of the numbers for the quarter. And what's extraordinary is that even as the 10-year yield went up almost a half point, a huge move on a relative basis. And you guys know every day we're coming in, we're like, it's the highest since then. It's the highest since a longer period >> 2002 on the 30 year. >> There you go. It keeps getting longer and longer. Even given that the Dow was down a little bit, the S&P 500 down 210 of 1% this month, the NASDAQ up on the month. >> So, it's been pretty extraordinary that even though, as we've been talking about, the vibes aren't great. There's a lot of angst over AI. stocks are doing okay even in the face of all that and in the face of those higher bond yields because the bond yields and we argue about it all the time that the bond yields at least in part seem to reflect higher growth expectations which would also be good for >> the economy is growing you get that in the revised GDP >> I saw I saw a little graph earlier today showing um sort of volatility sort of trickling lower right just not doing anything but then um a spike in credit spreads >> right >> high yield like going bad. This is an indicator of bad things. We've seen so many indicators of bad things and I'm not trying to be a bear here. Seen so many indicators of bad things and the market just keeps chugging along. Right. How much longer can we keep doing this? Right. >> Right. But this long time probably >> I know. Yeah. >> If you ask any strategist >> what's going on, >> they'll give you the same answer kind of across the board. Yes, we have an oil shock. Yes, rates are at decades uh decadesl long highs. Yes, you have all these problems, but earnings have kept being good. Earnings is the engine here. We're going to get the financials starting on October 13th, right? That'll kick off the next cycle. >> And there are expectations that those earnings are going to be good. The problem emerges, especially for a growth shock. If there's any weakness there, >> right? And especially within tech. That's right. >> We're going to talk about micron earnings a little bit later. >> That's right. Talking about tech, >> some big news out of Washington yesterday. >> Was there [laughter] That's debatable. It's debatable whether it's >> We can argue over whe what the word news means in this case, but please >> two different things coming out of the White House yesterday. Um several of tech's biggest leaders were there to meet with President Trump, speaker of the house Mike Johnson. This is Invidious Jensen Wong, Google Sundar Pachai, Elon Musk, Mark Zuckerberg, uh bunch of big figures there to talk together. Daario, Dario, Emma also there, Greg Brockman representing Open AI, >> Amade as I was just corrected. Um, two things. The first maybe less consequential, President Trump deciding to rename artificial intelligence to super intelligence. >> Okay. >> Um, there were polls on truth social. Nothing's going to change here. There's also a very legitimate argument from the tech community that inside the Silicon Valley PhD world, super intelligence is a term already with a defined meaning and it's not the same thing. Sports Illustrated is going to see. >> I was I was literally thinking [laughter] the same thing. SI to me was Sports Illustrated. >> Even I not a sports fan as you all know. Si is Sports Illustrated. Anyway, carry on. >> Apparently, a ton of people have been buying up SI URLs now, which is apparently the country code for it's either Slovakia or Slovenia, [laughter] >> but all of a sudden those country codes are seeing their prices spike. >> More I think set that set that aside and the theater there. The more important thing we got is um a morally binding President Trump calls it accord on kind of frontier safety development. And it's it's worth just kind of pointing out what this uh what this would require. It was signed by again Zuckerberg, Amday, Sunder Pichai, Greg Brockman, Elon Musk, all these Wong all signing this basically a commitment that is morally binding, not legally or legislatively binding to uh for the labs to do such things as robust internal controls. uh empowering internal teams to ensure those controls are in place. >> But also have an auditor internal uh excuse me independent external auditors >> making an independent committee of the board of uh directors for the companies to look at this. >> But here's here's the maybe the the crux of this. >> Over time it may make sense to codify these steps into law or regulation. Right now this lives in the land of and I'm quoting here. We believe each company should. >> Well, okay. So, here's the thing, and here's why I would quibble with it being news. These companies are mostly already doing all this stuff already. This is what um you know, Anthropic already came out and laid out all of this stuff. They said Meter's going to come in and uh observe what we're doing. These like it is an extraordinary situation where these companies are begging the administration and the Congress to regulate them and they're not doing it. And PS, the American public is also begging for this, which is why you get any kind of concession whatsoever from Trump. I mean, the latest I was looking at the latest Quinnipiac poll this morning. 71% of voters say they are more likely to vote for a political candidate who supports stricter guard rails for AI development. Um, eight and 10 voters think safety is more important than staying at the forefront of innovation. 73% of voters say they would oppose the building of an AI data center in their community. But it's also worth pointing out on the government side, most members of Congress are starting to get behind this. Obviously, you see a lot of Democrats coming out very in favor of guardrails on AI. It's increasingly becoming a Republican topic, too, and a bipartisan issue. The push back you get is from the president and from the executive office. >> Yeah. And from David Saxs. >> And from David Sachs, where the two of them have really ran in the opposite direction. to your point this is a bit of a concession maybe uh you know kind of a panacea ahead of the midterms but what's this going to actually mean when to your point the labs are already doing it and it's not binding there's a great quote Bill Gates gave an interview to as recline at the New York Times and there's a great quote from Gates I think really applies here he says in other areas do we just say hey release your drugs there's no FDA there's no airline safety board here there's no requirement that cars use seat belts right there. I understand the argument that Congress has historically been bad at legislating tech, but there's a reason the FAA exists. Nobody would get an airplane if you didn't have uh national coordination, national guardrails, national safety guidelines. Like pros, this is your world. How stringent are the requirements that Boeing has to go under just to get the FAA to approve a plane? >> I mean, it's it can be a monthl long, years long for a plane. Yeah. years, but just even like a slight change to any system potentially could require months and months of training virt pilots have to fly down to simulators and use work on these things whether it's systems or new uh features of the plane. So yeah, it's a it's but it's all regulated. It's all there's a rule book in place. I think the problem here is that the AI stuff is such a moving target that it's so hard to like say here's the rules. Here's how here's how you develop a new super intelligence. [laughter] >> Well, but you can have guard rails, right? So I think what's what's extraordinary is and and to come back to that Bill Gates interview, you now have Jensen Wong giving an interview to Ezra Klein last week, Bill Gates giving an interview this week and the two men who are obviously luminaries in the tech world from an innovation standpoint >> um are at odds with one another, like pretty dramatically at odds with one another. And I was listening to that um Gates interview this morning and I thought it was so interesting. First of all, his primary concern right now is not so-called recursive self-improvement. It's not um AI, you know, coding the next version of itself. Runway problem. >> Correct. His concern is that earlier this year, he says we got to a point with AI where it reached a tipping point when it comes to cyber security and boweapons. >> Yeah, bioeapons. We saw that in the anthropic risk report. >> We're falling into the wrong hands that this could present a real problem. My favorite moment perhaps of the interview I've listened to so far is when Ezra Klein says, "Well, like how did you re like what what was the tipping point for you or in the in the development of AI and Bill Gates says >> when I realized it could code as well as I could?" >> There you go. >> Which I thought was so funny like he's like and I mean it's Bill Gates. He's like I think I'm I'm one of the best coders alive and this thing can match my ability in coding. And like it's so interesting to me that someone as like brilliant, you know, like Bill Gates could like that. That's the thing that it's very personal to him that makes him realize, okay, we better pay attention. >> Apparently, he's not a coder, by the way. [laughter] >> No. >> Well, he says he's a coder. >> Yeah. I also I'm sure he's smart enough to figure that out, but he's like a not he's like one of these founders that's not a not a coder. >> All right. >> Um just saying. >> So maybe that was just him burnishing his legend then. I >> Yeah. Yeah. Yeah. Yeah. But but but but not stick anything what from what you're saying right >> it's he's just afraid of what how powerful the technology is I just want to quickly pivot over here sticking with AI and everything like that you know we had um the big open AI dev day yesterday with all this stuff happening this has been the longest week for AI I cannot even imagine right [laughter] >> so they announced dots their new sort of agent that's taking on Facebook's muse right they say they can accomplish quote nearly anything using their the um the actual agency has its own cloud computer. It has it own web browser. It has connections to 4,000 other apps like Slack and Chat GBT if you want that uh right for for Google Drive. You want that kind of uh connectivity and problem solving. But but but comes on the safe the safety backdrop like we've been talking about, right? Open AI apologizing, right, for the intrusions of its of its systems, a hacks of its agents, right? And then you have Julie, you noted this New York Times story, right? you know, employees, internal employees complaining about AI safety issues and being ignored by management saying, "No, we got to keep pushing forward." So, >> you talk about moral what moral rules >> moral morally binding rules. We're seeing uh people sort of saying, "Forget the morals, forget this. We want the growth." >> Where are we at here? >> So, I want I want to bring up something that I uh spotted on on X of all places, but it's really smart. um an AI safe a safety fellow at Enthropic named uh Josh Carver I want to make sure I get his name right put together a really smart chart uh charting out the the changing rate in how often new models arrive from open AI and enthropic used to be 70 days back in 2024 between new models it is now 11 days and when you think about uh a product that comes out every year or regularly like an iPhone each new iPhone typically is a marginal improvement At this point, the camera's marginally better. The screen's marginally better. Some of the functionality is marginally better. The models are getting more and more frequent in how often they come out. And they're getting bigger and bigger and better. And the differences between them are getting wider. Now you have employees inside Open AI saying we are not taking security right seriously enough. >> Yeah. I mean, right. So the the less time it takes them, the you know, one way like the other thing about Yes. It's incremental. the improvements in the hardware year after year, but like you know it's Apple, so they're they're like >> they take their time, >> you know, perfectionism, whereas in this case probably perfectionism is not necessarily what we can expect. The other thing is that more and more people are using >> That's right. >> um chat GPT, right? They now said that they have 1.2 billion weekly active users. >> These are like the numbers we used to talk about with Facebook, >> right? So there are more Yeah. Well, exactly. >> Weekly active. >> Weekly active users. Now, all of that said, like are DOTs going to be It seems like Muse has the first mover advantage and people are very excited about using um Muse Meta's Muse. It does it doesn't necessarily feel like right now, and this is something Mark Mahaney wrote about, and as we've talked about, he's a big bull. He still thinks um I mean, maybe he's got a bias towards Meta or whatever, but he thinks that that Muse has that advantage here. >> I will say this from an Asian point of view, you know, I'm I'm a more of a heavy Claude user, right? So, I'm not terribly enthus enthusiastic about Muse or uh Dots for that matter, but when when there's an actual new I mean, so Claude has co-orker, right, which is considered their agent, but if I have a real agent that like we see geared more towards consumers, uh I'd be more inclined to try because I'm already kind of locked into that >> that world. You know what I mean? Like I don't want to necessarily train a new agent. >> It's like the Apple ecosystem, >> right? You buy the iPad because you've got the iPhone. No, but it's it's it's more it's more than that because plot has so much like >> it's got your history. >> I mean, you could I guess download that all and put it port it into another one, I suppose. >> But is it going to be as good? >> I don't know if it'll I mean, maybe there's a way to port it from one system to another, but I think there probably it's all so much locked into that. >> Um, one more thing I wanted to mention as we talk about all of this, the new stuff, them raising money, the safety concerns is to come back to the idea of like, but are these good businesses, right? And I was looking um from some um at Silicon Data. There's this firm called Silicon Data and they have a token expenditure index. this token expenditure index which um prices how much people are spending obviously on tokens has fallen quite a bit in August and through August and September and then has kind of moved sideways which again raises the question of okay these guys are coming out with all this new stuff in an attempt to get new revenue um and yes you look at opening eyes's annual run you know >> annual run ratevenue annual revenue rate whichever way you slice it recurring revenue >> but the question is how you know is it commoditized at the end of the day and will there will they be more efficient will people spend less on them and I think that's still an important underlying question if and when these companies go public >> this also plays into the numbers we got from anthropic yesterday >> yes they're making a lot of money yeah >> they're also spending a ton of money and so at what point does that equation get untenable especially once you go to the private market or excuse me to the public market we saw the news that open AI just ran a newly funding round, reportedly 30 billion plus bridge round, valuing the company around a $1.4 trillion pre- money. If you can raise that much money, why go public? And I think that's probably part of Sam's idea, >> right? >> Why actually go public? >> Yeah. >> Um, >> we have time to talk about >> I don't know. I'm trying to get an answer here. Trying to get an T. >> Delta, >> let's do it live. All right. Delta. Let's talk about Delta here. Okay. So, we're talking about Elon Musk, right? Elon Musk big in AI, right? He's also waring with Delta CEO Ed Bashion. Reportedly, reportedly, here's the joke. Best way to contain an AI agent is put them on Delta flight. No Wi-Fi. Can't can go to the internet. >> But yeah, this is >> quick book him again on SNL. >> Right. Right. Right. [laughter] Right. Well, this is in response to reportedly again uh it's Deltio Ed Bastion in a company sort of town hall talking about how you know quote uh it's all true about what they say about him being Elon Musk being like we don't want to be doing business with him he's a you know a tough guy to work with talk about >> right right uh so we've reached out to Delta to get confirmation on that haven't heard back yet but basically kind of goes back to the whole you know they have this war going on but but but if you're a Delta flyer you're not happy about current Wi-Fi service. And I think there's a growing drum beat of them saying just get it done. We want to have Starlink on these flights. United is ramping up big time. A lot of other airlines competitors in in the US are doing that as well. People talk about insane speeds that are more than they can get at home, >> right? And and Delta has, you know, signed something with Amazon's LEO, which apparently isn't even going to be ready until what, 2028? >> Yeah, I think so. 2027 at the earliest. And 28 probably more likely. Uh we're talking two [laughter] one and a half two years of just really look I got to say the the service is poor like it's just it's really >> but is this are people actually changing their plans to fly based >> if you do x.com search you'll see many people like I used but X is not representative of the bigger >> these are people saying that >> that's I mean that's data >> that's also that's also Elon land. Oh, you think you could be juicing those numbers? >> But I don't know about Delta anyway. >> I don't know. I don't know about that. I don't know about that. People are like are upset about this. >> I I being upset and changing and not flying up that airline are two different things. Just like feeling bad and spending less money are two different things. >> Great tieback. >> I'm telling you, there is real people there that are [laughter] changing their flights. >> Okay. >> Because of this is not flying Delta. We're going Delta. >> Yeah, there it is. >> Why? Because I have Miles. That's why. >> All right, we better take it. >> I must leave United. I must leave United. Don't listen to her. I almost >> We'll be right back. >> [music] [music] [music] >> Heat. Heat. [music] [music] [music] >> [music] [music] [music] >> Heat. [music] Heat. Down. [music] [music] Down. How doo [music] [music] Down. [music] >> [music] [music] [music] [music] [music] >> Hey, hey, hey. >> [music] >> Welcome back to the 8:30. That little animation on your screen means it's time for this week's ETF report brought to you by >> um we have been watching chip stocks and we're especially watching chip stocks because u Micron is about to report its uh earnings after the close of trading today. We've seen chips kind of go sideways. They've recovered a lot from where they were um from the declines that we saw over the summer, but they've kind of gone sideways since then. Um, and I know like every time we get one of these companies reporting, we're like everything's riding. The AI trade is riding on this one. >> Make or break moment. >> I don't think that that is true of my I think it's important obviously and because it reports on a different cadence from the rest of the market. It is an important sort of interstitial between the the other um earnings reports. >> What are we looking for for Micron and what could that catalyze for the broader um chip sector? And I I'm I tend to watch the SMH by the way, which is the VANC semiconductor um ETF. So the estimate is for EPS growth of 951% of revenue of to rise that much revenue to rise 355%. And this is the number that always gets me with the chipmakers. You think it's high with Nvidia? Take a look at at at Micron gross margin, the consensus estimate is 86.2%. ridiculous, >> which is extraordinary um for any company, but for chipmakers especially extraordinary. So, those are the big numbers we're going to be looking for. Continued insight into pricing and the runway for pricing. The one other thing I just want to highlight and then I'll let you guys talk. >> Yeah. [laughter] >> Is been two and a half minutes. >> Stock buybacks. Apparently, >> um there are some Chips Act restrictions on stock buybacks. Micron technically would be able to restart buybacks as of December 9th. Analysts aren't necessarily looking for the company to announce that today, but that's something that they are keeping an eye on. >> Yeah, why not throw in a buyback there, right? Um, but just real quick, I want to talk you mentioned the AI trade. Yes. Apparently, there is a there's some specific memory that sits next to these the chips that do a lot of the AI like so the GPU has its own chip uh memory chip system like uh that that's part of that unit and that's very important from a Nvidia chip building point of view for these AI chips. You need to have this specific memory built in next to these ch these to these uh the GPU. So that's why it's very important that's why it's been the runup has been insane, right? Amongst other things, regular memory. Um you mentioned DRAM which is the ETF we're talking about. If you take a look at the ETF, >> that's a different one actually. There's a memory ETF which is DM. There's a more broad semiconductor one which is SMH. There's lots of semi. >> But aren't we doing DM for this segment? >> We can talk about whatever. >> We can talk whatever, right? Well, I want to talk about DRM. Okay. >> We talked about it because it's actually a relatively new ETF that started in April, >> but it's up 120% since then. >> This is the round. They like they've been they've been on it. They've been on it. >> They have a meme ETF, too. They're good at like striking all the irons. >> However, it's been down a lot since June. Hit a hit a recent high in June. has been trailing off a lot, still up a lot as we know. The question is, you know, Ronald, great guys, they they know what they're doing, but like you know, is this a quick trade? Is this a long-term trade? What is micron, right? I mean, the thing is is that it seems unsustainable. 80 you mentioned 80% plus margins. Why? Not because they can char they can charge a lot, but it's more it's a it's a supply constraint. They cannot make enough, and if they could, they would, and that that GM would come down, >> but they're not. And the question is when does the other side of the kind of the foot fall? Shoe drop. Shoe drop. Shoe drop. Yeah. Because this is not sustainable. You cannot be charging this amount of prices for for memory. I mean it's going to be at some point we're not making any as much data standards anymore. >> Well, this is this is where you get the argument. >> You get burned. Right. >> Right. And of how important are they to the AI trade? I think your point's right that the AI trade is not hinging on Micron's results like Micron is not Nvidia. You know, at the same time though, >> the AI trade doesn't even hinge on Nvidia's results at this point. >> But at the same time, if you got a signal from the earnings that there was they were seeing a real slowdown in demand, then that's a wider signal to the market. >> That's not Come on. >> But that's not going to happen. No. And I I let's just keep keep track of where the stock is. As of this morning, it's up 273% year to date. It's up 550% over the past year. Um, also just for people watching the stock today, I think it's interesting to point out, this is from uh the team at Travariat. So over the last 11 prints, Micron has basically split the difference of whether the stock moves up or moves down kind of regardless of what happens. They say about today, and I want to quote, Micron likely needs a huge print to be at least moderately rewarded. >> But that's been the case. Okay, so we're talking about two different things. We're talking about what's the problem. We're talking about how the stock behaves after earnings and we're talking about the fundamental case for the stock. >> I I have been like I've consist. It doesn't matter how the stock moves tomorrow. Doesn't really matter. >> It's fair. >> What matters is the longer term story for the company. >> You know what we're talking about. It is true. >> Yes. Well, he's just talking about how [laughter] the stock moves. He's talking about Okay. If you're an investor, you want to know. You want to know. >> Here's what I would say. Here's what I would say. Pros. Yeah. >> There are 57 buy ratings on this thing. four holds, zero cells. And the bull case is that you have had, and I I'm not saying this is right or wrong. The bull case is that you have had a fundamental rerating and change in these companies businesses because they used to be beholden to short-term moves in memory prices. Now they are signing these long-term agreements for two, three, longer in terms of the years on these contracts. And so that is the argument that's one argument why you have seen these stocks rerate and why they have sustainability. And the other is simply the view amongst many on Wall Street that the data center buildout that the end is not in sight. It's not going anywhere >> that that there is no slowdown at least that they foresee. Now whether that's right or wrong, I think we can debate that. But that is the reason behind the bullishness around the memory trade. And on in addition to that, prices are still going higher. I was just looking at V Arya of Bank of America who's one of the many people who has a a buy rating on this. He looks at average selling prices in the third quarter. He says uh the channel checks from one of their colleagues suggest DRAM products are up 20 to 30% quarter over quarter despite these long-term agreements that are locking them in. ND pricing is up 15%. So, and he says we expect the prices to keep going up in the fourth quarter. So, like that's I mean >> well this gets to your points that if they could build more they would. They're not building more and so pricing really only has one way to go when demand from data centers to your point does not yet look to be slowing down at all. >> So, I will say this Morgan Stanley is talking about how conditions are still very good. They're overweight the stock, right? >> Yeah. But post-report estimate increases may be smaller than in past quarters, right? They can't like keep bumping up guidance. It's how what's realistic here? Well, I guess we'll find out tonight, right? Uh I will say this on the bullish side of things. >> You have memory that's not >> that isn't so let's say let's let's just say so fast, right? So speedy that you can actually use in other applications, i.e. cars, right? >> You don't need the most highest and greatest like DDR5, DDR7 memory. You can get like less or more memory. They can't get enough of that either. Well, and because they've been making less of that, in some cases, they've been caught going back and forth, >> but that's the memory that sort of drives our everyday sort of lives and that's been a every automaker GM cited. I think even Ford talked about it. >> They cannot get enough of this. So, that itself is like a true sort of demand signal of like actual products that need this stuff. They can't get enough of it. So, that's not going away. So, >> you know, and you're saying they're they're they're sort of prioritizing the more expensive memory at the cost of the lower expensive lower memory >> in some cases. Although then Samsung I think most recently said it was swinging back the other way. >> So that all again fuels that bullcase in just the memory sector. >> Yeah, I guess it does. Are you are you going to get a new duo? >> Speaking of so let's talk about let's talk about the duo, right? So I did get a chance to see it uh before it came out and I was quite impressed uh with that. But I want to talk I mean who's the man behind the duo now? It's John Turnis, right? Apple CEO, right? So basically Turnis is reportedly trying to sort of remake the company. Uh his desire is to make it more more nimble, more leaner, uh improve the product cadence or make it faster. Uh this could come with um layoffs and middle management with some of these these these product managers who are who are a big part of the Apple system in terms of getting products out. But uh he wants to do that. You know, look again the the source within Apple who showed me the the duo uh also tells me that Turnis is a product engineer through and through. Very impressive guy. uh knows his stuff from that end. So if anyone can do it, he can. But we're talking about a massive company that has so many moving parts, making cutting edge products. Can you cut that layer of product managers and still be, you know, be the Apple that we see today? >> Who knows? But I mean, but Counterpoint thinks they're going to sell millions of that of the duo. >> Now that that's contingent on the production ramp up, >> my you really want to hear my my take on this one. Basically, [laughter] basically, uh, it's either buying or it's the iPhone 20, which will be the next one. Not the not the 19. It'll go 18 to 20. >> Is 20 supposed to be the all glass phone? >> I don't know what it's going to be, but from what I don't know anything, but I'm saying to myself, I might want that as opposed to paying $2,000 now for a Duo. >> My concern with the Duo is that I'm already kind of addicted to my phone. The Duo is just going to like >> when you have that screen, >> put put a fork in me, it's over kind of thing. There also is something to be said about just kind of form factor that people get used to. >> Was once upon a time everyone had a foldable phone. That was the model. We've all gotten used to kind of the single screen phone. Do you see this? >> We call them We didn't call them foldable though >> because we didn't have an alternative. >> We called them flip phones. >> Flip phones. Flip phones. Showing my age, I suppose. >> But flip like this, not like this. Right. >> Right. [laughter] But my my point is I I am curious to see how much this stops being kind of a novelty product and becomes something people really turn to as the device that they're going to operate their life off dayto day. >> That's that's a good point. But with regards to Turnis, I mean it's not just the foldable phones, right? >> That's right. It's a camera equipped iPods or AirPods, smart glasses, right? Again, the iPhone 20 which the iPhone which uh Horus Du noted is the greatest uh selling product of all time. $2.5 trillion over the past 20 years. I mean, just think just insane numbers, right? Like E has a lot to execute. >> And are these products going to catch on like like the iPhone has for for for our just everyday life, you know? >> It's also worth noting we got another report this morning from Bloomberg's Mark German uh coming out reporting that there is a planned push on October 13th >> for Apple's new uh smart home system, which has kind of been talked about. There were rumors that there were products being developed >> HomePod. Uh it it'd be part of the HomePod ecosystem, but think like a what do you call the Google screen that that's in everybody's kitchen now? Clearly not mine. Um or the Amazon like home. It's like home automation type stuff, >> right? But it's basically a screen you would set on your wall from which you can control a lot of your your your >> an [laughter] like a wall mount. >> People use iPads for that, >> right? >> Yeah. The criticism of the HomePod for a long time was that even though the sound quality, and I say this as an owner, proud owner of a HomePod, the sound quality is unbeatable at the price. It's it sounds amazing, but Siri's not been great. There's not many other products to integrate it with into your home. Whereas, if you're Google, you have the screen plus the speakers plus the cameras. Amazon's the same way. Now, Apple's trying to position this as a new big market for them. Another big push coming right alongside the new phones. I mean I will say I had been you know this all of this talk about Apple AI Apple AI I have been early to say like it doesn't matter if they have their own AI you can just use the other AI on them that view might be changing a little bit with the advent of Muse and Dot and and whatnot. So I wonder um if the pressure is going to increase on Apple to come out with with something. It's also worth saying people have been begging for a better Siri for a long because if you have the HomePod you can use >> I know we need to Okay. All right. >> I use it a lot actually. Siri AI is is pretty incredible in terms of your local device finding stuff. >> But do you know what is terrible still like the new texting? Look this latest iOS. >> Oh yeah. >> Like why doesn't it understand what I'm trying to say? >> You agree with me right? The T9 texting predictive testing was texting is better than it is now. Right. It used to be >> G9 predictive texting was like incredible. It cannot do this. >> What happened? >> This is we're we're super intelligent somewhere. You got to be that's been >> John Turnlet number one. Bullet number one. Fix >> make it work. >> Fix predicted texting. >> And we are not saying this in a bubble. This has been a widely reported thing that it's just gotten worse and they don't seem >> spellch check has gotten a little worse which you would think that's a technology that should be linearly improving. >> I will say this one. Yeah. real quick about Apple. Uh buddy of mine has a golf simulator in his basement. It's all run off of an iPad. No big computer. The iPad handles everything >> and it tracks the balls and everything. >> It just everything's plugged into the iPad. I was amazed by this. This is like kind of the automation thing we're talking about. You can run it all off iPad. So anyway, >> right. >> I'm not advanced enough to do that. >> Well, if you've uh if you've got a golf simulator, maybe you're trading a lot of stocks. [laughter] >> Okay. >> Stay with me. Stay with me. >> Don't win. Yeah. Okay. We should make this as bad as possible. The worst. We should have a competition, I think. Um, >> of course I'm talking about Robin Hood. [laughter] >> All right. Of course. Of course. Sure. Well, it does say Robin Hood behind the >> It gave away they gave away the joke, but um in all seriousness, we got a few pieces of news from Robin Hood over the last um couple of days. >> Really kind of two things. The first is a real kind of big push on agentic trading accounts where you could basically put money into an account that you can then enable an agent to run. >> They had this before, but I think I think this is like a better version of it. >> They had it before >> and it's integrated into the app. Right. >> That's right. It's more integrated. Also, they're opening up access to more people. Um, it's kind of a new upgraded version of it, a new platform. And the idea here is that you can have an agent trade an automated strategy. you know, every time Micron stock goes above X, sell, right? That kind of thing. Um, you can also turn on and off whether you want it to be able to truly trade autonomously or not, >> right? It'll come the default is apparently it comes in and asks you for permission when it makes trades, >> right? That's one side of this. And I want to read a quote. our own David Hollerith, Yahoo Finance, David Hollerith spoke with Robin Hood vice president um Abashek Fiperia yesterday who told him we were like oh if we made this a hundred times easier and more delightful that is agentic trading >> delightful >> you could probably you could probably go from 150,000 people using it to millions again one more piece of news from Robin Hood they're also going to be expanding their after hours trading into the weekends into the overnight markets opening up that and launching perpetual ual futures on cryptocurrency which are basically contracts where there's no end date. They just kind of keep cycling forward. All of this comes of course as Robin Hood has pushed the boundary on trading. I will give my take and then I then I will shut up. There is a reason the SEC has rules around accredited investors or unqualified purchasers. If you want to put money into a hedge fund, you've got to have X millions in net worth or X millions in annual income. And the thinking there is that a lot of these products that are riskier, sketchier are not really that great for the average investor who does not have a sophisticated understanding of the risk they are taking. Part of this new launch are products that can be 10x levered. That means your losses will be levered as well. That is >> those leverage products are available already. >> They're available but Robin >> I know what this changes with >> push into into perpetual futures into the agentic trading. I see the business incentive obviously and this is coming. It's the future. But I do worry about the retail investors who will be caught trying a new thing and then getting really burned by it. >> Especially if you're trading on margin, trading on autonomous trading, you're not really in control of it. How how how bad could it get? I mean, it's you got to you got to you got to set these bad rules in place if you're going to you're going to burn yourself by having to opt into these things. But I think you're just talking about just the overall sort of you know, do we want to have people doing these things? Um especially when you see gambling problems and you see problems with people, >> right? Well, this is the problem with over weekend. Getting destroyed on market at least now the market closes. If we go to 24-hour trading uh or 245 like the Nasdaq is talking about >> people being like drunk trading on the weekends >> 100 a thousand% Julie >> I mean the thing I look at sports betting the thing I would say about agentic trading is like the people who are on Robin Hood who are actively trading aren't they doing it because they like it like in other words are they going to hand it off to an agent? I don't know maybe they will. The other thing I would say is like for some reason I'm more worried about, you know, prediction markets and sports betting than I am about this stuff marketing, but I don't know why. >> Yeah. I mean, yeah, I think I think I think you're right about that. I think with with the with the agentic stuff is how deep could you go in, right? You can't it can't keep trading money you don't have. >> Right. >> It only can trade on money you put in the agentic kind of >> you can only lose what you have. >> But then of course you have to you have to also you have to pay the agent for its use. Right. They've open AI models. other models. It's a it's a $10 per month add-on. U you can get data from uh NASDAQ, unusual whales, etc., and use that to to to sort of fuel your your trading. It's all kind of interesting stuff, but again, I I I questioned who's going to want to be doing this stuff. You know, you mentioned the, you know, isn't it fun to do these things, right? There's people online that are talking about how like I'm having AI do my fantasy football team. What's the point of that? >> Part of the fun is making bad decisions in your fantasy roster. Why why even bother playing if you don't want to play? So, I think I kind of that's where I sit. But also look at all the people on that subreddit um page, Wall Street Bets, where you you go online any day r/wall street bets and you see story upon story upon story of people who thought they had a really good handle on some advanced options trading strategy or on a per future or on whatever else it is or were trading overnight in extended markets and lost a ton of money because these are really complicated products and it's not necessarily on Robin Hood to protect investors. Right. >> I just worry about what this will do, especially when you see all the sports betting. >> I want to add one little wrinkle on a apparently Robin Hood admittedly has not has not looked into whether the agentic trading is better than human trading. >> Love that. Right. Right. Right. >> The robots might be worse. >> We don't know. >> Yeah. And obviously there are hedge funds where their whole game is. >> We don't know. >> What do they know? >> Yeah. >> Do they know? They probably do. >> Jane Street makes billions of dollars a year trading with robots. Not everybody's Jane Street. >> Yeah. >> Just Just buy an index fund. >> Yeah. give me their give me their >> algo. All right. Well, the other option that people will have is whether to buy some new IPOs, but not as many IPOs as perhaps they would have wanted. Um, as we talked about yesterday, Ora became the latest company to delay its IPO to postpone its IPO IPO, but there is another company that is going to begin trading today. Acceleration, I can't get tired of saying Acceleration um which is data center infrastructure. They priced their holding last night. They raised a $540 million, but it was priced below the range um $18 each. They had been marketed at 20 to 24. This is all um according to reporting from Bloomberg. So, we'll see what the demand is for this thing today. But reportedly, one of the issues with Aura was valuation, which is something that Jay Ritter when I tal when I emailed with him yesterday from University of Florida said might be an issue. And another issue is that um it was basically just insiders selling shares instead of issuing new shares to raise capital. >> Right. I also think it's worth sitting on the AI point for a second with accel acceleration. Such a good word. Acceleration, which is, as you point out, >> made up word, [laughter] >> a data center infrastructure company. Um there's a great story in Reuters. Um they interviewed um Matt Kennedy over at Renaissance Capital. Renaissance is the shop that tracks a lot of these IPO stats. Um as Julie takes a sip of water. uh or coffee coffee coffee um Matt Kennedy over Renap he says and I want to quote here AI infrastructure is the dominant theme of the 2026 IPO market but there's no question that market conditions have worsened not long ago IPO investors would line up for almost any AI infrastructure play that's no longer the case >> um I want to quickly add acceleration Julie you like this reminds me of elevation partners >> right yeah yeah >> you know Bono right fine >> whatever are they still around >> I think they're still around, right? Still around. Um, but but back to the whole, you know, 2/3 of the shares are coming from a private equity uh company called Olympus Partners, right, for this for this IPO. >> That's right. >> Is it even an IPO? This is like this is like blank check days. You know what I mean? We're just cashing out. It's like an exit. So, if you're an investor, you're like, why do I want a piece of this? I'm just buying someone else's bag here. Like, >> why am I taking the other side? Right. Yeah. >> And I think that's what we saw with Aura too is that potentially that's a a negative and um and but are we seeing a broader trend, right? The journal story is a broader trend of of sort of we don't want to be getting into new issuance. >> Well, I mean, as we've talked about before, like this year was going to be year >> and SpaceX was kind of it, right? I mean, unless we still get anthropic before the end of the year, which reportedly we still um are expecting that. Not going to get open AI until next year. So, you know, the the sort of black blockbuster year for that is not is not coming to fruition >> or as Dan Ies is calling it temporary volatility, right? Temporary volatility. >> It's not. >> But like take >> not a collapse. >> Take the volatility point like it's worth stepping back and looking at the macro. Taking risk on equities is a much harder sell to make when you're trying to IPO with yields at multi-deade highs with volatility really really coursing up even if the index is still smooth. All of that's going to make it harder to pitch the product to investors and it doesn't help when you have something like Aura where it looks like a lot of the demand uh was either misplaced, might not have been there, was coming from other sources. So I mean so is this an early sign then of tightening financial conditions which is what the Fed is trying to achieve the Fed wants >> is so is this does this show is this sort of a small sign >> that the Fed that they're making progress with you know >> what's funny you have on one side you have >> you have this IPO sort of uh demand waning potentially and you have aic trading [laughter] let's do more trading you know like more worth the stock you know it's it's this push and pull of uh I think we're heading towards more issuance, right? It's going to happen. This is a question, are they going to get the price that they want? And maybe that's what it is. It's just that you're not going to get the price you want. Anthropic two trillion, no 1.5, we take that valuation, >> right? Well, or acceleration case, pricing below the range that they initially wanted. >> We talked about rerating. Maybe we're talking about rerating of of new issuance. I mean, I think that's not necessarily a bad thing. >> That could be. >> We solved it. It's over. >> We solved it. >> We can we can go home early now, right? >> Wait, wait, wait. Before we go, before we go, Ross, I told you I'd squeeze this in. >> Julie, sorry. Sorry. >> This is something to do with sports. >> It is. But we're not talking We're not talking football. We're talking football. >> European football. >> European football. >> Run me run me through the news. Manchester City, their city, their hated rival, uh just basically got caught with a lot of number of financial impropriets here in terms of basically spending a lot of money on players and not necessarily uh um sort of releasing that information properly, disclosing it in the right way. >> Are they publicly traded too? >> No, they're owned by uh is it UAE or No, it's a cutter. >> They're not but they're not owned public. Okay. >> Yeah, they're owned by one of the big Saudi um investment funds, right? Uh not Saudi uh uh east. M East. Yes. Yes. Yes. But basically this is a huge scandal in in Europe. Huge scandal owned by the vice president, deputy prime minister of the UAE. >> Yeah. UAE. Okay. So huge scandal here with you know 900 million I think spent on players and they've been sort of hiding those allegedly hiding some of those transactions to say we're it's fair it's fair play because they have fair play rules, right? Not the case. Kind of a problem. We're following the story. Right. >> You've been found guilty on all charges by the by the the the league. >> Yeah. Football league. Yeah. >> Yeah. The football league. Now the question is because this is kind of such a sweeping indictment of the club. What's the penalty? >> Right. Right. >> Do they can they not trade players and transfer players? Do they get relegated to a lower tier? All of that's going to be a huge question for one of the biggest clubs in the world. >> I don't see relegation happening, but definitely transfers going to probably be knocked uh financial fines, point deductions in the tables like like our good friend Lindsor was talking about. Maybe loss of European championship cup play. That's the big one. And let's bring it home after the World Cup. Soccer for those Americans on the, you know, of us. >> I can't believe we did this. >> Has been getting more and more popular. This is a big story, Julie. We'll be following it. That is all we have for you today [laughter] for the 8:30. Ryan Sazi is kicking off the trading day next on Sazy Unleashed. He is backstage right now taking off the chains. >> She's going to stab us now. >> [music] [music] [music] [music] [music] [music] >> Heat. [music] [music] Heat. [music] >> [music] [music] [music] >> down. Down. [music] Down. Down. [music] [music] Take a Heat. [music] Heat. Heat. [music] [music] [music] [music] Hey, Heat.