Stocks rally as a soft jobs report cools Fed rate hike bets, the Nasdaq nears a record

[music] Hello and welcome to Market Domination. I'm Josh Lipton live from our New York headquarters. [music] There is just an hour to go now until the closing bell and stocks are rising here following [music] that softer than expected September jobs report and Yahoo Finances Enzay has all the very latest. Nez. >> Yeah, that's right Josh. investors expecting perhaps for the Fed to remain steady at their next meeting in October or so. Right now, we're seeing the Dow that's jumping about half of a percent. It's really the NASDAQ with technology that is leading the gains up 1.2% and the S&P 500 also higher as we have seen longdated bonds going lower, easing a bit from those highs that we saw, those 2002 highs that we saw earlier in the week. Taking a look under the hood where we're at with the sectors as I mentioned uh consumer discretionary technology really leading materials also leading the gains today. And over on the NASDAQ percent touching intraday highs earlier today also Apple up more than 1% Alphabet is higher. You've got SpaceX up 7% and Tesla also gaining today. Over on the semiconductor space, Nvidia leading the semiconductors, but the rest of the space is also seeing a bit of a jump when it comes to Broadcom, AMD, ASML, and others. And then just taking a look at where we're at with commodities, we've seen quite a bit of volatility when it comes to oil prices today. We are seeing crude prices lower. So, you've got WTI that's down about 2%, brand crude at around 102 per barrel. Josh. >> All right. Thank you, Nez. Appreciate it. Well, traders pairing back bets for rate hikes after the September jobs report came in short of expectations. KPMG US chief economist Diane Swank joins us now with her take on that report. Diane, it's always great to see you. Let's just dig right into this jobs report. Diane, all right, it's soft 29,000 unemployment rate up a tick, negative revisions. What is your headline from that, Diane? You know, is that just a weak month? Is it evidence of a a more serious slowdown ahead? What were you telling clients? >> So, what we're looking at in this number is I think it's important that one, we lost a lot of jobs in the local uh public sector. So, that was where we lost a lot of jobs. But underlying employment gains, we've lost both supply and demand. And that's why we're seeing the unemployment rates sort of stay the same in what I consider almost a suspended animation kind of labor market. Those people who have a job are clinging on. Those people who don't have a job are having a hard time getting their foot in the door and that's showing up in everything from quit rates to the low wage gains that we've seen. The wages have cooled quite a bit and benefit costs are now biting into those wage gains as well. And even though people don't experience benefits as like a dollar of income, it is actually included as income. And I think that's important as well when we're thinking about this that this is a very hard labor market, harder than it looks on the surface. And we really have this underlying economy that's got resilience in the overall aggregate figures, but that resilience is not resonating with most consumers because we've also had wages for 12 consecutive months fall below the pace of overall inflation. >> Diane, under the hood, which sectors were weakest? So we actually saw a lot of weakness in sectors exposed to AI, finance, insurance, um, information technology, professional business services. All of those sectors shed jobs during the month. So that's where there was some weakness. There was some strength in construction and manufacturing, but none of the gains were huge. And in fact, even the gains in leisure and hospitality and healthcare and social assistance, which had been driving gains for a long time, have really abaded. And part of that's due to the fact that we're losing temporary protected status workers in immigration and many of them work in those sectors. They don't count as the unemployed, but they are losses in jobs. So, we're not adding as many jobs as we normally would in those sectors because of those vacancies. In leisure and hospitality, we're actually seeing some in food services where those workers are lost. some bidding up of wages because native born workers require a higher wage level than foreignb born workers. >> That point you made about uh wages, Diane, as you know, failing to keep up with inflation here for a a full year now. In your opinion, Diane, does that data point go a long way to explaining why a lot of American consumers uh say they feel downbeat about the economy? >> Absolutely. The bottom line is that much like stock returns have compounded over time and given us an enormous mountain of wealth for those people who have it, the top 1% of households own now 50.9% of all equities and mutual funds. The bottom one 50% own less than 1%. So that really is a lot of inequality. And when you're basically waiting on your wages to be able to make ends meet, they just don't go as far. And there was actually a study done by ADP that really hammers it home. By the end of 2020 to the end of 2025, that data showed more than a third of wage earners had lost 16% of their purchasing power. And that was before we got the energy shocks this year. >> Uh Diane, so I'm also curious what you think the Fed makes of this report. I I was reading through your notes, Diane. It sounds like you're saying you think they they they stand pat in October, but you do think they hike again in December. Do I got that right? >> Yes, we've got a December and a January hike and then they're going to hold it at a little higher rates and hopefully just grind inflation down. They don't want to cause a lot of damage more to the labor market at a time when inflation is running around 3%. It will be hotter than that in September because we'll get those higher energy prices coming through and the diesel prices in particular. Unfortunately, we have very little refining capacity globally and so that's going to linger around for a lot longer. And that's what I think unfortunately the Fed is worried about us getting a muscle memory of inflation. We're 5 years in and we've not had price stability. We came close to it, but we've not gotten to it yet. and price stability for the Fed is still not enough for the average consumer because they have to regain the ground that they already lost to inflation. And that takes a long time of wages outpacing inflation rather than where we are today. >> Can I ask you Diane just if wages aren't keeping up with inflation though? Um doesn't that give the Fed some breathing room? Um doesn't that ease pressure to hike? Well, it it's one of the reasons we don't think they're going to hike in October, but it doesn't get rid of the entire inflation problem. Unfortunately, we have a lot of inflation in the health care sector. Those benefit costs I talked about, those are slated to go up even faster in January. The Kaiser Foundation is showing 14% increases in benefit costs in the month of January when they reset. Those those things are not something the Fed can do. They can't pump oil and they can't fix health care costs, but they can hammer other costs to bring down inflation to hold it at a constant level that hopefully doesn't erode so much purchasing power for so many consumers. >> Uh I've heard others say, Diane, that another reason they're going to stand pat in October is they say, "Listen, there is just no way the Fed is going to hike right before an election. That would just put a political bullseye on their back." What do you make of that argument? I think if it's a close call, there's no reason to do it because waiting six weeks is not going to make a difference in terms of the economy. If it was an emergency, there's no question that the Fed would either hike if we had runaway inflation or if we had the other situation. We have seen the Fed move extremely aggressively in the middle of election. We saw it in 2008. That was a horrible period. So there are times when the Fed would move close to an election, but in this case, I think there is no reason to be pushing the Fed to move in October and they can wait it out. They can see how the labor market comes out. But the labor market numbers, if they look weaker, they'll take the December rate hike off the table. But I think there's still one in there. >> Final question, Diane, just about the economy broadly. You know, I'm looking at Atlanta Fed GDP here, 37, though. Then I hear others counter Diane. Well, that they'll argue is really listen that that they'll say is the great AI boom. The rest of the economy they'll say is uh more tepid. What what do you make of that? >> Exactly. True. The problem is you've got this strong AI boom where the costs are landing before the actual productivity gains have scaled to a place where they can ameliate those costs. And that's the problem for the Fed. And the AI boom is accounting for about a third of all growth. Wealth effects as well. It's not just the AI boom. It's wealthy households, more affluent households that are carrying this economy and anything that derails that of course will derail the economy. So it makes us a little more fragile as well when you basically got one stool that you're sort of weighing so much on >> Diane. Always a pleasure to have you on the show. Thank you. >> Thank you. >> Coming up, European countries agree to release diesel reserves and amid rising [music] prices. We'll dive into that next on Market Domination. >> [music] [music] [music] [music] [music] >> Heat. Heat. [music] [music] [music] [music] Heat. Heat. [music] [music] >> [music] [music] >> Downow [music] down. >> [music] >> Down. [music] Wow. Take a look. [music] Down. [music] >> [music] [music] [music] [music] >> Ah, [music] hey. >> [music] [music] >> The September jobs report is adding new pressure heading into the midterms. Unemployment ticking up and the US adding just 29,000 jobs for want to bring out Yahoo Finance Washington correspondent Ben Workllo. Ben Ben, uh, you got us now. We're going to move. We a little technical difficulty there with Ben. We we'll loop back with him. Uh, meanwhile, new Goldman Sachs survey finds roughly four and 10 workers earning more than 300,000 a year say they are living paycheck to paycheck with many also carrying credit card pressure. For more, let's bring in now Y's Carrie Hannon. Carrie, it is hard to imagine why folks making 300,000 are kind of living paycheck to paycheck. What What explains that, Carrie? What is driving that? >> Yeah, you know, Josh, it's baffling, isn't it? You would think that, you know, as your income ticks up, you have more financial security. And you know, the study showed that people who made less than 100,000 definitely were living paycheck to paycheck. And you can get that that they, you know, they really struggle to save. even especially under 50,000. But when you're over 300,000, the logic seems to be this. As best I can tell, Josh, it's that you know that when you get to that stage, when you're making that kind of money, that your lifestyle also creeps up with it and there's this pressure and it maybe it's psychological in many ways to continue to maintain that lofty lifestyle. And so people, you know, get themselves in a bit of a bind. are making a fair amount of money, but they're spending a fair amount of money, too, to keep up that lifestyle. So, I think that's what's happening. And the experts I talked to from Goldman said the same thing that this seems to be what is behind that sort of rather shocking number, but it's a U-shape, though. Those who make somewhere between 100 and 300, they think everything's hunky dory. Like, they're fine. They get it. They're living within their means. They're they're not paying living paycheck to paycheck. But it's at this next level that it seems to shift >> and this financial, you know, just sort of insecurity uh we're talking about uh playing out in other areas too, Carrie. >> Yeah, Josh, I think the one piece you alluded to at the beginning was credit cards, right? So, people who make, you know, less than 50,000 often are just paying the minimum payment on their credit card. Okay, we can kind of understand that. I certainly can. But when you're at this level, they are also paying the minimum at 300,000 up. They're also paying minimum payments on their credit cards. It's like, where does that come from? Again, it's just they're just trying to keep, you know, dancing as fast as they can. Is as best I can tell. But again, it's it's really an alarming uh statistic for someone who's making that kind of money to be living and carrying that kind of debt from revolving interest on credit cards. What were some other findings from this survey that just, you know, popped out to you, Carrie, as you reported it? >> Yeah, thanks. The thing about this Goldman survey is it's an annual one. So, they really cover a lot of ground and I find it particularly interesting some of the details. Um, overall what they found is because of rising costs in the last year, um, you know, from July 20, you know, 2026 to now, uh, throughout 2026, I'm sorry, that they have, um, the rising costs have kept, you know, people are cutting down. They used to a lot of people would bump up how much they would put in their retirement accounts their contribution each year for the you know this is the biggest drop in six years of people who are increasing their contribution. So people are are tamping down on on saving for retirement. Um another big finding which which is very interesting is a huge amount of people are taking second jobs. They're taking side hustles because, you know, they can't seem to I think it's the statistic in this report says eight and 10 Gen Xers say their primary income is just not enough to meet their expenses. So, they're they're adding a side hustle in order to make ends meet. So, we're seeing that throughout the different uh income levels. in fact in the in the study that a lot of people are taking on this uh a second job in order to keep pace with all the uh affordability questions we all are facing and and I think that that's sort of um interesting because of things are non-negotiable right if you're paying your utility bill and all of those things saving for retirement comes last in a lot of things because you've got to pay these each month so that's really eroding people's ability to save for retirement um another finding that this uh is pretty interesting, but it's consistent across a lot of studies is people who take the time to actually do a retirement plan uh projection with a financial advisor uh tend to do better. They they are adding more to the retirement accounts, they feel more financially uh comfortable. So, if people can just take that action, it really does seem to pay off. And finally, they found that in terms of investing for for the retirement accounts, uh this year, people are definitely skewing more conservative right now and moving out of equities to some extent, which is totally understandable given how robust markets have been of late, but um it is a little dangerous for someone nearing retirement or in retirement because with longer lifespans, you really need to stay invested in equity. So that needs to be kind of a delicate dance. >> Carrie, great stuff. as always. Thank you. >> Thank you. >> Well, the September jobs report is adding new pressure heading into the midterms. Unemployment ticking up and the US adding just 29,000 jobs. For more, let's bring out Yahoo Finance Washington correspondent Ben Worko. Ben, what do you think? >> Yeah, Josh. So, we are definitely kind of in the closing phase of the campaign season. It's often called the closing argument. And these numbers they clearly are not going to be helpful for President Trump and for Republicans as they try to fight they try to make an already uphill economic argument to voters who are who are quite skeptical. This is the last jobs report we'll see before election day. The the jobs numbers as we've covered have been lower than expected but also showed cooling wage growth. And that second figure I think is the is going to be the one of the more politically salient ones. It's definitely one that Democrats have have zeroed in on quickly because what that showed is that Americans wages have grown about 3% over the last year while inflation has grown 3.4% meaning Americans purchasing power even if they have a job is declining here. Um that that's a challenging argument to make. That's a that gets right at a lot of Americans economic anxiety right now. And the response from Republicans today has been to try to explain these numbers which is already always a difficult position to be in 30 days before election. White House economic adviser Kevin Hasset was on TV talking with the reporters today talking about revisions, talking about government payrolls versus private payrolls, all these these nuanced issues that are important, but it's just a difficult thing to break through to voters with with the reaction less than a month away way right now. Um, it's just it's what for the Democrat's part, they're focusing on this wage growth issue and banking on the idea that President Trump's overall ratings on the economy, which are between 30 or 40 or 50 points underwater, historically low for this time in an election season, will be what helps them. And then these numbers today are clearly going to help the Democratic side as Trump and his team try to explain why the economy is their is their version of it as opposed to what a lot of Americans are feeling and what some of this data is showing. And Ben, before let you go, I know you got another story out. G7 leaders uh plan to release a lot of oil and diesel. What can you tell us about that? >> Yeah, this is a move on diesel we've been waiting for all week, and the G7 made it official this morning. What the plan here is to release 100 million barrels of both oil and diesel over the next four months from these G7 countries. Diesel has been the focus in in recent weeks as it's reached all-time highs, even though it's bounced down a little bit in recent days. Um, and this is also a significant move because it appears to take export bans off the table. The White House has been commenting, but this is a statement from G7 leaders of which the US is a member and talks about reaffirming quote our commitment to refrain from export restrictions and other language like that. This is comes as Trump has complete has repeatedly floated an export ban, but also the message to Europe has been you need to release more diesel or or this ban will be kind of our plan B here. So it does seem to take this export ban idea off the table which economists have warned could have real wide wide ranging ripples and economic consequences both in the short and long term if Trump moved forward with that. Remains to be seen how much this 100 million barrel release does ease oil prices oil prices but diesel prices are down a little bit although Americans are still feeling the pinch. A lot of details still to be figured out about this release country by country, the ratio of oil to diesel, but it it should sort of push some downward pressure on diesel prices for the next few weeks at least, partly because there is a front-loaded um push in the next 20 days to release as much diesel as possible. >> Ben, great reporting. Thank you, sir. Finances Jennifer Shawnberger caught up with Council of Economic Advisors Chairman Christopher Failen following this morning's softer than expected September jobs report. Here's what he had to say. We saw some volatility in the jobs data this morning. Payrolls came in a bit weaker, the unemployment rate ticking up as more people joining the job force. There had been hopes that the job market was picking up. We could break out of this so-called low hire low fire environment. What is the prospect that that could still happen? We could see sizable job gains or does the existing trend prevail? >> Right now the job gains actually were pretty good. This is a very volatile series. It b it bounces around like crazy. Uh it was revised to 133,000 jobs gained last month, 29,000 gained this month. But my organization, the Council of Economic Adviserss, calculates that we need to add about 40,000 jobs a month to keep the unemployment rate at about where it is. That is basically we've been adding about 65,000 jobs a month in 2026. So 29,000 is not much less than 40,000. And by the way, the unemployment rate really didn't tick up. It went from 4.14 and something to 4.17 and something. And when you round that goes 4.1 to 4.2, but it basically changed hardly at all. >> Do you think we can break out of the monthly trend though that we've been seeing or because of immigration that sort of tamps down on things and how does AI factor into that outlook? >> Well, I think the job market is going well. The the 4.1% is essentially or 4.2% 2% or halfway in between is what we would consider to be a good job market. >> Yeah. >> Uh good news. The reason that it went up the the tiny bit you mentioned was because of increases in the labor force participation rate. People are saying I want to get into this market. And believe it or not, if somebody out of the job market starts looking, by the time that they decide to start looking and actually get a job, even if it's two weeks, they're unemployed. they're counted as unemployed for those two weeks. So, it matters. I think it's good that people are saying that labor force participation is they want to participate in this job market. Regarding AI, AI shows up everywhere but the unemployment data. Uh it's not the case that everyone, you know, that it's different this time and it's going to replace everybody hasn't shown up yet. Companies that use AI are in fact hiring more people than companies that don't. You don't think AI is impacting the job market right now? >> Well, everything impacts everything, I I would say, but I don't think it's the case that we're seeing AI as fundamentally different than things we had in the past. I mean, we've had automation before and that's why we have the standard of living that we have. Uh we don't need to have 80% of the people working on the farms because of automation on the farms. To your point, through all the tech revolutions that we've been experienced in this country, we've always seen that there's a certain amount of jobs that become obsolete and then there's a new class of jobs that are created and you need to acquire new skills perhaps to meet that new job demand. There is been some talk about white collar job decimation, other convulsions that may be seen in the short term as AI makes its way into the job market. I wonder is the White House, the administration working on any contingency plans if we were to see a mass amount of jobs go away, skill sets, new skill sets that would be required in that case to retrain people. right now. I think it's the the the White House's focus, I believe correctly, >> is that when they have a new technology, this is one of many we've had in the past, that the leader in that technology be us, the United States of America, and not another country that maybe is not friendly. Uh that is, I think, the singular focus and it should be the singular focus. Regarding the job market, again, I don't see it as being the case that at least in anything that we've seen so far that AI is fundamentally different from what we've seen in the past. And again, what we've seen in the past is there used to be entire rooms of people that would connect one phone call to the other. That wasn't even replaced by computers. That was replaced by electrical machines. uh ATMs >> the you don't need as many bank tellers because of ATMs but that it's I hate to put it this way but that's kind of the history of the world >> is technology comes in and lets you do more with less freeing up people to do other things and that's why we have the standard of living that we do >> we're seeing a massive capex um AI boom right now and a lot of economists that I have spoken with have said there are two phases to this tech revolution. The first is inflationary where you're building out all the infrastructure and then the second phase productivity increases. Do you subscribe to that and if so where do you think we are in the phases of that cycle? >> I don't subscribe to the first part. Building out your economy is not inflationary. Uh we are but you're absolutely correct. We're seeing a massive investment boom. Uh I can't get you the exact statistic. I think it's something like the top, you know, investment by the top 1,000 companies, but it's on course to be about double in 2026 what it was in 2024. Not quite double, but getting there. Uh, that's huge. The we're seeing a buildout in investment by American companies, not just in AI, but in all sorts of things. uh manufacturing is up across metals, across cars, across trucks, across airplanes. It's really important that the United States make stuff for national security reasons. >> And during the course of this administration, it's only been about a year and a half, >> it's really starting to happen. It shows up in the statistics, shows up in the anecdotes. It's real. >> What about your outlook for productivity and how are you modeling that out? when do you expect that to really pick up from AI specifically? >> I always go with the Yogi Baraism that the future, you know, it's hard to predict especially about the future. Um, companies wouldn't be doing this kind of investment if they themselves didn't expect a payoff from it, uh, a productivity payoff from it. and the investments are huge and they're probably better situated to make that call about whether or not we're going to expect productivity increases uh than I am. People putting their money where their mouth is uh expect this and are making massive investments uh because they expect those investments to pay off. >> You have said that you thought it would be a mistake for the Federal Reserve to raise rates. I want to put to you what Bill Aman said earlier this week. He said that he's dubious that higher rates will reduce demand and investment because the demand for intelligence and energy is not affected by higher rates because winning the race for AI has a near infinite ROI and the demand for compute will remain incalculable. I'm curious how that fits in with your view. >> My view is a little bit simpler than that, much simpler, which is I said right before they raised rates that it would be a mistake to raise rates. I said right after they raised rates that it was a mistake to raise rates. And my view was simply keep your eye on the ball which chairman wars in his Jackson Hole speech said what is the ball? The ball is inflation. We want to get inflation down. Inflation the reason I thought that they shouldn't have raised rates and I still think it was a mistake was inflation has been coming down. The PCE their preferred measure just came out on Wednesday I believe. And over the last 3 months, just the 3-month a you know, I don't like to look monthtomonth, but if you just look over the 3 months and average and then look at an annual rate, core PCE came in at 2%. And headline, which includes food and energy, came in at 1%. So we are already making progress on inflation. It is coming down uh before they took any action. So that like I said, I don't look at things as complicated as as Mr. Aman. >> The Fed's pencled in one more rate hike. What happens if they do another rate hike to the economy? >> I don't think Mark I think today's job market data >> uh and a speech by the vice chairman. I think the markets now no longer expect another rate hike. >> Chris, we'll leave this conversation there. Thank you so much for your insight. So appreciate it. >> Thank you. Coming up, we're dive into some potential winners [music] amid the AI buildout. That's next on Market Domination. [music] [music] [music] Heat. Heat. [music] [music] >> [music] [music] [music] [music] [music] [music] [music] >> Adamos [music] AI demand is booming, but the cost of building out the infrastructure behind it is raising new questions about where the real investment opportunities are. For more, we want to bring out Ava ERS Shares COO and chief investment strategist. Ava, always good to see you. Let's start here. Ava, this is an interesting point you make. You say AI demand it's booming. It's booming. You say that's the good news, but flip side of the coin, Ava. You say the economics remain challenging. What do you mean by that? Explain that for us. >> Yes. It's counterintuitive, but it's no longer AI is no longer anymore about demand. Now it's about financing. And we're seeing issues through our work for Xov, which owns private equity in it, VTF. um we see uh we have exposure to the secondary market and we are seeing cracks in the valuations of companies like open AI and anthropic and the reason is that there's a big mismatch of these companies having long-term commitments u when it comes to infrastructure investment and compute but only short-term commitments from their customers and for example Enthropic has um has 500 billion that's half a trillion of commitments when it comes to long-term commitments in infrastructure and compute over the next few years, but only a handful of the large customers that account for most of the revenue uh have um um signed for long-term contracts. So, there's a big mismatch here which concerns us when when it comes to these companies, the big LLMs, OpenAI, Anthropic, and other companies like this. And you argue Ava there are in fact historical parallels you say here to the telecom buildout 25 years ago. Walk me through that. >> Yes. Um so we see a big parallel. It's not a bubble. So it's not we do not suggest that this is a bubble but um back in 99 uh internet was real. It was very real but the the investors and PE money and capital was changing. There was actually an irrational exuberance that's the right term chasing the telecom industry but their expectations were never to be met because if their expectations were met that would be a disproportionate amount of the global GDP. The same thing is happening today. AI is real is here to stay. But all this PE money all all this capital has so high expectations that if we put all these numbers together the growth expectations the earnings expectations uh the capital that's being invested in infrastructure and compute if we put this all together it's an a disproportionate amount of the global GDP which means that it it will never be achieved. So Ava, are you suggesting kind of big picture, let's say uh when Anthropic makes its public debut, which reports suggest could actually be, you know, sooner rather than later, you would be skeptical about committing capital there? >> Yes. Um and we we we invest right now, as you know, we have um we bought SpaceX before it IPO for the Exov ETF. We were the first to do this and we get offers every other day when it comes to Enthropic and OpenAI. the $1 billion block came out yesterday. It's evident that big shops are dumping it because they're concerned about their valuation and competition from China etc. Uh we would not recommend touching it preipo at these levels or at the day close to the IPO. We we do not expect um these um this to be a right investment at this point in time. It's a better we call it winning the losers game. You can be in the same area the AI play but not investing in what we deem uh companies that have unsustainable business models like open and anthropic which are companies that have a revolutionary technology but having a revolutionary technology does not necessarily mean revolutionary returns and we've seen this within.com era uh with companies like Lucen technology uh and Cisco that back then they were the uh top five market cap they were the top five market cap and then they plummeted. So, uh we need to be careful. It's m it's a much a much better play to invest in the infrastructure, the memory, the connectivity companies, the companies that that that uh support these big AI LLMs. One counterpoint Ava uh I just get your take on would be you know OpenAI and and Anthropic you know some of their investors supporters Ava are are that those are big tech names and these are some of the you as you well know the biggest most powerful profitable companies on the planet won't the big tech names the supporters right won't they just keep financing the buildout >> um so the capital at some point will we believe will dry out because It's just unsustainable. It requires so much capital and there's such a big mismatch when it comes to these companies um of their long-term commitments and the rate with which they're generating revenue. For example, anthropic for every $1 they make in revenue, they spend 1.6 re uh dollars in uh compute and infrastructure. So, this is a very unsustainable. they they say they want to slow down because of humanity and um security issues. We are also thinking that's probably not the only reason. The main reason might be it's going so fast that they cannot find finance this huge gap between the rate with which they generate cash and their uh long-term obligations. >> Ava, you mentioned uh opportunities you find more attractive. You mentioned memory specifically. Are you talking about Micron there, Ava? >> Yes. Um I I love Micron. It's a great company, great technology with HBM4. Uh they're growing by 350% a year. That's a one of the biggest numbers when it comes to growth rate that we've seen uh throughout these companies that we analyze. 350% per year and um and and as a result, they've grown their gross margin from 35% to 87%. So it has great fundamentals, great technology, we see the the the demand for memory, high bandwidth memory increasing because as AI skills, there's more and more need for memory. So uh we we see this as a winner long term and it's the big and shovels game and we think that's one of the winners that um we we really like. >> Ava, as always, great to see you. Thank you. >> Great to see you. Thank you. Coming up, I speak to an entrepreneur whose company is using AI to disrupt the tax [music] services industry. That's next on Market Domination. [music] >> [music] [music] [music] [music] [music] [music] [music] [music] [music] >> Down. [music] Heat. >> [music] >> Heat. Heat. [music] >> [music] >> Down. [music] Down. >> [music] >> Down. [music] Heat. [music] Heat. Heat. [music] [music] >> [music] >> Hey, [music] hey, hey. >> [music] [music] [music] >> AI tax platform Numemeral just raised $100 million in its series C funding round as it looks to expand and accelerate its product development. Join me now on is numeral co-founder and CEO Sam Ross. Sam, it is good to see you. Start with that news, Sam. Uh raised $und00 million. Maybe for viewers who aren't uh familiar, Sam, just explain a bit about the company, the mission, the history, the problem you're solving for, Sam, and and what you're going to do with this new funding. >> Great. Yes. So, Numeral helps businesses primarily e-commerce, but also software businesses as well, uh with sales tax compliance. And the background of the business is I've had been running a number of e-commerce businesses which meant I had to in the U sales tax is handled by states. So you end up having to file [snorts] in 50 plus states which is is quite complex. And so we leverage AI to make it easy for businesses to go and file in all 50 states. We started the business three and a half years ago and now working with 3,000 plus clients and growing really fast. And so, yeah, recently raised $100 million led by Insight Partners and yeah, excited to continue the growth. >> And what will you do that with that $100 million, Sam? How you going to put that to work? >> Yeah. So, the world there's, you know, there's big shifts right now um obviously in the services economy and we're seeing AI being used more and more in the world of tax. And so as we continue to work with larger, more complex businesses, there's more and more opportunities for us to translate what people are doing today by hand and actually build different um AI services u large, you know, largely different types of agents to go and automate workflows. So a lot most of the spend is really kind of on the R&D side for hiring large engineering team. >> Sam, let's give a people a hard example. Let's say I'm a viewer right now. I'm watching this. You know, maybe I I run a a company, Sam, my own business. I sell products, you know, across the country. Give me give me some real concrete examples what exactly you'd be doing for me. >> Yeah, good question. So, a real example is my business that I own, which I own a, you know, a vitamin gummy company and it used to be when I would go and sell my gummies online, if I, you know, I was based in I'm based in California. If I ship in California, I have to collect, you know, if I ship it at Los Angeles, Los Angeles sales tax and then remit it at the end of the month. And it used to be if I shipped to say New York, uh it was taxexempt. Uh but um there was a big Supreme Court ruling at the end of 2018 which made it so now every time I ship to any state, you know, any city or state, I have to get the right tax rate in all there's 13,000 different tax jurisdictions in the US. So as a small business to figure out how do I collect the right rates for for every city and then at the same time as well go and do ongoing filings in 50 different states it's quite complex because you know again US this federal system it's not handled at all by the federal government and it just makes it very hard to go and work with all these individual states >> and and Sam obviously I mean businesses have been using tax software for a a long time what does the AI do Sam that that makes it so much more efficient effective productive. >> Yeah, good question. So, you know, there's AI throughout the product. I would say a simple example would be, you know, one thing I really hated when I was filing in again 40 plus states is I would get physical mail uh every month from almost every single state. So, you get this pile of mail, you get, you know, any nobody likes a tax notice from a government agency and I'd have to go figure out what to do with it, you know, call be on the phone with Department of Revenue Alabama. Big frustration. today. Now with AI, we scan all of the mail that our clients get. AI reads it, figures out what, you know, it looks at all my tax records, figures out what the if there's an issue, what the issue is. Um, and so again, you end up the experiences feel I think where the type of business you're able to build today feels much more like a service-like experience than in the past where I'm just handing somebody a tool. >> What What if numero makes a mistake, Sam? What if the AI makes a mistake? like who ultimately you know is accountable for that who pays the penalty? >> Great, great question. So, uh, New Roll offers a guarantee a very large guarantee for our clients. So, if there is a mistake or there's a late filing, we cover those penalties. Um, and so ultimately, you know, there is almost like an insurance product built into the pro uh into our into our offering that we we do have a guarantee with the AI. I I would say again there's still humans in the loop throughout our our systems and you know a lot of this the logic that's still done for tax calculation is still deterministic. Um and so we do have a lot of different safety valves uh you know to make sure that there are there's no like no hallucinations or anything like that. A lot of these you know there's been a lot of engineering techniques developed in the last year or so to really um you know make these things very reliable. And I know you're private, Sam, but can can you give us any line of sight in in terms of how strong business is right now, like paying customers and revenue growth? >> Yeah, so we've more than tripled over the last year. As I said, we have just a hair under 4,000 customers. Um, yeah. >> Who are your customers, Sam? >> Yes, good question. So we work with all sorts of businesses you know uh on the e-commerce side work with brands like eight sleep mattress or uh Graza olive oil um we al work with software businesses companies like superbase fast you know fast growing AI infrastructure as well as you know businesses like bre uh big credit card process um company and so we have a diversity of businesses more and more we're also working with you know businesses in traditional industries as well who also have uh complex tax needs. >> Final question, Sam. I'm just curious. I mean, I I would imagine there are other companies, Sam, offering a service like yours or something similar. I'm just wondering what what's the competitive advantage, the mode, like why why is the customer choose you all? >> Yeah, good question. I think again being able to build in an AI era means uh you know there's been these historical businesses that have you know tax technology as you mentioned that have been around for years and without AI really what you end up delivering is just a tool but a lot of the onus on your compliance needs ends up being falling on your team and uh because we're able to process documents and handle a lot of this it ends up the experience ends up again it feels more like you're working with an you an accounting firm or something like that rather than just trying to have some clunky tool that's hard to implement. You often the traditional tools you often have to go and hire thirdparty implementation vendors things like this. Uh whereas today with with you're hiring someone like numeral you can uh it's it's one vendor to to handle the whole problem. >> Sam, great to have you on the show today. Thanks for your time. >> Thank you. >> Coming up, we got you covered for the closing bill on Wall Street. Don't go anywhere. Heat. Heat. [music] [music] [music] [music] >> [music] [music] >> Heat. Heat. [music] >> [music] [music] [music] [music] [music] [music] [music] >> Heat. Heat. [music] >> [music] >> Heat. Heat. [music] Down. [music] Down. Down. [music] [music] Heat. Heat. [music] Heat. Heat. [music] [music] [music] [music] >> [music] [music] [music] [music] [music] [music] [music] [music] >> Stocks in a day higher here as traders pair rate hike bets. Yo finds us in Nez Fere has the very latest. Nez >> and Josh. We're seeing green across the board when it comes to the major averages and where they ended today with the NASDAQ gaining the most 1.2% just shy of a record high for the NASDAQ. It did hit an intraday record high throughout the session but ending just below its record close. Also the S&P 500 up about 7/10en of a percent and the Dow also higher. Now for the week, I'm going to pull up a five-day chart so you can see some losses for the Dow for the week. the NASDAQ notching some wins for the week, 4/10en of a percent higher for the week. And then the S&P 500 also in red territory over the past five days. If we take a look at the 10-year Treasury, we've been watching those longdated bonds. You saw those bond yields going lower, easing a bit this morning after that weaker than expected jobs report. Well, then they climbed a bit. So, it's it was a bit of a volatile session uh for uh bonds, but nevertheless easing from its 2002 highs for the 10-year yield. Over on the sector map, we're seeing that technology was really the leader throughout the day along with consumer discretionary. That's really big cap uh stocks that were higher today. If we look at the NASDAQ 100, there you see where the action really was. You're looking at Nvidia, which by the way hit an intraday high throughout the day. Nvidia up more than 1.3%. And then Apple also higher. You've got SpaceX that's up 7%, Amazon, Microsoft. So really the MAG 7, Tesla 5%, really leading the gains today. Over on the semiconductor map, you'll see that we saw quite a bit of a pop for some of the semiconductors there. And then just noting crypto because we've been watching Bitcoin. Bitcoin has been hovering around now 84,000. Earlier this session today, earlier this morning, you saw Bitcoin topping 86,000 after that week jobs report. By the way, seasonally, October tends to be on the side of Bitcoin tends to lean bullish for uh crypto in general. So, we'll see. But then just taking a look at commodities, we saw also some volatility when it came to oil prices today because this morning you had seen Brent going below $100 a barrel around 99 and now jumping back up to 102 a barrel. Josh. >> All right, thank you Anz. For more on the market's reaction to the latest jobs report, we have Brian Jacobson, Annex Wealth Management chief economist and strategist. Brian, it's good to see. We'll start right there with that jobs report. Uh, Brian, you call it a dud. What What do you mean by that, Brian? >> Yeah, I don't know if you've ever uh, you know, kind of bounced a ball and it just kind of lands flat, right? I think that's kind of what happened with these job numbers. If you just look at a chart, we had a negative number in July, a big bounce in August, and then kind of nothing. Uh, when it comes to the September number, the plus 29,000. Thankfully, and I don't know if I really should say thankfully, but we do have a situation where because of demographics, immigration reform, it doesn't take a lot at all to keep the unemployment rate from moving too much higher. So, you could get this plus 29,000 number and actually have the unemployment rate effectively unchanged. You know, went up to 4.2% from 4.1%. But part of that is because the unemployment rate comes from a survey of households, non-farm payroll numbers, comes from a survey of employers. So different surveys there. But uh really it does look like we had that drop in July, a decent bounce, but the bounce didn't have a lot of followthrough. >> And you note Ryan that job growth becoming less widespread across industries. How uh how narrow has hiring become? Yeah. So, one of the interesting things in the report is if you go to the Bureau of Labor Statistics, their website, and you scroll to the bottom of the release, they have all these different tables. And one of them, you can actually look at the diffusion index. So, it's just looking at uh if it's 50 or higher, that means that a majority of industries are expanding uh their hiring. If it's below 50, it means a majority are contracting. Well, it was below 50 and uh that was unfortunate to see because we did have it where kind of from the end of 2023 through just about Decemberish it was becoming more positive. We were getting better breadth with job creation. Now all of a sudden it took a big step backwards. Most of that is because a lot of the gains were once again in health care and social assistance. That's been the story is that aging demographic, lots of hiring for, you know, CNAs, uh, uh, for, you know, people who are in hospitals, nurses, nursing homes, and the such, and not a lot of hiring in other parts of the economy, unfortunately. >> In terms of what the Fed makes of this, Brian, you think the Fed pauses in October? Now, I've heard some push back on that, Brian, because they say, listen, you know, Fed's made it clear, uh, they want to get back that 2% target. It's a target. It's they've been above it for way too long, more than five years. They're hiking. What do you say to that? >> Yeah, I don't think they're going to try to make up for lost time. Right. So, I agree. They want to get to the target, but they don't have to get there right away. And if you think about um how that would actually be incredibly difficult because what the Fed does by changing that overnight interest rate, they're trying to affect the demand side of the economy and what's going on is more the supply side. So it I don't think they can crush housing anymore or that they can do more damage to autos and to the more interest rate sensitive parts of the economy to bring demand back into line with supply. So if they want to try to get there right away, they just can't do it. They don't have enough tools and I don't really think they really want to impose that type of damage on the economy that would be required to get to 2% that quickly. So, I think that they recognize most of what's going on is a supply side issue that they can't really do much about. They can try to stop the spread of the shock, but really it's now more about kind of doing the damage control as opposed to actually doing the reconstruction of the uh edifice of inflation. You did in your notes, Brian, you said you expected action to bring down energy prices. And then right on Q, we saw that headline, G7 and its partners set to release oil and diesel reserves. Um, I'm just curious what you made that headline, Brian. And would you expect such action to bring, you know, lasting relief? I I don't think it'll be lasting relief, right? because it takes a long time to rebuild the destroyed infrastructure, the refinery capacity in the Middle East and also in Russia uh or if we want to build new capacity here in the United States. So, anything that we do right now is going to be more of a band-aid in but it was nice to see that there was this concerted effort. Maybe it's took a little bit of a few threats from President Trump to say, "Hey, we'll ban exports of diesel um if Germany doesn't release some of their reserves." Right? I think that's effectively what happened and it is likely going to help give a little relief but not longlasting relief. The long lasting relief is really just going to be a matter of trying to over time get the capacity back online. Maybe there's more that can be done in terms of the investment in the Middle East a little bit more so than what you can see in Russia just because of the extent of the damage that's been done. Um but you know if we do get uh oil prices lower uh I would not be surprised if we go through say the next week and we do see some action um between President Trump as it relates to Iran. Now whether that's what we call kinetic kind of euphemistically or if it's actually a negotiated settlement of some sort but the deadline for the election is coming and I think that there's a strong political incentive to try to get some sort of agreement or get oil prices at least in the United States West Texas Intermediate staying below $90 per barrel. Finally, Brian, just in terms of where you see investment opportunity, uh you're buying beaten down areas of the market. Bottom fishing, you say? Uh like what, Brian? >> Yeah. So, some of the areas I really like are just think about it from a very broad perspective. Think equal weight instead of market cap weight tends to give you more small cap and midcap exposure. Those areas that haven't really run up quite as much as other areas. But from an industry perspective, homebuilders, I think that um you know, people have left them for dead for the most part because of how high interest rates are. So is there a lot of negativity that's already priced into there? So having exposure to home builders, also now banks, we've seen them uh over the last month, they were down more than 6%. A lot of that is because of compressed interest rate, net interest margin, less deal flow activity. When you get more market volatility, you tend to not have as many IPOs. We've seen some of those pulled. But if the Fed is on pause and we do get some sort of relief at the pump, I think that it's a strong argument for both banks and then also for homebuilders to uh really shine for the balance of the year here. >> Brian, great to have you on the show today. Enjoy the weekend. >> Thank you. You too. >> Coming up, Dirty Jobs host Mike Row [music] discusses that skilled worker shortage. That's next on Market Domination Overtime. >> [music] [music] [music] [music] [music] [music] [music] [music] >> Heat. [music] [music] Heat. Heat. [music] [music] [music] Heat. >> [music] [music] >> Heat. Heat. >> [music] [music] >> Down. [music] [music] >> [music] >> Down. [music] Ah. >> [music] [music] [music] [music] [music] [music] [music] >> Shortage in skilled labor workers could soon weigh on the AI buildout. The finance executive editor Brian Sazy spoke to Dirty Jobs host and creator Mike Row about that and more. Take a listen. We've been talking about this at microworks for 18 years and you know it's both gratifying and terrifying if I'm being honest to see the numbers uh made real. This is a lot of research went into this report and there's a lot of data in it and we could probably talk for an hour about what it all portends and just scratch the surface. But the bottom line is the skills gap is real. It's really wide. It's really dangerous. And now, as we enter what looks to be a really new uh infrastructure buildout and a really new economy, it's going to be the pinch point. That's why all these companies are here, Brian. That's why every time I turn around, whether it's Meta or Lowe's or Home Depot or FedEx or Black Rockck or or Blackstone or Wells Fargo, who's been incredibly uh vocal about all this, they all get it. They're they're realizing that an imbalance in the workforce throws the entire conversation, the entire economy off center. And so it it's pretty extraordinary to see everybody at the adult table focused so completely on this topic. Also interesting too the way it's happening all over the country at the same time. It's it's almost like a kind of singularity has occurred around this issue. >> Mike, you know who I would argue doesn't get it? It's the investors that I talk to every day in my crazy world of finance. You know, everybody is so excited about Muse. You know, I can use this AI agent. Uh it'll order me a pizza. It'll pay my bills. That's great. But what if there's we don't have the infrastructure built by the humans to support this technology? Then none of it comes to life. >> Yeah. You know, and I think the language is interesting too, right? You know, the artificial, although I know the president now wants to talk about superior, but call it what you will, you know, it like everything I feel like is going to fall on one side of the line or the other. It's either going to be fundamentally artificial or it's going to be fundamentally authentic. And when you think about work through that lens, it gets very clarifying very quickly. A plumber is still authentic. An electrician is still authentic. Steam fitters and pipe fitters and ship builders and linemen. These jobs have always been there. The whole theme of this conference is the essential economy, but I would just as soon call it the authentic economy. And I think part of the reason so many people are now paying so much attention to careers in the trades is because they're comparing them to these other opportunities that exist in some kind of alternative space. Like we can't get into the cloud, we can't get into the blockchain. We can't get into the AI means like what is it? [laughter] I >> I don't know. I don't know, man. I it's it's it's part science fiction. It's very exciting. I'm actually super bullish about it. But I think what's surprising people is that look, Larry Fank just told me we're looking at a a 10 to 12 trillion infrastructure buildout. It's not going to happen without electricians. And those are the guys that are in the shortest supply right now. Nvidia CEO Jensen Wong, he recently said, "AI data center buildouts will create 1 million jobs." It's a great headline, but again, to your point, we need the humans to do it. When you're on these data center sites, what do these data centers where are the jobs at these places? >> The last one I toured was in Plano, Texas, and I met three electricians there, all under 30, all making well over $200,000 a year. But that's not really the headline. The headline is all three of them had been poached three times in the preceding 18 months. So certainly electricians are in demand. And it's funny, you know, I think I said this to you when we talked before, but when industry leaders ask me where all the workers are, and believe me, they're all asking the same question. I tell them, "Yeah, I I know where they are. They're in the eighth grade." But you can't recruit out of the eighth grade. So what we're seeing now is really it it's actually super complicated and I would imagine really interesting for a guy like you because on the one hand companies are coming together to discuss how to fix the problem on a macro level. But on a micro level they're all competing for the same guy. They're all competing for the same skilled worker. And we've not yet got to the point where you see Ford and GM in the same room having the same conversation. >> No, that can't happen. No, no, no. That's not and home people. >> No, that can't happen. No. God. Oh my god. >> But we'll see. We'll see. Like if if the problem becomes truly existential and a rising tide is needed to lift all the boats and the workforce is that wobbly, nothing would surprise me. >> So, let me throw this scenario at you. Let's say um I am getting ready to exit high school and I have dreams of going into college in my first year and studying liberal arts. What would you tell me? >> Well, I'd say good luck. I'd say uh a liberal arts degree is not your enemy. I would say a liberal arts degree in fact is very valuable. It served me well. Then I would ask you how much it costs and if you're borrowing to avail yourself of the information. And then I would suggest with great respect that the liberal arts degree you're talking about is right here. It's in my hand. If you have an internet connection and a smartphone, you have access to 99% of all the known information on the planet. I just watched two weeks ago from my hotel room a lecture from MIT for free in bed. It's the same thing people are paying tens of thousands of dollars for. So a liberal arts degree is not the enemy. And if we want our kids to think critically, they better get exposed to the Stoics and Socratic thought and the arisatilian approach to to learning. But we have to do two things at the same time. I would tell that kid, learn a skill that's in demand. Figure out how to weld, expose yourself to the trades, and then be curious and figure out how to talk intelligently about Ni and Day cart at cocktail parties because people dig that crap. [laughter] You got to do it all. >> You got to be able to do that on a data center site. That's that's where we're living. But even before we get into college, Mike, you know, you will have had 12 grades before then. Don't in that period, that formative development when you're a kid, teenager, don't you have to not have that stigma attached to these jobs? Like remove that stigma that it's like you're not going to make a lot of money using a hammer. You're not going to make a lot of money wiring up this or that. You're not going to make a lot of money fixing a clogged toilet. Like that stuff needs to end. >> Well, it must. And look, we kind of brought this on ourselves. The greatest self-inflicted wound in the history of modern education was taking shop class out of high school. And part of the reason that happened was parents wanted to be able to tell their kids, they wanted to consult a playbook, right? And and we wanted to say, look, the best path for the most people is this 4-year path. It just happens to be the most expensive, so borrow whatever it takes in order to go down that road. In the meantime, had we just left it there, that would have been lousy advice, but we made it truly dangerous because what we added to the top of that, to your point, was to say, if you don't go in that direction, you're going to wind up over here turning a wrench or doing some HVAC job or laying pipe or running electricity. We made half of our workforce sound like some sort of vocational consolation prize. That was stupid. And now we are where we are. Like we laid the groundwork and smart people are realizing that was dumb. We were wrong and it had a consequence. How quickly can we turn the ship around? How quickly can we upskill? You know, there's a lot of information in that trade report. uh that just came out. And whatever the answer is, it's not going to happen overnight, but it has to happen quick. >> And I was in line yesterday picking up my car, just got inspected. It was only 65 bucks for me. I got some oil put in it. That was good. The lady in front of me, $1,500 bill to get her brakes done and get an oil change. And my thought was like, "Holy crap, I got to bring this up to Mike because this is everything you've been talking about. These jobs pay well. They turned a wrench. They got a big bill. They're going to have a good night out eating. Jim Farley runs one of the most consequential brands in the world and making cars is one thing. Keeping them on the road and repairing them, that's a huge part of his business. He has five to 6,000 empty bays right now. Empty. These are AI proof six-f figureure jobs, Brian. And he's struggling to fill them just as his competition is struggling to fill them because the pool of people who are fired up about doing the work is very, very shallow. And that pool is shallow because a lot of well-intended parents and guidance counselors turn their kids away from it. That's where we are. And it's it's not that it's not that complicated. In fact, the solution is simple. Not easy, just simple. Coming up, we're looking at borrowing habits from car buyers. That's next after [music] the break. [music] Heat >> [music] [music] >> up [music] here. >> [music] [music] [music] [music] [music] [music] [music] [music] >> Heat. [music] Hey, Heat. [music] Heat. Heat. [music] [music] [music] >> [music] >> Down. [music] Down. [music] Down. [music] [music] Heat. Heat. Heat. [music] >> [music] [music] [music] [music] [music] [music] >> Ah. >> [music] [music] [music] >> Hello and welcome to asking for a trend. Well, according to data from Edmonds, car buyers set multiple borrowing records as prices and rates skyrocketed in the third quarter. Joining me now is Jessica Caldwell, Edmonds head of insights. Jessica, it's good to see you. Let's start with this stat. Uh Jessica, average new car payment, you say 7.87 a month now and more than one in five finance buyers, you point out here, paying at least $1,000. Uh what do you make of that, Jessica? And who can who can comfortably afford that? >> Many people do, right? I mean, I think for any elder millennials or even Gen X, I think they remember those payments looking like rent payments more so than car payments at this point in time. But I mean, we are seeing that the new car market is really catering towards people on the upper side of that K-shaped economy and people are still buying vehicles. They're buying more expensive vehicles and those that can afford this new vehicle market and maybe can't get by with the new vehicles that are compact sedans or, you know, something some stuff on the cheaper spectrum are, you know, stuck in the used market or just waiting. Uh more than a quarter of financed new car purchases, Jessica, you say, uh now involve loans lasting seven years or longer. I mean, is that seven-year loan is is that is that becoming the only way, Jessica, a lot of folks can can afford a new car? Yeah, I mean that's one workaround that consumers are are using to afford these higher payments, but also it's another way that consumers are getting the vehicle they want because most Americans, they want all the tech, the equipment, the bells and whistles, the larger vehicles, and that comes with a higher price tag. So, one way they are going about that is longer loan terms. It's not always the safest route because that means you're committed to paying this vehicle off over the course of seven years. Average trade in age is around six years. So, people don't generally keep their car that long, and that's when you start to see issues like negative equity, people being underwater in their loan, and they're kind of done after 3 to four years, or they have a life-changing event that they need another vehicle, and now they find themselves, their car is worth less than they owe, and that opens up a new can of worms. >> The average interest rate uh held steady at 7%, Jessica, lifetime interest cost though, um if I have this right, they hit nearly 10,000. Why are why are buyers paying more even though the rate hasn't changed? >> Yeah. Well, they're borrowing more, too. Um, so that really is the key here because in terms of amount finance, that also hit a record. People aren't putting as much down. That's the one thing that is not climbing. It's actually significantly down from where it was last year. People are just contributing less to the down payment, relying on longer loan terms to get the vehicle they want. So, it is sort of like a shell game in terms of where you going to put your money, how are you going to afford this vehicle, but yeah, the uh the amount of interest that people will pay if they keep their loan over the course of the term is nearing $10,000. So, that's not even the price of the vehicle. Nothing to do with that. They're buying the car plus a $10,000 loan on top of that, which I think when you tell people when you lay it out like that, they're like, "That's unfathomable." But people do it. >> What is the responsibility to automakers here, Jessica? I mean, are they are they offering enough vehicles that, you know, just ordinary Americans can realistically afford? >> Well, the thing about it is automakers have responded long to what Americans have been demanding. And Americans have been demanding larger vehicles, more trucks, more SUVs, uh, more technology and vehicles, more amenities. So, if you actually look what people want to buy, they are generally higher trim level vehicles. Even if you start out on a budget thinking, "Oh, I'm just going to get more of the basic vehicle." A lot of times that is not what happens. So automakers, yes, they have been making larger vehicles and more expensive vehicles, but if you look through the 2010s, that's what people demanded. They didn't want the small quirky cars. They wanted all the bells and whistles and they had lower interest rates at that point in time. So if you're getting a 4% interest rate, maybe it wasn't a big deal to you to pay a little bit more. Um, and it's just not the case right now. >> Let's talk about the used car market as well, because that that's not exactly cheap either, Jessica. Average payment, you say 5.82. 82. Now, what do you make of that? And and where do you think that price could head from here? >> Yeah. I mean, well, the issue with the used car market is inventory, right? Because you had to have a new car to have a used car. And if we look at the COVID years, a lower new car sales rate, uh, the microchip shortage a few years ago, the fact that people just don't lease any as much anymore because interest rates are high and you're not necessarily seeing those bargain lease deals that we saw through the 2010s, there's just not as much used vehicle inventory. And as a result, prices are rising in that area as well. And also, you have the double down factor of people that have been sort of can't really afford a new vehicle or the new vehicle they can't afford is one that they don't want or too small or whatever it may be. They're in the used vehicle market. So, that's the increasing demand there, too. So, used market, I don't think any of the issues are going to be solved short term. It's it's more of a long-term horizon there. I don't know if you got this granular, Jessica, but were there brands that, you know, were doing a relatively better job at offering cars and financing deals a relatively better job than others? >> Yeah, I mean, a lot of the automakers do offer low interest financing. Um, it just sometimes they're for 48 months. And if you could see what the 84month payment is, people don't necessarily want to sign up to pay their vehicle for four years. And people also have to qualify. So even if the incentives are out there and they have zero or 1% because that's not un you know uncommon to see those ads out there it's just that can you actually get those. So we are seeing a lot of I mean most of them offer some sort of cemented interest rates u perhaps for brands in which the vehicles are really hot right now like Toyota necessarily have to offer incentives and that's another thing is that automakers have drastically reduced their inventory following COVID. So all of that excess inventory which caused high incentives for decades is just not there anymore. So the incentivization structure just doesn't really work the same. And you know consumers are seeing that now when they're back in the market shopping. >> Jessica, thanks as always for your time. Appreciate it. >> Thank you. >> Coming up, I speak to two former Lululemon executives who created their own thriving women's sportsware brand. That's next on Ask for a Trent. >> [music] [music] [music] >> Heat. Heat. [music] [music] [music] Heat. [music] [music] Heat. [music] Heat. Heat. [music] >> [music] [music] [music] [music] [music] [music] >> Down. [music] Down. >> [music] [music] >> Heat. Heat. [music] >> [music] [music] [music] [music] [music] [music] >> Women's sports is becoming a battleground for athletic brands and Left on Friday is scaling with it, expanding beyond swimwear and becoming the first ever apparel sponsor of volleyball world. Join me now is Left on Friday co-founders Laura Loaki and Shannon Savage. Uh, welcome both. Shannon, I I'll start with you. I I read that you had some time there both you at Lululemon and I was just sort of curious Shannon what you sort of learned during your time there about building you know a brand of your own you know the lessons that you carried Shannon with you and maybe if there were ones that you didn't bring with you. >> Oh yes well I mean thank you. Yeah I was at Lululemon before and um the time spent there was during the really formative years like we started there before the company was a a public company. it was probably only 30 million in size and and when we jumped off it was close to three billion. Um so massive growth during that time. So everything from how [clears throat] product was made to how um how we um built product for women in a time when women weren't being um focused on I think that um we really took with us the lessons of what does it take to actually solve for a women's body in sport u making them look good feel good and perform better. Uh Laura, I I was reading that about 90% of your swimwear sales have been direct to consumer. I was just wondering kind of as you think about how the business evolves going forward, Laura, does that sort of does that remain the core model or No, you're going to there'll be more emphasis on on wholesale physical retail. >> Yeah, we're really excited about um physical retail right now. So, definitely online is working for us. It's an easy way to reach our customer who's predominately in North America. We're about 80% US, 20% Canadian, and we're really excited to introduce stores cuz swimwear is something you want to try on. >> How seasonal is your business, Laura? >> Oo. Uh, we definitely are seasonal. We start seeing a pickup of sales in spring when people are thinking about spring break travel. Then, um, in summer we are, you know, it's summertime and everyone wants a swimsuit. So, super seasonal, but um you know, people travel year round and so people need swimsuits year round. >> So, Shannon, as as Laura's mentioned, there's some seasonality. What do you guys do to try to reduce that seasonality? What levers do you kind of pull there if possible? >> Uh great question. Well, we've tried a bunch of different things. Um as we move into the fall, I think it's really normal to see things slow down after summer. That's like our b busiest season. And we look at other things that our customer would want in this active lifestyle. But we do see things start to pick up even again and like once you start traveling and things get dark and our climate gets cold, our customer starts traveling again even as soon as October. And so then we still have her attention and she comes back and continues to shop with us. So we still see that like swim is like the main um point of access to that customer. So our um I mean we're still figuring it out. We try new things every year. opening retail was actually really helpful to see um what happens in that off seasonason and there isn't a lot of other swim brands out there with stores open during the winter time when you are traveling and needing swimwear. So that's where we were seeing people come to us and >> and Laura I was reading that also you're kind of broadening the product line including uh stuff for men as well. Tell tell me about that launch. >> Oh well we're really excited. We have a partnership with World Beach Volleyball. So, we're starting small with um singlets to um outfit the to provide the uniform for world beach volleyball players, men's and women's. But in terms of broadening, we're really focusing on women's active as well as like beach coverups. Um so, it's an easy transition. Like, you're buying a swimsuit, you're also buying a beach cover up if you're going on vacation. And then what's fun about active is it's the one thing we make which you need 12 years 12 months a year. you see bigger brands, Lord, kind of moving into, you know, just putting more into money, time, effort into women's sports. And I'm just curious, Laura, does that sort of when you see that new competition, does that sort of do you think about that as validating the opportunity or or is it a more of a of a risk? New new rivals, new competition, maybe it's both. How do you think about it? >> Yeah, I mean, sports has always been um at our core, we are ultimately solving for the active lifestyle. And if we've always believed if we can sell for the best in the world athletes, it means we can sell for the the Saturday morning casual beach volleyball player here in LA. Um, so we've been product testing with pro athletes since even before we launched. I think it's really validating for us that we're on the right uh, you know, it's we're lucky it's become a hot thing, but it's whether it was hot or not, we'd be doing it regardless being involved in sport. Um, Shannon, I you saw Caitlyn Clark's first Nike signature shoe. It sold out um basically nearly in just hours. I'm just curious what you made of that. Did that sort of tell you, okay, that that indicates the size of the opportunity, the potential here in women's sports wear, what we're what we're going after. >> I I think so. I love seeing this kind of thing. I think it brings more attention to women, more attention to the sports that they're in. I think women's sports are really fun to watch and I think that it it puts more of the spotlight on these women. They worked so hard to get to where they are and they should get all this attention. So, if a shoe sells out in 3 minutes, I think that that like that shows just like how much impact um women are having right now and it I think they deserve it. >> Shannon Laura, great to have you on the show today. Thanks for your time. >> Thank you for having us. Great to be here. >> Stick around. We'll ask for a trend still to come. >> [music] [music] [music] [music] [music] [music] [music] [music] >> Heat. Heat. [music] [music] [music] >> [music] [music] [music] [music] >> Down. Down. Hey, [music] [music] hey, hey. Down. [music] He [music] >> [music] [music] [music] [music] [music] [music] [music] [music] >> Time now for to watch the week of October 5th. [music] Starting off on the earnings front here. Pepsi announcing third quarter results on Thursday. >> [music] >> Now it's expecting organic volume and net pricing to each rise around 2% helping drive up to 5% revenue growth. Delta Airlines also reporting results for Q3 with higher fuel costs likely to be the biggest pressure point. Analysts estimating fuel prices jumped about 68% [music] weighing on margins even as stronger and slower capacity growth support revenue. Also on deck, the Fed releasing minutes from its September meeting on Wednesday. Investors will be looking for more detail on how divided policy makers were over the path for rates and how they're balancing persistent inflation [music] against signs of a softer labor market. And finally, we're getting a fresh read on the consumer with October sentiment data. Economists forecasting sentiment to edge down compared to September. That's a wrap on today's show. Thanks for watching. You stay classy. Yahoo Finance. [music] [music] [music] Heat. Heat. [music] Heat. Heat. [music] [music] >> [music] [music] >> Heat. Heat. >> [music] [music] [music] [music] [music] [music] [music] [music] [music] >> Heat. Heat. >> [music] [music] >> Down. [music] Hey. Hey. Found [music] [music] down. >> [music] >> Down. [music] Down. Down. [music] Heat. [music] >> [music] [music] [music] [music] [music] [music]