The 8:30 (8:30–9:30 a.m. ET)

Well, good morning and welcome to the 8:30. It is a big day here on set for us. It's a big day for the markets. Welcome to the start of Q3 earnings. >> Woo! >> With uh the big banks leading off this morning with a bit of a split picture across uh we've got JP Morgan, Goldman Sachs, Wells Fargo in City today. We'll get Bank of America, Morgan Stanley, and a few others tomorrow. Where to start here? Let's just go through some of the topline numbers. JP Morgan, >> we got to start with JP Morgan, >> of course. Of course, Mr. Diamond at the top there, JP Morgan EPS5 $557 against estimates of 590. That is a miss. Revenue also missing at that bank. 50 uh 50.91 billion against 51.37 billion expected. That is a double miss from JP Morgan. Not something you commonly see at that bank. There is some strength trading up 15% year-over-year. However, some of the real weakness we're going to see there in their FIC trading, that's fixed income uh currencies and commodities reporting 5.37 billion against estimates of 6 billion. That is a decent miss there. Walking down the list, Goldman Sachs, EPS, let's linger. It's too much to go through. All right, let's do let's do it oneonone. The shares have been bouncing between gains and losses, I should point out, because at the same time that the company kind of came out with this mixed picture, it also raised his forecast net interest income, right? So that's something that it looks like is helping to some extent. That is right. Um, if you look under the hood here, investment banking fees just about in line with estimates, M&A advising fees interestingly beating estimates, but equity and debt underwriting falling short here. And that net interest income figure last quarter was at 27 billion dollars. So that was above estimate. So when we're trying to figure out the answer to the question of how are these banks going to navigate higher interest rates, >> them increasing net net interest income forecast gives us at least one answer to that question. >> Yeah, that's right. I thought it was really interesting. We we got a statement from Jamie Diamond. Obviously, he'll be speaking to investors and analysts on the call here in a few minutes, but he says, I just want to quote this. He says, "The US economy continued to be fueled by strong business investment and ongoing consumer spent consumer spending, excuse me. However, >> large fiscal deficits, sticky inflation, elevated asset prices, rising interest rates, and geopolitical conditions continue to shift under the surface. Essentially, yes, on the top line, the economy is doing all right. People are spending money. Investment is growing. Look at the AI boom. Strip that away. Look under the surface. There are a lot of cracks starting to build. >> I feel like he's been sort of a downer lately. >> He He's the perpetual downer. He's always the cautious guy on Wall Street. Ruka as an aside here come talk about some IPO wo, right? So Bloom Diamond said on Bloomer television that he says quote there's a little bit of a slowdown for September and quote for the Ibanking business. And then um Saz pointed out that that that Diamond also said that there's not a >> there's not a cancellation of IPOs. There's just a delay in IPOs. There's a delay in IPO. So that's interesting to note there. >> And then my baseball stat baseball card stat JP Morgan has not missed on earnings per share since the second quarter of 2022. >> Oh, that's a great stat. >> And this is the first time in 17 quarters that JP Morgan has missed. In other words, it is pretty unusual for JP Morgan to miss estimates, but the market doesn't seem to be freaking out. Even when the shares have been down this morning, right, they're not down by that. >> I mean, 2022 was a different world, right? I mean, >> it was a different market. We were coming out of CO. It was a different market. >> Shall we move on to Goldman Sachs? >> All right. Top line there, EPS of 1701 against estimates of 1302. That is a very large overperformance there. Revenue also beating $18.68 billion versus the 16.71 billion expected. Trading though, same story here. Equities 6.44 billion on the quarter, up 72% year-over-year. But fick, that's that fixed income currencies and commodities coming in at 3.47 billion versus 3.72 billion. Again, another miss in that sector. Also, Goldman Sachs, they've been leading a lot of these IPOs. Investment banking fees at 3.22 billion against 2.86 billion expected, up 21% year-over-year. net interest income also outperforming. So a good quarter for them, a really good quarter with the exception of that FIC number which has been the problem now across both of America's biggest. >> Yeah. Well, it shares are up this morning. So I think investors are looking huge EPS outperformance there. >> Um I thought it was interesting Max Abson over at Bloomberg pointing out that headcount is not declining at Goldman. He said if you would expected those new AI robot bankers we've all been hearing so much about to affect headcount. That's right. says that's not happening. Headcount was up 3% from last quarter, quote, reflecting the timing of campus hires. There's hope for the youth of America. You can still get a job at Goldman Sachs, >> which is interesting because first year investment banking was like one of the first things where people were like, "All you do is build spreadsheets, right? That's gone." >> Yes. Well, >> that can be automated away. But the problem is, and here's the other argument. for all the MDs, the managing directors at at Goldman Sachs, excuse me, they all started there, >> of course, >> as first year banking analysts, >> you need the pipeline. >> And so, you have to build the people pipeline, even if, you know, maybe they're not staying up until 6:00 in the morning anymore to finish that spreadsheet before a 9:00 a.m. meeting. >> Yeah, but it's but it is heartening. >> It's heartening. >> We're also hearing, you know, kind of some mixed stuff about the consumer. Uh, and Goldman being the most least sort of tied to the consumer, right? Uh, seems to be doing the best here, but, you know, we'll see how that goes. >> Yeah. Yeah. Yeah, that's right. Also want to point out their asset and wealth management division. To your point, Goldman Sachs is the least consumer oriented, but where they do have a big business is in serving the ultra high net worth clientele that is up 14% year-over-year, 10% quarteronquarter, the revenue in that uh business. So, a good quarter there for the wealth management division. >> They've also been adding ETF assets there. They bought and then they bought innovator um ETFs. So, that's that's a B business they've been building. And the other timeline to watch today, which David Solomon is almost certainly going to get asked about, are the reports that they have started some real leadership succession planning. Now, of course, that conversation has been happening for how many years, >> but there's a little bit more of a drum beat now. >> Yeah. Um, >> shall we keep rolling? Yeah, do it. >> You want to do Wells, you want to do city? What do you think? >> Let's do Wells. Wells. Okay. >> Wells. >> Let's do Wells. Well, >> well Fargo. Okay. The uh the consumer bank here, EPS of 187 reported against 184 expected. That's a beat. Revenue coming in a little bit below 21.8 21.87 billion reported against 22.31 um expected. That's a bit of a miss there. Net interest income also missing slightly. 12.52 billion against estimates of 12.59 billion. Investment banking fees which is not their hugest business but it is there. Also coming in a bit below estimates 894 million on the quarter against 911.2 million. One thing that caught my eye here was, you know, with Wells Fargo being the most sort of tied to the consumer. I mentioned the gold being the opposite. Uh, it seems like the consumer might be a little bit better off than we thought potentially, uh, credit losses provisions and also charge offs were were better than expected. >> And then Sharf, Charlie Sharf, the CEO said in the in a statement, while economic uncertainty exists and consumer sentiment remains mixed, our data shows that our consumer and spending customers are doing well. He notes that consumers are spending more, loan delinquencies are down, and deposit investment balances have grown. So this is kind of like something that we were, you know, we're hearing a lot of sentiment stuff that's kind of bad feeling feeling bad when you go to the grocery store, but it turns out people are still again still spending and it seems like, you know, not sort of writing off debt, not sort of not paying off their stuff. It's it's better than expected at least right now. >> At least but then the the shares are down like if I feel like Walls can't catch a break generally. >> No, that is true. um you know in terms of perception of the stock you know part of that has to do with that net interest income miss I think that that's right >> that is the reason that the shares are down but it is interesting that um >> that you know they they are saying good things it looks like the call might have begun here um or there's a media call and the CFO is talking on the media call um and he says there's a healthy pipeline in investment banking and that credit is really good among consumers and businesses That's what Bloomberg's reporting from the media call which is kind of interesting. >> Yeah. And to your point Pros, like this is one of the storylines we keep talking about. Yes. Consumer sentiment levels are lower than they were during the during the global financial crisis and yet consumer spending is not slowing down. People are still spending. If you're a consumer bank, that's going to be good for you. >> Yeah. And you can still have a job, still make money, but you're still not feeling well about where you are. Right. I think that's there's two things to be right at the same time. So >> that's right. >> Yeah. >> All right. Final bank of the day. Cityroup. uh the only femaleled bank of this cohort with Jane Frasier as the CEO there. EPS coming in at 285 $2.85 reported against $2.66 uh expected. That is uh that is a beat there. Revenue coming in at 23.85 billion against estimates of 23.72 billion. It's their best third quarter revenue in a decade. So hats off to Jane Frasier. Uh fick trading, this is the reversal. Thick trading better than expected 4.39 billion against estimates of 4.26 billion and equities trading is where they miss for Croup 1.73 billion reported against 1.78 billion expected. Net interest income just to hit that too that's a beat 16.98 billion versus 16.64 billion expected investment banking revenue basically flat on the quarter. The other point of outperformance I want to mention services revenue for them that is strong 6.61 billion up 15% yearoveryear >> the stock is down >> but the stock is down >> yeah and it you know maybe that's because of that the the miss the partial miss on trading >> the partial miss on trading right because they miss on equities trading which by all accounts for all the other banks was a huge boon this quarter. Yeah, I mean the other thing is a lot of these banks have been selling off going into the reports. City has as well, but on the year thus far it's a better performer than some of the others. It's up something like 13%. >> Um year to date. So you know that's the context I suppose going into this as well. >> Yeah, you you have to go back a couple weeks and just look at the kind of underperformance of that whole sector. Now some of this you know could have been uh cyclical, some of this could have been you know selling into the earnings. Some of this is broader macro. But the question now is, okay, you've seen the numbers, so how do the financials do kind of going forward? >> Right. Yeah. Exactly. All right. Well, should we move on and get some outside perspective a little bit on this? >> I think we should. >> Dory Wy is joining us now. Commerce Street Holdings CEO. His firm is a shareholder of many of these banks, JP Morgan, Goldman, City, and Wells. Um, Dory, it's great to see you. Obviously, there is a lot of information to go through this morning. Um, sort of thematically, what stands out to you thus far? Well, yeah, there's a lot of detail and you guys covered a lot of it. I think what what's the big picture here and you got four different results from one economy. So, what's the story? And it's really because of the funding source. You know, they all made money different ways. So, if you look at the weakest uh of of the three, which is Wells Fargo, it is the most deposit funding source of of the three or the four. Uh if you look at Goldman, which is least dependent on that, uh they made most of their money off their equities trading. I don't know who the superstar equity trader is there, but uh they killed it. They were up 72%. So volatility was the name of the game for them. Now you had volatility in bonds and uh no one excelled, including Goldman, but that that was a really big beat for them. JP Morgan, uh, you know, aside from the Apple transaction, which basically had a a provision for them and a write down for Goldman. So, not many people picked that up yet, but you take that out, the real issue was they they had their expenses go up uh uh more, you know, 12% versus revenues of 8%. That's the hardline questioning that Jaime's got to come to the table with. That's not a consumer, that's not an economy issue. That's an expense versus revenue issue that the other ones didn't have. You look at at Jane over at City Group, uh, man, she's tended to all the plumbing and wiring, processing, payments. You're up all across the board. That's been my favorite of the of the all the money centers for the year. And boy, she delivered in spades for me today. Uh, so really proud of Croup. They had a nice beat. >> Dory Jake here. Uh, you mentioned it briefly, but I want to drill into it just a bit more. I think we've got to talk about the bond selloff. we've seen both domestically and abroad. Now, those kind of rising yields, they can be good for banks, they can be bad for banks. There's a little bit of both. How do you see that rippling out here for this quarter and then just further for the banks and how they're adapting to kind of the changing conditions in the bond market? >> Yes, we got a good message from that today. First of all, we had a rate hike, right? So, the question is immediately banks have a lag when they they raise their loan rates and they drag their feet on deposits. what was going to be the real effect on your net interest margin. And again, that hit Wells Fargo more than it did the other ones. I wasn't sure whether we'd see it this quarter or next quarter. That tells me quite a bit, right? Because now we've got regionals and community banks which are much more dependent on deposits and they're going to be much more exposed to margin compression in this quarter than maybe I expected. Uh so that's not going to be good for those. those stocks are not going to do well uh today or going forward for a little bit. I don't know that it's a big crash, but it's just going to be a squeeze and damper the earnings. Uh now, as far as the steepening of the curve, you know, that can be good for for longer term rate lending, but most banks are very well asset liability matched and and a lot of the the uh rates are are floating on their loans. So, so Dory, if that so if if that's the case, if it's that's not that much of a concern in this environment, in this rising rate environment, do you still want to tilt towards less the money center banks and more the investment banks, more the Goldman's and and Morgan Stanley's of the world? >> Well, those are temporary, right? I mean, how much do I really want to bet on this superstar equity trader or whatever's going on, >> right? And especially when the fake numbers aren't looking good. >> Yeah. you know, so that that's not really quite its core. I try to invest a little longer term than that. So, I still like City. I see some long-term changes there that work work pretty good. Uh, usually I have a bias towards community banks and I I I still do for the long term, but I think in the short term they're going to be a selloff and and as far as the larger bikes, I think I'll go with the I'll go with City uh uh in this diversified beat. >> Hey, Dory Pro here. You know, we hearing a lot of talk about private credit kind of lurking underneath the surface of the bank's balance sheets. We didn't hear much about that so far, as far as I know. Are you are you are you concerned about that or is that something that we should maybe not so be so concerned about? >> Great question. Great question. Right. uh banks are extremely transparent and uh uh on credit and lending and and they but they are funding uh a lot of these private credit off balance sheet and the re some of the regionals have some pretty good exposure to that. So I think that's something we got to continue to watch. Uh I think everyone's been watching it for the last couple of years. We keep wondering where the there is. Uh it hasn't shown up yet. So, uh, so far so good, but I I think we got a it's still a big- time scare and fear of mine, and I'm keeping an eye on it. >> Dory, let me ask you the fun question. Are we going to get anything today out of the Goldman Sachs uh Palace intrigue around the uh succession planning headlines we've seen? Are we going to get any new updates there? >> You know, great, great question. I don't want to lose my friend David Solomon. He and I were fellow DJs in the past and and so now be I'll be a lone wolf when my leader's gone. Uh but you know, I don't know. That's a good question for him. I I suppose people are going to ask that because it's been rumored. Uh none none of us really know. I think he's done a pretty good job and I'm really not quite sure why there's uh uh unless he's tired and he wants to go spend records. I'm not sure why he wants to do that. Dory and DJ Diesel. I I want to go to that party. >> Dory, do you do you have a DJ name as well? >> Well, my mother used to call me Dorian, so I use that. >> I love it. There we go. >> I love it. All right. Thank you so much. It's great to see you. >> Let's move on to another company that reported earnings and that is Johnson and Johnson. And that company again raised its profit forecast for the full year. It is doing that consistently every time it reports. So now earnings for the full year going to be as much as 1115. Before it was 1111. Um last quarter pharma sales up 7.7%. That was the real area of strength. 2 and a.5% for medtech which is an area that kind of continues to languish a bit that they're having trouble with that. And it's really leaning into its new pipeline of drugs. It has a new pill called iicotide which is to treat psoriasis. And it ha it pretty much doubled prescriptions in this past quarter and analysts are very focused on that drug. I uh just spoke to the CFO Joe Wal a few moments ago and this is what he told me about iicotide in particular. >> Our revenue would probably be double if it wasn't for the free goods and it would probably be a reportable um product for us at this point in time. 20,000 prescriptions to date uh over just these first two quarters. The prescribing base is about 9,000 strong. And Julie, what we really like about this is you would expect because it's indicated for psoriasis that it would be prescribed by dermatologists. But what we're also seeing in addition to dermatologist are primary care physicians, uh, advanced practitioners such as nurse practitioners, physician assistants. That really speaks to the broad appeal. >> So that was a really interesting point that he made. And he was talking about revenue specifically for iCoide, which they're not revealing yet publicly. That's just the way that that they do things they have. So they have a pill version and then they have something called TrimFio which is an injection to treat psoriasis. Uh Trifia's revenue was up 68%. So both of them are growing which is kind of interesting. Couple other quick things to mention. MedTech, they're still kind of working on that business. There was a study in the UK for a heart pump that led people to pull way back on prescribing that. Um he says they're going to come out with their own study results next year to try to push back against that. And then they also have an orthopedics division that they were talking about what to do with it. They've decided they're going to spin it off rather than sell it because they feel they have more control over the valuation of it if they do it in that way. So interesting quarter for >> Yeah. One thing I just want to point out to your point about the medtech, you know, CFO Joe Wal, we were just in there saying medtech needs to improve quite frankly seeing the weakness there. interesting that he attributed that in some comments he made this morning. Part not totally but partially to the weakness from the Middle Eastern conflict and what he calls European austerity. Kind of this idea that people overseas are just buying less and if we didn't have all of these other headwinds that business would have been stronger but we're getting beat by the macro. >> Yeah, potentially. Um and you know that stock has done pretty well year to date. It's up by 27%. So that's something to consider as well when we look at um at how it's going to behave today. But um interesting quarter from them. Going to continue to to keep an eye on on on what they're doing for the full year. But it is interesting that they keep raising their forecast. >> Trimio, that's the psoriasis drug, right? >> Yes. >> Yeah. I I don't know how many commercials I see for that drug every day. >> Well, I guess every day >> I guess it is working. >> You know, there are there are countries on this planet where you don't get pharmaceutical ads on the TV. >> Yeah. because they're not allowed. >> Because they're not allowed because it's considered a bit reckless. It's kind of crazy. >> I mean, they have a a big franchise too for multiple myyoma. Um, and that also continues to perform and continues to grow. We do one more health stick with uh healthcare here in UNH, right? So, uh, reporting Q3 results, revenue topping expectations 112.7 billion, adjusted EPS of $469. Uh, earnings uh from operations hitting 6.6 billion. Now, the big headline here is the medical cost ratio came in lower than expected. Uh, good for them, >> which is good. They're paying less for for the for the care. Uh, good for them. Raise his fourear guidance, EPS guidance to $20.50. Uh, Julie, you're kind of mentioning the AI effect earlier today and sort of they're one of the first, right, to sort of embrace that technology, right? >> Yeah. And basically they said last quarter that it helped with their customer service in particular that they were leaning into AI and that's one of the things that allowed them to compress that medical um care ratio to some extent to 88.4% this last quarter. So it'll be interesting to see if we get more questions on the call about how they are navigating that. And they're also sort of they've been changing their strategy towards Optim Health which runs health clinics. they've been offloading those to private equity in some cases um because that is a very costly business to run. Um so that's been an interesting trend with them as well. >> It's funny we we saw the other side that's one side of the AI AI uh coin. The other side is we're seeing providers like uh hospital networks and people like that companies like that using AI to boost uh sort of uh uh payments return payments because they're saying that oh there's stuff that we didn't do that we didn't actually charge for. For instance, let's say we we treated your one of your conditions, but actually you actually treated a secondary condition that we didn't. Now, they're they're optimizing for uh treatments, but that's also going to weigh on the insurers's balance sheet, right? On the insurance side, unless they push back against covering, right, >> some of that stuff. >> I guess it's an age-old battle, right? This has been happening, you know, that doesn't happen elsewhere, right? >> Doesn't happen elsewhere. The other things that doesn't happen exactly >> and who pays for it? >> Yeah. Ultimately, >> yeah, higher higher premiums. Yeah, >> health insurance stocks, by the way, have been performing pretty well here, especially sort of in the run-up to this earning season. I was looking at the IHF, which is a healthcare insurance and uh medical services ETF. Um it is up about 30% this year. UNH itself is up about 15% this year. So, we've really seen a this was sort of post spring, we've really seen a rebound in some of these names. Humanana in particular has been strong lately because it um we've seen um Medicare sort of do reratings of how they're reimbursing and and Humanana has had some favorable results on that point. It doesn't report by the way until early November, November 6th. >> Um but it'll be interesting when the you know when we get another wave of health insurers to see if they are performing as well as UNH. >> Yeah, that's right. I just want to point out one more number on UNH as we're kind of going down below the surface here. uh their enrollments um >> were 48 48.3 million versus 48.62 million expected. It's not a huge gap, but one of the parts of these companies businesses is just keep getting more people on your plans. If you see any slowdown there, that's going to be a weakness for analysts and investors to look at of why where's that coming from and why aren't your numbers improving as fast as we want them to. >> Yeah. Well, there's a lot of changes I guess through the Medicare Medicare Advantage. >> A lot of that's going to be some of that. This is also a big question for uh the midterms and for you know politics over the next two years because we could see some health care policy coming out of Congress in the next two years. But a lot of how that goes is going to depend on whether Republicans can hold on to either chamber. >> And another thing we've been seeing is that the premiums that not just we pay but also the companies pay have been rising like steadily, right? >> Uh are you going to see anything any kind of push back on that? Are we going to is this going to be fully passed on to us? Is that going to uh now appear more in CPI and things like that? Uh I think that's also a concern for the the consumer uh but maybe not for the companies themselves. >> One more thing to mention, I'm just seeing some headlines again from the conference call um for UNH. The CFO says that analyst consensus may understate 2027 earnings and then initial 2027 growth is at the low end of the range of 13 to 16%. So those shares extending some of their gains. Um but coming up next, we're going to take a pause from earnings and talk about the chip selloff this morning. We'll be right back. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Down. Down. Down. Yeah, >> welcome back to the 8:30 uh taking a little bit of break from the earnings frenzy this morning to uh to look east at a really deep sell-off that started in the Asian market. the costby falling roughly 5 a.5% overnight um getting uh getting stopped briefly the trading there halted after that sell-off and now bleeding into the US market where chip stocks really taking a route this morning the catalyst there news out of China that China's CXMT which is their kind of leading memory maker competing with the likes of Micron and SKHEX has made some real progress on a new chip uh chip architecture chip structure that allows them to put more memory into the same area kind of a more powerful version of what the likes of Micron and SKH Highix are trying to do. There's little information yet on kind of the volume they could achieve this at, the quality that memory sits at, the yields they could get out of it, but nonetheless, it is spooking American investors who are seeing a pretty well- capitalized Chinese uh competitor really making significant progress. the other things weighing on the stock this those stocks this morning leaders from Broadcom, leaders from Intel all kind of putting out warnings over the last few days about kind of the financing but the leading trigger today is that CXMT news. >> Well, but that happened over the week like it all began sort of yesterday and now we're seeing kind of is sort of feeding the sell off into it. Exactly. The selloff sort of began yesterday. I mean micron was down yesterday also. It's just it seems to be picking up ste >> right and then we saw the real Cosby selloff last night. >> Yeah. This new architecture is called 4F squared. >> 4F squared, right? DRAM. >> Isn't that what it's called? It's >> Yeah. 4.0. 4F square. So currently CXMT they supply all the major OEMs here with you know talking about companies like Xiai talking about companies like um you know uh Asus and MSI who are big computer main big brands in the computer space personal computer space even servers uh traditional memory stuff fine but yes this new architecture kind of scary but at the same time isn't this a good thing for technology a good thing for for you know uh for the whole trade here in the sense that you're going to bring down costs for stuff like data centers and bring down costs or stuff like but if you bring down costs >> that's good for us. >> It's good for us but it's bad for all these companies who need financing. They >> should keep charging more and more and more and more and more and more and more and more money. No, >> well, okay, it's not good for a couple of reasons. If the whole memory chip trade is predicated on high on higher prices, >> that's not a good thing. >> Then it's not good for them. >> That's right. It's not a good thing. >> It's not it's not a good thing for investors though who are invested in all of these companies. The other part of it is is CXMT cannot they you named a bunch of companies they can sell to but none of them are based in the US. In other words, like CXMT you can't like they're not selling their chips to US companies, right? >> Other companies like Lexar I'm seeing here. >> What the heck is Lexar? >> Lexar is like tell me what Lexar does process memory. Seems like you'd buy to put into your computer. >> Yeah, but I don't think that they're selling to the big US companies, right? Right. I mean, Asus and and MSI things. I have an MSI computer, >> right? Yeah. >> Um, so >> I'm being a little fun. I'm having a little fun here, but why should we constantly have price inflation in memory in chips? Isn't I think that's a potentially Yes, it's good for the SanDisks and the microns of the world, but what about everyone else? What about Nvidia? You have to buy memory for your your your 5090 RXT uh GPUs, right? This is a good thing. This is a good thing. >> I price competition is typically a good thing for the market. You bring prices down, you get better value for it. >> But the problem is this whole trade is so overleveraged on everything that if you get any slowdown anywhere, >> who could have thought there could be a slowdown in any one part of this overleveraged trade. >> Well, speaking of overleveraged trade, this this selloff is happening at the same day that we're getting the latest fund management today from Bank of America. >> That's right. Two things stand out from that. One, the people they surveyed, the fund managers they surveyed are the most overweight technology since August of 2020. So they're almost 40% overweight technology. 40% of them or it's their net overweight of technology is almost a 40% >> which exacerbates a sell-off like this. >> Yes. And the most crowded trade is long global semiconductors. >> Exactly. Exactly. people asking them who they thought is currently what they thought was currently the most crowded trade that's been the most crowded trade by the way for the last 3 months that long global semiconductor. So when you see a morning like this followed by yesterday as yesterday's session where it's selling off, it's presumably going to sell off more if people are more leveraged to >> This reminds me of a couple months ago. Who was wasn't there one guy who was super leveraged towards uh uh AI trade and and chip stocks and and memory stocks >> and his hedge fund blew up? Is that who you were talking about? >> Yeah. And he got married on the same day that his fund blew up. Yeah. Yeah. Yes, situational awareness. >> That's right. Um I there's >> I know we know but I was just wonder John >> Cross was being koi. >> Cross was being koi. There was a good quote um from UBP's um analyst Vern Lang talking about this stuff on Bloomberg TV this morning. He says, "The excuses are not new, but nobody wants to stand in front of a stampeding herd. Sell first, ask later is the mood." Well, >> when you get a little bit of spook right now, >> you see the move get a little bit more drastic than maybe is required, maybe is warranted. But that's just the mood we're in right now. Everybody's kind of shaky. >> I mean, and nobody wanted to be in front of the stamping herd to the upside either, which is why they all got why everybody got long in the first place is because this was seen as the sort of no-brainer trade, the trade that you could not fight, >> right? Unless you're Michael Bur, I suppose. That's right. >> Um, and you know, even he's gotten gotten dinged a few times. uh not even he he has been included in getting dinged a few times on this. So, you know, is this sort of a fundamental challenge to this whole trade? You know, C CXMT, by the way, hasn't come out with this thing yet, right? They just said that they're going to like research. >> This could this could also just be the whole solid state battery thing all over again where it's like this is coming. It's going to change the world and it still hasn't come yet. That's a hard that's much harder chemical challenge than I think what's happening. But the but the whole question that we have too that we keep bringing up over and over again is even if AI changes everything >> that doesn't mean that all of the investment that goes with it is going to succeed. That's >> exactly right. >> Right. I mean that's what has happened in prior innovation cycles from the railroads to the internet is that you know you have this investment cycle but then >> the winners and losers >> kind of change as time goes on. And even when the the the cycle works like the railroads were a success, the internet build out was a success, you still are going to have losers who get burned because they were in the wrong trade at the wrong moment. >> Yeah, >> that's right. >> Um should we stick with AI here? Talk about meta. >> Yes. So >> Meta yesterday said it joined the frontier, right? Said saying their new models family of AI models like um I think it's called uh what can I read this here? Uh, muse >> muse wonder and wonderful >> wonder and wonderful can handle >> wonder space f u l >> yes yes that's correct >> to be to be exact >> let's see if I can I can read this correctly so muse wonder and muse wonderful yes >> can handle a range of tasks right like personal and professional agents memory coding uh meta super intelligence head Alexander Wang says these are true frontier models competitive with the best models in the world and are particularly state-of-the-art art and personal and professional agentic work. Guys, is there enough here though for you to switch from, let's say, your preferred model to to go to one wonderful? What? I feel like this is this whole game of we have the top one now. No, we have the top one now. We are the top one now. >> Every every lab is only >> so we're supposed to keep switching. >> Yeah. I mean, the shares did rise yesterday for what it's worth. They were up like 3.4%. But to your point, like how many pe like even when I use my preferred model, I'm not using the most I don't need the most of the thing. >> I'm using the lowest version. >> I'm not doing those sophisticated math problems. You know what I mean? Like >> Yeah. No, we're not out here solving uh new science. >> Right. Right. >> Super deep research. Make me a PowerPoint and make me a deck on this investment idea on 190. >> And you and you can still do that with like the mid level. You don't need the ultra high models that you're going to have to pay for an API for, >> right? >> But to your point, there's like I mean, how long have these models really been on the market? Only a couple years. You are already seeing kind of like, you know, the forget the word I'm looking for, but like people lock into their preferred model. Yeah. >> And so, sure, Meta is going to come along and say, "Hey, we've got the best one now. >> Fine. You've spent all this money developing your next biggest model. >> At some point, you're going to get lapped by one of the other labs who's then going to get lapped. You have to convince people to come pay for yours when they're already paying 20 bucks a month or 100 bucks a month for anthropic or for open. >> I'm already locked into my model where it's got all the the pervasive memory stuff from before all the things I've been working on. >> So are you going to go try to download that and move it and try to replicate it? Probably not. >> Right. Right. >> Well, but maybe they don't. I mean, even though Meta is primarily a consumerf facing company, is this their attempt at more the enterprise? And will enterprises switch more? They more going to chase the frontier, >> right? professional agent. >> I mean, but this is this has been a weak spot for Meta for years. They've always they've tried to break into enterprise repeatedly and they've always struggled because they can't compete with the likes of a Microsoft or an Amazon or an Alphabet. And so they've struggled and they've come back to the consumer which is where they've made all their money and done really well. Though increasingly the AI thing is a split of all the real money is being made in enterprise. So if you're not an enterprise, how are you going to keep up? On the flip side, you could say is there an opportunity on the professional side because you know people who use Microsoft products complain about it endlessly, right? >> Sure. >> So, you know, maybe there's a a more userfriendly consumer wrapped model or package or agent that is easier to use on in your professional setting. >> I think one of Meta's arguments will be that this comes after they put out um you know, Muse Spark and all that and their kind of their agentic uh models and a lot of this looks like it's going to be leveraged for more powerful personal agents. they're going to be rolling that out for paid users initially um over the next few months with Muse and everything else putting in some of these stronger models. So maybe that's the pitch that your assistant is going to be really really really good. >> Well the other thing is um Mark Mahaney over at Evercore who as we know is a big bull on meta points out that it you know there's consumer there's enterprise but there's something that we're not talking about where Meta is a leader and that's small business. >> That's right. So, as he points out, our long-standing re view review remains that Meta has a substantial chance of being one of the biggest consumer and um SMB, smallmedium business AI winners. So, that that's potentially another area >> and that's a that's the part of big one of the biggest parts of the American economy, small business, right? So, Right. >> Right. So, maybe that's where it happens. Um another event that we are watching for today, um Apple is going to be is expected to unveil a bunch of new products uh today. The event opened at uh started at 9:00 a.m. Oh, it did. >> We're 11 minutes in. >> 9:00 a.m. our time. >> Yeah, we're 11 minutes in. >> Oh, shows how much I know. So, did they come out with anything yet? >> They did. What do we got? >> Okay. Um, so they have their new home view smart display at 299. I I wish I would have known that beforehand. I just assumed it was 1 p.m. like all their other events. >> Um, okay. Their home view smart display at 299. new Apple TV 4K. They did all the things that they were expected to do. This smart home hub that's going to be available on November. >> Can we put up this? Yeah. Can we put up this this thing? You got the home view. This thing looks pretty wacky. It looks like the middle screen of the Ferrari Luche. >> Really? >> Yeah. >> Where are you seeing it? >> So, look. This is what it looks like. I don't know if you can see that. >> Oh, yeah. It looks like a giant iPad. >> Yeah. Yeah. It looks like an iPad you plug into your wall. >> Yeah. So, they're also cooperating, collaborating. They're expected, I don't know if they've come out with all of the things, but they're expected to collaborate with LG to come out with a doorbell, a thermostat, >> um, and a bunch of sort of home related products. So, here's here's the thing. >> There it is. Um, you know, it's worth noting they're unveiling all of this stock. Uh, the shares are up, you know, 7/10en of a percent pre-market, not getting a huge bump here. I think one of the questions is going to be like who's the buyer for this and how much excitement are they really going to get out of this? Um, you know, you already have the Google Home and you have the uh what's the Amazon one called? Um, >> Echo Fire TV. >> The Alexa, like the the screen, the Alexa, the Echo, the Fire TV. >> I mean, that's the thing is like Apple is sort of later on this kind of stuff, the whole ecosystem. And you could argue that Apple, you know, this is Apple's playbook. They wait until they're happy with, you know, they feel like that they have perfected whatever product it is or it is the best iteration. But in this case, I already have all this crap in my house. I'm not going to replace it with a bunch of new crap unless it's like revolutionary, right? >> I don't see the point of this home view thing. I mean, I I mean, like the for me, I mean, the Apple Apple TV 4K updates. That's interesting. You know, I use that a lot. Search sucks. It's a new C series AI search. Fine, fine, fine. But you're right. Like, why do I need this home view thing, right? Why do I need to keep upgrading my my my stuff? Is that what you're saying? especially if you've already got the uh the Amazon Alexa or you've already got the Google system in your house. I'm saying what's the trigger to switch? Now, I do not have either the Amazon or the Google. >> I do I do have a fullsize HomePod the speaker. >> Okay. >> Which to me is the best smart speaker sound quality on the market. >> Sonos. >> Yes. Oh, I would argue because >> you would like this. >> But I may maybe I'm the buyer for this. >> Maybe. >> But there's not that many of me who haven't already bought the Google or the Amazon version. >> Probably. Um, apparently the new Apple TV 4K can pair with the HomePods. Yeah. speakers that well it has two speakers in each thing. So it can like do four speaker or something. >> You can do like you can basically set up a surround sound and the >> the uh the full range based treble on the HomePods just to get nerdy for a second. It's unbelievable. >> Really? >> It's unbelievable. Try one out like and it also it's really smart about reading where your walls are and directing the sound. It's really good. >> Still not buying new stuff. Julie's not buying it. Obviously, >> I already have all those stuff. >> I don't the home be like I don't need to tie in all this like home automation entertainment. >> There is something to be said for having music having one place for like your whole your whole house control. >> It's also worth >> I think I think that's interesting >> and it's worth pointing out this also comes right after they just uh debuted their new Siri which is supposed to be much better because the complaint with the HomePod and all their other home stuff for forever was that the Siri sucked. you it was it was it was unintelligent. You couldn't do much. So maybe now we can get some of this tied in. >> I'm not that impressed with the new Siri. Um the stock meanwhile though has been doing well this year. We know it's the best in the mag 7. Um it tried again yesterday to get above $5 trillion in market cap. Didn't quite add sitting at 4.9. >> The number the number to watch is $34260 I believe >> um to see if it will get to that $5 trillion market cap. So we'll see what happens today. Shares are hanging this new release >> right at that 7/10 of a% bump. >> So we're talking about these all these products at home that are connected and things like fridges and things like you know um your oven your smart ovens and whatever. So Anthropic had a had a warning out right late yesterday about how these AI models could basically uh infiltrate you know internet of things or IoT devices like Android TV uh like like I said fridges that's like Samsung smart fridges >> microwaves >> use the comput microwaves use better connected right use the computing power to run themselves and self-replicate uh in this case if this happened and the AI went rogue uh anthropics says it' be quote challenging to shut down since there's no centralized point of control to shut off Right. So they could infiltrate and kind of you know in aggressive and not uh uh a way that you weren't you didn't authorize it to do so. It takes over your let's say I'm not say Apple TV because Apple products seem to be pretty locked down from a you know a security point of view but another type of >> modem. They said they could just get >> Yeah. modem an internet modem. >> Just to be clear here they don't seem to be saying this is not a hugging face situation. This is not a situation where they say it can get out of our control and this can happen. they seem to be saying is that bad actors >> could they are trying to do this this be one way that even if you tried to shut them off at the data center source >> that it could you know the so-called kill switch could not necessarily work if there was a hack in progress it could then go to these home devices >> these like hackers are already doing that with viruses that can that can you know can go into other types of devices like this already >> uh and and do these things and and do sort of like DOS attacks and stuff like But in this case, it would be agents self-leating themselves, right? Potentially, which could even be more damaging, right, per this per this warning. >> Well, to your point, IoT devices are already huge targets for state security services who are trying to get at somebody. So, if now you can push that even further with some kind of agentic system, then that's the fear. >> We just saw this in France, right? To me, we did. So, there was a massive hack uh throughout France and I believe the Netherlands. Uh uh it seems some kind of rogue group hacking into uh uh one of those big grocery store systems and refrigeration systems to turn up the heat or turn off the freezing. So employees in in Paris and cities kind of around came in in the morning to kind of restock the shelves, opened up the fridge and got blasted with a wave of hot air that has already resulted in millions of dollars in losses because all that food is spoiled. That is a really serious threat for anyone facing that kind of Did you guys see this Norwe Norwegian army use these Chinese rental cars and the the cars were recording everything they were doing including uh coordinates who got into the car? Uh the cameras were type recorded them typing in passcodes to enter bases. >> Yeah. >> And then they they supposedly even knew this was happening at some point. They said we got no other transportation. I got to keep using the Chinese cars >> because they they were using Chinese-made rental cars where the Norwegian >> and they had they didn't have any other vehicles to use at >> which I I will note this comes maybe what 2 3 weeks after we got a report from the Dutch security service which I brought up uh and I don't think I said it on here but in a meeting with us this exact point that you can like these hackers can now get into cars and get into vehicles and any kind of smart car you're driving whether it's a Tesla or anything with a smart system you have to assume it is always listening and always feeding everything back to a centralized base, centralized database. >> Great. >> You know, I got this little thing that closes off my my my camera. I can slide it off and it's not going to record me. >> Yeah, I have a few friends who do the piece of tape across the camera. >> It'll record my record audio, but it won't record this. >> I just I just can't with all this stuff. >> All right, that all right. >> If you move on to >> That's a great segue. As John says, as John producer says, there's something else that won't record you is pizza. Lovable, tasty pizza. >> Hey, give it 10 years. You never know. >> Domino's Pizza earnings. Domino's says they're the largest pizza company in the world. I did not know that. They said this in the release. Uh but anyway, Q3 revenue came coming in 1 point nearly 1.2 billion better than expected. EPS $4.60 better than expected. Total margin of 40%. That's not that's pretty good. Uh same source sales, US growth only 310en of a percent. Um, international X foreign ex uh FX effects up 210 of 1% >> and it looks like the shares are down. >> That's right. >> Yeah. You know, we talked about so new new CEO Joe Jordan, he he just he just uh stepped on the role October 1st. He's former COO. Uh he says, quote, "I have pizza sauce in my veins." That's what he says. Uh like a longtime 15 year veteran of the company. It's kind of kind of gross, but um I'm not I'm not going to lie. The pizza >> might get that checked out by a doctor, my friend. It's a Domino's pizza, the newer pizza that they've been working on. Tastes better. >> It tastes better. >> So, you've tried it? >> I've tried it within the last couple years. Yeah. They they obviously have a Chicago thin crust style that I I thought wasn't bad >> as a Chicago native. Quote unquote wasn't bad, >> quote unquote. >> Um so, I'm seeing some some stuff from their um conference call here that doesn't sound great for forecast. They said US comp sales are going to be towards the low end of their guidance range and international comp sales will be flat for the year. That the macro environment is pressuring their US store development pipeline as well. One interesting thing they are not yet seeing a meaningful impact from GLP1s. >> Um but if they're not yet seeing a meaningful impact from GLP1s and they're still seeing comp sales are going to be the limit to their guidance. >> Then if you do start seeing an impact from GLP1 sales, >> right? That's not >> what happens. Well, it's interesting. Pizza is known. I mean, I it's like known as like I mentioned the total gross margin is 40%. Like it's a very cheap thing to make and you can sell it >> still cheaply and still make a lot of money. But the question is you're not growing as much. And then what happens when sort of your customers are are not wanting to eat pizza if they are on GLP1. >> And we didn't talk about we didn't talk about the Medicare effect GLP1's now going on into onto Medicare too. So, uh that also is going to be probably a big a big thing a negative. >> Yeah. I mean, you know, as you point out, same store sales, both US international, basically flat. >> Yeah. >> Um, you know, global retail sales excluding FX effects, um, up 3.2%. Excuse me. They give it 175 net store openings in Q3. That's 149 international and 26 US. Um, >> so they're not opening up a lot. >> So, they're not opening up in the US. Now, some of that could be market saturation. They've been operating in the US for a long time. The international is a bigger market with just more space to expand. >> Yeah, >> I don't know. >> But still, you have to see what does that look like over several quarters. >> Um, should we sneak in Bumble here before I think so? I think we got to some breaking news. >> So, Bumble is agreeing to sell itself to Ithaca, which is a sort of relatively newly formed company, uh, private company led by a couple of Silicon Valley execs. 605 a share in cash. This was reported upon was in the works yesterday by the Wall Street Journal. out is confirmed by the entities. $1.3 billion is the price here. Whitney um Whitney >> Wolf Whitney Wolf Whitney Wolfford >> will no longer be the CEO here. Those Ithaca guys are going to be the co-CEOs >> of the new company. Are people are people still using Bumble? I >> I mean it's probably a question of this guy because the younger generation is not into it. >> I've never been one for online dating. I've also been out of the game for a long time, but from from friends from friends who I talk to, >> Hinge seems to be the name I hear all the time now. People aren't talking about Bumble. >> I think it's part of the match group. >> Tinder. >> Match group. Yeah. >> Yeah. Uh like nobody's nobody's talking about Bumble. You're talking about Hinge or Tinder. >> So Bumble >> that's very anecdotal evidence. >> Well, Bumble switched from Remember before it was the whole thing was that women respond or or need >> do the outreach first out and now they changed it. Uh but yeah, I think it's more of the the generational change that right maybe Julie and I you our generation was more potentially when we came of age with like nerve and things like that, right? Remember back maybe you don't remember those. >> I don't remember nerve was one of like it was like the hipster um Julie wasn't a hipster back in the stop. You were she was going to all the shows in in New York and Brooklyn. Okay. So, >> so that was like maybe that's a bit more of our generation now. The new the younger younger kids are saying, "I'd rather meet someone in real life," which is crazy to me. You know, not crazy, but I'm I'm surprised they would say that. >> Um, >> see, that again, >> or they're dating less. >> This is what this is what I want to hear that they're meeting people in real life, >> which this is part of the like the anti-digital thing. There is a movement among like, you know, my my cohort and down of like >> we're all so sucked into our phones, right? >> Go to a bar, have a conversation. club. People are hungry for that. >> It's happening. >> Is that trend still happening? >> If you wear all black, it means you're single. Uh, I got to I got to tell you, >> you're running. Is that the thing? >> If you go to the club in all black, >> if I'm wrong, if you wear all black, it's just indication. >> In a running club or in a club club? >> In a running club. >> Oh, >> in a running club. That's my That's my That's what I heard. >> I mean, all black is just the default outfit at a club. >> But I But I tell my friends I tell my friends who are single. I say, "You got to do you got to you got to have all the avenues. >> You got to you got to do not you got to do in life in real life, but also do some digital, do some do some apps. You got to do both. >> Well, uh, you know, investors are liking this deal. Those shares are up 57%. Free market. I'm closing it out. I'm glad. I'm glad you did that. I'm glad you did that. >> Bringing it away. You're way next. Sazi unleashed coming up. >> You got to You got to bring me back for me. around. Heat. Heat. Heat. N. Heat up Heat. Heat. Down. Oh. Down. Down. Take a look. Heat. Heat. Hey. Hey. Hey.