Transcripts For CNBC Fast 20240703

Unemployment rate rises slightly. Yields fall. Stocks surge. Is it really any more complicated than that . Its not. And, you know what, i thought we had i wouldnt call it a Perfect Press conference from powell, but i think we had a really, really good one, and i would say very dovish. So you take that, you take the report today, and thats why the market is up. The market has been up the last few days, and, frankly, now that were out of the woods, at least for now, and were always going to be, like the fed, data dependent, you sort of have the all clear Going Forward because theres nothing really something can pop up, and thats always what hits markets. But overall, the base case has to be the markets going higher. Shannon, lets sort of take stock, if you will, pardon the pun, of where we were at the start of the week to where we are today. We came into the fed meeting thinking, okay, the risk, and maybe a likely risk, the fed claire will be more hawkish than we really want. The market had sort of gotten ahead of that by looking not so great. Mega cap earnings. What is amazon going to deliver . What is apple going to end up delivering . Whats the data going to deliver . And we emerge on this friday with a sizable rally, and we seem to have gotten over the moguls, and now were on the downhill heading towards a good spot in the race. I think theres two things, and you really touched on them. One, if we think about positioning and positioning in the bond market is positioned for a hawkish powell in the press conference on wednesday. And so we started to see some movement on the fixed income side of the coin within the bond market, seeing what yields were doing, and then coming into the print today, if you think about this is good news good news and bad news is bad news, this isnt bad news. I think thats the differentiator that people need to think about. Coming in at 175,000 jobs added with a positive Household Survey as well, adding in areas like construction, social assistance and in health care, in areas we anticipate there will continue to be some growth, those things arent bad. Then you look at the wage growth numbers, and the fact were looking at a number that could potentially annualize a lot closer to 2 , the transmission mechanism of wage growth is much different than the transmission mechanism of all of the more kind of structural auto insurance, medical care. Wages are what is sticky. Wages created this problem for us in the first place, scott. To get at such a beat, if you will, quote, unquote, on wage growth in this report, thats really what i think is buoying the market right now in looking forward to what will be the next print and not anticipating and not positioning for a really disappointing cpi print. Kev, is it time to be less fearful and more bullish again . 100 . This week could have been a completely different week. You used the mogul analogy. I think that was perfect because imagine if the fed had been hawkish, which we all expected. Imagine if he hadnt pushed back on rate hikes the way that he did. Imagine if he didnt say there is no stag and there is no inflation. That was an awesome meeting. The jobs report today, and shannon nailed every point on it, it is a great way to end the week. Are things perfect moving forward . Were priced to perfection. I dont know we want to be overly aggressive buyers, but you can be more optimistic when this week started. Certainly not out of the woods. At this go to Tony Pasquariellos note where he says i think the market needs to do more work within this trading range. These are choppy waters. Where im going with this, simplify your portfolio to highest quality and highest conviction assets and do not, in all caps, fight the Freight Train that is u. S. Mega cap tech. Shannon, make sense . We talked about this on closing bell, about the choppy waters. The combination of micro and macro is working in our favor this week. If you think about quality and you think about the continual long lags, those long lags are going to continue to impact lower quality businesses with less free cash flow, less weaker Balance Sheets and less of a competitive moat and they are stronger companies. I think when you think about quality and you think about a factor thats been fairly consistent this year, quality is that. You know, weiss, tony has been so correct on the direction of the market and the kinds of stocks that are going to carry you, a bit of a pullback in mega cap tech. Hes urged investors and weve told you what he has said about keeping your eye on the ball. Go big or go home. Stay with the Freight Train of mega cap tech and that trade is back because the nasdaq, as you know, is ripping, and the performance over one week, what a difference a week makes. Look at apple at the top of the heap, up 8. 5 on the week. Amazon is up 7. 5. Alphabet, 6, meta, microsoft, 2. 5 and 2 respectively. This trades back . I dont think it ever left. It looked dicey for a little bit. It was a little dicey. Premega cap earnings, okay, is this trade going to have some struggle . Do valuations need to correct more meaningfully than they perhaps had . And here we are back to go where the money is . Thats a fair point. Though theyve struggled, the struggle has not been g gargantuan. 10 to 15 , take a look at where its come from. So its natural for these stocks to take some gas at some point in time. I like that, frankly. But to kevins point, and i should have made this point as well, were back to where we were which is overvaluation in the market. So to tonys point, and hes phenomenal, he has a great track record, and more important than his conclusions is his thinking, his logic in getting there. I can draw my own conclusions, but i like hearing the thought processes. His is really good. Hes right. We have to stabilize at this level. And then lets not forget, the world can change when we get to the week of may 13th and have ppi and cpi. Theres no point in getting over your skis here. I dont see the market running away to the upside, and i think the debate is still valid that our higher rates for longer are going to derail the economy more than it has, more than just a little slowing, and you know what can survive all of that is mega cap tech. But they cant be an island in valuation. Lets pick onwhat you said, though, about market overall valuation, which i think you reiterated the belief the market is still overvalued. Is that fair . Okay. So is it, my comeback to you, if higher for longer today isnt as high nor for as long as we feared it might be on monday . Yes. Is it still that overvalued if earnings are coming in fine, i think we can say, the economy is still reasonably strong, i think we can say. The fed chair gave you the idea they really want to cut. Theyre just not going to do it today, and theyre probably not going to do it in june. July . Maybe. Some firms are still sticking with july. Some firms have four cuts. Some with three. Some with two. Some with one. Today we can say, well, maybe rates arent going to be as high for as long as we thought. A week ago our valuations overstretched as you make it out to be. Sometimes its a curse having too much experience because youre sort of a prisoner to whats happened before in economic and monetary cycles, so i like being the og and in other cases i wish i didnt have that perspective. When you have rates this high, and we talked about this a little bit on wednesdays show, its unprecedented to have a multiple decide. This is a multiple you have with not accommodative Monetary Policy but easing Monetary Policy. I think were in a new paradigm. Ive been saying that for a year and a half. You turned over in your investment base and have an experience of vshaped recoveries and agnostic to valuations, right, it could keep going. So thats what i debate. What i know, though, while i believe some of the stocks i own are overvalued, i have no doubt they will grow into the valuation, so its only a moment in time that they are overvalued. Shannon . So i am so glad steve just said that. I do think its about Earnings Growth. I think it comes back to whats happening in these underlining reports. What are we looking at from an earnings perspective . Who is growing Topline Revenue . Growing into some of these valuations, maybe not for some of the tech names were talking about right now, but i would acknowledge that perhaps they trade at a premium to market. In sectors outside of mega cap tech, thats really the thesis for the second half of the year, that all of this compounding of improving Gross Margins and the ability to maintain Revenue Growth even in a disinflationary environment, that will allow some of these stocks to grow into a valuation that, scott, in parts of the market, isnt all that demanding. So i think when you look at is the market overvalued, youre looking at it from a Historical Perspective but in terms of what do you anticipate will happen for earnings because there could be this notion of growing into that valuation. Earnings growth, kevin, its no secret im not going to break my news near that mega cap Earnings Growth is accounting for all of the Earnings Growth or the great majority of Earnings Growth this quarter. Which is no surprise why people continue to go to those stocks hello, apple. Now i get their revenues have declined six times in the quarter. Service revenues grew to a new record. China revenue, yes, it declined, but it was way better than feared. And then a mountain of a buyback, the largest ever by any company ever. 110 billion. It goes sort of, also, to what Tony Pasquariello suggests, the reason you want to stay with the stocks, they are buying back the most stock that matters. On the Earnings Growth idea, where else are you going to go . I dont know the Earnings Growth for apple supports 26 in a week, right . It was last thursday we were talking about adding to the position at 165. Today its 185. Thats a big move. I dont know the earnings will justify that. Were excited about the Developers Conference and the prospects for a. I. , 110 billion Share Buyback is massive, a 4 dividend increase. We own the stock. You know what we did this morning at the open, we wrote a covered call on apple because theres a big move, maybe a little bit too much too fast, so to harvest that volatility, it gives you a very modest hedge, and i think thats something anyone who owns apple should think about doing. Let me ask you this. Does a trough deserve a 20 stick . Were going to put our flag in the sand here and say this was the moment that were confident that apple troughed both in their revenue, both in china, both in they havent even talked a. I. Yet. Theyve sprinkled it. Its coming. If not now, when, is my point. Sitting here bragging that its up this much, we thought there was weakness there. We can never pick ultimate bottoms or tops. Anywhere between 150 and 160, that stock is a buy. Between 190 and 200, i would take a little off the table. You know, apple would have no Earnings Growth without their buybacks. Its all financial engineering, so while companies that have Balance Sheets and can do acquisitions of their own stock, thats great. But what do you pay for that . I pay a premium for the brand and thats it. So i dont have to own apple. You dont have to own apple. Apple will be an underperformer in my estimation Going Forward. They are not going to be a primary a. I. Play. Period, end of story. Why not . Because they wont. You have microsoft, who has Pricing Power theyre a different kind of a. I. Player. They are. If you ask the question, as you ask in the past, who will benefit most from a. I. . Im paraphrasing. I would say apple is not even in my top five or six. Yes, but youre talking as if its an apples and orange conversation, i think. Youre talking about a Product Company that i mean, and services obviously. A. I. May very well be what leads to the next great refresh cycle of a company with the strongest install base in the history of consumer products. See, i dont think it will. I think it will. I dont think it will. I think look, they have a big install base. They have big market share in some markets. They have the best. No, they dont. Globally their market share is a fraction of what android is. They have the best install base. Lets not kid ourselves. They have a good install base. I will not argue that. Despite that, thats my point, despite that, remember it was a disaster with the x. I would rather pay a Software Company like microsoft with recurring revenue with significant Pricing Power rather than relying on the Telco Companies to subsidize the phones. So my point is, look, i dont think when i look at mega cap, i dont want to own all of them. I nearly do. But if i have to pick and choose and youre classified as mega cap this is the last one on the list. Kevin, i know youre taking the other side of that. You have to because the refresh cycle is the story. There is no debate. I dont know anyone who has an android. Even my dad has an apple phone. I dont think he has a computer. The opportunity set is beyond anything weve seen before. I own microsoft i think that there will be an increase finally in the revenues. If you look back six, seven quarters, its done nothing. It just stalls. Your point is spot on with the Share Buybacks. To think a. I. Cant be a may juror contributor to apples next phase, i think it can and will be. If you look at the big tech buybacks and the new authorizations so its 110 billion from apple. Google is 70 billion. Thats a new authorization, steve. Meta is 50. You own meta, 50 billion. Microsoft is unchanged at 13 billion. I like buybacks, but i like the fact that meta has increased their spending in a. I. By 10 billion. Thats going to be much more creative to earnings and have longer staying power than a Share Buyback which they also have. If you rip out the Share Buybacks, they still have great growth. Apple hasnt had that growth in a long time. We can say six down quarters. You can go further back and see its been flat for a long, long time. Injust think youre going to look at a moment like tony upgrading the stock for the first time in six years ahead of the earnings, by the way good on him buy the fear, is what he said. Thats by virtue of the Stock Performance today and the earnings last night. Seems to be a good call. I think the buyback buys them some time, scott. Look at the second half of the year and the refresh cycle, the rationale for why. I think a. I. Needs to become more relevant for the install base that apple has in order to support the eventual refresh cycle. And so i think if you think about product evolution and what theyre working on, they saw what happened to meta. If they had gone out and spent a bunch of money or announced a huge capex to nowhere at this juncture, that wouldnt have been the right thing for them to do. They introduced this enormous buyback. They buy themselves time so they can figure out what their a. I. Story is going to be from a product perspective and how they can make a. I. Relevant to their install base. Services were up 14 . They need people to buy the new phones. I think this is asecond half story. I do think there will be a showme aspect to this. I think Apple Management did the right thing to buy themselves time. The street is all bulled up today, by the way. Citi has a 90day positive catalyst into wwdc. Morgan stanley, i will have first reaction on closing bell today, he raised the target. Its hard not to be more bullish. Jpmorgan raised the target. Time to buy, they say. Ives is bullish. I know thats not a shock to anybody, but hes reiterating that. Bofa reiterates it. Goldman, evercore. I get it. Theres nothing wrong with owning apple but, again, i have to pick and choose where i will get the best performance. To me, if what youre saying to read into what youre saying if tim cook didnt come out and talk and wanted to talk about spending on a. I. But said, hey, look what happened to zuckerberg and meta, so im not going to do it, thats no way to run a company. Hes running it quarter to quarter. Think longer term. Who cares what the market does in one quarter . Youre telling me how many rabbit holes do you want to go into . Youre telling me tim cook is running apple quarter to quarter . That was the comment. I think youre responding to what i was saying. I do think they have theyre going to have a very wellarticulated a. I. Strategy. No doubt apple will have that. In this moment, however, the inflection point, they came into an earnings season where china wasnt as bad, where they had Strong Services and they had plenty of cash to announce this buyback which, to scotts point, matters right now. People want to see capital coming back to them. This isnt eight years ago where people were like, why arent these Big Tech Companies spending. They want to see you back. Now theyre giving you dividends, too. And its a different universe. Almost all now. Which is why barclays said that the earnings that have come out are going to continue to lift the growth trade higher and values outperformance has reversed course and we expect this to sustain. That leads me to the broadening trade which, you know, again, felt good. While mega cap was pulling back, they say not so much now. Maybe energy is a perfect example of that. Have you seen that . It was a great trade. Its looking like, i dont know, is it done, weiss . The worst sector this week, the worst sector this week and month. Take take a look at a tenyear chart. Youve done an awful lot of work on chevron to be running in place over ten years. So you have to trade it, right . There are dividends that maybe increase that, but look at the charts of any of the Mega Cap Technology stocks. Its a new world weve been living in for the last decade, maybe more. And, you know, do you really want energy to broaden your do you really want to believe the thesis in energy . Im not going to mention how many times ive heard 200 oil. Think about that all the time. You dont need 200 oil for Energy Stocks to work. No, no. I know that. If energy if oil moves up in price, thats not a good thing for inflation in the market, right . Be careful what you wish for. Kevin, you have chevron, co conoco. Its just such a massive amount of money thats returned to them. We talk about apple, and theres no comparison to a 110 billion buyback. I get it. If youre invested in the names, you get great dividends, special dividends, Share Buybacks, low multiples, now, to steves point, we did trim chevron. We were a little bit overweight in it. I will not abandon it and try to run into technology because they have a lot of heavy lifting to do. It looks like they did it this earnings season. We have nvidia coming up. Theyre probably the behemoth in the room. I will not abandon the energy trade because i dont believe the broadening has ended. And i want to be diversified. So speaking of being diversified, the broadening trade, tjx, you bought more. Well do that before we take a break. Give us insight into why you leaned into this more. If we see consumer trading down, we like off brands looked at kel loggs, mcdonald, starbucks, tjx tried to catch up to the postpandemic numbers. But were seeing growth again. Good dividend growth. Only 1. 6 yield. Theyve been increasing for the past five years, and theyre a beneficiary of the Strong Economy and of the tradedown con consumer. 4 billion over the past year. Were going to take a quick break. We have more committee moves. Steve weiss, Kevin Simpson both making trades in two big banks today. We have those details straight ahead. Later on, the countdown to the 150th running of the kentucky derby. Well take you there live and speak with nbc sports legend mike tirico ahead of the big race. Halftime is back in two minutes. Announcer are you following the Halftime Report podcast . What are you waiting for . Look for us in your favorite dcti app. Follow the halftime podcast now. Only at vanguard, youre more than just an investor, youre an owner. Our Financial Planning tools and advice can help you prepare for todays longer retirement. Hi mom. Thats the value of ownership. And theyre all coming . Those who are still with us, yes. Grandpa whats this . Your wings. Light em up gentlemen, its a beautiful. Day to fly. Stocks and financials, steve weiss has bought more goldman sachs. New alltime high today. That stock has been on the run. Why did you buy more here . Actually, i bought it twice. I bought it wednesday after powells comments. I thought, hey, who is going to do better who is more leveraged to a better economic environment, a better market environment, m a and ipos and secondaries, than goldman . And then the reason i bought more late yesterday afternoon, i was at a goldman conference yesterday, and i have to tell you, theyre just the best there is. Every single they have i view as the best in coverage, in knowledge. Their strategists are phenomenal. Are you trying to get a police vest or Something Like that . I did get a sweater. But that was, you know, from somebody else. They are the best in every single seat, have the best coverage, for me, and i think for everybody i spoke to, and why not . Why not own more of the best . Thats why i did it. Kevin simpson, you own goldman, too. Send him a vest, too. I got a free pen. The either or story, we own both. We added to jpmorgan, because after their earnings, the stock traded down about 10 . We still think theyre best in breed. 2. 4 dividend. They increase by 10 every year. Looking at a 12 times forward multiple. If we think about things i realize were old and remember p es of 14 and 15, so 12 is attractive. For us in that broadening trade, we want to be in financials. Theyve been terrific the past year. I think its a great time to add. One more comment if i could. Theres always noise on goldman that people, theyre leaving. They only have three or four but you would be hard pressed the next one up is as good as the last one and solomon, all the noise is gone. Hes a phenomenal ceo and a great job reshaping the market. You get a pen then. I got a pen. What about financials . Bank of america talks about the biggest outflows in eight weeks, one of the reasons is higher for longer is not necessarily good for banks. That created issues last year and it weighs on financials. The flip side, some of the larger banks grow loans, certainly to have less pressure should we see lower rates. I wouldnt be surprised to see a change in leadership. Weve been waiting a long time. To steves point, transaction levels are increasing, that could potentially continue. And, also, weiss, most people we speak to in the venture world who play a vital role in the trajectory of where the ipo market will go, arent looking for any gangbusters this year. Its our 25 story. Do you agree with that . I do. Theyre so under water on their current portfolios and those companies have not been able to raise cash. People like us that are active in the private markets, were not in that position fortunately because of the vintage of our private investments, theyve been using their capital. Theyve been picking and choosing which companies will survive and which to let go. Before you see the appetite for new vc funds and new they just cant raise capital. Theres always going to be something, but youre not going to get a, b, c and d in the same week. And not while rates are where they are. Lets get the headlines with leslie picker. Former trump confidant hope hicks is on the stand in Donald Trumps hush money trial testifying about her role as press secretary during the 2016 campaign. Her testimony could give a glimpse of what was happening in the final weekends before the 2016 election as former lawyer Michael Cohen was negotiating the hush money deal with adult star stormy daniels. And the Bowling Alley that was one of the sites of maines deadliest Mass Shootings is opening today, just under six months ago a gunman killed six people before driving to a nearby bar killing ten more. He later died by suicide. The owners were originally against the idea of reopening until the Community Rallied behind them and convinced them to change their minds. And hall and oates are over. The group will not be getting back together. It comes after a public rift over john oates attempt to sell off half of the duos jointly owned company. Back to you, scott. Leslie, thank you. Up next, mike santoli joins us with a special midday word live in omaha today ahead of berkshires annual Shareholder Meeting. Ameritrade is now part of schwab. Bringing you an elevated experience, tailormade for trader minds. Go deeper with thinkorswim our awardwining trading platforms. Unlock support from the schwab trade desk, our team of passionate traders who live and breathe trading. And sharpen your skills with an immersive Online Education crafted just for traders. All so you can trade brilliantly. Hows the chicken . The prawns are delicious. Oh, i have a shellfish allergy. One prawn. Very good. Did i say chicken wrong . Tired of people not listening to what you want . Its truffle season ah thats okay. Never enough truffles. How much are they . Its a lot. Oh okay im good, that its like a priceless piece of art. Enjoy. Or when they sell you what they want . Yeah. The more we understand you, the better we can help you. Thats what u. S. Bank is for. Huge relief. Yeah. We are back. Berkshire hathaways annual Shareholder Meeting kicking off less than 24 hours from now. Cnbc will have special live coverage of the big event tomorrow morning, 9 30 a. M. Mike santoli is there, as he usually is, and he joins us now for a special midday word. Its quite a day in the market. Im sure its quite a day there. Its going to be an amazing weekend. Were looking forward to watching tomorrow, of course. Whats on your mind given all of that . Yes, scott, they did just open the doors. The public will flood in any minute. It will be a busy meeting, i think with the apple news here, so many points of relevance. What i find remarkable, and this is at the heart of the discussion you were having and the buyback and everything else, its exactly what he said all along, he bought it, he was attracted to it, and, you know what, for as long as ive been doing this, people have had the same discussion. Its slow growth, financial engineering. They have a very high floor on their business. The fundamental support is there. Whether you want to pay that much for it right now, im not sure. The buyback, 110 billion is business as usual. The market cap of apple was under a trillion and now youre at 2. 8 trillion. Its a smaller percentage. Thats what they do. They have enough capital to share it in various forms while also nvesting. To me, thats why the mag seven is what it is. They live in a World Without difficult tradeoffs in capital allocation. Are your feet bothering you, mike . I dont know why were taking a shot of that other than theres a famous berkshire shareholder in the live shot. I was like, is my mic line trapped on my feet . Why is the crew grabbing me. That is bill murray he is a wellknown berkshire shareholder. Thats one of the great parts of this weekend, right, mike . One of the great parts of the weekend. Yes. Literally you never know you never know who will show up. Shareholders from everywhere do, and he is and has been a berkshire shareholder. 100 , for a long time. Its good that he managed to catch a break in life and got into the stock at a relatively early time. It is an interesting feature of this meeting. There are so many side events and dinners and talks that do go on. You have a collection all gathered here for a couple of days. You were a good sport. We might have known something was going to happen but i didnt want to ruin the surprise to you or our viewers. Say hello to murray. Thats mike santoli. I think well see you on closing bell. Tomorrow at 9 30 you can watch. Amgen soaring. The company goes all in on an injectable weight loss dg. Ru kevin owns the stock. Well get his take next. To new adventures. Oh. Mwah. Planned. And unplanned. Surprise they lead to goals. For you, mama. And connect us to family. I didnt get the part. Your dedicated fidelity advisor can help you open those doors. But i did get waiter number 2. Because they know you. They can help you create a comprehensive plan for your full financial picture and personalized Money Management with the right balance of risk and reward. Doors were meant to be opened. Welcome back. Take a look at amgen soaring today. The Company Announcing its moving forward with an injectable obesity drug. Its really soaring on that drug trial result, and you own the stock. Can you give us context here . Even we were pleasantly surprised with the stock price move. Apple was great. Looking at amgen, this stock is up 15 . Theyre a limb bit late to the party on the obesity drug admittedly, but theyre entering phase three, and the advantage they could bring to market is a once a month shot as opposed to once a week or every other week, and i think any of us that have to take shots for whatever the reason, the fewer times we would need to do it the better. The other thing you need to look at under the hood, this acquisition is making them double digit growers in terms of their revenue, their earnings. This is something that is a credit to their bottom line immediately. They have three other top tier drugs. We really like the stock. We love the dividend and we love the dividend growth. What about the space in general, one of the worst year to date . You have more exposure through United Health and merck. Weve been very careful, its not a stock were recommending adding to. Theres a lot of risk with United Health care. Its been a best performer year to date. We played the Health Care Sector well. We went into amgen, scott, we rotated out of j j. Thats lower. Amgen is higher. I think you called it dead money. Too bad you didnt listen to me on United Health and sold it. Youropinion and positioning have really changed on health care, right, whereas you, you know, a handful of months ago, profitable health care how you described it and now decided it wasnt. Now im interested in your view moving forward here. My view moving forward is when i broaden out the portfolio slightly, i went into defense and aerospace, and i stay away from health care because, as we saw, predicting what cms would do with pricing is very, very difficult. And as the world and this gets too wonky switches from fee for service to valuebased care, where the government wants you to be, its difficult. You have to know your patient populations intimately to be able to manage the risk appropriately. I think its worth waiting on the sidelines. Shannon . Having this news on amgen, i dont know that it helps the Overall Health care space too much. There has been this binary trade in terms of youre either in glp or youre not. The implications have weighed on the rest of the Health Care Sector. I think steve makes a great point around managed care and the challenges there. If you think about consumables, instruments, those types of health care exposure, i do think theres still opportunity and value. Coming up, well take you live to Churchill Downs ahead of the 150th running of the kentucky derby. Nbc sports mike tirico is there. He will talk about it with us next. Welcome to the roots of our legacy. Where excellence, comfort, and electricity. Are forever in bloom. Welcome to beyond. The mercedesmaybach eqs suv. [crowd chanting] they ignored your potential, and mocked your ambition. But its not the critic who counts. With every swing and block, your game plan never changed. Some still call it luck. Let them. Because you know what its always been. Inevitable. The future is not just going to happen. You have to make it. And if you want a successful business, all it takes is an idea, and now becomes the future. A future where you grew a dream into a reality. Its waiting for you. Mere minutes away. The future is nothing but power and its all yours. The all new godaddy airo. Get your Business Online in minutes with the power of ai. So this is pickleball . Its basically tennis for babies, but for adults. It should be called wiffle tennis. Pickle yeah, aw whoo these guys are intense. We got nothing to worry about. With e trade from Morgan Stanley, were ready for whatever gets served up. Dude, you gotta work on your trash talk. Id rather work on saving for retirement. Or college, since you like to get schooled. Thats a pretty good burn, right . Got him. Good game. Thanks for coming to our clinic, first ones free. All right. Welcome back. The road to the triple crown begins tomorrow with the 150th running of the kentucky derby. Mike tirico will be hosting nbc Sports Coverage at Churchill Downs, as you can see he joins us live. We always love the first saturday in may, and its great to catch up with you, mike. Welcome. The same. Good to be back. And the first friday, the kentucky oaks, happens later today. About 100,000 people here this is a great weekend and a milestone year for Churchill Downs. Tell us what to expect tomorrow in the big race. Well, 20 horses, their one chance for glory and alltime history. Two favorites have emerged as weve gone through the trail, the preps leading up. Fierceness is one horse owned by a guy from queens, who had the favorite last year, that horse was scratched the morning of. Came back with a favorite again this year. John velasquez and John Pletcher are the jockey and trainer. And then the other choice is sierra leone and its perfect to talk about the big investment and will it pay off, one of the top five prices paid for a yearling. Over 2 million was the price point on this horse. The horse has done well. Those two are separated from the rest of the horses as we handicap the derby. What else stands out to us since were talking money like you just did, the purse, 5 million now, right . Theyve bumped it up significantly. 150th anniversary. I think, also, trying to keep pace and in step with large sporting events. Big horse races around the world, weve seen big purses attract races and some of the best horses. If thishorses, and this is to be considered the premiere race in the world, the price purse has to be commensurate with that. So 5 million is a very significant size purse. Not the biggest around the world, but right up there in that neighborhood. Other standout, i suppose, is whos not going to be racing, and thats bob bafford, the legendary trainer doesnt have a horse thats going to be running. Youve been outspoken in what this means for this moment in this sport, particularly what it means for the future if people like mr. Bafford who are iconic and legendary continue to have these sorts of issues. Can you expand on that . Sure. Simply put, he had the winner, hes won multiple times, triple down events. Well see his horses in the preakness coming up in maryland. But bob bafford had the champ here a couple of years ago who, after drug tests, was removed and disqualified, and no longer was the winner of the kentucky derby. There that point on, there was a suspension. Churchill downs put a couple of derby suspensions on him. Weve gone through a lot of the legal cases, and even this year, churchill down says because we havent seen enough contrition, were going to suspend him for the calendar year. In any case, the larger point is, whether its bafford or other folks that have been involved, in conversations of is the horse sport clean, are the horses drug free . Are you having their best interest in mind . If this sport will try to find a way to grow in the next ten years, you need Consumer Confidence thats the betters, thats the public. I think its beholden on all the stake holders, the tracks, trainers, owners, jockeys to get on the same page and pull in the same direction, because the sports dollar has a lot of competition, especially with betting in other sports now. This isnt the only place where you can have fun wagering money. Well said. Lets talk olympics for a moment before i let you run, and watch some more racing. Peyton manning, Kelly Clarkson joining you in paris. Payson manning said, wouldnt have even considered it without tirico. Were looking forward to this. Super nice of peyton. Something i think our whole company is looking forward to, top to bottom. The olympics, weve had three in a row in asia, two in a row with covid and no fans. The olympics need as jumpstart. There are Great Stories with team usa, especially because theyre only three years removed from competing in tokyo. And paris is the costar. When our set is on during the today show, during daytime and primetime, the eiffel tower will be behind us. Iconic places and venues around paris are going to be used for the competition. So its a great opportunity for the olympics to get a recharge, a refresh, and build momentum to four years from now when the olympics are in los angeles in 2028. So we are super excited, not just for the summer but what happens in june, making team usa and the olympic trials is going to be spectacular, as well. All the networks of nbc, including us, excited. Mike, enjoy the weekend. Well be watching, of course. Will do. Always a pleasure. Thats mike tirico. 2024 derby starting tomorrow, 2 30 eastern on nbc. 12 00 on peacock, 2 30 on nbc, also available on nbcsports. Com and the nbc sports app. Final trades are next. 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Good weekend, everybody. Ill see you on closing bell. Welcome to the exchange. Im dominic chu in for kelly evans. Heres whats ahead on the show. We have a weaker than expected jobs report last month, a more dovish than expected powell, so did that just change the whole rate cut timeline, and is it presenting new opportunities in this market . Well talk about all of that. Plus, there was one thing in apples report that makes our analyst worry a bit. Well tell you what it is and how to trade that stock from here, and then starbucks,