Transcripts For CNBC Power Lunch 20240714 : comparemela.com

Transcripts For CNBC Power Lunch 20240714

Markets the dow and s p back within 1 of record highs. The nasdaq is higher today as well and 2 from alltime record highs. Check out microsoft. That stock jumping to a fresh record high after announcing a 40 billion buy back, thats helping the do you today well have more on that later. Lots of big names making big news leslie picker has all the market moving news and there is a lot of it. Leslie its a busy and eventful day. So i think were going to kick it back over to bill and im going to head to the desk and well continue our discussion. What a good idea. Thank you, morgan. Come over. Were wondering how worried investors should be at the alpha conference believe that our economy is being propped up by a strong consumer right now, should investors start worrying our push to record levels is going to stall out bring in Brian Jacobson with Wells Fargo Asset Management and christian amami is with investments. Thanks for having me. A lot of the investors, the feeling is that this is as good as its going to get and if the trade war continues and the tariffs continue higher and the Global Economy continues to slow down, its got to take a toll on our economy at some point and evidenced z in our stock market. What do you think, brian i think weve seen in the Economic Data evidence of that slow down. And now i think investors are looking for, is there going to be a favorable resolution. One of the fears that we have is that maybe the rug gets pulled out from underneath us as far as what some of the sentiment, where if theres a backtracking on the status of the trade negotiations or if theres something dramatic that happens with brexit. As it is, i believe weve already experienced some of this economic slow down i think it was very evident in the housing data, although that has gbegun to rebound, very evident in the manufacturing data so investors could be whip sawed on any tweets on the trade front. An even though the fed seems to signal theyre not cutting rates any time soon, you think there are rate cuts coming yes in fact, jay powell in a smart way left himself that optionalty and his performance yesterday was meaningful better than last few that he has done so i think the outlook for the economy is definitely growth moderating however, the likelihood that we get to 1 or sub 1 i dont think is really in the cards in fact, things are stabilizing rather than deteriorating. If we get any resolution on the trade front, i think the set up is very nice for the markets to move higher, rather than go lower. Gentlemen, we want to keep this conversation going, but first were going to head back over to the delivering alpha conference and leslie picker for the biggest market moving headlines coming out of there. A busy and eventful day here at delivering alpha, big topics surrounding where some of the world top investors and politicians expect the growth to go pimcos ceo says, issues around the world are likely to drag down u. S. Growth specifically. We see the u. S. Economy slowing down, and the number we have in mind is we are slightly above 1 for the first half of 2020 and obviously the elephant in the room is the trade war with china. How to resolve itself. And also other distinct incident across the world think of saudi arabia, think of brexit, think of italy all these things basically are a dampner on growth , only so much Monetary Policy can do to reignite growth. But Vice President mike pence who spoke with joe kern nan had a different take, arguing the u. S. Economy is benefitting from his administrations policies. American economy is booming thats absolutely undeniable since election day, 2016, more than 6 million jobs created by businesses large and small, unemployment is at a 50 year low, wages are rising at their fastest pace in more than an decade one fact after another, as we travel around the country, the enthusiasm, the confidence you know, the a soaring stock market, improving the pension and retirement of working americans. When asked about the upcoming 2020 election, Vice President pence said democratic socialism would, quote, crush the economy. Invester Lee Cooperman reiterated that concern. There is a shift to the left in this country, they wont open the stock market if Elizabeth Warren is the next president so tons more investors, economists to go for the rest of the afternoon here, so im sure well hear a lot more about everyones takes on the economy. Back over to you leslie, what has the, i guess, general motor sentiment been like at the conference given the fact you have so many high profile names there are there certain bigger, key broad themes that are emerging here a lot of people are talking about public versus private markets, thats the theme thats spanned across the largest panel, its been in the tech panel, been in the conversation with the sec chairman, its been a big theme especially in light of what were seeing with we work and people are trying to understand if theres a disconnect between the public and private markets and what that means for your average investor out there p the economy has been a big theme, the fed a big theme and people are divided on the aisle in terms of what to do about the economy, whether it is booming as the Vice President said or whether it is likely to slow down in 2020 as we heard from pimco. Fed and where they are in terms of Monetary Policy, same thing some think theyll stay where they are, some say theyll continue to climb. Thats the beauty of the events you can listen to the smart people in the room and get a sense of where their heads at. Brian, just to go back to you here the fact were in striking distance of fresh record highs for the markets right now, does that make sense to you where does it go from here i think we could probably get up to 3,100 on the s p 500 if theres some sort of say tomorrow we get some positive news with the trade negotiations and that continues on through october, that could push us higher however were a little concerned that really when you think about the fundamental backdrop, the economic momentum having slowed were probably setting ourselves up for another pull back here as we go into the end of the year my friends at the Wells Fargo Investment Institute we agree with their forecast, over the next year probably about 6 to 7 returns on the s p 500, which is good but its not great in the context of the last few years where youve seen more double digit returns. What weve seen, interestingly, is the sectors that have gotten us to these close to these alltime highs are the value stocks, not the Growth Stocks that were so hot a few years ago or a few months ago. Do you play value now or are you sticking with growth i think the regime change that people are looking for in the market is going to be very short lived. And the reason for that is it very straightforward unless Global Growth picks up meaningfully or Interest Rates rise significantly, both unlikely events in our view, that the losers become winners and winners become losers likelihood is pretty small im sticking with tech for u. S the credit markets for yield and maybe emerging markets as a bet on Global Growth stabilizing. Gentlemen, thanks for joining us today thank you coming up two tech titans in washington today well tell you what jeff bezos is pushing for and arcade games, will the gamers come. Welcome back to power lunch. Apple launching arcade today, a move it hopes will give it entry into the Gaming Business josh lipton has those details for us morgan, more than 2 billion people will play video games this year. Apple hopes some of them will give its new service a try today the iphone maker officially launching arcade, thats a single subscription at 5 a month, it includes access for up to six family Members Service will feature more than 100 new exclusive titles the Company Reportedly spent hundreds of millions of dollars to secure these new games. Its no surprise tim cook wants a greater piece of game industry, total game revenues this year expected to reach nearly 150 billion, ever core isnt expecting arcade to have a big impact on apples bottom line but he does think arcade could help bolster the companys segment by adding 7 billion in revenue over the next three to five years apple making other news today, too. Cnbc was invited to look at the companys new revamped store on fifth avenue in new york city. Its had over 57 million visitors since opening its doors in 2006. It will officially reopen tomorrow morning just in time for the new iphone models. Morgan, back to you. Josh, thank you very much now weve got Mark Zuckerberg in washington talking behind closed doors to members of the house and senate weve been tracking him down in the halls. Literally did you catch him we saw him very briefly he is now heading into the office of senator josh holly, a republican, one of the most vocal critics of big tech here on capitol hill. Just before he met with senator holly, he also met with senator mike lee of utah, another republican, head of the antitrust subcommittee in the senate also someone skeptical of the power that big tech wields over our lives. But zuckerberg is here not only to speak to republicans but also offer an olive branch to democrats as well. He had dinner last night with senator mark warner of virginia. They talked about data protection, Election Security and talked about competition now mark warner was on cnbc earlier today and said that zuckerberg appeared to be more humble, he understand that a new era of legislation and regulation could be coming and he said that the days of the wild, wild west on the internet are over and he wanted to convey that to zuckerberg we know that zuckerberg has been trying to meet with senators individually in their home offices as well. He met with mike shots of hawaii in his office about a month ago. So again we see here big tech trying to make inroads on capitol hill, trying to smooth oversome of the acrimony that has existed about their dominance on the platforms and over their privacy practices the fact that Mark Zuckerberg met with some of his fiercest critics in congress, does this mark a shift in terms of not only how facebook but big cap tech in general is now thinking about the conversation it needs to have the lawmakers given all the swirling possibility around legislation and regulation i think that big tech has done a better job of trying to tell their story here on capitol hill and also, get out in front of some of the potential movements. We saw that zuckerberg also penned an oped in the Washington Post a few months ago that laid out the framework for what he sees as essential movement over privacy. They have a framework of what they would support for privacy legislation to ensure that their platform is not manipulated ahead of the next election they understand theyre going to need to work with lawmakers here, not against washington and theyre trying to do a better job of that. See if it makes a difference, though. And wearing a tie only the second time weve seen that, the last time was the last time he was on capitol hill. He ditched the hoodie thank you very much. When tech grows up, i guess you can say. Turning back to apple arcade is the dawn of the streaming age for video games. Joining us is brandon ross. Lightshed partners. It should be light stream, dont you think . There is one, though, isnt there . Yes. Were happy to have you on. No pun intended, is apple arcade a game changer i think its very interesting for the mobile gaming world. Thus far, all the games that have been successful on mobile have been in the premium model, which essentially means that publishers are trying to create addictive games that ultimately frustrate players and get them to play. So thats been a turnoff to some creators and a turnoff to some players. This subscription offers a new technique that can incentivize new types of games which may be more fun for players and incentivize players to play mobile games if youre talking about new potential Business Models and way for content creators to make money, who will be, i guess, attracted to do that are you talking about the big tent pole publishers. Yeah. Well. Or are you talking about someone else i think the big tent pole publishers all have their individual plans youve seen with activision, call of duty mobile is just kind of days from release and that will be in that premium model. But theres a lot of independent and smaller publishers that want to create different types of games that havent really had the opportunity beyond premium so i think its an opportunity for them and, of course, its an opportunity for apple, right right. They have an install base of, what, 900 million iphone users, which theyre looking to add Service Revenue to and thats Service Revenue beyond the reallocated equipment revenue that my partner likes to point out. And youve seen them attack that base with everything that consumers are doing on the phone. Youve seen music be very successful already obviously cloud has had some success. And youre going to see tv and now games. Are we to view video games the way were viewing the content were seeing on the streaming services coming out . In other words, will that same Business Model work for gamers the way it does for people who love to bing watch tv shows on streaming services many. Our belief has been that on console and pc subscription is actually not the right way to monetize i dont think theres either a player incentive as players are really just playing one or two games continuously in this new games as a Service Model where games are living, breathing animals for a long time. Theyre not playing several different games a year so whereas in netflix you have the consumer need for it, because we watch tons of different video content or on music where we listen to tons of different types of music the subscription model probably isnt going to appeal to pc and console players. And then the Business Model from the supply side has been quite good to date with both upfront sales working for software yvar of games so i dont see subscription taking off strongly there, but we do have more hopes on mobile as we pointed out. Whether its the video game creators or the Tech Companies getting into this or some of the other names that you follow with an entertainment more broadly, what do you like the most right now . Well, i think our kind of favorite idea has right now is Madison Square garden thats away from our video game coverage, but msg has gotten extremely cheap. Especially over the last kind of couple of months as theres been some push back on a project theyre doing in las vegas but look, this thing has an enterprise value of 5. 5 billion right now. The knicks alone we know, which they own, have already received an offer of 5 billion for just that asset then you have the rangers, Madison Square garden, the forum and several other top of the food chain assets and you have a hard catalyst coming here, the entertainment and sports teams are going to separate probably by january and before that youre probably going to see a partial sale of the Sports Team Sports team to a minority investor which should mark the valuation of sports opponently as high as the entire value now. Thanks for joining us. Thanks. Microsoft padding its trillion dollar valuation today, that stock higher as the Company Raises its dividend and said its going to buy back billions of its own stock again this has been a huge week for the streaming wars themselves, lots of big moves. Which ones are going to pay off, we have jim stuart and Kay Koplovitz joining us dont go anywhere. indistinguishable muttering that was awful. Why are you so good at this . Had a coach in high school. Really helped me up my game. I had a coach. Math. Ooh. So, why dont traders have coaches . Who says they dont . Coach mcadoo you know, at td ameritrade, we offer free access to coaches and a full education curriculum just to help you improve your skills. Boom mad skills. Education to take your trading to the next level. Only with td ameritrade. By the way, shes the it wasnext mozart. G day. As usual we were behind schedule. But sophies enthusiasm cannot be dampened. Not even by a runaway donut. We powered through it in our toyota prius. Because a stars got to shine, no matter what. Its unbelievable what you can do in the prius. Toyota lets go places. Liberty mutual customizes your car insurance, hmm. Exactly. So you only pay for what you need. Nice. But, uh. Whats up with your. Partner . Not again. Limu thats your reflection. Only pay for what you need. Liberty, liberty, liberty, liberty Classical Music playing throughout lunc lunch microsoft hitting all time highs and leading the dow today, the stock on fire after they approved a 45 billion Stock Buy Back Program so do you stick with the winner or cash in for now todd, im going to guess, as you look at the chart youre going to tell me being at an all time high is not a bear condition for a stock. Its been a bullish stock back to 2015, theyve initiated two buy backs, 2013, 2016, and heres the third one the chart below us is microsoft into the q microsoft is outperforming the nasdaq and thats whats happening here theres no signs of giving back here on this chart so getting rid of the strength and just focussing in on microsoft itself, we are in a pretty up trend channel. We have this beautiful uphetren here i just put the re of the trade back on about ten minutes ago. I think we will meet resistance around 155 so we start to hesitate there, walk out. That looks like 10 up roughly from this level. Mark, the technicals seem unassailable is it getting expensive or would you stick with it . Wed stick with it. Whats n

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