Transcripts For CNBC The 20240704 : comparemela.com

Transcripts For CNBC The 20240704

Well reveal the company and speak with the ceo and an interesting three buys and a build gina sanchez is buying the u. S. Consumer and selling the chinese one. But first, to the inflation reading. Im still raising my eyebrows. And mike santoli is here to explain. A big part of the story is the bond yields. Yesterday, we had a failed rally on a benign cp ireport today, a telloff on a slightly hotter than expected ppi this really has been chopping around as the seasonals get a little more challenging coming into august. If you look at where it sits in a oneyear term, that pullback did get us right to the precipice of that 50day average. 4443 was the intraday low. This morning in the s p, why did that matter, if at all take it back, and ill tell you on july 11, the high for the day was 4443 what happened the next day really nice cp ireport, reported july 12. The market popped from there we filled it this morning. People think this matters, but it matters on a macro basis, because july 12, that cpi report got everybody on the soft landing side of the boat, raising the bar for good news. Nasdaq 100, it has breached the 50day average well see where it goes from here tenyear treasury yield, kelly, spending a fair amount of time at the upper end oh of this range going back to last fall, when we got to about 4. 3 so not a lot of give in there. So the treasury supply, you know it all, that seems to be at work here it has the equity markets attention. I find it noteworthy that we can swing around 20 basis points in a day did you say the nasdaq was down 8 from the highs . Nasdaq 100, yeah, down 6. 5 monthtodate. Mike, thank you so much mike and josh brown will be on tonights special program, the buzziest program in television right now at 6 00 p. M. Mike, thank you. A warning sign that inflation could turn back up, theres that and the runup in oil prices, which has one of my next guests concerned. Lets bring in my two guests great to have you both here. Jay, youre watching crude prices or pump prices, arent you . For sure, kelly pump prices, we have seen gasoline prices rise 30 cents, 40 cents or so over the last month or so. So all those things could push the overall headline rate of Inflation Higher i think whats more important is the core rate of inflation thats coming down but that still remains, depending on what measure you are looking at, 3. 5 to 4 so inflation at this point remains elevated so when we say elevated, i guess the real question goes a couple of ways number one, are we going to go up to 4 on the cpi, and if the fed is expected more or less not to hike rates again, might they get involved and is all of this, you know, a drag on the consumer, attacks on the consumeer . How should we analyze this, signs of more inflation in the economy is something that could drag on growth and the consumer . Well, you know, right now in terms of the consumer and real purchasing power, wages and salaries are rising faster than most measures of inflation right now. So thats good for Consumer Spending Going Forward i think the area where you have a little more concern is, so the fed is probably not going to cut rates any time soon. If core inflation continues to drift lower coming forward, which we think it will, well have the real fed funds rate start to move even higher. Youll get a passive tightening of Monetary Policy Going Forward. So thats what really matters for real Economic Growth is the real fed funds rate. So thats something were keeping a close eye on and how much head wind is on the economy that can exert ill circle back to that. But john, i want to ask you if you are worried about inflation turning back up, or what the process of the market looks like in whats been a choppy month, and like mike says, weve had the hottest month, the nasdaq 100 down 8 at the lows from the highs. Youre right. Technically the s p 500 hit its recent highs on july 31st. We are concerned about inflation. Were concerned about two of the things that jay pawked about, price on oil, high of the year and were also concerned with restrictive Monetary Policy going into next year so stocks may stay choppy here the rest of the year, depending on what the fed does why is that what do you think is the chopiness proxy . Inflation, more fed chatter, that kind of thing well, technically, our equity team, were not seeing any earnings per share estimates go higher were not seeing raises, and thats one of the things on our mind, giving the high p. E. Multiples on some stocks and inde ind indexes. So not what the fed does in september, but what they do in november, if they go in every other meeting with a rate hike whats your favorite part of the market right now, is there anything are you just tbill and chill . What do you think . We have a little bit of a bias we took basically it turns out so and then allow our clients to enjoy higher yields. But within the stock market, energy is one area were looking at financials is the other area high Interest Rates are generally good for them. So financials and energy are two areas of interest. Two areas that had been struggling earlier this year jay, should the fed kcall out core cpi and say were going to cut rates a quarter point. I think it was last week, john williams, the president of new york fed, came out and said those sorts of words i dont know that they necessarily have a consensus i think thats still some hawkish members on the fed who want to see inflation come down. If you continue to see inflation coming down and you see deceleration in the economy, then the fed is going to have to start thinking about cutting rates or get into a situation where, just by letting the fed funds rate where it is, you have that passive tightening of Monetary Policy through the higher fed funds rate. One question people are starting to ask when they look how home prices are up, when they look at energy prices, where we have seen destocking, they say are fed rate hikes infla inflationary, what do you think about that sooner or later, if you continue to hike rates, youll put enough restraint on the economy it will slow it down and bring price pressures down so even with some of the shortterm effects you see, hike prices, one way or the other, can act more as a tax on the consumer what we are seeing in general is Credit Card Debt continues to rise higher and higher thats very sensitive to Interest Rates that acts as a headwind on Consumer Spending. Most Household Debt is mortgage debt the vast majority is fixed but on the mr. Chaargin gentlemen, well leave it there. Thank you very much for your time today chinese stocks are under pressure again the etf down 6 this week, even with babas rally yesterday. But today, fresh default fears hitting the real estate skter. Eunice has more on that. Reporter shares of one of the countrys largest deve developers this is definitely in china, the company cited some of the challenges in the property sectors, such as falling prices and core sales. Theyre contributing to cash flow problems of the company the company has missed two coupon payments. Moodys downgraded it. Morningstar estimates that Country Gardens problems are not over at all. In fact, they estimate at least 137 million worth of bond Interest Payments in 2023 are going to become an issue for the company. Some market expectation is that the company, the family that owns and controls the company would be putting in their own personal wealth to mitigate the problem, but morningstar believes that might not be enough the company has home run alerted investors in hong kong that it could be reporting a loss of up to 7. 6 billion in the First Six Months of this year. This is after last year in the same period, it posted a profit. The company itself has said its going to make every effort for a selfrescue. The company has said that its potentially weighing various Debt Management measures and could be looking at a debt restructuring but the company hasnt commented on those reports. Kelly . Eunice, well talk later on about the Chinese Consumer with a trader who is bearish on them. But we heard from companies who say in the past six, eight weeks they started to pick up a little bit. How would you describe the way you sense the Chinese Consumer is doing these days . Im surprised that you are hearing that people think things are picking up this week has been dire. The news has been about how exports are really terrible, that the factories arent doing very well. Most people here are not feeling confident about the outlook at all. The inflation figures here have been down played, not only by the government and state media, but people are hearing about these pricing issues so on top of that now, there is a lot of discussion about the property sector, especially with the share price of Country Garden going down to a penny stock, for a company that here has been known as one of the giants in the property sector, one that caters to people who are in the upper to middle class. I was talking to somebody today that said that Company Sells to wealthier people in this country and its not doing well, that must mean the wealthier people in our country dont have as much money as we thought so that paints a negative picture, and one of the reasons you see many more people concerned about saving money opposed to spending. Thats interesting. I didnt realize Country Garden was upscale part of the market eunice, thank you so much. Appreciate you staying up for us eunice yoon live in beijing. Still to come, Higher Education involvement typically goes down in a lower market. Plus, a special three buys and a bail retail edition. Our trader is bailing on the Chinese Consumer, and the one shes buying might surprise you. And here is a glance at the markets. The dow is clicking onto a 46point gain. The nasdaq down three quarters of a percent the russell is positive by about a point and the tenyear note is at almost 4. 16 . Back after this. Welcome back to the exchange. Strong labor markets can be tough slugging for educational companies. Why bother with school when you can go straight into the labor force earning top dollar but one company is bucking that trend this year. Shares are up 26 since jan 1, including todays 2 pop theyre a leading provider by offering online and hybrid education. Because the need for nurses and doctors remains great, they may be uniquely positioned to weather this market. Joining me now is the ceo. Steve, welcome thank you am i saying the name right . Thats right. A lot of people know the name chamberlain as a chain of Nursing Schools. Youre online and you have campuses, as well. Thats right. We own the countrys largest Nursing School with 27 campuses. Bealso deliver online and deliver hybrid programs, as well theres always this reputation with forprofit schools. Health care is a little different, a lot of your candidates might be in the workforce and working professionally talk to me about who are the people at these schools and whats the cost of the program and youve been around for like 60 years thats right. We focus on what the like we think of the folks that have jobs, families, other obligations. We take the model that meets them where they are. So we have parttime programs, night and weekend programs, fulltime programs and we try to support the student in a way that allows them to achieve an skrout come that they might not achieve in a Traditional University the wall street journal reminds us of the high cost of colleges and universities. Maybe some forprofit pressures. Talk to me about the quarter you guys had what led to the earnings in revenue beat were seeing a real return from a demand in enrollment perspective. Across the category, about an 8 loss in enrollment and the pandemic has waned weve seen real demand for our programs and health care is suffering from a tremendous Workforce Shortage so the demand for positions, nurses, veterinarians is as high as ever. We should mention one of your Large Schools is a veterinarian program, as well i read how in the uk, theres a talent war going on where they are trying to import nurses from african countries. How acute is the problem in this country . If you talk to hospital ceos, their number one challenge is workforce. The strain on their existing workforce, but also the shortages that they have the real impact of quality of care, and we view ourselves with a scaled solution to address that you give 9 of nursing degrees and veterinarian degrees, as well thats right, 9 of nurses and vets we are the second largest residents in hospitals, medical residents. You are an interesting play there are some troublesome headlines. I remember when the giant Health Care Chain had a terrible quarter because of these inflationary pressures but do you think at some point this market will be more in balance . Have we seen any signs that those wage pressures are easing up no. I think theyre getting worse. Thats tough news for health care and great news for us, as we look to scale up and provide more workforce to hospitals and Health Systems its good for the quality of care and Health Outcomes and its also a way to provide access to careers and folks that might otherwise not have it. With colleges overall, we have seen these are the years which things might get more lean, just by demographics and population do you expect to buck that trend, as well what does Revenue Growth or enrollment growth look like in the next few years to come enrollment is down, student debt at an alltime high and people are questioning the valueproposition of a College Degree where i think were different is because we play in health care, and the need there is so acute and great. And i also think its a noble profession people are called to care, to be a nurse or physician or a veterinarian. So we think we will buck that trend. What does it cost to get through one of your programs, typically speaking, versus ive known people who get maybe their bachelor degree and have to go back for a nursing degree. There seems to be a lot of different ways to come at this we benchmarked our tuition at a typical State University we think all of our programs are affordable, but more importantly, theyre highly employable professions, which means our students are able to service their debt, repay their loans. In fact, we have some of the lowest loan default rates in all of Higher Education because of the careers we provide our students publicly traded we have a few strategic education is a publicly traded competitor but no one has quite the breadth and depth in health care that we have at this hour. You also have the ross school of veterinarian medicine great to learn more about the company and see how youre navigate thing period. Appreciate you coming in coming up, a lot of major u. S. Retailers report results next week. If you are worried about the consumer here, its the consumer in china you should be more worried about. Thats the argument gina sanchez is making today. And gig workers, watch out a new pact would impact payments on Services Like paypal, even airbnb what you need to know if you have a side hustle heres the dow heating up as the index remains the only major average in the green today chevron and merck are the biggest gainers. Disney and bowing are weighing dn. The exchange is back after this so you know all you need for recovery. And you are . Im an investor. In invesco qqq, a fund that gives me access to. Nasdaq 100 innovations like. Wearable training optimization tech. Uh, how long are you. Im done. Im okay. Im hearing different ways for me to screen for colon cancer. Its time to use my voice, ive got a choice, more than one answer. I sat down with my doc. We had a talk. Knew just what to say. I asked for cologuard and did it my way. Cologuard is a oneofa kind way to screen for colon cancer thats effective and noninvasive. Its for people 45 plus at average risk, not high risk. False positive and negative results may occur. Ask your provider for cologuard. I did it my way let Innovation Refunds help with your erc tax refund so you can improve your business however you see fit. Rosie used part of her refund to build an outdoor patio. Clink dr. Marshall used part of his refund to give his practice a facelift. Emily used part of her refund to buy. I run a wax museum. Let Innovation Refunds help you get started on your erc tax refund. Stop waiting. Go to innovationrefunds. Com you really got the brows. Welcome back the chips are under pressure today as the etf is down 2. 5 . Nvidia continues its correction, as well. Down about 3 in todays decision lets get to tyler now for a cnbc news update kelly, thank you very much. At the same time, attorney general Merrick Garland was announcing a special counsel in the hunter biden administration. A court filing in delaware from prosecutors in the case who filed a motion to dismiss, saying the two sides are no longer able to come to a plea agreement, and that the government now believes the case wont resolve unless there is a trial. The plea agreement, as you may recall, fell apart in court last month when the judge started questioning both sides on the scope of that proposed agreement. Ftx crypto currency whiz sam bankmanfriedman, prosecutors are pushing for incarceration for harassing a witness. Glad yeauater fights are ma a comeback with elon musk and mark zuckerberg. Musk tweeted the fight will be promoted by their foundations and streamed on twitter and meta italys culture minister, i guess you can call it culture, confirmed he had spoken to elon musk about hostin

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