And Anglo American is agreeing to split or selloff some of the company as they fend off a takeover from bhp. Round two. The single post from the Roaring Kitty social media account reignites the craze with the gamestop losing almost 1 billion in a single the session. All right. Where are we with the market picture today . We are pretty much flat waiting for the cpi data from the United States with the ppi, of course, anticipated this morning. That will be another key focus and normally getting the ppi data before the cpi data from the United States as well way indicates we will work out the pce data very soon. It is a lot of the Economic Data markets are focusing on although you have a host of earnings numbers still to really go through even out of europe as we have been speaking about rheinmetall. We have bayer with earnings and hanover re with numbers out this morning. We have a lot in europe and the tech stocks from the asia region which we are looking at with tencent and baidu and jd d. Com. It is all about the inflation print which will move this week. Around the flat line is where you see the threemonth change up 8 for the stoxx 600 which is above 500. Overall here, european markets being a mixed picture. The ftse is down following yesterday as we have seen it move toward 88,450. A dropoff of the dax and the ibex market down. 30 . We are following the resources sector with Anglo American. Autos are up. 23 . We will look at some of those and what is moving along with the telecoms. Still consolidation talks in play on that one although it has been long term and muted. Vodafone numbers have come out as well. We will see how that effects the telecom unit. And still firmly above the 200point mark. Travel and leisure going down more than 1 . I had been speaking about a host of earnings and they may not be the ones moving the markets, but this is what you get out of todays movers when it comes to the ones in the earnings picture. Rheinmetall going down 4. 5 in its numbers. Hanover re is 4 weaker. Vodafone going up 3. 3 . The big gainer being the top of the stoxx 600. Ill unpack these and give you a sense with bayer going slightly lower so far. Out of the u. S. , we said it once and well the say it again, it all about the inflation print anticipated tomorrow. We are headed to ppi numbers first and that will interest a lot of investors. We have been speaking about earnings and it has remained resilient despite the inflation overhang and what you get from the fed as well as they have the fed speaking later on today as well. Investors will be looking through comments from jay powell l later today after the Producer Price inflation ahead of wednesdays allimportant cpi print. Producer prices are expected to rise up 3. 3 . Lets get into this more now with the ceo of Capital Management who is joining us to unpack this. I appreciate your time. So much to peruse and go through. It is all about the inflation print. It seems to be about Government Spending. You know, to quote Stanley Druckenmiller last week, he said he would give the u. S. Treasury an f. Were spending 7 of the gdp like were in a depression and were at full employment. What do you do with a congress and treasury willing to spend and you are trying to fight inflation . It is a tough spot. This is beating out all sense of normality. In a market with the high rates, you should be getting a weakened economy. You dont see that because of the spending. If that falls away, does that tak take away a lot of the market . If you look at the u. S. Economy and ill give you a statistic and you look at the portion tied to r d and software, it is 7 . The u. S. Is growing away from the credit cycle. To your point, if you get to the rates and that quick of tightening gets to a spillover because people will not borrow money to build factories and stuff, but software is op ex instead of cap ex. The fed is using traditional tightening with the spending, but businesses have morphed to something op ex related. It is not how the economy is taking things, but the risk taking. The fact we are talking about Roaring Kitty is a joke. It shows you there are people less than 50 who like to gamble in the stock market. The stock market is the biggest gambling casino. So far, 5 on the fed funds rate hasnt scared them off. What will . I definitely want to talk about the meme stocks as well, but we will do that later. I want to talk about Company Balance sheets are clearly where they can make the spending. That is an annual spend they cant just do once off and hope that comes to fruition p. T they have to keep spending. They benefit from massively low rates. We are not at the point where businesses en masse are factoring in shorterterm debt. That will cut into margins. You look at corporate margins and the issues are the interest costs and taxes. Go back to the Government Spending we talked about. Can we run these deficits and we pray to god it doesnt happen. Its adorable. What we find interesting is the return equity of American Business is cyclical. They are treating it as noncyclical. We are so good in business in america, which is a lie, but it is believed and it will never been effected. I think the taxies will come hoe to roost. It does not bode well. Is that why you need to be more selective . We tell people the s p will reach zero over the next decade. Im not saying every stock in the United States will do poorly. If you look at the 70s and 2000s, not all stocks do poorly. The composition in the market was set up to punish investors someone says what is that composition . That is really up to 20 stocks that dominate the indicie. All of the Wealth Managers in the world would say stay di diver diversified. It is interesting to see how dive dive diversification will have success. It is unique. We have Jpmorgan Chase and bank of america still liking that credit story . We have owned those for a long time. Bank of america since early 2012. We owned Jpmorgan Chase many monies ago. We got involved in fifth third last fall. If you give us a good spread business where you can go out and make 10 return on your capital and buy below book value, that is a good return. It is the same analysis in europe. Our Portfolio Holding is unicredit. You get one who wants to cut costs out of the business and what do you do . You find good economics for shareholders. I dont know in you saw macrons comments yesterday, i talked about this with steve as i came in, he said he is ready to consolidate in france. There is no banking union. The french letting you know they are available for sale is bizarre. It is not long ago where they cried to buy carrfour. Every french person said were going to starve to death. Macron is saying europe wants to put their best put forward and america is not the best business or the endall. The eu is tired of the United States eating their lunch in banking. Ubs is offering a similar note as well. Cole, you are staying with us and we will continue this conversation in a bit. Stay tuned for the coming up conversation. Whats coming up next . Vodafone reporting out of europe today. We breakdown the results for you. Thats all coming up next. What is cirkul . Cirkul is what you hope for when life tosses lemons your way. Cirkul is your frosted treat with a sweet kick of confidence. Cirkul is the Effortless Energy that gets you in the zone. Cirkul, available at walmart and drinkcirkul. Com. Switch to shopify and sell smarter at every stage of your business. Take full control of your brand with your own custom store. Scale faster with tools that let you manage every sale from every channel. And sell more with the best converting checkout on the planet. A lot more. Take your business to the next stage when you switch to shopify. Shipstation saves us so much time it makes it really easy and seamless pick an order print everything you need slap the label on ito the box and its ready to go our cost for shipping, were cut in half just like that go to shipstation tv and get 2 months free this homestyle Chicken Salad wrap from subway this is how you do it. Savory chicken, crisp veggies all wrapped up these wraps are amazing. People can hear my thoughts . Thats a problem. Stay fresh out there welcome back. Uk unemployment ticked up to the highest level in almost a year coming in at 3. 4 in the first quarter. Job vacanciyies slowed and wage growth remained at 6 . The bank of england member said the central bank will likely need to keep a restrictive stance on Monetary Policy adding the labor market is tight saying a lot more work needs to be done with inflation. That comes after the bank of england decided to keep Interest Rates unchanged last week. This is the picture from the uk. Still report territory for the ftse 100. Speaking of the ftse 100, Anglo American with a slew of changing. The divestment or demerger of the platinum and diamond and steel coal movements. There is after the rejection of the 34 billion pound takeover from rival bhp which said it under valued the company. It is interesting to see what the government of south africa think bss about this with the demerger of the company. We will have more with john meyer from sp angel later this hour. You see vodafone rising 3 in the early trade. It met expectations for core fullyear earnings at 11 billion euro. The British Telecom company returning to growth. It is facing energy and inflation headwinds in that market. First Quarter Sales at alcon rose to 2. 4 billion. That was boosted by a 7 growth in net sales in the vision k unit. You see this moving higher. 9 higher today on the top of the stoxx 600. The fullyear outlook is 7 to 9 year on year in fullyear sales. We have been looking at the german earnings story with bayer coming out with the numbers. Rheinmetall going down 4. 8 . A 3 drop for swiss re. Lets head to annette with more on this with the rheinmetall going down 5 . Annette. Reporter rheinmetall is having High Expectations and not meeting them for the first quarter. It is a miss on sales and operating income. The companys underlining momentum iss still going strong. You have to look at the Share Development since the outbreak in the war in ukraine. The ceo is not shy in actually promising to grow the company further. Currently, what they are doing is constructing two new plants. One in lithuania and one in germany to build up the ammunition capacity. Clearly, that is a very scarce commodity in building up military spending across the globe. If that plan actually goes according or if the plans build p up ammunition capacity, rheinmetall could be the biggest ammunition producer in the world by 2026. The ceo is saying recently in the interview is that they are going to benefit by roughly 30 to 40 from any special spending on military things or products in germany that could amount to 30 billion euro, i should say, because the need for ramping up kcapacity in europe is so big. In the mediumterm rheinmetall is looking to buget plans to bud a tank which could come to market by 2034. They are working on cannon producing and that would benefit from going forward. As i said, the shares did have a huge rally in the past and now hovering above 500 euro. That is a little setback we are seeing, but the growth ext trajectory with operating and military spending on the rise across the globe is tremendous. Annette, thank you very much for that. We have bayer as well coming up in this news headline as well. What have you basically seen out of that one . Reporter bayer is, by the looks of things, is doing better than analysts expected. The share price is still down because that is the way the shares have gone because of the debt level which they have debt on the Balance Sheet with no vision how to substantially reduce it. Then, we have the costly weed killer litigation still not resolved. We talk about roundup, the monsanto weed killer, which has 54,000 cases outstanding. Litigation is still a major issue. Annette, thank you for your time. I appreciate it. A lot of earnings as well out of germany. Delivery hero shoares are o track for the best day in years. That is after uber announcing it is buying new shares. That is pulling the wider sector in early trade. That stock is up 20 . Cole smead is still with us. I want to start off with the mining stuff that we have seen. Yes, perhaps not a say just on Anglo American and bhp, but Mining Sector getting more interesting. A little bit more buy in . There is a lot of cash left over from the last three or four years. The pesmart people in the space are at glen core. Obviously, the anglo deal that bhp is making an offer and you hear glen ccore. If anglo would like to sell their core assets, i would like to be a buyer through a couple of companies we own. I think most investors are unwilling to go to the commodity space because they have been poor 10to15 year stories. What that is doing is creating a scarcity of supply and deprivation of capital. The only way you draw capital back is good returns to drive investor enthusiasm and more competition. I know everybody is interested in the copper side because of the ev conversation, but if we dont generate power via colal,i dont understand how copper matters. This is one of the issues with the conversation. Lets talk about the Portfolio Holdings. So much more you can goo through. Very interested here. Volkswagen and porsche in all of this and bmw. What do you see in the european auto space and especially the german auto space . Does that continue to get the traction you think, especially when things have looked so difficult and we are focusing more on the ev pace, which is slowing down, but its what the market wants. As these large growth sellers of ougautos are out there, but are seeing a rapid slow in ev sales. We are back to the Combustion Engine and although porsche has made a big push toward doing that slowly, we will find some of the plans will change. Everything from the mining side like we talked about a second ago to what is the consumer want and what can we do. In the case of volkswagen and porsche holdings, i think the most interesting thing is will the porsche family be aggressive in their plans . They own 89 . That has done really well. They have not spun off the shares. Will they push to do more in the deconstructing of volkswagen itself . It will be an interesting one in the auto space. I was reading as well this morning that ubs is coming out with a note and they said that they have a uturn on their Global Equity strategy favoring europe over u. S. Equities. They point to soft data and improving relative to the u. S. And that may be argued a bit. Wage cycle and wages. Europe is moving sooner than the United States with Interest Rates. Valuations. Are they too high state side . Better earnings revisions and uniqueness leadership in the top 40 of the market cap companies. Your thoughts . Should we favor europe over u. S. Now . Is this the time . From the broad context, i tell people you can take a drunk monkey and throw a dart on the global map. As long as he doesnt hit the United States, he will do well the next ten years. Thats how big the spread is to be honest. I would put what is going on in the United States as japan in 1989 or the dotcom bubble. If you just go look at the largest ten market caps in the world and do the numbers, historically, it is a bad way to invest. To your point, i think what we will see in europe is effectively europe does well sans luxury. That is the winner in the ear a. Era. Not everyone has to go out and be a showme person. I say that because i come from im considered a wealthy person. I watched that around me. They are reaching so far down into average people and when we do get a deep recession or traditional recession, where will the buyers go for the stocks . I look at the Mining Sector or places like autos. Those are four takes of the uk economy or european economy or stock markets and thats not what america does well. Thats a huge differentiator. Ill add one more. The world of my childhood is gone. I was born in 1983. Major powers never fought direct wars with russia. It is proxy wars. People ask us why do you enjoy owning oil stocks or the american and canadian producers. Frankly, economics, every time problems crop up, i make money. That is a bizarre way to make money. Shares of gamestop closed up 74 after the social media user Roaring Kitty sparked the meme craze in 2021 posted on x for the First Time Since that volatile summer. Other gains with amc closing up 80 . A quick read from you with the meme stocks. It is crazy. It is gambling. It is back to what i said earlier. We have the biggest casino in the world. Fool me once, shame on you. Fool me twice, shame on me. These are 40yearold people like me that are going out and doing stuff that is stupid to honor the late, great charlie munger. They are taking in rat poison. Cole, always good having you this side of the atlantic. Thank you for joining us. Cole smead. Coming up on the show, a nogo from anglo. The miner rejects at takeover offer from bhp. That is old news because so much more has happened becae ey usth are about to structurally change the business. Well discuss next. Hi. Im Wolfgang Puck when i started my online store Wolfgang Puck home i knew there would be a lot of orders to fill and i wanted them to ship out fast thats why