JPMorgan investor day, benefits of Biden tariffs on solar: Market Domination

The Dow Jones Industrial Average (^DJI) seeks to close back above its all-time high of 40,000 in Monday's trading session, while the Nasdaq Composite (^IXIC) flirts with its own record close.

Yardeni Research President Ed Yardeni sits down with Yahoo Finance's Julie Hyman and Jared Blikre on Market Domination to discuss the economic factors that could push markets even higher in the coming years.

First Solar (FSLR) CEO Mark Widmar discusses the long-term positive impacts that President Biden's tariffs on Chinese imports will have on American industry, including for the energy sector and green energy initiatives.

Yahoo Finance Reporters David Hollerith and Dan Howley also join Market Domination to break down their respective coverage of JPMorgan Chase (JPM) CEO Jamie Dimon's remarks at the bank's investor day and Microsoft's (MSFT) unveiling of its CoPilot+ PCs.

This post was written by Luke Carberry Mogan.

Video transcript

Hello and welcome to market domination.

I'm Julie J for Josh Lift in today, live from our New York City headquarters.

We are giving you the ultimate investing playbook to help tune out the noise and make the right moves for your money.

And here is your headline blitz getting you up to speed one hour before the closing bell rings on Wall Street.

The company is going to clearly beat expectations on top line and eps and will likely see a very positive guide.

And I based a lot of this analysis on on two or three core things which is look at demand, demand is off the rails.

NVIDIA has been important for a very long time.

Obviously, we everybody is familiar with A I, it's still in its infancy, but it's not going away anytime soon.

And I think many people and I share this opinion is going A I is going to change things as much as the internet did when it came about 3040 years ago.

So that's very, very important.

And as you said, it's been a, a key component to the overall growth in this market.

We are likely in a low fed cut cycle right here.

And that is absolutely goldilocks for stock markets.

If you go back and look at all the eight cycles going back to 1950 you look at all those slow cut rate cycles, the average return from the very first cut is about 23%.

We've got an hour ago until the market closed.

So let's take a look at the major averages here.

The dow the weak link here today, it's off almost a half 1% and it's been deteriorating throughout the session.

But if we look at the S and P and the NASDAQ, both of them are on track for a record close.

Although the S and P 500 it'll be a little bit more by the skin of its teeth here.

It's up just about 1/10 of 1% right now.

The NASDAQ, the strongest of the three today, up 6/10 of 1%.

And we've got a lot of bond issuance this week, but not there is focus on the government issuance, but also there's a lot of corporate debt issuance this week.

So that's something that bond investors are watching.

As we see the 10 year T note a little change right now, 4.44%.

Uh as we look at what's going on with the sectors here, financials are the big loser today being dragged lower by JP Morgan after its Investor day.

We will tell more about why coming up a little bit later in the show, energy and consumer discretionary.

Also we on the flip side, tech, the big winner today JB Circuit, the contract chip maker, electronics maker, leading gains there today after its earnings, industrials also doing well and just quickly as well want to go back and take a look actually at what's going on in the commodity market.

Today, we're going to talk much more about metals later in the session here and you've got crude oil off a little bit.

But man, there still continue to be some fireworks in the metals, copper trading near record here, gold continues to push higher and silver continues to push higher in today's playbook.

We'll get some opinions on how to play what's going on in the Medals Jared.

That's right, Julie and the S and P 500 fighting for another record day while the Dow is back below the 40,000 level.

But our next guest sees only more gains ahead for the benchmark index calling for the Dow Industrials to hit 60,000 by 2030.

Joining us now is Ed Yardeni Yardeni Research President.

Ed.

Thank you for joining us here today.

Uh Let me just ask you about your call here.

That would be a 50% rise if the Dow went from 40,000 to 60,000, I just did the math.

We went 50% in the last four years from 20 to 40.

So there you go.

Yeah.

I think the uh economy is performing extremely well in the face of what seemed to be high interest rates.

I think increasingly it's becoming clear that interest rates are simply normalized back to where they were before the great financial crisis.

And meanwhile, inflation is moderating.

So I don't think that we actually need the fed to cut interest rates for the market to continue to go up on earnings.

I would prefer that it goes up on earnings rather than valuation because valuations are already a bit stretched.

Ed.

Hey, it's Julie here.

It's good to see you.

So do you what you, what's gonna be the main sort of tail wind for the continued gains in earnings that you are expecting?

Well, I think productivity is the big story from a macroeconomic standpoint, we have a shortage of skilled workers.

I think companies are seeing that their business is really quite good even with the global economy kind of muddling along.

It's not exactly booming, but us companies are doing extremely well.

We've got analysts raising their expectations for earnings in 2025 and 2026.

And so I think companies are gonna want to take advantage of the uh strong environment that they're seeing uh by increasing their productivity so they can bring their goods and services to the market if they can do that and using technology.

And then I think we're gonna see better than expected economic growth lower than expected inflation with real wages going up and expanding profit margins.

So, put it all together and you've got a uh a great scenario for the market to continue to move higher.

And can you talk about some of the importance of that technology?

A lot of which is based on A I, at least that's where the hype is.

We've seen this play out in the chip market with NVIDIA, but we've also seen the infrastructure play the uh electrical electricity play all these other things, copper record highs.

Where do you see that fitting in?

Well, I think all these things uh are uh you know, the very, there's a lot of moving parts here and as, as you just indicated and I think that the technology revolution that started in the 19 nineties has evolved to the point where a lot of these technologies are very user friendly, they're relatively affordable.

Uh They're relatively easy to operate and they have tremendous impacts on every business.

I think every business these days is not uh is a, is a technology company, they either make technology or they use it.

If you don't use technology to increase your productivity, you're gonna lose it, you're gonna be out of business.

So I, I think that's where the story lies is in the productivity boom uh based on the productivity uh revolution ed, what do you think is the biggest risk to further upside in the market?

Well, there's always a risk and uh clearly there's still plenty of geopolitical risk.

Uh uh look, uh recessions uh tend to uh lead to bear markets or bear markets.

Anticipate recessions.

Uh The, the market didn't do a very good job of that in 2022 expecting a recession that never happened, but usually recessions are caused by credit crunches.

And at this point, I don't see something like that, but a spike in oil prices is something that's from a geopolitical perspective is still not out of the realm of possibilities here.

Fortunately, the price of oil has actually moderated quite a bit ever since Israel and Iran launched missiles at each other and then kind of backed off.

So I think there's enough oil.

So we don't get a kind of big spike the way we had in the 19 seventies when we had two spikes and now this decade we had one in 2022.

I don't think we're going to get another one, but that would be the risk.

But let me ask you about sentiment here and we, you can measure that a few different ways.

One way is the equity put to call ratio.

Um I guess where I'm coming from is we see the indices at record highs right now, but we're not seeing those frothy valuations.

We're not seeing the euphoria that we've seen at other extremes.

So, uh where do you see the path forward and where do you see that euphoria and perhaps sentiment that gets too elevated.

Where do you see that coming in?

Well, sentiment has been pretty flaky of late, uh, a few weeks ago, it got, uh, really high.

Uh, and then in April we had to sell off as, as you typically do when there are too many bulls and not enough bears.

Uh, and, uh, then the bears came in and now we're back to seeing a lot of bulls.

But, uh, all in all I think the market, uh, is, uh, is in good shape from a fundamental perspective in terms of earnings, uh, valuation is, is, is definitely stretched.

But all in all, um, with the economy doing well and, uh, the first quarter earnings season turning out to be really better than expected.

Uh, I think, uh, we've got the market, uh, in still in fairly good shape to, to make more, more gains.

And it's interesting to me that you're somewhat, I don't know, fed agnostic is the right way to characterize it, but fed agnostic when it comes to long term continued, um, returns in the market.

But, you know, when you watch the fed here, um, what, what is your current thinking?

Do you think we will not get an interest rate increase this year?

I think the last time we talked, maybe we're still looking for one in December.

Well, they just won't listen to me.

I told him to take the rest of the year off and I, I haven't heard them announce that they will do that.

Uh But uh I, I don't think the economy needs uh rate cuts.

The economy is doing fine.

I don't think any rates increases either.

Look, uh I think the economy is gonna continue to grow with inflation moderating.

Uh Why mess with a good thing.

Why mess with success.

Uh uh My concern actually is if they do come in and lower interest rates and then we'll have uh something more like the late 19 nineties where uh you know, party like it's 1999 that uh would, would be the song that comes to mind.

I don't want to see a melt up in the uh technology led melt up the way we had in the late 19 nineties followed by a tech wreck as we all recall what happened back then.

It, I don't want to see that either, but I'm all in favor of giving the fed a few months off maybe till the end of the year as well.

Thank you, Ed.

As always.

We are just getting started here on market domination and guess what?

Coming up Microsoft is going all in on an A I for the PC company unveiling a new category of computers and software.

Today, we're gonna get the details on that later in the hour.

And at 430 Eastern, it's the debut of our new show.

Asking for a trend.

We've got you covered with the latest market moving stories so you can get ahead of the themes affecting your money.

Stay tuned more mark damnation after this time.

Now for the day is trending tickers JP Morgan Chase Ceo Jamie Diamond, speaking out of the bank's annual Investor Day, he addressed the succession question as well as calls for more buybacks while also raising forecasts for a key revenue metric was pretty action packed.

In other words, here to discuss is someone who was there, you find David Holler.

So David give us the sort of most important takeaways.

Yes.

So in a wide ranging Q and A, uh Jamie came out uh after his executive team gave presentations about various parts of, you know, JP Morgan Chase, which is a sprawling uh enormous, the largest bank in the country.

Um and effectively, you know, he weighed in on A I saying um it, it's more, it's a little bit like exercise.

Now, uh we're beyond the debate of about talking about whether or not it's important.

Um He also addressed the banks uh excess capital.

JP Morgan has a lot of ca extra capital even by their own standards saying that um he did not want to buy back more of the stock at these prices.

Now, he always cages that as it being a personal uh judgment um earlier uh that today uh CFO actually did touch on maybe more buybacks being in the cards being a possibility.

Um uh Jamie Diamond also did talk about his succession plans and he didn't give us, he didn't give us a date per se.

Um But last year, he sort of made a comment about how he had 3.5 more years.

And this year, um when asked how long he would stay, he said it's not five years anymore.

So what we're taking from this is sort of that he is, uh being a little bit more clear in, in vocalizing the fact that he's not gonna run the bank forever.

Anything that you glean from just the tone you were there among the participants.

Um You know, we're only a few years back into the return out of uh hiding here from COVID.

Just what was, what was the mood like there?

Yeah.

You know, I think um the most interesting thing, the Consumer and Community bank, the biggest part of JP Morgan Chase is running uh fairly smoothly.

Um But then we have this combination of the commercial bank and the investment bank and trading and all these other things that's cib the, the commercial and investment bank and that's a new reshuffling of management.

So it's a little bit of a new team forming and it's a pretty complicated uh multinational team they're working with.

So that's sort of where I think we'll see the new from JP Morgan come.

Um outside of that, I think artificial intelligence is something that every executive brought on and talked about.

So, you know, we want to hear more about that and just a, just a quick comment on the stock, it seems like it is going down on the buyback comments specifically that they're not buying back shares at this particular price.

I mean, without ever having a true answer of what, what the market's doing, it seems like that's probably where things the stock start began selling off around the time.

Uh, Jamie starts speaking.

So.

All right.

Well, thank you for uh the boots on the ground there, David Ho it, all right, Instacart shares sliding after its Chief Financial Officer was looking to manage expectations over the company's gross transaction value guidance.

Saying at a conference, this was a JP Morgan conference.

It will not exceed the previous estimates.

And uh Julie, I was looking at the Wi Fi Interactive here, I hadn't card.

I hadn't shown our mobility dashboard in a little bit here and here we can see.

Uh, let me get the year to date totals.

There we go.

Um And I'm not sure what happened to cart here.

So maybe I'm maybe that uh fell off my radar.

Anyway, my point was we do have a trend that some of the uh the actual providers of uh of ride sharing.

And also these delivery services are doing well.

Well, the rental car business has just really taken a hit.

But beyond that, you know, this is a comment that comes from CFO Emily Reuter at the JP Morgan conference and she said basically she doesn't exede that she doesn't expect them to, to exceed their gross transaction value grid.

And so there had been some speculation they would, they just said they wouldn't and stock takes a little bit of a hit.

Yeah.

And just for some perspective here, the stock is up some 40% year to date, but it is down about 16%.

It closed at a record high on April 5th.

And since then, it's fallen about 16%.

So, you know, remember it just came public in last September and that gross transaction value forecast just came on May 9th.

That's when the company came out with the forecast.

It was in line with what analysts were expecting and the stock went down.

So maybe there were still some hopes out there.

Well, maybe that wasn't the last word on it.

Maybe they were going to come out and beat that forecast and she seems to be putting that to bed with a comment today.

So that explains that the tumble, um another stock that's trending today hit and her health, those shares are soaring.

Uh the company announcing it will unlock access to injectable G LP one medications that move to expand what it calls its Holistic weight loss program.

Remember him and hers online purveyor of various types of medications.

Um and the stock is up a lot, which always leads me straight to the short interest chart, right.

Because the short interest here is about 12% a float relatively high.

So you gotta imagine there's something of a short squeeze there.

The other thing is most of the analysts I saw said that they expected that the company had already sort of telegraphed it was doing this.

So it's interesting to see such a dramatic move.

Yeah.

And you know, it's one of those somewhat new issues, it's not widely held just yet.

There's kind of getting their footing.

And so that would be a prime short squeeze uh candidate.

I do have some commentary from Citi, they rate him buy it with a price target of 16 dollars.

He said it's interesting that unlike a few competitors, hims is only offering compounded G LP ones and this is for 100 and 99 a month or 199 a month.

Uh steering clear of cost access issues asso associated with the branded offerings.

That would be we go vo ZIC, but that's just for now, it could change later.

He thinks the HS program may be met with some controversy as it does introduce more regulatory and legal risk into the model.

So I in a highly regulated industry, I got to think, OK, that could carry some weight.

But then you also note the tremendous up upside.

You know, you look at an Eli Lilly chart that's evidence for the potential potential of this market, especially in a smaller competitor or no vote.

For that matter.

That's the other poster child.

Um Well, President Biden last week announcing $18 billion in tariffs against China.

One industry, those tariffs are meant to benefit is solar.

As us producers have been struggling to grow amid competition with China.

Our next guest says we're one incident away from supply chain chain disruption and job losses for more.

We're bringing in first solar Ceo Mark Widmark Mark.

Thank you so much for being here.

Um So talk to us about um your thoughts on these tariffs and and what you mean by the sort of insecurity or, or your view of the insecurity of the supply chain?

Sure, then the tariffs that were announced last week were just another step and trying to create a stable policy environment to ensure that there's a level playing field, you know, here in the US to make, you know, meaningful investments.

I'm here today in our R and D facility.

First of its kind, almost a $500 million investment that we're making here in Ohio, not just for manufacturing, but for innovation in next generation technology.

Those types of investments that you make that have to be enduring for multiple years need to have the backdrop of a stable policy environment.

So you can ensure you can get a return on invested capital.

So the type of policies and tariffs that were put in place announced last week, plus some of the other changes made by the administration give companies like mine as well as others confidence to make these types of investments.

So, yeah, I, I noticed that your stock happens to be up 13% this year.

A lot of your competitors stocks uh is down, is down for the year.

Quite a bit more.

What policies do you think you've implemented that have allowed uh your shareholders to uh treat your stock a little bit better than some of your competitors.

Look, I think it all started with the, you know, Inflation Reduction Act, you know, that was announced a couple of years ago now, almost two years ago.

Now um that enabled kind of this first of a first of a kind opportunity for this industry, a whole of industry approach that could now see across the balance of this decade.

Um Whether you're a developer, whether you're owning of generation asset, where you're part of the supply chain to really understand a demand profile that was enduring.

So it starts with that.

So it's kind of like the first step in the, you know, the industrial policy, uh the domestic content policies that have come out now that enable or support domestic manufacturing is another step.

And then a level playing field is the third step in that process.

And once you have all three legs to the stool, you know, you have an opportunity to see the type of growth that we're demonstrating here, not just with our R and D facility, but we're making an expansion to manufacturing capacity outside of Ohio, into Louisiana and Alabama.

And when we, we see ourselves through the next couple of years as we exit 2025 we'll have 14 gigawatts of capacity.

And maybe that's not really a number that a lot of your, the listeners fully understand.

So maybe translate that into jobs.

We'll have created direct, indirect and induced jobs.

30,000 jobs here in the US with a domestic manufacturing supply chain and a $2.8 billion annual payroll impact.

So that's what we're doing by making investments here in, in the US.

Um We provide certainty to our customers and it's showing up in the demand for our product um mark uh while these tariffs may be good for the the uh domestic solar industry, they're not necessarily good for the domestic energy transition.

For example, if you, you were just talking about the the installations that we have seen here in the U SI I believe that the US uh last year installed half the amount of solar capacity.

As Europe.

For example, Europe doesn't have tariffs.

They're importing that cheap stuff from China and because of that, they are further along and much further along and their solar installations.

So do you have here a problem where the need to have an energy transition is a little bit in conflict with the need to support domestic solar production industry.

Yeah, Europe's faced with a different dynamic right now.

And it's really driven obviously between the Ukraine Russian war and the heavy dependence on an adversarial country for natural gas.

I mean, that's the reality of what happened and they had to pivot very quickly and accelerate, you know, their deployment of alternative energies and renewables, whether it's solar or wind, being one of them, but they're also very vulnerable now because now they've traded that potential adversary counter party, which was Russia now for dependency on China, you're right, 99% of the product that is going into Europe is um is supplied from China.

And we all know that China also has a tendency towards retaliation and Europe is actually taking some actions right now, they're trying to create a more level playing field and, and, and the Chinese are actually starting to retaliate.

I think when you look at what we're doing here in the U SI, think you have to have a strategic lens that plays the long game on how do we ensure long term energy independence and security and how do we ensure that we don't have uh over reliance on any one particular country, especially one that could be an adversarial counter party.

Um Solar is very competitive.

Um The impact of these tariffs are going to be relatively de minimis and really they're only there in place because China has created such oversupply and overcapacity and even in their own market right now, they're selling below cash cost.

I don't see why we we as a country or really any country should have that ripple effect come into their domestic market.

If China wants to create significant overcapacity, three or four times their domestic demand, let them do that and let the bloodbath stay in China.

There's no reason it should bleed into the into the US as an example.

But let me get back to the point on, on pricing.

um tariffs, let's say the tariffs add 10 cents a watt to a module that to a power price is about $3 a megawatt hour to a kilowatt hour, which is most what most ratepayers see it about 3/10 of a cent, a cent, excuse me.

And it's a fixed price for 3540 years that you own that generate asset because other than the sun taking photons and making electrons, there is no input cost, there's really no moving parts.

So it becomes deflationary by definition.

So I think we have to look long term and strategically, yes, some tariffs may be needed near term to allow a domestic industry, industry to scale.

But when you look across the horizon and what value proposition that's being created, I think it's it's well worth the short term impact to the extent there are any of the long term potential mark.

Um As you mentioned, um there is also, there are also incentives in place here in the US uh through the IRA your company is gonna be the beneficiary of uh I believe an estimated a billion dollars this year through section 45 X of the Ira.

You also, it's my understanding would push not just for tariffs on China but also on some of the other solar panel producers, places like Vietnam, the Philippines, Malaysia.

I it's my understanding why do we need all those measures.

In other words, if you're already getting these incentives in the US, the tariffs are already on China, why then also the tariffs on some of our trading partners that are not adversaries.

Yeah, let me put it in perspective.

One thing first on, on the benefit of Ira, put it in perspective relative to the investment I mentioned the R and D facility that we're making here, one of a kind first of its kind um to really evolve and allow for next generation technology to um to be developed.

That's about a half billion dollar investment in my new factory expansions that I've made in Alabama and Louisiana plus plus the investment we were making here in Ohio to expand existing capacity.

There's another $2.5 billion.

So I'm making $3 billion of investments here in the US market.

Um Before we're really receiving any meaningful benefit from Ira yet.

So what I want to put that in perspective as it relates to the um the impact to Southeast Asian countries that are part of the most recent petition, they're all Chinese owned and controlled companies, right?

So that's, that's the root root of this challenge that we're still trying to deal with.

China has basically circumvented the tariffs that they were put in place directly against China by moving some production into Southeast Asia and some of the countries that, that you mentioned, but they're still heavily subsidized through supply chains that come from China through tooling and equipment that comes from China, even through um Belt and Road type of initiatives and low cost financing.

So if, if that's the fundamental that still needs to be addressed because of the circumvention, because of the movement of supply chain, the vulnerability still exists.

And this is really to address Chinese own and control companies that happen to move some portion of the supply chain into Southeast Asia Mark.

Thank you for your time today.

I really appreciate it.

Thank you very much.

Coming up.

It's the latest edition of our series.

Goodbye or goodbye.

We'll take a deep dive into two stocks to help you make the best choices for your portfolio.

Stay tuned, more market domination after this.

It's a big noisy universal stocks out there.

Welcome to, goodbye or goodbye.

Our goal to help cut through that noise to navigate the best moves for your portfolio.

Today, we're dialing in on the narrative divergence of two property and casualty insurers.

Joining me here to discuss bar and senior writer I out good to see you Thanks for being here.

So let's get to the stock you like, first of all in this property and casualty universe and it's a IG an international group.

So let's go through why you like it.

The stocks done pretty well over the past year.

But despite that, you say it still looks cheap on a pe basis.

Yeah, a couple of things.

One is uh performance is improving.

So on 2025 numbers, it's trading at about seven times uh operating profit, which is a very attractive level relative to the group.

It's also trading for about 1.2 times book value also relatively attractive to the group.

All of these are are good things if you're looking for a good buy and this at a time when we are seeing some of the underlying profit metrics improve.

Yeah, now we're gonna do the uh we'll we'll unveil its challenger in a second here.

But uh the overall trends for property and casualty insurance, right?

Insuring you and me and all of our stuff, they're fairly uh positive.

Um uh profitability is improving, return on equity is improving.

Um rates are going up.

We all know we're paying more for our insurance that's that tends to benefit these players.

And I still think to a certain extent people when we were just talking lump a IG they have this flashback to the great financial crisis.

It's a totally different uh company with different leadership and it's really poised, I think to uh start to close the gap uh versus some of the leaders which we'll talk about, I mean, effectively it's back to being a boring old insurance business, which sometimes as we learn from the financial crisis is not a bad thing, right?

That you're not in these complex uh financial instruments.

You alluded to the leadership here, Peter Zaffino took over a couple of years ago and you think he's in a good place.

We, it's interesting, right?

Value investors and investors all the time, like to go to the management transition.

Oh, what's the, and, and we sort of jump right in, but actually the data shows that about two years in is a really good time to sort of revisit uh management cha changes takes about a year to uh get all the people you want at the first level of management, another year to implement all of your processes and lay out your vision to everybody else.

Uh Zaffino has been there for a couple of years.

He sold uh some of the life insurance business in the UK.

He's exited the reinsurance business and it, you know, based on that theory, uh it's, it's really good time.

Um We're chatting with Bill Nygren of Oakmark Funds and he is a big fan of Z Zaffino and uh thinks that right now is a good time for uh him and we, you know, see his vision and expanding profitability in the next couple of years.

Interesting.

Ok.

So what could go wrong here?

Big picture, economic risks.

Well, big picture.

It's an insurer and it's a financial.

So, uh, you know, Jamie Dimond retiring could knock, can knock, uh, multiple for all financial stocks down as we see today.

However, it pretty much is, uh, a PNC cycle issue.

Right.

So, I don't see, to put it this way.

I don't see the big risk being execution.

right?

You know, looking back over the last 16 quarters just before a new CEO got there, they haven't missed estimates.

It's become a much more leaner, stable business.

So it's much more about the PNC cycle turning right now.

Things are fine.

But uh you know, if, if uh curves get inverted and things like that happen, it'll, it'll, it'll knock this one down.

Quick question for you on the phenomenon we've seen of insurers pulling out of certain states or certain regions that they are finding more difficult to insure.

Is that something that affects a IG?

This is much more traditional uh property and personal lines business, right?

So, um to the extent that you're just insuring your house or you're just insuring uh contents and things like that, it's, it's not as big a deal reinsurers.

These are, these are questions for the Warren Buffetts of the world more than a IG in these days.

All right.

So, speaking of Warren Buffett, let's move to the stock that you don't like as much because it's one that Warren likes, which is surprising.

So it's chub the stock obviously got a big leg up after it was revealed that this was one he was investing in, but it's near all time highs.

Now, this is the problem.

We uh love to uh follow Warren.

We love his investment logic and reasoning.

The problem is he was buying this much lower.

The, the Buffett bump sent it to all time highs.

Uh It has a pristine track record.

Um, but the bottom line is, there's less.

I am a big fan of the rate of improvement.

There's sort of no improvement.

It's already a top insurer as evidenced by Warren's by.

So Wall Street doesn't expect much operating improvement over the next uh two years in terms of uh profit margins and absolute uh dollar of, of profit generated.

So that leaves it trading at about uh 12 times operating profit on 25 numbers versus that seven times we have for a IG uh Evan Greenberg.

He's great.

He's a legend.

It's already has, you know, 20% 21% return on equity.

You don't see that improving much from here.

Uh So that whole combination says Warren knows what he's doing, but I'll avoid it.

Yeah.

And so kind of what you were saying.

No, I mean, they've already gotten that profit.

They've already squeezed the profit out of the business is what you're saying.

Yeah.

And it's the same sort of trends, right.

The PNC business is performing well and, you know, they're beating estimates and doing things like this.

It's just a question of, um, how much do you want to pay for it?

Right.

If you just look at Wall Street target prices, which I, which I like to do just as a, as a guide, you know, Buffett's bump took it to beyond where analysts, the average target price was a two, was 270.

The stock was trading at 274.

So it's sort of, you know, all of the good news got reflected, you know, the reverse is true.

You know, there's still some upside based on price targets for a IG.

So, uh while I to venerate Warren, I'm gonna throw that one over the top and one more thing to consider you talked about that he was buying lower than when he revealed it.

Obviously, the other thing is he's probably gonna hold it longer than most people do.

Yeah.

Now I come from Barons, right?

And we tend to do things, our stock picks on a one year uh basis, right?

One or two years is our typical time horizon.

And, and I think that I think Warren will be happy owning this for a decade or 20 years and he'll revisit it, um or, you know, whoever it will be Berkshire the way it behi will revisit it in 10 years and, and they have a longer term time horizon, they're folding it into their other insurance operations and looking for synergies.

I just think that the outlook for I over the next 12 to 24 months is much stronger.

All right, let's talk about what could go right for Chubb though.

That would make, you know, that would make it do better.

It's just that it does better than expected.

It's always uh an execution story, right, to some extent, I'm saying that a IG can, can catch chubb but you know, strong execution from chubb and smart moves from Mr Greenberg will continue to help that.

What are the chances?

Berkshire would outright buy a chub we that, that's the risk, right?

So I'm saying throw it over uh you know, our Andrew Berry predicted.

Well, maybe, you know, Warren is interested in it, maybe he could pay 320 he was doing some math.

That's about 20% above recent levels, right?

So the risk is Berkshire says, you know what I'm gonna take over the whole thing that hasn't happened in a while.

There's no guarantee he owns about 6%.

Now, that was what was disclosed that sent that stock up so much.

So I can't tell you it won't happen.

But uh the the biggest risk would be that he does something that he does something like that.

Hopefully, that would revalue the entire sector and A IG would get a bump.

But that's, that's a bit of wishful thinking.

Yes.

Well, OK, let's summarize what we're telling people.

By the way, we wanna remind folks, um, any of the people who come to talk with us from Barons do not own the underlying stocks we do not talk about and neither do we for that matter.

If you don't know that here at Young Finance, it's a policy among most journalists.

In fact, let's tell people what al, let's sum up what AL is saying here by American International Group.

It's cheaper than chubb business is improving.

It's at that point where it's in a place to outperform the CEO S in a sort of sweet spot.

On the other side, you say avoid chub, it has now become expensive after Warren Buffett pushed the stock to all time highs and there's not much more upside in the next 12 months, either in the stock price or maybe much more profit improvement.

Thanks so much for being here.

Good to see you and thank you so much for watching.

Goodbye or goodbye.

We'll be bringing you new episodes three times a week at 3:30 p.m. Eastern and time.

Now for some calls of the day, several analysts raising their price targets on NVIDIA ahead of the earnings, their earnings on Wednesday.

Uh One is Barclays and I have a note from them.

Their price take target is raised to $1100 from 850.

And one of the things that uh Miss Tom o'malley is writing there, we uh there have been concerns through the quarter of a possible air pocket and that's a big thing for NVIDIA in the, in the middle of the year ahead of the Blackwell launch.

That's its latest chip.

Um Although the analyst is saying these calls are seemingly overblown, so maybe just uh not as bad as people thought, we still do not see evidence of this occurring with the tone from our checks remaining mostly unchanged.

And uh these come as there's a lot of excitement over there.

There's an interview with uh Michael Dell uh of Dell computers and also Huang of NVIDIA.

And they were talking about putting their resources together and launching these new A IP CS.

And uh Dell says that's gonna be the standard next year and you're gonna be one, you're gonna wanna be on that track.

If you're buying a new PC, you're not gonna wanna have the one that doesn't have all the bells and whistles.

So that's so that's another thing to keep in mind when we talk about the data center, which is over there and really big.

Well, personal computers as well.

Yeah, personal, although data center is something like 80% of their business of their revenue at this point.

Uh The baird uh note, one of the many folks who raised their price targets says there is no match to Nvidia's product offering this year and next, which combined with shortening lead time should play well into the second half of the year from a market share standpoint.

So there still a lot of gushing, no shortage of gushing when it comes to NVIDIA.

Well, sticking with tech here, Microsoft is going all in on A I for the PC.

The company unveiling a new category of computers and software during an event this afternoon.

Yahoo Finance's Dan Halley is there at Microsoft headquarters.

He's got more on the news.

We got you running around a lot here lately.

Dan, what stood out to you from today's announcement?

Yeah.

Right.

Julie, we're here at Microsoft's newest campus here in Redmond.

Obviously, you can see behind me, they're talking about a new era in P CS.

Basically, the, the gist of what they were doing was announcing kind of a, a new refresh or I guess error uh in P CS where they're going to have their Microsoft co-pilot running across all the windows and powering that will be chips from Qualcomm, Intel and a MD Chief.

Among them though Qualcomm here was the most mentioned it also in addition to opening up copilot and adding A I to General P CS, opens up a new front and uh kind of an exciting front uh in the, the overall computer landscape uh where Microsoft and Apple are now back going toe to toe.

And so uh part of the event was Microsoft basically saying, look, these P CS can now be the uh Macbook Air with the latest M three chip in terms of battery life, in terms of performance, in terms of sustained performance.

And they really wanted to hammer that point home.

Now, as far as the the copilot integrations, they say that they're running open A I GP T 40 as part of copilot now.

And so users will be able to do things like uh have their copilot look directly at their screen.

So say you're running in a demonstration, they showed uh the game Minecraft, you can ask how to build a sword in Minecraft.

And Copilot will be able to see what's on your screen and tell you exactly how to complete that test.

Now.

Sure, most people probably won't be playing Minecraft on their computer.

Uh I'll be playing other games, but other people will be doing things like using uh office or maybe Adobe uh uh apps.

And so they say that that will be able to be something that's integrated as well.

They just use the example of Minecraft because it was a nice visual thing for them to do.

So the, the upshot here being that Microsoft, uh you know, while P CS went through this doldrum period of two years of just declining shipments, uh we just saw the first increase in shipments in two years.

And now they're hoping to kick start a whole new cycle with this A I PC era led by their co-pilot plus P CS is what they're calling them.

And some of these chips from Qualcomm Intel and a MD Dan.

Thank you so much and we'll hear more from you tomorrow as all of the excitement continues.

And also we're gonna hear more in the later in the show.

Market domination over time.

We'll speak to Qualcomm CFO and Coo Akash PWAA about that Qualcomm Microsoft partnership.

Well, economic uncertainty and global competition is driving gold and copper to near all time highs.

We'll take a closer look in our investor playbook.

On the other side, commodities have been on a tear, specifically metals, gold prices hitting a record high today.

Boosted by mounting geopolitical uncertainty fueled by the death of Iran's president over the weekend, we're looking at how to navigate the big picture with the Yahoo finance playbook and we're joined by Phil Strebel, blue line futures, Chief Market Strategist and Tim Natan, managing director at Wolf Research.

Thank you both for being here.

Phil.

I'm gonna start with you.

Um It's not just gold, silver, copper.

We are really seeing some pretty amazing um increases in many of these medals.

Does a lot of it have to, I mean, is it sort of the dual thing here of geopolitics and then A I that's helping fuel this?

Yeah, if you break it down into copper, I mean, you know, when you trade commodities, it doesn't matter what it is, you really got to identify two characteristics when investing it's a supply demand, imbalance and its market momentum.

You look at copper, for instance, you've got increased electrical power use because of the green energy revolution.

You've also got rising demand from electric vehicles and advancement of A I have also strained the outdated electrical grid.

So the combination pushes demand for copper, silver and other metallic metals higher for the first time in over a decade.

And this comes at a time when increased regulation makes it harder for additional supplies of these metals to come into a light and end up in the end user's hands.

So it's just creating this global deficit right now.

It's a perfect storm for commodities.

And Tim now you cover the miners.

Can you give us an overview and these are very different companies uh depending on what's mined and scattered throughout the world, different geopolitical structures and, and things at play.

What are factors that the miners are being, are concerned with right now and some of those that are translating into higher prices down the stream amount of new copper mines starting up this year, there's um we can rattle off a couple off the top of our heads, the K of Eco QB two, there's Oy Togo and uh Koa Kula.

So there's quite a bit of copper coming on and a lot of the new copper demand isn't gonna hit the market till 2030 especially data centers may be a 1 to 3% global phenomenon over from 2020 to 2030.

So there's nothing really very incrementally supporting this um massive rally aside from a small deficit in copper.

If you look at the data, however, you know, there's nothing to get in the way of a good.

Um The facts don't want the facts to get in the way of a good narrative here.

Um The reality is this is really a squeeze that's happening in the financial community more than in the physical market.

Uh There's a lot of shorts that were squeezed in copper.

It's quite a bit of analysis on that.

Um And definitely, um you know, the phenomenon of Russian material not being able to delivered to the US is causing a physical squeeze in terms of the miners.

Um Certainly they are enjoying these higher prices.

Uh It's hard to explain if how sticky they'll really be from what we just described.

Um There is the high profile potential uh acquisition of Anglo by BHP that looks like it's hitting a wall here, but we aren't hearing a mass amount of M and A. Um Even though it is hard to build, it's also getting expensive to buy.

Well, and Phil to circle it back to you, if indeed at least a substantial portion of the copper rally is a short squeeze.

Like if you're not an experienced trader, do you wanna try and chase that?

I mean, how much sustainability does that have?

Well, this is where you gotta really put your thinking cap on you've got to manage your risk, you've got to manage your position.

Sizing of the uh more recent plays that we had recommended to our clients was a particular call spread where it's a calculated risk trade, which has a favorable risk to reward ratio, but it also defined the risks involved.

So when it comes to investing of any type, you know, you always want to manage position sizing, making sure that it's risk capital that's involved.

So if you were step into the market right now, you know, on the copper market, you could take some of these calculator risk option play or you could look at the micro copper contract which is only 2500.

So every penny moves say from something like $5 to 501 would be a $25 positive impact in your account or a dip down to 499 a $25 negative impact Tim.

Now let's stick with ri risk management here.

Uh So the approach that we would have with the futures market and whether you're investing directly in the futures or an ETF that's a little bit different than a stock play where you're investing in with miners.

How do you go about that?

How do you advise clients?

Uh the best way to approach?

We have coverage names that are a little more liquid like Freeport.

We have names with a nice dividend like Southern Copper and then we cover tech resources, which we think has the most interesting combination of a little discounted valuation because it's a show me story and execution of their operational ramp up at QB two and some more interesting growth.

So in our view, if you can have copper exposure with copper growth, that's the way to go.

Um Tim, I wanna turn to gold and silver a little bit more now too because as you look at the miners, I mean, many of them do multiple different metals that they are mining.

But I'm curious what you think about the trajectory for those medals and which miners might be best poised to take advantage?

Sure, we don't unfortunately cover precious.

We do have uh exposure through Freeport where they do mine gold or um their grass mine is the largest gold producer in the world and it's a great by-product credit benefit to them.

It's an interesting market when you see geopolitical risk helping gold, but also copper at all time.

Highs.

It's not usually um you know, they usually uh go in different directions.

So it's a, it's an incremental positive for sure for Freeport.

And uh Phil talk to me please about some of the volatility that we've seen in the futures market this year.

I was just looking at uh a heat map we have on the Wi Fi Interactive and Cocoa is actually up the most this year.

It's up 68% although it's still down 30% from its highs.

Just wondering uh how investors should consider some of the volatility embedded in these markets before rushing out and, and investing in a, in a metal.

Yeah, this is where you got to weigh in as far as those many and micro contracts account size and everything else.

A lot of the volatility we've seen, you know, is because of the rising geopolitical tensions.

You've also seen increased consumer investments and one of the largest speculative long positions that we've seen in the last two years in the gold market.

So you get geopolitical events, things that happen over the weekend and things like that.

You're gonna see a lot of that volatility here because of the fact that people are so embedded in the market, they've got so much exposure there and the more participants you have coming in there, it's like a river and they all rushes in one direction here at the moment.

So you always got to keep your 1 ft out of the door here and be ready to, you know, be the first person to leave.

They always have an old saying in commodities, you want to arrive to the party late but be the first person to leave.

I like that, Tim, uh I'm gonna give you the last word here.

Anything we didn't touch on, uh in this, uh in this discussion that you want to leave with viewers, I think you can ignore the 800 gorilla in the room which is China.

China accounts for 50% of all demand for commodities that we follow on the middle side.

Um And I think that China is a big question mark.

So clearly, they're farther along in terms of eb adoption than we are here in the North American market.

But um you know, and so that's positive for transmission lines for copper demand.

But on the flip side, their property sector is I'd say in very late innings of development, you've seen, you know, months now of the completion side reversing which is usually negative for copper.

So are we seeing net copper demand in China or not?

I think a lot of that will depend on how the stimulus measures play out.

And so far they've not been that impressive.

So I think we have to include China in any of these discussions.

All right, never forget the 800 gorilla.

Thank you, Timna and Phil.

And while we're wrapping up today's market domination, don't go anywhere.

We've got you covered with all the action following the closing bell including the latest earnings from reports from Palo Alto and Zoom.

And at 430 Eastern time, it is the debut of our new show.

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