Apple overtakes Microsoft, oil supply, Fed decision: Catalysts

May's Consumer Price Index (CPI) was lower than expected, showing signs of cooling inflation. Apple (AAPL) has overtaken Microsoft (MSFT) as the most valuable company, speeding past the tech competitor after Apple shares surged to a record high on its AI announcements. The European Union (EU) has announced that it will impose tariffs of up to 38% on Chinese EV imports beginning on July 4. The International Energy Agency (IEA) has raised concerns about a potential oversupply in the global oil market, warning that a surge in US-led production could outstrip demand by a staggering 8 million barrels per day by the year 2030.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

Video transcript

It said I am here in New York City.

I'm sure that alongside of Madison and I to the catalyst of moving markets today.

Act one for the day is done with that cooler than expected consumer price index report.

Now we're on to act to the fed decision out today at two pm Eastern.

All eyes are going be on that new summary of economic projections.

We discuss how a change in the dolo could influence market action and while the overall consumer price index coming in, so the shelter prices remaining sticky still rising by 4/10 of a percent, we tell you how this could complicate the ability here to inflation and taking a look at Big Tech Apple officially overtakes Microsoft to become the world's most valuable company.

Reclaiming the title will discuss whether or not the moves are going to hold for Apple.

All right.

First, let's get to today's top story and that's the latest reading on inflation, consumer price inflation coming in a bit cooler than expected across the board.

Now we spoke to Peter church just last hour.

He's Academy Securities head of macro strategy asked him about this print, his reaction to him.

What ultimately this means for the feds timeline to cut rates.

Here's what he told me.

I think this is good enough for them to really start pushing still for a July cut even.

Right.

It's because they do want to get ahead.

Right.

There's these long lag times.

So comparing what he just said that he still thinks July cut is on the table comparing that to maybe what the broader market is saying and taking a look at the ce a fed watch to the probability of a cut in July.

It is up from yesterday but not significantly.

And 80% of investors still are not pricing a July cut in.

But Matty, we bring this up because there certainly hasn't been this debate surrounding the timing of the first fed cut.

Ultimately, what makes the most sense for the fed to do how they are going to walk this fine line of trying to tame inflation and trying to get back to that 2% or as close as it can to that 2% goal.

But they're also we're starting to see some softness when it comes to the labor market, the unemployment rate ticking up.

So exactly how far they are going to push it before we start to see any further deterioration in the.

And ultimately what that means here for the economy, it's going to be a tough balancing act that for sure it's a great point, Shana because it points to the fact that there are discrepancies within the data, Morgan Stanley with a quick quick reaction to the CP I print this morning pointing to what it could mean for PC coming forward here saying they do expect a little bit of a slowdown in PC and saying, quote, this would add to the convincing evidence that the fed does need to start cutting soon.

And that points to exactly what you said to shot.

How is the economy going to be able to withstand the hire for longer environment before we do start to potentially see a little bit of pain under the hood?

Yeah, exactly.

And I think there's going to be lots of questions or maybe the attention clearly is going to be focused on Fed Chair Powell this afternoon.

Any commentary that he does have to say about that and ultimately how the Fed is thinking about it as they navigate the next move here for the central bank.

All right.

Well, treasury yields are falling after that may CP I coming in cooler than expected for more on the market's reaction.

We've got Blake Gwen and studio here with us R BC capital markets, head of us rate strategy.

We also have Jason Drej, he's UB Ss America's head of asset allocation.

Great to see both of you, Blake, let me start with you the reaction that we're seeing here in the bond market.

We've got yields tumbling on the heels of this print.

I'm curious what this print signals to you and ultimately the impact that's going to have on the bond market.

Yeah, I think it's the first, you know, good print that the Fed wants to see.

I think, um you know, there was a lot of positivity around uh last month's or I should say the April inflation data.

Um But I think that took some of the edge off around risks of a re acceleration that we had kind of coming out of that very strong Q one data.

But it wasn't what I would call good.

I mean, you know, core P ce we had 0.249 you carry that over out over a year, that's still 3% plus inflation.

Um Today was the first one I would consider good 0.16 does get you to a two a 2% you know, year over year number at some point.

So I think the fed can count this as one in the bag for good prints.

But I still think it's going to take a couple more before we, you know, really start putting that, putting that cut, setting up for that cut at the next meeting.

Yeah, and the fed has certainly indicated that, that they need to see some trends.

But Jason, I do want to bring you in to the conversation here.

We're already seeing some commentary about whether or not this is immaculate disinflation.

Is that what you would say you're seeing here.

Well, well, it's clearly a very good print.

Right.

I think across the board all the data was sort of, you know, told a good story.

The one actually, I think that was a little bit on the high side was o, you know, is a colt rent.

But the good news about that is like the direction of travel still seems kind of lower.

So it was a very kind of good print overall.

But as Brent said, it's, you know, this is the first real month where it's been kind of a good story after 34 months and one in line.

So I think it's a little too soon to say it's uh you know, it's kind of a great disinflation story, I think for the Fed, it's kind of really good news because it basically gives them optionality that if things deteriorate, they can move more quickly.

It makes, I think certainly Powell's life easier today at the press conference that he can sort of justify if they go to two cuts.

As we think to say, the inflation story is moving in the right direction.

But now they can kind of wait to see the unfold and if they need to, they can move quickly.

The inflation story is kind of giving them a little more room there.

Look, I guess my question is the reaction that we're seeing in the bond market today.

Do you think that's justified just because this is just one.

Yes, it is good news, but we need more of a trend.

No, I think it's justified.

And I think if you look at what happened immediately after the print, we kind of moved down to the support levels we saw before the NFP print.

So we're kind of back to the lower end of those ranges and much like into the NFP prints.

I think markets are trying to figure out what the range is gonna be over the summer.

Are we gonna go back to those kind of April May type of ranges and kind of stay in there?

Um Or we're gonna break to this new lower range and we're right on that precipice right now.

So I, you know, I don't think it would take much of a, a push by Powell to get us over that.

Um But I, I think one thing that we uh uh sometimes mistake about power, we always kind of say, oh, he, he's always Dovish.

I think he's more uh uh anti market sentiment in a way like he's always kind of pulling back on the extremity and in a time where we've been very hawkish for a few years that has generally meant he comes out a bit more Dovish.

So I do wonder if he's going to come out today and say, hey, look, this is one print.

He's actually gonna take the other side and kind of say, hey, let's you know, we didn't overreact to the hot prints in, in the early part of the year.

We're not gonna overreact to this, this low print.

So I think markets are rightfully hanging out right around that precipice to kind of fit what we get from Powell and where the next few months are going to line up.

Can we pause on that blake?

Because I've not heard that take before.

So I'm really fascinated in it because I would assume and since I'm paid to, you know, look at financial markets just as closely as you are, I would assume that the market rally in the Fed, kind of allowing that to continue without being even more hawkish means that Jay doesn't necessarily care how much of a rally we see.

Why am I incorrect about that?

No, I mean, I think they are probably very happy with where markets have been trading in this kind of 1 to 2 cut type of range because um you know, it gives that optionality.

Um You know, if they have to go to one, you know, if the data moves that direction, they're kind of set up for that set up for two.

I mean, I think it's a very good place for market pricing to be for the Fed.

Um I think what happens is if we start to really push that narrative, we saw this in extreme late last year, if we really start to go too far on cuts and start to look like we're boxing them in if we move to three cuts priced.

I think Powell wants to push back against that.

If we start moving to one cut, he would want to push back against that.

I think markets and the press are more like a sign wave going back and forth and the Fed tries to cut a nice even keeled balance through, through the middle of that.

Jason.

I'm curious how you see the Fed uh balancing the risks right now, the risk that maybe they aren't going to act quick enough, ultimately, what that is going to look like here as those ripple effects uh play out in the economy.

And then of course, the ultimate reaction that we could see in the equity market, how do you see how addressing that?

And I guess his ability here to walk that fine line.

Well, let's kind of first assess the potential impact of them being a little bit too slow.

In some way, the market is already doing the easing for them.

If rates are coming down, if equity markets are rally, the credits are tight, financial conditions are easing and that's a positive impulse for growth.

So if there was a kind of a gross slow down and they are somewhere behind the curve, the markets kind of doing some of the lifting for them.

So again, that gives them a little more optionality to wait.

And if the data gets worse.

Of course, the market will probably price and even, you know, more aggressive action, even potentially kind of in July.

So this is kind of a good situation for the FED after.

What was a difficult situation earlier in the year where the inflation was running against them?

I think they can again keep that even keel.

Something I've looked at.

It's interesting if you take where the feds dot Plot would be for the end of this year, whatever applies for the fed funds rate from June of last year, it was around 4.65.

It's basically held steady.

If there it did spike in September, it might take up against this month.

But that means that over the year and a half or over a year, the Feds pretty much had a consistent view of where do they think they'll be at the end of this year?

The markets oscillated a lot around that.

But I tells you that the Fed tries to kind of think through the noise, the oscillations and has a pretty even keel approach of how they're taking it even if the market doesn't always like it.

So Jason help our investors for the rest of the trading day.

We had the Apple breakout here, superseding Microsoft, we got the soft CP I leading us to new rounds of all time highs.

What's the bigger risk to that today?

Is it the fed meeting the dot Plot or Chair Powell's commentary, but it could be Chair Powell's commentary and that, you know, if the dots go to two and now things can be pretty likely it's more along the lines as he sort of push back and become sort of more hawkish, try and downplay it.

So I think there is a scope that he might try and treat it.

Like, think of this as where, where we want to, you know, have a sort of almost a hawkish outcome given how the markets react.

I think there's a little risk that he may not sound as as dovish as the market would like after this inflation data.

So that's, that's the risk is the markets move higher and lower rates and he might try to pull a little bit of cold water on that really quick.

Blake, I'm looking for a one word, one or two in the dot plot today.

Two.

All right, there we go guys.

Thank you so much for joining us.

We have Blake Gwen Gwen here in studio R BC capital markets, head of us rate strategy.

We also have Jason Drago joining us remotely.

He is U BS America's head of asset allocation.

Thank you both so much for being here.

We're going to turn now to big tech Apple shares are jumping after overtaking Microsoft and reclaiming its spot as the most valuable company.

This coming after Apple announced its new A I powered features at its worldwide developers conference and shot I was looking at some of the commentary online to kind of understand why we saw an initial downside move from Apple Stock after the announcements from the conference.

And then we saw obviously this big surge to the upside.

And some folks were saying Wall Street just wasn't necessarily sure how to suss the news that we got out of the conference, wasn't necessarily sure what was good enough news for Apple.

And then after some big commentators that are really famous within the space came out and said, hey guys, this is actually really big stuff coming from Apple.

That is what led to the rally once investors kind of digested that the good news from Apple was really good news.

Yeah, exactly.

And I think overall the commentary here from analysts, much of what we heard on Monday was expected, right?

And we have seen this resurgence just about some of the excitement surrounding Apple out of this announcement.

What exactly this is ultimately going to mean for the adoption story, whether or not Apple coming out having features that they announced on Monday, what exactly that is going to do to that next iphone cycle?

If it's going to be enough to convince in to convince uh their customers out there that they do need to go out and pay 1213 $1400 for a new phone because of these new features and the commentary that has trickled out since.

And I think initially it was, yes, this is exactly what we were expecting.

Nothing really going above and beyond, maybe what had already been out there in terms of the rumor mill.

But then I think once you take a step back, right?

And you think about what this means overall, getting back to that adoption point there just a second ago, what ultimately, this means for some consumers that are not using A I capabilities on a day to day basis.

Ultimately, the impact that that is going to have on their life, what what that is going to do here for that longer term adoption and and ultimately, what this does about excitement surrounding some of those other larger cap tech plays, right?

A lot of that could be, you could be argued or you could you rides on some of the success, maybe that Apple is going to have, but at least when it comes to that consumer everyday impact side of the story.

So that's why Julie Hyman was out with a great morning brief this morning talking about that.

So yes, I guess some analysts remain split or maybe weren't too excited or overly excited by what we heard on Monday.

But again, when you take a look at the, at the reaction that we saw play out in the stock yesterday and of course, the gains today you can clearly see there is that I hype there.

Is that a a excitement and now Apple is one of the stocks after lagging behind for quite some time now starting to benefit more from all of that excitement.

Right.

It seems like it was a little bit of a price in event by the rumors, sell the news heading into the week and now after the commentary, a lot of room to rally here.

Certainly.

All right, we'll keep right here on Yahoo Finance.

Coming up, the eu announcing new tariffs on Chinese EVs, we will dive into what exactly this could mean for the country's ev sales.

Next, the European Union announcing it will impose up to 38% tariffs on electric vehicle imports coming from China.

That's expected to start on July 4th.

Now this of course, coming a month after the US quadruple its tariffs on Chinese s to 100%.

We spoke to a lot of analysts at the time who said us tariffs wouldn't have a huge impact on China's ev sales since there are no Chinese EVs here in the States.

But what about these new eu duties?

What impact could that have?

Joining us to discuss?

We have our very own pros sub Romanian pros.

That's the key question I want to ask you about how big of a headwind is it to see these tariffs imposed by the Eu given that there are Chinese ev sales happening in Europe right now.

Yeah, I mean, I think that you could say that they, the EC the European Commission are kind of dropping the hammer here.

I mean, 38.1% at, at the high mark was more than what was expected.

I think there was a 25% or so uh tariff duty was, was expected.

So, you know, looking across it's actually um you know, the, the EC had had discussions with Chinese officials about this and they came to this to this sort of a, a stagger uh policy here.

So so for instance, for B ID cars, it would be a 17.4% tariff uh for ge cars a 20% tariff.

But then on SAS A IC, for instance, 38.1 and if and if a automaker did not cooperated with the EC on their investigation, they were all stuck at a 38.1% others who cooperated at 21% tariff.

So you see this kind of staggered approach all going into effect July 4th.

Now the EC says that, you know, they can still have ongoing discussion with Chinese officials and they can sort of uh pote potentially lower that or adjust these these tariffs.

But one interesting automaker Tesla uh petition for a kind of an individual rate for their cars coming from China.

So they're going to do that.

But anyway, more pain here, I think for Chinese EVs in the country, uh especially when you consider the fact that other European automakers were saying, hey, if you do this, our cars in China are going to get directly tariff again.

So it's kind of an escalation here, I was gonna say.

So what ultimately could that backlash look like?

And, and putting some of these foreign automakers who want to have, have any sort of presence more of a presence in China than in a tougher position.

Yeah, definitely.

I mean, a lot of the luxury brands sell their big V eight powered uh S classes and BM seven series.

Those cars can get tariff heavily if the Chinese are in response.

And then, and ultimately consumers both there and in China kind of worse off.

And then just real quick, even with, with these tariffs are some of these Chinese vehicles still cheaper than what some of the domestic automakers are offering.

And I guess how much of an impact is it ultimately at the end of the day, even going to have on some of that demand, I mean, the B by D seal, maybe around 15,000 or so, 25% tariffs can only make it 20 grand more.

Right.

It's only 20 grand total.

So it's still relatively cheap in the USA 100% tariff would make it a bit more and unpalatable.

So you're absolutely right.

I think it's potentially the fact that the tariffs may not have that big of an effect.

But if you're a consumer, it's 38.1% on S AC cars.

I mean, almost half all Right pros.

Thank you so much for joining us.

Really appreciate it.

That was great.

Thank you so much for being here with us.

Now, we're gonna take a look at some trending tickers that you are watching here.

Shares of Broadcom moving higher this morning ahead of its second quarter earnings report that is coming out after the bell today.

All eyes are on the chip sector as investors are of course doubling down on A I just to take a look at what we are anticipating city out with a preview of Broadcom earnings, expecting the company's full year A I revenue target to hit at least $11 billion.

But saying that the 2024 guidance will likely stay intact as strength coupled with momentum from VM Ware as a reminder they did acquire V that is going to be slightly offset by weakness in the company's legacy offerings.

And that commentary is actually according to Bank of America there, but still really interesting to have one more chips name in the space that we can monitor earnings for to kind of get an outlook on the overall sector as not only the A I story continues but also continued regulation.

We're hearing news that the Biden administration is weighing more curbs on China and chips.

So it will definitely be interesting to see the success rate for broad.

Yeah, exactly.

I think this is just gonna be another barometer here for the wider space, right.

Exactly what the uptake looks like, exactly what demand looks like, really what it means for some of these quote unquote tier two players when you get outside of NVIDIA, some of the smaller players within the space that are benefiting that have benefited from this excitement surrounding A I.

But materially, the impact that it is having on their business, what it shows in terms of sales, in terms of demand, especially that guidance.

I think that's going to be so critical here as we try to gauge kind of the overall health of the broader sector.

And also ultimately, what some of those I guess growth milestone numbers could look like here in the coming quarters.

But again, Wall Street, very optimistic, very upbeat.

It sounds like ahead of these results that we will be getting after the bell here today in city there uh expecting the chip maker to report revenue ahead of consensus, putting it on track here to raise its full year A I revenue target to at least 11 billion.

All right, let's take a look at another ticker that we are watching today, consumer name and that is Birkenstock cut to neutral by Goldman Sachs.

Attributing the downgrade to some of those rich valuations.

Now, this comes after the retailer reported earnings that beat on both the top and bottom line.

Goldman, though pointing to some fragmentation in the overall market as a headwind.

We're still though looking at gains on the day up just about 9/10 of a per sample when they talk about valuation.

I think it's good to take a look at some of those longer term charts when you see the price action, the price movement of what we have seen in recent weeks.

Yes.

Birkenstock, it did come out and be, it's right there.

The three month chart you're looking to gain of nearly 27%.

You can see a lot of that excitement coming within just the last month alone.

You take a look at the max chart ever since it went public there less than a year ago, up just about 48%.

So we'll see how this all plays out and how big of a risk some of that pulling back, weakening of the consumer is going to pose here to a name like Birkenstock.

Yeah, perhaps a cautious tone because of the degree of those gains that you pointed out.

Shanna.

I think that that's just the, the main picture here because they did point out in the note a lot of positives for the, for the name.

They talked about the kind of diversification.

They found a way to sell a closed toe shoe, which is an incredibly bullish signal.

Apparently for Birkenstock, they were worried about the kind of non summer months being a headwind for them.

So I'm just amazed that these shoes are still so popular.

It still reminds me of high school, but people love them.

They've been wearing them the whole time.

We have some people in our newsroom who was still saying that they have held on to their Brian socks from their high school days.

So, I don't know, I'm not convinced, but a lot of people love them.

You can clearly see it reflected in the sales numbers that they put up.

Right.

We need a shopping trip.

That's what that tells me.

Uh, speaking of some consumer related news here, shares of a firm still on the move up over 12% here.

This comes after the buy.

Now, pay later provider disclosed a partnership with Apple that they say could drive user growth.

Our very own executive editor, Brian Sazi spoke with the firm CEO following that news, take a listen, things that are worth doing, take a long time.

And you know, if you look at another really amazing part of virus is Shopify.

So it, it's in its third year and it's accelerating and that just shows that when you build something really well, it takes time.

But if you put the right foundation in and continue iterating, you really get some extraordinary results.

And I think with this announcement speaks to probably more than certainly a lot more than just affirm the idea of unbundling the credit card is here to stay.

Well, that part I think is the key thing to watch because obviously they're going to talk about how it's a bullish signal for the stock.

That's fine.

Of course, the CEO is gonna say that but the unbundling of the credit card space, that could be an indication of this kind of solidification of the Fintech wave.

And I'm curious what that is going to mean for some of the bigger credit card providers in the space?

Could that end up being a head one for them as Apple pay becomes even more accessible for consumers?

What does that mean for the JP Morgans of the world?

I don't think they're too worried about it, but they're not too worried about it, but, but he does bring, bring up a good point, right?

Just in terms of some of the new innovation, some of the trends that we have seen the lack of loyalty that maybe uh could uh come up in the coming years as we do have these types of offering, take hold and become more and more popular.

So again, I I it it's not too far out of the realm of possibilities and I think it is something when you talk about the evolution of this space and ultimately what the space is going to look like over the next 3 to 5 years, I think it's going to look extremely different from what it looks like today.

And at least when you take a look at this, at the investor reaction to this partnership that they did announce here with Apple, it's doing a lot for the stock, you're looking at gains once again here today, up nearly 12%.

So again, a lot of excitement surrounding this JP Morgan out with instant reactions and that they estimate the Apple pay accounts for the high single digit percentage of us e commerce volumes.

It really speaks to the growing presence, the growing popularity.

And I think ultimately, maybe what that number could look like a few years out, you think would be a lot higher than what it is today.

Just given the rising popularity of Apple pay over the last even last year.

Pretty amazing.

You never are gonna rebuff a partnership with a name like Apple.

And that's obviously working for the stock though, since the IP O though the stock down 70% year to date down 20%.

So much need to move to the upside for them.

Now coming up, shelter remains one of the stickiest sectors in the latest CP I print we'll dive into the numbers after the break.

Shelter inflation rose 4/10 of a percent in May, the biggest single contributor to the increase in core consumer prices.

Now the shelter index rising 5.4% over the last year.

That is two thirds of the 12 month increase in the fed's preferred inflation gauge.

This data is just the latest example of how critical housing prices are to the overall inflation picture here.

So we're going to discuss this with our next guest.

We have Ivy Zelman.

She is the CEO of Zelman and Associates Ivy.

It's great to speak with you.

Thanks for joining us.

When you look under the hood of today's data.

What story is it telling us about the inflation outlook specifically for shelter that we might be missing here?

Well, overall, thanks for having me, but overall the deceleration is um started to become more obvious in the numbers that we had been seeing in 2023.

Back half of 23 was very pronounced.

We saw actually negative new move in rates um for multifamily and deceleration in single family rental.

But interestingly right now, even though we're seeing slight deceleration, the more important um I think note, I want your viewers to understand is that multifamily rents are re accelerating and single family rents are firming based on according to our surveys that we do of owners and operators, which is definitely not what the fed wants to hear.

So, I mean, so what ultimately then does this mean all for the housing market, the rebound that maybe we are expecting or many are hoping to see in terms of that activity is that going to take longer to take place?

And then ultimately the impact that that we will see on pricing for the longer term too.

Well, if you're referring to multifamily multifamily starts have been under tremendous pressure, given the backup in rates.

And we don't expect that to really turn around anytime soon.

The single family market has been accelerating for new construction.

The real weakness in the market has been pronounced in existing home turnover, which in fact is, is starting to um what we thought was bottoming and improving is actually starting to turn more concerning and, and declining given the backup and rates and affordability constraints.

So, affordability is really challenging and we're starting to see that um show up based on the work that we're doing.

So I, I do wanna bring it to the Fed Ivy because I guess what I wanna know is, is the CP I data that they are looking at today and moving forward is that an accurate picture of what you are seeing on the ground in the housing market.

And from what I'm looking at, in terms of some of the commentary out there, I could argue in either direction, some data showing that people sign your lawn leases is there, there's a lag time in rent, meaning it could be higher than what we're seeing in CP I.

Others saying that that could be the, the opposite that what we're seeing in CP I is actually underestimating just how cool prices have gotten.

If you were talking to Jay Powell today, just to put a button on this long question.

What would you tell him about housing inflation?

I'd say that housing inflation reflective in the CP I is usually lagging according to our data about four months and generally because turnover in uh rents tends to be for multifamily kind of in the 40% range.

Single family people turn 25 30%.

What they're showing is that renewal rates are, are still sticky and because renewal rates are sticky.

Um What we hear in most data is reflected is new home rates which are not really indicative of the market.

So I'd say that JP L needs to be concerned that the market is firming and re accelerating.

All right, Ivy, we're gonna have to leave it there, but really appreciate you joining us.

That was Ivy Zelman.

Zelman and Associates CEO.

Thank you.

Now, coming up the Biden administration closely watching today's inflation data mid an election year.

We'll tell you how political pressure on the FED is mounting after the break, markets hit fresh record highs after the softer than expected inflation print policymakers are still stressing that they need to see a trend of disinflation before cutting rates.

Joining us.

Now to discuss the outlook for the FED is our very own.

Jennifer Schumer J.

Good morning John.

That's right.

The cooler than expected reading on May consumer price index out of the fed's interest rate decision this afternoon is encouraging but likely not enough to convince officials to cut interest rates just yet.

The question for today's meeting whether the moderation in CP I influences some officials to reduce their prior estimates from 3 to 2 instead of one, the FED will release its quarterly interest rate projections today.

The so called dot plot, the March in March, the median projection was for three rate cuts.

After a sticky first quarter of inflation, officials have signaled they will hold rates higher for longer with market expectations of just one cut for this year.

The improvement on CP I isn't likely to alter the fed's cautious stance yet, with officials widely expected to hold interest rates steady this afternoon at a 23 year high.

Though the fact that the monthly print for CP I clocked in at just 2/10 of a percent versus three tens in the previous month is exactly what the fed is looking for.

They're just going to need to see three more months of this to gain confidence that inflation is dropping.

That chair Jay Powell has made clear, he thinks the FED will need to see more than a quarter's worth of data to make a judgment on whether inflation is steadily falling towards the 2% goal before cutting rates.

He's likely to say that today's CP I is good news but not enough.

If inflation continues to drop at this pace, then the fed could be cutting in September.

But if there are bumps along the road this summer, then cuts probably won't come until later this year.

The fed set to announce their policy decision at 2 p.m. this afternoon followed by the chair P press conference at 230 back to you.

All right, Jen Thanks so much for bringing that down.

Of course, we'll be watching here at 2 p.m. Well, the global gender gap closing by a marginal 10th of a percent from a year.

This according to the latest report out today from the World Economic Forum.

Now, according to the new report, if the piece continues at this rate, it's going to take up to 100 and 34 years to fully close the gap for more on this report, ultimately impact that it could have here on the economy.

We wanna bring in Sadia Zahidi World Economic Forums, managing director, Sadia.

It's, it's great to see you.

So let's take a step back and talk about the findings of this report because yes, we did see marginal improvement.

Although I did notice that the pace has slowed just a bit.

So I'm curious what you attribute this to and how big of a risk this could ultimately be here to that longer term goal of obviously getting on par.

Yeah, I I think um you know, you, you've summed it up there.

The pace of change is um slowing down and this is something that has been happening over time.

There's a little bit of a gain of a few years um in one year and then a little bit of a loss another year.

But at the end of the day, what this means is, it could take five generations to get to parity.

Uh you know, the year 2158 if we continue at the current rate of change.

So there really needs to be a lot more acceleration when it comes to the efforts from businesses, the efforts from governments and ensuring that we actually unlock and use all of the human capital investment that has been made across countries.

You know, the in this looks at four different areas, health and education, economic participation and political empowerment.

On the first two, for most of the world, there is parity.

But then when it comes to economic participation and political empowerment, the same isn't happening.

So we're essentially wasting all of that investment.

I do wanna bring it home here to the States.

And interestingly at the top of your report, you have the 2024 top 10 rankings in terms of countries hitting the pay gap a little bit more directly and successfully.

Uh the United States keenly not part of that list.

What are we seeing in the data in terms of what the US is doing on the pay gap and how that progress is looking?

Yeah, so the top 10 countries very much dominated by Europe and the number one country in the world, Iceland is the only country that has crossed closing over 90% of his gender gap and has been in that top spot for about 15 years.

The US on the other hand is at 43 very much on par with where things were last year and while it's an economy that does fairly well in terms of economic participation, it's the leadership gap in both politics and in economic participation.

That's driving its ranking overall.

So what do you, what do you think is the catalyst then beyond elections that needs to happen in order to see more improvement?

And also I I think the big thing is also for that rate of improvement to pick up and speed too.

Yeah.

Um three probably big things that need to be looked at.

So one is the care systems in the most successful countries tend to be those that build out care infrastructure and ensure that it's essentially not just women that are having to provide child care and elder care.

Some have gone for public systems, some have gone for privately funded systems.

But at the end of the day, there is something available that allows for workers to balance family and work.

The second big area is getting more women into political participation and into decision making roles that actually then end up changing policy.

And of course, this big year for elections in 24 and 25 could be one of those that provides an opportunity to get more women into public office.

And then the third area is more of a focus on the growing roles of the future.

And the most striking example of this is stem related fields.

Think we all know how much A I and technology is not just starting to seep into various aspects of the economy already, but what a game changer is going to be in the future.

And if in those roles, there can be more of an effort to ensure that women are going into A I related roles, women are going into wider technology related roles where there is still a very significant gap that's going to of course, occupy those specific jobs of the future.

But it's also going to change how things end up for our economies and societies more broadly, more diverse teams in those fields matter.

So those would be the three big things, care, political office and then a focus on the jobs of the future.

Yeah, ideally, I would love to see more women in positions of power in all positions across all types of companies and sectors.

Saria, thank you so much for joining us.

That was Saria Zahidi.

She is World Economic Forum's managing director.

Now, as investors, look ahead to Fed chair Powell's comments this afternoon, political pressure for the Federal Reserve to cut rates is rising for more on the politics of Fed policy.

We bring in Yahoo Finance's own, Rick Newman.

Rick always a treat to speak with you.

Thanks for joining us.

So the reason we're talking about this stems from the letter that Senator Warren and I mean, others have also been increasingly kind of making their commentary about what they want the Federal Reserve to do more vocal how out of character is that?

It seems to me like a little bit of a potential overstep.

Is that true for you?

In terms of your long term coverage of politics in DC?

Everybody wants the Fed to cut interest rates and apparently nobody's worried about inflation anymore.

Um I don't think this is that out of character.

I mean, when Donald Trump was president, at least not in modern times.

Uh when Donald Trump was president, he constantly be rated uh the fed and uh chair Jay Powell to do what he wanted basically to cut rates as low as possible.

Um But I, I mean, if Powell is not, he's not a pushover.

Um he's going to do what he uh he thinks he has to do and we, we've seen this for the last um basically 12 to 18 months.

I mean, Elizabeth Warren and a few other liberal members of Congress have been hammering Powell to cut rates because they say that uh this is, you know, high, higher rates are hurting consumers and specifically lower income consumers.

That is true.

But II I don't know what Elizabeth Warren thinks about inflation.

I mean, inflation hurts consumers and lower income consumers as well.

So, um I think one of the dynamics here is it's easy for politicians to hold hearings or send letters and hammer the Federal Reserve when they know the Fed is just going to do what it's going to do.

I mean, there's definitely an element of posturing here because I think Elizabeth Warren is pretty clear that she's not going to persuade uh chair Powell or the Fed to cut rates before they're ready to do it.

I, I guess the good news is that at some point, I mean, rate cuts are start starting to come into view here as we get more favorable inflation numbers like we did today.

So maybe we will finally have some rate cuts and, and, and uh some of these politicians will get what they're what they're after.

But uh I mean, not too nothing is coming uh imminently.

All right, Rick, thank you so much for joining us.

Really appreciate you breaking that down and of course, all eyes on the fed meeting and the subsequent conference later today.

Now coming up, oil production could outpace demand by 8 million barrels a day by 2030.

What that could mean for renewable energy opportunities?

We'll discuss that when we come back.

International Energy Agency, IE A is a warning that the US led surge in oil production will lead to an outstripping of global demand by 8 million barrels per day by 2030.

Now, this is according to a new report that just released today.

The report attributing this to a number of factors including post pandemic rebound to slow down China's economic shifts, also advancements in clean energy SRE closely tracking this for us joining us now with more.

Ok. Yeah, the ie a basic finding is that oil supply is set to outstrip demand between now and 2030.

The end of this decade is when the IE A says oil demand will peak.

It's important to remember that the IA A advocates for the use of cleaner energies and less fossil fuels.

Now, the international watchdog said that oil demand will slow before peaking at 100 and 6 million barrels per day in 2030.

As you just mentioned, that's up from 100 and 2 million barrels per day in 2023.

Now, at the same time, oil production is expected to surge to 114 million barrels per day.

Now, that would result in an oversupply of about 8 million barrels.

Right now, fossil fuels account for about 80% of global energy supply.

And by 2030 that's expected to decrease to 73%.

Despite this warning, by the end of the decade, oil demand is expected to be higher than what it is today.

In part because of growing Asian economies, the aviation industry which is very difficult to electrify and petrochemicals.

Remember that almost everything that you see around you that is synthetic, that's not made from wood or metal comes from chemicals made of molecules derived from fossil fuels.

And that industry has been growing as new materials are constantly being brought on to the market guys.

All right.

And thank you so much as always for joining us, really appreciate it.

We're gonna stick with the energy space because the consumer price index indicating energy prices fell 2% over the last month, but still up 3.7% year over year.

That's coupled with today's IE a report on how the mismatch in supply and demand could impact oil prices moving forward.

That's exactly what we're going to discuss here.

For more on this.

We have Sharia on T he is on T sorry P Js head of thematic research research and thank you so much for joining us in studio Sharier.

So I, I want to start on the CP I print because obviously that decline really good news for the Federal Reserve.

What does it mean in terms of oil prices that we can anticipate experiencing as consumers?

Well, you know, um lower, lower energy prices, of course, are good for consumers.

They're very, very good for uh corporate profit margins.

And of course, we've seen the price action um um today and energy affordability is of course a major major factor when it, when it, when it comes to the energy transition.

Um you know, but, but energy affordability is, is not the only factor that sort of goes, goes into the energy transition.

There's this energy trilemma, of course, affordability is one sort of anchor of that.

Another one is reliability and the technical job bargain for that is dispatch ability.

That's the ability to dial it up or dial it down as, as needed.

And the third leg of that energy trial limit would be sustainability.

And that's basically that the production of energy and the consumption of it does no harm to the environment.

And one thing for, for investors that's important to remember as they go, go forward here is that there is no single source of energy that's perfect along all three dimensions.

And so the energy system of the future is very, very likely to have renewables as well as some fossil fuels.

The report that P Jim just put out caught our attention because I think so many of our viewers out there, they're trying to figure out what makes the most sense investment wise where there is the most opportunity given the transition that's taking place, given the changes that we are expected to see uh specifically within the sector here over the next several years.

I'm curious just what you found and what you think makes the most sense in terms of the most attractive investments right now and what exactly that catalyst is going to be for those games.

So, um so let me start by saying that the energy transition is a really long complicated process.

It's not an event.

Um So it's not, it's likely not to happen as quickly as maybe we would, we would hope.

And so fossil fuels are gonna have a long sunset.

But, you know, our, our, our research found that there are really 222 themes.

Um One is what we call complementary infrastructure around renewable energy.

So, you know, when we think of renewable energy, we think of these big vast wind farms and off offshore turbines and that, that part of the energy infrastructure landscape is very well capitalized.

There's a lot of attention on it.

It's other parts of the energy value chain that are less uh that are lagging and are a little bit less developed and we see a lot of opportunities there.

So really, I'm talking about power transmission and power storage specifically.

Um The second theme out of out of our, our research is really around the greener end of fossil fuels because fossil fuels are gonna be with us for such a long time.

It really makes sense for investors to um to be thinking about how, how to, how to meet our rising demand as well as reducing carbon uh emissions over the over the future.

And a good way to do that is with is, is with natural gas and, and LNG.

So we really see um plenty of opportunities and pipelines LNG infrastructure.

Um You know, at that greener end of fossil fuels and where are you seeing the investment opportunities that might be a little bit over hyped in the space.

So I'm so, so glad you mentioned that.

Um You know, we all, we all wanna be hopeful and we all wanna be um you know, techno techno optimist and certainly technology is gonna play a, a tremendous role and innovation is gonna play a tremendous role in this energy transition as it spins spins forward.

Um And there are, you know, a number of a number of innovations and technologies that, that have really captured the imagination of investors.

I'm talking about hydrogen, which is an alternate uh fuel source.

I'm talking about carbon capture and storage.

And, you know, both of them have tremendous promise and they can really be game changers in, in concept.

But in reality, right now, they don't offer a very attractive risk reward proposition for investors today.

So this is not a judgment about technologies.

Certainly innovation has to be part of the energy transition.

This is more a judgment about how, what's that risk reward proposition today for an investor, Jerry, I, I'm curious just from your research that you've done um thematically when it comes to the, the changes that we, that we've seen in the energy sector, when it comes to the changes that we're expecting to see that timeline for investors, does it vary versus some of the other research that we've done from other, just given the unknown, given that variable and given the fact that like you said, and like you started out that this is a transition that's going to likely take decades, obviously.

So um there's no simple answer to it, you know, the energy transition, it's, it's taking uh it's, it's happening at a different pace in different places and different countries and different industries are, are going at different, different speeds.

So it's not a one size or one speed fits all situation.

And uh you know, um you know, energy is about more than just supply and demand.

I know we had that IIE a report but it brings in so many other other factors.

It brings in geopolitics, it brings in national security brings in the pace of technological innovation.

So anybody who's sort of forecasting, you know, oil, oil prices out five years, six years, 10 years, anybody who's forecasting, how long the energy transition is gonna take?

Boy, you better be making that forecast in pencil because it is really, really complex.

Sharia Antia.

It is great to have you.

Thanks so much for taking the time to join us here today of PJ.

Thank you so much.

All right, let's recap quickly.

The uh INL data that we got out this morning, 8:30 a.m. eastern time before the opening bell.

We're still seeing that reaction play out in the markets coming in at just softer than expected really across the board.

We take a look at that headline print on a month, over month basis.

It was when you look at the year over year print coming in just below what the trade had been forecasting.

And that also goes the same with that four month over month print as well as the four year over year print.

As a result, you're seeing games here across the board for equities.

You got the dow now off the highs of the session but still at nearly 200 points.

You also got the na that up just around 1.7% but only a couple of hours away here, Matty from the fed decision.

And then of course Fed chair Jay Powell, a press conference is going to take place at 2:30 p.m. Eastern time.

So we could see a very quick reversal maybe in some of the gains depending on the narrative and what we're hearing from Powell.

We really could interesting to see whether or not we're going to be able to hold on to these all time highs following the commentary and of course the dot Plot, but first we've got wealth dedicated to all of your personal finance needs coming up here.

Our very own Brad Smith has you for the next hour.