Consumer sentiment drops, Tesla's Supercharger, Zeekr IPO: Catalysts

The University of Michigan's Consumer Sentiment Index reported that preliminary data for the month of May fell below estimates, a six-month low of 67.4, which could complicate the Federal Reserve's mission to drive inflation down to 2%.

Artificial intelligence developer OpenAI is reportedly developing an AI-powered search engine that could rival Alphabet's Google (GOOGL, GOOG), and it could drop as early as Monday, May 13 according to Reuters.

Path Trading Partners Co-Founder and Chief Market Strategist Bob Iaccino joins Catalysts to detail how Fed interest rate cuts and asset inflation could fuel a jump in gold futures (GC=F). Gartner Vice President and Team Manager of Automotives, Transportation, and Cross Manufacturing Mike Ramsey also sits down to explain the future of Tesla's (TSLA) Supercharger network and the EV maker's plans for its full self-driving autonomous vehicles down the line.

Other notable guests this hour include Santander US CEO Tim Wennes (SAN) and Gen Digital CEO Vincent Pilette (GEN).

This post was written by Luke Carberry Mogan.

Video transcript

10 a.m. here in New York City.

I'm John Smith alongside Madison Mills and welcome to our new show catalyst from equities to commodities.

Were the coding trends and uncovering the movers behind today's market moves.

Our team of experts are here to help you navigate all the possible outcomes, help you make the best decisions for your portfolio.

It's Friday May 10th.

Let's dive into the catalyst moving markets today.

Stocks are poised to end the week.

On a high note, the Dow looking to not its eight day winning streak, the S and P 500 heading towards its third week of games, both the S and P 500 the Russell 2000 moving back above their 50 day moving averages indicating a market that could be continuing to broaden plus investors optimistic about rate cuts following slightly weaker on that.

And recent fed President Rafael Bostic saying in an interview with Reuters that the fed is on track to cut rates this year, but timing is uncertain.

But we're hoping a fed Governor Michelle Bowman was going to speak on the timing of rate cuts today but she didn't offer any guidance.

We will also hear from Chicago fed President Austin Goolsby and Vice Chair for Supervision Michael Bar later this afternoon.

And Tesla is looking to expand its supercharger network, Ceo Elon Musk, writing on X that the giant will spend quote well over $500 million to create thousands of new chargers this year.

And this comes after the company slash nearly 500 jobs and the people who ran that business just last week.

Meantime, President Biden is set to unveil new China tariffs as early as Tuesday.

That is according to several reports.

We want to get to some breaking news on consumer sentiment.

A bit of a miss here for the month of May.

The preliminary reading for May consumer sentiment falling below expectations to 67.4 sentiment falling to the lowest reading that we've seen in just about six months.

But I also want to point out the inflation expectations because that's really, I think what's driving the media reaction that we're seeing here in the markets, inflation expectations during the next year, that's higher, rising to 3.5% that was up from 3.2%.

And then when you take a look at the expectations for the next 5 to 10 years that rose to 3.1%.

So take a look at the market's initial reaction.

We are off the highs today.

We did, we did see a other markets give back some of those earlier gains.

We had the S and P 500 right now, trimming their gains to just about 3/10 of a percent.

Mattie.

Yeah, it was interesting Shana seeing the S and P kind of coming down to the 2/10 of a percent range.

Now it's popping back up, up those lows but still not at their highs of the day.

Also taking a look within this report, we're seeing similarities between all political parties in terms of that consumer sentiment, Republicans and Democrats both feeling less positive in May.

So a lot of kind of negative data to look at in this point honestly, when it comes to how the consumers feeling about the economy and inflation again, not falling as rapidly as it did last year.

And consumers obviously here taking notice the latest University of survey here showing the consumers expect inflation to hit 3.5% in the next year.

Obviously, that's not the two number that the fed is looking for worsening.

Inflation could be the head when that stalls market momentum as well.

At least that's what our next guest has to say.

He's joining us.

Now we've got Mark Pinto, head of America's Equities at Janice Henderson investors.

Thank you so much for being here with us this morning.

I mean, talk to me about your reaction to this print is this surprising to you.

Well, you know, I think the consumer has definitely been a little bit weaker since 2021.

And we've seen spending in discretionary categories, uh not quite at the levels that we saw pre um or during the pandemic and coming out of the pandemic.

Um We're definitely seeing examples of consumers trading down, uh looking to buy, you know, better priced items and maybe not getting the premium product where we are seeing the consumers spend a lot of money, however, is in travel and leisure, it seems that consumers are gravitating more towards experiential spending if you will rather than buying hard goods.

So, in general, I think the consumer's health is is pretty good.

The um the well being index which is a track measure of consumer strength is close to 99.

Um So, you know, the consumer is in decent shape, but they're definitely being selective in terms of where they spend their money.

I'm curious mark you're reading just in terms of the timeline of that rate cut.

Do you still believe given the fact that we are starting to see some weakening?

I think it's fair to say within the economy, at least the most recent prints that we have seen, is it still too early to cut rates at this point?

Well, as you know, the uh the April Jobs report was definitely weaker than expected with 100 and 75,000 new jobs.

And, and I think even more important importantly, wage inflation moderated a little bit.

So um you know, you take that and you can also add the fact that second quarter GDP got revised down to 3.3%.

It does seem like the higher rate policy is starting to impact the economy on the margin.

And from our standpoint that actually, um, set, sets up the best drop for a possible rate cut and, and honestly can't tell you whether it's going to be June or September.

But Chairman Powell was pretty clear in saying that it's a very high bar to take rates higher, which makes me believe the fed is looking more at cutting than um than anything else.

I'm curious then does the fed care that consumers think inflation is staying above 3%?

That's not the number they want.

No, they clearly want it um below 3% and as close to two as possible.

Um You know, I think they're obviously tracking all the different metrics.

I think wage inflation um from our vantage point is one of the most important ones.

And again, as I said, in the April Jobs report, we saw that wage inflation moderated.

Uh Obviously, there are parts of inflation that are out of control of the FED, whether it's energy prices, um how housing prices, those are, you know, more driven by externalities and cyclical factors.

But you know, I think, look, the FED is trying to manage the mandate between keeping inflation in check, but also keeping the economy on solid footing.

You mentioned some of that sector performance and we know that utilities are up 8% this month.

Do you read that as a flight to safety or as evidence that the rally and the momentum that we're seeing is starting to broaden?

Well, you know, we've been hope, we've been wondering when we would see a broadening in the market.

Uh The magnificent seven.

We're clearly a major driver of the performance in uh 2023.

Uh The S and P is up 10% year to day and it is a, it is a broader rally, but we're still seeing a lot of strength in the growth, technology and, and health care areas.

So, um I, I think the market actually is showing a lot of in this uncertain period in terms of rates and, and, and I don't think that um if you look at the behavior of the market in different sectors, um we're seeing some very good uh results.

Q two, sorry, Q one earnings were very strong.

Um Overall eps was up 5%.

Most companies beat expectations.

So it doesn't feel like a defensive market to me.

Um And so utilities um could be, you know, having their own individual drivers, but I don't think it's a, it's an indication that that investors are looking for more um conservative uh types of bets and right, that was gonna be my exact question there.

And then building further upon that, when we talk about the shift that we have seen to these defensive plays.

It sounds like it might just be a rotation into those that had underperformed here since the start of the year.

What does that though?

Tell us about the likely action and the likely allocation that we will see in terms of market leadership from here on out?

Well, again, I think the um you know, people this, this is a growth oriented market, um growth stocks have outperformed value for quite a time being.

We've got some major secular trends going on, whether it's Artificial intelligence, um uh innovation in health care and the growth in biotech and the and the meeting of unmet medical needs with new therapies and companies.

So I I it doesn't seem to me like um it's necessarily uh that people are, are shying away from the growth here, parts of the market, there's some very powerful trends that are driving the market higher, uh those that I mentioned.

And by the way there, those seem uh we're getting the benefit of that growth in even in a high rate environment.

So, um I think the market's been incredibly resilient uh given the uncertainty over interest rates and that resilience has translated into investors um not taking a defensive posture.

Um And yes, there has been a little bit of catch up as you noted um with the broader market sort of trying to catch up to the to the highly concentrated uh big holdings at the top of the S and P 500.

But I mean, those companies are still doing really well, whether it's, you know, on Amazon Microsoft or NVIDIA, they're, they're putting up some very impressive numbers and um and investors are, are staying invested in those names.

Many investors are excited.

Looking ahead to Nvidia's next print here in a couple of weeks.

All right, Mark Pinto, we have to leave it there.

Head of America's Equities at Janice Henderson investors.

Thanks so much for joining us.

Thank you for having me on top of gains for the broader markets.

We're looking at some big moves in metals, gold prices hitting a two week high.

We are going to take a closer look.

Next, you're watching Catalyst.

Let's do a check of the markets here, sponsored by tasty trade, looking at green across your screen.

You've got the dow up 140 points here.

You got the S and P 500 teetering around uh 3/10 of a percent and the NASDAQ up 1/10 of a percent.

We're still seeing more momentum coming into the flows when it comes to the S and P and the NASDAQ, that consumer sentiment print, which is very interesting to me.

I would have thought that the consumer feeling less good about the economy would potentially be a sign of the markets kind of questioning what the fed was going to do with the rates here.

But we are seeing the move to the upside moving forward for the markets here.

All right.

Looking at gold futures on track for its best week since early April as rate cut hopes are lifting medals across the board for more.

We want to bring in Bob.

I, you know, a path trading partners, co founder and chief market strategist, Bob.

It's great to see you and talk to me just about this rally.

What's called a rally that we've seen in gold this week, we certainly have seen gains in terms of how much upside momentum is left because you talk about the fact that clearly the feds uh path forward here is driving and influencing the price of gold.

But you also got the central banks around the world buying gold and not being a real driver here.

So then what does that upside look like if there's any?

Well to your point according to the world Gold Council, largest purchases ever by central banks.

Largest purchases on record, I guess in 700 BC, maybe a central bank then could have bought more.

But for the record that we have first quarter largest central bank purchases.

So we have that the second thing we have is what I believe to be a reflation narrative just generally across the economy.

And people think gold is an inflation hedge.

It is not what gold is, is a store of value or an asset.

Anywhere you store money is an asset, your home land, the stock market Now that doesn't mean they come without risk, downside risk.

All of those just mentioned do and gold does as well to a certain degree.

Bitcoin is a high beta store of value.

Gold is the same.

And if inflation is picking up again, which I believe it is gold will rally as a function of asset inflation.

We all complain about inflation.

I do as well.

I bought a bunch of stakes yesterday really pissed me off.

But when you look at asset inflation that comes with it, those of us that own assets like gold, we benefit from that.

So my target for gold is about 4.8% higher from here.

Very specific 2491.

If you get to 2491 the speculator will probably push it to 2500 just because they like those numbers.

So sticking with gold there.

I'm curious, the Chinese Central Bank is slowing its purchases of gold.

I wonder to what extent stateside buyers of gold?

The people.

Brian Si loves to talk about going to Costco getting those gold bars.

Do they need to worry about that slowdown from foreign central banks?

That's funny.

That's where I got my stakes.

They don't need to do that as long as we're going to get this fed rate cut.

I I'm, you know, my job as a strategist is to figure out what's going to happen.

Not what the fed should do or what markets should do.

But what they're going to do, I think the fed is going to cut rates, the probabilities are rising of that just based on market pricing.

Uh I'm sorry, cut rates.

Did I say raise cut rates?

And if they do that will boost gold because the only time that gold suffers in an inflationary environment which I believe we're still in and we're probably getting a little bit of an uptick on that is if the fed is fighting inflation.

And right now, the rhetoric is pivoted to the opposite of that.

So despite central banks slowing China being the main one, as you mentioned, Madison, I don't think that's going to slow gold all that much.

It's just going to slow the rise, but I think the rise will still be in place, Bob.

How are you looking at the pickup and buying that we've seen in silver and a lot of that on the back of this rally that we've seen in gold?

Yeah, that gold silver ratio can really widen out, but it really is sort of a a tug on the rope from gold and it's sort of an elastic rope, right?

Silver will snap back.

Silver gets looked at by a lot of speculators and people who want to store in precious metals as the poor person's gold.

For lack of a better phrase, my biggest losing trades have been in silver and simply because I don't understand the juxtaposition well enough between the industrial properties of silver and the precious properties of silver and which one dominates when.

However, in a reflation narrative, when you're starting to see us PM is manufactured PM, I specifically go back into expansion territory.

Silver's now benefiting from both of them.

Again, I'm not in it because uh if I get in silver, it'll be a losing trade.

That's just the way it's been.

But from that perspective, I think silver's playing catch up, but also benefiting from the environment that we're in because of that dual nature of it.

Right.

Well, it's interesting because you are missing out on some of those big gains here to date unfortunately, for you, Bob, but I am not the first time for many of the investors who chat with us, but I'm curious, we're not, we're not seeing a lot of the traditional hedging activity that you think of.

When you think about investors who are concerned about the momentum of a market, we're not seeing people buying volatility, for example, with the V, why is gold a better hedge?

Well, I don't know that it is a better hedge again, I think what it is is a lower risk asset that could benefit from inflation and reflation.

So really, I don't know that it is a better hedge for equities falling.

It may not be at this point.

But if equities were to drop, then you're likely to see the fed cut more aggressively and that would benefit gold simply on dollar weakness.

Gold has probably four factors that move it in the short to medium term.

Three of those in my view are pointing to gold being higher.

Now, I'm not, I own gold.

Full disclosure.

I've owned it since November 2022.

So I don't want anyone to take that and run with it so that my trade gets better.

I just think when I analyze it, there's only one way that gold comes out in the negative and that's if inflation spikes and the fed decides to tighten and fight it, gold will suffer then and I don't really see that happening in the near future.

All right, Bob, we're gonna have to leave it there.

Thank you so much for joining us.

We really appreciate it.

That was Bob.

I aino of path trading partners joining us.

We're watching Moderna shares after, after the company announcing that the FDA has delayed the approval of its RSV vaccine to the end of May.

Yahoo finances, Angeli Kni joining us now with the latest on.

That's right guys.

So uh the FDA let Moderna know that even though they were supposed to have a decision by this weekend for that RSV vaccine, they're going to have to delay it due to administrative constraints until the end of May.

Now this doesn't fully throw the approval process off track.

The C is still on, on track to get to their portion of the approval process in June.

So it doesn't totally throw off the timeline, but it does put a little wrench in the overall timeline for modern, which has been waiting to get this product to market to make it the second product that it gets revenues out of.

So that is the only concern for this right now.

While it doesn't throw off the entire process, it does put sort of a, a little little tiny dark cloud over Moderna for the day.

All right.

Um Thanks so much for breaking down that story for us and certainly a trade here that uh investors should continue to watch.

All right, let's also take a look at a company that's making its public debut here in the US today.

A Chinese EV maker set to start trading on the New York Stock Exchange.

Ziker will be the first major Chinese EV maker to go public since Xang and Lee O went public just about four years ago.

The carmaker set to sell 21 million shares are priced at 21 bucks a share after the close last night, last night pricing at the top end of the range.

I'm taking a look right now at the latest developments that we're getting looks like it's indicated to open right around 23 to $25 a share here.

We're waiting for the opening trade here of Ziker.

But Mattie, we bring this up in the context of what this means for so many other companies that are already within this space.

Obviously, specifically Tesla is the name that comes to top of mind for many people.

When you think about another competitor here within this space and now going public, the real threat is viewed at least to Tesla and Zieger posing that huge competition.

In a recent interview, their CEO was saying that their sales gap with Tesla keeps narrowing was very optimistic about the company's plans to expand in Europe and in Latin America this year.

So that also just speaks to that competition side of the story.

And then you also can talk about the pricing and exactly what that ultimately means for so many of these larger US auto giants here in the US as well.

Well, it's really interesting that you bring up the pricing wars because Zer is going to be impacted by this announcement from the Biden administration expecting to put tariffs on Chinese S and those automakers there.

Now, the parent company of Zer has previously indicated that they're going to subscribe to 90% of the stock indicating that there's a little bit of stress coming into this.

IP and that's no surprise given that this, we've got this news from the Biden administration today.

It was probably a good move for them, given that those geopolitical tensions between China and the US are headwinds that are unpredictable and that are unfortunately going we for them unfortunately going to weigh on the stock as the IP O today.

So see some stress across the board there.

But staying in the electric vehicle space here, we are going to move on to our next guest in this space, Tesla, Ceo Elon Musk Post on X saying Tesla will spend over $500 million expanding the supercharger network to create thousands of new chargers this year.

This comes after the electric vehicle maker laid off the employees who ran the EV charging team to break down what's next for Tesla?

We have Mike Ramsey Garner, automotive analyst, Mike, thank you so much for joining us this morning.

Listen, we got great news to talk to you about so plenty to dive into.

I mean, talk to me about this.

You turn from Elon Musk, what do you make of it?

But I mean, actually, to be honest with you, this announcement makes more sense than the layoffs do.

Um The Super Charter network has been one of the most important assets that Tesla's had in terms of differentiating it between the other automakers and why buy a Tesla and they just spent the last year essentially getting all of the other automakers in the United States to switch over to the type of charging plug that they use.

And by doing that, they actually open up that network to become a significant source of new revenue.

So the layoffs, maybe that is a uh you know, cost optimization effort as they try to, to get their operations in line.

But the investment in the network actually makes a lot of sense um and might be a real benefit to them in the long term as a new source of revenue.

How long does something like this do you think take to build out what is the timeline look like?

Given?

Obviously, they clearly have experience, but they're almost starting from scratch in a sense.

Yeah, there's a, there are a lot of things that go into it.

Obviously, you need to work with utilities um to make sure that there's enough high power connection to these sites.

And uh you also have to uh get the real estate that is in the right place.

So, I mean, to build out $500 million worth of infrastructure is probably a good solid couple of years of, of work, but they do know what they're doing and, and I promise you that they've already done the real estate scouting for almost every spot in the United States at least uh to find the best locations for superchargers.

Well, this announcement from Tesla coming after BP was very excited to try and pick up some of the ev charging real estate in the US left behind by Tesla after those layoffs.

Does BP stand a chance here?

Yeah.

Listen, I mean, i it's, it's not exactly like the um liquid fuel refueling market, but especially at the beginning, it was very different, but as we mature and these superchargers, meaning like really fast chargers, they are a lot closer to that market.

I do think that there's gonna be more parallels and just like there's more than one oil company and there's more than one set of retailers.

Um Once everybody starts using the same plug, then there's, there's room for everyone to compete in this market.

Let's talk about one of the other uh big question marks that's hanging over the heads of a lot of investors in Tesla.

It has to do with their automated driving, their full self driving.

And Elon Musk was out earlier this week last night saying that he is actually saying that the cyber truck full self driving is only a few months way.

How realistic do you think that timeline is and, and just give us your sense just of where Tesla stands within this race in uh full uh driving here and self driving here and, and what exactly that ultimately means here for the space at large?

Yeah, it's really important too.

And I, I think this is very hard for people to, to get their head around because Tesla's autopilot and their full self driving software works pretty well.

And to most of us, we think you get behind the wheel and it can do a lot of automated functions.

You think this is a self driving vehicle, it's not ok.

This what they are charging for, what they're charging customers for is a uh partially automated system that is more like a convenience feature.

It is not a self driving vehicle, like something that Waymo is offering in uh the Southeast United States and in San Francisco.

So when Tesla talks about this service improving and rolling out, they are not really playing in the same field, as many of the I would say, fully autonomous Robocop type providers are playing, that said their system keeps getting better and better and they can make money selling it because it's a nice feature and that people like to have.

Um and they promised Tesla has promised that uh in August, they're gonna unveil their new robo uh that couldn't, you know, essentially be a full self driving vehicle.

My expectation is that vehicle will not be the same thing that you and I can buy or even the cyber truck, full self driving.

This will be a vehicle that has a lot more equipment on it, more computers, more sensors, things that are not part of a standard Tesla self driving vehicle.

So Mike just taking a step back.

One thing that confuses me about the challenges that Tesla has faced is that Elon is in a world where this technology is existent from some of his competitors.

Why not just go get those people who can make Tesla's get on board and, and kind of get a step ahead in this, in this E va full self driving race.

What is it about Tesla's approach that is different than those other competitors in the space.

That could be the reason they're a little bit behind.

Well, I think that they've always done the same thing, which is they want a low cost high volume approach.

So they're looking at it like, hey, how can we get this system into the hands of as many people as possible?

Using the cheapest equipment as possible at scale and then try to, I wanna say crowd source data and behavior to keep improving our system.

That, that that way of doing it where it can, it can provide a system to you and me that feels nice but is not really safe.

And they've been very clear about putting a system out there that requires the driver to still be paying attention.

It can do a lot of things but you and I have to jump in.

If something goes wrong and take control of the vehicle, the other people that they're competing against are not trying to do that, they are trying to create a fully automated system where there is no need for a driver ever.

So they have way more compute power on there.

They have redundant systems, they have way more sensors.

In other words, they have a much, much more expensive product out on the road than what Tesla is trying to do.

So when Elon says, hey, we're gonna be able to do this, what he's doing is kind of effectively like saying, um, hey, I'm gonna try to take a wedding pictures with my iphone versus having a professional photographer out there with a $20,000 Nikon shooting.

That's what we're comparing now that iphone camera keeps getting better and better, but it's still not the same as a professional camera.

And that's kind of what we're talking about when, when Tesla is talking about doing full self driving, they're trying to do it with cheap equipment that you could find on a regular car, not with the $250,000 package that we would have on its Mike.

You know, I love the analogy.

I appreciate it.

Last quick question for you.

We know that Elon was just in China.

I'm curious regarding these tariffs.

If we do see a retaliatory move from Beijing to what extent is that a headwind for Tesla?

Yeah, I mean, I I definitely think that there is potential for um Tesla to continue to struggle in China and the if there are additional tariffs put on them, it could, it could definitely affect them.

That said, I think that Tesla's bigger problem in China is that the Chinese automakers continue to get better and better and they can offer lower priced vehicles that are very competitive.

Um And unlike in this market where Tesla really is a dominant player in China, there are a lot of good players, you mentioned one, Zika is just one of many that are offering evs in China and at a much lower price point and and also importantly, these vehicles look good.

This is not China 10 years ago, you know, the vehicles that have slick designs, they have nice interfaces on the interior and you can have some features that Tesla doesn't have.

Uh so that's going to make it a tough environment, particularly if the government retaliates with uh some sort of uh tariff that would make it more expensive for them to operate.

All right, Mike, we got to leave it there.

Thank you so much for joining us.

This is a great conversation, really appreciate you.

That was Mike Ramsey Gartner's automotive analyst.

Well, J shares are up after the company reported results topping earnings and revenue estimates.

This is the top performer in the S and P 500 this morning.

Those shares up over 15% and this comes after challenging year to date performance for the company stock was down about 13% heading into the.

So for more on the quarter, we are joined by J CEO Vincent.

Vincent.

Thank you so much for joining us here this morning.

Uh Talk to me about what the market was missing heading into this print because that year to date performance was tough and now you're recouping those gains here to the upside.

What do you make of that?

Absolutely.

And you know, about 18 months ago, we closed the merger between a vast and Northern Lifelock to create gen digital.

As you know, we merged too big leader to become like the leader in consumer cyber safety for the individuals.

As always, when you go through merger, you have you set of challenges and opportunities.

Yesterday, we reported our first full fiscal year as gen digital and our our numbers, our performance was broad based across the board.

We posted record revenue, record profitability, record cash flow and really supported by the demand with growing customer account.

And I think the uh investor it was nice to see this morning are recognizing the opportunity that we see.

The threat landscape is continue continuously evolving and is here to stay and Jenny is best positioned to to protect the individuals.

Yeah, Vincent judge us a little bit more about what exactly that opportunity looks like because I was also taking a look at the instant analyst reaction to this print and R BC was also calling out just your next chapter and some of the driving factors that they see in terms of those new products.

So what is it and what is it ultimately then going to do for your business?

Yeah, absolutely.

Still in the broad environment, people see like the protection of the individual as protecting your, your computer or your device, protecting you get Mwa and that time is totally shifted.

If you want the threat landscape is a lot more about anti scam, about breaches.

You can have your personal data stolen.

Uh from somewhere else than your own devices.

And a year later being posted in the dark web being bought by bad actors and suddenly you wake up and you have credit cards and, and and mortgages taken on your name and your identity being stolen and you don't realize it.

So we've evolved our portfolio to be uniquely centric around the user and protecting your data from not only just device security, overall security, but also identity protection and restoration services.

Giving consumers the ability to also understand their data and their privacy features they want to have in the dark web all the way to the ability to manage your own reputation online.

I'll give you two examples of two new products we came up with in January.

We launch Northern genie, which is kind of an anti scam assistant.

You can have as an app in your pocket and it detects um it detects sorry, anti scam from text from um uh social posting and, and then it has a U I conversation or U I where you can really get more insight.

Um Another, another product we came up with is total radius uh which really scanned the entire web or the dark web about your personal data.

And then it's using our 15 years of data and history um using A I technologies to detect patterns and predict the future of your reputation and giving the consumer the ability to manage um their reputation online.

So um we we constantly evolving the portfolio and then we came up with the overall membership concept, uh no 360 or a vast one or two of those for a membership fee, you can have access to our entire portfolio and all the features that give you entire protection against uh cyber risks.

Well, that plays well into the next question I have for you, Vincent, because analysts at Barclays are pointing out that average revenue per user is the key stat to watch for your company moving forward.

It looked pretty much in line with previous reports to me.

So what is your hope for what those products can do to that specific data point to the A RPU?

To what extent do you think that could push that number up?

A little bit more?

Yeah, absolutely.

And you know, everybody is coming at different stage of their life cycle into the, the, the cyber environment.

If you want an understanding the risk profile that they have personally based on their preferences or their own set of activities online.

So we have a lot of, we have 65 million paid customers.

We have hundreds of millions of users and some are coming with basic security needs and they are the low end of the R pool and some understand the full concept of a protection and they are the high end on the high end of the R. It's like $15 a month on the low end, it's $5.

And so our portfolio is an average, we believe that over time, even if you come at the first year of that cyber protection, as you understand, more and more of the risk, as we educate you on the overall environment that sits out there, you're going to move up the, the value change in terms of protection and empowerment.

Listen Johnson was just as we zoom out a little bit, just what you're seeing in terms of the infiltration of bad actors, how big of a spike we have seen in scams and ultimately just your confidence in the ability to continue to detect scams as they seem to be increasing at an extremely rapid rate.

A a absolutely.

And I think we all agree that the cyber risk are here to state has moved from basic malwares to now a lot of sophisticated scam.

Uh you mentioned uh you know, phishing scams spear, phishing scams, the ability to use A I data to even target and social engineers uh scam that are tar directly targeted at you.

I can take based on all of your social media connections, a profile of one of your friends and pretend to be that to get special information from you.

So I think that's rapidly evolving.

We see the bad actors using A I technology to construct pictures, deep fakes and really uh fool the consumers even more.

And we combating that environment with our own technology the history of data we have as you know, A I is basically a game of data and we look at all of those patterns that we constantly update on a very frequent basis to be able to be at the forefront of that, of that protection.

All right, Vincent, we're gonna have to leave it there, but thank you so much for joining us.

That was Vincent Pelle joining us from gen their earnings out today and the company up uh the top performing the S and P 500 at the moment.

Now, coming up, open A I could unveil its own search engine as early as Monday.

We're gonna give you the details on that.

Right after the break, the polarized political environment of the last several years has forced some corporate America leaders to speak out on issues.

But as we head into the height of the 2024 race, the tone appears to be shifting.

The Wall Street Journal highlighting some CEO S are drawing up plans to tell their employees not to expect any comments about political issues ahead of the November election.

Now this comes in light of Google recently firing dozens of employees for disruptive activities at its offices over the war in Gaza and Google, Chief Executive Officer Ceo Sundar Pachay reminding employees in a memo that ultimately quote, we are a workplace for more.

We want to bring in our very bring in our very own Rick Newman and Rick, my question to you is just give me your sense of how business leaders are approaching the 2024 election and whether or not we should anticipate corporate America trying to sit this one out.

Well, I think you have to define their level of involvement here.

So what the Wall Street Journal was talking about is activities in the workplace itself where you're going to be uh tolerating discussions of political issues, especially some of these hot button ones.

Then there are campaign donations and I have a feeling that we're going to see a robust level of uh campaign donations from the corporate sector this year, which we always do honestly.

Um They do, they give to these campaigns for a couple of different reasons.

One is obviously uh whether you like or dislike the candidate.

There are big differences between the policies of the candidates this year, between Trump and Biden.

Uh Trump, of course, less regulation drill, baby drill, more fossil fuels, Biden, more emphasis on clean energy and other things we've been talking about.

Uh and we'll continue to talk about.

So there's that, but um corporations also just want to kind of play both sides in elections.

Uh We see this in donations to Congress often they will give to more or less equality equally to both parties because they want to make sure they have friends in high places no matter who wins.

So I think we're going to see the the donations uh keeping up.

Um But of course, in terms of some of these very hot button political issues, I mean, these are, can't win issues.

Do you favor the Israelis or the Palestinians?

Uh LGBT Q, we saw Bud Light get hammered on that last year.

Um It's like you just can't win by taking a stand, so they just want to be as neutral as possible.

Well, I'm curious then, Rick, you mentioned the policy differences, one of the differences between Trump and Biden, of course, with taxes, we have Trump tax cuts potentially expiring at the end of 2025.

What can you tell us about corporate borrowing so far this year and just how corporations are preparing for that expiration date?

Well, market watch had a story recently saying that corporate borrowing is up uh simply because, um, companies expect more volatility getting into the, uh the home stretch of the election later this year and then who knows what's going to happen after November, but important to point out here.

Um First of all, interest rates are high.

This is not a, this is not a great time to borrow and most analysts, including people we have on, I think literally every day think we're probably close to the peak for interest rates.

So there it would make sense to hold off if you can on borrowing and see if rates don't come down.

Um And the other thing is that the corporate the taxes that expire at the end of 2025 are individual tax cuts that went into effect in 2018.

The corporate tax cuts that were part of that deal uh are permanent.

Um Now, the concern is that as part of a negotiation, if Biden wins a second term, as part of negotiations, Biden might try to negotiate a higher corporate tax rate.

Um So you have to anticipate that, but listen, that it's very hard to play a uh an election one way or the other.

And I think you, you're going to see a lot of companies just basically waiting, trying to do what might seem prudent, but just wait and see what happened and not try to play a Biden win or a Trump win.

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

Have a great weekend.

Thank you.

Bye.

Thank you so much by whatever.

I don't know what we love you.

Right.

Thank you so much for joining us.

All right.

Moving on to some more news here, Google might be facing some new competition in the search space.

According to Reuters.

Open A I, that's the company behind Chat G BT is set to announce its new A I powered search engine as soon as Monday.

For more on this, we're going to bring in our own Dan.

How Dan?

Thanks so much for being here.

This would be just ahead of a key Google event.

That we know is coming up next week.

So what should we anticipate?

Yeah, man, this is something that uh is somewhat uh almost predictable, uh but also, uh obviously a massive deal.

And so the, the, the thinking here, uh according to Reuters and uh there was previously talk of this uh reported by Bloomberg is that the uh chatbot essentially is a way of kind of, you know, trawling the internet uh for information to pull up uh data for you and, and, and give you uh uh you know, generated content, right?

So, because you can do that naturally, it's a, it's a good fit for uh search engines and look, Google is doing this already with their search generative experience.

Um I'm signed up for the, the betas for that uh uh or the early access and I do a regular Google search and uh in my, my app, I get generative uh text at the top uh and then links uh at the uh just below that and then the regular uh links uh that you would get when you did a normal search uh below those as well.

So, uh it's something that's around bing has been doing this, but for open A I to do it, I think is, is a much bigger deal just because of how popular chat GP T is.

And because of how uh much name recognition there is now uh behind O Open A I and Chat GP T and so, you know, is this going to be something that would replace Google?

That's a pretty big long shot.

Um You know, Microsoft is, you know, the, the biggest company in the world right now, um in terms of market cap and they are barely making a dent at all when it comes to market share uh from Google, uh you literally say I Google something.

Um You don't say I bing something and you probably aren't gonna say I, you know, chat GP T or whatever, they're gonna call it uh something.

Um And so, you know, I, I do think that it is interesting though, the way that they're supposed to announce it uh on Monday just a day before Google's IO conference where they're probably gonna have a lot more news on their search experience.

So I think overall this is something that, you know, is like I said, was predictable or is predictable.

Uh It makes a lot of sense for them.

Um But it's, it's gonna take a lot of work to try to the throne Google Dan.

How reliable is the information?

Because uh I, I think a lot of people who even use chat GP T whether it's casualty or even daily, there are still a lot of questions about the reliability of that information.

So how big of a factor is that going to be when we talk about the potential here for future growth?

Maybe?

Look, uh you know, hallucinations as, as they're called, which is just, you know, wrong information, um which is probably a more accurate way to describe it properly.

Uh They still haven't.

Right.

So it's not as though this isn't uh uh uh at issue still.

Uh There are ways that, that companies are, are mitigating it in, in some of their models.

Uh Part of that is to shrink down the size of the model.

So there's less of a, uh you know, there's not as much information.

So there's a smaller chance of, of an error.

Um It's more focused.

Um And so that's some of the ways, uh there's also something called R A uh that companies are using to help cut down uh on hallucinations.

But, you know, I, I think when it comes to, to something like, like a search engine, you know, you want to make sure that you're getting everything as accurate as possible.

And so it'll be interesting to see if they, if they've done something uh in some way to, to, you know, either fully cut down or, or nearly eliminate uh you know, these hallucinations, uh maybe work with Microsoft and, and Bing uh has helped them or maybe they're just doing it on their own and they figured out how to do it.

Um But, you know, it, it will be interesting and obviously, if you're looking for something online, you know, if I'm looking up, uh I don't know, like how to cut my cat's nails.

I don't want it to say take your cat's feet off or something like that, you know, like some kind of weird wrong information.

So, uh theyre they're going to have to ensure that there's a lot of accuracy there that would be painful.

Dan, thank you so much as always.

And thanks for all your help on my dot Coming out on Monday too, I've been annoying you, so I really appreciate you.

Thank you so much.

We're gonna have all of your market action ahead right here on catalyst.

Stay tuned for more.

You're looking at a little bit of mixed picture across your screen.

We're gonna continue to cover all that and more on the other side of the break for this morning announcing an executive change Auto Giant is hiring a new CFO to replace John Lawler who will be transitioning into the position of vice chair next year.

The role will be filled by former Lucid CFO Sherry House.

Yahoo Finance's pro to Romanian has the latest details on that press press.

Yeah.

Hey Sea, he had John Lawler longtime executive there at Ford uh a Farley confidant if you will moving into that vice chairman role, kind of his second in command there at Ford to take over a lot of his strategic decisions.

But beyond, you know, the financial stuff that he was working on before.

And also uh noting that Sherry House now has emerged as the new CFO, she left Lucid in December.

We kind of figured that she was going somewhere.

So now we're, we're hearing that she's joined.

I mean, Ford is a new CFO, she's been around also in other companies like GM and also we o but, but back to Lawlor, you know, he's going to be in charge of Ford's strategic development, including establishing partnerships with other companies in the EV space.

Right.

So he's gonna, he's gonna help make that EV business more profitable as you know, they're going to lose about $5.5 billion this year.

On evs Waller used to work in China in Europe in those businesses.

So he has experience there sort of vital for kind of producing or striking these partnerships with other automakers.

So, um I think that it's a, it's a potential move for him to be possibly groomed as the next CEO we'll see when and if um the current CEO Jim Farley uh decides to do something else, we'll see.

But it's a good move.

Big move for Lawler, a well trusted, very experienced hand there at Ford.

Really interesting pro Thank you so much for joining us on that news this Friday morning.

Thank you really appreciate it.

Well, target will not sell LGBT Q themed merchandise in some stores this year during the pride month of June.

This coming after the retail faced backlash for selling the products in stores.

Last year, the company had said that backlash led to a 5.4% decline in comp sales in its second quarter, 2023 earnings.

Now, lots of questions.

This is Bloomberg reporting here.

They said it would be about half of the stores that would not be selling the merchandise, but to put into context, this is an extremely complex issue targeted.

Said that one of the reasons that they were initially taking some of the merchandise off shelves last year was because of safety concerns in some location.

After staff were getting threatened, they were also getting filmed on location.

But then some LGBT Q employees had come out and said that the company kind of threw them under the bus.

So it's a very complex thing for the CEO to have to navigate very complex.

And we have heard uh Brian Cornell uh try to navigate this situation going back to what he had said last summer.

He called it gut wrenching just hearing about what some store employees had to confront as a result of this backlash.

So where does the company go from here in this report?

Uh Target spokesperson was very clear to say that target remains committed to supporting the LGBT Q community.

They're going to continue to have a presence at local pride events uh in Minneapolis where they are based also throughout the country and also being committed to selling the Pride Month products.

But I think exactly in which stores that remains to be seen and exactly how they're determining which stores to sell it.

And that was not included here in this article.

But again, target will be selling some of these, um, pride, um, supported, uh, merchandise here for the month of June.

It seems like in about half of the stores according to the, according to the, to the report here from Bloomberg.

Let's do a final check of the markets here 90 minutes into the trading day as we close out what has been a winning week here for the market, at least for the dow the Dow on track to hire to potentially close higher early in the trading day.

But if we keep these gains, it will be the eighth straight day of gains here for the dow.

We also got the S and P moving further above that 5200 level, the NASDAQ though the laggard of the session off just about 2/10 of a percent and coming up wealth dedicated to all of your personal finance needs.

Brad Smith is going to have you for the next hour.

So stay tuned for more.