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Meme trade roars back to life, OpenAI's GPT-4o: Market Domination

While the major stock market indexes (^DJI, ^IXIC, ^GSPC) are mixed ahead of Monday's closing bell, meme stocks are roaring back to life this session. And it all started with a post on X (formerly Twitter) made Sunday night by user "Roaring Kitty," the handle of retail trader Keith Gill that sparked the original meme trade frenzy around GameStop (GME) in early 2021.

tastylive Founder and CEO Tom Sosnoff sits down with Yahoo Finance's Market Domination to share his thoughts on the "welcomed" and renewed excitement around meme stocks.

Infrastructure Capital Advisors CEO Jay Hatfield joins Julie Hyman for the latest edition of Good Buy or Goodbye, shedding light on which major player in the financial space he is all in on.

Also, watch for the latest coverage around Walgreens' (WBA) plans to sell off its UK chain Boots, the latest iteration of OpenAI's ChatGPT artificial intelligence model, and Kraft Heinz's (KHC) intent to sell the Oscar Mayer brand.

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This post was written by Luke Carberry Mogan.

Video transcript

Hello and welcome to market domination.

I'm Julie.

I that Josh and live from our New York City headquarters.

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

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

K. The account behind gamestop reddit phenomenon just three years ago is making his first appearance on X since 2021 looking at that inflation side, right, where the fed kind of set up, you know, just a couple of weeks ago where they said we're really squarely in this wait and see, you know, the sort of moment, right?

That does seem to me suggest that you have, you know, a little bit more asymmetric risk to the upside from a market perspective.

If we were to get a little bit better than expected inflation report, they would like to move towards easing.

Uh But the problem is when you've got core services running at 4.8%.

And you know, again, as you highlighted earlier that just uh the the traditional core rate, uh X food and energy is running, you know, at around, you know, 3.63 0.7%.

Um, it's very hard for them to start signaling that, you know, they're ready to eat.

We have got one hour to go until the market close.

So we're taking a look at the major averages sponsored by Tasty trade and then Jared is going to help us walk through some fireworks that are happening in today's session.

But first, let's look at the major averages here.

We've got the dow down about 6263 points today.

That's a drop of about 1/5 of 1%.

The S and P 500 almost exactly unchanged right now as we look at it and the NASDAQ moving up by about a quarter percent.

Why are we not seeing more action?

Well, investors are looking to inflation data that yet later in the week, post producer prices tomorrow and then followed by consumer prices the day after for more direction on a macro basis here.

That's also reflected in what we're seeing in yields today.

Also not seeing much change there hovering just under 4.5%.

Also, we're watching what's going on in the crude oil market there, a gain of a little more than 1%.

We're going to get some more details on that oil trade later in the show.

But in the meantime, we got to get to Jared because he is taking a look at what is going on with the meme stocks today.

It is not 2021 Jared.

You know, I woke up this morning.

I didn't expect this gift but we have been treated.

Guess what?

Roaring kitty is back with.

The volatility is back.

The volatility pauses are back as well.

So here are our meme stocks today and let me sort by performance because we got some eye watering numbers.

I know it's, excuse me, really small but a MC in the upper left that is up 83% Gamestop, up 76% Tupperware.

Remember that that's a 40% cost just a little bit less than that new egg.

And I could go through the names beyond meat, uh Virgin Galactic.

And the list goes on here.

I haven't seen a lot of these names pick up in a while, but I would say over the last couple of weeks, some of these, some of these have and showing strength.

And in fact, I was writing about this in the morning brief.

Um specifically I was looking at clusters.

Now this map, this chart goes all the way back to 2021 the beginning of the meme stock craze any time you see an orange dot That's when you have a cluster of meme stock volatility outbreaks.

And what we saw in 2021 this happened at various intervals, not really predictive as to the general market, but then when we got into 2022.

Any time you got a cluster, they were laggards, money was rushing into the Laggards.

It was a good time to sell the general market.

But this latest lag up since October, I've seen meme stocks kind of interspersed randomly or maybe somewhat evenly.

I don't see the predictive power there.

And what I said a couple of weeks ago is that stocks is probably just another example of risk on and that may be what we're seeing today.

So a couple of uh or actually more than two roaring kitty videos later here is where we are.

Let me just show you a stock of game stop.

This is intraday and what it does, what it did here, this is about 121 130% up at the highs and much like I saw in January of 2021 you would see this of settling down.

You'd find the market come to an equilibrium before launching off again.

So it could be really interesting to follow this trade all week guys.

Thank you, Jared with the main stock frenzy back in the spotlight.

Let's bring in Yahoo Finance's miles ler here for more so.

Miles Keith Gill roaring kitty.

He posts on X proper name for the for the first time in a long time, right?

Gamestop rips.

What do you make of it?

Can I just say this is Miles like favorite subject and that's why I wanted Miles to go.

I don't know.

But that miles, miles and I lived through the first meme craze together and I saw how much joy it brought him to talk about this stuff.

I think there still bring him joy.

I think the reason that I remain so drawn to business media is that it's, it's much more fun than most other media things that you can cover.

It's just not that serious.

Like there's a lot of money at stake and people know they try to assign seriousness to something.

Well, II I mean, there is some seriousness when it's, you know, trillions of dollars and all this and it's people's retirement, etcetera, etcetera.

But the vast majority of that is spoken for in, you know, conservative time tested strategies with all like an incredible amount of regulatory um you know, apparatus around that.

But there are these things that exist within markets, the entire crypto market is basically this meme stocks are the equities version of it where I, I mean, it doesn't make like it actually makes complete sense.

I think people over intellectualize something that's pretty simple, which is that there's now huge amount of people aggregating their, you know, conversation on the internet, mostly on reddit.

In this specific case, it can be other places.

It could be the Yahoo Finance message boards, it could be youtube comments section, et cetera, et cetera.

And there is like a very clear momentum when a certain person in this case, Keith Gill, also known as Warren Kitty speaks about a certain stock.

In this case, gamestop.

There is an impulse to buy it because of what has happened in the past.

And because pretty much everyone who's involved with this knows it's a joke, but it's also up 80% today.

So you know, go for it.

There you go.

It's just money.

And just to be clear here, all of this was set off by a tweet that he tweeted.

He hasn't tweeted since June of 2021.

That is a picture presumably of him or of someone in a gaming chair leaning forward, leaning forward after sitting back for a couple of years, he's now leaning back forward.

And then that tweet by the way, was followed by like a bunch of mash up movie meme kind of tweets throughout the course of the day.

One of them had the theme of run.

So, you know, Run II I took it to be like run stop.

The stock is gonna keep running or it's been on a run and it will continue running.

Um Also, let's not forget like Keith jumped onto the scene with a series of extremely earnest and detailed uh fundamental breakdowns of gamestop's business in the summer of 2020 when literally no one was paying attention to it.

It was like, I mean, I don't even know split, adjusted what it was at this point.

It was a single digit dollar stock.

And he's like, it's definitely worth way more than that.

And who knows what he's done with his portfolio, right?

Like the cynics in us could say he went out and bought a ton of short dated calls this morning and then he sold them all and he's made all his money and jokes on everybody else.

But he is, he was a true believer way before there was any meme.

He literally just liked the stock as he put into the official record when he testified before Congress.

So your point being miles maybe just see this as what it is to a lot of people which is, which is fun, which is entertainment, which is Dave Portnoy.

Now jumping in and he's posting about it.

Portnoy will be the first one to tell you, I'm not an investor.

I'm a gambler.

Yeah.

And, and, and I think also like as Jared was, was outlining for us, there has been this energy within the market of pockets of enthusiasm, pockets of risk on.

I think the more serious versions of it is, look at what we've seen with Chinese internet stocks over the last month.

They have ripped hire.

Look at what's happened with utilities over the last month they have ripped hire.

There's a lot of energy in markets right now.

You know, coming back to a more serious tone uh for people seeing mag seven goes up, that group has divided away, but there's this sense of if rates are going to go lower over the next, you know, year or whatever, uh, equities are probably gonna be a beneficiary of that.

What isn't played out and we've seen that money move around.

Um, and maybe you could make the argument that if the meme stocks have been dormant for some time, maybe that's not played out.

I mean, a MC ultimately was the more mem meme stock than gamestop.

right?

And that stocks up more today, which I think tracks like A MC is the real play thing.

Gamestop, like has a more real business, I would say than a MC does.

Yeah, I mean, you know, uh, well, speaking real business, I was looking at the numbers for, uh, Gamestop in terms of what's happened to its sales over the past few years.

I mean, last year its net sales were about $5.3 billion.

Its net income was $6.7 million.

But if you look at the chart of the trajectory for either its sales or its income over the last few years, you know, it's been down to the right.

It has not been a good trajectory.

But, you know, you have like how much of this is just, it's fun.

People are having fun, I think, I think I, and I think Gamestop is more fun because if you look at what the management at A MC has done over the last two years, it's actually not that fun.

Uh They've like explicitly built all the shareholders who piled into the thing.

They got this weird, you know, the, a share structure that got folded back at a MC.

Everybody loses a ton of money.

The CEO gets paid a ton of money.

He says, don't worry, I'm not actually having the money but like he does because he unloads all the stock.

That's not really that fun.

That's a very cynical and dark story, I think within markets, I think Gamestop, while Ryan Cohen has his issues and he doesn't talk to anybody.

It's management's prerogative not to host an earnest call that's open to analysts.

Um and a lot of analysts, you know, kind of stop covering these companies too, especially gamestop, right?

They gave up on it.

Um So I wouldn't say, you know, Gamestop all like, you know, roses and sunshine, but it doesn't quite, to me have um some of the, I don't know, like the, the slickness that has gone on at A MC.

Oh, interesting.

I mean, I'm not the only person saying this, this is a, this is a, this is a, this is a broad take.

I think if you look at the, the machinations that have happened at that company.

Well, Miles Sud, I'm glad to see the gleam in your eye when we discuss these issues.

Hey, thank Keith G. The only thing is this will be over tomorrow probably.

And then we'll just, we'll be, it'll be, you know, let's hold this preview CP I and then we'll react to CP I and then we'll discuss, you know, next week's in video earnings.

That's why the meme stock is trade is so fun because it is an actually fun thing in a, you know, day in, day out kind of grind through stocks that, you know, can, can feel a little grinding.

Yeah, it can, it can.

Well, this is a little rave sunshine.

Thanks so much.

Appreciate it.

All right.

Roaring K as we've been talking about bringing the meme trade back to Wall Street and beyond a single post on X sparking a massive rally in gamestop shares with volume hitting its highest level since 2021.

It's not just Gamestop as we've been discussing shares of a mc Tupperware.

Remember that's a meme stock, Blackberry.

They're all moving sharply higher.

Joining us now, Tasty Live founder and Ceo Tom S have to talk more about this.

Tom.

Uh Thanks for being here.

Um Are you having fun today too as much?

I mean, you heard us just talking about it.

What kind of activity and chatter are you seeing today?

It's, it's kind of, yeah, of course, I'm having fun, but it's, it's all the chatter we're hearing today.

I mean, there really isn't much else, so it's been a slow week, you know, I mean, last week was pretty slow.

So this week, um everybody came in all perked up and um yeah, it's kind of dominating the, the story time.

Do you see Tom, you know, is this kind of a broader sign of just risk appetite ramping right now to you?

And, and if so, do you see that kind of playing out in different data points?

Do you see that in the options market?

Well, well, for sure, I, I think that it was a, there was a real lack of new ideas, there was a real lack of kind of, you know, there was a lot of complacency in the markets.

Like I said, the last two weeks were kind of slow and this rally has been kind of a grind to the upside and balls been crashing.

So I think that, you know, it was, this move today was really welcomed by, especially by option traders, but also by kind of everybody just as, you know, just as another level of excitement.

I don't, I don't look at this at all like I did in 2021 when it was almost a transformational moment, dragging, you know, tens of millions of people back into the marketplace.

That's not what we're seeing today.

This is just, you know, this is all the players just um kind of transitioning or, or moving into something that's actually active.

This is kind of like the old days on the trading floor when there's a lot of noise in one in one pit, everybody would run to that pit.

That's what we're seeing today.

Well, Tom, there was another aspect of this whole phenomenon in 2021 which was like the narrative of the little guys trying to stick it to the big guy, right to trying to stick it to hedge funds.

And of course, we know Gabe Plotkin um got caught up in that and there was a big short squeeze.

What's fascinating to me is today is that there's still a short squeeze that 24% of the company's float was still shorted going into today.

According to S3 partners, we're looking at what $936 million in mark to market losses as of earlier today in a single day.

Like it's so, it's so interesting to me that there were still that many people shorting this stock kind of quietly in the background.

I don't know.

Well, first of all, the float is a lot, the, the floats a lot bigger than it was, you know, um, three years ago.

And so that is one of the, there's been a couple of splits, there's been, you know, a lot of stock that's been, that's been issued.

So it's a very different situation.

And you also have to remember that, that those numbers are really misleading because there are huge index fund positions right now.

And on the short side of the index funds, because interest rates have been popping up.

There's, there is a lot of short stock out there that is just tied into different index arbitrage positions.

And, you know, Gamestop is one of the bigger, you know, I uh Russell 2000 stocks.

And so you're really talking about a lot of that, that number is mixed in with just, you know, huge R positions and they don't really necessarily not going after gamestop, for example, they're just, they're just shorting the index because it's an R play A and Tom, who, who's in gamestop right now is that retail institution?

Both?

Well, I, I would have to think that there's some institutional and some prop speculators, but I would and I also think today you're seeing.

So what happens when you have a move?

Like what you're seeing today is that a lot of the high frequency firms, um after they learn their lesson in, in 2021 they try to get ahead of it.

So a lot of the volume is high frequency firms and market making firms that know that there's going to be customers coming in on the buy side.

So they're just trying to get in front of it so that they have some inventory to lay out.

So I think that's part of it and that, that's part of the excitement, that's part of the huge volume.

But I would say that this is a lot more retail and a lot when we say retail now, you know, it's, it's kind of a mix but, but retail is very customer.

And I would say that today there's been a lot of customer interest, especially, like, just in our own office.

I'm seeing it.

You know, people are talking in a lot of, you know, people that just work here, they're buying, you know, they're buying some gamestop, they're buying some A MC, you know, they're just toying around with them.

It's, it's mostly just kind of, it feels like play money, but I feel like that's, we're seeing more of that than we've seen in a long time.

And, and what do you think is driving that Tom?

Oh, it's just, you know, like I said before, it's just, it's just, there's the markets for traders and, and, you know, I come from, this has been my world for a long time in the trading world.

Traders are just attracted to noise.

And what's happening today is that there's an incredible amount of noise after being almost, you could hear a pin drop for recently for the last couple of weeks today.

All of a sudden there's this, you know, credible amount of noise.

It's like a stadium that erupts and you want to know who hit, who hit the home run.

Well, that's kind of what you're seeing today and it's just a lot of noise and everybody's attracted to the noise.

So all of a sudden, you know, you gotta get involved.

I, I think it's, it's, it's good, it's good for, it's good for the industry.

It's good for business.

It's good for what we do.

It's good for what you do and it's, it's kind of good for everybody in a fun way.

I don't know how sustainable it is.

Well, that's what I was gonna ask you to on this thing.

Now, do you expect what we're seeing here in gamestop to continue, or?

No, you expect it to fizzle out pretty fast.

Well, as a, as a hardcore contrarian, I do not think you are going to see this is not going to be a repeat of 2021 and that whole, you know, that crazy meme stock explosion where gamestop went from, you know, $15 to, to 500 back down to, you know, whatever 100 or something.

I don't think you're gonna see that.

I think this is going to be much, a much more muted version of what we saw and maybe, maybe two or three days.

But I don't think there's much more than that.

I do not think this is 2021 all over again, but I do think there is an incredible amount of speculative capital out there that is just kind of begging for a shot begging for, you know, um, just, just kind of, I don't, I don't want to call a lottery ticket, but I do think there is a lot of speculative capital out there that's just looking for a play and Tom finally just quickly do you think that regulators are gonna be looking at Keith Gill again, you know, with that tweet kind of setting off this huge huge explosion.

I really don't, I don't, I mean, I know it kind of, no, I just don't think so.

I think that, you know, fool me once I get it, but I don't think that's the same thing now.

I don't think this is at, at the current levels we're at right now.

Julie, I don't think there's any chance this is, there's any regulatory issues at all.

I think this is pretty clean, fun at this point.

Um I, I just don't see it beyond that.

I, I don't think it gets to anywhere close to where it was in 2021 when there was, you know, industry wide issues and Robin Hood had those problems, you know, clearing issues and things like that.

I do not see that happening at all this time around there.

There's a very different, there's very different margins, there's very different, you know, the, the float on the short stock side, it's all the stocks are hard to borrow.

It's not that easy.

All right, I like to hear that.

Pretty clean.

Fun.

Thanks so much, Tom.

Great to catch up with you on this.

Thanks guys.

We're just getting started here on market domination.

Coming up.

Apple is putting all its chips on the table, announcing a partnership with open A. I will break down what that means for the iphone maker on the other side.

Plus the latest episode of our Yahoo Finances video series.

Next, a glimpse at the future of neuro technology that's in the four pm hour and it's the latest issue of our series.

Goodbye or goodbye.

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

They t more market domination after this open A I wrapping up a live stream conference earlier with Chief technology officer, Mira Murati unveiling a flagship chat bot model called Chat GP T 40, let's take a look.

OK.

So chat G BT, this is what I ended up with.

How does this look?

It looks perfect.

You've solved it and X equals one nicely done.

How do you feel about solving linear equations now?

Yeah, honestly, I I'm not pretty confident I can solve linear equations.

Joining us now is Patrick Moorhead founder CEO and chief analyst at More Insights and strategy.

Patrick.

It's great to have you on set.

Josh, it's great to be here.

Usually I'm fro you know, in front of a uh uh computer screen, but here we are in the big studio, you were in New York and we had to make it happen.

So let's get right to the news, Patrick.

So open A I announces this new flagship model, they say smarter faster first.

Just give us your response to the news.

What you heard today.

Patrick and how you think it impacts kind of the broader kind of competitive environment we find ourselves in.

Yes, first off timing is everything.

So tomorrow's Google's big Google IO conference, they're the king of search, they're the kings of advertising.

And this was clearly time to give Google Google advertisers uh something to think about.

Obviously, we have Apple WW DC in a few weeks and yes, it impacts them because they want to get out and define what the quote unquote best intelligent agent or assistant experienced is.

And this brought together brings together voice, it brings together uh images and videos and text in a very interesting and, and human like inter action mode.

So uh what I continue to struggle with and I don't know if this changes the paradigm.

OK.

So chat GP T comes out early, you know, late 22 early last year explodes in interest all of these grand predictions about how it's gonna change the world.

You and I are still sitting here in person.

My life hasn't changed at all as a result of this.

I know some people who use it as a tool fine in corporate America, they're integrating it to some degree, but it's still kind of unclear like where, where's the big deal where like where's the thing that's gonna be this revolution that seems to have been promised?

Yeah.

So technology is always slower to be adopted than we all think it's going to in silicon Valley.

Right.

It, it, it comes overnight but the reality is to hit consumers and even businesses uh come years after use.

But you have to show off the latest and greatest to get people excited.

It's kind of like the beginning of an investment bubble.

Right.

Let's get everybody excited.

Let's show the capability.

We're gonna hit the trough of disillusionment uh at some point.

But it's to get people uh uh tied in.

Now when it comes to software and services we can use on our smartphones like jet chat GP T 40.

Uh It is a much faster time to use than let's say, building a new product like the rabbit that you, you know, stick on, on your lapel that unfortunately bombed early.

But um I, I think it's a good testament to what we should expect to see from a Google, an Apple and even a Microsoft.

Do you, do you think Patrick though, for big tech investors who are listening right now, how concerned should they be that users start using open a chat G BT more and more and relying less and less on big tech voice assistance?

So it is a risk.

I don't think it's a midterm risk.

Uh But if Apple and Google don't get in there and plug the whole or potentially for Apple's case, a line with open air, it could spell trouble because if you look at the biggest applications that that just took, took the world by storm like Facebook, it was initially free Google search was free with no ads, right?

So you weren't paying for it.

And this has the same type of risk.

If you get eyeballs and experiences coming in, you could op uh open A I could monetize that multiple ways through a service payment, through advertising, through essentially sending you to another chat bot for a company that does make money, a food services company on airlines.

That's how it could be monetized.

And that is a potential risk to both Google and Apple.

And speaking about Apple, there was also a report that Apple is indeed gonna be partnering with open A I for some version maybe of its chat bot or on the upcoming phone cycle.

Do you think that that is gonna happen?

Do you believe that that is gonna happen?

And then what are the implications?

Not just for Apple, but for Google in that case?

Yeah.

So I put the odds at about 5050 that we'll, we'll see the two come together.

There could have been some of the leaks that saw Mac Os desktop app that was announced today and they took that to the next level.

But Apple does need help in in certain areas.

And there's two types of A I there's on device I I which would be on the iphone and the ipad and the Mac.

And then there would be the cloud based services, I believe if there's going to be any deal.

It would be cloud based services, maybe a type of deal where Google pays Apple today 20 to $30 billion to get uh Google search as the default search on the iphone.

Maybe this is a deal like this or maybe a it's less of a payment but more of a quid pro quo Apple has to have um very good on device A I or, or literally uh it's gonna spell trouble for Apple because that's what it does.

It's all about on device.

It's not about the cloud Apple's biggest level of sophistication on the cloud is backups and streaming media and video which in in aggregate aren't that uh complex.

And if you recall back things like Mobile Me, we were just complete disasters.

I do believe that we will see a Siri relaunch at WW DC.

Uh and it will incorporate generative A I potentially some help from open A I.

And again, it's not just one model you're looking at probably 40 models that have to be addressed in between what's on the device and at the cloud to do different types of things.

And you hit on a point which I want to touch on Patrick because let's say Apple and open A I get this deal done.

Tim Cook and Sam Altman, they work it out, the lawyers, they sign the paper.

Your point is you think it's possible that Sam Altman pays Cook's company because Altman thinks, you know what?

Yes, I'll pay to get in front of these billion plus iphones.

Yeah, this could be the long term play for them.

Right.

Let's get people hooked on open A I and Chat G BT.

And that would pay dividends for years in a very similar way.

I mean, open A I is losing a tremendous amount of money today.

A lot of money and, uh, they can either invest it into infrastructure, advertising product or a potential deal to get on the most pervasive uh brand out there, which is Apple.

I like to get out of here on this Patrick, a different headline reports.

That arm is going to develop A I chips, the keyword being chips there, no one knows arm better than you.

Um What do you, how much credibility do you give that report or you think it's bogus?

So creating actual products, meaning you buy a chip from them.

I put very, very low probability.

What I do put a high probability against is them getting into them licensing the intellectual property like they do uh to Apple like they do to Qualcomm like they do to Aws and Azure which enable other people to use their intellectual property to build A I accelerators for, for phones, for tablets, for P CS.

And even in the data center, I do think that will happen.

And quite frankly, I think that's priced in might be priced into the stock already.

When you look at the multiples that, that, that it's trading at right now, investors want to see more tangible A I goodness, even though they're the processor behind it and a lot of A I is done on ac pu they want to see specific A I IP Patrick, we didn't plan it this way, but you were the perfect guy to have today on set.

We maybe we did plan it.

I don't know.

Thank you for coming, my friend.

Thanks for having me on.

Thanks, Josh.

Moving on time to check in on some of today's top trending tickers shares of Walgreens boots.

Let's start, they are live higher today.

On the back of report, the pharmacy giant was looking to sell its arm of drug, its armored drugstores in the UK, this acquainted to Bloomberg.

So this was an interesting one.

So the news and again, this is Per Bloomberg, Julie signing sources.

They're kind of reaching out.

It sounds like they kind of gauge interest in the drugstore chain.

Um Early stage discussions, apparently possible bidders.

We're not sure no formal sales process yet, but the chain could be valued if it goes through at around 9 billion in an exit, which explains investor reaction.

Yeah, I mean, what's interesting here is um it was just about a decade ago that they became Walgreens boots because they bought the thing in the first place and it was sort of a series of different transactions and stages that led to the deal going on.

But Walgreens has had a really lousy year, the shares are down sharply here.

It hasn't been growing, cut its dividend.

Um, and so, you know, it looks like it might be coming from a place of weakness, certainly, rather than strength as it tries to figure out whether this would make sense.

Yeah.

I mean, to your point, it's been under a ton of pressure to pull up a chart there and the stock's been hammered with the capital Turners, you mentioned lower the profit outlook talking about consumer spending, not great on non essentials.

They said, so investors may be getting some relief from that headline.

Yeah.

And then there is another potential deal that we got to talk about.

Shares of Kraft Heinz are watching those as well today.

That's after a report, the company is looking to sell its iconic Oscar Mayer brand.

That's according to the Wall Street Journal which says that Oscar Mayer could go for between 3 billion and $5 billion in the sale.

It's interesting, the shares are not moving much and I don't know if that means that uh you know, investors are not taking this terribly seriously or they don't think it's that likely to happen.

And um Kraft time cheers down a little more than 1% this year.

There is a new Ceo of Kraft time, Carlos uh Carlos Abrams Rivera who has been sort of looking through the portfolio and trying to figure out what makes sense.

Yeah, you could, strategically, you could, you could understand it because it kinda we know the company has kind of been moving with the times are trying to, consumers are more interested in health and nutrition, less, more concerned.

We know about sugar and sodium.

So they're making there.

And so you in a broader strategic sense how it could make, make sense, but it doesn't sound like we, we know right now who might be curious is that a, is it a pe firm or some food industry giant?

Yeah, maybe that's another reason why it's not moving that much.

It's sort of very like open ended and vague about what, what the outcome of this could be.

We await specifics we do coming up.

It's the latest edition of our series.

Goodbye or goodbye.

Stay tuned, more market domination after this.

It's a big noisy universe of stocks out there.

Welcome to, goodbye or goodbye.

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

They were passing through the banking sector and joining me here to discuss is Jay Hatfield, infrastructure capital advisors, CEO J come on down here so we can get you uh the stock that you like.

First.

Let's start there and it's Goldman Sachs.

So Goldman Sachs interestingly has already had a pretty good run over the past year.

You can see the stock has moved higher, moved higher again after its most recent earnings.

So let's get to why you still like it here.

First of all, you say it's still trading at a relatively attractive multiple.

Yes.

In fact, we're actually carrying estimates 10% above consensus.

So it's 11 times consensus and we're at 10 times.

And the main reason that were above consensus is that were more optimistic about investment banking.

And really Goldman is the pure investment bank of all the investment banks.

And I think most people don't appreciate, I used to work at an investment bank.

Um and they don't appreciate the synergies between investment banking and capital markets.

So when you do deals, then that generates extra trading for the trading operation and you saw that in the first quarter, but really the whole firm just outperformed.

Yeah, and let's dig into that a little bit more because we are seeing, we're seeing fixed income uh underwriting.

We're seeing also that sort of capital markets are perking up a little bit in some areas.

There's a little more M and A coming out, there are a little more initial public offerings.

So you think that's going to be good for do?

And even in 25 you just had an A I great A I segment.

We think that the A I IP O boom will start in 25 which it normally does because, and that's why the US capital markets are so efficient is that we um you know, high valuations of the public companies generate IP OS.

So we think it's a little bit of a longer term play.

That's why even though the stock is working now, we don't think it's overvalued and even will get better as we go through the summer have rate cuts, at least from the ECB and then have a rally in 25.

Right.

And I think our last one was that derivative A I play.

There's also the fact that they exited the consumer business and sound.

No, now they're even a more, well, they were a pure play then they got into the consumer business.

It didn't go so hot and then they got out of it.

So they're back to being right.

I think that's why the multiples lower like Morgan Stanley trades at 13 times.

They were more resilient during the downturn because they have more steady wealth management.

Goldman's more is about 80% banking, investment banking and Morgan Stanley is 40.

So we think it's time to kind of rotate from the safe, safer.

I mean, we wouldn't be out of Morgan Stanley, but we're short.

It certainly, but gonna trade pretty well together.

But to get more leverage to banking from Goldman Sachs got you a little more.

Um uh we always like to talk about what the risk is in this situation and in this case, it's, you know, if markets don't do as well, then they could be a victim of that because they don't have that insulation.

Right.

This is absolutely a bull market play.

I remember when I started on Wall Street at Morgan Stanley during a down cycle in 89 we were turning a 0.4 times buck.

I mean, it used to be, these investment banks just got smashed.

So they are high beta stocks, 1.2 beta very correlated in the market.

If we're wrong about, we're bullish on the market, we have 5750 target.

But if we're wrong about that, you don't wanna be in financials and certainly not in investment banks.

Got you.

And you have, you guys have a pretty decent position and it is our largest position in ICAP.

So we're pretty um bullish about it.

But it's a sector.

We know we're in Manhattan.

I worked in investment banking.

I understand that, that when things start going, this is just the beginning in our opinion of the, of the boom.

All right, let's get to an area you don't necessarily want to be and that's in more in the regional banks.

And here we're showing PNC financial is just one example of the regionals which largely have underperformed some of the other, some of the larger financials over the past year.

So there you're looking, they don't have the benefit of being as much in the capital.

They are 5% to pick on PNC.

They're just 5% capital markets.

Got you.

So that compares with Goldman, that's, that's all, all of it.

Right.

Exactly.

So, one reason there that they're not gonna benefit um net interest margins have been under pressure and talk to us about how that's working for the regionals relative to rates as well.

Right.

So PNC is forecasting themselves about a 5% decline in net interest margin.

And the problem is when rates go up really fast, uh the deposit beta as they call it the or the sensitivity to interest rates start hitting, which is just a complicated way of saying people realize they can get 5%.

So they're not gonna leave money in a checking account or a six month CD.

So they've seen those outflows which means they, it's just March, it's pressured and also they have slow loan growth too as well.

Uh They're probably being conservative about putting credit out right now.

So those two things are putting pressure might get better in 25 but you have something that's declining with regionals and something that is booming with the investment bank focused.

And also they tend to have less exposure to that interest margin as well.

And the other thing, we've all been trying to sort of read the tea leaves on the consumer, you know, in from the payment companies by now paying later from the regional banks themselves from retailers.

And it does feel like they're starting to see some deterioration on the on the lower end, at least.

Definitely, I mean, if you just think about it, it's sort of, there's a have, and have nots in the US consumer, anybody who owns a home did really well from the inflation and anybody who doesn't did really poorly because they had to pay really high rents that are flat now but not going down.

So if your wages didn't keep up, so it's definitely pressure on the lower income consumer unclear how that's gonna unfold.

But if you look at the more investment bank oriented, they have particularly Goldman's now getting out of it, they have less exposure to that.

These, these large banks, their credit exposure is hard to track.

They're not like reeds where you can model every building.

So we don't really know what's going on there, but it's a potential downside.

And could we see defaults, for example, that would affect rising slowly already?

We don't think they're gonna be terrible.

But if the Fed didn't cut rates, we might have a slowing economy recession.

So we just further risk, um, without the upside, investment bank.

And so conversely, we'd like to talk about what could go right for the regionals.

And it's what you kind of just referred to that the fed could cut and maybe cut a little more aggressively than expected, right?

If they, if the yield curve de inverts and, and we're well into 25 so the longer term story, the banks are gonna do fine.

And by the way, if there's a bull market, they're gonna go up there, risky stock, cyclical stocks.

So it's, it's probably could be a situation where invest in 25 maybe investment banking is kind of already full at full force and then it's time to rotate into and, and benefit from the net interest margin slowly getting better in 25.

And as for the regionals, do you have any position there?

Are you sort of under way?

We're, we're intentionally completely out of regionals and then not just in the investment banks, but in the money center banks that tend to be better hedged, less dependent on net interest margin have more capital markets upside.

So they're just better positioned in our opinion, in this market.

Ok.

So let's summarize what you're telling folks, Jay here, you're saying you would recommend buying Goldman Sachs given that reasonable trading, multiple potential benefits from avenues like fixed income, underwriting other capital markets and A I related IP OS coming down the pike and you say avoid regional banks, there's limited upside from capital markets.

They're not as exposed.

There's possible pressures on profitability from rate cuts and potential for credit metrics to worse.

And thanks so much for being here.

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

Goodbye or goodbye.

We'll be bringing you new episodes three times a week at 3:30 p.m. Eastern oil edging higher on improving demand from China and the market is waiting on CP I data on Wednesday.

Yahoo finances Inez for here with the latest nez.

Yeah, Josh.

And we did see today wt I up about 1%.

We also saw Brent crude higher.

Now wt I has been trading within a tight range since around May 2nd.

So it did settle above $79 per barrel, Brent crude on our wifi Interactive, settled above $83 per barrel.

And we have been seeing oil off of its peak from April.

And that's basically because of the unwinding of the geopolitical risk in the Middle East.

But nonetheless, a lot of analysts are saying that look Brent crude, it's up 10% year to date around 10% and you are going to see rent ceiling at around $90 per barrel.

They do not think that that Brent is going to go past 90 OPEC plus doesn't want it to go that high because then you will see a recession worldwide.

So, uh OPEC Plus also, by the way, analysts are expecting the oil alliance to extend its production cuts beyond June and in a sticking with the oil space.

But getting company specific here, there are some new developments in the Chevron hes deal and some big if not opposition at least, I don't know, maybe a fly in the ointment here.

Yes, that's right.

This is from a proxy advisor and proxy advisors are hired by big shareholders like a mutual funds like pension funds to advise them on murder on what they should do, how they should vote in merger deals.

And this one is with respect to the Chevron and he deal.

So he shareholders are being told by this proxy advisor that they should abstain from, from voting on that acquisition of hes at the end of May.

Basically with this proxy adviser saying that this entails that the deal entails risk that it may break down and then there would be no compensation in the end for shareholders.

Now I did reach out to Chevron.

Chevron said that they look forward to this shareholders voting on this deal.

But look this all comes down to the Guyana stake, the operation of hes.

This is why Chevron wants to buy Hess and Exxonmobil has taken the companies to arbitration.

Basically saying that Exxonmobil has a right of first refusal for that block.

Exxonmobil has about a 45% stake in that block and says that it has a right of first refusal for that block.

So wait to be seen, what happens with this deal.

All right.

Thank you so much.

Appreciate the update coming up.

Stick around more market domination.

Still to come.

Stocks are mixed just ahead of closing Bell on Wall Street as an investors await.

Now key inflation data on Wednesday for more on what to expect from that.

April CP I print we wanna welcome in Jim S Miguel ce I cio Jim.

It is good to see you.

So markets to look at the major averages uh kind of modest moves today, Jim, but we do have that uh big inflation print on Wednesday CP I is on deck.

What, what do you expect to, to see there, Jim?

And how important is that for the market?

Uh Good to see you, Josh.

Thanks for having me.

I, I'll start with the latter question first.

It's very, very important for the market.

All eyes definitely focused on on this number.

Uh We have three hot prints in a row as most investors are, are aware.

Uh And the fed is really running out of room here in order to deliver the cuts that I think most investors would love to see and that the FO MC wants to deliver themselves.

So one data point doesn't make a trend, so they're going to need a few more.

Uh uh after this one, even if this one does come in light, I will say the, the whisper that we are hearing around Wednesday's numbers that we should expect slightly weaker.

But even if we do get it, get something slightly weaker, you're still looking at a three handle on probably both headline and core, still leaving the fed in a, in a pretty tight spot if they would like to see rate cuts coming in calendar year 2024.

So Jim, how you then sort of position yourself going into that?

Do we just assume that rates are gonna stay where they are for a little bit here and, and sort of strategize, excuse me.

Uh accordingly.

We're, we're actually taking a little bit of a more pessimistic stance as it, as it comes to rates.

Uh We are a little bearish.

We do expect a 10 year in particular to try to maybe retest that 5% level that we saw about a year or so ago.

Uh and even at the very least get that 20 or so basis points back uh post the last FO MC press conference where really what Chairman Pell went ahead and did is took any talk of a rate hike completely off the table.

So uh we know with the trend that we've seen recently, a bit of a reeler in inflation, the market began pricing in, you know, the probability however small of a potential rate hike coming in here.

Uh uh Pal went ahead and squashed that and we have a 10 year kind of rallying below 450.

So, you know, from a positioning perspective, we're, you know, we're taking, you know, relatively modest moves at the margin, but our view is for rates actually higher between now and the end of the year.

You know, Jim, we talked about that CP I print this week but another date on the calendar for investors is uh NVIDIA, their earnings are coming up as well.

Could that be a catalyst for the market, Jim?

Uh I think it absolutely, uh could be looked at it's, if you take a look back, uh the last 12 months, maybe even 18 months, NVIDIA is in, in one way, kind of all that's really mattered.

I mean, as much as we talk about the magnificent seven and whether that's turned into the, I don't know, the fab four now or the terrific three, whatever they, who's ever left standing.

NVIDIA is clearly the juggernaut uh of the bunch.

So you, you're trading at the 4050 times kind of forward earnings.

Uh When we look at, when we look at that as a possible event, we're looking at that relative to the fix.

So, uh, equity volatility we think has been unusually low, given everything else that's kind of happening in the world and just given the overall importance of, of this one individual name, uh the earnings, the percentage of investment, the percentage of earnings that this one name, the percentage of performance, I should say year to date that this one name has been, uh, has delivered and delivered.

Uh not just year to date but also in 2023.

Uh a lot of uh a lot of importance riding on this one number.

Um Jim can talk to us about utilities a little bit because that's an area that has been rallying.

I believe you like it as well.

Um Why, you know, and this is not typically a group that does well when rates are high Um, do you think it's gonna be able to continue to run here?

Yeah, we're a little skeptical on that.

So, we're, we're kind of neutral utilities.

Um, it, I think you're, it's, it's a great point, Julie because, you know, this, this hook in the utility performance, if you track the chart on Yahoo Finance, you know, you, you can see that, uh, it's been pretty, pretty recent rally there.

Uh, and I think a lot of that has to do with this kind of doves stance that the FO MC came out with.

So everybody knows we started the year with these huge expectations, six rate cuts kind of kind of priced in or, or, or investors trying to bake in the cake for 2024 that's been walked all the way back.

Uh Now we put a few more back on.

Uh Thanks to the Ds from the last press conference and I think you utility is always a bit of an income play.

Uh whenever there's expectations for lower rates, you would expect utilities to kind of hang in there.

And that's what we've seen recently, especially with that uh kind of strong uh performance post uh press conference.

So, Jim, you said you're a bit skeptical of utilities.

What, where do you see opportunity right now, Jim, what, what sectors look attractive?

Yeah, it all kind of goes back to the same point which is uh kind of our view for rates.

We, we you know, we think rates have higher, we think inflation is going to be stickier for longer.

Uh And if we have that view, that's gonna probably not too surprisingly lead us in to the direction of more kind of value type names and what represents kind of good value right now.

Uh It is financials uh good conversation in the last segment uh on financials, very, very diverse uh part of the market for sure.

Investment banks, money center banks look pretty attractive right now.

Forward earnings and twelves and thirteens and fourteens relative to the broader market at uh 22.

Uh We're also looking at things like materials and energy.

So uh things that really have aren't overly geared to an interest rate kind of move or at the very least are gonna benefit.

Uh If we do see uh rates kind of drift higher uh from where they are today, Jim, thanks so much for joining the show today.

Appreciate your time.

Thank you while wrapping up today's market domination.

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