Nvidia uncertainty, autonomous trucking: Asking for a Trend

Nvidia (NVDA) shares continued to slump toward the end of Friday's trading day, with the S&P 500 (GSPC) following that downturn.

WAABI CEO Raquel Urtasun joins the show to discuss the company's efforts to leverage generative AI for autonomous driving, especially for commercial-grade trucks. The company recently raised $200 million from investors, including Uber (UBER), Nvidia (NVDA), and Volvo's venture wing.

Yahoo Finance reporter Jared Blikre stops by to break down the latest trends in the market, including the rise of oil prices (BZ=F, CL=F). Jennifer Schonberger also sits down with Boston Federal Reserve President Susan Collins in an exclusive interview to discuss potential Fed decisions and the overall state of the economy.

For more expert insight and the latest market action, click here.

This article was written by Nicholas Jacobino.

Video transcript

Hello and welcome to asking for a trend.

I'm Julie Hyman in for Josh Lipton.

And for the next half hour, we'll be breaking down the trends of today that will move stocks tomorrow.

There's a lot to keep track of.

So we're focusing on what you need to know to get ahead of the curve.

Here are some of the trends we will be diving into in this holiday shortened week.

Technology stocks have more or less been in control of the markets and not always for the better shares of NVIDIA slid again in today's session, bringing the S and P 500 down with it though the broader index did manage to notch a winning streak.

We're less than two months away from Tesla's Robo Taxi unveiling long time B Dan Ives from Wedbush calling the event a key historical moment for the company, but Tesla isn't the only name in the self driving space.

We're talking to the founder of an NVIDIA backed autonomy company next.

And those looking for signs of economic weakness had plenty of data to bolster this week through this week as the fed looks for more signs of progress in its fight against inflation.

It's been a bumpy road for many self driving vehicle start ups, but Wabi approaches the tech differently.

The autonomous vehicle start up is deploying generative A I in its quest to launch driverless trucks by 2025 and big tech is taking notice earlier this week, the company raised $200 million from investors including Uber, NVIDIA and Volvo's Venture Wing.

Joining me now the CEO of Wabi Raquel Orta San uh Raquel.

Thank you so much for being here.

So, first of all, congratulations on the race.

Talk to us a little bit about uh what Wabi does and how you're differentiating from some of the other autonomous vehicle companies out there.

Yeah, thanks Julie for having me here.

Um Yeah.

So if you look at the industry today, uh particularly that I've been tracking, the industry has consolidated to a very hand in year approach, what we call it V one point.

Oh, that really has difficulty solving.

The problem is very capital intensive.

And what um what is doing is bringing the revolution of United A I to the physical world.

And uh that's what uh you know, give us a very significant advantage in terms of how quickly we can actually build and deploy this technology as well as uh you know, being super capitalistic compared to the rest of the competition.

And so how does the, the training um exactly work of the software uh that you're using to to um get to autonomy.

Yeah.

So what has created a new generation of foundation models uh that uh are able to uh understand and interpret what they see, be able to create abstractions that are interpretable so that you can validate and verify the system and then uses those abstractions to reason something that for the first time, you know, foundational models could not do before.

Um And this gives uh you know, the system, the abilities to really generalize to the unknown, which is fundamental when you bring you gonna bring this type of technology to the physical world.

So that is very data efficient as well.

It's very efficient in terms of computation on the vehicle and it's provably safe.

Uh You can think of it as we solve the alignment problem uh that you see uh in traditional more transformer like architectures uh that you see on the last language model side of things.

Um And the way that we train the system is mostly on simulation where we create kind of next generation, also genetic P I technology so that we can expose the system to all the 60 critical situations including accidents, et cetera.

And when we put the system in the real world, it's already much more performed than anything that you see out there.

Uh We, we're just showing wy trucks on the road, do you guys?

But do you guys don't make the trucks?

Right?

You are making the software that goes into the trucks.

How does that sort of melding work?

Yeah.

So we integrate uh our sensors and computes.

So we don't build the sensors themselves, but we actually touch them in a way that is very uh uh you know, build so that it's very easy to integrate at the factory line with the OEM.

Uh So we partner with the O EMS and then uh you know, our technology can be very robustly uh deployed in the physical world.

And then the, you know, the biggest I will say uh kind of a differentiator is the software uh that drives the trucks is uh you know, for the first time is genetic P I uh that can really do uh you know, with an end to end system, as I mentioned, that is interpretable, right?

Something that is kind of like the next frontier uh for the industry uh that has uh you know, really give us this competitive advantage compared to anybody else.

Well, um we've been talking about autonomous for a while now, you know, we've heard people like Elon Musk promise it for a while.

And yes, as I mentioned, we're supposed to be getting this announcement later this summer.

We'll see exactly what that announcement entails.

Why is autonomous?

Why is it so hard to crack?

And are we really closer, not just at WABI but at other entities?

Are we really getting closer to cracking it?

Yeah.

And as for context, I spend almost two decades now working in, in South Arian, right.

And, and, you know, the um you know, the problem has been really that uh you know, the approaches that the industry had utilized to solve south driving were, were very fine engineered were actually not scalable uh that really had difficulty generalizing to the unknown.

And there are so many things that can happen in the physical world as you drive that uh you know, these systems were, you know, really uh you know, are having uh you know, more and more difficulties to make more, you know, to make progress towards the goal so that, you know, it's been a technology problem uh so far.

And you know, the reason I started the company three years ago is that being at the forefront of innovation and really saw that the industry needed a different approach that, that uh kind of uh approach that will be scalable, will come from an A I first approach.

Uh and really ambition the full power of A I uh to build a single A I system that can actually really, so this task and what we see today is that, you know, three years in uh this technology is so powerful and you've seen the revolution I would say in the digital world with a GP T in November 22.

And uh you know, all the, you know, different things that we have seen from other companies afterwards.

Uh And you know, the same kind of, you know, the ca of a revolution in the physical world.

And this is not possible prior to this technology.

Uh So definitely what you're gonna see now is uh you know why we deploying driverless next year, uh our commerce product.

And the other thing that we uh we have also for the first time in public is that uh we're gonna do many more things than just tracking.

Uh We're gonna do other other robots with different form factors, whether it's robot access, whether it is warehouse robotics, uh whether it's humanoids uh will be things that, you know, we will be doing in the future and all.

Thanks to this, you know, groundbreaking technology.

Well, we will keep in touch as you make all those developments, Raquel.

Thank you very much.

Actually, don't go anywhere and we're asking for a trend on the other side, the major indices ending the way little changed as tech stocks remain in the spotlight.

Finance Jar is here with more of his trading day takeaways and we start with record tla which is so interesting to me because you wouldn't know by the price action this week.

No, and it's sometimes you see a bunch of flows but you know, the price, you might see a lot of selling kind of disguised in there and this is the highest volume day of the year or it should be right now.

I haven't calculated the the final tallies.

But if you wanted to a lot of tech and guess what Apple was sold to a tune of $10 billion a day to make room for NVIDIA and XL K. Well, this would be the week to do it.

Now, the reporting is from the last five days.

So I believe that stretches back to last week, but here's that spike.

Uh, this goes back all the way to what, 2016, 2017 and this is $8.7 billion.

Michael Hartnett's team that tracks these flows is calling it A I capitulation.

That implies an ending of sort.

But, you know, the topping is a process.

So one thing I'm interested in is the fact that seasonality and I showed this the other day with Josh, uh, seasonality favors the Bulls the 1st 10 days of July and that's just market wide.

But I'm thinking if you're looking for a summer lull, you might look for it after that.

July, I was gonna say too, again, capitulation implies different price action that we've been seeing, you know, but I think capitulation can mean different things.

You can see like at the bottom of a bear market, you'll see a stock do this, it just plunges and then it rebounds.

That's a capitulation of a different sort.

But you can have an exhaustion.

I think of buying that ends in capitulation with a kind of, you know, an uptick even interesting.

Ok, let's also talk about commodities, shall we wt crude punches above $80 a barrel?

So let's, let's bring up a chart here.

This is going to be wt I crude futures year to date.

And here's the pattern that I'm interested in.

This is the $80 price level.

We're spending some time below that punched above.

Now we've come down, the next logical move is take off, but you need a catalyst.

So what could be a catalyst?

Well, we were just talking to a guest earlier hurricane season right around the corner.

OPEC plus not likely to move the needle, but they could Biden could try to pull a lever in the election year.

These things happen, but I think hurricane risk is actually probably underappreciated right now.

Positioning in the oil market is very low.

So that just means the potential to go higher.

Is there?

Finally, we have XL E and I'll put a line chart here multi decade highs.

And you can see this high kind of in line with this high kind of in line with this high takes a while to put these 16 year patterns in play.

But my question, uh my question for the viewers is what happens if we punch above here?

But I'll show you another chart.

Here's wt I crude futures energy can be very range bound because the stock price, a lot of those gains are returned to the shareholder in the form of dividends and also buy backs.

Interesting.

Well, not good news for drivers, perhaps potentially this summer, but we'll see about that.

And then finally we talk about, we gotta, I mean, it's gotta be NVIDIA is, does NVIDIA do, are we like, as Josh likes to joke, we are contractually obligated to speak about NVIDIA on the show.

Not really, but it seems to go that way.

Yes.

All right.

So let me bring up Invidia here.

I guess this is gonna be a max chart.

That is, that is a Parabola if I've ever seen one, but I wanna focus on the price action here.

A lot of attention is on this candle that's from yesterday.

That was a big red candle.

What did you call it earlier?

A bearish engulfing because it engulfs the entire body of the previous candle.

Hard to see there.

It's really small plus uh over drew over it.

But it reminds me of this price action right here.

That was in March.

This was a record high.

We got that big red candle and then we kind of backed and filled for a few months.

So if you're a big NVIDIA fan at the very least, maybe this sets up a potential buying opportunity, not right now necessarily, but, you know, in the coming weeks, I would also add that with options expiration today.

Uh Half of the gamma.

That's a very well term rolled off.

But the net effect for people for investors next week is that NVIDIA is going to trade more freely when you have high gamma that just kind of mutes the volatility.

There is a trend to the upside, but we'll see things differently next week and we'll talk about NVIDIA again.

You bet.

Thanks a lot, Jared coming up, it's what to watch on Monday.

I'll tell you everything you need to know.

Kick start your trading week.

Stay tuned.

We've got more asking for a trend on the other side while the market is keenly focused on Federal Reserve moves and Fed speak.

We rarely get a look at a day in the life of members of the Federal Reserve.

Yahoo finance is Jennifer Shaber had a chance to sit down with Boston fed President Susan Collins earlier this week to get a glimpse at her day to day life.

Susan Collins is one of the most powerful people in America.

The president of the Federal Reserve Bank of Boston, the first woman of color to hold that position belongs to a select committee in Washington DC that decides whether interest rates should go up down or stay the same.

We had an exclusive peek into how she makes decisions that influence what you pay to borrow money for a home car or what a bank pays you to open a savings account.

The FED has held rates at a 23 year high in the range of five and a quarter to 5.5% for nearly a year as it tries to tame inflation.

And right now, Collins and her colleagues at the Fed are wrestling with a vexing question.

Has inflation cooled enough from its pandemic highs to start cutting rates.

We're going to have to let the data really tell us when it's clear that we're sustainably on a path.

And that means looking at a wide range of data in June, the Federal Reserve opted to hold interest rates steady in the battle to bring down inflation.

It signaled just one interest rate cut this year.

Part of the decision for setting interest rates from information gleaned by regional fed bank presidents on the ground in towns and cities across their districts like this one in the first district which spans six states from Maine to Connecticut.

Collins monitors key data from the personal consumption expenditures index to the monthly jobs report for clues on the direction of inflation and the economy.

But it's also important for her to talk to local businesses, banks and consumers to see if the official data line up with what she's hearing on the ground.

A lot of the data is telling us what happened last month or last quarter.

And when we talk to people, they're telling us what they're seeing right now, they're telling us about their plans and how they see things evolving.

And so that's one thing that's important.

It also helps to kind of flesh out what the data are telling.

We were invited to follow Collins around for the day in Lawrence Massachusetts, a former textile town 28 miles north of Boston.

Seeing a renaissance Collins started her day hearing from a local group of bankers and real estate developers who discussed how investments made in refurbishing low income neighborhoods have fueled the local economy's redevelopment over the past 10 years.

Why don't we start with introductions?

Let's go around the table.

She went on to hear about the impact inflation is having on local businesses and the desire for lower rates, the cost of living is getting out of control and the rent is something.

Let me tell you extremely out of control.

Extremely out of.

One of my key takeaways was really understanding some of the challenges that the higher inflation that we had endured is creating especially for smaller businesses and the fact that labor markets are actually uh coming uh improving.

Um It's getting easier for people to hire and there's much less turnover.

Despite the Fed's dual mandate of promoting maximum employment and stable prices, inflation has been the greater focus for the FED as it's opted to hold interest rates steady while other central banks have started cutting rates after a scare earlier this year that inflation may be stalling or re accelerating in the first quarter.

The latest readings confirm prices aren't accelerating but may be moving down slower than thought.

It's inflation.

We're we're all consumers at the end of the day.

We all buy food at the end of the day.

And our biggest challenge over the past three years has been, how do we provide a high quality product at a price that people are willing to pay?

The data suggests an economy with demand and supply coming into better balance, which is what's required in order to restore price stability.

But this process may just take more time than previously thought.

It's too soon to tell whether inflation is durably on a path back to 2%.

What Collins and her colleagues watch closely is the fed's preferred inflation gauge, the so called core personal consumption expenditures index.

It showed inflation grew at 2.8% year over year as of April a level unchanged from March.

Another measure of inflation, the more popularly cited consumer price index on a core basis rose 3.4% in May cooling from the 3.6% increase seen in April and 3.8% in March.

Both are still above the fed's 2% target.

Jonathan Isaacson is CEO of GEM line, a business based in Lawrence which prints custom logos for companies on a variety of swag from bags to hats and even coolers.

Gem is one of the largest employers in the city.

And Isaacson says he hasn't been able to push through price increases to customers.

The time of being able to just hand off price changes is now over from our perspective during COVID, we did pass through a number of price changes and everybody understood it today, things seem to have normalized and people just aren't accepting it anymore for economists.

That's one of the first indicators that inflation is likely to gradually come down.

I think that data that we have seen recently in terms of CP I, in terms of the producer prices, it is consistent with an economy that in an orderly way is becoming better aligned.

But we also first quarter saw news that was more disappointing and the inflation numbers in particular, but other data as well, those monthly numbers are really volatile, the volatility is still quite elevated.

And so I do think we have to be patient Collins and her fed colleagues don't expect to lower rates until they gain greater confidence that inflation is moving sustainably toward their 2% target is September too premature to think about cutting rates.

Are we looking at something later in the year?

More like November, December?

I think we're going to have to let the data tell us.

So it seems to me that there are very plausible scenarios um where we um you know, later in the year, it would be appropriate if we see strong continued good news on inflation and an economy that is aligning.

Are you looking at one or two rate cuts at this point?

Given where things are, I could imagine scenarios that would be consistent with both.

I mean, I I think that as I look forward, um my view of how much easing might be appropriate this year has uh been reduced.

As I looked at the data, Collins is also watching for any signs of a slowing economy which would help the argument for lower rates.

The official data indicate the economy may be cooling growth in the first quarter slowed to 1.3% from three point 0.4%.

But on the ground in Lawrence Julie Thurlow, Ceo of Reading Cooper Bank and chair of the American Bankers Association says the economy looks resilient based on demand for loans outside of housing.

I'm optimistic that we that a soft landing is in our future.

We still see demand.

Consumers are still spending, um interest rates are high, but I think it's more of a structural problem that we have as far as housing is concerned.

Collins says she sees a solid economy overall that's showing healthy signs of cooling.

What I see in the statistical data is certainly evidence that the economy is coming into better balance.

There's been some slowing in demand but an economy that's still solid, but it's still quite mixed.

There are differences across sectors, there are differences across regions and what I heard today, it's very consistent with that in the sense of um some firms that are still seeing quite strong demand and others where they are seeing consumers being um you know, a bit more cautious in terms of their spending.

What's the risk that in the quest to gain confidence that inflation is dropping, sustainably back to 2% that you hold rates at current levels so long that you sow the seeds of a recession.

So the risks are absolutely two sided and both sides of our mandate are top of mind for me.

So I do think that there is a risk that if we held too long, we would see more slow down than we need.

And that's something that I watch carefully, you know, II I think that labor markets are still strong.

I think they are not overheated the way that I would have described them earlier.

But continuing to watch what's happened across a range of indicators in that space is also important in terms of the timing that will be appropriate to change the stance.

So the soft landing still in place.

Well, I continue to be that realistic optimist, optimistic that gonna bring that inflation down, but we're going to do it amid a labor market that stays quite healthy and um you know, lots of uncertainty around that.

But I still see that possibility as being very much the path that I believe and hope we're on time now for what to watch next week.

Starting off with the economy.

The latest data on personal consumption expenditures that's also known as P CE the fed's preferred inflation gauge.

It's on Friday morning.

Economists forecast both CO P CE and P and PC overall to decline month over month in May.

Compared to April, moving over to the Federal Reserve itself will be getting another round of commentary throughout the week from fed officials.

This coming after a slew of fed commentary in recent days, Boston fed President Susan Collins telling Yahoo Finance that she sees a scenario in which we could see one or two rate cuts later this year.

And as for earnings, investors can expect to hear quarterly results from names like fedex carnival, Nik Nike General Mills and Blackberry.

Finally on Thursday, President Joe Biden will face off against former President Donald Trump in their first debate for the 2024 presidential race.

That's a wrap on today's asking for a trend to be sure to come back Monday at 4:30 p.m. Eastern for all the latest market moving stories affecting your wallet.

Have a great night and a great weekend.