Closing Bell - Closing Bell Overtime: Dow Jones Notches Another Record Close 8/27/24

Episode Date: August 27, 2024

From the open to the close, “Closing Bell” and “Closing Bell: Overtime” have you covered. From what’s driving market moves to how investors are reacting, Scott Wapner, Jon Fortt, Morgan Brennan and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in business.

That's the end of regulation. Summit Global Investments ringing the closing bell at the New York Stock Exchange and Investopedia doing the honors at the Nasdaq. The major averages range bound today, but plenty of movement under the surface as attention turns to NVIDIA's report tomorrow. Waiting for stocks to settle here. We might have a new record close for the Dow, but it's on the cusp. That's the scorecard on Wall Street, but the action's just getting started. Welcome to Closing Bell Overtime. I'm Morgan Brennan. John Fort is off today. Ahead this hour, reads on retail and tech when we get earnings results from Nordstrom, PVH, Box, Ambarella, and cybersecurity firm Sentinel-1. Plus, we will hear from the CEO of mining giant, the largest miner in the world, BHP, about why he's bullish on a rebound in China's property sector. And we are looking ahead to the main event of the week,

NVIDIA earnings. Those are 24 hours away. They'll be happening right here on Overtime as all of Wall Street awaits to see if Jensen Huang's team can top expectations. But first, let's bring in our market panel, Vital Knowledge founder Adam Crisafulli and Main Street Research CIO James Demert.

Adam, I'm going to you first. I mean, we are we're just swinging back and forth here in this very tight range. It does look like we're getting a new record high for the Dow, though. So what does that tell us about this rotation we have seen in the market as the market becomes more and more confident that September is already in the books for rate cuts and a real pivot is actually afoot here for the Fed? I think you've had three buckets of really favorable news flow for the last several weeks that kind of help propel us back to where we are now. You had Goldilocks data, meaning that you've seen resilient growth plus signs of ongoing disinflation. So, you know, disinflationary growth, which is kind of the ideal scenario

for equities. We've had pretty strong July end earnings. So the initial tech and retailers, so Walmart, Target, Cisco, Palo Alto Networks, all were very strong. And then we had, you know, dovish Fed communications, the most significant of which was Powell's speech on Friday at Jackson Hall, where he was very explicit about them cutting in September. So those three buckets have helped drive us where we are now. And there really doesn't seem to be any change in either of those forces. So the bias remains higher. Stocks are expensive. And that's definitely going to be a risk factor.

But, you know, the fundamental macro forces for the time being are favorable. And, you know, like you said before, we're now in the tail end of the July end earnings season. We have some huge tech names, including NVIDIA tomorrow and Dell on Thursday. That will be very important to watch. James, especially when we do talk about this AI trade and NVIDIA tomorrow, how much does the next move in either direction for the market hinge on that? I think a lot, Morgan, and good to see you. You know, there's no question NVIDIA and all the MAG7 are a big part of the S&P 500.

So the way they go, the way the index goes, as you probably know, we're bullish on the NVIDIA trade for lots of reasons. There's a lot of skepticism more than normal around this print tomorrow. The stock hasn't done anything since June, which we think during that same period of time, there's been a lot of spending, a spending spree by Microsoft, Meta, and so on in this arms race to get more AI. So we think the numbers are going to beat or meet. So that means the stock market does well. And as far as the Fed pivot, that's sort of the last booster, we would say, of this bull market, the beginning of this bull market. It needs the Fed to turn. Now they have. We suggest that they go 25 slow and steady. And the fourth quarter is going to be, I think, very, very productive for investors.

Adam, we've seen some interesting movement in Treasury, specifically the 210 spread. That is moving closer and closer here. It's flirting with de-inversion. Yeah, de-inversion. Inverting? Yeah. And I just want to get your thoughts on that and what it's telling us about the bond market and what that means ultimately for the equity market if you actually start to see some sort of normalization. Yeah, I think it's an encouraging sign. The two-year yield is most sensitive to Fed expectations. So that's been driven lower by, you know, some very aggressive dovish messaging coming out of the Fed. And on the 10-year yield, you know, it's encouraging that it is not collapsing. If it really were collapsing, it would be signaling

a lot of anxiety about the outlook for growth. We had a couple of scares on the data front several weeks ago with the July jobs report, but we've seen more resilient numbers since then. And so it's encouraging from a growth perspective that it's holding relatively steady as two year yields come back, come move lower in response to the Fed. And the curve, like you said, is normalizing, reflective of kind of a healthy economy. You know, and so I think to the extent that continues, it's certainly something to be encouraged about. If 10-year yields really were to collapse, then I think that suggests the market is becoming a lot more concerned about the backdrop for growth.

And then that would be an issue for stocks. Okay. James, I mean, you're still expecting the S&P 500 to reach 6,000 by the end of the year. What drives it? What do you invest in, assuming that move actually happens? Yeah, you know, the nice thing about the next four months, in our view, is that we're going to continue to see this broadening. So we think it's going to be driven, yes, by the AI tech trade. But finally, we're going to get this broadening out. And I think there's a new bull market in financials coming our way and a lot of these other sectors. So this will be the first time that we'll get that broad movement. And, you know, what it's driven by is,

you know, there's five trillion dollars outside the market that should be in it. And we think that FOMO fuel is what we call it is going to really drive equities. And I think investors, you know, on any weakness want to add to their portfolios allocation if they're not already, you know, at that right allocation yet. You know, it could be that the Fed, you know, has a policy misstep and that could cause or maybe maybe they don't go 50 like a lot of people think. I think they were 25. That might cause a bit of a pullback. That would be an invitation, we think, for investors up until that end of the year. Well, we said we were going to get some earnings this hour. We've got our first report. Nordstrom results are out. And Julia Borson has the numbers for us. Julia.

Morgan, Nordstrom earnings beating estimates with an adjusted earnings of 96 cents per share. That's ahead of the 71 cent estimates. Nordstrom's revenue is pretty much in line at $3.89 billion, just under the $3.9 billion estimated. Same store sales increasing 1.9%. That was led by RAC, where same store sales were up 4.1%. And active women's apparel, beauty, and kids are the strongest growth versus 2023. And the company's gross margin improved 1.5 percentage points to 36.6%. And that was helped by strong regular regular price sales. We see all this news driving shares up now trading up about 8 percent in after hours trading. Morgan. Julia, thank you. Well, box earnings are out as well. And Deirdre Bosa has those numbers for us. Heidi. Hey, Morgan, those shares are up nearly 8 percent on a beat on the top and bottom lines.

EPS of 44 cents adjusted versus 40 cents is what the street was expecting. Revenue roughly in line, small beat here though, 270 million versus 269 what the street was looking for. Q3 guidance and full year guidance looking good as well. And that is what is likely boosting the stock right now. Higher than the expected range is also higher than what Box had previously guided. I did get a chance to speak to CEO Aaron Levy. He said that there's lots of interest and excitement around Box's AI offering. He said that the spending environment for IT companies is still relatively stable from the past couple of quarters.

I'll also be speaking again exclusively with him in text tomorrow. Back over to you. All right. We're looking forward to that. Thank you, Deirdre. I'm Going to go back to the panel here. Adam, pick your poison. Do you want to go tech or do you want to go retail? Nordstrom, to me, particularly stands out because we know department stores have not been doing well for quite a number of quarters, and this came in better than expectations. Yeah, I mean, so far, really, on both the retail and the tech front, those two sectors dominate the July end earnings season. It's been a very healthy season, other than May

season, which was quite disappointing. You know, most retailers and most tech firms have put up decent results. I'd have to go through the details on Nordstrom's. It looks like the RAC unit outperformed on revenue, and that's consistent with what we see from TGX and Ross Stores and even what really Target and Walmart have said. You know, the consumer is resilient. They are seeking out, you know, bargain type of merchandise, but they are still spending where they see value. And that would be consistent with kind of strength at their off-price brand rack. But, you know, a continuation of a trend, I think, with the rest of the July end season. But the real test will be the tech names tomorrow and Thursday.

Yeah, strength in kids apparel, too, perhaps speaking to back-to-school season. Ambarella earnings are out, and Pippa Stevens has those numbers for us. Hi, Pippa. Hey, Morgan. The stock is up 19 percent here after a top-and-bottom lead. Bottom beat for Ambarella. The company reported a loss of 13 cents. That was smaller than the expected 19-cent loss. Revenue coming coming in at 63.7 million, also ahead of estimates. But it really seems to be the guidance here that's lifting the stock. They see Q3 revenue between 77 and 81 million. That is well ahead of the 69 million that Wall Street was looking for. The company also said that it achieved record revenue for its Edge AI inference products during the second quarter

and that they're anticipating double-digit sequential growth for their total revenue for the third quarter, and that company-specific drivers are more than offsetting a mixed global economic environment. Those shares up 18%. Morgan? All right. Pippa Stevens, thank you. James, going to get your thoughts on this one,

because we are talking about the AI trade, and this is a precursor to some of these other perhaps high-flying, bigger, higher profile names like NVIDIA, like Dell, like others that we'll get over the next couple of days. Yeah, I'm hoping the rest follow this one. You know, it is interesting that there's a lot of revenue talk on that call, but there's no earnings. I mean, they're losing money. It's not really a position that we would want to take because of that. And relative to any earnings they have, it's a super high earnings or sales multiple. So I like the idea that they've beaten and the street likes it. And there's not a lot of equity there. So it doesn't take much for the stock to move. But yes, let's hope that's a

precursor for what I call a national NVIDIA Day tomorrow and the rest of the sector. All right. On that note, we will leave it there. James Demert and Adam Crisafulli, thanks for kicking off the hour with me. AI darlings, Supermicro and Lumen Technologies were the targets of new short seller reports today from Hindenburg Research and Carisdale Capital, respectively. Let's get to Senior Markets Commentator Mike Santoli for his take. Mike, both of these names have moved because of AI. Yeah, Morgan, it's seemingly coincidental that they both hit on the same day. Or maybe not. Maybe they wanted to get a little attention ahead of NVIDIA's earnings.

Super micro relative to NVIDIA's earnings. Supermicro, relative to NVIDIA, of course, we know it was sort of anointed in a belated way as a hugely levered AI play, kind of packaging together a lot of the AI units from NVIDIA and others. Now, this is a two-year chart. It shows you that NVIDIA and Supermicro have landed in almost exactly the same place. I put it up there, though, to show just how wild the move in Supermicro was. Now, the short selling report from Hindenburg focused on some accounting issues. You know, several several years ago, they had some accounting concerns. And then some of the people who were sort of responsible for it were rehired by the company.

Some related party transactions, revenue from companies that seem to be affiliated with brothers of the CEO of Supermicro. So the stock itself didn't end up down very much today, but that's a swirl of accusation anyway that has gone on Supermicro. You see it already had been cut in half from the highs. Now, Lumen, similar story in the sense it's a big legacy business with a lot of debt that did really kind of try to capture a bit of an AI tint to it. This is a one year chart of all three, NVIDIA, Luminance, Supermicro. You see that massive shot higher and giving some of that back today. And this is mostly about the idea that it's not really that much of an AI play. If you look at the majority of the business kind of eroding, that's what Keresdale is saying anyway. And essentially that they might not be able really to well service the debt load

that they have from the legacy business. So that's the one year move there. You see, there was a real instinct on the market to try and grab hold of derivative plays on the AI trend outside of just NVIDIA, which, of course, is piling up massive profitability. Now, overall, is this a heavily shorted market? Not really. Goldman Sachs tracks this sort of thing. This is the median short interest relative to market cap of S&P 500 companies. It's at about one point eight percent right now. You see it's up off the lows, but sort of nowhere near what you would consider to be this sort of bear market zone when people feel much more comfortable staying short the stock. That would imply there's not that big a short base in this market to be scared out and create, you know, potential upside pressure to stocks as shorts cover, Morgan. I mean, since you took the question out of my mouth, because I was going to ask,

how is this reflective of the broader market here, especially when we do talk about some of these AI infrastructure plays like Supermicro, like Lumen Technologies, names that are known, CEOs who have been on overtime, if you've been watching regularly for a while. And so I just do wonder what that looks like if you look across the broader halo of companies that have caught love because some of these dollars are going their way now. I think if you seek the spotlight on the hot new trend, people are going to notice you. And I think there is an appetite among hedge funds for individual idiosyncratic shorts, not macro shorts, not stuff that says, oh, the economy is falling apart. Let me get short

economically sensitive stocks. It's individual stocks that maybe seem like they got overinflated in the near term. And I have seen some commentary just in the last few days from the prime brokers, the big Wall Street firms that service hedge funds, saying that they are kind of comfortable keeping a short book of those kind of idiosyncratic names as they allow their winners to run on the long side. So, I mean, that's the game that hedge funds tend to play anyway. But it seems like once you have these quick moves higher, someone's going to start to scrutinize and see if it's if it's based on reality. Yeah, makes sense. Mike Santoli, thank you. We'll see you later this hour. After the break, much more on all of today's after hours action and some big moves on the board.

Longtime retail analyst Dana Telsey gives us her first take on results from Nordstrom and PVH. And later, is China's troubled property market on the cusp of a rebound. Well, the CEO of BHP explains why he sees a comeback in the cards. Overtime is back in two. Welcome back to Overtime. Nordstrom shares are popping in overtime after reporting earnings moments ago. PVH also just out with their report. We're going to go through that right now. And in the meantime, let's bring in Dana Telsey, CEO of Telsey Advisory Group. Great to have you here on set. Welcome. Thank you very much for having me. Great to be here. So I think we've got to start with Nordstrom because it looks like pretty much a beat across the board. OK, revenue is in line, but same store

sales up almost one percent and RAC, perhaps not surprisingly, up more than four percent with same store sales. Yep, that's the strength. RAC is the strength. That's where their growth has been. They're opening stores this year at Rack. Take a look at the guidance. They upticked the lower end of the guidance, so moved everything up a little bit. That's encouraging. The anniversary sale, one of the surprising things, home. They called out home as a category that did well in the anniversary sale.

We haven't heard home called out in a long time. Active and Beauty were the callouts. No surprise. That's what's been the call outs for them. The better gross margin. We don't want to hear about the uptick in SG&A because the SG&A did come in a little bit higher than expected and the inventory levels were up. They were down at the end of the first quarter. So we don't want to hear about that up inventory and how they're planning the back half. Okay. So do we look at a name like Nordstrom as a macro telling the consumer or given the fact that department stores for a while now have been secular losers, is the way to think about this report just better than feared? Better than feared. You had the anniversary sale in there. You got a benefit

from the anniversary sale too. And the expectations were low. Okay. And we've got PVH earnings out. Julia Borsten has those numbers for us. Hey, Morgan, PVH earnings beating estimates, $3.01 adjusted versus $2.29 estimated. Revenues of $2.07 billion right in line with estimates. But you see the stock is down about 1.5 percent in after hours trading. And that's because of the company's guidance. Now, the company reaffirmed that they expected a revenue decline of 67 percent versus estimates of a down 6 percent. But when they raise their EPS guidance, they raise the EPS guidance by 55 cents, but they just beat by 72 cents. So that's why the stock is trading lower. A couple more quick comments here. Tommy Hilfiger revenues down 4% in the quarter. Calvin Klein revenues down 1%. And they do see

third quarter EPS at $2.50 versus the estimate of $3.12. Stock is now actually pretty much flat. Back over to you. All right, Julia. Thank you. Dana, we're doing this in real time right now. Want to get your initial reaction to this, especially since it does seem like we have a softer guide here. Yes. Keep in mind, PVH has guided softer as we've gone through the year. Europe is going to be the thing to find out about because that's been where the weakness has been. Want to hear about the European wholesale order book and especially the orders that are going forward. The expectation that the decline in the orders would lessen is going to be what we hear about. And Tommy Hilfiger being down 4%,

that's pretty much not worse than feared. I want to hear about the margins. I want to hear about Europe because that's going to be the key. And don't forget, they're doing a lot of share buybacks also to help support that stock price. But I thought the 90s were back. I thought Tommy Hilfiger and Calvin Klein were hot again. Is that come and gone? I think it is back. Look what they're doing with the wide leg jeans. They're the whole part of that trend. Look what they've been doing about marketing and data. And they've become a digital first company. OK, so how do we take this and read through to other areas of the consumer landscape, the retail landscape, especially as we get more names as the week goes on here, including Lululemon, which I know is very

high profile report here. It's the haves and the have nots. When you think about the world and what we have with earnings, you're absolutely right. People think it's Labor Day week. It's slow. We've got over 20 earnings where the whole bulk of retail is reporting tonight, tomorrow and Thursday. Lulu, Gap and Ulta at the end of the day on Thursday. So I think it's a situation of the haves and the have-nots. We know about value. We've seen Walmart, Target, T.J. Axe & Ross. Burlington's coming on Thursday.

Let's see that. Brands and innovation have momentum. Let's watch Abercrombie and Birkenstock because we know that there's a lot of full-price sales at Birkenstock. And there's a moment that's happening with footwear. It's provided by the new denim trends that are out there. Wide leg loose jeans. You need new footwear in order to be able to go with that. But when you think about also the inventory order trends, everyone's being very careful with inventory. Price and value matter. It was impressive what Nordstrom do. We're going to get more color on that. And their women's apparel

picked up. That was encouraging to see. All right. So the 90s are back. The 90s are back. Although you and I have got to be wearing wide leg jeans. OK, well, I'll get on that. OK. Dana, Chelsea, thank you. Thank you. Well, new housing data shows home prices sitting at their highest level ever, even as mortgage rates remain elevated. Morgan Stanley's housing strategist joins us next with a look at how Fed cuts could change the equation. And NVIDIA earnings are slated to hit the tape right here around this time tomorrow. We will talk about what to expect from perhaps the biggest moment of the summer for Wall Street. Welcome back. New data out on the housing front.

Home prices hit record highs in June, according to the S&P Case-Shiller Index, up 5.4 percent from last year, even as mortgage rates were rising. New York seeing the highest annual gain, up 9 percent in June. Portland, Oregon, seeing the smallest gain. Let's bring in Morgan Stanley's U.S. housing strategist, Jim Egan. Jim, it's great to have you on the show. And that's exactly where I want to start with you, because it wasn't just a year-over-year increase. It was also It was also a month over month increase looking at Case-Shiller, even as mortgage rates, borrowing rates have stayed stickily high. Absolutely. And thank you so much for having me on. I think with a lot of the housing market today, this Case-Shiller number is

also a discussion of absolute level versus direction and rate of change. As you said, we're still talking about record home prices at this point, but the pace of growth, that year over year change, has finally started to slow. We were at 6.5 percent four months ago on that national index. We're at 5.4 months with the data that was released this morning. So we're seeing a little bit of a slowdown there that we think can continue. Okay. So you have a Fed that's on the cusp of beginning a rate-cutting cycle in the next couple of weeks. What does that do to change the equation here, especially when inventory is key? Absolutely. So when we think about what drives our housing forecasts, both sales volumes and the home prices that we're talking about, we like to lean into what we call our four-pillar

framework to make sure that we're digesting all of this housing data through what we think are the appropriate lenses. Those pillars are demand, supply, as you mentioned, affordability, and credit availability. So when we talk about that affordability piece of this, mortgage rates are already down roughly 130 to 140 basis points from the fourth quarter of last year, and the Fed hasn't cut yet. Now, our economists have leaned into the soft landing. They see three 25 basis point cuts to finish out the year, but the market is pricing in those cuts at this point. We don't think the mortgage rate is going to come that much down from where it is right now, but as this improved affordability,

though the absolute level is still very challenged, as this improved affordability makes its way felt more in the market, we think you're going to see a little bit more supply, and that's going to continue to slow down the pace of home price growth. Now, I realize if you go back 15 years, right, like a 6% mortgage, a 7% mortgage, like that was normal. But the fact that it wasn't for the better part of two decades up until recently, the fact that you haven't seen home prices come under more pressure, how unusual is it to be in a tightening cycle, which I know is coming to an end,

but to be in a cycle like this and to not see prices come down? Right. I think when it comes down to it, the housing market right now is in a pretty unique situation. Because we saw record low mortgage rates in 2020 and 2021, a lot of people were able to buy homes at those rates. A lot of people were able to refinance their mortgages at those rates. A term that's been used a lot recently has been the lock-in effect. And as rates have gone up and affordability has deteriorated really in 2022 and 2023, affordability wasn't deteriorating for current homeowners. They had locked in those low rates. And so as affordability deteriorated, current homeowners were reacting to that by simply not listing their homes for sale.

When we talk about Kay Schiller, we're talking about a repeat home sales index. Those homes actually need to transact for prices to come down as affordability deteriorates. Homeowners don't need to sell their homes. Inventories are at historic lows, especially over the course of the past two years. And that lack of transaction volumes, that's what's kept home prices elevated. Got it. Okay. So finally, and looking above and beyond Case-Shiller with PCE inflation report out later this week and and and you know that data is still mattering the shelter price data still mattering here what does all this mean for rent prices as well right so I think you're asking the question about rents that's what really feeds into shelter

inflation on the home price front we think that prices are still going to slow from 5.4 percent this morning to two percent by the end of the year. From a rent and an inflation perspective, our economists believe that you're going to continue to see inflation slow. Slower shelter inflation is going to play a role in that. Shelter inflation has lagged versus rent growth. And when we look at where rent growth is today versus those shelter inflation numbers, there's still a pretty healthy gap with shelter inflation above rent growth. So we do think that shelter inflation has to come down and close that gap versus where spot rent growth is today. Got it. Jim Egan of Morgan Stanley, thanks for joining me.

Thank you very much. Well, time for a CNBC News Update with Kate Rooney. Kate. Hey there, Morgan. Special Counsel Jack Smith just filing a superseding indictment against former President Trump in that federal election interference case. The case was presented to a new grand jury with the same charges, but charged in a way that takes into account the Supreme Court's recent decision expanding presidential immunity. Meanwhile, a Utah mother accused of killing her husband and then later writing a children's book about grief will stand trial.

The Utah state judge ruled at a preliminary hearing that prosecutors had enough evidence against Corey Richens to proceed with that jury trial. Richens faces 11 felony counts for allegedly killing her husband, Eric Richens, with a lethal dose of fentanyl in 2022 at their home. She has been adamant that she is innocent. And a California jury found this afternoon former high-powered attorney Tom Girardi guilty on four counts of wire fraud for allegedly running a 10-year Ponzi scheme and then stealing settlement money from clients. Girardi spent that money on private jets, jewelry, and the career of his estranged wife, Real Housewives of Beverly Hills star Erika Jayne. Back over to you, Morgan. All right. Kate Rooney, thank you. Up next, the surprising gap in consumer confidence. Mike Santoli looks at what's behind the divergence between how Americans feel about the economy now versus how they feel about the future. And as we head to break,

check out shares of Kava taking a break from their furious rally on news of a number of insider sales, including from CEO Brett Shulman. Shares finished down 6 percent. We'll be right back. Welcome back. Let's get a check on Nordstrom and PVH. Those companies just reporting moments ago. And you can see shares of Nordstrom are up 8 percent. PVH is up or down, I should say, almost 6 percent. This morning, we also got data showing consumer confidence improved this month, according to the Consumer Conference Board's new survey, she said. Let's bring back Mike Santoli for more. Mike, what is all of this data telling us now about the consumer? Well, Morgan, the conference board asked a couple of

different things of consumers. One is how are things right now? How does the economic conditions seem at the moment? And then also, what are your expectations for how the economy and your own finances will look several months out? This is the gap between expectations and the present situation as assessed by consumers going all the way back to 1970 or so. I wanted to show the pattern here, which is when expectations start to go up relative to what people say the present situation is, it has coincided with recessions. That's the shaded areas are recessions. Now, why is that? It's because people say the present situation is collapsing

much faster than they say expectations are going down. When the economy's doing well, they say, yeah, things are fine, but I can't imagine they'll stay fine. When the economy's bad, they say things are bad, but they'll probably get better because the pendulum swings. So that little uptick at the end of the chart suggests, who knows, maybe we're late cycle and maybe we have to brace for a downturn. However, take a look at the actual breakdown over the recent years of present situation versus expectations. So what you see here is pretty much in a range for present

situation and for expectations. But you see an uptick in expected conditions. That's actually different than what usually happens before a recession. So yet another way that it's just not really conforming to the way we would normally expect something like this to happen at this point in the cycle. And you see here before the global financial crisis, how fast the present situation answer went down south, as did expectations along with it, just not as much. Yeah, it's really fascinating to me. I'm just curious why. I mean, do we have any sort of sense of why this continues? I mean, everything about this economic cycle has been bucking the trend, but why this particular piece of it where consumers are concerned is bucking the trend as

well? Is it just because they know that the Fed is getting ready to cut and maybe 2025 looks better because we're through the worst of it with inflation? Is it something else? Do we know? Yeah, it's very difficult to pinpoint, but I would say those things perhaps are in the mix. The idea that the Fed might cut rates, the fact that the stock market had been relatively strong. Who knows? Maybe there's even a political component here. People looking ahead to whatever election outcome they're handicapping. What it's not is people are not saying their own finances are looking up and they're not saying the job market's getting better because both those components actually softened up in the latest report. So it's not all good news. It just nets out to status quo. Got it. All right. Well, Mike Santoli,

thank you. Yeah. Charles Schwab out with a new survey of trader sentiment showing investors the most bullish right now than any time in the last two years. The firm's head of trading and derivatives joins us with a closer look at the results, including the parts of the market that traders are most excited about. Stay with us. We have breaking news on the NFL. Owners have just voted to approve a rule allowing a portion of NFL franchises to be sold to private equity firms. Mike Ozanian joins me now to discuss. Mike, we had been expecting that this would be the outcome here. So what does this now enable for investors? What does it enable for team owners? What does it enable for the NFL more broadly?

Well, private equity firms, Morgan, have been dying to get into the NFL for years, just like they invest in Major League Baseball, the NBA, hockey, and Major League Soccer. The NFL is very picky along these lines. It really vetted these private equity firms. And what this means for the league is, number one, when a team is sold, it's going to be much easier for the buyer to finance the limited partnership share of the sale process. Number two, I think some NFL owners are going to use money from private equity firms to invest in their stadiums, whether it be adding luxury suites, renovating the seats,

putting in more hospitality. That's really important in the NFL, Morgan, because unlike, say, ticket money, the NFL owners don't share money from suites and corporate sponsorships. That's really fascinating. I also wonder what it does to, and I know you're the king of sports valuations here, so what this is going to do to valuations in the NFL, because we've already seen them really across professional sports, move to sky high places. And part of that has to be supported, I would think, by institutional money coming in. Yeah, I mean, the Commanders last year sold for six billion dollars. Two years before that, a year before that, excuse me, the Broncos sold for four point six five billion. What it's going to mean is prices are going to continue to go up because right now, if you were to buy the typical NFL team, the general partner, he would only buy about 30 percent to 35 percent of the team.

The rest would come from limited partners. Where's that money coming from? He's going to have to raise like three point two billion dollars based on the way this arrangement with the NFL is being structured. These four groups of private equity investors are going to be able to each invest in six teams. So figure five hundred million per team on average. That's going to really make the funding easier and make prices of NFL teams go even higher. Wow. Mike Ozanian, thank you. Thank you, Morgan. Good to have you on Overtime. Well, news also just crossing on Elf Beauty. The company announcing a new buyback program for $500 million worth of shares. The company's CEO saying in the

release, quote, the share repurchase authorization reflects confidence in our strategy and the long term potential we see for Elf Beauty. Shares have been under heavy pressure since earnings earlier this month. I actually spoke to the CEO on the heels of that. But getting a lift here right now in overtime, up 2.5%. Meantime, the Dow notching a record close today, and traders hopeful about gains ahead with fresh data showing sentiment at its most bullish in two years, as according to a new survey from Charles Schwab. Joining us now is Joe Mazzola, Charles Schwab, head trading and derivatives strategy. It's good to have you on. I want to start right there because we do have and I realize just barely, but we did eke out a fresh record

for the Dow here. Investor sentiment does seem to be strong. Your survey results. What is driving the strong sentiment and should we see it as a contra indicator? Well, you know, I think what Mike Santoli was talking about a couple of segments ago made a lot of sense, right? This idea that there's a wealth effect that's building right now. And I think traders feel good when they see the markets go up. But they're also seeing that that that rise kind of spread out amongst other sectors. I think that's important. I think the whole concentration risk that we saw kind of leading the market higher for

the first six months of the year has started to spread out a little bit. We got that dip at the beginning of August, where we saw that pullback from the deleveraging of a lot of the AI and tech companies. And you've seen some of that money rotate into other sectors. And when you start to see stuff like that, you actually see trader sentiment start to pick up a bit. Okay. So what does that mean in terms of the results of your survey and where traders are putting money to work across sectors? Yeah. So, you know, still I think that traders are looking to kind of buy the dip that they saw in that August pullback. A lot of that has moved into the tech and AI space.

But if you look at where some of the other gains have been, we've seen it in health services. We've seen it in materials. We've seen other sectors do utilities and real estate do well also. And like I said, I think the key to that is just, you know, looking for other opportunities where there might be some underpriced valuations and looking for opportunities where you see earnings growth. And I think that's critical because if you look at the earnings that we saw in Q2, yeah, the expectations for sectors outside of tech and communication services is that you're going to start to see more of a pickup, a double-digit earnings growth in those other sectors. Speaking of tech, I'm going to ask about the positioning you're seeing in the marketplace ahead of NVIDIA earnings tomorrow. Well, you know,

they continue to buy. It's one of our clients' top holdings. It's something that, you know, when you do get the dip, pull back the 9090. We saw a lot of buying in the days that kind of led up to that August 5th and then the days that followed that. So, you know, that continues to kind of move. Expectations are that you're going to see anywhere between maybe a 10 or 11 percent up or down move based upon what the options market's pricing right now. And if there's anything, I would say it's bullish sentiment from our clients at this point. Okay. Joe Mazzola, thanks for joining me. Thank you. Up next, the CEO of BHP, fresh off earnings on why China's beaten down property sector could be on the brink of a major rebound. Welcome back. The world's largest miner, BHP, reporting a 2% rise in annual underlying

profit. Under CEO Mike Henry, the company has been betting big on copper through acquisitions like Oz Minerals and investments into new markets like, just recently, Argentina. That, as BHP's biggest revenue generator, iron ore, has seen prices fall this year as China's economic growth slows and supply rises. Now, I spoke with Henry directly following those earnings last night, and I asked him why he continues to be so bullish on copper. World's population continues to grow as we see ongoing urbanization around the world, the decarbonization thematic being overlaid on that. All of those are going to be copper intensive.

So we're expecting 70% growth in copper demand between now and 2050. But at the same time, copper resources are becoming harder to find and harder to develop. So supply-side constraints against the backdrop of strongly growing production. And we're a large incumbent producer of copper. So we think long-term supply-demand fundamentals for copper are robust, and BHP has all the capabilities that are needed to bring more copper supply to market to capitalize on that opportunity. You do also publish an economic and commodity outlook as well, so I would be remiss if I didn't ask you about China specifically as such a big producer and consumer of industrial metals

and materials, hearing about a harsh winter from some of the steelmakers in China. And also more broadly, what you're seeing across the globe right now is everybody's trying to get their arms around the economic outlook. In China, we're seeing uneven growth. And I know that the property sector, because of its impact on steel and iron ore, gets a lot of focus, at least in respect of our sector. But it only makes up about 20% of steel demand. And there's a lot of other sectors in China that contribute to steel demand that are growing quite healthy and that includes infrastructure, shipping, automobiles and so on. Now the weak point is property where we've seen both sales

and new starts running at levels substantially below where they were historically. Having said that, the government has enacted policies recently that are meant to support the property sector, and that includes a government program to acquire some of the excess inventory, and secondly, relaxation of some of the constraints on purchasing in China. So we expect that we could see a turnaround in the property sector in the year ahead. Well, this was Henry's first interview since embarking on and ultimately walking away from a six-week courtship by BHP to acquire rival Anglo American in a $49 billion deal

that was driven in large part by its copper assets. Now, given the six-month wait period, I asked him if he would still be interested in that company. I was really clear at the time of the proposed acquisition that we thought that there was value to be created for both sets of shareholders, but it wasn't plan A for BHP. Plan A was to do everything that you see us talking about in this set of results, which is to unlock even more from our underlying resources. And we have the largest copper resources of any company in the world.

So we wanted to unlock more through organic growth. of course in the intervening period we've we've announced the uh philocorp acquisition as i mentioned earlier alongside lundin mining which gives us even further growth optionality in the existing portfolio so they're off pursuing their plan and we're sticking with plan a for bhp and you see that being reflected in the results announcement of today so shares of bhp finishing today slightly higher, up fractionally, and actually right now up half a percent in after-hours trading. Well, the countdown to NVIDIA earnings is on, with less than 24 hours to go until one of the most consequential moments for Wall Street this summer. An analyst joins us with his expectations for the quarter. That's next. Welcome back. Brace yourself for a huge show tomorrow. NVIDIA is set to report earnings in less than 24 hours right here on

Overtime. We will break those results for you and get instant expert reaction. But first, let's get you set up for those earnings with our next guest, Harsh Kumar of Piper Sandler. Harsh, it's good to have you on. What are you looking for tomorrow, especially since it seems like everyone is expecting a beat and raise at this point? Yeah, thank you, Morgan, for having me on your show. So the report tomorrow, it's going to be the big one. Historically, NVIDIA has been on a $2 billion beat and raise cadence. So let me explain that. They beat the actual quarter by $2 billion, and then they raised the guide by about $2 billion. But I think for the July quarter, the beat could be larger.

If you recall, in the April quarter, they were short some networking chips. Those chips were now procured in the July quarter and sold. So the beat could be greater than $2 billion for the July quarter. But for the all-important guide, we are expecting strong trends for the Hopper 100 and the 200. The Blackwell ship, the new architecture comes out in October, so it'll have a partial impact to the quarter. But we have heard stories that the Blackwell might possibly be delayed a bit. And if that's the case, the guide could be slightly short of $2 billion. But we're not worried because the customers literally have no other option. They will queue up and line up with bigger backlog

onto NVIDIA. And I think NVIDIA is the best position from a rack performance angle. So we're not worried as long as the backlog keeps rising, the business will just shift by a quarter. Okay. So with Blackwell, do you think that's already priced into the market, the expectations? Because there's been so many media reports that it could shift. And even if it does, it's shifting timeline, but not shifting because of fundamental issues or flaws or delays to the design? Yeah. So that's a good point. So Blackwell is supremely, I mean, powerful as far as the performance comes. Like I said, the closest competitor is AMD, and they don't have anywhere close to the performance and probably won for another year or so. So when the stories first came out, you saw the stock make its way back up as people realize,

hey, there's literally no other alternative that the business will simply get shifted as opposed to get lost. Okay. So clearly you have a buy rating on this name. Yes. Buy on a pullback, buy regardless? I think buy regardless. This is one of those unique companies that I think will continue to see strong tailwinds from the data center place for the next several years. And we're not seeing anything on the horizon that bothers us. You've got the black hole coming out. Then pretty soon after that, you'll have the grace black hole coming out. What Jensen likes to call the super chip.

So based on the heels of that, we're expecting strong trends well into next year. I think at last count, they were sold out till the midpoint of next year. And I think with this particular earnings, that sold out situation could be pushed out a little bit more. Okay, Harsh, thanks for joining me as we do monitor NVIDIA

and get ready for those earnings tomorrow. And of course, they're not going to be the only earnings that we're getting in overtime either. We get CrowdStrike, which will be key, and we also get Salesforce and quite a number of others. In the meantime, the Dow did manage to eke out a new record close. The S&P and the Nasdaq also finished higher, but the Russell 2000 took a breather today, as did the transports. That does it for us here at Overtime.