Closing Bell - Closing Bell Overtime: Getting Ready For Big Tech Earnings; Bitcoin Price Levels To Watch 7/29/24

Episode Date: July 29, 2024

Four of the Magnificent 7 report this week and we have you covered with what to watch when the earnings come out. T. Rowe Price’s Dom Rizzo, who manages the Global Technology Fund, on what he’s expecting and which tech stocks he likes the most heading into the pivotal week. F5 Networks CEO on strong earnings, deal pipeline. Rockefeller International Chairman Ruchir Sharma on how the 2024 presidential candidates are positioned for deregulation. Plus, Renaissance Macro’s Jeff DeGraaf on what levels to watch in bitcoin and Altana CEO Evan Smith talks hitting unicorn status. 

The bell knocks the end of regulation. Lennox ringing the closing bell at the New York Stock Exchange. KBW doing the honors at the NASDAQ. And the major average is next. Dow's lower because of 3M and Caterpillar. Small caps pulling back about a percent as we kick off one of the most consequential weeks of the summer for investors. That's the scorecard on Wall Street. But winners stay late.

Welcome to Closing Bell Overtime. I'm John Fort with Morgan Brennan. Well, a massive week of after-hours earnings gets underway this hour when Lattice Semiconductor, Chesapeake Energy, and F5 Networks report results. And we will bring you all those numbers and an interview with the CEO of F5 before he talks to analysts on the street. Plus, we will get you the setup, or get set up for MAG7 earnings this week when we talk to T. Rowe Price Technology Portfolio Manager Dom Rizzo. And NVIDIA CEO Jensen Huang

speaking this hour at the SIGGRAPH conference in Denver. We're going to bring you any headlines there as we get them. First, though, stocks struggling for direction today. The Russell 2000 notable move lower more than a percent ahead of a busy week of earnings and the Fed decision. Let's bring in our market panel. Truist Wealth Co-CIO Keith Lerner and Kestra Investment Management CIO Kara Murphy. Welcome to both of you. Keith, what do you make of this? I mean, how do you feel the earnings this week might set us up to know what to expect from

here? Yeah, well, great. Great to be with you. It is a crucial week. I mean, not only earnings, we got the FOMC meeting and then we got the payroll report at the end of the week. So it is a crucial week. And also talk about big cap tech. We got four of the mag seven. Now, what's interesting right now, we downgraded technology at the end of June, thinking it got stretched too far. And that's why last week when we had some earnings, they weren't that bad, but expectations are too high. We've reset expectations a bit going into this. We've seen some of the MAG stocks that are reporting this week down about 10%. So I think more likely, we'll likely get some type of bounce.

But Jonathan, I also think that more likely that we will see people sell into that bounce because of what just happened the last two weeks. They were caught off sides. So any bounce that we see, I think we're going to see some selling into it on a short-term basis, even though I still think tech is a good place longer term.

Just short-term, we're not ready to upgrade it as of yet. I do want to mention Lattice E, Chesapeake earnings, both out. Lattice is down. Initial move quite a bit, about 8% at the moment. Chesapeake also lower by about 2%, which doesn't look so bad by comparison. Kara, how much are interest rates yields affecting what we see happening in stocks? I think that's a huge part of the whole story. Over the last 18 months, we have names like the MAG7 that have done incredibly well. And that's in an environment where growth has been a little bit more starved.

There's been more concern with higher interest rates, but it's also been driven by really strong earnings, which is part of the reason why this week is so important as we hear more about earnings. But going forward, as you look to some of the names that have lagged over the last 18 months, these are names that tend to be more highly levered, that have not yet seen the uptick in growth. So with a little kicker from the Fed, a little bit lower interest rates, that starts to really change the earnings trajectory and combine that with an environment where you have smaller names, value names that are at historic differentials in terms of valuations relative to some of the winners in the market. I think that really sets up for a longer term trend where some of the names that didn't do well over the last 18 months can do well in the future. OK, we've got Sprouts earnings out as well. So we're going through all these reports, all these reports as we get them.

We'll bring you those headlines momentarily. You can see shares of Sprouts are popping. In the meantime, Keith, the fact that you downgraded tech, you're not ready to upgrade again. What would it take, A? And B, what do you like right now then? Yeah, no, it's a fair question. You know, what we're thinking as a base case is probably just some time, time to digest. When we downgraded tech at the end of June, the two-month outperformance of the S&P was the greatest since 2002. So the rubber band got too stretched. We've seen that rubber band come back in. So we just want to see earnings reconfirm the trend.

We look at relative price momentum as well. And I just think it's a little bit of time. I think later in the fall, I think money will come back in here because I think it is still the secular story. I mean, in the interim, we have been thinking that the small cap trade and the equal weight has longer to go because just like tech was stretched this way, the broadband was stretched the other way for small caps and equal weight. And the momentum that we've seen more recently is historic. Typically, we see more gains. But I think that's more of a maybe one to three month story before we rotate back into tech later this year.

OK, well, we've got a lot of semi earnings out. Contessa Brewer has the results for us. Contessa, we've got a miss here on the top and bottom lines here, guys. It looks like we have earnings per share coming in at twenty three cents when the street was expecting twenty four cents adjusted revenues missing at one hundred twenty four million. Again, consensus was one130 million. But what is really troubling here is the third quarter revenue guidance, where the street was expecting $142.5 million. Lattice Semiconductor has come back in and said that they are expecting a range of $117 million to $137 million. Basically, they say, look, there's been some cyclical industry headwinds, but they are starting to see some signs of improvement right down. Right now, you're already seeing that stock dropping almost 7 percent in after hours trading, Morgan. All right. Contessa, thank you. We've got more earnings. John has them.

Yeah. F5 networks just crossing. F5 reporting a fiscal Q3 that beat lowered expectations on the top and bottom lines, guiding to a Q4 above consensus on the top and bottom as well. You see it's up 10%. Q3 revenue came in at $695 million versus $686 expected. And non-gap EPS came in at $3.36 versus $2.97 expected. And for Q4, F5 guiding to revenue in a range of $2.70, sorry, $7.20, that's very important, $720 million to $740 million versus $7.18 expected. Earnings per share, they're guiding to $ dollars, thirty eight cents to three dollars,

fifty cents, both of those higher than the streets expected. Three dollars, thirty four cents. I did speak with F5 CEO Francois Locodonu about the quarter and keep it here with overtime to get the color on this quarter before the analysts call. And it certainly seems like it was a strong quarter. Chesapeake Energy earnings are out as well. Let's find out about that quarter. Pippa Stevens has the numbers. Hey, Morgan. Well, Chesapeake reporting a one cent adjusted loss, which was slightly bigger loss than analysts were looking for. Revenue, though, a pretty big miss here, $505 million, well below the $787 million that analysts were looking for. Now, no updates on that acquisition of Southwestern

and when that might close. And the company did also say that given continued weak market dynamics, they are executing a previously disclosed plan to defer completions as well as other cost-cutting measures. The stock marginally higher here. Morgan? Yeah, and of course, we know supply has been a big area of focus over supply, arguably, with everything in storage for natural gas producers like Chesapeake. Pippa, thank you. Cara, I'm going to go to you because this morning we get McDonald's, we get On Semiconductor, both of those names putting disappointing numbers out there, but not as bad as feared. And so when you see the results we got here, which were mixed depending on which name we're talking about, how does this set us up for the rest of earnings?

Because it seems like the bar is very high for some names, for example, MegaCapTech, but much lower for others, like perhaps McDonald's, where the commentary about the value meals really propelled the stock higher today. I think those are really great examples of a trend that we've been seeing over the last couple of weeks in this earnings season, in that when a company does better than expected, the stock performs well. When a company misses, the stock performs poorly. That's a sign of a pretty healthy, pretty neutrally positioned market. But what's really interesting is that as we dig in a little bit more, if you get outside of those mega cap names, what you find is that smaller cap names are being rewarded more when they beat and they're being hurt less. So again, that's telling us that

expectations in general in the smaller end of the market, and you don't have to go all the way to small cap, you could just need to go outside of the mega cap. Those lower expectations provide a little bit more room for earnings with positive momentum to be rewarded in the market. Interesting. Keith, part of the commentary here around the likes of F5 is just more stability, more certainty around business demand. Do you see other implications there? Well, I think in general, when we think about tech, I mean, it is disparate. But I will say, long term, the reason why we're still positive on tech and looking for an opportunity to eventually upgrade is the underlying earning trends are still strong. We have not seen any really slowdown in the aggregate as far as the relative earnings momentum for that sector relative to the overall market is still strong.

And I think even if the economy slows down somewhat, which we still think is likely to happen, companies will still have to invest in technology, otherwise be left behind. So I think we will likely see somewhat of a slowdown, but I think tech is going to hold up better in that environment as far as tech spend relative to the broader economy. Cara, I want to get your thoughts on fixed income here and what we've seen in the bond market, how we're positioned not only going to a big week for not only a Fed decision, but a number of central bank decisions. But also just earlier today, we got the Treasury's quarterly refunding announcement. The borrowing estimate for the quarter that's come down.

That was expected. But year end cash balance of 700 billion dollars. It's going to put in focus again sort of the health of the U.S. economy, debt limits, how much how much the deficit has grown and where we go from here in 2025 and beyond? I think there's been so much focus on the short end of the curve. We know that the Fed is likely to start cutting interest rates soon, that there's almost been too much focus there and not enough on the long end of the curve. So lately, we've been lucky. Long-term interest rates have been declining. But as you suggested, there's still a lot of debt to be issued, even if it's a little bit less than what the Treasury had forecast. Cash balances are going to be lower by the end of the year. We have a presidential election coming. We have very little flexibility

in being able to reduce spending and therefore reduce borrowing. this is a very big intractable issue that is not going to go away. So if anything, especially if the economy continues to hang in there with lower short-term interest rates, I would expect a steeper yield curve and part of that coming with at least as high long-term interest rates from here. Okay. Carol Murphy and Keith Lerner, thanks for kicking off the hour with us with a mixed picture for the major averages and what's going to be a big week full of macro data and earnings. Well, Sprouts Farmers market earnings are out and PIPA has that for us as well. Hey, Morgan, the stock bouncing 9% here after a top and bottom line beat for Q2. EPS coming in at 94 cents. That was 16 cents ahead

of estimates. Revenue at 1.89, also ahead of the 1.83 analysts were looking for. Now, in terms of Q3 EPS guide, they see 71 to 75 cents ahead of the 69 cents that Wall Street was looking for. And their full year EPS guide also came in ahead of estimates. You see there now the stock up 9 percent. Morgan. All right. Pippa Stevens, thank you. After the break, T. Rose Tech Portfolio Manager gets you set up for a momentous three-day stretch of earnings featuring Microsoft, Meta, Apple, Amazon, and others. Big, yeah. Plus, much more on today's After Hours action, including a conversation with the CEO of F5 Networks ahead of that company's call with Wall Street analysts with that stock up more than 15%. Over time, we will be right back. Welcome back to Overtime.

We have a pivotal week of earnings ahead in tech, with Microsoft and AMD reporting after the bell tomorrow, Meta reporting Wednesday, both Apple and Amazon after the close on Thursday. You can catch all those results on Overtime. But in the meantime, joining us now is T. Rowe Price Portfolio Manager, Don Rizzo. He manages the Global Technology Fund, which holds Apple, Microsoft, Amazon, among many other tech names. Don, it's great to have you back on. It's almost like where to start here. There's going to be so much for us to dig into.

And so I think the place I do want to start is that according to Morgan Stanley last week, it was the largest selling period in semi since 2022. Investors are now most underweight mag seven relatives to the market since 2016. Given those statistics, has the bar come down for the mag seven names that we're going to hear from this week? I do think the bar has come down, Morgan. It's a great observation. If we look at the numbers, you know, a few weeks ago, the Qs were up 20% year-to-date and the IWM was flat. Now we're kind of looking at them roughly at parity, right?

Big tech overall has corrected 15%. So we've seen a pretty substantial pullback. And if we think about that pullback, there's a couple reasons why. Number one, people are looking for broadening out of earnings growth beyond the MAG-7. This quarter, the MAG-7 is expected to be 50% of the earnings growth for the S&P 500. If you look at the estimates into 2025, that number comes down to 10%. Now, the question is, is that right or not? My gut is that the tech earnings are going to come in better than people

expect. OK, so Microsoft tomorrow, AI investment translating into monetization. This is a key trend. We saw this playing out in the digestion of results from Alphabet and Tesla last week. How are we set up with Microsoft and beyond? Well, the big question is, is all this CapEx spending on Gen AI going to return any return on investment? And I think it's kind of not exactly the right way to frame it, because if we look at the core businesses of, say, a Google, that performance max is really accelerating the Google revenue growth. And that's why we've seen Search put up a low to mid-teens growth number. If we look across software, we've actually seen really strong software numbers this quarter. SAP, current cloud backlog, up 28% year-over-year. ServiceNow, seeing their CRPO grow 23% year-over-year.

So when I look at Microsoft and the setup on the Azure growth rates, I'm feeling pretty positive. Dom, I'm most curious of these names probably about Meta because more than the other, it's done nothing stock-wise for six months, since the beginning of February. And all they have to do, it seems like, is announce some further cost discipline. And it would probably excite some people. I don't know whether they're going to do that or not.

But it was the YouTube piece of Alphabet's business that was really the disappointment. And I don't know that that aligns to Meta as well as the other part of Google's business that did better. What do you think? I think the way you're thinking about it is right, John. The number one use case for generative AI today and parallel-based compute is improving the ad tech stack, right? And that's why we saw strong numbers at a search. Like you said, YouTube was a little weak. And the question is, what's meta going to do going forward? My gut is this meta earning season is a little tougher just because we have really tough comps into the back half of the year. So we're going to have some very

natural deceleration. But if you look out six to 12 months, maybe that will reverse. The other thing that you have to deal with meta, and I'm sure we're going to talk about NVIDIA, is what does the capital intensity look like going forward? My gut is CapEx keeps creeping up for all these guys, and that's going to be a tough setup for something like a meta. Well, what about the likes of an Amazon then? I'm going to avoid NVIDIA for the moment because Amazon's trying to make the case. We got Trinium, we got Inferentia.

We're going to be efficient with our hardware that moves toward AI. Are they more affected by the overall consumer trends and perhaps benefiting from people wanting deals? Or are they more affected by the overall trajectory and momentum of their cloud business and how much they need to spend on infrastructure to keep that going? Yeah, I think there are two things that matter for Amazon going forward. And the first is the AWS growth rate. Are we going to see sequential acceleration in that AWS growth rate? And so far, the main data point that we've had on this this quarter has

been the Google numbers, right? GCP saw Google growth rates in the cloud go from 28% last quarter to 29% this quarter. Now, with AWS, my gut is we see continuous sequential acceleration. The other thing that matters are do we see continued operating margin expansion on the core e-commerce business? And my gut is yes. We have the ads flowing nicely. I think Prime Day went well. And if you put that all together, we should have nice operating margin expansion for the company. All right. Well, we look forward to opening up those results here on Overtime and seeing what we get. Dom Rizzo, thank you from T. Rowe. Well, Tilway earnings are out. Contessa Brewer has those numbers now. Contessa.zo, thank you from T. Rowe. Well, Tilway earnings are out. Contessa Brewer has those numbers now.

Contessa. Okay, let's get to the numbers right off the top here. We're seeing the EPS was a loss or it was a loss per share of 4 cents where the street was expecting a loss of 2 cents per share. Revenue is coming in slightly higher though at $230 million. We're not really comparing it to the consensus here

because it was rather thin on coverage. But I'm looking at estimates of $227 million. Here's the thing. The net revenues jumped 26 percent year on year. Pretty good, right? 36 percent is the gross margin. But when you look at beverage alcohol, they are seeing incredible growth in this particular segment. We're seeing the gross profits up 146 percent year on year and the net revenues in this particular segment up 137 percent. Gross margins on beverage alcohol, 53 percent. So, John, you're seeing the share price here up almost 12 percent on this earnings report despite the earnings miss. All right. The stock getting higher appropriately.

Contessa, thank you. Still ahead, the CEO of F5 Networks on today's quarterly results before he talks to analysts on the earnings call as that stock heads higher. Again, more than 15 percent in overtime. Plus, Rockefeller's Rasheer Sharma joins us to talk about his new op-ed today. on the earnings call as that stock heads higher, again, more than 15 percent in overtime. Plus, Rockefeller's Rashir Sharma joins us to talk about his new op-ed today centered on why the business community should be paying close attention to how the 2024 presidential candidates talk about cutting red tape. Welcome back to Overtime. Shares of enterprise software company F5 up about 15% after a strong earnings report. I spoke with CEO Francois Locodonu about the beat and raise quarter.

It comes after the company lowered expectations three months ago, but managed to just about hit the top line number the street had originally been hoping for. What we're seeing is customers that had been reluctant to spend for the last several quarters, in part because of the macro environment, we're seeing them starting to spend again, in part because they see a little more certainty. But if you pull way up from there

and you look at what's happening in the world of enterprise IT, generally, enterprises are in a significant crisis as it relates to what they need to do to deliver their digital experiences. I also asked about the deal pipeline, given the confident guide, and we'll have to wait until October to get F5 guidance for the next fiscal year. But Locodono told me the pace of customer commitments is steadier than it had been. Our pipeline looks pretty strong, John, and it has really looked strong all year. But what we're seeing today is we're seeing better close rates. And we're seeing better close rates on that pipeline largely because customers have a little more certainty in their projects. It's more predictable. And therefore, the projects that perhaps in the last couple of years, they would have

struggled to really start and get going on, they are actually undertaking these projects. F5 is application delivery. There's some security in there. There's some hybrid cloud, but really the guts of enterprise software. So those close rates improving. Yes, it's a $10 billion or so, $11 billion market cap. But I wonder what this says about the AWS, you know, sort of ecosystem, because there is some read there. That's actually exactly where I was going to go to, is how this sets us up for more cloud earnings this week. Not to mention the fact that we know AI is a part of the conversation

around enterprise software more broadly, and I would suspect that there's thoughts there, too, for F5. Some other names like Informatica to pay attention to when we're thinking about hybrid cloud and just those nuts and bolts, some of these names that are traditionally more hardware infrastructure players that have become more software and services players. But the overall steady nature of enterprise software is worth noting here. Just even though the broader macro economy is kind of

uncertain, it feels a lot more certain to them than it did a year and a half ago. Yeah, which is certainly a headline. You could see it with the stock moving higher. All right. Well, it's time now for a CNBC News update with Bertha Coombs. Bertha. Hey, Morgan. Some Venezuelans took to the streets in Caracas to protest President Nicolas Maduro's claim that he won the country's election. Residents of some neighborhoods banged on pots and waved the Venezuelan flag in a show of support of the peaceful protest against Maduro. The National Electoral Council, which is loyal to Maduro's party, formally announced his victory of a third six-year term as president. The U.S. Department of Energy finalized a deal to buy 4.65 million barrels of crude oil

for the Strategic Petroleum Reserve. The purchase is the latest contract to refill reserves after the White House released 180 million barrels two years ago in an effort to bring down gas prices. And SpaceX is in talks to land and recover its Starship rocket off the coast of Australia, a potential first step in the company's effort to expand its presence in the region. Sources tell Reuters the plan would require the U.S. to loosen its export controls on space technology for Australia. The Biden administration has already looked to ease similar restrictions within a secure alliance with the U.S., Australia and the U.K.

aimed to counter China. Are you going to Australia for that, Morgan? Editors, take note. It would make sense, though, this would be a logical next step, given the fact that we have seen some of those regulations come off around the alliance with Australia as well. One to watch. Bertha Coombs, thank you. When we come back, Rockefeller International's Rashir Sharma breaks down one key business issue to consider in the presidential election and his latest thinking on the Fed ahead of Wednesday's interest rate decision. And check out McDonald's as we head to the break. The top performer in the Dow today, that's despite earnings and revenue that missed estimates. Though management was optimistic on the call about the company's $5 value meal. We'll be right back.

Investor value meal. Welcome back to Overtime. Rockefeller's Rashir Sharma out with a new op-ed in the Financial Times today. Quote, is Trump the king of deregulation? Looking at a key issue that could matter for business owners in the 2024 election. Joining us now to discuss is Rashir Sharma. He is also the author of the new book, What Went Wrong with Capitalism. Rashir, it's great to have you back on the show. Let's start right there. You dug into the data. What did you find? Yeah. So I think that this is one of the very key issues currently bogging down capitalism, which is that the regulatory state, which is the way it's grown in the last two or three decades, that America has been adding roughly 3,000 new regulations a year. And the total

number of regulations that it's withdrawn over the last 20 years is 20 in total. So what I did hear was that Trump is basing his campaign a lot on being the king of deregulation in a way, to look at the data. And the data said, yes, that under him, the cost of businesses in terms of new regulations did come down quite significantly, and especially compared to the Biden administration, where the costs have gone up incredibly at new records. Under Trump in his first term, the cost did come down, but it was nowhere as close to what he claims, because he's still implemented lots of regulations. So I think that what America needs today is a much greater streamlining of the regulatory process,

or we are all in a way dying a death by a thousand paper cuts, as someone put it. I mean, it's a key point. And I think I think one of the things that former President Trump has been competing on and has talked about is shrinking government, which is perhaps even more salient on a day where we have the U.S. national debt hitting thirty five trillion dollars. It really speaks to how much we're spending and how much government activity is out there, I guess, in the economy. So how does this how does this continue to evolve? Do we know yet what Vice President Harris, what her campaign would be around this? Or is the expectation that maybe it's going to be very similar to what we've seen with current President Biden? Yeah, she hasn't said much on economic issues. So I think that the default assumption has to be that's going to be a continuation of what President Biden has done.

And the two issues I have with that under the Biden administration, one is the regulatory state, that the regulations exploded under Biden like no precedent before. And also that one of the big legacies of the Biden administration, as you point out, is that hardly any president in history has taken on so much debt to produce this kind of growth. So I know there's been a lot of talk that economic growth has been quite decent under President Biden, which is a fact. But if you look under the hood, the amount of debt that has been piled on on the public debt side to generate that growth is nearly unprecedented, especially outside of a recession or a depression or a war. We have never seen such an accumulation of debt as a share of GDP virtually, as we have seen under President Biden. And that is something which does concern me, both for the future and as I've argued in the book as well,

that the last 30 to 40 years, the single biggest reason why productivity growth in America has been declining are the suite of government habits, whether it's debt or it's the increase in regulation. So someone who tackles that will really be tackling a core issue that's been bogging down the American economy over the last few decades, which is declining productivity growth. Well, can we really tackle the debt issue without tackling the issue of spending more than we take in? And, you know, there's a question about how we're going to end up taking in as much as we need to, right? Absolutely. But I think what's happened now is that we're in a totally different zip code, because if you look at America's history, first, for the first 200 years of America's

economic history, America rarely ran a budget deficit. Then from the 1970s, it became a habit for America to run budget deficits. We've, in fact, run a budget surplus for just five years of those 50 years or so. Now is the third phase, I feel, where the budget deficit has gone into a totally different zip code, which is that we're running a budget deficit now of 6% to 7% of GDP, far higher than any other developed country in the world today. And the problem is this, that if you have a downturn or a recession, that deficit as a share of GDP could easily get up to 9% to 10% of GDP. And this brings me to the second sort of aspect of what we're going to discuss today. That makes it very hard for the Fed to cut interest rates too aggressively or for long term interest rates to decline when the funding requirements are so large. So I think we're finally reaching that stage now where the deficit begins to impact interest rates after that having seemed like a

false alarm for so long. So some would say, well, you look at how much the Biden administration has spent. Some of that has to do with covid. But you also look at how do you rationalize the Trump record? The economy is doing great and the deficit is expanding because of all the spending. Absolutely correct. So I make this point that this has been a bipartisan project. It's not one administration or the other, just that the emphasis shifts. Under Trump, it's tax cuts. Under Biden, it's spending increases. So no one cares about the deficits because I think we have reached that stage where talking about deficits seems like so passe that people have been talking about a deficit scare in America since the 1980s and nothing has happened so far. You know, so everyone talking about the deficit is dismissed as one of those people crying wolf.

As we know from that fable that the wolf finally did arrive at the door. And the point I'm making here now is that we may be close to that stage because this hubris that deficits don't matter has reached unprecedented levels, where our debt as a share of GDP now is closing in that of Italy, and with only Japan after that. And our deficit as a share of GDP now is at 6% to 7% of GDP in a very different zip code. America never ran budget deficits of anything of this scale during a peacetime. And even when the deficit was expanding in the 2000s or the 2010s, it was around 3% of GDP, roughly comparable to other developed countries. Now we're in a league of our own.

So when we look at the growth numbers, we should look under the hood and see what's really happening to the deficit numbers. Yeah. Got to look eventually. Stop kicking that can. Rishir Sharma, thank you. Thank you. Well, is the recent Bitcoin breakout for real? Up next, we're going to break down the charts on the cryptocurrency, plus why one key commodity might be oversold. And before we head to break, our colleagues from Squawk Box are in Paris as the Olympics heat up on NBC and Peacock.

Check out some of the highlights from a special edition of Squawk Box at the Olympics. We are live from Paris, France. That's one heck of a green screen, isn't it? Yeah, it's not a green screen. We are actually here. It really has become almost the Davos, if you will, of Olympics. The streamers are realizing, okay, the appointment television that is left, it's sports. If you go back to the founding ethos of bringing the world together through sport, this is a special platform

and you feel it in the air. Fundamentally we had to make our athletes the best performing athletes and that means we have to understand their body to help them perform the best. How are the lessons that you learned as a swimmer things that you can still rely on today? When you feel it's unfair, grit your teeth, smile and get on with it. Squ box live from the paris olympics continues tomorrow 6 a.m eastern Welcome back. Bitcoin is trading in the red. But over the weekend, there was buzz in the crypto community after former President Donald Trump pledged to build a strategic Bitcoin stockpile, sort of, during the Bitcoin 2024 conference in Nashville.

Joining us now with a technical look at Bitcoin and other parts of the market is Jeff DeGroff from Renaissance Macro Research. Jeff, at what price does this Bitcoin move get really interesting? Well, I think you break it out through $73,000, and that's a real legitimate breakout that actually counts pretty close to $100,000. If you can break that out, not quite, right around $96,000 on the upside. So, we think it's an important measure of liquidity. We think it's part of the whole infrastructure, if you will, ecosystem with speculative assets. But it is one of the keys for us, along with other credit spreads and some of their measures regarding the health of this market.

So we certainly are more interested in a breakout than a breakdown. And as long as it stays above 55,000, I think the path of least resistance is higher. And this will just prove to be a long consolidation in this ongoing uptrend. OK, well, we'll keep an eye on that one. And then also copper. You say copper is oversold at this point i was overbought for quite a while on the way up so why is this level now significant well you know overbought conditions and uptrends are are meaningless it's kind of a function of the trend right you're always if you're if you're trending higher you're going to just be perpetually overbought so we use oversold

conditions and uptrends to give us some sense as to where the likelihood of a reversal is and to re-engage in that uptrend. And we saw that over the weekend where our oscillators, which take into account volatility and some other factors, started suggesting that we were oversold enough finally to get a good buy signal in this ongoing uptrend. And I think it's important that it's not just in copper. We saw it in silver. We saw it in aluminum. We've seen it in quite a few of these metals. And frankly, we're seeing it globally in some indices, some currencies, and obviously some tech stocks as well. So at this stage of a bull market, you really have to have something special if you're going to chase something and buy a breakout or buy something at a 52-week high. We prefer to see these

consolidation, these corrections and these uptrends, what we call optimal entries. And certainly copper triggered as one of those this weekend for us. We've seen some steepening of the yield curve, I'll call it, in recent trading sessions, in recent weeks. There's a lot of focus on the two-year Treasury yield specifically, especially as we go into another Fed decision this week. We know that tends to be tied to it. What are you seeing in the charts? You know, we've been we've been believing that the two year yield has been topping for a while and it's still we're still in that camp. It just has failed to break. So it's kind of elongated this for us. Five percent is resistance. I think

we're on our way to four percent pretty easily and probably something below that if, you know, in fact, we continue to see data that's weaker than what the expectations are. But certainly we're looking at this as, you know, to the downside. This is exactly what should be happening at this part of the economic cycle in our work. So, you know, it's something that we're playing for. You know, I think it'll be interesting to see what the reaction is on the long end, right? The long end is really being driven by fiscal concerns. The short end is being driven by monetary policies. So getting some normalization of that curve, I think, is good news. And the thing to watch are banks, right? Banks tend to have a high degree of sensitivity to these rates. And so if banks, which have been doing well, if banks suddenly start to underperform around this, then I think that's a problem that's

probably embedded in the curve somewhere. And speaking of central bank decisions, we get a flurry of them this week, starting with the BOJ. We've seen that carry trade unwind here ahead of the decision from that bank and the expectation that we're going to start to see quantitative tightening. What are you seeing in those charts? So that's just the opposite of what we're seeing in copper, right? This is what we call an optimal exit. This is an overbought condition and a downtrend. It's one of probably three that we've had over the last year, year and a half. And each one of those have proven to be a pretty good spot to be a seller of yen. And we're certainly in that camp here. What's interesting and maybe a corollary that would be of more interest to your viewers is that that strength in the yen has now, in fact, pushed the Nikkei, which is the index, the equity index

there, into an oversold condition. And again, just like copper, it's an oversold condition and again just like copper it's an oversold condition in an ongoing uptrend and looks viable clearly there's there's that currency conversion that you have to worry about there but what we're seeing from the straight out equity indices is actually a pretty good opportunity in our view to be a buyer of this weakness all right some great charts from jeff de graaf thank you thanks guys. Up next, the CEO of data and AI startup Altana on his company's new funding round and unicorn status and why governments are paying more attention to supply chain issues. Plus, check out shares of OnSemi, the top performer in the S&P 500 today, after the maker of chips for the auto and industrial industries beat Wall Street's earnings estimates, finished up 11.5%. And if you love the show, you want even more overtime, you know you do. Scan the QR code on your screen.

Follow us on LinkedIn where we'll post exclusive content. Overtime. We'll be right back. Welcome back to Overtime. Some interesting news today from a startup that is bringing together an unusual assortment of investors across defense tech, supply chain and other interests. Altana, which specializes in helping governments and companies understand what's really happening in supply chains, raised a $200 million Series C at a billion-dollar valuation. Investors include Thomas Toll's U.S. Innovative Technology Fund and Al Gore's Generation Investment Management. And that's because supply chain data is both a national security issue and a climate issue. The business we're building is about navigating the breakdown of globalization and trying to bring about a new form of trusted global business. Look, the only bipartisan issue right now is

great power competition and tightening up the supply chain, either from an industrial policy, you know, reinvigorating manufacturing kind of point of view, a climate point of view, a fair trade point of view. Like that's where the action is. And, you know, it's not just in the U.S., it's really like across the West that this has become the bipartisan thing. Smith told me he hadn't planned to raise this round until the fall, but Tulse Fund wanted to make it happen sooner, given their conviction about the need that governments have right now to understand where their supply chain risks and entanglements are, Morgan, because, you know, U.S.-China is only one piece of the complexity. U.S.-China is only one piece, but it's a very big piece, especially as you have lawmakers drafting

the fiscal 2025 policy around defense spending. And this is very much, and not just for defense, but this is very much on the table, more regulations around this, because there have been issues. I think of F-35, a sourcing issue a couple years ago that tied back to China that went many, many layers down into the supply chain. There's not always that much transparency. So that's why some people think Altona has got some real value going forward. Yeah. It also speaks to defense tech. We've talked about it. This is, you have money in private markets going to defense tech. It's a hot investment now. All right. Well, tomorrow will be another wild hour of overtime earnings. All the names that need to be on your radar, including

Microsoft. That's straight ahead. And don't forget, you can catch us on the go by following the Closing Bell Overtime podcast on your favorite podcast app. We'll be right back. Here is a recap of today's big overtime movers. F5 Networks, the big winner, up about 14.5% after earnings and revenue topped estimates, also giving strong guidance. Sprouts Farmers Market is a grower, jumping after a sizable bottom line beat, also giving strong guidance. And comp sales growth nearly doubled estimates at 6.7%. But Lattice Semiconductor, eh, sitting out the party, falling hard after missing on both lines, down almost 12%.

Management citing the impact of cyclic industry headwinds. Yeah, some soft guidance there, too. Tomorrow will be another action-packed day of earnings before the bell. Investors will digest results from Dow members Merck and Procter & Gamble, as well as Pfizer, PayPal and JetBlue. Speaking of JetBlue, the carrier's CEO will break down those results exclusively right here on Overtime tomorrow, but then after the bell. So here on Overtime, Microsoft will headline a huge hour of earnings. We will also have instant analysis of results from AMD, Electronic Arts, Starbucks, Mondelez, Skyworks, Arista and Pinterest. It's going to be busy. It's going to be very busy here.

We also get tomorrow night a Bank of Japan decision ahead of the Fed decision and then a few other central bank decisions later this week, too. So keep an eye on the bond markets. A lot of AI commentary, I expect, of different sorts between Microsoft and AMD. We got a sense last quarter of how much of the Azure growth was fueled by AI. I wonder if that's a number that Microsoft is going to consistently give quarter after quarter. And then there are questions about how much AMD is going to be positioned to pick up some of the demand out there for AI chips, right, Given that NVIDIA is running away with so much of the demand. NVIDIA is running away with so much of the demand. And you do have the Amazons and other hyperscalers of the world

looking to design their own chips to counter NVIDIA and the semi-space as well. You do, but hey, right now the name of the game is NVIDIA if you want that top flight performance. There aren't a ton of other places that you can go, so you've got even people stockpiling. It's like a form of currency, having these NVIDIA chips. Yeah, it definitely is. We've had those conversations here on Overtime. In the meantime, it was a mixed picture for the markets today. Arguably, you're seeing the FOMC drift kick in.

Expectations, that happens tomorrow too. Nobody's expecting a cut this week, but the commentary about a September cut, that's what's on the table. All right, that's going to do it for us here at Overtime. Fast money starts now.