Closing Bell - Closing Bell Overtime: Intel CEO Pat Gelsinger On Company’s Progress; Can Fed Celebrate Victory On Inflation Fight? 1/26/24

Episode Date: January 26, 2024

The first very busy week of this earnings season wraps up, including results from Tesla, Intel and Netflix. Renaissance Macro’s Neil Dutta and Wilmington Trust’s Meghan Shue break down the action. Jon sits down with Intel CEO Pat Gelsinger on the latest quarter and the company’s progress. Former Federal Reserve board member Frederic Mishkin on the latest data and if the Fed can celebrate victory over inflation yet. Payoneer CEO John Caplan on what his data is saying about the consumer. 

Pretty good week for all the major indices, not even bad for the Russell. That's the scorecard on Wall Street, but winners stay late. Welcome to Closing Bell Overtime. I'm John Fort with Morgan Brennan. Well, the S&P 500 and the Nasdaq both snapping a six-day win streak. Tech, the biggest drag on the market today. Healthcare and energy outperforming the broader market. Yeah, speaking of tech, Intel, the biggest drag on the Dow, having its worst day since October 2021, following disappointing first quarter guidance.

I asked CEO Pat Gelsinger whether it's market share loss or the macro. Our market share looks healthy. We don't see any unique inventory issues outside of the non-core areas that we've already talked about. So we think the Q1 guide is just where the market is right now in terms of its outlook. Much more of that interview coming up. But first, let's get more on today's market action. Mike Santoli joins us from the New York Stock Exchange. Mike, great to kick off the top of the hour with you. It was a really mixed picture for the stocks today, but in general, you look at the Dow, the S&P, and the Nasdaq.elfth positive week in 13. What does that tell us about what I'll call

a potentially blistering rally to start the new year? It means, for one thing, Morgan, that the market is able to seize upon what remains pretty good economic news. So, you know, at some point, maybe people are going to say it's as good as it gets in terms of growth, in terms of inflation coming down. Today's numbers on PCE were all very consistent with the optimistic case that we have a soft landing underway. And the market is still able to feed off of that, at least for now in the short term, and get through a relatively, I would say, mixed week in terms of the overall flow of earnings reports. All right. And we'll see you, Mike, again in just a moment. But for now, let's bring in our market panel. Joining us now is Neil Dutta from Renaissance Macro Research. Megan Hsu of Wilmington Trust. Guys, happy Friday. Neil, GDP this week stronger than expected. Core inflation today softer, but a lot of weakness in top line growth leading companies to cut costs. So what does this mean for potential rate cuts and for stocks?

Well, I think with the companies, it's always, you know, when things are going well, it's my strategy. And if they're not going well, it's the economy. I don't really buy it. I mean, the economy is fine, John. It's fine. Private domestic demand is running at about two and a half percent. The important thing is that inventories have been unsustainably drawn down over the last year. And ultimately, what's going to have to happen is that retailers are going to need to restock their inventories. And when that happens, there's going to be a boom for the manufacturing sector as those inventories are restocked. At the same time, core inflation is moderating. It's moderating more rapidly than I think the Fed believes. By March, they're going to revise down their core inflation forecast yet again. And I think that sets them up

to either cut in March or use March to set up a cut in May. But I do think the die is cast at this point for the Fed to be cutting relatively soon. We're on a glide path to 2% inflation. Okay. So that must, Megan, be music to your ears because you still expect five rate cuts. I guess Neil just made the case, but with GDP so strong, why? Yeah, well, this is really interesting because for the better part of 2023, all we talked about was really this idea that if growth is strong, inflation is likely to also be hot. And what we've seen is that that has really disconnected. And we've been able to realize better than expected economic growth with inflation coming in lower than expected, all while real wages are elevated for consumers, which has helped the consumer part of the economy.

So I think we have to sort of get rid of this idea that good news for the economy means that the Fed has to stay more hawkish. And we've been looking a lot at real interest rates, and they are restrictive. And as inflation continues to come down, we expect that the Fed will react and that they'll ease policy so that they don't overshoot and passively tighten, if you will. So I think good growth is good for the economy and inflation is likely to stay on track for hitting the Fed's target by this year. But, Neil, what if we what if we do get a so-called no landing scenario that plays out? Is that still good news is good news from a Fed standpoint and an inflation standpoint? I mean, pending home sales today, well ahead of estimates, the highest since April. In general, we're seeing signs that housing is bottoming or stabilizing here.

You've got a pipeline of spending that is really going to start to materialize and hit the economy this year, whether it is the Inflation Reduction Act or the CHIPS Act or all the infrastructure policy that has been signed into being in the last couple of years? I mean, how real is the risk that you do get a no-landing scenario and that inflation doesn't continue to keep falling the way it is? Well, you're getting a mid-cycle refueling, but it's clear that inflation is still moderating, right? I mean, I think that's the bigger point. I mean, the risk to the economy was really at its peak when the Fed believed that a recession was necessary to quell inflation. It's been clear that even as the economy has been growing, that that recession is not required in order to do so. You still have, you know, you mentioned the pipeline of growth.

There's a pipeline of disinflation, particularly in housing rents. And keep in mind, Morgan, that used car prices actually rose over the last three months. And despite that, core inflation has been weak. What we know about wholesale auction prices suggests that used car prices will be deflating in the first quarter. And when that happens, core inflation will look even weaker. So, you know, I take the point. I think the things that you're pointing out are important, but I think all that really does is put a ceiling on how many cuts the Fed can end up delivering. It doesn't stop them from actually cutting. That's

about inflation. Gotcha. Megan, I mean, when I look at your notes, I hear your commentary. You sound less cautious to me than you did in recent months when you came on the show. I wonder if that's true. And just looking at 2024 and the setup, which certainly the year has started again with a mega cap tech rally, maybe excluding Tesla here this week. Is that still the place to put money to work or are you thinking about it differently? Yeah, Morgan, I think you're reading my optimism correctly. We have become more constructive on the economy. We've taken down our recession

probability and we've added to equities over the past couple of months, specifically to U.S. small cap, which we expect to benefit in the better than expected economic scenario and even a slowing economy because valuations are still very attractive for small cap relative to large cap. They're in about the seventh percentile historically when you look at those two valuations relative to each other. I think the question is really, what is the makeup of that leadership? And we have been expecting a broadening of that S&P 500 equity market leadership. We started to see it in the fourth quarter.

That's really kind of fallen off a little bit as it has been dominated by mega cap tech again. I don't think you have to think of it as either or. I think Mike Santoli was talking about this earlier, and I agree with that. It doesn't need to be for the rest of the market to do well. Mega cap tech has to do poorly. I think you want to own pieces of both and still maintain that structural growth exposure within technology. That's kind of the first order AI beneficiaries. But I think we also are going to start to shift into the second order AI beneficiaries

and those companies that are going to see productivity and profitability growth in other sectors, more cyclically oriented. Banks are looking better this year. And if we can get out of the manufacturing doldrums, I think industrials and materials could start to look good as well. OK, guys, thanks for kicking off the top of the hour with us, Neil Dutta and Megan Hsu. With the S&P finishing today at 4890, down fractionally. A not-so-bright debut on Wall Street for Bright Spring Health Services, which priced below its IPO range last night. Bob Pisani has those details. Bob.

Morgan, the IPO season is not off to a great start. Today, Bright Spring Health Services, which is a home and community-based health care services provider, went public on the NASDAQ, pricing 53.3 million shares at $13. That is well below the price talk of 15 to 18. Then it opened at $12 and closed at $11, right at the lows for the day on very poor volume. The IPO market has been on a roller coaster ride for the last several years. A record year in 2021 was followed by a disastrous year in 2022 and another disaster in 2023. This year is not starting off well, both in terms of new issuance and the performance of prior IPOs. So I'll show you an example. The

Nasdaq is off to a great start. You hear us talking about every day. It's up about 3% this month. But the Renaissance Capital IPO ETF, this is a basket of all the recent IPOs. It's down 8% this month. So the IPO industry is in desperate need of really fresh blood. We need more IPOs. We haven't had them. The IPO ETF has recently added a few newer names like Kenview and Arm Holdings. Remember them? They went public last year. But many of the largest holdings that are in that, Coupang, Coinbase, Roblox, Rivian, Affirm, they're almost three years old now. All of them, in fact, are trading down this month. So guys, what this tells me is that the buying public is still really picky. Those valuations haircuts we talked about last year with tech, they're still coming over to 2024. And this was a health care deal. Now, next week, we're going to get Amherst Sports. This is the big guys, big global sports brand company that they owned.

Wilson, the old sporting goods company, they're trying to float one point seven billion dollars next week on the NYSE. Let's see about that one. But this is not an auspicious start for one of the first real big IPO of the year, guys. Yeah. I mean, the flip side of it, I realize it's small cap, but Smith Douglas did go public earlier this month as well. Homebuilder. Yeah, homebuilder. That's still trading above its IPO price. It was under a little bit of pressure today. And to your point, we do have some companies that are going to spin and are going to split. And I would imagine they're going to be watched very closely here in the coming months, too. Yeah, the home building company was nice, but that's a real small company here.

This company was trying to float almost a billion dollars today. And Wilson's going to try to float close to two billion, $1.8 billion next week. So when you start getting towards the billion-dollar level, that's when people start saying these are significant IPOs that are bellwethers for other people coming out. There are just dozens of these companies. We're waiting for them to come out right now, and this is not a good start. Okay. Bob Pisani, thank you. Let's bring back Mike Santoli for a look at S&P 500 earnings and the reliance on the Magnificent Seven. Or should we call it Sensational Six?

What are we calling it now, Mike? Oh, man. You know, we can keep kind of juggling them and put them into different baskets as we like. But, yeah, the Six is a little more relevant than the Seventh with Tesla falling away. But this from Goldman Sachs sort of looks at the earnings revisions by those different baskets. And you see the Magnificent Seven. This is since September 30th. So over the course of the fourth quarter and into this year, how have earnings estimates either gone down or up relative to where they started?

Well, you see the Magnificent Seven up somewhere around four percentage points since that point through the fourth quarter. And you see here the S&P 500 declining by more than 10 percentage points, bottom 493, obviously more than that. So it shows you the importance of the large mega cap growth stocks in terms of holding up the absolute earnings level. Now, this is not showing you the decline year over year. It's showing you we thought there was going to be a lot more earnings growth

in the fourth quarter, let's say starting at 8% or 9% from the S&P 500. That's been whittled down. And then what almost always happens is companies report, let's say, three, four percentage points ahead of the final estimate, and that's how you get your final earnings change for the quarter. But no secret that people have loved these stocks because that's where most of the earnings growth has been coming from. I mean, I look at this chart, and we're talking about estimates here. And mind you, a lot of the Magnificent Seven are going to, you know, report, really start reporting in earnest next week. I look at this and I think the bar is much higher to hurdle for those mega cap tech names. And there is a much bigger chance of any of those other S&P names,

if they come in higher than these than these lowered estimates, that maybe you see bigger moves in those stocks. There's no doubt about it that I think generally people expect the biggest companies, the most dominant ones in the Magnificent Seven to deliver and probably outperform. Some of them don't really give guidance. You have like an alphabet that's not really going to help you out very much in terms of the estimates. So I grant your point. There's no doubt about it. We could see some news. But again, it does show you that just an absolute dollar income growth. This is where it's at for the moment. And I think the hope of the bulls is that somehow the wealth gets spread around a bit more over the course of the year. All right, Mike, see you in a bit. Yeah. Up next, former Fed

Governor Rick Mishkin on when Jay Powell and company could start cutting interest rates following new signs. Inflation keeps slowing. And later, key data that could give investors insight on what to expect from Amazon earnings next week. Overtime's back in two. Welcome back to Overtime. The core PCE, the Fed's favorite inflation gauge, coming in cooler than expected this morning. The report adding fuel to claims that the Fed could cut rates and rates soon. Joining us now is former Fed Governor Frederick Mishkin.

It's great to have you back on the show. It's exactly where I want to start with you, is how this sets us up. When we've had so many Fed officials come out in recent weeks and say, we're looking at all the data, but PCE is really going to matter the most. How this sets the stage for FOMC and the discussion around rate cuts next week. So I don't think there's going to be a rate cut next week, but I do think that the Fed is exactly on the glide path that they want to be on. And my reason for that, what we've seen is that they've done two things that were extremely important. One is that they shifted to a very radical and very sharp increase in interest rates when they had made a mistake of being too low for too long. That actually reestablished their credibility that they were going to control inflation and

comments that they made that they said, if we have to get a recession to do it, we're going to do it. And that actually worked beautifully. It stabilized inflation expectation, extremely important in terms of bringing down inflation. The second thing is that their tightening also actually has softened the tightness of the labor markets. When people look at unemployment rate, which is the number that most people look at, it doesn't look like much has happened there. But on the other hand, better measure of labor market tightness, which I've used in my research and others as well, is vacancies relative to unemployment. And in fact, that actually has come down quite a bit. It peaked in 2022, has come back about two thirds back towards the

towards where it was in 2018, 2019. So that's, again, a big success for them. And the result of all of this is that inflation is actually on a glide path, a very nice glide path back down to two percent. Now, the reason I think that they have to be a little cautious on lowering interest rates is that they made a mistake allowing inflation to get out of control. A key part of the element of their success is their credibility. And so to keep their credibility, I think that they have to be somewhat cautious. But right now, there's going to be a lot of discussion of when we might be able to start lowering rates.

And in fact, I think that's exactly what is appropriate right now. It certainly seems like it's a real tight rope to walk in terms of the credibility piece of this, because it what finishing last year at a five point three percent policy rate, you're seeing core PC inflation now three percent, two point nine percent, we'll say today. It raises the question, is the terminal rate too restrictive? And if the Fed remains cautious because they're concerned about credibility, could they get behind the ball in terms of the disinflation narrative and what that means for their policy? Sure. I mean, I got to tell you, monetary policy is not an easy game to play. I mean, I've been involved in this business and thinking about it for a lot of years, that it's really hard to get it perfect. It's actually

extraordinary how well the Fed is doing. I would never have predicted this. You know, I was very critical on CNBC starting quite a long time ago that they were actually had rates that were much too low for too long. But they've turned it around. And in fact, the outcome has been better than I would have expected. That inflation is coming back down. I thought that we would have a recession as a result. But right now, that's not in the cards. So they've done really, really well on this.

And I think that the problem is you never get it 100 percent right. If you get it 80 percent right, you're doing really damn well. And right now, they look like they're doing pretty good. OK, Rick, so how do yields play into this? I'm looking at the 10 year Treasury yield. It's creeping up, you know, four point one four now and has been for a few weeks now. Does that play at all into the calculus where you look, how investors should think about how the Fed is handling this and where the markets are likely to go? Well, so I actually think this is part where the markets are. Likely to go. Was I actually think this is part of the good

news but one of my concerns was that the market had this view that the fed was going to cut rates to look too early. And so I and the fed were pretty hard to say you know we've been doing pretty good but. But you know don't don't- get your

hopes up too much. But I think that was necessary I think that the market was a little overreacting. They were predicting much faster rate cuts and earlier rate cuts than I think has transpired and will transpire. So the Fed basically talked that down through it and said, you know, we're not done yet. Inflation is not back to 2 percent. But now it looks like it's on that glide path.

I mean, it's remarkable that, you know, that this is a damn good pilot. Right now, it looks like they can land that plane without, you know, hitting that tarmac too hard. That's fantastic news. So, Rick, finally, you said you were surprised that the Fed was able to pull this off. When somebody gets surprised, I like to ask them what they learned. So what have you learned? Well, one of the things I learned is that the Fed can move much faster than ever expected. This is an organization that's fairly conservative in terms of what it does. And so the way I've always characterized the Fed has been they're sort of like a super tanker and turning them around, you know, it takes a long time to turn a super tanker around.

What was remarkable here was that the Fed made actually very serious mistakes. And I've been very – was very critical of the Fed given their forecasting mistakes. I thought they had basically theoretical mistakes in terms of a bad framework for thinking about monetary policy. One of the things that was extraordinary, and I'm not inside the room anymore, is how quickly the Fed was able to say, you know what, we just got it wrong. You don't want to advertise that, but we got it wrong, and we're going to change it 180 degrees, and we're going to do it gangbusters. So instead of being a supertanker, they turned out to be a motorboat.

And that's really, really impressive on this case. That doesn't excuse the mistakes that they made in 2021 and early 2022. But everybody has failures. The question is, do you learn from them? A good learning organization does, a bad one doesn't. And the Fed's shown that they're a pretty damn good learning organization. So give them credit. And you're doing that. Rick, thank you. Frederick Mishkin. My pleasure. Up next, much more of my first on CNBC interview with Intel CEO Pat Gelsinger, including his thoughts on Wall Street's reaction to that guidance. Ouch. Cloud demand and more.

Plus, Bitcoin staging a big rally today, and that's helping one beaten down crypto name, or stock, I should say, to make a big comeback. We've got those details later on Overtime. And just breaking, moments ago, Spotify has some harsh words for Apple. We'll bring you those on the other side of this break, too. Welcome back. Mike Santoli is back on Overtime with a look at the dominance of quality stocks.

What do we mean by quality, Mike? Yes, John. Good question. This has been one of the more dominant factors in the market. Quality usually defined as strong balance sheets, high profit margins, consistent earnings growth over time. It bumps up against the mega cap tech trade that has been so much the chatter in the last year or so, but also other stocks. Here you see how the overall market has started to look very much like that quality factor. This goes back basically five years. And the S&P 500, the quality factor ETF, and Berkshire Hathaway, who I think of as like the exemplar of quality and certainly outside of tech. Now,

you've got to pay up for quality, right? So here is the price earnings ratio of that quality ETF basket. Both in absolute terms, it has gone toward the high end of its range, but then relative to the S&P as a whole, you see on a decade high right here. So not a huge premium, but of course the S&P as a whole is kind of expensive now. So you still are paying up for it. And even Berkshire Hathaway, which by the way, up 5% this week, it's at a new record all-time high and is now outperforming on a five year basis. The S&P, you see, price to book is normally the way you want to value a conglomerate like Berkshire Hathaway. And it basically is at the very top end of its own range. If you take a look at that

price to book, there it is of a 15 year range. So the point is the market's gone pretty deep into paying up for these quality stocks. We'll see if there's any comfort with the broader economy and the pace of it and what the Fed's going to do if, again, that broadening trade changes up this story. Mike Santoli, your analysis, also quality. Thanks, John. Thank you. Amazon, one of the big names reporting earnings next week. And up next, we're going to get insights into what to expect from those results and the state of the consumer when we speak with the CEO of a company that processes payments for Amazon sellers. Also, check out shares of Coinbase popping today thanks to a jump in Bitcoin prices and an upgrade to buy at Oppenheimer, which also set $160 price target. That implies upside of more than 25 percent. Overtime will be right back.

Welcome back to Overtime. Tech and retail giant Amazon set to report results next week. Nearly two thirds of sales come from third party sellers, most of which are small and medium-sized businesses. Payoneer is one of the fintech firms powering those payments, and CEO John Kaplan joins us here on set. John, good to have you here. So leading into the holiday season, I was hearing so much from different technology providers about the importance of loyalty and coming back, getting more payment from those who have already paid. What would you say distinguished this season for those kind of third-party sellers that are operating on Amazon and elsewhere? Yeah, I think it is really important for everybody to understand that Amazon's the world's best marketplace. The world's best marketplace has the best suppliers

from around the globe. The sellers that sell on Amazon are in Vietnam, Turkey, China, and around the globe. Those sellers need Amazon to be successful, and they love the platform. The advertising on the platform works. The demand is there. The 3PL, the shipping is effective and works. So what we see, we did an event this week in China with 1,000 Amazon sellers, Walmart sellers, eBay sellers. There is incredible energy among the SMBs who sell on the world's biggest marketplaces because those marketplaces really work to drive demand for those goods. But what

about Shopify, TikTok, Shein, you know, some of these other players that we've seen offering different kinds of challenges to the vertically integrated Amazon. Does this mean that they're not really having an effect? So Shein and TikTok and Taimou are incredible platforms and they will make give Amazon a run for their money. Because if you're under 30 years old and you're a female and you're on TikTok, you're buying beauty products, you're buying apparel products. Those platforms, influencer-driven e-commerce is really working around the globe. Shein, same thing. Shein taking share from the AliExpresses and Wishes of the World and the Groupons, they've definitely grabbed share. Taimou, the same thing. When you think about Shopify, going direct to the consumer is essential for an SMB. So an SMB needs to sell on Amazon, needs to sell on Walmart and eBay, needs to try to get distribution through an influencer on TikTok, and certainly needs their own direct-to-consumer

business on a Shopify or a BigCommerce or ShopLaws or any of the sort of dozens of great store hosting platforms around the globe. But which way are the winds shifting? It seems to me that a couple of years back, I don't remember exactly when it was, when Apple made those iOS changes that changed the economics of Facebook ads in particular and customer acquisition, that's when cracks really started appearing in the D2C model. And a lot of the weaker players started falling by the wayside. Now, with kind of demand growth weakening a bit, some D2C efforts seem to be losing steam. So am I wrong about that? I think the rich get richer on Amazon. If you're good at Amazon and you know how to price and market, have product

variation, you can sell a ton of product on Amazon. If you're on Shopify and you have a Shopify store, you need to be an expert online marketer to acquire customers. In order to acquire customers, you need loyalty. You need products that you can repeat sell because the return on ad spend, the ROAS, you need to be able to sell 3x the cost to acquire a customer in that first order in order to make the return on ad spend work. So what we see with our sellers around the globe, the best sellers are multi-channel. They're getting sophisticated about buying advertising on Facebook, on Google, on Amazon, or Walmart, or other platforms. They're connecting to influencers to be on TikTok,

to be on Instagram, try to get people remarketing their products for them. Just D to C on Shopify, not enough. So is it getting too complicated? Because Shopify was supposed to simplify so that you could do all these things yourself. Consider your computer. I got my website.

I can distribute on Amazon, all these other places. But now you've got all these different factors affecting. You've got the economic shifting. Can the smaller of the small businesses afford to play in all those lanes or do they just go with Amazon? Yeah, I think it is not a get rich quick scheme of selling products online. And you got to be close to the manufacturing to have enough margin in order to buy the advertising and support the logistics. So I do not think, I think we're in a new era. And the era now is it's sophisticated small businesses, you know, million dollar plus GMV businesses can be successful. Just doing it as a side hustle from your garage, unlikely to get enough volume to feed your family.

Is Prime getting any less powerful with its payment capabilities and its now local distribution kind of fueling same-day and one-day delivery? Yeah, if you just track by the packages coming to my front door every day, Prime is an extraordinary loyalty program, only more powerful day after day. Great insight right ahead of Amazon Earnings. John Thacks, CEO of Payoneer. Up next, we'll look at the AI ripple effects of making huge amounts of data more accessible to companies. Over time, we'll be right back. Welcome back. As we heard from earnings this week, lots of public companies hoping to capitalize on AI demand to fuel growth in 2024.

Today, Overtime is taking time out with the founder and CEO of an AI startup that's readying the data. Renan Halak is the CEO of Vast Data, a startup valued at $9.1 billion last month when it raised its Series E. Think of Vast as a competitor's snowflake, already public with a $67 billion market cap, and Databricks, one of the most closely watched IPO prospects with a private valuation over $40 billion. Halleck at Vast Data was a precocious math nerd growing up in southern Israel who didn't care much about technology until he saw it as a way to feed his appetite for data. My dad bought me, I remember, a 386 PC when I was a kid and tried to convince me to use it, and I wouldn't. I did not have any interest in that computer until we got a modem. And when it was connected to the internet, that became, for me, a transition from just a gadget, something that you could play games on, maybe

use a word processor, to something that was a way to access information and to learn. It's fitting that Halak is now the CEO of Vast Data, whose technology allows customers to store petabytes of data at a lower cost, accessible at a higher speed than traditional methods. That's especially important in the AI era. These new algorithms, as you say, they want to train on as much information as we can possibly give them. And then they build a new AI model as a result of that. And then you want to infer on all of your information. You want to understand what's in it because you have a new AI model.

And the only way to make use of it is to run all of your data through it. And as more data flows into the system, you want to retrain to have an even better model. And then you want to reinfer on all of your history. And so that cycle of training and inference and training and inference on the entirety of your history requires extreme performance. OK, so investors, the timeout takeaway here, follow AI's ripple effects because the rise of artificial intelligence means data gets stored and moved in different volumes and in different ways. Investors are going to benefit from knowing which innovations really matter to make that possible. So Renan there was talking about training and inferencing. Pat Gelsinger was talking about the same thing where Intel is concerned because NVIDIA has benefited so much off of the training cycle. Pat inferring

that inferencing is going to be bigger in 24. Renan, though, seems to be saying there's going to be both happening. So we'll see if NVIDIA gets any less attention this year. Also, PayPal this week, a little bit of disappointment after their AI announcement didn't cause as many ripples as they hoped. So we've seen the big shockwaves in compute. Rennan Halleck, Vast Data and its competitors working on storage areas like networking, likely to see those as well in the AI era. Well, now Alphabet, Amazon, Apple, oh my, we're going to get you set up for a massive week of earnings on tap for Wall Street when overtime returns. Welcome back. The S&P 500 and Nasdaq both snapping six-day win streaks, but the major average is still higher for the week, hovering near record territory, and we've got a big slate of earnings next week.

Let's bring back Mike Santoli to discuss. Mike, the most intriguing thing to me about next week is the Tuesday-Thursday interplay. Tuesday, we've got Alphabet and Microsoft, and there's a bit of a read-through from both of those to Thursday, Amazon and Meta when it comes both to cloud and to the consumer and advertising markets. Right. Sure. And whatever they might be able to say about the monetizing AI. So I do think it all fits together. Earnings season is generally cumulative. I always find you have to have these themes emerge over time. So those three, those couple of days is going to be a big one. The bar seems pretty high for Meta and Microsoft to me, just not just in terms of how the stocks have done, but just how widely and avidly believed

the fundamental stories are right now. See if they can hurdle it. I keep pointing to last earnings season when the tech reports really did charge the market higher. But we've been correcting for three months and we're down 10 percent on the S&P. And to that point, very different setup right now. Anything else that you're particularly watching? Boston Scientific could be interesting, given what we're seeing with these procedures being done that are hurting Alexa Humana. Yeah, I would say, well, health care in general, in part because I think it's a recently grabbed favorite trade. And then, yeah, a little thing called a Fed meeting.

It's not earnings, but that's going to get in the way right between Tuesday and Thursday. Can't forget the macro. Yeah. You know, can't forget the forest for the trees. You can try, but it doesn't always work. You'll keep us on track. Mike Santoli, thank you. Have a great weekend.

I'll do it for overtime, but fast money starts right now.