00:00DANI: 5:00 IN NEW YORK CITY, GOOD MORNING. HERE IS WHAT YOU NEED TO KNOW THIS THURSDAY. AI BOOM TAKES A BREATHER. NVIDIA SIGNALS A GROWTH SLOWDOWN WITH THE TEPID REVENUE FORECAST. STOCKS BRUSH OFF THOSE RESULTS AFTER THE S & P 500 NOTCHES ANOTHER RECORD HIGH. THE WORLD REBALANCES TRADE. CHINA AND INDIA GROW CLOSER. BRUSHING IT OFF, THAT'S INDEED WITH THIS MARKET IS DOING DESPITE NVIDIA SAW SALES GROWTH SLOW. WE ARE LITTLE CHANGED ON THIS EQUITY MARKET BUT YOU WOULD'VE THOUGHT IF I SAID THE THING THAT THE BIGGEST COMPANY IN THE S & P 500 WE PINNED ALL OF OUR HOPES AND DREAMS ON DISAPPOINTED THAT THIS WOULD BE WORSE. FUTURES ARE DOWN BUT JUST BY .05%. NVIDIA OFF BY .75 PERCENT. THE SMALL-CAP RALLY CONTINUES WITH SOME PACE UP THREE QUARTERS OF A PERCENT. THE LONG STEEP -- LONG CURVE STEEPENING AS OF LATE YESTERDAY WAS OF THE STEEPEST CURVES SINCE 2022. TWO YEAR YIELDS LITTLE CHANGE. THE 30 YEAR FINALLY MAKES A MOVE LOWER NEARLY THREE BASIS POINTS WHILE THE 10 YEAR YIELD STANDS AT 4.2207. KRITI: NVIDIA WE THOUGHT THERE WOULD BE A BIGGER MACRO MOMENT. SHARES IN THE PREMARKET ONLY DOWN ABOUT 1.7% FOR THE EARNINGS THAT CAME ACROSS. 56% GROWTH STILL PRETTY SIGNIFICANT. THERE IS THAT IDEA MAYBE SOME OF THAT AI MOMENTUM ACCELERATION IS SLOWING DOWN. THE A PLUS PLUS STUDENT MAY ONLY JUST BE AN A PLUS STUDENT. IT IS NOT THE ONLY ONE WHO REPORTED EARNINGS IN THE LAST 24 HOURS. CROWDSTRIKE HIGH UP ON THAT LIST. A KEY ONE GIVEN HOW MUCH OF THE CUSTOMER ATTRITION THEY HAVE HAD GIVEN THAT OUTAGE FROM LAST YEAR. SHARES DOWN 3%, THE EARNINGS NOT LOOKING GOOD THERE. HP IS THE LAST TECH STOCK WE WILL KEEP AND I ON. IT DID, IN LINE WITH EXPECTATIONS SO WHAT'S THE PROBLEM. THERE ARE SOME CONCERNS AROUND THE TARIFF RATE, ESPECIALLY WHEN IT COMES TO THE COMPUTER BUSINESS WHETHER OR NOT THE GEOPOLITICS. DANI: WE WILL CATCH UP WITH YOU LATER IN THE HOUR. IN JUST MOMENTS WHO WILL SPEAK WITH JORDAN ROCHESTER ON HIS LATEST FED CALL. KATRINA DUDLEY OF FRANKLIN TEMPLETON WILL JOIN US AS STOCKS HIT AN ALL-TIME HIGH PLUS WE HAVE NVIDIA RESULTS. BUT FIRST LET'S SHIFT OUR FOCUS TO THE FED. JORDAN ROCHESTER MIZUHO BANK WRITING SEPTEMBER'S PRICING AT 21 BASIS POINTS FOR A CUT SHOWS A MARKET STILL AWARE OF ANOTHER NONFARM PAYROLLS THAT COULD MAKE THE EVENT MORE OF A 50-50 PROBABILITY. DESPITE THE DOVISH TONE OF CHAIR POWELL'S MESSAGE LAST WEEK I'M PLEASED TO SAY JORDAN JOINS US NOW. I KNOW BEFORE THE JACKSON HOLE SPEECH YOU WOULD ASSUMED THIS WAS A FED ON HOLD FOR 2025. HAVE YOU CHANGE THAT OPINION GIVEN JACKSON HOLE AND THE PROBLEM -- POLITICS OF THE MOMENT. > > OUR U.S. ECONOMIST AS AN CHANGED HIS VIEW. STILL THINK CPI COULD COME IN STRONGER-THAN-EXPECTED TO ALLOW THE FED TO NOT CUT IN SEPTEMBER MAKING OCTOBER DECEMBER THE CRUCIAL MOMENTS. THE BETTER TRADES TO EXPRESS THIS SORT OF VIEW RATHER THAN TAKING IT OUT FLAT IS ON THE FRONT END. THE CLEAR TRADE CUTTING MORE NEXT YEAR. REMOVING FED GOVERNORS WHERE HE CAN AND INSTALLING NEW FED CHAIR. WHAT WE'RE SEEING IS THE Z SIX PRICE ALREADY SLIGHTLY BELOW, THAT IS THE LONG RUN AND WE COULD START SEEING THAT PUSH TOWARDS TO 75 SO YOU MIGHT ON THE VERY FRONT END IT MIGHT MEAN CUTS IN SEPTEMBER. PREPS ACTUALLY DO GO IN THAT MEETING BECAUSE THERE TO CUTS IN THE DOTS ALREADY FOR THIS YEAR SO WHY NOT AT THE MEETING WITH THE FORECAST BUT WILL BE GET TO HOW IT'S EXPRESSED IN TRADES WE CAN DO A HIGH CONVICTION TRADE THE DEALS WITH THAT ON THE FRONT END FOCUSING MORE ON NEXT YEAR. > > JUST ON THE TWO PIECES OF DATA WE WILL BE GETTING NEXT MONTH HOW BIG OF A RISK EVENT ARE THEY FOR MARKETS. WHAT ARE THEY ALSO THE JAY POWELL WHOSE CLEARLY MADE A SHIFT TO THE DOVISH SIDE AND OPEN THE DOOR FOR SEPTEMBER CUT WHAT IS THE BAR TO HAVE THE DATA UPSET SOME OF THE PRICING IN THIS FRONT-END OF THE CURVE AT THE MOMENT. JORDAN: HE'S RAISED THE BAR IN TERMS OF WHAT MAKE HIM NOT COT. YOU NEED THEM TO CUT MORE THAN 100 K. THE FED HAS INFORMED -- FORMALLY LOWERED THE NATIONAL RATES OF WHAT LEVEL KEEPS UNEMPLOYMENT UNCHANGED AND GETTING NUMBERS 70 TO 80 K FOR A FEW SPEAKERS IT COMES TO THE PREVIOUS ASSUMPTION AROUND 90 TO 100 SO EVEN IF YOU GET 70 TO 80, AND THE FED DOESN'T NEED TO CUT IS WHAT I WOULD ARGUE. IF WE GOT A NUMBER 150 OR HIGHER AND WE GOT POSITIVE REVISIONS TO LAST MONTH WHICH IS AROUND THE 70 FIGURE. MAYBE THAT'S ENOUGH TO MAKE THE PRICING FOR THE 2122 IS NOW DOWN TO 15. CAN WE GET TO ZERO IT'S IF YOU HAVE CPI. WHAT SURPRISED ME ABOUT THE CPI FIGURES WAS WE ARE LOOKING AT IS THERE A TARIFF IMPACT. BUT WHAT YOU ARE SEEING IN THE DATA IS THE SERVICES HAVE BEEN MUCH STRONGER AND SOMETHING THAT RAISES YOUR UNDERLYING INFLATION SO ANOTHER MONTH OF SOLID SERVICES UP TO THREE MONTHS IN A ROW THAT MIGHT BE COMBINED WITH A HEALTHY NFP ENOUGH TO LEAD TO SEPTEMBER CUT. BUT THE BAR IS HIGH. DANI: FURTHER OUT ON THIS CURVE WE SEEN A 10 YEAR YIELD ABOUT 15 BASIS POINTS FAR THIS MONTH TO CONSECUTIVE WEEKS OF MOVING LOWER. AT THE SAME TIME INFLATION EXPECTATIONS HAVE SHOT UP. DO YOUR FORWARD INFLATION SWAPS TRADING BUT THE HIGHEST SINCE 2022 BUT WE HAD INFLATION AT 6% WHAT DO YOU MAKE OF THAT DISCONNECT? JORDAN: IT'S ALSO TAPPING ON THE FRONT END LEADING THROUGH ON THE LONG END. WE ARE NOW COMING UP TO SEPTEMBER WHERE THEY'RE BETTING A LOT OF ISSUANCE. A SIMILAR STORY SO WHAT WE COULD SEE THE CURVE STEEPEN'S EVEN MORE. IT'S A VERY CROWDED TRADE. ONE OF THE TRADE THAT HAD ON FOR QUITE SOME TIME. I THINK THE CURVE WILL STEEPEN. IT'S BEEN A LITTLE BIT MORE RANGE BOUND THAN WE WOULD LIKE. DISAPPOINTMENT FOR THE CURVE. BUT FROM HERE ONWARDS BUT WE DO EXPECT IS THE U.S. 10 YEAR IT'S ACTUALLY NOT SOMETHING WE KNOW, YOU LOOK AT STEVE'S FORECAST UP TO 5% ON THE 10 YEAR. WE COULD BE LOOKING AT THOSE LEVELS NEXT YEAR IF THE CONSUMER REBOUNDS IN THE U.S. THANKS TO THE FED CUTS WE'VE HAD U.S. EQUITIES AT THE HIGHS LOOSE FINANCIAL CONDITIONS. YOU DON'T HAVE A RECESSION AND IT'S NOT CLEAR THE DURATION SHOULD OUTPERFORM. DANI: YOU HAD TO GET THAT DIG IN THERE ABOUT MAN UNITED. GIVEN ALL OF THAT, WHAT IS PRICED INTO THE LONG END RIGHT NOW. DO YOUR POINT IT'S A CROWDED TRADE. FROM POLITICS TO INFLATION TO DEFICIT, WHAT EXACTLY IS IT CAPTURING? > > IT'S CAPTURING THE MONETARY POLICY EXPECTATIONS. THE END RESULT IS THE MARKET THINKS TRUMP WILL CREATE A MORE DOVISH SENSE OF FED GOVERNORS AND THEREFORE RATES WILL BE HELD EASIER THAN THEY SHOULD BE FOR ALL THESE TAYLOR RULES. ON MOST OF THOSE ESTIMATES. USUALLY YOU WOULD SAY TERM PREMIUM SHOULD PICK UP, BUT BECAUSE THE FRONT-END IS RALLYING SO MUCH IT'S DRAGGING DOWN THE LONG END WITH IT. IT'S THE CRUX OF THE ARGUMENT WERE POLICY WILL GO. AS I SAID IT'S BEEN A CUT RATES THAN MARKET VIEW MET NECK -- NEXT YEAR BECAUSE OF THAT MARKET SHARE. I CAN SEE THE MARKETS START TO SEE THAT CUT RATES TO 3% IN TERMS WITH THE MARKET IS PRICING IT AND THE CURVE STARTS STEEPEN FROM THERE. DANI: THANK YOU SO MUCH FOR JOINING THIS MORNING. JORDAN ROCHESTER MIZUHO. SOME OF THE TOP STORIES TRENDING ON THE TERMINAL. A SALES BE DELIVERED IN THE SECOND HALF OF ITS NEW FINANCIAL YEAR. THE COGNAC MAKER EXPECTS THE RESUMPTION OF DUTY-FREE SALES TO CHINA TO BOOST ITS SECOND-QUARTER. JAPANESE TRADING HOUSES GOT A VOTE OF CONFIDENCE FROM WARREN BUFFETT'S BERKSHIRE HATHAWAY. RAISING STAKES IN BOTH MITSUBISHI, RAISING SHARES BUT HIS COMPANY HAS HOLDINGS OF JAPAN'S FIVE BIGGEST TRADING FIRMS. NORTH KOREAN LEADER KIM JONG AND PLANS TO ATTEND CHINA'S MILITARY PARADE ON SEPTEMBER 3. THE -- HIS ATTENDANCE OF THE CHINA ANNIVERSARY CELEBRATION OF WORLD WAR II WAS CONFIRMED BY CHINESE AND NORTH KOREAN MEDIA. A TEPID OUTLOOK FROM NVIDIA. WE WILL RECAP THE CHIPMAKERS EARNINGS DOWN 1.5% IN THE PREMARKET COMING UP NEXT ON YOUR BRIEF. ♪ DANI: -- > > THE OPPORTUNITY AHEAD IS IMMENSE. SCALING INTO THE THREE TO $4 TRILLION GLOBAL AI FACTOR BUILD UP THROUGH THE END OF THE DECADE. > > NVIDIA CEO JENSEN HUANG SPEAKING ON THE CALL AFTER A MILD FORECASTED SIGNAL SLOWING GROWTH AFTER A TWO YEAR BOOM AND AI. LET'S GET MORE FROM MARK BERGEN. SLOWING TO SOMETHING LIKE 15% BUT AT THE PEAK IT WAS 200%. WHAT WAS YOUR TAKE AWAY FROM THE RESULTS YESTERDAY. > > A COUPLE OF DIFFERENT WAYS TO READ THIS. IT IS SLOWING FROM WHAT IS PHENOMENAL AND MAY BE LESS SUSTAINABLE GROWTH. WE HAD THIS MAJOR QUARTER ON QUARTER POSTING THESE RECORDS. NOW THE MOST VALUABLE COMPANY IN THE WORLD AND WERE SEEING A SLOWDOWN THE MIGHT BE A REFLECTION OF A COUPLE OF THINGS. SUPPLY CONSTRAINTS. RELYING ON TAIWAN TO PRODUCE A LOT OF THEM. THERE'S OBVIOUSLY THESE POLITICAL AROUND CHINA WHETHER OR NOT THEY CAN ACTUALLY SELL THEM TO CHINA. IF THERE HAVE TO PAY THIS 15% CUT TO THE U.S. GOVERNMENT. THEN THERE IS A CONCERN ABOUT PEOPLE EXAM ALTERNATE OPENAI SAYING AI BUBBLE THAT PERHAPS SOME OF THE AGGRESSIVE EXPECTATIONS WE'VE SEEN IN ROSIE FORECAST AROUND AI ARE NOT SPENDING AS MUCH WHICH MEANS A LOT OF POTENTIAL FOR REAL SUSTAINABLE SLOWDOWN. DANI: ELSEWHERE THE OTHER THING WE WERE LOOKING FOR WITH THE POLITICS OF THE MOMENT AND HOW JENSEN HUANG AND NVIDIA WOULD ADDRESS THIS. THEY TALKED ABOUT THAT 15% REVENUE SHARE WITH THE U.S. AND THERE HASN'T BEEN CODIFIED. WHAT DID YOU MAKE OF THAT? MARK: A REALLY FASCINATING COMMENT FROM THE COMPANY CFO BASICALLY SAYING WE ARE HAPPY TO PAY THIS 15% WE JUST NEED TO KNOW HOW. SHE ALSO SAID WE HAVE THE LICENSING WE WILL PLAN TO SELL INTO CHINA AND THERE ALSO WANING IN TALKED ON A CALL FOR THE GOVERNMENT TO APPROVE THE SALE OF ITS ADVANCED TRIP TO CHINA. GOT A SIGNAL THEY ARE WILLING TO DO THAT. AND THE NOTION OF THE COMPANY IS WE ARE WAITING ON THE GOVERNMENT NOW AND THE BALL IS IN THEIR COURT. DANI: GOING FORWARD THEY OBVIOUSLY DIDN'T INCLUDE H20 CHIPS IN THEIR CURRENT OUTLOOK THAT THEY GAVE. DID THEY GIVE ANY SENSE OF WHEN THAT COMES BACK AND THEY'RE ABLE TO SELL MORE TO CHINA. MARK: I THINK THEY ARE STILL WAITING ON THE TIMING. THAT WAS SORT OF CERTAINLY AN INVESTOR CONCERN ALTHOUGH THIS IS SOMETHING WHERE THEY'RE GOING AT AND WHICH IS THE CHIEF RIVAL, I THINK THE QUESTION HERE IS HOW MUCH DEMAND THERE IS TO BE IN CHINA AND HOW MUCH A LOT OF COMPANIES HAVE TURNED TO LOCAL ALTERNATIVES. > > IF YOU HAD SAID A $4 TRILLION COMPANY WE PINNED ALL OF HER HOPES AND DREAMS ON WOULD HAVE GIVEN A SLIGHTLY DISAPPOINTING OUTLOOK YOU WOULD ASSUME NVIDIA WOULD BE MUCH OFF MORE THAN IT IS NOW. A STOCK THAT'S SWUNG A LOT AROUND ITS EARNINGS. IT'S DOWN 1.5% AND NOT EVEN DRAGGING THE BROADER MARKET DOWN WITH IT. HAS SOMETHING CHANGED IN TERMS OF NVIDIA'S IMPORTANCE. WHAT IS IT SAY IT'S NOT HAVING A BIGGER MARKET IMPACT. > > CERTAINLY IN TERMS OF ITS GEOPOLITICAL IMPORTANCE. WE HAD A LOT OF GOOD REPORTING AROUND HOW BIG THEY ARE IN THIS AI ACCELERATE. I THINK THE MARKET SHARE SOME WITH A 95% RANGE JUST HOW DOMINANT THEY ARE. WE SEEN A SLOWDOWN IN THE DATA CENTERS BUSINESS AND THAT'S RELYING ON A HANDFUL OF THESE BIG COMPANIES BUT THERE GAMING BUSINESS OR AUTOMOTIVE BUSINESS THOSE STILL BEAT ANALYST EXPECTATIONS THERE. I THINK WE SAW THE FRONT OF THE CALL FROM JENSEN HUANG THAT HE SEES THIS AS A MULTITRILLION DOLLAR OPPORTUNITY SO IF INVESTORS ARE GOING ALONG FOR THE RIDE I THINK THAT'S PROBABLY WHY WE HAVEN'T SEEN THIS MAJOR SWING. > > WE APPRECIATE YOUR TIME THAT IS BLOOMBERG'S MARK BERGER. U.S. DEMANDS PUSH MEXICO TO RAISE TARIFFS ON CHINA. WE HAVE YOUR TRADE UPDATE AND WHAT ELSE IS MAKING HEADLINES WITH YOUR FRONT PAGE COMING UP NEXT. ♪ DANI: YOU ARE WATCHING BLOOMBERG BRIEF. LET'S LOOK AT THE FRONT PAGES THIS MORNING WHAT'S MAKING HEADLINES. FIRST UP THE WASHINGTON POST HAS THIS ON THEIR FRONT PAGE. THE WHITE HOUSE FIRING CDC DIRECTOR SUSAN MANN RISK. THE DECISION HAPPENED AFTER SHE REFUSED TO DESIGN AMID TREASURE THAT PRESSURE TO CHANGE VACCINE POLICY. HER LAWYERS ACCUSE ROBERT F. KENNEDY, JR. OF WEAPONIZING PUBLIC HEALTH. THE FINANCIAL TIMES HAS -- REPORTS HEDGE FUNDS ON INSURANCE IS THREATENING CATASTROPHE COVER. THEY ARE SOUNDING THE ALARM THE PRIVATE INVESTORS ARE TRYING TO STABILIZE THE OLDEST SECTOR. THE WALL STREET JOURNAL REPORTING ANOTHER FIRING BY PRESIDENT TRUMP THIS TIME A BOARD MEMBER OF THE RAILROAD REGULATOR THAT'S WEIGHING THE PROPOSED META-MERGER BETWEEN UNION PACIFIC AND NORFOLK SOUTHERN HAS BEEN DISMISSED BY TRUMP AFTER BEING THE ONLY MEMBER TO OPPOSE THE DEAL. ON THE BLOOMBERG SOURCES SAY MEXICO IS PLANNING TO RAISE LEVEES ON CHINESE GOODS AFTER A LONG-STANDING DEMAND FROM PRESIDENT TRUMP. LET'S GET STRAIGHT TO BRENDAN MURRAY WHO TRACKS GLOBAL TRADE COVERAGE FOR US. WHAT IS THE CHANGE HERE THAT MEXICO IS UNDERTAKING. > > MEXICO MORE THAN MOST OTHER MAJOR U.S. TRADE PARTNERS HAS REALLY PLAYED THIS GAME WELL AGAINST PRESIDENT TRUMP AND THEY HAVE BEEN REWARDED BY IT BY NOT GETTING HIT WITH SOME OF THE TARIFFS THAT CANADA HAS IN SOME OF THE ONES THAT ASIAN ECONOMIES HAVE. WITH MEXICO IS PREPARING TO DO IS TO PUT HIGHER TARIFFS ON CHINESE IMPORTS AS A WAY TO SORT OF CLOSE OFF WHAT WASHINGTON OFFICIALS SEE AS A BACKDOOR INTO THE U.S. MARKET SO AS THE U.S. RAISES ITS TARIFFS AGAINST CHINESE GOODS, THEY HAVE TO FLOW OTHER PLACES AND MANY OF THEM ARE GOING TO MEXICO. TALKING ABOUT CARS AND MACHINERY AND THE KIND OF THINGS THAT THE U.S. AND MEXICO DON'T WANT TO BE FLOODED WITH. SO MEXICO IS POSITIONING ITSELF HERE REALLY THE LONGER GAME IS TO POSITION THEMSELVES IN A GOOD WAY HEADING INTO THE RENEGOTIATION OF THE USMCA, THE FREE TRADE AGREEMENT BETWEEN CANADA THE U.S. AND MEXICO. THOSE DISCUSSIONS ARE GOING TO KICK OFF IN THE COMING WEEKS AND MONTHS. > > THE TRUMPET ADMINISTRATION'S TRIED TO GET RID OF THINGS LIKE AT LEAST TARIFF THEM HIGHER. IT SPEAKS OF THAT MOMENT BUT HOW MUCH FRICTION DOES THIS INTRODUCE IN THE GLOBAL TRADE SYSTEM IF IT'S NOT JUST COMING FROM THE U.S. BUT OTHER COUNTRIES AS WELL. > > IT IS THE DELEGATE BALANCING ACT THAT COUNTRIES LIKE MEXICO HAVE TO PLAY WHEN THEY'RE CHOOSING BETWEEN WANTING TO HAVE A FAVORABLE TRADE RELATIONSHIP WITH CHINA AND ONE WITH THE U.S.. PRESIDENT TRUMP HAS MADE IT VERY CLEAR THAT HE WOULD LIKE HIS ALLIES HELP WITH DE-RISKING SUPPLY CHAINS FROM CHINA TO THE REST OF THE WORLD AND MEXICO IS TAKING A STEP IN THAT DIRECTION WITH ITS PROPOSED BUDGET TODAY. DANI: ELSEWHERE, INDIA HAS BEEN IN THE TARIFF FIRING LINE AFTER GETTING 50% TARIFFS FROM THE WHITE HOUSE. THE WHITE HOUSE COUNSEL OF HER TRADE AND MANUFACTURING PETER NAVARRO SPOKE TO BLOOMBERG TV YESTERDAY. > > EVERYBODY IN AMERICA LOSES BECAUSE OF WHAT INDIA IS DOING. CONSUMERS AND BUSINESSES AND EVERYTHING LOSE AND WORKERS LOSE BECAUSE OF THESE HIGH TARIFFS CAUSING JOBS AND FACTORIES IN, HIGHER WAGES. THE TAXPAYERS WE TO FUND HIS WAR. > > THE U.S. CONTINUING TO HEAD OUT AGAINST INDIA AND SEEING INDIA SEEMINGLY STRENGTHEN ITS TRADE RELATIONS WITH CHINA. WHAT'S GOING ON. > > EXACTLY. THE U.S. INDIA ECONOMIC RELATIONSHIP TOOK THIS OMINOUS TURN THIS WEEK WITH THE DOUBLING OF TARIFFS TO 50%. THAT'S GOING TO HIT EXPORTERS UNDER PRESIDENT MODI VERY HARD AND WOULD PRESIDENT TRUMP IS ACTUALLY DONE IS TURNED INDIA MORE TOWARDS CHINA TO TRY AND REPAIR SOME OF THOSE STRAINED TENSIONS THEY'VE HAD INVOLVING BORDER SECURITY AND THOSE SORTS OF THINGS. PRESIDENT MODI IS TRAVELING TO CHINA IN THE COMING DAYS FOR THE FIRST TIME IN SEVEN YEARS AND SO WHEREAS THE U.S. USED TO TO TRY TO DRIVE A WEDGE BETWEEN THE -- CHINA AND INDIA, TRYING TO SPARK THEIR ECONOMIC RIVALRY TO THE U.S.'S BENEFIT, THE OPPOSITE IS HAPPENING. INDIA AND CHINA ARE LOOKING AT EACH OTHER GOING WE ARE BOTH GETTING STUNG BY TRUMP'S TRADE POLICIES, TARIFFS AND THOSE SORTS OF THINGS AND AT LEAST ON A SURFACE TRYING TO MAKE IT LOOK LIKE THEY ARE GOING TO REPAIR THOSE TIES. > > THANK YOU VERY MUCH FOR THE COVERAGE THIS MORNING. WE ARE WAS APPRECIATED BLOOMBERG BRENDAN MURRAY. A QUICK CHECK ON COMMODITIES BECAUSE YOU DO SEE OIL MARKETS MOVING LOWER BY JUST OVER HALF OF 1%. > > ALL OF THAT HAPPENING AGAIN AS THE U.S. RATING INDIA. IT'S ALSO THE SURPLUS CONCERNS THAT ARE REALLY TRYING TO FLARE AGAIN. NYMEX CREW DOWN 6/10 OF 1%. ANOTHER STOCK MARKET RECORD HIGH DESPITE MAY BE SOME DISAPPOINTMENT FROM NVIDIA WHICH STILL MOVING HIGHER IN THE FUTURE SESSION. WE WILL SPEAK WITH KATRINA DUDLEY FRANKLIN TEMPLETON. YOU'RE WATCHING BLOOMBERG BRIEF. ♪ DANI: HERE IS WHAT YOU NEED TO KNOW. AND AI BOOM TAKES A BREATHER. NVIDIA SIGNALS A GROWTH SLOWDOWN WITH TEPID REVENUE FORECAST. BUT THE BULLS DON'T BUDGE. STOCKS BRUSH OFF RESULTS AFTER THE S & P 500 NOTCHED ANOTHER RECORD HIGH. THE WORLD REBALANCES ITS TRADE DEADLINE. MEXICO -- CHINA AND INDIA GROW CLOSER. ANOTHER RECORD HIGH FOR THIS EQUITY INDEX BUT WE ARE LITTLE CHANGED THIS MORNING DESPITE CONCERNS ABOUT FED INDEPENDENCE. DESPITE NVIDIA WHICH RESULTS SHOWING EXPLOSIVE GROWTH AT THE VERY LEAST ACCELERATING YOU CAN SEE THAT DOWN 1.6%. SMALL CAPS TRADED CLOSED AT AN EIGHT MONTH HIGH. THE SMALL-CAP RALLY CONTINUES IN EARNEST. MEANWHILE IT HAS BEEN MORE STEEPENERS. JORDAN ROCHESTER SAYING THAT'S A CROWDED TRADE. YOUR TWO YEAR YIELD MOVES HIGHER BY A BASIS POINT. THE THIRTY-YEAR DOWN A BASIS POINT AT 419. LET'S LOOK AT SOME OF THE STOCKS THIS MORNING INCLUDING THE BIG ONE. NVIDIA. KRITI: THE BIG ONE DOWN 1.7% YOU WOULD THINK WITH FEARS AROUND AI THERE WOULD BE A BIGGER MOVE AND THIS IS LESS THAN WHAT I BROUGHT YOU JUST 30 MINUTES AGO. CERTAINLY PARING SOME OF THOSE LOSSES. PULLING DOWN SOME OF THE DATA NOT SEEING THAT EXPLOSIVE GROWTH. IN TERMS OF LAST QUARTER SALES GROWTH NOT TOO BAD A NUMBER TO SCOFF AT. NOT THE ONLY TECH EARNINGS OF THE LAST 24 HOURS. CROWDSTRIKE GETTING A LOT OF TENSION AS WELL. THE COMPANY HAVING A MAJOR OUTAGE LAST YEAR. CUSTOMER ATTRITION HAS BEEN A PROBLEM, SOMETHING THEY UNDERSCORE WHEN THEY CAME TO THE EARNINGS REPORT. I WILL LEAVE YOU WITH ONE LAST TECH EARNINGS STORY. HP WITH THEIR NUMBERS AS WELL AFTER THE BELL IN LINE WITH EXPECTATIONS. THE FULL GUIDANCE -- FORWARD GUIDANCE, TARIFFS LEANING INTO THEIR BOTTOM LINE. DANI: EXCELLENT ROUND UP THANK YOU VERY MUCH. KATRINA DUDLEY OF FRANKLIN TEMPLETON WEIGHS IN ON THE EQUITY MARKET WRITING THE U.S. MARKET HAS CONSOLIDATED AFTER A STRONG RUN. SMALL AND MID-CAPS ALONG WITH PEOPLE WAIT S & P 500 ARE OUTPERFORMING OR KEEPING PACE WITH THE MAG 7. HISTORICALLY THIS SUGGESTS LEADERSHIP AND SUSTAINED GAINS. KRYST -- KATRINA JOINS US NOW. GREAT TO SEE YOU THANKS FOR COMING IN THIS MORNING. IT FEELS LIKE THAT TRADE GOT ANOTHER BOOST WITH MAYBE A LITTLE BIT OF DISAPPOINTMENT FROM NVIDIA AND SMALL CAPS OUTPERFORMING SO HOW SUSTAINABLE IS IT. KATRINA: IT IS NOT THE MAG 7 THAT ARE DOING THE HEAVY LIFTING THAT THEY WERE DOING OVER THE LAST FEW YEARS. WE'VE ACTUALLY SEEN THE MARKET CAP WEIGHTED S & P PERFORM IN LINE WITH THE OVERALL S & P AND THAT'S GOOD NEWS BECAUSE IT MEANS THERE'S MORE STOCKS TO FOCUS ON. IT MEANS THERE'S MORE STOCKS TO GENERATE EARNINGS GROWTH AND WHEN THERE'S MORE EARNINGS GROWTH VALUATIONS WILL BE SUPPORTED. ULTIMATELY THE END OF THE DAY IT IS EARNINGS GROWTH THE DRIVES MARKETS. DANI: WE SAW IT WAS A STRONG EARNINGS SEASON. SOMETHING LIKE 44% OF COMPANIES UPGRADED THEIR OUTLOOK BUT IN THE BACKGROUND THERE IS THIS REALLY MACRO NERVOUSNESS. IS THERE A DISCONNECT BETWEEN THE TWO. KATRINA: 80 SO EASY TO POINT TO THOSE POINTS. I'VE ALWAYS BEEN IN THAT GLASS HALF-FULL CAMP I HAVE TO ADMIT THAT OPTIMISM SOMETHING THAT WAS PERVADING MY CAREER. IF I TAKE A LOOK UNEMPLOYMENT RATES ARE VERY LOW. THE STOCK MARKET BUYBACKS WE ARE AT ONE TRILLION ANNOUNCED BUYBACKS ALREADY. AND I HAVE A LOOK AT THAT TYPE OF UNDERLYING MARKET SUPPORT AND IF I PAIR THAT WITH GOOD EARNINGS GROWTH THAT IS SUPPORTED BY GOOD STRONG ECONOMY I DO THINK THERE'S A LOT OF GOOD NEWS OUT THERE AND GOOD NEWS IS SUPPORTIVE OF WHERE THE MARKET IS. DANI: I HAD LORI CALVO SEEN ON YESTERDAY SAYING THERE WAS A SHORT-TERM BOOST TO SMALL CAPS, BUT THE INDEX ITSELF THE QUALITY ISN'T AS GOOD SO THAT CAN ONLY LAST FOR SO LONG. HOW OVERWEIGHT DO YOU WANT TO BE ON SMALL CAPS IF IT IS MAYBE SOME OF THE RATES LIFTING IT UP FOR NOW. KATRINA: I WONDER WHAT PEOPLE MEAN WHEN THEY SAY WHAT'S A QUALITY SMALL-CAP OR LESS QUALITY SMALL-CAP. YOU WANT TO LOOK AT WHERE YOU'RE BUYING THINGS. SO WHAT WE'VE BEEN ADVOCATING FOR IS COMPANIES WITH LOW LEVERAGE EVEN THOUGH WE EXPECT INTEREST RATE CUTS YOU DON'T HAVE ANY INTEREST RATE UNCERTAINTY AND THEY ALSO HAVE A BALANCE SHEET THAT THEY CAN INVEST BEHIND. I THINK THAT'S VERY IMPORTANT. THEN YOU LOOKING AT COMPANIES WHICH HAVE RETURNS ON CAPITAL. IF YOU WERE TO PAIR THAT YOU COULD PROBABLY GET TO THE QUALITY BUT I DON'T NECESSARILY IN THE CAMP THAT NEEDS TO BE AN INVESTMENT STRATEGY OF BEING ON QUALITY -- LONG QUALITY AND SHORT NOT SO QUALITY. IN THE SMALL-CAP A TYPE OF RECIPE FOR SUCCESS IS ALWAYS GOOD. > > WHAT YOU MAKE OF THE FACT WE HAVE NVIDIA TAPPET AND IN THE PAST NVIDIA WOULD'VE COME CRASHING DOWN TO EARTH DRAGGING EVERYTHING ALONG WITH IT IT'S AN INCREDIBLY CALM MARKET. > > I THINK PART OF IT IS THE FACT THAT THERE ARE ZEROS CHINA SALES AND THAT FORECAST. IF I TAKE A LOOK AT THE RANGE IT MET EXPECTATIONS BUT SOME OF THE ANALYSTS WERE AT MUCH HIGHER 60 MILLION RANGE. I THINK IT WAS A LITTLE BIT OF MISSING SOME FAIRLY OPTIMISTIC. THEY GIVE SOME KIND OF GLIMMER OF HOPE BUT IF THEY HAVE SOME TYPE OF SETTLEMENT WITH THE ADMINISTRATION OVER SALES TO CHINA THAT IS ADDITIONAL UPSIDE. SO I THINK THAT IS WHY THEY GET THE DOWNDRAFT IN THE STOCK AROUND 3%. THAT'S WHAT EXPLAINS THAT. THE SECOND THING IS I'VE GROWN UP IN A MARKET WHERE WE ARE TRAINED TO BUY THE DIP. NVIDIA IS UP SO MUCH, PEOPLE ARE STARTING TO REALLY SEE THE BENEFITS OF AI AS IT COMES INTO THEIR OWN WORKPLACE AND I WONDER HOW MANY PEOPLE HAVE BEEN SITTING ON THE SIDELINES AND SAYING. > > IT FEELS MORE THAN JUST NVIDIA THAT'S INCREDIBLY COMMON. FOR ALL THE HECK DISTANT -- EFFECTIVENESS THAT'S GONE ON. THIS SUMMER HAS FELT LIKE A DECADE. YOU HAVE THINGS LIKE TRUNK FIRING A FED GOVERNOR AND THE DOLLAR BARELY MOVES. YES YOU GET SOME CURVE STEEPENING BUT NOT HUGE MOVES IN THE TREASURY MARKET. WHEN YOU MAKE OF THE FACT OVERALL IT FEELS LIKE IT'S BEEN A VERY CALM MARKET THAT'S TRADED. KATRINA: WE HAD A LOT OF VOLATILITY IN THE MARKET. WE HAD SUCH A DOWNDRAFT AND ONE OF THE THINGS WE WERE LOOKING AT APRIL AND SAYING THIS IS A TIME TO BUY EQUITIES WE WERE LOOKING FOR AN UPDRAFT IN THE MARKET AND I DON'T THINK WE THOUGHT IT WOULD HAPPEN THIS QUICKLY. SO THAT'S BEEN ONE OF THE THINGS THAT HAS REALLY SURPRISED US IS THE SPEED AND THE PACE OF THAT RECOVERY. I THINK WHEN WE LOOKED AT THE TARIFF NEWS IF YOU WOULD TAKE ABOUT OFF THE TABLE THE UNDERLYING ECONOMY HAS CONTINUED TO BE STRONG AND THAT'S WHAT'S DRIVING THE MARKET. THE GAINS ARE NOT JUST SITTING IN A SMALL GROUP OF PEOPLE OVER THERE IN THE CORNER IT IS MIGRATING DOWN TO THE REST OF WALL STREET. I THINK THAT'S WHY YOU HAVE A LOT OF CALM BECAUSE MORE PEOPLE ARE SHARING IN THE GOODS IN THE GAINS OF THE MARKET. DANI: THEN AGAIN IT FEELS LIKE THIS CONTRAST WHERE YOU HAVE THAT CONVERSATION ON THE ONE HAND AND ON THE OTHER YOU HAVE THE FED TURNING MORE DOVISH SAYING THEY ARE CONCERNED ABOUT THE LABOR MARKET. KATRINA: PART OF THE CONCERN ABOUT THE LABOR MARKET IS THE INFLUX OF NEW GRADUATE HAD. IT IS A TOUGH JOB MARKET. IT HAS BEEN A TOUGH JOB MARKET. SOME OF THAT IS JUST A REFLECTION OF THE UNCERTAINTY THAT COMES FROM THE EARLIER PART OF THE YEAR. WE SET OUR HIRING PLANS EARLIER IN THE YEAR AND THAT WAS THAT LEVEL OF UNCERTAINTY AND I EXPECT NOW THAT WE SEE SOME RESOLUTION WE SEE SOME ADDITIONS TO THAT JOB MARKET. THEY WILL COME INTO THE MARKET BUT MAY BE ON A DELAYED BASIS. I THINK THAT'S PART OF WHAT THE FED IS LOOKING AT. SOME OF THOSE NUMBERS AND THEN THE SECOND PART OF IT IS WE TALKED ABOUT BENEFITS FROM AI. THERE IS ALSO ANOTHER SIDE TO AI WHICH IS SOME PARTS OF THE MARKET WILL BE DISLOCATED AND I THINK THAT THE OTHER AREA WHERE PEOPLE ARE CONCERNED. DANI: YOU'VE GRADUATED GOT THERE AND FIND A JOB. KATRINA: THE FACT IS AI YOU AND I WERE TALKING ABOUT IT THE FACT THAT PEOPLE CONCERNED ABOUT LOSING CRITICAL THINKING OR LOSING ABILITY, I THINK IT GIVES MORE CAPACITY TO DO THAT. SO IMPROBABLY THERE IN THE CAMP THAT IT TAKES AWAY A LOT OF THE DRUDGERY WORK AND ANALYSTS SO MUCH TIME TO DO THAT CRITICAL THINKING TO DO THOSE ADDITIONAL MEETINGS AND REALLY MAKE FOR MUCH MORE INVESTMENT. SO I AM OPTIMISTIC. > > WRITING CODE MAKING EXPEL -- XL SPREADSHEETS. A NICE FUTURE TO SEE COMING. SO GREAT TO SEE YOU. THAT'S KATRINA DUDLEY OF FRANKLIN TEMPLETON. SOME OTHER STORIES THAT ARE TRENDING ON THE TERMINAL THIS MORNING. BOUNCING BACK DELIVERING A SALES BEAT IN THE SECOND HALF OF ITS NEW FINANCIAL YEAR. THE COGNAC MAKER EXPECTS THE RESUMPTION OF DUTY-FREE SALES TO CHINA. EXPECTING OVERALL SALES TO IMPROVE FOR THE SECOND HALF. JAPANESE TRADING HOUSE GETTING A VOTE OF CONFIDENCE FROM WARREN BUFFETT'S BERKSHIRE HATHAWAY. RAISING STAKES IN ME TO BE DEAF MITSUBISHI BOOSTING SHARES OF ITS COMPANY HAS HOLDINGS IN JAPAN'S FIVE BIGGEST TRADING FIRMS A MOVE THAT'S BOOSTED INVESTOR CONFIDENCE. NORTH KOREAN LEADER KIM PLANS TO ATTEND CHINA'S MILITARY PARADE ON SEPTEMBER 3 ALONGSIDE RUSSIAN PRESIDENT VLADIMIR PUTIN. HIS ATTENDANCE WAS CONFIRMED BY CHINESE AND NORTH KOREAN MEDIA. COMING UP WE DIVE DEEPER INTO NVIDIA'S RESULTS AND WHAT IT MEANS FOR AI SPENDING WITH FRANK LEE AT HSBC. STAY WITH US ON YOUR BRIEF. ♪ > > THE OPPORTUNITY AHEAD IS IMMENSE. AI PLATFORMS WILL BE SCALING INTO THE THREE TO $4 TRILLION GLOBAL AI FACTORY BUILDOUT THROUGH THE END OF THE DECADE. > > NVIDIA CEO JENSEN HUANG SAID AI DEMAND IS STILL STRONG AFTER THE CHIPMAKER SIGNALED SLOWING GROWTH WITH A TAPPET FORECAST. JOINING US IS FRANK LEE WHO HAS A $200 PRICE TARGET AND A HOLD RATING ON NVIDIA. LET ME GET YOUR FIRST TAKE ON THE RESULTS YESTERDAY. FRANK: BASICALLY IN A WORD WE JUST DID NOT SEE A BEAT AND RAISE AND IT'S BEEN ALMOST FIVE QUARTERS SINCE THE LAST TIME WE SAW A SIGNIFICANT BEAT AND RAISE FROM NVIDIA. THE NARRATIVE IS STILL LARGELY VERY POSITIVE BUT WE JUST DIDN'T QUITE SEE THIS BEAT AND RAISE THE MARKET HAS BEEN LOOKING FOR. WE HAVE CONTINUED TO SEE THAT DEMAND IS STRONG BUT THE MARKET HAS GOTTEN SO USED TO THEM THE HOPE FOR THEM TO BEAT NUMBERS AND THEY HAVEN'T SO I THINK THAT'S BEEN ONE OF THE REASONS THE STOCK HAS CONTINUED TO COME OFF. DANI: DOES THAT CHANGE OR DO WE JUST ACCEPT THIS AS THE NEW NORMAL. FRANK: PART OF IT IS THE BASE IS SO MUCH HIGHER FOR THE COMPANY COMPARED TO TWO YEARS AGO. I ALSO THINK THE OTHER THING WE SEE IS THE MARKET TENDS TO RUN UP LIKE WE HAVE SEEN THE LAST COUPLE OF MONTHS AHEAD OF THIS AND I THINK A LARGE PART OF THE NVIDIA NARRATIVE HAS CHANGED FROM MORE ON COMPANY SPECIFIC THINGS THEY ARE DOING FOR THE FIRST TWO YEARS OF THE AI STORY THE ROADMAP WAS CONSTANTLY SURPRISING THE UPSIDE AND WE ARE SEEING PRICE INCREASES. NOW IT'S A FUNCTION OF HOW BIG IS THIS GOING TO BE AND IT'S A BIGGER MORE MACRO NARRATIVE BEING DICTATED BY THE ONGOING SPEND BY HYPERSCALERS. DANI: EVEN IF YOU HAVE AN ADDRESSABLE MARKET THAT'S EXPOSED -- EXPLODING. WHAT ABOUT ON THE SUPPLY SIDE OF THINGS. WHAT ARE SOME OF THE SUPPLY CHAIN MATCHES HOLDING NVIDIA BACK AND HOW QUICKLY COULD THEY BE RESOLVED? > > THAT IS ALSO A GOOD POINT. ONE THING WE'VE SEEN IS THERE HAS BEEN A MISMATCH OF HOW MUCH NVIDIA HAS BEEN ABLE TO SHIP ON A CHIP LEVEL AND HOW MUCH THEY CAN ASSEMBLE ON A IRAQ SERVER LEVEL AND THAT GAP HAS CONTINUED TO PERSIST. THE RATES HAVE IMPROVED BUT THERE IS STILL SOMEWHAT OF A GAP THERE. THE MOST RECENT QUARTER WE'VE SEEN THIS ALSO START TO BUILD UP A BIT. THAT HAS RAISED A BIT OF A RED FLAG. WE DON'T THINK IT'S A SERIOUS ISSUE BUT THAT GAP SHOWS WE ARE NOT GOING TO SEE THIS NARROW ANYTIME QUICKLY. I THINK A COUPLE OF MONTHS AGO WHEN PEOPLE SAW THE YIELDS IMPROVING WE THOUGHT THERE WOULD BE A MUCH FASTER NARROWING OF THIS GAP BUT IT SEEMS LIKE IT IS STILL THERE. DANI: DOES THAT MEAN WHEN WE GET EARNINGS FROM THE LIKES OF META, ALPHABET THOSE BECOME MORE ESSENTIAL TO UNDERSTANDING WHERE NVIDIA GOES FROM HERE VERSUS NVIDIA'S EARNINGS THEMSELVES. > > I THINK THAT'S WHAT WE THINK THE NARRATIVE STARTS TO SHIFT. IF YOU LOOK AT NEXT YEAR, THE OUTSIDE OF META WHICH IS GIVEN AN EXPLICIT TARGET FOR NEXT YEAR'S GROWTH. WE HAVEN'T SEEN AN ACTUAL FORECAST FOR NEXT YEAR SO IF YOU LOOK AT WHERE MOST ANALYSTS ARE EXPECTING FOR THE CAPEX SPEND IT'S ABOUT 15 TO 20%. THAT'S WHERE WE WERE AT THIS YEAR FOR THESE -- FOR THIS YEAR'S CAPEX. THE LAST COUPLE OF MONTHS THAT NUMBER HAS RISEN FOR THIS YEAR SO THE QUESTION IS NEXT YEAR DO WE SEE THE CAPEX SPEND INCREASE BY ANOTHER 40 TO 50%. IF SO WE WILL HAVE AN OPPORTUNITY FOR NVIDIA EARNINGS TO GO UP NEXT YEAR. BASICALLY THERE IS NO BEAT AND RAISE. THERE WASN'T A REASON FOR ANALYSTS TO TAKE THE NUMBERS HIGHER FROM WHERE WE ARE TODAY. > > WITH THE CFO TALKING ABOUT STARTING TO GET LICENSES TO SHIP TO CHINA BUT THE 15% REVENUE WHICH THEY ARE SUPPOSED TO GIVE TO THE U.S. HAS NOT BEEN CODIFIED AND BASICALLY SAYING WE CAN REALLY PAY THE U.S. UNTIL IT DOES, PRESUMABLY OF PRESIDENT TRUMP SEES THAT HE MIGHT NOT BE SO HAPPY. HOW DOES IT CHANGE THINGS WITH UNCERTAINTY OVER THAT 15%? FRANK: THE -- IT IS UNUSUAL TO SEE THIS KIND OF POLICY BUT I THINK IT'S MORE THAN JUST THAT. THE WAY WE THINK ABOUT THE CHINA BUSINESS IT'S BEEN VERY MUCH A ONE-SIDED VIEW WITH THE U.S. WOULD ALLOW NVIDIA TO INITIALLY NOT GO INTO CHINA BUT ONE THING WE HAVEN'T CONSIDERED IS HOW THE CHINA GOVERNMENT RESPONSE HAS BEEN. RIGHT NOW WE HAVE A CERTAIN SEEING THERE'S BEEN A HOLDING OFF THE CHINA CSP UNTIL THERE'S A BETTER VISIBILITY. IT DEPENDS ON WHAT THE U.S. DOES, I THINK THE CHINA SIDE THE DEMAND IN THE NEAR TERM AT LEAST HASN'T BEEN AS EXPECTED. IT COULD BE TEMPORARY OR PART OF THE TRADE NEGOTIATIONS BUT THAT DOES ADD AN ELEMENT OF UNCERTAINTY. > > SUCH AN EXCELLENT POINT AND I'M GLAD YOU CONTINUED TO TALK ABOUT THIS BECAUSE BEIJING HAS BEEN PUSHING FOR MORE HOMEGROWN AI CHIPS AND CHIPMAKERS. IS THE RISK OF DISPLACEMENT FOR NVIDIA IN THE REGION REAL? > > I DON'T THINK THE RISK OF DISPLACEMENT IS THAT SIGNIFICANT IN THE NEAR TERM. NVIDIA IS A SOLUTION IS STILL THE BEST OUT THERE. WE DO SEE SOMETIMES THE GEOPOLITICAL SIDE OF IT GETS IN THE WAY IN THE NEAR TERM. I THINK THIS IS WHAT WE ARE SEEING NOW, NVIDIA IS NOT THE ONLY ONE. AND TALKED ABOUT THIS -- AMD TALKED ABOUT THIS IN THEIR CALL. I THINK OUR FOCUS IS WHAT MATTERS MORE IS THE UPSIDE OPPORTUNITY FOR HYPERSCALERS WILL BE MUCH MORE IMPORTANT THAN THE INCREMENTAL UPSIDE ON THE CHINA MARKET. DANI: GIVEN THAT THE GUIDANCE DID NOT INCLUDE THE CHINA REVENUE I UNDERSTAND THERE'S A LOT OF UNCERTAINTY CAN YOU VIEW THE GUIDANCE MAY BE AS CONSERVATIVE THEN FOR NOT INCLUDING THAT PIECE? FRANK: SURE. THEY'VE ALSO ENDED THEY WOULD SEE AN EXTRA 2.5 MILLION IN REVENUES WITH THE CHINA PIECE. THE BEGINNING OF THE YEAR NVIDIA HAD TALKED ABOUT POTENTIALLY NOT MISSING OUT ON 15 BILLION IN REVENUES. I DON'T THINK WE GET THE FULL 15 MILLION IN THE BACK HALF OF THE YEAR AND THEY WILL GET SOME OF IT BACK BUT IT DOES SHOW YOU PERHAPS THE MARKET SIZE IS NOT PERHAPS AS BIG AS INITIALLY THOUGHT. AND IT'S NOT BECAUSE DEMAND ITSELF IS POOR BUT THE FACT WE HAVE GEOPOLITICS CAUGHT IN THE MIDDLE OF THIS. > > THANK YOU SO MUCH FOR JOINING US THIS MORNING WITH THE LATEST ON THOSE NVIDIA EARNINGS. FRANK LEE ON THOSE NVIDIA SHARES. LET'S STICK WITH EARNINGS AND WE WILL GET MORE RETAILERS AROUND BEFORE THE MARKET OPEN. ENCODING BEST BUY, DOLLAR GENERAL, VICTORIA'S SECRET AMONG OTHERS. ANDREA FELDSTEIN OF BLOOMBERG OPINION JOINS US. YOU HAVE COMPANIES THERE LIKE DOLLAR GENERAL THAT MAY BE TARGET MORE TO THE LOWER END OF CONSUMERS. WHAT IF WE LEARNED WITH HOW THOSE COMPANIES ARE PERFORMING? ANDREA: THE LOWER INCOME CONSUMER IS STILL UNDER PRESSURE, THAT'S BEEN CLEAR THROUGHOUT THE EARNINGS SEASON. WE HAVE SEEN WAL-MART DO VERY GOOD, MAYBE NOT AS WELL AS PEOPLE WERE HOPING BUT IT DID DO WELL AND IT IS HELPING THAT IT OFFERS VALUE AND THOSE LOWERING -- LOWER INCOME CONSUMERS ARE LOOKING FOR VALUE. VALUE IS IN DEMAND ACROSS THE INCOME SPECTRUM. DANI: JAMES SMUCKER YESTERDAY FEELING PRESSURE ON OFFERINGS LIKE HIGHER COFFEE COSTS. BECAUSE OF SUPPLY CHAIN ISSUES OR TARIFFS ON BRAZIL, WHAT DOES THAT TELL US ABOUT WHERE WE STAND WITH THE CONSUMER NOW? ANDREA: THE THING IS WE HAVEN'T SEEN ACROSS THE BOARD WE HAVEN'T YET SEEN A LOT OF TARIFFS COMING THROUGH. WE ARE ONLY GETTING HINTS OF WHERE TARIFFS ARE COMING THROUGH. WE'VE GOT THE WORST PART AND AS WE GET INTO THE HOLIDAY SEASON WE ARE GOING TO SEE THIS STANDOFF BETWEEN COMPANIES TRYING TO PUSH TARIFF COSTS ON TO CONSUMERS IN CONSUMERS PUSHING BACK. CONSUMERS HAVE BEEN HERE BEFORE. THEY HAVE LEARNED A LOT OF HABITS FROM THE PANDEMIC, THAT POST-PANDEMIC INFLATION, CLUBBING TOGETHER, BUYING IN BULK, BUYING PRIVATE LABEL. DIFFERENT COUPONS. ALL OF THESE THINGS CONSUMERS CAN DO TO MANAGE THEIR INFLATION. DANI: HOW IMPORTANT IS THIS UPCOMING PERIOD GOING TO BE WITH THE HOLIDAYS AND UNDERSTANDING WHAT THE CONSUMER IS BUYING AND THE PRICE HIKES THEY ARE WILLING TO STOMACH. ANDREA: WE WILL FIND OUT WHO IS GOING TO EAT TARIFFS. COMPANIES HAVE BEEN ABSORBING SOME OF IT BUT PUSHING SOME OF IT THROUGH AND THERE IS GOING TO BE MUCH MORE OF THAT AS WE GET INTO THE HOLIDAYS. THE CONSUMER HAS STILL BEEN BUYING TO SOME EXTENT IF IT'S BEEN GOOD VALUE OR IF IT'S A GOOD PRODUCT. IT'S REALLY BEEN ALTHOUGH PREMIUM, IT'S BEEN IMPROVING ITS PRODUCT, POLISHING ITS IMAGE, SO WHEN THERE IS A STANDOUT PRODUCT CONSUMERS ARE WILLING TO BUY SO YOU NEED TO BE VERY GOOD VALUE OR JUST VERY GOOD TO WIN IN THIS HOLIDAY SEASON. > > THANK YOU SO MUCH FOR JOINING US. YOU ARE WATCHING BLOOMBERG BRIEF. ♪ DANI: LET'S GET YOU SET UP FOR YOUR TRADING DAY. EARNINGS BEFORE THE BELL FROM BEST BUY, DOLLAR GENERAL, DICK’S SPORTING GOODS AMONG OTHERS. JOBLESS CLAIMS CORE PCE AND A REVISED GDP. DELL'S RESULTS ARE EXPECTED AFTER THE MARKET CLOSED. SOME INDIVIDUAL MOVERS NVIDIA EXTENDING DECLINES. IT WAS DOWN WAS 3%. NOW DOWN JUST ABOUT 2% ON THAT TEPID FORECAST. CROWDSTRIKE SHARES DOWN 3.4%. THE RESULTS RAISING QUESTIONS ABOUT THEIR GROWTH. THEY ALSO MISSED FORECAST ESTIMATES. SNOWFLAKE SHARES UP 14% POSTING STRONG RESULTS AFTER THE BELL AND BOOSTED GUIDANCE. SURVEILLANCE TAKES THINGS FROM HERE. ♪

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Stocks Steady After Record High; Nvidia Forecasts Decelerating AI Growth | Bloomberg Brief 8/28/25

US equity futures stall its rally after the S&P 500 notched another all-time high, shaking off doubts about AI from Nvidia's earnings. The world's most valuable company gave a tepid revenue forecast for the current period, signaling that growth is decelerating after a staggering two-year boom in AI spending. Jordan Rochester of Mizuho says Fed Chair Powell has raised the bar for a September rate cut. Katrina Dudley of Franklin Templeton believes the Magnificent Seven isn't doing the heavy lifting in the market anymore. Frank Lee of HSBC cites Nvidia's high expectations as the reason for its post-earnings price drop. “Bloomberg Brief” delivers the market news, data and analysis you need to set your agenda. (Source: Bloomberg)

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