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00:00ROMAINE: THE LINK BETWEEN THE AI BOOM AND INFLATION. LIVE FROM BLOOMBERG HEADQUARTERS IN NEW YORK, I AM ROMAINE BOSTICK. SCARLET: I'M SCARLET FU. WE WILL EXPLAIN THE LINK AND A BIT, LET'S LOOK AT EQUITY MARKETS. S & P 500 AT A RECORD HIGH, AND ANY GAIN IS A RECORD HIGH. THE MAG SEVEN DOING BETTER THAN THE OVERALL MARKET BUT NVIDIA WHO HAS BEEN THE STAR IS A LAGGARD TODAY. INTERESTING MOVE IN TREASURIES BECAUSE IN THE BOND MARKET IT'S A REVERSAL OF THE STEEPENING YIELD CURVE WITH YIELDS ON THE TWO-YEAR RISING. THE BLOOMBERG DOLLAR INDEX SHOWING A WEAKER U.S. DOLLAR. ROMAINE: TWO OF THE BIGGEST OVERHANGS, INFLATION RISK AND FEARS OF AN AI BUBBLE ARE GIVING THE BULLS AND BEARS REASON FOR CONVICTION. NVIDIA'S DECELERATING GROWTH FROM LUDICROUS SPEED TO MERELY LIGHTSPEED IS BEING SHRUGGED OFF AS MORE A FUNCTION OF TRADE POLICY RATHER THAN WHAT THE BEARS SAY IS A SIGN THE AI BOOM IS BURSTING. > > I THINK THE BOOM IS JUST STARTING. WHEN YOU LOOK AT THE NUMBERS AND ESPECIALLY WHEN YOU FACTOR IN WHAT CHINA WILL BE, TALKING ABOUT 50% TYPE GROWTH NUMBER, THESE SHOW THE NEXT STAGE OF ADOPTION IS JUST STARTING. ROMAINE: IN FAIRNESS A LOT OF INVESTORS THINK THAT SENTIMENT IS RIGHT, PARTICULARLY EVIDENCED IN PRIVATE MARKETS WERE AI ACCOUNTED FOR 65% OF VC FUNDING IN THE FIRST HALF BUT DISLIKE THE PUBLIC STOCK MARKET, CONCENTRATION CONCERNS WITH NVIDIA AND MICROSOFT, ETC. THERE ARE CONCERNS THAT PRIVATELY HELD HE MYTHS -- HELD COMPANIES ARE WHO BRING UP OTHER COMPANIES IN THE SPACE. THAT BRINGS US TO INFLATION, WITH THE CRITICAL REPORT DUE OUT TOMORROW THAT IS LIKELY TO SHOW THE PERSISTENCE OF PRICE PRESSURES. IT MAY SEEM LIKE AN ODD LINK TO AI INVESTMENT. IF YOU DO BELIEVE THE M.I.T. PAPER FROM LAST WEEK HAS GENERATED NO MEASURABLE RETURNS FOR 95% OF ENTERPRISE AI PILOTS. SCARLET: THAT RAISES EYEBROWS. TECH STARTUPS ARE STAYING PRIVATE FOR LONGER, THIS GOES BACK FIVE YEARS. HERE'S THE PANDEMIC AND YOU CAN SEE THE NUMBER OF VC EXITS. SOME COMPANIES PICK UP IN THE SEVEN HAVE OF 2020 TO 2021 AND THEY PEAKED RIGHT HERE. SINCE THEN VC EXITS HAVE DECLINED AND STABILIZED. THE BLUE SLICE IN THESE BARS, VISIBLE THROUGH 2021, BUT NOT SO MUCH IN THE PAST FIVE QUARTERS OR SO, YOU CAN BARELY SEE IT. MOST VC EXITS ARE THROUGH M & A, THE ORANGE SECTION, AND TO A LESSER DEGREE, BUYOUTS, WHICH IS YELLOW PART. ONLY 27 COMPANIES THIS YEAR WENT PUBLIC, THE SMALLEST NUMBER IN AT LEAST 10 YEARS. ROMAINE: WE WANT TO TALK ABOUT A TECH FOCUSED FIRM, A FUND WITH $8 BILLION UNDER MANAGEMENT. THE CO-CEO AND COFOUNDER JOINS US. I WANT TO TALK ABOUT THE SENTIMENT ABOUT THE BIG INVESTMENT WE SAY -- SEE IN THE AI INFRASTRUCTURE WRIT LARGE. YOU'VE BEEN IN THE FOREFRONT WITH EARLY-STAGE INVESTMENT AS WELL AS GROWTH STAGE INVESTMENT LIKE PERPLEXITY AND SOME OTHERS. WHAT IS THE STATE OF THAT WHERE YOU SIT? RAJ: AI IS JUST GETTING STARTED. IT IS THE NEW ELECTRICITY BUT THERE IS A LOT OF BOTTLENECKS. THE GRID IS MADE OF GPU'S AND THERE'S A LOT OF INVESTMENT AND I REMAIN BULLISH ON NVIDIA AND THE FACT THAT WE WILL NEED A LOT MORE GPU'S TO POWER THE NEXT WAVE OF AI BOOM. ROMAINE: WE TALK ABOUT THE MISMATCH IF THERE IS ONE BETWEEN WHAT WE ARE SEEING IN TERMS OF EXPECTATIONS AND IN TERMS OF RETURNS. I KNOW THERE'S A LOT OF HAY MADE ABOUT THE M.I.T. PAPER, BUT I'M CURIOUS HOW ALIGNED INVESTOR EXPECTATIONS ARE WITH THE CURRENT REALITY. RAJ: I THINK THE PAPER FROM M.I.T. IS SPOT ON BUT TO YOUR POINT, IT'S NOTHING NEW. THE STARTER WORLD HAS ALWAYS BEEN ABOUT TAKING RISK AND TRYING NEW THINGS. IT'S THE BEST TIME EVER TO BE A FOUNDER OF A COMPANY, YOU DON'T EVEN NECESSARILY NEED A TECHNICAL COFOUNDER BECAUSE PEOPLE WHO HAVE NEVER LEARNED CODING ARE BUILDING GREAT PRODUCTS. I THINK YOU WILL SEE A BOOM IN TERMS OF THE NUMBER OF STARTUPS AND A LOT OF THEM WILL FAIL. IT'S PROBABLY ONE OF THE HARDEST TIMES I'VE SEEN TO BE A VENTURE INVESTOR. WE KNOW THERE'S THE NEXT GENERATION OF COMPANIES THAT WILL BE BUILT, THE LAST GENERATION OF PEOPLE IN THE MARKET, I THINK WE WILL SEE A BROADER SET OF COMPANIES THAT ARE DURABLE AND BUILT FOR THE NEXT GENERATION OF AI NATIVE APPS BUT YOU CAN'T JUST INVEST IN THE MODELS YOU HAVE TO INVEST IN THE POWER AND GPU'S AND THE PIPELINES THAT WILL DRIVE THE NEXT WAVE OF AI. SCARLET: I'M SURE A LOT OF PEOPLE ARE LOOKING FORWARD TO THE NEXT WAVE BECAUSE THERE'S A LOT OF FOCUS ON THOSE SEVEN CRITICAL COMPANIES. SPEAKING OF THE MAG SEVEN, I WANT TO GET YOUR TAKE ON NVIDIA'S RESULTS AND THE FORECAST WHICH DISAPPOINTED A LOT OF PEOPLE EVEN THOUGH IT'S ROBUST GROWTH RATES. I KNOW YOU DON'T FOLLOW THE STOCK MARKET AS CAREFULLY AS THOSE WHO TRACK PUBLIC MARKETS THAT IT OPENS LOWER AND HAS STEADILY PARED LOSSES. WHAT DOES THIS SAY ABOUT THE LEVEL OF EXPECTATIONS TIED TO A COMPANY LIKE NVIDIA AND HOW THAT MAY TRANSLATE INTO HOW PEOPLE VIEW TECH STARTUPS OVERALL? RAJ: A GREAT QUESTION. I THINK THE AI BOOM IS NOT GOING TO BE LINEAR. I THINK YOU WILL SEE STARTS AND STOPS TO IT. YOU SAW THIS IN E-COMMERCE. IN THE LATE 1990'S WE SAW THIS, IT TOOK 20 YEARS FOR E-COMMERCE TO GET TO WHERE IT IS TODAY. I THINK AI WILL BE FASTER. I THINK WE'RE IN THE FIRST TWO OR THREE YEARS OF A 20 YEAR CYCLE. IT WILL TAKE TIME AND I THINK NVIDIA IS SUFFERING FROM ASTRONOMICAL EXPECTATIONS. IT IS STILL PRETTY IMPRESSIVE GROWTH AND I THINK WE NEED OTHER COMPANIES BUILDING THESE KIND OF GPU'S. IT CAN'T BE ONE COMPANY. I THINK FOR THE U.S. TO BE ABLE TO CONTINUE TO BE A LEADER AND AI, WE HAVE TO SEE A BROADENING OF THE MAG 7. WE HAVE TO SEE A BROADENING OF THE NUMBER OF COMPANIES BUILDING THE FUNDAMENTAL INFRASTRUCTURE OF AI. SCARLET: FOR NVIDIA THERE'S CONCERN ABOUT THE PACE OF INVESTMENT IN AI SYSTEMS IS NOT SUSTAINABLE. HOW MUCH DO YOU SEE THAT REFLECTED IN THE PRIVATE MARKETS? RAJ: YOU'RE DEFINITELY SEEING IT IN THE PRIVATE MARKETS. IT WAS A LOT OF FOCUS ON THE FUNDAMENTAL MODELS AND THE FOCUS IS SHIFTING TO THE AI APP LAYER. YOU'RE SEEING HYPERSCALERS FOCUS ON THE APP LAYER, AND WE ARE SEEING A LOT OF STARTUPS IN THAT APP LAYER. IT'S A TOUGH LAYER BECAUSE THERE ARE SO MANY COMPANIES BEING BUILT IN IT, AND THERE'S A DIVIDE BETWEEN LEGACY COMPANIES, AND WHEN I STARTED IT WAS A COMPANY LIKE GE AND NOW IT IS A COMPANY LIKE GOOGLE. EVEN A 10-YEAR-OLD COMPANY IS A LEGACY COMPANY AND YOU ARE SEEING A NEW WAVE OF AI NATIVE COMPANIES. I THINK LEGACY COMPANIES HAVE AN ADVANTAGE WITH THE DATA THEY HAVE AND IF THEY CAN FIGURE OUT HOW TO LEVERAGE THE DATA I THINK YOU WILL SEE SOME LEGACY COMPANIES PULL AHEAD BUT YOU WILL SEE A LOT OF NEW AI DATA, COMPANIES THAT STARTED FIVE TO 10 YEARS AGO. ROMAINE: WE WERE TALKING WITH SOMEONE ABOUT THE DOT-COM BUBBLE. THE IDEA OF WHO THE WINNERS WERE. THE IDEA THAT ALPHABET AND THEN GOOGLE FOR THE MOST PART CAME OUT ON TOP, CERTAINLY WHEN IT COMES TO THE SEARCH AND ADVERTISING SIDE OF THE SPACE. THIS IS A COMPANY THAT EFFECTIVELY DIDN'T EXIST DURING THAT BUBBLE, IT WAS PRIVATE AND DIDN'T GO PUBLIC UNTIL 2004. YOU'RE INVESTING IN A LOT OF COMPANIES IN THE PRIVATE SPACE AND MAY BE COULD ONE DAY ENTER PUBLIC MARKETS AND POTENTIALLY BE THE NEXT BIG THING, IS THAT A FAIR PARALLEL FOR INVESTORS IN PUBLIC AND PRIVATE MARKETS TO BE MINDFUL OF? RAJ: IT'S A FAIR PARALLEL. WE SHOULD ALL LEARN NOT ONLY FROM 1999 BUT 2021. THERE HAVE BEEN PERIODS OF TROUGH. I WAS A SKEPTIC IN 1999 ABOUT COMPANIES BEING BUILT THAT HAD NO REAL PROFITABILITY. I THINK TODAY WHAT YOU ARE SEEING IS A LOT OF AI COMPANIES ARE FUNDAMENTALLY PROFITABLE. THEY ARE PROFITABLE BECAUSE THEY HAVE VERY LOW COST. THEY ARE ABLE TO HAVE DEVELOPERS USE AI SO THEY HAVE LESS DEVELOPMENT COST, THEY ARE ABLE TO HAVE AI DRIVEN CUSTOMER SERVICE. THERE'S FUNDAMENTALLY BETTER PROFITABILITY. THINK WHAT A LOT OF VENTURE CAPITALISTS ARE LOOKING AT IS COMPANIES ARE GETTING VERY QUICKLY TO 10 MILLION OR 20 MILLION IN REVENUE BUT THAT DOESN'T IMPLY DURABILITY. I THINK IT TAKES A TRACK RECORD OF THREE TO FIVE YEARS TO PROVE YOU HAVE PRODUCT MARKET FIT AND WE CANNOT GET FOOLED AGAIN BY COMPANIES WHO IN A SHORT TIME GAINED A BUNCH OF TRACTION BUT ARE NOT SOLVING A FUNDAMENTAL PROBLEM CUSTOMERS HAVE, THEY ARE MORE ABOUT EXPERIMENTATION. ROMAINE: ALWAYS GREAT TALKING TO YOU. CO-CEO OF A FOUNDER LED CAPITAL FIRM. WE ARE COUNTING DOWN TO THE CLOTHES WITH A FOCUS ON NVIDIA. WE WILL TALK WITH LISA SHALETT IN A SACK. SCARLET: AND BACK-TO-SCHOOL SHOPPING AS SUMMER DRAWS TO A CLOSE. WE WILL TALK TO STEPHEN YELL OFF. ROMAINE: A PUSH AHEAD TO TOMORROW'S INFLATION GAUGE, AT LEAST THE PCE DATA WITH FRANCIS DONALD. THIS IS "THE CLOSE" ON BLOOMBERG. SCARLET: STOCKS AND A LIFT, DATA SHOWING JOBLESS CLAIMS PRETTY MUCH WHERE THEY WERE BEFORE AND GDP DATA SHOWING THE U.S. ECONOMY WHO FASTER THAN INITIALLY REPORTED LAST QUARTER. A LOT OF THAT FEELS LIKE COMPANIES RUSHING TO GET AHEAD OF TARIFFS. WHAT DOES THAT -- WHERE DOES THAT LEAVE EXPECTATIONS FOR THE REST OF THE YEAR? LISA, BACKWARDS LOOKING, AND THE NEXT DATA POINTS WILL BE KEY, PCE AND JOBS FOR AUGUST. WITH THE SEPTEMBER RATE CUT OF 20 FIVE BASIS POINTS PRETTY MUCH BAKED IN, HOW COMFORTABLE ARE YOU WITH CURRENT VALUATIONS? LISA: I THINK WE HAVE TO TAKE A STEP BACK AND ASK OURSELVES WHAT WILL HAPPEN WITH EARNINGS. I THINK IF YOU LOOK AT THIS MARKET, WHEN ALL IS SAID AND DONE, EARNINGS THIS YEAR UP ABOUT 10% IN THE MARKET, THE S & P 500 UP ABOUT 10%, OVERALL VALUATION MULTIPLES ARE FLAT. THAT'S TELLING US WE HAVE SQUEEZED ABOUT AS WE CAN SQUEEZE OUT OF PRICE-EARNINGS, VALUATIONS AND RATIOS, A LOT OF THE VALUATION IS CONCENTRATED IN THE TOP 10 BEHEMOTH STOCKS. IT'S AS FAR AS EARNINGS. THE STORY IS ONE OF STOCKPICKING'S, ONE OF THE TOP NAMES WILL BE EARNINGS COMPOUNDER'S. AND PROBABLY GROW DOUBLE DIGITS. THE CAPITAL SPENDING BOOM WE ARE IN, IF IT CONTINUES, THERE WILL BE OTHER PLACES TO INVEST. ROMAINE: I'M CURIOUS ABOUT THE CAPITAL SPENDING BOOM, I WAS LOOKING AT THE REPORT AND WHAT STRUCK ME WAS THE PACE OF SPENDING, NOT PHENOMENAL BUT LIKE TRIPLE WHAT WE SAW AND PERSONAL CONSUMPTION. I KNOW THAT CAN'T SUSTAIN ITSELF LONG-TERM BUT DO YOU THINK IT WILL SETTLE AT A LEVEL HIGHER THAN HISTORICAL NORMS? LISA: IT DEPENDS ON HOW LONG. DO I THINK WE WILL GO THROUGH A PERIOD WHERE CAPITAL SPENDING IN MANY WAYS AIDED BY GENERATIVE AI AND INTERRELATED INFO STRUCTURE BILLS IPSOS OF BOOST AND CERTAINLY THE ONE BIG YOU TO FULFILL WILL GIVE US AT LEAST A ONE-YEAR BOOST? YEAH, I THINK THE QUESTION IS WHERE ARE WE IN THE JOURNEY. A LOT OF FOLKS THINK WE ARE IN THE FIRST OR SECOND INNING OF GENERATIVE AI INFRA STRUCTURE BUILDOUT. I'M OF THE MIND WE ARE CLOSER TO THE SIXTH INNING AT LEAST WHEN IT COMES TO DATA CENTERS AND SOME OF THE POWER GRID INVESTMENT. MAYBE THIS HAS ANOTHER YEAR, YEAR AND A HALF TO RUN BUT THEN I THINK CAPITAL SPENDING, AS IT ALWAYS DOES, SETTLES BACK AND WE HAVE TO DIGEST CAPACITY. SCARLET: IF WE ARE IN THE SIXTH INNING MAYBE WE WANT TO LOOK AHEAD AND HOW TO DIVERSIFY AWAY FROM BIG CAP TECH. WHAT ROOTS OF STOCKS PROVIDE VALUE? -- GROUPS OF STOCKS PROVIDE VALUE? LISA: FOR US, THAT'S AN EASY QUESTION BECAUSE WE ARE FINDING A LOT OF STUFF WE REALLY LIKE AND WANT TO OWN. WE ARE BIG OWNERS AND BUYERS OF GLOBAL FINANCIALS IN THE U.S. BUT THE LARGE-CAP GUYS AND MID-CAP GUYS AND REGIONAL BANKS WE LIKE A LOT. GLOBAL FINANCIALS AS YIELD CURVES AROUND THE WORLD STEEPEN AS WE GET DEVELOPMENTS AROUND DEREGULATION, SOME OF THE DEVELOPMENTS IN STABLECOIN AND DIGITAL ASSET SPACE. FINANCIALS ARE A KEY SECTOR FOR US. WE ALSO LIKE ENERGY AND ENERGY INFRASTRUCTURE, AS WE ALLUDED TO . INVESTMENT THERE WILL HAVE TO CONTINUE AND WE THINK THERE ARE A HOST OF WINNERS AROUND THE WORLD. INDUSTRIALS ARE ANOTHER PLACE WHERE WE ARE FINDING POCKETS OF VALUE. LAST BUT NOT LEAST, WE WOULD SAY HEALTH CARE. WE ARE BELIEVERS IN THE UNDERLYING DEMOGRAPHIC TRENDS AND WE THINK HEALTH CARE HAS CONTINUED TO MAYBE GET BEATEN UP UNJUSTLY YOU ACTUALLY LOOK AT THE FUNDAMENTAL GROWTH AND CASH FLOWS MANY COMPANIES ARE PUTTING UP. WE LIKE THAT. EMERGING MARKETS, ANOTHER FAVORITE. ROMAINE: LISA, WE HAVE TO LEAVE IT THERE, BUT GREAT STUFF AS ALWAYS. COMING UP, A CLOSER LOOK AT THE CONSUMER AND THE SO-CALLED THE MINIMUS ROLE. A CONVERSATION AFTER THE BREAK. THIS IS BLOOMBERG. ROMAINE: LET'S GET TO OUR TOP CALLS, BIG MOVERS ON THE BACK OF ANALYST RECOMMENDATIONS AND WE START WITH INTERNATIONAL PAPER, BANK OF AMERICA PUSHING IT TO BUY, CITING THAT THEY WILL OUTWEIGH ISSUES ELSEWHERE. UBS RAISING A RATING TO BUY ON WYNN RESORTS. IT IS THE ONLY GAMING OPERATOR IN THE UAE. FINALLY, KOHL'S, BOOSTING THE RATING TO ACCUMULATE, SAYING SECOND-QUARTER EARNINGS SHOULD KEEP THE NEAR AND MEDIUM-TERM OUTLOOKS ON TRACK. THOSE SHARES, WHICH SURGED 24% YESTERDAY, GIVING BACK ABOUT 5.5% TODAY. WE WANT TO STAY IN THE RETAIL SPACE AND FOCUS ON THE SO-CALLED DE MINIMUS TARIFF EXEMPTIONS IN THE U.S. WHICH EXPIRE AT MIDNIGHT. ANY GOODS COMING INTO THE COUNTRY UNDER $800 EFFECTIVELY WERE NOT SUBJECT TO ANY MAJOR IMPORT DUTIES. JOINING US TO TALK MORE IS OUR GUEST, THE CITI COHEAD OF RESEARCH. THIS EXEMPTION HAS BEEN AROUND FOREVER, SINCE LIKE THE 1930'S. AROUND 10 YEARS AGO IT INCREASED DRAMATICALLY, THE 200 DOLLAR EXEMPTION WENT TO $800 AND STARTING TOMORROW IT DROPS TO $100. WHO DOES THAT AFFECT MOST? TYLER: THE REALITY IS WE DON'T KNOW THE EXACT IMPACT. A COUPLE INTERESTING THINGS THAT I WOULD CALL OUT. WE COVER SHOPIFY, SALESFORCE, THEY TARGET LARGE MERCHANT COMPANIES, THEY HELP THEM LAUNCH WEBSITES TO SELL GOODS TO CONSUMERS AND WE ALSO COVER SOME OF THE OTHER PLAYERS IN THE SPACE. GO BACK TO LAST QUARTER, A LOT OF CONCERNS FOR SHOPIFY. THE STOCK WENT DOWN 50% FROM THE HIGHS ON TARIFF CONCERNS IN THE MONTH OF APRIL AND MAY. WHAT HAPPENED LAST QUARTER IN THE JUNE QUARTER, YOU SAW THE STRONGEST GMV PERFORMANCE IN SEVEN YEARS, OVER 30% GROWTH. CHINA, THE DE MINIMUS EXEMPTION EXPIRED FOR CHINA IN MAY AND IT HAD VIRTUALLY NO IMPACT FOR THEM. SHOPIFY ALSO SAID ONLY ABOUT 3% TO 4% OF OVERALL GMV IS SUBJECT TO THE DE MINIMUS IMPACT. WE DON'T THINK IT WILL BE A SIGNIFICANT. OBVIOUSLY THERE'S A LOT OF UNCERTAINTY WITH THESE THINGS. IT DID NOT HAVE AN IMPACT LAST QUARTER WITH CHINA ROLLING OFF. IT'S NOT A HUGE PART OF THEIR BUSINESS. SCARLET: ARE THE COMPANIES SAYING THIS IS SOMETHING THAT COULD POTENTIALLY BE A SOURCE OF CONFUSION OR HEADWIND GOING FORWARD? IT HASN'T BEEN ACTIVATED YET. IT'S AUGUST 29. TYLER: THE KEY QUESTION IS WHAT DOES THIS DUE TO CONSUMER DEMAND? IN CERTAIN CIRCUMSTANCES, THIS COULD HAVE A NEGLIGIBLE IMPACT. IF THE COST IS ONLY GOING UP MARGINALLY. THESE COMPANIES TEND TO CATER NOT TO DISCOUNT RETAILERS, THESE ARE GENERALLY MORE HIGHER INCOME CONSUMERS BUYING FROM SHOPIFY MERCHANTS. OVERALL WORRY ARE NOT EXPECTING A HUGE IMPACT. ROMAINE: I'M CURIOUS ABOUT THE IMPACT, BLOOMBERG HAS A GREAT STORY TODAY WITH ANECDOTES FROM FOLKS ALREADY HIT POTENTIALLY WITH HIGHER BILLS. ONE GUY SHOPPING FOR COMPUTER PARTS AND ALL OF A SUDDEN RECEIVED A $1000 BILL HE HAD NOT EXPECTED PRIMARILY BECAUSE OF THE EXEMPTION OF -- BECAUSE OF THE END OF THE EXEMPTION. TYLER: THERE COULD BE SURPRISES. WE HAVE OUR GLOBAL TECH CONFERENCE NEXT WEEK AND WE HAVE THE SHOPIFY CFO PRESENTING ON WEDNESDAY AND THURSDAY. THAT WILL BE A GREAT QUESTION AND HOPEFULLY WE HAD -- WE GET AN UPDATE IT'S BEEN LESS THAN A WEEK AT THAT POINT BUT CERTAINLY WE WILL BE WATCHING THIS CAREFULLY INTO SEPTEMBER. SCARLET: DEFINITELY SOMETHING TO WATCH FOR. THANK YOU SO MUCH FOR JOINING US. I WOULD BE SO MAD IF I GOT A PACKAGE IN THAN HAD AN INVOICE SAYING YOU OWE THIS AMOUNT. ACTUAL TO GET THE PACKAGE, I WOULD GET THE INVOICE FIRST. ROMAINE: IF YOU DON'T PAY IT YOU DON'T GET YOUR GOODS. WHAT DOES THIS MEAN? SHOP LOCAL? SCARLET: BASICALLY, YOU'VE GOT TO LOOK INTO THE PROVENANCE OF EVERYTHING YOU WANT TO BUY. COMING UP, DIGGING DEEPER INTO CONSUMER CONSCIOUSNESS. WE WILL ASK ABOUT THE STATE OF SPENDING AND THE BIGGEST RISKS FACING RETAILERS. FROM NEW YORK, THIS IS "THE CLOSE" ON BLOOMBERG. ROMAINE: 3:30 P.M. IN NEW YORK AND THIS IS THE COUNTDOWN TO THE CLOSE. SCARLET: OF COURSE WE ARE KEEPING AN EYE ON RETAILERS BECAUSE IT IS THE THICK OF EARNINGS SEASON FOR RETAILERS AND WE'VE GOTTEN A MIXED BAG FOR THE ONES THAT HAVE REPORTED. ROMAINE: DOLLAR GENERAL REPORTED BETTER-THAN-EXPECTED EARNINGS AND IT MAY BE THAT WE ARE LOOKING FOR VALUES. BURLINGTON, ASKED BY -- BEST BUY. I DON'T KNOW WHAT IS GOING ON WITH BATH AND BODY WORKS, HAVE YOU EVER BEEN IN ONE? SCARLET: NOT IN A LONG TIME BECAUSE I DON'T WANT TO SMELL LIKE CHERRY BLOSSOMS IN THE WINTER. ROMAINE: WE GET SOME EARNINGS AFTER THE BELL, GAP AND ULTA. GAP HAS BECOME A TURNAROUND STORY IN OUR NEXT GUEST HAS A LITTLE BIT OF A CONNECTION TO THAT. SCARLET: THE GLORY DAYS IT FEELS LIKE ARE BEHIND IT. IT HAS TO REINTRODUCE ITSELF TO A NEW AUDIENCE. WHEN IT COMES TO THE CONSUMER WE ARE NOT SEEING SIGNS OF A SLOWDOWN, THAT'S THE MESSAGE FROM DICK’S SPORTING GOODS. RECENT ECONOMIC DATA HAS SHOWN A SOLID SPENDING PICTURE AT LEAST ON GOODS IN RECENT MONTHS. OUR NEXT GUEST HAS HIS PULSE ON THE STATE OF THE CONSUMER AND BIGGEST RISK TO SPINNING, HE IS PRESIDENT AND CEO OF TANGER, WHICH OPERATES OUTLET MALLS. THE LATEST BATCH OF EARNINGS SHOW CONSUMERS ARE SPENDING DESPITE UNCERTAINTY OVER TARIFFS AND LONGER-TERM INFLATION. THE WRINKLE IS EVERYONE WANT VALUE. HOW IS THAT SHOWING UP IN YOUR MALLS, IN FOOTER TRAFFIC AND SALES? STEPHEN: WE ARE A VALUE PLATFORM, WE ARE WHERE THE CUSTOMER WANTS TO SHOP FOR THEIR FAVORITE BRANDS AND BEST POSSIBLE PRICE AND WE SEE CUSTOMERS SHOW UP. YOU TALKED ABOUT TARIFFS. YOU THINK ABOUT TARIFFS ANNOUNCED IN APRIL. WE'VE SEEN TRAFFIC BUILDING SINCE APRIL AND IT'S BEEN AN INTERESTING STORY AS CUSTOMERS ANTICIPATED ISSUES IN THE THIRD AND FOURTH CODER. -- QUARTER. WE DID SMART THINGS, INTRODUCING BACK TO SCHOOL THAT HAS RESONATED. THE TARIFF IMPACT WAS NOT AS STRONG AS SOME OF THE CUSTOMERS ANTICIPATED, PARTICULARLY IN Q3 BECAUSE THEY ARE COMING BACK FOR A SECOND VISIT. RETAILERS ARE SAYING WHAT ARE YOU DOING TO GET THE CUSTOMER TO COME IN EARLIER? SCARLET: GOTCHA. HAND IN HAND WITH TARIFFS IS GEOPOLITICAL TENSIONS WITH OTHER COUNTRIES AND THERE HAVE BEEN FEWER FOREIGN VISITORS TO THE U.S. ANECDOTALLY. MAYBE FEWER CANADIANS COMING TO THE U.S. BID IS THAT SHOWING UP IN A MATERIAL WAY AT YOUR MALLS? STEPHEN: OUR CENTERS ARE TOURIST DESTINATIONS, SO WE SEE FOLKS WHO ARE ON HOLIDAY VISIT AND SHOP WITH US. OUR SUMMER TRAFFIC NUMBERS WERE OUTSTANDING THIS YEAR. MORE IMPORTANT IS OUR CENTERS, 10 OR 15 YEARS AGO, THE NARRATIVE WAS OUTLETS WERE FAR AWAY FROM MOST OF THE CENTERS OF CITIES AND WE SEE A LOT OF FOLKS MOVE BACK TO THOSE GEOGRAPHIES. SECONDARY HOMES ARE BECOMING PRIMARY HOMES BECAUSE OF HOW THE CUSTOMER IS WORKING TODAY AND WE SEE A LOT OF TRAFFIC DURING THE WEEK. OUR TRAFFIC CONTINUES TO BUILD IN THOSE DOMESTIC TERRORISM MARKETS AND ALSO DRIVEN BY LOCAL CONSUMERS AS WELL. ROMAINE: OBVIOUSLY TANGER HAS A SPECIFIC FOCUS THAT ALLOWS THE BRICK-AND-MORTAR MODEL TO SHINE THROUGH IN A WAY THAT MAYBE IT DOESN'T FOR OTHER SEGMENTS OF RETAIL. WE WERE JOKING BEFORE THIS AND MENTIONED YOU HAVE A CONNECTION TO GAP, YOU WERE BASICALLY THE REAL ESTATE GUY MANY MOONS AGO, MICKEY DREXLER, YOUR FORMER COLLEAGUE, WAS ON A FEW WEEKS AGO TALKING ABOUT TRANSITIONS IN THAT SPACE. IS THERE HOPE FOR MAYBE MORE HIGHER END RETAILERS OR RETAILERS THAT MAYBE NEED TO BE MORE E-COMMERCE FOCUSED, IS THERE A PLACE FOR BRICK-AND-MORTAR IN THE STRATEGY? STEPHEN: I CERTAINLY BELIEVE SO. I THINK THE YOUNGER CONSUMER WANTS TO SHOP FOR BRICK AND MORTAR AND ONLINE IS DEADLY PART OF THE JOURNEY. YOUNGER CUSTOMERS LIKE TO WINDOW SHOP ONLINE BUT EXECUTE IN-STORE. WHETHER THEY ARE BUYING GAP OR PRODUCT, THEY WANT TO FEEL THE FABRIC AND TRY THINGS ON AND I FIND THAT TO BE TRUE IN FOOTWEAR AS WELL AS ACCESSORIES AND FASHION APPAREL. ROMAINE: YOU'VE MADE EXPANSIONS AND CHANGES TO THE TANGER MODEL, MAKING IT A LITTLE MORE EXPERIENTIAL FOR LACK OF A BETTER PHRASE. TALK ABOUT THE PROGRESS YOU'VE MADE SO FAR AND THE PLANS YOU CAN DISCLOSE PUBLICLY. STEPHEN: SURE, THAT'S AN IMPORTANT PART OF THE BUSINESS. YOUR PLAY OUTLET SHOPPING WAS A FUN THING 10 OR 15 YEARS AGO BUT WE ARE FINDING AS OUR CENTERS BECOME MORE AND MORE INVOLVED IN THE COMMUNITIES THEY SERVE, THE CONSUMER WANTS MORE WHEN THEY GET OFF THE COUCH AND SHOP LIVE, THAT'S MORE FOOD AND BEVERAGE OFFER CHING -- OFFERINGS, MORE ENTERTAINMENT, BETTER AMENITIES. AND WE HAVE TANGER LOYALTY, WHEN PEOPLE SHOP OUR CENTERS, WE REWARD THE CUSTOMERS FOR SHOPPING WITH US. THEY CAN USE REWARDS ACROSS ANY TANGER SHOPPING CENTER. SCARLET: I'M WONDERING IF YOU'VE OBSERVED THE SATURATION POINT FOR THE NUMBER OF FACTORY STORES FOR CERTAIN BRANDS. I'M LOOKING AT J. CREW, IT HAS ABOUT 117 REGULAR STORES ACROSS THE U.S. BUT THERE ARE ABOUT 369 FACTORY STORES AND SOME COULD MAKE THE ARGUMENT THAT IS WATERING DOWN THE BRAND. I WONDER HOW THAT MIGHT SHOW UP ACROSS YOUR OUTLETS. STEPHEN: SURE. FIRST OF ALL I LOVE WHAT J. CREW IS DOING, THEY NOT ONLY PRESENT THEIR OUTLET BRAND AND OUTLET CENTERS, WE SEE A LOT OF OUTLET STORES IN NON-OUTLET CENTERS AS WELL. I THINK THEY'VE IDENTIFIED THE FACT THERE IS A CUSTOMER THAT LOVES THEIR BRAND AND STYLE AND FABRICATIONS BUT WANTS THE VALUE PRICE POINT. AND IF THEY CAN PROVIDE THAT CUSTOMER THE VALUE PRICE POINT AS AN ENTRY-LEVEL, GET THEM INTO THE STORE, GET THEM TO BUY THE PRODUCT, I THINK IT IS AN OPPORTUNITY TO TRADE THE CONSUMER UP TO MORE EXPENSIVE PRODUCTS AND MAKE THEM A CUSTOMER FOR LIFE. SCARLET: DO THESE KIND OF COMPANIES NEED TO PROVIDE MORE THAN JUST APPAREL? CAN THEY TURN THEMSELVES INTO A LIFESTYLE BRAND AT AN OUTLET LEVEL? STEPHEN: THAT'S WHAT I THINK IS SO EXCITING ABOUT OUTLET STORES, THERE ARE PLENTY OF PLACES TO BUY DISCOUNT THERE ARE SECONDARY DISCOUNT STORES, DISCOUNT STORES THAT SELL PRODUCT BY THE POUND, DISCOUNT STORES THAT USE CLASSIFICATION MERCHANDISING WHERE THEY TAKE FIVE OR 10 BRANDS THAT COMPETE AND PUT THEM ON THE SAME RACK BECAUSE OF THE SAME SIZE AND CLASSIFICATION. I THINK THE OUTLET PROVIDES THE OPPORTUNITY FOR ALL THE RETAILERS TO SHOW THEIR PRODUCT, SOUP TO NUTS, THE ENTIRE LIFESTYLE. I WILL USE RALPH LAUREN AS AN EXAMPLE, YOU CAN BUY SOCKS, SHOES, BELTS, HATS, SHIRTS, HOUSEWARES, SHEETS, TOWELS, THE ENTIRE PRODUCT ASSORTMENT FROM END-TO-END AVAILABLE FOR THE CONSUMER AND IT'S ALL RALPH LAUREN PRODUCT. THAT NOT ONLY GIVES THE CONSUMER AN OPPORTUNITY TO SHOP THE WAY THEY WANT TO SHOP, MORE PORTLY, GIVES THE BRAND THE OPPORTUNITY TO SHOWCASE ALL OF THEIR PRODUCTS LINES AT AN ENTRY-LEVEL PRICE POINT THAT TURNS THE CONSUMER INTO A LIFELONG CONSUMER FOR THE BRAND. ROMAINE: STEPHEN, ALWAYS A PLEASURE. PRESIDENT AND CEO OF TANGER. WE WILL GET ANOTHER READ ON RETAIL AFTER THE BELL. WE WILL GET SOME TECH EARNINGS, ANOTHER READ ON THE AI SPACE AND DATA CENTERS WITH DELL, OUR STOCK OF THE HOUR. WE WILL HAVE A BREAKDOWN OF WHAT TO EXPECT WHEN WE COME BACK AFTER THE BREAK. THIS IS BLOOMBERG. ROMAINE: TIME FOR OUR STOCK OF THE HOUR AND IT IS DELL. THEY ARE SET TO REPORT EARNINGS AFTER THE BELL, EXPECTED TO RAISE ITS FORECAST FOR FULL YEAR AI SERVER SHIPMENTS. OUR CORRESPONDENT JOINS US, THIS IS KIND OF LIKE THE OLD TECH COMPANIES BACK IN VOGUE AGAIN BECAUSE OF THE MAN FOR DATA CENTERS. IT IS YOUR EXPECTATION FOR TONIGHT AND WHAT TYPE OF GUIDANCE DO YOU THINK THE COMPANY MIGHT GIVE? > > THEY WILL HAVE A SOLID QUARTER IN TERMS OF AI SERVERS, I EXPECT THEM TO RECOGNIZE $7 BILLION IN REVENUE, PCS WILL BE FAIRLY GOOD, THERE IS SCOPE FOR UPSIDE. ALL EYES ARE GOING TO BE ON THE AI SERVER NUMBER. THEY'VE FORECAST ABOUT $15 BILLION IN SALES FOR THE YEAR. CONSENSUS HAS STARTED TO CREEP HIGHER. I THOUGHT THE 50 BILLION WAS CONSERVATIVE, SOME AS HIGH AS 20 BILLION FOR THE YEAR. IF THEY DON'T GET THE 20 BILLION IT WILL BE A DISAPPOINTMENT. SCARLET: WHEN IT COMES TO AI SERVER SHIPMENTS, I KEEP READING ABOUT NE-YO CLOUD PARTNERS. WOO-JIN: I GUESS THE MOST WELL-KNOWN NEO CLOUD IS COREWEAVE, THEY'VE BEEN ON THE SHOW QUITE A FEW TIMES. THEY ARE A CUSTOMER OF DELL BUT ALSO THERE ARE SMALLER AND EMERGING NEO CLOUDS. THEY ARE OFFLOADING SOME HYPERSCALE CAPACITY AND DOING SOME OF THE WORK FOR THEM. THEY ARE DOING A LOT OF PURCHASING OF AI SERVERS. ROMAINE: I'M CURIOUS ABOUT PC DEMAND. I KNOW THERE WAS SOME INFORMATION, HOW IMPORTANT IS THAT FOR INVESTORS TO PAY INTENTION TO -- PAY ATTENTION TO? WOO-JIN: PC'S REPRESENT ROUGHLY HALF OF TOTAL REVENUE, THE PERSONAL SYSTEMS GROWTH, ROUGHLY HALF OF TOTAL SALES. WE THOUGHT TARIFF HEADWINDS WOULD BE A MONKEY WRENCH , YOU LOOK AT HP RESULTS YESTERDAY, THEY MANAGE THE PC REVENUES , AND I EXPECT THE SAME FOR DELL. SCARLET: SO THE PC CYCLE IS ALIVE AND WELL. MY QUESTION IS WHEN IT COMES TO A COMPANY LIKE HP THAT MAKES PRINTERS AND LAPTOPS, THE PRINTERS WERE NOT GETTING A SIMILAR BOOST. WOO-JIN: PRINTERS ARE STILL IN DECLINE FOR A COUPLE OF REASONS, CONSUMERS HAVE NOT REALLY PICKED THINGS UP. MORE IMPORTANTLY, MARGINS FELL SHORT OF EXPECTATIONS BUT WE EXPECT SOME BACK-TO-SCHOOL BUYING FOR HP ON THE PRINTER SIDE BUT ALSO IMPROVEMENT IN SUPPLIES NEXT QUARTER. SCARLET: ALL RIGHT, THANK YOU. I THINK I'M THE ONLY PERSON ON EARTH LEFT WHO LIKES PRINTERS. ROMAINE: WE ARE OLD-SCHOOL. SCARLET: COMING UP, THE CLOSING BELL. THIS IS "THE CLOSE" ON BLOOMBERG. PRINT IT UP, ROMAINE. > > AI IS JUST GETTING STARTED, IT'S THE NEW ELECTRICITY THERE ARE A LOT OF BOTTLENECKS, THE GREATEST IS GPU'S, COMPANIES LIKE NVIDIA, AND DATA CENTERS. THERE'S A LOT OF INVESTMENT THAT NEEDS TO GO ON AND I REMAIN BULLISH ON NVIDIA. ROMAINE: OUR GUEST KICKING US OFF, A DISCUSSION ABOUT EVERYTHING GOING ON IN THE AI SPACE WITH THE BIG LEADER IN THE SPACE NOT REALLY PARTICIPATING IN THE RALLY BUT SHARES ONLY DOWN ABOUT FIVE TENTS OF A PERCENT, DROPPED ABOUT 3% EARLIER IN THE SESSION. SCARLET: WE WILL SEE IF THEY MAKE IT INTO THE GREEN BY THE END OF THE TRADING DAY. FOR LONG-TERM INVESTORS, THEY SAY EXPECTATIONS AT LEAST FROM THE PUBLIC MARKET INVESTORS WERE SIMPLY TOO HIGH. ROMAINE: YOU LOOK AT THE NUMBERS ON YOUR SCREEN, AND LAST WEEK OF AUGUST, WE ARE IN THE SUMMER OLD ROOMS, VOLUME IS LIGHT, SO A LOT CAN CHANGE AFTER THE LABOR DAY HOLIDAY IN THE UNITED STATES FOR WE CAN'T YOU DOWN TO THE CLOSE THIS THURSDAY AFTERNOON. OUR GUEST JOINS US RIGHT NOW. I'M WONDERING IF YOU SEE VALUE IN ANY OF THE COMPANIES OUT THERE CHASING THE AI DREAM. CHARLES: THAT'S A GREAT STARTING POINT. THERE ARE SOME VALUATIONS THAT ARE ROBUST THAT ARE HARD TO ARGUE YOU MAKE MONEY. PLENTY ARE NOT THAT ROBUST. THAT PART OF THE ECONOMY IS EXPOSE OF THEM POWERFUL. SOME STOCKS ARE WAY AHEAD OF THEMSELVES , BUT I THINK WE ARE GOING INTO AN EXTENDED BOOM. I THINK INVESTORS ARE IN A PLACE WHERE EXCITING NAMES ARE WAY OVERDONE BUT THERE ARE PLENTY OF TECH NAMES NOT OVERDONE AND A COUPLE OF NAMES THAT HAVE A LOT OF GROWTH AS WELL. ROMAINE: WE'VE HEARD THAT FROM OTHER INVESTORS AS WE LOOK AT NVIDIA AND MICROSOFT. YOU WERE TAKING A STAKE IN ORSTEAD, THEY MAKE WINDMILLS, DOWN 40% IN A MATTER OF WEEKS,, SOME WIND POWER CONTRACTS FROM THE TRUMP ADMINISTRATION. YOU'VE BOUGHT SOMETHING LIKE 100,000 SHARES OF THE COMPANY IN THE PAST FEW DAYS AND WEEKS, IS THIS A BET ON ORSTEAD OR POLICIES OUT OF THIS ADMINISTRATION? CHARLES: THIS IS A CONTRARY AND THAT ON ORSTEAD. 45 YEARS AGO, THE WIND COMPANIES ARE WHERE THE AI CAMP NEEDS ARE TODAY IN TERMS OF INVESTOR ENTHUSIASM AND EXCITEMENT AND HOW THEY WILL TAKE OVER THE WORLD. THEY PROBABLY WILL END UP HAVING A HUGE ROLE TO PLAY IN PRODUCING ELECTRICITY FOR THE GLOBE OVER THE NEXT FIVE AND 25 YEARS AND THE ABILITY TO PRODUCE ENERGY AND ELECTRICITY FROM OFFSHORE WIND FARMS IS NOT LIKE ANYTHING IT HAS BEEN IN THE PAST EVER. IT WILL BE AN ECONOMIC GROWTH ENGINE AND ECONOMIC POWER. INVESTORS HAVE TURNED ON THE STOCKS BECAUSE THERE HAVE BEEN A BUNCH OF HICCUPS AND BUMPS IN THE ROAD AND AS THERE ALWAYS BE IN GROWTH BUSINESSES. THEY ARE CHEAP AND INVESTORS ARE THROWING IN THE TOWEL AND THAT'S WHERE WE TRY TO DIG IN AND DO THE WORK AND SEE IF THERE IS REAL VALUE AND IN THE CASE OF ORSTEAD WE ARE SURE THERE IS. SCARLET: IT'S A BIG BUMP IN THE ROAD WHEN IT COMES TO A TRUMP ADMINISTRATION THAT IS COMPLETELY OPPOSED TO ALTERNATIVE SOURCES OF ENERGY, HALTING WORK ON A PRODUCT OF RHODE ISLAND THAT'S ALREADY 80% DONE. HAD YOU THINK ABOUT THE IDEA THAT ORSTEAD CAN'T DO MUCH IN THE U.S.? HOW PATIENT ARE YOU WILLING TO BE? CHARLES: WE ARE WILLING TO BE PRETTY DARN PATIENT, ADMINISTRATION LAST FOUR YEARS OR SO, WE OWN SOME GAS PIPELINE COMPANIES SIX YEARS AGO AND THEY COULDN'T GET ENVIRONMENTAL APPROVAL, MINOR PIECES OF WATERWAY IN 90% OF THE PIPELINES WERE BUILT. THEY COULDN'T GET APPROVAL TO GET ACROSS THE FINISH LINE THE ADMINISTRATION CHANGED AND THEY GOT THAT APPROVAL AND PIPELINES HAVE BEEN FINISHED AND WE SAW THREE X ON OUR INVESTMENT. THE DIFFERENCE HERE IS ORSTEAD IS NOT A U.S. COMPANY AND IT'S A VERY GLOBAL COMPANY. THEY PRODUCE A HUGE PERCENTAGE OF THE ELECTRICITY USED IN THE U.K. U.S. OPERATIONS ARE MEASURED IN THE FIVE OR 10 BILLION RANGE, NOT 25% OF WHAT THEY'VE INVESTED AROUND THE WORLD. EVEN IF THE U.S. IS A TOTAL DOUGHNUT HOLE, WE ARE PRETTY SURE IT'S CHEAP FOR TODAY'S PRICE AND ULTIMATELY THIS ADMINISTRATION HAS PROVEN TO BE VERY TRANSACTIONAL, THEY ARE LOOKING FOR THEIR PIECE OF THE ACTION. UNTIL NOW THEY'VE ALWAYS BEEN WILLING TO STRIKE A DEAL AND GIVE SOMETHING TO GET SOMETHING AND WE ARE PRETTY SURE THAT'S HOW IT WILL WORK OUT ON THESE OFFSHORE WIND FARMS. IF IT DOESN'T, THE REST OF THE BUSINESS PROTECTS US REALLY WELL. THESE THINGS WILL END UP BEING WORTH A LOT OF MONEY WE THINK. SCARLET: HOW CONFIDENT ARE YOU THAT IT CAN PLACE THE RIGHTS OFFERING? CHARLES: THAT'S A VERY IMPORTANT POINT. IN ORDER FOR THEM TO BE ADEQUATELY FUNDED, THEY NEED TO BRING IN BILLIONS OF DOLLARS AND THAT SAID, THE EQUITY CAP TODAY IS $12 BILLION, THEIR 50% INVESTOR SAID THEY ARE WILLING TO PONY UP THEIR SHARE. WE WOULD BE SURPRISED, IF THEY CAN'T PRICE IT IN SUCH A WAY THAT THE 9 BILLION COMES INTO THE COMPANY. WHAT SHARE PRICE THAT IS, IT DOESN'T REALLY MATTER TO INVESTORS BECAUSE YOU WILL HAVE THE SAME INTEREST IN THIS COMPANY IF YOU EXERCISE THOSE RIGHTS AS YOU HAVE TODAY IN THE COMPANY WILL HAVE THE MONEY ON THE BALANCE SHEET. WHEN YOU TAKE IT FROM ONE POCKET AND PUT IT IN THE OTHER, IT DOESN'T MATTER. WE THINK THAT WILL GET DONE AND WE THINK IT'S IMPORTANT AND WE THINK THAT WILL RELIEVE AN IMPORTANT PSYCHOLOGICAL OVERHANG AND I THINK THE STOCK WILL BE UP. ROMAINE: LOOKS LIKE IT'S UP 6% ON THE DAY WE WILL CHECK IN WITH YOU SOON TO SEE HOW THINGS ARE GOING. THE STORY ON THE TERMINAL ABOUT THE BET HE'S MAKING ON, ORSTEAD, THE WIND POWER COMPANY. SCARLET: IN AN INDUSTRY THAT'S VERY MUCH THE TARGET OF PRESIDENT TRUMP AND HIS ADMINISTRATION. IT MIGHT TAKE A WHILE TO PLAY OUT. IT WILL HAVE TO UNFOLD OVER TIME. ROMAINE: IT GETS INTO THE IDEA AS WE GET CLOSER TO THE CLOSING BELL, TWO MINUTES AWAY, A BIG FOCUS ON NVIDIA BUT IT'S ALSO HITTING AT THE IDEA OF HOW MUCH POWER IS NEEDED TO POWER THIS AI TRADE, WHETHER IT'S THE TRADITIONAL GRID OR RENEWABLE ENERGY SOURCES, IT'S A BIG SOURCE OF INVESTMENT. SCARLET: AND WHY SO MANY TECH COMPANIES ARE DOING THINGS ON THEIR OWN, LOOKING FOR NUCLEAR POWER, TO MAKE SURE THEY HAVE ENOUGH POWER TO MOVE FORWARD WITH DEVELOPING AI BUILDOUT. ROMAINE: THE MAJOR INDICES IN THE U.S. ARE IN THE GREEN, FRACTIONALLY HIGHER BUT GIVEN SOME OF THE DRAG WITHOUT WE WOULD GET FROM NVIDIA LAST NIGHT, IT IS SOMETHING A LOT OF FOLKS ARE PROBABLY PLEASED TO SEE. WE ARE COUNTING YOU DOWN TO THE CLOSING BELL. JOINING US IN NEW YORK ARE JESS AND BAILEY WHO LEAD OUR EQUITIES COVERAGE. I WANT TO TALK ABOUT NVIDIA, EVERYBODY THOUGHT IT WOULD TANK THE MARKET, IT DROPPED ABOUT 3% BUT IT'S ONLY DOWN ABOUT 6% OF 1%. THE BIGGEST WEIGHTING IN THE NASDAQ AND S & P 500. > > IT WAS SUPPOSED TO BE A 6% SWING IN EITHER DIRECTION, IT IS LOW RELATIVE TO EARNINGS MOVE IN THE LAST FEW YEARS BUT THE NEXT MONTH, IT WAS WAS TO BE THE SECOND-HIGHEST IMPLIED MOVE BEHIND FED DAY BUT THE VIX IS CLOSING AT ITS LOWEST ON THE AIR AND IT STILL BELOW 1%. > > IT WILL END THE DAY DOWN SEVEN TO SOMEONE PERCENT. WE ARE UNCERTAIN ABOUT CHINA BUT PRETTY GOOD PRINT. ROMAINE: WE ARE EXPECTING OTHER EARNINGS IN THE AI SPACE, INCLUDING FROM DELL. GREEN ACROSS THE SCREEN, THE DOW JONES UP ALMOST 2/10 OF 1%. THE S & P 500 FOR THE FIRST TIME OVER CROSSING THE 6500 MARK, A RECORD HIGH, THREE TENTS OF A PERCENT HIGHER. THE NASDAQ UP 6/10 OF 1%. THE RUSSELL 2000 UP TO 10 SUB 1%. SCARLET: GREEN ACROSS THE BOARD BUT YOU LOOK AT THE S & P 500 AND THE NUMBER OF ADVANCERS VERSUS DECLINERS. 278 VERSUS 222, VERY MUCH BIG CAP NAMES KEEPING IT ALOFT. ROMAINE: THE S & P EQUAL WEIGHTED CLOSED IN THE RED TODAY. SCARLET: HOW MUCH? ROMAINE: LESS THAN 1/10 OF 1%, MARGINAL. JESS: I KNOW YOU WERE ABOUT TO GET INTO THE IMAP, BUT IF YOU LOOK AT UTILITIES, THAT GROUP OF MORE THAN 1%. SCARLET: THE AI THEME PLAYS OUT ACROSS THE MARKET. THE IMAP, A LOT OF GREEN, THERE ARE FOUR SECTORS IN THE RED AND JUST WAS SAYING UTILITIES DOWN, CONSUMER STAPLES, DEFENSIVE GROUPS IN THE RED. ENERGY AND TECH LEADING GAINS. ROMAINE: WE WILL GET TO OTHER INDIVIDUAL GAINERS AND DECLINERS OF THE DAY BUT WE ARE GETTING EARNERS. A SOFTWARE COMPANY, AUTODESK, A BEAT ON OPERATING MARGIN, A BEAT ON NET REVENUE. A BEAT ON THE BOTTOM LINE OF ABOUT $2.62 PER SHARE. HERE IS THE GUIDANCE GOING FORWARD. THE COMPANY GIVING A TIGHT REVENUE RANGE, HIGHER THAN THE PREVIOUS RANGE IT HAD GIVEN AND FOR THE CURRENT QUARTER, AUTUMN ONE, THE ADJUSTED EPS, $2.58, ALSO HIGHER THAN STREET ESTIMATES. BAILEY: MAYBE THE BUS OR THE JUNIOR ANALYSTS TRADING THE STOCK, IT CLOSED AROUND $2.88, IT HAD CLOSED THIS HIGH A FEW MONTH AGO. WANT TO KEEP AN EYE ON IT INTO TOMORROW. JESS: THE GAINERS TODAY, HEFTY MOVES IN SOFTWARE AND CLOUD PROVIDERS. I'M GOING TO START WITH DATA DOG, UP OVER 7%, BEST DAY SINCE JULY 3, ONE OF THE BEST GAINERS IN THE S & P 500 AND THE NASDAQ 100. WE SAW A HUGE MOVE FROM MONGO DB YESTERDAY. ROMAINE: THAT WAS A CONCERN COMING INTO THE EARNINGS SEASON, THAT THESE MID TIER SOFTWARE COMPANIES WERE BEING LEFT BEHIND. JESS: THE AI TRADE CATCHING UP AND ANOTHER ONE GAINING TODAY, SNOWFLAKE, THAT'S PART OF THE STORY WE HAVE SEEN WHEN IT COMES TO THE EARNINGS THEME, UP 20%, TO SINCE NOVEMBER 21 OF LAST YEAR. AND THEY EASED SOME INVESTOR ANXIETIES YOU WERE TALKING ABOUT BECAUSE THE SOFTWARE VENDORS, THE CONCERNS ABOUT BEING HURT BY A SLOWING ECONOMY, THEY ARE BUCKING THE TREND. I WANTED TO POINT OUT YOUR STORAGE. ROMAINE: THE BIGGEST GAINER ON THE DAY. JESS: BEST PERCENTAGE GAIN ON RECORD FOR THIS COMPANY, ANOTHER CLOUD STORAGE PROVIDER. IT RAISED ITS 2026 FULL-YEAR FORECAST. BAILEY: YOU ARE TAKING THE BULLISH STOCKS, LET'S GO WITH THE BEARISH STOCKS AND THE REAL ECONOMY, SOME OF THE WORST PERFORMANCE ACROSS A NUMBER OF INDEXES, STARTING WITH HORMEL FOODS, MAKER OF SPAM. LOOKING AT THE TERMINAL, ENDING THE DAY DOWN MORE THAN 13%, ONE OF THE WORST DAYS IN HISTORY. THEY WERE FOUNDED IN 1891, WENT PUBLIC IN 1925 SO IT'S BEEN A LONG TIME. AS WE TALK ABOUT UNCERTAINTY AROUND THE CONSUMER, THEY ARE BLAMING COST, SO SOMETHING THAT STANDS OUT. ONE OF THE OTHER POOR PERFORMERS , THE COMPANY THAT MAKES JACK DANIELS, THE REPORTED RESULTS NOT AS GOOD AS EXPECTED AND WHEN YOU LOOK AT IT, IT'S UNDERWHELMING WITH WHAT WALL STREET WAS LOOKING FOR, IT SEEMS LIKE ALCOHOL CONSUMPTION IN THE U.S. IS REMAINING WEAK. ROMAINE: APPARENTLY GEN Z DON'T DRINK ANYMORE? [LAUGHTER] TRUST ME, GEN X IS STILL DRINKING. [LAUGHTER] BAILEY: I'M NOT BUYING JACK DANIELS, I AM MORE BOUGIE. URBAN OUTFITTERS DOWN 11% AFTER A BIG RUN UP. ROMAINE: WE ARE GETTING DELL EARNINGS ACROSS THE WIRE RIGHT NOW, LET'S GET TO IT. THE RED HEADLINE, WE WILL START WITH THE FORECAST, THE COMPANY SAYS FULL-YEAR, IT'S AI SERVER SHOULD MINCE WILL BE $20 BILLION, IT HAD PREVIOUSLY GUIDED $15 BILLION, SO ALMOST 30% HIGHER. BASICALLY THE LOWER END OF THE GUIDANCE, COMING IN ABOVE ESTIMATES. IF YOU CARE ABOUT THE QUARTER THAT JUST PAST, THE NET REVENUE ROUGHLY IN LINE WITH ESTIMATES, SLIGHTLY HIGHER AND OPERATING INCOME TO $.28 BILLION ROUGHLY IN LINE WITH ESTIMATES AS WELL. INTERESTING TO SEE SHARES LOWER ON THE BACK OF THAT. SCARLET: WE JUST TALKED WITH BLOOMBERG INTELLIGENCE THAT TOLD US BLOOMBERG INTELLIGENCE WAS THE WHISPER NUMBER, THAT THE STOCK HAS HINGED ON. IT EXPECTED ABOVE $15 BILLION SO HITTING THE WHISPER NUMBER IS NOT ENOUGH. IN TERMS OF THE FULL YEAR OUTLOOK, ADJUSTED AT THE MIDPOINT, PREVIOUSLY IT HAD BEEN $9.40 AT THE MIDPOINT. THE IDEA THAT THIS IS AN OLD-SCHOOL TECH NAME THAT HAS CAUGHT UP WITH THE AI REVOLUTION AND FOUND A PLACE. ROMAINE: I WANT TO GET YOUR THOUGHTS, JESS. TO STAY IN THE TECH SPACE, A CHIPMAKER WITH SHARES, DOWN IN AFTER-HOURS TRADE, REVENUE FIGURES PRE-MUCH IN LINE WITH FIGURES. EPS RELATIVELY IN LINE WITH ESTIMATES. I'M WONDERING WHERE SECOND-TIER COMPANIES FIT INTO THE AI STORY. JESS: THINK BACK TO LAST MAY, AT THAT POINT THEY HAD DELAYED THE INVESTOR CALL AND IT SOLD OFF AND IT HAD CUT INTO THE FORECAST TO COME AND NOW THAT THREE MONTHS OF GONE BY, INVESTORS ARE LOOKING FOR BETTER GUIDANCE. BLOOMBERG INTELLIGENCE THOUGHT THE RESULTS WERE EXPECTED TO BE IN LINE WITH ESTIMATES BUT STOCKS ARE STILL DOWN 30% YEAR-TO-DATE. EVEN IF YOU SEE BRIGHT SPOTS, STILL A LONG WAY TO CATCH UP COMPARED TO SOME OF ITS PEERS. SCARLET: MARVELL WITH SECOND-QUARTER ADJUSTED EPS, MATCHING ESTIMATES THIRD QUARTER NET REVENUE, TRAILING THE CONSENSUS ESTIMATE AND THIRD-QUARTER ADJUSTED EPS, JUST ONE PENNY BETTER THAN EXPECTED. ROMAINE: PETCO OUT AND ULTA. ULTA WITH RESULTS AND THERE'S A LOT OF TALK ABOUT WHETHER PEOPLE WILL CONTINUE TO SPEND ON CONSUMER DISCRETIONARY ITEMS. THE MOST RECENT QUARTER, FIVE DOLLARS 70 EIGHT CENTS, THE STREET WAS LOOKING FOR $5.11. SELLING AHEAD OF ESTIMATES. THE COMPANY SAYS FOR THE FULL YEAR, IT'S PROVIDING COMP SALES RANGE OF 2.5 TO 3.5 PERCENT GROWTH, THE PREVIOUS GUIDANCE WAS 0% TO 1.5% GROWTH SO I MEANINGFUL BUMP UP. BAILEY: BIG BUMP UP IN COMP SALES, AND OPERATING MARGIN, 11.9% TO 12%. THIS IS THE STOCK AFTER HOURS, UP MORE THAN 4.5% AND WHEN YOU LOOK AT CONCERNS AROUND THE CONSUMER IT SEEMS LIKE THERE IS GOING TO BE CONTINUED SPENDING. WE ARE TALKING ABOUT BETTER OR WORST PERFORMING STOCKS, THEY ARE UP 20% YEAR-TO-DATE. ROMAINE: PETCO JUST CAME OUT WITH EARNINGS. SCARLET: FLYING. THIS IS A CONSUMER DISCRETIONARY COMPANY, I WOULD ARGUE IT'S A STAPLE. STOP JUMPING 31% AFTER BOOSTING ITS ADJUSTED EBIT OUTLOOK. BAILEY: JUST WANT TO POINT OUT SHORTAGE. JESS: ALSO TRADING AROUND $30 AND 2021 AND IT JUST CLOSED ABOVE THREE DOLLARS. ROMAINE: GREAT CONTEXT AS ALWAYS. THAT DOES IT FOR THEM AND FOR SCARLET, I WILL STICK AROUND. AFTER THE BREAK, BIG EARNINGS WE JUST GOT INCLUDING OUT OF DELL. THIS IS BLOOMBERG. > > THE COUNTDOWN IS ON. EVERYTHING YOU NEED TO GET THE EDGE AT THE END OF THE MARKET DAY. THIS IS "THE CLOSE." ROMAINE: A RECORD HIGH FOR THE S & P 500, A RECORD HIGH WITHOUT THE HELP OF NVIDIA, BELIEVE IT OR NOT. THE LOW VOLUME SUMMER GRIND HIGHER PUSHING THE SOP -- S & P ABOVE 6500 FOR THE FIRST TIME. CAN THE BIGGEST PERCENTAGE MOVERS WERE STILL IN THE TECH SPACE, LIKE DATA DOG, ORACLE AND CROWDSTRIKE PUSHING THINGS HIGHER. APPLE AND AMAZON ALSO PARTICIPATING IN THE RALLY. THE BIGGEST INDIVIDUAL MOVERS ON THE DAY, PURE STORAGE, AND ENTERPRISE SOFTWARE COMPANY UP 20% ON THE DAY, AND WE ARE GETTING EARNINGS IN THE AFTERMARKET, THE STOCK HELD ITS OWN IN THE EARLIER SESSION BUT NOW SLIGHTLY LOWER, PROVIDING REVENUE FOR THE MOST RECENT QUARTER THAT BEAT ESTIMATES BUT IT'S GUIDANCE GIVING A WIDE RANGE THAT IS SLIGHTLY ON THE LOW END OF WHAT THE STREET WAS LOOKING FOR. I WANT TO GO BACK TO SOME OF THE INDIVIDUAL MOVERS SPECIFICALLY ON THIS A DAY, INCLUDING NAMES AND THE CONSUMER FACING SPACES, NAMES LIKE CORNELL, DROPPING THE MOST SINCE GOING PUBLIC IN 1980. CONCERNS ABOUT THE RISE IN COMMODITY PRICES, AND EBAY AND ETSY UNDER PRESSURE, ETSY ON A 60 SLIDE, A LOT OF CONCERNS ABOUT THE DE MINIMUS RULE, WHICH ALLOWED IMPORTS UNDER $800 TO AVOID TARIFFS. THE ECONOMY HISTORICALLY HAS BEEN DRIVEN ALMOST ENTIRELY BY THE CONSUMER AND THAT IS CHANGING. PERSONAL CONSUMPTION STILL MAKES UP 67% OF GROSS TO HIM ACTIVE PRODUCT, AT LEAST IT DID LAST QUARTER. THE MOST RECENT QUARTER AND EXPANDED AT A HEALTHY 3.3% ANNUALIZED PACE BUT THERE IS A BIG ASTERISK. WHILE THE BULK OF GDP IS ALL CONSUMER ALL THE TIME, THE GROWTH RATE SEEMS TO BE ALL AI. SO-CALLED NONRESIDENTIAL INVESTMENT, THAT CATEGORY SURGED AT A 5.7% PACE, MORE THAN TRIPLE THE PACE FOR CONSUMER SPENDING, A RARE OUTPERFORMANCE THAT FOLLOWS A 10% VANCE IN THE FIRST QUARTER, TWO BACK TO BACK QUARTERLY ADVANCEMENTS IN QUARTERLY INVESTMENT SEEN AS DIRECTLY RELATED TO THE GROUNDSWELL OF ATTENTION ON TECHNOLOGY AND AI. THAT BRINGS US TO THE AFTER-HOURS TRADE WITH A CLOSER LOOK AT THE RESULTS WE JUST GOT OUT OF DELL. DAN NILES JOINS US, FOUNDER AND PORTFOLIO MANAGER AT NILES INVESTMENT MANAGEMENT. I WANT TO START AT WHERE THE INVESTMENT SPREE IN THE AI SPACE STANDS RIGHT NOW GIVEN WHAT WE LEARNED OUT OF NVIDIA LAST NIGHT AND WHAT WE ARE LEARNING IN THE MOMENT RIGHT NOW OUT OF COMPANIES LIKE DELL. DAN: I THINK YOU'RE AT AN INTERESTING CROSSROADS WHERE IF YOU THINK ABOUT SOME OF THE THINGS WE'VE HEARD OVER THE PAST TWO WEEKS, YOU HAD SAM ALTMAN COME OUT AND SAY WE ARE IN AN AI BUBBLE, CHATGPT, WHICH THEY RELEASED, A LOT OF USERS CAME BACK TO CHATGPT FOUR FROM FIVE. A STUDY CAME OUT THAT SAID ENTERPRISES INVESTING IN AI WERE NOT SEEING A RETURN. THE FINAL ONE IS META-, SPENDING MONEY ON AI RESEARCHERS LIKE THEY WERE MAJOR LEAGUE BASEBALL PITCHERS, THEY WENT INTO A HIRING FREEZE. YOU'VE HAD A MASSIVE SURGE IN AI SPENDING SINCE THE END OF 2022 WHEN WE HEARD ABOUT THIS THING CALLED CHATGPT. I THINK YOU'RE GETTING TO THE POINT NOW WHERE IT WILL GET A LOT MORE INTERESTING YOU HAVE TO SEE SOME RETURN AND THE RESULTS FROM NVIDIA LAST NIGHT IF YOU REALLY LOOK AT IT, A LITTLE ON THE DISAPPOINTMENT SIDE. IT'S AMAZING THE STOCK DID AS WELL AS IT DID BECAUSE THEY MISSED WALL STREET'S ESTIMATE FOR DATA CENTER REVENUES. BY JUST A PERCENT BUT THE FIRST MISS THEY'VE HAD SINCE WE HEARD ABOUT CHATGPT IN 2022. IT WILL BE MORE INTERESTING BETWEEN NOW AND I THINK THE END OF THE YEAR. ROMAINE: WE SHOULD POINT OUT WE ARE COMING UP ON THE THREE YEAR ANNIVERSARY, I THINK THAT WAS NOVEMBER 2022, AT LEAST WHEN IT CAME INTO THE PUBLIC CONSCIOUSNESS. WE HEARD JENSEN HUANG AND HIS CFO TALK ABOUT THIS ON THE CONFERENCE CALL. ONE BIG COMPONENT HAS BEEN THE IDEA AT LEAST IN THEIR CHARACTERIZATION THAT THEIR FUTURE GROWTH IS AT LEAST RIGHT NOW SOMEWHAT DEPENDENT NOT SO MUCH ON THE COMPANIES BUYING THEIR STUFF BUT IF THE GOVERNMENTS IN THE U.S. AND AROUND THE WORLD WILL ALLOW IT TO SELL ITS STUFF WHERE IT WANTS TO SELL ITS STUFF. DOESN'T CONCERN YOU THAT AT LEAST AS OF TODAY IT HAS NO MARKET IN CHINA FOR ITS ADVANCED TIPS -- CHIPS? DAN: THE GOOD NEWS IS THERE WAS NO REVENUE FROM CHINA IN THE LAST QUARTER SO THERE'S NO DOWNSIDE, IT'S ALL UPSIDE. WHEN THEY GAVE THE GUIDANCE, IT WAS ABOUT 1% ABOVE WHERE CONSENSUS WAS, IT WAS PREDICATED ON NO CHINA REVENUES. IF THEY GET CHINA REVENUES, THEY BELIEVE THAT WILL ADD AN EXTRA TWO TO 5 BILLION, WHICH WILL RAISE IT ABOUT 6% OR SO. IT'S UPSIDE IF YOU GET IT. FROM A LONGER-TERM PERSPECTIVE, OBVIOUSLY THE MORE THE U.S. PUTS PRESSURE ON CHINA, AND WE HAVE HEARD THIS LAST COUPLE OF WEEKS, THE CHINESE GOVERNMENT ENCOURAGING THEIR COMPANIES TO BUY DOMESTIC CHINESE AI PRODUCTS, WHETHER IT IS DEEPSEEK ON THE SOFTWARE SIDE OR CHIPS FROM ASCEND INSTEAD OF NVIDIA, THE GOVERNMENT WOULD LIKE CHINESE COMPANIES USING CHINESE PRODUCTS FOR OBVIOUS REASONS, THEY DON'T WANT THEM DEPENDENT ON U.S. COMPANIES FOR TECHNOLOGY. ON A LONGER-TERM BASIS, CHINA IS PUSHING TOWARD SELF-SUFFICIENCY. THIS JUST ACCELERATES THE PROCESS AND IF WE ARE NOT WILLING TO SELL THEM BLACKWELL CHIPS, THAT WILL ACCELERATE IT EVEN MORE. THAT'S SOMETHING TO THINK ABOUT FOR THE ULTIMATE MARKET SHARE POTENTIAL FOR NVIDIA IN CHINA AND EVERY OTHER COMPANY THAT WANTS TO SELL TO CHINA. ROMAINE: I'M CURIOUS ABOUT THE OTHER PLAYERS IN THE SPACE. DELL HAS BEEN A BIG BENEFICIARY OF THE DATA CENTER BUILDOUT. WHATEVER'S GOING ON WITH NVIDIA SPECIFICALLY AND ADVANCED TIPS, NO ONE SEEMS TO THINK THE AI BUILDOUT IS COMING TO A HALT. ARE YOU IN THAT CAMP? DAN: IT DEPENDS ON SHORT-TERM OR LONG-TERM. IN THE SHORT-TERM, I STARTED TALKING MID LAST YEAR THAT YOU WOULD GO THROUGH A DIGESTION PHASE AND TRAINING DEMAND AND YOU SAW THAT. IF YOU GO BACK AND LOOK AT WHAT HAPPENED WHEN THE THREE BIGGEST HYPERSCALERS, MICROSOFT, AMAZON AND GOOGLE, REPORTED RESULTS FOR THE JUNE QUARTER OF 2024, THE REVENUE ESTIMATES WENT DOWN FOR THE SEPTEMBER QUARTER OF 2024 AND WHEN THEY REPORTED THE DECEMBER QUARTER, THE REVENUE ESTIMATES FOR ALL OF THOSE COMPANIES WENT DOWN AGAIN FOR THE MARCH QUARTER. THEN YOU HAD INFERENCE DEMAND THAT REALLY STARTED TO PICK UP, COMPANIES LIKE GOOGLE SAYING WE ARE SEEING 50 TIMES MORE TOKEN PROCESSING IN THE MONTH OF MAY VERSUS A YEAR AGO AND GOOGLE TALKED ABOUT -- OR SORRY, MICROSOFT TALK ABOUT FIVE TIMES MORE TOKENS PROCESSED IN THE MARCH QUARTER THAN A YEAR AGO. THEN THEY PUT UP DECENT NUMBERS AS INFERENCE DEMAND, THE STUFF IT TAKES TO GENERATE YOUR ANSWERS CAUGHT UP TO TRAINING DEMAND. THAT HELPED TRANSITION THE BATON. BUT IF M.I.T. IS RIGHT AND MONEY 5% OF THE ENTERPRISES INVESTING IN AI ARE SEEING ZERO RETURN, THAT'S A PROBLEM WHEN YOU'RE ALMOST THREE YEARS INTO THIS AI BUILDOUT SINCE WE HEARD ABOUT CHATGPT AT THE END OF 2022. ROMAINE: DAN, GREAT STUFF. DAN MILES FROM NILES INVESTMENT MANAGEMENT. TWO BIG MOVERS AND AFTER HOURS, A CHIP MAKER, ONE OF THE BIGGEST GAINERS, BUT ONE OF THE BIGGEST DECLINERS IS A GAP, SHARES DOWN AS MUCH AS 11%, NOW DOWN 9%, THEY JUST REPORTED EARNINGS. COMP SALES MISSED ANALYST EXPECTATIONS IN A LOT OF TALK ABOUT THE IMPACT OF TARIFFS. WE WILL HAVE THE CONVERSATION IN DEPTH AFTER THE BREAK RIGHT HERE ON BLOOMBERG. ROMAINE: GAP REPORTED EARNINGS, A TURNAROUND STORY AND UP UNTIL TODAY A RELATIVELY POSITIVE ONE. SHARES DOWN ABOUT 8% IN AFTER-HOURS TRADING AFTER THE COMPANY SAID COMP SALES IN THE SECOND QUARTER CAME IN AT 1%, THE STREET LOOKING FOR ALMOST 2% , ABOUT 1.7%. COMP SALES OF OLD NAVY UP BETTER THAN EXPECTED. AT GAP GLOBAL WAS BETTER THAN EXPECTED BUT YOU HAVE SOME WEAKNESS IN THE ATHLETIC BUSINESS, DOWN 9%. HERE'S THE ISSUE, THE COMPANY PROVIDED A FORECASTING NET SALES FOR THE CURRENT QUARTER WILL BE IN A RANGE OF 1.5 TWO 2.5%, BUT THE GROWTH MARGIN WILL BE IMPACTED BY AS MUCH AS TWO PERCENTAGE POINTS BECAUSE OF THE EFFECT OF TARIFFS. OUR GUEST JOINS US, TO TALK MORE ABOUT THIS. WE HAD ULTA BEAUTY WHICH SEEMED TO DO WELL. THE TARIFF IMPACT, THAT IS A HUGE HIT TO MARGINS TO HAVE A TWO PERCENTAGE POINT HIT AND I'M CURIOUS WHY YOU DON'T THINK WE SAW MORE MITIGATION BY MANAGEMENT TO BLUNT THAT IMPACT. > > THANK YOU FOR HAVING ME. SECONDLY, IS NOT OFTEN MY JAW DROPS AND YOU CAN'T BELIEVE THE SIZE OF THE NUMBER BECAUSE WE HAVEN'T HEARD ANYTHING CLOSE TO THAT FROM ANY OTHER RETAILER OR BRAND. THE FACT THEY HAVEN'T HAD BETTER TARIFF MITIGATION STRATEGIES, THAT SAYS THIS IS SOMETHING ALMOST BEYOND THEIR CONTROL, WHICH IS CONCERNING AND I THINK THE STOCK IS REACTING AS SUCH. ROMAINE: WHAT WOULD YOU EXPECT TO HEAR ON THE CONFERENCE CALL AND BEYOND? WE ARE ALREADY IN BACK-TO-SCHOOL SEASON, ANYONE WITH KIDS HAS ALREADY DONE BACK-TO-SCHOOL SHOPPING, WE ARE LOOKING AHEAD TO THE HOLIDAY SHOPPING SEASON. IF THIS IS A COMPANY ALREADY GUIDING INTO THE NEXT THREE QUARTERS WITH A HIT FROM TARIFFS, WHAT LEVERS IF ANY DO THEY HAVE TO PULL? DEBORAH: IT WOULD HAVE TO BE ON THE TOP LINE BUT EVEN THAT WAS DISAPPOINTING THIS QUARTER. IF WE START TO LOOK AT A TWO YEAR STACK, THEY'VE BEEN DIGGING OUT BUT I THINK THEY ARE FLATTENING OUT IN TERMS OF THE DEGREE OF IMPROVEMENT TO TOPLINE. IF YOU CAN'T WORK THAT DOWN TO EARNINGS FOR THE BOTTOM LINE, AND ONE THING YOU ARE CALLING OUT IS TARIFFS, AND OTHER THINGS, SHRINK, ETC., IT GIVES CAUSE FOR CONCERN ABOUT THE LEADERSHIP. ROMAINE: YOU'VE BEEN IN THE SPACE A LONG TIME AND YOU UNDERSTAND HOW THESE RETAILERS OPERATE AND THERE HAVE ALWAYS BEEN CHALLENGES OVER THE YEARS. IF IT'S NOT TARIFFS NOW, IT WAS SOMETHING 10 YEARS AGO AND 10 YEARS BEFORE THAT. WHAT YOU SEE IN OTHER RETAILERS IN THE ABILITY TO MANAGE TARIFF IMPACT, WHAT ARE THEY DOING RIGHT IF AT ALL? DEBORAH: WE TALKED TO A LOT OF CLIENTS AND IT IS GET AS MUCH IN AS YOU CAN AS EARLY AS YOU CAN BECAUSE IT WILL NOT ONLY REMOVE A LOT OF THE UNCERTAINTY BUT ALSO YOU WON'T BE FACED WITH THE SAME DEGREE OF POTENTIAL TARIFFS AS OTHERS. I THINK GOING BACK AND FORTH, ULTA IS IN A DIFFERENT SPACE BUT THEY SAW A STRONG GROWTH MARGIN THIS QUARTER. THEY HAVE THEIR OWN BRAND AS WELL. THERE ARE DEFINITELY LEVERS TO PULL IN TERMS OF SUPPLY CHAIN RISK, TARIFF RISK, AND IT DOESN'T SEEM LIKE THAT WAS TOP OF MIND FOR CAP, WHICH IS SURPRISING. ROMAINE: I ONLY HAVE ABOUT 30 SECONDS, PRICING POWER, WHERE DOES THAT STAND IN THE RETAIL SPACE, WHO HAS IT? DEBORAH: GOING BACK TO EARNINGS LAST WEEK, WE HAD EXPECTED TO SEE WALMART, THEY HAD TALKED ABOUT PUSHING BACK ON VENDORS. WE DIDN'T SEE AS MUCH AS WE WOULD HAVE EXPECTED BUT THEY SAID THEY ARE TRYING TO SHARE SOME OF THE BURDEN. TRACTOR SUPPLY HAS SAID THE SAME THING, WORKING WITH VENDORS. THOSE KINDS OF COMPANIES ARE SEEING SIGNIFICANT OPPORTUNITY TO SHARE THE PAIN. ROMAINE: ALL RIGHT. THANK YOU, DEBORAH. ROMAINE: LET'S GET RIGHT TO OUR TOP THREE, THE PEOPLE DRIVING THE DAY'S MOST TALKED ABOUT STORIES. WE START WITH XI JINPING, QUIETLY REACHED OUT TO INDIA ALL THE WAY BACK IN MARCH TO TEST THE WATERS ON IMPROVING TIES. THIS AMID A LOT OF CONCERNS ABOUT THE U.S.'S TRADE POLICIES TOWARD BEIJING AND INDIA. BACK IN THE U.S., THE CDC DIRECTOR, AT LEAST FOR NOW, HAS BEEN OUSTED BY THE TRUMP ADMINISTRATION, THIS AFTER CLASHING WITH RFK JR. OVER HER VIEWS ON VACCINES. THE HEALTH AND HUMAN SERVICES SECRETARY RFK JR. SAYING THE CDC IS LIKELY SUFFERING FROM "A DEEPLY EMBEDDED MALAISE." THIRD, LISA COOK, THE FED GOVERNOR CHALLENGING PRESIDENT TRUMP'S ATTEMPT TO FIRE HER. HER LAWYERS SUGGESTING AN UNINTENTIONAL CLERICAL ERROR MAY HAVE BEEN BEHIND SOME OF THE DISCREPANCIES ON HER FINANCIAL DISCLOSURE FORMS REGARDING AT LEAST TWO MORTGAGES SHE TOOK OUT IN 2021. WE CONTINUE TO FOLLOW THE LAWSUIT NOW THAT LISA COOK HAS FOLLOWED. SO TOO HAS SENIOR LITIGATION ANALYST FOR BLOOMBERG INTELLIGENCE. HE JOINS US AROUND THE DESK. I WANT TO JUXTAPOSE TWO FIRINGS. LISA COOK AT THE FED AND SUSAN MONAREZ AT THE CDC. WHEN WE TALK ABOUT THE LEGAL STANDING TO PUSH BACK AGAINST TRUMP'S ATTEMPTS TO OUST THESE FOLKS, WHO HAS A BETTER LEG TO STAND ON? > > THERE ARE SO MANY CASES CONSIDERING PRESIDENT TRUMP FIRING COMMISSIONERS OF DIFFERENT AGENCIES. WE'VE SEEN THIS WITH THE FEDERAL RESERVE AND EVERY OTHER AGENCY, INCLUDING THE CDC. EVEN LAST NIGHT -- AND WHAT IS INTERESTING IS ABBY LOWELL IS A LAWYER FOR THE CDC DIRECTOR AND LISA COOK. YOU SAW THE CDC DIRECTOR'S LAWYERS LAST NIGHT PUT OUT TWEETS, SAYING -- ESSENTIALLY CONCEDING THE PRESIDENT CAN PROBABLY FIRE HER, BUT THEY CONTESTED THE PROCEDURAL MECHANISMS THAT RESULTED IN HER BEING REMOVED, BECAUSE IT DID NOT COME FROM THE PRESIDENT DIRECTLY. YOU NEED TO CONTRAST THAT WITH THE FEDERAL RESERVE, WHICH THE SUPREME COURT IN MAY SAID IS UNIQUELY STRUCTURED, MORE QUASI- PRIVATE, AND AS A RESULT DOES NOT FIT UNDER THE PRESIDENT'S AUTHORITY TO REMOVE THOSE PEOPLE AT ALL. ROMAINE: YOU HAD A CHANCE TO LOOK AT LISA COOK'S LAWSUIT. WHAT IS SHE SAYING IN THAT DOCUMENT? ELLIOTT: SHE'S SAYING THE FEDERAL RESERVE ACT HAS A FOR CAUSE REMOVAL RESTRICTION, WHICH IS A CONSTITUTIONAL REMOVAL RESTRICTION, AND THAT THE PRESIDENT HAS NOT SATISFIED THAT STANDARD, BECAUSE WHAT HE'S ACCUSING LISA COOK OF DOING IS JUST AN ALLEGATION AT THIS POINT. THERE'S BEEN NO INVESTIGATION. HE CAN'T MAKE THAT DETERMINATION ON HIS OWN. THERE NEEDS TO BE SOME PROCESS. HE NEEDS TO BE GIVEN DUE PROCESS TO CONTEST THESE ALLEGATIONS AT A MINIMUM, AND NONE OF THAT HAS HAPPENED. ROMAINE: NONE OF THAT HAS HAPPENED. SEVERAL TRUMP ADMINISTRATION OFFICIALS SAID AT MINIMUM LISA COOK SHOULD EFFECTIVELY RECUSE HERSELF IN THE INTERIM. I KNOW WE ARE IN UNPRECEDENTED TERRITORY, BUT AS THEIR LEGAL PRECEDENT TO SAY YOU SHOULD NOT BE INVOLVED IN -- BIT US THERE LEGAL PRECEDENT TO SAY YOU SHOULD NOT BE INVOLVED? ELLIOTT: WE WILL HEAR ON LISA COOK'S TRO, TEMPORARY RESTRAINING ORDER. IF YOU ASK PRESIDENT TRUMP, LISA COOK IS FIRED. IF YOU ASKED LISA COOK, SHE'S STILL A FEDERAL RESERVE BOARD GOVERNOR. ROMAINE: WE ARE THREE WEEKS AWAY FROM ANOTHER FED MEETING. THE DECISION TOMORROW, IS THAT EFFECTIVELY GOING TO BE THE DEFINITIVE DECISION AS TO WHETHER SHE WILL BE PARTICIPATING IN THAT MEETING? ELLIOTT: FOR THE SHORT-TERM. THE HEARING IS TOMORROW. THERE'S A GOOD CHANCE THE JUDGE WILL DECIDE ON THE TRO TOMORROW. THAT WILL STAY IN PLACE FOR 10 DAYS OR TWO WEEKS, THEN LISA COOK WOULD ASK FOR THAT TO BE ELONGATED AS A PRELIMINARY OR PERMANENT INJUNCTION. AND PRESUMABLY THE PRESIDENT WILL GO TO THE D.C. CIRCUIT APPEALS COURT AND ASK FOR THE TRO TO BE DISSOLVED. ROMAINE: OUR LITIGATION ANALYST AT BLOOMBERG INTELLIGENCE. WE WILL HAVE FULL COVERAGE OF THE RESULTS OF THAT HEARING TOMORROW MORNING. A BIG QUESTION MARK AS TO WHETHER IT LISA COOK WILL BE PART OF THE FED'S NEXT POLICY MEETING SEPTEMBER 16 AND 17. THERE IS A POSSIBILITY A NEW TRUMP APPOINTEE COULD BE PART OF THE MEETING. THE SENATE IS NOW RUSHING TO HOLD A HEARING ON HIS NOMINATION TO THE FEDERAL RESERVE BOARD AS SOON AS NEXT WEEK. ALL OF THIS COMING AGAINST THE BACKDROP OF A PCE INFLATION REPORT SET TO COME OUT TOMORROW MORNING. THE CHIEF ECONOMIST RBC JOINS US NOW. THERE'S A LOT TO UNPACK HERE, THE ECONOMY, THE DATA, AND A LOT OF THE POLITICS AROUND THE FED. I WANT TO START WITH THIS PCE REPORT. IT'S PERSONAL CONSUMPTION, INFLATION PRICE INDEX REPORT THAT MOST PEOPLE THINK WILL RATIFY THIS IDEA THAT THE PERSISTENCE OF INFLATION IS STILL THERE. IS THAT YOUR OUTLOOK? > > YES, BUT MAYBE NOT FOR THE REASONS OTHERS MAY BE DISCUSSING. ALL THE FOCUS ON INFLATION IS RELATED TO WHETHER TARIFFS WILL SHOW UP. OUR TAKE HIS IT IS TOO EARLY FOR TARIFFS TO SHOW UP BECAUSE COMPANIES STILL HAVE TO RUN DOWN SERIOUS INVENTORIES BEFORE WE SEE NUMBERS LIKE THE PCE AND CPI SHOW DISINFLATION. WE ARE LOOKING FOR MORE SERVICES INFLATION HOLDING IN TOO STRONG, UNCOMFORTABLY STRONG. THE PROBLEM IS SERVICES INFLATION, THE FED IS SENSITIVE TO THAT. IT HAS TO DO WITH THAT TIGHTER LABOR MARKET. THAT IS WHAT WE WILL BE LOOKING FOR TOMORROW, NOT THE TARIFF STORY, BUT HOW PERSISTENT IS THE SURFACE'S SIDE OF THE PICTURE? -- SERVICES SIDE OF THE PICTURE? ROMAINE: JAY POWELL PUT MORE EMPHASIS ON THE STATE OF THE LABOR MARKET RATHER THAN ON TARIFFS AND INFLATION. FRANCES: THAT IS THE CHALLENGE. YOU AND I ARE USED TO THE DUAL MANDATE HEADING IN THE SAME DIRECTION. BUT WE ARE AND WHAT WE CALL STAGFLATION LITE, GROWTH IN LABOR THAT IS UNCOMFORTABLY LOW, BUT INFLATION IS UNCOMFORTABLY HIGH. THE FED COULD CHOOSE FROM A RANGE OF INDICATORS TO CUT OR EVEN HIKE IF THEY WERE JUST GOING OFF INFLATION. WE HAVE TO LISTEN CAREFULLY TO THE BIAS THAT EXISTS WITHIN THE FED BAR. THIS IS A FEDERAL RESERVE THAT HAS NOT RULED OUT A SEPTEMBER CUT. OUR TAKE IS THEY WILL NOT HAVE THE RIGHT DATA THAT PERMITS THAT AND IT WILL BE HARD TO CUT BEFORE DECEMBER. FEDERAL RESERVE CAN CHOOSE TO SPEAK TO A VARIETY OF INDICATORS. THOSE RECENT NONFARM PAYROLL NUMBERS, FOR EXAMPLE, AND SAY THAT IS ENOUGH FOR US TO MOVE NOW. WE ARE STILL AT 4.2% UNEMPLOYMENT RATE, EXACTLY WHERE WE WERE LAST YEAR, AND YET INFLATION IS AROUND 3%. THAT'S NOT A CLEAR-CUT EASING CYCLE TYPE OF DATA LANDSCAPE. THE FED CAN NEVER GET THIS, BUT THEY WILL HAVE TO GET TRICKY WITH WHAT DATA POINTS THEY USE TO JUSTIFY. ROMAINE: THE MAKEUP OF THE FED COULD LOOK DIFFERENT IN A COUPLE WEEKS. STEPHEN MEYER WILL BE NOMINATED TO THE FEDERAL RESERVE BOARD, COULD GET A HEARING AS SOON NEXT WEEK, WHICH WOULD RUSH HIM ONTO THE BOARD AHEAD OF THAT MEETING. THE COURTS MIGHT HAVE TO BE THE ARBITER OF WHETHER LISA COOK WILL BE IN THAT ROOM AS WELL. DOES THAT MATTER TO WHAT THE OUTCOME MIGHT ACTUALLY BE WITH REGARDS TO THE MONETARY POLICY DECISION ON SEPTEMBER 17? FRANCES: PROBABLY NOT FOR SEPTEMBER 17, BUT ABSOLUTELY WHEN YOU ARE LOOKING AT THE POTENTIAL EROSION OF THE FED INDEPENDENCE OVER TIME, IT CANNOT BE ENTIRELY DISMISSED. CALL ME A TRADITIONALIST, BUT IT IS NOT WHO IS IN THE POSITIONS BUT WHAT IS THE DATA SHOWING US? THAT UNCOMFORTABLENESS IN INFLATION WILL PROBABLY MAKE THE FED'S JOB DIFFICULT COME SEPTEMBER. THAT IS WHAT THE MARKETS WILL LATCH ON TO, IN ADDITION TO THE NOISE AROUND THE POLITICS OF THE FED COMPETITION. ROMAINE: GDP DATA BACKWARDS LOOKING, 3.3% GROWTH RATE. UNDER ANY CIRCUMSTANCE THAT WOULD BE PHENOMENAL FOR A COUNTRY OUR SIZE, BUT IT SEEMED THE MAJORITY WAS DRIVEN BY INVESTMENT SPENDING TIED TO TECHNOLOGY AND AI THAT A LOT OF PEOPLE DON'T THINK IS SUSTAINABLE. FRANCES: IF YOU WERE IN A COMA THE LAST FIVE YEARS AND I TOLD YOU THE ON EMPLOYMENT RATE WAS 4.2% AND INFLATION WAS ABOVE 2%, YOU WOULD SAY THE ECONOMY IS BOOMING, RUNNING ALMOST ON THE TWO HOT SIDE OF THE PICTURE. WE WOULD NOT BE TALKING ABOUT MATERIAL WEAKNESS IN THE LABOR MARKET. LOOKING FORWARD, SOME FACTORS THAT SUPPORTED GROWTH WILL SLOW DOWN. WE SHOULD LOOK AT MORE LIKE 1.5% GDP. WE WILL NOT SEEK CAPEX THAT STRONG. HOUSING IS EFFECTIVELY IN A RECESSION. HIGH INCOME CONSUMER IS SHOWING SOME SIGNS OF SLOWING. IT'S REALLY HARD IF YOU LOOK AT A BLANK PIECE OF PAPER AND ADD IN THE DATA TO MAKE JUSTIFICATIONS THAT THIS ECONOMY IS IN SERIOUS TROUBLE. ROMAINE: THE CHIEF ECONOMIST AT RBC. 8:30 A.M. TOMORROW WASHINGTON TIME WE ARE SCHEDULED TO GET THE PCE REPORT. ELLIOTT STEIN TALKED ABOUT EARLIER WE ARE EXPECTED TOMORROW MORNING TO GET POTENTIALLY A DECISION REGARDING LISA COOK'S STATUS. WE LOOK AT THE AFTER TRADE AND BIG GAINERS AND DECLINERS. GAP SHARES HAD BEEN DOWN AS MUCH AS 12%. THAT COMPANY SAYING IT WILL SEE A MAJOR TARIFF IMPACT FOR THE NEXT QUARTER. ULTA BEAUTY IN THE SAME RETAIL SPACE, SAYING IT'S STILL SEE IN HEALTHY CONSUMER SPENDING. WE TAKE A LOOK AT WHAT HAS BEEN GOING ON IN THE TECHNOLOGY SPACE AND AI BUILDUP. THIS IS BLOOMBERG. ROMAINE: THE COLLEGE FOOTBALL SEASON IN THE U.S. IS ALREADY UNDERWAY, THOUGH WE SHOULD POINT OUT THE BIG GAMES OSTENSIBLY START TODAY. BOISE STATE AND SOUTH FLORIDA. A MARQUEE MATCHUP ON SATURDAY BETWEEN TEXAS AND OHIO STATE. A LOT OF DOCTORS ARE BRACING FOR AN IMPACT THAT MAY BE WE DID NOT SEE IN THE PAST. COLLEGE ATHLETES RAKE IN MILLIONS IN NAME, IMAGE AND LIKENESS DEALS. NOW TEAMS ARE FACED WITH THE HEIGHTENED LIABILITY FOR THEIR DECISIONS AS TO WHETHER PUT FOLKS BACK ON THE FIELD. A PRECARIOUS VISION FOR MEDICAL PROFESSIONALS. OUR NEXT GUEST HAS A KEY PERSPECTIVE ON THIS ISSUE. AFTER ALL HE'S THE PRESIDENT AND CEO FOR THE U.S. COUNSEL FOR ATHLETES HEALTH AND THE CHIEF MEDICAL OFFICER FOR THE BIG TENT. GREAT TO HAVE YOU HERE ON THE PROGRAM. I HAD NOT THOUGHT ABOUT THIS ANGLE AS SOMEONE WHO ALSO PLAYED SPORTS. THERE IT IS THIS IDEA THAT YOU GET HURT AND AS LONG AS IT IS NOT A BROKEN BONE, YOU DUST YOURSELF OFF AND GET ON THE FIELD. IF YOU ARE A COLLEGE PLAYER MAKING POTENTIALLY MILLIONS OFF YOUR NAME, IMAGE, LIKENESS, WILL THIS FORCE THE HAND OF MEDICAL PROFESSIONALS WITH REGARDS TO THE DECISIONS THEY MAKE? > > THANKS FOR HAVING ME. THERE IS A NEW VARIABLE THAT'S BEEN INTRODUCED IN THE COLLEGIATE ATHLETICS THROUGH NAME IMAGE AND LIKENESS AND REVENUE-SHARING. IT IS THIS IMPACT OF THE FINANCIAL IMPACT SOME ATHLETES FACE IF THEY ARE NOT ON THE FIELD. NOW MEDICAL PERSONNEL ARE LOOKING AT THIS ADDITIONAL VARIABLE WHEN AN ATHLETE MAY NOT BE ABLE TO RETURN TO THE FIELD, AND CERTAINLY THERE ARE QUESTIONS NOW, BECAUSE THESE ATHLETES ARE NOT EMPLOYEES, ABOUT WHAT IT MEANS FOR THE MEDICAL PROFESSIONALS. LOOKING IN PROFESSIONAL SPORTS, WHAT THE RAMIFICATIONS CAN BE IF THERE IS A DISAGREEMENT ABOUT THE DECISIONS MADE FROM MEDICAL PROFESSIONALS. ROMAINE: YOU HAVE A UNIQUE PERSPECTIVE NOT ONLY BEING A MEDICAL DOCTOR AND ADVISOR, BUT FORMER PLAYER YOURSELF. I THINK WE ARE OF THE SAME GENERATION. IT SEEMED TO BE A DECISION BACK IN THE DAY BETWEEN THE HEAD COACH AND SKILLS COACH AND WHOEVER THE DOCTOR WAS ON THE FIELD. HOW MANY OTHER PEOPLE MIGHT HAVE TO BE PART OF THE DECISION-MAKING PROCESS TODAY? DR. BORCHERS: THERE IS DEFINITELY GOING TO BE THE REPRESENTATIVES OF THE PLAYERS. YOU HAVE AGENTS INVOLVED REPRESENTING PLAYERS. THEY ARE SEEKING OUT OPINIONS OF PHYSICIANS THAT ARE NOT PART OF THE UNIVERSITY AND THEY WILL HAVE AN IMPACT ON THE RECOMMENDATIONS. THERE MAY BE A DIFFERING OF OPINION. TRYING TO RECONCILE THAT, MAKING CERTAIN THE BEST DECISION IS MADE TO GET THE ATHLETE BACK ON THE FIELD, BUT UNDERSTANDING WHAT THEIR DECISIONS ARE WHEN THEY THINK ABOUT THEIR FINANCIAL DECISIONS. WE'VE SEEN SOME OF THIS WITH OPTING OUT OF BOWL GAMES, WITH THINKING ABOUT TAKING THE NEXT STEP TO THE NFL, BUT WE HAVE A NEW MARKET IN COLLEGIATE ATHLETICS WHERE INDIVIDUALS ARE NOT JUST MAKING A LOT OF MONEY, THEY ARE LOOKING FOR OPPORTUNITIES TO MAKE MONEY, EITHER MOVING THROUGH THE TRANSFER PORTAL, SO THERE IS NEW VARIABILITY TO THIS COLLEGE ATHLETICS SEEN. -- ATHLETIC SCENE. ROMAINE: BEYOND PHYSICAL HEALTH, THERE ARE QUESTIONS ABOUT HOW YOU APPROACH POTENTIAL MENTAL HEALTH ISSUES WITH THESE ATHLETES, PARTICULARLY WITH SOME OF THE MONEY AT STAKE. DR. BORCHERS: IN COLLEGIATE ATHLETICS YOU'RE TALKING ABOUT YOUNG ADULTS WHO MAY NOT HAVE DEALT WITH ANY OF THESE VARIABLES. THE PRESSURE NOW THAT IS ON THEM TO PRODUCE NOT ONLY ON THE FIELD, BUT FINANCIALLY, SO THERE IS SIGNIFICANT STRESS. THERE COULD BE SIGNIFICANT ANXIETY. YOU TAKE AN 18-YEAR-OLD WHO IS PERFORMING ON A BIG STAGE AND HOW HAS THEESE FINANCIAL ISSUES ALONG WITH IT. THERE CAN BE A LOT OF MENTAL STRESS, AND CERTAINLY THE SUPPORT NEEDED FOR INDIVIDUALS TO PERFORM. ROMAINE: WE HAVE TO LEAVE IT THERE. APPRECIATE YOU COMING ON. I WON'T ASK YOU WHO YOU ARE ROOTING FOR IN THE TEXAS AND OHIO STATE GAME. IF YOU ARE A SPORTS FAN, THIS IS YOUR TIME OF YEAR. THIS NEW ERA OF HYPER POPULAR COLLEGE PLAYERS COMING TO THE FORE THIS WEEKEND WITH TEXAS VERSUS OHIO STATE AND DON'T FORGET MY ALMA MATER NORTHWESTERN TAKING ON THE MIGHTY MIGHTY BULLDOGS. THE U.S. OPEN IN NEW YORK. ALL THAT A BIG REASON TO BRING THE POWER PLAYERS IN SPORTS INTO ROOMS OVER HEADQUARTERS. JASON KELLY IS LEADING THAT CHARGE. YOU HAVE A BIG EVENT HERE NEXT WEEK WHERE YOU WILL MEET A LOT OF PEOPLE IN THE BUSINESS OF SPORTS TO TALK ABOUT HOW MUCH IT HAS EVOLVED. WE ARE TALKING ABOUT NAME, IMAGE, LIKENESS. JASON: NEXT THURSDAY, WE ARE EXCITED TO BRING EVERYONE TO BLOOMBERG WORLD HEADQUARTERS AS THE U.S. OPEN IS HAPPENING. MARIA SHARAPOVA JUST GOT INDUCTED INTO THE TENNIS HALL OF FAME. SHE WILL BE IN CONVERSATION WITH DAVID RUBENSTEIN. WE WILL HAVE THE ATHLETIC DIRECTORS FROM OHIO STATE, UCLA, DARTMOUTH AND DUKE ALL TALKING ABOUT THIS UNBELIEVABLY NEW ERA. I WAS FASCINATED BY THE CONVERSATION WITH DR. BORCHERS. I HAD NOT THOUGHT ABOUT THAT. ROMAINE: IT IS GOOD FOR THE PLAYERS. THERE HAS BEEN TALKED ABOUT MAKING THE COLLEGE FOOTBALL BUSINESS MORE EQUITABLE. IT DOES INTRODUCE A DIFFERENT DYNAMIC AND TO THE DECISIONS -- DYNAMIC INTO THE DECISIONS THAT HAVE TO BE MADE. WILL THEY BE AMONGST THE LINE OF HOW TO PROTECT THESE PLAYERS, MAXIMIZE THEIR VALUE? JASON: IT'S YES-AND. WHAT WE ARE STARTING TO SEE, AND IT WAS INTERESTING TO LISTEN TO THE CONVERSATION, WE ARE FIGURING OUT HOW THIS WILL WORK. ONE QUESTION WILL BE HOW MUCH ARE YOU PAYING THESE PLAYERS? HOW ARE YOU PAYING THEM? ARE YOU WORRIED THEY ARE GOING TO LEAVE? ARE THESE PRICES GOING TO GO UP? THERE'S A SETTLEMENT THAT EACH SCHOOL THAT HAS BOUGHT INTO THIS HAS $20 MILLION TO PAY PLAYERS. WILL THAT BE ENOUGH? YOU HAVE PLAYERS BETWEEN NIL AND THEIR SCHOOLS ARE MAKING $10 MILLION. ROMAINE: WHEN WE WERE KIDS, THERE WERE THREE SPORTS MORE OR LESS, FOOTBALL, BASKETBALL, BASEBALL, AND MAYBE HOCKEY DEPENDING ON YOUR REGION. WOMEN'S BEST CABAL BECOME BIG -- BASKETBALL HAS BECOME BIG. JASON: WE WILL HAVE THE COMMISSIONER OF MAJOR LEAGUE SOCCER, AND WHO RUNS U.S. SOCCER. A YEAR FROM NOW WE WILL BE ON THE BACK HALF OF THE WORLD CUP IN NORTH AMERICA. ONE OF THE QUESTIONS I HAVE IS WHY AREN'T WE TALKING MORE ABOUT THE WORLD CUP? I HAVE TO REMIND MYSELF THIS IS ALL WE WOULD BE TALKING ABOUT A YEAR OUT. HOW BIG OF AN EVENT IS THIS GOING TO BE? JASON: PARTICULARLY BECAUSE WE HAD THE CLUB WORLD CUP IN NEW YORK. JASON: WHEN WE LAST HAD THE WORLD CUP HERE IN NEW YORK, THAT GAVE BIRTH TO THE MLS. IS THIS FINALLY GOING TO BE -- THIS HAS BEEN THE NEXT BIG THING, SOCCER, AS LONG AS WE HAVE BEEN AROUND. ROMAINE: SOMETHING TO LOOK FORWARD TO NEXT WEEK ON BLOOMBERG TELEVISION. JASON KELLY, THE HOST OF "THE DEAL" AND "POWER PLAYERS." CATCH COVERAGE OF THE POWER PLAYERS SUMMIT NEXT WEEK. BEFORE WE GO TO BREAK, AN UPDATE ON BREAKING NEWS INVOLVING CATERPILLAR, SHARES PLUNGING IN THE AFTERMARKET. DOWN 3% AFTER THE COMPANY ARTICULATING THE IMPACT OF TARIFFS ON ITS BUSINESS. THE COMPANY SEES A NET IMPACT FOR THE FULL YEAR OF 1.5 TO 1.8 BILLION DOLLARS AND SAYS THAT WILL TAKE ITS OPERATING PROFIT MARGIN TO THE BOTTOM OF ITS PREVIOUS RANGE THAT HIT AT GUIDED FOUR. IT SAYS THERE WILL BE NO IMPACT ON SALES OR ITS REVENUE OUTLOOK. A MARGIN STORY, BUT A PRETTY BIG ONE OF AT LEAST $1.5 BILLION. THIS IS BLOOMBERG. ROMAINE: BREAKING NEWS ON THE CDC IN THE UNITED STATES. THE WASHINGTON POST REPORTING THE TRUMP ADMINISTRATION IS PUSHING JAMES O'NEILL TO TAKE OVER THE CDC, THIS AFTER THE ADMINISTRATION MOVED TO OUST THE CDC DIRECTOR SUSAN MONAREZ. JAMES O'NEILL HAS BEEN A CLOSE ALLY OF PETER THIEL AND RAN THIEL'S FOUNDATION FOR AT LEAST THREE YEARS. WE WILL TRY TO GET YOU MORE DETAILS. THE TEAM ON "BALANCE OF POWER" I AM SURE WILL HAVE MORE DETAILS AS WELL. A PUSH AHEAD TO SOMETHING THAT COULD MOVE THE MARKETS TOMORROW, INCLUDING EARNINGS OUT OF ALIBABA AND BYD, TWO CHINESE COMPANIES WITH TWO BIG IMPRINTS ON THE GLOBAL PICTURE. WE WILL GET THE PCE PRICE INDEX AT 8:30 A.M. TIME. UNIVERSITY OF MICHIGAN SENTIMENT NUMBERS AT 10:00 A.M.. MIDNIGHT TONIGHT, THAT TO MINIMUS EXEMPTION -- DE MINUMUS EXEMPTION COMING BACK FROM $800 TO $100 STARTING MIDNIGHT TONIGHT. STICK AROUND. THE INTERSECTION OF WHAT IS GOING ON IN WALL STREET AND WASHINGTON COMES UP NEXT ON "BALANCE OF POWER." ♪

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S&P Surges as Nvidia Growth Slows on AI Doubts | The Close 8/28/2025

Bloomberg Television brings you the latest news and analysis leading up to the final minutes and seconds before and after the closing bell on Wall Street. Today's guests are B capital’s Raj Ganguly, Morgan Stanley Wealth Management’s Lisa Shalett, Citi’s Tyler Radke, Tanger’s Stephen Yalof, ValueWorks’ Charles Lemonides, Niles Investment Management’s Dan Niles, Coresight Research’s Deborah Weinswig, RBC’s Frances Donald, US Council for Athletes’ Dr. James Borchers. (Source: Bloomberg)

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