Rebel's Edge - Financial Falls Off A Cliff

welcome back to the rebels Edge where today Pete and I discuss why the financial stocks are going down so hard there's a good reason behind it and if you want to know you got to stay tuned Bang [Music] [Music] welcome back Pete yeah oh you no clapper today huh no no that's all right no clapper I left it down in Puerto Rico well we missed we missed you yesterday but I will say this uh that Justin does a heck of a nice job filling in he really he's a he's a clever son of a gun and people love him you know and I think he gets his Vibe because he lives in Hawaii which I didn't know till yesterday it's not such a bad gig that's not a bad gig at all uh it's almost as nice as Puerto Rico people yeah well well welcome back folks uh of course we got the presidential debate tonight we've got uh JP Morgan and others talking about what's going on with interest rates and who It's Gonna Hurt well I think you might guess but we'll talk about that in a whole lot more on the rebels Edge we're g to kick it off with what's going on in macro minute TR uh rather China Pete and the trade surplus widened sharply in August uh due to slower than expected export growth in China uh still below forecast but positive year on year I'm gonna say that's the macro all right I think that is a very good one and I'm going to follow it up with what else I think is also pretty damn good CPI coming at us and PPI coming at us and I think that data you know we talk about it all the time right we we talk about all right how big of a focus this has become matter of fact last week John I was on that Schwab Network which by the way those guys do a great job and they were asking me questions about a few things and I I just said look uh these numbers have become so much more important than they once were and we focus on them and they're catalysts and I'm not saying it's not for the right reasons it is for probably a lot of the right reasons but it's something that we didn't do 10 years ago or 20 years ago right I mean it it wasn't to the same uh levels that it is now that and the uh the Trump Harris debates on tonight that ought to have a little bit of fire into the markets as well I think yeah it might and uh Pete our mutual friend Aon Bernett was just ripping Camala I don't know if you saw that but which is kind of rare but she said uh so the alcu uh the American Civil Li ACLU sorry American civil liberties Union sends out a questionnaire and apparently somebody at the Harris campaign filled it out and uh it said she fully supports uh transgender surgeries for illegal aliens no matter what what it costs and all that kind of stuff and Aaron was like did you really say this and the guy uh on her team said she said it in writing and she said it verbally so there's a there a fair amount of folks who uh probably don't feel the same about that particular issue even if they might feel that Americans who lived here and work here um might deserve that that's debatable I guess but somebody who comes here illegally we should all of a sudden all of us should pay for some crazy surgery uh I don't think so but uh that was her statement all right Pete fantastic Futures I'm going to say Brett um Brent is the of course um overseas version of our WTI West Texas intermediate they call theirs Brent and those Futures trade very actively also first time since 2021 it's below 70 bucks a barrel Pete that is amazing uh and and we were talking about yesterday just crude itself WTI um at 52- we lows over the last couple of days just terrible I mean the the performance of that has been amazing because we got a little bit up there towards 80 and never was quite sticky enough to hold up very long before they sold it off I'm looking at the volatility ex uh right now John markets are getting banged around pretty good today especially the Dow if you look at it but I'm looking at the vix it's getting a little bit narrower a little bit tighter as far as where it is basically call it 19 to 21 I know we've G up to 23 didn't last long I know we've gotten below 19 didn't last long so it looks like 19 to 21 just always remember this a 16 vix means that you're going to have about a 1% move in the S&P 500 right that's what that's what we're looking at what were we yesterday well we are a little bit more than 1% and oh by the way that vix it was sitting right around that 18 19 20 Level so I would say that the vix has been very very um accurate on where it is right now and where it's been as far as that room that little range that we've been in lately yeah and uh uh a lot more of this from the big cap stocks in the financial space Pete could put a another hurting on the market and a little boost boost boost on the vix uh and why is that happening folks just real quick before the show started we saw that uh JP Morgan was down 7% Goldman's down all of the big Financial hubs why well JP Morgan says that that uh the interest income the net interest income nii is going to be down substantially now obviously they're still making money but they were projecting to make $91 billion on interest and apparently uh it's going to be a little bit lower than that I'm gonna say a little bit lower out of the goodness of their dark Hearts Pete they might not take quite as big a bite out of uh consumers but they're more than happy to be out there biting Pete yeah they are indeed well Oracle we'll kick it off with that because they were up you know over 15% for a while today Pete and the reason is they've signed deals with Amazon web services and with Google cloud and apparently those uh uh AI features that Larry Ellison's company has put in are working like a charm and their bottom line numbers Pete uh 53% rise in total uh performance obligations 99 billion but that is an interest Pete like uh JP Morgan this is how that company is operating and that is a huge number yeah the Strategic partnership with AWS that's obviously something very good you look at the the q1 they crushed it on the earnings the revenu is up 45% % for the cloud I mean the things are going pretty well I'd say right now for Oracle on top of all that hit 52 week highs today traded over 160 really really nice performance three times normal volume trading in the first couple of hours versus an entire day that's pretty impressive and they had some strong guidance you look at all that John on top of everything else fundamentally it's trading at a 22 forward PE this isn't trading at 4050 or something crazy it's a 20 2p and then of course free cash flow of 10 billion dollar I'd say Oracle is moving in the right direction and if people haven't been paying attention they should this is still a stock that I think has room to the upside given what's going on in the AI space and the expansion efforts that they're making with Oracle yeah 24 billion shares Changing Hands Pete at Mid session versus eight on a normal session so a lot of people I think were very enthused about both getting both two of the biggest customers you could possibly get Amazon and Google all right let's talk about HP this is huet Packard Enterprise um they announced that they're going to do a public offering Pete to raise uh$ 1.35 billion dollar convertible preferred stock that's what this will be which means of course people can dilute the stock so getting money into the company good thing diluting the stock not a horrible thing but that's why the stock dumped today Pete because in the short term of course if you put more Supply on the market and the demand doesn't increase you're talking about lower and that's what's happening and is that last I looked it was down about 6% it's not too far off those 52- we lows John I now when you look at this company they've got some growth it's okay I don't think it's phenomenal by any stretch but it's also another one that from a price to earnings perspective it's pretty dagone cheap as a matter of fact it's near single digits so there's some reasons that they could have hope but this is a name that's going to probably press a little bit lower at least early for the next week or so and then I think it's something that might be worth looking at in the future not the immediate future a little time I think is going to take it but when you look at HP what they're doing with the servers and everything else I think it's an interesting stock that's gotten themselves more involved in the AI space as well everybody is of course but um they've got some hitch to the giddy up right now I'd say because of what they've done to the stock here with the converts well and Pete had just mentioned about Oracle and uh you know what its PE is you look at this one Pete forward pe oh my God I mean the the PE Ratio itself not the forward just the straight out where is it now 11 yeah I mean so if you get a chance and you decide to do a little bit of a research and a deep dive maybe I think this one's pretty tough to ignore Pete yes yep all right let's hit another stock Au this is Anglo gold Ashanti and uh these guys are buying a company called Camen for about 2.5 billion um it's a big deal um the stock traded down initially on the announcement of course but this is going to increase their uh annual production by almost half a billion ounces PE huge number um half a million I apologize I misspoke half a million ounces billion ounces would be all the gold in the world it's gonna increase uh by about 450,000 ounces so in other words like I say close to half a billion that's pretty big deal that that is and I I'll tell you what uh for the people not paying attention as closely as you and I do to the markets I'll tell you what take a look at what Gold's been doing it took a while it started to move silver can't get out of its own way silver continues to be underneath 30 but you take a look over at Gold it's been over 2500 it's gotten pretty sticky over there and then it's been sliding up a little bit further up towards 2550 and all of a sudden Anglo gold makes this kind of an acquisition they're going to have a lot more as far as production goes it's going to cost them two and a half billion yeah they're going to take a little bit of a hit on that in the short term but they also talked about John how a Creed of it's going to be within the first year so I I like everything about this the fact that they're attacking it the way they are and all you got to do is go out there there's a few investment Banks out there that have been talking about gold where they think Gold's going to be Goldman Sachs is one of those just look at some of the projections going forward I don't know that gold is done going to the upside there still might be I don't know a 100 20000 maybe even more than that to the upside they're talking about 2700 and I don't think that's that unrealistic in the next year no I don't either Pete um and as interest rates come down of course uh it makes Investments like gold and even some of the assets like Bitcoin for some of us more attractive why because they don't have any dividend there's no yield for your gold or your Bitcoin now there's ways that Pete and I could teach you how to increase your yield there but uh for the most part most people that own gold pay to store it or they keep it in you know a safe or whatever uh and Bitcoin doesn't pay a dividend either so you have to know how to do that if you'd like to uh uh have a yield instrument which neither one of these two are but when interest rates come down like Pete said more attractive all right uh quickly Pete uh Ally Financial this one uh they were speaking at the Barkley's conference it's a big fin Financial conference and they opened up by saying credit challenges have intensified so you couple that with what JP Morgan said about their interest income coming down and then you have Ally one of these big financial institutions that says you know what um credit challenges uh intensifying cost of living is up consumers aren't as strong these are all reasons that the president uh president Trump is leading in all the polls now Pete including the New York Times because people aren't doing so well if that debate tonight um goes Trump's way this thing's over uh so we'll have to keep our eye on that but certainly Ally a very strong indication of a weakening consumer yet again Pete yeah well it's high inflation which is something that was brought up the credit quality which is dropping that's something that was brought up the challenge that they're dealing with delinquencies as you brought up John the auto business that's going to be up 20 basis points as far as the delinquencies so I think that's pretty clear on where Ali thinks things are right now and it's pretty accurate I'd say it's six times normal volume when you look at what's trading in the transactional side of things down about 15% last I looked not quite near the 52- we lows somewhere finds itself somewhere in the middle right now but nonetheless I think if anything this is one that you want to look at and try to understand the markets a little bit better as far as why are we seeing some of the things that are going on today in the market some of the selling obviously uh you look at the financials right now and anything related into the financial industry that is what's getting hit the hardest right now and it's it's a pretty brutal you know the day started off okay and it's been going down ever since as far as the Dow with all that influence from financials well uh normal turnover is 2.7 million shares it's already traded four .9 I'm sorry 14.9 million shares so uh that's pretty ugly U I think people are paying attention to what they're saying and uh probably thinking you know Buffett might not have been so dumb lightning up on Bank of America and some of his other uh Financial Holdings Pete right yeah the one that he's holding on to American Express we were talking about that yesterday Justin and I and he uh he's 12.2% and he's one of the I think he's that that's his second highest position I think outside of Apple after selling some apple even still is the number one um want to hit a little Sports man let's do it all right let's start off John NFL I think it's you know it's one week in so we can do is as exaggerated as we want to go and everybody loves to do that type of thing they immediately want to measure everybody from the first game not taking into account the fact that maybe in the first game they played somebody either very good or very bad right I mean like the Minnesota Vikings great example suddenly darnold people in Minnesota here think he's the next coming of Joe Montana right because he beat up on the Giants and I'm not kidding to say that John these people are drinking the Kool-Aid here and I say that as a bit of a Viking fan but I'll also say I realize how bad the New York football Giants are they stink they really looked awful Daniel uh Jones throws I think he's thrown 40 interceptions John going into this weekend with 60 touchdowns that is not very good for a guy who was picked when he got picked and the salary that they gave him in New York it's pretty ridiculous so who are the ones that really looked probably uh I would say average at best but maybe they won their games Chicago Bears I thought looked average they they they kind of snuck in they were able to win the football game that was something that was a little more unexpected than I thought because Tennessee is really struggling their quarterback is not all that great Levitz just having a hard time still in the NFL the Bengals didn't look all that great the Browns I didn't think looked all great the Panthers we may as well just say there's only 31 teams in the NFL because the Panthers I don't know if they could survive in the SEC to be honest with you right now John I think Missouri's got them Alabama's got them Georgia's got them they all got them but that's how bad they really are the Saints lit them up Derek Carr looked like he was playing against nobody I mean it was absolutely an amazing game to watch Buccaneers Baker Mayfield throws four touchdowns pretty damn good the defense is there that's one of the teams I thought looked good the ners last night I thought looked good and how about that running back John out of Georgia Tech nobody's ever heard of him Christian mcaffrey was out he's the best player I think but he's definitely the best running back in the NFL and Jordan Mason steps in and goes well I got 28 carries for 147 yards I might be pretty good too so they're going to have a one-two punch when he comes back who do they play they're going to be playing the Vikings right over here this weekend so it's gonna be pretty interesting but what did you take away from the the first week of the NFL well um it seems neither New York team has a defense Pete yeah now the Jets Gang Green they used to be known for having a defense and no offense yeah for years for decades now it looks like it's flipped Pete I'm not saying what they got out of Aaron Rodgers was spectacular but it was enough that if you had a strong defense you're in the game instead with no defense you're not in the game at all uh like you said you got a a a running back that nobody's heard of hardly and he rushed for 147 yards against you they just looked terrible um and the Giants same thing um when you look around Pete at the money that uh for instance our buddy Dak Prescott got um 240 mil now the highest paid player it's not the biggest contract but he makes the most per season based on this contract extension um he only threw for I think maybe 30 yards more than Deshawn it wasn't exactly a spectacular performance not that it had to be because the Browns like you say Pete I don't know what I don't know who makes the decisions there um there's a lot of people that are critical of the Dak Prescott you know $240 million extension what do people in Cleveland think about Deshawn Jackson what they had to give up and that huge contract which at the time was the biggest contract for him because that guy doesn't look very spectacular to me and the Browns have a great defense usually Pete but uh not so much on offense right now yeah that offense did not look good I agree with you Dallas outplayed him just a little bit but Dallas uh on the road obviously first game and and I'll tell you what Dak Dak probably was still kind of figuring out how to get rid of the champagne after that contract he got signed like right before the game practically that was amazing college football John it's always fun to talk about this one I've got a couple for you there's some Shockers there's some surprises and then there's some unbelievable surprises so we'll start off with the surprise gbr go Big Red they look like the black shirts have returned to the University of Nebraska John this is a school that has struggled for a while and I'm not saying that they're World beaters because I don't know that Colorado is a world beating type team to put you up into that area but you know everybody loved Dion last year and they won the first three games and then they won one more game this year they had a a fist fight with North Dakota State and they ended up on the right side of it they went into Lincoln and had no idea what they were in for John the black shirts came at him shadur didn't look like shadur but everybody thinks he's the first pick in the draft he's a quarterback he's coming out he's the best thing ever uh the offensive line defensive line I what here's what bugged me about that one he left the field John before the end of the game I know that you know his dad pulled him out because you know they weren't going to get anywhere why get him hurt I get that but why do you leave the field that's something for a lot of people to think about by the way I still go back to the Oklahoma linebacker who got a fraction of what shador got and he's sharing it with all the Walk-Ons I don't see any sharing going on at Colorado I just see a guy driving around at a Rolls-Royce and like like like Tom Brady said you need to get out of that damn car and get back on the field and maybe watch a little film so a lot of things going on there Michigan they lost the offensive line running back quarterback and of course the head coach so is it understandable that they might get whooped in their own stadium by Texas I'd say yeah Florida state is 0 and2 enough said and then you got Northern Illinois going to Notre Dame and taking it to him John and running the ball they had 35 minutes they had the ball so they dominated the the have that that side of things 190 yards rushing that coach used to be here at the University of Minnesota he's a great guy he showed his emotion on the field and they go into Notre game and win unbelievable now they're ranked number 25 in the country because of that win probably deserved but Notre Dame they had no excuses they they should have beaten Northern Illinois they didn't Northern Illinois actually they didn't just win they beat him they beat him in the game yeah uh I I was waiting for you to get to Cal Pete that was a good one you know what um Auburn is a good football school Cal is not a good football school at times Cal has had great offense and sometimes they've had a balance of a pretty good offense and a pretty good defense and on those rare occasions they go to a bowl it's usually a tertiary Bowl that's way down but this team looked good and for them to go and beat um an SEC power because I'm gonna say it Pete that's an SEC power Auburn yeah you know you've got Bama of course both Mississippi schools I think State and you um Georgia uh I mean LSU this is a great conference we all give him lots of credit for Cal to beat up and beat what was it Pete 214 I think it was something like that and and it was at Auburn right if I'm not mistaken yeah on the road so you got damn near a 100,000 people in there and they're watching a team you know that's usually graduating a bunch of Engineers and polyi majors and things like that uh nobody in the SEC expects to get beat by a team like Cal so that's that was a shocker to me yep I had the great opportunity to sit down with those guys a couple of months ago back in May when they were doing some of their practice still and I'll tell you what the head coach was excited he's got a lot of ties to San Francisco area the bay area but he's an Oregon guy was a linebacker just like his father I mean they they have a good culture there right now that I like at Cal John they might they might be able to fit into the ACC for sure but beating an SEC team like you said like Auburn uh that's a nice accomplishment it says a lot about Cal might say more about Auburn too I don't know we'll see two of my favorite things I'll leave you these two thoughts Pete one um they had uh the Texas Longhorn mascot and he had a chalkboard and on the chalkboard it said 600 days since the last M Michigan loss and then he comes up and grabs an eraser and erases that and goes zero that is good that's good the other one Pete is Shaquan Barkley um you want to know how bad it is for the Giants folks they didn't sign this guy all the kid did was leave his heart on the field every T every single time he played uh that he was able to play for the Giants he did that and he is a phenomenal athlete well he gets uh over to Philadelphia Pete he had 109 yards three touchdowns two rushing one receiving uh down in Brazil since a lot of you probably didn't see that one and they beat the Packers which as Pete said uh Jordan love uh not good with that uh injury that he suffered for having one of the largest contracts that has nothing to do with uh whether or not you get hurt of course but um Shaquan I'd say that guy's making Philly look like they're gonna be one of those contenders against San Francisco again well you know John it's kind of a funny thing too real quick I'll just say this it's funny in the NFL everything's about quarterbacks but you and I both already just documented well maybe it's not look at San Francisco they ran the ball they did pretty well they beat him up pretty big you look at what you were just talking about with Philadelphia what did they do they ran the ball they beat him up well they didn't beat him up but they beat him and they won the game and probably a lot of that had to do with running the football Minnesota Vikings same thing they ran the football well if you run the football well by the way Aaron Jones who used to be at Green Bay a big rival who's now here at Minnesota people are pretty excited about him and that first game not so bad so I I still think as a if I were GM you got to have a running game that's what wins yep well we appreciate all of you joining us today folks I'm sure some of you will be watching the uh debate this evening and uh we certainly will be commenting on the reaction that voters have to it tomorrow on the rebels Edge which comes your way at 1 pm eastern time we'll see you then Bang [Music]