Biden and Nippon Steel, Trump vs. Harris on tax, a 50bps cut? | Sep. 5, 2024

to all our viewers from the US Korea and around the world welcome to Global money talk by S TV live from the floor of the New York Stock Exchange I'm your host Remy Blair and you're watching our live broadcast from the financial capital of the nation in New York City we'll begin the hour with the market briefing for an exciting live coverage of us markets and then we'll bring you Market insights for an in-depth conversation with Market experts and today for the market Insight we have Dan Haw co-founder and portfolio manager of Rani asset management for an expert discussion on goals so make sure to stay on for the entire show but first for the market briefing let's welcome JD Durkin CBS contributor and host of public.com thank you so much JD for joining me good morning happy Friday Eve as we like to yes so as you mentioned we are awaiting John John's reports non far peral today so we are here the eve of that jobs report and we're seeing mixed trading for us Equity averages on this Thursday the Dallas is off by 200 points while the NASDAQ is up by nearly a quar of a%c but the S&P 500 is lower so what are you watching today JD especially on the heels of that economic data release yeah of course well I mean first of all I think that ADP payroll I think historically we like to take that with a little bit of a grain of salt because it's not an exact predictor for the number that we get the next day from the Bureau of Labor Statistics but maybe it gives us some indication about what we can expect come tomorrow morning the ADP figure Remy this morning much softer than expected 999,000 relative to an expectation or an estimate that was Far higher uh and it's kind of interesting to watch how investors are reacting across the major Market indexes in response to that but also to position themselves for tomorrow's jobs report uh you mentioned the S&P I always look at the most weighted Tech names obviously Apple Microsoft Nvidia all three of those names are down fractionally into the red Amazon with a nice gain so far early on this Thursday morning up about 9/10 and then over in the Dow the price weighted index the 30 household names we cover most closely the most weighted names there include United Health Group and Goldman both in positive territory so far Microsoft slipping a little bit Home Depot and caterpillar also highly weighted names up fractionally helped set the stage for the remainder of Thursday's session into tomorrow's very anticipated jobs report and as you mentioned JD we're keeping a close eye on the equity averages but of course dissecting those jobs figures so we got ADP and we also got weekly job claims for the latest week which fell by 5,000 and yesterday we got the jols report as well so a lot to digest when it comes to the labor market but of course 8:30 a.m. tomorrow we will be getting non-farm payrolls as well as the unemployment report and JD and I will bring you the latest from The Exchange but in terms of those data points what are you watching out for tomorrow well I think we we want to get a sense about the continuing deterioration as some people would call it of the labor market what is that we weakening of over labor overall labor market conditions look like and what does that do to reinforce the central bank's soft Landing scenario right we will focus a lot on these we know there may be knee-jerk reactions across the market to some of these data points I don't know if necessarily it will really move the FED dramatically off of what we expect it to do come September 18th it does appear as if as of this morning as of right now in real time Traders are pricing in a bit more of a likelihood of a 25 basis point rate cut for September 18th or. 25% off the federal fund rate as opposed to more of a jumbo rate cut which some people have been calling for for quite some time but if tomorrow's number is far softer than expected maybe that might actually influence the FED to do something where at least right now investors are not expecting them to do which would be maybe 50 basis points come September 18th and speaking of September 18th it's hard to believe that it's already the 5th of September JD and we have jobs reports uh coming out tomorrow but of course we also get inflation figures ahead of the uh September fed meeting so we'll keep a close eye on those figures as well as we Edge closer to that date but right now why don't we start out by looking at different sectors especially given the recent price action that we've seen cuz I think when we get a lot of Market volatility it's healthy to take a step back and look what's happening to the different sectors so overall if we look at what's happened so far in 2024 it's no surprise that Communications service say is up by over 20% but when it comes to Consumer discretionary as well as energy what are we seeing right now yeah let's start with energy I think it's a really interesting sector I think a lot of investors might be surprised to find that shares of XLE that's the State Street spider select ETF that covers energy stocks they've done incredibly well since Joe Biden has been president up about 120% since January 20th of 2021 for all the rhetoric we're here on the campaign Trail about drill baby drill from one campaign Democrats may be shying away from it it's a sector that overall uh has done very well it is the second weakest performer so far year to date we are talking of course shares of xla uh the most weighted names in this sector include Exxon Mobile and Chevron those two giants combined for 40% of the entire Holdings of the ETF it did close yesterday just below its 200 day moving average I like to try and look at the relationship between the 50 and the 200 so it's a really interesting sector I think keep our eyes on as we get closer to the election and then what would that post-election reaction look like for energy stocks in 2016 after we learned that Donald Trump defeated Hillary Clinton energy stocks skyrocketed in the fall late as we got closer to Trump taking the oath of office I'll be watching for shares to see how energy stocks react to the next few months here in US politics also for our viewers who are looking at that chart that is a one-day chart but for perspective it would be helpful to look at a uh chart that goes out further not just one day to get even more perspective in terms of what JD was talking about so now that we've covered energy let's move on to uh take a look at what we're seeing in technology so we know that there's been a lot of focus on Tech this year so tell us what's going on in this space this is the worst performing sector of the last 5 days yet is also the best performing sector of The Last 5 Years these are the Splashy prog growth big Tech M lot many of the Magnificent seven names that we know and love tend to be in xlk the technology uh ETF Microsoft and Nvidia are 40% of that ETF uh today in terms of intraday performance it is up fractionally not the strongest performer uh but not doing that badly it's up about 2/10 of a percent it is dragging behind communication services and consumer discretionary but if you were to take a step back and look at year-to dat uh technology is up 8.9% overall still lagging the broader Market but of of course in terms of pure portfolio plays lots of investors out there love to have these splashy tech companies uh and I would argue there really aren't very many better ETFs for that than xlk I think it's an important one to to continue to follow and for this uh fund JD can you tell us about some of the Holdings especially some of those splashy names that you mentioned yeah of course well I mean obviously I think that the top dog of the group is Microsoft that's almost 22% of the entire ETF Nvidia makes up 18 % and then of course your big names like apple broadcom really interesting avgo is the ticker symbol we'll hear from them coming up after the Bell today what does the ongoing demand look like for graphics and GPU processors really important to that number uh to that company which the 11th largest company in the world it's the fourth most weighted name and Technology Holdings and then as you go down the list it includes names like Adobe Salesforce AMD and Oracle and while we're at it you mentioned that we will be getting earnings out after the closing bell here today on this Thursday so what can we expect from those results and what are you paying attention to well at least in terms of broadcom we want to see what was sort of pre-written by Nvidia earnings that were taking into broadcom right they're not the exact company but maybe they are shared similarities we're looking for that overall potential slowdown to start in terms of the GPU processing demand how does that impact a company that maybe doesn't get talked about as much in the AI hype space as Nvidia but certainly like we said the 11th largest market cap in the world it's over $700 billion broadcom an incredibly important company it opened the year trading at 109 the uh the stock has surged as high as 185 before falling back a little bit uh the company did have of course its 10 for one stock split earlier this summer which we followed uh 23 analyst ratings on the stock only one hold 22 buy ratings on avgo so even despite some choppiness from time to time this is still a long-term Buy in the eyes of many analyst here on Wall Street and we'll make sure to bring you the results of those earnings uh tomorrow morning Although our main focus will be on jobs so that is something that we'll be keeping our eyes on as we head into the rest of today's session and JD we've talked about the consumer the American Consumer before so what are we seeing when it comes to Consumer discretionary because in terms of that sector they didn't have a great August but in terms of 2024 performance they are still up but what about this particular fund that you're looking at uh yeah these are shares of xly also from State Street these are the cyclicals the consumer discretionary names the idea being what are the sorts of companies you might be willing to spend a little bit more money on if you have that little bit of extra discretionary income if you feel more confident about your personal economic situation maybe you'll spend a little bit more money on an Amazon The Challenge with this particular ETF is that the second most weighted name believe it or not is Tesla Tesla is very much a wild card many people have argued Tesla shares move based on Elon musk's popularity in many ways so that has really kind of threatened I think overall the Integrity of the ETF and how it trades uh Amazon makes up 20% of this ETF it did hit its 52 we high of 194 back in July the August 5th selloff saw the number drop down to 180 you see it there on your screen trading at about 187 this really tells me about the resiliency of consumer spending overall but again keeping in mind Tesla which is 16% of the ETF you're looking at your screen right now is kind of that Elon Musk fueled wild card and a very volatile stock in and of itself and JD we've talked about the American Consumer not just when it comes to the earnings reports that we saw as well as same store sales as well as those retail sale numbers that we got in the latest month which came in stronger than expected but we're seeing this bifurcation of course when it comes to the lower income spender versus middle class and the five the 1centers who can afford to buy anything but even then we're seeing the American Consumer being very choosy shall we say yeah and and I think they it puts the the word discretionary into the phrase consumer discretionary right we talked about this on the broadcast yesterday that wealthy Americans are opting to shop for their Basics at more discount retailers because I think we're now living in a reality where we recognize that there is upward pressure on prices for fuel for rent for food where can we afford to cut back and I think that's why it drives a lot of the movement in these consumer discretionary names and Amazon is without a doubt the most important one everyone loves Amazon got an Amazon Prime account you feel good about your situation you're willing to spend that extra $3 or $40 maybe on an Amazon purchase or two you see that reflected so it kind of gives us a nice look under the hood about how consumers are feeling in terms of their own confidence their own positioning and maybe a bit about how they see things moving forward mean a lot of economists say the stock market is really the best leading indicator of the economy so consumer discretionary stocks are so important to keep an eye on as a result absolutely JD and I think that was a great summary of some of the sectors that were keeping our eyes on here at the New York Stock Exchange so we'll do a quick Market check as we head into our next uh segment today and we're seeing the Dow Jones Industrial Average lower by about half a% the S&P 500 still off by 0.2% while the NASA compus index is in positive territory up by 0.3% so JD you and I we're talking about the American Consumer and we will be talking about the implications of economic policy for both kamla Harris as well as Donald Trump Donald Trump will be speaking in New York later this afternoon at 12:00 p.m. eastern time so of course we will be bringing you the latest uh from that tomorrow morning but let's take a look at some of the market moves that we're seeing and we'll start out by looking at us deal so let's see where shes are trading on this thir Thursday morning because yesterday we saw us steel shares drop by 7 177% and that came on the heels of reports that Biden May block the US steel deal and both us steel as well as nepon steel said they have not received any update or executive order regarding the National Security review so break this down for us JD what's going on oh my goodness well first of all the stock is getting hammered year to date us steel is down 36% you know this is the sort of deal where I I think a lot of people are arguing even if the economics of it makes sense unfortunately the politics don't us steel one of the oldest most iconic industrial companies this is a company that went public right here on the floor of the New York Stock Exchange and was added to the Dow all the way back in 1901 just 5 years after the creation of the Dow one of the longest running companies to be on the Dow was there all the way until the early 1990s and I think that underscores this great American Spirit of manufacturing resiliency these icon Brands and that helps explain I think why union workers in Pennsylvania and why now both campaigns the Harrison Trump campaign are against this deal going through nipon says in terms of their own struggle for manufacturing and output they would love to make a deal with a company like us steel obviously us steel would like to make the deal with nipon and part of their argument is to say in terms of geopolitics who better than one of our most important allies in the world States than Japan in order to combat the rise of influence manufacturing from countries like China I believe we have a statement for us steel but it is worth noting what the company said in response to this report that cyphus which is this government agency is set to make a recommendation against the deal going through if that happens President Biden expected to basically move forward and block the deal agree with cyphus is recommendation us deal saying in that statement uh we have not received any update or executive order uh in relation to the cyphus process M and also so uh JD I understand that the company CEO has uh warned that the company will be forced to close steel meals if uh this $14.1 billion sale uh does not go through so can you walk us through some of the implications that we're talking about here I mean it's basically nipon Steel on one hand versus the union leaders of groups like United Steel Workers on the other and so yes the company us steel is now in a position to say hey we really want to communicate to all the power Brokers involved that it is in our best interest and the best interest of our union workers for this deal to go through because we don't want to have to shut down factories we don't want to have to uproot our operation from Pittsburgh Pennsylvania and again this gets back now to the heart of the Electoral politics of all this Pennsylvania is 19 electoral votes it is the most important state for KLA Harris and Donald Trump whoever wins Pennsylvania will likely win the presidency that helps explain I think why both campaigns are messaging so aggressively about blocking the steel the way that they are part of the original frustration according to reports was that the companies did not foremost take into account the considerations of Union groups in other words they tried to did the deal directly with the company instead of including the union that opened up the door to some early frustration so not entirely clear how this is going to play itself out but there's obviously huge implications for a great American Legacy name with a proud tradition here at the New York Stock Exchange that also crosses over with the markets and politics more broadly absolutely since you mentioned 1905 that was definitely before you and I were born so quite a lot of history here that we're talking about and you mentioned Pennsylvania of course we're paying attention to Pennsylvania that state not just in terms of what that means for the overall presidential election but the debate taking place next week JD so that's going to take place 9:00 p.m. eastern time at uh on September 10th and all eyes all years are on that debate what can we expect to hear from both of the candidates I think they'll look to continue to make their case on economic populism they're really both campaigning for the same type of voter and it's really just comes down to maybe a couple hundred thousand Americans in six or seven key States arguably Wisconsin Michigan Pennsylvania being the three most important so these types of policies that speak to that worker pro-american Spirit Comm Harris really positioning herself more and more as a pro business candidate day after day I would look for those expectations to be on the debate stage I can't believe they're actually going to debate I'd been sitting there wondering if there is kind of an off-ramp whether or not it's going to happen but as for now it does appear as if it's going to it's going to be a pretty wild event and I know people all around the world will be tuned in to hear what the candidates have to say specifically on the economy I think absolutely I'm sure we will all be closely watching next week as those two take the stage but while we're on the topic of Economic Policy Donald Trump is scheduled to speak this afternoon 12:00 p.m. eastern time at the economic Club in New York and given what's come out of the Harris camp and what's expected to come out of the Trump Camp can you lay out their economic policies for us and what that means for the stock market as well as uh Main Street not just Wall Street but also Main Street well we're still looking for the details and that's always where the devil is right we as we've talked about before you campaign and poetry you govern and Pros so it's a lot of economic populism if you're Donald Trump a lot of your massan of course tax cuts uh reinforcing the tax cuts you had already passed in 2017 and then of course tariffs that was so crucial to Donald Trump's presidency the sort of trade war with countries like China I would expect that to continue and then from vice president Harris we've heard a lot about trying to help first time home buyers help uh small businesses with increase in tax subsidies and then anything that she can message in terms of bringing prices down the challenge for vice president Harris and I expect that to really be litigated on the debate stage is Trump's I think very easy argument to say well you've got this big plan Madam vice president for day one inflation issues yet you've been vice president for the last four years why haven't you and Joe Biden gone and done these things you've had this opportunity uh since early 2021 so I that those are along the lines of what I expect for the markets or for the economy and as we've talked about before I think the investors will find a silver lining regardless of who wins the election uh to likely Drive equities higher in the short term and JD we are fast approaching the second half of global uh Market talk today so I do want to quickly take a look at what's happening in energy so in today's trading session we're looking at WTI prices we can take a look at the chart right here on the screen but I do want to mention that us crude stock file slump by 7.1 uh 7.4 excuse me million barrels last week according to API data so what are we seeing in terms of crude oil prices and what do you make of potential delays out from OPEC yeah well and that's a big one members of OPEC plus and this is really breaking news in the last little bit the key oil Alliance now delaying plans to hike production by the scheduled expected output of 180,000 barrels per day in the month of October that is according to OPEC sources familiar who reported that out to networks like uh or Outlets like Bloomberg a short time ago but this does come a day after oil Rising yes but we did see WTI prices fall down below $70 a barrel uh and of course we're following what that means kind of indirectly for the national average of a gallon of gasoline in the US which as of this morning is $330 so much higher than we were used to before the pandemic but down about 50% uh 50 cents or so rather from where we were 52 weeks ago and in New York morning trade we are seeing uh Brent as well as uh WTI higher on the session by at least 1% so we'll keep an eye on oil prices as we head into tomorrow's session as well but very quickly I want to focus on Verizon before we wrap up today's segment so Verizon has agreed to buy Frontier Communications for $20 billion that is quite a sum I know that you have uh talked about this uh here but why does this matter and do you think there are any concerns that this might not go through well to the first part I think it establishes Verizon's commitment to to a firmer fiber based Broadband strategy ultimately even if you have these Legacy telecom companies they're always looking to adapt they're always looking in the merger and acquisition space but the challenge brings me to your second question which are potential hurdles we have seen previous Departments of Justice under both Republicans and Democrats at times be very skeptical about these sorts of deals from going through concerns about what that means for a consumer if you limit competition uh much like the nipon seal us Steel story both companies will position this as being advantageous for both of them it's a different story altogether to what degree Regulators choose to get involved you and I talked before the show about T-Mobile and Sprint something previous doj's had closely uh investigated and looked after really to make sure consumers are not being squeezed out I would expect much of the same conversation even this if this if this even if this is excuse me a staggering sum of money so much so I sometimes have a hard time forming the words about it but it is REM able for a stock that is trading down about $41 a share Verizon is the second lowest weighted Dow company at such a low share price so it's going to be a fascinating story to watch unfold in the coming months and you mentioned fiber and that happens to be the tricker symbol for Frontier and we're just talking about this fybr as well so we'll keep a close eye on those names but as we head into uh break uh in today's session I do want to say that we'll be keeping our eyes on that e e omic club uh statement by Trump and then of course non-farm payroll so as we head into tomorrow's session JD give us your take on what you're paying attention to in terms of uh the afternoon session here I think broadcom earnings are going to be really important here for sure and I'm also interested to see how does the dust continue to settle as you and I are having this conversation it is 11:23 local time here in New York we're still only a couple of hours removed from those earlier data points we get how does the market continue to digest that spe specifically those big tech stocks I'd like to see kind of how their response and a potential bounceback is for the rest of the session and then broadcom I think will drive a lot of the after hours into Futures Trading and then of course it all sets the stage for the biggest arguably the most important thing of the week is it most important jobs tomorrow I it's one of the most got to be it's got to be way up there big time so we'll be here early well caffeinated everyone on the floor will be really give us a sense for how uh tomorrow could be it could be a huge day tomorrow one way or the other depending on what that print looks like ADP gave us a bit of a sense but it'll be really interesting to see those numbers cross the wire tomorrow morning absolutely JD and we will both here be here bright and early that jobs report comes out at 8:30 a.m. eastern time and of course JD and I will be live from the New York Stock Exchange for S proo TV and we'll bring you not just the market reaction but we'll dive into the details of the headline figure for non-farm payrolls unemployment and what this means for that all important fed meeting coming up in uh later this month so JD thank you so much for joining me and I look forward to dissecting those numbers bright and early tomorrow morning see you bright and early thanks Remy and after we come back from break I will be joined by Dan ha so don't go away we'll be right back with Global Market 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