About this transcript: This is a full AI-generated transcript of AI Jitters Return as Markets Await Jobs Data — Open Interest 8/6/2026 from Bloomberg Television, published August 7, 2026. The transcript contains 16,686 words with timestamps and was generated using Whisper AI.
"The rally running out of steam. It's just 30 minutes to go until the start of trading. I'm Tani Berger. And I'm Michael McKee. Bloomberg Open Interest starts right now. Coming up on the show, fresh AI weakness keeps investors on edge amid U.S.-Iran talks and ahead of tomorrow's job report. Also on..."
[00:00:00] Speaker 1: The rally running out of steam. It's just 30 minutes to go until the start of trading. I'm Tani Berger.
[00:00:05] Speaker 2: And I'm Michael McKee. Bloomberg Open Interest starts right now.
[00:00:19] Speaker 1: Coming up on the show, fresh AI weakness keeps investors on edge amid U.S.-Iran talks and ahead of tomorrow's job report. Also on deck, billions worth of SpaceX shares are unlocked following the company's post-earnings plunge. And back in the game, Leopold Ashenbrenner returns to investing with a $400 million bet. Some of the stocks that we are keeping our eye on this morning, let's take a look at them because chip stocks are getting hit hard. It had been sell the good news, but maybe the news wasn't great for these companies. We had AI hardware giants, SanDisk, and Western Digital reported revenue forecasts that missed analyst estimates. That also said that the stocks were among the top performers in the S&P 500. SanDisk, up 460% this year. Western Digital, 200. SK HYNIX, that's suffering its second sharp sell-off in a week after another bout of extreme price swings on South Korea's alternative exchange. That's what we're looking at in the U.S. market structure and liquidity. Let's dig into this with Bloomberg intelligence head of global tech research, Mandip Singh. Mandip, it's the same question that we continue to ask. How much of this is something structural and mechanical versus a rethink of just how valuable these companies should be?
[00:01:31] Mandip Singh: I mean, when you look at all the earnings, even, you know, SanDisk last night and Western Digital, like these companies are growing, you know, triple digits. Yes, the pricing part probably has played out. So you're not going to see, you know, pricing continue to go up as it has in the past three, four months. So and these companies are deliberately trying to sign, you know, these longer term agreements just to have visibility in terms of what their customer profiles are in terms of the buying behavior, et cetera. And that way you could see the margins may have peaked. But overall, the volume growth remains very strong and the fundamentals coming out of 2Q season suggests CapEx will go up. So I don't think fundamentally there is anything wrong. It's more market structure driven. But pricing growth probably has peaked at this point of time.
[00:02:25] Speaker 2: Yeah, because next trade is the volumes are much, much lower and it doesn't take much to move the stock. And I was reading the story today on Bloomberg. And it just seems like this was the mark, the market structure and a couple of people selling shares. And then you have this big move.
[00:02:41] Mandip Singh: Yeah, I mean, what we saw with situational awareness and, you know, the whole of July, everyone was trying to figure out, you know, what change? Why are these stocks moving down so much? And so that's where the margin calls and all those aspects come into play. But look at what these hyper scalers have done this quarter. And, you know, even a company like SpaceX, I know the stock reaction was negative, but they are aspiring for $100 billion in ARR and they really want to make big investments in terms of setting up more gigawatts for next year. So, from that perspective, it's a positive for the AI infrastructure plays, because that's what tells me they will keep investing. Whether the ROI question will get louder and louder, that's secondary. But the infrastructure guys will continue to get their investments now that you have one more hyperscaler in SpaceX.
[00:03:33] Speaker 1: And certainly Alphabet's news just emphasized that this morning, tapping the bond market yet again, this time for $25 billion. Yeah, I mean, look, Alphabet has raised the equity.
[00:03:42] Mandip Singh: They are tapping the bond market. So clearly they feel they can get towards that $300 billion in CapEx for next year. And they have the balance sheet to do it. So right now it's about who can go bigger, who can have more gigawatt capacity live next year, because that will all translate into revenue if you're a cloud provider
[00:04:00] Speaker 1: renting compute. All right, Mandeep, thank you so much for joining us this morning, Mandeep Singh of Bloomberg Intelligence. As Mandeep mentioned, we're also watching SpaceX this morning, not just for the fundamentals, but also another mechanical issue. Investors are bracing for the next potential hit when some $101 billion worth of SpaceX stock becomes available for trading at the open. Let's discuss with Bloomberg's Bailey Lipschultz, who's been reporting on the expiry. So Bailey, we get a lockup.
[00:04:26] Bailey Lipschultz: Just walk us through the numbers and what we might see. And Danny, we get up to 911 million shares. So nominally call it about $101 billion based on where shares are trading right now. That's freely available to trade. The big question, though, when I'm talking to investors and bankers is investors have held on to SpaceX potentially for decades, riding it from, you know, a couple hundred million dollars to one and a half trillion dollars in value. So the big question now is, are these going to be venture capital firms that are looking to outright sell the stock to pocket some of those gains? Will they distribute them to shareholders? And then it becomes kind of a bit of a domino effect where the shareholders are then selling shares. And the ultimate kind of question is how many of these shares are being distributed to employees and people who invested through things like special purpose vehicles who have been waiting to at least have an opportunity to either A, sell stock because of tax purposes or B, reap benefits that they kind of have been dreaming of. So it's certainly going to be something to keep an eye on on exchange as well as off exchange throughout today and through this evening. Now this has been the biggest shorted stock on Wall Street as people wait for this
[00:05:31] Speaker 2: expiry. And I'm wondering if you are short, you're going to have to buy stock back at some point. So are we going to see some real volatility in the
[00:05:38] Bailey Lipschultz: price given that? I think that's a big question, Mike. When I talk to investors over the last few days, their question is, will we see short covering? Because the fundamental picture to Mandeep's point hasn't changed since the IPO. So you can see the stock right now around $109 a share. If that starts ripping and shorts are forced to cover their bearish bets, that can power the stock higher. The big question then is calling back to GameStop and other kind of meme stock like crazes. Do new short sellers then line up to bet against the stock? And do we see this continue to move like an EKG as these shares are unlocked today? And again, remember guys, this is the first of nine share unlocks. We're looking at $5 billion or $5 billion shares, excuse me, coming online through mid-December. So this is the first of many. So more conversations to be had,
[00:06:27] Speaker 1: Bailey. Thank you very much. Bloomberg's Bailey Lipschultz will keep track of SpaceX as that trading begins. Elsewhere in earnings, Warner Brothers Discovery reported an 11% drop in revenue year-over-year. The slump coming in part due to losing NBA rights and a weaker movie lineup. Let's get more with Bloomberg Intelligence media analyst Geetha Raghanathan. And of course, the backdrop for all of this is the drama continuing as to whether the courts will allow Paramount to actually buy the thing. Geetha, what was the setup for this? What did we
[00:06:57] Speaker 5: learn in today's earnings? Yes, so the earnings were fine, Danny. I mean, as you pointed out, yeah, we did have that drop in revenue. You had a 30% decline in advertising. And of course, 20% of that was because of the lack of NBA. On the flip side, though, the good part of it was that, you know, we also had EBITDA that actually got a little bit of a bump, the TV EBITDA, especially because of those lower costs with no NBA. Studio was mixed. You know, Supergirl hasn't really delivered. Streaming, though, was very, very good. So the fundamentals seem OK. But as you pointed out, the earnings are just a side show at this point. It's really all about that Paramount Skydance transaction, which has now been delayed from September of this year to probably June of next year. And that makes it risky to think about what kind of
[00:07:43] Speaker 2: company is going to exist next year. So I'm wondering what, if anything, the earnings tell us about the Warner Brothers new management. They've only been in place for about a year. If you were if you had to discount the idea of the merger, what did
[00:07:58] Speaker 5: we learn? Yes, I think, Mike, what we're seeing is that the Warner Brothers fundamental story is actually in pretty good shape. So this this management team, as you pointed out, David Zaslav and his whole crew have really done a good job in kind of turning things around. Streaming, they've made it profitable. We've already gotten to a margin target of the margin target of 20 percent. We've already gotten to about 17 percent. So really, the question is, what happens on June 4th of 2027 when the merger agreement actually ends? Are these guys going to settle? That is what Paramount Skydance absolutely wants. But, you know, Warner Brothers discovery, I think, is in a good place no matter what. If the merger deal just expires and it doesn't go through, remember, they collect $7 billion in termination fees. That puts them in a really, really good position, apart from having a pretty strong, you know,
[00:08:48] Speaker 1: fundamental business. All right, Geetha, thank you very much for helping us cover that and the other media earnings this season. Bloomberg Intelligence's Geetha Raganathan. A check on your markets this morning, 20 minutes before your trading day gets started, and we are dipping into negativity for both the S&P and the NASDAQ. After yesterday, just ending inches below all-time highs, the NASDAQ underperforming down eight-tenths of 1 percent as the chipmaker sell-off. Perhaps more notable is what's happening in this Treasury market, Mike. For one, you have Alphabet issuing all of that debt, so that's also pressuring this bond market. But, too, I know you've been talking about this this morning, this FT piece on what kind of feels like people familiar trying to clarify or walk back or do damage control on what we heard from Kevin Walsh in the last presser.
[00:09:33] Speaker 2: It definitely is damage control out there. And the way the story is phrased, somebody close to Kevin Walsh could be Kevin Walsh, telling them that he's willing to raise interest rates in September if inflation doesn't get better. That's the reaction function answer that the market was looking for at the news conference that they didn't get. And now you're seeing markets repriced based on that. And I'm sure Google doesn't help. And I wonder, and it will be interesting to see when we get closer to the actual sale, if the price has changed because of all the people who left yesterday, the Gemini project. And does that lessen some enthusiasm and push yields up?
[00:10:14] Speaker 1: LISA: It shows just how intense the talent war is to have Jeff Dean, who I'm assuming you're referring to, one of the foundational people at Google to be leaving. But just to revisit Walsh, how does this change things for Jackson Hole? Because there was some commentary in that FT piece basically saying that he wants to clarify his messaging at Jackson Hole. He wants to use that as an opportunity.
[00:10:35] Speaker 2: Oh, they just climbed up on the marquee and put a new coming soon to Jackson Hole on it. Because Walsh, people thought Walsh was going to just give a kind of anodyne speech about looking forward and the kind of stuff he's been saying. But now he is basically told people that he's going to go out and explain himself. So now Wall Street is going to be very focused on this.
[00:10:57] Speaker 1: It's going to be an eventful one. Let's hold tight on that and also get a check on some of the other movers on our radar this morning. With that is Bloomberg's Nora Melinda. Hey, Nora. Hey, guys, three stories I'm following for you this
[00:11:08] Speaker 6: morning. First up, DoorDash having a great morning paying subscribers or ordering takeout and groceries more often. This helping the company's forecast come in ahead of expectations. DoorDash did warn, though, of more spending on AI for product development. You're seeing shares of the company up about 4% in the pre-market trade. Now from food over to fitness, Peloton is tumbling after giving a weaker than expected revenue outlook. Just another reminder of how different the business looks from its pandemic heyday. On the bright side, though, the company did post its first full year of net profit. Shares lower by about 8% right now as we speak. And finally, Honeywell Aerospace cutting its full year outlook. But Wall Street seems to be giving it a pass. The company says supply chain issues are still weighing on the business. But shares were higher earlier, down about 18%. So a tough day so far as we start off this morning. Those are your morning movers, Hany. Nora, thank you very much. We'll
[00:12:03] Speaker 1: catch up with you later in the hour. Coming up, situational awareness is back with a new $400 million private investment. More on that after this commercial break. Let's give you some high interest stories to look at what's making headlines around the world. Iran says an agreement with Oman on proposed shipping lanes in the Strait of Hormuz is in its final stages. The two countries have been in talks for several days. Iran's deputy foreign minister cautions, though, that a bilateral deal does not mean the full reopening of the Strait. DeepSeq planning a significant price increase across its AI services. It marks an unusual shift from the Chinese company, whose low cost models have put pressure on U.S. and domestic rivals. DeepSeq did not specify the exact increases. They called them substantial and urged users to plan accordingly. And situational awareness is back in business. Sources telling Bloomberg that the hedge fund has completed a $400 million investment to back a privately held company. It's the first sign of how Leopold Ashenbrenner intends to pick up the pieces of his fund after it nearly collapsed under a wave of margin calls from lenders last week. Joining us now is Bloomberg chief hedge fund correspondent Nishant Kumar. Nishant, excellent reporting from the team. It feels notable not only that he's dipping back in, but he's not necessarily doing it in public markets.
[00:13:35] Speaker 7: Nishant Kumar. Yes. I mean, he sold all the public market investments and kept the private market investments. And this latest deal, it seems primarily as a statement of confidence. Situational awareness is showing investors that it still has capital to deploy and remains committed to its private AI holdings. Together with about $100 million invested in the same company last month, this appears to be a sizable commitment in a very short period of time. It is the first sign that how he intends to
[00:14:14] Speaker 2: come back to the market, really. Is this any kind of sign that investors have lost some confidence in his management, not just on how much money they have to invest, but the strategies and given his age, his experience
[00:14:30] Speaker 7: at dealing with these kinds of things? I mean, there is, you know, we have to wait for that verdict. He was trying to raise external capital. We don't know whether he was successful or not. But this deal, it's quite remarkable that just within days of seeing this biggest stress test of his very short investing career, he's out there doing deals of this size immediately. So he feels confident, it seems. What investors feel like, we'll have to wait and watch.
[00:15:07] Speaker 1: What about the overall hedge fund landscape right now, Nishant? Because there was a concern that hedge funds beyond situational awareness did have large risky leverage concentrated bets in AI heading into the sell-off.
[00:15:18] Speaker 7: Definitely. So July exposed how many managers were leaning into some momentum, technology and AI trades. And when those positions reversed, the funds with the greatest concentration suffered. Although several remains fine, if you look at the very sector focused, tech focused hedge funds, their returns have been down in double digits, they have lost in double digits. But if you look at the mainstream hedge funds, so the multi-strats of the world, who manage like tens of billions of dollars between them, I mean, they seem to be, you know, fine. I mean, they have lost some money, but they're OK. I mean, if some are even positive, like Citadel picked up situational awareness bets and they have ended the month in positive territory. But some have lost up to three, 4% of their assets.
[00:16:19] Speaker 2: Any indication that anybody else is in trouble the way situational awareness was or that might need help. We obviously saw some sales in June and July of some of these portfolios. But anyone else out there that you're watching?
[00:16:33] Speaker 7: I mean, we are definitely watching a lot of managers, a lot of managers with very concentrated bets on this highly leveraged crowded AI trades. But so far, the losses doesn't seem to be existential, at least what we know. But you never know. Like, this is probably the most crowded trade right now in the market. It was suffering for a large part of July. But then it bounced back so significantly in the final two days of the month of July. So that helped a lot of hedge funds recover some of those losses. And that's why even the losses seem to be like 10, 15, 20 percent and not like 40, 50, 60 percent, except for situational awareness.
[00:17:21] Speaker 1: Nishant, thank you so much. Again, you and the team have just been doing such excellent reporting over the past month on all these developments. That's Bloomberg's Nishant Kumar. Coming up on the show, wealth manager Emily Green talks about the split that we're seeing among tech stocks. The mag seven, not all of them so magnificent. This is Bloomberg Open Interest. We're being stuck trading sideways for the past three months. This week has seen stocks surge to new highs. Once lagging the market, now the big hyperscalers are back with just five stocks, Microsoft, Nvidia, Amazon, Meta, and Alphabet, driving 83 percent of the S&P's gains over the past week. Joining Mike and myself now is Elvis head of wealth management Emily Green. Emily, it was starting in May that we really stuck in the doldrums. Yeah. So did something change this past week or is it just a blip and maybe we get back to the summer sideways trade trade.
[00:18:23] Speaker 8: Yeah. I mean, I think we've seen obviously with Nvidia, we saw SpaceX coming out with the news yesterday, like this week. And so obviously that that that went up with that. You know, Microsoft, we've seen finally coming back after a really rough 12 month period of time that they've had. But, you know, when I think about it, I think this is like a tough thing for people to look at with these tech stocks because people truly think that they're like everything in the market. And yes, they've driven a big part of the market. I do think that the trade in general, like while it's very concentrated right now, I think the market really has evened out more. And we are seeing like the market actually like AI trade is not just those seven stocks anymore. It is so much broader. I think this may be a short period of time and not that they're not going to continue to go up, but it's not going to drive the entire market like we saw for a few year period of time. Yeah. But do your customers get that. Do they understand at this point? No. So the thing I keep telling people is you need to have a strategy with these stocks and your strategy is not to wait till it hits whatever the high is. That is not a strategy. And people don't understand that because people look at these stocks, especially they say, I believe in them long term. Great. So do I. That doesn't mean that they are going to be what drives the market for forever. That doesn't mean that we shouldn't look at the enormous spend that each of these companies have. Those are important things to think about the debt that they've taken on the competition that's happening these days. The IPOs of anthropic and open AI that may come this year later and early next year. And so start to really think about what is your strategy around that and start to think about, you know, just like we're going to see people today with SpaceX. You've got to take some off the table when you have these gains. And you look at something like Microsoft. Microsoft is trading over $100 a share more than we were a year ago. And so, yes, it came down a lot. But it's your strategy that it's going to go up for forever. That's not a strategy.
[00:20:15] Speaker 1: It must be so difficult, though, especially in moments like before the past month when you did see all these stocks just taking off and not wanting to chase them and doing the big momentum trade. So what does a portfolio need to look like right now acknowledging that this is a mega theme that AI is here. It's transforming things. But to make sure you're not overly
[00:20:33] Speaker 8: concentrated. Yeah. I mean, AI is throughout the entire market now. We have to be realistic of that. Like, you know, we're talking a year or two years ago. People were saying, I want to own AI companies. Most of the market are AI companies at this point. There's no company that really is just an AI company. Everyone has AI within it today. And we see that through the entire market. And so really thinking about how do you have that diversified portfolio taking down that risk, understanding that if you have some of these concentrations that things can happen, you know, that's going to make people nervous again. Like what we saw with some of these tech stocks over these past year that they really were not the darlings of the market over this past year till recently. And so really thinking about what is that going to mean for your overall portfolio and really that diversification. And I'm not only talking about like U.S. large cap stocks diversification internationally matters too. And I think people forget about that a lot. We go to those seven stocks and you forget that there are a lot more things out there and, you know, developed international and emerging markets exist too. All right, Emily, stick with us.
[00:21:35] Speaker 1: We're going to have the opening bell in just a moment. That's Emily Green and a check on markets ahead of that opening bell. Again, we take a step back. We'll see how SpaceX performs as we head to an expert lockup today. This is Bloomberg. Just seconds until your trading day begins. You're watching Bloomberg open interest. I'm Danny Berger alongside Michael McKee. Matt Miller still out. And we finished basically unchanged yesterday, just below all time highs. Are we going to do the same thing today? A lackluster market except for the Nasdaq. That is falling precipitously. We're seeing a lot of the chip stocks do poorly. Sand disc earnings and some of the weird Zs in the Korea trade and the various circuit breakers we've seen over at SK Hynix. We got America's field trip ringing the opening bell. The Nasdaq. This is pretty cool to see these young girls ringing the opening bell. This is a contest apparently for students around arts kind of things, essays, artwork. Perhaps these are some of the winners. So congratulations to them if they are. We have an IPO down at the Nasdaq. They also brought some kids alongside them. You should always bring your kids to the bell ringing. Such a unique experience. Braveheart Bio. They are a biopharmaceutical company IPO-ing, looking at various cardiovascular disease treatments. The thing that we want to look at today is SpaceX and how these shares are performing at the open. They are currently down 2.2%. More than 900 million insider shares are now eligible for sale. Volume has been off the charts. 50 million shares have already changed hands this morning. And that compares to an average daily volume of 115 million shares. So we're seeing almost about 50% of the volume we see in a typical day for SpaceX. And we're only just starting our trading day. We're back with Elvis head of wealth management Emily Green. Emily, I mean, you understand investor psychology so well just because you're constantly talking to clients. What do you think it must be like to be one of the early investors of SpaceX and now entering into this lockup? Is this a market you think a lot of people are willing to sell into? Yeah, I mean, it's certainly been a ride.
[00:23:41] Speaker 8: We saw the IPO price 135. We saw it go over $200 a share. And now we're trading almost close to 100 today and a lot of pressure on there. But we have to remember, there's a lot of profits that they've made in this. And so you're one of those early investors. And you're maybe not saying I want to dump all of this stock today. But you're saying I want to take some of this risk off the table because you look at some of the high flying goals that SpaceX has. And you look at, you know, Starlink. And that's one part. But especially after the earnings this week and we look at how much they're planning to spend on AI and you start to say, oh, is that upside worth this risk? And you're taking some of that profit off the table if I'm one of those people. Yeah, but is this sort of a meme stock moment in
[00:24:18] Speaker 2: the sense that you've got a lot of people with a lot of locked up value who can make themselves very rich by selling. But it doesn't
[00:24:25] Speaker 8: tell you anything about what the company's prospects are. Yeah, I mean, this isn't the first time that a company has had their lockup expired. This happens every time a company IPOs. This is unprecedented in the fact that there are so many shares coming and it is so close to the IPO. Typically we're waiting 180 days after. You don't have all these different lockup periods. There were supposed to be more shares trading today if it was above $135 a share. But you still look at it and think, you know, while we've had this this ride, you're still one of those people. And you say, you know, it becomes down to like your fundamentals and your goals and whether you're a venture capital company, whether you're an individual early investor. And you say, what are the other opportunities I have out there? And let me take some of this profit off the
[00:25:06] Speaker 1: table and put it into other places. By the way, this is just a bar chart of I believe this isn't like 20 minute chunk or 10 minute chunks of the volume. If you can see it, there's a red line there, which is the average. I mean, we're just well above and beyond the average. And I wonder what's also different for this company than other ones in the past and how they've done their lockup is also just the inclusion of this in indexes. It's in the Nasdaq 100. And you can already see that this price is just kind of swinging wildly. I mean, not wildly, but we're down like nearly 2% now, just down 1%. What difference does it make for now passive investors to be holding this thing as we're thinking not just about how the company fundamentals are doing, but trying to achieve something of a price discovery as shares lockup.
[00:25:46] Speaker 8: Yeah, I mean, today, you know, as of yesterday, this wasn't a big part of the index. It was included in it. But there are so much to share is actually available. It wasn't a big part of it. And we're going to see increase more and more as the flow gets bigger. And so as we just get more shares publicly available, we are going to see that increase over time. And so right now, today, this move isn't going to be big make a big difference. And even just the Nasdaq 100, that's not going to be a huge move that it's going to make. You know, if we see it starting trading down below 100, you know, maybe that starts to affect it. But it's not a huge part of it. But then the market today, a year from now, you and you have, you know, next 2027, you have Elon starting to be able to sell the shares. You have a lot more shares available in the market. You're going to see this make move the market more and more.
[00:26:28] Speaker 2: Well, what do you think happens with the capital that people are going to get from this back into equities, back into shares of mag seven companies? Luxury car healers. Besides the Rolls Royce, I mean, what are people going to spend money on? I think
[00:26:43] Speaker 8: you're going to like the home prices in San Francisco. Oh, my gosh, what are you going to see there? Like maybe they'll have a renaissance in San Francisco. But, you know, these are people who invested in something because they think they believe in the future and they're looking at something. They want growth and they were willing to take that risk on it. And so I don't think people are going to take this same stock, like the cash from the stock, and they're not going to go buy municipal bonds. They're not going to sit in cash. They're looking for growth. But I do think they will take it and put it into a much more broad basket of high growth type of
[00:27:11] Speaker 1: companies. This earnings season, we have seen a lot of volatility. And I just wonder what you make of these companies. SanDisk being an example this morning. It has been a lot of tech. But just kind of the moves we're seeing in this market, how much of it is investors truly reevaluating what they see as the terminal value for these companies versus just some strange positioning that's forcing these big moves in stocks? You know, I think people start to look at just the risks overall in the
[00:27:37] Speaker 8: market. And I mean, I think we know that people are starting to look at the Fed likely raising rates. We've had more or more of that even come out this week. You start to look at the geopolitical risks. People I've heard from a lot of clients who start to think like it feels like this war is going to be forever. You know, it doesn't feel like there's an end to this. And so I think there is people look at the risk of this. And so when you look at moves of these of these companies, some people starting to say, you know, especially these companies that are starting to issue a lot of debt, which we're seeing from a lot of these big tech companies as well. And there's risk to that in there. That's not a no risk type of thing. And so people starting to say, do we believe in that over the long term? And do we think the amount of money that these companies are spending is going to lead to the growth that they say? And, you know, only time will tell. But I think people are
[00:28:22] Speaker 2: starting to get a little nervous about that. It's interesting. SpaceX is now in the green. It's moved up a little bit. But you don't know whether people are covering their shorts on this. It was the most shorted stock. As we go forward, I'm wondering if we get to Wednesday of next week, which is CPI. Does then everybody go away until Jackson Hole at this point? Because you're talking about the war and people's reaction. And I'm wondering if people are just exhausted by all this. And it's August. And hey, let's let's. Well, we don't want to go to the Hamptons because they're covered with ticks, according to the story. I'm a little bit kidding. But you want to go somewhere. It's funny.
[00:28:56] Speaker 8: I feel like the ticks has been the conversation. I think this vineyard is bad, too, isn't it? Yes. Oh, Nantucket. Thank you. It's really people. I can't eat red meat or something. I think that people are hyper aware of what's going on in looking at the Fed, looking at these types of things. I think people are exhausted from it, though, to your point. And, you know, I had I had clients yesterday asking about, like, you know, how do they how do they even trade some of these things. And it's the decisions change every single day. Like it's something really hard to change when you look at the Strait of Hormuz is, like, is it opening? Is it closing? Is it what's what's going on here? And I think people are exhausted from that, to your point. I do think that, you know, like we have more and more of the Fed speaking out, talking about, you know, potentially raising rates. And so I think we've all kind of looked at this for a long time. But then coming out and saying it, people are starting to take that in reality. I do think people will start to look over the next month of, like, what do I need to do to build my portfolio if interest rates are really going to start to rise again?
[00:29:54] Speaker 1: That shows also just thinking, I know this is horrible, but like getting alpha gal might solve beef inflation because people can't eat red meat anymore. So we'll put that to the side. Let's not discuss that because that would be a big bummer. I also know that clients have been asking you about Eli Lillian Nova Nordis after their earnings and kind of the GLP wars. How are you navigating them through that?
[00:30:11] Speaker 8: Yeah, no, I think that's one of those interesting. I mean, this is one of those, like, trendy things that people talk about. And I always go back to things like, yeah, in 2020, when people are asking about zoom and Peloton and I saw Peloton finally became profitable this morning, but it was trading down. And so you look at this and I kind of always joke to people that once I have five clients call me about a certain stock, it's time to sell. It's definitely, I mean, that's hit a tie. Joe Kennedy's shoeshine play. Yeah, yeah. You're like, once all these retail investors are calling you, it's time to get out. And I always tell people, like, you don't have any more information than everyone else does. And so how are you thinking about that future? And the question is not, is the stock going to go up? The question is, is the stock going to go up more than the market? And that is how you need to, like, reframe that because people, yes, a lot of these companies will go up over time. But is it going to beat its peers? Is it going to beat the Nasdaq? Is it going to be the S&P 500? You know, time will tell. But a lot of these stocks have already had their run up. Emily, this has been so brilliant.
[00:31:11] Speaker 1: Thank you so much for stopping by. Really appreciate your time. That's Emily Green. Almost 10 minutes into your trading day. Let's get a check on your markets this morning. We are early up 0.04%. The breadth, though, does have the majority of stocks that are up. I was just looking at the names that are in. So, again, we always sort this as to the companies that are adding the most points to the S&P 500. So the things you see here are always going to be biased by market cap, which is why it's interesting to see companies like Parker Hannafin up at the top. This is the sixth biggest contributor to the S&P 500 this morning. And this is an aerospace company. I don't know if I've ever mentioned that name on the show. How I met aerospace. You have a lot of aerospace-related companies doing well. Motorola Solutions, Costco. So, very different kind of vibe to this market. Although the very, very top is the people you usually see, NVIDIA, Apple, Microsoft. Downside, it's all these chip makers. Again, SanDisk reporting earnings down a whopping 17.309%. It's Apple 11 that's down 17%. Micron, Western Digital also having a tough go of it this morning, too. If you look at the individual sectors and how they're performing this morning, again, tech, it's being dragged down by what chip stocks are doing. So it's down a third of a percent. Energy that moves higher up 1.4%. Consumer staples, you just saw Costco there doing well, followed by healthcare, financials, and communications. Coming up on the show, we're going to get more into earnings season, speaking with Krispy Kreme's CEO on whether their turnaround is gaining traction. This is Bloomberg Open Interest. Let's hear from the sell side and get your morning's top calls. Here with that is Nora Melinda.
[00:33:01] Speaker 6: Hey, Nora. Hey, Danny. Let's look at some of the chatter on Wall Street. SanDisk under pressure. That's following its earnings report. City lowering its price target on the stock to $2,100. Analysts are saying pricing just isn't looking as strong as they were hoping for. And City wasn't the only one saying this. Wells Fargo and Jeffries also trimmed their price targets as well. Shares of SanDisk down just below 8% right now. Next up, Bernstein downgrading Zillow to market perform. After its earnings report as well, the stock heading for its worst day since February, Bernstein saying the story just isn't as convincing as it used to be. With several questions hanging over the business, shares of Zillow down double digits, falling about 13%. And finally wrapping things up, Mizuho raising its price target on Shake Shack to $90 after a better than expected quarter. Shares are lowered though by about 4%. The firm saying activist investor Starboard could end up slowing the company's expansion plans. Those are your top calls. Danny. Nora, thank you very much.
[00:34:02] Speaker 1: Jeff Smith announcing that position yesterday on Bloomberg deals, saying that his aim was to speed up their expansion. Speaking of expansions, that maker Krispy Kreme is maintaining its full year outlook as margins improve, helping to offset lower revenue. CEO Josh Charlesworth says that the company is making continued significant progress on its turn around. And so pleased to say that Josh joins us now. Josh, great to see you. And look, it's clear. This turn around that you've been doing, focusing on having more franchise stores, it's working with your improved margins. How much more operational efficiency do you think you can squeeze out? Or do you need to kind of refocus on getting that top line growth back?
[00:34:42] Speaker 9: Yes, good morning. Great to see you. Yeah, the turnaround we announced a year ago is working. And you're right. We've seen margins improve this quarter 340 basis points. That's contributed also to our ability to pay down their leverage. We're down 1.3 turns on that. But perhaps most important for the future, and to your point, is we're also seeing good underlying growth. If you exclude the business we exited last year, distribution at McDonald's, we actually grew 4.4% in the second quarter, which is a really good sign. And so I see going forward that we'll be able to continuously improve the margins like you say, but also at the same time grow the business because people want our doughnuts.
[00:35:32] Speaker 2: Well, again, on the margin side, I'm wondering if you're having any impact from all of the inflation that we have seen that our people worried about and whether you feel you have any pricing power to make up for it.
[00:35:44] Speaker 9: Well, we've made a lot of operational improvements over the last year. We have, for example, outsourced our logistics. That's the deliveries from our doughnut shops to our customers like Walmart, Target and the like. And outsourcing that has provided a lot of predictability and cost efficiency opportunities. We've also made sure that all our revenues are profitable, shifting to distribution that is more profitable than before. For example, our fresh delivery channel. That's the delivery to those grocery and convenience stores. The sales per location are up weekly sales by 30% year over year. So we're able not just to address those cost pressures, but improve the underlying profitability of the whole network.
[00:36:35] Speaker 1: Have you seen any changes in consumer behavior, Josh? I know when you talk about Krispy Kreme, you say, look, this is usually the treat that people go out for. Are they maybe buying that treat less often? Are they changing exactly what they're ordering? Are they opting for maybe more of a basic or a smaller package?
[00:36:53] Speaker 9: Has anything shifted in the consumer? It's interesting. In this dynamic consumer environment, we see that we are well positioned, as you say. We haven't purchased just on average two to three times a year. You're usually bought for sharing occasions, special occasions and celebrations. And we're seeing that, you know, those fresh doughnuts are well positioned in this market. And that explains, I think, the underlying growth we've seen. People love our original glazed. It's our most popular and affordable product, usually bought in a dozen. And we're seeing even second dozen sales going up. And also we're bringing a ton of innovation that people get excited about. It's important for them to see our latest creations. It creates buzz and excitement for the brand. And we're seeing those perform well in our traditional channels and increasingly in the digital channel as well.
[00:37:48] Speaker 2: So there's a lot of engagement around the brand in this environment. Have you felt any pressure to sort of match some of your competition and add products to your lineup?
[00:37:59] Speaker 9: Well, you know, the number one reason why people say they may not purchase Krispy Kreme is, where do I get it? I want to get those amazing fresh doughnuts. And so our focus is more about taking those fresh doughnuts that we make in our doughnut shops from scratch. You can actually literally see the dough being prepared and the doughnuts being decorated in our shops. How do we get them to people more conveniently? And that's why we've been partnering with the likes of Walmart and Target, also making them available online. And so that's where we see the growth opportunity, really doing what we do best, make great fresh doughnuts.
[00:38:38] Speaker 1: But, Josh, the space is so hyper-competitive, both dessert and bakery, whether it's your big chain competitors, Dunkin's, Starbucks, leaning into their breakfast and pastries offerings, or hyper-local chains popping up, crumble coming up. So kind of like the sweets and dessert things feel like they are kind of cyclical, that they have these moments, and now feels like one of those moments. Josh, how do you compete with the old stalwarts of, again, the Starbucks and the Duncans of the world trying to compete more over, and new competitors seemingly pop up every day?
[00:39:11] Speaker 9: It's a combination of innovation and creativity, bringing excitement to our customers. More than half our customer base is aged under 35. We have 18 million loyalty members. That's just for 400 doughnut shops across the country, showing how engaging those people in the brand, engaging them in the new doughnut creations, whether they're seasonal variations or our cadence or limited-time offerings. We did a 4th of July 250th birthday doughnut collection was really popular. My favorite was the orange-glazed dreamsicle. We just tomorrow will launch our pumpkin spice as part of our full collection. So we find that we're able to stay ahead of that competition by bringing what nobody else can do.
[00:39:58] Speaker 1: Can I just quickly, we have like no time left, but what's the weirdest doughnut you guys have ever put out? I'm just listening to these, like orange-creamsicle. What do you think is the most strange doughnut you've ever put into the market?
[00:40:07] Speaker 9: Oh, I don't know. It's amazing what you can do with a doughnut. My favorite was the blueberry glaze that we just did. I don't think it's strange. I just think everybody loves those traditional flavors, but sometimes, yeah, we do fun stuff as well.
[00:40:20] Speaker 1: Yeah, blueberry glaze isn't strange at all, Josh. It does sound delicious, though. I know where our stop will be after the show. We'll have the food roundup for you. This is Bloomberg Open Interest. Take the areas that you want to densify and you want to own, and let's own those. And the areas you weren't going to get to on your roadmap for four, five, six, seven, eight, nine years.
[00:40:42] Speaker 10: Let's just do that at the same time. Let's bring in quality franchisees and have them attack those markets that you weren't going to get to for seven, eight years anyway. And let's get those started sooner so we can improve the growth rate. And if you just run the math, it's a higher NPV. It's a higher NPV. It's a higher return for shareholders. Starboard's Jeff Smith announcing with me his firm's new stake in Shake Shack yesterday. Shake Shack responded, saying, quote, we appreciate the investment in our company and the confidence expressed in the quality of our brand and the strengths of our operation.
[00:41:18] Speaker 1: Joining us now is Michael Halen, senior restaurant analyst at Bloomberg Intelligence. And, Mike, look, Jeff Smith, basically what he argued was, one, the stock is too cheap, so I should buy it, and two, maybe they can grow faster by franchising. I know the team at Mizuho thinks that maybe that would even slow down their growth. Well, what do you think of Starboard's stake and what they're pushing for at Shake Shack?
[00:41:54] Speaker 11: Well, I'm not really sure what metrics it's cheap on. Maybe he could educate me on that. You know, it was interesting. I mean, typically when you see an activist, right, they're unhappy with the management team. And that's where the real opportunity is in restaurant chains, in my opinion, that are struggling, right, is changing the management team and really improving the core of the business before trying to grow it more aggressively. One thing that also struck me was, you know, kind of how easy he made it sound to franchise units, right? Like, this is an entirely new muscle for Shake Shack. They're going to have to do some hiring at corporate, right, to expand this and grow this, develop this business, right? And it's not something that's going to hit the P&L for 18 months, right? So he's buying in now for a catalyst that's going to hit a year and a half from now. And who knows what the economy is going to look like at that point. So this is a really interesting investment by Starboard, in our opinion.
[00:43:01] Speaker 1: Yeah. Mike, I appreciate you helping us cover it. And for what it's worth, they compare it to Kava and Chipotle and say it's shading more cheaply on a 2027 times EBITDA basis. And then it should be above them. Hey, Michael, we're going to have to leave it there just at a time. Michael Halen of Bloomberg Intelligence. Coming up, we're going to talk to Smashburger CEO Jim Sullivan. Some nominative determinism with me having burger interviews, it would seem. That's coming up in the next hour alongside Bernstein's Alex Chaloff. He's going to talk about how he is leaning into risk. Plus, we talk biotech and investment banking. This is Bloomberg. We are 30 minutes into your trading day. Welcome to Bloomberg Open Interest. I'm Dani Berger alongside Michael McKee. The S&P just barely gaining this morning as the Nasdaq falls. Coming up on the show, fresh AI weakness keeps investors on edge ahead of tomorrow's job report. Investors also waiting news of an Iran-Oman agreement to partially reopen the Straits of Hormuz. Plus, billions worth of SpaceX shares are unlocked following the company's post-earnings plunge. SpaceX, very volatile in today's trade, currently up 1.5% with huge amounts of volume. We begin, though, with volatility. Leverage ETFs driving market volatility. Leverage ETFs are less than 2% of the ETF industry assets under management. But account for upwards of 15% to 20% of volume on a given day. They are currently acting like a momentum monster at the close. Alex joins us now. A momentum monster, something to keep us up and afraid at night. I mean, you do see it another day like this morning. We come in. SK Hynix has had like a weird flash crash in one of the exchanges in South Korea. And I wonder when you look at these moves, chips selling off, things so dramatically, whether to you that says something fundamental or what you're talking about, a very mechanical thing driven by an unwind of leverage ETFs.
[00:45:11] Speaker 12: You have to separate Korea from everything else, because that's 10% a day up or down, no matter what's going on. But the leveraged ETFs have really created a momentum problem, as I said. Sometimes it's good momentum. Sometimes it's bad momentum. Sometimes it's at the last 30 minutes of the day, and it changes the dynamic of a trading day. I heard you talking about August and people maybe disappearing before Jackson Hole. I don't know if they're going to be able to with the kind of volumes that we'd expect.
[00:45:38] Speaker 2: Well, yesterday, Jamie Dimon said that there is a lot of leverage out there, and it does worry him. And we're going to have some more people blow up. But he said it's not systemic. It's not anything that goes beyond these individual firms. So is this anything really to worry about unless you're in one of those funds?
[00:45:57] Speaker 12: I think there's more headlines of private deals that will go bad over the next few months. So far, we've seen 14 mega deals that have gone basically to zero. I'd expect to see probably another half dozen of those before the end of the year. I think it's just a byproduct of the fact that so many of these funds had to put so much money to work so quickly because of investor pressure, and now they're regretting it.
[00:46:23] Speaker 1: Is it part of this, though, just the new nature of markets where in the hedge fund universe, everybody's a pod shop, and those necessarily become momentum trades because the winning pods get more money. If you lose, you get kicked out and everyone gets fired. Isn't the market just more geared toward momentum because of these structural changes?
[00:46:39] Speaker 12: Yeah, it's hard to separate what are the long-term strategic buyers and owners in a market relative to the leveraged ETFs, relative to the pod hedge fund shops, relative to the other type of options-related trading activity that we see. But this is the new normal. This is what it is. So you just have to get used to it and figure out how to trade around.
[00:46:59] Speaker 1: Is that exciting for you? Or is your job dramatically changed and become much more stressful?
[00:47:05] Speaker 12: I don't know how it could become more stressful. But, yeah, there's a lot of Tums and roll-Aid action. Yes. But it is, like I said, this is what it is. And if you want to be invested in the market, you have to understand that you have to separate the day-to-day noise. You have to own the companies that you want to own for the long-term market. And follow earnings. And don't worry so much about what happens in between.
[00:47:30] Speaker 2: Well, there's what you should do. And then there's what people do do. Where are we on the fear-greed index at this point?
[00:47:36] Speaker 12: I think we're tilted heavily to greed. I think this year is evidence of that. Yes, earnings are up dramatically and have surprise to the upside. And we think that continues for the rest of the year and into 27. But I think the fact that markets have been so profitable for the last number of years, this is a different type of struggle that investors have. Now they're trying to figure out how to unwind some of these positions with big taxable gains that they've got.
[00:48:03] Speaker 1: It's been a terrific market. Speaking of unwinding positions, a good chunk of SpaceX investors can now sell into this market, about 911 million shares. I'm just looking at the volume. We're almost already at 100,000 shares. And the average volume is about 115. So, like, what is it, 30 minutes into the trading day. And we're already almost at the average daily share amount. These -- and this is just a volume chart here in 10-minute blocks in that one line there is the average. We've seen big swings in the price. But I just wonder how you're thinking about these lockups, whether the majority of investors are going to be exercising them. They see the direction SpaceX is heading in. And what this just means for investor psychology, to have this giant company be having these different tranches of lockups expiring.
[00:48:48] Speaker 12: I think that there are a number of investors who are in the name at a fraction of where it trades today. So, even though we're talking about it off the lows and, oh, woe was me, it's come down 50% from where it was, there's still people that have made 10 and 20 and 50 and 100 decks. And those are the people who are selling.
[00:49:07] Speaker 2: Well, SpaceX came out and everybody wanted to get in. And the stock shot up. And now, we obviously know where it is. What are your clients saying about the big IPOs that are out there? Are they saying, I don't care about what happened to
[00:49:19] Speaker 12: SpaceX, get me into Anthropic? It's a little bit of two sides. There's a barbell. There is a group that says, I want -- and there's a list. It's not just Anthropic. There's about a dozen companies that we'd expect to go public in the next 12 to 18 months. And so, building a book there is important. And then there's also some that say, I don't want to touch any of this stuff and
[00:49:43] Speaker 1: keep me out of it. Well, what is the conversation about price discovery? Like, do you recommend back off these stocks, especially something like a SpaceX that has these mechanical things until it kind of settles somewhere? Or is it a jump in right at the IPO and
[00:49:55] Speaker 12: that's the time to get into these companies? So, I think each one is going to be different. I wouldn't say just because of how SpaceX played out. That's how all of these names will play out. There's a lot of different dynamics. This was a widely held name, probably greater than any of these other businesses that we'll see go public in the next couple of years. So, I would separate what's happened here
[00:50:15] Speaker 2: from what we think will happen with the other names. What do you think is the best alternative at this point for the people who are on that side of the barbell you talked about who don't want to play the volatility that we're seeing in the mag seven and the tech stocks. Where can you still get some kind of alpha after the after the tech space? I think there's a lot of opportunity outside of the tech
[00:50:41] Speaker 12: space. I think of industrials. I think of cap equipment in general. I think of defense names. I think of banks. There's a lot of different ways to play this market and even this year to take industrials for example. Industrials coming into the year in the first quarter. Earnings were expected to be 3 percent. They were 20 percent. There's a number of different sectors that have produced terrific earnings. Yes. Technology is driving 40-45 percent of the earnings growth that we'd expect this year and into next. But there's 55 percent that somewhere else in other high-quality names that have been ignored for much of the last couple of years. So, not only can you get really good growth you're buying at an
[00:51:15] Speaker 1: interesting entry point. Alex has been so fantastic. I hope your colleagues greet you back into the office with a well-deserved bottle of Tums.
[00:51:22] Speaker 12: Well, after the discussion we had, I want a donut and a burger. Yeah, true. And you'll definitely need those Tums. Alex, thank you so
[00:51:29] Speaker 1: much for joining us. Alex Shaloff of Bernstein. Let's get a check on your markets this morning. We are just about 40 minutes into your trading day. And you are looking at Russell 2000. That's up. It hit a new record alongside the S&P. The S&P 500 up two tenths of one percent this morning. The Nasdaq falls as chipmaker sell-off. Two-year yields. Those are moving higher by nearly four basis points. Two things happening there. For one, a monster bond offering coming from Alphabet. And two, an FTPs saying that chair Kevin Warsh would raise rates should the data suggest that inflation remains sticky. Brent Crude also adding to the stress up about one and three quarters of a percent. Let's get a look at some of the other movers on our radar this morning.
[00:52:09] Speaker 6: With that is Nora. Good morning, Nora. A few stories I'm watching this morning. First up, AI hardware giant Sandisk and Western Digital reported revenue forecasts that fell short of analyst estimates. Western Digital hitting its lowest level since May. The two companies are among the biggest, the best performers on the S&P 500 this year. Sandisk up more than 400 percent this year. But take a look at the action that we're seeing today. Sandisk down about five percent. And Western Digital down double digits. Now sticking with tech. SK Hynix seeing its second sharp sell off in a week. Raising fresh questions about trading volatility on South Korea's alternative stock exchange. We're seeing shares of SK Hynix down just below four percent. And finally, SpaceX facing another key test today. More than $100 billion worth of shares are now available for trading as a lockup agreement restricting insider share sales ends. We're seeing shares of SpaceX up just about 1.9 percent. Those are your morning movers.
[00:53:05] Speaker 1: Danny. Nora, thank you very much. A volatile session for SpaceX. Just want to point out, so far 97 or now 98 million shares have traded hands. The average volume for the stock since the IPO is about 115. So lots of volume on this name today. SpaceX. Let's talk about it. Bloomberg Equities reported Carmen Reinecke joins us now. That was maybe to be expected. Just a huge amount of volumes. What are the numbers here in terms of what is actually eligible to be sold and how might that impact the shares today? Yeah. So what we're seeing today is that
[00:53:39] Speaker 13: the number of shares available is more than doubled. So now there are more than one and a half billion shares available to trade yesterday. That was about 640 million. And this is something that's been really, really top of mind for investors. Obviously, SpaceX IPO was record breaking. It was highly watched. It had earnings earlier this week. Also a very important event for analysts and investors on Wall Street. And now this share lockup expiry is one of the first of many that we're going to see over the next year. Usually we can see some selling pressure here. The early the earliest investors are now eligible to sell their shares. But we're really bucking the trend. We're seeing SpaceX stock up. Obviously, it had a pretty big sell off yesterday. It was down more than 13 percent. But seeing it bounce back today, we're seeing buying strength. Well, we're seeing shorts covering at this point. You know, that's not something that I've specifically seen right now. But I will be checking in on that throughout the day. We know that short interest jumped or has been, you know, consistently climbing in this name. I think at yesterday's close, it was about 36 percent. That's pretty high. So people have been looking ahead to this lockup, looking for weakness and betting against the stock here.
[00:54:50] Speaker 1: Carmen, it's also been really interesting to watch this morning. Sandisk, Western Digital, all delivering quarters that maybe in the past would have delivered them big rallies, like maybe even a 10 percent rally, just given how strong some of the numbers were. But you're not seeing that. You're seeing shares fall. So what are investors picking through that is leading to this disappointment?
[00:55:09] Speaker 13: You know, those memory stocks are in such an interesting place going into these earnings reports because the bars are set so high. They've had these sell offs in their shares, but the stocks are still some of the best performers on the S&P 500. They're still winners. So to really move the needle and get buying back in, it would have had to be, I think, pretty incredible. Investors are just looking for other pieces of the puzzle. I mean, we've seen some buying back into the mag seven, which have, you know, really sold off in the first half of the year. We're just seeing investors sort of shift through and rotate. All right, Carmen.
[00:55:40] Speaker 1: Thank you so much for joining us. Appreciate your time. Bloomberg's Carmen Reinecke. Coming up, we speak with the Roy Vaught CEO MAC line as the company awaits an FDA decision on its lead drug. This is Bloomberg Open Interest. Let's get you some high interest stories to look at what's making headlines around the world. President Trump has periodically spoken by phone with Fed chair Kevin Warsh since he took the role. Sources telling Bloomberg that Trump has inquired about Warsh's forecasts and opinions, but has not pushed him to make any specific course of action. It's unclear if the two have discussed monetary policy. Millennium partnering with Anthropik to build a risk analyst powered by AI. The tool aims to help human risk managers make decisions and extract new risk insights across asset classes. The partnership will also expand the use of Anthropik's models across the hedge fund's firm. And situational awareness back in business. Sources telling Bloomberg that the hedge fund has completed a $400 million investment to back a privately held company. It's the first sign of how Leopold Ashenbrenner intends to pick up the pieces of his fund after it nearly collapsed under a wave of margin calls from lenders last week. And Roy Vaught reported first quarter results with revenue missing estimates as it continues to invest in the pipeline. Shares up 1% as the biotech company now awaits an FDA decision on its lead drug later this quarter. CEO Matt Glein says Roy Vaught remains focused on delivering for patients. And Matt joins us now. Matt, great to have you in the studio. Thanks for joining us. Thanks so much for having me. Let's talk about the pipeline and the FDA approval. So September, roughly when you're targeting to get this drug out, are you still confident in that timeline
[00:57:29] Speaker 14: and the FDA approval? Yeah, absolutely. So what we said is the approval is expected this quarter and we're going to launch it by the end of September. And it's a drug for a disease where there's really no other options for these patients. So we're excited to get it out there.
[00:57:40] Speaker 2: Well, that's a market that a lot of companies are reluctant to get into. How do you hedge that backstop yourself, make sure that you can recoup your costs? Yes. So the drug that we're launching is called brepacitinib
[00:57:54] Speaker 14: and a disease called dermatomyositis, which is this orphan inflammatory disease. You get these terrible skin rashes and then debilitating muscle wasting these patients. They can't walk upstairs. They can't lift objects at home. And it's been a tough development area. So many, many companies have run studies in dermatomyositis and failed. And about a year ago, we put out our clinical data and it was good data. I think the most important thing in any pharmaceutical market is if you're delivering data that's going to help the patients with the disease, that's just a huge tailwind. I think we have such good data with the drug that a knockwood FDA will be on our side and we'll get the approval.
[00:58:25] Speaker 1: I think we'll have a good set up. I always find this to be one of the most fascinating things about your industry. And it's important work, right? Finding treatments for these orphan diseases that maybe other people don't put in the money and the really costs that are associated with it. When you look at the pipeline, how do you make that decision? What is sort of the risk reward analysis of, yes, we're going to have to spend money to develop this thing that is hard to find a treatment for? How do you find new targets for when you're building out the pipeline?
[00:58:52] Speaker 14: Yes, it's a great question. I'll say one of the things that's been encouraging to us in the last call it five or six years is that a bunch of biotech companies like us have successfully launched drugs like Argenix and Mycena Gravis and Horizon and Ted and a couple of others where we get to watch what they've done and sort of draft on that success. And those are all mostly in similar orphan markets where it tends to be pretty tractable. There's not that many doctors. This is more concert number of patients in general. These drugs come at higher price points. I think the real tricky thing with these diseases is because so many people have tried and failed, it's hard to run the clinical trials. And that's where, you know, you need an investor mindset. You need to think about the science. You need to try and figure out how you're going to structure the trial in a way that maximizes success. And mercifully, again, clinical data. We've got lots of it coming ahead of us. But at least this one, we know that it worked because the data is behind us.
[00:59:35] Speaker 2: How much of a role is AI playing in the discovery of drugs? There's a lot of talk in the farmer world about using AI to come up with new formulations.
[00:59:45] Speaker 14: Are you using it that way? Yeah, look, it's a lot of people think they have to talk a lot about AI. You say with a huge sigh. I think that so much of the discussion of AI and drug discovery right now is these like high science, chemistry and biology uses. And my only thing about that is I think those are the apples at the very top of the tree. Those are like the hardest problems. We have the least information. And I do think over time we will make progress against those problems. The models will be helpful. But I think so much of what happens if you run a clinical trial, we've got hundreds of patients at thousands of doctors offices. You've got people reading medical records and negotiating boring contracts and sending tons of email. And we all know from our daily lives that whatever whatever whatever we can do on the chemistry side, we know that AI is good at reading documents, good at sending emails, good at the boring stuff. And I think there's a lot of low hanging fruit that's making clinical trials easier to run where those tools can be.
[01:00:38] Speaker 1: Is the FDA keeping up with that, though? Are they sort of allowing the use of some of those tools to get rid of the monotomy, the bureaucracy of doing these clinical trials and submitting to FDA?
[01:00:49] Speaker 14: MOSTLY I think the agency has been encouraging on this. Look, they want trials to be fast. They want drugs to get approved. It's sort of an unusual regulator and that they're a pretty supportive regulator. They want these treatments. That said, look, the evidentiary standards haven't changed. You still need to run a well controlled placebo controlled study. It still needs to be double blinded. And I think as long as you're generating the evidence the right way, a lot of the house sort of fades into the backdrop.
[01:01:10] Speaker 2: And I think they're comfortable that these tools can be helpful. How much are you putting into R&D these days to build the pipeline? And how much of your revenue goes into just supporting this drug and the things that you have under development already?
[01:01:26] Speaker 14: Well, we don't have revenue right now. We're launching this product. It'll be our first product. And so that makes that question easy one to answer. We spend a little bit under $200 million a quarter on R&D right now. So it's expensive. These trials are big and expensive. This DM program costs a couple hundred million dollars to run. And the cool thing about our industry is everything is the R&D cycle. And so you sort of quote unquote know you get this sort of patent patent life exclusivity. You know that if you're successful, you can market the drug. It's about making the right decisions and doing the research ahead of time. And then it's just about running good science aggressively. But yeah, it's expensive. It's a lot of cost.
[01:02:01] Speaker 1: So besides the AI conversation, the other conversation that's really taken off for your industry is M&A. Yeah. It's remarkable. And there's this conversation about the patent cliff. But now it feels like anything is literally on the table of AstraZeneca and Bristol Myers Squibb can reportedly have conversations. Matt, how often are you getting phone calls from different CEOs saying, hey, nice company you got there. Would you like to join forces?
[01:02:23] Speaker 14: Big pharma looks at biotech all the time. It's a big part of how they build their pipeline. So we have ongoing dialogues with most big pharma companies and they call us and they're excited about what we're up to. One of the goofy dynamics in biotech is when you're a smaller biotech company, mostly what investors on average want from you is to get bought by a big pharma company. And so as we had a lower market cap a year or two years ago, a lot of the investor conversation was about like, who's going to buy you? When are they going to buy you? How often are they calling? And then you graduate into this like launch moment.
[01:02:51] Speaker 1: If AstraZeneca can buy Bristol Myers Squibb, even though you are bigger now, you could clearly still be a target.
[01:02:58] Speaker 14: Maybe they're watching. No, look, I agree. But I think, though, that the nice thing is we don't have to be a target anymore, that we can launch these products, that we can build a real business, which is something that, you know, it's a privilege. Not that many biotech companies get to go on to actually build a company with revenues and profits. And my hope is that we are like on the cusp of that change for ourselves.
[01:03:18] Speaker 1: All right, Matt, such a pleasure to have you on. This has been so interesting. Thank you for joining us. Say the name of your drug one more time. Brepacitinib.
[01:03:23] Speaker 14: Just rolls off the tongue.
[01:03:24] Speaker 1: Who makes up those names? Matt, thank you so much. Thank you very much. Roy Vaughn CEO Matt Glein. Still ahead, more earnings to cover. We're going to speak with the Lincoln International CEO Rob Brown following the company's first earnings report since going public in May. This is Bloomberg Open Interest. Just about an hour into your trading day. Let's get a check on your markets this morning. The S&P now positive up two tenths of one percent. It outperforms the Nasdaq, which had been negative, now back positive once again, up one tenth of one percent. We're looking to see if we can hit another all-time high after we notched it earlier this week. Dow Jones, that's down. That had also hit an all-time high. Ten-year yields, those are up nearly three basis points. For one, the FT reporting that Warsh, should the data continue to show sticky inflation, may want to hike in September. And at the same time, Alphabet, a monster bond offering. $25 billion it is tapping this bond market for. So that also adds to the pressure in this Treasury market. You can see Alphabet down. SpaceX, those shares are up nearly seven percent. This is so remarkable. Remember, about 911, rather, million shares come available to sell into this market. The lockup expires in different tranches. And we're up seven percent, the volume off the charts. We're already at the average volume, and we're only about an hour into your trading day. Sandisk and Western Digital, both those are down a huge amount, reporting earnings. But big swings we've seen in those various chipmaker companies. Shake Shack, Jeff Smith, the starboard, telling me yesterday he's taken a stake. They rose about 10 percent yesterday, selling off slightly some analyst commentary coming in, questioning the franchise model, which Jeff Smith has recommended for this company. And restaurant brands, those shares falling 1.6 percent. Burger King sales, they did jump on a Whopper and Star Wars meal promotion, but not enough to get us excited about that stock. Coming up, more earnings we hear from Lincoln International.
[01:05:36] Speaker 15: Capital markets are open. It's a good environment, and we're finding great opportunities to exit and to invest. These exits all over the world across many different industry sectors. So it's not just one place that is open for exits. Really, the market is open if you have good companies and you know how to find the right buyer.
[01:05:54] Speaker 1: That was Carlisle Chief Financial Officer Justin Booth speaking to Mike and myself yesterday. Speaking of M&A results at Lincoln International are just reinforcing that trend. The investment bank posting record first half revenue in its first earnings as a public company. We are now joined by the CEO, Rob Brown. Rob, great to see you this morning. I'm really interested in this because this had been a part of this market that was really gummed up. Middle market and especially sponsor-backed P&E. You call this an ice dam melting. Where specifically are you starting to see some of the deals break free?
[01:06:32] Speaker 16: I'm broad-based, Danny. I think if I had to call out one industry sector, I would say industrials. The ice dam is probably melting faster there and really for two reasons. One, as investors are looking for where are safe places to park money that might have less AI disruption. Industrials and manufactured products are one of those. So you have strategic acquirers that are trading at really high values, in some cases all-time high values. And secondly, the build-out of the data center infrastructure supporting AI has created tremendous demand for certain sectors of industrial products. So we're definitely seeing industrials. But I don't -- it has been broad-based. And it is an ice dam. It is a gradual improvement that we think has legs.
[01:07:14] Speaker 2: Is this a situation where you've sort of got a liquidity wall here and there's just lots of money out there. And you're able to raise money very easily. And that's also incenting people to try to sell their companies?
[01:07:26] Speaker 16: You know, it's interesting. Fundraising for -- to date has not been great. But there's so much liquidity left over from fundraising done over the last several years, both in the private equity and the private debt market. So, you know, Michael, I think to your point, there's more capital that wants to be put to work right now than there are opportunities to invest. And so I think that's creating a view of let's bring more companies to market. I also just think there is a -- as time has gone on, I think investors are thinking about their businesses and saying, listen, I've got money to deploy. I want to focus on the future. It's just time to sell some of these businesses that maybe haven't hit their investment thesis. So the A businesses, the high-quality, high-performing businesses, those have been selling fine. What really hasn't come out are the businesses maybe that haven't met their investment thesis. I think we're seeing more of those come out. And I think we're also seeing investors deal with some of their problem children and put businesses through restructuring.
[01:08:24] Speaker 1: See, Rob, that's what I wanted to ask, is what we're seeing, just all the high-quality stuff that can be sold at the moment. For the things that were bought in '21 and '22, how still challenged is it to get actual, meaningful deals and exchanges of hands of these companies, considering that many of them were just bought at lofty valuations, and a lot of them are, again, to use your term, problem children, like software companies.
[01:08:49] Speaker 16: Well, I think one of the things that has happened, I think, particularly in the private equity world, as they've sold off some of their stars and they're locking in good returns or they're locking in returns on some of these funds, they now feel that, okay, I can sell these next level of businesses. And by the way, those aren't bad businesses. Those are good businesses that maybe just were bought at the wrong value or need a little more time to execute on their investment strategy. And they're doing several things. They're putting some of those in continuation vehicles. But some of them now, they're coming to market with the conviction of, okay, the market's going to speak, and when the market speaks, I'm going to transact. I think the problem children are the ones where, you know, they're either turning the keys over to the lenders. We have seen foreclosures increase in the last quarter. Or they, you know, investors, their most valuable asset is time. And if you put yourself in investors shoes, where do they want to spend their time? Yes, they want to generate returns, but they want to spend their time on their strategies and their futures. And to the extent some of these legacy portfolio companies that are not going to have the returns that they wanted are taking up their time, they're of a mindset to start moving on from those.
[01:09:51] Speaker 2: You do private credit advisory work. And I'm wondering what your view is of that whole segment, sector right now, given all the talk of people being overleveraged and watching some funds blow up.
[01:10:03] Speaker 16: Well, I think we have, we have a very good, a very good finger on the pulse of the private credit market. It's really from two vantage points. One, we have a capital advisory business that helps raise private capital for our clients. But I think as importantly, our valuations business, we're the leading provider of portfolio valuations to private credit. So we get to see the underlying health of the portfolios. The underlying health of those portfolios overall is good. Are foreclosures up? Yes. Are they up beyond what people were modeling? Likely not. Institutional investors continue to come into that asset class. The headlines have been a lot about retail investors wanting to get out and maybe not being able to with redemption gates. But I think that's a, that's a, that's a, that's a growing pain of retail investors coming into the private capital markets. These are long term assets and the horizons have to be long term. And there's going to be, there's going to be some learning curve there. But, but where we sit today, there is lots of capital available, debt capital available. And we actually see a lot of institutional investors coming into that asset class.
[01:11:08] Speaker 1: There has, though, at least in public markets, Rob, been some pushback on the massive amounts of spending that's occurring, especially within the tech players. I wonder if you're seeing any of that pushback also take place in private capital markets, considering that these giants just given their capital needs aren't just going to the broadly syndicate bond market, for example. They're also looking to the giants of Apollo's and the others of the world to get some of these debt offerings done.
[01:11:31] Speaker 16: I, you know, I, I think that the, the, the tech giants, and as I mentioned, the build out of this infrastructure is real. And it's going to require financing from, from almost every pocket that's, that's willing to do it. And I think also part of, as we think about technology, you know, there were some real headwinds in Q1 with what people were calling kind of the SaaSpocalypse. We are seeing the market sort that out. The market is trying, is now starting to say in some of these software businesses, hey, this is a business that can benefit from AI. This is a, this is a vertical business that has data assets or other services. This is a good company. And the market is starting to, to really sort what are the ones that are subject to more AI disruption. And what are the ones that are actually going to benefit from it? So I, I do think we're going to see improvement and investment in the software market.
[01:12:15] Speaker 1: Yeah, Rob, really interesting. Thank you so much for joining us this morning. Rob Brown of Lincoln International. Let's not get a check on your markets over an hour into your trading day. And we, on this equity index, are moving higher by only one tenth of one percent. Same goes for the NASDAQ, ever so slightly outperforming, but not really to a huge degree. We need to get back to seven, seven, three, six in order to hit an all-time high. So we're just under that level right now. Two-year yields, those are move up by nearly four basis points. A few things going on for one. Brent crude up 2% this morning. Some concern. It seems like what's happening in Yemen. Some escalation between the government and the Houthis there. And then you also have the FT reporting that Kevin Warsh might be interested in hiking rates come September if inflation remains sticky. And a giant bond offering from Alphabet, $25 billion. All of that weighing on your Treasury market this morning. Let's look at some of the individual movers with that. Hey, Nora. Hey, some stocks on the move this morning.
[01:13:12] Speaker 6: Hertz getting a boost after beating earnings expectations. That's giving investors a bit of a sigh of relief after concerns about the used car market and the company's recent unusual debt raise maneuver. Now, this is still a cheap stock, still trading below $2 per share. And we're seeing the stock down more than 60% this year. Now, over to Warner Brothers Discovery. Reporting an 11% drop in revenue year over year. Now, that slump comes from in part due to losing NBA rights and a weaker movie lineup. The question now is whether streaming can help make up the difference. Shares, though, up about 1%. And finally, looks like we're still ordering in. DoorDash is climbing after another strong forecast with paying subscribers, ordering takeout and groceries more often. The company is spending more on AI, but for now, investors seem to be okay with that. Shares of DoorDash up just below 2%. Those are your morning movers.
[01:14:06] Speaker 1: Danny. Nora, thank you very much. More on food and on burgers and on healthy meals. Hungry. This is the theme of today's show, Mike. All the things that will raise your cholesterol. Smashburger accelerating its expansion plans this year. We're going to speak to the CEO, Jim Sullivan. That's coming up next. This is Bloomberg Open Interest.
[01:14:27] Speaker ?: We'll be right back.
[01:14:32] Speaker 10: Take the areas that you want to densify and you want to own and let's own those. And the areas you weren't going to get to on your roadmap for four, five, six, seven, eight, nine years. Let's just do that at the same time. Let's bring in quality franchisees and have them attack those markets that you weren't going to get to for seven, eight years anyway. And let's get those started sooner so we can improve the growth rate. And if you just run the math, it's a higher NPV. It's a higher return for shareholders.
[01:15:04] Speaker 1: That was Starboard's Jeff Smith breaking the news live on Bloomberg Deals with me that they are taking a position in Shake Shack and saying that it's too cheap, but also that they should grow via franchise. And it's not the only burger chain that's growing. Smashburger North America, same store sales grew 2.4% in the fourth quarter. It's also planning to open 12 new locations this year via franchise. Joining us now is Jim Sullivan, Smashburger CEO. Jim, this debate over franchising chains really seems to have picked up some steam with Jeff Smith yesterday. And one of our analysts, for example, basically said it's hard for a company to kind of switch and get out there and start to franchise. I would love to hear just what your experiences and how difficult it is to get franchising right, because you obviously have a brand inequality that you also want to preserve. Great. Well, first, thank you. And good morning.
[01:15:56] Speaker 17: Thank you for having me. I think what I support, which I had to say 100%. Franchising within the restaurant sector specifically, it's a great way for us to grow. It's a great, it's a great return on our invested capital. It is difficult. It's always about making sure you have the right unit economics that are scalable and sustainable. And then it's picking the right partner that are well capitalized and experienced within the space. So it is a challenge, but it's one that's very rewarding when you get the right partner in the right market. And they can accelerate and propel the growth of the brand, which just drives many efficiencies across many channels of the business, whether it be marketing supply chain, spans of control. So we've, we at Smashburger are completely committed to the franchise model. In fact, we plan to become an asset light model here over the next 18 months. So we're going to double down and really ramp up what we're doing both from a traditional franchise as well as our nontraditional franchise space.
[01:16:55] Speaker 2: As you look to expand, how are you identifying the best places to put in new franchises? The space is crowded. There's a lot of fast food everywhere. How do you pick what's going to be successful for Smashburger?
[01:17:08] Speaker 17: You know, it's interesting. It's kind of an art and science. We have technology that we utilize that will help us pinpoint exactly based on performance of existing restaurants within the portfolio. We take those characteristics and then we repeat them through an algorithm. And then we have the what I call the art, which is our people on the ground that are actually viewing each of the sites, studying the trade area, studying the competition, understanding how the competition is performing. We benchmark against that. We want to make sure that they index north of 100 of where their national average is. That gives us a good indication that there's a demand for burger within the markets that we want to compete in.
[01:17:45] Speaker 1: The other thing that's happening in this in this space at the moment, Jim, which I'm sure you are acutely aware of, are the various outbreaks, whether it be Silospora, Salmonella. How has that impacted you? Have you had to take a good and hard look at your supply chain? And is that protected at this moment?
[01:18:03] Speaker 17: Yes, we absolutely take a hard look at that every day that we operate. From the standpoint of the recent outbreaks, one, we don't use iceberg lettuce in our restaurants. We use a green leaf lettuce, a whole head, and we also use one that's a pre-cut. We've taken precautionary measures where we've instituted double washing of our whole head as well as an additional washing, even though it's a pre-wash product that comes in. That's purely precautionary. There was no need for that. We verified with our suppliers that our supply is safe. As it relates to jalapenos and the recent news that came out, we, one, use it on a very limited basis. Jalapeno for us is what we call a modifier under our create your own menu, where if you want to add jalapeno, you can. We don't feature any of our core builds. However, we did last night elect that we would voluntarily remove jalapeno for the time being until we further understand the impact. So for us, we're just taking a precautionary measure to protect our guests and our team members. So we pulled it, but we don't feel that there's any risk to the business.
[01:19:03] Speaker 2: This is purely precautionary. Well, have you seen any decline in traffic or any effect on traffic from all these headlines?
[01:19:11] Speaker 17: We haven't. We haven't. We continue to drive positive same store traffic, same store sales. So, no, we have not seen an impact from that. But if you think where we're situated, we're burger, right? We do have a lettuce component to what we do, but we're primarily a protein. So we have not experienced that. And quite frankly, we haven't even heard from our guests questioning what it is or what we're doing as it relates to our produce.
[01:19:38] Speaker 1: Jim, you know this industry well, and I wonder, perhaps we're just suffering from recency bias, but it feels like there's been a lot of outbreaks as of late. Is it actually the case? Has something changed? Is it hotter weather that's allowing this to happen? Has something changed with like overall supply chains, or is this like a normal course of business, what we're living through right
[01:19:58] Speaker 17: now? You know, I honestly, I think that there's always risks that are out there. We just rely on the FDA and the CDC, and we follow what they direct us as to what the risks may be that are out there. I do think it's just kind of an anomaly right now that you had back-to-back. We haven't experienced that for now several years. There's always small cases that break out, but I'm not concerned that there's an overall overwhelming concern for supply chain. What about pricing and the inflation that you're facing,
[01:20:30] Speaker 2: particularly in the beef market? How is that affecting your margins and how you're trying to protect them? It's definitely
[01:20:36] Speaker 17: impacted our margins. We've been very disciplined around price and pricing, understanding the macro that's out there, and consumers are pinched. So we've introduced our everyday value, which is a $4.99 price point. For us, this is a way for us not only to promote a price point, but it's really about our quality and our experience. So value for us is an entirely different equation versus just price. But we're offsetting what's occurring with beef by driving other proteins and other products through our menu and through product innovation.
[01:21:10] Speaker 1: So, Jim, that's all we have time for. Thank you so much for joining us, Jim Sullivan of Smashburger. And that is our last unhealthy interview for the day. Oh, good. We can we can think about vegetables now.
[01:21:20] Speaker 2: We are always saying 30 minutes of the open. Well, we got about an hour and 15 minutes until lunch.
[01:21:27] Speaker 1: That's the right way to frame things. Just a quick check on your markets this morning. Again, the S&P, it is now flatlining. It's unchanged with the Nasdaq falling one tenth of one percent. Oil that continues to rise this morning. That is currently up for Brent crude up two and a third of one percent. Nymex crude up 1.8 percent. We're going to talk about oil coming up. It's rising as Oman move closer to a Hormuz agreement, but concern of escalation elsewhere in the region. That's next. This is Bloomberg Open Interest.
[01:22:11] Speaker 18: I'd rather make a deal because I don't want to kill people. We were all set for the biggest attack since World War II. And they called me and they said, please don't do it. Let's talk. And then they don't. They said, we never said that. But we are talking. Let's see what happens. As soon as this situation ends with Iran, oil is going to go down to the floor. Gasoline is going to go down.
[01:22:33] Speaker 1: That was President Trump speaking yesterday in Las Vegas. Brent edging higher, as Ron says, it's close to a shipping agreement with Oman on the Strait of Hormuz. Tehran cautions that the arrangement would not fully reopen the critical waterway. Also watching developments among the Houthi rebels moving oil higher this morning. Let's get the latest with Bloomberg's Kayleigh Lyons, co-host of Balance of Power. Kayleigh, what sort of agreement might we expect when we get this announcement between what Iran and Oman have agreed on?
[01:23:02] Speaker 19: Well, frankly, a narrow one, Danny. Iran says that this is strictly between themselves and Oman and that this effectively renders a map for passages in and out of the Strait of Hormuz, entry and exit pathways that would hug the coastline of each country while the mid portion of the Strait of Hormuz would be cleared of mines. But Iran is insistent that the U.S. is not part of this agreement and has even hinted that it would require the U.S. lifting the naval blockade that President Trump to this point has said is going to be maintained. There are also many things that this agreement in principle as it stands now would not accomplish. This is not, for example, a permanent solution. Iran has said that this is simply going to be a temporary agreement that could last some two to four months. This also does not necessarily guarantee a full opening of the Strait of Hormuz, as you mentioned, Danny. And it also doesn't include the very objective that President Trump says was the whole point of launching this war against Iran in the first place, which is its nuclear program. Nothing about this agreement between Iran and Oman has to do with Iran's ability to have a nuclear weapon. So this would still leave some of the stickiest points here, at least in terms of negotiations between the U.S. and Iran, which President Trump says are still happening, unaddressed, at least for now.
[01:24:13] Speaker 2: Going to the other side of the Arabian Peninsula, we were just showing a map there with the Bab el-Mandeb Strait and the Houthis. And there are reports that the Houthis and the Saudis are ramping up their military activities against each other. What do we know about that? Yeah, the Houthis are saying today that they
[01:24:32] Speaker 19: specifically attacked Saudi-aligned forces in Yemen and what the Houthis described as a, quote, wide operation. And this is obviously a second point of concern, the concern that there could be a double choke point in terms of energy exports out of the Middle East, knowing that the Strait of Hormuz, while it may be getting closer to a deal that would at least guarantee some passage and exports able to go in and out, that the Red Sea could be another issue in the Bab el-Mandeb Strait, as you mentioned, Mike. So this is something that is also going to need to be closely watched. Of course, the Saudis here are one of those Gulf states that we understand had expressed concern with President Trump about escalation against Tehran, specifically when the president threatened to go after things like energy infrastructure out of concern that their own infrastructure could be targeted by Iran. But Iran-backed proxies like the Houthis also pose a similar kind of risk so that certainly is a factor here. There also are other factors to consider as well in terms of the ability for this conflict to escalate any further on the U.S. side. It's been well reported in recent days that the U.S. is simply running out of munitions and that that could have played a role in President Trump's decision-making to call off the planned strikes against Iran over this past weekend. According to the Washington Post, it was a bit of a dust-up between the president and the defense secretary, Pete Hegseth, at Camp David in recent days over the idea that the president maybe had been misled about the munitions stockpiles of the U.S. even as publicly President Trump still insists that the U.S. has plenty of munitions to go around.
[01:25:56] Speaker 1: Thank you so much. Really looking forward to balance of power today. Kayleigh Lyons, co-host of balance of power. You can check that out at 1:00 p.m. And then again at 5:00 p.m. Your markets this morning, they are being pressured by higher yields. But we are seeing a rally with a semiconductor index up 1.5 percent. NASDAQ, little change. And, Mike, the big event comes tomorrow with jobs day after we have had jobs all this week. But I wonder, like, what will it even take to change the market's thinking? We don't know how Kevin Warsh feels about this job market.
[01:26:27] Speaker 2: It has always been that the jobs report is the most important data point of the month. But in this case, I think it is going to be just interesting, not important. UNLESS WE GET SOME BIG SURPRISE. WE KNOW PROBABLY THERE WILL BE A NUMBER OF JOBS LOST BECAUSE THE WORLD CUP IS OVER. BUT BEYOND THAT, IT LOOKS LIKE LABOR MARKETS ARE PRETTY STABLE. SO THEN WE MOVE ON TO THINKING ABOUT NEXT WEDNESDAY, THE CPI REPORT.
[01:26:48] Speaker 1: YES. AND THIS IS A FED AND, AGAIN, A CHAIRWARDS WHERE WE HAVE JUST HEARD MORE ABOUT INFLATION THAN WE HAVE FROM JOBS FROM THEM.
[01:26:53] Speaker 2: AND THE COMMENTS HE -- SOMEBODY PLANTED IN THE FT TODAY SUGGESTS THAT INFLATION IS FIRST AND FOREMOST STILL ON THEIR MINDS.
[01:27:01] Speaker 1: PERHAPS A HIGH IS TO COME. WE WILL DISCUSS ALL OF THAT TOMORROW ON YOUR JOBS DAY. WE WILL HAVE RICK READER OF BLACK ROCK ALONGSIDE WHITE HOUSE NATIONAL ECONOMIC COUNCIL DIRECTOR KEVIN HASSETT AND ANGELA CORNADO OF MACRO POLICY PERSPECTIVES. THIS IS BLOOMBERG.