AMD, SPCX Fall; Markets Await Jobs Print

[00:00:01] Speaker 1: To help set up the trading day, Kevin Hanks is live at the CBOE for our pre-Bell playbook. And we take a look here. Markets are really hovering around the highs. We saw records for the S&P and also the Dow yesterday. And the Nasdaq's not too far off an incredible four days for the Nasdaq. Some of your thoughts here on the markets at highs. [00:00:21] Speaker 2: Yeah, I think the, good morning, Nicole. I think the crude oil sell-off and the headlines coming out of negotiations between the U.S. and Iran. They said an all-day negotiation yesterday on Tuesday has futures feeling better. And crude oil, it's slightly up this morning, but it was a pretty significant sell-off yesterday. Crude oil now is up, oh, about four-tenths of a percent to just over $76. So we're waiting for more headlines. The market is poised for that. Futures are up across the board, despite AMD being down, despite SpaceX being down. But NVIDIA is higher on news that you and I will talk about in a moment. So, so far, you've got the macro, the dollar, and the 10-year yield both lower on the day. So a pretty positive setup overall for the markets going forward. Obviously, that could change without notice, Nicole. [00:01:19] Speaker 1: Yeah, without a doubt. I mean, we've had a nice run from Palantir yesterday. Some of the hyperscalers have taken off and hit new highs. A lot of good stories here circulating within the market. Let's talk about what's going on in the jobs picture. I just was listening to Janet Yellen, who was talking about the resiliency of the economy, almost to her surprise. She said she, you know, she was, showed the very resilient economy, surprised that it has not affected more the Middle East and what's happened with oil, that I guess if it keeps going, that maybe it still could be a wild card. But there's been moderate growth and the labor market has proven to be resilient. And so I thought that was interesting. ADP came in a little bit lighter than expected. [00:02:05] Speaker 2: Yes. Starting with the labor market, we did get ADP employment data. A miss, 44,000 jobs. They were looking for something around 98,000 jobs. I think everything was up slightly, Nicole, in terms of size of company, except from 20 to 49 employees were down 4,000. All the rest, 1 to 19 was up 27,000. That's a nice number. Everything else was small numbers. In terms of the breakdown of industry, it is education and health services added 36,000 jobs. Financial activities gained 10,000. Professional and business services gained 9,000. On the downside, leisure and hospitality lost 11,000 jobs. Trade, transportation, and utilities lost 8,000. And natural resources and mining lost 6,000. The good news, a little bit of a surprise, they have a section called pay insights. And job changers, their wages grew by 7%. That's an uptick from last month. Job stayers had stayed pretty flat around 4.4%. But a nice bump in wages for job changers. So maybe we're continuing to come out of this low-hire, low-fire economy. So we're certainly watching that. But in terms of the overall number, a slight miss on private payrolls. [00:03:34] Speaker 1: Understood. And, you know, I also heard recently that when it comes to the Treasury auctions, it seems like there's going to be a certain element of steadiness, at least for the near term. We don't have any Fed meeting until September. We'll have Jackson Hole in August. But we're going to be getting in different. Next week we'll have CPI Friday. This Friday we'll have the jobs report. So it looks like things are going to be somewhat steady overall. Some of your thoughts. [00:04:04] Speaker 2: I think, well, with earnings season still coming out, we've gone through a pretty significant batch of earnings here that the market has done okay with. But we have jobs data. Remember, the number one economic data point of the month we'll get Friday. They're looking for something around 88,000 jobs, 4.2% unemployment, 0.3% month-over-month on wages, and 3.5% year-over-year on wages. So we'll watch that number. But the market will certainly react to that. A lot of discussions going on right now. Yes, we do have several weeks until the next Fed meeting. We'll get two rounds of economic data before that. A big look at the inflation numbers from CPI, PPI, PCE. We'll get a lot of those before the Fed meets again. But as you mentioned, Jackson Hole is always an interesting meeting because the Fed chair usually speaks at that conference. So, yeah, we'll certainly watch that. But there's plenty of things on the calendar that could be market-moving events, Nicole. [00:05:12] Speaker 1: So I'm watching some of the headlines coming out of SpaceX and Elon Musk. And he's certainly putting out some targets that maybe seem aggressive. I mean, he talks about $100 billion in annual recurring revenue run rate by December. He also upped the date for the $1 trillion mark. He looked from 2031 to 2030. So he moved that closer to our date now. So the stock is down, but he's saying it's the AI spend that's overshadowing some of the great growth that they're experiencing. What do you think about SpaceX here today? [00:05:46] Speaker 2: I thought SpaceX numbers were, you know, excellent for a young company just starting and reporting for the first time. Now, the CapEx numbers worried investors. And remember, there's something looming on the calendar. August 6th, as much as 911 million shares get released. I mean, that SpaceX first IPO share lock-up expiration is August 6th. So you could see just more shares on the market. People that could, you know, have very early investors could be selling. So there is some uncertainty around the stock right now as a big supply comes in. But the earnings, solid numbers, except obviously the street always worries about the CapEx numbers from SpaceX. But good numbers, just worried about the lock-up expiration that happened to August 6th. [00:06:46] Speaker 1: And, you know, Steve Wesley, who's a friend of our network and has been a Tesla board member, talked about XAI. And he actually spoke positive, which is part of the SpaceX umbrella. He said, you know, can XAI really break in with the big boys, Anthropic, OpenAI, Google? I think they can. It's going to be some heavy lifting. But he also put out some positive news on XAI overall and where he thinks that's headed. I see some price targets. J.P. Morgan, $2.40. Piper Sandler, $1.40. I had Cantor written down, $2.46. So a lot of these targets are well above where we are today. [00:07:22] Speaker 2: Well, there's a lot of optimism about the future of this company. It may be a volatile. It's already been a volatile start. Remember, the stock traded over $200 after opening at $150. Now it's, you know, lower this morning. So, but we'll see how this plays out throughout the day. A lot of times when stock gets released in this lockup expiration does not mean all those shares are going to be sold. They're just available to be sold. And so we'll watch how that comes. And there's rumors about the short interest numbers in SpaceX. I think it's going to be real interesting to watch this play out over the next couple weeks. [00:08:01] Speaker 1: Just quickly on AMD, Lisa Su saying that Wall Street is really underestimating the company and its abilities in the AI business. Now she sees a $2 trillion opportunity. Quick on AMD here. [00:08:16] Speaker 2: AMD put out pretty solid numbers, but they were modest beats, right? $1.66 in earnings per share beat $1.62. $11.54 billion beat $11.28. These aren't sexy, but they're good solid numbers. I think that's why the stock really isn't selling off. It's just giving back what it made yesterday pretty much. So pretty solid earnings report for AMD. Lisa Su doing an unbelievable job. And they are, remember, I was talking to my son about this yesterday. AMD is a much, much smaller company than NVIDIA. They have 1.6 billion shares, outstanding, you know, open shares, their float. NVIDIA has $24 billion. You're talking about a company only a fraction of the size of NVIDIA. So if they actually start to compete with NVIDIA in the future, then the future is very bright for AMD, Nicole. [00:09:15] Speaker 1: Yeah, I mean, she talked about the large opportunity across AI accelerators, server CPUs, and the broader high-performance computing market that even six months ago, they didn't expect AI infrastructure to expand this quickly. And so that's a huge opportunity for the company and giving a good outlook there. Okay. Thank you, Kevin Hanks. Really great to see you. Appreciate it. Live at the CBOE. Let's try.