About this transcript: This is a full AI-generated transcript of CPI Relief & AI Earnings Push Stocks Toward Records — The Close 8/12/2026 from Bloomberg Television, published August 13, 2026. The transcript contains 18,120 words with timestamps and was generated using Whisper AI.
"The countdown is on. Everything you need to get the edge at the end of the market day. This is the close. One tame CPI report, three hot AI earnings reports, and a benchmark S&P reaching for another record high. Live from Studio 2 here at Bloomberg headquarters in New York, I'm Romaine Bostic. And..."
[00:00:00] Speaker 1: The countdown is on. Everything you need to get the edge at the end of the market day. This is the close.
[00:00:11] Speaker 2: One tame CPI report, three hot AI earnings reports, and a benchmark S&P reaching for another record high. Live from Studio 2 here at Bloomberg headquarters in New York, I'm Romaine Bostic.
[00:00:22] Speaker 3: And I'm Isabelle Lee. We're kicking you off to the closing bell here in the U.S. and this is where we stand. Romaine, I feel like I heard a sigh of relief earlier this morning when we got a bang in line. Inflation print, which pushed stocks really to the green. You see the S&P there higher by three tenths of one percent, hovering at near record levels. This Philadelphia Semiconductor Index is leading the rally up by more than three percent, pushing the Nasdaq even higher. Brent crude wavering there down by, I would say actually it's flat at around $88 per barrel. And of course, you have a 10-year yield now at around 4.68 percent, Romaine.
[00:00:53] Speaker 2: Interesting to see that differential between the three percent gain in the socks and the three tenths of a percent gain in the S&P because it's AI names once again giving the broad market a boost. This after the neoclouds Nebius and Corweave reported earnings as a surprise to the upside as demand for leased computing capacity for right now showing no signs of letting up. Nebius saying the value of contracts won last quarter quadrupled. Corweave signing deals that said will carry margins five to ten percentage points higher than in quarters past. AI component makers, Cerebrus, Coherent, and Cisco, they're up after the bell tonight. Meanwhile, the big surprise out of that CPI report today was, well, there were no surprises. Underlying U.S. inflation subdued in July. Core CPI increasing 0.2 percent from a month earlier. And on an annual basis, advancing 2.5 percent. That's the slowest pace since March of 2021. Now, whether those figures truly impart real knowledge about which direction the Fed goes at its next decision day on September 16th, that remains an open question.
[00:01:52] Speaker 4: I don't think this really resolves a lot. You know, I think our lean is still that the Fed remains on hold in September. You know, we'll have some more data releases between now and the meeting that will also be important. Another payroll report as well as another CPI. And we'll just have to keep watching and waiting.
[00:02:10] Speaker 2: Some investors, though, feel no need to wait for a signal. A $42 billion auction of 10-year U.S. debt today had the Treasury offer the highest yield since 2007 for the benchmark to lure enough investors to that sale. And a 30-year sale scheduled for Thursday expected to log the highest financing rate for that 10-year in a quarter. Outsized federal deficits, still strong. GDP growth, an ongoing war and inflation, yes, still above the Fed's 2 percent target, making it hard for some, some to bet on a bond rally. Bill Campbell joins us right now to kick things off to the close. Portfolio manager at Double Line overseeing the firm's global sovereign and emerging markets teams. Well, let's start with the sovereign market here in the U.S., Bill, particularly coming out of that CPI print. Has anything changed for investors right now?
[00:02:58] Bill Campbell: Honestly, I don't think so. I think the CPI report coming out pretty much, you know, as the market expected, just kind of kicks the can forward to the two August reports that are coming out, one on CPI and one on labor, and all eyes turning to Jackson Hole. The biggest question in the bond market, well, there's two big questions. I think the first big question is, one, what is the Fed's reaction function with new chair Warsh? He's pulled back on communication, and now we genuinely have, you know, mixed data coming out. On the employment side, we're in this low-hire, low-fire environment, and maybe we're starting to see a little bit of slack, you know, enter that market, maybe. And I don't think today's CPI report answered any questions. We still have open questions to the headline risk coming out of the Middle East with potential continuation of an oil shock. And then there are a lot of dissenters on the board that are questioning the path or how quickly disinflation can happen, and if the current policy rate is appropriate. The lack of communication, you know, that this Fed is delivering, I think, you know, keeps that, it's an open question.
[00:04:16] Speaker 2: Well, I am curious, then, Bill, just as an investor, that if the Fed does hold in September, as most people anticipate, but maybe keeps a hawkish bias, I mean, where is the trading opportunity there? Is it just still in short-dated Treasuries, or is this more of kind of a break-even story and playing the curve?
[00:04:33] Bill Campbell: Yeah, we're, we could take you to favor, you know, the short-end Treasuries. If you look at the two-year, it's up at 420 today. You're basically pricing the hike in. So even if they remain on hold, there'll be questions as to, you know, the potential need for them to hike by the end of the year. But, you know, I think between the two- and the seven-year point of the curve, that continues to make sense. The long end of the curve right now continues to back up. We're getting close to this year's high and this cycle's high up on the back end, the long bond, the 30-year end of the curve. I think we have several things happening in the long end of the curve, you know, one of which, obviously, is questions about inflation. Secondly, questions about fiscal, you know, and that's not just a U.S. problem. That's a developed market global problem of, you know, the continued government bond issuance that's coming out. And then third is the large hyperscaler issuance that we're seeing, you know, from this A.I. story, where there is a lot of investment-grade paper that's coming out. And that's going to, I think, continue to put pressure on the long end of, you know, the government interest rate curves, not only in the U.S., but across other developed markets. So I think all of those forces keep us wanting to focus, one, on the front end of the curve, two, we want to stay up in quality. We think that, you know, credit spreads are at pretty much historic tights, no matter where you look in the markets. Yes, we're finding pockets on an idiosyncratic basis. But then the third, with this large investment boom and debt boom that we're seeing that's leading to the potential for an investment cycle, there's going to be a lot of commodity demand.
[00:06:13] Speaker 6: Yeah.
[00:06:13] Bill Campbell: And across the fixed-income markets, the non-dollar and commodity spaces, you know, offer potential value over the coming years.
[00:06:23] Speaker 3: Definitely a lot to unpack there, Bill. But I want to go back quickly to inflation. Do you think that the market is underestimating the risk that the Fed's inflation target may be above 2% for longer than expected?
[00:06:35] Bill Campbell: Do I think that the market's underestimating that risk? No, because I think right now we're fairly pricing. It's, although the pricing this morning came down to just a little bit below 50% chance of a Fed hike in September, you know, the hike is pretty much a coin flip for September. So I think the market is relatively cautious about that. On a longer-term basis, I think there's still, like, I think there's two points of uncertainty when we look at the Fed. You know, the first is the near-term reaction function of how they're going to react to the current data. But remember, we also have five task forces that Fed Chair Warsh has put forward. And there is a potential that the reaction function itself may change in 2027 depending on the outcome of what these task forces find and, you know, the willingness or, you know, interest of the Fed, you know, to take the advice that comes from those task forces. And one particular, you know, piece that I'm thinking about is, you know, is the Fed going to try to change their primary inflation target? You know, right now they're primarily focused on core PCE. But there's a task force focused on, you know, data quality and inflation. So, you know, there's the near-term question of is the disinflation path going to continue with all of the questions that we have around, you know, the potential for AI inflation and inflation coming out of a geopolitical shock in the Middle East. But then this long-term question of, you know, is that, is the structure of the reaction function potentially going to change?
[00:08:17] Speaker 2: Hey, Bill, I do want to get your thoughts, though, on kind of the interplay right now with what's going on in the currency market and in the treasury market, particularly with regards to that yen intervention that took us down to 164. I think as of today, we're right around 159 on dollar yen. And your interpretation, not just so much of what happened, but why it happened. There's obviously a lot of speculation that the treasury department, Scott Besson, this was less maybe about defending the yen and more about defending treasury rates. What's your interpretation?
[00:08:48] Bill Campbell: Yeah, several items to unpack there, but I think Secretary Besson tipped his hand. The fact that we saw this joint intervention, not only from the Japanese authorities, but then from U.S. Treasury, you know, in the Japanese yen, in a near-term basis, the, you know, well, one, treasury Besson, I think, tipped his hand that he is concerned that there could be pass-through to the U.S. treasury market. He asked the Fed, and the Fed has increased the foreign repo facility to allow the Japanese authorities, MOF directing the BOJ, to be able to put treasuries to the Fed and that repo facility to receive the dollars back to intervene in order to avoid treasury selling. So I do think that that, you know, is kind of the near-term tactical concern, but I really think this intervention is, you know, in a way, it's only addressing the symptom, not the underlying problem. The underlying problem, why is the yen weakening to, you know, historic lows and JGB yields, pushing to cycle highs? The concern is the policy mix. We're seeing, you know, very loose fiscal policy and continued growth-centered, you know, fiscal policy that's going to require more spending and potentially more issuance, combined with a Japanese, you know, interest rate on the front end of the curve that remains well below the rate of inflation. So the real policy rate in Japan is negative. And both of those are, you know, a bad cocktail when you're running a debt-to-GDP, you know, depending on which measure you look at, you know, over 200% or around 200%. I think that, you know, it is very telling that despite the tactical approach of the U.S. Treasury and the MOF intervening right after the last July Fed meeting when the dollar came off, that was a very tactical timing of the intervention in order to be effective. But what we've seen in the following, in the subsequent weeks, is the yen continues to weaken. The yen continues to weaken and rates continue to rise.
[00:11:07] Speaker 2: All right, Bill, always love talking to you, man. Wish we had longer. Bill Campbell there, portfolio manager over at DoubleLine, one of the best in the business, kicking us off to the close here on this Wednesday afternoon. When we come back, our coverage of the cyclospora chaos continues here on the close. We're going to talk to the CEOs of Kava and the CEO of Sweetgreen, as well as the former CDC chief medical officer, Deborah Ory. You don't want to miss all that. That's coming up next here on The Close. Right here on Bloomberg.
[00:11:39] Speaker 3: CME Group set to expand 24-7 trading of its 100-ounce silver futures contract in September. The new contract, now under regulatory review, could follow the debut of CME's one-ounce gold futures contract, which started trading around the clock less than a month ago. Joining us live, I'm pleased to say, is Gin Hennig, managing director and global head of metals at CME. Thank you for joining us in studio, Gin. Thank you. So what did you see a few weeks back when you launched a futures gold contract that made you think, okay, we're ready for silver?
[00:12:08] Speaker 7: Yes. I mean, we have, over the past three weekends alone, we have traded over $200 million in notional value, especially coming from a lot of retail interests. So that got us to really think, okay, the market demand is here and the client have responded. So for us, it's a natural step to go for the silver, given that it's a very much of a similar product.
[00:12:33] Speaker 2: How much of the demand that you're seeing out of the gate is actually sort of organic, really coming from that, and how much is that kind of liquidity being provided by the mechanisms?
[00:12:42] Speaker 7: Yeah. I mean, for us, you know, we started with a crypto back in May. Gold was the second we introduced, and then now with the silver, really came from the client, especially on the retail front that tends to be self-directed, digital savvy, smaller wallet size. They really wanted a smaller contract size to be able to trade so that when you're waking up on Saturday morning and you want to have a directional view on that, those are the type of market participants that really demanded it. And, you know, we had a lot of retail support that coming from the day one.
[00:13:13] Speaker 3: So you mentioned when markets move on Friday, on Saturday or Sunday, which it has been these days, we see price gap and we have to wait until Monday. Is that what you're trying to eliminate, the weekend gap or the pricing gap?
[00:13:24] Speaker 7: Yeah, I would say the more of the weekend gap and give the traders, especially on the retail front, giving them more of a, you know, you don't have to necessarily wait, right, to trade, and you can actually directionally click in a trade and have your view expressed on that. So this is really very much of a directed by that, yes, you know, you want to give that visibility and price discovery venue to the traders over the weekend.
[00:13:49] Speaker 2: Well, so you have that now, or at least that's being built out. But what about on the collateral side? Because my general understanding is that you still more or less have to wait, correct me if I'm wrong, wait until Monday for all of that to actually be settled.
[00:14:02] Speaker 7: Yes, correct. It's largely true for the institutional clients, for sure. But on the retail front, a lot of those are removed by, you know, client really having, have to have more of a money down in the upfront. And there is a protection mechanism that is done by our retail partners around that area. So, you know, there is a much less of a concerns around that.
[00:14:22] Speaker 3: Do you think 24/7 trading is becoming the norm? Because in crypto land, where I also sit sometimes, like hyperliquid, they offer a lot of contracts when it comes to gold, silver, virtually almost everything you can think of.
[00:14:33] Speaker 7: Yeah, I mean, I think that directionally longer term, maybe that is the world that we're going to be going. But, you know, as a CME group, we're very much driven by the client demand. And, you know, where we are seeing more of that demand coming from is definitely around the retail front. You know, they wanted to have that always on, you know, right size regulated product that is innovative.
[00:14:52] Speaker 2: And can you give us any sense geographically where the demand is coming from, where the retail trade is? Are you seeing more of it coming from outside the U.S.? Are these primarily U.S.-based investors?
[00:15:03] Speaker 7: Well, you know, in the metals front in general, metals as an asset class, the CME group is one of the most global asset class, where roughly about half of our trades comes from non-U.S. clients. In this case, particularly on the 24/7, I would say that isn't reflective of that for metals. So, I would say that it's very much of widespread in terms of the client draw. I would say roughly about half of that come from the U.S. and then half of that, you know, come from non-U.S. client base.
[00:15:29] Speaker 2: All right. Well, we've got to get you back on, particularly as this sort of builds out and we start to get a little bit more volume and activity really compelling here and maybe a sign of exactly where financial markets are going. Jen Hennick, CME Groups, Managing Director and Global Head of Metals. When we come back, salmon sales at Kava offsetting the cyclospora concerns swirling around health food chains. Comp sales were up and the company sticking by its full year forecast. We're going to catch up with the CEO of Kava when we come back after the break, right here on The Close, right here on Bloomberg. Let's take a look at shares of Kava. They're up after reporting a faster than expected rise in sales in the most recent quarter. Salmon, pita chips offsetting a mid-July slump tied to consumer concerns around leafy greens. Joining us right now is the CEO of Kava, Brett Shulman, live here in studio, too. Brett, great to see you here. 9% comp growth. That was great. That was above estimates. Talk to me a little bit about the forecast. You maintained the forecast. You didn't cut it, but you didn't raise it either. Why not?
[00:16:30] Speaker 8: Well, we wanted to be prudent with our guidance and take into account what we noted to be the impact of some of the broader concerns around food safety issues, even though our supply chain or ingredients have not been connected to the issues, as well as some of the inflationary pressures that may persist throughout the year. And then certainly the volatile geopolitical and macroeconomic environment. So we wanted to be prudent with that guidance, but very pleased with the strength we saw in the quarter.
[00:16:55] Speaker 2: Just to be clear, there's been no link at all to this outbreak, to Kava. But I do have to ask you, as a restaurant CEO, I'm sure you had to take a close look at your supply chain, your food quality, to make sure that there was no concern. You're confident right now that your supply chain is clean, none of your customers have gotten sick, and that going forward, you can sell with confidence.
[00:17:18] Speaker 8: That's correct. No, there has been no connection to our supply chain. We have not been contacted by any public health officials, but we are closely monitoring the situation. We have an external advisory committee of industry-leading experts, because food safety is paramount to what we do. It's foundational to our guests' relationship, and we want to make sure that our guests have the confidence that we are committed to having a food-safe environment.
[00:17:39] Speaker 2: Just one other quick question on that. Have you been in contact at all with any health officials, either at the federal level or at the state level?
[00:17:45] Speaker 8: No, no. We have not been contacted, nor have we been involved. And again, we have not had any connection within our supply chain to any ingredients or farms or facilities that were impacted by the recent issues.
[00:17:57] Speaker 3: You're also opening restaurants at a pretty aggressive pace, I think 17 this quarter, and around nearly 500. How much of this growth is kava-specific, or how much of this is really maybe consumers trading down restaurants for more fast, casual meals like kava?
[00:18:13] Speaker 8: Yeah, we see people trading into kava from full-service restaurants, from other limited-service restaurants, or as an alternative to the grocery store. Our food is very unique, differentiated, not easily recreated at home. And I think people are shifting their diets more and more to a Mediterranean-style diet. It's the number-one-ranked diet for nine years running, and delivering on all the needs that the modern consumer is looking for. Protein-dense, fiber-rich, nutrient-dense cuisine that is flavorful, but also helpful for you.
[00:18:42] Speaker 2: Well, I'm curious. I was looking through the conference call, a transcript, and this GLP-1 issue was addressed, so it was a bit here. And you talked about this idea that people are actively reshaping their orders, doubling up protein, doubling up protein. Adults are ordering kid-sized portions, et cetera, et cetera. So give me a sense as to how you're adapting to that. Are you anticipating that these types of trends are indeed long-term, structural, and not just some fad that we'll move away from in a couple of weeks?
[00:19:09] Speaker 8: We think GLPs are kind of just one part of this larger shift to people more interested in longevity, in health and wellness, but also bolder, more interesting flavors, and that's where our food sits at the intersection of. So we feel like whether it's GLP or some of these other secular trends, it's moving more people to our style of eating.
[00:19:28] Speaker 3: And you also called out, which is interesting to me, the pomegranate glazed salmon. Is that part of Kava's new strategy, introducing more higher-end items and hopefully driving sales when it comes to that, because even the extra pita chips, I don't think I've ever paid extra for a pita chip, but it seems like people are.
[00:19:43] Speaker 8: Yeah, well, we are seeing people opt-in to our premium proteins and attachment items, and salmon was really to have our first seafood item on the menu. Seafood is a core aspect of the Mediterranean diet, and we wanted to make it available to our guests, so very excited to have that on the menu and the reception that it's received from our guests.
[00:20:00] Speaker 3: Another interesting thing, digital sales are now 39% of your revenue, and I'm guilty of ordering, and, you know, your order is like something like $20, the delivery fee is something like $10. Is that becoming the new trend now, and is that what you see will be the next leg to push Kava's growth further?
[00:20:16] Speaker 8: We see growth in all of our channels, and we don't think it's an either-or. We think it's an and. We want to have great digital channels and great physical channels. That's why we've invested recently in Project Soul, which creates even warmer environments and better aesthetics in our dining room. So if you do choose to have a meal, you feel like you can have it in our dining room and be comfortable, or if you're running errands, you can use the app or even have it delivered to you, because we know that most of our guests, depending on the day of the week or where they are in the world and their need, they cross-channel traffic us. So we want to be equally as relevant across those different channels.
[00:20:47] Speaker 2: Talk to me about your marketing strategy, because we were talking earlier about, you know, the GOP ones and the eating healthy. My first thought was, okay, how are you selling that to the public? But I remember looking at your marketing, at least what's in the filing there. You don't spend a whole lot on advertising and marketing, at least not relative to some of the other fast, casual, fast food chains.
[00:21:05] Speaker 8: We've been very able to be very efficient with our marketing. We've seen great word of mouth, great user-generated content on social media and our community day program. And we open a new restaurant in every market that we open, and we invite our new neighbors to our table for a free meal. We suggest donations. We'll match those donations. They're not required. But if you do donate, we'll match it. And that goes to a local philanthropic food partner addressing food insecurity in the market.
[00:21:29] Speaker 2: But do you think that that might have to change? I mean, as this company matures and you start to reach saturation points in certain markets, I mean, there is this idea of making sure people are always aware that you're there, because there are a lot of options out there.
[00:21:41] Speaker 8: There's always opportunities for us to continue to grow our brand awareness beyond just opening restaurants and some of the activities we do today. And an example of that is we just did our Mediterranean summer supper series. So we did three different cities. We brought people to a communal table together to celebrate food, to celebrate meeting one another in a human connection form. So we're big about human connection in our brand. It's part of the Mediterranean way, the Mediterranean hospitality, the Mediterranean lifestyle. Not just the food, but the hospitality and the human connection. So you'll see more in real life marketing activities like that that help drive that human connection.
[00:22:15] Speaker 3: And your restaurant level margin fell some 60 basis points. I mean, we know that you've got strong sales growth, but costs are not standing still. I mean, inflation is all we talk about. How much more can you absorb before you have to raise prices again?
[00:22:27] Speaker 8: Well, that's been part of our long-term strategy where we've wanted to underprice inflation. This year was no different. We took about a 1.5% menu price adjustment in January with no plans to take further price increase where inflation is running north of 3% this year. So we've in recent years underprice CPI by over 10% taken less than half the price increase of the average restaurant company really to invest in our guests and help grow that value proposition each and every year. That's making us given us the ability to welcome more people to our table.
[00:22:57] Speaker 2: All right, Brett. Always great to have you. Another great quarter and it'll be interesting to catch up with you again and see how things are going, particularly with this marketing strategy. I'm actually very fascinated by this. Did you do you watch the prediction markets, by the way? Because, you know, you were all over that. Like, what was he going to say on the call? What do you say this word? What do you say that? Someone was talking about manifest. It's manifesting something in San Francisco or something or another. You're like in the zeitgeist.
[00:23:18] Speaker 8: We did announce we are going to open in the Bay Area next year. So, you know, that came true.
[00:23:23] Speaker 2: All right. Well, somebody prayed above and they got their wish. Brett, always a pleasure. Brett Schulman there, the CEO over at Kama. All right. We're going to stay in the restaurant sector. A share of the sweet green actually rebound today today after a multi-day sell off after the chain cut its outlook last week over reduced demand that it did tie to some of the concerns about cyclospora. I had a chance to catch up with the CEO and co-founder Jonathan Neiman to talk about the impact and how he thinks he can turn things around.
[00:23:53] Speaker 9: Obviously, cyclospora has had an impact on our business as it has had a business had an impact on really anyone selling fresh produce. The good news is, is just over the last week, the FDA has announced that it is safe to eat iceberg lettuce. So, as we mentioned on our earnings call, we had a really big initial impact. We have seen some recovery since. But, you know, it has been a significant impact given this fear customers have about having leafy greens. The important thing for sweet green, though, is that none of our customers or our supply chain has been implicated in the outbreak. We do not serve iceberg lettuce. The outbreak has been isolated to iceberg lettuce from Mexico. We source all of our greens from the United States. And in a lot of ways, this is a moment where the sweet green supply chain and the direct relationships with farmers is so critically important.
[00:24:41] Speaker 2: Well, before we get deeper into that, have you had any sort of contact or any of your folks there with the government? We had the former acting deputy director, excuse me, for the CDC's National Center for Infectious Diseases. And he seemed to suggest that, at least based on his data, that the outbreak overall of cyclospora was actually starting to sort of plateau and taper off and basically saying that a lot of controls that the government had either put in place or alerts they had put out there, at least for right now, seems to have curbed the issue. What contact have you had at all with government health officials?
[00:25:15] Speaker 9: They've been wonderful in direct communications with them. And I think they've done a good job of explaining what's going on and that it's now safe. I think it's now the responsibility of everyone who said, excuse me, everyone who said that, you know, it's not safe to eat a produce to really correct the record because I think there has been a bit of a mass panic hysteria. And most people, you know, I was at a barbecue this weekend. Nobody was touching the greens. People weren't eating blueberries. I was at a supermarket a few days ago. And you're seeing people, you know, instead of grabbing, you know, a bag of greens or a head of lettuce, picking up a picking up some processed food in a bag. And you've seen some of the impact, not just the restaurants has been severe, but the impact to farmers. We've seen about a 40 reported 40 percent impact to farmers that are growing produce. So to answer your question, yes, we have been in touch. Again, they've said that they believe that the outbreak is under control. I think it's now more of that message getting out to consumers and them getting back into their into their habits.
[00:26:15] Speaker 2: I do want to be clear, though, I mean, because there are two separate events. Obviously, the cyclospora outbreak associated with lettuce, which, which, as you've stated, sweet green does not actually use that that type of lettuce that was known to be infected. There was a separate issue with regarding a recall of jalapenos, I believe, related to salmonella. And my understanding was you do use those jalapenos in your dressing. Has that issue been addressed?
[00:26:39] Speaker 9: That issue has also been addressed. We, out of abundance of caution, removed jalapenos from 23 restaurants that that that that source from that supplier. We have no indication of any illness from that or any trace of salmonella anywhere in our supply chain. We do only source that that jalapeno only goes in two of our 16 dressings. So it's a very small bit of jalapeno we use in our in our restaurant. And out of abundance of caution, we removed jalapenos entirely from those restaurants.
[00:27:07] Speaker 2: I am. Yeah, I am curious what steps you're going to take next. I mean, you were giving this anecdote about people kind of being afraid of raw produce. And let's face it, I mean, the primary your primary business traffics primarily in raw produce here. So how do you convince people to not only come back to sweet green, but overall just to trust what you're selling? Have you sort of planned any sort of marketing campaigns, any more maybe greater disclosures about the farms and other sources of your food?
[00:27:38] Speaker 9: Yeah, absolutely. So going back 19 years ago when we started sweet green, we had this pretty bold idea that we were going to list every single farm that we source our food from on the wall and it to be fully transparent for every single restaurant in every single city. And we still do that today. So if you go into any side, any of our restaurants today, you will see a chalkboard listed with dozens and dozens of ingredients and where each where where those ingredients come from. What we do differently than most restaurants versus going directly to a distributor to source our food for the vast majority of our products. We source directly with farmers. We spend a lot of time with them and making sure they are how how they're taking care of their soil. The conditions on the ground there are coming are delivering food that is not only safe, but delicious and nutritious. I want to address another point. You know, while sweet green is known mostly for salads and that's how we started over 50 percent of our products mixed today is warm bowls and wraps. So salads are actually less than 50 percent of the product mixed today. We have a huge portion of cooked foods, you know, chicken, rice wraps. We launched wraps just a few months ago. It's already mixing in at 20 percent. So I think it's a little bit of a misconception with the name of sweet green that it only sells fresh raw produce. While we're great at fresh raw produce, we also serve a lot of cooked delicious cooked food.
[00:28:54] Speaker 2: Well, I point taken. I am curious, though, about just foot traffic overall and how much of the contraction that we saw in the most recent quarter and what was baked into your forecast, how much of that could actually directly be linked to the fears over cyclospora and how much of that was just sort of longer term trends that sweet green had already been dealing with prior to this outbreak.
[00:29:17] Speaker 9: So, you know, while the quarter was overall challenged and we have a lot of work to do, we did see sequential improvement month over month. And in June, transactions were flat. Ten days. Ten days into July, we were seeing some really good momentum. And it was a product of a few things. First and foremost, just consistent execution in our restaurants. We had the right staffing, the right leadership, the right hospitality and delivering on food quality is starting to take hold. Secondly, our menu innovation, things like wraps and more to come. We launched yesterday a new collaboration with Fish Wife. And to your earlier question, we have a really robust marketing calendar for the balance of the year with a combination of seasonal items and new menu launches to really get new customers back and both acquire new customers and engage existing customers. So, cyclospora really began to impact us about ten days into July, has a huge impact so far on the quarter. Our guide has it, you know, our high end of the guide has it getting better by, you know, the end of September. We're not sure how long it's going to impact guests, but we're doing everything in our power to deliver on a great experience, great marketing and great new food to welcome guests back into our restaurants.
[00:30:27] Speaker 2: There have been so many restaurant chains over the years that have dealt with foodborne illness outbreaks, whether it was of their own fault or not their fault at all, whether they actually had the ingredients or didn't have the ingredients. And there's been a lot of lessons learned over the years about how you approach this, how you approach the customer, how you try to get them back and win their trust back. Have you had a chance to talk to any of your peers in the restaurant space that maybe have gone through this before and sort of how they dealt with it?
[00:30:53] Speaker 9: Absolutely. I have a number of my leaders that were at Chipotle, post-food, either at, during the time of the food safety crisis or afterwards, including one of my board members. I'm in touch with many other leaders in the restaurant industry. And I'll tell you a few of the things that I've learned. One is transparency and speed of communications. So acting quickly when you know something and being honest with customers. Two, it's really securing your supply chain, having the right checks and audits in place, having the right food safety standards in the restaurant. And then the last piece is the importance of traceability. Traceability is really, really important for many reasons. But in these instances, knowing, in the case of a recall, being able to know which lot number is impacted and being able to pull that product immediately. And we have that technology and the ability to pull, to understand which farms any product at any of our 300 restaurants around the country comes from.
[00:31:49] Speaker 2: And that was Jonathan Neiman. He's the co-founder and the CEO of Sweetgreen. Now, the shares are up about 7.5% today, Isabel, but they have plunged about 20% after that earnings report. There was a lot of concern here, given that they do have a big footprint when it comes to raw vegetables. I mean, he pointed out a majority of their sales now coming from warm products, but still a lot of raw vegetables. And he's made clear, I mean, they were not directly linked to the cyclospora outbreak, but as people fear one thing, sometimes they tend to throw the baby out with the bathwater, and we certainly saw that in their results a couple of weeks ago.
[00:32:23] Speaker 3: It's definitely an overabundance of caution. I have a lot of friends who stopped eating salads. I still eat. I'm reckless and irresponsible, so I still have been eating. But it's interesting. We talked to the CAVA CEO just a few minutes earlier, and he said they haven't been affected. And you even asked, did he hear from regulators, and he said no.
[00:32:38] Speaker 2: Yeah, well, it's interesting, too, because you get to this idea of sort of, you know, how certain consumers view certain types of restaurants. I mean, CAVA has a lot of fresh products, obviously, as well. But clearly, I think being a quote-unquote salad chain, whether that's fair to him or not, certainly did that. And we're going to continue to cover this. In fact, a little bit later in the program, we are going to talk to Deborah Owry. She's actually the former CDC official who actually ran the chief medical office there and was the director for program and science. And if you remember her name, she was also one of those folks who resigned in protests last year because of some of the changes being made by RFK. We're going to talk to her a little bit later in the program. But when we come back, we're going to get back to what's going on in financial markets and what else is going on in financial markets, then, well, the build-out of our infrastructure. Bank of America's Karen Fang will be joining us in a second with a new U.S. infrastructure initiative announced by Bofa. That's coming up next, right here on The Close, right here on Bloomberg. Bank of America unveiling a $250 billion initiative to invest in critical infrastructure like data centers and renewable power across the U.S. over the next year. Joining us right now is Karen Fang, the global head of infrastructure and sustainable finance over at Bank of America. Great to have you here, Karen. So this is kind of a three-pronged deal here. Digital infrastructure, energy and power, core infrastructure. As far as digital infrastructure, data centers, we all know that. Everyone's talking about the power side of this and what is needed to actually fund that. And more importantly, like, how far along are we?
[00:34:13] Speaker 10: Well, I think we need trillions of dollars for our nation's critical infrastructure development, which is why we're so excited to be announcing this today. And we do believe infrastructure investment is a unifying national priority that can actually produce economic growth and jobs and community development and long-term competitiveness. To answer your question on power and power development in particular, that is the number one constraint right now for compute power, i.e. the digital infrastructure side. Clearly, we have to build the data centers. We have to build up the equipment for the data centers and, obviously, supply the chips. However, without power, there is no compute power. So on the power side, interestingly, you mentioned renewable energy and storage. That is pretty cheap to construct and then pretty fast to construct. So, in fact, we actually have seen 90% of the new electrons added to the United States power grid, being renewable energy and storage. And we need gas power, too. But, obviously, the turbines and lead times, you guys have all reported on that. And we need longer-term, clean, 24-7, firm power as well, such as nuclear or advanced geothermal. It has to be all of the above.
[00:35:15] Speaker 2: So, I know the 250, obviously, that number kind of picked a peg to the anniversary of the signing of the declaration of independence 250 years ago. But, as you said, a lot more money is going to be needed than 250 billion. So, if we bring you back a year from now, is this going to be like a $500 billion initiative, a trillion-dollar initiative? What?
[00:35:34] Speaker 10: Well, first of all, we have to figure out the best way for the capital to find the projects. So, I think the 18-months condensed timeframe reflects Bank of America's belief. It has to be we have to feel the sense of urgency. And we have to figure out the best and most efficient way for the capital to find the projects. And I think the permitting, the labor, the equipment, the supply chain, everything around it is complicated. So, in order to build this, we actually have to make sure the ecosystem is working together. And everyone is focused on this. So, in a year when we reveal our 18-months results, we're pretty confident we can accomplish this. But the goal is to actually not set a comfortable goal. It's to set a stretch goal for all of us. So, every year, every 18 months, we should revise the goal and make sure we can actually deploy the trillions of dollars of capital that's required.
[00:36:23] Speaker 3: And there's a lot of talk about private capital filling in the gap when it comes to infrastructure projects. But these projects take years to build out. What do you think Washington could be doing to unlock more of that private capital? Because I like what you said of stretching and revisiting goals.
[00:36:36] Speaker 10: Yeah, absolutely. I think every infrastructure project, in its broadest sense, is a public-private partnership. Without the policy and the permitting framework, and, frankly, policy around communities and natural resource concerns, I think some of these projects are just going to be held up in the preparation stage. Right? When you look at infrastructure finance, it goes from construction. It goes from green, actually, before that. Greenfield development capital into construction capital, into maintenance and operating and stabilized asset capital. We need public capital, private capital, frankly, public markets and private markets to all come together to supply that capital. Different pockets of capital have different risk-return objectives. I think our job is to find those capital and marry them together efficiently.
[00:37:17] Speaker 2: As you launch this, I mean, how much discussion did you have with your folks about some of the social and community backlash that we're starting to see with data centers, particularly in election year? This has become a political issue, and there are a lot of people, they just look at this and they don't want it in their backyards, literally. So how much of that have you kind of factored in?
[00:37:34] Speaker 10: Environmental considerations such as power, land, water usage is very important. Community engagement strategy is equally important. We've seen with finance data center projects where the community engagement has been done from the start. Communication has been very transparent. The closed-loop water cooling system is designed very efficiently. Power usage is very effectively. Frankly, some of the best power projects for data centers are those excess power unlock projects that we can actually build batteries to use the excess power that's currently not utilized in the grid. So with the communities, obviously, I think education is really important, right? If you think about a proper data center that's well-designed, it shouldn't be using more water than an office building. And when you think about power and what have you, I think the power efficiency, energy efficiency is equally important. So a project is not, cannot be evaluated only based on the economic benefits. It has to be evaluated based on the environmental factors as well as the community support.
[00:38:29] Speaker 2: All right, Karen, really great to have you. I have to get you back. Karen Fang, Bank of America's global head of infrastructure and sustainable finance, a new $250 billion initiative out of Bank of America for critical infrastructure. We count you down to the closing bells here with the S&P trying, trying to reach for a record high on the back of some relatively decent earnings yesterday out of a few AI companies. We'll get a couple more tonight, including from Cisco and Coherent. We're going to catch up with Tiffany McGee over at Bifiddle Advisors when we come back after the break, right here on Bloomberg.
[00:39:05] Speaker 6: When it comes to financing chips right now, most companies that are doing very large purchases are having to get, like they call it a wrap from a Google or another credit worthy lender in order to be able to get financing to go and get these chips. And, you know, there's some scarcity in how many of those agreements can be signed. And so it's really smart from NVIDIA to enable these companies to actually get access to the chips they need.
[00:39:33] Speaker 2: Erica Brescia over at Red Point Ventures on the show yesterday, of course, talking about, I guess, some of that circular financing, but more importantly, a pretty shrewd bet by Jensen Wong to keep the AI boom going by trying to create a new pool of financing for all of its potential customers.
[00:39:47] Speaker 3: It's almost a little crazy. I mean, on one hand, is it like a master class in balance sheet management? On the other, I've been hearing people saying that maybe this is a new credit bubble. I mean, it is $500 billion, and he did only gather the biggest names in Wall Street.
[00:39:58] Speaker 2: Why not both?
[00:39:59] Speaker 3: Yeah, why not? It would be fun for us to cover.
[00:40:01] Speaker 2: Yeah, well, you know, look, the market's getting a boost, partly of those earnings that we had yesterday after the bell, a lot of Supermicro and Nebbias and a few others, and that's carrying over into today.
[00:40:11] Speaker 3: And we're looking at your screen there with the S&P 500 higher by two tenths of one percent. The semiconductor index is, of course, the one leading the rally up by, let's say, two and a half percent, and you're seeing Brent crude there kind of wavering by around $88 per barrel. We're seeing the resolution in the Middle East still really not being resolved. And lastly, the 10-year yield by 4.68, Roman. But I think overall, investors are breathing a huge sigh of relief.
[00:40:35] Speaker 2: Yeah, you're seeing some of the hyperscalers get a bid. Most of the chip sector higher on the day as well. And, wow, we're going to talk a little bit later about all those optical stocks are absolutely on fire. Remember, we get coherent after the bell tonight, and we're also going to hear from an OG in the space, Cisco. Tiffany McGee, she joins us here in studio, too, CEO and CIO of Pivotal Advisors. Tiffany, great to see you again. Good to see you, mate. Are you still a believer long-term in this AI trade? Because I, oh, you didn't even let me finish. You're like, of course I am. But talk to me a little bit. Do you have any concerns? Let me rephrase the question. Do you have any concerns about maybe the way it's being financed? Are you comfortable right now with where we stand?
[00:41:13] Speaker 11: Yeah, you know, I am, and I think, you know, we're certainly, just to be clear, certainly very constructive on AI, and not just now, but for the future. But I really think that the AI story is really evolving from excitement about the spend to really scrutiny of, like, actual returns. And so I think investors, you know, are really, they really want to see that revenue. They want to see the cash flow. So there are a lot more eyes, and, you know, I think investors are taking more of, like, a deeper dive.
[00:41:43] Speaker 2: And shouldn't that be a good thing? I mean, as Isabel kind of said, oh, are we in a credit bubble? But I guess the idea is you don't want just pure euphoria and people just buying blindly.
[00:41:51] Speaker 11: No, no, no, absolutely. Because then that would lead to a bubble. And I know that there's some people that think that this is a bubble. I don't think so. I think that, you know, for all the reasons that anybody who can open up ChatGPT or Claude knows, I really do think that this is the future. And I heard something a couple of weeks ago that said, you know, if you, the AI you used on Tuesday is probably, you know, or yesterday is already, like, obsolete. It was, like, a better way of saying that. But, you know, this thing is evolving so fast. And so, you know, when people talk about that, I go, can we picture a world without the Internet? No, right? So this is, I think, that next wave.
[00:42:29] Speaker 3: And CPI came up. We did promise to ask you. It came in line as expectations. Do you think that this gives the Fed more room to cut? Or do you think that inflation is still too high for a Fed to be comfortable?
[00:42:39] Speaker 11: No. So, listen, again, the Fed has two mandates. And so, you know, thinking about CPI, we got a headline, you know, CPI rose modestly. And then really, more importantly, that core CPI was really, you know, relatively benign. So, you know, that combined with last week's job report really does take a lot of pressure off the Fed, I believe. You know, now we've got this labor market that's really cooling rather than kind of overheating. And then we have this inflation report that really did not surprise to the upside. So, we're seeing markets, you know, today kind of price in no hike in September. And, of course, we're seeing everything go up. So.
[00:43:16] Speaker 3: What is the risk to this market? Because I feel like nothing, almost nothing could derail it. I mean, the S&P is now nearing all-time highs. You're seeing when you look at ETFs, investors are still plowing capital into risk assets. It's almost like it's just one huge party. Should we just celebrate it or should we be in one corner and sulk?
[00:43:32] Speaker 11: Well, I hope none of us are in one corner and sulking. But I think, you know, a potential big risk is inflation, but we're just not seeing that right now, right? So, of course, we're going to have to wait and see. I think also the situation in the Middle East is kind of still a wild card. That's not resolved yet, right? So, there are these elements that I think could potentially give us some volatility. But, you know, overall, you know, corporate earnings are really high. You know, that's really supporting equity growth. So, we're in a good place right now.
[00:44:02] Speaker 2: But when you think about all of the gains that have been made in this market, at least for those people that were prescient enough to get in front of it, there's this concern now that some people might want to try to protect those gains, particularly heading into the final few months of the year. Do you reposition now? Do you just continue riding this wave? Do you diversify? I mean, what is kind of, I guess, the allocation strategy for September and beyond?
[00:44:25] Speaker 11: Yeah. So, first of all, I think that everybody should be looking at their total portfolio. You know, I am a thousand percent a diversification girl. So, if you do have names that have run up, I think that the people kind of, like, want to see it go up even more. But I think having, number one, you know, part of being a good investor is having a discipline rebalancing strategy. So, right off the bat, I think that's important. But, you know, I also, you know, you kind of bring up a good point. If things are kind of going up, you know, have we kind of missed it or what's kind of next? And, you know, I actually read something the other day that JP Morgan put out, I think it was JP Morgan, and they were just talking about getting into a high market, you know, versus historically, you know, it's really not that much different than getting into, like, an average market. So, it's, you know, do you want to be in this? There's, I definitely think that there's still some more momentum to gain. So, I think that there's still opportunities.
[00:45:19] Speaker 2: Well, I mean, then you have, like, people, though. I mean, like, we had, you know, Denny on. He's raising his price target on the S&P, I think, 8,400 or something, is his bullish case. JP Morgan. So, I mean, we're at 7,700 on the S&P. So, we're talking about just on the broad market, I mean, people still pricing in pretty healthy gains.
[00:45:36] Speaker 11: Yeah. Yeah. I mean, listen, this market has been incredibly resilient. And so, I am, you know, not the person who's going to poo-poo everything. And we've seen this. We've seen this, you know, over the last few years. So, I'm all in.
[00:45:49] Speaker 2: All in. And just to be clear, though, too, because when people talk about the rally and the nature of where we're going, they always point back to corporate earnings. And we had somebody sitting in this chair just a few weeks ago, and he said, look, you know, I'll be scared when I start to see the bottom lines of some of these corporations start to actually deteriorate. And for right now, at least based on the last couple of earnings seasons, we haven't seen it. And even the forecasts.
[00:46:11] Speaker 11: Yeah, absolutely. And I think that it's really important to make that distinction between earnings growth and, like, multiple expansion, right? So, earnings growth, you know, and revenue is really, you know, what those companies are making versus multiple expansion, which is kind of like all getting caught up in the hype. And so, what we're seeing is that companies are delivering in earnings.
[00:46:29] Speaker 2: All right, Tiffany, always great. Tiffany McGee, CEO and CIO over at Pivotal Advisors, keeping an eye on the S&P 500, 7744 and change right now. 77.57 and change is your closing record high. We count you down to those closing bells, and we count you down to some critical earnings report, including from a Cisco, maybe another read that suggests how much further the AI trade has to go. That conversation with our global simulcast starts right now.
[00:46:59] Speaker 1: The closing bell, Bloomberg's comprehensive cross-platform coverage of the U.S. market close starts right now.
[00:47:08] Speaker 2: And right now, we are two minutes away from the end of the trading day. Romaine Bostic here with Isabelle Lee, taking you through to that closing bell. It's a global simulcast. We're joined now by Tim Stenevic, and, oh, look at that, Carol Masser actually decides to make an appearance this week. Welcome to our audiences across all of our Bloomberg platforms, television, radio, our partnership with YouTube, here on a day where Carol Masser, the S&P, at least briefly traded above its most recent record high.
[00:47:34] Speaker 12: All right, so briefly, it's kind of like a meh trade, it feels like. Maybe it's just because we're getting to the tail end of earnings. However, having said that, what do we got? Cisco and a few other companies reporting. We still have to get through what, NVIDIA? We have to get through...
[00:47:46] Speaker 13: Jackson Hole.
[00:47:47] Speaker 12: Yeah.
[00:47:48] Speaker 13: Yeah. Jackson Hole?
[00:47:49] Speaker 12: I don't want you to keep talking about Jackson Hole.
[00:47:50] Speaker 13: I am. Are you kidding?
[00:47:52] Speaker 12: He's been talking about it all afternoon.
[00:47:53] Speaker 13: Why wouldn't you want to talk about Jackson Hole? You go to the mountains in August?
[00:47:57] Speaker 12: Are you actually going?
[00:47:57] Speaker 2: I thought you meant, like, is there going to be some market-moving event out of this? Oh, I don't know. I'm just curious about the fly fishing. It sounds like Michael McKeel.
[00:48:03] Speaker 13: The fly fishing and the cowboy hats and the vests.
[00:48:06] Speaker 2: The vests.
[00:48:07] Speaker 13: Is that a requirement? Yeah, I think it is if you're a central banker. Okay, Isabel, take it away.
[00:48:14] Speaker 3: I want to talk about the inflation print because for me... Oh, right.
[00:48:17] Speaker 13: Okay, she wants to do work. Okay, interesting.
[00:48:19] Speaker 3: Like, you know, a couple of hours ago, what's up with me is Diane Swank. She's the chief economist on... Was it lame or tame? That's what I keep saying. It was bang and line. I don't know. I mean, I guess...
[00:48:28] Speaker 2: Bang and line.
[00:48:28] Speaker 3: Wow. Bang and line.
[00:48:29] Speaker 2: The lingo on the show.
[00:48:30] Speaker 3: Diane Swank said that it's still above the 2% target, and it's been... Keep it clean. Five years, so...
[00:48:35] Speaker 2: Yeah, I know. I got in trouble for saying none, but none, but...
[00:48:37] Speaker 12: Yeah, well, as you should have. It's like, you know... Wait, you just said it again.
[00:48:40] Speaker 2: Well, okay. Well, somebody on the other side of this wall is going to go run to the boss. So, anyway... Anyway, it's in the dictionary, by the way. All right, we get the closing bells here in New York, and it is going to be just shy of the record high for the S&P 500. It takes a while for these numbers to settle, but we're camped out right around 77.48 and change, up about 20 points, or three-tenths of a percent on the day. The NASDAQ composite is going to add about a half a percent. The NASDAQ 100, seven-tenths of a percent. The Dow Jones Industrial Average actually going to finish in the red, only down by about less than a tenth of a percent on the day. And the Russell 2000, getting in on the action, up 18 points, or six-tenths of one percent.
[00:49:17] Speaker 12: All right, back to the S&P 500. I've kind of been saying this all day. Isabel, kind of an even split. 262 names in the S&P 500. Higher today, 240 to the downside, one unchanged.
[00:49:30] Speaker 3: It may be even split, but when I'm looking at my IMAP, it's a little bit more green on the screen. You're looking at tech, of course, leading the rally up by one and a half percent. Financials also higher by three-tenths of one percent. Some of the losers, energy, down by, it's actually almost flat, down by a tenth of one percent. Healthcare and consumer discretionary, also in the red.
[00:49:51] Speaker 12: All right, guys, let's get to some of the individual gainers. I had some nice names to choose from. I'm going to go through to some of the neoclouds. Take a look at CoreWeave and also Nebius. CoreWeave up 19.2 percent, so just off its highs of the session. Nebius, also an outperformer, up about 34 percent. We saw these names on the top gainer list. Are you guys okay?
[00:50:15] Speaker 2: Yeah, we're fine.
[00:50:15] Speaker 12: All right, come on.
[00:50:16] Speaker 2: Yeah, Isabelle slipped.
[00:50:17] Speaker 12: Oh, are you okay?
[00:50:18] Speaker ?: No.
[00:50:19] Speaker 2: Isabelle, usually that's my move.
[00:50:21] Speaker 12: Or Isabelle, were you pushed? It's a secret I'll never tell. All right, all right. All right, let's go back to gainers. All right, so CoreWeave and Nebius, definitely some outperformance. CoreWeave surging after the AI spending frenzy spurred faster sales growth than anticipated. Sales expected to be $3.45 billion to $3.6 billion in the third quarter. The backlog was $104 billion at the end of the quarter. It inked more than $25 billion in new customer commitments after the period ended, suggesting that AI demand remains strong. Yeah, I would say so. And then you had Nebius, another neocloud, reported second quarter revenue that beat estimates. That stock, by the way, is up 193 percent year-to-date. CoreWeave is up 49 percent year-to-date. All right, let's go on over to kind of staying with the AI trade, some of those optical companies. Lumentum Holdings, Fabronet, Corning, all outperforming. What's your problem there, Stenevec? All right, Lumentum is up more than 13 percent. Fabronet riding the wave up almost 9 percent and up more than 4 percent is Corning. The reason we're talking about this is that Lumentum Holdings up about 150 percent, 150 percent year-to-date. Analysts are positive on the maker of optical equipment after it reported fourth quarter results that beat expectations and gave an outlook above analyst consensus, and then it just pushed other names in the space higher. Should I stop now?
[00:51:41] Speaker 13: No, I'm just jealous on a day where I had trouble finding decliners.
[00:51:44] Speaker 12: Oh, he's just jealous. I'm rushing through because I'm like, what's the problem? All right, and then Vestas Wind Systems, I love this. The ADR is rallying up the most since about November of 2012 to its highest since March of 2022. Do that stock up more than 19 percent. The company lifted its profit guidance for the year and announced a share buyback following a jump in turbine orders. Keep in mind, they've been working on a turnaround after the company spent a lot of years trying to sustain profitability. But nonetheless, investors liking what they got from the company on the latest update.
[00:52:14] Speaker 13: All yours. Well, even though you had almost an even split between gainers and decliners in the S&P, it was kind of tough to find decliners with actual stories or interesting narratives behind them. Home Depot is one of those in the S&P, down 3 percent today. Ted Decker, the company's CEO, is taking temporary medical leave of absence. The senior vice president, Anne-Marie Campbell, and CFO Richard McFaul will oversee day-to-day operations and financial management during leave. Decker is expected to return, quote, within the next few months and has said the company has the right strategy in place to grow share in any market. Once again, shares at Home Depot finished the day down by just about 3 percent. And rare earths and critical minerals. Let's go there now into U.S. Antimony, which actually had the worst day going back to October of 2020. This is a result of the company's most recent earnings report. Shares fell in U.S. Antimony by 24 and a half percent today. This after the mining company cut its full year outlook for gross revenue and lower Antimony prices. We actually had Gary Evans on our program, the CEO of U.S. Antimony earlier this week. And we talked to him a little bit about what it would take for the U.S. government to take a stake in his company as it's done with other companies, including MP Materials. He said he'd be open to it and he'd be willing to offer as much as 20 percent of the company, but nothing over 20 percent.
[00:53:26] Speaker 12: These guys are kind of disappointed, I think.
[00:53:28] Speaker 13: It's a different it's a different world where we're talking about this, especially during, you know, a Republican administration when, you know, it's kind of surprising to hear that the government is taking stakes in publicly traded companies. Finally, speaking of the administration, ticker DJT, Trump media and technology shares fell today by a little more than seven percent. Two media organizations, the Intercept Media and Freedom of the Press Foundation, sued President Trump over Trump media and technology groups plan to sell faster access to his true social posts. The suit seeks an order declaring the exclusive posting of government information on true social to be unconstitutional and blocking the Trump administration from using it for that purpose. We did see shares fall on Monday and Tuesday. Also yesterday they fell after the company reported a net loss for the second quarter of 238.1 million dollars and revenue of only 1.67 million dollars remain.
[00:54:21] Speaker 2: Earnings crossing the wire from Cerebrus and from Cisco. The knee jerk reaction on Cisco to the upside for its fiscal fourth quarter, a beat on adjusted EPS, a dollar 22. The street was looking for a dollar 17. Revenue, 17.3 billion dollars in the quarter. And that is also a beat. Here is the guidance. The company says that for the current quarter, its fiscal first quarter, the company expects revenue of 18 to 18.2 billion. The street was looking for 16.8. So a big beat even on the bottom line of that range. As for EPS for the current quarter, a dollar 32 to a dollar 34 profitability and profitability that's higher than the average of street estimates for a dollar 17. And for the full year, here's your guidance. Adjusted EPS, the 505 to 511 a share. The street looking for 484 revenue for the full year, fiscal year. That's the quarter that that's the quarter that we're in right now. 72.2 billion to 73.4. Street looking for 69.
[00:55:18] Speaker 12: A beaten raise quarter. All right, guys, let's go to Cerebrus systems also reporting and out with their results. Let's go right to the outlook here. The company sees third quarter revenue of about 214 million to 216 million. That is definitely above the street estimates of 211.9 million stockers right now, though, down about 7.6 percent here in the after hours. The company sees fiscal revenue 880 million to 890 million. Again, better than what it had seen prior to that. 855 million to 865 million. That's the earlier estimate that it has been out there. Third quarter gross margin again looking into the outlook in the range of 38 to 40 percent. Let's go backwards. Second quarter revenue 180.1 million versus an estimate 194 million. That is a miss. Also looking at second quarter gross margin of 14 percent. The estimate on the street was much higher than that. 26.3 percent. And then the company says second quarter cloud revenue was 126 million. The estimate was 116.3 million. That gross margin, though, there's some questions around that one. And the stock is down about 6.5 percent here. Yeah. I mean, the stock, though, if you just go back to the IPO just a few months ago, it has
[00:56:30] Speaker 13: been all over the place. I mean, this is a stock that after, you know, it surged in the first couple days of trading, it was down 45 percent romaine a couple months later. And just since, you know, earlier this month, I mean, going into this print, it's up 24 percent. So, I mean, big moves despite the fact big moves lower today, maybe, you know, it was priced for higher expectations, even though it beat in some cases. Yeah. We're also waiting for a coherent.
[00:56:54] Speaker 2: Don't get to have the headlines just yet here, but the share is actually popping. And the releases on the wire, those shares up about two and a half percent optical equipment maker. But real quickly, I just want to pivot away from AI to what's been going on in the restaurant space, because there's been a lot of focus there. Red Robin, the burger chain out with its earnings. Comp sales are up. And adjusted EPS did beat by a mile, 12 cents a share. The street was looking for 2.3. But more importantly, everyone's looking for any sort of read on whether the cyclospora outbreak affected any sort of foot traffic. Jack in the box also out with this results. The shares up 8 percent. Revenue did come in actually slightly below estimates, though operating EPS did actually come in above estimates. EBITDA also above what the street was looking for as well. All right. And that stock, Jack in the box, up about six and a
[00:57:38] Speaker 12: half percent here in the aftermarket. All right, folks, that is a wrap. Our cross-platform radio, TV, YouTube, Bloomberg Originals. We do call it the closing bell. Romaine and Isabelle out there on the close on Bloomberg Television. Tim and I back here on Bloomberg Businessweek Daily. We'll see you again same time, same place tomorrow.
[00:57:54] Speaker 2: And we continue our coverage here on Bloomberg Television. Redhead crossing the wire right now on Cisco. The company saying that it is reporting fourth quarter AI hyperscaler orders of about $4 billion. We're going to dive deeper into that when we come back after the break. This is the close on Bloomberg.
[00:58:15] Speaker 1: The countdown is on everything you need to get the edge at the end of the market day. This is the close.
[00:58:27] Speaker 2: Welcome back to the close. Romaine Bostic here with an S&P 500 closing out the day just about 10 points shy of its most recent record high. 7748 and change a three tenths of a percent gain on the day. But today was really about chip stocks and some of those communication equipment stocks. Basically, we're talking about the AI infrastructure build out. We're going to have more on that in just a second as a group. The S&P 1500 communication services index up about five percent on the day. Dow transports in on the action as well up about 1.4 percent. You did see a slight mixed day in the yield picture. A slight uptick on your 30 year yield with the big auction set for tomorrow. As for some of the individual gainers on the day, Brinker, that is the company that owns Chili's, closing out the day at a record high. Comp sales at his Chili's restaurant chain up five percent. Wendy's also having a great day. This after the Financial Times reported that Nelson Peltz is trying apparently trying to assemble a group of folks together for a bid to buy out that company. Nebius, which we reported yesterday here on the close, up 34 percent to close out the day, its best day in about a year. And Lamentum, on a two day run there, the big optical equipment maker, all the rage once again. And in fact, well, everything in the AI space, all the rage once again. And that is our top story. Cisco systems. Remember them? Few companies embody the Renaissance and legacy tech more than the OG maker of networking equipment. And, of course, the poster child of the 1990s dot com boom and bust. Briefly, it was the world's most valuable company in the year 2000. Then the stock plunged 90 percent over two and a half years. And then it would take 25 years to return to its peak. That return, though, aided by the AI boom and a corporate reinvention for this new era. Is it real? Cisco's earnings report three months ago in May seemed to suggest so. And its latest earnings report out just a few minutes ago, the numbers, even more phenomenal. Hyperscaler orders in the fourth quarter alone of $4 billion. A seventh straight period overall of quarterly revenue growth. A third straight quarter of double-digit growth. The first time that that has actually happened in more than a decade. Net income for the full fiscal year that just ended. All-time record. But looking back to the year 2000 history, it may not be repeating itself, but it sure is starting to rhyme. The company then was in the midst of what would be 11 straight quarters of rising revenue growth, but its profitability started to become hampered by a supply chain shortage of memory chips. By mid-2001, sales growth went from more than 50% to the first contraction in revenue the company had as a public entity. Now, no one is predicting a repeat of that. Let's be clear. But almost everyone is keeping an eye on it. And keeping an eye on whether CEO Chuck Robbins can keep the momentum going this time around and whether, well, there's any read through into what the current picks and shovel king Jensen Wong may be facing up ahead. Let's bring in David Bonson. He's the chief investment officer over at the Bonson Group. He owns shares of Cisco and oversees the management of about $8 billion in client assets. You like Cisco. You like Chuck Robbins. Did you like the earnings report that we just got, David?
[01:01:35] Speaker 14: Yeah, what we've seen so far and obviously we want to do more digestion of the weeds of the results. But what we've seen so far we like. There's no big surprises to us. The thing I want to point out is that the hyperscaler growth, which is at and above target, is not the entirety of the growth. On one hand, if you look at their legacy businesses, which is what attracted us to the stock. We bought in 2011 in the teens and we were compounding in the stock at double digits as they were growing the dividend year over year, when no one was talking about AI. That networking orders, the non hyperscaler orders, they're also up substantially. But I think there's questions about the margins that they're generating in their security business. The hyperscaler orders were strong. It's clearly become an AI story more than we like. But no one can complain. It's now compounded at 15% a year in the time we've owned it.
[01:02:34] Speaker 2: Well, break down kind of the margin issue. I mean, overall adjusted gross margins for the company as a whole, 66.3% on operating basis. You're around 36%, which is for any company is pretty phenomenal, but certainly for a company that a lot of people had left for dead a few years ago. This does seem real. And I sort of set this up because I am curious as to how that legacy business has become not just so much a bridge to whatever this AI era, but also kind of central to a lot of what's going on out there today.
[01:03:02] Speaker 14: Because they bought and tackled the whole time through even when the dot com crash happened, they continued to be the leader in the area that mattered most to technology infrastructure, which was network servers and routers. And then when you got into the last 10 and 15 years, they became that leader in the cybersecurity side as well. But they converted the revenue model to something much more subscription oriented, something more recurring, which gave them the ability to have free cash flow that they could pay out with a growing dividend. They were very attractive from a capital market standpoint, but their business model enabled them to be that leader. And now they do build some of the infrastructure that's vital for hyperscalers in the AI moment. What do you think about their
[01:03:50] Speaker 2: security business revenue there about 2.23 billion and growing? I would think given everything going on and I'm not just talking about AI specifically, but just the whole modernization that we're seeing out there right now of a lot of technological infrastructure, I would think that security business would have a business to be an even bigger growth driver. Well, you're exactly right. And not only that, but I
[01:04:13] Speaker 14: don't think the market is viewing it that way, which I like even better. I mean, it's very hard to make money in a story that everyone already knows about. I think what you're highlighting is that it's a great strategic and competitive advantage the company has, but not the one that's getting it the big valuation. And so my thesis would be it's fine that they're doing so well with the thing everyone's talking about. The shiny object at the moment is supplying capex to AI to hyperscalers in the AI story. But the cybersecurity element is going to touch all of these different things. And they have a footprint there that is being underappreciated in valuation over time. I think you're going to see that cash flow grow substantially. Well, I mean, I know you talk a lot about the
[01:04:57] Speaker 2: the legacy business, the networking business and how that is still a big driver. But you go back to the last earnings report back in May where they talked about sort of reorganizing the company around AI. Are you comfortable with that strategy?
[01:05:10] Speaker 14: It isn't so much that I'm not comfortable with it. It's just that I recognize that the market has already rewarded it. The stock is up over 60 percent year to date. It was up, I think, 74 percent in the last 12 months. So we made a lot of money in this company and we took our weighting down. Now, why didn't we sell it entirely, which is what we often will do if we think a company is overvalued. We still think the legacy business provides a backstop. It provides recurring cash flows and we feel confident in their ability to keep paying and growing the dividend. But for those chasing a hot stock growth, I am not as comfortable with the fact that so much of it is now levered to the same story and many other things are, which is only the AI side. We're super contrarian on this front. We may own the same company, in this case Cisco, that a lot of others do, but we kind of own it for a different reason. All right,
[01:06:04] Speaker 2: David, appreciate you joining us. Always great conversation. David Bonson, chief investment officer over at the Bonson Group. Cisco shares now turning into the red despite a record quarter. Meanwhile, coherent, the maker of optical equipment, those shares also lowered down about 5 percent. They did miss on a couple of key metrics. Revenue in the quarter did come in pretty much in line and adjusted EPS, too. But the guidance going forward, the company gave was for revenue in the current quarter of 2.1 to 2.4 billion. The street was basically looking for about 2.2. As far as StubHub, those results also out. The ticketing service shares are down despite posting revenue of about 573 million. I need some time to take a look at the comparison here. But you see, investors not so plussed about it. We should point EPS for the second quarter was zero. We'll be back in a moment. This is Bloomberg. Let's take a look at shares of Cerebrus down about 13 percent right now. This is the maker, of course, of these AI server racks. And the numbers for the quarter on a revenue basis overall revenue jumps 74 percent. It's cloud revenue, a big business that's been trying to build out. Revenue there more than tripled. However, its hardware business plunged unexpectedly 23 percent to $54 million. And that might be why you're seeing the reaction there in the shares. Joining us now to unpack what's going on here is Paul Meeks, head of technology research over at Freedom Capital Markets. All right, so a bit of a surprise decline in the hardware revenue, the way Bloomberg's reporters are characterizing it based on an interview with the CEO Andrew Feldman. It's basically that the hardware business is, quote, going to be lumpy. And that in his words, that's just the nature of the beast. I think there's some truth to that.
[01:07:53] Speaker 15: But here's a company that only went public a couple of months ago. And the first quarter out of the box. This is the second one. The first quarter out of the box, they had a big disappointment in profitability. The stock plunged. And now there's another miscue. Maybe it's just investor relations, public relations. But you shouldn't be disappointing folks back to back in your first two quarters, a public company. So we've always had a hold rating on the stock and a 209 price target. Our price targets, the low on the street. I will tell you this, the company's technology, what they've done with their innovations and semiconductors may be the most impressive that we've seen in a long, long time. So I give them that. I just think it's going to be rougher than buy side and sell side investors think in ramping up capacity because they have two different businesses, a hardware business and a neocloud business. And in both businesses, very stiff competition, very expensive capital intensive businesses. So there might be a little bit more of a gap between the build out and the revenue than people expect.
[01:09:09] Speaker 2: Well, that's what I'm curious about because I've never really heard anyone with regards to their technology saying anything negative about it. But there does seem to be this idea that not only is a crowded space, but right now, the market is just all over the place with regards to, you know, whether you're leasing out the servers and everything else. It's just, it's just the demand is just fluctuating so much. I think last quarter they talked about even having to buy back some of their capacity just because they felt like they could maybe find a better way to deploy it here. Is this just a temporary sort of growing pains, if you will, or, Paul, or should we be looking at something maybe a little bit more ominous?
[01:09:45] Speaker 15: I'll give them the benefit of the doubt. I think it's temporary growing pains, but I don't think it was well enough understood when the company went public. Because, again, their technology is quite elegant, though I will tell you in the two businesses they're in, they face very tough competition. You know, they have a great chip or a system on a chip for fast inference. But NVIDIA, through its relationship with Grok, that's Grok with a Q, has maybe it's not as good of capabilities as Cerebrus, but maybe it's good enough. And, of course, you're fighting against the 800-pound gorilla. And then in the Neo cloud business, which is super expensive, super difficult, they're getting a late start with the likes of Core Weave, which had a big quarter. Also, Nebius reported today another big quarter. We cover those stocks. We'll see what happens over time. But there are going to be fits and starts, particularly on the bottom line, probably for the next couple of years with Cerebrus.
[01:10:48] Speaker 2: We're still trying to dig through the release, and we have to wait through the conference call as well. But I am curious about the company's relationship with OpenAI and some renewed concerns out there, not just for Cerebrus, but for all of OpenAI's partners. This idea of whether OpenAI will indeed make good on these, you know, basically billions and billions of dollars of commitments.
[01:11:10] Speaker 15: Remember a year ago, and I say tongue-in-cheek, when you announced a press release you were doing business with OpenAI, your stock went through the stratosphere? Of course, now, sometimes you're getting a discount. You're getting a black eye, because OpenAI has lost some business momentum, clearly to Anthropic. OpenAI looks like they're pushing their IPO until 2027, where Anthropic comes this year. And I think OpenAI's IPO might actually be late in 2027. And the reason I mention this is they need that equity to pay some bills, including Cerebrus bills. And so, yes, I think that part of the anxiety in the stock is that concentration with OpenAI.
[01:11:57] Speaker 2: All right, Paul, got to leave it there. Paul Meeks, head of technology research over at Freedom Capital Markets. Cerebrus shares down more than 10 percent. When we come back, we're going to turn our attention back to restaurants and the cyclospora outbreak with the former chief medical officer at the CDC.
[01:12:11] Speaker 9: The outbreak has been isolated to iceberg lettuce from Mexico. We source all of our greens from the United States. And in a lot of ways, this is a moment where the sweet green supply chain and the direct relationships with farmers is so critically important.
[01:12:30] Speaker 8: We are closely monitoring the situation. We have an external advisory committee of industry leading experts because food safety is paramount to what we do. It's foundational to our guests' relationship. And we want to make sure that our guests have the confidence that we are committed to having a
[01:12:44] Speaker 2: food safe environment. Just the CEOs of Sweet Green and Kava speaking earlier only here on the close about how they are navigating the cyclospora outbreak that is sick in thousands across the country. According to the latest update from the U.S. FDA and CDC, 15 states have reported cases linked to cyclospora as of August 5th. However, that number does appear to be going up. But there's a lot of conflicting messages out there. We want to bring into this conversation Dr. Deborah Aurey, the former chief medical officer and deputy director for program and science at the CDC. And Dr. Aurey, I do want to start with some of the conflicting messages. Because just earlier today, the HHS says, and I'm quoting them directly, that the cyclospora outbreak is contained and salad is safe to eat. I look at some of the CDC numbers. We just cited the ones through August 5th. But there are new numbers through August 11th showing a 33% jump in cases. When you go through certain states, the state health departments, they're also reporting what still continues to see some sort of persistent increase in cases. What am I supposed to believe right now about where we stand in this?
[01:13:49] Speaker 16: Yes, absolutely. Great, understandable question. And what I would say is the CDC data reports confirmed cases. And so right now, they're reporting nearly 14,000 cases. And their website also reports there's about 10,000 still under investigation, meaning that number might go up. Right now, it's not required to report these cases to the CDC. It used to be under FoodNet, but now it's not. So states may have higher numbers. States may also be using data that aren't confirmed but are suspected that they're not confirmed by labs. So the numbers absolutely are likely higher. And those are just the ones that are suspected. If somebody gets better or doesn't have symptoms that require testing, those numbers aren't counted as well. As for whether this is contained, I would say there's a better handle on it now that they're tracking it. States are communicating. But unfortunately, when you don't fund surveillance systems and there's been staff cuts, I don't think FDA and CDC have the capacity they had in the past to handle something like this.
[01:14:54] Speaker 2: I do want to go there. Before we get there, just explain to me when I see in the CDC data, it talks about the unresolved pool, which actually fell in the most recent.
[01:15:04] Speaker 16: What does that what does that actually mean? So sometimes it can be that they're waiting on laboratory confirmation. And when labs are confirmed that it is cyclospora, then we'll see that number move to the confirmed and some of the unconfirmed will then go down. And sometimes they might think the case of cyclospora and then maybe it comes back as like E. coli or salmonella. And so that will change then as well.
[01:15:25] Speaker 2: What is the number for the public that is concerned? And let's face it, there are a lot of people that are scared now. When we talked to the CEOs today, I mean, they were even saying anecdotally, there are people that, you know, they just are just staying away from anything. Raw lettuce, raw produce whatsoever, whether it's linked to them or not. Should we be looking at the illness onset dates? Should we be looking at hospitalizations or just keep an eye on the reported cases?
[01:15:49] Speaker 16: You know, I think it's a combination of everything. And even to have over 700 hospitalizations is really concerning. And there were two deaths as well. And both those individuals, my understanding is they had other medical conditions. We do see cyclospora every year, as well as other food borne diseases. But this is tenfold times greater than other times. You know, they've identified at least one source, the Taylor Farms, and those products are now off the shelf. So hopefully we'll start to see a slowing. But that doesn't mean that's the only source. And that's why it's important to, you know, make sure you cook vegetables, peel fruit. And even though washing won't get all of the parasite out, it certainly helps. So, you know, just really having that food safety mindset right now is important. Absolutely still should be eating fruits and vegetables.
[01:16:37] Speaker 2: Well, not to be glib. I mean, you say it's pulled off the shelves. But there's a lot of anecdotal evidence of people finding products made by that company still on the shelves. And this gets to this idea of trust. I mean, I understand there's a science behind it and what's real and what's not. But there is perception. I mean, I mean, and I'll just pose this question.
[01:16:55] Speaker 16: And we don't know it's the only source.
[01:16:57] Speaker 2: Exactly. So I guess my question to you, and I'll just be blunt, if you would you go into a grocery store today and pick up a bag of a bag of lettuce?
[01:17:05] Speaker 16: I have actually changed my practice. And what I've been doing is getting romaine lettuce and peeling the top layer off and washing it well. I had been a big bag lettuce person. And just lately, I haven't been just given the number of cases. But, you know, I continue to eat other vegetables, cook them and then fruits still eating those as well.
[01:17:25] Speaker 2: With regards to the contamination that we do know with regards to the lettuce, how much confidence can you have that that contamination didn't also cross over into other produce like herbs or other types of, you know, leafy vegetables?
[01:17:40] Speaker 16: So I don't think we can be confident of that. But they're still doing the disease detective work where, you know, they have the case investigations and try to track it back. And at least for the initial couple thousand cases, I think about six thousand were tied to that Taylor Farms farm in Mexico. Those were linked to the iceberg lettuce, the shredded lettuce. There's still so many cases in my mind that aren't accounted for for where that outbreak comes from. And that's why I think just continuing to be mindful of how you're washing your vegetables and if you have symptoms, monitoring for them and think, you know, I could be exposed and go talk to your doctor. But in general, it's safe to have the fruits and vegetables.
[01:18:24] Speaker 2: I want you to take us inside the CDC for a second. For those who maybe look at your name and say she looks familiar. You left your very prestigious job at the CDC just about a year ago in protest of HHS secretary RFK Jr.'s ousting of the director. You've claimed that RFK censored CDC science, politicized the processes and expected scientific leaders to function as, quote, rubber stamps. I was looking at a number and it says a former CDC lab director says the cyclospora team shrank from 11 people to three. Does that sound about right to you?
[01:19:00] Speaker 16: That's accurate. And I would also say 25 to 30 percent of the overall CDC workforce is gone. And so you've got less boots on the ground being able to do these inspections and investigations.
[01:19:13] Speaker 2: Did the loss of those people, in your view, limit the ability to test slow testing or in some way weaken the potential response to an outbreak like this?
[01:19:25] Speaker 16: Absolutely. And also with some of the funding changes at CDC, there was a food program called FoodNet, which would look at different pathogens like E. coli and salmonella. And cyclospora had been required for reporting until last year due to funding changes. So that's another just showing that the capacity isn't there like it used to be.
[01:19:47] Speaker 2: Is that situation as it stands right now and, you know, setting politics aside for a second, is that something that's rectifiable, whether it's through this administration or a subsequent one? Can we get the CDC back to a level where, in your view, as a scientist, you think it would be staffed enough and independent enough to actually police and react to these outbreaks?
[01:20:12] Speaker 16: Absolutely. You know, and I'm, you know, I always say I don't care if you're a Democrat or Republican when you come in and see me as a patient. And I feel that's how public health should be as well. Taking care of communities, following data and science. And so if they have the appropriate resources and are able to bring experts and staff back, they will absolutely be able to protect the health in our country. But unfortunately, today, they don't have that capacity to where they did before.
[01:20:37] Speaker 2: We spoke with someone who said they would probably trust some of the state health agencies more than they would the CDC and the federal health agencies. You were there. You talked about this idea of rubber stamps. When you were there, did you see anything where career scientists recommended, changed or suppressed any evidence that could have maybe protected the public, not just with regards to cyclospor, but for anything?
[01:21:03] Speaker 16: Not that I saw, because we moved forward. I was asked, like, I've reported on, like, the measles toolkit to put forward recommendations that included things that weren't evidence-based, like steroids or antibiotics. And we said no. I was concerned because of the requests around things like that that weren't evidence-based. And when the vaccine committee members were fired and they moved forward with a new vaccine committee group that did put forward recommendations that weren't evidence-based, that's when I knew I had to resign.
[01:21:34] Speaker 2: JOHN: Trump just issued a vaccine framework. It reclassifies childhood vaccines, several of them, I should say, calls for separate MMR shots once available, recommends administering vaccines at separate visits. Is there a legitimate scientific case for this or any part of it?
[01:21:48] Speaker 16: JOHN: Unfortunately, there's not a scientific base for it. And there's actually not an implementation ability to do it. There aren't, in the United States, the ability to separate out MMR into three different shots. And if you do, you're actually going to do exactly the opposite of what they're saying they want to do. It'll increase the number of injections for children. And if they're worried about things like febrile seizures, instead of having a single shot, now they'll have three shots. So there's no science or evidence behind it, which is concerning. I think when you have a secretary and a president with no medical experience, there's no medical experience, there's no medical experience. There's no medical experience. There's no science or evidence behind it, which is concerning. I think when you have a secretary and a president with no medical experience, and the acting CDC director, who's never been a practicing physician, pushing down science and data, that's where we have issues. We should be looking for our pediatricians. And if you do, you're actually going to do exactly the opposite of what they're saying they want to do. It'll increase the number of injections for children. And if they're worried about things like febrile seizures, instead of having a single shot, now they'll have three shots. So there's no science or evidence behind it, which is concerning. I think when you have a secretary and a president with no medical experience and the acting CDC director, who has never been a practicing physician, pushing down science and data, that's where we have issues.
[01:22:31] Speaker 2: I think we're talking to our pediatricians and our scientists and the vaccine specialists to really be driving the data science and policy recommendations around vaccines. I know you resigned in protest, but you were there for several months. Was there any guidance that you allowed to go out that you believe was unsupported by scientific evidence? No, I held my ground and I testified before Congress about that because to me, that was my red line. If I signed off on something that wasn't
[01:23:01] Speaker 16: scientifically accurate, I couldn't do that. And that was one of the reasons why even on things like thimerosal and additives and vaccines, we put up an evidence-based summary that showed it wasn't linked to autism. The secretary took it down, but I stood behind the development of it.
[01:23:18] Speaker 2: Erica Schwartz was confirmed as CDC director, I think last week. Is there any action you think that she can take over the next few weeks or so that would actually restore confidence or at least prove that the CDC is genuinely independent and operating on the basis of scientific evidence?
[01:23:40] Speaker 16: I think she can put in a very difficult position with the executive order that just came out this week. You know, if she wants to show independence, I think she can just say CDC will not be following this executive order because it's not based on data or science and that she stands behind the original vaccine schedule that now everybody's falling from the American Academy of Pediatrics because, you know, there's a lawsuit against the CDC childhood vaccine schedule currently. I think she could also look at what's happening with things like Ebola, the movement restrictions and things like that don't align with the World Health Organization recommendations. And with Hantavirus, the secretary overruled CDC scientists. I think she needs to say that that won't happen. She'll protect the health of Americans in our country and around the world.
[01:24:27] Speaker 2: All right, Dr. Auri, we're going to leave it there. Really appreciate you being with us. Really appreciate your candor. Dr. Deborah Auri, the former chief medical officer and deputy director for program and science at the Centers for Disease Control here in the U.S. We turn back to the markets right now and particularly some of the big movers in the after-hours trade. We are keeping an eye on Cisco and that conference call, a record quarter for the company, a record fiscal year. But investors clearly looking for something more. The share is down 4%. Cerebra is getting hit by about 15%. And we were just talking restaurants there, Jack in the Box and Red Robin out with their most recent results. Both of those shares in the green here in the after-hours trade. This is Bloomberg. Monterrey Car Week underway out there in California. I'm not there. I'm still in New York. But our next guests are out there and they've got a new collaboration forming in the world of luxury cars. Louis Vuitton's teaming up with Singer Vehicle Design to build a pair of reimagined Porsche 911s. Joining us now is the founder and executive chairman of Singer Rob Dixon and Mazen Fawaz, Singer's chief strategy officer. Hey, great to have both of you guys here. You got to first start me off here with sort of just sort of how momentous is because this is basically kind of a first for both of you. I don't think I know Louis Vuitton has never co-branded anything like this before. Singer, as far as I know, has never co-branded like anything like this before. How did this all sort of take place?
[01:26:01] Speaker 17: Through happenstance, really. It was it was a contact through John Arnault, who's the head of watchmaking at the Louis Vuitton to potentially incorporate one of their amazing clocks into one of our restorations. And a friendship developed, a level of trust developed, a mutual appreciation developed. And suddenly we the car snowballed into something much bigger than just a clock. And sure enough, it snowballed into a second car, which none of us were expecting. And it was just one of those moments that was kind of unplanned. But I think it's two companies that have perhaps quite a lot in common. Obviously, we haven't been around for 172 years, like Louis Vuitton, but we've been around for 17. And we've tried to, you know, make a name for ourselves doing things a certain way. And I think that came to the attention of the folks at Louis Vuitton. And this magical collaboration was the result.
[01:27:06] Speaker 2: Well, I'm curious, I mean, what does this actually do for your order book? I mean, last time I checked, I mean, there's already a wait list a mile long. Is this about volume or pricing power, brand altitude or just prestige? What?
[01:27:21] Speaker 17: No, I mean, all those things sound very grown up and very premeditated and rather boring. We like to think it's saying we've got a bit of a rock and roll spirit. And it's just we've worked with some amazing companies and brands in the past that are very very much part of the automotive zeitgeist. Never done anything like this in something that is that is that is that is so fashion orientated and and with such a brand with such a storied heritage. So this is new for us. We have a we have a we have a mantra at Singer that everything is important. Yeah. And that and that, you know, our mission to restore what we think is the most important sports car in the world. The Porsche 911 is one very much targeted at execution and dynamic ability and and material spectacularness. And this is a this is a left turn for us in embracing the aesthetics and the whimsical nature of fashion in a way and just two companies having a bit of fun reimagining a Porsche 911 in a way that's never been done before. So it's a it's a new it's a new pathway for us. We consider these art pieces in many ways. They're not perhaps the most practical cars in the world. Well, you know, that doesn't mean I don't think the world's a better place for them. Yeah. Well, you don't always need practical.
[01:28:48] Speaker 2: I mean, sometimes, you know, excess is important to have some variety out there. And we should point out, Rob, you are the rock star. I do want to bring you in here, too, because I mean, the idea that a hundred and seventy plus year old company steeped in tradition is Louis Vuitton would actually trust singer a young upstart company, if you will, with their traditions, with their vision. And as you can see there with their paint color there. I mean, what was the hardest thing that their artisans may be asked of you. And I guess maybe what you
[01:29:16] Speaker 18: asked of them. Yeah, well, I mean, obviously, it's a privilege to be trusted with that that heritage. And I think it was it's really due to the the team that that we have, which is a spectacular team at singer. Super, super talented folks that are very driven to very committed. And and they they really pushed us kind of in a lot of ways. It wasn't really just one one one area of the car that was, you know, a challenge. There's all sorts of metal work, rubber, wood, all kinds of things. And they really had a very bold vision. They were very brave. It wasn't maybe what you think of. They're not really what you think of anything of just simply a Louis Vuitton branded endeavor. They really dove into every single material, every single detail, how things were constructed. You know, it was it was it was it wasn't a challenge in a negative way. It was actually a thrill. I mean, it was it was very cool for us. Yeah. And we've actually become quite quite close. Yeah. Quite friends along the way. Well, yeah, I mean, you've had some great partnerships before.
[01:30:26] Speaker 2: I mean, and kind of a hodgepodge, if you will. You go from Louis Vuitton now, Red Bull before Cosworth, etc. I mean, so I assume these two cars are there for sale, I assume. Is this just going to be a two car project? Is there are there more to come?
[01:30:39] Speaker 18: What's going to happen? We don't plan to do another one. Obviously, we'd be open to it. I think we've we've dreamt up some pretty interesting ideas, but there's not there's nothing solid really solid at the moment.
[01:30:54] Speaker 2: All right, guys. Well, a great to have you here on the program. Have fun out there. Rob, keep rocking on. Rob Dixon there. Mazen Fawaz over at Singer, a vehicle design, of course, the unveiling that we're learning there out at the big car show out there in Pebble Beach, a Porsche 911 reimagined by Singer, that classic here with that Tom Saffron pink color there. All right. All right. We want to take a look here at a headline that's just crossing the terminal here. This involving Pershing Square. You can see the publicly traded shares moving a little bit lower there. And it looks like basically the main news here is that they have a new vehicle now named Pershing Square Ventures. They're going to launch a permanent capital vehicle appears. I'm going to try to get you some more details on this, but obviously the ever-expanding empire of Bill Ackman here now crossing the wire. We'll come back in a moment right here on Bloomberg. All right, let's set you up for what to watch over the next 24 hours. Here's what the markets will have an eye on. We do get more earnings before the bell. We're going to hear from Tapestry, of course, the big clothing and apparel retailer out with its results, but also keep an eye on bending spoons. Those shares have fallen about 11% in the cash session earlier today. This will be their first earnings report since they went public back at the end of June. Aftermarket, another read. Yes, another read on the AI and the trip trade. This time it's going to be applied materials out of the gate. We'll have full coverage of that right here on the close tomorrow afternoon. Tomorrow morning, though, two interesting reports to keep an eye on. The weekly jobless claims number. Obviously, a lot of fluctuations there, but keep an eye on that trend line and keep an eye on PPI. The CPI number we got this morning, definitely benign, probably the more important report, but PPI sometimes provides a little bit of a peak here and maybe what could come next. And we're also going to get some Fed speak. This time it's going to be from Cleveland Fed President Beth Hammock, and we're also going to hear from Richmond Fed President Tom Barkin. We'll see if they can maybe shed any light here on what the Fed might do next, particularly at that next meeting in mid-September. Take a look at the after-hours board here, because most of the major movers are to the downside. That conference call for Cisco, really intriguing here. Keep an eye on that. The share is down about 3.6% in the after-hours trade. And Cerebris, a really lumpy quarter for its hardware business. Its AI cloud business did pretty well, but investors, as you can see, selling off pretty hard. Similar pattern as to what we saw the last quarter when it reported. Coherent down about 3%. And Virgin Galactic now at about $2.80 a share, down 15% in the after-hours trade. Appreciate you joining us here on "The Close." We'll be back tomorrow with all of your market-moving information. Meanwhile, a lot of headlines coming out of Washington. Joe Matthew, Kayleigh Lyons, they're stepping up next with "Balance of Power," right here on Bloomberg.