Signs of a Slowing US Consumer — Open Interest 8/14/2026

[00:00:00] Speaker 1: The record run continues as retail sales fall by the most in more than a year with 30 minutes until the start of trading. Matt Miller, Danny Berger are off. I'm David Gurra. Bloomberg Open Interest starts right now. Coming up, a surprise drop in retail sales with spending unexpectedly falling across the board in the month of July. Oil rising as Treasury Secretary Scott Besant warns the U.S. is going to ramp up economic pressure on Iran in the days ahead. An open AI on track to generate annualized revenue of more than $40 billion ahead of a hotly anticipated IPO. Let's take a look at some of the stocks that are moving this morning before the opening bell. I want to start with Applied Materials reported very good earnings, I must say. But looking here at the head of the open bell down almost 6 percent. Pre-market trading here for Sandisk Corporation, of course, that memory company we've been talking over the course of this week just about that sector, about chips and memory. It up 7 percent. And looking at Reddit, the social media site, one I check in my neighborhood for candid anonymous reviews of restaurants and other stores, it is up 11 percent on news. It's going to be included in the S&P 500 next week starting on August the 18th. Want to get back to that retail sales data coming in this morning softer than expected. Michael McKee, our chief international economics and policy correspondent with us here on set in New York. Mike, great to see you. Let me just start with what was an unexpected decline here, down 0.6 percent. What do you make of the numbers and what do we see beyond the headlines? [00:01:30] Michael McKee: Well, there are probably a lot of under the hood reasons for this and we'll get to that in just a second. But here are the numbers. Six tenths percent decline in July from June for the headline number. You take out cars. It was down three tenths. Take out cars and gas down two tenths with the retail control number. That's the one that basically goes into GDP. That's the one economists and the Fed watch down four tenths. And that was a surprise. It was up by four tenths in the month of June. So here are some of the footnotes. If this were a earnings report here are the footnotes explaining what's going on. We had very strong quarter to spending by consumers up three point two percent on inflation adjusted basis. So that does show that the consumer was still pretty strong going into the month of July. Prime Day was in June this year. So we didn't get as much spending on non electronic I'm trying to think at non retail store numbers. World Cup ended in July. So that ended some of that extra spending. And did we mention it was hot. It was hot. It was hot. Did people want to go shopping because the malls were air conditioned or did they want to go to the beach. Looks like they voted for the beach. The biggest movers do show what happened under the hood. And the biggest mover at all was non store retailers. See there I said it right. Down two point two percent. We saw a big increase in the month of June because of course everybody goes over to Amazon and buys cheap stuff. Auto dealers were down one point eight percent. Although on a nominal basis they were little changed. Gasoline stations down nine tenths of a percent. Remember this is all counted in dollars. So lower oil prices mean lower gas prices means lower sales. And clothing stores were up one point nine percent. It is the beginning of back to school season. And maybe people wanted to go out and get t-shirts and shorts if they were going to the beach. So it was hot there. It was hot. So there. So there are some reasons why you might look past this and say this was sort of a one month blip. We were very strong. People took a month off. And there were some [00:03:38] Speaker 1: factors that led them to spend a little less. As I look for connective tissue here with the other hard data that we've gotten over the course of the week. I think a big theme here Mike is that these are backward looking data of course. And we're talking about a time in which that memo of understanding was was in place. There was more optimism about the prospects of there being some sort of off ramp in the Middle East. Energy prices were down slightly here. This is a this is very much an automobile story in part. Yeah. It's all vehicles as I said [00:04:03] Michael McKee: on surveillance because it's cars and gasoline. And the cars as I said on a nominal basis were pretty much unchanged. So there's a seasonal effect there. And then gasoline prices go down and retail sales go down because they're been nominated in dollars. The question now is are people going to pick up. Are they picking up in August. And it is back to school season. So what kind of sales are we going to see this month. Gasoline prices are going up. So that should help as well. Michael. He's going to be back with us here in a few [00:04:33] Speaker 1: minutes. We're going to get those sentiment data from the University of Michigan. Have you back on after those cross the terminal. Mike. Thank you very much. And I want to bring in now Sarah Hunt. She's the chief market strategist at Alpine Saxon Woods. Sarah. Great to have you with us. Let's talk about the data as a whole. Talk about that with Mike just a moment to go here. But how is your understanding of the market change as a result of the benign relatively benign inflation data we got this [00:04:54] Speaker 3: week. And now these retail data as well. I think that a lot of this is very situational right because the CPI numbers are also fueled by gasoline on the opposite direction because things went down. It hits retail sales. I think you know the chief economist for the bank of New York was on surveillance just recently and was talking about some of the factors that were in here and looking at credit card data. And the credit card data actually looks like it's starting to pick up again. And I think that that's very helpful as well. And so I do think that there were some situational factors that were happening that may not be repeated. We'll see how that goes. I did notice that the one service component that's in there was up 0.5 percent. That's restaurants and bars. So people were still spending. It's just a question of what they were spending on. And I'll go with Mike. It was hot. And they bought T-shirts and shorts. Right. Because what are you going to do. You're not necessarily going to go shopping or buy a car. And those kind of [00:05:41] Speaker 1: circumstances. We have to do it. It's a macro story this week. It's an AI story as well. Bloomberg has learned open AI's annual revenue run rate has nearly doubled over the course of this year looking at 40 billion dollars on an annualized basis. What does that tell you. And can step back even further. Just say sort of how you're feeling about the AI space here on the heels of yes the earnings part of earning season that we've been through with all these hyperscalers. But this is a sizable number is this company's kind of pivoted a bit. It was so consumer focused. And now like its rival like Anthropic really focusing on the kind of commercial [00:06:09] Speaker 3: professional sector. I think all of this is really important because the AI trade has been fueling the technology trade. And you've seen some oscillations between where do we go. And is there a cheaper model. And does that affect things. And how bad does that make things. But I think the fact that you're seeing these the growth numbers in the revenue lines of the companies that are participating is really important given the financing that's going on underneath the concerns about those financing how much we really need to spend. So I think that that's good news especially since they are going to try to IPO this year. And the IPO market went from what's going to be great to is it really that great. I don't know. What do we do now. So I think that it's important. And I think that that really helps investor sentiment. You bring up financing and I've been asking all [00:06:46] Speaker 1: the guests that I've talked to this question. You see Jensen Huang video there with all of the heads of these major financial institutions announcing this financing deal at the beginning of the week. Did that cheer you imbue you with a lot of confidence about the sector or did it worry you seeing this 500 billion dollar deal being announced in that way. So I think the concern [00:07:03] Speaker 3: continues to be we are spending an enormous amount of money. In the beginning that looked fantastic. Everybody had cash flow was coming out of cash flow. It wasn't a problem. And then it started coming out of debt. And is that a problem. Then it starts crossing. And then you start to worry. I don't know that it was a full on negative or full on positive. I think the fact that it was such a consortia probably helps a little bit because everybody's involved in the same situation. And that situation seems to be going fairly well. But that's also what I mean about those revenues increasing. You start to see a slowdown in that. And then it's a question of where CapEx goes. And I think the market's going to have to contend with [00:07:33] Speaker 1: that at some point. That point is not yet now. It is a wonderful earnings season in the sense that we're not just talking about AI companies. It seems like things are broadening out some earnings great across the board. 11 out of 12 sectors beating on estimates. As you look through those reports and listen to those CEOs. How much are they talking about notional progress when it comes to AI when it comes to productivity the way that it's affecting their business or is it still too early yet to get any kind of indication of that. I think that they are talking about it. [00:07:59] Speaker 3: I think that that's what helps the entire trade. I mean I think that there have been some bellwethers in that talking about how they're seeing efficiency gains. There's a lot of question about productivity gains and how much we need productivity gains. So I think that any time that comes through it adds to the story in a positive way. I really think that the question is going to be both orders of magnitude and what happens to that second derivative. And right now we seem to be still doing fairly well. And that's that's important because that also brings up the rest of the of the rest of the market that isn't just the AI trade. And you're seeing some very good earnings across the board there too. And I think that that's really helpful in what's been going on in markets this year. [00:08:34] Speaker 1: Mentioned video a moment ago. We were talking at Cerebris yesterday. This is a chip company trying to make a go of competing in this space. What do you make of the kind of mammoth size Nvidia at this point having such a corner on this market. And as we talk about kind of it broadening beyond kind of AI strictly even within the AI sector. It seems like there are still just so few players and really many are in the [00:08:54] Speaker 3: shadow of this one company. I think that you know Nvidia has always been ahead of the crowd in a lot of ways. Now there's a lot of trying to catch up because the margins have gotten even better and better and better. That technology is not so easy to catch. And you know to the to the point where a Matt had numbers today but they weren't as fantastic as they could be going forward. You're still building a lot of this right. You're still building a lot of different semiconductor production plants. And there's an attempt to sort of make sure that the supply isn't all coming from one place. You're going to see competitors. It takes a long time. I'll date myself here. But AMD used to be an also ran to Intel. Right. And think about how that has changed. Those micro those markets change. Who leads in those markets change. And we expect that to happen over time. And that's where people are looking for some of the smaller players to come in. But it takes a long time because why am I going to design out Nvidia if there is a potential problem. I'm going to get in trouble for that ultimately. Right. So there's so there is a there's a incumbency benefit that you get. But that always sort of turns over especially in the [00:09:53] Speaker 1: technology. You bring up AMD that company having a huge bond sale here in recent days. Are you concerned about credit in this in this [00:09:58] Speaker 3: space in the kind of high tech. A.I. space relative to other companies. The credit metrics don't look bad. I mean yes you're getting it. You're getting a lot of borrowing. But look at who's borrowing and look at the rest of their financials. And all of a sudden it's not like I'm going nine times EBITDA into debt. I'm not. I'm going from point five to two or one point five which is not. It's not inconceivable in this environment especially for the companies that generate a ton of cash. So I'm not. There are some places where people are concerned about credit. And there will always be places in that. And with the private credit markets there you know that it gets noisy and then it calms down a little bit. Right now that doesn't seem to be as noisy as it has been. But it doesn't mean that under the surface there are some issues. The bigger companies I'm not worried about. All right. Sarah's going to stay with us. We've talked about [00:10:40] Speaker 1: AI. We're going to talk about macro. Maybe talk a bit about fears of a bubble as well here in the hour ahead. We do a quick check of markets here. Markets higher going into the opening bell here as we look at those numbers as retail sales numbers lower than expected. Disappointment. S&P futures up six points here. NASDAQ futures up 77. And again we've seen this kind of recalibration over the course of this week about expectations for what the Fed is going to do or not going to do at that September meeting. It's a long road to get there. Of course we've got to get through Jackson Hole first. But a sigh of relief here among those who were worried that the Fed was going to be forced to hike at that September meeting. Looking at Brent 8697. The story is still out of the Middle East here. Treasury secretary Scott Best as I mentioned at the top of the show talking about wielding new tools to get Iran's economy kind of in control and maybe try to get some progress out of doing that. We'll see what happens and talk a bit more about that here in the hour ahead as well. In the meantime let's get a look at some other movers on our radar with Bloomberg's Emma Palmer. [00:11:32] Speaker 4: Thanks David. Yes I'm watching three stocks this morning. Let's kick things off with the AI boom. Sandisk on the move again after surging 14 percent yesterday. Demand for memory chips more than tripled this year. Prompting JP Morgan to upgrade the stock to overweight and revise up its price target by 47 percent. The shares are up about 7 percent in pre-market so far. Let's move on to financials. Brazil's digital bank new bank just cross a major milestone. It's topped 1 billion dollars in quarterly profit for the first time. And it's been helped by its surges in its credit portfolio and fewer costs. And that's really reassuring investors today. After a disappointing first quarter they're finally seeing the stock rally in the pre-market up a significant nearly 16 percent. And finally over to consumer goods. Wayfair getting a boost of confidence from Bernstein. It upgraded the stock. The furniture store saying that it's continuing to gain ground even as the broader future market continues to slow. Shares already up 19 percent this month. They're up a little bit in the pre-market. So we're going to be watching that. Maybe some good news if you're doing any online home goods shopping David. Thank you very much. Famously they have what I need. We'll see if that's the case. [00:12:44] Speaker 1: Coming up the U.S. preparing to ramp up economic pressure on Iran. We'll have the latest next. This is Bloomberg Open Interest. Now to high interest. A look at what's making headlines around the world. Jane Street deepening its bet on computing infrastructure. A developer sold 2.25 billion dollars in green bonds to finance an Oklahoma data center leased to the trading giant. The deal highlights how Wall Street's demand for massive computing power is helping to fuel the broader AI data center boom. President Trump is imposing tariffs of up to 100 percent on imported drones citing national security and U.S. alliance on foreign suppliers. Smaller drones face a 25 percent duty. The move could accelerate a split with China which dominates global drone manufacturing. I haven't expected Trump Xi meeting in September. The Trump administration is preparing with Treasury Secretary Scott Besson calls unprecedented economic measures against Iran. We went from epic [00:13:51] Speaker 5: fury to economic fury. We are going to apply measures like have never been seen in the history of the economic isolation on a country. It will be a combination of economic isolation and the continued blockade in the strait of [00:14:11] Speaker 1: Hormuz. I will note the U.S. has added some 2,200 sanctions on Tehran since 2018. That is according to one estimate. We get the latest now from Bloomberg Washington correspondent Tyler Kendall. Going back to what the Treasury Secretary said there. Measures like have never been seen before. What do we know of what the Treasury [00:14:27] Speaker 6: Department has planned here. Tyler. Well David at this point we're still awaiting further details though the Treasury Secretary did go on to say that it will be a quote one to punch once fully rolled out. What is clear though is that this is the administration's latest step in a bid to try to get Iran to the negotiating table. The context here of course being that Iran's economy has already been severely hit with central bank data showing year over year inflation reaching seventy seven percent. But as you just alluded to there Iran has already weathered waves of sanctions including this figure that you mentioned 2200 since 2018. Plus we should keep in mind that the U.S. did grant limited financial relief a few months ago but that wasn't enough to keep the cease fire intact. That's in part led our own analysts at Bloomberg economics to say that potentially dialing up the pressure could include the U.S. targeting Chinese purchases of Iranian crude though that of course leads to its own risks when it comes to the truce between Washington and Beijing ahead of the Xi Jinping's visit here to the U.S. next month. We'll have to see how this ultimately develops. The Treasury Secretary made it very clear that the U.S. will maintain that naval blockade. We got some optimistic comments from the Energy Secretary to overnight saying that the U.S. is continuing to more greatly escort more ships through the strait of Hormuz. But David I'm sure you saw those headlines overnight. We saw at least two U.A.E. state linked tankers be hit while they were trying to transit through the strait. So those headlines in the ones about the Abraham Lincoln as well. So a lot to focus on [00:15:58] Speaker 1: there in the Middle East. Bloomberg's Tyler Kendall. Thank you very much joining us from Washington on this Friday morning. Sarah Hunt still with us. She's the chief market strategist at Alpine Saxon Woods. I was struck by something the president said in an interview with Axios that he was quote low key ing it when it comes to Iran. I guess waiting to see what happens here applying what economic pressure he can. What's the market perspective on that. This has lasted a lot longer I think than most investors thought it would certainly longer than the president said it would. How are you thinking about the low keying it of this conflict. Well it has absolutely lasted a lot longer than anybody expected [00:16:29] Speaker 3: to. I mean we were talking about it in March as if it would go on for some short period of time. We're far beyond that. I think what it speaks to is the fact that there has been one inability to draw down on stockpiles which I think were very high before we started and that has had an effect that people weren't necessarily counting on. I don't know that the bluster that was going on before the low keying it was working. So maybe the low keying is I'm going to stop blustering. I think in the end what ends up happening is that people start to make different choices. And the longer this goes on the more substitution effects that you see. That doesn't mean that we won't have problems. It doesn't mean people are now talking about product shortages as opposed to crude oil shortages because of refinery runs and some of the issues that have happened to refineries globally. There hasn't been a new refinery built in a long time. So there's issues with what kind of crude can be refined where the products may be the problem. Jet fuel was supposed to be the problem. It hasn't been so far. I think that again you start to see those substitution effects. It doesn't mean that we can't get a problem that is then going to affect everybody including investors. Right now we've been fairly lucky through the entire straight of it. We marry this with the inflation data that we got. Yes there's a focus on the course of stripping out energy. [00:17:33] Speaker 1: But I saw Paul Donovan of UBS wrote this this morning. For major economies the price consequences of the war are the dominant reason inflation is currently above target. You agree with that. There's still talk among many Republicans of there being kind of residual Biden era stickiness to the inflation. I think so I think that there is still [00:17:49] Speaker 3: stickiness to some of the supply chain issues that started started arguably in covid or were happening. But the idea that we are also de globalizing which is which is still going on in the background. There's a lot of things that are much noisier. But the fact that we're still de globalizing is more expensive. That raises price levels to manufacture things in the United States which is good for the United States economy. But it still raises prices overall globally. When you start to move production back from those low cost countries back into medium or higher cost countries that changes the price level. I think that there are a combination of effects. But they're absolutely exacerbated by the energy effects. And the question is if the energy effects calm down. Will you start to see that in other places. And we don't quite know where that goes yet. [00:18:31] Speaker 1: There is a seasonality in the way in which we talk about the U.S. deficit and it's kind of percolated up again. We're talking about the deficit once again. And we had two bond auctions this week that kind of rose that to the fore even more. We had the 10 year auction that tenner the highest cost we've seen in many years. We had the 30 year yesterday. Five point two one percent decent demand. I should say on that Sarah but the highest cost that we've seen since 2001. And one. What do you make of that. First of all the tenors the cost that we saw there. But then beyond that sort of where do you see this conversation about the deficit going. I should say Fitch reaffirming that double a plus rating yesterday. Well the deficit and interest rates can be the same [00:19:08] Speaker 3: and two different conversations at the same time because there is some driver of interest rates that goes along with growth. And then there's a driver of interest rates that goes along with fear. And right now I think it's more about growth than it is about fear. But that fear does come back. And I think that it is absolutely something that needs to be dealt with. Nobody wants to deal with that because it requires doing the kind of things that no we can't even do the things that we want to do versus the things that we have to do. Right. So there is a problem with that that continues. I think that as it gets worse from a how much of the budget is coming into interest rates. You start to see more thought about that. But it doesn't change the math that we are not doing that right now. And so that deficit looks like it is going to continue to climb. It is not at catastrophic rates yet. No one actually knows what that tipping point is. But it will come. I'm hoping it I'm hoping you get to a point where the growth starts to outrun that. And that's what everybody hopes right is that the growth starts to solve that problem. Right now we're seeing a lot of growth in some areas. And that's helping a little bit. But we're still from a deficit. It's still an issue. All right. Let's come back and talk bubbles. We've got stocks at records here. [00:20:07] Speaker 1: We've got the Nasdaq 100 just a stone's throw away from a bull market. And we see some analysts here writing about a potential bull market and how to navigate it. Sorry bubble and how to navigate that. Should we get we're in the bull market. I should say safely at that. Sarah Hunt's going to stay with us. Be back after the opening bell. This is Open Interest on Bloomberg Television. Let's go check on the markets. We head to the opening bell here in New York City. We're looking at futures here higher on the heels of those retail sales numbers that surprised the markets down 0.6 percent here during the month of July. Looking at the Nasdaq 100 up 62 points here ahead of the opening bell. Still focused on that 10 year 10 year yield coming in some here. That of course the focus as Treasury Secretary Scott Besson has said his primary focus is on that 10 year yield. And finally turning to Brent crude the Treasury Secretary promising more severe actions on Iran here in the days to come. We see Brent at 86 92 a barrel. More Open Interest straight ahead here on Bloomberg Television. We're just moments away from the start of trading. This is Bloomberg Open Interest. I'm David Guerrero. Let's get a check of those futures here as we wait [00:21:25] Speaker ?: the start of trading at the Nasdaq and the New York Stock Exchange. We see futures up 6.5 about eight hundredths of a percent here. So very you know we're at this record level. Very little movement here going into the opening bell. Nasdaq 100 futures. [00:21:25] Speaker 1: Up 57 points. The Dow Jones futures down just slightly. You're looking what's happening to the New York Stock Exchange. Tudor Perini ringing the bell on this Friday morning. This is of course a general contracting company does a lot of building across this country and indeed around the world. Turning over to the Nasdaq market site. We've got Vogenics. This is a Raleigh North Carolina based pharmaceutical company that deals with metabolism metabolism and digestive pharmaceuticals late stage testing of those things based on the research triangle park. We see them ringing the bell there at the Nasdaq market site in New York City. Looking at a few stocks that I'm watching close to this morning starting with applied materials. We were talking about this just a few moments ago. This is a company that beat earnings estimates raised its forecast and yet shares are down as investors take profits as the stock has been more than doubled over the course of the year. It's Sandisk. Now that memory company. It up 7 percent on a JP Morgan call. Memory demand market has more than tripled since the last year. And lastly I want to conclude here with reddit the social media site. It up almost 11 percent here after news. It's going to be included in the S&P 500 starting on August the 18th. Bank of America. Bank of America strategists are looking ahead to the midterms and its impact on markets. The team there led by Michael Hartnett longtime strategist at Bank of America sees the quote door wide open for bulls to rip risk higher if Republicans maintain control of the Senate citing strong earnings a 10 trillion dollar wealth surge in 2026 and over one trillion dollars in AI CapEx expected in 2027. We are back with Alpine Saxon Woods chief market strategist Sarah Hunt. Want to get you to react to this note from Michael Hartnett and company. Really a lot of enthusiasm. You're really presenting the race in Texas in particular is this kind of referendum on the AI spend. He says if Republicans win if Greg Abbott wins the governor's seat once again doors wide open to data centers without any kind of contest. [00:23:19] Speaker 3: Your read of that. Are you worried about a bubble at this point in time. So it's it's hard to say exactly that you're worried about a bubble because you've got several different things going on and they're all a lot of CapEx and it's all about an infrastructure situation as opposed to one thing. But it doesn't mean that you will not have some issues. I mean I thought that there were some arguments about what was going on in Texas data centers even absent whether or not it's going to be Greg Abbott or not. So I think that that is a continual conversation. And I think that you're seeing much more backlash against that than you did before because of both the cost of energy and the issues around water. Although in the scheme of things it's less water than agriculture. But you need all these things. And we are counting on this infrastructure to come through. I don't disagree that if you get more what people would expect to be forward motion if you continue to keep the Senate Republican. But the market also tends to like a split administration in Congress. So I'm not I'm not exactly sure how that plays out yet. And I think that the pollsters aren't either. And if you just look at the recent elections that we've had the polling has been all over the place. And then the results have been a little bit different. So I think that it's one more thing to add into the list of things you're looking at. But it's not the only thing to count on. So you're not you're not looking at the potential for a bubble. How about general effervescence. What would give you cause for concern at this point. So there is general effervescence right. Even those memory stocks even even applied materials you look at that and you say the stock is doubled. I mean down 5 percent is or 5 is nothing relative to where the stocks have moved. I think that the enthusiasm is so high that you always worry that that enthusiasm is going to be too long. But you never know when that too long is. And I think that that's the biggest problem when you're trying to sit here and either market time or stock pick time and say this is difficult. I mean it's what we do. And we try to be as precise as we can. But you don't. Those themes can go on longer. And I think that the AI story is still I wouldn't say it's in its infancy but it's certainly not a mature story yet because it doesn't have that end result of where that plays out. So you're still going to see that build and you're still going to see that spend. We borrow that metaphor. [00:25:17] Speaker 1: So if we're in the beginning chapters here what's going to have us turn the page. What are you watching for to get us to that next stage in the story. [00:25:23] Speaker 3: Well I think it's really all the companies that are using AI talking about how they're using it and specifically what they're doing to both get better productivity to see where that flows through to margins and in a way that doesn't terrify people because the only way they're getting that productivity and margins is because they're firing people. You need to see that. You need to see a marriage of use and still employment before people can feel really comfortable that there isn't a huge downside in the near term to this. But I also think that it's taking some time for companies to get their hands around how to use it because people started firing a whole bunch of programmers. They went back and had to rehire some because you can't you do need an and with the technology. It's not always an or. And I think that finding where that's going to be is why it's hard to figure out where exactly the bubble is and when it's going to pop because you can see that there's a lot of spending and a lot of enthusiasm. But it's hard to see how that plays out individually. Let me pause at [00:26:11] Speaker 1: something here and you can respond to. I think that's the most worrisome to me. You see companies making these kinds of decisions particularly when it comes to personnel at a moment when I think everyone is admitting we're kind of fumbling through this in a way. It's a nascent technology. We don't know how it's going to affect the economy how it's going to affect a variety of sectors. And yet you see companies taking steps to kind of yes incorporate it kind of think of what the knock on effects of that might be. How do you think about that just the way that the industry embraces a new technology like this given so much uncertainty [00:26:36] Speaker 3: surrounding it and its efficacy. I think everybody's looking for the best way to use it in their process as opposed to wholesale getting rid of people. And I think that that first wave of getting rid of programmers again as I said sort of has had some backlash and you start to see people looking for people again. I think that everybody wants to use it themselves to make themselves more productive because there is an enormous amount of what I would call legwork that can be done. But it still has to be checked because you're still just going through what's already out there. It's just doing it faster. We always have to go back and analyze what we see even though we didn't do some of that legwork. You want to check and make sure those theses are correct and a person needs to do that. And I think that that's where in each individual industry they're trying to figure out how that works the best. And I don't think that we have the answer to that yet. But that's where you're going to start to see more enthusiasm or less [00:27:24] Speaker 1: depending on what happens on this hot summer day in the middle of August. Where do you see opportunity at this point in time. Where are you looking in the market right now for opportunity. Well there have been a bunch of places that were sort of left behind [00:27:36] Speaker 3: although they're left behind less now. Right. Health care was sort of left behind for a little while as were financials. The industrials were already part of this story because you were looking at the build out as were the utilities. But there are places now where you're starting to see some you know there was a lot. There's a lot of drug discovery. There's a lot of things that AI can help with that doesn't necessarily have to replace people but can make people more productive and discover things faster. And I think that there are some some of the instrumentation companies. You know we like Danaher. We like some of the areas there where the companies are being able to use this technology to further things and make it happen faster. It doesn't mean that we need less drugs. We just want to try to figure out how to get them better and faster. So I think that there's opportunity in a lot of areas there. And that's and that's where [00:28:17] Speaker 1: companies and investors are looking. We're pushing ahead here to consumer sentiment. Let me get the Sarah Hunt sentiment on the market here before I let you go. How are you feeling just generally about the state of the market in the economy today. I think that it I think that right now in August [00:28:29] Speaker 3: we're feeling pretty good about it. I think that if you get data points like we just saw on both retail sales and some of the other data that was a little bit mixed. It's going to be harder. The fall is always tricky because people are looking at all of a sudden you start looking at 2027 which I can't believe I'm saying out loud already because it feels like 2026 went so fast. But people start looking ahead at the next year and then you start to worry about whether or not that CapEx spend again. It's not that it's going to go. It's not that people are not going to spend but that rate of spending changes. When that second derivative turns negative people start to get concerned about where valuations are. We're not quite there yet. That is something to look at as we go forward. So great to see you. [00:29:04] Speaker 1: Sarah Hunt joining me here for the first half hour of the day here. First half hour of the show here as we get a start of the trading day. Sarah Hunt of Alpine Saxon Woods joining me here in New York. We're going to check on the stock market right now. Markets higher after that opening bell. Maybe I can look at some selected movers that are making moves here in the early morning of trading here. Clip MOV on the terminal looking at what's gaining here. Tesla and Apple both up this morning. Alphabet as well. Alphabet under pressure a little earlier in the week here. Micron technologies continue to talk about the AI trade. It up. Let's see about 1 percent here. Pointed some laggards here if we could. The other side of the coin here. Broadcom down 2.6 percent. Four or six at six points down. Eli Lilly applied materials. They are lagging as well. Maybe we can look at some sectors too here. Again just a few minutes into the start of the trading day on Wall Street. We see a lot of these sectors in the green here including communication services. That's been so much of our focus here over the course of this last week. Energy up higher as well. And then looking at sectors not doing as well. The financials down slightly this morning. Not by much. Health care index. We were just talking about that Sarah and I. It down about 75. 75 percent. All right. Coming up here. The Nasdaq 100 is less than 1 percent away from a bull market in the past month. Just as strategists came out a potential AI bubble bursting. We're going to get into that next on Bloomberg Open Interest. It's time now for our top calls. Here's Bloomberg's Hema Palmer with some of the analyst action in focus on this Friday morning. [00:30:28] Speaker 4: Thanks David. Yes. We're looking at three consumer stocks today. Kicking it off with airlines. A bullish bet on Boeing. The airline is winning its strongest Wall Street backing since 2022. BNP Paribas says Boeing's post-COVID uncertainty is over. And Argus expects a meaningful ramp up in production. Moving over to media. Fox is catching a pair of upgrades from JP Morgan and Wells Fargo. JP Morgan likes the boost from World Cup viewership. A better outlook for political ads and distribution strength at 2B. Meanwhile Wells Fargo says Fox's deal to buy Roku will create more financial muscle for spending. The shares are up about 4 percent this morning. And let's end on some home goods. Bernstein is upgrading online furniture store Wayfair to outperform. It thinks Wall Street's underestimating how well the business is trending and thinks sales can come in stronger than expected. [00:31:24] Speaker 1: Shares up a little bit this morning. Maybe some good news if you're doing a little home redecorating David. Indeed. Emma thank you very much. Appreciate that. Well optimism around the AI trade is also being met with caution as strategists at Citigroup and Bank of America game out a bubble playbook. A city analysis found the Philadelphia semiconductor index is in bubble land after it rose over two standard deviations above its long-term trend in real terms. Let's discuss Bloomberg tech reporter Ryan Flastelica. Ryan great to have you with us once again. Let's pick up right there just the degree which there are fears in this market right now of a bubble. We were talking about circular financing just a few few minutes ago. [00:31:59] Speaker 7: What stands out to you when you look at the Philly stock index right now semiconductor index right now. Well it seems like what these investment banks are really talking about was just how quickly we've seen the socks recover. Obviously it's done extremely well this year. I believe the second quarter of the year was its biggest ever quarterly game. But since then we really saw a pretty steep retracement that it is now clawing back some. And the scale of that which has been supported by some positive fundamentals including some of the earnings we got this earnings season I think has some people cautious about is it moving up too fast too soon. [00:32:32] Speaker 1: Is it is it a widely shared thing my right to mark the moment here as we get a pair of these notes is there been kind of growing generalized concern about this or is it still something that's kind of not not really in the mainstream. [00:32:41] Speaker 7: I would say the idea of a bubble is something that people talk about sort of in the abstract and something we've been hearing about really for more than a year now. People concerned about like hey are there a lot of parallels to the dot com era in terms of the build out of AI infrastructure. Is there a parallel to the build out of Internet infrastructure 25 years ago. So that's always been sort of in the ether. But I don't think people are really you know in mass calling for some kind of bubble that's expected to pop in the near term. Most people continue to say even though things have really moved up a lot. The fundamentals remain pretty supportive. We are seeing more growth better profitability a better ROI from some of this hyper scale or capex spending. [00:33:19] Speaker 1: So that is really part of it. But certainly people calling a bubble is not new. Viewers will know I've been watching applied materials here over the course of the morning. I wanted to ask you about that company kind of in line with what you were just saying Ryan which is here's a company that seems to have done pretty well. The outlook for the future looks pretty good as well. And yet we see it down here 3 percent this morning. What explains that just kind of the general sense that you're getting of why this company is down on this Friday. [00:33:41] Speaker 7: Well one thing I would just note is that applied materials I believe it had more than doubled year to date going into this report. So that's just an indication that expectations were quite elevated. Now I think the report was pretty strong. I think it beat expectations about the top and bottom line. The forecast was pretty strong. It is seeing a lot of tailwinds associated with artificial intelligence including demand for memory related chips. This is a company that is involved in you know building out the machines that are used to build out the chips. So it is seeing a lot of positive trends right there. So as far as this you know modest decline in the stock following the year to date rally. [00:34:13] Speaker 1: I'm not sure people are too surprised by that. Maybe I could close by asking about this Bloomberg report about the revenue run rate at open AI 40 billion dollars here. And just ask you to put that into some context. I mean I think there's going to be a tendency here to kind of want to match that with what Anthropics doing how it's fairing as both of these companies speed toward an IPO. And I gather there's some nuance there. Difficult to compare these two companies directly when it comes to that revenue metric. But what do you make of this news and what does it tell us about the contours of that push to an IPO that we have here presumably in the months ahead. Well I know there has been a lot of caution about [00:34:43] Speaker 7: open AI and like how much growth is it seeing. Is it able to meet the targets it's setting. And this really does have a lot of broader implications for the market because so much of open air so much of the AI trade is tied to these big LLM providers like open AI like Anthropics. So if open AI is seeing some better trends that's going to help reduce some of the concerns people have about its ability to monetize all of its AI services its ability to pay for all the AI infrastructure. It's building out that will ease concerns about you know going back to the whole bubble idea. If we start to see these big LLM providers really start to get on a stronger financial footing. I think that's going to have positive implications across the space. Right. Great to talk with you as always. [00:35:23] Speaker 1: Thank you very much. Have a good weekend. That's Bloomberg's Ryan Vestelico joining us from Chicago. Coming up we are talking commodities with portfolio manager Doug Daley. How to play the trade through ETFs. That is coming up next here on Bloomberg Open Interest on Bloomberg Television. Commodities remaining in focus as the war with Iran passes the five month mark from oil to uranium to gold. The market's favorite trade keeps changing making it harder to pick the next winner. Doug Daley co-manages the core commodity natural resources ETF which takes a broader approach to the commodities trade. And he joins us now. Doug great to have you with us. We'll get to oil here in a moment. But I wonder in the broader commodity space of where you see the most opportunity at this point. And as I say a lot of vacillation here in terms of what's been doing well. [00:36:12] Speaker 8: Absolutely. Thank you for having me. Really I think that's the key is there's a lot going on in a lot of different places right now especially with everything going on with AI data center build out the hundreds of billions of CapEx we're seeing. Truth is we're going to need a lot more energy across the board not just traditional energy like oil and gas but also renewable alternative energy. These are things that by investing via natural resource equities were actually able to get exposure to as opposed to just futures alone. Talk a bit more about that. [00:36:39] Speaker 1: The equities kind of that you're looking at that make a part of the portfolio here. We had a head of a nuclear fuel company on a little earlier in the week. Very bullish very bullish on the promise of this being something we're going to see a lot more not just in the U.S. [00:36:50] Speaker 8: but around the world. Absolutely. And we focus on uranium miners a good example of something we incorporate in our in our portfolios to gain exposure to the nuclear trade as well as you know all the materials and other things that go into the construction of all this power infrastructure all the you know the data centers just again the breadth of materials the breadth of energy sources we're going to need to fuel these massive demand increases is really staggering. And that's why our approach is really in all of the above type of solution. When I ask you about metals. [00:37:19] Speaker 1: I know there's been a lot of inflows into gold here. Of course the still very much a haven and something people turn to when there's a [00:37:24] Speaker 8: lot of uncertainty. What have you seen when it comes to gold kind of in recent weeks. So gold obviously been very volatile. We know for the the mining companies of gold. It's been a great environment to be a gold miner right about now aside from higher fuel costs today. Gold prices where they are. These companies are making phenomenal margins. And we've seen those companies up the triple digits last year. And they're also doing well again this year. So it's a good time to be a gold miner with prices as they are. I know that [00:37:48] Speaker 1: oil is not your sole bailiwick here. But you're you're tracking that I'm sure. And we've kind of been through this moment where you have the president kind of job voting there being some solution here to this conflict in the Middle East. And oil has risen and fallen in equal measure day in and day out here. How are you kind of thinking about oil at this moment in time. We heard from the IEA about just the low levels of resources that many of these countries have now the need to replenish those stockpiles. What's your [00:38:10] Speaker 8: advantage on the oil sector right. I think it's it's in line with that. I mean the difference today versus at the start of the conflict is we still have very little uncertainty about what's going on in the straight. But inventories are operationally critically low levels right now. So it's a very different environment. We've seen China pull back on its purchases. But again they're going to run through that at some point. We're going to have to build up those inventories. As you say that should be a strong floor of demand. And you have not seen capex spending in the oil companies particularly trying to take advantage of what's going on with prices right now. They have been continued to be very restrained enjoying free cash flows and strong margins. So we're not really seeing a big supply response either. So it's a it's a delicate situation in oil right now. And at $80 or so it might be a little [00:38:56] Speaker 1: complacent. Yeah. You bring up China. And we're looking ahead to this meeting between President Trump and President Xi and Washington in September. That's when it's scheduled to take place. And I gather that rare earths is going to be on the top of that agenda. There's been a push just as there has been for greater emphasis on the nuclear industry here in the U.S. on rare earths as well for the U.S. to do more and kind of shore up that supply chain. How are you thinking about that side of the natural resources picture here. The emphasis the U.S. is placing here on having to get more of that under its control. Absolutely. And we're seeing it not just in rare earths other [00:39:22] Speaker 8: rare rare earths is a great example because China controls you know 90 to 95 percent of the refining of rare earths. They also control a strong majority of the actual materials themselves. But we're seeing that across the board. It used to be that you know how cheap something was produced was the most important factor. Right. And today that's really starting to shift towards where it's produced being just as important as how cheaply. Right. If a 20 mile straight in the Middle East gets shut down and all of a sudden all the things that flow through it are not getting to you you need to rethink how you're supplying these critical materials including rare earth elements which are crucial for so many things so many military and in consumer technologies. So we're not just seeing it in rare earths. We are seeing it across the board. I think you're starting to see countries and and companies start to think about how we can bring that production back to you know friend shoring or near shoring or on shoring it to ensure that security of those supply chains going forward. The minute we have left just tell us about the thesis of the funds or where you see it playing a role in a person's portfolio. Absolutely. We think it's it's really key for a portfolio. If you look at the proportion of the S&P 500 for example that is invested in commodity producing companies 50 years ago it would have been almost a third of the index. Today it's less than five percent the index. A lot of people think they have exposure to these companies when in reality they they actually don't just through their natural broad equity exposure. We think this fits well with that to help bolster that exposure because again these are the companies that make all the real things that the world uses day in and day out and has continued to use more and more of as our population grows as technology advances. So we think it's a really important part of a portfolio and one that many investors might be lacking right now. [00:41:00] Speaker 1: Doug Daly thank you very much. Great to see you here in New York. Doug Daly of Core Commodity Management joining me here on set and you can tune in to ETF IQ on Mondays at 12 p.m. New York time on Bloomberg Open. Just want to take a look here at what's moving as we get into the trading day close to 10 o'clock Wall Street time. Looking at the major indexes first we see the S&P 500 up about a tenth of a percent here. The Nasdaq up about a quarter of a percent. The Russell 2000 up two tenths of a percent. There was some talk about there being some kind of takeoff here in small caps when we were on the show yesterday. Not seeing that yet in dramatic effect. The Dow barely moving this morning. Taking a look at Brent Crude. We were just talking about this a moment ago. The challenges that the U.S. administration is facing here with the issue of oil as the conflict the Middle East continues rounding that five month mark. The president saying this is going to be much shorter live conflict than in fact it has been. We see oil at 8695 a barrel here absent any kind of deal to reopen the straight of Hormuz. Looking at a few companies in particular Nvidia has been in this marquee position over the course of the week. It's still up there ever since that announcement of that financing deal with those six major financial firms including Goldman Sachs and Blackstone and Blackrock and KKR. It up a tenth of a percent and very much still focusing on the AI trade. Yes the macro story the AI story as well. Sandisk up 6.1 percent this morning and applied materials we've been talking about down 3.6 percent. This is a company that had great earnings great forecast but the stock has more than doubled here over the course of the last year. Reddit joining the S&P 500 here in the days ahead I believe on the 18th of August it up 15 percent on that news and we've talked about AI we've talked about macro space systems York space systems down 15 percent. This is still a story that we're tracking here on open interest. The space story very much front and center here as we get to this part of earnings season. Coming up in the next hour you missed survey director Joanne Hsu on the latest consumer sentiment read and then Flox CEO Garrett Langley on his surveillance firm's recent backlash. We're going to hear from the commissioner of League One Volleyball. It's coming up on Bloomberg Open Interest on Bloomberg Television. Stay with us. We have 30 minutes into the trading day. Welcome to Bloomberg Open Interest. I'm David Gurra. Matt Miller and Danny Berger are off. Let's get a check of the markets here on this Friday morning. Just about an hour in trading half an hour in trading underway here. Looking at the major indexes barely moving here but we are in kind of record-setting territory as we have been over the course of the entire week. We look at the S&P 500 here up about six points and looking here at the Nasdaq 100 up about 0.15 percent focused on the 10 year as well. That coming in just a little bit here 4.65. The VIX incredibly quiet as our colleague Tom Keen would say here in spite all of this is where focus has been yes on the macro story but on the AI story as well over the course of the week. And we're getting some new data crossing the terminal right now. University of Michigan Consumer Center between my colleague Michael McKee chief international economics and policy [00:43:55] Michael McKee: correspondent for some insight into that Mike. We're depressed again. We are. Yes. Americans sentiment has gone down. It's still above 50 but it's at 51 down from 55.2 is fairly significant drop. Current conditions 51.8 down from 54.8 and expectations 50.6 from 55.4. What might be behind it. Well the war is still going on and gas prices are going up again. So you're seeing Michigan one year inflation number 4.3 percent up a tick from 4.2 percent the prior month and the five to 10 is unchanged at 3.3. So I know you're going to be talking with you in a few minutes but looks like probably what's going on in the [00:44:38] Speaker 1: Middle East is weighing on Americans. Mike Mary these soft data with the hard data that we've gotten this week. And I'm curious when you look at the whole panoply of data that we get how important this is what it tells you and indeed what it tells policymakers when they get a sense here an anecdotal sense I should say of how consumers are feeling about the economy and their [00:44:54] Michael McKee: prospects going forward. Well what studies have shown is these are more contemporaneous numbers the confidence numbers that we get from Michigan and the conference board and they sort of tell you where consumers are now. But they're driven a lot by headlines in the Michigan case. It's usually something to do with the stock market in the conference board case. It's much more the labor market. But both of them have been going down had had been going down because of the war in got a little bit of a bounce in July when the numbers for gasoline and things like that were going up. And there was a thought that might the war might end. But now it's giving people again disappointing outlook. Now we saw in retail sales today didn't matter. People were still spending money. It was really cars and gasoline and nonstore retailers because of Prime Day that pushed the retail sales numbers down. So if Americans keep saying they're depressed but keep spending money. The Fed's not going to worry about it. There we go. Michael McKee. Thank you very [00:45:56] Speaker 1: much. Michael McKee our international economics and policy correspondent breaking those numbers for us here as they cross the Bloomberg terminal. Joining us now is Joanne Xu University of Michigan Service of Consumers director. Great to have you with us. Joanne once again. Mike McKee a moment ago saying we're depressed again. Is that your rate of these data as well. Overall consumers really just don't [00:46:14] Speaker 9: feel like they're thriving in this economy. And one of the big things that really changed over the last month is that the downward trend in gas prices that we had been seeing earlier in the summer that not only stopped but it started to reverse. Consumers have been loud and clear that the number one thing that they've been concerned about for the last few years now has been purchasing power. And that's something that [00:46:38] Speaker 1: hasn't really improved much at all. How do you think of these numbers kind of in complement with the retail sales numbers that we got as well markets reacting positively to that unexpected downturn in retail sales. But what are these two numbers together these two sets of data together. Tell you just about the health of the consumer the feeling of the consumer at this moment in August of 2026. So at this [00:46:54] Speaker 9: time labor market expectations have are pretty flat. They haven't gotten any worse than they were last year. And so as a result you know consumers are are not feeling any worse on that front where they're really feeling the pain has been on has really been on prices. They're not expecting their real incomes to go up. And while people aren't necessarily afraid that they're going to lose their jobs tomorrow or any more than they were a few months ago that gives them the ability to hold a part of their spending. But what consumers are telling us is that they are looking for value. They're trading down how they're spending. Even if they're not making major [00:47:33] Speaker 1: cutbacks they are making alterations to how they spend. A declaration in recent days for the Treasury Secretary the case shaped economy is [00:47:40] Speaker 9: over. Is that borne out in the data that you see. We consistently see that higher income higher wealth people feel much better about the economy than lower income and lower wealth consumers. And that that absolutely continues to be the case. Some of the largest drops in sentiment that we saw between last month and this month has been among lower income consumers. Those are specifically the types of consumers who are most sensitive to the persistence of high prices and don't have the buffer stock of a large stock portfolio to cushion them through through high inflationary periods. So at this time we are seeing some some signs continued signs of strain at the bottom of the income distribution. But those who are wealthy those with large stock portfolios they have the wealth that will power them through through this period. And that's one of the major reasons why aggregate spending may still be relatively OK or stable because we have that high wealth segment of the consumer that is absolutely [00:48:38] Speaker 1: willing to spend. How granular insight do we have and just of how Americans are feeling about the war stretching on as long as it has here entering its six six month. A sense of sort of how they're feeling about its prospects generally the effect that it's having [00:48:50] Speaker 9: yes on their personal prospects on business prospects as well. What we saw between July and August was not a whole lot of movement in terms of personal finances but we saw pretty strong deterioration in expected business conditions and this lack of resolution about what's happening in the Middle East and what's happening in the Strait of Hormuz is likely a big part of that. Consumers don't necessarily see their personal financial situation changing a lot between last month and this month. But they do seem to be [00:49:17] Speaker 1: worried about business prospects. The old line is that there's kind of a political nuance to these numbers that you get here. How should we think about that that the way that the survey is conducted and what it tells us about the American public more broadly. You know the different [00:49:30] Speaker 9: people in the economy in the population have different types of use of the economy and the political spectrum is no different. That being said this decline in sentiment between July and August was visible across the political spectrum. And in fact the largest declines were seen among Republicans. For Republicans now we're at the lowest level of sentiment since the last presidential election. So that really goes to show that this weakening in sentiment is quite broad based. [00:49:58] Speaker 1: Thank you very much. Joanne Xu of the University of Michigan joining us on the heels of those new data being released. Really appreciate it. Just reiterating what we learned here. A downside surprise. Those sentiment data coming in 51. The expectation was 55 according to the survey. And looking at those one year inflation expectations 4.3 percent slightly higher sorry slightly higher than what was surveyed as well. We're going to check on the markets here starting here. Look at the S&P 500 up about a tenth of a percent here. Ten points 78.08. The Nasdaq 100 is up about a third of a percent. Eighty eight points. And Brent crude still attracting a lot of my attention here. That is rising this morning as well. Eighty seven thirty three. We're talking about this just a moment ago with Joanne Xu the way that Americans are processing the fact that gas prices continue to gravitate higher here after that memo of understanding was was done away with Treasury Secretary Scott Besson telling Newsmax the U.S. is preparing economic measures against Iran like have never been seen. We'll get the latest on that from Bloomberg Washington correspondent Tyler Kendall. Look we've seen the administration trying to navigate these waters for some time now Tyler recognizing the fact that yes oil prices are up gas prices are up with them that in concert here. It's becoming a political issue for this White House. What's your read on what we heard there from the Treasury Secretary kind of expressing I think the irritation dissatisfaction that this administration has with where these gas prices and oil prices are. [00:51:11] Speaker 6: David that's a fair point. At this point the U.S. is trying to make sure that it can get Iran back to the negotiating table after what has been weeks of stalled talks. In fact we heard from a spokesperson for Iran's National Supreme Council earlier today who said that they are in talks but that they are in talks with Oman and that any deal that they reach to establish shipping routes in the Strait of Hormuz will be totally separate from reopening the street. So that shows us a little bit more of the nuance there that as the U.S. wants to ensure that there can be freedom of navigation they're going to have to take these additional steps in a bid to get Iran to talk. We're still waiting on what more details what this is going to look like. The Treasury Secretary went on and said it's going to be a quote one two punch. There's going to be this economic pressure as well as the U.S. maintaining its naval blockade. The context here is that Iran's economy has already been significantly squeezed. The IMF said back in April that it expects Iran's economy to shrink by 6.1 percent this year. And recent central bank data is showing inflation reaching year over year 77 percent. But as you and I spoke about last hour on this program, Iran has already weathered waves of sanctions. And when offered limited financial relief earlier this year, it wasn't enough to keep that ceasefire in place. David, I will point out that our own analysts at Bloomberg Economics say that in part, this is why they think that dialing up the pressure could very likely mean that the U.S. targets Chinese imports of Iranian crude. Though that comes with its own geopolitical risks amid the truce between Washington and Beijing ahead of Chinese President Xi Jinping's visit to the U.S. in about a month's time. Though, of course, we also saw last night the U.S. move to impose those tariffs on drones, which was seen as an effort to perhaps push back on China. [00:53:00] Speaker 1: I want to move this, Tyler, if I could, into the political crucible, the domestic political crucible here. And I'm curious, the way that the White House is approaching this issue. Yes, there is the threat there from from the Treasury Secretary. But we are less than three months out from the midterm elections. And I'm curious how the White House is thinking about this uptick in energy prices, the kind of way that they've stayed high and what that means for them and for Republicans more broadly here on the campaign trail. Well, David, as you all know, the [00:53:22] Speaker 6: economy will be the number one issue going into the midterm elections. And we're starting to see Republicans lose their grip when it comes to voter favorability on the issue. A new poll from Fox News shows that for the first time in 10 years, Democrats are now beating Republicans when it comes to voter confidence in handling the economy, an issue that historically has gone in the GOP's favor. Now, this White House has been playing defense on the issue, though President Trump still maintains that he feels that the American public is on his side when it comes to trying to ensure that Iran won't be able to obtain a nuclear weapon. But we've seen the U.S. have to take some additional measures. Earlier this week, Bloomberg News confirming that this White House extended that Jones Act waiver an additional 90 days in a bid to make it cheaper to transport these critical goods like gas, diesel and jet fuel across the U.S. We had at one time been talking about the idea that we could see a federal gas tax holiday. But as we get closer and closer to November, it doesn't feel like that is going to be a likely avenue of any potential relief. We'll have to see where it goes from here. The administration is still talking about the economy. They are still campaigning when it comes to the one big beautiful bill. President Trump is expected to be on the campaign trail later today. But David, we heard from his NEC director Kevin Hassett earlier this week in an interview on Fox Business. Business seemed to suggest that we should expect additional plans to come forward when it comes to potentially tax cuts related to capital gains. But keeping in mind that those are initiatives that have to be implemented by Congress and we can't get there until after the November. [00:54:51] Speaker 1: Just about a dozen legislative days here. I think before the midterm elections. Tyler Kendall. Thank you very much. Our colleague in Washington, D.C. with that update. We're about 40 minutes into your trading day. Let's get a look at some of our other movers on our radar with Bloomberg's. [00:55:03] Speaker 4: Thank you. Yes we're watching three stocks this morning. We're going to start on applied materials posting solid earnings and a better than expected forecast. But still getting some lukewarm reaction here from investors. Shares down about 4 percent this morning. Maybe signs of lofty hopes surrounding the company. That is key to the AI boom. And we'll stay on that theme. Sandisk is on the move again up this morning after winning an overweight overweight rating from JP Morgan. They think the company is uniquely positioned to benefit from the AI driven demand for memory chips. Stock is up about 7 percent in a strong morning. And finally let's get to the Internet's favorite chat forum Reddit. Shares of Reddit are surging this morning. The stock is set to join the S&P 500 next week. Its sales have grown steadily since its IPO two years ago. Shares are up nearly 15 percent this morning. I'm sure there's a sub Reddit thread for that, David. [00:55:58] Speaker 1: No doubt. No doubt there is. Thank you very much. Appreciate it. Those are the morning movers. And coming up Luigi Mangione expected to plead guilty today to resolve federal charges relating to the fatal shooting of United Health executive Brian Thompson. Get the details on that ahead of a court appearance. That's coming up on Bloomberg Open interest. All right. Not a high interest to look at the stories making headlines around the world. Open AI's annualized revenue run rate has topped 40 billion dollars, roughly doubling from the end of 2025. Growth is being fueled by coding tool codex subscriptions, advertising and rising demand for AI agents as the company builds momentum ahead of a potential IPO. The information is reporting that a flying Tesla could be unveiled as soon as this month. The site says Tesla is planning a stunt demonstrating a SpaceX linked roadster with flying capabilities at a Texas test site. Elon Musk has reportedly warned staff the ambitious demonstrations could go awry. Spectators will be kept hundreds of yards away from the demonstration because of potential damage to their eardrums. And Luigi Mangione is expected to plead guilty today to federal charges tied to the killing of United Health Care CEO Brian Thompson. Prosecutors are expected to seek life in prison. A federal guilty plea could also complicate Manzioni's separate New York murder trial. We'll get more on this here with Bloomberg Legal Editor Tony Ares who joins me on set here in New York. Let's set up what's going to happen today so much as we know the expectation is he goes to court and pleads. [00:57:30] Speaker 10: He'll plead guilty and there'll be some kind of what they call an allocution where he describes what happened. What did he do on that fateful day in December 2024. And he'll talk about that. And then the judge will decide whether to accept the plea or not. After that it spins ahead to the state trial which was scheduled to take place September 8th. Now the whole point of a guilty plea in the federal case is to try and stop that trial to say that the legal doctrine of double jeopardy where you can't be tried for the same crime twice takes precedent and the state trial should go be dismissed. [00:58:01] Speaker 1: Whether that happens or not it's an open question. Let me pick that apart a little bit here. Help us understand the distinction between what he's being accused of at the federal level and what the allegations are at the state level. [00:58:09] Speaker 10: The charges in the federal case is that he stopped Brian Thompson and that stalking led to his death. So it's a stalking charge. It's a serious crime and it carries life and life in prison which the Justice Department likely will still ask for no matter what kind of agreement there might have been. Now in the state case it's a traditional murder case that he planned the murder to kill him and he murdered him on that day. And that becomes New York is one of the strictest double jeopardy laws in the country which is very fact based. It says you can't be charged out of the same crime out of the same events not necessarily charges. Others. So that's what man Johnny's lawyers will argue. Same case same facts. Please no no state trial. Manhattan district attorney will argue this is a murder case. It's a very very different charge. He wasn't charged with that. And this case should go forward. [00:59:04] Speaker 1: What what brought this about. So we have seen the defendant take a very strong tack in a lot of these previous hearings that he's had seemed to indicate that he wanted to fight all of this. Indeed has won some small victories in the course of these these appearances as well. Why why this change. Why plead. It's very they want to get rid of it. They don't want to go through two trials. [00:59:23] Speaker 10: There are some benefits to being incarcerated in the federal system rather than the state system. You can argue about whether that's really a benefit or not. But two trials would be a lot for everybody. But I just want to point out we're not sure what's really going to happen. I mean in June. There was a big deal that we learned. The judge disclosed that his lawyers been arguing for a type of insanity defense called emotional distress extreme emotional distress which would have lowered the charges in the state case to manslaughter versus murder would have might might have lowered the sentence. 36 hours that we learned after we learned that the lawyers had been planning that for months in a very short one page filing. They said we're not seeking that anymore. No one knows why that happened. So things change very quickly here and they could change again today. [01:00:12] Speaker 1: Is there a circumstance like this much communication between lawyers at the state level and the federal level. I imagine there's probably some dissatisfaction on the state's part that this is this transpiring the way that it seems to be. [01:00:21] Speaker 10: I you're completely right. Usually there's very very close communication between federal and state prosecutors. But you have to look at the way things are right now. This is the Trump DOJ Trump prosecutors. And in New York Alvin Bragg the person who put Donald Trump on trial a few years ago in the so-called hush money case. So I don't think there are a lot of warm feelings there. [01:00:42] Speaker 1: I've covered a few cases a few trials and sometimes at moments like this there's there's there's a lot of expectation to build up but not much happens in the court itself. It sounds like from what you're describing this will be a very fraught dramatic moment in the court. If it goes the way we think it will it'll be very dramatic. Let's let me just ask you about this double jeopardy issue and sort of how this might play out going forward. Is this something that could kind of forestall the state trial from happening here or might be taken up kind of on the heels of it. [01:01:04] Speaker 10: That's a good question. And we don't know the answer. So what will happen is very soon after a plea is entered today. Man Jones lawyers will file a double jeopardy motion and ask for dismissal to state case. The judge will certainly will more than likely pause the state trial until he rules on that issue. And then if he rules the trial can go ahead. Not certain. But if he does then there'll be another question. Whether they man Jones lawyers can immediately appeal that to the state appellate courts or they can only appeal it after the trial takes place. So there are really two or three key moments after today when we learn what happens to the state trial. [01:01:40] Speaker 1: Scheduled to start what 11 o'clock 11 o'clock should take about an hour. Few minutes now. Tony. Thank you very much. That's Tony Ahrens on the legal team here at Bloomberg filling us in on the state of player when it comes to those trials. Still ahead. Flock is rolling out new privacy safeguards. We're going to speak with CEO Garrett Langley. That's coming up next on Bloomberg Open Interest. Bloomberg Open Interest on a summer Friday. Let's take a check of stocks. Not really moving here so much on this Friday morning. We see the S&P 500 basically flat. Same with the Nasdaq. Russell 2000. Looking at those small caps get up slightly third of a percent. Nothing major. They're looking at the tenure yield. Here's we continue to talk about sort of what this week's data has meant for the Federal Reserve going forward here. There is some expectation that if the inflation numbers that we got earlier this week were in line with expectations. Maybe that rate hike would be on the table in September. It seems like from what we've gotten with the CPI and the PPI reports. The retail sales numbers that we got today. Policymakers have bought themselves some time to enjoy Jackson Hole at the Kansas City Fed Economic Symposium as they make their way to that September meeting. No real pressure to hike rates at that meeting. Looking at a few stocks here in focus. We've been talking a lot about the AI trade over the course of the week here. Nvidia has been front and center for so much of that starting with that announcement at the beginning of the week that Nvidia and six financial firms have partnered on a financing deal worth $500 billion. We've seen Nvidia down slightly two tenths of percent on this Friday morning. A couple of upgrades I want to draw your attention to one is Sandisk Corp. Of course that memory maker Micron. Both those stocks are up as well. And Reddit we see here up 14 percent. Reddit being added to the S&P 500 next week on the 18th of August. Of course that social media site known for its chat boards. Tesla up here in the corner up 1.8 percent. A wild story here. Tesla reportedly planning a flying roadster working with SpaceX on a vehicle that will be tested. According to Elon Musk in Texas. Of course that is where SpaceX is now headquartered. We'll see what comes of that if it's anything more than a stunt. But I will say here there's been a lot of speculation about a potential merger at some point between SpaceX and Tesla. Maybe this is portending that. And once again just looking at Micron here that up 2 percent. New Street seeing its value at $3 trillion. All right. Coming up here a fascinating conversation. I'm sure with block CEO Garrett Langley about growing privacy concerns surrounding that company's surveillance technology. This is a company that kind of charts license plates and other data and is used by law enforcement across the United States. Talk with him next year on open interest on Bloomberg Television. Stay with us. The company flock is rolling out new privacy safeguards amid concerns over its surveillance technology. The changes come as the company expands beyond license plate readers with annual recurring revenue topping 500 million dollars. Joining us now is flock founder and CEO Garrett Langley Garrett. Thank you for being here. And I want to just start by asking you how surprised you were by everything that led to these changes including that that report in the Washington Post that at least 50 law enforcement officers have been charged or accused of using license plate readers. And I want to just start by asking you how surprised you were by everything that led to these changes including that that report in the Washington Post that at least 50 law enforcement officers have been charged or accused of using license plate [01:04:46] Speaker 11: using license plate readers for unauthorized purposes. What was it a surprise to you. Yeah I mean look I think the debate we're having right now is important one. And one of the consequences of being consequential is that a lot of people care about how your products work and how you run a business. And I think we've been transparent from the onset of the business that this is critical public safety infrastructure. Now what's been a surprise is police abuse. I grew up in a city where I trusted the police and to see a single officer abuse our technology is horrible. And I think I'm really proud of the tools we built you know four months ago and now requiring that across the country as a mandate because I think the topic of police abuse has just been under discussed. And there are certainly communities who have felt this way. And I'm proud to be a part of that kind of new chapter for law enforcement in America. I want to ask you just about the company's degree of culpability for that kind of abuse. So I saw on CNN site a Milwaukee [01:05:44] Speaker 1: police officer used flock to search the location of his romantic partner 124 times. Is that the fault of flock in any way is the fault of the police department or just the officer himself. How do you think about that issue. Yeah I think it's a shared responsibility. Right. I think the the we as a company develop incredibly powerful tools. Right. You know last year we helped solve over a million crimes. And I got the data from July of this year. [01:06:08] Speaker 11: And in July alone we helped detect one thousand and twenty five missing people. And I think we all want to be safer. And the question is how do we get there. Right. How do we balance safety and privacy. While holding those who have accountability. Sorry while holding those who have power to a level of accountability. And so we're going to continue to push forward. And yesterday was definitely a new chapter for us. And we're far from perfect. And we're just going to keep talking to our customers. And more importantly talking to our customers customers. [01:06:36] Speaker 1: Which is the community. You are somebody of course in the position of power as well. And we're kind of at this moment in which not just in the field in which you work but more broadly we're being told to kind of trust executives the heads of companies to make decisions and really wrestle with issues that go beyond the kind of general remit of the businesses that they operate. So. So let me just ask you a basic question which is. [01:06:54] Speaker 11: Why should consumers trust you. Why should consumers trust this company on issues of privacy and on issues of safety and the light. Yeah. I don't I don't think you get to ask for trust. I think trust is something you have to build over time. And you know we're live in almost seven thousand communities across this great country and probably attended close to 10 thousand city council meetings last year or the last 12 months. And that trust gets built in the field. It gets it gets built day in and day out. And for me you know I think about just last week in my hometown here in Atlanta you know there was a stolen car. And that car had a two year old child in the back. And within an hour that child got safely returned to her parents. And that happens every day sadly. And for us we're going to continue to build that level of safety while holding police accountable and while building transparency into the system. And so every action is logged. Our customers launch transparency portal. We've got about fifteen hundred of those lives. So it's a process and it's an evolution. And I think to your point we are questioning and asking as CEOs you know what is our responsibility. And I think the number one thing we can do is have strong defaults. [01:08:04] Speaker 1: And so for us requiring auditing requiring a shorter retention period. Those are the kind of defaults that move the industry forward. You mentioned that transparency portal. I gather that's elective that a law enforcement agency can sign up to have that on its website. Have you thought about mandating that having each of your customers have to do that without question. [01:08:22] Speaker 11: Yeah we definitely have. And I would say I take the decisions I make not lightly. Right. The decisions I make impact thousands of police departments and over 12,000 customers at this point as a company. And so when we make those defaults it's a lot of consternation. And I think the decisions that I announced yesterday were years of listening months of engineering work and not something that we just do flippantly. [01:08:46] Speaker 1: You've been tangling with the ACLU and the Electronic Frontier Foundation and something the ACLU has suggested here is maybe you should have an independent evaluator analyze your audit tool. Is that something that you would consider committing to doing. [01:08:59] Speaker 11: A hundred percent. And I think we maintain an open line of communication with the ACLU because like me they want to be safe as well. And when you go double click down and the disagreements that we have with the ACLU is actually quite minor. You know we we believe seven days is a valuable amount of time to hold this data. The ACLU says 48 hours. But I would articulate that the most aggressive state legislation is 21 days outside of New Hampshire. And so it is about finding that balance. And I think we also shouldn't skip over the role that our elected officials have in all of this regulation of police technology is critical. And so I'm also you know we call yesterday for our state regulators to catch up. It's time to acknowledge that police abuse is unacceptable and we need to hold these officers accountable with criminal charges when they abuse their power. [01:09:49] Speaker 1: A lot of the changes you've introduced have to do with many of your customers those who are in law enforcement. But you of course have private sector clients as well. And I'm curious sort of what changes you are making or need to make for those who are not in law enforcement but are using your technology outside the law enforcement space. [01:10:04] Speaker 11: Yeah. You know I think this is another interesting topic of you know what is the role of government in regulating private business. And I look at states like California and it's important to note that in their state regulation it includes private businesses of the use of this technology whether that's both cameras licensate reading cameras and drones. And so I would encourage you know state regulators to pick up the topic and mandate what private businesses can and cannot do. [01:10:31] Speaker 1: I gather that flock was poised to work with Amazon ring before that Super Bowl commercial aired that I think freaked out a lot of people. And I wonder if the door is still open for for a deal with Amazon and maybe as a second to that question sort of what that moment taught you about the way that people in this country [01:10:46] Speaker 11: feel about surveillance more broadly. Yeah I think Jamie and the ring team are great people with the same mission as we have which is to build safer neighborhoods. And so maybe not today maybe not tomorrow but I'm sure there's an opportunity in the future to find these two great companies to work together. Now as it relates to surveillance you know I think the way I think about this is that there's two types of products out there. There's products like flock that are transparent that have accountability built into them where everything is searchable with a FOIA request. And then there's products that you and I don't know about that. It's a black box. And those are the ones that worry me. And so for us we're going to continue to be transparent to continue to balance privacy and safety and building a better country. [01:11:31] Speaker 1: We've been talking a lot about license plate readers. Of course that's kind of a fixed market. There's just a finite number of cities that would have that technology. So when you look at your business going forward here how incumbent is it on you. [01:11:42] Speaker 11: How important is it to develop new products and new technologies. And so where are you looking to do that going forward. Yeah I mean you know as we've shared you know our ALPR business is less than 50 percent of our go forward revenues. So it's an important product for us. But we're we're a very diversified business across traditional live video cameras drones and then software software that allows officers to be more effective. It's a scary statistic. But you know more than 80 percent of police departments are understaffed against their budget. Literally no one wants to be a cop right now. And that's been a problem that's plagued this industry for the last decade. And so we look at the opportunities to make these police departments not only more efficient but more objective. More often than not we criticize technologies like flock or autonomous vehicles and say they need to be better which we should. But we also should look at what was before that. And I think about the policing world before flock where officers drove around looking for suspicious people. Now a camera says that car was stolen. That car has a child in the back that was abducted. That's an elderly person with dementia who's gone missing. This is a new way to police. That's objective. And we're removing that subjectivity. [01:12:52] Speaker 1: Let me ask you. Lastly there's this group. I'm sure you know of it called D flock planning a week of action next week protesting the technologies that your company has kind of trying to compel law enforcement not to use license plate readers. [01:13:02] Speaker 11: What is your message to those protesters who are thinking about taking action next week. Yeah. My only message to them is I'm glad you're speaking up show up to city councils show up to vote. Well that's every four years for six years over two years. And my only ask is don't commit a crime over this. Sadly I've seen day after day an arrest of an individual who's charged from social media to go vandalize government equipment. And in many states that's a felony. And it's disheartening to me when I see a young individual be at 18, 20 years old conduct a felony, get charged and ruin their life over a topic that we have a democratic process. We have a democratic process to share our opinions. And so I'm interested to see what they come up with next week and hope it maintains a civil disorder civil protest. [01:13:56] Speaker 1: Thank you very much. I appreciate your time. That's Garrett Langley the CEO flock joining us here on this Friday on the heels of the news that the company is making some changes to its policies. And I want to get a check on the markets here this morning looking at the S&P 500 barely moving here just down five points. The Nasdaq down 16 points five hundredths of a percent here on the heels of those retail sales data that we got and the consumer sentiment data that we got from the University of Michigan as well. And my eyes tend to wander here toward Brent crude once again as we look at what's happening in the Middle East and that promise from the Treasury secretary. Scott Besson he's going to take more action going forward here. Let's get a look at some other movers on our radar with Bloomberg's [01:14:26] Speaker 4: Hema Parmar. Hema. Thanks David. Yes we're going to start on digital assets some pain over at Gemini posting a fourth straight quarterly loss since last year's IPO. It went public just before the market tumbled and the exchange is still struggling with a decline in crypto trading and pressure from Bitcoin which has been sinking shares down about five percent this morning. And looking at Brazil's digital bank new bank it crossed a major year. It's going to be more than a year. You know it's going to be more than a year. The first time it's being helped by falling credit costs and surgeon credit portfolio shares up this morning nearly 11 percent. And finally let's keep an eye on drone makers. The Trump administration said it's applying 100 percent tariffs on imports of drones and their parts. U.S. Companies unusual machines. Red cat holdings and air environments all surging on the news. Those are your morning movers David. [01:15:22] Speaker 1: I'm a thank you very much. Coming up here. Sandra. I didn't love pro commissioner serves up the details serves up the details. I got to say that again. I didn't land that pun well enough on the volleyball league's growth. That is coming up on Bloomberg open interest on Bloomberg television. The boom in women's sports is creating new opportunities for leagues looking to grow. League one volleyball is partnering with inner city circle sports as it pursues its next phase of expansion. The six year old league has announced the sale of ownership stakes in seven of its ten teams with each deal reportedly valued at about 20 million dollars. Joining us now our love pro commissioner Sandra Edahan and Bloomberg sports reporter Vanessa Perdomo Maglione. Sandra great to have you with us. You've set out this objective here of getting these kind of individually owned teams seven have gone that route so far. Where are you kind of in the process of getting to where you want to go. Yeah. Well [01:16:15] Speaker 12: firstly thanks for having me here. It's exciting. It's a pivotal moment for women's volleyball women's sports holistically but especially volleyball. The league started two years ago. Our company was founded six years ago and we started at the youth sports level. So we actually started different from most sports leagues. We actually started from the youth level and then shifted over to pro. And so after our two seasons of running the professional league we are now transitioning to sell off teams. And it's been incredible to see the appetite and the demand from the market. Sandra. So he said there the last team has been sold for [01:16:50] Speaker 13: 20 million dollars. And for context right. This is this is the third year of the professional league. And to go a little bit into what women's sports is. I mean where women's sports is David right now. It's the NWSL when they were in year six in they when they started their expansion process. They sold for their teams were selling for two million dollars at the time. Angel City sold for two million dollars at the time. So why is volleyball in such a place that you're kind of ahead of the game right now. Yeah. It's you know it's incredible because obviously you have the momentum that's [01:17:18] Speaker 12: happening in women's basketball and women's soccer. But there's a uniqueness for volleyball which is that we're the number one team sport for youth girls. Right. So we sit on a huge base of participation. We're also the number one sport for women globally. And so it's almost a hidden gem that's been sitting there. You have a huge participation base and there's been an appetite to participate and invest and drive on the [01:17:42] Speaker 13: professional level as well. Tell us a little more about that appetite that there is to invest. You know and who are these investors that you're looking for the next three teams and how you're working with inner circle to develop that valuation process in the market and all that. Who who's looking to buy. Yes. [01:17:58] Speaker 12: Well firstly we have an incredible collection of owners who are already along the journey with us. First and was our team in Austin. That is co-owned by the Spurs. David Blitzer's family office as well as G9 Ventures. And so that already shows the caliber of ownership of bringing to the table. Along the way we've also brought in a number of variety exceptional owners. Alexis O'Hanian for our expansion team in L.A. The Houston Texans for our team down in Houston. And an incredible collection of female entrepreneurs and athletes who collectively are driving the team in San Francisco. So you can already see the types of people we're trying to partner with. People who are really invested for the long term who understand the potential of this league who were partnered with us to to make it the next major league in the U.S. And so that's why we brought in inner circle. They're going to take our process to the next level. Right now we are in markets who sell our team in Atlanta our team in Madison and our team in Minnesota. How does that process of valuation [01:19:02] Speaker 1: look. So when you see you're working with inner circle. So what's the process that's underway. And how are they assigning a value to [01:19:06] Speaker 12: these teams. Yeah. It's a really complex process. We do it really diligently. As I mentioned we want these investors to be on a long term journey with us. So there are a lot of different components. We want to make sure we're in markets that have strong commercial value for local ownerships. We also want to make sure we're in markets that have a thriving youth volleyball ecosystem already present. And we also want to make sure that we're really looking at where volleyball is most important in the country but also balancing it where you have the large DMAs the large media footprint the more large commercial footprint as well. So it's somewhat of a puzzle let's say. And there are a lot of different puts and takes. But we kind of work together to figure that out. The college volleyball space is where you know you're seeing [01:19:55] Speaker 13: massive numbers right now. The national championship last year in the semifinals last year both had viewers over a million. You know and that's kind of where basketball was years ago where you had really big numbers at college. But it wasn't translating into the WNBA until King Clark Angel Reese and Paige Beckers and some of these players saw that you know they made that connection. How can you make that [01:20:15] Speaker 12: connection from college volleyball to the professional level. Absolutely. It's it's really fundamental for the growth journey that we're on. What you've seen in college is phenomenal. You have a number of marquee events that are taking place this fall and we're focused in to ensure we convert those players after they finished their collegiate careers because their brands already. Right. It's a it's a new era where in college you have these dynamic players who are already themselves individually brands. And so we're working closely to ensure that we can welcome them into our league that we can have a really strong rookie transition program. And most importantly to make sure we're the most competitive league because ultimately strong players want to follow competition. Great [01:21:00] Speaker 1: to meet you. Thank you very much. Yes. Exciting moment. Sandra and joining me on set here in New York and Vanessa Perdomo Maglione of Bloomberg with me here as well. And coming up affordability taking center stage ahead of the midterms. More on that next with balance of powers. Joe Matthew that's coming up on Bloomberg. On Bloomberg. Treasury Secretary Scott Besson telling Newsmax the U.S. is preparing economic measures against Iran like have never been seen. What's he mean by that. Let's ask Joe Matthew co-host of Balance of Power unfair to put in the position to have to get in the head of the Treasury Secretary there. But it's you know our team and I'm and Bloomberg economics has pointed out this is a country Iran that has no shortage of sanctions on it. What more can the administration do at this point. I heard you mention it earlier. The analysis that we got from our great [01:21:54] Speaker 14: point out there are 2200 sanctions already on Iran. We hear about 47 years a lot. Well it's been 47 years worth. We started this exercise in 1979 and we've been turning the screws ever since then. So exactly what the secretary has up his sleeve is one question whether it would work is another. If you really want to dial up the pressure on Iran right now it might involve doing some things that you might not want to do at this delicate moment when it comes to China because putting sanctions on China's purchases of Iran oil is the real way that you might be able to start making a dent and I'm just not sure ahead of the president's meeting with Xi in September that's going to happen. [01:22:29] Speaker 1: Square this with what we heard from the president in his interview with Axiosi says he's low keying it when it comes to Iran right now. You're in D.C. You're listening to him more than I am. Help us define that term. Does that simply mean not taking kinetic military action at this point kind of leaning into the economic side of [01:22:44] Speaker 14: or just waiting him out. The fact is nobody knew exactly what he meant by that. It reminded me of Han Solo when he told Chewbacca to fly casual. Yes. Chewbacca didn't know what that meant either. But look this is a moment in time where the list of options are just not great. And if maybe waiting out the regime is the answer. I mean we're going to low key it for a little bit here and just give him some space to drown in their own inflation. But this simply hasn't been a plan that has worked until now. So what breaks through is the question. The administration is still very proud of this blockade that they have in place. [01:23:17] Speaker 1: And all the while we're getting these reports of difficulties on the U.S.S. Abraham Lincoln. Real difficult stories about the conditions on that ship and what folks on there have had to endure. You spoke with Senator Jack Reed if I'm not mistaken in recent days about that. And he of course has a distinguished record of military service as well. What did he say and what did he say about the way the Democrats are planning to have some oversight of what's going on here. [01:23:38] Speaker 14: Well investigations are coming whether they take place in this Congress is a question. He did say that the Republican chair of the armed services committee. He's the top Democrat agrees with him on this. They're hearing stories on the armed services committee that we're likely not hearing. And there's some pretty awful stuff stories of sailors keeping their fellow sailors from jumping off the boat. This is where we are. Extended deployments are a big reason. You've got facilities breaking down on some of these boats. And so as we consider a longer term engagement cycling these out is going to be really important. The president interestingly last evening though according to the Wall Street Journal says he wants to put steam driven catapults on our aircraft carriers and remove the magnetic systems the more modern ones. Because I guess there's some romance when it comes to steam in the Navy. So I'm not sure what's happening to the fleet right. [01:24:28] Speaker 1: One of these fascinating stories where the president says he talked to some sailor. That's right. He felt like he was reminiscing about it. The president has seized on this and wants to make it happen. Yeah. Tony Capaccio picking up on what the journal reported there and reporting on that change. Let me ask you lastly the president coming up to Bedminster this weekend. But all of this has to be coming to bear on the president as we look ahead to the midterms. Well yeah he's going to Garden City today. Ever been to Garden City. I have not been to Garden City. It's only 18 miles from here. You guys in the city need to get out. Look gasoline's $4.14 in the state of New York. He's going to be out there though with a very supportive crowd. It's going to be [01:24:58] Speaker 14: more of a crime a fighting crime message. And you know the first responders on Long Island and in that area particularly will surround the president for this. He's had some pretty chippy experiences going out there though when it comes to the rhetoric. I'm very curious to hear if he says some things today that make news this evening. But when it comes to the message of affordability the president continues to call this a democratic hoax while his Republican members just want to show a light on the housing bill that they put up there. Some of the other things that might help them. What they have been able to do. Joe great to see you. Joe Matthew here in New York. Of course the co-host of [01:25:28] Speaker 1: BALANCE OF POWER. You can catch him at 1 o'clock then at 5 o'clock. I'm excited because he's going to be hosting the weekend show this weekend starting at 7 o'clock. And don't miss their conversation today with representative Mike Flood. Greg Kesar and Gwen Moore later on BALANCE OF POWER. I teased my own tease there. Don't miss Bloomberg this weekend. That's tomorrow and Saturday. Joe filling in with Carol Masser allowing me a weekend off which I greatly appreciate. Coming up Monday on Open Interest Christina Hooper of Man Group Sarah Henry of Logan Capital Management and Brown Harris Stevens CEO Bess Friedman. You don't want to miss that on Monday starting at 9 o'clock. You don't want to miss that on Monday. You don't want to miss that on Monday. You don't want to miss that on Monday. You don't want to miss that on Monday. You don't want to miss that on Monday. You're welcome.