S&P 500 Hits Record as Inflation Cools — Closing Bell

[00:00:00] Speaker 1: And right now we are two minutes away from the end of the trading day. Romain Bostic here with Isabel Lee taking you through to that closing bell. It's a global simulcast. We're joined now by Carol Masser and there's also Tim Stenovic. So we welcome our audiences across all of our Bloomberg platforms. Television, radio, our partnership with YouTube. Carol I never these boxes pop up for our TV viewers. I never know who's going to be on it. I mean I'm here every day but you two I don't know. You're not here every day. I mean I feel like one day Mike Bloomberg's just got a pop up on there. I hope so. That would be a lot of fun. [00:00:29] Speaker 2: That would be a fun conversation. I would totally love that. Hey we might get another. What's he investing in right now. I don't know. Let's ask him. Come on. Let's go. No I don't want to go. All right. So S&P 500 we are looking at well we're right now below 7800. We were thinking we could see our first close on the S&P above 7800. We'll see if we get there. But right now it's still going to be a record right. Yes. Carol Masser. Well hey come on. I'm just seeing if you're you know waiting over there. We got a minute to go. We got a minute. We got a minute to go. You know I should know [00:00:59] Speaker 3: this is we're only we're not even halfway through the month. We're already up over 4 percent on the S&P 500 for this month for this month alone. Yeah. Well we're only halfway through the month. You don't care. You sound so boring. Come on. Isabel help us out here. Yeah. Isabel help me out here. We got data this morning again and it showed inflation moderating and I feel like investors are breathing a sign of relief. But we still have one more to monitor before the Fed meeting. So we can't be too complacent. I would say. All right. Well we did get those two benign [00:01:28] Speaker 1: inflation reports and at least for right now that combined with earnings giving investors a little bit of a window to move a little bit forward here with this bull market. A bull market that continues at a bull market that at least for the broad market is going to end the day at a record high. The S&P 500 looks like it's going to close right around that 7800 level. It takes a while for these numbers to settle. It looks like it'll be a ticker or two below that. It doesn't matter. It's still a record high of 50 points or seven tenths of a percent on the day. The Dow adding about 70 points or about a tenth of a percent on the day. The Nasdaq composite up about eight tenths of a percent. The Nasdaq 100 up about one percent. And the Russell 2000. Just double check this. I believe it is a record high for the Russell 2000 as well adding about two tenths of a percent here on the day. [00:02:15] Speaker 2: Wait. Do you know. Are you confirming it. I'm 100 percent telling you the Russell 2000. Okay. I'm just checking. Close at a record high. You got this incredible machine in front of you. That tells you everything. All right. Let's go to the S&P. All right. So Russell had a record. You've got the S&P at a record. I'm going to go back to the S&P 500 because you did have most names higher Isabel in today's session about 319 to the upside. 183 lower this Thursday. And you had one unchanged. Let's take a look at the IMAP Carol. [00:02:44] Speaker 3: So it's mostly green on the screen. Biggest gainers of course tech higher by nearly one and a half percent. Communication services also in the green by four tenths of one percent. You see some peppers of red there. I guess I'm wearing red. Energy is down two tenths of one percent. And materials also lower by one and a half percent. [00:03:02] Speaker 1: All right. Well speaking of materials let's take a look at applied materials the maker of equipment to make semiconductors out with this fiscal third quarter report sales at least for its semiconductor business did beat estimates at about seven billion dollars. Net sales a total amount of sales for the company as a whole 9.21 in the quarter. That's a slight beat over the average of street estimates that we're looking for about nine billion EPS in the quarter. A slight beat three dollars and 50 cents. The street was looking for 342. But I can tell you right now we need to dive a little bit deeper because what everyone wants to know is what that fiscal fourth quarter forecast looks like whether this phenomenal growth we've seen for this company can actually. [00:03:40] Gary Dickerson: Well I will say Gary Dickerson the company's president CEO says that he's further raising our semiconductor systems revenue expectations for calendar 2026. They're confident that they'll grow faster than the market this year based on the increased demand visibility where we're receiving from our customers. We expect another strong growth year for [00:03:57] Speaker 2: applied materials in 2027. All right. So I'm not quite sure. Forgive me if I made if you already said this. But a Matt does see fourth quarter net sales of 9.75 billion to 10.75 billion. This gets to outlook. The estimate on the street is 9.62 billion. Interesting to see the stock. It is down about 4.6 percent in the aftermarket. Keep in mind it's up more than a hundred percent year to date. Isabel. So it's just a little bit of perspective but we'll look for some more headlines here to cross. I think it's again [00:04:24] Speaker 3: expectation versus reality and maybe investors are just expecting more and more. You have the CFO saying that this is the 13th consecutive quarter of year over year gross margin expansion. So that is a lot. That's 13. I just want to just go go back to that [00:04:38] Speaker 1: number though because that fourth quarter number and I think you kind of understand the idea here also is everyone's looking at that percentage growth number and whether that's actually coming down. And it does appear I need to do the math. But when you look at that range of 9.75 to 10.75 and this idea here of a company that had been enjoying some pretty healthy double digit growth and the idea that that's always going to be hard to sustain into the new fiscal year. If this is the fourth quarter number I guess my big question is what does the number for the full year up ahead actually start to look like. That's not in the release. [00:05:08] Speaker 2: I'm sure they'll be asked about it on the conference call. Yeah. No absolutely. And again the stock not as low as it was pairing some of the earlier loss but still down about two and one third percent almost 3 percent here. [00:05:19] Gary Dickerson: So yeah a lot of questions here. There's also going to be questions I think too about CapEx and what the company is going to spend on investing. The company's senior vice president CFO Bryce Hill saying that they're making additional manufacturing capacity investments to support projected demand through the end of the decade. So that's up through the end of you know the next few years. Right. More than three years out. They're saying continued strong revenue growth in the second half of the calendar year particularly in DRAM as well as leading [00:05:45] Speaker 2: end foundry logic and advanced packaging. All right. So we're going to keep an eye on this look for a little bit more in terms of headlines and obviously the analyst call. But again the stock we've seen a little bit under pressure. Hey I'm going to go to some of the gainers in today's session. Here's one group SanDisk Western Digital Micron Seagate Technology. These were top in the S&P 500 the Nasdaq 100. SanDisk alone was up 13.7 percent. You've got Western Digital up more than 7 percent. You've got Micron up more than 4 percent and Seagate Technology up almost 5 percent. You did have SanDisk come out. The computer hardware and storage company jumping to a session high might even be a close high but I have to check on that. After it announced its financial model for the years 2028 through 2030 at its 2026 investor day. SanDisk targeting the following as part of its outlook revenue growth in the mid to high teens during that period sees non-gap gross margins at about 80 percent targets non-gap operating margin of about 75 percent. It goes on and on. But nonetheless the whole sector we saw higher. I got to mention Workday as well. Shares jumping intraday high of about 30 percent. After a Reuters report that private equity firm Silver Lake is in talks to purchase the software provider. So again we saw this one moving dramatically. And then I'm just going to throw in Birkenstocks. Just something different rallying after the footwear maker boosted its adjusted EBITDA forecast for the full year. And so we did see that one also up just shy of 12 percent in today's session. Okay. Let's go to some of the decliners on the day today. [00:07:22] Gary Dickerson: Cisco system shares down 8.4 percent. The biggest decline going back to earlier this year ticker CSCO. This after the company projected seven and a half billion dollars in a data center sales this fiscal year that disappointed investors. We talked to Woo Jin Ho from Bloomberg Intelligence a little earlier. He said for him it. He didn't think it was the data data center sales outlook. He said it was more weakness in the company's product in the product gross margin. But nonetheless Cisco shares did fall today by 8.4 percent. I also want to talk a little about Hertz. Hertz shares just getting crushed today down more than 16 percent. This after Pershing Square's chief investment officer. The firm has sold its stake in Hertz. Pershing lost confidence in Hertz's management after the firm announced a funding plan that quote we did not think was necessary. This is Ryan Israel over at Pershing Square saying that. The stock drop snaps a run up for the last six sessions after Wednesday's close. Hertz's stock has seen some wild swings over the course of 2026. So some movement there down 16 percent. And finally let's talk ticketing and StubHub. StubHub shares falling after the company said earnings per share for the second quarter missed the average analyst estimate. The challenge here Romain was with the World Cup. The for the company's forecast for the full year underwhelmed. But I guess they had a lot of ticketing challenges for the World Cup and people weren't able to get access to tickets that they somehow bought months in advance. And StubHub says that was an issue with FIFA. And now there are a lot of customers complaining about this. [00:08:52] Speaker 1: Yeah. I remember seeing all that online. I mean who's to blame who knows. But obviously StubHub taking the blame at least based on the reaction in the shares today. A quick look at yields. They are down across the board here. Down about four basis points on the long end. Five basis points on the short end. That benign PPI report following a benign CPI report giving investors a little bit of hope here for a bit more of a bond rally. But keep in mind we also had that 30-year auction today where the Treasury had to pay up its highest yield on a 30-year auction since 2001. [00:09:25] Speaker 2: And I just want to clarify SanDisk not at a record high. That was back on June 25th when it was more than $2,335. I know. I knew you would come at me if I didn't mention some things. I do like to get as you'd like to do. Hey here's a story that's on our radar. It's among the most read on the Bloomberg Terminal. Manhattan rents hitting $5,000. That is a record while listings all but vanish. What was the story yesterday? Was it people paying $4,000 to get a peak on listings? Because of the broker fee issues, right? Yeah. [00:09:55] Gary Dickerson: So I mean it's so competitive out there. It comes against, I mean, this is the way it works, Isabelle, it's supply and demand, right? So a drop of supply, listing inventory in Manhattan plunged more than 39% year over year in July. Inventory in Brooklyn fell by 27% compared to last year. It is expensive out there. [00:10:12] Speaker 3: I have a lot of thoughts. We moved to Brooklyn and then... [00:10:16] Gary Dickerson: Welcome. We are happy to have you. [00:10:18] Speaker 3: Yeah, I'm a Brooklyn girlie now. So we were looking at an apartment and then we offered $100 above asking and we were beat by someone who offered $700 asking. [00:10:28] Speaker 1: $100? [00:10:29] Speaker 3: Yes, but we were beat by someone $700 a month romaine. Per month romaine. Yes, per month romaine. Maybe you and I are in a different tax bracket. [00:10:39] Speaker 2: Maybe that pita-terre tax is going to bother you. [00:10:41] Speaker 1: Yeah, are we going to talk about that? Can we talk about something I can relate to? What is this pita-terre tax thing? Apparently it's back on. [00:10:46] Speaker 2: Yeah, well, an appellate court. [00:10:47] Speaker 1: What's the mayor doing? Come on. [00:10:48] Speaker 2: Yeah, the appeals court said it's on, so... [00:10:50] Speaker 1: All right. Yeah, get your checkbook out, romaine. Well, no. Actually, I'm putting it away. Oh. I had to write a check the other day for like the first time. I was like looking through the last time I actually wrote a paper check. [00:10:58] Speaker 2: Oh. [00:10:59] Speaker 1: Who are these people? [00:11:00] Speaker 2: Okay, we got to run. [00:11:01] Speaker 1: Like, think that. [00:11:01] Speaker 2: We have something important to do on this side. [00:11:03] Speaker 1: Tokenization, something. [00:11:05] Speaker 2: Why not? Put it in the blockchain. I got a cramp just running. Thank you very much.