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This is Bloomberg Businessweek daily reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy, plus global business, finance and tech news as it happens. Bloomberg Businessweek daily with Carol Massar and Tim Stent event live on Bloomberg Radio, Television and Bloomberg Originals. And a very good afternoon, everybody across Bloomberg platforms, Carol Massar along with Emily Griffith or she is again, of course, in for Tim, who is on vacation this week. And it's already been a week where I feel like stocks giveth, chip stocks giveth, and then they taketh away. Yeah.
What's interesting about the trade today, Carol, is just the divergence between tech stocks and the S&P 500. We have the S&P down only about 2/10 of 1%. But the Nasdaq 100 down 1.2%. Yeah exactly. And then you take a look at something like let me just pull up the Philadelphia Semiconductor Index that indexes down more than 4%. So you see where the drag is coming from in space. To its first day in the Nasdaq 100 but trading lower today. All right. So we're going to get into all of that. Uh, I got to say ahead this hour we are going to think about the chip concerns and how it changes the narrative from day to day or week to week. Um, this is amid Samsung's record
profit, not enough to impress investors. So that's why we're seeing some of the pressure out there in the markets. We're also going to get into Amazon's debt offering Rivian share offering. And then you mentioned space X which begs the question is the next thing to watch for when it comes to all things Elon space and Tesla essentially merging. We have a good reporter on that to tell us. Ed Ludlow will join us very soon. Plus, we head to the NATO meeting in Turkey today for a gut check on the relationships between the U.S. and its allies. All right.
Coming up, all of that. We're also going to hear from the CFO of Wayfair. She Kate Oliver. And the company is the episode, uh, the upcoming episode of Chief Future Officer. So looking forward to that. And then Conrad Quadros, he's head of economics for our city. Well, we're going to talk about all of this and really what it means in terms of the global excuse me, economic and market backdrop. So speaking of markets, let's get an update for you on this Tuesday here John. All right. Thank you very much. A lot of read on the screen.
Uh, you two are just discussing the market internals. How do you explain the Max seven index today on a day when we got the Sox selling off, on a day when we've got the Nasdaq 100 index lower, and on a day when Nasdaq is down right now, the Bloomberg Max seven index is pushing higher up by about 5/10 of 1%. But I begin with what is trading lower. And that is the Nasdaq 100 index down 1.2%. You guys mentioned the Sox the Philadelphia stock exchanges semiconductor index down now by 4.1%. Bottom line here declines on Wall Street with the S&P now down 18. Uh drop there of just about 2/10 of 1%.
The Dow down 3/10 of 1% NASDAQ lower by 6/10 of 1%. Tenure at 4.52%. The two year 4.15%. Sparkle down $22. The answer to 4142. Drop there of 5/10 of 1%. West Texas Intermediate crude oil pushing higher WTI 7049 A barrel, up 2.8%. Barrel of Brent 7419. Brent the global benchmark, up now by about 3.1%. Bitcoin back above $64,000. Bitcoin today higher by 4/10 of 1%. As we mentioned those semiconductor names facing fresh scrutiny today. Case in point we do have Broadcom shares lower now by 5/10 of 1%. Nvidia turning around up by 1%.
Micron is down 5.3%. Intel hit hard today Intel shares down by 9.3%. Again recapping the Dow the S&P Nasdaq all trading lower. And as we are also keeping an eye on developments in midtown Manhattan with that high rise on 42nd Street, the old Pfizer building. It does remain unstable, said to be still moving after it columns buckled. During this morning's rush hour. For On-Demand news 24 hours a day, subscribe to produce Now wherever you get your podcast. I'm Charlie Pellet and that is our Bloomberg business flash. All right, Charlie, thank you so much. Yes, indeed. Everybody. Carol Massar. Emily GRA fill in for Tim this week.
Um, we are going to start overseas on this Tuesday. And with the NATO meeting underway, we know that is going on. Earlier, NATO allies agreed to at least $50 billion in defense industry deals. That's according to an overflights official, essentially, to show that President Trump, uh, that Europe is heeding his spending demands that Emily, we know that he's been saying it's time for you guys to step up, spend more on your defense. It's not just about us kind of protecting meaning the US protecting Europe. It does beg the question so that are they really stepping up? And I'm always thinking about the U.S. relationship.
Its presence in the world. Its relationship with its allies. So let's head to Bloomberg surveillance co-host Anne-Marie Hordern. She's been reporting on the sidelines of the NATO summit in Ankara, Turkey. Anne-Marie, good to check in with you. We know it's later there. There's been a lot going on. Um, I want to start with President Trump listening to him this morning in the press conference, uh, lauding his relationship with the host of those meetings.
We're talking about President Erdogan of Turkey. Not a surprise. I guess what's more important I think about is the U.S. relationship with its other NATO allies or its NATO allies. What's been the mood? What have you been able to read into that? Well, it hasn't been a great look for the other allies. When the United States recently said before this summit, Carol, that he was only going because of Erdogan. And then in that meeting with Erdogan at the top of that bilateral meeting, he pretty much gave the green light for his intent to try to come to some form of agreement which would have to go through Congress to get Turkey on the F-35 air defense system.
Of course, they aren't on that system because years ago they bought the S-400 from Russia. There's a lot of legal challenges when it comes to this. But when the Turkish president heard the translation, he gave a thumbs up. So this is something that Ankara has really been pushing for. And potentially we could see some sort of movement on that at this summit when it comes to the other, uh, allies in the NATO alliance. The president, of course, has been pushing them to step up defense spending. That was the key theme of last year, as they tried to reach 5% of their GDP. And on the sidelines, we're seeing $50 billion worth of deals.
I think it's interesting for some of the deals. Uh, you see, actually, some of these partners decide to go with Swedish Saab instead of American Boeing, but in other forms you can still see really the hold some American manufacturers and defense contractors have on the global stage, and they're going to have to stick with those US made parts, but they're going to need to be buying from everyone if they want to hit that target, at least when it comes to hard core ammunition of 3.5%. When it comes to really the more tenuous, um, topics being discussed between the NATO alliance within the United States. In that context, with the transatlantic alliance, it's going to be things like,
obviously, Russia's invasion of Ukraine. There's a lot of countries here imploring the U.S. to do more when it comes to Patriot missiles. I spoke to the Finnish president, Alexander Stewart, who said it would be a welcome development if maybe there was a licensing agreement and they could produce those missiles inside that defense system, inside Ukraine. And then, of course, the conflict in Iran. The president does not feel like the European allies have had their back for a critical international, um, uh, waterway that arguably Europe relies more heavily on. So those are going to be potentially two of the hot button issues when it comes to the topics discussed here at the forum.
Yeah. Talk a little bit more about just how the US allies are talking about the war in Iran, at least behind closed doors. Is there any vibe here that there is more tension among allies or more unity when it comes to that war? Well, I think it depends which ally you're talking about. When it comes to a country like Turkey. There has been a lot of discussion with the United States and also a little bit of a fine line the U.S. is walking because the Israeli prime minister definitely does not want to see Erdogan get F-35s and does not want to
see a closer relationship with the United States and Turkey. When it comes to the Europeans, it's really country by country basis. At one point during this conflict, Spain barred the United States from using its airspace when conducting this conflict. So it really depends what country you're talking about. If they have even the ability. Do they have the hardware like a minesweeper to send to the Strait of Hormuz? Or is it also just do they have the political will to do so? All right. Good stuff. And obviously tracking all of your reporting out there. Anne-Marie, her Durham Bloomberg Surveillance co-host in Ankara, Turkey. Of course, there with the president. All right.
That is certainly something we are watching, uh, from outside the United States. Uh, we do want to get to a lot of headlines when it comes to the tech community. And let's get to our tech roundup, some of which is dragging down the trade. Today we talked about the semiconductor trade. Ed Ludlow is host of Bloomberg Tech on Bloomberg TV. Of course, 11:00 Am Wall Street time Monday through Friday. He's back with us. Ed, um, good to have you here. Love having you here on the East Coast for this week. Um, I want to start with chips because we're definitely seeing it way Samsung a record profit, but yet not enough. Yeah.
So like, clearly there has been a spillover of the trading in the Asian session into the US session. Yeah. Samsung reported prelim numbers where they only give us revenue which more than doubled. And then basically profit, which was 19 fold increase from the prior quarter sounds pretty impressive. Those are quite good numbers. And beyond that, you know, we interpret that the state of play for memory chips in particular. Nothing has changed. Supply is still tight. Pricing is still going up on Dram and Nand. Dram is basically equal memory Nand flash memory. And there's no new information about when that supply tightness ends. But there was a really heavy selloff in Samsung.
Um, 9% drop is actually only the biggest drop since June 23rd. It's become very normal around the world to see swings in both directions. So what can we interpret from the market reaction globally? Valuation reconsideration Samsung was up 150% before that point year to date. Maybe it's just time people are taking that their foot off the gas on chips. But why is it that on any given day yeah, investors are comfortable and they push the SoCs higher. Um, and then on a day like today I'm looking at the Philadelphia Semiconductor index in 29 of the 30 names or lower. And then there's a day when it's off.
Is it just headline to headline? In terms of the space, like tell me why the valuation, you know, is okay one day in the next. It could be yeah. Not okay. It's really important on days like that to say we don't know the Samsung print was the catalyst in the market. It's not the full cause of why stocks are trading that way. But there is just clearly association. So what's really interesting is like in the last month, the Philadelphia Semiconductor Index, which is this basket of 30 stocks, including the Adas of, of non-U.S. entities, it's been very normal to see
it go up by a range of 5 to 8% or down. Prior to that, though, the index I think I was hearing a month ago exactly about to go talking about this point that, you know, year to date, the Sox have had an incredible melt up. People were calling it a melt up. The difference with the memory stocks is that the market saw them as being quite reasonably priced or valued on a forward 12 month earnings basis. Again, nothing is fundamentally changed. There was the Mike Wilson note in the week that said, well, maybe you see a rotation out of chip stocks into hyperscalers, cloud computing companies and normal speech because that's really the main economy of AI.
It's where you see the revenue translation. And because, you know, those stocks haven't had as much love of late. But there isn't an answer to your question. I'm sorry. It's okay. I'll let you get away with it today. I was going to ask another potentially difficult question because you mentioned the volatility. One of my colleagues, Natalia Kenny, which pointed out that we have seen the Nasdaq 100 exceeding a move of 1% in either direction for the longest streak since 2024. So it hasn't just been the chip names.
It's kind of been the sector more broadly that's been whipsawed. I'm wondering, Ed, when you talk to people, what do investors want to see to smooth out the volatility? Well, you know, uh, the wonderful thing about, uh, how public markets work is that earnings season will be upon us soon again, and we'll start from scratch. You know, there has been a distinction in financial markets between it's kind of become more nuanced beyond like what are the capital expenditures numbers. It's now who are the capital expenditures deploy as, who's spending money and who are the recipients of that?
It's easier to model near-term where you can see some economic growth and output. And. ET cetera. And people have tried to do that math. Um, again, you know, I think it's actually now the headline of our global wrap. If you just put to one side the recent in recent means, 30 days, the past month of volatility, there had been an incredible run up in the eye trade focused on chip, uh, memory and storage stocks and then compute names. And we're just taking a breather from that. That's the difference. Okay. And that's fair. I mean, uh, most market watchers would say it's good to take breathers every once in a while or take some of the
fluff and air out of certain trades. I want to do kind of a rapid fire with you go staccato. I feel like there's so much going on. Amazon $25 billion. Looking to raise a US dollar bond. Uh, sale. It's all about I infrastructure. Surprise, surprise. This is just going to keep happening. Yeah. They've already done $70 billion in those IG rated bonds. They're burning cash so they need cash. And what Andy Jassy said in April was CapEx growth is way beyond revenue growth. Don't freak out about it.
This is what will happen. You have to spend. I always get worried, though, when a CEO says, don't worry about it. Yeah, but no one was worried. When Amazon turns negative you cash right? Amazon needs money. Its CapEx is likely to go up. The bond market has been a great vehicle for them to tap uh, to get money. And investors are snapping it up. Investors are snapping it up. The headline from just about half an hour ago, uh, that they've already drawn $62 billion of demand, 25 billion for 25. Yeah, that's a little bit oversubscribed or whatever you call it. Um, yeah.
Yeah. I mean, we continue to see that ad with these, uh, corporate bond deals. Yeah. I mean, you know, talk to Shiffman, The aisle by credit analyst Robert Schiffman about this. But basically, Amazon is creme de la creme of IG writing name. And bondholders of Amazon are happy to be bondholders of Amazon. All right. Go to deep. I want to go there I know I'm bouncing around and super important story. So tell me okay. So Deep Sea is developing its own ship to help our AI systems. This is according to Reuters citing unnamed services. First of all, tell me what's important and what do we really, really know about
what's going on is reported is that Deep sea is looking at its own inference chip. Yeah. No timeline, no specifics on it. The market data interpret it is bad for Nvidia because right now Nvidia dominates compute. Be that for training or inference, what you need to know is that everyone in the world that's in a frontier lab to a hyper scaler is working on custom silicon, because right now there isn't enough compute. And they think that diversifying away is important. With respect, deep seat just raised $7 billion in its inaugural fund raising round. Yeah, they're tiny seven billions. Nothing in terms of what you have to spend to get a program like that on track. It can take a really experienced team
anywhere from 18 months to 36 months to bring a chip to market, and so this is distant future stuff. Okay. Do we have access to deep Seac in their programs? Do we have. So one important thing that is that deep psychology focuses on an open source model and materials. So yes you would, but uh one all I will do is reflect on industry that I speak to. They would be hesitant to make use of the model or have their data exposed to it. That's kind of a personal preference thing. All right. Two more companies we have to get to.
Oh my gosh. Let's go. All right. Yeah. Well that's what we really tease that you're going to come on. Wall Street is bullish. Is that at all surprising surprise. Uh, the news story is that those banks, um, and brokerages that were involved in the IPO process are now free to initiate sell side coverage. And unsurprisingly, they're all bullish. Um, and what's interesting, if there is any point of interest, is like, take Morgan Stanley, I think, but various others, yeah. In there price targets, very small portions of it. The dollar value account for the space business. It's all the future AI business.
And that's pretty uniform across the South Side's view. Raymond James has a $800 price target. So they could I mean that's if it grows into it. You're talking about a valuation by about $10 trillion. But you know it when it's Elon and everything superlatives always fall out. Yeah. Um, before we go, I've got to ask you about Rivian. This is a company. Oh, sure. Yeah. So, well, we did see, uh, and we see the share price tumbling after the company says it's going to sell 75 million shares to fund equity contributions. Uh, this is related to U.S.
Department of Energy loan. This has to do a share dilution, I'm assuming. Yeah, but what's going on at Rivian I so look them on the road. Yeah. Like Rivian had a really good uh, second quarter delivery numbers. And they raised their outlook very slightly for how many vehicles they'll deliver this year. In literally the four trading sessions that followed their stock went up a lot. Yeah. And what I'm told by, uh, company insiders is they were opportunistic. They were like, hey, guys, the stock went up quite a lot.
We should use that. And we'll come to the market and do an offering. They need cash partly to that. There are milestones that the department set them against a very large loan. They need to make their own contributions before the Dow will give them money. So. So they need the money, right? They have cash, but not as much as they once did. And yeah, they're just being opportunistic. It is diluted. Hence why the stock is now down 16 uh 15% in response. I mean I get it, but I just curious about it. Yeah. We don't need a high.
We have that low. I'm gonna just have we just create an ask a low blow. We have. I mean, I just didn't ask Ed Ludlow. We just ask Ed. Yeah. I mean, we have the Bloomberg terminal with wonderful data. You know, Bloomberg has certain tools that we're allowed to use that I think help the reporting. Did we leave anything out today to say, well, you should take fish oils and omega threes for the brain function. Um, generally speaking.
Yeah. And not advice. Just my own personal choice. Each sleep scored. Did you know I go to 76 on or overnight? Oh. Oh, my God, I can't believe you're in here. Yeah. All right, we got to talk. Thank you. We gotta talk later. Ah. I love that. Host of Bloomberg Tech Ketchum and living on Wall Street. Time on Bloomberg TV. Coming up, a new episode of Chief Future Officer is going to drop this week. It features Wayfair and its CFO, Kick Oliver. She joins us next.
It's 2.31 on Wall Street. We do check markets all day long here at Bloomberg. We've got a selloff in chipmakers that is dragging down the stock market. This on concerns over whether massive AI investments justify lofty valuations. So the S&P currently trading at 7518. It is down 19 points now. Nasdaq down 2/10 of 1%. Dow industrials down 3/10 of 1%. Nasdaq down 6/10. The Nasdaq 100 index down 1.3% with the Bloomberg Max seven index higher by 6/10 of 1%. The SoCs the Philadelphia Stock Exchange semiconductor index. It is trading lower by 4.3%.
The ten year, 4.52% with a two year, 4.15% gold, is down $23, the ounce down 6/10 of 1%. Spot gold 4142 the ounce and West Texas Intermediate crude, up 2.9%. 7051 a barrel on WTI. Bitcoin just above $64,000. Bitcoin up by 4/10 of 1%. SpaceX shares tumbling by 5.1%. SpaceX currently at one 5228. It is now in the Nasdaq 100 index. Also, the traditional quiet period for SpaceX is over. Following last month's IPO against SpaceX, lower now by 5.1%. We continue to monitor that Manhattan high rise on 42nd Street in Midtown. It does remain unstable, according to city officials. They also say it is still moving after columns. At least two columns buckled during this
morning's rush hour. City officials say engineers are working on ways to shore up the damaged floors, or also using drones to monitor the building. Officials the old Pfizer building, by the way, the old Pfizer headquarters on 42nd Street described the situation as, quote, extremely dangerous for on demand use 24 hours a day. Subscribe to Bloomberg News Now wherever you get your podcasts. I'm Charlie Pallett. Emily and Carol, that is a Bloomberg.
This is flash. All right, Charlie, thank you so much. Carol Massar along with Emily graphic Emily is in for Tim, who is on vacation this week. Hey, in less than one month, we're going to get a quarterly financial update from Wayfair company, which pitches itself as a destination for all things home, has a key technology history and infrastructure at its core, even as the company more recently is opening up brick and mortar stores and continues to shop around for more properties to do so. The company and its chief financial officer, Kate Gulliver are the subjects of the latest episode of Chief Future
Officer on Bloomberg Television. The episode drops on Wednesday. We think about the cash on cash returns of the store. Um, so based on the capital investment that we are making, you know, when do we get that payback? What does that look like? We look at the formal economics of the store. So the sales within the store. How does that, you know, has the margin looking there, the sales associate cost. And then we look at the sales that are happening outside the store that we can tie directly to the store, and the overall halo effect that we think we get from the branding.
Do you have a map in your office of some sort with push pins in it and saying, here's all the places we want to be? Like, how big do you think this can be, or do you expect it to be? We have customers all across the country. Basically, if you mapped Population Center in our customers, they would overlap. So most population centers are going to be good locations for us to have a store. The goal is to create a frictionless connection between online and offline commerce, a sort of virtuous circle. It's working well so far. When customers who have seen us online come into the store, they're generally a bit surprised by actually the breadth of what we offer. How does technology help in kind of making it seamless online to store? I think the vice versa.
The biggest thing is for the customer on the front end that she can be in the store, that she can actually shop here, go back home, complete that purchase. And if you look at these sort of price tags and everything, they're all these digital tags. It's because they're the exact same price as they are online. So you're not going to be surprised that you, you know, saw something in the store and then you decided to purchase it online, that it's somehow different and that the offering is different. It's actually very consistent. But when she's here, she can have her app open and everything that she's doing here, it can be very similar to what
she's doing at home. And I think that consistency is quite important. All right everybody, that is Wayfair. Kate Gulliver in a preview of the upcoming episode of Chief Future Officer. It does premiere Wednesday, tomorrow, July 8th at 9:30 p.m. Wall Street time. You're also going to be able to find it on Bloomberg.com and of course, on YouTube ahead of all of that. Kate is kind enough to find some time for us stopping by. She is the chief financial officer, also chief administrative officer. She's responsible for Wayfair finance, legal talent, real estate and corporate affairs teams.
She joins us once again from Boston. As I like to remind everybody, you're pretty busy individual, Kate. Thank you so much. Thank you. I know it's a busy season. I know earnings are coming up in less than a month. Um, I gotta say, every time I am with you, I learn more about the company. And, you know, we've talked about this before. Certainly it's covered in the episode, but share with our audience once again why it's so important for Wayfair, which at its heart started as an online platform, that it has to have stores. Why is this so important?
And you talk to me about it certainly for the episode. Yeah. So first, thank you for having me. Carole. It's great to be back. Um, you know, what we've shared a bit before is how much of this category Remains offline remains shopped in stores. When we think about sort of that $400 billion market that we play in, we think, you know, somewhere 25 ish percent of that is shopped online and the remainder is shopped offline. And even as that online penetration grows, a significant portion will stay offline.
And so if we want to meet our customer where she's at, enable her to shop in all of the ways that she shops, which is offline, online, maybe in a, you know, a social format with a friend. We think that stores are an important element of that. And so for us, it allows us to get closer to that customer and provide her yet another experience. And when we think about, you know, the key pieces that you need for stores, many of them we've built over the last 25 years. Um, the brand, the technology behind it, the supplier relationships, our customer portfolio. And so we're able to take all of that and leverage that as we expand the store network. So, you know one thing I'm curious to you, and I know you can't talk too much
because we've got earnings coming up, but the more that you guys are in stores continue to build out. It's now, what, a couple of years since the first store in Illinois. Um, does your conviction behind this strategy. Is it proven? Does it increasingly continue to make more sense in terms of that kind of loop, um, between the stores, the platform and more? Yeah. So we, um, spoke about this a bit on our last call, which was in May. Um, at that point, our store in, um, outside of Chicago, in Wilmette, had been open for just about two years. That's our large format Wayfair store, 150,000ft².
And then we'd recently opened our Atlanta store, um, which is where we, we filmed, uh, the episode. Um, and then actually since then, we've also opened our Columbus store just a few weeks ago in Columbus, Ohio. It's a slightly different format. That's a 70,000 square foot store. Um, and so what I think you're seeing, we've announced several other releases. There's another store set to open in Denver later this year, one in Westchester early next year. Um, and that's just a handful of sort of, you know, what we're starting to roll out. And I think what you're hearing from us is, yes, we you know, we are seeing
these work. And what we're really seeing is that the customer is excited about the in-store potential and then the integration with that and her overall shopping experience. So she can come in store. She can touch and feel the product. Importantly, she can work with a sales associate. She can develop a quote to think about maybe redoing a bathroom or, you know, perhaps getting some new outdoor furniture. Um, and then she can go back home and she can think about it and she can complete that purchase. Um, you know, at her leisure, at home or in the store if she chooses to. But the overall experience is very
consistent and very comprehensive, and we're really seeing our customers respond to that. And we're excited by the potential here. How do you get, you know, the customer that is so used to sitting on their maybe sitting on their Wayfair, uh, purchased couch at home, scrolling on their phone looking for furniture. How do you get that person to come into the store? I just know that, you know, it's so hard these days for brick and mortar stores, but I totally see the potential here of why you would want to go into a store and touch the furniture.
What do you tell your online customers about the stores? Yeah, it's a great question because what's interesting is that in the store, so actually more than 50% of the customers that it came into that, that are in that Chicago store are actually new to the customer file. So they weren't necessarily a customer before they were coming in for the first time and wanting to experience us, you know, in a is sort of a physical application. But for our existing customers who have shopped with us before, what we're hearing from those folks is, you know, they wanted to come in and experience the brand. And often what they're discovering is actually our breadth of offering is much
broader than what they appreciated. So, you know, you mentioned the Wayfair couch. I think most folks that shop for a couch would think to come to Wayfair, right? They would know that's a sort of core part of what we sell. But then they come into the store because they're curious about what sort of this feels like, and they realize, actually, that we have a very extensive, um, you know, storage and org offering, though we have an extensive mattress offering that you can get kitchen accessories, seasonal decor. If you walk into that Atlanta store right now, there's a number of great seasonal accents, you know, on tables out in front that you can sort of purchase to, you know, around the 4th of
July, we did a number of sort of Americana pieces there, right. And so those kinds of things that are a little bit more impulsive, a little bit more experiential, um, you know, you get that flavor in the store and we're hearing from existing customers, and it's exciting for them to really understand the expansiveness of what we offer. You know, and I certainly saw it ahead of Memorial Day. All of those seasonal items in the front and it's yeah, it's just it makes sense. And it's like you walk into the store and it's if you're a shopper, you want to see that kind of stuff right off the bat.
Hey, um, Kate, one thing I want to ask you, first of all, you know, again, I'm reminded that you guys are technology is really at the core of Wayfair, uh, in terms of your platform. And I think about your founder and founders. Um, I want to ask you about AI specifically, clearly improving productivity across merchandising, advertising, catalog management, customer experience. I'm just curious, as CFO, as you look at the investment versus the ROI, you know, where are you actually seeing or continuing to see kind of measurable financial impact as a result versus areas where the ROI is going to maybe
take a little bit longer term? Yeah. You know, I think you framed it well, Carole, which is certainly there are places where you start to pick up, you know, individual efficiency gains, um, and allows folks to, um, maybe, you know, do more than they were doing before or sort of explore new areas. But what we're also quite excited about is how we think about using AI to improve that customer experience. Um, you know, one of the unique things that we offer is an incredibly expansive catalog, right? Millions and millions of items.
Um, you know, whatever you need for the home, you can find it with us, and each person can find their preference. But that also can be, you know, complex for folks to shop. And when I'm particularly excited about is how we use AI and are using AI to really personalize and improve that experience. Um, some of those you can find on the site today that would feel sort of obvious. I think in some ways that it's an AI application. So the discover tab is one I particularly like. Um, you describe, um, the room that you would like to, um, you know, design and an AI generated image, um, is shown to you that is, you know, matches that
description, but it's all populated with products that are in our catalog. So they are all purchasable, right? You know, right then and there. Um, so that's a sort of more obvious usage. Then there are other things where we've been able to use AI. You know, you talk about efficiency gains. Um, we have millions of products in our catalog and vetting the data around each product that, you know, comes in from supplier materials, say, dimensions or the material of the product, whether it's wood or composite or metal.
Right. Um, you know, it can be hard to sort of vet all of that. I allows you to do that at scale, which means the quality, the detailing around the product is better, and that's a much more, you know, sort of secure purchase for the consumer. Then I'm going to be really honest. We need one in New York City. So it's like a place I would go to unwind and just have fun. It was so much fun to where it'll be in Westchester. So you can check that one out. It's getting closer. Um, um, K, thanks so much. Uh.
Take care. Yeah. Be well. Kick. Oliver. She's the chief financial officer and chief administrative officer over at Wayfair. Be sure to check out Chief Future Officer with Cake All Over. It is premiering tomorrow, July 8th at 9:30 p.m. Wall Street time. Also find it on the Bloomberg and at Bloomberg.com. Hey, coming up, we're going to kind of tie everything up the macro overseas the markets I that's coming up next.
It's 240 on Wall Street. We do check markets all day long here at Bloomberg. Chip stocks are slumping. The Dow the S&P NASDAQ 100 index all in the red. We begin with the Nasdaq 100 down almost 1.5% right now. This is a gauge of semiconductor firms the SoCs the Philadelphia Semiconductor stock index. It is down now by 4.8%. This despite Samsung's record profit. We had S&P down 22 down 3/10. Dow industrials down 2/10. Right now Nasdaq the composite index down 208. Drop there of 8/10 of 1%. And again the Nasdaq 100 index now slumping by 1.5%.
All of this is the Bloomberg Max seven index pushes higher up now by about 0.5% ten year, 4.52%, with a two year, 4.14%. Gold is at 4140, the ounce down 6/10 of 1%. West Texas Intermediate crude oil pushing higher, up 2.6% 7036 a barrel. Brent 7401 right now up by 2.8%. So oil is gaining following attacks on shipping in and around the Strait of Hormuz, pointing to continued risks to vessels in the strategic waterway. Among oil majors, they are all higher today. ExxonMobil up by 2.4%. Chevron also higher by 2.4%. Conoco Phillips up now by 3.2% for on demand news 24 hours a day.
Subscribe to Bloomberg News Now wherever you get your podcast. I'm Charlie Pellet. Emily and Carol, that is a Bloomberg Businessweek. All right, Charlie, thank you so much. Carol Massar Emily Graphic here at Bloomberg headquarters in New York City. Um, let's not forget we do get some economic data points. Uh, and we did this morning. The U.S. trade deficit widened in the month of May. Broad based increase in imports, decline in exports, propelling the gap to the most in more than a year. Emily, we also heard that Americans
expectations for inflation over the near medium term rose in the month of June. That's amid strong increases anticipated for medical care costs and rent. That's according to a fed Bank of New York survey that was released earlier today. And then we've also heard from some fed officials, and we have the bond market reacting in a pretty sizable way. At least today, we have the two year yield up four basis points and some movement on the longer end of the curve as well. Uh, the ten year up about five basis points right now. And I just want to point out our next guest notes that volatility has increased recently across equities and currencies. And we continue to expect that bond may offer less of a balance than they have
historically for suitable and qualified investors. They write, review, select alternatives and real assets as a potential diversify or through lower correlation and distinct return drivers. Here to explain and talk about the investing and economic backdrop is Conrad de Quadros. He's head of economics for City Wealth. He's here in studio. Welcome, welcome. Nice to have you here. Thanks for having me. Um, I want to ask you, you know, you have had a lasting career in Wall Street, and you and I were just kind of reminiscing about, um, the times that
we've talked over the past years, you've seen numerous cycles. I love when someone has. How would you describe today's cycle? Okay. So I think there's elements of today's cycle that we've seen before. Um, you know, I think we can see elements in this cycle on the economy side to the environment of the late 1990s, right when we had a innovative technology, there was heavy investment going into it. Um, so similar to what we're seeing today. But there are also very big differences between the two, right? The investment happening today is coming from companies that have earnings late 1990s.
Big difference. And that wasn't the case. Yeah. So there are very I think very important differences. But then also similarities the impacts on productivity growth. So in the economy, you know I think we can we can say we've seen some parallels, but we have to distinguish. Um, and the other thing I think is interesting is if we think about the fed and how the fed evolved, uh, over the various leaders that we've had, um, for the past couple of decades, say, um, and now, in some sense, when you look at the fed under Kevin Warsh, there does seem to be maybe some shift back to the way things were before, during the Alan Greenspan Fed, when communications
weren't, uh, weren't as, um, extensive as they have been since Greenspan. I think that those changes started under Greenspan. Um, and now I guess there's this feeling that maybe went a little too far, and it's better for it for the fed to talk less. So, you know, it is interesting to see how things can sort of shift between the eras. What about the era of stock bond correlation? Mhm. Because you noted that, you know, things are changing. Maybe bonds aren't a safe haven that they used to be. Is that because of this new fad era that we're in?
I don't think so, because I think that correlation broke down before we had the Fred Fitch transition. Um, and so, you know, one of the things that we noticed is, is that ballast, that bonds that they provided in the past, um, we weren't really seeing it anymore. And so that the correlations were more aligned than we had, we would have liked them to. So, um, so we started looking at what other assets can investors use to protect themselves. Um, and gold was one of them. That's a that's an asset that we've been recommending for quite some time. Um, and, you know, that's it's an interesting one because gold has obviously moved around a lot in the past several months.
Right. Um, which raises questions about, you know, whether it's still providing a ballast in our answer is we think it is. Um, we, you know, our view on gold is much more of a secular view. And we think that it has an important place in investors portfolios in this environment where we have, you know, the equity market, um, you know, performing very well. But, you know, questions about, you know, the certain sectors of the equity market, you know, in the eye space.
Are we going to see the returns from all the investment that's being done? Um, and then in the bond space, all the questions about we have globally fiscal ratios that are concerning to people. Um, and I think that's in the back of investors minds and maybe is that different this time around. Because again, I would go back 15 years or so and we'd have this conversation about concerns about the fiscal position of the United States or other countries. Is it different, though, in terms of the fiscal state? I'm not only the U.S. but other governments, as you point out. Well, I think that one of the differences is just the levels of debt, right. So we need to if we're at least if we're
looking at in terms of GDP, which a lot of people will argue, maybe that's not the best way to look at it. But it is a very common way to look at it. And a clean metric. I would say it's a clear measure, but there's even, you know, people in very senior roles, like Janet Yellen who, as Treasury Secretary said that we should be looking at other things like the interest cost of that debt in real terms, for example. Um, but you know, the as you said, a clean way to look at it is look at debt ratios, um, debt deficits relative to GDP. Um, and those are high. And so we have debt as a share of GDP. You'd have to go back to World War two
to see levels similar to what we're seeing now. We have very large deficits in an economy that is in good shape. And that's that's I think that's the aspect that might be a little bit concerning to investors that if we have deficits this large, when the economy is growing quite solidly, you know, what happens when we inevitably have that downturn and spending has to go up, because how do you grow yourself out of it if you're doing kind of already well or how do you stabilize? Right. One of the, the, um, you know, hopes of deficit spending is that it provides a temporary stabilization for the economy to kind of find its footing.
Um, and the concern, I think, is that given that deficits are already so large, they know it will there be that fiscal room to provide that stabilizing force the next time we have a downturn, whenever that is? To what extent does the strong consumer kind of provide a little bit of cushion here for that scenario? Because you noted that, um, the consumer's been pretty healthy. They've been spending and I think that has a lot to do with the labor market. You know, we had a report last week on Thursday. Um, I think I a lot of people sort of wrote it up as being somewhat disappointing. But I would say, you know, we have to look at the trends in that report.
And we have employment growth that's still averaging 100,000 per month over the last, uh, over the last three months. Uh, you know, close to that for this year thus far. And you compare that to 2025, when employment growth really didn't grow at all. And then think about that growth in the context of labor supply that's growing very slowly. So to bring that back to the consumer, it looks like job growth is strong enough to absorb entrance into the labor force. Wage growth is pretty solid. And I think that's what's providing the support to the consumer and why the consumer is holding up quite well. And of course, we would remind everybody and we talk about this, the cash
strapped economy, not all consumers are doing well. We still see a lot of, uh, consumers in America, you know, struggling just to get by. Having said that, if the labor pool is not increasing and we've talked about the impact of immigration and people are not coming in to expand, um, the workforce, that plays into my worries about how do you expand growth if you also restrict the size of the available labor pool? But it also speaks to existing workers maybe getting paid more. Great. But it also speaks to wage inflation and inflationary concerns. Is that a problem and got about 35 seconds. Yeah. So I think that's really important there. But I think I would tie that back to, to I where we sort of started off okay.
And, and we have that situation where we don't have the labor supply that we've had in the past, but we do have this other source of output, um, in EI and that boost productivity growth. And so I do think that, you know, we have a growth outlook as a trend that is better than it was ten years ago, even with slower labor force growth, because I sort of picks up some of the missing workers that we don't have anymore, which goes back to Alan Greenspan and productivity gains, um, come back again. That was really great. My pleasure. Thanks for having me. Conrad Quadros, he's head of economics for Citi about joining us right here in studio.
Stick around and we'll be checking on the markets and some stocks on the move when we come back to you on this Tuesday. This is Bloomberg Businessweek daily with Carol Massar and Tim Stenbeck on Bloomberg Radio and Television. All right. Everybody back here on Bloomberg Businessweek, daily Carol Massar, along with Emily Graf in for Tim Stead of, um. Different tone today. Different tone around. Right. Are we bouncing around or are we bouncing down? Well, we're off the highs and lows of the session, as I guess what I mean.
It's so it's not like a straight move down, a straight move down. But you're right. Like across the board. The Nasdaq 100 down about 1.7%. I keep going back, uh, to the Sox, which rallied 2.2% yesterday, is down five and a third percent today. So we see some pressure there. And I meant to look at the S&P 500. I know you broaden out which is always great. Kind of an even mix. But yeah 290 names gaining ground 213 to the downside in terms of kind of where the strength is today, at least in the green in the Nasdaq 100, it's the mega caps, the hyperscalers meta, Palantir, Microsoft Nvidia, Amazon to
the downside. What's dragging that index down is the chip names. It's the chip. Um, it's what's going to be in the stocks index. So micron um Intel AMD Tesla also lower and space to its first day in that index five of the Mac seven all higher today by meta which is up more than 3% but not enough to lift the index into positive territory. Know. Exactly. All right. Uh, so that's your big market picture. Overview. I'm Carol Massar, along with Emily Graf. Let's get to some stocks on the move back with us to do that is Bloomberg TV markets correspondent. Normal.
Linda. She's here in our studio. All right. So we're going to talk a bit more about chip makers. I mean it's really been a bad day for them. If you take a look at the second worst performer in the S&P 500 Intel. We talked about Intel micron AMD all under pressure. And we're really seeing essentially the ripple effects of what we saw from those preliminary results out of Samsung. Uh, and we did see pretty much a global sell off as you look at chipmakers more broadly. And it really ricocheted into U.S. markets as we've been seeing this playing out during the trading day.
To be fair, we do know that the SoCs index, the Philadelphia Semiconductors index, has risen about 75% so far this year. So the group as a whole has really been on a tear. But this just goes back to those underlying concerns that we've been seeing over and over again on Wall Street as to whether or not the I trade has run too far, too fast, and whether or not the spending that these companies are putting into artificial intelligence is actually justifiable. Okay, take a look at Intel. Year to date up almost 200%. So perhaps there you're taking if you want to look at this on the bright side, nothing ever just goes up in a straight red.
Can never. I'm also looking at automakers I've got Rivian in focus. That's ticker R IV. And now shares are down actually for double digit losses. The stock is heading for its worst day since 2024. Now this is coming after Rivian announce plans to sell 75 million shares. And this would be to help fund commitments tied to a U.S. Department of Energy loan. And so, clearly, uh, you know, we're seeing on Wall Street investors not taking this too well, uh, the stock is also down on a yearly basis by about 15%. So this really just adding to some of those, uh, declines and the weakness
that we've been seeing when we were talking about this with our Ed Ludlow, who is a host of Bloomberg Tech. And, you know, talking about this is share dilution, but I guess is part of the deal for getting the money from the energy department. The company also had to pony up some money. So this is why they're doing it. So absolutely. Yeah. But I get it. I get it right in terms of how investors see it. Yeah. Um, let's go to Pfizer. So Pfizer this is an interesting one. So the stock is up today. Uh, but I mean, it hasn't been doing too well this year. It's down about 21%. But this is after report that we are seeing a rally in the company because of
report, uh, that several U.S. banks have explored a potential deal for a debit network that's owned by Fee Reserve. And we've seen JPMorgan, Bank of America, also PNC all expressing some sort of interest in, uh, this deal, this debit network. So we'll have to see whether or not this actually is a major tailwind for the company. Uh, but it has been struggling and you are seeing a bit of a bright spot as investors digest, uh, this news. All right, good stuff. A couple of stocks there that we are watching and certainly sectors the chipmakers overall. Noor thank you so much Melinda. She's Bloomberg TV markets correspondent joining us for Stock Movers. Check out our stock Movers podcast five
minute episodes of big winners and losers in the stock market. You can find it on Apple, Spotify, or anywhere you get your podcasts. Hey folks, just want to mention some headlines. Crossing the Bloomberg Terminal is coming from the U.S. Treasury Department and issuance of an amended Iran related general license. So the Treasury revoking a June 21st Iran related waiver, uh, issuing this license related to um, essentially allowing some Iranian oil actions on a winding down of this waiver. I just did a little bit of poking around and it looks like, um, back about it. Yeah, I guess it was earlier this month.
There were some sanctions and oil, um, you know, authorizing the sale of Iranian oil for 60 days. So there's been some different moves and measures as the US and Iran seem to be moving closer, hopefully to really winding down, um, the tensions, the war, if you will, uh, between these two nations. Having said that, the Strait of Hormuz, we saw the most activity since the U.S. Iran peace deal today. So we've seen some pressure there once again in the region. And we're seeing oil move higher. Um, presumably on these headlines, WTI up about 4%. And the bond market following yields moving um close to session highs on this news.
Yeah. So keeping an eye on that again uh continuing to watch all those things going on in the Middle East. Hey folks. That's going to do it for the first hour of Bloomberg Businessweek daily. We've got a lot coming up in the next hour. We're thinking about midterms, what it means for the economy, what it means for the Trump White House. We're also getting into that token grasp of the AI boom and what it all shows. If you're watching on TV, the clothes coming your way.
