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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 STENOVEC, LIVE ON BLOOMBERG RADIO, TELEVISION, AND BLOOMBERG ORIGINALS. TIM: VERY GOOD AFTERNOON, LIVE ON RADIO, TV, YOUTUBE, BLOOMBERG ORIGINALS. I'M TIM STENOVEC. CAROL MASSAR IS OUT. JESS MENTON IS HERE IN HER STEAD. AND KNOCKING TO MAKE ANY JOKE ABOUT THE MARKETS BEING SPOOKED. SEEMS TO BE WHAT IS HAPPENING.
JESS: FINAL TRADING DAY NOT ONLY OF THE WEEK, BUT THE MONTH. NASDAQ 100 WIPING OUT THE WEEKLY GAINS YOU LOOK AT THE S&P 500, ONLY TWO OTHER DAYS IT HAS HAD A 2% DECLINE. WE WILL SEE WHETHER OR NOT THE LOSSES HOLD THROUGH THE CLOSE. TIM: MORE FROM CHARLIE PELLETT IN JUST A MINUTE. IT IS ALL ABOUT THE TRADE TODAY. INTEL THINKING AS MUCH AS 30%, AMAZON FOLLOWING 2%, HELPING TO DRIVE DOWN INDEXES. ALSO WITH US IN JUST A MINUTE, MATT DAY FROM OUR BLOOMBERG NEWS TEAM IN SEATTLE. THEY WILL BE TALKING ABOUT AMAZON. IT IS A BLOOMBERG EXCLUSIVE.
HIS ONLY BROADCAST INTERVIEW, INTERCONTINENTALEXCHANGE FOUNDER AND SHERIFF JEFF SPEICHER STOPPING BY IN JUST A MINUTE. HIS COMPANY IS PUSHING INTO PERPETUAL FUTURES, BRINGING THEM ON SHORE. HE WILL JOIN US IN THE STUDIO IN JUST A MINUTE. JESS: HAPPY NEW YORK CITY MARATHON WEEKEND TO ALL WHO CELEBRATE. I WILL BE THERE TO CHEER ON MY FRIENDS RUNNING THIS WEEKEND. WATCHING THOSE RUNNERS, AND THE CEO WILL JOIN US LATER IN THE HOUR. THAT IS A FUN ONE COMING UP. TIM: I THAT HE WILL BE WEARING BROOKS.
MORE IN THE NEXT HOUR ON "BLOOMBERG BUSINESSWEEK DAILY." FIRST UP, I PROMISE WE WOULD GET MORE FROM THE MARKETS FROM CHARLIE PELLETT. THANK YOU VERY MUCH, TIM AND JESS. MAJOR SELLOFF SPECIFICALLY IN TECH. GOT TO BEGIN WITH WHAT IS GOING WITH INTEL, DOWN 30.7%. THE SOX, PHILADELPHIA SEMICONDUCTOR INDEX, PLUNGING 8.7% NOW. NASDAQ 100 DOWN 4%, NASDAQ COMPOSITE DOWN 3.4%. S&P 500 INDEX DOWN 163 AT THE BASELINE, A DROP OF 2.1%. DOW INDUSTRIALS DOWN 111 POINTS. TWO-YEAR, 4.57%. 10-YEAR, 4.92%. GOLD HAS BROKEN BELOW $3900 THE OUNCE, DOWN THE.5%. WEST TEXAS INTERMEDIATE CRUDE RALLYING, UP 2.2%. BARREL OF BRENT, 117.70.
FOXCONN, A KEY NVIDIA AND APPLE PRODUCTION PARTNER, IS COUNTING ON A STEADY U.S. EXPANSION FOR ITS GOAL OF CAPTURING HALF THE AI SUPERMARKET IN TWO YEARS. THE CHAIRMAN SAYS HE IS CONFIDENT THEY CAN KEEP UP WITH DEMAND. WE ARE ALL FACING SIMILAR PROBLEMS. THIS TIME, THIS NEW INDUSTRY IS COMING SO BIG AND SO FAST, SO THAT THE WHOLE INDUSTRY ALL HAVE A SIMILAR PROBLEM. BUT THE PROBLEM IS NOT -- IS NOT THE DEMAND. IT IS NOT IMAGINING DEMAND. IT ISRAEL. THAT'S A GOOD PROBLEM. --IT IS REAL. THAT'S A GOOD PROBLEM. CHARLIE: THE DOW, S&P, NASDAQ ALL SELLING AWFUL NVIDIA SHARES ARE MOVING LOWER, ALONG WITH OTHER SEMICONDUCTOR NAMES, SPECIFICALLY INTEL RIGHT NOW,
DOWN 31%. TIM AND JESS, THAT IS A BLOOMBERG BUSINESS FLASH. TIM: WE WILL PICK UP WHERE CHARLIE PELLETT LEFT OFF, SHARES OF INTEL DOWN 31% IN TODAY'S TRADE. YOU DON'T HAVE TO BE SURPRISED WHEN I SAY THIS IS THE WORST TAPE IN THE COMPANY--WERE STAY IN THE COMPANY'S HISTORY. JESS: AND TO USE AGO IS WHEN HE GOT KICKE OUT OF THE-- TWO YEARS AGO IS WHEN IT GOT KICKED OUT OF THE DOW. TIM: I WANT TO BRING IN IAN KING. YOU WRITE THAT THE MISS ON THE TUMBLING OUTLOOK, SALES FOR THE QUARTER SITE OF THE AVERAGE OF $17 BILLION. PROFIT WILL BE $.25 A SHARE IN THE QUARTER, EXCLUDING CERTAIN ITEMS. WALL STREET WAS PROJECTING ADJUSTED EARNINGS OF $.43 A SHARE. IT IS MORE THAN THE TOP AND BOTTOM LINE MS. THE OUTLOOK THAT IS SENDING SHARES CRATERING
TODAY? IAN: IT IS, YES, BECAUSE IF YOU LOOK AT THE NUMBERS, INTEL IS GOING EVEN WITH THIS REDUCTION IN OUTLOOK. A COUPLE OF YEARS AGO, YOU WOULD BE HAPPY. THE PROBLEM IS CONTEXT. INTEL IS TRYING TO REASSERT ITSELF AND WIN BACK INVESTOR TRUST IN A MARKET WHERE NVIDIA, FOR EXAMPLE, IS GROWING AT 80, 90% A QUARTER. VERY, VERY HIGH BAR, AND UNFORTUNATELY, IT IS NOT ABLE TO MEET THEM. JESS: OF COURSE WE WERE TALKING ABOUT INTEL DID GET KICKED OUT OF THE DOW TWO YEARS AGO. WHEN YOU SEE THAT SPAN OF GAINS IN THE STOCK, WHAT WAS WORKING FOR INTEL, AND WHAT IS DIFFERENT NOW? IAN: WHAT WAS WORKING FOR
INTEL WAS THEY HAD PROBLEMS WITH THE BALANCE SHEET, ESSENTIALLY RUNNING OUT OF MONEY TO DO WHAT THEY WANTED TO DO. THE NEW CEO, LIP-BU TAN, BROUGHT IN MONEY FROM NVIDIA AND THE U.S. TAXPAYER, SOLD MORE SHARES INTO THE MARKET, STABILIZE THE FINANCES. THAT HELPED A LOT. TAKE OUR FIRST CONCERN, AND NOW THAT'S MOVE FORWARD WITH MAKING BETTER FACTORY OUTPUT AND BETTER PRODUCTS. WHAT WE SAW YESTERDAY'S ANNOUNCEMENT WAS THAT WE STILL HAVE PROBLEMS WITH NOT GETTING OUT OF THOSE FACTORS IN BEING UNLUCKY IN TERMS OF A FIRE IN A FACTORY IN ISRAEL.
WE ARE NOT GETTING SOME OF THE SUPPLY-CHAIN ISSUES TO SOLVE THAT WE NEED TO GET SOLVED IN ORDER TO MEET THE DEMAND. TIM: THE SHARES GOING INTO YESTERDAY'S PREMIUM, 150% GOING INTO JUST THIS YEAR. FAIR TO SAY -- AND LOOK, EVEN WITH TODAY'S ROUT, STILL UP MORE THAN 72% THIS YEAR. I GUESS I JUST WONDER WHY IT TAKES INFORMATION GLEANED ON ONE EARNINGS CALL TO MAKE PEOPLE RETHINK THIS TRADE SO MUCH. IAN: I MEAN, AGAIN, ENVIRONMENT -- WE HAD AMAZON REPORTING, WE HAD THESE HYPERSCALERS AND COMPANIES SPENDING SO MUCH MONEY ON THE VERY TYPE OF PRODUCT THEY GET THE MOST PROFIT FROM.
IT'S PRESENTING A MIXED PICTURE, SO THAT CREATES AN ATMOSPHERE OF UNCERTAINTY. FUNDAMENTALLY, COMPANIES LIKE INTEL AND THE OTHER BENEFICIARIES OF THIS MASSIVE AI TRADE, THOSE P/E RATIOS HAVE BEEN EXTENDED. IT'S BEEN VERY MUCH A CASE OF, HEY, YOU'RE GOING TO HAVE TO PROVE THIS TO US. NVIDIA MUCH LOWER -- THEY ARE PUTTING UP THE NUMBERS, PUTTING UP PROFITABILITY. IN AN UNCERTAIN ENVIRONMENT, YOU DON'T KNOCK IT OUT OF THE PARK, YOU DON'T BEAT AND RAISE, TO USE THE WALL STREET PHRASE, THEN PEOPLE GET CONCERNED AND WE SEE THE REACTION WE HAVE TODAY, UNFORTUNATELY. JESS: TALK ABOUT THE SPILLOVER EFFECTS IN WHICH COMPANIES ARE MOST VULNERABLE TO INTEL'S STEEP
DECLINE. IAN: THE SPILLOVER EFFECT -- INTEL HAS SUPPLIERS, BUT RATHER THAN LOOKING AT IT IN THAT PARTICULAR WAY, THE WAY TO LOOK AT IT IS INTEL HAD A CHANCE. IT HAD A CHANCE TO GET BACK INTO THAT FRONT AND SAY WE ARE MAKING A LOT OF MONEY, THIS IS OUR OPPORTUNITY. THE PROBLEM IS IF YOU WERE NOT READY IN THE FACTORY DON'T DO ELSEWHERE. I THINK WHAT PEOPLE WILL BE LOOKING FOR IN TERMS OF SPILLOVER EFFECT, ANDY, WHICH WILL BE REPORTING SOON, ARE THEY CONTINUING TO TAKE MARKET SHARE FROM INTEL AND SEIZING THIS OPPORTUNITY, OR IS THIS AN INTEL-SPECIFIC ISSUE. TIM: AT THE RISK OF REALLY REPEATING THE QUESTION THAT JESS ASKED, IN OTHER WORDS, IS THIS
IDIOSYNCRATIC FOR INTEL, VS. SOMETHING BIGGER ABOUT THE AI TRADE RIGHT NOW? IAN: THERE IS TWO WAYS TO LOOK AT IT. YOU HAVE TO LOOK AT WHO IS MAKING MONEY AND WHERE IS THE MONEY COMING FROM. THE ANSWER TO THAT IS FROM WHAT MICROSOFT SAYS, AMAZON SAYS, META SAYS. WE ARE SEEING A MIXED PICTURE THERE. THEY HAVE GONE CASH FLOW-NEGATIVE IN MANY RESPECTS BUT THEY ARE TALKING ABOUT SOLID GROWTH IN THEIR BUSINESSES. AWS HAD A GOOD QUARTER. THE FLIP SIDE OF IT IS TAKE INTEL ADDEDS-- AT ITS OWN WORDS. LIP-BU TAN, WHO SPOKE TO YESTERDAY, WAS VERY FRUSTRATED. HE WAS LIKE, LOOK, WE SHOULD BE DOING BETTER THAN THIS.
YOU HAVE TO TAKE THE COMPANY AND ITS OWN WORDS AND SAY THAT YOU AND EXTENT, THIS IS A PROBLEM THAT INTEL HAS HAD FOR SOME TIME AND NEEDS TO MAKE BETTER PROGRESS AT SOLVING. TIM: IAN, LAST QUESTION. SO FAR, IT DOESN'T SEEM LIKE THE PRESIDENT HAS WEIGHED IN ON THIS ROUT OF INTEL SHARES. REMINDER, THE U.S. GOVERNMENT IS THE LARGEST SHAREHOLDER IN THE COMPANY. IAN: YEAH, AS A TAXPAYER WE ALL HAVE AN INTEREST IN INTEL'S FORTUNES, HAVE AN INTEREST IN THE U.S. BEING BETTER IN THE SEMICONDUCTOR INDUSTRY. IT HAS TO BE AN IMPORTANT PART OF THAT.
THEY SAID THEY ARE GOING TO WORK HARDER, GOING TO GET BETTER, GOING TO EXTEND MANUFACTURING IN OREGON, GOING TO FIRE UP A MANUFACTURING IN OHIO. A, A SITE THAT HAS INSTALLED, DO MORE IN ALL OF THESE THINGS -- REQUIRE CUSTOMERS, REQUIRE ORDERS, REQUIRE A BETTER JOB OF EXCLUDING DEMANDS OUT THERE. IF YOU ARE A TAXPAYER, WHETHER YOU ARE A REPUBLICAN OR DEMOCRAT, YOU WANT THIS COMPANY TO DO BETTER. IT IS IN OUR INTEREST. TIM: LARGEST INDIVIDUAL SHAREHOLDER BECAUSE VANGUARD AND BLACKROCK IN THEIR INDEXES, IN THEIR FUNDS, HAVE A LARGER PORTION OF THE STOCK.
IAN KING IS OUR TIP CAME JOINING US IN SAN FRANCISCO, BLOOMBERG NEWS SEMICONDUCTOR REPORTER. DO APPRECIATE YOUR TIME. IAN MENTIONING THIS, CHARLIE MENTIONING THIS -- AMAZON IS DOWN 1.8%. THIS AFTER THE COMPANY SAID IT REPORTED GREATER CAPITAL SPENDING THAN ANTICIPATED THE SLOWEST GROWTH IN ITS E-COMMERCE BUSINESS IN THREE YEARS. THE COMPANY HAS SET UP SUPPLY FINANCING ARRANGEMENTS TO BORROW AS MUCH AS $80 BILLION AGAINST THE VALUE OF HARDWARE IT BUYS. IT IS THE LATEST MR. PERMIT FINANCIAL FLEXIBILITY AS IT SPENDS ON AI INFRASTRUCTURE. FOR MORE, I BLOOMBERG NEWS TECHNOLOGY REPORTER. MATT, I WANT TO START WITH YOU ON THIS $80 BILLION BORROW AGAINST THE VALUE OF HARDWARE.
YOU MINED THIS FROM REGULATORY FILINGS. WHAT ARE THE DETAILS? THROUGH THE THIRD QUARTER OF 2028, AMAZON HAS THE CAPACITY TO BORROW FROM SUPPLIERS UP TO $80 ASSETS THEY ARE BUYING. THEY DIDN'T SPECIFY WHAT THAT IS. I THINK THE PEOPLE MONEY IS THAT IT IS PROBABLY ON SHIPS. THAT IS MOST OFTEN THE MOST EXPENSIVE THING GOING INTO A DATA CENTER. A LOT OF PEOPLE HAVE BEEN GETTING LINES OF CREDIT TO FINANCE JUST BECAUSE THE CHIP BILL HAS GROWN SO ENORMOUS. JESS: ANURAG, I WANT TO BRING YOU INTO THE CONVERSATION. TALK ABOUT THE COST AND ISSUES WHEN IT COMES TO AMAZON WHEN YOU ARE SEEING THESE BIG AI BETS, BUT THEY ARE CONFRONTING SLOWING GROWTH IN OTHER SEGMENTS OF THE COMPANY.
ANURAG: YEAH, I DON'T THINK THE OTHER SEGMENTS IS WHAT IS DRIVING THE REACTION, FRANKLY SPEAKING. ONE OF THE THINGS IS THE STOCK WAS DOWN 10% AFTER THEY REPORTED. YOU COULD SAY IT HAS BOUNCED BACK AND IS ONLY DOWN 2% RIGHT NOW. I THINK A LARGE PORTION OF THAT IS THE AWS GROWTH OUTLOOK NEGATIVE, WHICH I DON'T THINK THEY'VE EVER GIVEN--OUTLOOK THEY GIVE, WHICH I DON'T THINK THEY'VE EVER GIVEN BEFORE. ONE OF THE THINGS WE TALKED ABOUT, THE THREE HYPERSCALE CLOUD PROVIDERS SPENDING A LOT OF MONEY RIGHT NOW, THEY ARE DOING SO BECAUSE THEY SEE THE PIPELINE OF WORK COMING IN.
THESE ARE COMPANIES THAT ARE NOT FISCALLY IRRESPONSIBLE, AND THEY HAVE MANAGED TO BALANCE SHEETS VERY WELL OVER THE LAST 15, 20 YEARS. IF THEY ARE SEEING THE WORK COMING IN, THAT IS LEADING THEM TO SPEND THAT MUCH MONEY. CHIPS IS THE SINGLE BIGGEST EXPENSE OF A NEW DATA CENTER AS YOU GO AHEAD. SO THEY HAVE TO BE CREATIVE IN THE WAY THEY FINANCE THIS. JESS: TO YOUR POINT, LOOKING AT AMAZON STOP NOW, DOWN 1.9%, HAD FALLEN AS MUCH AS 6% EARLIER. ARE THE AI SLOWDOWN FEARS POTENTIALLY OVERBLOWN? WHY ARE WE SEEING SOME OF THOSE LOSSES PARE BACK FOR AMAZON'S SHARES? ANURAG; THAT IS THE KIND OF THE GAY FOR 27 AND 2028- --THE GUIDANCE THEY GAVE FOR 2027 AND 2028. STREET SAID THEY WOULD GROW 39%
AWS. IF YOU LOOK AT MICROSOFT, BEAT THEIR ESTIMATES, AND GOOGLE BEAT THEIR ESTIMATES. IF AMAZON DIDN'T RECOGNIZE HER, PEOPLE THROUGH THE-- DIDN'T BEAT, PEOPLE THROUGH THE STOCK AFTER THAT POINT. 40% GAIN IN 2028, THAT GIVES YOU A LOT MORE CONFIDENCE THAT THEY HAVE THE VISIBILITY WITH ALL THOSE ORDERS COMING IN THAT THEY CAN BE CONFIDENT SPENDING THAT MUCH MONEY. TIM: MATT, I KNOW SO MUCH OF THE ATTENTION HAS BEEN ON AWS AND ON THE TECH INFRASTRUCTURE BUILDOUT. I CAN'T IGNORE WHAT YOU REPORTED ABOUT THE SALES NUMBERS FOR AMAZON, FOR ONLINE SALES, GAINING 2% TO $68.5 BILLION, THE
LOWEST INCREASE SINCE 2023. SIMILAR QUESTION THAT I ADDRESSED TO IAN KING, IS THIS IDIOSYNCRATIC TO AMAZON AND PEOPLE BUYING DIFFERENTLY, MAYBE USING AGENTS TO BUY? I DON'T KNOW IF WE CAN SAY THAT YET, ACTUALLY. BUT CHANGING THE WAY THEY ARE THINKING ABOUT BUYING ONLINE, OR IS THERE SOMETHING BIGGER HAPPENING WHEN IT COMES TO THE POWER OF THE U.S. CONSUMER? MATT: ON THE AGENTS POINT, ANDY JASSY DOWNPLAYED AGENTS. HE SAID THEY ARE NOT ASH ONLINE SALES 2% TALK ABOUT FUEL COSTS AND INPUT COST TAKING A HIT. THAT COMBINED WITH LIGHTER THAN EXPECTED FORECAST FOR THE QUARTER, LOOKS LIKE THE CONSUMER IS A QUESTION. JUST: SPECIFICALLY WHEN YOU
THINK OF THE FINAL THREE MONTHS OF THE YEAR WITH THE U.S. ECONOMY, MORE THAN TWO THIRDS OF GROWTH, IT WAS UP EARLY INDICATIONS, BLACK FRIDAY, CYBER MONDAY CAN BE GLEANED FROM THIS EARNING REPORT? THIS IS KIND OF THE LAST ONE AND THAT'S OUR FORECAST IS LEAVING THE TASTE IN FOLKS MOUNTS AS SHARES FELL TODAY. THEY DO TEND TO FORECAST CONSERVATIVELY FOR THE FOURTH QUARTER IN PARTICULAR. ANALYSTS WOULD JOKE OR SAY OFF THE RECORD, SO THAT IS OUT THERE TOO. WE ARE NOT GOING TO GET A LOT OF REGULARITY BETWEEN NOW AND THE END OF THE YEAR WITH AMAZON IN TERMS OF THEIR FORECAST. EVEN UP TO THE BLACK FRIDAY SALES. TIM: I WANT TO GO BACK TO THE
TECH INFRASTRUCTURE BUILDOUT. THAT SIDE OF THINGS. AN UPDATE ON HOW YOU ARE THINKING ABOUT AMAZON'S TRAINING AND THE CHIPS IT IS BUILDING TO COMPETE WITH THE BIGGEST PLAYERS OUT THERE? I THINK THEIR OWN CHIPS IS ONE OF THE WAYS THEY CAN KEEP EXPENSE DOWN. WE HAVE NOT SEEN THAT YET BECAUSE DEMAND IS SO STRONG. THERE WILL BE A TIME DOWN THE ROAD WHEN IT IS IMPORTANT TO HAVE LOW COST INFRASTRUCTURE. THE BEST WAY TO DO THAT IS TO HAVE YOUR OWN CHIPS. IT IS GOOD TO SEE THE PREMIUM HAS PICKED UP IN THE LAST ONE YEAR. WE SEE THE OTHER TRAINING MODELS ON IT. FROM THAT POINT, IT IS THIRD-PARTY MODELS. I THINK THAT IS A VERY GOOD DEVELOPMENT.
WE ARE HOPING TO SEE THE SAME FROM MICROSOFT. IF THEY CAN PULL IT OFF, IT WOULD TAKE IT FROM OVERLY DEPENDENT ON NVIDIA. TIM: THE SENIOR TECHNOLOGIST FOR BLOOMBERG, MATT DAY, OUR MAN IN SEATTLE, BLOOMBERG NEWS TECHNOLOGY REPORTER IN THE SEATTLE BUREAU. THANK YOU TO BOTH OF YOU. REPORTING ON THE TERMINAL AND THE RESEARCH ON THE TERMINAL AS WELL. TAKING A LOOK AT MARKETS. WE ARE IN THE MIDST OF WHAT I THINK IS FAIR TO SAY A FAIRLY STRONG SELLOFF. S&P 500 DOWN TWO POINT 2%. NASDAQ 100 DOWN 4%. THE YEAR. THE BIG WAVE ON THOSE REPORTS IS INTEL. JESS: TRACKING ITS BIGGEST MONTHLY UNDERPERFORMANCE SINCE 2002.
TIM: COMING UP NEXT, JUST BURGER OF ICE. CHARLIE: IT IS 2:20 ONE ON WALL STREET. WE CHECKED MARKETS ALL DAY LONG. TO THE RIGHT AND DOWN, THE SELLING CONTINUES. SELLING INTENSIFYING. NASDAQ 100 INDEX DOWN 4.2%. THE LOW OF THE DAY CLOSE TO CORRECTION. WALL STREET WAKING UP TO A REALITY CHECK AS A BRUISING SELLOFF IN TECH SHARES FUELS CONCERN THAT THE AI FRENZY MIGHT BE OVERBLOWN. THE NASDAQ 100. DOWN 4.2 PERCENT. THE PHILADELPHIA STOCK EXCHANGE AND SEMICONDUCTOR INDEX LOWER BY 9%. ALL OF THIS WITH INTEL PLUNGING 30.7 PERCENT. S&P 500 YOUR BASELINE DOWN, DOW INDUSTRIALS DOWN 1.3 PERCENT. NASDAQ THREE POINT 6%.
NASDAQ 108 -- INDEX DOWN BY FOUR POINT 2%. TWO-YEAR YIELD, FOUR POINT 57%. 10 YEAR, 4.92%. GOLD DOWN THREE POINT 6%. TRADING BELOW 3900 DOLLARS AN OUNCE. WEST TEXAS INTERMEDIATE CRUDE AT 104.38, UP 2.3%. BRAND CLOSING IN ON $118, BARREL OF BRENT GLOBAL BENCHMARK UP BY 2.5 PERCENT. BITCOIN, MAJOR MOVE. DOWN BY 2.4 PERCENT. NOW BELOW $77,000. BIG OIL REAPED MORE THAN $50 BILLION IN WINDFALL PROFITS AS CONFLICTS IN THE PERSIAN GULF AND RUSSIA URGES FINDING RESULTS. CHEVRON, BP, SHELL, ALL SURPASSED EXPECTATIONS WITH ADJUSTED NET INCOME OF 56.3 BILLION DOLLARS. WE HEARD FROM EXXON MOBIL, SHARES UP 1.7 PERCENT.
CHEVRON SHARES UP BY 1.5 PERCENT. CONOCOPHILLIPS REPORTS NEXT MONDAY. S&P 500 DOWN 2.3 PERCENT. NASDAQ 100 INDEX DOWN 4.1 PERCENT. THE STOXX IS DOWN 9%. INTEL IS PLUNGING 30.6%. THAT IS A BLOOMBERG BUSINESS FLASH. TIM: STOCKS LOWER, BUT SHARES OF INTERCONTINENTALEXCHANGE UP MORE THAN 9% THE LAST TWO DAYS. THE COMPANY HAVING THE BEST TWO DAY RUN SINCE MARCH OF 2020. AFTER THE THIRD QUARTER EARNINGS BEAT THE AVERAGE ESTIMATE. IN THE WAKE OF THE PRINT YESTERDAY, NEWS SEVEN ANALYSTS WHO COVER THE COMPANY RAISED THEIR TARGETS BY 5.5%, ACCORDING
TO DATA FROM BLOOMBERG. KAT DOHERTY BROKE THE NEWS THAT THEY HAVE JOINED FORCES WITH ONE OF THE MARKET OPERATORS WITH THE OFFSHORE PLATFORM HYPER-LIQUID AS IT SEEKS TO BRING PRODUCTS INTO U.S. REGULATED MARKETS. FOR MORE AND EXTRUSIVE INTERVIEW, WE ARE JOINED BY THE FOUNDER, AND CEO OF INTERCONTINENTALEXCHANGE. GOOD TO SEE YOU AGAIN. WE WILL GET TO EVERYTHING YOU ARE DOING WITH PERPETUAL FUTURES, BUT BEFORE WE DO THAT, I WANT YOU TO WEIGH IN ON THE MARKETS TODAY. NASDAQ 100 DOWN MORE THAN 4%, THE WORST DAYS AND MONTHS. WHAT IS YOUR VIEW? MARKETS CLIMB A WALL OF WORRY.
IT FEELS LIKE WE'VE HAD AN UNBELIEVABLE YEAR IN THE AI TRADE, AND A LOT OF THE INPUTS INTO THE MARKET, IT FEELS LIKE CONTINUE TO GO UP. BUT IT IS PART OF BEING A LONG-TERM INVESTOR, TOLERATING IT. JESS: YOU WERE JOKING ABOUT RUNNING THE CASINO. WHEN RUNNING -- TALKING TO CLIENTS, HOW DO THEY FEEL? WHAT ARE THE TOP CONCERNS? WE FOCUS ON NEW COMPANIES TRYING TO GO PUBLIC, AND WE'VE HAD 73 COMPANIES GO PUBLIC ON THE NEW YORK STOCK EXCHANGE. MORE THAN ALL OF LAST YEAR. BUT NOW THERE IS A RETRENCHMENT. WHAT YOU ARE TALKING ABOUT HAS BANKERS AND OTHERS SAYING LET'S LET THINGS SETTLE DOWN BEFORE WE TAKE THINGS PUBLIC. TIM: LET'S SEE HOW LONG IT GOES ON. WHAT DO YOU THINK?
TIM: LET'S TALK ABOUT THE WAY YOU ARE DIVERSIFYING THINGS. NYCE IN TRADE XYZ ARE PLANNING A MARKET TO TRADE. YOU ARE TAKING A STAKE IN TRADE AS PART OF THE AGREEMENT. STAN DRUCKENMILLER ALSO INVESTING. IT IS A PUSH INTO RETAIL. WHY DO YOU WANT TO BRING PERPETUAL FUTURES PRODUCTS INTO U.S. REGULATED MARKETS? I WAS INVITED WHEN THE PRESIDENT WAS TRYING TO PUSH THE CRYPTO BILL TO CONGRESS, I WAS INVITED TO THE PRESS CONFERENCE HE DID. HE ASKED ME TO STAND NEXT TO HIM. TIM: YOU HAVE A RELATIONSHIP THAT GOES BACK YEARS. YOUR WIFE IS ALSO AN ADMINISTRATOR -- A CABINET MEMBER. AND I'M A MAR-A-LAGO MEMBER.
ANYWAY, -- I ACTUALLY PAID HIM MONEY. I WAS STANDING NEXT TO HIM, AND YOU GUYS ARE PROBABLY USED TO THIS, BUT THERE WAS A GAGGLE OF REPORTERS STARING US DOWN AND MICROPHONES AND PEOPLE JOSTLING. TYLER KENDALL, WHO IS LOVELY, IT IS KIND OF THIS CRAZY THING. I DID NOT KNOW WHAT TO DO. I TOOK A HALF A STEP AWAY SO I WOULD NOT BE IN THE SHOP. I JUST STARED AT THE SCRIPT AS HE WAS WEAVING AROUND. I SAW THAT IT SAID WE WOULD BRING HYPER LIQUID TO THE UNITED STATES AND REGULATE THEM. I WALKED OUT SAYING WE SHOULD DO THAT. SO JUST AS AN ENTREPRENEUR, I SAW AN OPPORTUNITY. I BEFRIENDED THE FOUNDERS OF THESE COMPANIES AND WENT TO THEM AND SAID WE CAN HELP.
TIM: TALK ABOUT THAT. THE DEAL HAS BEEN IN THE WORKS, YOU BEGIN SPEAKING WITH HYPER LIQUID AND TRADE XYZ. THERE FOUNDER IS KNOWN ONLY BY SHOW GROUP TO MOST PEOPLE. HOW DID YOU GET COMFORTABLE PARTNERING WITH AND INVESTING IN AN ORGANIZATION WHOSE LEADERSHIP TEAM IS ENTIRELY ANONYMOUS? I WOULD ALSO TELL YOU, HYPER LIQUID, THERE ARE TWO FOUNDERS. ALSO HAS A SIMILAR SUIT ON THEM. IT IS PART OF THE ETHOS OF THIS CRYPTO COMMUNITY. WITH THE GOVERNMENT IS SAYING STARTING WITH THE PRESIDENT ON DOWN, WHAT YOU SEE IN BINANCE
YESTERDAY, WE HAVE TO GET THESE PLATFORMS INTO THE UNITED STATES, GET REGULATORY OVERSIGHT, GET ACCOUNTABILITY AND SUSTAINABILITY INTO THESE BUSINESSES. IT IS A BIT OF THE WILD WEST. I'M AN OLD GUY THAT HAS BEEN IN THE INDUSTRY A LONG TIME. I UNDERSTAND THE GUARD RAILS, I CAN HELP YOU. JESS: TALK ABOUT THAT. YOU SAID THE PRODUCTS CAN BE ADDICTIVE. AT THE SAME TIME WILL NOT CANNIBALIZE YOUR EXISTING PRODUCT, SEEING THEIR CURRENT CLIENTS ARE MOSTLY INSTITUTIONAL WHEREAS WHEN IT COMES TO PERPETUAL FUTURES, THERE ARE
MORE ON THE RETAIL SIDE. MAKE THE CASE FOR INVESTORS WHO MIGHT BE CONCERNED IT COULD CANNIBALIZE YOUR EXISTING PRODUCTS. WHY WON'T IT? GREAT QUESTION. I THINK INVESTORS ARE ASKING US THAT QUESTION HONESTLY. WE WERE IN THE WORLD'S LARGEST ENERGY EXCHANGE. THE AVERAGE HOLD IN OUR HUNDRED -- ENERGY EXCHANGE IS A SIX MONTH OR LONGER. IF YOU LOOK AT PERPETUAL FUTURES, OIL ON THESE PLATFORMS, THE AVERAGE IS 12 HOURS, NOT EVEN A DAY. THESE ARE PEOPLE THAT ARE JUST SAYING I THINK WHAT IS GOING TO GO UP OR DOWN OR THERE COULD BE A CONFLICT IN THE MIDDLE EAST OR SOMETHING THAT WOULD BE A PUT TO THE MARKET, THAT WILL NOT WORK
FOR YOU TO AN OIL COMPANIES AND PEOPLE TRYING TO LAY OFF RISK TO MAKE LONG-TERM INVESTMENTS. I THINK THEY ARE SEPARATE, HIGHLY CORRELATED. BUT I DON'T THINK THE AVERAGE PERP INVESTOR WANTS TO DEAL WITH CROSSING A 10 YEAR CONTRACT WITH A LARGE OIL COMPANY AND A LARGE OIL COMPANY WILL NOT BE THERE FOR 12 HOURS. TIM: YOU SEE THE AUDIENCE AS A STINK? I DO. THAT IS PARTLY WHY WE WANT TO TIM: I FEEL LIKE WE CANNOT TALK ABOUT THIS IN A VACUUM BECAUSE KALSHI ANNOUNCED THIS NEW ROUND YESTERDAY, $1 BILLION RAISED. $40 BILLION VALUATION. IT IS HARD TO KEEP TRACK AT THIS POINT. IT LAUNCHED PERPETUAL FUTURES. OVER 500,000 TRADERS.
IS THIS PARTNERSHIP ICE'S EFFORT TO CATCH UP? JEFF: WE ARE A MAJOR INVESTOR IN POLYMARKET WHICH IS A MAJOR COMPETITOR TO KALSHI. THERE IS A TECHNOLOGY SHIFT GOING ON. THERE IS A TRADING BEHAVIOR SHIFT. WE JUST WANT TO BE A PART OF IT. IT'S NOT IN OUR DNA -- WE ARE DEALING WITH AT THE NEW YORK STOCK EXCHANGE, EVERYONE WHO IS THERE IS A MAJOR BROKER DEALER, ALL THE BRAND NAMES YOU WOULD KNOW, THE OIL INDUSTRY. YOU AND I WOULD NEVER BUY A BARREL OF OIL. HERE YOU HAVE THIS NEW COHORT THAT IS RAPIDLY TRADING AND WE DIDN'T WANT TO IGNORE IT. JESS: KERRY DUFFY HAS SAID HE'S VERY CONCERNED ABOUT THE RISE OF PERPETUAL FUTURES BECAUSE GIVING
RETAILERS ACCESS COULD POTENTIALLY BE EXCESSIVE LEVELS OF RISK. IS HE WRONG, WOULD YOU AGREE WITH THAT? JEFF: I PARTLY AGREE WITH TERRY WHICH IS THAT THESE PRODUCTS NEED TO BE REGULATED. I THINK THAT CME GROUP THAT HE LEADS HAS SAID WE THINK THE CFTC SHOULD BE THE REGULATOR. THE CFTC ITSELF HAS SAID WE THINK WE SHOULD BE THE REGULATOR. CME AND THE GOVERNMENT AGREE THAT THESE SHOULD BE REGULATED. REGULATION. MY OWN VIEW IS THAT WILL SORT ITSELF OUT. THESE ARE NEW MARKETS.
SOME THINGS WILL GO WRONG, SOME CHALLENGES WILL APPEAR, REGULATORS WILL HAVE TO DEAL WITH IT. BUSINESS. SO, WE'RE A VOICE OF REASON, I IN THE WORLD. TIM: HOW ARE THE TALKS WITH REGULATORS AND YOUR TEAM GOING RIGHT NOW ON THIS? JEFF: I THINK THEY ARE HAPPY THAT WE HAVE BEEN ABLE TO THEMSELVES UP. WE ARE ALSO AN INVESTOR IN OKX, WHICH I WOULD SAY IS THE SECOND LARGEST EXCHANGE AFTER BINANCE. WE ARE WORKING WITH THEM TO BRING THEM INTO THE U.S. THE NICE THING ABOUT THESE CRYPTO ENTREPRENEURS IS THEY HAVE A MINDSET THAT IF YOU REALLY WANT TO BE GLOBAL, YOU CANNOT IGNORE THE UNITED STATES. THESE ARE THE DEEPEST, BIGGEST
CAPITAL MARKETS. SO, THEY ARE WORKING WITH US TO HELP THEM NAVIGATE HOW TO COME OVER AND GET REGULATED. TIM: IS THIS ALL ABOUT MAKING IT ONE STEP CLOSER TO 24/7 EQUITY TRADING? JEFF: IT IS, YEAH. THE THING THAT THE CRYPTO GUYS HAVE DONE AND IT IS WHAT BINANCE IS DEALING WITH NOW, THEY HAVE FIGURED OUT HOW TO MOVE CAPITAL OVER THE INTERNET. WHEREAS TRADITIONAL FINANCE MOVES CAPITAL ON PRIVATE NETWORKS BUT IT IS CLOSED ON THE WEEKEND. SO, THE STABLECOINS AND THE CRYPTO TOKENIZED DEPOSITS HAVE SORT OF TAKEN THE PLACE OF THE BANKING SYSTEM BUT IT IS VULNERABLE, AS WE SEE.
WE ARE WORKING WITH THE BIG BANKS TO WORK HOW TO MOVE MONEY WHEN THE BANKING SYSTEM WOULD OTHERWISE BE CLOSED BECAUSE THERE IS A DEMAND AROUND THE WORLD. TIM: CAN YOU GIVE US A PREDICTION ON WHEN YOU THINK WE WILL SEE 24/7 EQUITY TRADING AT THE NEW YORK STOCK EXCHANGE? JEFF: WE ARE THINKING MORE 23 BY FIVE, AND THAT WILL GIVE EVERYONE A GLIMPSE OF WHAT IS THE ASIAN INTEREST IN U.S. EQUITIES IN A TRADITIONAL PLATFORM. I THINK IT WILL GO FROM THERE. TIM: JEFF SPRECHER, CHAIR OF INTERCONTINENTALEXCHANGE. THANK YOU FOR JOINING US.
JEFF: THANK YOU. TIM: I WANT TO GET BACK TO MARKETS REAL QUICK, TAKING A LOOK AT HOW THE NASDAQ IS DOING. IT IS DOWN 4.4%. THE S&P 500 DOWN 2.5%. THE DOW IS DOWN ABOUT 1.4%. IN TERMS OF WHAT'S MOVING INSIDE THE NASDAQ 100 AND WEIGHING ON THE TRADE TODAY,I INTEL DOWN MORE THAN 31%. SANDISK DOWN 15.7%. STERILE LABS DOWN 14%. ARM HOLDINGS DOWN 13%. JESS: VIX EDGING CLOSER TO 24 SO ABOVE THE 20 LEVEL WHICH IS WHERE YOU SEE MORE MARKET STRESS PICKING UP. IF YOU LOOK MONTH TO DATE, ENERGY STOCKS ARE UP 14%.
STAPLES UP ABOUT 12%. TIM: COMING UP NEXT, THE COMPANY THAT IS GROWING ITS SALES EVEN OF THE MARKET FOR ATHLEISURE IS UNDER PRESSURE. DAN SHERIDAN IS COMING UP NEXT. THAT IS NEXT. ♪ CHARLIE: WE CHECK MARKETS ALL DAY LONG HERE AT BLOOMBERG. DOW INDUSTRIALS DOWN MORE THAN 700 POINTS. THE S&P LOWER BY 2.3%. NASDAQ 100 INDEX NOW DOWN BY 4.2%. ALL OF THIS WITH THE PHILADELPHIA STOCK EXCHANGE SEMICONDUCTOR INDEX NOW DOWN BY 9.1%. INTEL CERTAINLY WEIGHING ON THAT INDEX. INTEL PLUNGING 31% AFTER LAST NIGHT'S EARNINGS REPORT. S&P DOWN 2.3%, DOWN 177 POINTS.
DOW INDUSTRIALS DOWN 708 POINTS, NOW DOWN 1.4%. NASDAQ COMPOSITE HUNDRED DOWN 4.2%. THE TWO-YEAR -- THE 30 YEAR AT 5.30%. GOLD IS AT $3882 THE OUNCE. IT IS DOWN 3.3%. CRUDE IS RALLYING. WEST TEXAS INTERMEDIATE UP BY 2%. BRENT, $177.55, A DROP OF 2.3%. BOTTOM LINE KAMALA STREET GETTING A BIG-TIME REALITY CHECK AS THE BRUISING TECH SHARES FUELS CONCERNED THAT THE AI FRENZY MAY BE OVERBLOWN. INTEL NOW PLUNGING BY 31%.
BEYOND TECH, STARBUCKS SHARES ARE LOWER. STARBUCKS U.S. SALES ROSE FASTER THAN EXPECTED IN THE LATEST QUARTER. IT WAS HELP BY SPRUCED UP STORES AND A STRONG PERFORMANCE FOR THE COFFEE CHAIN'S FALL MENU ITEMS. WE ARE LOOKING AT STARBUCKS SHARES DOWN BY.8%. S&P DOWN 2.3% RIGHT NOW. WE HAVE GOT INTEL DOWN BY 31%. THAT IS A BLOOMBERG BUSINESS FLASH. TIM: THANK YOU FOR THAT UPDATE. I WANT TO PICK UP WHERE CHARLIE LEFT OFF AND TALK ABOUT THIS REALITY CHECK ON WALL STREET.
THE DISAPPOINTING TECH RESULTS THAT ARE DRAGGING THE NASDAQ DOWN MORE THAN 4%. 4.2%. S&P DOWN 2.3%. WE ARE ALMOST SEEING A TECHNICAL CORRECTION ON THE NASDAQ 100. JESS: THE NASDAQ 100 DOWN MORE THAN 70% THIS MONTH SO THAT WOULD PUT IT ON PACE FOR ITS WORST MONTH SINCE MARCH 2025. THAT IS DURING THE HEIGHT OF THE TARIFF FRENZY THAT WENT ON LAST YEAR. TIM: STILL UP 11.5% THIS YEAR. I MEAN, I DON'T KNOW. I TOUGH MONTH. LET'S SEE ERIC THINKS, HE JOINS US FROM NEW YORK. IS THIS JUST A CONTINUATION OF WHAT WE SAW YESTERDAY OR SOMETHING BIGGER?
ERIC: IT COULD BE SOMETHING BIGGER. YOU NEVER REALLY KNOW UNTIL YOU GET TO THE POINT WHERE YOU CAN LOOK BACK AT THESE THINGS. SO, IF THIS IS THE BEGINNING OF SOMETHING, WE WOULD POINT BACK TO THIS WEEK. IT'S NOT JUST THE CHIP STOCKS. IT'S THE WHOLE COMPLEX. SO MUCH OF THE AI TRAIT HAS GOTTEN HIT THIS WEEK -- TRADE HAS GOTTEN HIT THIS WEEK. YOU CAN LOOK AT AMAZON AND ALPHABET AND WHAT THEY'VE BEEN SAYING ABOUT CAPITAL EXPENDITURES. YOU CAN LOOK AT SOFTWARE MAKERS. YOU CAN LOOK AT OBVIOUSLY THE CHIP STOCKS. IT IS REALLY, THE QUESTION IS TWO THINGS.
IT'S CAN THEY KEEP SPENDING? AND IF THEY DON'T KEEP SPENDING, WHAT HAPPENS? WE DON'T REALLY HAVE A GOOD ANSWER FOR THAT BECAUSE THE WHOLE MARKET IS KIND OF PREDICATED ON THIS SPENDING CONTINUING. JESS: WHEN YOU LOOK AT THE TOP OF THE LEADERBOARD FOR THIS MONTH IN THE S&P 500, BEHIND ENERGY, OBVIOUSLY THE BEST GROUP THIS YEAR BUT STAPLES, HEALTH CARE, UTILITIES -- THOSE DEFENSIVE DIVIDEND PAYING CORNERS OF THE MARKET. EVEN NASDAQ 100 AGAINST THE WEIGHT S&P 500. WHAT DOES THAT TELL US MORE ABOUT THE BREATH OF THE MARKET? DAN: IT TELLS YOU THERE IS KIND OF A ROTATION AWAY FROM -- WELL, AWAY FROM RISK BUT RISK IS WEIRD BECAUSE FOR THE LONGEST TIME,
MEGA CAP TECH WAS NOT CONSIDERED RISKY BECAUSE THEY PRINTED IT'S -- THEY PRINTED CASH AND THEY MADE STOCKS AND THEY WENT UP. IT WAS ALMOST AS A HAVEN TRADE. WHAT WE'VE DONE OVER THE LAST FEW MONTHS IS THE IDEA THAT THESE ARE HAVEN STOCKS, BECAUSE THEY NEED TO SPEND A TON, THEY ARE CASH FLOW NEGATIVE, AND MANY OF THEM ARE. AND THEY HAVE TO RAISE EQUITY, RAISED IT TO WHERE THEY NEED TO BE. PEOPLE ARE ROTATING TOWARD THE SAFER PARTS OF THE MARKETS, PLACES LIKE HEALTH CARE WHERE DEMAND IS NOT DEPENDENT ON ANYTHING, SAME WITH STAPLES.
UTILITY IS WHERE YOU GET A DIVIDEND. DO YOU THINK THE ROTATION WILL STICK? IN THIS RUN WE HAVE SEEN IT HAPPEN A FEW TIMES BUT IT ENDS UP BEING TEMPORARY AND THE AI TRADE COMES BACK. HOW LONG YOU THINK YOU'LL POTENTIALLY LAST? -- IT WILL POTENTIALLY LAST? THIS IS WHERE I CAME IN FROM THE BEGINNING, IF WE LOOK BACK A MONTH FROM NOW, TWO MONTHS FROM NOW, WE ARE LIKE WE DON'T, THIS IS BAD, AND NOW WE ARE KIND OF AFFORD. WE WILL LOOK BACK AT THIS AND BE LIKE THIS WAS THE WEEK WE REALLY FIRST SAW IT KICK IN. HOWEVER, THIS COULD BE ANOTHER HEAD FAKE, WHICH WE HAVE SEEN A TON OF. AT WHICH POINT THIS BECOMES A BIZARRE BUYING OPPORTUNITY. TIM: I THOUGHT THE TONE CHANGED
WHAT CHANGED? WAS IT ALPHABET? ANTHROPIC IS PART OF IT. A LOT OF IT IS THIS NEGATIVE FREE CASH FLOW THING. WHEN YOU ARE SEEING MEDA AND GOOGLE OR ALPHABET, EVEN MICROSOFT, WHICH IS LOOKING GOOD, GOT HIT AS SORT OF A SIDESWIPE FROM THESE OTHER STOCKS. THESE ARE HUGE STOCKS, AND AMAZON REPORTS IT IS -- IT'S E-COMMERCE UNIT IS NOT KEEPING UP WITH THE SPENDING GOING ON THE AI SIDE, THAT KIND OF UNWINDS THE WHOLE LOGIC OF THAT TRADE. YOU ARE STARTING TO SEE A LOT MORE ATTENTION TO RISK ON THE DOWNSIDE THAT WAS HELD UP BY OAK BEFORE. TIM: WE MIGHT COME A KNOCKING AGAIN, SO DON'T GO TOO FAR AWAY GIVEN TODAY'S TRADE. ERIK WEINER JOINING US FROM NEW YORK. SPEAKING OF NEW YORK.
THIS SUNDAY, 60,000 -- JESS: A YEAR. TIM: THE GREATEST DAY TO SEE SPECTATORS SHUTTING DOWN SWATS FOR THE MARATHON. THE RUNNING BOOM SINCE THE PANDEMIC. OUR NEXT GUEST IS ALL ABOUT THE RUNNING BOOM. WE ARE JOINED BY DAN SHERIDAN. WELCOME BACK TO THE PROGRAM. GREAT TO BE BACK, I LOVE BEING IN THE CITY FOR THIS WEEKEND. TIM: YOU HAVE TO COME HERE FOR MORE THAN JUST -- THIS IS BY FAR MY FAVORITE WEEKEND IN THE CITY. TIM: YOU SPEAK FOR A LOT OF PEOPLE SAYING THAT. SOMETHING INTERESTING HAS CONTINUED TO HAPPEN. YOU ARE OWNED BY BERKSHIRE HATHAWAY, SO YOU DON'T HAVE TO GIVE ALL THE SALES FIGURES A PUBLIC COMPANY WOULD.
WE ARE SEEING INDUSTRY FACE A LOT OF PRESSURE, WHETHER WE ARE TALKING ABOUT FOOTWEAR, ATHLEISURE. HOW ARE YOU GROWING? WE ARE IN OUR 13TH CONSECUTIVE QUARTER OF GROWTH, GROWING ABOUT 12% YEAR TO DATE. THE STORY IS ONE WHERE THE CONSUMER WE TARGET IS SUPER HEALTHY RIGHT NOW, THE CATEGORIES HEALTHY. WE CHOSE A GREAT CATEGORY AND A HEALTHY CONSUMER. AROUND THE WORLD IT IS ROOTED IN PARTICIPATION. WE TRACK PARTICIPATION RATES, 60,000 PEOPLE, I THINK 250 THOUSAND PEOPLE TRIED TO GET INTO THE RACE.
THE SPORT IS HEALTHY, WHICH IS OUR FOCUS. THE SPORT OF RUNNING. YOU SAY STRONG CONSUMER, BUT WHAT ABOUT WHEN IT COMES TO MACRO CONDITIONS, SPECIFICALLY MORE TOWARDS SHOE PRODUCTION? I THINK THE PRODUCTION IS PRETTY STEADY FOR US. THE TRADE POLICIES THAT HAVE COME INTO OUR CATEGORY HAVE BEEN DISRUPTIVE, BUT WE GOT OUR ARMS AROUND IT. JUST COLLECT WHAT SUPPLY CHAIN CONSTRAINTS? WE TOOK A FULL SUPPLY CHAIN APPROACH TO IT. OUR PARTNERS IN ASIA, LOGISTIC PARTNERS, WE WORKED WITH THE FRONT END OF THE HOUSE TO MITIGATE THEIR RISK ACROSS OUR BUSINESS. THE SUPPLY CHAIN IN OUR INDUSTRY IS PRETTY RESILIENT IF YOU THINK BACK TO COVID, IT WAS VERY RESILIENT AND IT WEATHERED THE STORM. TIM: YOUR OLD BOSS WAS WORRIED ABOUT IT. YOUR NEW BOSS, ANY DIFFERENT IN
THEIR MANAGEMENT STRATEGY? YOU AND I HAVE TALKED ABOUT THIS IN THE PAST. THE AMAZING THING ABOUT BERKSHIRE IS THE CONSISTENCY AND LEADERSHIP. I REPORTED TO ADAM JOHNSON, THE CEO OF NETJETS, AND I WOULD TELL YOU CONSISTENT ACROSS -- TIM: HOW DOES THAT WORK? THEY REORGANIZED MORE AND STEPPED MORE INTO THE CHAIRMAN ROLE. I HAVE BEEN REPORTING TO ADAMSON SINCE THE START OF THE YEAR. I CAN TELL YOU IT IS THE SAME CONSISTENT LEADERSHIP CULTURE WE HAD UNDER GREG AND WARREN. I THINK I'VE GOT THE GREATEST JOB IN SPORTING GOODS BECAUSE OF OUR OWNERSHIP STRUCTURE. TIM: HANDS OFF?
VERY HANDS-OFF. AUTONOMY WITH ACCOUNTABILITY. INCREDIBLE ACCOUNTABILITY TO DELIVER RESULTS AND GROW THE BUSINESS. BUT WE RUN OUR SHOP. THEY ARE THERE WHEN WE NEED THEM. I FEEL BLESSED TO BE WITHIN THE BERKSHIRE PORTFOLIO. JESS: HOW MUCH OF THE BOOM HAS TO DO WITH THE DIFFERENT RUNNING CLUBS, INFLUENCERS IN THE SPACE? RUNNING CLUBS HAS ALWAYS BEEN IN THE SPACE. BUT THE ACCELERATION OF RUNNING CLUBS IS INCREDIBLE. AROUND THE WORLD, NOT JUST IN THE U.S. WE WERE IN CHINA LAST YEAR. I RAN WITH ONE OF THE GREAT RUNNING CRUISE CALLED DARK RUNNERS, THEY RUN AT NIGHT ON THE SHANGHAI BOND RIVER.
THE UNIVERSAL TRUTHS OF RUNNING ARE TRUE IN EVERY MARKET WE GO INTO. THEY ARE INVESTING IN THEIR HEALTH AND WELLNESS, THEY WANT SOCIAL CONNECTION. TIM: IN THE PAST COUPLE OF YEARS YOU HAVE COME ON OUR PROGRAM, GIVEN US AN UPDATE AND IS IT EXCEEDING EXPECTATIONS OVER THE LAST COUPLE OF YEARS? WE ARE RIGHT ON PLAN INTO CHINA. WE HAVE A SMALL AMOUNT OF STORES. IN COMPARISON TO COMPETITORS, WE ARE STILL AN EMERGING MARKET. WE ARE GROWING 40% IN CHINA. I WILL GO BACK TO THE RUNNER. THE RUNNER, THE UNIVERSAL TRUTHS OF WHY THEY ARE INVESTING, THEY WANT A GREAT PRODUCT, WE DELIVER THAT. THEY WANT A SOCIAL COMMUNITY WE
CAN ENGAGE WITH, WE ARE ENGAGING WITH A RUNNER. THE CENTER OF THE RUNNER CULTURE IS WORKING. TIM: PUSHING THE LIFESTYLE. HE RECENTLY REDESIGNED THE LIFESTYLE? YES, THIS BRAND IS 112 YEARS OLD. WE HAVE A HOST OF PRODUCTS AND OUR HISTORY THAT ARE RELEVANT IN THE FASHION TREND AND PERFORMANCE TRENDS. ADRENALINE IS ONE OF OUR BEST SHOES, AND ADRENALINE 10 IS A LIFESTYLE PRODUCT FOR US. OUR STRATEGY IS TO MEET OUR CONSUMER WHERE THEY ARE IN FASHION TRENDS AND PERFORMANCE TRENDS, AND WE ARE HAVING A GREAT TIME IN LIFESTYLE. TIM: WE ALWAYS HAVE A GREAT TIME WHEN YOU SWING BY THE SET. DON'T LET A YEAR GO BY.
JESS: COME BACK EARLY. TIM: THE CEO OF BROOKS RUNNING. LET'S TAKE A LOOK AT HOW MARKETS ARE LOOKING ON THIS FRIDAY AFTERNOON, CONTINUING TO SEE STOCKS SELL OFF. S&P 500 DOWN. WE CAN ROUNDED UP TO 2.5 PERCENT. NASDAQ 100 DOWN 4.4%. DOWN 1.4%. JESS: ONLY TWO DOWN DAYS, JUNE 5 OF JANUARY 20. IT IS RARE TO SEE THOSE DECLINES. ALSO HAVEN'T HAD A BACK TO BACK 1% DROP SINCE LATE MARCH. IT HAS BEEN ABOUT SEVEN MONTHS. WE COULD HAVE A BOUNCE BACK ON MONDAY. WE WILL HAVE TO WAIT AND SEE. TIM: WE WILL HEAR FROM APPLE. JESS: AFTER THE CLOSING BELL ON MONDAY.
TIM: WE WILL SEE WHAT APPLE SAYS. IF YOU LOOK AT THE MAG SEVEN, THE BEST PERFORMING SO FAR THIS YEAR. THEY ARE ALSO THE COMPANY THAT HAS SPENT THE LEAST ON CAPEX. JESS: IT HAS DEFINITELY BROKEN AWAY. TIM: THESE ARE APPLE AND ORANGES. JESS: ESPECIALLY THESE TOP CUSTOMERS WHEN IT COMES TO META, MICROSOFT, ALPHABET. AMAZON IS IN ITS OWN SPHERE WHEN IT COMES TO THAT GAME. TIM: ACROSS THE BLOOMBERG TERMINAL, THE NASDAQ 100 HAS FALLEN 10% FROM ITS OCTOBER HIGH. THIS IS YOUR WORLD. THE S&P 500 IS EXTENDING A FIRST SESSION LOW TO 2.5%. SHOULD WE READ INTO A TECHNICAL LIKE THAT? JESS: A LOT OF THE PAIN HAS BEEN MORE GEARED TOWARD THOSE CHIPMAKERS.
THE ETF THAT TRACKS SEMICONDUCTORS, STOCKS, BROKE BELOW ITS 200 DAY MOVING AVERAGE. THE S&P 500 DOWN ABOUT 3.7% FROM ITS ALL-TIME HIGH JUST A FEW WEEKS AGO ON OCTOBER 6. STILL YOU ARE SEEING THE PAIN MORE GEARED TOWARDS THOSE CHIPMAKERS, MEMORY CHIPMAKERS RATHER THAN MORE BROADLY. SO YOU ARE STILL SEEING STAPLES UP MORE THAN 10% MONTH TO DATE. TIM: I WANT TO BRING IN NORAH MULINDA, BLOOMBERG AND TELEVISION MARKETS CORRESPONDENT TO WEIGH IN ON TODAY'S TRADE. WE ARE GETTING SOME HEADLINES THAT THE NASDAQ 100 FALLING 10% FROM ITS OCTOBER HIGH, SET TO ENTER A CORRECTION, ENDING ITS FALL. -- ABOUT 2.5% RIGHT NOW. MARKET INVESTORS ARE ASKING FOR MORE, AND THAT HAS SHOWN -- BROADCAST THROUGH INTEL AND THE
REACTION WE ARE SEEING WHICH WE KNOW TO BE THE WORST PERFORMING STOCK IN THE S&P 500 TODAY. IT IS MORE OF A SHIFT FOR INVESTORS NEEDING TO SEE CASH FLOW FROM THESE COMPANIES. THEY NEED TO SEE BUSINESSES ARE HOLDING UP, WHICH WE DID NOT SEE FROM INTEL. THAT IS SPARKING BROADER CONCERN. THEY ALSO WANT TO SEE THAT AI IS DRIVING GROWTH. IT IS GOING INTO R.O.I. AND NOT JUST SPENDING MONEY, BUT WHAT ARE YOU SPENDING IT ON AND IS IT OF QUALITY? JESS: PARTICULARLY THE BRIGHT SPOTS TODAY, ENERGY. CHEVRON TRADING AROUND RECORDS. ENERGY THE BEST PERFORMING SECTOR.
NOT JUST THIS MONTH, BUT YEAR TO DATE. WHAT ARE YOU SEEING WHEN IT COMES TO THAT? OBVIOUSLY THOSE COMPANIES BENEFITED BY THOSE REFINING MARGINS. AS FAR AS THE WINNERS AND LOSERS, WHO IS STANDING OUT? IT IS INTERESTING, WE ARE SEEING RED WHEN IT COMES TO THE MAJOR INDEXES. GREEN STILL ON THE SCREEN. CONSUMER STAPLES LEADING THE MARKET. ENERGY IS THE SECOND-BEST PERFORMING SECTOR IN THE S&P 500 FOLLOWED BY UTILITIES, HEALTH CARE, DIVIDEND PAYERS, INVESTORS SEEKING SAFETY RIGHT NOW IN THIS MOMENT. I HEARD FROM ONE OF THE SOURCES I WAS SPEAKING WITH, THE CEO OF MAHONEY ASSET MANAGEMENT.
SAYING THAT MARKETS ARE VERY ELASTIC AS WE KNOW, WE NEED SOMETHING OUTSIDE IS THAT WE ARE SEEING HERE, YOU MIGHT HAVE A BETTER CHANCE SNAPPING BACK WITH SOME FUEL. I THINK THE MARKETS NEED IT IN THIS MOMENT CONSIDERING THE LAST COUPLE OF YEARS HAVE LED TO THE BEST AND THE BIGGEST UPSIDE MOVE. IF YOU THINK ABOUT THE VOLATILITY AND THE IDEA OF THE MARKET BEING ABLE TO POTENTIALLY PUSH AHEAD ON THE OTHERS. TIM: SPEAKING OF MARKETS, LET'S TAKE A LOOKING AT STOCKS ON THE MOVES. JUST -- TIM STENOVEC ALONG WITH JESS MENTON.
WE ARE JOINED BY NORAH MULINDA. STOCKS MAKING BIG MOVES TO THE DOWNSIDE WEIGHING ON THESE INDEXES ON THIS FRIDAY. WHAT DO YOU HAVE FOR US? SHARES OF INTEL, THE STOCK DOWN MORE THAN 30%. THIS IS ALL DUE TO THE SLOWING PC DEMAND, BUT ALSO THE SUPPLY CHAIN CONCERNS. WE HAVE SEEN THIS PRESSURING OF BROADER MARKET WITH ITS OUT LOW -- OUTLET DISSIPATING. IT IS NOT JUST ABOUT THE AI VALUATIONS, BUT WE SAW SOME WEAK FUNDAMENTALS PUSHING AND LOWER. IT IS ONE OF THE MORE EXTREME EXAMPLES WE SEE TODAY, BUT CERTAINLY LEAVING THE MARKET LOWER. ALSO KEEPING AN EYE ON NAMES LIKE AMAZON, THAT IS A STOCK I HAVE IN FOCUS. AMZN. BUT THIS IS ALSO A STORY WE ARE THINKING ABOUT THE CAPEX SPEND.
THAT IS PUSHING THAT STOCK LOWER, LOOKING AT SHARES OF AMAZON LOWER BY 2.4%. JUST KIND OF SPEAKING TO THE BROADER SELLOFF IN THE MARKET TODAY. TIM: I THINK IT IS FAIR TO SAY IT IS ONE OF THE MOST INTERESTING STORIES TO ME, WHAT IS GOING ON WITH REDDIT AND THE CHANGES IT IS MAKING TO ITS PLATFORM. WHAT IS IT DOING TO ITS STOCK? IN THE RED, DOWN 30%. ALSO HEADING FOR ITS WORST DAY ON RECORD, WHICH I DO WANT TO POINT OUT INTEL IS HEADING FOR THAT SIZE AND SCOPE AS WELL.
THIS IS BECAUSE OF THE FACT SINCE ITS IPO, IT PLANS TO LIMIT ACCESS TO ITS ONLINE FORUMS. IN THE COMPANY IS STARTING TO DUST -- TEST DIFFERENT APPROACHES, GETTING USER TO REGISTER FOR ACCOUNTS -- TIM: ON THE MEETING ACCESS, ALL ANYTHING. BUT THE IDEA IS -- I DON'T KNOW WHY IT IS SUCH A BIG DEAL, THE IDEA IS THEY CAN BETTER TARGET ADVERTISING. I DON'T KNOW WHY IT IS NOT 30%. IT IS PART OF A DEEPER SELLOFF POTENTIAL. DOWN 61 PERCENT YEAR TO DATE.
