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Welcome to Catalyst. I'm Madison Mills. 30 minutes into your US Training Day. Let's get you the 3 catalysts we're watching this hour. First up, we break down the market action amid a muted response to the latest inflation print coming in cooler than expected. Plus we'll break down what that cooler than expected print means for the future of the Federal Reserve. And we'll tap into the tech trade and where the Magnificent Seven is heading next after staging a big rebound to start the week.Half an hour into the start of US trading, let's get you a check on the markets brought to you by Tasty Trade. Taking a look at the major averages here. You've still got the Dow under pressure due to some company specific news with UnitedHealth, but your S&P 500 up about 0.5%. Your tech heavy Nasdaq taking on the majority of the gains. It's up about 0.1%. Some company specific news there as well, with Nvidia up nearly 2.5%, perhaps boosting the broader NASDAQ and the Nasdaq 100, by the way, completely retracing its losses year to date. It is now flat.On the year, but let's flip it over to the bond market and take a look at yields continuing their climb to the upside. You've got your 10 year up about a basis point. Your 30 year yield is up about 3 basis points. Interesting to see what the growth picture is that the bond market is pricing in off the back of that quarter than expected inflation print. And lastly here, let's take a look at Bitcoin. One of our risk on risk off indicators here does look like it is moving to the downside, but after a record breaking run over the past couple of sessions here.Well, I want to bring in my guest host for the hour. I've got Lou Bassany. He's with Prairie Operating Co as the EVP of Market strategy. Lou, great to have you here this morning. Let's talk about the market action here because stocks are edging higher. It's not like a massive rally here. Do you think the market is pleased with the CPI

reprint? Yeah, I think it's a yawn, right? Like we were, I think for the markets to really rally on the CPI print, we need to see a tremendous drop, and I think what's interesting is this is the first report.Where we should have seen some impact from tariffs, and I think that's just uh OK there's not really that worry we've seen this. We've been having this discussion. The soft data has been suggesting really terrible times ahead now we're getting actual hard data. It's not coming through. So I think market is just OK, this is good. Let's see what happens next with the Fed, right? I think it gives a more clear picture for the Fed as opposed to them having to balance maybe labor changes the jobs market changing quicker.We have, you know, dreaded stagflation scenario where inflation might be, you know, returning. So

canthe Fed and can we trust the data when it's being gathered as negotiations are getting struck aswe speak?

Yeah, trust but verify. I think this is one data point. It's one month. I think it's going to take several months before any of those tariff impacts to work their way through the system, you know, we saw it in the Q1 GDP print, right? A lot of inventory building.How long does it take to shed that off? How much, how many companies are sitting back on capital expenditures? You just don't know those decisions that are being made in the C-suites and where it's going to trickle through into the hard data. So I think can't put it all on one data point. I wouldn't say that this is a given now that the Fed's gonna cut next month. Um, I haven't looked at the, the, the probabilities, you know, it's, it's swung.So fast. I mean, a month ago there was only a, you know, there was a 60% odds of a June rate cut. Now it's down to like 8%. So I think everyone's still trying to figure out what Jerome Powell is going to do, and Jerome Powell might still be figuring out what he's gonna do, right?

We'restill looking at two rate cuts priced in from the market this year, but I do want to get to some of the individual names that you sent over to us.Look at what's driving the major averages today. You've got tech as the biggest sector gainer. I know that you are only looking at one name in Magnificent Seven though. Talk to me about that. Yeah, it's

alphabet. I mean, I think I've used the analogy and it's getting worn out, but the, the Mag 7 is a boy band that broke up. Just everyone didn't get the memo yet. And so I really think you're seeing solo careers and outperformance. Apple, um, I think Alphabet is the next one to have a breakout solo career because if you look at the valuation.It's the cheapest it's been in over a year and it's the cheapest of the mag sevens and it's really attractive from that standpoint. And if you look at the other side, well, can they compete in AI? Look at the last quarter's results. They're actually showing what matters in AI, not just that we can do a lot of computing power, but that we can use that to help our customers do better advertising. So it's really driving their business. I think that's gonna continue.And I think it's one of those things it's fallen out of favor over regulatory concerns. They might break them up. I don't think that's ever gonna be happening and we've been talking about this for 10 years, right, breaking up big tech. Not a single big tech company has even been close to being dismantled. So I think this is an overreaction, and I think it's undervalued. Uh, I'd rather buy here cheap, uh, at a good price while they have good growth coming than trying to chase.The name I love Apple too. I've been a long term shareholder, but I don't think it's really compelling at this at current prices.

How are you thinking about Apple right now in the face of tariff headwinds? Yeah, look,

Steve Jobs gets paid to do exactly what he's doing. He's showing that he can move production. I'm sorry, Steve Jobs, yeah, Tim Cook, Tim Cook's doing what people didn't think he could in the aftermath of Steve Jobs, um, you know, and if he just points to the scoreboard, if you look at.The stock, it's up 1,300% since he took over in 2011. Um, so I think he's showing, hey, I can be nimble even as a multi-trillion dollar company and move production and save on costs and honestly, a $900 million hit not that big of a deal to Apple. It sounds in absolute terms like a big deal, but when you look at these companies that are making, you know, $15 to $20 billion a quarter.$900 million is really really a rounding error and then if you give, you know, um, Tim Cook some time to really figure out where he's gonna get supplies from, I think in a quarter or two it's, it's long forgotten. But middle of the year always seems to be the time everyone gets negative on Apple. The next iPhone's not gonna be great. They need to iterate or they're gonna, I mean innovate, they're gonna die.It's the same mantra every time and yet the company keeps executing and going higher.

Yeah, I keep hearing from sources that they're investing in management teams right now and not specific names, and that certainly makes the case for that when you talk about Apple and Tim Cook at the helm. Thank you so much for that insight, Lou. I appreciate it. We're going to have you for the rest of the hour here to give more unviable context. We're gonna have all your markets action ahead for our audience and stick around. You're watching Catalysts.

Weak buck easy ride. 2025 is ripping up the old playbook as the US dollar stopped dancing with the 10 year yield for a stretch during all the tariff turmoil. Now they're doing the tango once again. Let's dive into what this means for stocks and risk markets writ large. I'm Jared Blicky, host of Stocks in Translation.Well, let's start with the chart. This is a 4 year chart of the US dollar index that's in white and the 10 year yield rate, and this is the US borrowing rate going out 10 years, and you can see for the most part they're going in the same direction most of the time. They diverge a little bit, but if you'll notice they're going up here, they're going down here in tandem, up and down, and it proceeds until we had a little bit of a hiccup lately. So things are changing, and this is what I mean by the new playbook. So this zooms in.A little bit on the last chart. This is a one year chart of the dollar versus yield, and here you can clearly see this divergence. And when that happened, that was in early April and it happened around Liberation Day. Suddenly yields shot up and the dollar dropped. Why would that be? Because in the old days a dropping dollar meant risk gone. Well, not in this context. In fact, the S&P 500 had some of its worst days since the early pandemic. Meanwhile, yields were shooting higher, so they were going in an opposite direction.So let's break down what this correlation means. First of all, when I say the dollar yield correlation, I'm looking at a 1 year link between the US dollar index, and this is a ticker symbol right here that you can find on the Yahoo Finance website, and the 10 year Treasury reelield, and that's a ticker right there, carrot TNX. Now if they're positive, that means that they're moving together and if they're negative, that means they're moving apart and the slope matters too, so.Increasing slope as we're seeing here in green means that they're moving together in an increasing way. So this truck goes all the way back 4 years and we do see a little bit of a decline here in the beginning of that 2022 bear market. But early on, even as the S&P 500 in white continued to move lower, the correlation had bottomed and it started heading higher. This proceeded right into early November of 2024.year and guess what would happen what happened right back then. That was the Trump election. From there, from that peak, it slowly declined, but then it started accelerating in January when we started hearing more rumblings about the tariff policy. Then it took a bigger dip, came up a little bit, and really sunk as Liberation Day, and the whole world realized that they didn't want to own US dollar assets. In fact, kind of the mantra was.Anything but US dollar assets. So what does this mean going forward? Well, the last few days have actually seen a resumption in that positive correlation between the 10-year yield and the US dollar index. In fact, that happened right after the Fed meeting, and we saw it in force on Thursday. That would be last Thursday, a little bit Friday, but then Monday, yesterday was a huge day. Over the weekend we got that big tariff detente with.China and that kind of signaled more risk on environment and so we have seen the dollar moving higher actually quite forcefully along with US yields and far from being risk off, the fact that they're marching together again and the dollar higher, that means that the whole world is accepting US dollar once again. So going forward we want to pay attention to this relationship, not just the direction of each of these assets individually.Tune into stocks and translation for more jargon busting deep dives, new episodes on Tuesdays and Thursdays on Yahoo Finance's website or wherever you find your podcast.

All right, Jared, thank you so much.It's time for some of today's trending tickers. We are watching Nvidia, Hertz and on holding. First up here in Nvidia with CEO Jensen Huan saying the company will send ships to Saudi Arabian AI company Humane. Humane, which is focused on data centers, AI infrastructure, and developing Arabic LLMs, is owned by the kingdom's $925 billion public investment fund and was unveiled on Monday here. The shares up over 4.5% responsible for a lot of that lift in your Nasdaq this morning. Lou Basany is still here with me.How are you thinking about Nvidia? I know it wasn't on your buy list for the Mag 7, but where doyou see

this? Yeah, so I am a shareholder. I got in late though, so I didn't enjoy all the run. I think it's really critical. If you want to play AI, you have to own this blue chip, no pun intended, chip maker because they are the majority of the chips sales. Um, I think chips are the oxygen of the digital economy. We have to understand that for us to do $600 to $700 billion a year in annual sales in chips, they fuel everything. It's not just AI. I think that's what.Everyone overlooks is the chip sector is much broader, much bigger. There's tailwinds here that are going to persist. Nvidia alone, I mean, still trading about 21% off its all-time high, uh, 52 week high. There's room for it to continue to run on good news like this, uh, and obviously on good earnings because they report off cycle. So we'll still get that that look here before toolong,

right? Exactly. That's going to be the key final earnings print of those big tech names to watch here. But let's look at Hertz reporting a wider loss and lower revenue in the first quarter. The rental company attributing lower revenue to a tighter.and current macroeconomic conditions, still executives say turnaround efforts are working. The shares down over 18%. And, we were talking before this about Bill Ackman and his continued love for the stock, or maybe spiteful love. It's a relationship he can't get out of. So what do you think Ackman is thinking on this

toxic death spiral. I just don't understand what attracts him to a business. Amobiles, airplanes, and groceries have terrible operating margins when you've got tens of billion dollars to invest.Why are you going after things that don't have much margin to improve upon? So, um, I think Hertz is really still struggling post COVID. They seem to be in this rut relationship rut, if you want to call it, where they keep going back to trimming down their fleet and then building it back up and everyone gets excited because, you know, you're seeing better economics after they trim. But look, this is a business that I think we talked about is overpriced the rental rates if you travel a lot, they're not the most competitive, um, and their operations are not very seamless or smooth. So I, I don't know what he's betting on, but he's got a lot more money.To lose and make in other places where he canafford to do it.

Yeah, you don't want to be betting on a company that has high priced, uh, services when we're in a macroeconomic question mark environment right now. But let's look at on holding, lifting its full year outlook for sales driven by strong demand. The Swiss shoemakers's first quarter sales also topping expectations up 40% from a year earlier. The shares up nearly 9% at the moment, and we've spoken with the CEO previously on this program and and CEOs have talked about the fact that the.The company is really in a strong place when it comes to any headwinds from tariffs. We know footwear is one of the areas that has been subject to some headwinds from tariffs, but, uh, clearly this quarter able to eke out some.

I mean, look, you gotta applaud the growth. I think they're benefiting from the halo effect too. You can see on sneakers everywhere. I was in Paris and Amsterdam in the last month, all over the US, you know it's there, but now they're getting that halo effect from apparel. You're starting to broaden out into that which has better margins. I think this is a gross stock that's got more momentum and this report shows it. So

are you buying at these?

I, I don't know. I'm not really retailers is not usually on my list, but no, it's interesting. It's worth following right now for me as a potential momentum play. uh, Birk the, the, the thing that's surprising, this is a good read through for Birkenstock on Thursday, right, which I can't believe Birkenstocks or Crocs are still a thing, but everything comes full circle, so, uh, the retail shoe trend is definitely on point. Yeah,

it's really interesting to watch. Thank you so much, Luke. Great insights as always, and you can scan the QR code on your screen and track the best and worst performing stocks with Yahoo Finance's trending at Ticker's page.We're gonna have all your markets action ahead, so stick around for more. You're watching Catalysts.Let's do a quick check here on the major averages. Your S&P 500 up 0.7%. Your tech heavy Nasdaq taking the majority of the gains up nearly 1.3%. But let's double click on the S&P 500. I want to pull up a year to date chart because the S&P 500 is officially up on the year if it were to close at these current levels. The level that we are watching this morning is 5881. That is the level that the S&P 500 has to close above to officially be up for the.Right now it's at about 5888, so we are on track to close up if we do continue these gains to the upside on the S&P 500. And as a reminder, that is a far cry from the 15% drop year to date that the S&P 500 was sitting out on April 8th after a slew of tariff-driven headwinds and headlines led to a lot of market pessimism coming in here. Now we are seeing that movement coming in back to the upside as stocks have recovered from those losses, at least at the current moment.Treasury Secretary Scott Besant was optimistic on Tuesday when discussing talks with Asian trading partners, telling reporters things are going well on the heels of a temporary truce with China. Besant was more cautious on EU negotiations, saying talks between the US and Europe may be a bit slower thanks to differing attitudes within the bloc. Comments come just one day after a China tariff pause ignited a monster rally in US markets. So what might future negotiations mean for the US economy? John Lear, Morning Consult chief economist.Joining us now John, great to speak with you this morning. I want to talk about the data that you have for us on consumer sentiment. If we can pull up the chart on that here, you'll take a look at this because you say that we are already seeing an increase to the upside in consumer sentiment off the back of negotiations, not deals. Talk me through that because I have a hard time believing that consumers are following the tariff headlines the same way that you and I are because we're paid to. How is sentiment already recovering off the back of this news?

Well, I think there's two primary channels through which your sentiment is recovering. The first is that sort of direct policy channel, right? Just some level of tariff tariff easing, even before the trade, uh, negotiations with China were announced, we already knew that, uh, the reciprocal tariffs were being walked back slowly but surely. So there was sort of momentum in that direction. And then the other more I think direct effect on consumers is, is through markets and public markets. So strong stock markets lead to a strong.effect. And we see that in fact, we take that number and break it out by different market segments, we see higher earners with more money invested in the stock market have more directly benefited from these trade announcements over the last couple of days. Yes,

talk to me about that. The idea that the wealthier consumer is feeling better because of market activity here, how does that impact what we call the hard data, the actual spending patterns for that higher income group, which does make up the majority of consumer spending.

Yeah, it impacts it pretty directly, although I would say it impacts it, uh, uh, the word I use is asymmetrically. So we know that a fall, a rapid deterioration in sentiment tends to lead to a deterioration in spending. We see that for example, the Chicago Fed uses our data for their now cast of retail sales, their carts index, really for that real-time downturn monitoring uh effect.Uh, and so I think right now we're in a situation, right, where we've got sentiment recovering, we continue to see a strong labor market through yesterday, the data I saw showed that we had another strong week last week. And so I think all of that together paints a picture of a really strong consumer. Remember, not too long ago, pre-liberation Day, the US economy was in a great position. I think slowly but surely we're trying to get back essentially to where we were at the end of March.

And my guest host Lou has a question for you,

John. Hey John, I, you know, it's amazing what a difference a week makes in terms of trade talks and negotiations. It looks really constructive, but my question for you is, how do we factor in the, the chance that these trade talks could fall apart just as quickly as they came together and at what point does the consumer just get fatigue and change their behavior permanently because of that? They don't know when it's gonna happen.I mean how do you, how, how do you calculate for that?

I mean, it's a great question. I think thus far, what we've seen from consumers is some residents to dramatically change their behaviors in response to trade negotiations, tariff negotiations, right? Because announcing a 145% tariff on Chinese-made goods is not the same as in fact paying 1 45% more.For the next day, companies have ways of working around things. We also know from our, our small business survey that we run with the Boston Fed that small businesses were very reluctant to immediately pass on those elevated costs that we're gonna do so over a period of 2+ years. So I think from the perspective of consumers, they're sitting back and they're saying, well, what does this mean for me in my pocketbook, um, the, the expectations of tariffs, I think wrongfully were over, uh, you know,I think people wrongfully thought tariff announcements and tariff expectations were immediately gonna affect consumers' pocketbooks. That didn't happen. And so we've got some breathing room right now, and I expect consumers to go back uh and spend.

Yeah, so just a follow up too in terms of the hard data versus soft data, right? If we don't know where consumers are gonna lay out, how do you balance that, ignore some of the sentiment data, and what, what data, hard data would you put more priority on in given this environment?

So I think right now in a period of elevated volatility, I tend to look more at the soft data just because it's more of a real-time indicator. On top of that, with the hard data, you're gonna get revisions, you know, 3 months, 6 months, 9 months down the road. So you've got to be a little careful as it relates to sort of where you prioritize, um.The signal as opposed to the noise. We saw very clearly in the, in the announcement following the liberation day that consumers were starting to feel worse about their expectations, but their assessment of their personal finances remained pretty strong. That's what I was telling a lot of CFOs and heads of investor relations was, look, the future is really uncertain, but the present is pretty strong. And so there's an opportunity right now, you know, to sort of adopt this, um,Uh, you know, to go try to capture some of that market at the higher end of the income spectrum in particular, where folks have a little bit more, uh, room to absorb higher costs. So I think it's, again, it's gonna be a really, uh, sort of company by company specific, uh, uh, outcome as it relates to the consumer, but overall, we're in a much better position now than we were a week ago.

Well, talk to me about the labor market here because one thing that I want to hit on, we're getting some headlines that Microsoft.is cutting 3% of all workers. They are not tying this to any performance related issues. A spokesperson telling CNBC one objective here is to reduce layers of management. John, I wonder how you're thinking about how companies are responding to the macroeconomic uncertainty of this moment. I heard you saying this idea that consumers were going to have this stark negative reaction straight away was a little bit overdone. Fine, but we're already getting headlines. The companies are cutting.Their staff, so does that economic impact start to trickle in and slow down you know

it might the strength thus far over the last few weeks of the US economy has been the jobs market. I think there's certainly a world out there. You could imagine a world where tariff announcements created such uncertainty that businesses immediately pulled back.On hiring and started laying workers off. We didn't see that, uh, we didn't see it in Morning Consult's own proprietary data. You didn't see it in the jobs data, uh, for April. You don't see in the unemployment, uh, claims data. I think that's because companies deep down inside know that there's money to be made by selling in the here and now in the present.And that it would be, um, uh, you know, a loss, a significant loss of, of, of opportunity to go sort of shut things down essentially because you expect the future to be so uncertain. Instead, what's more likely to have happened and what we see in some of our small business data is that businesses reduce their longer term investment planning, they reduce some of their more speculative investments, but they continue to hire uh and staff in the near term again, because there was.Money to be made. So it's sort of like a game of musical chairs, you know, no one wants to be left without a chair, but you don't also want to be the first one to sit down unnecessarily when there's still a game to be played.

Yes, we are coming off that labor shortage coming out of the pandemic, so certainly coming into play here. John, really appreciate your insights. Thank you. My pleasure.Let's check in on shares of Microsoft down just a touch. The company said it's laying off 3% of employees across all levels and geographies, according to CNBC. It's likely Microsoft's largest round of layoffs since the elimination of 10,000 rolls in 2023. Back in January, the company announced a smaller round of layoffs that were performance-based. These new job cuts, the company says are not.Related to performance. Microsoft had 228,000 employees worldwide at the end of June, meaning that the move will affect thousands of employees. One objective is to reduce layers of management, according to the spokesperson. The company reporting better than expected results and an upbeat quarterly forecast back in late April. Again, those shares under just a bit of pressure this morning.Well, big tech, much more ahead on Yahoo Finance.Big tech stocks leading market gains today with the Nasdaq 100 officially wiping out year to date losses. The Magnificent Seven adding more than $800 billion in market value following the deal between the US and China to temporarily reduce tariffs. Joining us now with more, Dan Ives, Wedbush Securities, global head of technology research. Dan, great to have you as always. I know you say this truce is the best case scenario, which tech stock is the biggest winner within that scenario?

I think it's Apple and Nvidia. I mean, if you look at this, that was the black cloud, right? I mean, the supply chain hearts and lungs are in China. And and as much as you could talk about moving to India and others, this is a huge sigh of relief. And, and I think it changes our view that, you know, new ties for tech, new highs for the market, now on the table after what we just view as a dream scenario happened this weekend.

Well, Dan, let's talk about Apple a little bit. I know you had a call for a $3500 iPhone if production was brought back to the United States. What's your call on the price of an iPhone today?

And it comes down to I mean they're, they're gonna have to struggle not to raise prices if you actually, they don't get exemptions and you actually keep some sort of tariff and when it comes to to China. Look, it all comes down to the reality is.iPhones need to be made in China, some could be made in India, they can never really be made in the US, because if you want made in the US.The, the price points would basically be massive demand destruction on day one, and it would take 4 to 5 years to even build 10% of that in the US. So that's why our whole point over the last 6 weeks was let's talk reality versus fairy tale.And the reality is is that iPhones will continue to be built in China with some being built in India.

How do you suss out the reality versus a negotiation, a framework, a thinking of a deal when there isn't necessarily clarity yet on the goal of these tariffs?

Look, I think ultimately they're both playing poker, and especially the US, they look at their hands, it's not a good hand, right? And I think they had to move further and further back from the cliff in terms of what we saw with the delay of the reciprocal and obviously when it came to China, because the cargo data doesn't lie, and the price points doesn't lie. And whatever CEOs are saying publicly behind closed doors, what they're telling the White House is you need to change, you need to move.So our view is like even when it comes to the 30%, I mean, that's probably the high bar, it goes to what call it a reciprocal 15%, 20% once you work at WTO, IP and all the other issues, you're gonna have to get worked out over the next year, but you don't want the coupling when it comes to AI revolution, and I think this was, you know, a potential black swan movement that was self-created, that's no longer there.

And Dan, my guest host Lou Bassey has a question for you. So Dan,

I just want to talk to you more about Apple. I feel like earlier in the show I said this time of year everyone gets a bit negative on Apple. How worried are you about price sensitivity, right? I mean, the consumer is super loyal to Apple, 2.5 billion devices out there. You got a lot of subsidies. Does it really matter if the iPhone price is a little bit higher than than it was expected? I mean, do you really think that impacts demand?

Yeah, it's a great question. Look, I mean.The last thing Apple wants to do is raise prices, and they've kept prices basically the same. The reason that is because you have caught 300 million iPhones that have an upgrade in 4 years. So if it, even if it's 3%, 4%, 5% of that, that may be delayed for a year because of a $100 increase, or $150. That's not what Apple wants, but.They're beholden to their supply chain, but when it comes to going into WWDC and iPhone 17 and obviously AI, I mean, this is a key period for them to actually see growth in terms of high single digit double digit growth, which is obviously evaded, you know, in terms of the Apple story over the last few years.

Then one quick follow up earlier in the show, I said that Mag 7 was a boy band like NSYNC that's breaking up.Who would be I love. Yeah, look, who would be your Justin Timberlake though for breakout? You said Apple and Nvidia. If you had to pick one for the best breakout for investors right now, which one are you most optimistic about on the aftermath of these

traders? If there was like a, if there was like a Timberlake part of uh NSYNC breaking out, it would have to be invidia. I mean, and look, Jenn, we, we'll see what happens with the black leather jacket if he had to, you know, make it for it to be a boy band. But look, I think the reality is, is that.I think it makes all new new all-time highs, because there's only one ship in the world fueling the AI revolution, and that's led by godfather of AI, Jensen

Nvidia. How big of a catalyst, Dan, is the fact that the United States is lifting some of these sanctions between the US and Saudi Arabia when it comes to chip purchases. We're seeing the shares of Nvidia up over 5%.

It shows it's not just about China. I mean, think about it.That was not on the table when you look at that whole market. It's not coincital that they're in Saudi Arabia this week after obviously the US-China, you know, weekend talks with Bessin, because it shows like when you think about AI revolution, you only have 4% of US enterprises going through AI 0% in Europe, 0% in Asia outside China, and in the Middle East, it's basically it's baby steps in terms of where we are today. So this just shows.What I believe is gonna be happening over the coming years, the trillions being spent on AI and obviously it starts with chips, but then on the software side, from Microsoft.To Google, to Amazon, to obviously names like Palantir which I kind of view as front and center of the best pure play AI name out there.

Dan, let's talk about Microsoft since you mentioned it. A report from CNBC citing a spokesperson with the company that Microsoft is cutting 3% of its workforce. Any take on that?

And I think they're, they're just doing what they do every kind of few years. They're still hiring when it comes to.Direct sales, I think some of the strategic areas, but about companies and we've seen with a lot of big tech companies, they're gonna have to continue to focus on strategic versus non-strategic. But right now it's Microsoft's world, everyone else paying rent when it comes to what we're seeing on core cloud in terms of enterprises. So this is in no way any sort of sign of weakening. I mean, they just had a quarter, that was just a squa quarter they posted.

And I also, before we let you go, Dan, I want to get your take on Tesla. We saw the shares slumping a bit off the back of a fall in Chinese sales, but of course back up today, perhaps off the back of images of Elon Musk and President Trump together in Riyadh and also the broader market lifting. What's your take on Tesla?

But also remember Mike Musk is in Riyadh as CEO of Tesla, no longer in terms of my view with Doge, Trump administration. Remember that was that dark chapter is over.Now it's about autonomous when it comes to Austin in June. I believe it's the next stage of this massive story for Tesla, and I think they're going into a Jalen Bronson moment. I think it's just the start of what I see is just massive growth and I think a $2 trillion mark cap could potentially now be on the table for Tesla.

Really great overview as always, Dan. It's always a pleasure to have you. Thank you so much for making the time and thanks to Lou for joining the conversation as well.Perplexity is in talks for a new round of funding that would value the AI startup at $14 billion according to reporting from The Wall Street Journal. That represents a more than 50% increase from its valuation late last year. The new funding round, which is expected to total $500 million is a sign of still present enthusiasm for AI companies, some of which are.The new technology to challenge Google's longtime dominance over web search. Perplexity is one such company. Its search tool provider provides users with summarized answers that include links to sites. Perplexity also plans to launch its own web browser comment and a potential challenge to Google Chrome and to Apple's Safari.Last November, perplexity was valued at 9 billion. It's among the startups riding the wave of AI enthusiasm initiated by Chat GBT just 3 years ago. And as I mentioned this, I want to let you know that you can find the Yahoo Finance platform to track more private company data, including valuations and funding rounds by scanning the QR code here on your screen, and that's what that private company data will look like for you on our site.We're gonna have all your markets action ahead, so stick around for more. You're watching Catalyst.The S&P 500 currently on track to wipe out losses for the year. We are now higher for 2025, but what did the market technicals signal about the health of this rebound? Joining us now, we've got Jeff Bookbinder, LPL Financial's chief equity strategist. Jeff, a great time to talk to a technical person. I really appreciate you being on with us here because I want to know what everyone wants to know. Is this year to date now gain on the stock market gonna hold?

Yeah, well, thanks for having me on. First of all, uh I do fundamentals and technicals, so I'll get that out there first.There are some very positive technical signs here. Uh, for one, you know, that massive move yesterday certainly we saw about 90% of stocks above their 20 day averages on the S&P 500, very positive technical signal, and of course, which everybody's talking about, we are above the 200 day on the S&P 500. So, generally speaking, that's a positive signal, especially if you're coming off of a big downdraft.Perhaps the most positive piece of this is that it's gonna drag the, the technically driven trend followers back into the market. There's some big institutional money that's coming back in. We've already seen reports of those dollars moving in, that can actually allow these gains to hold.

Jeff, of course your expertise knows no bounds. You can talk fundamentals. You can talk technicals, but I'm interested in the technicals at the moment because of exactly what you said here. And one thing I'm curious about is at what point do we start to see selling get triggered if the rally is a purely overdone to some investors. What might that look like?

Sure, well, you know, we, we've been looking at this 5800 level as key technical resistance. There are a lot of reasons for that, previous highs, previous lows, uh, as well as near the, the 200 day moving average. Markets are pricing in a lot of optimism right now. In fact, you know, we at LPL have been telling our clients we've gone from peak tariffs and max uncertainty to clarity and trough tariffs. So think about that.In a very short period of time, essentially we're pricing in the best case scenario.We're on top of the wall in terms of the wall of of worry that stock markets climb. And so in the very short term, we do think we need to pull back a little bit, digest these gains, and, uh, you know, perhaps.See the market be a little bit less complacent and start pricing in the risks. We've got still sick inflation, although the CPI news was positive. We have potentially a little bit of an upmo in rates, which of course can drag on stock valuations. And then these tariffs, you know, if 10% holds.That's certainly good news overall, uh, but if we see those tariff rates creep up to maybe 15% overall.That's not so positive. Market's pricing in a lot of good news

right now. And Jeff, my guest host Lou has a question for

you. Jeff, I'm a fundamentals first guy and mostly, but I do pay attention to technicals, and I'm just curious. I'm not sure if you were one of them. About a month ago, everyone was freaking out over the S&P 500 death cross, which fast forward to today and really wasn't that deadly. How do you decide what technical indicators are the most important for investors to follow? What from your vantage point, what are the strongest tech technical indicators to follow?

You know, to that, I would say bread, right? And so I cited one stat in terms of the percentage of stocks above the 20 day. Uh, we also like to compare the moves to prior historical moves. And so this move actually resembles some of the really big reversals in the past. You can look at 1987. You can look at 1998. You can look at 2011, right? Probably have to take out some of these bad recessions, not very comparable. Uh, we don't think we're gonna have a recession this time.But some of those big moves certainly resolved higher. Now retests happen more often than not. Now the retest doesn't have to go all the way back to the lows, but you see throughout history better chance than 50/50 that we retrace a big portion of this up move. Hopefully this time the economic data and the earnings is supportive enough that we don't have to retrace even half of this move.But 17% move in about a month is, is a pretty, pretty big move that probably needs to be digested.

And Jeff, you talk a little bit about the idea that earnings estimates have come in just a bit because of all the macro headwinds and the uncertainty out there. What is that signal for where stocks can head going forward? Is it a good thing that those estimates have started to come in?

Yeah, that's one of the things we are looking for to signal a durable low, which now we think is probably in. Credible estimates are probably finally here, right? Somewhere in the 257 to 258 range is generally where the strategists are, are landing here. Now that we got the good news on China tariffs, potentially a little higher than that is in play. So, you know, we have a bull case scenario of about 6100, maybe a little higher than that.The odds of that certainly have gone up, now thatEstimates have come down to a level that's credible and uh the market can start pricing in some of the um benefits of the tax cuts that are coming. Remember this markets had toYou know, essentially take its medicine. We've been saying eat vegetables of tariffs before the dessert, before the sweets come, which is deregulation and tax cuts. We're now moving into that dessert phase, and the sooner the stocks can start focusing on that, certainly the better.

Yeah, and certainly questions about what that dessert phase is going to look like in reality. Jeff, really appreciate you joining us, Jeff Bookbinder. Thank you so much.Thanks a lot. And we're gonna get final thoughts with Lou Bassany who's been with me for the hour. Really appreciate it, Lou. I wanna get a take from you on the extent to which you see this rally lasting.

So I think it has legs. There's a big disclaimer in here, and I'm gonna say why it has legs and then go to the disclaimer. I think it has legs because Jeff was talking about it too. Earnings are very strong, right? Analysts were expecting quarter 1 growth of 6%. We actually right now are tracking for 12%.Later half of the year we still have double digit growth expectations. That's ultimately what drives stock prices. The disclaimer is if this on again, off again trade war goes on again, then all bets are off because you're really gonna get a system and and companies that are fatigued and you're gonna start seeing these increases in price, work their way into the system.Everyone's gonna get tired of a 90 day pause every time there's, you know, we want, it gets too painful. So I think that's the real threat. I don't have any confidence in anything, you know, in terms of a deal until it's done. I've done investment banking for decades. Deals fall apart a million times before they actually get done, so we're on a good path, but I, I, I'll.Leave it when it's when it's

inked. I think that is very important context for our audience straight from the source, Lou, thank you so much for joining us for the hour. Great insights as always, really appreciate it. Coming up here on Yahoo Finance, we've got wealth. It's dedicated to all of your personal finance needs. Our very own Brad Smith, he's gonna have you for the next hour, so stick around here for more.