Q3 2023 CI&T Inc Earnings Call

November 17, 2023

[music].

Technology is built by people for people.

So for people, who desires and needs and ambitions.

By our people who are talented.

There is creative.

The diverse power.

How are people, who use innovative strategy design and engineering to offer end to end solutions that help companies to quickly transform and scale. The operations later today, while we create AI powered solutions, all we really want and what motivate us is.

I should add tomorrow.

P I N T with grief and bill tax make there tomorrow.

Good morning, welcome to <unk> earnings call for the third quarter of 2023, I am Eduardo <unk> head of Investor Relations at <unk>, and it's a pleasure to be here again to talk about our operating and financial results.

With me on today's call are SaaS are gone founder and CEO Bruce <unk>.

Founder and President for North America, and Europe, and <unk> our CFO.

This event is being recorded and all participants will be in a listen only mode. During the companys presentation.

After that there will be a question and answer session for analysts and investors if you'd like to submit a question. Please send an email to investors at <unk> Dot com.

The presentation is available on the company's Investor Relations website, and the replay will be available shortly after the event is concluded.

Some of the matters, we'll discuss on this call, including our expected business outlook are forward looking statements and as such are subject to known and unknown risks and uncertainties, including but not limited to those factors described in our earnings release and discussed in the risk factors section of our annual reports on form 20-F.

These risks and uncertainties could cause actual results to differ materially from those expressed on this call. We caution you not to place undue reliance on those forward looking statements because they are valid only as of the date when made.

During this presentation, we will comment on certain non <unk> financial measures to evaluate our business. Please refer to the reconciliation tables of non <unk> measures in the appendix for more details.

Our agenda for today includes an update of our quarterly highlights followed by some of our business cases, we will then talk about our people and our quarterly financial results now ASI sales are going to begin our presentation.

Thank you Eduardo good day, everyone. It's great to be here again to talk about our results and achievements.

Basically in low low for the past few months, our hub superbly positioned for global travel.

I've had the opportunity to visit many.

Teams around the globe.

This is a routine of ours that I am now able to resume in this post pandemic world.

Our team's spirit rich global culture enthusiasm for our vision and plans are truly hard to me.

These trips have been focused on introducing <unk> flow, our AI platform for hybrid digital in cities like New York, London, Sao Paulo in Melbourne.

<unk> presented our value prop off rapidly enhance productivity and customer experience through AI.

It's been remarkable to witness the evolution of our platform since its July launch.

Outdoor bar that over to wean off our largest clients are now engaged with more than 2000 actively users from <unk> and our core beauty clients utilizing the beta version of <unk> Flo.

We are at the beginning of these exciting differentiation journey yet the early results have been very promising.

Now, let me comment on our operating and financial performance net revenue Richard.

<unk> 29 medium rise in the third quarter of 2023 compared to 559 million Reais in the second quarter last year, the number of clients with annual revenue of above one <unk> in the last 12 months continued to expand reaching 187% in this quarter and serving as a strong growth driver.

Or was the overall market conditions improve.

Adjusted EBITDA margin reached 18, 5% in the third quarter of 2023, which demonstrate our commitment to maintaining a lean organization always structure and optimizing our operations during a period of lower growth. In addition, we generated $254 million.

And cash from operating activities in the nine months of 2023 this strong cash generation further.

<unk> financial position and provide us with the flexibility to invest in the strategic initiatives that will drive future growth Sterling, we will deep dive into these figures later now let's take a look at some examples of our client engagement and business highlights for the quarter.

Yeah.

Okay.

Uh-huh.

Yes.

Thank you and Templeton is one of the world's largest.

Millions of clients based on their behalf.

50 countries worldwide.

<unk>.

There are still 2018.

In order to pass.

But we're taking approximately four outlets.

One question with gains in order to allow for quality and valuable time with that client ultimately support outside.

Awesome.

One of those are tougher.

Finally, iPad application not only increased efficiency.

<unk> enhances that client.

Yeah.

Okay.

And you need to put into motion.

Just quickly adjusted.

And just to do that.

The project itself, let's go a little bit with an agile approach tapping.

Tapping into a best in class engineering integrating several internal system.

Ed I'll telephone protection.

Our R&D team settling six time zones and five different languages.

But the sales teams at Franklin Templeton.

Your question please.

From Alex.

Improving client relationship.

And at the same time, providing a 100% sustainable.

Lisa.

Yes.

Okay.

Yes.

Okay.

Yes.

Okay.

<unk> Bank.

Client is the first bank in Brazil to launch a product base calculate and have the ability to offset a customer's carbon footprint.

The carbon footprint product sets as a driver for sustainable consumption and a catalyst for positive change in consumer behavior.

C I N T along with <unk> Bank played a pivotal role in operationalized, the project's development delivering it in a remarkably short timeframe exceeding client expectations in terms of base outcome and quality.

To make the carbon footprint product viable it was necessary to create an architecture that guaranteed and <unk> forward integration with multiple partners, allowing the calculation access to the carbon credit marketplace and patches of carbon offsets.

As a result of the project the six customers now have access to three innovative features.

Calculation of that carbon footprint, which considers that card purchases and instant transfer.

The ability to purchase Vera certified carbon credits to offset their carbon footprint directly through the app.

And evolving valuable consumption tips and guidance on adopting sustainable practices.

Since the launch in March 2023 up until May 19, 2023 C. Six bank has made the product freely available to 100% of more than 25 million individuals and companies companies.

Okay.

And the vibrant city of Melbourne, where urban living mates coastal charm Hudson's Bay City Council has taken a giant leap forward with a groundbreaking partnership.

Three years ago.

Produced Android and iOS applications that provided residents with notifications such as been schedules local news as well as guidance on recycling.

But challenges of various icf's coded by sites that twin Santee partnership that gain.

Together, they devised a plan to.

Upgrade the react native App also migrate the legacy Javascript Servico to typescript streamlined notifications by transitioning to neck automate synchronization with our Golia and create a dedicated powershell script.

For our residents the results of a transformative location specific information and services reliable being collection notifications enhanced community engagement through feedback and chips and a convenient lookup feature for being disposal.

And at the Hudson's Bay City Council, they streamline processes and data management also improved user experiences fostering community connection.

And reduced call center volume facilitating easier resident council interactions.

The new App is a shining example of half thoughtfully designed digital products can make a significant impact on our community.

Okay.

Yeah.

Okay.

Welcome to our latest update we have gathered the most recent information and insights from our leadership team to share with you.

In August Professor Julian Bergen Shah and renowned professor at the London business School authored a paper in partnership with <unk> that explores how artificial intelligence is reshaping the world of business.

Join us and co thinking this technology has profound implications guided by professor Julien Bergen shot insights you can check this paper in our website.

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<unk> T is now ISO 27001 certified the international standards, <unk> guidelines, where information security management, helping organisations safeguard their data comply with regulations and manage risks achieving this certification demonstrates our commitment to cyber security and competitiveness in the mall.

Enhancing our resilience against security threats and incidents all of this aligns seamlessly with the principles, we cherish at CMT, we withheld our commitment to safeguarding our data implementing stringent controls and maintaining topnotch infrastructure to shield our entire organization from any external threats. This certification is a test.

I meant to Ci and Ts unwavering commitment to excellence and security, we are now better equipped than ever to navigate the challenges of the digital landscape.

Yeah.

CMT slow made a breakthrough with its release in Asia Pacific North America, and Europe in China, and U K, we are promoting CMT flow and keynote speeches events and meetings in the United States and Australia leaders and guest speakers discuss the current state of AI adoption in enterprises indispensable metrics for <unk>.

Productivity and the potential of the human touch and AI development to foster inclusivity.

Internally more than 2000 users have access to CMT flow and more than 20 clients are already using this technology.

Around the World CMT flow is gathering a global community of pioneering users and co builders of this solution for a hyper digital world.

Okay.

Cin team IDEXX technology in Education services group, probably announced their partnership with N patera startup dedicated to diversity equity and inclusion. This collaboration aims to break the cycle of exclusion in the Brazilian workforce together, they're working on an innovative platform.

That revolutionize the recruitment and selection process and identifies diverse talents nurtures their technical and behavioral skills and connect them with the most fitting job opportunities the platform transforms recruitment into the journey of self discovery and learning. This collaboration means a big step towards a more diverse workforce aligning with our goal of.

Making their tomorrow by empowering communities.

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Yeah.

This is our latest news our aim is to continue providing transparent and relevant information to keep you informed and up to date on our latest developments and achievements.

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Okay.

[music] in a fast paced world of AI, our priority is to foster the power of collective intelligence and knowledge sharing we believe that collaboration between AI and human intelligence is the key to Trailblazing in this new frontier.

In our DNA, we are always ahead, creating and trying with new methods and technologies with AI wouldn't be different or upskilling and reskilling programs facilitate continuous learning by enabling global teams to share the best of human intelligence with the exponential capacity of AI focusing on critical skills for our hyper productive era.

The Ci and T slow week ventured valuable content to foster the flow mindset globally, bringing together partners clients and our people to explore the potential of this new technology. We are also supporting the journey of valuable brands around the world to add this technology to their business changing uncertainty into confidence our.

<unk> AI events held in Australia, and the United States brought together business in Tech leaders from companies like Wells Fargo, Amazon and Blackrock to collaborate exchange ideas foster partnerships and navigate the expanding ecosystem of AI technology I think the challenge with this revolutionary models is that they tended to.

Drive.

In the photo.

Environment of start ups and digital natives, but normally takes years.

To have an impact a relevant impact in the brownfield sadoff large.

Publish enterprise.

These advanced needs to be enterprise ready, so they need to reach a level of maturity where they put.

<unk> of the new technology can be translated into customer value within a framework of reliability security and privacy and factors that are non negotiable for large successful.

We truly believe that you can't improve the things that you can michele.

And how does it do that in desktop by collecting a lot of data points at calix stayed up lines by connecting to the systems that you already you like Sci C. D E F G a bit bucket Github and all that so our goal with santee flow is to dramatically reduce the lead time from innovation to production. So.

We allow the organizations to put value generation product in the hands of the users earlier.

We aim to make their tomorrow more sustainable and socially responsible while generating long term positive impact for all our multiple and diverse stakeholders.

Our digital solutions for sustainability offer was born from our firm commitment to lead the way and transformation using our years of experience with social and environmental projects. We offer solutions that promote sustainable business practices inclusivity and environmentally responsible value chain with one of Latin America.

His biggest educational solutions companies, we created an entirely accessible application for people with visual disability. Our approach has helped our client understand the importance of prioritizing accessibility at the start of any project improving development efficiency and results, while promoting inclusion and social impact similarly.

Impactful with one of our clients, we created a platform to help in the reduction of carbon emission and waste generation and the clients value chain. Our approach proof that it's possible to have a positive social and environmental impact while remaining profitable, we believe that by creating value for society investors and clients.

We can do good make a difference and lead the worlds most critical sustainable digital projects.

Okay.

Yes.

I am Erik Lovelace VP of marketing North America and global problems.

I'm very honored to be featured in four article talks about something that's very close to my heart for a minute leadership I talked about the refinance debt so that women the profits.

A lot of this is because when they introduce new ideas I suspect this problem solving they bring different ideas Olympics period. So this April and overall health.

<unk>.

But beyond my work at Ti and T. I'm very passionate about giving back to the community and specifically really being and helping you mentor to the next generation of leaders.

And when I talked about women leadership does not focus on moving towards the highest level since the company really it can be any one leader I C level, so as part of our strategy as well for physical vessels brand and it's important that we're building.

Say that we're staying ahead of the future and staying ahead of the trend.

[music], David Bacon on the director of design <unk> here in Melbourne, Australia Empathy lab is an online workshops to help clients and partners better understand digital inclusion and accessibility involves a series of digital based exercise its designed to help build empathy.

The people with disabilities, whether they'd be permanent temporary.

More situational disability or take most people in some form throughout their lives so retaining a customer for life means catering for their changing needs designing if you include safety not only at <unk>.

And experiences to more people in a wider range of abilities. It also reflects help people really are all humans at growing changing and adapting to the world around them everyday products should reflect this diversity accessibility, regardless of who you are is critical to allowing people to collaborate papers.

Ill take part in society.

Okay.

[music].

I Hope you enjoyed our selection of client stories news and highlights now I would like to invite Bruno to discuss our global talent strategy.

Thank you Sandra and good morning, everyone. It's a pleasure to be here again.

Throughout this year, we have diligently balance of supply and demand of skills with prevailing market conditions, keeping a streamlined organizational structure, while preparing ourselves to resume growth in the near term we.

We ended up the quarter with 60, 170 years and our voluntary attrition rate continues a downward trend.

All our leadership turnover rate remains at 4%, which plays a vital role in the continuity of our high quality service delivery and our ability to develop a new generation of 70 liters.

Diversity and inclusion is a cornerstone of our organizational culture.

In the third quarter of 2023, we made progress by introducing some key initiatives.

For instance, we hosted a months people with disabilities in September welcomed a fresh cohort of students into our three year acceleration for Black people program and provided inclusive leadership training. Additionally.

Additionally, we organized numerous workshops training sessions and events center around enhancing cultural awareness and promoting emotional wellbeing.

Now, let's shift our focus to our environmental initiatives.

<unk> is fully committed to champion social environmental responsibility.

Our primary objective revolves around generating positive and less of an impact on society and the environment.

This quarter brought forth exciting news.

First year on the public image shows registry, the leading platform 40, 40, corporate greenhouse gas emission Latin America that Brazil, and Ghd protocol awarded the Golden fueled quality.

In our sustainability journey, we achieved a significant mild this year by bullish in our greenhouse gas emissions inventory in our ESG report.

Since then we have diligently strive to comprehend and minimize emissions infusing environmental and sustainability responsibility across our organization.

Leveraging initiatives, such as our ESG powerhouse and collaborative projects with our business units, we actively integrating sustainability into every aspect of our operations. Our commitment involves consistently refining our approach to environmental matters and in alignment with industry best practices now.

I invite steadily to give you more details about our financial performance.

Thank you Bruno and good morning, everyone I'm glad to be here once more sharing our financial results with all of you in the third quarter 2003, our net revenue was $529 1 million Reais and it compares to $559 million in the third quarter.

Any change to the variation in net revenue was mainly due to the unexpected budget with planning of our top one client and part of oil acquired portfolio for the nine months 23, our net revenue increased to $1 7 billion Reais up nine.

<unk>, 9% at constant currency compared to the same period of last year.

When analyzing our revenue distribution by geography, North America is our largest market accounting for 44% of our thorough revenue in the nine months of 2023.

This is a testament to the strong presence and success we have achieved in this region.

Latin America is another significant market for us representing a substantial share of 41% in our total revenue Europe follows with a revenue share of 10%, while Asia Pacific holds a 5% share.

In terms of verticals the financial services segment continues to be our primary source of revenue contributing 29% to our total revenue in the nine months of 2023.

Additionally, the consumer goods sector is a significant contributor accounting for 20% of our total revenue exemplifying our ability to deliver transformative solutions in this industry.

The technology and telecommunications vertical contributes 18% two our revenue showcasing our proficiency in meeting the unique needs in this rapidly evolving sector.

Finally, our revenue share from our top one client improved to 10% today from 16% in the nine months of 2022, and the top 10 clients revenue share improved to 42% from 52% in the same period. This is due.

Two way variety of factors, including the cautious approach in the enterprise spending environment as well as the successful onboarding of new robots.

Most importantly, as we look forward it represents the diversification of our revenue streams as we expand our client base and enter into new geographic regions and industries.

Talking about diversifying our client base throughout the last 12 months, we have successfully on boarded 40, new clients that are generating revenue exceeding 1 million reais.

We are excited to share that these new clients will serve as a catalyst for our growth as these engagements expand and gain traction over time.

The consistent net revenue retention rate of approximately 123% over the past five years is a strong indicator of the value we provide to our clients. This rate exemplifies our ability to not only retain new clients, but also <unk>.

Span our engagement with them overtime. This aspect plays a pivotal role in ensuring a sustainable growth trajectory.

Moving forward, we will continue to prioritize both the acquisition of new clients and the nurturing of existing relationships.

Now, let me detail our financial performance for the third quarter of 2003, and the nine months 23.

Our adjusted EBITDA was 98 million Reais in the third quarter 2003, compared to $105 million in the third quarter 'twenty to <unk>.

EBITDA margin was 18, 5%.

Analyzing the results year to date, EBITDA increased to $328 million versus $290 million in the nine months 2022 up 13, 2%.

The EBITDA margin rose to 19, 2% in the nine months 23 from $18 four in the nine months 2022. These results demonstrate our strategic focus on optimizing our SG&A expenses through a systematic and disciplined.

The approach we have actively identified operational optimization opportunities, resulting in the reduction of these expenses.

This has helped to offset the impact of our garage margin, reflecting our commitment to maintaining financial resilience and efficiency.

It is important to note that we have adopted a cautious approach throughout this year recognizing the need to navigate the current market dynamics with prudence, while preparing a resumption of more aggressive growth in the coming years.

As we continue to adapt and refine our strategies, we are confident in our ability to position ourselves for sustained growth and long term success. Our adjusted net profit was 45 million reais in the quarter versus 67 million.

In the third quarter 2022, mainly due to higher net financial expenses, which I will explain in more details.

In the third quarter 'twenty three net financial expenses were 20 million Reais 13 million higher than third quarter 'twenty two as a result of three factors lower foreign exchange gains in the comparable period, which is a noncash effect.

A derivative gain from an interest rate swap that benefited our results in the third quarter 'twenty, two and higher debt position as part of our M&A strategy.

The foreign exchange variation and derivative results tend to balance out throughout the year.

Our adjusted net profit in the nine months 23 increased by 10, 5% to 176 million rise from $159 million in the same period of 2022.

Finally, our cash generated from operating activities rose to 254 million Reais in the nine months 23 from 29 million in the same period in 2022, and our free cash flow, excluding the capex of our net operating cash flow in.

<unk> to $163 million substantially above or a cash consumption of 81 million in the nine months 2022, the consistent generation of strong cash flow empowers us to continue investing in strategic initiatives that will further drive our growth.

<unk> ending Hayes, our competitive advantage, while simultaneously maintaining flexibility in our capital allocation priorities now I invite Cesar back to comments on our business outlook.

Thank you and Stanley wiring device.

These sentiments remain cautious we are glad to be supporting a growing number of clients with their digital renewables as they design and prepared their AI investments for the years ahead for the fourth quarter of 2023, we expect our net revenue to be in the range of 592.

540 million Reais on a reported basis.

The midpoint of this guidance range indicates stable sequential revenue.

For the full year of 2023, we are narrowing the range within the previous guidance now we expect our 2023 FX neutral net revenue growth to be in the range of 4% to 5% compared to last year.

Finally, we are maintaining our expectations for the adjusted EBITDA margin of at least 19%.

In such a volatile year, we have focused on maintaining our solid profitability generating a significant amount of cash and have opened the AI capabilities of our team as we resume our solid growth trajectory.

Thank you for attending our call today, we now conclude our presentation and we will begin the Q&A session.

Alright, we will now begin the question and answer session I will announce each party expense name. Once you hear our name. Please mute your line and ask your question.

Then when they're done please mute your line.

The first question comes from Ashwin <unk> from Citi.

Please go ahead.

Thank you Eduardo and.

Good morning, everyone.

I appreciate the comments.

Let me start.

Maybe asking about the.

Stepped down the top client.

Is that more in nature.

<unk>.

These steps.

Like that is.

Theres something.

Great.

Regards to something else going on with regards to the client and are there any indications of Glenn.

Spending at the client might come back to him on that one.

Good day Ashwin. Thank you for your question Rich do you.

Well I think as termination it was an expected budget through planning for our top one client and.

Now we believe there is we have a very stable since.

Situation Thats, what we are foreseeing.

Let's start with one client had been with us for them.

More than 10 years now so I think it's.

We are it's Joe I think the most strategic partner for digital.

And I think it is just a result of.

I've heard a volatile either decide to address budget and that's why we.

We saw this decline so now we foresee a stable situation.

Okay, Okay, and as you think more broadly.

Perhaps the last the one client.

Any.

Talks that you can give us as to how youre planning for 2024.

What we've heard from others.

The slow start to the year.

I hope that.

Higher backlog should.

Mark.

In the later part of the year.

Consistent.

Okay. Thanks that you can say that Hawaii.

Higher visibility into forward comments.

Sure I think passion.

Good.

To see that carry the demand environment for our services I think there isn't equipped truthful.

Acting differently.

The first one is macroeconomic.

Hi, Susan.

Pointing to.

Stuart cautionary spending.

All of our brands, but there is a second.

Of course that is the new Tech Revolution, driven by I think this is pushing our clients and every single company to increase their investments around digital captor efficient first.

Then prepared.

The company for inexorable customer behavior disruption that is going to happen because of the competitive environment.

We're borrowing by so much.

Macro constraining.

Pushing demand and our recommendation simple capture efficient with CIM two flow of course opening budget.

Space for the new.

New customer experiences Gabe.

How we translate that to our.

This demand equation two hour hour.

Environment.

If we exclude patients that still remains.

Our.

Observe renewed demand.

Indicating growth across the board. So we are confident we can deliver a very stable and strong Q4 marketing what I believe is the start of our extender sequential.

Growth through 2024 and accelerating as we.

We progress in the year.

Our current visibility.

Under the current market conditions.

Understood.

Thank you all.

Thank you Ashwin.

Our next question come from Ernesto Gonzalez with Morgan Stanley and that's the please go ahead.

Hi, Thank you for taking a question.

Some international expansion just to see how its doing relative to your expectations and anything you can comment going into year end and into 2034 would be great. Thank you.

101.

I'm not sure if I got the question can you repeat you you're interested in seeing how the the revenues outside of Latin America or Windows, Yes, how they're doing relative to your expectations for the year have you seen any improvements.

And demand trends or anything you can comment going into a year and then 2024.

Yes.

We don't see a lot of differences.

In demand.

<unk> regions.

It looks like there.

Very similar across the board so some sectors.

A little softer than others like mainly the <unk>.

Sector itself, which was a relevant one for us softer than others, but.

Still strong.

And the CPG.

Financial services.

No.

It's more like about that by the cohort of clients like traditional.

Big Fortune 1000 clients to growing stable.

Waller type companies.

But that's across the board doesn't have any difference across regions.

That's what I've seen everywhere.

We are in the queue. Thank you.

Thank you.

Thank you Ernesto.

Our next question comes from Puneet Jain with JP Morgan.

Please go ahead.

Hey, Thanks for taking my question.

I have a question for Stanley like on margins like obviously, you are doing a lot of cost cutting this year.

Including cuts in SG&A.

Is that margin upside sustainable and what are you seeing on pricing or expect for gross margin.

Moving to next years.

Thank you for the question.

What we've seen in this quarter I would say that this is.

The lowest.

It's a transition phase acquired a transition.

The bottom.

Yes.

Moment that is changing coming from this.

The breast market market and overall and heading to.

Transitioning to a stabilization and heading to Asia.

A growth period again, as we calculate and in terms of the margins of course.

We see.

Margins regaining to our track record in the next quarters.

And with regard to sustainability, we see everything fairly sustainable and what.

Everything that we've been managing in terms of cash in terms of margins in terms of cost is everything has been fairly sustainable.

And mainly we have been preparing ourselves to regain growth in for example, taking the opportunities, especially towards AI I think we did a great move.

Really at speed and with a strong strategy towards optimization.

And later down the road to capture all the consumer experience that is.

It will really drive.

Further growth and we've been focusing on that and cost and cash management all combined.

Everything fairly sustainable and we'll continue in that path.

Got it.

And then are you seeing any differences.

Across.

Regions or across verticals as it relates to clients' willingness to stock initiate new projects specifically.

Yes.

Okay.

Sure.

Yes.

A couple of menu.

Yes, I would say that we have.

20 of the biggest clients already into floor platform doing all the experimentation initiating the trajectory on top of.

Optimization, and and but some clients already willing to jump to the next phase which is towards the consumer experience.

You may add.

Sure.

I think.

She IMT fro helps series they go to market strategy in two ways.

I think in Q <unk>.

Different timeframes.

The forces efficient productivity, so it's already happening and we are replacing competitors based on the concrete gains around that efficient.

Our leverage by ACI into flow.

This is the main opportunity for.

We're now in 2024.

In Ics.

Big opportunity for many years ahead, because it's not a sprint.

10 year marathon around evolution with software development software engineering boasted by AI the second opportunity.

It's the demand associated with the added enough new business use cases by industry by vertical.

Already happening, but is doing the early days.

And I believe it too will be relevant really relevant in terms of revenue.

In 2025 or so.

The technology gains some maturity and Easter holiday and the competition environment.

Reshape.

It's natural that customer will have to increase their investment in hyper personalization.

And new customer experience natural language.

Experience all based on AI. So this is there's a big shift but probably from.

$225.

Okay. Thank you.

Ken.

Thank you. Our next question comes from Carlos de leg of it at that.

Carlos Please go ahead.

Hi can you hear me.

Yes.

Sorry, I'm not sure it might be it is working.

Well, thank you and good morning, Thanks for taking the call and the question.

I have two on my end very quick ones. The first one if you can talk about the utilization rate in each evolution, how do you see that going forward.

And secondly, if you can comment on how the let's say the digesting of the acquisitions that you made in 2022.

These four of them. So if you can talk about that give us some color on a quantitative level there'll be very helpful. Thank you.

The biggest one.

Carlos Thanks for the question.

Utilization traditional rate has been high as we've been adjusting.

The workforce according to demand so it kept high.

For guests and that as we kind of resumed growth.

<unk> are high and we already have.

A couple of hundred positions open so we see.

Some potential growth.

Near future right. So that's a metric that we are that we track very closely.

So even in the.

In the previous quarters, when the low demand was hitting that.

The utilization rate is still very high.

To your second question.

What was that again, sorry cards second question was around.

Jeff you acquired digestion.

So we're very happy with the speed of that integration and so are you already kind of a really seamless integrated the business teams and the delivery teams across the board.

For the acquired companies.

Low lights and that process is actually.

Some of the acquired companies have a bigger exposure.

As I mentioned before that's a segment that is soft demand right now.

But the highlights we've already seen phases of those acquisitions working price. So we have many clients that were coming from those smaller companies.

That had under a million dollar type of engagements scaling rapidly to know $5 million to $10 million engagements.

Kind of really tapping into the scale of guarantee and the complementary.

The capabilities of guarantee and reaching a completely different level.

Of engagement and relevance for those clients. So I feel that we're very happy to see that happening already.

We see that in U S.

In EMEA.

In many cases, so we feel like that's a.

Going forward was to continue to it's a long term game for us.

Dana to look for.

More opportunities to do this in 'twenty, four and maybe a second wave of foot.

And it is coming.

I mean as soon as we see kind of market conditions and prices.

Coming to.

That.

Makes sense.

Some of that activity.

Yeah.

Thank you Bruno.

As a follow up to that I guess.

Last comment you just made like what would be the conditions are the metrics that you would be looking at.

Two.

To assess that.

Outlook for M&A is getting better.

No.

We've been looking at.

Pricing right so.

The private market is kind of already reflecting.

The reality of public markets and of course, we're looking at for companies for assets that are doing well right. So we want to see that resilience on the target companies as well as companies that are that in navigating the soft demand environment.

So those are the I think with the main two things we wanted to see there before.

Moving forward with.

Our M&A processes.

I appreciate it thank you.

Sure.

Thank you Carlos we have two questions here is that we've got by E Mail. The first one is regarding shanty flow how.

How do we expect it to contribute to winning new clients are expanding their relationship with existing ones.

Sure I can't get it as well.

Again.

We are very excited with the early results.

As I mentioned before more than 20 of our largest clients.

On the team more than 2000.

People from <unk> clients.

On boarding the broader firm and we are now reaching.

A large number of use cases for our efficiency the platform we have now around them.

<unk> AI agent so.

Does this basically fulfilling our branded Brock.

We started with foundation that we're going to handle privacy security.

B Mab.

AI enterprise ready on top of that.

We boost the teens with AI agents towards stack efficiency and is powered by AI team can tackle traditional digital demand with hyper productivity or even work on new AI businesses use case. So this is the three layers of the Amanda Brock enterprise.

Residents efficiencies and experience.

And.

In terms of the way, we are seeing the demand being generated by the assets basically.

<unk>.

Productivity, so replacing poor performance competitors based on concrete tradable.

Gains around tech efficiency, and open space budget space and creating data.

AI teams that can tackle the opportunities around that experience. So basically a huge push around our current portfolio.

The main folks in this initial.

Beta launch of flow and from next year on we will onboard new clients in the platform right now is available only for current clients.

We are preparing everything in terms of capabilities and the technology to scale grow next year.

Okay. The second question is considering this strong cash generation. This year, what are the priorities for capital to be deployed.

Alright, well I can take that one thank you for the question.

Well on top of that.

Cash generation, we may very mind that usually tradition or.

This seasonality of generating a stronger cash flow in the second half of the year end.

We are deploying that cash we're allocating that cash mainly in three areas first we have our debt service. So we are paying down debt.

To prepare our balance sheet for this more the next strategic inorganic moves that we are we will make in the near future.

Second one towards.

R&D and we have this great opportunity towards.

AI and we as I mentioned, we are investing.

Timely.

With the proper timing and inappropriate scope in that area as well.

And the third would be we are we've been promoting a share repurchases for example.

We see that and have a great opportunity with <unk>.

Ice out there and it's a way to return value to our shareholders as we have no dividend policy here.

And.

As well we have some M&A obligations that we when they use those repurchase shares to two to comply with that with those obligations. So.

Mainly those three areas for capital allocation.

Thank you Sally there's just another question that came up by email.

Do you foresee the evolution of our organizational structure in response to client demand and our T shrink diligence.

I can take that one.

So we can go next to Caesars point before right. So the next 10 years I think were completely reshaped borrowings right so or not.

Very happy with the pace. We're learning so we're not thinking of you know there is no amount of hiring that can be done actually.

Get people that know what that's going to happen because.

For the scale that the new demand will bring.

Retrained, our whole staff the game will be who learns faster. So that's where we're dedicating our efforts come through really moved fast to.

Today, we have more than 2000 people.

It's almost like a third of the company already exposed to either.

Our houses one of those 22 clients that we mentioned it already using floor. So we have a third of the company learning expose contributing.

What we need to do and what they need to reformulate.

The software development what needs to be done.

We're very happy with this.

Have a great and conditions and ambassadors.

Okay.

70 floor is now open to a 100% of the staff.

So we get even more and more people joining is in kind of really helping clients figure out how to kind of a really re formally.

Their whole soft development processes.

This is going to happen in the next year. The next two next III next 10.

We'll be always changing there.

Men's potential for <unk>.

Gains in speed.

In productivity.

So just applying those tools to the external world.

Captured a lot of potential for hybrid personalization.

In hybrid experimentation kind of creating completely different.

User experiences for our clients.

Customers.

All right that concludes today's Q&A session.

Five <unk> to proceed with his closing.

Closing remarks hasn't played through.

Sure.

Thank you all for participating in our call, Thanks, Eduardo Sternly and Bruno.

Once again I want to thank you all <unk> around the world for the hard work and achievements.

And a special thanks for our clients that are selecting <unk> to computer.

Amazing.

New chapter.

Innovation powered by our fishing times stay well see you in the next quarter.

Thank you. Thank you all for attending today.

Okay.

[music].

Okay.

[music].

Okay.

Yes.

[music].

Experienced mouthwatering bless starting at only 399.

Sure.

One.

Number nine.

We were eight.

Many days in a row.

Can we make it dine on November nine.

We're starting out that way a lot of good earnings reports to cover Bitcoin get a pop got to talk about the house mouse.

Thursday pre market prep.

Okay.

Coming to you live from downtown Detroit.

Dispensing is pre market prep with your host Joe I'll comment. This is a volatile coffee here isn't it and Dennis did I've been the pattern I'd buy that stock for a passion.

With everything you need to start George trading day.

Okay.

Yes.

Okay welcome to it as an investor you saw were up almost seven handles over 4400 40 406 in a quarter. The book is up about a time, a dime 105, 54 bonds not dragging us down down a half a 0.1.

14 at 930 seconds crude.

A little bit of a rebound up 71 sensor 70, 604 gold now way away from two K Dow 720, 1950 60 silver under 23, that's down 16 stands at 22 57, another big move a bitcoin up $1300 at 37002.

And those are the future, let's break in Triple D. Triple D. We've been around a long time I cannot remember tool running nine day, winning streaks, but we are starting at way today.

<unk> fewer market nine times nine times, obviously, great theme from one of the best movies ever made Ferris bueller when he can add some for the ninth day in a row and his mom is nine times nine times, well nine time, winning streak I mean, and we're on track for the time here Joe up on.

Why not.

Did you get my reference in the.

Or are you too young.

Not really.

Mitch.

Last back here.

All of these reference I bet, you I bet, you easy, Mike or get it easy Mike or Mike.

Mike come on Huawei.

E Mail.

Come on.

Come on maybe you guys are all too well come on.

I don't say it again, because I didn't catch anything thats, just a number nine here any type of around nine.

Musical reference just not abuse.

Yeah, No I haven't.

No chance of getting out of musical I've never even seen them years ago before I don't know musical referenced just a reference to ban Ottawa Pan Oh, sorry, there we go.

France was the winter weather chicken.

Yes, its ddos by favorite band of all right all right we got children.

Love to get worried about just the voice on the back baby.

I know what he's doing he's trying to find that Beatles songs. So we get final tariff people to stay off either.

Sure.

What's that I was.

Yes.

Stay off how about with that guys. When everybody is Stephen hockey after the watch that movie.

Yes, that's it.

Play Hooky right.

What was that Guy's name is fraud Cambrian, wherein the Redwings Jersey Yep Yep that was.

Joel its character.

Ron was in Egypt.

Hi, This is Oscar Atlanta, you got it.

To finish up all realistic.

Alright, here's the hook, let's bring it in here guys. So I'm going to talk about something that I caught of course, a magnificant seven couldn't escape the cracks recently.

Stocks were going down this is something interesting that icon bank of Americas analysts here. So VITAS subprime in reveals a surprising twists you're talking about the Russell here and he's talking about that the largest quintile of the Russell 1000 out shining the smaller.

Of course, the smaller quintile by a staggering five percentage points. So the smaller the <unk>.

Bigger only went down one seven and the recent downturn, while the smaller stocks went down six 7% and so what is this tells US. This tells US that we're big money is Heidi right, they're hiring at the top yeah.

I mean this is this is this is a pretty girl stop so again I'm just reading it here again crack starting to form with amongst the largest quintile. The Russell 1000 outperformed the smallest quintile by five percentage points.

That continues.

Continue to hiding in the big stuff I mean does that trade unfold is that what he is calling for is that what they were thinking its going to happen here, that's going to eventually the crowded trade unfold or its just continue to hide out because we know they've been high enough that magnificent seven but there's not a lot of tech stocks and a lot of bigger companies. We know the small stuff just been crushed what kept the IW.

Tandem catch a bit I mean, we can talk with a nine day win streak here I don't know finally, catching a bit here today, but wholly opposite Batman S&P goes up for three days in a row, our Wm goes down for three days in a row.

It's not even connected to the market anymore not weird.

I should I going to have to bring Todd Gordon on it because I have hey, it might not the closing Fred on Wednesdays and.

Through that Adam and <unk>.

He talked about you know that.

There's a lot of really poorly run.

Companies at all of the 2000 kept some of these companies just aren't going to be around and they're in their <unk> and also we got to get rid of some bankruptcies or whatever but I'll.

I'll have to bring him on maybe next week explain that in a little bit more detail he's got bullish.

<unk> bullish and he has been making some good calls in this market but.

We got shaken 815, so Mitch what are what earnings would you like to start you know where we Gotta go Walt Disney Q4, adjusted 80, <unk> Speedster 70 cent estimate sales of 20 124 billion missed the 20 133 billion estimate total Hulu paid subscriber I'm one of them 48.

$5 million Disney plus core at $112 6 million and of course, what you guys have already gotten here on pre market prep about Disney CEO, saying that ESPN bet would launch next week I already gave you guys. The date there.

The way for the conference call for that one and then of course. This was an interesting one about the dividend and that it will be recommending to the board that they declare a dividend by the end of the calendar year also said on the call talking about the recent films and how they have struggled iger stated that the quantity can add.

Actually be negative when it comes to quality and I think that that's exactly what happened we've lost some focus and this came from either.

Actors strike over here to overnight, we got a news that the actors strike him off the special about it looks like it's settling here that was good for Disney we're seeing Paramount pop on that news as well.

So basically right now as of this moment in time, the news really couldnt be better for Disney They beat the talking about the dividend, which investors want the actors' strike stocks trading up $3. One major issue. The stock is going to have though is massive.

Perhaps supply and I mean, the math the type the 90 that was like the rocket Gibraltar of support for a very long time and now it's going to be the rock of resistance I predict so not chasing Disney everytime. It rallies it seems like it's a selling opportunity.

Next year I still think the stock doesn't do well next year I'm not no sorry, I used to like Disney That's where I got less administrative change your opinion on stocks and that's legal that's the legal the trader is still not a fan of Disney.

Okay.

Dennis we gotta reveal.

Come out that that is going to come out.

Alright for me talks and I don't want you guys scrutinizing. The Alk you bought this thing now.

But well first of all that is we have a new indicator here.

It's called the garrison draw going to Disney indicator.

But behind the ground I always.

So my 60, <unk> birthday, I don't know if you guys figure that out but that Lisa asked me what I wanted to do and I said I wanted to hit the water parks.

Man, Oh man did I ever hit the water Park.

Surprised me the whole family show it up and now that is just taking the kids there.

Suddenly we don't know when yet.

We've been hanging together.

Neither Raj I mean, you've been to Disney World, we each it but at the same time Disney World in a decade or yeah.

20 years actually that's not true I brought the kids like six years ago, but not only was the baby at that point in time, so she didn't get much out of it.

Alright.

Big pop you Dennis.

How are the crowds yeah, how long.

The crowd that that's.

That's important.

Alright.

Nice you know it wasn't super busy, but when we went on Friday, we went to have caught it was it was jammed.

They're always Adam because yatra, how Jim Yeah, Yup, yup, and die, but anyways, Dennis I have been talking about that $86 level a lot I mean I had my line across there.

I know you're busy and stuff you look a lot of different stuff, where you're able to catch that golar to 86, I mean, that's you're talking to co level no and typically it's a good question Joe a lot of people think Oh, yeah I'm in there in the house the mouth there on the bigger earnings trading all those things I typically trade the sympathy plays more than anything I'd be looking you know potentially off.

Honestly, you can look sometimes netflix trades off of but Disney doesn't have a lot of pure sympathy right now sometimes they do sometimes they don't right now there hasn't been much moving with Disney So its kind of its own animal and the reason I don't trade. The leaders is that it takes a lot of babysitting. So basically if you're busy doing a lot of things Youre trading in earnings report that just reported you got a really.

Pay attention to that so I nobody met you were talking that's opportunity costs and thats exactly what it is so so I'm like trading a lot of different things I can't put a 100% focus on trading that if I was trading one stock and just one stock after hours and that was that I'd be probably trading days, maybe because I can take rate that I can pretty confidently.

Probably in the long run make money this tape reading off or something like that but it's a matter of do I give up more money elsewhere.

So I typically don't trade the leaders mainly for that reason the down trading too many stocks youre going to trade.

The major reports like a Disney or like last night or the other ones like take two which had while we get to that one that affected you got to really focus on those a lot you've got to really pay attention you can't trade like 2030 stocks trade Disney too, it's really difficult to do so that's the main reason that I don't trade the leaders, but you know what there's a lot of traders do do.

They just got to focus on those okay, Rod quick technical as pre market high which I don't know if we're going to see is 80 880 586 man we've got to wait until this thing comes back down old resisted do support.

I want to see this thing back at 86, and I think I think I'll do it.

Worrying about at breaking 80 after that long term portfolio I'm waiting for the pullback I think I think Lisa has in a couple of portfolio was not not big positions, but.

Oh wait for it to come back down not fill that gap what else. You got you can always share one of those portfolios, but take two interactive software EPS at $1 22 beats the dollar or three estimate sales of 144 5 billion beat the one for three 3 billion estimate take two interactive reiterated 24.

Net booking guidance of 545 billion to $5 five 5 billion of course, the new Grand theft Auto being mentioned out there. That's the biggest catalyst for the stock and could get it running especially if they somehow released this towards the end of the year I think if they can put the release date towards the holidays, yeah, it'll get it'll definitely.

Get bought up.

I got to tie them. This thing with absolutely insane off the earnings report so on the initial number they hit this down over $6 actually over $7 here Joel.

Brent This is one from $1 43 blow it up I think that's right. It went down like 134, no no I'm sorry, I got it was $35 90, due you got that Joel I got it right I got straight I saw one three.

I did see it I don't know why it missed it there on your trade station, but yeah I don't know either did see yet and then they just started buying it so they slam at seven box then they buy at up to 153, so from the $1 36 up to the $1 53, that's a 17 point rally then they turn around and hammer at all.

Way back down again to fly so I mean, why don't Wild ride here and this is tani. These earnings that's why I'm like you can't just if youre a trade. These things that you ought to focus on them because you know like theyre going to be moving and Theyre moving quickly I mean, that's an insane move for take two like this is like you.

You just think about that that's the entire range of basically trade after hours for the last four months, they basically traded at all point in time.

Period, it traded the entire last four month range all malls I know, we got down to about 31, but the majority of white market ran that and in 10 minutes. Unlike these moves are just insane off earnings so.

It's hard to trade that stuff its back down I don't know what to say, who knows where it's going to go down everywhere. After hours that could go anywhere in all likelihood we've seen the high and the low I would imagine from the after hours session. I think those are getting breached.

This comment is for informational purposes, only if youre good at traded stuff like that.

Got it.

Yup Yup I, just look at the closing price from yesterday $143 47.

Support for now by Dod, Yeah, Wild ride and take two and it's weird because they they wanted if they did the news with the grant of I don't want I don't understand that that new person of the PR Department.

Our firm, let's get to that one and then we will get to a core smart taken so everybody smashed. Unlike affirms Q1 EPS at a loss of 57.

Loss of 70% estimate sales of 496.

Five 5 million beat the $444 $7 7 million estimate they do see Q4 revenues at $495 million to $520 million versus a 500 to $3 9 million estimate fiscal year 'twenty for <unk> of more than 20 425 billion and one thing that I wanted.

To bring you guys as I did a little research inside the report I'm going to give you guys. The image. So you guys can see it on the screen now as I explained this and so 26% of delinquent loans are using affirms payment deferral to essentially stay alive 1583.

The 6098, which are using payment deferral and it's clearly stated right here on the earnings money minutes doing a little bit of a deep dive for you guys.

For a loving this the firm because they don't they pay later, meaning sometimes they pay never actually it's good payment.

<unk> are all there so they can do four to 'twenty past nine pass through non delinquent loans. So there's quite a few that are non delinquent I guess, yeah, well the other ones are like I said a delinquent.

There'll be 74% that are non delinquent, 26% are using that payment or whatever number if the store a lot like what it is that a firm because I think of I think a lot of people are using our firm.

Maybe some of these 24% never pay their bills I don't know maybe they do maybe they just take their time paying their bills, but.

I've challenged the concept for a while here of a firm obviously the stock has come significantly off of its all time high which was $176 back in 2021, they never going back there I think I think the path of least resistance is eventually lower but right now Bowser and control stuff I mean, we're up nine days around the S&P IW I'm, just trying to get a <unk>.

But life here today, it's hard shortened stocks right now eventually there's going to be a time of shorts Doctor again that time of carbon soon I think but it's hard to just come in here and say yeah shortlist part because the short path with box continue also upstart really lowered the bar for a firm U P. S T got hammered.

Look I have enough of a better firm was down with it but then rally towards the end of the day now for Pops and goes the other way on it so low bar for a firm here because of upstart that day before I'm, just staying away I do see a lot of resistance, though Joel give us quick level 25, 13, yeah were backed up right near the highest and then boom. So keep an eye on 25 13.

And somehow if it gets too that the recent hire them of $25 63.

Let's go to Mark taken you guys know what time it is let's see what's going on in the power gains.

Yes.

Sure.

Yes.

Marc Jacobs J can analytics joins us every two weeks for is fundamental and technical outlook on the market Mark Yeah look you look very serious today how're you doing.

Doing well.

Serious at all just try to project with a little bit of gravitas that that that God that wall Street.

Swagger you got that so the status of the rally Mark what do you think too much too fast.

So the action that we had another great breadth for us.

As of last Friday, those wide breadth for us this time.

Six to 12 months out always good a little choppy.

In the short term and with the budget.

Mess upon us again in Congress, that's not surprising, but I like the market here I think we're gonna rally into year end again with.

Some chop.

This budget debate, but.

4400, it's critical we haven't gotten through it yet we've got to get through that close there and then I'm very comfortable with 4600 by year end do you wait for it to go through just to be sure or do you buy today, just anticipating that's going through a lot depends what stocks are trading if youre, if youre buying adobe crowd strike.

Which we love.

You don't reach for them here, but if you find stocks that have pulled back a bit.

You buy them if.

If you're talking about the industry ACI boy I'd wait for them to close about 4400, if youre buying spies.

<unk> is actually doing really well, but the big surprise for me is that the financials are turned bullish in the power gauge Oh Wow would.

Led by the insurance stocks, which have insurance, but unbelievable, but also bank of America bullish rating about four days ago.

Bank of New York Mellon and then some of the regionals truest TFC.

Which I thought was always a quality.

Bank and.

Fifth third have all turned bullish in the last week or two both of those bill gross I believe bill gross was tweeting, yeah, how often a tweet tweet it out or stock, but he was buying let me go through the four banks that I can quick Oh really.

I know you had.

So seven days ago. He puts out this tweet and he says he is buying truest citizens and below that symbol TFC.

See that's true with these buying C. F G, which is citizens financial Keycorp Kui and first horizon Shannon all those stocks rip that they like they all rip 5% they've come back and so all of them come back in a little bit here, but for the most part that was you know the blast off was those four.

Sure Yes.

That gave a vote of confidence to the regional banks as a whole I think mark when you get a voice as big as Bill gross while no one out there I think it's not just those four regionals like Green light to maybe go by regional maybe that's why you know like maybe that's something that helped the power gauge or bullish on these things.

It could be because it certainly turned a lot of head. So I'll ask you this though what as bill gross now about regional banks.

Paul is a bond guy.

But he's got a name.

Got it.

Okay.

Ari is also turned bullish in terms of the ETF powered gauge rating going bullish and this is all let's see that term bullish on Friday October 30th.

So where do you think yeah, one of the few things very few things that I added. This year was in a bad guy in that banking classes. The only one I got dragged out a little bit what was that gonna find and went bankrupt I sold a lot before it went bankrupt but dom.

Eat out.

If you buy the did you probably like the F. I V B, which one is you buy those.

What was the wanted to start with Silicon Valley Republic.

Yeah, Yeah, Yeah, Yeah that was that that was the only one I mean, it had a big pipe, but that but the biggest one I took with J P. Morgan I didn't have any any exposure related to banking sector I did have some.

Keybanc and that's so that was the only one and then it got hit hard.

Okay, Jamie Diamond, we could put the Jamie diamond low there because when they hit that 135, that's when it revealed that he was solid $140 million in stock. So if you were a kid sharing on that one you got a nice trade government, but.

What else what else you like Mark.

Still like technology software is top of mind for me I think some of the.

Rally is based on the fact that the third quarter earnings showed an uptick in productivity and that's that's typically software related so.

Im looking for pullbacks in any of the quality software names and the semiconductor names that we like but adobe's my favorite, but you can't buy it here, although I think there is still 20% of upside into a bull market peak in the stock above 700.

Crowd strike you got to be very selective in cyber.

Net.

Also seem to be hurting, but crowd strike just keeps making new highs.

Microsoft I mean, it's a big names I'm not.

<unk> in the us.

These are the cash cows.

So much crowd strike, but Microsoft Adobe the usual suspects Amazon. These this is these are the safety trades now well and I don't know if you were listening, but we've been breaking it down for the last few weeks on that and just talking about why the magnificent seven has outperformed in the majority of these companies have very little debt relative to market.

Cap. The other thing is a lot of their products don't require the customers to go out and get financing to buy that we were talking about Apple. This zero percent fighting I figured out what is really happening.

One zero percent financing 24 months, Mike sure.

Jonathan why don't <unk>.

A lot of these companies are sitting on a lot of cash a lot of cash do you think they're positioned much better than a lot of these smaller companies that rates are going up in these companies that are like okay. While this is going to really hammer, our bottomline as interest payments that we're gonna have to make that's not the case with the bank.

If the U S government had a balance sheet like the magnificent seven.

So we'd be at 10000.

So I don't think that will ever happen, but.

But I'll, let Joe Joe last two weeks ago.

Dennis I think you said what.

It would.

Churn, you're bullish on bonds and I thought for a minute I said I guess, if they hit 5%.

That I can see them.

That's what's happened and that's what this rally is all about.

Plus.

Some parsing of a fed statement, which is debatable, but yeah I agree I agree on that I think he has been pretty consistent the whole way, but that's the way that they just like to run his state with whatever statements. He makes oh, yeah that that was damaged that was hockey I think he's been pretty steady that the whole way.

So you mentioned some potential bumps in the road here on that path to 4600 by year end, what do you think I mean, what you earning season right. What do you think it's Keith I'll do some inflation numbers I had it on my sheet I think coming up next week.

The potential bumps in the road that speak G.

<unk> political stuff, where do you think the bumps in the road of coming from the chaos in Congress.

We need to we need a budget.

We've got a fund in the military.

Every good part of the government and clear.

Clearly theres going to be some drama attached to that but it's a wonderful period here between now and the end of the year because you don't have a lot of headwinds for the market you'd never do that's typically why they especially in up here's the final six seven weeks are really a joy to be hold especially in the <unk>.

Pre election year.

Interestingly, our Oh my.

The roadmap for this year was a V shaped bottom in October it just came a lot later.

I thought it might come around the middle of the month that it really.

Because of the bond market took a long time, but it's there are endless.

Breadth for US we're seeing are historically very very powerful.

Not straight up I.

I think there were 19 swag, Brent for us and for them pull back.

One of them you made a lower low again. This is after 1950 anything before that is suspicious but in three of the four you sort of tested the bottom didn't break it.

But in the other 15, you didnt have any meaningful pullbacks at all.

Alright, Mark I wanted to ask you of course about the start that at least has been really hot as of late I know Dennis has taken his shot on it pretty good timing, there, but nvidia what about Nvidia here going into earnings.

Pretty high up already at that 473 right now.

Well I think target empower engage is still bullish I think the AMD report bodes well for a very of people talking about how AMD is going to capture market share well yeah, but.

Yeah.

Theres I think Theres a story out today about theyre going to unveil new chips for China as soon as that China situation gets resolved if it gets resolved and video could have 20% upside Wow.

And then just ran we've talking about the stock almost just ran 20% yeah.

Another 20% upside well, China. So you've got people caught short here. This move has had no pullback.

Up nine days in a row on the S&P I think its up nine days and Rona and video I mean, usually shorts will buy the pullbacks when they're caught there hasn't been any pullback here in.

That's in a by law.

Unless you want to reach for so.

I really like where we're positioned in the market so financials tech.

Particularly software and some of the chip names.

<unk> O N T O that we recommended.

A couple of months ago pulled way back in.

That's now starting to move again.

They're really well positioned.

And there is a stock that I really like cold.

P S T J.

So storage company that's the symbol.

And they've got a deal with Nvidia This is flash storage.

<unk>.

And big demand based on AI and data center requirements. So.

That's sort of a sleeper name that we recommended above I guess.

Back in July or August.

On that.

And I think this is a really interesting long term play on AI.

The need for faster storage so.

A panoply of stuff, but I think basically if you stay bullish youll be happy by the end of the year Hey, We got jobless claims cover named Mark we're going to keep you add forward here initial jobless claims come in.

We're trading that not a big number Denis I don't think you need to go wide or anything on that.

Why.

Allied.

So initial jobless claims consensus is here 215000 in the continuous jobless claims the consensus is that 182 million, we'll get them both as they hit here I'll. Let you guys know as soon as I see them and remember bad is good right now yeah. It's funny, how we're back to that age bracket and we're back to that.

It's it's like either a silver lining market or dark merge it it's likely it doesn't right now where it's silver lining market, where well if it's good Oh, we got south Atlantic, but I'd, rather look, but that's not going to raise so we can provide the bull case in both cases now yes. This is the goldilocks period.

And seasonality is playing into a factors here too I think mark like you know like obviously, we know November December is historically, a stronger time you get towards the end of December if a very strong time give us those numbers here money much because I know you've got them on the screen.

Initial jobless claims 217000 versus 215000 2000 off the estimate and if this number doesn't change drastically I think it's nothing Burger at the end of the day, we need to see this number changed big for tests really start playing an effect on the economy.

Really didn't move Youre right. This is a complete nothing Burger here. The S&P's moved one point, Georgia call not to go wide I've got to put all my orders out there now.

Didn't even move off this either T. L. T same exact spot it was before the numbers, though market hearing about this number whatsoever, yeah, rich rich that tally.

Are you still call for 13%.

Yeah.

The ridiculous.

Even scarier, Jamie Diamond was calling for 7% I don't know what got into it.

We don't Chase they would chase the market.

Or like what were three we've watched it go from one to two to three to four to five whoa.

Does double it right.

Yes.

Yeah.

Okay, an exponential.

It always pretty good our boy Blue member with Blue was out a couple of weeks ago, and he said you know whole numbers like that 5% Mark.

That's like five <unk>.

Yeah.

So I, let you go you're probably the only person I'm just chat on wall Street, that's been around longer than me.

[laughter] eight day, winning streak, how many 90, winning streaks having have you seen not very many.

Okay.

At this time.

Right now we're at eight today, whereas today, we have.

Yep Yep.

And I guess, what I'd say.

They don't come in bear market rallies.

Yeah.

They come in Bull markets.

Well, it's back above all is bad.

And never went away so they nevertheless that for about a month and a half.

How about three months.

Hung out if it wasn't that great and watch the RSP I talked about that last time.

RSP after we talked on a weekly basis gave an oversold by signal in a very.

Accurate.

Indicator that I use, whereas the S&P 500 cap weighted didn't even come close so you have to.

To figure this market out you have to look a little bit under the surface.

So, yes, 493 stocks basically trigger an oversold condition.

No none of the other indices did but that's still a.

A lot of market cap rates there.

Marc Jacobs taken analytics, joining us here and premarket, perhaps Mike always a pleasure speaking to you will die in a couple of week of Thanksgiving when does that Thanksgiving.

Hello goodness common.

Is it Tony Jim.

That's net.

Mark I'll say I'll reschedule, yeah, because they like to two weeks from today as Turkey day.

In Boston, So, we'll do it from from the apartment or leasing in Boston.

Okay, but that on that Thursday, Okay, Mark alright.

Thank you Mark Alright lets get back, but we have a very interesting day before we go into the earnings very interesting day happening here, where you've got the small cap or smaller stuff oils, having a good day banks are having a good day IW M is having a good day and what is not having a good day as the magnificent seven very rarely do you come in and see the S&P up and handle it.

Almost the entire white house at seven in the Red that's why isn't the Rad HSBC coming out with a reduce our math. So that's the reason for that one but Apple has turned to the right. Microsoft has turned to the right meta has turned to the right. Google has turned to the Red Amazon has turned to the Red who do we Miss 1234560 on video and video taken and they are picking up the fact that the videos.

A more of a dollar.

Just help them sell their videos help in here today I don't even know what the news is not in video today, it's probably just stop just because that's what it does but still logging video full disclosure.

Sure.

Alright, where do you guys want to go from this let's let's keep it rolling here just wanted to catch the next comment there on the chat chats talking all about different things there mark bullish a lot of the analysts that we know are bullish someone said that.

We'd never came out of the bull market.

John Lewis, bringing in some of that conversation that's a conversation to have right did we even.

We did we just get a correction and this bull market right. This is.

The awesome thing about the markets because it's absolutely too perspective here because the S&P have went nowhere for almost three years here now so if we go back to the beginning of 2021 not two years two years 24 months of no action. So you could argue it both ways sideways markets, you're like Wow you know.

We're still a bull market because they can go a long enough that overall up trying to fill up and then the barrels and say well, yes, but we never went back above 2021. So we've never recovered from the previous bear market. So we're still in a bear market. So it's like you can just look at it from either side. If you want so that's the fun thing about this market, but sideways for the win here I mean again seasonality plays too.

Factor here, we are seeing we did see stocks oversold a week ago. They have had a nice lift for eight days here now it's an impressive run.

But it's still overall I don't know if you can call it a bull market or a bear market. It's a sideways market two years. He is a different story, but that's two years have been sideways.

This is one that we haven't talked about let's get to arm holdings Q2, EPS here at 36 cents up from 7% and year over year revenues at $806 million up from $630 million year over year their outlook here not looking too bad a C Q3, 24, adjusted EPS of 21 to 28.

Revenues at 720 to 800 million, but you guys can see this this has been a struggle.

And it is in its valuation that's really fight I mean, it's trading what 50 times earnings 45 times earnings somewhere in there where all of its peers trade a hell of a lot less of that and it's not doesn't have the super growth rate here, either where it's going to be like a video where it's exploding earnings next year. If you are looking for in a relatively stable here I mean this company has just been.

So I mean, it's trying it is an AI story here, so that keeps the stock elevated and that will keep you know where the buyers the underneath demand here for a stock like this do I expect the step to get part of kind of already starting to get bought so I think it is the kind of stock that people want to fill out I think you know there's only so many ways to play.

<unk> is definitely one of the newer ones the player valuation keeps me away though.

Stopped at near 50 box and that after hours print and now you're back Bob.

Little gap fill here at 50 52.

Did that and then some of the pre market, but if he thought you missed the move off the <unk> 46, and a half level both.

This is just as you put in place to strike, 50% retracement depends what youre risking void ratios, but until this thing can get above 56 box that it failed at 50 shakes early after the IPO.

October again earn our late September early October that's like nine star resistant so, let's see if we could hold the 50% Sps sneaking up on the eyes of the session.

Hub spot Q3, 23, EPS of $1 59 beats the $1 24 estimate revenues of $557 6 million beats the $534. One 1 million estimate they do see Q4 adjusted EPS at $1 53 to $1 55 versus $8 50 estimate total revenue.

He was at 556 million to 558 versus a 556.24 million estimate customer accounts grew here, a 22% year over year to 194098 average subscription revenue per customer up 3% year over year and 11005.

<unk> and 'twenty.

Got out to the Ras who still has this as long term portfolio. So a nice day for him on this stock here, it's moving up a lot of cloud stocks to like hotspot really move in here. We know this it's funny like you'd go into like pockets of verdict and we've been right now in the last couple of days in the cloud earning season I mean, we've had you know obviously the twilio as reported.

The data dog hub spot. This is the product of stocks that are in the cloud that have been reporting earnings here.

Tonight, we get a few more as well, but it's just like it's pockets of earnings and that's really where it is yet but you know hotspot. One concern here is we are starting to leak, where about 15 points off the after hours I never want to see that the leak. Starting here. We saw a few stocks like yesterday I thought review that could hold at it could not yesterday gave it all back so there is some.

Profit taking here on some of these pops here, where we weren't seeing the three or four days ago, we're starting to see profit taking on the earnings Pops.

I'll just give you the trademark and high 480 333, that's a long ways away. So let's look at let's look more relevant level here is your October eight T tie for 60 505. So there you go <unk> got a whole 465 off the hop.

Twilio Q3, adjusted EPS 58 cents beats. The 35 cent estimate sales of 1.03 billion beat the 980 928 million estimate Twilio said that it had more than 306000 active customer accounts as of September 30th up from 280000 year over year.

Year. They expect Q4 revenues of 1.03 billion to 1.04, and adjusted EPS of <unk> 53 to 57 cents. This used to be a favorite now it just seems like it's in the gutter.

I would tell you, though its valuation is starting to become compelling I mean this company went from I don't think it was even making money a little while ago to actually not being a ridiculous valuation here now on a forward basis. If we're looking at those earnings it's still trading high but it's 25 times earnings here now so it's not in market multiple trading around 19.

2025, Twilio seems to be a company that is still growing I mean, you look at these growth rates and they are fairly impressive revenue growth rate one year, it's 34%. If we're just taking it off the pro I don't know if those all these numbers are always immediately are updated for the current quarter, but pretty impressive I mean, you start thinking of Twilio go on my long term.

Shopping with I think it does and I think you have major support long term supportive of $40 level.

From there or do I want to chase that I'm, just it's not admit to chase, but chasing has been working to a certain extent I think you know you get back down near the 50 area, though I think you find buyers so I'm not chasing in here today, but valuation isn't crazy on this thing.

<unk> got a nice pop to 60 90, and now you just pulled back only a buck 15 away from that six.

60, you know as a psychological level, if you could get through that the next daily high comes in at <unk> 62 and a.

A quarter of million shares have traded so there's some decent volume Dennis I just got back from yesterday. This is a little bit off topic, but that usually yesterday, maybe you saw that iceberg in there Ed.

No. It did trade lower AD insertion, so that salary cut I had it right there for a little bit but.

Above that level today.

Yeah, it's getting their pre earnings Pops, and you know one of my core strategies is to own stocks ahead of earnings reports, especially stocks that are well no not like small caps and nobody knows about but stocks that are covered in the media stocks that are talked about aren't wetter stocks that are allowed those tend to do well ahead of earnings and I mean that core strategies maybe.

A lot of money over the years, so I've been biased long unity I believe in the long term portfolio and also trading the trading account just flipping up buying it overnight and it gets that overnight pop and then I, usually solve and then a buyer overnight at Gibson overnight pop and then ive been selling it are people asking me I will not hold it as a trade through I still have it in the long term investment account, which.

There's just been a disaster I mean I bought it and then three days later that the that fee and the stock got hammered and never recovered. So I'm definitely not been good on the investment side of this by trade up pretty well.

Halloween macro look at AMC here, just get lit up like a Christmas tree.

No. This is doran.

Yeah. This is I've had someone that actually came to my stream just the other day and they were like well as AMC, you're going to come back and stuff like that I was just like man, there's still people holding on to that like just dream that this will come back.

Let's just be honest, let's call. It is a dream it's a journey.

And it's not going to come back man Ive found are 89% from the all time and then I know that this was the first stop it really kind of stuck to the institution knows right. It kind of actually retail got the upper hand, but the truth is majority of the times. This retail have the upper hand.

No.

That's what I think that we need to kind of take that learning lesson here it.

It just isn't that whole battle against the system thing that's going to win.

But hey, where are all those people there on Twitter where are they are older hiding their hiding those losses.

I don't know how to even high to go to.

Sweater, Joel and put AMC under your latest you know and look at the commentary.

So coming back they all believe man there at ball believer. It's like you know like Louisiana Clause Man. That's fully believe that eventually this thing is going to squeeze I'd go back to thousands of dollars a share and theyre going to get bailed out. They fall, we believe that Gamestop same thing there.

Fully believe that they were I'm, sorry folks, but you know like basically this was just you know it worked for a long time. These are hot potato stock. So you hold onto these long enough fundamentals in the long run matter in the short run they don't matter at all story is hot but these don't matter whatsoever, but in the long run they do when the valuation.

Never made sense, the only person that made a lot of money on AMC was Adam Aron, who has a lot of these people's hero and he was the one that made a lot of money on this.

100%, let's get to an interesting conversation I'm going to take a step back on the earnings I think it's interesting to talk about what's going on of course, Eli Lilly getting their drug approved yesterday weight loss drug competition stocks. What do you guys think about this story is it just way too late to chase, but I don't know.

Go on.

And how could we screw this up when they have that check back three oh, good money, that's talked about it and now it's doubled since that since the beginning mid year when they have that checks out.

I mean, the valuation isn't saying, they're talking about this drug being the best drug of all time was Kramer is talking about it. The bowls are in full control here. This is the story here and its weight loss drug will never have the exercise again forget about your planet fitness is forget about your swimming Joel that's forget about all the exercise that you do.

Have you done any more you just pop a pill and you'll lose weight I did an interesting trade off of this right.

Not going to be your common trade I I.

Shorted modeling contest.

Our model is it probably works.

That would work.

We're just supposed to beat along model is because cancer just pop a pill that need all the candy want yeah, but.

It works that way I don't know.

What happened to a good diet and exercise no Joe that's too much people don't like to Nomura Lazy Joe.

Yes, we're all my time exercise.

Hello World, It's kind of like everybody wants to do and nobody wants to exercise one off diet.

No one wants to get up at five o'clock in the morning and go so well then all Joe It's just like trader what everyone wants to know if you trade. They don't want to know how to trade right and then this is what we see a lot out there can be little lenient.

That's what they want right to Mitchell spot on you know it doesn't show you know trade. They wanted to see what did you tell me what to buy right now I don't want to think for myself, but that's one of my daughter chat they like to learn.

So whenever we say something we're not talking about our trial, we're talking about everybody else our chat likes to learn they like to come here for the learning experience at least go some stock that's out there every once in a while to like what we'd like but our opinions, but you're right. Like this is just the world. We're in here a man, it's a lazy world. It has become like people want to work for.

So we can get paid for five days a week that's what they are trying to go see it.

We need some that we need to get that guy, saying that should we need that we need him are represented here.

Yesterday, he's just taking a victory lap all around and they're talking about you know they've had them.

Sally had him on his show there and I was watching the interview it's always throw out. Some good question. I mean, you aren't you worried about you know the big three profitability with your wages going up 26% and he was like that it makes so much money. This is a drop in the by basically saying this is a drop in the bucket of wages that kind of impact those car prices whatsoever, because they are just raking it in and they need to share something.

And that money, they're raking it there until it now.

<unk> Dot com Q3, EPS at $1.10 beats. The 67 cent estimate sales at 390 384 million beat the 380 983 million estimate they did raise fiscal year 'twenty three revenue guidance to 1.558 billion and $1 563.

3 billion prior being at 1.4543 billion and $1 558 billion consensus is right off of that this is interesting to me because I know that wix dot com is using AI and there's different AI services now. They can go ahead and make your web design. So does that help wix.

In the long run I would say yes.

I was gonna go along this last night.

Three reporting earnings that's a bad thing to say, but the GAAP accounting over there is not in existence for the accounting methods always different and right now it's like this market as like you beat your go up like almost these Chinese companies, sometimes they beat sometimes they don't but we're in this kind of mercury where you'd be it go up.

And data speed.

And you know again I'm not saying these are numbers aren't real not saying that whatsoever, but I'm, saying, they're counting methods are a lot different over there and it's a lot of times. These companies be no matter what.

Hunter, but I bet you can't look at anything else is that the hundred docs and this took it all the way to start going wrong, if what's not Chinese about wix is Chinese.

Hum.

For that about Joel does some time I'm wrong.

Yeah, I've called me out on here I think it's well actually I'm going to I'm Gonna go ahead of the hundred onto Bosley cause I, just like look topic not 95 I take it all back 95 major resistance at 95, several highs in that let's call. It 95, and a half bunch of highs in that area. You know what we haven't talked about.

For ever is the BOP stack watts.

What's going on.

Nothing look at that thing just hanging out at near the lows of the move of assisting ever going to catch a bid waxes and Israel, Israel Wickes's, Israel I'm wrong, I thought with the Chinese I thought it was to a couple of people that that's what they thought was it is not Chinese sorry, My apologies here works. This is Israel Joel This is Israel.

As in Israel Company in surprising you know, we talked about what those companies go down with the situation. They havent really necessarily so at least.

AI I think is the play here right look at that EPS pretty good be almost double I mean, one turn at a 67% estimate it's not a bad beat there on the EPS. So a huge b that's a huge beat.

I take it all back because I did not realize that I always I had on my list as a Chinese company like I've had it on my long term less Oh, Mike that's wrong I always thought it was it's Israel.

<unk>.

So I learned from the chart. This why did this show you guys have to teach me literally I've got the Wingstop com on my Chinese last I've had it there for like a year, probably two years and I've been wrong I did not know that.

Yes.

Teaching me guys lift not lifting of course Q3 EPS at a loss of three cents misses the 13th estimate sales of 1.16 billion beat the 1.14 billion estimate lifts. His Q4 gross bookings of $3 6 billion to $3 seven adjusted EBITDA at 50 million to <unk>.

60 million lifts said that it had Q3 gross bookings of $3 554 billion and was up 15% year over year rides grew 20% year over year active riders grew 10% year over year, yet you still can't even make a profit.

Boy, Oh boy what it.

Whereas the breed farmers to breed.

But long term cap rate that theyre in a sticky now never fireworks to breed.

That is in trouble unless it's short squeeze season, which made me live.

[laughter].

No comments on that.

There is nothing to comment Matt.

So I guess, Ted box, I mean, theres, some gaps to fill here I add that cat on four but there's another gap.

Beneath it so cat box 10 box, let's see what happens I don't know if I will get that low it did sneak onto it in a pre market but.

Man I got the monthly here this well we might want to add to stop talking about the stock not even gave its earnings.

Now there is down 37 said Uber had a wild day on its report and look at the safety. This is a big psychological lateral they're trying to clear it and are up nine cents today, let's see if we can.

I mean, not only get over 50, but when you have these kind of moves you gotta get above a sustain a bit over 50.

Pub Vanadic here of course, they do programmatic advertising. If you guys don't know what this company is we can name some relationships, but Q3 adjusted EPS comes here at 14th sense beats the loss of five cent estimate sales of $63 six 8 million beat the $59 four 9 million estimate problematic. These Q4 revenue at.

76 million to $80 million versus a 70 444 million estimate.

Just the named some relationships like GTD Mag night, they'll just some of the names that you guys can be looking at.

T D D again in your life.

Here as well P you be.

No not that I actually look at the technicals into the report like Little Cup and handle for them and here not that were big pattern traders, but it was something I'm pretty well.

Bo me at all like you are in this market, where the Bulls, Iraq and control. So a lot of these stock for GAAP it down get popped back up and the ones that are gobbling up. Some continues so it's blocked off so to where we were two weeks ago.

And you did get a pop up near that gap area. So that's very important and you backed off on almost a bump from that area, but once you get above the sub 14 70, where do you go where do you go from there if you're looking to buy out a pull back you had some tight consolidation right at the 12 2012.

30 area.

And boom boom boom, a that would be the support and if we get above 14 70 get a nice little rally go on maybe fill the gap.

Bill Holdings is near a $1 95 billion payment deal or a mellow.

This as reported by Bloomberg I don't know exactly how this is going to affect it but of course I don't think acquisitions have been too loved as of late build dot com. What do you guys think rumor of an acquisition they knock 13% off it I mean rumor. This this company here is just didn't like it feels like it's like in a death spiral.

I mean, you've got every company bouncing your bill is not bouncing whatsoever now they get rumored about buying something and where the stock again, there are 13% on a rumor that they might buy something that feels like an overshoot or something else is happening here like this stock is just get absolutely hammered I ought to look at the fund me about this thing going into my trustee.

Zynga pro big enough build out a whole Bell holdings $6 billion market cap, one 7 billion of that I'm not sure. If they know they're thinking about buying something I bought they're probably not the worry that they're going to increase that that again. So it has a lot of that.

Wow I don't know what to say, but the stock just won't stop going down.

Do you see this news that can be seen right now about what's that that media, but what do you see just buffett privately traded in stocks, the Berkshire was buying and selling.

We're just looking at a headline here so yeah I'm sorry.

Who is pro publica first of all that is the thing that's what are they are they find out or selling.

Essentially that is that what they're trying to do.

Alright.

Put that up there he probably didn't even know what they were hit by Oh, Yeah, you walk around the trading gas coal what do we buy today.

My portfolio.

As Joe come all right.

Okay great.

Can you put that up there.

So a pro publica investigative journalism and news for the power I just want to their website, because I never heard of Lora Publix got before it maybe it's my bad or whatever.

A profile I've never heard of pro publica before they do have a lot of followers on Twitter and 922000, but I'm just looking pro public I'm actually looking at some of the stuff obtain Warren Buffett personal stock trade data and we found that on at least three occasions. He may have BIOLASE, Berkshire ethics policies, Don Don on Yeah.

Coincident with two three times three times, so you'd probably made you know hundreds of thousands of trades I'm not I'm just reading you know I'm I'm, just reading off the headlines, but I mean could this possibly be coincidence, probably I don't think buffett's do an insider trading that guys. What why would you ever do that.

Yeah, guys worth billions.

Okay.

However, one website or trading that definitely wouldn't make any sense ignore this.

Do you I post is more reliable than told me.

I'd like to draw tabloid this should be on CMC may simply applying the buffets doing insider trading hub.

This is nothing that I would I'd give any headline two let's wrap up the market guys. What will you be focusing on today what are some levels could we finally, just having a little bit more on played out the actual overall Buffett's Records show he reported at least $466 million and personal stock sales between 202019 that's all.

For all he's worth over a harder billions of dollars. So you're talking about 0.5% of his portfolio being traded not like not like like 0.5 like half of 1%.

Yeah.

Going through this very quickly here because we're doing this live and it just got brought to my attention three minutes ago, but Oh, my coli, reaching for headlines here in my opinion, reaching for headlights, not affecting the stock the stock is trading up a buck 51 here.

All right well, let's do it I'm, sorry man, he's really going to kill it.

You're going to close it down that yeah. Okay.

Yeah.

Well folks we're in open area here I can't give you any daily resistance for another 20 handles. So there you go you're not too long ago October 11th High 44, 30 50, that's the top number on my sheet I don't know if they're going to have to adjust that are coming back on the downside when I see days like dish and maybe if I.

I could sneak game Satya all log at the top yesterday's range are you now and wished and maybe mid range on this session, but so far so good I don't know if we have any fed speakers or anything to shake us up in a day, but that look.

Lucky for a night day, winning streak may truly got coming on tomorrow.

It's going to be really interesting guys, we're going to get into a little bit of some crypto action, Yes, I said crypto action you guys don't want to Miss It we will have the general manager of crypto from Robin Hood.

An interesting conversation that you guys do not want to Miss out, Yes, Tomorrow and guys. This is gonna be interesting well, we'll get some information so I want to source. Some questions from you guys. We don't normally do this beforehand might as well get the opportunity to do it today. So what I'd like for you guys to do is hit the comments down below I'll look at this before.

Tomorrow's interview and grab a couple of questions from there. So if you guys have some question for the general manager of Crypto and of course Robinhood hit those comments down below let me know what you guys want F and I'll go ahead and do so alright lets wrap it up here Joel Alcon and of course, Dennis <expletive> tripled the trader at boost follow them on Twitter and of course check out <unk>.

The market prep plus and the closing print at 330, Eastern who you have on their closing printed agile all of the one and only.

Triple D R.

Oh.

I lost a day. It is it's all of them I think birthday, Oh I see.

Realize that as the Atlanta, the closing per I don't Miss that as well.

Otherwise I lose track my own schedule. So we got Joel my schedule as well and he reminds me when I got stuff going on [laughter] avocado and Dennis take care My friend Alright, guys will get you guys over alive trade and that's coming up next don't go anywhere and like always guys. This show is for educational purposes, only not for investment.

Advice and opinions do not represent those of benzene hosting guests may maintain positions in the securities discussed today and like always we're here to keep you guys growing right here pre market prep up next we've got live trading and I took a trade. During this show that I want to tell you guys. All about it's actually really interesting because the big news hit the tape.

And this is something that I've been waiting for I'll give you guys a little bit of a hint has something to do with a baby sock find out guys online trading coming up next.

Okay.

Yes.

Sure.

Okay.

Uh huh.

Yes.

Okay.

Yeah.

Whoa.

I got some good news that I got some bets.

The good news is that we're at a seven day winning streak in the S&P and right now we're working on it.

The bad news.

It was in November of 2021, and we know what happened in 2022.

We got stocks moving big.

Both directions up and down won't cover them, we'll talk to Jeremy Schwartz at 835 for wisdom tree get his take on the market. It will debate what fed speak will be today.

Wednesday, and it was pretty market prep.

Okay.

Coming to you live from downtown Detroit. This dispensing is pre market prep with your host Joe Alcon and this is a volatile coffee here isn't it and Dennis <expletive> I've been the Penny I buy that stock for a passion.

With everything you need to start yours trading day.

Okay.

Welcome traders and investors we are in the green by fourth quarter handles at 4400 that nice range overnight 13 handle a range or the Buck is up 22.

It's a 105 59 bonds bought some back up about almost half a 0.1 14, 11th 30 seconds crude is not going to $100 folks. It's not about 26 to 70 610 cold slipping from the two K level down to 80 at 1977.

Silver the Red just by a couple of pennies 22, 57 in bitcoin residing in the 35 K handle down $435 35715, let's bring on Triple D. Here Triple D. I mean.

Savi day rally and were working on eight what are you seeing out there.

S&P is working on a seven day rolling out the same in the other markets, but we know the S&P is you know what everybody looks at so yeah. It's been an unbelievable balance we were oversold and just like Derrick said yesterday, we have went from oversold to over bought just like that I don't remember the last time I saw it go that quickly either to go from Oversold overbought.

But that is exactly what has occurred its hard to chase here now I did buy a couple of stocks more in the long term portfolio yesterday trying to remember actually what I said.

Oh I bought that FMC I wanted to get back in that Super micro computer. So in the long term portfolio I'd put that back and I've just building myself off because I think they I Farrell and you know that few of these stocks not going to have five positions. Just you know nibbling into stuff here just like in video with a half five physician that's M. C. I have five.

<unk> two nibbling into stuff don't want to go full odd ball because I still think those tougher times ahead, but I also think that there's going to be this market here in 2024 that is going to still have this bifurcation, where you see some stocks, which have a higher debt load is probably not doing as well and I start maybe still continuing a holdup.

Yeah seasonality coming into effect too right you have.

Black Friday coming up or everyone's just gonna be out there buying do you have the holiday season coming up with Christmas show that seasonality is working in the market's favor.

Marpol control for sure Yeah earnings season, everyone was looking for you know disasters, maybe a warning from the big Saturday shopping nothing but by the dip in Apple here.

Up over 180, we covering all of the.

Losses, Bammer went down they had the problems with the iphones in China not being banned it work. So just a lot of things, we got to earning season I guess.

Next turn I'll have to look it up will be yeah, all of those inflation numbers and we're looking at crew now crude is residing in the 76 handle but when they take those readings from a month ago.

The other thing too there's fed speak today and that you know once again I mean, everyone took his comments as you know very very Dov Asian, I think he's just kind of been the same. So we have him speaking we have a couple of other fed speakers today. So keep your eye in Hawaii there'll be definitely be some moves on that but.

Earnings season continues none of the Big boys, but once again stacks up big stocks down Big let's let's start with take two interactive let's bring in merch Mitch give me the numbers on page two.

They did not report earnings Joel.

Grand Theft auto yeah, yeah, yeah, so let's get to of course, Roger Brooks Tonight, Yeah. They report Tonight Rockstar is highly anticipated game of course Grand theft Auto six expected to be announced later this week of course Grand theft Auto five proved runway success selling over 185 million copies.

Only trailing minecraft as the <unk>.

Best selling game of all time of course I can tell you right now guys, even as they get older and older I'll still play some grand theft auto six but I'm waiting to hear though and a lot of people were kind of this is speculation, but they wanted to see if potentially grand theft auto six could be moved to like VR.

Or like the oculus or something like that if that happens I will tell you right now that's a big move so just putting a little speculation out there there's no confirm that it would switch over to the oculus, but just the anticipation of Grand theft auto coming out is enough here to get take two moving and they do have earnings Tonight.

Amazingly the moves and the stock's off the games like Europe.

Europe $13, because they're moving up the release of the game correct.

And it is moving up the release of it.

Well it just we didn't have in <unk> and an expected date okay.

Yeah. So now we know it's going to be announced later this week, we still don't know the exact date that is coming out.

But we're told that the date will be released later this week.

So boom, we get the 13 point pop I would normally say just fade this stuff, but it hasn't been the market to fade for the last few days of stock with GAAP up go hire a K a.

<unk> got a dog.

That's up 96 continues to go bowls are incomplete control here. It makes shorting tougher even the stocks that have come in and they still buy the dip demand people really believe you know this is that like we would have saw the bottom and that's why I stopped all time highs I.

It could happen.

I can't believe we blasted off you know as much as we did I thought we were oversold I thought we'd get a bounce. This didn't think this much. This fast. So obviously you know I've been looking for laggards docs that haven't gone yet FMC I Havent gone yet another one that I am watching here, which is traded crazy right now unity that must be off of the roadblocks, which just came out but.

Really gone yet either so I am looking at the laggard trade here has been working so far jumped back over to just to take to though it's a big move Joel give us some level of your $1 49 in the premarket Yeah, Yeah Nice job number 149, 40 threes your pre market high but let's go back to your August.

Hi, Your early August high came in at just under 150. So you got to think about that that's certainly 70 80 cents away and a little gap to fill above that to 150 161, but as we saw with the Dodd yesterday that David Dodd Boom was off earnings as you said this is a.

Moving the date of Grand Theft, Auto, which I don't know have you ever played that Dennis have you ever played Grand theft auto I'm still stuck on Nintendo where we play with Nintendo We're still pointed my old we that's why we broke out so.

The original meta versus.

What is that this is the original meta versus.

And in the long run I think youll see more and more games like Grand theft auto.

I'll tell you right now it just it's highly addictive to savings are gaming is not going away Jamie because I've been here you know I play I play every day with my Kids chat, let US know if you replace the Cranberry Army every single day. So I mean, it's fun I liked the games to Grand theft auto is a little bit.

But violence I can't at this point in time dry plant later on with a violator with them I don't want to be.

Just might be a little bit.

Gaming is not going away the games are going to get cooler and cooler the meadows or if all of that tied into it. So I mean I think there is a play here for you know to be long video games long term unreasonable valuations. Let's go quickly to of course their gaming just to like bring another gaming stuck in here and we'll wrap up the gaming Todd Corsair gaming Q3.

E. P. S. Here at 13 cents in line revenues at 363.193 million beat that 347.355 million estimate they do see fiscal year 'twenty three revenues at $1 4 billion to $1 5 billion versus a 1.47 billion estimate and net revenues were up.

Up here at an increase of 16, 5%. They did release, a new scuff envision pro wireless gaming controller for the PC.

I did see it was sold out on best buy you could still get it on the website, but that's a good sign right you're seeing.

Their products being sold out there high demand of course of course your gaming owns also Eldorado and that's probably one of the highest use for streaming stuff I mean I have to have their products right in front of me. So just to put that in prepares a laggard for you follow my gosh isn't it.

A laggard, but you know what it's.

It's I hate it stock.

For whatever reason never gets the name never gets a lot of like you'd think of gaming anything take to AA Activision Blizzard, obviously gone those are the big three and then you got other games like Roblox, which we'll talk in a second because they just had earnings and it's tied to the gaming, but I don't even think of course, there and I don't think the market thinks of course, there and I don't know if the market's evergreens I think of course there.

So it's hard to just get on the Crs are laggard trade, but it's a lager.

Lower the move is in Jeopardy was actually taken out here I take it in a pre market right. At 12 34 was the prior lull in November you got down to 12.

12, even in pre market trading and then maybe ill put it put a little worried that as this ever puts Australia closes above 13, and maybe you're buying it adds strength, but right here, you're just trying to pick the bottom and we know what happens when you try and do that let's go to those roadblocks earnings cause so yeah, let's get to that run rate.

There.

Q3, EPS you had a loss of 45 speech the loss of 50 cent estimate bookings at 839.45 million.

Q3 revenue was at $713 2 million up 38% year over year bookings up 20% year over year and daily active users also up 20% year over year at $70 2 million. So.

This is my thing about robots is that it's a one product stock and that always concerns me with one product starts what do you mean by one product stocks as a dad one game right. It's not like they make like five different games like let's say take to you know they have multiple titles under their belt. That's my concern with investing in this kind of company.

Nice part about it.

But I have to come up with more games, though I mean, but then I just got a few.

People talk about it I'm not sure. This is the one I would invest in either Mitch So I'm kind of with you. There. It's obviously got to love its got the name out there our people think about it and they do this is you know a wall Street Darling from back in the 2000 22021 area went obviously starts with just blowing away $141.

The all time high I don't think it ever gets there again a market cap of this thing which is always a good exercise when we get the jokes technicals on that second but just to get a feel for you know what the size of this company is you can't look at the dollar share of price look at what the feel is by looking at the market cap I mean, we got a 21 billion dollar company here take two is a monster.

Comparatively speaking take too.

Oh, My Gosh take two's only worth 23 billion take two's 23 billion and this is 21 billion Wow. That's crazy so anyway, there's a no touch for me a little bit that seems crazy that you would pay as much for roadblocks with you what's it take to it seems absolutely insane.

You have a candle here I put a red bar, there's just going to be the candle to look at for today. This was high.

We had a high at 40 93, you havent reached that yet psychological $40 level no no a couple of highs here in that area, but just keep an eye on this fire. It was a bad day. It at a high of 40 93 take that data 37.

37, 61, and then we know what happened after that I believe this is where they are back in August when they talked about that was changed was it changing the fee structure or a C. L came out and said that so it's recovered, but 40 ninety-three, if that'd be a nice target.

Hard to talk about resistance the way the stocks had been running lately, but that.

All of them cant continue to run all day long keep an eye on 14 93.

Alright, let's go to some of the stocks that got hit here upstart Holdings Q3, adjusted EPS loss of <unk> misses the loss of <unk> estimate sales of $134 five 6 million Miss the $142 6 million estimate upstart expects Q4 revenues of $135 million and adjusted net income of 40.

Million. They stated that we're making rapid progress in building the world's first and best AI lending platform and this was said by their co founder CEO of course, we prefer to be growing quickly.

But this is a time when it would be wise to operate in a conservative mode.

Oh, Hey, hi, lending, who liked that one right Joe.

I was gonna get your attention.

That's much likes to call it downstairs.

I mean, it's been just an epic disaster since the gentleman on CNBC virtually well, we won't even go into that but it was $380 or $400 a share. It's bontebok stocks down 95% from all time highs throughout that stat again majority of stocks trade down 90% from their all time highs 10 years.

Or still down there. So typically these stocks do not come back when they trade over 90% off their highs. They don't go back to the all time highs. There's always an outlier there's always an Amazon that got hit during the tech bubble burst and he goes up thousands and thousands of a percent, but the majority of the stocks in the tech bubble versus never came back. This is one of those we had the tech bubble burst.

I think the stock is never coming back I don't know if there if they've got a case here or not I know our firm was getting hit on this year. Two it's just not kind of stock now again, so not to kind of stock I would invest in.

Thereby at depths on everything in there the burdens of Das one I don't know did they come in and buy the dip on this Joel I I don't want to go.

Oh, no I mean, I wouldn't be shortened it down say, if I had shorted it I'd be shortened it without really.

Really tight leash you have one number in this area from May 18 to 21 56, you did you did trade below that in the pre market right. What did you trade down to you traded in the free market down to 29 D cell.

It'd be more of a you know a buyer in the 'twenty 'twenty to 'twenty one range than you know a salary here I mean, this is kind of a short salaries dream here you got jammed. When this was near 30 box just yesterday and now you're picking it up in the lower 20 handle as far as you know.

For a long term investment I don't know, but just kind of feels like down seven and a half box one daily loud, yeah, I'm looking at what money metrics.

You know I am like I start looking at what the rate is here and I'm like Okay, Yeah, I'll get a person that's already.

Yeah, just five 2% for the best birth rate that you could possibly get.

The worst right you're ready for this 135.9 did that on their website.

Yeah.

I put that on your website come on through I got you come on board.

Okay great.

Got it.

No I didn't.

[laughter] February of every year rule of 72, if you're paying a 36% that means every two years or so.

We got you come on down.

The I think I've got a better name for this company loan shark Dotcom, Yeah, Mike.

So I've talked about this in the long run I really do expect regulation to step in against companies like this and against a firm and those kind of come all the way they target consumer card and visa, Okay, let's give up sort of break Mastercard and visa is upwards rates or 'twenty four 'twenty five that's not true I mean, they've got bad credit.

They've got to pay you a mastercard, who were just darlings and wall streets, either 24 25 per cent somebody even if upstairs willing to lend money to the person who doesn't have a job maybe they should be get 36%. So we're sorry upstart you know if youre going to lend money to people, who don't have jobs, we need out there and we need the odd loan shark.

Alright, let's go to upward Q3, adjusted EPS here at 21 cents beats. The Tencent estimate revenues of $175 733 million beat the $168 193 million estimate they do see fiscal year 'twenty three adjusted EBITDA at 67 million to 71.

EPS at 16 to 18 cents versus the 16th that estimate and approved 100 million share buyback program I'm. So sick of these buybacks but.

Some more at yeah. It's a good pop I don't think this is the I don't think this is one that's coming back anytime soon either I mean, it's not off nearly as much as some of the other stocks my all time high of $64.

Our entire portfolio to eight and then I'll, let it go and I wish I still had it obviously its up at 14 here now this is back in the summer or early spring maybe it was we talked about on the show I'll, let it go too soon and I Miss the big gap on the earnings but.

Got it my story more so to really to take the first bite my might lead the meat for somebody else I don't know, it's get a pop I'm not chasing them.

It's not immune to chase stocks and I know, it's been working last few days, but it's just not in me to do it.

Well last time it had the pop off earnings. It continued and then look at that came all the way back down and filled the gap on that really nicely who knows if that will happen. This time, we did pop over $15 you could see a daily high at 15, 47, and then a double tap at the 15th.

75 areas. So first things first let's take out 15, and then if you get up in that upper 15 handle I think you'll find more sathers coming back on the downside you are not buying it may fill the gap today is totally crashes, but that the bottom at the top of yesterday's range 12, 12, but let's see if the salaries that were out.

They're in August and September a little a little bit in September out there isn't a 15 dollar handle.

One thing I'd be looking at up work is for use of a third party AI services right like who can build your AI your cat robots Theres. Some Google trend data and then of course, you see on their page a lot of AI services right build custom chat bots fine tune your writing good advice. So not all of these companies put a eye on there.

Front page of their wealth, yes, but then remember remember what they are right. There is like hiring like like outside source work right and a lot of times you know with these AI is what do you go you outsource to wherever you can outsource cheap and try to build AI products. So this is why I, maybe wouldn't be betting too much against up work, but man.

I know, there's five days going to go back down to 10 Bucks now with 14 of half like stocks up 50% in five days, we need to pull back now so agreements maybe throw it on your shopping list.

But you know I, just cant chase and maybe its the thing to do I mean, they have been working on a few of these names lately the last five days.

Overall in 2023 chasing has led you to a lot of losses.

Spirit Aero system S. P. R. More trouble ahead wherever you.

Been talking about that one twos docked epic disaster had an underwriting here underwritten public offering of 200 million here of class a common stock to fund its general corporate needs. The company also announced an offering of 200 million principal amount of its exchanged senior note due in 2028. They also.

Tried to push and theyre going to give them an option for 30 million more its been really hit hard I think this is a matter of trying to fix the issues that they have they need money to survive fixed those issues. What do you guys think you're S. P. R.

Uh huh.

It's just it always is it seems like there's always a headline coming out that knocked the stock down 20% or 15%, but not talk that declines and then boom gets a bad headline goes down I don't know if they're the Boeing problems fixed yet I'm not sure.

The story closely enough for that but I think we just got to be cautious as buying spirit whatever it goes up in here to get some nice rally what do they do their shopping offering down your throat. So I was just kind of not stocks I'm definitely not going to invest them.

20 box is an area of interest here you didn't quite get there in the after hours you got closed 2056. So the bowls are gonna be defending that gap area down $3 27, and that's a big move for the stack, so well see I mean, if you're waiting for 'twenty got another box 35 to go.

Just coming back on the upside a lot of room.

So the bottom of Yesterdays range at 24, 15, if you really wanted to be a GP hold out for a team, but that would really be a whopping today.

Yeah.

Alright, guys. There has been recent issues from the G. T F engines, and that's supplied by our T X, but that's for now.

Not for Boeing planes, and this is something that I'd take a look at if you're an investor in the aerospace. So just giving you guys a little extra to maybe do a little research on what's going on there that could potentially maybe help Boeing get some sales next year as those planes are having a lot of issues with those turbo engines also take a look into that if you're into the airlines.

Definitely something to keep an eye out for let's go to <unk> and Ribena and delivered robust third quarter performance here, surpassing the wall Street expectations.

The Big thing is focusing on the much anticipated our two electric vehicle platform of course, the or two would be a lower cost platform to compete with tesla's hold on the 45000 to 50000 Evs. The current timeline for ribbon to reveal the art to us in early 2024, they came in with a loss.

$1 19, beating the loss of $1 32 estimate and sales at 1.3, $3 7 billion to $1 three $2 7 billion estimate, we'll see what happens here, but our production guidance to 54000 units, citing progress on experience on the production lines and ramp.

Of in House motor lines supply chain outlook, not looking too bad here.

Arabian.

The trucks look really cool I mean, I've read that.

Right.

So the picture do you have it on the screen I can bring it up but remember that's the our one. So these are two would be kind of a cheaper version of that and so that's the thing that I'd be looking at Dennis I'm, one Evs to tell me that theyre going to make a cheaper model because of the way that the financing is right now.

I can't be going after that are one right now that's what.

I'm going to say, so I'm going to shock you, but I'm actually a believer here in revenue.

I think revision is number two I think it's going to be I think where Ford and general Motors are obviously struggling to find the way to transition Tesla. Obviously, you didn't have the transition ribbon doesn't either because they've been easy the whole time, I think youre going to see always tough why it number one I think <unk> and the E V is going to eventually be the number two auto.

Acre here like eventually Toyota and all of them are going to figure it out and they're going to pass them, but a pure EV plays I think its review and that's number two I don't want to lose that I talked about fifth gear before it just hasn't worked out I still think there is maybe a place for fifth gear I don't know if its a zero, but a lot of these are zeros I kind of like revision down here, it's a 16.

What's the market cap of this puppy 16, Bill sorry.

Is that right 16 billion sound right chart 16 billion of them getting actually seems kind of low from where it was but obviously, it's come down significantly come down.

I could be you could talk.

So putting a starter position in revenue and in the long term portfolio that seems insane for me to say because obviously the company's burning cash, but I think you know we're in early I don't think its efflux not therefore, I didn't want him off not gonna be the size of that far but is there a place where you know you look at it as the market cap like just doing this for fun like other types of market cap.

Where the Hell is tougher.

$700 billion, revealing at $17 billion is there a place you know where rabies and it could get to 30 or 40, or 50 billion market cap and actually maybe grow into that market cap.

This earnings we never thought I could do what they did at I think if I'm buying an EV play.

Like I like I like one of the smaller ones because there's like a dozen autoimmune ninos and all of those I think that's Arabian.

How many how many vehicles are there.

And so having deja vu here because this is how we talk on Tesla 10 years ago.

Like when we were like Wow, they're not going to take out Ford and GM, you know like and you know and all of a sudden you know they are the number one producer here I feel like their trajectories here Joel So how many of you. It's like 57000, you said matched novel.

They're gonna first can I ask for a very long.

But all your offerings in your face. So you have a lot of things that youre going to fight, but is there a story here and is there a path of profitability because Tesla did have a path to profitability, which we obviously didn't give enough credit to words I feel like if you're going to do if you. If you want to be in this industry and your big Bill.

Lever in EV, I think ribbons and number two I think Vivian number two to Tesla and the place I think one thing to add to that is that we're not talking about it is their last mile delivery truck right with Amazon and this is from Reuters I'll give you guys. The headline I read. This article a couple of weeks back just came out on October 18th, but Amazon said that.

They had 10000 electric vans and the delivery fee and you can see it right here plugged in ready to go and that's the future man, especially Amazon that wants to have 100000 electric delivery vans on the road by 2030, and if theyre already using more than 10000 of these trucks you don't.

They're just going to keep buying more since they're working that's what I would think what do you think would you probably Arabian longterm yeah. There's not a this is one theres going to be some kind of winners and you have to take some time, that's why I think too you know what I mean.

There's still a nice five I'm just getting a nice pop today off the earnings up a box can you knock over 19 box in the prime market Garner 19 can.

<unk> NAND from $28 in July this really hasn't participated in the recent rally that much so keep that in mind, a nice target on the upside if you're looking for more here 1973, and the reason I mentioned that one because that was a bad day. It peaked at 1973.

Settled near the bottom of the range at 18 O nine that that's where that really the catalyst to take it down to $16 So little little law.

Not much of a gap there is a gap there, but let's see if you're looking for more of that's about 20 way first things first though you got to clear the 19, and that's a pretty market. How your 50 cents away in Riviera. So better it's got a point here on the chart I just want to continue that discussion there are a few numbers here, but it's like a call.

Option. It is this a speculative capital this could very well be a zero Arabian could be but I don't think it is I don't think rebidding of zero and I don't think vickery zero, either I don't think Libyan orphan girl zero, but the market cap is low enough now that the upside when the Mercury couple of hundred billion you upside just wasn't enough now.

<unk> has come down enough that the upside maybe make up you know because I think it was a matter of saying four times you know.

<unk> can really become the number two EV you know auto maker.

It could even be higher that can be 567 times. After 10, bagger, because that'd be 170 billion dollar market cap, but could this get to a 70 or $80 billion market cap. If you know they really you know figure it out I think it's possible I believe in revenue and I believe in the trucks I believe in the management actually there. Obviously you can see right now to see I was on CNBC I think there's a place here.

The question is should you maybe wait a minute.

Recession is coming you know and maybe people are going to have the money to buy the stuff, but this is a luxury purchase too there isn't like you're you're majority of people are never going out buying review, but like what are these things worth much like what does it cost.

The R. One it's definitely up there it's in the seventies rich people are buying the rich people on why they are trying to make the art too. That's why they are trying to make the <unk> down to 45, right and slowly worked their way down right I've got the Canadian RF Rab RFP. Its 86000 to a $140000. This is a luxury truck.

Yeah, not that anybody walking side, let's be honest so I, it's at their expense, but you know what rich people or this is this is such a high ticket. So you have stuff that's high ticket here Here's an argument here still for revenue you stuff like automotive I'm going to buy a new car because 40 grip well that's because majority of the population is trying to get to that majority of the.

<unk> is never going to be able to afford a review so they are a luxury auto producer. The question is can they get to you know so that so during a recession the retro still rich so maybe by the maybe not the stock market wealth goes down because that pisses them off, but I think ribena and actually just a kind of believing it so.

And I can't believe I'm, saying, it here, but I don't mind it here at <unk>.

$17 billion market cap like spinners, there's like a lottery ticket.

Now one thing I would say is if the consumer is paying for Arabian what happened to the sleep number man because it didn't seem like they're paying for the beds out there, let's get to sleep number here as their earnings disastrous stock on a day EPS at a loss of 10 cents misses the 17th Est.

Estimate revenues of $437 million Miss the $511 816 million estimate and also see in fiscal year 'twenty three EPS up to a loss of <unk> 70 cents.

N P R.

What people arent buying that they're not going to buy new beds people are you know and I don't know if you're financing the stuff, but I pretty much guarantee it isn't zero preferred there Nathan a lot of them finance them because yeah like how what's the fleet average. So this is like the chatter out of stocks all the same stuff falls in the same category that this is big.

Ticket stuff that people don't need to absolutely they replace sleep number cost bad costs, Google one of those things cause.

879 is where you got to have it.

Some of them rock com still got $100 some of them are $4000.

Man I just can't even like imagine you know I think that's just not the place to be especially with the coming recession.

Wow. This is way below the COVID-19 low the Covid, though was 15 27 and a niche but this has been a little while volatile poppy is I like to say you got that 879, then you got a nice pop on that but you're leaking once again. So that's the only number I can give you there is.

879 that was your after hours low in sleep number I don't think these are the depths youre looking for we're looking for so when we put it up by the Dep Hot good companies with little debt there that their financing that they don't customers don't need a huge amount of financing to go buy their products at reasonable.

Uhm. So that's what we want so that's right down the checklist right now I'm gonna write it down so you want good companies. This isn't even one of those reasonable valuations.

Did you get a little sure it out we don't want it out and we want load that.

And we also want Oh. This is essentially the most important one customers need financing to buy your product your customers need financing to buy your product, it's not going to continue to do well in 2020 for the reason that all of these stocks in the IW, having all of these other companies continue to go down. It's a reason solar continues to go down every pocket. So.

Gold because the customers need financing to buy their product that a customer needs financing to buy your product. It's probably you know not the place to be and people argue what about revenue where people are buying revenue and a rich. So it's just a little bit different animal there, but overall I still don't like autos I'm, not saying a binary evian here today bring it back to having a conversation about I'll tell you.

Definitely not falling asleep sleep number alright, let's go to our guest.

Yes.

Okay.

Yes.

Alright, we are joined by Jeremy Schwartz Global Chief investment Officer at Wisdom tree funds, joining us here on three market, perhaps Jeremy How're you doing today.

Good morning, guys enjoyed the conversation to start I've got some good comments on a lot of it where you can talk about continues.

Well.

They are wherever you want.

Jeremy wherever you want to go well.

A few different right.

Idea does just continue Dennis your latest threat actually two of the things you've talked about I had things I wasn't I thought I could bring up.

But if you if you go back to your checklist, good companies reasonable valuation low that customers don't need financing and then sort of as a combination of you're talking about Libya and for the E V E V stocks.

Carbo.

Robert.

Here's my play that gets actually it's one of my favorite places in the World I talked about with you all before.

Dx, Jay which is our Japan Etfs is symbolic of all of that it's got a 10 to 12 P. So it's like some of the cheapest stocks in the world. So very reasonable valuations you've got the largest holding as Toyota alright. So I know we talked about Japanese are they the pure play E b, they're behind on Evs, but they're actually doing a lot of interesting innovations.

Or actually are.

A very strong place for intellectual property and patents. They haven't been always created commercial commercializing other ideas, but a lot of interesting innovation I wouldn't count out Japan, Inc. As a player and so they've got good companies reasonable valuations not just low that they like the cash rich country of all companies. They have so much cash on their balance sheets, and if you need to do.

Financing their central banks at negative rates still they still have sub 1% on the 10 year and so you usually have this there is no alternative because bond yields were so low now you got 5% 10 year in the U S. There's 10 years still below 1%, so theres a huge equity premium.

So I think Dx Jay as part of the answer for your play and it will diversify your lottery ticket with Caribbean.

I'll do a little bit of Japan, a little bit of Arabian I'll have oh, I'll be like Kramer diversified certainly.

Great.

That's what I was looking for ideas I liked the Japan idea. It was core ideas, Jeremy it's performing like an AI stock I mean, that's where we have EBIT, yes in the U S. It's our second best performing ETF. This year, so it performing like Mega cap growth.

But.

It's not you can't grow it's sort of like deep value for international.

So I think that's that that's needs one of my top ideas. There's also there was a question I saw a pop up about the low interest rates.

There's also the question of should people go hedge your unhedged Dx Jay is one of the hedge Etfs you don't have currency in it which actually is a benefit if you compare a U S investor buying Dx J to the local Japanese investor.

The U S investors actually getting 6% more than the local Japanese investor like how is that working well because when we hedge the currency.

We are paid the relative interest rate differentials, where the tenant five and their central bank. It negative and you rolled. These forward contracts you don't have any currency risks, you're getting paid 5% to 6% on top of the local market returns, which you're saying otherwise if you go unhedged.

See the yen go back to 140 from $1 50, just to break even with the hedge.

I I still say this is like the buffet trade when Boston pot, whose five stocks, which are all in our top 20 holdings.

A lot of them are in the top 20 holdings. They he did it with the currency it she issue debt in yen. He got this cheap financing basically the same trade that we're making the extra weeks I come back to that all the time that this is the waste buckets by in Japan.

That's interesting because I've been I remember when there was a lot of talk about what Buffett was doing are doing over there in the Japanese markets and then you look at that E. T App and still are not doing well what was the what was the other topic you wanted to hit on before we go on to some other things sure Dennis started off the show, saying he is long term portfolio added S F.

See I want the AI stocks, believing in AI that is one of the things we believe in as a theme I mean, I think it's often hard to pick the winner I mean, this is sort of wisdom tree approach in general with buying Etfs versus a different or but we have W. T. AI wishes are diversified basket. It had been up almost 40% of its co.

Back to talking about pullbacks.

The way we have structured it we're working on rebalancing it at the moment, we'll have some updated portfolio holdings in a few weeks, but essentially we have about 40% semiconductors, 25% to 30% software. There's like these innovators of who's really using it. So you get some of the big companies there.

And then also just other hardware and they're actually some plays on.

Well there were some robotic place. There's also like cars, we're going to use automated driving have some AI hardware component to them. So it's sort of a diversified AI story, where we're believers in that story long term. It's had a very you know pretty significant pullback from its highs and so I think that's an interesting one as well I'm trying to just look at your holdings I just went to wisdom tree dark.

I'm looking at the holdings in there so it looks like a.

Chip technologies I don't know if that.

Not a U S company AI chip cookies, Taiwan Company, you get a lot of one company you do get a lot of that is the number one holding so I don't know that we're in the video obviously is number two meta synopsys cadence a M DS in their Microsoft Taiwan semiconductors, and their alphabet do you have a lot of stock from here hopefully 75, it's not us.

As many as some others.

Well, we balance it.

You weeks, so here's an interesting one what about W. T AI the wisdom tree.

We were talking here. So when you guys are looking at that.

This is their funds.

This is Bob.

I'm watching him right now I'm looking at them all up right I mean, there's so many here that you guys can take a look at you guys cover a lot of Mega trends also yeah, which is really interesting right their cyber security battery value chain and innovation that's W back.

What about that one that's an interesting one and especially now that we're getting some discount in the EV space.

We'll refine and W bet it is.

It's a play off of that EV storage, I mean talking about Arabian and who's going to benefit from that this was the idea that E V is going to be a big part of the world and this goes through.

All sorts of that value chain for batteries. So it is sort of a derivative of the <unk> story that we were talking about as well.

So its global companies there'll be some miners will be people, who are producing batteries you have some of the EV companies in there as well. So that's that's all tied to the to the same story I think the AI play that I'm interested in as well that is it sort of it I mean, you don't think of it as a direct AI play, but you think about who's.

Benefit from.

All of this innovation and who's actually really lagged.

Biotech we have W. DNA, which is not a mega trend family called Bioware evolution, we see a lot of usage of the technology for.

Biotech companies and we think a lot of new innovation is going to come because that's one of the most data intensive sits of research out there and we see sort of gene editing happening in things beyond health care. So theres, even some energy plays in there there's some crude.

Agriculture type plays in there.

And so it's an interesting one it's actually been one of the best performers just recently I wouldn't say this quarter. It started to do act a little bit better, but it's obviously been a very tough spot. So I think that that's sort of an interesting monitoring team.

Alright, well take a look at that let's shift gears here I can't remember the last time, you had a we had John but that's great.

Great. It just rate debate here and the dovish tone and market interpretive we've gone from such entered Oversold Dino Bangladesh dive now potentially overbought here back up at 40, 40, 4400, who would have thought that just a couple of weeks ago Tata.

It's about <unk> earnings and then your outlook for the year end rally and interest rates, Yes earnings have come in quite strong actually I mean, when we look at the expectations coming into the quarter. We have a tool on our website called the path tool. Its got all sorts of indexes that you can track.

Sort of on a free basis.

Log in and it can play around with it and we sort of show what the estimate was before the earnings season starts we show what's estimated and then you show like as things are coming in how much is reported what that's that and then sort of whats the surprise factor coming into the quarter. It looks like youre going to earnings are going to be down on the quarter. My site. This morning shows earnings up five.

<unk> for the S&P 500, so it's actually come in way stronger than people thoughts for an average surprised me by about 87% of the S&P reported average comprised of 8%.

Check we put our expanded tech that has things like Amazon and Netflix and meta and Google that went away from just the official tech sector. So we put these about 73 companies in what we call. The expanded tech sector, they've had earnings growth of 28%. So they are off the charts, what's really drag the S&P.

Has been energy if you did S&P ex energy and energy is only like 4% of the market, but that 4% your earnings have really been negative.

On the year and so you take energy out in the earnings growth is like 10%. So it's been a.

It shows you how how impacted one sector can drag the overall number down but so I'd say in general it's been a good season.

And I think so much of the market has just moved on interest rates and we certainly saw that.

The market rallied significantly when the 10 year went from five to $4 50.

That $4 50 went back to five I think that you do have a little bit pressure again potentially.

I mean, certainly are impacting small cap stock small cap stocks.

You can talk about some of the business issues. They also are the ones are the only ones paying the higher borrowing costs. They have rates resetting because they do a lot of bank loans. So it's not like the large caps you issued extending maturities and arent paying these higher rates.

We didn't try to the net interest burden.

That is being paid by large catch it hasnt changed at all the small cap, so 130% or 40 basis points or losing losing margin for these banks resetting their rates. So that's one of those impacts of small cap earnings way worse than large cap earnings but.

We somewhat think the market is reasonably priced.

Given all that's going on in earnings season coming in pretty well.

Worried about that the concentration the magnificent southern I mean, one thing that that Dennis talks about it.

Look at those service to actually look at D. S. P. A and then you look at like something like the I doubt you add just modeling between it's Covid law. When it's late 'twenty. One high here are we ever going to see that that great.

Major rotation, where we you know we get the small caps joining perhaps at lower interest rates would happen. It. So is it bother you that Oh, you know what we're seeing with the concentration in the magnificent seven well it comes back to that earnings sorry, just said I mean, those companies grew earnings 30%.

Or just the tech sector in general not just the maintenance it sounds like the tech sector in general has grown earnings 30% when the S&P.

Was basically five and so they haven't when we look at that expanded tech sector. This is another thing I show on a daily dashboard everyday the T ease of the tech and the ex Tac and the the techies about 10 points higher than the ex Tac. So yes, they are more expensive, but they're delivering the earnings growth. So the real question will.

When do earnings start meaningfully disappoint.

And until that happens they can command a premium now the ex Tac basket gets you can say maybe its too low at 15 times its below their 30 year average and so people get a little bit pessimistic I, often things are a little bit brighter in the future than they get in some of these value sectors and I do like value long run but right.

Right now these tech companies are delivering on the earnings so it's until that until that narrative fails theyre going to keep going there they're the only ones that have delivered on the earnings really when you're looking at this last earnings report there was disasters in the cyclical I mean, the oil and gas stocks, but they've been price didn't go up quite a bit here, but for the most part it's been tech that has been <unk>.

[noise] system, that's been where the consistent earnings with them and that's where the investors are going to continue to stay because one is the story and then two is it's you know technologies and everything so I mean, it's hard to really come up with a thesis that technology starts to lag all I'll give you one little thing I think is happening.

I put a piece out earlier this year, saying around October we're going to have very good earnings and you say what.

How do I know that.

And I can say is that right. The dollar has a very disproportionate impact on earnings.

Particularly for tech as a sector most exposed to foreign sales. Okay now partly why it's in Japan.

Hans beating earnings by a lot because the yen is so weak and there when they translate dollar revenue back to yen they make a lot more yet and so their earnings are going up a lot or same thing is happening with the weak dollar and it often happens in advance now what happened was the dollar and usually when I do the analysis is like six months later after the dollar changes when it starts to show up in her like earned.

In a more meaningful way and so I said October is going to be when you start seeing real good earnings and that's what we're seeing right now the dollar started turning around though so you might see if I had to guess.

As you get into April.

Hey, you might see a little different story.

And you might see because of the dollar's been strongly into that create actually pressure. Some tech earnings might see mortgage spreads. It is amazing that analysts don't factor this in as well.

That's one of the things it's hard to fully get this factor and tease out what is the dollar impact and not it's not easy to get this.

This was just my high level macro take on it not a company by company, it's not easy to do the company like company take.

But my sense is you'll get a little bit of pressure in the analysts don't factor. This in that well, which is why I think you're getting to beat right now and I think it would be six months from now would be a little bit trickier.

We will be looking out for Q1 and Q2 earnings next do you ever see the lag dollar effect, we've been joined by Jeremy Schwartz Global Chief investment Officer of Wisdom tree Fudge covered a lot of things here on free market, perhaps Jeremy great conversation as always we want to have you back on again real soon always declared.

Sure.

Thanks, Jeremy Alright lets get back to the market is how we look and Joel we sell.

Why did it shipped were up a buck or a quarter and just hanging out near 4400.

As I mean, Inc. A winning streak I mean, we know what matters right how's the TLC you're doing.

And why it's flat yeah.

Long as they're not going market.

We're not going to get out here, though we were only up about 24 up 50 cents an hour here. So you'll see it a fantastic day yesterday, I mean that was sneaky there too I think you've got to look and say can I take out the high from two or three days ago. The $89 five that would be the next major resistance. When you start thinking about above 90, but I mean I W. M was down most of yesterday to try to come up.

Towards the end of the day. So you did see a little bit dispersion, there, where I've been saying that T. L. T rallies IW I'm rallies, they didn't see that yesterday. So one of two things aside everyone's going to catch up or that means that IW. One thinks about the rates are going to start to sneak back up again.

And we got Apache I mean, a very nice rally what happens after baked moves either up or down and you get a couple of days of digestion the digestion of the.

The buyers are not going away and the salaries are still out there maybe taken some short term profits, but psychologic.

Psychological 4400 level yesterday's Hyatt three in a quarter or one of the quarters at current high and so we got some fed speak today. So.

Early early to tell.

<unk> for the the Hood report right Oh gosh.

Yes.

Alright, well I live.

Oh man I have some fun sometimes guys.

Yes at a loss of nine cents beats the loss of Tencent estimate revenues here are $467 million Miss the 470 845 million estimate.

Monthly active users decreased 16% year over year to $10 3 million. They do see fiscal year 'twenty three expenses at $2 399 versus 2.439 and prior was given to three three and 2.41 billion the hood coming on.

Now.

I mean retail traders have really been hurt you know where all the a M sees in the G M ease and all of these mean stocks and all these high short interest docks on all these storage stocks of 'twenty 'twenty like the Oxford from your firms. They are all just been crushed all these stocks have been crushed the only thing that worked was investing in a mega cap tech and if youre in.

Investing in a Mega cap Tech you said, okay. If you weren't if you invest in the Qs you said, okay enough inspire located really buying a lot of other stuff. So all those stories DOCSIS Kathy stock for 2021 have been crushed and retail got crushed along with them you know and like I said I don't believe it's all retail traders like I said I think we have a lot of excellent retail traders.

And our chatroom I think we have a lot of excellent retail trader is still out there that we don't even know about but there's a majority of these retail traders believe it or not that I've really been hurt so where you're seeing some like I said I had one friend and he was looking at is other.

One friend for bright trade it was talking about the retail trader and the gentleman was down 90% of this portfolio and had all the stock from there and I'm like I Wonder how many other people are out there that are full of GB and AMC and all of these upstart.

All of these other loose sits and all these other E. G O as in all of these stories stock from 2020, I Wonder how many people are just loaded up with all that junk.

I think it's more people than you think.

Pre market now and they really hit the Sanger, let's call it an after hours though.

881, but I think the dailies in your key here because you did have the big boys stepping up or trade or stepping up add the nine dollar area. They got a little pop they were hoping to get over to 10 today. That's not the case so very important for this to put a similar formation in here did it.

And at the end of October at that between eight eight and nine so down down trading 600000 shares so looking at potential support not wanted then.

The close the Mark 976 that bunch of highs that nice 70, 590 80 level if they decide to take this green on this session and maybe maybe next quarter it'll be a little bit better for them. Since we did get some pick up in trading activity.

You know as of late so maybe next quarter it tends to be a little bit better for Robin Hood. So John mentioned in the chart here and I've been watching the same thing John like roughly I've been watching unity. All morning here. There has been a seller of all sellers in the stocks of roadblocks blasting off you would naturally think take two two was wall blasting off it too.

Gaming stocks, which unity provide software for these games blasting off you would think the unity would get a sympathy move it has not been allowed to have a sympathy moved this morning, because theres been one seller with an iceberg order at 26 88 for the last hour I've never seen one that big order unity before so the volume right now on <unk> 600.

Third and 48000 shares almost all of that was sold at $26 88 by one institution. So if you'll look you didn't get the pop and I was like what is going on with unity why the trading so much it was trading because roadblocks at eight o'clock hot or any kind of trade up and they were trying to lift the offer they've been trying to lift the offer 26 88 for the last hour and <unk>.

Have not moved finally have moved does that release and does that allow the stock to actually go up here now I don't know maybe the seller comes back and maybe they have more but that salary 26 88 sold 600000 shares there do the math on that Joe What 600000 times 30 threes.

Three is $1 8 million times 18 8 billion.

<unk> worth of stock, we sold $18 million worth of stock there. So somebody wanted out so watch unity now now that the seller does appear to be gone and we don't know a seller might come back and maybe it will come back and they have more you know who knows but they've released it for now but these ice FERC orders control the market I mean, you've got one big institution that institution did not allow the stock going.

They have a Brazilian pay traders now that are logged. This thing at all so that is a concern that the Brazilian natures, but by the same things should go up and it should go up and it would have went up I think you already would be up a dollar right now if not for that seller, but because thats all or was there and I have a lot of day traders crowded log on this thing. So I don't know what's going to be interesting to watch the stock today, that's going to be.

The big movement that unity as earnings on Thursday, So that'll be important as well we know the stock got hit hard when they put that you know the yen for the software of youth did that knock their number is down like the people say screw it I'm not going to use the unique I don't want to pay that fee or use something else I don't know yet. So there's some interesting stuff to think about here for balls to juggle I'm still long unity.

The long term account, it's been a disaster.

Alright last thoughts Dennis a quick little wrap up for us what you'll be looking at today.

I think we're still just in digestion I think to Derek's point yesterday, who made some excellent points on the show from Q3.

We're so far so good for the bowls, we've had a huge move and we really didn't give any of it back I mean, a little bit back on the IW AUM, but the S&P is holding in well youre seeing some of these other stocks I had big moves usually see 10% moves up then you know you have a little check back we haven't had the check back. So that's the good news here is that the bowls are still incomplete control digestion.

Up here with equal going higher seasonality in their favor there's a lot of reasons to still be short term bullish. Despite me looking at 'twenty 'twenty, four and saying it may not be as easy.

Okay.

A real quick Pablo has been asking for Paypal for the entire show and I just say my voice.

Right.

Consistent so.

Abby good ship.

54, I mean, it's hanging in there at 54, it's up a nickel you know building out some support here.

I'd like to see it get over 56 and O, but right now keeping I am 54 box digestion mode here got some fed speak going on today as well. So we will see a loose market. We got that I close the move yesterday series of higher lows seven day, winning streak, let's make it eight and then tomorrow.

815, well talk to Mr. Marc Jacobs see what his outlook is and the market. So everyone have a great day, and we'll talk to you soon.

Alright, John Condon data here and of course, you guys can keep up with Dennis Triple D trader on Twitter and we'll wrap up here like always guys catch US up next we got live trading coming up and I didn't want to give a shot out to everybody in Ohio. If you guys don't watch our cannabis content of course, we have candidates insider, but yet the Dales report and.

They were all talking about this situation that just happened of course, Ohio voting to legalized possession and sale of marijuana. So pretty interesting results. There, 57% said, yes, and we're going to continue to watch to see what happens in those situations of courts. The H eight S recommendation will the D.

E. A reschedule cannabis all things that you can find out on candidates insider and the deals report if you don't watch our cannabis content I think you might be missing out on a big opportunity that could be coming and investments smashed the like I'll see you guys over on live trading and let's keep going team Theres always much more right.

Here on benzene.

Okay.

Uh huh.

Okay.

Yes.

Okay.

After last month's NASA solar flare added a 25 hours of the day. This is kind of wondering what should we do with bacon and eggs twenty-five seven right solar stocks are up 20% with the additional hours.

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Extra hour Unpicking companywide power now, let's put it to a vote.

This is going to wreak havoc on overtime.

Anything can change the world of work from HR to payroll ADP designs forward thinking solutions to take on the next anything.

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Sure.

Welcome to Yahoo, Finance live on Brad Smith, alongside a FICO Fujita today here at the NASDAQ in times square happy jobs Friday to all who celebrate we certainly do and were glad you are with us at that time again economists are looking for 180000 jobs added in October that would mark a notable slowing from September's blowout report the big <unk>.

This time around there will strike action in the United States the stores the number probably thousands of workers not accounted for in the number but to what extent is the big question here the unemployment rate expected to hold steady process of watching that all important reading on wage growth as the fed's pause continues to capture the markets essentially and then when you.

Considering just how what a blowout number we got back in September I mean, the expectation here is that things would have sort of pulled back significantly the UAW number as you highlight and Brad can be really interesting for me because we're still sort of a secondary impact right. When you think about the big frame what that has done as well, but as we have seen from even the Hollywood choices, while that has been highlighted.

Over the past few Johnson parts of one number two we're watching really closely and work well.

The three 8% are expected to hold steady, but interesting to see the market reaction and in fact, we do see a pick up because we have heard from Jay Powell consistently saying the labor market has been surprisingly resilient right is Mr. Juan Let me finally, starting to think about a range of data and commentary that we got this week and especially around the labor environment.

Right now when we think about even the commentary that we got from Fed Chair, Jay Powell, who had talked about wages and we're looking at on a screen right. Now this average hourly wage expectation increase that's the year over year figure here and saying that ultimately wages werent. The biggest thing that were driving inflation right. Now. However, it is still a consideration we heard similarly, you know even.

Within the ADP research that had come through over the course of this week to where wages. You also saw that continue to move higher. So all of this considered there is that conversation about wages being involved within the broader inflation concern, but at the same time, that's not the shifting that's driving inflation right and we're going to get that print right at 830, but the other big story, we are watching this morning.

Of course sandbank mainframe found guilty on.

All seven criminal count, there, including fraud and conspiracy he faces over 100 years in prison for the charges. His sentencing is set for March and of course, our Brad we're talking about the founder of F. T X sort of path to overstate, what a stunning follow up for me.

You think about just over a year ago, Yeah, right. I mean, she was at the top of the crypto World now he faces what essentially amounts to life in prison.

It was remarkable for the figures that have really emerged as some of if you may say the barrons, a bitcoin or some of the czars of crypto currency. Overall, if you look for those figures right now where are they to be found and the larger question going forward from here is what the confidence in crypto currency among the masses that have some of PS.

Who have placed their life savings into it other people have decided to put some of their portfolio in it but recognizing how risky of an asset. It was and also how risky of an asset it can be when you have some of the biggest.

Whales out there or at least those who are driving not just the conversation, but the flows that are going be both into and out of crypto when they get involved in some of the more not just questionable but guilty charges such as this with sandbank Winfried decline you were mentioning earlier today, whereas he even we don't know yet I mean, what does this all mean for other Chris.

So players crypto sector as a whole and we still have to talk about regulation as well, we're obviously going to be breaking that down throughout the next two hours, but worth noting here that the journey is deliberated for roughly four hours.

It is a pretty swift.

Clift verdict, there and some would argue more legal analysts certainly pointing to and they've been France own testimony, whose decision to testify.

Certainly going to help.

And the fact that he had multiple of his associates also testifying against him and for them and there. Please.

Ultimately how their sentencing, we'll move forward from here till you imagine how that's going to be playing into the overall sentences that they each get yeah, I mean, they're not expressively attentive to late 'twenty four or so story is far from over a one we're going to continue to follow as well, it's going to be interesting to get that's what we'll hear from them are yesterday, specifically on that but.

Going from $35 million penthouse, right, just about a year ago, Yeah, no life potentially I mean, he has said that he will.

Indicated they think they will likely at black are David Hall, or it was just in the Bahamas at one of the events that have taken place here, we're getting closer though to the October jobs report figure of course, just a reminder, we're expecting 180000 jobs to be added futures going into this report mixed as of this point in time, So we're gonna be watching closely to see exactly where.

Those figures come in and as we are getting that figure. It looks like 150000 jobs were added during the month of October reading into some of the other data here as we're getting the change in non farm payrolls coming in that had frontline figure as we mentioned 150000 and then additionally here taking a look at the unemployment rate that takes high.

To 3.9% average hourly earnings month over month that was up by about two tenths of a percent average hourly earnings year over year that figure hotter than expected. It was up by about 4.1% here you are taking a look at the futures once again here on your screen, we've seen a little bit of movement. We were mixed now all three major averages here in the U S are in positive.

Territory fractionally as it may be we're seeing gains of about three tenths of percent on the Dow about a quarter of a percent on the S&P 500, and about 110th of a percent on the NASDAQ right now too obviously watching bond yields really closely on the back of my reaction to this as well. So I look at the tenure here, we have seen it really pulled back this week by the way it is at four 5% roughly.

Sure and are preparing for sale three year at four <unk>.

And.

Seven year or the five year I should point out at 4.5% I've also got to look at some of the sectors. You guys know I love talking about sectors. The job gains occurred in health care government and social assistance those were the drivers here, but employment did decline in manufacturing due to strike activity that noted within the first stanza of this report so there was that.

Question of how much strikes would actually impact this figure seems as the data came in lower than expected here and ultimately a bit more of the data we're going to be able to dive into here just within the next few minutes labor Labor force participation rate, though that is at 62, 7% that was a slight tick higher from the last reported as well, let's get over there.

Oh, who finances, Jared blurry now to see how stocks are reacting in the pre market hedge or hey, there I am looking at lift off right. Now. This is the NASDAQ100 futures since midnight and you can see we actually have a quite a bit a big spike up right. There, let's take a look at the Dow we swung from negative to positive in the NASDAQ Dow is positive just before and it is up.

About 101 points in the pre market and let's take a look at S&P 500 futures as well went from red to Green and we have them up one third of 1% now I was just looking at the Treasury market, we're seeing some pretty big moves. There. This is two year Treasury note futures. This is the price of the bond this moves inverse to yield. So we have this big spike up.

There that is relief that it was a lowering of rates and that's what the market has been looking for we've seen treasury rates kind of ameliorate ameliorate that had been given the overall risk markets quite a bit of pressure and it looks like that is continuing to be a relief valve for the markets now here's the tenure tenure Tino futures those are a preset.

In Italy up six tenths of a percent that's a pretty big move there. So we're gonna be receipt, we're gonna be seeing that reflected in the future as to the downside and then let's take a look at gold gold, maybe pricing and a little bit a little bit more price inflation as the fed is able to lift its foot off the brake we're seeing gold up about three quarters of a percent here's a look.

At the year to date, it really picked up recently I was writing about it in our morning brief today, so technicals lining up for a potential Polish breakout, but I'll tell you. What you look at a five year basis still got some work to do before we get out of this five year sideways trading action Alright, I just wanted to take a checkout silver real quick it looks like we got a spike there as well.

And then in the pre market.

Well I know Brad you said you like sector. So we're going to take a look at the sector action in the pre market. This is what happened yesterday, but I'm going to throw on the pre market quotes and guess what we have just about everything in the green consumer discretionary which was up 2.61% yesterday, that's down three tenths of a percent, but real estate up over 1% utilities and financials up.

More than half of prints present, so as industrials by the way in the pre market going guys. Okay, great with the first stock market reaction there on the back of their shopping.

I'm going to go slowly and by the way, but the unemployment rate taking up let's forget David Peterson The conference Martin Chief Economist and Joe Bruce Layla RSM Chief economist discuss this mornings jobs are important Joe let me start with you the number coming in weaker than expected.

I'll tell you on the numbers that we got.

Well, it's another rock solid American jobs report right, even if it did come in below consensus I think thats a good thing we didnt need to see jobs are hiring slow we saw 33000 jobs.

Sort of.

Adjusting for due to the auto worker strike so the topline number actually understates the true pace in the overall scheme of things here look.

Right now firms are having a much easier time.

<unk> labor, we're not at that point, where we can call. This a red hot market. The trend is cooling. It's what we want to see is why bond yields are falling it's why inflation is easing.

I think when we get into this.

Too often we fall into these false dichotomy of recession versus soft landing I think what we need to do we start talking about this as it is this is a very solid American economic expansion.

Truly historic rates.

Employment and a very low unemployment rate look average hourly earnings they're easing zero point to take a look at the three months run rate on that youre going to get much more friendly economic and financial outlook. So I don't see here much not to like.

Alright, Dana Joe says rock solid what say you.

Well I still see three stories in the labor market you have the companies that are letting folks go there are companies that are hurting and then the companies that are still hiring and it's still the same story.

Companies that are letting folks go those are the pre the pandemic era.

Darlings and Theyre letting people go such as finance, and certainly transportation and tag and that's understandable because they over hired and now Theyre right sizing. When you look at the jobs that are increasing again, it's those jobs that are in person.

Or they're still trying to ramp up after the pandemic, that's government healthcare leisure and hospitality, but in the middle you still have a lot of hoarding. So this is the same story, we've been seeing over the last few months, but we do think that we're going to continue to see softening in the labor market on the back of the fed extreme tightening of monetary policy.

And we actually think that we will land in a short and shallow recession in the first half of next year.

Joe You said, there's not much to not like in this report, but how do you think the fed season I realize there's not just one dataset they'll look at that.

Pulling back just a little right.

Right. They see the slower pace of hiring we had a downward revision of 101000 over the past couple of months yet people can get jobs very quickly I noticed the median duration only nine weeks, so roughly if you're out of the job youre getting one within two months I mean, even before you get that first one on climate check in many cases, so I think the.

<unk> is going to take a look to say, yes, you know what.

This reaffirms our pause in November I think it points towards an extended pause you know the truth is I think the fed's done hiking rates.

They will and they should at one point and just get on with it and begin to think about stabilizing real rates.

Bringing down long term borrowing costs for commercial and industrial loans, our clients tell us they are paying double digits.

Findings payroll and expansion. So there's a lot of work left to be done, but as Jean Paul said at the end of his meeting we're very close to the balance of risk being evenly distributed that's inherently a bullish case for the American economy, and that's why frankly, we just don't see a recession here right now.

Then how does the consumer see things I mean coming from the most recent conference board release that came out this week consumer confidence regarding the employment situations slightly fewer consumers were saying the jobs were plentiful compared to September number, saying jobs were hard to get also declined if the consumer is reading through this employment.

What are they to take away from it.

While consumers are saying that jobs are hard to get and they are not as readily available and that's consistent with what we've seen with the jolts data, where yes companies are pulling down those job ads and I think a lot of it's because yes, you have some companies that are letting folks scale, but most of them are holding onto workers and I actually think there is one thing that the fed wouldnt like in this report.

And that's the fact that wage growth is not flowing and that's reflective of the fact that companies are holding onto workers and their advertising higher wages raising benefits in comp and all those things to keep those workers and that's all linked to labor shortages. So I think the labor shortage issue is leaning against the worst at the fed is trying to do to slow the economy.

<unk>.

And then when you think specifically on wage growth I mean this the last several months have really been all about the strikes that we have seen and you've got the Hollywood trying to you've got the UAW strikes you got hospital workers housing care health care employees also going on strike as well then what does that ultimately mean from a wage perspective.

How does that leverage still partly you could argue because of a tighter labor market.

Seek out higher wages and benefits.

Well I think again, that's a huge issue for the fed that's difficult for them to control when the laborers have the upper hand, and they're saying we want higher wages companies really don't have much choice and indeed, our own survey and CEO say that they plan to continue to raise wages anywhere from 3% to 5% over the next year. So that is going on.

Lean against higher interest rates and certainly we think that means the fed even if theyre done hiking for now that theyre going to leave rates elevated for longer and that the easing that may happen, it's going to be minimal and then the ultimate fed funds rate is going to be higher going forward than what we've seen over the last 15 years.

Joe just to briefly follow on the strike theme here I mean employment in manufacturing decreased by 35000 in October reflecting a decline of 33000 in motor vehicles and parts largely due to the strike activity. All of this considered when you think about how we now have to kind of calibrate future reports for where some of those jobs are going to come.

Back.

Where ultimately the strikes in that consideration is in future reports as well what is that how do we kind of readjust our calculus around them if necessary. Okay. That's going to reverse next month right and we can see what's going on in manufacturing construction that means we're going to be opening new factories, you can see them along highway 290 in Texas for March.

Into Houston.

Manufacturing plants are going to be making semiconductor chips, which were going to sell across the economy and all over the world look like.

<unk> I'm looking at this report nor would I see four 1% increase in average hourly earnings that's above inflation, you know what that means income generate positive income growth.

GDP grew at four 9% in the third quarter of the year over the last two quarters. We've had absolutely robust increases in productivity you know what that means margins youre going to increase.

I would tell you theres just too much gloom and Doom here on Wall Street, what's good is bad that's not how the public is going to see it and I'm going to tell policymakers youre going to see it either.

Port people are getting jobs, they're making more money employment remains very easy. The fact that you can if you lose a job you can get a new one within two months and it's an extraordinary statement and look demographically induced changes that are happening in the country. We're going to guarantee that we're just going to have a tight labor market indefinitely.

<unk>, 4% as our new full employment and anybody who expects the dynamics over the past 20, or 30 years 40 years in the labor market to return you need to take another look at what's going on data and you take a look at what's going on in the country.

Vincent This is good news and we should celebrate it let us celebrate it like I said earlier to easily we found that false choice or false dichotomy of inflation or excuse me recession versus soft landing. This is really solid business expansion and we haven't noted as it is.

So what does that ultimately lead with that if we need to come to accept here that the labor market is going to remain strong right Dana pointed to higher wages shouldn't employ still have more leverage.

So inflationary so so so what are the levers the fed pause if in fact this jobs market is here to stay.

And if I dig a random walk up wall Street.

<unk> go over the New York Fed Euro Mattel, our star neutral rate tier.

We're going to have a much faster economy that can grow at a much lower inflation rate.

We're going to have rates youre going to be higher for longer I think the policy rate look we're not going back to zero, we're going to settle imaging three and three five and what that means for the 10 year yield four 5% to 5% if youre wondering about wow, what's that going to do the mortgage market well mortgages remain high for very expensive for a while but I think theyre going to drift back down in that $5.

Five 6% region, that's going to be your post pandemic economy.

We all need to begin to think about those shocks the long lasting changes and what it means for policy, we're not going back to zero.

That era.

Asset leverage is not just not come back.

So Joe you're sort of arguing that what we have today is what we need to accept that this isn't all going to have room, but it's also not going to change it as a shift in sentiment.

Well, it's not it's a shift in structure more important right.

It's just that we're all going to have to learn to manage through and around these the new realities of the economy, which is higher for longer.

The pace of inflation, which means higher interest rates I think ultimately the fed will lift their inflation targets from 2% two 5% to 3% to acknowledge this reality, but well after the point at which it's already become accepted.

Then in the most recent consumer confidence figures you also mentioned that more than two thirds of consumers still said recession is somewhat or very likely does this report signal anything or show any signs of recession.

Well I think the answer is probably no right because labor markets react after.

GDP. So if you have GDP going negative in the first half of next year, then you'll start to see the labor market and payrolls go negative as well right you have to look at the timing, but I mean I have to say that our.

Look for the U S economy is actually slower growth growth closer to potential and inflation, if the fed needs wants to keep inflation at 2% and I don't think they're going to change the target because that would impact there.

Sure.

Well, there are reliability, and certainly whether or not people trust that they have to say then that means that they will have to keep interest rates higher the bigger issue is still inflation inflation impacts everybody in in our consumer confidence survey. Most people were still complaining about higher prices for food for energy prices in general.

And so the fed still needs to address this and I don't think that we're going to see these outsized growth rates. Indeed, if you look back at the third quarter you had some special factors that bolstered GDP theyre not going to be repeated in subsequent quarters and consumers are complaining about incomes being slower their personal finances, not being as strong in the future we can't ignore.

That and just look in the past and say well.

It was awesome earlier, this year, but not look to the future.

Dana Peterson The conference Board, Chief Economist and Joe Griswell is RSM chief economist, joining us here to break down all things jobs. So thank you so much for helping us dive into this employment situation before and we appreciate it.

Thank you Keith.

Let's do a quick recap of the numbers that we got out this morning for the October jobs report Nonfarm Payrolls came in at 150000 that is below the expected 180000 unemployment above the expected three 8% came in at three 9% and average hourly wages just slightly above the expectation there came in at.

Four 1% we've got more coverage ahead for you at nine a M to watching young findings.

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Welcome back to Yahoo, Finance, we are continuing to dive into that jobs number today. So payrolls growth slowed in October, but we just aren't from ours in silver as well as calling it another rock solid jobs report.

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