GameStop rally, NYSE glitch, Best Buy upgrade: Market Domination

Stocks ended the day mixed (^DJI,^GSPC, ^IXIC), with the Dow Jones Industrial Average closing lower by 115 points while the S&P 500 and Nasdaq both posted gains.

One of the biggest movers of the day was GameStop (GME), which saw its shares soar 21% after an account linked to meme stock trader Keith Gill, also known as “Roaring Kitty,” posted a screenshot of a trading account with a $175 million stake in the video game retailer. The Wall Street Journal is now reporting that E-Trade is considering removing Gill from its platform over concerns about potential market manipulation.

On the latest Market Domination, Jared Blikre reports on the NYSE glitch that showed Berkshire Hathaway Class A (BRK-A) shares down 99.9% at one point, Alexandra Canal breaks down the latest on the Skydance/Paramount (PARA, PARAA) deal, and Anjalee Khemlani discusses what the latest FDA consideration on Covid booster shots means for Novavax (NVAX).

Julie Hyman and Josh Lipton discuss analyst calls on Tractor Supply Company (TSCO) and Best Buy (BBY).

Finally, Rockland Trust Vice President and Portfolio Manager Michael Sayers and Halo Investing President Jason Barserma discuss some of their top plays ahead of the Federal Reserve’s next rate decision.

For more expert insight and the latest market action, click here.

This post was written by Stephanie Mikulich.

Video Transcript

Hello and welcome to market domination.

I’m Julie that Josh left in live from our New York City headquarters.

We are giving you the ultimate investing playbook to help tune out the noise and make the right moves for your money.

And here’s your headline blitz getting you up to speed.

One hour for the closing bell brings on Wall Street.

Think about it.

The meme stock phenomenon sort of died out in most of 2022 and a good portion of 2023 because we didn’t have the euphoria across the board that we have now.

Individual investors are back in general.

That’s a very good thing.

Although I’d rather they focus on more, um you know, shall we say, you know, value oriented types of names?

There’s no question that people can make money in these stocks because they’re moving so much in a short period of time.

The question really is, are they prepared to take the risks of losing a significant amount of principle in the case that the volatility turns against them?

And that’s what we’ve seen time after time in this A I battle this A I competition between A MD and NVIDIA, uh what we’re seeing is something that has never been done before at the data center level.

They’re basically going to be releasing these every year previously, cyclical companies are becoming more secular.

Story continues

And then when you add on the software layer that’s really gonna drive home secular games, we’ve got one hour to go until the market close.

So let’s take a look at the major averages pretty busy day for a Monday here.

The Dow right now selling off about 217 points.

But it’s really a mixed picture that we’re looking at today.

So you have the dow lower, you have the S and P lower by about 1/5 of 1% but you have the NASDAQ higher by 1/10 of 1%.

So let’s break that down.

Shall we, we had manufacturing data coming in today worse than estimated.

And so that then is having a ripple effect in the bond market.

And then that’s what you see playing out with the dow S and P today.

So it is sending yields lower actually by 1/10 of 1%.

And you know, this is something that sort of cuts both ways because on the one hand, maybe we will allow the Federal Reserve to cut rates sooner than expected.

Perhaps if we see some slowing in the economy that brings down the pace of inflation.

However, if they’re slowing in the economy, that’s not necessarily good news for the economy.

Itself and for earnings.

So that’s kind of the, the elements that investors are weighing today when it comes to the NASDAQ, we see that increase due to what we’re seeing play out uh with chips here today.

But let’s get to what’s going on with the memes there.

We just heard some folks alluding to what’s happening with meme stocks in today’s session.

If you look at them sort of very broadly here, you see a mixed picture, but you gotta equal weight it to kind of see what’s going on here because guess what?

There is games stop up in the corner.

We’re gonna get to more on that as uh as the show goes on, there’s the five day to really give you a look up at the look at the big jump that we saw in the shares and that has to do with uh the man known as roaring kitty or at least someone purporting to be him uh revealing a big new trade in that name.

A MC also getting caught in that updraft.

Um Well, we just also talked about what’s going on with semiconductors.

A quick look there with NVIDIA leading the way higher as the Computex conference is happening in Taiwan, Jensen Huang of NVIDIA, Lisa su of A MD, some of the folks who were, who were speaking at or around that conference.

Uh We also got some announcements from Intel and maybe we’ll get some more.

So all of that affecting what’s going on in the chip space today, Josh.

All right, Julie Mesto starring the first trading day of June back in the spotlight.

Gamestop getting a lift after individual investor, Keith Gill, also known as roaring kitty.

Of course, revealing a nearly $175 million position in the video game retailer that’s coming after a short lived rally in Gamestop last month leading to the company selling 45 million shares for more on where the meme trade is headed.

Let’s get to Chris Murphy, Susquehanna International Group, co head of derivative strategy, Chris, it is always good to have you on the show.

So let’s let’s dig into this, Chris.

So Warren Kitty, I’m, I’m just looking at his position uh here, Chris 5 million shares, uh bunch of call options, expiring June 21st strike strike price of 20 nearly 66 million worth of those.

I mean, this does look like AAA meaningful position here, Chris, what do you make of it?

Well, yeah, it is a huge position for an individual.

Um game stops trading um so much, so much volume.

So in terms of if his position is going to impact um gamestop itself and know where it’s trading and things like that, the actual trade, even if you were to close out of that position really is not gonna have a huge impact.

It’s more the sentiment that everyone’s looking for, you know what is Roar and Kitty gonna do next and then his followers are gonna follow that.

And of course, the pile on of, of all the followers now that could have a real impact on the stock.

And Chris I it’s Julie here just put this into perspective for us.

So uh uh according to the screenshot and, and we gotta caveat all of this.

You know, the, the account says it belongs to this person who we’ve known as Keith Gel in the past.

You know, we don’t, it hasn’t been verified.

There’s no one like, you know, that know, that has said yes, this is mine.

So just that’s the caveat here.

However, it also looks like 100 and 20,000 options.

Contracts are held as part of this trade that expire on June 21st.

Give us sort of perspective on the size of that kind of options position relative to what we typically see.

It.

It’s a, it’s a big position.

Um It’s a big position for, um, Gamestop.

It’s certainly a big position for an individual.

Um But, you know, Gamestop will probably trade, you know, maybe 200 million shares today.

So, um, you know, that’s the equivalent of um uh 12 million, I’m sorry, hun uh you know, you know, it’s, it’s, it is a huge position but like I said, it’s such a liquid stock.

It is trading so much that, um that, you know, that impact of that trade, if it was a, you know, an institutional client like we typically deal with and they were closing out of their position and we knew it was them and not some um you know, someone online and we knew it was a focused trade uh versus the chance for um a like amount of followers to follow on afterwards.

That’s really what’s adding to the uncertainty here.

Chris, I’m just curious when you look at this, you know, as someone who knows the market so well, do, do you have any kind of uh legal or regulatory questions, Chris or no?

You think, you know, the guy is a traitor?

He has the same information that everybody else does that Chris and Josh do and God bless.

I don’t, yeah, I know.

First of all, I wouldn’t speak on anything legal wise, but I would say that um we track this trading um for our clients and when we see these large positions, um being built up, um we are taking notice of them.

So the information is there if you’re looking at it like, you know, this, this tweet coming out uh yesterday or overnight or, or whatever it was or the post on Reddit, um that, you know, could have somewhat been expected if you are watching, um, you know, gamestop was, was, was pretty quiet, uh, you know, after 2021 through 2022 and 23 and then all of a sudden, you know, a month or two ago uh the options really start heating up again.

There’s no real story, there’s no real event.

So, um, you know, you can kinda see that information out there.

You know, obviously, you know, we weren’t expecting it to be uh a specific person, but you can see these trades, it’s a listed market.

Every option trade that trades um is accounted for and, and you can see it after the fact.

So, um you know, that’s why this trading options is challenging, but this information was out there in the world just not who it was.

Well, Chris, so I guess my question is back when this thing first started rearing its head in 2021 there was this whole narrative about the small retail investors versus hedge funds and then the hedge fund started participating on the side of the retail investors and you know, because whatever they would see that would make the money.

So I’m just curious now when you say you’re monitoring this kind of activity for clients, are clients also also participating in these kinds of trades?

I mean, before we knew it was him, did you see other people trying to get in on that activity?

And do you see that happening with some of the other so called meme stocks also?

You know, it, it’s like you guys kind of alluded to already, it’s, it’s harder um it is hard to trade and there was a guest in the, in the snapshots before I came on talking about, you have to be willing to, um, you know, understand the losses as well.

So, you know, I spend 99% of my time on, um, other opportunities on, you know, fed events on CP I on things like that really only look at this when this stuff pops up and it’s typically, you know, more media related than our clients.

Um, you know, it, now that this move has happened, you have to keep in mind that the options are really, really expensive.

So if you’re late, getting into the options and buying them and trying to hold them for any kind of a long term period, um that’s very challenging.

Um And in addition, you know, dealing with institutional clients, they don’t need me for gamestop.

Like I said, it’s incredibly liquid, you can trade options in and out all day long, you don’t need an institutional uh broker for that.

So really, we’re more using it as a vehicle to field questions, to explain um the risks of the options to our clients and to help them to understand what’s going on and whether it’s impacting their portfolio or not.

Uh And typically it’s not Chris, I’m just curious, you know, more broadly, do you, do you see this trend, this kind of uh meme stock phenomenon?

Do you see it uh continuing Chris because he didn’t, I would say died in 2022 but it did feel like it, it died down and now it’s back.

Do you expect it to kind of stay back?

You know, investors are smart and investors are, are creative when dislocations like this happen, uh People find ways to take advantage of me and there’s a lot of um uh new uh call selling of high volatility uh stocks and, and there’s, there’s people that are, are, are, are providing that to clients now.

So, you know, things never swing too far in one direction uh without, you know, a counterbalance.

So, you know, I think that, you know, as we saw already the meme stock stock, the meme stock movie from a week or so ago, it didn’t last very long.

And then you guys showed that graphic before you put me on showing, you know, the heat map and it was just game stop.

I mean, uh the last 21 or two times around people are looking for the next meme stock.

It doesn’t really seem like that’s happening right now.

It just seems like this is very stipulation specific.

Nobody wants to get on the other side of this shorting it here because, you know, roaring kitty did his Twitter post and he did his Reddit post, but he hasn’t done his youtube post yet, you know, so everyone just wants to stay away from this one until it’s completely um laid out.

So, you know, short answer to your question is um I think that um it’s it’s in the later innings of the, of the meme stock thing.

Chris Murphy.

Thanks for your perspective on this interesting stuff and we’re going to continue to watch and by the way later, we’re going to talk to somebody who said he’s shorting it.

So we’ll see how that is working out so far.

Thank you.

We’re just getting started here on market domination coming up, paying up to dine out.

We’ll take a closer look at how the rising cost of food away from home is impacting fast casual stocks.

Plus as tech giants looked to offset their A I emissions, we’re focusing on the business of carbon removal.

In our this episode of next, you can tune in at 4:45 p.m. Eastern for that plus Berkshire shares down 99%.

No, not really blame a glitch of the New York Stock Exchange for misleading stats on some stocks today seems to be over now.

But we have more from the NYSC floor.

Next.

Let’s get some trending tickers.

Now, investors starting the week with quite a curveball as the New York Stock Exchange that a technical issue was responsible for large fluctuations in the prices displayed for certain stocks including Warren Buffet’s Berkshire half the way here to help us explain what exactly happened.

Yahoo Finance is Jared.

L people looking at BRK definitely had to do a double take today.

Jared.

Yes.

And I saw some articles from certain news organizations that had to be retracted.

Berkshire Hathaway did not go 100% down today.

I can verify that but we do have a statement that we can attribute to a New York Stock Exchange spokesperson about the resolution of this issue.

It says after the market opened on the morning of June 3rd, that’s today technical issue involving industry wide price bans published by the consolidated Trade Association Securities Information processor triggered limit up, limit down trading halts on up to 40 symbols on the N group exchanges.

And when we take a look at some of these symbols and I have them in the Wi Fi Interactive.

It’s not exhaustive, but we have quite a few here.

You can see Berkshire Hathaway, the air shares are front and center and they are currently trading at $625,000 662 dollars and 50 cents per share.

But that was not the price reported earlier.

Some other big takers affected Abbot Chipotle Mexican Grill and we also have some smaller takers as well including Gamestop up 30% today and also AMC up about 13% today.

And all of this comes on the heels of a new trading practice that was instituted last week, which is T plus one settlement, which means all the stocks are going to be settled in one day as opposed to two days previously, it’s not known if this is in any way related to it, but within the last week we’ve had a couple of trading glitches and it’s been supposed or proposed that maybe it is the issue I dug around on the website for the NY and I came across another statement here and this kind of explains also what’s going on today between 9:30 a.m. and 1027 A MC.

T that’s a consolidated trade authority experienced an issue with limit up, limit down price bans that may have been related to a new software release.

So just another one of those cases of new software release, they did able to, they were able to fix the issue by failing over to a backup data center.

But I guess the good news is is that all of these stocks that we’re looking at right here were not limit down at their lows today.

Jared Bli.

Thank you, appreciate it.

Next up, Novavax shares soaring today, the Food and Drug administration announcing it would vote whether to recommend a new COVID-19 booster here with more as Yahoo finds the senior reporter, Angelique Klan.

That’s right.

And of course, Novavax, we know one of the companies that gains to uh looks to gain the most from this move from the FDA.

If they do decide to propose the J and one variant as the strain that company should focus on.

That includes of course players pfizer.

And um we know that those two will obviously also be out with their vaccines.

And this is setting up to be not so much the strain that we need to focus on here in the US KP two is now overtaking J and one and we are still keeping track of these strains and they are all Ron sub variant.

So that is the one benefit is that no matter what strain gets chosen by the FDA, they are all going to be able to offer some level of protection.

Barring any surprise, we know that that is the ongoing story for the COVID disease that you know, it it has been evolving, continues to evolve and impact mildly most people who are protected.

So uh what the fall roll out will look like and what the demand will look like still remains to be seen.

But Novavax is up because it will be able to play in this fall season.

Yeah.

And, and as you said, Novavax is looking to capitalize the most because it has the most to gain because it’s coming from, I mean, in other words, most of the other players are big companies, lots of other products, not not well and moderna also and not so much with the other.

It’s still working on its other products.

So um it did also get its RSD vaccine out now.

So it has two products.

But yeah, Novavax still the one that has just a single product on the market and that is this one right now.

So it does stand to gain the most, I also actually spoke to someone about whether or not this really matters.

What, what does the fall booster campaign really do for us?

And he basically told me that, you know, it, if we’re looking at boosting for the broader American population, we’re all pretty solid right now.

It doesn’t quite matter.

It’s for those who are immune, uh deficient in some way or need that support through what is known as memory cells.

They, they, their bodies cannot produce that protection that’s needed.

And so up until a random variant comes out that we have not seen before, we’re all pretty good.

I’m looking for some knock on retail.

Thanks.

I appreciate it.

And let’s get to the final training t trending ticker that we’re looking at.

That’s Paramount Paramount Global and Sky Dance Media.

They have agreed to terms on a complicated deal that would merge the two companies while keeping Paramount publicly traded.

That’s according to C NBC here with more young finance senior reporter, Alexander Canal Ali.

Uh maybe this is coming to a close.

Yeah, you just knocked on wood.

I’m gonna knock it again because it feels like this month long saga could potentially be reaching the finish line, but you never know here, we did see share surge as much as 9% on that C NBC report.

But as you mentioned, ultimately, this all comes down to Shari Redstone, a deal must first be approved by Redstone in order to move forward.

Now, C NBC said we could see an announcement in the coming days.

So that’s something we’re going to continue to track and this is a very complicated deal.

So I’m gonna try my best to get the top level highlights based on some of these reports.

Number one is that Sha Redone will receive around 2 billion cash for her state in National Amusements Sky, but then merge its studio business with Paramount and purchase about half of Paramount’s non voting shares for 4.5 billion that translates to about 15 bucks a share.

Now, those non voting shareholders will have the option to cash out about half of their stock at the $15 premium with the remaining shares converted into shares of the newly merged company.

And then finally Sky and its affiliates will also offer a cash injection of 1.5 billion to help pare down some of Paramount’s debt.

So this is a total deal that is valued at 8 billion.

It was sweetened from that initial offering of around 5 billion.

So it appears this is more attractive to shareholders.

We do have that annual shareholder meeting for Paramount taking place tomorrow morning at 9 a.m. Eastern.

It’s not expected that we’ll see the deal be announced then.

But certainly at some point this week, it could be a possibility if it’s, if they’re not talking about it there, you have to wonder what are they, you know, what else?

Are they going to say at this meeting?

Switching gears, uh uh Spotify another price hike, another price hike.

Unfortunately, this was hinted at throughout the last quarter in the earnings call prices are going to rise between $1.03 dollars depending on the plan, family plans.

That’s going to see the largest increase prices there rising to 1999 a month up from the prior 1699.

Those duo plans that allows two users to share an account that’s going to be increasing by two bucks.

And then Spotify premium subscriptions will now cost 1199 a month.

That’s an increase of $1.

Now, we saw Spotify boost the price of their offerings last summer.

And like I said, they’ve been hinting at this.

This is something that they’ve been committed to as they work to reach profitability, stronger margins.

They spent a lot of money on podcast.

Now, this is a consequence of that.

I still think it’s a bargain.

Yeah.

And, and that’s what analysts say as well.

There’s a lot of bullishness on the street and, and you have to think that a lot of these services were priced really low to start just to get those subscribers.

And now we’re at a point where you’re gonna have to pay a little bit more.

All right, thank you.

Appreciate it.

Investors struggling to keep the market’s main momentum going in the first trading day of June stocks, mixed with about 30 minutes left to close We Manufacturing Day this morning.

Yet another sign of an economic slowdown spooking some investors.

But our next guest says there’s an opportunity to trade the scare around slowing with us.

Now, Brian Jacobson, Annex Wealth Management, chief economist and strategist, Brian, it’s good to see you.

So.

All right.

So we kick off June here, Brian.

I I thought it was interesting.

Brian Cfras Sam Stovall.

He had a note out this morning to his clients and he was pointing out June, he said you typically deliver below average returns and volatility.

But Sam was kind of was telling his clients, listen, we could see some elevated volatility this June.

What what do you think?

Do you think the chance you have any chance of a June swoon?

Brian?

Yeah, I like that plan words there and I think that there is a high likelihood that we will have that type of mainly driven by the resurgence of a growth scare.

Now, we here at annex on our investment committee think that it is just a scare that this fear will not become a reality, but a lot of people are probably going to start talking about recession risks.

Once again, we already had last week, the personal consumption expenditure data come in real spending.

This is negative in the month of April.

We had a decline in real terms for disposable income.

So the consumer is beginning to show a sign of some fatigue.

And then when you get to manufacturing, the ISM manufacture is going below 50.

Again, that’s just another sign that manufacturing is really not making a good turn here.

So it does point to we think slope growth ahead, not negative growth, but definitely slower growth ahead.

And so um why aren’t you as worried then?

I guess about a recession risk here?

Yeah, I think the biggest reason why we’re not worried about it is mainly because the consumer is still in a good position in terms of balance sheet health.

We do know that tighter m see higher interest rates really affects individuals across the broad economy from the bottom up in terms of lower income, individuals who are more heavily embedded also have the higher interest costs, lower credit ratings.

And so that’s where you’re seeing some signs of real pain, but the bulk majority of so if you think about middle income and higher, they are likely just taking a little bit of a pause here, maybe doing a little penny pinching, not necessarily that they’re going to batten down the hatches.

So we think that we’re actually moving to a slightly more sustainable pace of economic growth as opposed to the torrid that we somewhat became accustomed to last year for the stock market.

Brian, as you look out now, at least, you know, near to intermediate term.

What would be your, your big concerns, Brian, what’s on your, when you’re on your wall?

Of worry when you’re talking to clients.

Yeah, I think that as far as the wall of, one of the biggest ones is really the auction anxiety coming back again.

We saw as far as the treasury auctioning off securities, those not necessarily being as well bid if they have been asked, that’s creating and contributing to interest rate volatility and so that can create all sorts of turbulence on its own.

And then we also have, I think as far as the fed, really, they’re trying to figure out is inflation going to cool faster than growth right now, it looks like growth might cool faster than inflation.

And so will they now change their narrative if they’re going to dig in their and insist that they don’t need to cut rates until maybe after the election sometime in December.

That’s just going to continue to tighten the screws on small business, especially small cap value, which is the area where they tend to have the highest debt burden.

So from a market perspective, we think that a fed that is almost twiddling its thumbs or sitting on its hands is probably one of the biggest risks to the market right now, Brian.

Great to see you.

Thanks so much for your insight.

Appreciate it.

Thank you.

Dining out, get ready to pay up food away from home, is getting much more expensive than a meal at your kitchen table.

More on what that means for fast casual names.

It’s coming up next.

All right.

Now, let’s get to some calls of the day here, loop capital, maintaining a hold rating on tractor supply, the price target of 250.

You could see shares under some pressure there, Julie, this is coming from, of course, Anthony Cumba, we like Anthony.

We know Anthony smart guy looks like a couple of concerns for Anthony one.

He calls out this sort of wideness pricing gap versus rivals that it is on average 8.5% more expensive compared with 6.7% more expensive in March.

And it sounds like what he’s saying in and of itself, he wouldn’t be terribly worked up about that, but given the move in stock trading and he says it is a significant premium, you know what?

Given all that you still look warm.

Yes.

Um And by the way, tractor supply, the, the stock chart over the past few years has been pretty, the five year chart I think is something like 100 and 50% gain.

They’ve opened a lot of new, new locations during the pandemic.

Everyone became a gardener, right?

Or moved to the suburbs.

And I love looking at this price survey and the different items in it from the Vapo rust rust remover to um uh the loose fit mock neck vest to the pro commercial pro sprayer and various types of dog uh like a market domination out field trip.

I mean, I love these I love these kinds of stores, but, you know, you gotta, you gotta know your customer.

It was known sort of as a premium experience within this farm, you know, gentleman farmer kind of cohort.

Um But, you know, in this environment that’s perhaps a little bit less tenable than it was for a while.

Bloomberg noting by the way, the company is speaking at Baird’s Tech and service conference tomorrow.

So who knows?

Maybe it’s some more tractor news that point.

Yes, I look forward to it.

Let’s talk about another retailer Best Buy.

It’s getting a double upgrade from Citigroup which also raises price target from $67 to $100 and a rare double upgrade, rare double upgrade.

So that one really uh you are very excited about that this morning to see the rare double upgrade for too long when you Wow.

Um So as the analyst says there, the thesis changer for this has to do with gross margin execution that even if the company same store sales aren’t gonna be great that they are still going to have a building gross margins from here.

And that’s gonna be kind of the pivot.

He acknowledged some risk.

Julie telling his clients listen, I I acknowledge second half same store sales risk.

He talked about basically broadly consumer uncertainty but thinks it’s prudent to look at the multiyear opportunity ahead as the business returns to growth.

And an attractive margin expansion story develops most on the street, by the way, do not share this bullishness.

Most are on the sidelines but not city.

They are all in.

Yes.

And they say eventually, as you’re looking at that multi year opportunity, eventually, when rates come down, the durable goods demand should come back along with it.

And that’s something that best buy can benefit from.

Maybe people will start buying laptops again.

They say we’ll see.

All right, let’s move on for some families dying out is more expensive than ever.

The problem dinner at home is also pricier than it’s ever been.

And joining us now with more is Peter Gabo Bank of America Security Senior Food and Beverage analyst, Peter, thanks for joining us.

So the note here, Peter says, you say the gap in the cost of food at home versus food away from home is now at an all time high.

Just walk us through that trend.

Peter.

What, what are you seeing?

And, and what explains that?

Yeah, thanks.

Thanks Josh and Julian.

Good to be with both of you.

Look, I think uh what we’re seeing in in the data is that, you know, the cost of food away from home.

I I it typically is always rising.

And so to, to say that on an absolute basis, you know, the cost of of eating away from home is at an all time high.

Maybe isn’t the more relevant topic.

And, and the note, you know, the numbers we’ve laid out in the report, uh emphasize that it’s about $10 more expensive to eat away from home in a, in a quick service or in a, in a fast food setting and about 25 $26 more in a, in a more kind of sit down environment per person.

I think what’s more interesting though that we pointed out is that the relative gap.

So on a, on a percentage basis is at an all time high.

And again, in that, you know, food, food uh quick service channel, it’s, it’s almost four times more expensive and in the sit down channel about 6.5 times.

So that’s the more alarming piece that kind of we’re calling out here.

Now, what’s interesting, Josh, that kind of you you mentioned is uh we’re starting to see a lot more promotional activity come out of the restaurants as a response.

And my colleague, Sarah San is our, you know, restaurants analyst.

I can definitely let her, you know, speak to those trends more, more fervently, but it’s, it’s notable that just given where the food companies are and they sell into all channels, kind of some of the trends that they’re witnessing.

Well, what’s interesting to me is that you also point out even as we see this price gap widen that the food away from home stomach share as you call it or share of stomach has still been increasing and, and you know, everywhere we go right now for the past month, especially we’ve seen an increasing drumbeat of concerns over price sensitivity, over consumer spending.

Right.

And yet you see people eating out more.

What is that about?

Yeah, Julie II, I think it’s a, it’s a big question and, and certainly something we even debate internally here around, um, just the status of, you know, the lower income consumer and how that consumer is, is faring, particularly in that at home channel.

Why are they not able to or, or not purchasing nearly as much while as you know, the upper income consumer seems to still be doing ok. And they’re driving probably more of that um away from home spend at this point.

I think it’s particularly interesting and, and we’re gonna see here, we have a couple of of the off calendar, uh food companies reporting in the next few days.

Uh We’ve already gotten some commentary out of General Mills and out of Hormel that they’re starting to see a need to kind of pick up promotional activity more.

So in the at home channel, we’re gonna hear from Campbell’s and Smuckers this week as well.

And I’d expect that to be kind of more of the case.

A and Peter, another name I wanna get your take on.

I know you’re bullish on is Lamb Weston French fries, Peter, right?

Which is interesting because I remember, um you know, when they last reported Peter, I remember we talked about this on the show and, and they reported Peter and they just got nailed, walk us through what happened at that point, Peter and why you’re confident they’ve moved, moved past it.

Sure.

So look, II I think a few things, right?

You, you had the instance where the company was implementing a new enterprise resource planning system effectively across their entire North America network.

Um had some hiccups that, that went along with that and, and you know, had a volume disappointment in the quarter as a result, volume disappointments in, in food companies are being punished pretty dramatically at, at, at this rate.

And so I think that was a big driver of what we saw kind of coming out out of out of the quarter.

On top of that, you know, Lamb Weston was kind of the first ones to, to call out the softening environment that we’ve been seeing in restaurants.

Uh They reported it about a month before you started hearing out of um again, some of the restaurant names, whether it be ad or a mcdonald’s.

And so what I think we’ve seen as a response from, from that point is again, this promotional activity that is picked up.

And what’s important in that Josh is that fries are being included in the bundles, fries are being included in the bundles at these various fast food places in order to, to uh have sort of value meals, so to speak.

I mean, what does this all say about pricing power or lack thereof of the food companies right now?

It, it’s, it’s a great question, Julie.

I mean, if, if you go back, um, and, and this is something we’ve looked at, you haven’t had this level of pricing, um, over a cumulative kind of three year period in the US since like the 19 seventies.

Um, and, and that’s really been, you know, the only historical example that we can really point to where you took this much pricing in a short amount of time.

Um I, I think, you know, typically we would think about a low single digit type price environment each year.

We obviously saw north of 25% from the food companies between kind of 2021.

Uh and today.

And so look, I, I think there’s probably a breather that all these companies need to take from a pricing standpoint, potentially even some rollback on pricing uh here in the next, you know, call it 6 to 12 months.

Another name I want your take on Peter Utz brands, uh potato chips, correct me if I’m wrong, Peter.

But didn’t you have a buy on that one as well?

That’s right, Josh, we upgraded us back in March to buy.

Was that, is that in part Peter?

Um Why we do that thesis in part is that because you see them as a as an acquisition target?

So that’s not our primary uh rationale there Josh.

But really what we see is as a distribution opportunity.

So they have relatively low market share.

They think about them more as a regional brand that kind of started in the Mid Atlantic.

They’re starting to gain distribution nationally.

So that’s not only uh throughout the southeast where they’ve had new wins with Publix, but some bigger pushes even into uh into the west coast.

What’s interesting is we think UTS has really been a share gainer at the expense of some of the other salty stack companies particularly given.

They have called it a 15 to 20% price discount on shelf relative to some of the peers.

And so is there anybody else that kind of stands out to you that’s gonna be able to benefit in this environment?

Yeah, it’s, it’s been challenging for a lot of the food companies again.

I, I think um as we thought about, you know, lapping some of the, the downturn in in snap allotments or the supplemental nutrition allotments that there would be sort of a tailwind that would lift up a lot of these companies as we got through April and May, we haven’t really seen that come through in the data yet.

One name that we’re still um positive on and feel good as we get into the back half is, is mccormick.

Um We like that they’ve kind of gone through uh the, the iteration of solving some of the price gaps.

They have relative to private label and some of the new innovation and distribution opportunities that they have in the second half, particularly as we get through kind of the summer grilling season.

Peter.

Thanks a lot.

Appreciate it.

Thank you.

Coming up.

Happy first training day of June to all who celebrate, we’re taking a look at what’s in store for the market in the month ahead and how to play it in your portfolio.

Stay with us over the weekend.

OPEC Plus agreeing to extend most of its production cuts into 2025 in a move to support oil prices here with what else we heard from OPEC is ines fare in as a big meeting over the weekend.

Yeah, big meeting over the weekend and we didn’t really see the full impact on the oil markets until this morning when you saw WT I and Brent go down more than 3%.

And part of this is because of the details of that plan with their output cuts extending into 2025 because there are some voluntary additional cuts within that plan.

Those will be phased out in the next 12 months starting in October.

And analysts told me that the markets really had anticipated that those cuts would be extended through the end of the year.

So you have that 2.2 million barrel a day cuts that are voluntary additional cuts, those are going to be started to be phased out on a monthly basis later this year.

That’s part of the reason why you saw that heavy selling.

There were also some technical trades that were all creating pressure on oil prices and simply traders that weren’t buying the debt.

Now, if we take a look at our Wi Fi interactive, I just want to show you where we’re at with oil prices year to date.

We are seeing that wt I is up about 5% up about 13% from its April peak Brent crude also down more than 13% from its April.

April peak and year to date up 3%.

As far as what this is doing to gasoline prices.

This is sending gasoline prices lower.

We have seen wholesale prices go lower.

So we had had some predictions that we would see a decline in these gasoline prices.

But take a look there.

You’re looking at the average on a national level at 353.

That’s down from 367 a month ago and it’s actually down more than five cents from a week ago.

That’s the biggest weekly drop for 2024 that we have seen with gasoline prices guys.

All right, thank you.

Appreciate it.

All.

Major averages notching a six positive month in the last seven after closing out May with monthly gains and records, the S and P and NASDAQ boast posting their best performances since 2003.

The dow sides best May since 2020 as investors kick off the new training.

We’re looking at how to navigate the big picture with the Yahoo finance playbook, Michael Sayers Rockland, Trust Vice president and portfolio manager along with Jason Barcena President and co-founder of Halo investing.

Joining us now, guys, it is good both to see you both here, Jason, I’ll start with you.

So, uh li listen, we’re kicking off June.

I know, I know Jason, some strategists think could get kind of bumpy here in the New York term.

But let’s get your take, Jason, what do you make of this market where we are?

And where do you think we’re headed?

Yeah, I think now that earnings are, are over, ultimately, the market’s gonna be focused on the economics, right?

And you’re starting to see that in volatility, both Friday and today and, and clearly the last day of the trading uh month and the first day of the trading month, don’t tell a lot, but I think investors should brace for volatility as we look to the summer.

That seems to be kind of the conventional wisdom right now, Michael, that we’re gonna get this volatility coming.

Do you think that’s that the volatility is justified or do you think some of the recent pessimism that seems to be creeping into the market recently is justified?

Uh Yes, and thanks for having me, Julie.

Um Yeah, I, I’ve seen uh some headlines too about a little bit of liquidity withdrawal in the month of June um, and even though some people say, you know, sell in May and go away, I think, you know, the seasonal tail winds typically actually go through, um, July.

So I’m not really too concerned about the summer.

Um, or even through the end of the year, I think the economy has enough underlying momentum and there’s a lot of fiscal support from all the government uh, spending so that we can make it through the end of the year without a significant deterioration in the economy.

Jason, let’s get to some areas you like right now.

One is utilities, how, how come, uh, Jason walk us through?

Why, why you see opportunity there?

Is that more defensive or, or is it kind of a mix of defensive, defensive and offense and that you’re seeing as kind of a way to play that mega trend of a I, it’s a great question, Josh, and it’s a mix of defense and offense, right?

My favorite type of playbook and ultimately with utilities, if the economy continues to soften as we saw in some of the numbers last week and of course, this morning with PM I, you know, the utilities can be a great defensive play within portfolios.

They’re high dividend yielders, those should look more attractive if the Fed, in fact cuts interest rates this year.

And, and who knows my call is for one cut, uh, for, uh, for the fed this year.

But I think it’s about a global macro play, really talking about the offensive.

There’s such a strain on our grid system thanks to obviously the A I boom, uh evs and ultimately just a robust economy.

So I think utilities can be defensive within the portfolio, but also play that offense despite the rally we’ve already seen in the sector.

And Michael, um I, I would call the, the PICS that you sent to us defensive e maybe or, you know, they’re not necessarily big growth stocks, right?

So let’s take, uh I’m gonna look at Honeywell for a minute here um because, you know, an industrial has some cyclical characteristics, but how are you viewing it and where does it fit into your strategy?

Yeah, absolutely.

So, Honeywell is a high quality industrial conglomerate uh although more recently has announced plans to refocus um and, and it reorganized its business segments.

Uh uh And so, you know, kind of looking forward Honeywell is very well positioned uh to benefit from the industrial uh renaissance that we’re kind of seeing in the USA lot of the supply chains being moved back onshore.

Uh So that’s a nice tail one for them for their building automation, industrial automation uh and also the, their renewables um segment.

And uh just in terms of them trying to play A I a little bit, they recently came out uh with forge uh and roll that out.

So right now that’s just available to their uh indus uh building automation uh segment customers.

Uh but that’s a cloud based software platform that’s uh tailored to deliver uh customer specific uh A I data insights.

Uh And so that’s early days for that, but it’s something that could be uh rolled out to uh the other customers.

Uh and the other segments o over time, it would be a nice tail end for earnings.

And Jason back to you another sector.

I want your thoughts on you like financials here.

It sounds like uh Jason in part that’s you know, higher for a longer backdrop.

Also though you seem to suggest here, Jason, you think this is another sector sector that benefits from the A I roll out.

I do.

I mean, you’ve heard Jamie Dimond talk about this at length, right?

There’s over 400 applications uh you know, within JP Morgan via A I and, and ultimately, as, as Michael pointed out, right?

We’re in this industrial renaissance of of A I now with financials, Josh, you have to pick your spots, right?

Not every financial is created equal.

I really think that the mega banks uh as I say, the too big to save banks are well positioned here because the smaller banks still have a lot of CRE exposure, commercial real estate exposure on their books.

And that makes me a little bit nervous.

But ultimately, what we’re seeing, at least with our advisor, clients at Halo is we’re seeing people being defensive, they wanna play offense with protection and you have to pick your spots and by doing that with derivative based products and protection, I think is the prudent way to do it heading into the summer.

So what do you mean by that?

Exactly.

Yeah, it’s a great question.

So ultimately, just as you wouldn’t drive a car without insurance, you should invest without insurance.

So we’re seeing record volumes with advisors, buying structured notes that are linked to major indices like the S and P 500 Europe is really popular right now.

Japan is really popular and they want to go along the index, but they want to go along with a level of downside protection, not just in case they, you know, macro thesis of uh us equities or international equities wrong.

But if one of these macro variables rears its ugly head.

You have a multitude of elections including one in this country coming up, you have the fed where we have no clue of what’s gonna happen this year.

I have my own views, but barons doesn’t think they’re going to cut allegedly after their post this week.

And so you have a lot of macro boogeymen out there.

But ultimately, our clients still find a lot of attractive valuations in the market.

They just want to dip in with protection in case, you know, ultimately the market pulls back, Michael back to you.

Uh Another name, I want your thoughts on you.

You say telling viewers, you think A PD is a buy.

How come?

Sure.

So uh air products, they’re uh industrial uh gas uh supplier.

It’s an ob Ballo in industry and there’s only a few players around the globe and uh one of their biggest competitors is Lindy.

Now, Lindy over time is executed a lot better than air products.

So they tend to get a premium uh and air products has a little hair on it right now because they’re embarking on some very large projects that they haven’t done before, like uh green hydrogen products that really plays to the to the renewables um angle.

So there’s some concern there that they won’t be able to execute on time or on budget with those projects.

But ultimately, we think those concerns are overblown.

Uh And that uh right now uh air products is trading at a very attractive multiple uh relative to its history relative to the sector and also relative to Lindy and Jason.

I also wanna get your take on uh small caps.

Now, we’ve been talking to some folks for a while now that like small caps and they just haven’t really delivered, I guess in part because we have not gotten the rate cuts that people were initially looking for.

Do we need them to happen for small caps to catch up?

You do.

And I think it goes back to the point of why people are investing with protection is sometimes they’re early and if you’re early, you’re wrong.

And yeah, just as you pointed out, Julie and people have been bullish on small caps for the last two years.

When you look from a valuation perspective, they look quite attractive.

There’s a lot of reports out there that say that they’re 20% undervalued historically to large caps.

And I think that if you start to see a pullback or a rotation out of those, you know, mega cap, um you know, the magnificent seven companies you could see that capital allocated to small caps because of lower interest rates and and obviously small caps would benefit from that.

But small caps also benefit from a strong dollar which we’re still seeing and I continue to believe we’ll see and they benefit from a strong economy.

So it’s not just lower interest rates, although that will certainly be a tailwind for uh for the sector as well guys.

Thanks a lot, really appreciate it.

Michael and Jason have a great one.

Thank you for having us.

Nice having you.

Well, the meme stock trade has been back in focus and now the Wall Street Journal is reporting that E trade is considering taking Keith Gill off his uh off the platform, the uh trader known as deep effing value.

I think we can, we can call him here.

Um Who of course, as we’ve been talking about had posted uh or someone purporting to be him.

We haven’t confirmed it is him has purported to show a rather large business, 5 million shares including some options, trades in gamestop.

And apparently according to the journal, there has been this debate going on internally at Morgan Stanley which owns e trade about concerns as the securities and exchange commission.

Also, according to this story is looking into his options trade and because people follow him is this considered market manipulation.

You asked Chris Murphy about this earlier.

So there’s that concern.

On the one hand, on the other hand, there’s a concern of what happens reputation, what happens with his so called meme army if they do take him off the platform.

So they’ve been trying to sort of weigh those various elements.

Yeah, he does.

I mean to your point, I mean, listen, we’ve talked, he, he is a focal point of a lot of discussion.

Millions of people watch uh Mr Gill closely.

They monitor him, they follow him followers on X.

He just on that platform.

He has more than more than a million it sounds like.

Um according again, according to the journal Julie that the debate about him kind of as a client inside Morgan Stanley, they started kind of talking about this.

According the journal a few weeks ago, no decision has been made.

Um And obviously the firm decide to take no action at all but worth monitoring indeed, as we continue to monitor this story.

And uh as you mentioned, 1.4 million followers on X alone, his last post and uno card while we’re wrapping up today’s market domination.

Don’t go anywhere.

We’ll continue following all the action after the closing bell.

Stay tuned for market domination over time.