April JOLTS data, Ford sales, E-Trade considers ban: Catalysts

The US Bureau of Labor Statistics' JOLTS data (Job Openings and Labor Turnover Survey) for April fell below forecasts, posting a print of 8.06 million for the month. In this episode of Catalysts, Brad Smith and Madison Mills are joined by Citi Economist Veronica Clark and Sanctuary Wealth Chief Investment Strategist Mary Ann Bartels to review what the latest JOLTS print indicates about the US economy.

As GameStop (GME) shares settle back down, trading platform E-Trade is reportedly considering banning retail trader Keith Gill — who goes by "Roaring Kitty" on social media — on claims of supposed market manipulation around the meme stock. Wall Street Journal Reporter AnnaMaria Andriotis, the journalist who originally broke the story, sits down with Yahoo Finance.

ABB (ABBNY, ABBN.SW) Chairman Peter Voser shares his thoughts on the rate of growth in EV charging infrastructure and whether more private sector investments need to flow into the space to allow it to flourish.

This post was written by Luke Carberry Mogan.

Video transcript

10 a.m. here in New York City.

I'm Madison Mills alongside Brad Smith.

We're going to dive into the catalyst moving markets today.

That's right.

Bad news is bad news for markets.

Once again as the hopes that weak data means more rate cuts are replaced by a fear of sharp economic downturn.

Here, stocks are mixed as the latest labor market data jolts crosses the wires right now.

We got the latest for you on that in just a moment and Intel attempting to throw that in the rain and the A I chip Wars semiconductor company announcing new artificial intelligence trips for data centers as it attempts to rival leaders like in video and A MD.

A little bit of a leader there.

We're going to discuss the global winners and losers in the chip space moving forward and the meme stock superstar, Keith Gill, also known as roaring kitty is accused of market manipulation after a social media post from an account linked to him sparked a surge in the gamestop shares.

Each trade is considering kicking off the platform.

This is according to the Wall Street Journal will dive into what this could mean for the stock and investors and we have breaking news coming up on our show here with labor market data jolts job openings, labor turnover survey coming out for April coming in at 8.06 million versus the 8.35 million that was expected.

So that is a myth that is potentially going to be good news for the market and taking a look at the overall survey.

We're seen several different factors coming in below estimates here.

The April job opening rate coming in at 4.8% versus five.

This is a percentage of the total employment plus openings that you're looking at there.

Also the pace of hiring critical to watch coming in just in line here at 3.6% versus 3.6% of the prior month.

A lot of guests telling us that the pace of hiring is very critical to watch.

So interesting to see that coming just in line, we see the stock market coming kind of pairing some of its earlier losses, the S and P nearing that flat line.

So this could be an indication that the jolts data coming in below estimates kind of across the board is looking good for markets.

Also quickly want to mention layoffs.

We're seeing 1.5 million people fired or laid off in April previous year.

It was 1.6 million.

So seeing a little bit of a decline in the number of people laid off but overall that headline number coming in below estimates Brad, I'm focusing on some of the areas where we did see job openings change.

The biggest decreases in health care and social assistance down to 104,000 and then in state and local government education as well by 59,000.

However, you did see a little bit of a rise in private educational services that was up by about 50,000.

As you mentioned that rate for job openings a little changed 4.8% the number of hires as well within this report, the rates there a little change it held at 3.6% and increased in durable goods, manufacturing.

And ultimately, you did see some decreases though that and arts education and recreation.

That was down 45,000 and federal government jobs down 8000.

Yeah, it's interesting Brad because it really paints this picture of a potential goldilocks scenario.

But the big question for markets is whether or not we're going to see things tip into too much softness, right?

So that's going to be my big question moving forward in our show today.

Are we seeing too much softness?

That could be a catalyst for negative growth moving forward.

Also interesting quit rates coming in steady at 2.2%.

We've seen it there for the last four months.

The layoff rate still low at 1% that lay off rate indicating to me that maybe we are in this kind of immaculate scenario where we're seeing just enough softness to keep the fed happy, but not too much softness so that we're seeing an economic downturn.

So definitely interesting to continue to follow here, job openings.

The first of several looks we're getting at the labor market this week and the state of the jobs market, obviously a huge calls for the Fed.

But some economists saying we need to see a bit more moderate in the labor market before the FO MC can begin to cut rates.

So what is this data?

Tell us about the path forward here to discuss?

We got Veronica Clark City economist.

We also have Marian Bartels Sanctuaries Chief Investment strategist with us Veronica.

I want to start with you just talk to me about these Js numbers, markets coming off their lows in response but not seen too much upside activity in terms of the economic picture.

How critical is this data in your overall thesis?

Yeah, I mean, I think this is a pretty important data set, but it's, it's kind of painting a similar picture to what we've seen in the last few months where we know that demand for, for labor is definitely coming down.

You see that very obviously in the overall job openings number declining um but also in a very low hiring rate.

Um That's a really important detail of this jolts data.

Um We definitely see that, you know, hiring is is pulling back.

It's, it's still a favorable sign that that layoffs are still low, but that would really be the last step of a weakening labor market.

And we definitely see signs that businesses are looking to cut labor costs by not hiring.

And Mary Anne, I want to get your read in on this as well as what the fed is going to be looking for in the economic data coming in the form of the employment situation later on this week.

And then additionally, a little bit more of a read on the labor situation and employment and labor market more broadly as we get even readings like this is as far back looking as they may be for jolts, we get a little bit more active with the AD P and, and brought more in line with the jobs report later on this week too.

What's the fed going to be looking for?

So I think the FED is looking at a broad set of economic data, of course, they're looking at jobs that's very critical.

They're looking at inflation measures.

Yesterday, we had the ISM manufacturing and that dip below 50 a little bit of softness prices came down.

But the employment number in there actually was a little bit stronger.

So now, now we get um the jolts and we're getting some softness.

So you're seeing some data that's very normal.

But I really think the fed is still very focused on inflation and I do think inflation can continue to come down and we're still forecasting that the FED should be able to cut rates by 25 basis points in September.

And again, that's as long as the data is supportive, we do think that they'll cut rates and we think that's supportive of the bond market and the equity market.

Well, I, I want to talk to you both actually about the big our elephant in the room of a potential recession, Veronica starting with you.

You know, it's, it's so fascinating how quickly things change, right?

Because just a couple of weeks ago, we had PM I breaking out the economy was too hot.

Now all of a sudden the economy potentially too cold.

People freaking out about the Atlanta fed GDP numbers.

Are you seeing any evidence in the data about a potential recession?

And if so, what are you looking at?

Yeah.

No, we, we absolutely do.

That's actually still in our, our base case that we're gonna see just further weakening in the labor market, further weakening in, in activity and spending.

Um You've already seen signs that, you know, in the first quarter of this year and in April, um consumption is really starting to, to slow down.

Um We had those revisions lower to consumption in Q one last week.

Um residential investment which was a really big support for, for Q one GDP growth that is now turning, you've seen housing, you know, turning again construction falling, you know, home sales falling.

Um And to us, it does look like, you know, this is a weakening labor market on the brink of an even weaker labor market even further, you know, job loss that we're, we're gonna get in the coming months.

So a little bit of pessimism from you there, Veronica.

But Mary Anne, I mean, we're still near all time highs, right?

We're coming off of them, but we're still in this bull market.

So where are you on the kind of recession to no recession scale?

So I use anecdotal evidence.

I'm not officially an economist and I'm sure if you've been out at restaurants, uh they're completely packed and not just on the weekends, I've been flying the past two months, every flight I've been on is being completely packed.

The consumer is still spending however selectively.

And I think as long as the consumer is spending, I think, don't, I don't see a recession uh considering the consumer such a uh an important component of the economy.

But when it comes to the stock market, its earnings, earnings, earnings and the seasonality of estimates normally start coming down.

And what we're actually seeing is the opposite.

Analysts are taking their numbers up.

And with the strong earnings backdrop, we're still very bullish.

We never said sell in May and go away.

We actually said buy in May but sell by Labor Day looking for that seasonality correction around September and October but we're still pretty bullish.

We're still looking for 50,000, 658 100 on the S and P. So we think, you know, there's clear sailing for the markets from here.

Yeah, it's really interesting.

It's a great point, Mary Anne and Veronica.

I'd love to get the economist perspective from you because based on some facts that data during the months of April and May, analysts actually did increase EPS estimates and aggregate for the second quarter.

What does that tell you about the strength of the consumer right now?

Yeah, I'm not an equity strategist by, by any means.

Um We, we, we listen to, you know, earnings calls and it did seem like consumers, you know, had a bit of a pullback even consumer equities.

Um and the earnings that we've heard over the last couple weeks and we definitely see that in the, the hard data, I mean, it's been, you know, three of the last four months where real good spending has declined.

Um, restaurant spending in real terms has declined for of the last five months.

Um So I do think we're, we're seeing a pullback in this more discretionary type of, of expenditure.

Um, you know, delinquency rates on credit cards that have well surpassed 2019 levels.

Um It is, it is favorable that, you know, unemployment is, is still low.

But as people become more worried about employment prospects and we see that in some survey data and we see that in the low quit rate in this data, if spending pulls back even more, that does create, you know, an even bigger pull back for these consumer, you know, businesses.

Yeah, maybe that's telling us dollar tree will be the most important report of this week here.

Veronica Clark and Mary Ann Bartels.

Veronica is a city economist, Mary Ann Bartels sanctuary chief investment strategist.

Thank you both for taking the time here with us today.

Certainly.

Well, Intel is the latest chip maker to announce new artificial intelligence chips for data centers.

Intel is currently lagging behind the other big us names in the space, NVIDIA and A MD.

And when you take a look at the global semiconductor industry picture who is winning and who is losing this chip war.

Big question in our very own Akiko Fujita here with some answers and insight.

Hey Akiko, good morning to you Brad.

You know, you talk about the A I picture here, tough to argue with anybody uh being a big winner except NVIDIA so far, when you consider the sheer scale of what they've been able to accomplish.

You talk about data center revenue alone, the category that's seen the biggest bump from the A I boom rose 427% from a year ago in its most recent quarter.

But as you noted, we've seen those competitors making aggressive inroads at Computex over in Taiwan.

You heard from A MD announcing their own next generation A I chips for laptops company vowing to announce a new A I chip every year that came after NVIDIA Jensen Huang made the same vow the previous day.

Moving forward though the stat points to the battle that is playing out globally, private sector investment.

The chip space is expected to top $2 trillion over the next eight years.

That's according to data from BC G and the Semiconductor Industry Association, you compare that to $720 billion in the last 10 years.

So that's a big bump here and the biggest investments have been coming through from three key regions.

We're talking about the US, South Korea and Taiwan.

Uh Much of those investments certainly have been accelerated as a result of the Chips Act in the US, as we've noted before, that has spurred a global race for subsidies with Europe and other regions trying to match the funding that the US is providing to establish a home grown manufacturing hub and wrestle market share away from the global leader which has been Taiwan.

All the players in this space are chasing a roughly $1 trillion opportunity.

That is what the global semiconductor revenue is expected to top in the next decade according to consulting firm international business strategies.

But it's important to remember that this isn't all about A I.

Well, that gets all of the attention, the foundational chips, those that are used in cars, smartphones, even military equipment that still makes up a bulk of this market.

So we're talking about legacy chips that are 28 nanometers or larger.

And guys, when you think about that the chip designers like NVIDIA get all of the attention, but this is an industry that is still very much built on manufacturing TS MC.

The big name we talk about, we're talking about chip making or chip equipment makers like a SML.

The list goes on so very diversified market, even though Invidia A MD and Intel get all the attention, right.

It's a really good point and I know that you've been following the space closely, a lot of different names that could potentially take up a little bit of that market share from the big dog in the room.

Thank you so much for joining us, really appreciate it.

Now, coming up here, Ford sales are out, we're going to dive into what they signal about the auto industry coming up after this break, Ford is out with its may sales numbers that outpaced the industry expanding by 11.2% on new vehicle offerings.

Ford saw games coming from its portfolio of hybrids trucks and s now Ceo Jim Farley, stressing the importance of its variety of vehicle offerings in an interview with Yahoo Finances, executive editor Brian.

So here's what you have to say.

It's pretty clear to us what the next 5 to 10 years look like.

You know, we're not, it's not gonna be a future.

That's only evs, it'll be a mixed power train of ere P HS hybrids, pure ice.

If you're towing something and electrics and electrics will be a big part of the industry, but not the only part of the industry.

Um, we're gonna have a lot of software in our lives.

So for more on Ford's sales numbers, we're gonna be joined by Yahoo Finance's Pros Subramani and Pros.

Always great to speak with you.

Talk to me about what's going on with Ford in terms of the sales numbers and the impact on the stock because we are seeing it still moving to the downside, which could just be the overall market vibe today.

But this is kind of a big beat when it comes to their sales rising for vehicles by over 11%.

Right.

Yeah, I don't think the stock price move today is connected to this to this sales number.

I think the sales number is pretty surprising, pretty big month here.

The sales booming, like you said, 11% in May you be up 6% month over month.

Uh Ford also claiming it's getting market share in the US with these numbers and what's happening here.

It's of course, those hybrid sales that Barley alluded to Maverick hybrid up 100 and 11%.

The F 150 hybrid, the all new one up, 51% come after Ford, sort of leans in more on hybrids, pushes back a bit on those evs, those EV sales by the way are up big two totalling around 9000 evs not much but up 65% compared to a year ago.

The problem is those evs are losing money, but nonetheless, it is an overall big month for Ford.

All right, pros, we're gonna have to leave it there, but thank you so much for joining us.

We gotta get to some of our other trending tickers here shares of flutter moving higher after Oppenheimer Oppenheimer initiating coverage of the company with an outperform rating.

The analysts saying that Flutter is outpacing competitors at merchandizing pricing and innovating parlay products.

Yahoo Finance senior reporter Alexandra Canal has more on this story.

Now, ali this is one of the kind of online gambling services in the space.

Talk to me about what exactly this news means for flutter moving forward.

Yeah.

Flutter is a parent company of fan and even anecdotally, this is one of the top platforms.

If you are a sports better, if you are a gamer in any sense and you want to go and place your bets, you're probably going to fan as one of those options.

Now, according to this Oppenheimer Note, they say that flutter provides players the most pre built selections with seamless be building experience and we have seen a flutter no attended a positive sentiment across Wall Street in recent weeks when it comes to this company, Jeffries reiterated their by reading last week J PM reiterated its overweight rating.

We also saw a price target raise and by from Deutsche Bank.

And at the end of May, we did see flutter complete its move a primary listing of shares from London to New York.

They also recently moved their operational headquarters to New York switched up the CFO as a result of that CEO Peter Jackson said both the primary listing move as well as that HQ move represented basically the confidence that they have in the US.

Betting industry continues to be one of the most profitable areas for the company, especially as we've seen a surge of legalized sports betting in more than 20 states.

Now, I will say that there's still some potential risks here moving forward.

I mean, Illinois Senate, they passed a bill which will raise taxes on sports betting operators.

And it's interesting to the tax rates to some of those other states because New York has a 51% flat rate for those operators.

P A has a 36% rate.

But in Illinois, they're proposing a rate that would depend on the revenues that you generate.

So the more money that you make, the more you'd have to pay.

So that's a potential risk moving forward for not just float but really all of these companies, right?

The tax implications are huge for a lot of these online betting companies.

And I know you follow all of those differences closely for us.

So thanks so much for joining us.

We really appreciate it.

Now, moving on to gamestop, of course, e trade considering removing name stock leader Keith Gill from their platform after growing concern about potential stock manipulation around the recent gamestop purchases that is according to reporting from the Wall Street Journal.

For more on this story, we're going to bring in the reporter who broke.

We have Anna Maria, Andre Otis, Anna Maria.

Thank you so much for being here with us.

I mean, start with just what happened here, right?

Talk to me about what trading behavior your sources within Morgan Stanley noticed that indicated to them that this could be a sign of potential behavior that would be worth banning someone over.

Um great to be speaking with you.

So the concerns began about three weeks ago.

This was following um uh the ex post um on May 12th, uh from the account that associated with Keith Gill where it showed him leaning in and sitting on a chair leaning in.

Um, and the following day, uh people working at Morgan Stanley looked into his e trade account, um and saw that he had made a large uh purchase of gamestop options uh before that tweet had gone out.

Um So, uh what followed were conversations that have been ongoing um around what followed were conversations that were, that were ongoing around.

Um Well, is what he's, is, is what's playing out here.

Ok.

Specifically is what's playing out that like he, he, he bought, he bought these, he bought these options.

Um And then this tweet went out.

And what kind of impact that had on the stop?

Is this manipulation or not?

And should we be hosting him um on the platform?

Um What happens if we remove him from the platform?

Um And so around that there, there's basically been several layers of questions here and concerns.

Yeah, I I recognize that from your reporting here and I know that obviously you cover Morgan Stanley.

So you have a lot of sources within the firm that you were able to speak with as part of your reporting and, and ability to break this news.

Talk to me about what your sources within the firm though are saying who might be flagging, this could be a bad move when it comes to Etrade in terms of the impact it could have on other customers.

What are they saying to you?

Well, that's part of the, the, the discussion internally which is um what happens if we do remove him from the Etrade platform?

What happens if he goes public?

Um Might we risk a, a bunch of his followers um who are, who have e trade accounts, ditching e trade.

So there's several layers to this, right?

There's concerns around is what he's doing manipulation um which started a few weeks ago, those concerns following the May 12th tweet.

Um In addition, there's what are the implications for e trade customers uh for each trade with regards to the customers that it might lose uh given the large um followers a large number of followers that he has.

Um So this isn't an easy calculation that's playing out internally and it does touch on some gray areas and it's an area kind of a gray area that regulators themselves are looking at.

Right.

We know that the SEC is looking at this behavior as well.

I'm just curious in terms of your history covering Morgan Stanley, how abnormal would it be for them to shutter an account like this one?

So Morgan ST like all brokerage brokerages, we talk about the etrade portion of it like all brokerages, um, has the right to shut down accounts for a variety of reasons that's stated in their policies in a, in a pretty clear way.

Um, in addition, um, what I learned as I was, um, uh, learning about all of these developments is that it's, um, pretty normal for them to review, um, accounts, um, on a somewhat routine basis, especially if, you know, they have some questions around what's going on and that's part of what played into, um, e trade employees looking into Keith Gill's account, um, after, um, uh, May 12th, May 13th.

Um, uh, to see, well, you know, there was a sudden surge in demand for game stock, um, uh, um, ga games stop stock.

What happened here?

Um, So brokerages in general have a pretty um wide ranging latitude in terms of what they can do with regards to keep or not keep clients accounts really interesting stuff, Anna Maria and congratulations on the scoop, really important news.

Of course, this week, as the stock continues to be on the move consistently.

Thank you so much for joining us.

That was Anna Maria Andreotta.

She's Wall Street Journal's Reporter joining us on the news about Rory Kitty.

Now coming up, Paramount's merger saga continuing.

We're gonna break down how we got here and what is to come after the break a big day here for Paramount after news of their potential merger seemingly coming to an end after they reportedly reached a deal.

But what does this mean for investors moving forward?

We have Robert Fishman, Mo Na and senior research analyst joining us.

I also joined by Yahoo and says Alexandra Canal for this interview, Robert, thank you so much for being here.

I mean, there's no shortage of news from Paramount this morning, right?

We're hearing news about job cuts, streaming opportunities.

Also this potential merger.

What sticks out to you as the most important piece for investors to be watching?

Well, I guess the obvious answer is what does Sherry decide about the future of the company, given the proposed um new updated terms that, that are on the table with the Sky Dance's bid.

So then Robert, you know what we heard this morning?

From the shareholder meeting.

Mad.

He was just mentioning it.

We have $500 million in cost savings, a potential streaming joint venture down the line.

Do any of those initiatives excite you or is it all a mute point depending on what happens with this deal?

Yeah, I mean, I'd say it's a very confusing time and an awkward time probably to, to be having this annual meeting today given the uncertainty about the future of the company.

Um and how real this plan is and, and whether we'll actually see it, I think to your point because we, we don't know uh how long this is actually gonna gonna take place and and what the the real future of the company is gonna be if Sherry ends up deciding to uh go forward with the, with the Sky Dance deal as early as the next couple of days.

So, um it's unclear as far as where this plan is actually gonna be implemented and how much this uh future plan might be different as part of a new, new leadership and there's a town hall with employees that's set for tomorrow.

Do you expect a lot of the same in terms of what the plan is and the strategy go forward, move that we heard from management today on the earnings call on the um annual shareholder meeting to take place at that town hall tomorrow.

Yeah, I mean, again by tomorrow for all that we know um it's possible that, that there's a deal in place already.

So it, it, it should be known within the next few days I think is, is what the reporting suggests, whether Sherry wants to go forward or not.

But this alternative scenario with the office of the CEO and the updated plan that that was laid out today would, would be the marching orders if Sherry decides not to go forward with Sky Dance for whatever reason, if they do go forward though, how likely is it that some of the plan laid out today would still be in place moving forward?

Or should investors anticipate that what they talked about today would sort of be off the table and we'd get a completely new round of insights for the company moving forward if that goes through.

I mean, I'm sure some of it would be um at least considered as far as the the new plan for the company because clearly the company needs to be focused on additional cost cutting, given the pressures of the revenue and port cutting and even more so advertising recently as secular challenges for for the entire TV ecosystem continue to emerge and get worse over over the coming months and quarters.

So given the shift in landscape, of course, the company needs to be focused on cutting additional costs out of that system so that it can help offset the revenue pressures.

But the real question here is the future of streaming and, and what they decide to do with Paramount Plus and if uh they want to go forward with some sort of new JV type of partnership with Paramount Plus or look to keep Paramount Plus going and uh I guess try to license content in a different way than, than what they've been doing previously.

And Robert, let's talk about that Sweet and Sky Dance deal based on the latest reporting 8 billion in total equity.

We have a $15 premium for those non voting shareholders.

A cash injection of one point 5,000,000,002 billion for shari for her share of national amusements.

Do you a view view, this is more attractive to those non voting shareholders, especially because that was really the crux of the issue leading up to this week.

Well, I guess the, the question would be more attractive relative to what um and so relative to the, the prior reporting of, of the initial deal, I, I think the answer is clearly yes.

Um relative to other proposed deals out there, that that's, I guess a little bit less clear, but I think it does seem to be the case that this is the deal on the table right now.

And uh again, if the reporting is correct, the special committee is essentially um already approved it and, and now it's up to Sherry, whether she wants to move forward or not.

I know you don't have a crystal ball.

I know we don't know, ultimately what's going to happen.

But if this deal does not go forward, one, would you be surprised?

And two, does that mean we shouldn't expect any type of deal to happen this year?

And that paramount is just going to sit back and try to correct their problems internally.

Well, I think what, what you heard today is essentially the plan as if there is no deal going forward.

And, um, again, there, there's really only one person can, that can decide that as far as the crystal ball goes.

So ultimately, this is Sherry's choice and, and Sherry gets to decide, given her voting control of the company, uh and the future of the company and which direction she wants to go.

But as far as what the plan looks like without it, I think that that's what the initial vision that was laid out today.

And then we're going to be getting more details in the coming months if, if there is no deal.

But Robert to Ali's question, what percentage would you put on the likelihood of a deal going forward here?

The percentage question.

Um So I would say, uh you know, right now, it does seem more likely than not that, that uh the Sky Dance deal would go forward.

Um Again, that's all based on the, the public reporting and seemingly what Sherry wants to do as far as that, the taking the future of the company and putting it in someone else's hands that will not completely break up the company.

I think that they're probably going to be open to assets and, and explore different possibilities here.

But I do think um at least again, based on what has been publicly reported that Sherry is aligned with the Ellison vision and Sky dance vision in terms of what they want to do with the company.

All right, Robert, appreciate you playing ball with my percentage question there.

Thank you so much for joining us, Robert Fishman.

He is with Moffett Nathanson.

He's their senior research analyst and of course our very own Yahoo finances Alexander Canal as well.

Well, we are taking a poll on the future of electrification and automation.

I'm gonna be sitting down with Peter Boser.

He is a B BS chairman that is coming up right after the break.

So stick with us for more Microsoft announcing job cuts this week.

The tech giant, not the only one Google also reportedly cutting back on staff over 1000 people are expected to be impacted.

So why are these tech giants allegedly laying off workers despite strong balance sheets to break this down for us?

We got Yahoo Finance is very own, Dan Howley here with us.

Dan.

What's going on with the layoff news?

Yeah, Matty, some of the uh the layoffs from Microsoft have to do with its uh kind of mixed reality unit that really suffered heavy losses uh previously and now they, they seem to be kind of continuing to, to move folks out of that.

Uh, they're still continuing to offer their hollow lens too.

That's their mixed reality headset.

Uh, they have that, uh, contract with the government, so they're continuing to, to offer that.

But, uh, some of these layoffs have to do with, uh, the cloud unit, whether that's, uh, sales.

Uh, they say it's, uh, according to these reports about strategic alignment and ditto uh that for, for Google, which is also seeing layoffs in that unit.

Uh Basically saying this is all about uh strategic alignment.

Now, they are continuing to pump both companies continuing to pump billions of dollars into their cloud services as they build out their generative A I offerings and their ability to host generative A I capabilities.

So it's not as though they're pulling back on spending in those places, the cloud unit, it's just that they seem to be wanting to move money around to, to different opportunities.

And so that looks to be where, where they're at at this point.

Uh you know, both companies as well as obviously met at Amazon had huge layoffs in prior years as a result of over hiring from the pandemic.

Um It doesn't sound like this is uh uh something along those lines where they had simply too many employees and now they have to shed them because they didn't, you know, predict what would happen after the pandemic very well.

Uh this seems to be more of a, an uh just generalized issue where they're trying to kind of move bodies around and move money around uh to, to fill in gaps elsewhere.

All right, Dan, we're gonna have to leave it there, but appreciate you joining us as always on all things tech.

Thank you so much.

Now, manufacturing data out this week showed weakness in the month of May.

This is the second straight month of slowing manufacturing growth to break down.

What a CEO and executive in the space is seen in the automation and electrification manufacturing space.

We've got Peter Voser, he is a current chairman and he the former Shell CEO joining us here in studio, Peter.

Thank you so much for being here.

We really appreciate it.

Thanks for having me.

So I want to start on this data that we're seeing about some potential softness in the manufacturing space.

To what extent are you seeing that in your role at A BB?

What is that looking like for which is concentrating on electrification and automation?

We haven't seen that slowdown.

We have actually seen a pick up in the short cycle orders which normally is a good sign that the economy is actually doing much better than anticipated because that has been coming down for a few quarters.

So so far, I think we are still in the camp of its better than expected, but the second half will have some uncertainty.

So that's interesting given that the data has sort of looked worse in terms of that in the first half.

So we'll have to see in the second half.

But I, I wanna get to what you're seeing in the EV space while we have you, I know the majority of your revenue comes from building new energy systems.

And you've said that the whole electrification network when it comes to evs really needs to be up to speed.

Where do you anticipate that up to speed this coming from?

Do you anticipate the private sector coming in on infrastructure?

Do you think it'll be company driven at the public sector?

I think it has to be predominantly private and it has to start with the utilities actually providing us with the electricity.

That means the networks needs to be further developed the infrastructure and some of the acts there in the US do help if I stay with the US.

But then also on the more the charging infrastructure, in my opinion, that has to a privately led kind of drive.

We are a global leader on the charter itself, but we are not building the infrastructure for that, but this needs obviously more private money, it needs more investment because I think the electric vehicle side, the demand is there.

We see a little bit of a slowdown at the moment because subsidies are going out of the market.

But I think the long term change into the new energy system which is electrification is going to happen.

Therefore, we need urgently infrastructure investments and that will come from utilities and other new players going into that area.

When you hear about a Mercedes, a Stante pulling back on battery factories because of poor demand.

What read through does that have to your business?

Obviously, that could mean less charging for us.

But given that we have a backlog, I wouldn't see this as actually impacting us a lot because I think the infrastructure normally should be ahead of the usage of the technology.

So the cars itself over the last few years, this has been the other way around.

You saw a lot of cars coming in and then the electrify America's game in Europe, it's the ion, it's really the governments and the private sector now building the infrastructure.

And I think therefore this will happen.

I think we are selling a lot of charges at this stage in the industry, but there has been a slowdown.

There is no doubt about that, but the long term perspectives are exactly the same in my opinion.

Very positive.

I want to talk to you about China.

We've seen executives like Elon Musk going to China now saying that he favors no tariffs on Chinese EVs regarding the kind of tariff tit for tat that we might see bubbling up and kind of the tension worsening over that between the US and China.

What impact does that have for you and where would you say you lie on the tariffs conversation?

I think there are two answers to this for money in China.

Now, I have to tell you that never had global supply chains.

So we sell in a country what we produce in a country that's the same in the United States or in.

But in China it's around 85% in Europe, it's around 95% we produce and sell there.

Therefore, the tariffs for us are a little bit less relevant.

Now coming to the US, we had this situation also in between 2016 and 20 for example, where tariffs on steel actually were going up.

And as long as we can demonstrate that the steel cannot be produced, for example, in the United States, we normally got a favorable response of Washington that these tariffs were not hike that much because at the end, it will be the consumer in the US paying it.

So I think let's see how this will develop but tariffs on the imports of other countries for products you cannot produce in the country.

I think we need to find a different solution than just actually putting tariffs up because at the end, it will be the US consumer paying the bill for that as an executive that works really globally though I am curious what it's like for you to kind of walk the tight rope between the US and China.

How do you navigate those conversations when we do have this tense backdrop, I think as a company, you have the obligation to look at these risks.

And therefore we have a plan A B and C in China.

Should anything happen in Taiwan?

Should anything happen?

More on the tech war?

We do use different technologies in China for our local, for local business.

So we are not using, let's say Western technology.

So you have to adapt your system in order to actually be able to produce and sell.

We look at this from a macro perspective and then bring it down to micro where we can really manage the countries.

And yes, it's a concern on the one side, but on the other side, we are paid to also deal with obstacles in the road and that's what we are doing in terms of planning, risk management, etc I love that take, it's hard, but that's what we are paid for, right?

I want to get your take on one last saying here you're on the board at IB MA company that's really successfully navigated the transition to the A I boom, creating a fund for A I start ups, for example, what was it like in the room in terms of meeting with the board?

What single decision were you a part of that kind of laid the path for that A I transition and adoption at IBM to go so well.

I'm not the official spokesperson, but I give you an answer.

I think over the last few years under the management and the leadership of our wins, obviously IB a most positioned in a very different way starting with the major acquisition of Red Hat, which was a cornerstone in the strategy which we are using this spin off also of Kindred.

And with that, actually in the discussions in the board focused on new technologies and A I dominated the last few months.

I think in 23 years time, you will see that quantum will dominate the boardroom as well.

And I think IBM is A B to B business, it's not A B to C business.

And therefore, I think the tremendous opportunity which lies in the industries by using A I, I think IBM is well positioned to actually go in and get their fair market share of this one.

And I think that's not yet reflected in all the write ups I see on IBM because the B two B business comes after the B two C business, you're already having discussions about quantum.

Of course, we have because that's a long term strategic emphasis of IBM.

And I think uh it's, it's one we all look forward to.

All right, Peter.

Well, we're gonna have to have you joining us to discuss the future of quantum after this A I boom starts to wrap up.

Thank you for joining us.

Thank you for coming in the studio.

We really appreciate you for having me.

That was Peter Boer.

He is a B BS chairman and the former CEO of Shell as well.

We're gonna have all of your markets action ahead.

So stay tuned right here for more.

You're watching Catalysts.

Today's update on job openings could be a sign that the labor market starting to have a little bit of weakness here.

The data following a reading on activity in the manufacturing sector that did come in.

So the weaker than expected that some economists scaling back expectations for economic growth this year.

For more on this, we have our very own, Josh Shafer Josh, I know you cover this from the perspective of markets in particular, but also look at every single note that comes in so critically, I'm just curious what change you're seeing in terms of the reading and the tenor about the economy of course, but also markets.

Yes.

So when we started the year, we wrote a story back in, I think February of how the economists kept chasing the market higher, they were chasing the economy higher, the economy kept outperforming.

And so everyone was boosting their GDP targets for the year and that seems to have slowed a little bit really in the last month.

And that's largely because of data that we've seen.

I mean, if you remember the Q one GDP print that we had now at 1.3% there was expectations for that to be over 3% right?

So that was sort of the start.

And then from there, everything has come in just a little bit softer, right?

You look at retail sales for last month coming in flat.

Economists expected that to be a little bit better.

This manufacturing data, a lot of people thought we were gonna start to see a pick up in PM I.

So what you're looking at here is the Atlanta Feds GDP.

Now tool, this takes in data points as we go throughout the quarter to sort of extrapolate what GDP will.

That's now down below 2% for the second quarter.

Just a month ago, it was up over 4%.

So just seeing that line sort of tracking down is essentially what we're talking about here.

And Mattie, I think the important thing to highlight though is we're talking about the economy, maybe not outperforming.

That doesn't mean that people necessarily think it's going to underperform here.

There are not a lot of people bringing back the recession costs yet, we are not at that level.

You look at the job openings number today, uh a little over 8 million job openings.

Yes, it's the lowest level in three years.

But you still look at the ratio of that to unemployment and you're really sitting at kind of pre pandemic levels and you have a quits rate that's not moving lower, right?

You're at 2.2% for four straight months.

So the labor market still seems to be on relatively solid footing, which is why I think people still feel overall ok about the economy but not great.

Right.

They may feel meh, as you said earlier, but that doesn't necessarily mean we're heading towards a recession, which is a good reminder for me because I keep asking guests.

Well, now, are you starting to worry about the softness, you know, the GDP?

Now, figures tipping a little bit and to your point, maybe this is just what a soft landing looks like.

Maybe this is exactly what we've been wanting, what the fed has been for so long and, and when you sort of spin that forward and think about it from markets perspective, right?

So like when, if we were to have the economy continue at this pace, it sort of fits with a lot of strategist base case right now, which would be for the S and P 500 to finish at maybe 5500 or 5600 if we were to have seen GDP, keep out pacing and people feeling a lot more bullish on the economy.

That's when people say maybe 5,806,000 because you're starting to really out pace and that's just not quite where we're at, which is why I think it's been interesting to sort of watch the shift of, ok, maybe at some point, the consumer is gonna slow down a little bit and things are not gonna keep fully outperforming maybe we're not entering some type of new productivity regime.

Yada yada yada, but it's only, it's only been a month of data.

So I'm sure we'll change the narrative next month.

And of course, we've got our needs season coming up constantly, so we'll be able to monitor the consumer that as well.

Josh, thank you as always, really appreciate it coming up, wealth dedicated to all of your personal finance needs.

Our very own Brad Smith is going to have you right here for the next hour.

So stay tuned for more.