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July 4th travel, S&P 500 broadening: Asking for a Trend

On today's episode of Asking for a Trend, host Josh Lipton breaks down key trends and stories from Tuesday's trading day.

As Americans kick off their holiday weekend, AAA Travel senior vice president Paula Twidale breaks down what Americans can expect from July Fourth travel. Twidale explains that American airports are gearing up for a record 70.9 million people traveling for the holiday, revealing that the pent-up pandemic-era travel demand isn't over: "Consumers are not willing to give up the respite they deserve," she says. The Pacific Northwest, theme parks, and urban cities such as New York and Chicago are particularly popular domestic destinations, Twidale notes. However, she adds that international travel is equally high.

The S&P 500 (^GSPC) and Nasdaq (^IXIC) closed at record highs in Tuesday's session. Jared Blikre breaks down his three biggest takeaways from the trading day: Tesla shares closing above $200, market concentration topping the 1929 peak, and the dip in stock volatility.

Rising home prices and high mortgage rates are shutting out would-be US homebuyers. Angi co-founder Angie Hicks explains that Americans who would have thought about moving are now thinking about renovation. According to Angi's home spending reports, bathrooms are consistently in the top five renovation projects, while kitchens are in the top 10. Outdoor remodeling remains popular even in post-pandemic times, she adds.


Seana Smith joins the show to analyze a new Wells Fargo chart showing the potential rebalancing of earnings growth in the S&P 500 (^GSPC). Wells Fargo notes that earnings growth will broaden beyond the "Magnificent 7," while participation and profitability outside of tech and communication services will also broaden.

Finally, Apple (AAPL) has secured an observer role on OpenAI's board, according to a Bloomberg report. The seat will go to Phil Schiller, Apple's former marketing chief, who will be critical in providing Apple with key insight into OpenAI. Schiller will be allowed to attend board meetings but will not be able to vote or exercise any other director powers.

This post was written by Melanie Riehl

Video transcript

Hello and welcome to asking for a trend.

I'm Josh Lipton for the next half hour.

We're gonna be breaking down the trends of today.

That'll move stock tomorrow.

Here's some of the trends.

We're gonna be diving into EV makers, Tesla and Orian Surprising Wall Street today with better than expected delivery numbers for Q two.

But overall electric vehicle demand is not out of the woods just yet high prices and charging anxiety.

Still keeping many on the sidelines plus trains and automobiles, airports and interstates are gearing up for a record week of fourth of July travel.

We're going to discuss what complications from extreme weather and higher gas prices mean for travelers.

And the sluggish housing market is taking a toll homebuilder names getting a hit with several downgrades today as analysts expressed concerns the slow activity could last a year but homeowners staying put could pro prove a tail wind for renovators hurricane Beryl Barreling across the Caribbean now passing south of the Dominican Republic and the category five hurricane is expected to bring a life threatening winds and storm surge to Jamaica.


Barrel is the earliest category five storm ever to form in the Atlantic fueled by record warm waters and joining me now is Pauline Twiddle AAA, senior Vice President of Travel.

Uh, so Paul, what, what kind of travel ef effects have we seen so far?

Can you walk us through what you're seeing?


Well, first let's talk about the numbers.

Uh, we're right in the midst of, you know, 71 million people traveling for this Independence Day holiday from Saturday the 29th, right through to July 7th.

So tomorrow is gonna be the busiest day.

If we look in totality, that 71 million really is reflective of mostly road travel.

People gonna be on the roads, 60.6.

So nearly 61 million will be on the roads.

And that's a record breaking number for a totality and for road travel um also flying, you know, air travel, nearly 6,000,005 0.7 are going to be traveling by air.

That's 12% higher than pre Panem.

So we've got a lot of people traveling and the last thing we really need is weather getting in the way and that's 71 million Paul.

So you're saying record, you're saying that's, that's higher than last year.

That's even higher than pre Panem.

Yes, absolutely.

It's 5% higher than 2023 and 8% over Pre Panem over 2019.

So these are really staggering numbers.

What, what do you attribute that to Paula?

What are the variables, the factors?


Great, great.


You know, we, we, we talk about pent up demand and people think that that's over, but it's really not.

I, you know, even despite inflation and all the numbers we talk about, um you know, consumers are not willing to give up the respite that they deserve.

Uh consumer confidence still remains quite high and people still spending money on this very discretionary income, but they're spending money to get away and enjoy themselves and getting out of the daily grind.

So Paula 71 million huge number record.

Where are they going?


Do we have any line of sight?

Where are the destinations?

Yeah, absolutely.

You know, domestically, first of all, like places like Seattle and Anchorage and certainly Canadian Vancouver, those will attribute to Alaska business because this is Alaska season alpha cruises.

So Pacific Northwest is very busy and of course, we have domestic areas like the theme parks, Orlando being a top destination as well as Anaheim and out in L A.

Uh and then uh you know, urban cities like New York, Denver Chicago, people are traveling to those destinations too.

Let's not forget about international travel because international travel is equally high London, Paris, you know, Pre Olympics, we have all this going on right now.

People are really flocking to Europe, uh Dublin Athens, Barcelona, all very, very strong destinations that we're seeing that people are flocking to right now.

Any advice you can offer viewers, Paula about when is the traditionally Elise when is the best and worst times to travel.

Yes, absolutely.

And today being, you know, tomorrow is the third.

So tomorrow is the busiest time to be on the road or in the air.

Uh, we're gonna find a lot of bottlenecks there.

We can anticipate that, you know, 3040 even up to 60% in some locations, traffic delays because keep in mind some people are on vacation, traveling, other people still, you know, working and, and have that rush hour traffic.

So you want to stay away from those peak times.

Your best time to travel is very early in the morning.

Uh stay away from that two through seven time frame.

So or go later in the evening after seven or eight o'clock at night.

So best to go in the morning and, and avoid the rush hour if you can.

All right, great advice, Paula.

Thanks for joining the show with that insight and guidance.

We appreciate it.

Thank you the S and P 500 NASDAQ closing at fresh record highs.

Investors digesting fresh inflation commentary from Fed chair.

Uh Powell here with more on the trading day takeaways.

Yahoo Finance's Jared Blicker, Jared Josh.

We gotta talk about Tesla today huge breakout above the psychological level of $200.

And I'm gonna outline the technicals here.

Uh It's a number of milestones and breakthroughs depending on how you look at it.

This is not what I'm looking for, we're going to go to our mega caps and here we have Tesla closing in at $737 billion.

So still not in the trillion dollar club, but here we have today's price action.

Let me show you a one year with some candlesticks and this is going to help outline the pattern I'm noting here.

So this would be an inverse head and shoulders here and you can see we've clearly broken out to the upside.

You can also draw a trend line all the way down here and guess what?

We also broke above that trend line.

So no matter how you slice it in these two different ways, probably gonna get some momentum to the up resistance support.

What am I looking at?

Yeah, to the upside, we really don't have much uh resistance until about 265.

So let me um put a two year chart to see if I can find 265.

It's gonna be about somewhere in here to the downside.

140 is a big level, but I think 150 would probably stop it.

That was kind of the uh the neck, uh the lower neck line of the head and shoulders.

So, uh all in all, I think we got some space to move to the upside.

We got some space to move to the downside if it's a false breakout, but probably not gonna stay right there.

We got earnings coming up we got the big Robo Taxi Day in, in August Jar lot for Tesla investors.

Yeah, a lot for and consumer discretionary.

Let's not forget that Amazon and Tesla are actually in consumer discretionary.

So point number two market concentration, there were seasonal, 0, 1929 you know, that was the peak of the stock market back in the day.

And I got two different, uh, time series, two different lines.

One of them goes all the way back to the 19 twenties, that's a purple and one of them is blue.

Um This has to do with market concentration really difficult to do these calculations, especially with these old uh series.

But back in 1921 guess what the biggest stock in the universe was.

Give it to me AT&T Ma Bell.

So, Ma Bell was such a big part of the market that it was all the way out here.

And so this purple line is tracking the largest one stock relative to the 75th percentile, uh three quarters of the way down.

And then we also have this different measure that starts about what 1960 something, 1970 weight of the top, top 10 stock.

And you can see we are currently at about 33%.

That is the highest level in this series.

But for all the talk of concentration, is it different this time?

Well, by both of these metrics, yes, this is the greatest concentration we've ever seen.

Let me ask you, we, we talk about concentration a lot on the SPX beyond the broad gauge.

Any other signs of concentration?

You know, I think it spills over into everything else because when you have just a few stocks like the mega caps that have been working so well, uh you tend to forget about the other ones and you forget about the Russell 2000.

What I think is interesting about this chart.

This all goes back to the beginning of the Russell of in 1979 measure small caps.

So you take the Russell 2000 and divide it by the S and P 500.

You can get the relative out performance or underperformance.

So here in the 19 seventies, early eighties, we are seeing out performance of small caps.

Here we are seeing the opposite.

This is the out performance of those mega caps, the underperformance of small caps.

So this just tells me again, we've never quite seen anything like this concentration in the market.

So deserves to be handled a little bit delicately here.

I will say this.

I don't think it's an absolute disaster.

We're seeing market rotation right now.

Uh We saw three P three court uh three months of our performance by the big guy.

So I think we're starting to see some backing and filling here.

Third Jared Bluff Point.

Here we go.

Stock volatility.


So I'm gonna dial up, guess what?

The vics?

Which closed, right?

Around 10 or 12.

Excuse me, it dipped down pretty low today and I'll put a three month chart with some candlesticks.

So we can see.

And here we are, this is hard to see all the way down here, but this is not quite as low as some of the uh levels we were getting a month ago.

But if I put a tenure chart on, you can see this is really in the lower part of the range, especially when you consider where we are coming from in the pandemic, but we are not quite back down to those levels.

I wanna contrast this with what's happening in the ice B of a move index.

Now this is bond market volatility.

So where the vix was all the way down here?

Well, guess what?

This is trending up a little bit, a lot of times what we've seen over the last few years, bond market volatility spikes first and then you get it leaking into equities market volatility.

So all the V is low now, maybe this is a leading indication.

So my, my question, what's the, what would you expect to happen next?

What's the read through for investors?

You know, I, you know what, I think it gets back to timing.

We didn't do any seasonality.

Let's do some seasonality here.


We're looking at the VIC, let me show you some VIC seasonality because what we can expect now is here's the VX map.

This purple line goes all.

It is basically the average of what's happened since 1990 through to 2023.

The blue line is what's happened so far this year and we're right during this period, this period right here is supposed to be pretty quiet.

Guess what July is supposed to be a bullish month, especially those 1st 10 days.

I think we get those.

But then we start seeing some hiccups here when the vic spikes up, that's we start seeing stocks roll over.

And then by the time we get to September, October, that's gonna be those critical two months before the election.

Guess what?

That's when the VIC starts spiking historically.

See no reason why it couldn't happen, but we'll have to see if it does Jared all the trade and takeaways.

Thank you, my friend.


Coming up a pulse check on the renovation minded homeowner with the co founder of Angie's next on asking for a trend home listings just keep rising.

But much of the dismay of would be home buyers.

Property prices are as well.

It seems nothing, not even some of the highest mortgage rates the past two decades can stop the continued climb of home prices.

Joining us now to help figure out what homeowners are thinking and where they're putting their money is.

Angie co founder, Angie Hicks, Angie.

It is good to see you.

So you look at this housing market, Angie.

Um, you know, I I don't doubt the demand is there.

But 30 year Fix, Angie, we're here at 7.13% for a lot of people.

I just think affordability is an issue.

Has that meant Angie.

We just see this trend of, of people who are thinking, you know what?

I, I can't afford to buy that new home.

Instead I'll put my time, my effort, my money into upgrading and renovating the home I have, you're definitely gonna see people that are had been, would have normally thought about moving, consider renovation.

I mean, if they're thinking about taking and trading a mortgage, it was at 3.5 or 4% and trading it for 7%.

That is real money.

That could be $12,000 a year, increased expense on that mortgage to give you a comparable, you could renovate your bathroom on average for about $12,000 and that can make a huge improvement in the livability of your house.

So you really need to analyze why you wanna move and make sure you're moving for the right reasons.

And Andrew when people do decide to renovate, do we have a sense of what they traditionally looking at renovate?

Um Is it bathrooms, is it kitchens and and what are the smart rooms to innovate just in terms of the return on, on investment?


When we look at our state of home spending, bathrooms are always in the top five most common projects people tackle.

You know, it's a highly used room, kitchens are always in the top 10, a little more pricey, but it is the heart of the home and it's a place where you spend a lot of time with your family.

So an important spot to renovate and both of those are things that you do not want to do necessarily.


When you're ready to move, you wanna make sure you're gonna live in your house for a while to make sure you get that return on investment.

But if you're making that decision, should I move or should I renovate?

Those are good items to consider.

What about remo, you know, outdoor, uh remodeling Angie, you know, remodeling the deck still popular.

That is, that became really popular during the pandemic.

And we're seeing that continue to hang over.

Uh In fact, when people look at their five year plans for big renovation projects, the top three are bathrooms, kitchens and large outdoor uh large outdoor renovations.

So thinking about that outdoor kitchen, a new patio, uh new landscaping, those are all really good investments into your home.

Do you expect Angie?

You know, just look it out, you think about home renovation, um home upgrades.

Do you, do you see that big trend continuing to be strong in the years ahead?

Well, it's, it's interesting.

So we saw a big pop during the pandemic and I think a lot of people thought that spend on your home would start to decrease as we got back out and traveling and doing a lot more things.

But what we've seen is that state at this elevated level and I continue to, I expect it will continue.

In fact, 30% of the people in our most recent uh state of homes spending report commented that they plan to do increased spending on renovation instead of moving because of interest rates.

And Angie, let's say you're a viewer.

You listen to us right now, you've been kind of thinking about doing a big home upgrade, a big home renovation.

Give us some guidance, Angie, where's just some, some basic tips and tricks people need to think about.

Well, you really want to think about how you're using your home and what can be the biggest return for you and your family and how you live in it.

You want your house to be livable and comfortable for you.

So think about things and, and be clear about how much you want to spend.

I think a lot of times we think about, I'd like to remodel my kitchen.

Oh, that means I'm gonna spend $30,000 or more.

Not necessarily.

So think about what the important things are in that renovation that you're going to do.

Uh, an easy one.

Don't change the footprint of your kitchen, don't change where the plumbing is and the electrical et cetera and you're gonna save a lot of money down the road, if you can refurbish the cabinets you have versus putting in new ones another big expense saver.

So it's really prioritizing what elements are important to you and laying your budget against it.

You a last question for you though.

You took this idea and, and you turn it into a business and I'm sure it was not easy for any entrepreneurs who are listening right now.

Angie, a, any guidance you would offer.

You know, I think it's when you're starting a business, it's, it's, it's a lot about perseverance.

You have an idea, you've got to stick with it and you need to make sure that you're realizing exactly what you're good at and what you need to build in your team.

I think having a really good team around you that can balance and, and, and add to what you offer is important and sometimes that can be hard when you're first starting out.

So making those initial hires is really important.

All right, great tips and tricks, Angie.

Thanks so much for joining us today.

Appreciate it.

Thank you.

And coming up more asking for a trend on the other side.

A new chart from Wells Fargo showing the potential rebalancing of earnings growth in the S and P 500.

Yah finances, Shana Smith joins me now with a closer look, Shana.

Yeah, Josh, when you take a look at this, so all a lot of the focus on Wall Street is gonna be shifting to earnings here when we kick off second quarter earnings season next week.

And I want to bring up the growth expectations that we got from Wells Fargo today because I think it's significant a lot of times when we're talking to strategists uh day in and day.

Now, our question is whether or not the narrow concentration within the market, how big of a risk maybe that poses to the broader market at this point.

And what we're seeing here in terms of those expectations from Wells Fargo is that we are going to see more of a broadening in terms of that earnings growth.

It's not only going to be technology and communication services, which it very much has been driving the earnings growth as you can see going back to the third quarter of last year and through the first quarter of 2024.

But as you look ahead to the second quarter and even through just over the next year, obviously, we are starting to see in terms of those forecast expectations, we are expecting to see more of a broadening out in terms of the participation, profitability that we are seeing beyond tech and communication services.

And the reason why this is so significant is because this really supports so many of the calls that we have gotten most recently about arguing about the fact that hey, we're even though we're at record highs close today at another record high for the S and P and the NASDAQ, we still see this momentum continuing.

And, and that is a lot of that really driven by the strong earnings growth that we have seen.

But also what we are forecasting to see in terms of that forward earnings growth over the next 12 months.

So again, a broadening out here of that earnings growth is really a signal here.

A bullish signal to Wall Street.

All right.

Sea, also a new step in Apple's relationship with open A I just learning that the tech giant has secured an observer role on open A is board.

This is according to a report from Bloomberg, that seat is gonna go to Phil Schiller.

Apple's former marketing chief, Schiller is a long time tested veteran in Cupertino.

According to Bloomberg, uh this job would allow someone to attend board meetings without being able to vote or exercise other director powers but would would potentially give this person a whole lot of insight.

Um Of course, this was also following Apple's announcement at its big software show in June that it was going to offer open A I chat G BT in its devices, Shana.


And Josh, this really puts Apple on par with Microsoft in terms of that observer role that they are going to have on open A I board.

And like you just said, this person does not have voting rights, but again, they gained that valuable insight into open A I and how exactly the business is being run right now.

And when we talk about the impact obviously open A I has had on the A I story has been far from a leader within this space.

So again, Apple now having this observer role, a seat on the board, very significant and you would think potentially that the street could be viewing this as a bullish move here for the tech giant going forward.

Yes, of course.

There were so many questions about Apple's A I strategy and that big software show show with announcements like this partnership with Sam Altman and open A I Tim Cook, trying to, trying to uh kinda lay some of those concerns and, and lay out for the street.

Hey, we do have an A I strategy, we do have A I features.

Now, the big question is, does it help uh create a meaningful upgrade cycle for those new iphones which we expect in September, Shana?

Thanks so much and thank you for joining the show today.

Uh That's a wrap on today's asking for a trend.

Remember in light of tomorrow's holiday shortened trading day, we're to bring you market domination started at 11:30 a.m. Eastern tomorrow for now.

Have a great night.