Latest news with #ThomasHayes
Yahoo
22-05-2025
- Business
- Yahoo
This investor is doubling down on AI and real estate
Listen and subscribe to Stocks In Translation on Apple Podcasts, Spotify, or wherever you find your favorite podcast. In this episode of Stocks in Translation, Great Hill Capital chairman and managing member Thomas Hayes joins Markets and Data Editor Jared Blikre and Producer Sydnee Fried to discuss the concept of economic moats, a long-lasting competitive advantage, and where to invest amid market volatility. Hayes breaks down the importance of focusing on undervalued companies with competitive moats, using examples of corporations in the housing and tech sectors, as these are businesses that have the potential to thrive amid economic uncertainty. Twice a week, Stocks In Translation cuts through the market mayhem, noisy numbers and hyperbole to give you the information you need to make the right trade for your portfolio. You can find more episodes here, or watch on your favorite streaming service. This post was written by Lauren Pokedoff Welcome to Stocks and Translation Broadcasting from the New York Stock Exchange. I'm Jared Blickery, your host, and with me as always is the voice of the people, Sydney Freed. First, please like, subscribe, and comment on Stocks and Translation on Spotify, Apple Music, Amazon, or YouTube, and today we are welcoming back Tom Hayes. He is the chairman and manager of Great Hill Capital. He is a veteran value investor with over two decades of experience spotting market turnarounds in tech, banks, energy, and now housing. And today we're gonna be talking about the Great Value Renaissance, a phrase coined many moons and shows ago. Our word of the day is moat, designed to keep out invading armies, and today they repel competitors. So which castle is Tom investing in? And this episode is brought to you by the number 7.5, as in years. That's how. says it will take America to build enough homes to finally close the housing gap and fix the housing shortage, and Tom has some stock picks to potentially make it worth your while. So before we dig in, Tom, uh, let's talk about the most recent market action. You're a value investor, you like the booms and the busts, and we just had one. What are you swimming in here? I call it the big beautiful dislocation. You had, uh, $1.2 trillion of forced sales in the hole from hedge funds and CTAs at the beginning of April. And then President Trump put out his tweet, now is a good time to buy stocks in the markets. And did you, uh, not only did we, we were buying, we did a conference call for our clients the day before because people are really worried, right? There, it looked like there was no, and we went company by company. We went through balance sheet, we went through, uh, income statement. We went through free cash flow, and what we saw invariably was all these metrics are going up. What's going down the price based on, based on the short term noise. Long term, they've got the moats in the business. Even if the worst case tariff scenario came to pass, these would be the biggest players and they'd pick up share from the smaller players that were hit the hardest. And that's why a moat is so critical. You know, this leads to our word of the day. Thank you for that time. Perfect segue. A moat is a long lasting competitive event. So, so think of castle moat, like a safeguard to a firm's profits. So Warren Buffett hunts these kinds of corporate defenses, and we have a few Oracle quotes now to set the mood here. In 1991, he gave a lecture in front of Notre Dame and he said the most important thing in evaluating businesses is figuring out how big the moat is around the business and what you love is big capital and a big moat. So is that what we're seeing here in some of the names that you're looking at and who has it? There's no question. I mean, sometimes you have, uh, a monopolistic moat like Boeing has a duopoly with Airbus. That was not a hard one to figure out. It dropped down to $129 in the most recent sell-off. Uh, it's very simple. If you want to go to Airbus, that's fine. You just have to wait 20 years for your next plane, so that's an easy one. Then you have brand moats like Buffett invested a lot in Coca-Cola in 1989, 1990. Uh, now his dividends each year are bigger than his original basis because they keep increasing the dividends. It has that brand. Mode has the distribution mode. So we look for businesses like that, uh, and, and brand modes, and we're gonna talk about a few, few names like the Stanley's, like the Dewalts, like, uh, some of those companies in the housing sector that, um, people have been using these tools for generations upon generations, and they're not gonna go to the second best because they don't last, uh, and they don't have that same type of brand, uh, credibility. So it sort of sounds like if you have a popular brand or it's a popular company, you have a mode, but that doesn't feel right. Like, is any famous stock have a moat or no? That's not how it works. Well, I look, Apple, I was gonna say Apple Apple has a mode. It has an ecosystem moat. It kind of built that monopolistic app store which they continue to, to throw arrows, and he continues to create relationships with administrations and the arrows keep hitting the wall. Uh, that's protecting the moat, and Tim Cook has done an incredible job at protecting that moat. Procter and Gamble for years had moats around. Tide that's been kind of diluted a little bit with the Kirklands of the world, etc. so you have to constantly be on top of the moat. You have to constantly analyze the moat, but, uh, but the key is to start with a business that has a moat because if the moat is there, you're marginist and you buy it at the right time. If the moat is there, uh, you can, you can make it through tougher times, the cyclical downturns, and you come out stronger because in cyclical downturns, the smaller players with the weaker moats go out of business and you pick up share. I want to get back to a name you mentioned a couple of minutes ago, Stanley Black and Decker, because this hit my list Monday morning. We had, and we're taping this the week after the latest tariff detente, and, um, that morning I was looking free market at all the companies in the S&P 500 who was leading. Stanley's at the top of the list. It was like 12, 15%. I hadn't looked at this stock in years. Going on there, uh, they have an absolute moat and they're highly correlated to the home building industry, OK, so they have DeWalt, OK, they have Stanley, they have craftsmen, they have Black and Decker. So if you think about construction, if you think about projects, if you think about lower interest rates which spurs the, the former. Uh, uh, it's a huge leveraged play on the recovery of construction, which is gonna come in the back half of the year, and that's the back half of the show and the back half of the show. Uh, one of, you know, everyone's focused on the Fed. Uh, what they need to be focused on is what Besson is going to do. Uh, with capital requirements with banks, the SLR, so he's going to, and the SLR as a liquidity, exactly. So what the, the case they're making is government backstop securities, i.e., treasuries, mortgage backed securities, shouldn't be counted differently because there's no credit risk. And if they agree to that, which is common sense because if there becomes credit risk, then we got a lot more to worry about than bank capital ratios, um. That will enable banks to hold a lot more, and they're going to hold a ton on the short end of the curve which the Treasury then can then use those proceeds if you remember 2012. I know Sydney's that old. I mean this goes back to Basil. That's what I mean, doesn't this remind you of Basils of Basil, we're on the same page. So, so they can use those short term proceeds, uh, to reinvest on the long end of the curve, which is expected to bring 10 year treasuries down 30 to 70 basis points, which means a 30 year. Fixed for the for the woman on the street, 30 year fixed rate below 6%. When that happens, boom times, boom times. We know that President Trump wants lower mortgage rates and so part of that is I'm asking, is that part of the Mar a Lago accords because there are more, there's more to it than just that. There's other countries buying US Century bonds, that's 100 year bonds to bring down long term interest rates, but I hadn't really, I hadn't read that particular facet before, so that's interesting. Yeah, the Mar a Lago accord was, was predominantly. Uh, rumored in the 1st quarter of this year, which was a currency reset like you saw in Reagan's second term. I, I don't know that that's fully on the table yet. Uh, it's, it's implicitly on the table because as China does a deal, so China knew the tariffs were coming. So what did they do ahead of time? They just devalued their currency by 20%. The tariffs were kind of in that same neighborhood, and as the deal is set, part of the deal is going to be get your currency back to normal. That balance is out trade. So there, there's implicit, will there be an explicit meeting where you have 8 parties together and they uniformly devalue the dollar, Brentton Woods, exactly, um. Uh, Plaza accord, uh, the answer is we don't know, but the trend of the dollar is right now you're going to have a counter trend bounce because everyone was bullish on the dollar. Now that the dollar's falling a lot, everyone's bar, so you get a, get a counter trend, uh, bounce, but the trend, intermediate trend is down. That's gonna help earnings. That's gonna help all the things that we're talking about here. With everything going on right now, we still don't have, you know, a lot of solid trade deals. How are you thinking about the Market in terms of, you know, companies with a moat, in terms of sectors, what do you like, uh, you know, we're seeing stocks come back to where they were like a month ago before a lot of this happened. So what are you liking right now is we're navigating this uncertainty. Yeah, I think if you look at equal weight versus weight S&P, the valuation for equal weight is one standard deviation below its long term average. which in English means it's cheap, OK, on a multiple basis. 49 493 is cheap. So you have to continue to look there for the Stanley Black and Deckers, which are part of that 493. Uh, I think we're going to talk about a couple other, uh, housing stocks as well. Um, there's just a lot to do. The the companies that were most impacted by tariffs, which, by the way, was Boeing, uh, or the fear of the worst case, that's where you're going to find your biggest opportunity. I think the mag 7 will rebound a tradable rebound, but we can't overlook the fact that their earnings power has decelerated from 33% down to 16% and maybe a little bit lower, and that's part of the reason you've seen what they do because when you think about tariffs. Like how does that really affect Google when they're not in China, you know, uh, and so on. So, so they've come down relative to their earnings power, the amount of capex that they have to spend to stay competitive, to keep share has impacted their earnings, has also crowded out their ability to buy back tons of stock, uh, whereas the 493 announced record buybacks in the first quarter in the face of all this uncertainty, $665 billion. Um, talk to me about China real quick before we go to break. We've talked about Alibaba in the the last time we were here, that is, you know, it came up, it came down, but it's, it's held on. What do you like about China now? Uh, what I like is that Xi. After enough of social unrest and 25%, uh, youth unemployment, got his act together about a year ago, Xi gets it. Xi Jinping got his act together, uh, has done massive stimulus. He's now helping his country versus hurting his country, you know, soldering them in their apartments. That didn't work, uh, and people got tired of it after. 3 years. So, uh, you're seeing global M2 money supply start to hockey stick, and a good portion of global M2 money supply is China's new stimulus, which started in the last 12 months. He's committed to taking the country to 70% consumption like the rest of the developed world. Uh, Alibaba's got 40% of the e-commerce market. They are toll taker for domestic consumption, so they're gonna benefit from that. They're gonna benefit from being the number one player in AI. They have a piece of all the AI startups because as the number one cloud provider, new startup comes in, they say we need compute power. They say, no problem, I got you covered. I'll give it to you for free, and we'll, you're gonna, you're a piece of your business and a peek at your business too. We're gonna take a peek and a piece, uh, we're gonna get equity, so you have equity in all the Chinese AI startups. Some are going to be 1000 bagers and some are gonna be zeros. Uh, Alibaba takes a piece. Alibaba takes a piece. It's the granddaddy. It's like the cas it's like the casino owner versus the blackjack player. They get a piece of all the action on the retail, on the AI, and their models are outperforming open AI. The models are outperforming deep seek. Their international e-commerce is growing at 40%. They got $80 billion of cash on their balance sheet. They're generating $20 billion of free cash flow. What else do you want to know? Uh, as long as Jack Ma doesn't get more greens. Yeah, that's a bad joke. Um, oh, and by the way, Ant Financial, the Chinese tech crisis started with the pulling of the Ant Financial IPO. It was supposed to be the biggest IPO ever. It's gonna happen in the next 12 months, and we own 35% of that as owners of Alibaba. We own the stock shares in Hong Kong 9988. You can, uh, switch out your US shares if you're worried about delisting. I think it's a lot of noise, but as a fiduciary, I want to protect my investors. Uh, we, we still own derivatives in the US because. We can't replicate them in Hong Kong and we're willing to assume that risk. Wait, how do you, um, how do you move shares from international to US listed? It depends on your, uh, custodian, but you can call them and they'll just swap out because there's no currency risk. It's 8 to 1 peg to the dollar, so you'll get 88 more shares per every 1 USADR, but it's the effective same slice of the pie. All right, hold that thought. We need to take a short break, but coming up we're gonna be talking housing stocks again in a runway battle to turn heads as well as profits. This episode is brought to you by the number 7.5. That is the number of years that estimates it's gonna take America to build enough homes to fix the housing shortage. So it's a big gap, Tom, and you say it's a big opportunity, and I'm wondering how you're screening for opportunities here. We already talked about Stanley and the mode and all that. What else you got? Well, look, when you had the gold rush, who made the most money? Was it the people looking at picks and shovels, right? Uh, in war, you don't want to be. Betting on the warring factions you want to be betting on the arms dealers. So that's what we're going to be doing with the housing sector. So the DH, uh, the, the Hortons, the, uh, the Pulte, the KB homes, all the home builders, it's gonna be a race to the bottom because what's going to take place, uh, is a couple of things. One, number one, we're opening up federal land, OK? We've got hundreds of millions of acres. If we open up at like 1% of it, we'll have enough land. It's like a half a million. Uh, acres will be enough to, enough land to bridge the deficit of 1% of the federally owned lands, which is a huge swath, which is a huge swath, OK. Uh, so we're short 4 to 7 million houses like you said, it's going to take 7.5 years to do that. Um, and effectively what you're gonna see is a race, a race by the home builders. I don't want to be in that race because once that happens, once supply picks up, it's a pricing compression. But if you're doing the builders, the tools for the builders, the Stanley Black and Decker, the construction. The part suppliers like QXO I think we're going to talk about or what goes outside now that you got the electrical grid down every single month or so in some of the hurricane ridden states and the demand on the power grid, which is an aging power grid, you need a generator and if you need a generator, the Kleenex of generators is called GenerX. 75% of the market. The game is just getting started there. So those are our three arms dealers for home building that's to to come in a. Massive scale in the next 3 to 5 years. Oh, and by the way, you got 72 million millennials, 45 million people between age 30 and 40 who need homes. Sydney knows she's nodding in her head. Listen, it's like there, it's like it feels like the American dream is slowly slipping away in that sense. I, I have a question though, do you recommend in terms of these kind of tool companies that you go straight for these single stock names or you go to like an ETF so you're just covering all your bases. My clients pay me to outperform, so I don't go to. You're not going to an ATF it's. I mean, you could, you could buy XHB and participate, uh, uh, in a beta sense, but if you want an alpha sense, you got to do some work and say, where am I going to get the most return for the same amount of money? And that's what we try to do every single day when we get to work, and I love it. It's like a treasure hunt every single day. Said Warren Buffett. You mentioned a couple of names. What's your favorite story of all the names that you've ticked through so far? Uh, my favorite jockey, I like to bet on. because I'm turnaround Tom, uh, is, uh, uh, Brad Jacobs. OK, if you got QXL. Brad Jacobs wrote a book called How to Make a Few Billion Dollars. It was a useful book because he actually made a few billion dollars. Um, if you got involved with him in 1997 when he invested in United Rentals, you made 79 times your money, so 1 million became $79. If you got involved when he put $150 million in XPO logistics in 2009. Uh, you made like 160 times your money. 1 million became 160 million. So now he's going to do the home building supply sector. He started with Beacon roofing. Uh, this is a non-discretionary expense, Sydney, you'll figure this out when you get your starter home on federal land with an endangered elk in your backyard free of charge. That when your roof leaks, you don't think about should I buy it like you think about should I buy a pink iPhone or White iPhone, you just call the person and you say fix it. I don't like water in my living room. So Beacon Roofing is his first one. He paid 10 times IEDA, a little bit rich, but he's gonna double EEA. Why? Because that's what Brad Jacobs does. He brings in technology. He creates efficiencies, he doubles IIDA. That's his platform company. Then he's gonna roll up 10% of the industry. It's an $800 billion industry. He's gonna get $50 to $80 billion. How much do you know? Uh, he's got 10 billion. with Beacon, OK, and this was just announced. So he's gonna do another 78X. The stock is probably gonna do another 10x, by the way, because it doesn't account for the technology and the, the special magic that Brad Jacobs makes. He's a moneymaker. This guy earns for his shareholders, and here's the beauty. He put $150 million in QXO. He just put a billion dollars of his own money in QXL. So in in XBO we put, put $150 in this one he put a billion dollars. Uh, we think, you know, this is when you tuck away for 5 to 7 years you probably wind up with a 678 bagger from these levels. Kind of reminds me of Wayne Hezinga. Yeah, he's in the Fortune 500 over his lifetime, which is substantial, and they were roll-ups, by the way. And, and by the way, wouldn't surprise me. I'm, I'm trying to get Brad on my podcast, uh, if, uh, if that was a model, uh, it's called Hedge fund Tips with Tom Hayes. It's number one in the hedge fund category, which isn't a narrow niche, but we've been doing it for 5 years and people. Seem to like it. Tom, I need, I need an invitation over here. Oh, you can come any time you want. Yeah, come on hedge funds. I have, I have a different question for you. Are you invested in REITs? And I'm going to define that for anyone who doesn't know. REITs are real estate investment trusts, companies that own, operate, or finance income producing real estate. Yes, we own one. It's called Crown Castle. They're one of the biggest, uh, owners of cell phone towers. They just sold off their fiber business. They got. Uh, billions of dollars for that. They use that to pay down debt. They have the legacy 40,000 towers that are just cash machines basically require no, no, uh, maintenance. It's like owning an ATM every time someone uses it, you make a fee. It's the exact same thing with these towers. So now it's just gonna be a cash machine. They'll buy back shares. They'll buy more legacy type towers, and, uh, and these tend to be interest rate sensitive. So when rates come down, as we said, Besson's gonna work his magic the second half, rates will go up. Crown Castle will be a beneficiary as far. There's real estate rates, uh, there are none at attractive enough levels at this juncture. We, we were big buyers of Vornado in the hole, if you remember during that big, uh, mini banking crisis, we thought it would take 3 years to double. Uh, it took 6 months to double and we got out. So, uh, that one sometimes they take longer than expected like Alibaba, sometimes they happen faster than expected like Vornado, but, uh, the key is the framework is sound. Does the business have a moat and are we buying it with a large enough margin of safety? All right, we're gonna stick with the entrepreneurial vibe here because today's runway showdown is all about value-driven CEOs, two chiefs strutting the catwalk with distinct approaches to turning opportunity into profit. First down the runway is the serial entrepreneur dressed in relaxed business casual, confidently investing in under the radar cash flowing small businesses like storage units and car washes, quiet, consistent, and profitable. Close behind though is the turnaround specialist, sleeves rolled up, tool kit ready, eager to repair and revive neglected industrials, retailers and manufacturers. Tom, which value pays off more reliably, the steady entrepreneur building a portfolio from the ground up, or the specialist who sees gold where others only see rust? Well, I think it's, I think it's a question of scale, right? You can make a tremendous amount of money buying uh small. Um, uh, businesses that are kind of fragmented businesses, roll them up, get synergies, uh, whether you do it with car washes, whether you do it with laundromats, etc. uh, people do that, but If you want scale and you want control of capital, you need to be in bigger businesses, and that's what we try to do in the public markets. Uh, the beauty, you know, I get approached with private deals all the time, and there are plenty of private deals. Most of them are betting on the future. Uh, you know, we're guessing who's gonna cure cancer, who's gonna be the AI leader. I don't like to guess on the future. I like to bet on sure things, OK? And I want a business that's been a Gordon gecko. I want to bet. On businesses that have operated through many cycles, many downturns, and operated through and have a big enough moat, a strong enough balance sheet that I know they're going to recover just back to the mean, they don't need to be a home run, doubles or triples over 2 to 3 years, and you compound that with large amounts of capital, it beats, you know, grinding and, and, and, uh, getting synergies from a handful of laundromats or or as an entrepre. Um, but I will say Brad Jacobs does a combination of that. So he has his platform company. He gets the public market multiple. You get a higher multiple in the public markets, and then he uses that currency and his ability to raise capital in in public markets to buy defragmented businesses, smaller scale businesses, and tuck them into his platform company and that's how he's created. So much wealth for so many people over the years. It's great. Tom I want to switch gears here a little more personal and advice driven. OK. So you study the markets kind of day in and day out. I want you to share with me, with us, like what's the one thing that you think that everyone needs to know about the market, that either they're misunderstanding or sometimes misrepresented. I think the number one thing like anything in life is to be consistent. So if you're just buying the overall indices like a VTI Vanguard total market. Uh, or an S&P 500, buy it every single month at fixed amount, OK? And the months that you really don't want to buy it where your stomach is churning, you're afraid you're gonna lose your job, whatever it happens to be, those are the months you should buy double because, uh, when you buy down you get more shares and over time that compounds materially so dollar cost averaging, that's kind of your base, you know, put the majority of your money to compound that way and then when you have excess wealth, you start to take some of that and you want it to be a little bit more aggressive and you put it in different buckets and. Hire different managers like Tom Hayes, you hire, uh, uh, you know, maybe a private equity manager, maybe, maybe, uh, a venture capital fund, etc. uh, and you diversify with that excess, but start with the basics, get the compounding machine going because it's the 8th wonder of the world, uh, and, um, it's, it's created more wealth. This beautiful, amazing, the 9th wonder right here behind us. Exactly. Guess what? That is all the time we have. Really appreciate you stopping by and this will do it for the latest episode of Stocks in Translation.
Yahoo
22-05-2025
- Business
- Yahoo
This investor is doubling down on AI and real estate
Listen and subscribe to Stocks In Translation on Apple Podcasts, Spotify, or wherever you find your favorite podcast. In this episode of Stocks in Translation, Great Hill Capital chairman and managing member Thomas Hayes joins Markets and Data Editor Jared Blikre and Producer Sydnee Fried to discuss the concept of economic moats, a long-lasting competitive advantage, and where to invest amid market volatility. Hayes breaks down the importance of focusing on undervalued companies with competitive moats, using examples of corporations in the housing and tech sectors, as these are businesses that have the potential to thrive amid economic uncertainty. Twice a week, Stocks In Translation cuts through the market mayhem, noisy numbers and hyperbole to give you the information you need to make the right trade for your portfolio. You can find more episodes here, or watch on your favorite streaming service. This post was written by Lauren Pokedoff
Yahoo
17-05-2025
- Yahoo
K-9 sniffs out 2.5 pounds of meth in Santa Rosa: deputies
(KRON) — The Sonoma County Sheriff's Office said detectives executed several search warrants on Wednesday after stopping a driver in Rohnert Park who was being investigated for narcotics activity. MCSO: SF man stole $25K from elderly Marin County resident in fake FBI agent scheme The sheriff's office said the driver was identified as Thomas Hayes, 66, of Santa Rosa. 'K9 Duke detected methamphetamine in a vehicle and at two separate residences. Hayes possessed about 2.5 pounds of crystal methamphetamine, packaging materials, digital scales, and over $2,000 in cash,' according to deputies in a news release. The sheriff's office said two other suspects, identified as Jimmy Hayes, 61, and Patrick Gooler, 59, both of Santa Rosa, were cited at one home for misdemeanor possession of methamphetamine and drug paraphernalia. Hayes was arrested and booked into the Sonoma County Main Adult Detention Facility for felony possession and transportation of methamphetamine for sale, confirmed the Sonoma County Sheriff's Office. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
15-05-2025
- Business
- Yahoo
Why NRG is 2025's best-performing S&P 500 stock so far
NRG Energy (NRG) is the best-performing stock in the S&P 500 (^GSPC) so far in 2025. Catalysts host Julie Hyman and Great Hill Capital chairman and managing member Thomas Hayes take a closer look at the stock's moves and discuss some alternative plays. To watch more expert insights and analysis on the latest market action, check out more Catalysts here.
Yahoo
15-05-2025
- Business
- Yahoo
Trump's deals in the Mideast, retail tariffs, tax bill: Catalysts
Catalysts anchor Julie Hyman and guest host, Great Hill Capital chairman and managing member Thomas Hayes, cover a wide array of market and investment themes in Wednesday's first full trading hour of the session. Middle East Institute Senior Fellow Mohammed Soliman comes on to speak about President Trump's current trip to the Middle East and the investments and deals for US companies the administration has reportedly secured. Several Yahoo Finance senior reporters also join the program to talk more about how retailers are responding to the 90-day trade truce between the US and China, bitcoin's (BTC-USD) seasonality trends, and Congress' current tax bill. To watch more expert insights and analysis on the latest market action, check out more Catalysts here. Welcome to Catalysts. I'm Julie Hyman. We are 30 minutes into the US trading day, so let's get to the 3 catalysts we're watching this hour. First up, we break down the market action, and if the rally has legs as investors enter wait and see mode on trade, plus a floodgate of AI deals taking place during President Trump's visit to the Middle East will break down the risks and rewards of those agreements, and retailers rushed to restart production and shipments amid the 90 day tariff pause. We'll get the latest read on the industry later in the an hour into the start of US trading. Let's get a check of the markets brought to you by Tasty Trade. Let's first of all take a look at the major averages, and we do see a very modest rally. We call it little change for the Dow and the S&P 500. The Dow is up 30 points here, not even 0.1%. Ditto for the S&P 500 tech leading as it has been, but just up about 0.25% today. So not seeing huge gains here, not any new coming out of either the Mid East or more generally on trade, at least not yet. So not seeing much movement here. Taking a look also across other asset classes here and at the bond market again, not seeing much movement there. Treasury yields very slightly down and then want to take a look at the dollar and at gold. Now gold prices have been coming off the boil because we had seen money pouring into gold on concerns about tariffs now that sort of abated. We have seen the gold trade come off a little bit, and I'm keeping a close watch on the dollar today. We're going to talk more about this later in the hour, but there is a report on Bloomberg this morning that maybe the dollar strength or weakness might be at play in some of these trade negotiations. That seems to be pushing the dollar down a bit this morning, but again, we're going to get to more on that I want to bring in my co-host for the hour, Thomas Hayes, Great Hill Capital chairman and managing member, and Tom, obviously we've seen markets rebound and recover a lot of ground in a short period of time. The S&P 500 now a little bit positive on the year. What happensnow? Well, we have a lot of what we call trapped bears. OK. The data shows that in early April you had $1.1 trillion of selling in US equities that was and CTAs. So first you had the short covering rally after the tweet, the famous, it's a good time to buy stocks on April 9th. Now the market's up 15%. So they've covered their shorts. They're now chased and forced buyers. So I think as we continue to see more deals cross the tape and there have been rumblings, more deals are on the way, that you're gonna have forced buyers. That said, from a trading standpoint, I think you move 15% in a few weeks. You probably consolidate a little bit and a have jumped in Johnny come lately. Sometimes you get a 3-4% pullback just to kind of shake the weak hands out before we move higher, but earnings are super strong. The earnings growth rate was twice what we expected for this quarter. We were expecting 6%. We got 13%. Estimates have held up even in the face of all of that uncertainty. Now that some of that uncertainty is removed, we could start to see guidance rip higher and to your point on the dollar, that's gonna help earnings in the back half. It's been weak. I mean some of the uncertain this sounds awfully bullish here Tom. I mean some of the uncertainty is removed, but we got 90 days. There's still 30% tariffs on Chinese goods coming in. There's still 10% tariffs on everything else, you know, these companies that came out and pulled their forecasts, I don't hear them coming out and saying actually now we have a forecast for you, right? So has the, has the equation change? I mean how much has has the equation makers at corporations reallychanged. Yeah, well, if we look at things were in their worst case a few weeks ago and 2026 earnings still held up above $300 per share on the S&P 500, which is 18.5 times next year's earnings. The 10 year average is 18.3 times. So I would say the tariff news has only gotten better in the last few weeks. So if guidance was able to hold up in the worst case scenario as uh companies report again in the following quarter, which we're far they're not gonna come out mid quarter and say, hey, by the way, we did no guidance now we're gonna throw some guidance out, uh, uh, but they'll start to talk to analysts. Analysts will start to upgrade. You're seeing it now. All the people, you know, it's, it's funny seeing these reports from different, different sell side houses. One week they're saying recession chances high. The next week they're saying no recession, and they're just adapting to this and companies now are going to come off the sidelines. They've been just been saying we're not doing anything, we're not making any investments for the last 4 or 6 weeks. Now you're gonna see CEO confidence, CFO confidence, and by the way, what's so interesting, we had record buyback announcements year to date, $665 billion. So while hedge funds were selling in the hole, guess who was buying? Corporations believe in the future. Even in the face of all that uncertainty, they were putting their money to work to buy shares in. This is gonna be thing prospectively, um, the other thing I'm curious about is additional trade deals. None of them are actual deals, by the way. They're all frameworks. They're all plans to make a deal. Yeah, well, they're not details. All I'm asking is are we going to get diminishing returns from these announcements going forward? I mean, China was really the big one. China was the big one. Europe will be very, very important, but at the end of the day, here's the thing if, if President Trump had come out and gonna charge everyone 10%, OK? There's no way he would have ended up with 10%. So he came out, he threw a grenade in the room, he blew up the entire system. He said, we're gonna tariff you 145%. We're gonna tariff you 80%. Now 10% looks like the deal of the century, and it's an additional 30 to $400 billion into our coffers. So, uh, with that said, that we're paying for, well, that's you know we had tariffs that were put into place in 2018, 2019 and you actually avery different place for inflation you saw disinflationary, so like washing machines, whirlpool, the price went up like literally short term for a matter of months. Two years later, the price per unit was actually lower. So there's something to be said. I, I think it's the perfect balance. You get a little rebalanced. Look, China wants to move to a consumption by 2030, that is an explicit government mandate. They want to move to 70% consumption just like the rest of the developed world. We want to increase our manufacturing percentage. We're, we're already at that level of consumption, so this rebalance is natural and it makes sense. I'm very interested in what they're talking about as it relates to the currency kind of kind of lowering the value of the US dollar because that also helps alleviate some of the imbalances they were in the year, remember the Mar a Lago Accord where they'd have a, a, a, a summit like they had in the, in the mid 80s where they you know, devalued the US dollar. I don't know that that's gonna be part of it per se, but I think that's the trend. We're gonna get a counter trend bounce here in the dollar because everyone's bearish on the dollar now after everyone was bullish, and then we're probably gonna continue lower, which is gonna be great for S&P earnings, which is gonna help rebalance the trade and we're gonna be OK. What could go wrong with you like you sound like everything is perfect, Tom. Well, look, I look at businesses company by company. We did a client conference call April 7th, OK, and I went through every single company. I went through their balance sheet, their liquidity, their cash flow, their revenues, and all of these things were going up. The only thing that had changed is the headlines and the price relative to that. Yes, huge tariffs would have impacted the cash flow. OK, what, what's the big risk here? Is there. Thebig risk is you buy companies that don't have a large enough margin of safety. The tariff war has brought down so many companies 30%, 40, 50% on the fears of the worst case scenario. Now that scenarios out, positioning cyclicals relative to defenses is at all time lows. So it's, it's got to be what do you buy on the surface. The valuation of equal weight relative to cap weight is one standard deviation below the mean. Your money is gonna be made finding those things that have been hit tariffs, worst case scenario. No longer worst case scenario. These things can double over the next 234 years. OK. Tom Hayes, you're gonna stick her out. We're gonna do more of this. The House of Representatives is back in session this morning as lawmakers debate the GOP's tax bill. One major sticking point, the state and local tax deduction cap SAT, as it's known. After failing to reach a deal last night, House Speaker Mike Johnson hoping to find an agreement today. Yahoo Finance Washington Work has been tracking this closely. He's been readying his salty puns, and he brings them to us now. Hi Ben, goodmorning. Morning, morning, Julie. Yes, so Mike Johnson, it's worth noting that Mike Johnson was was talking about salt yesterday and he said he was hoping to have a deal by yesterday evening. That deadline is obviously flipped and switched into today, and it's kind of emblematic of how this, this salt issue has emerged as one of the biggest sticking points in Trump's overall big beautiful bill which theyRepublicans are trying to at least get the bill into shape this week ahead of a vote in the House of Representatives next week. At issue here is the Mike Johnson and his plan to triple the current salt deduction. The current salt deduction is $10,000 annually. This, this bill, as it, as it's written now would triple that to $30,000 for, for everyone making under $400,000 a year. There is a sort of GOP salt caucus here that's a, it's, it's about 5 members, so it's very small, but theyHave, have rejected that out of hand. They're floating much bigger numbers like a $62,000 credit, $60,000 deduction for individuals, um, and, and a whole, and a whole lot of back and forth there. There was a closed door meeting last night that that saw sort of some members asked to leave and, and then critiquing those that remained, and then this, this kind of core salty five, as they describe themselves, sort of holding out for now. We're expected to hear more from Mike Johnson in the next hour, so we may have developments on this. The real deadline here is kind ofof the week as what Johnson wants to do is have a final bill that he can then sort of put on the floor by next week. So expect a few more days of back and forth on this for sure. Well, and is this sort of the biggest sticking point? Are there other things and then the bill entirely, is that a realistic goal to sort of get that finalized version by the end of next week? So this has definitely emerged as one of the key sticking points right now. There's a lot. This is a huge, this is a huge bill that'sIt's going on multiple fronts. There were two what's called here in Washington markups that went all night last night. The first side was on taxes. The second side was on Medicaid cuts. That's, that's a real giant issue here. They're trying to find about $600 billion in Medicaid cuts to help offset some of these costs, and that's, that's a big issue that's, that's also going as, as, as part of this. So it's SALTA is definitely not the only one, but it's, but it's a big piece of this. Um, it, it, it, it, it's all sort of leading to this hopeful Memorial Day Johnson in the House, I will say that the Senate hasn't yet kind of weighed in, and they would they would revise this. The key deadline for everyone to watch here is this summer. So this is going to be a big process heading expected to be heading through July to kind of get this whole big beautiful bill through the House, to the Senate, and to the President's desk. Ben, thank you very much. Appreciate it. Tom Hayes of Great Hill Capital still with me here because I want to get your take on this tax bill, right? AndThe way that I've been sort of thinking about it is that if this didn't happen, it would be a big problem for the markets. It happening doesn't seem to necessarily be a big catalyst because it's expected. Or what do you think would be in there that would that could move the needlemore? I think it will move the needle once it's done. It's going to be pushed through with reconciliation like, yes, they got relief corporate tax rates, the impact on earnings power, the impact on the consumer having more money. So this is, but they're not gonna havemore money than they do now, right? Waitresses uh, no tax on tips. You, you've got corporate tax rate, you've got, um, we, we're basically shifting now from the apocalypse into growth and deregulation. Growth and deregulation is the happy place, OK, so welcome to the happy place. We're now focused on growth. Companies can start to invest. The tax bill is one more, uh, cherry on the, on the cake, uh, and, and this is gonna be the second half theme. So says stocks are going a lot higher. First off, his first tweet was right, OK, on April 9th. His second tweet last week when people were nervous before the UK deal was right. Yesterday he's in Saudi Arabia saying stocks are going a lot higher. Um, this is one of the few regions of the world right now that has an explicit growth program on the plate, deregulation, tax upon billions, trillions of dollars investment in the United States incentivized for these businesses go that's gonna create a huge amount of jobs. And if you remember Trump 1.0, guys who run money like me, we did OK. It was a good 4 years, a lot of volatility, we ended up fine, people, middle class working class people, if you look at the employment rate, real wages, they did better than ever, and I think you're gonna see that cubed in this uh Trump 2.0. I think you're gonna see the middle class, upper middle class, the lower class, working class do exceptionally well. I think, by the way, it's interesting. I think you're gonna see a continued of international stocks even despite all of this growth programs, US stocks are gonna do great. International stocks are gonna start to do well. It's, it's a cycle that happens every 10 to 15 years. We started it in the first quarter of this year, so it's a show today. I'm gonna get you to say something negative. That's my challenge of the deal. All your markets action straight ahead. Stay tuned. You're watching Catalyst. Bitcoin's rally has resumed in recent days, nearing those old January all-time highs. So what is next for the cryptocurrency? Let's take a look at seasonality. I'm Jared Blickery, host of Stocks in Translation. Well, first, our seasonality definition here. This is a predictable and recurring change in data that tends to happen at the same time every year, and the emphasis is tends to. It's not a guarantee and it accounts for about 1/3 of price action if everything goes well.2/3 of the time life can intervene and we saw that this year in April when stocks which were supposed to be going up, they went down because of tariff realities and the same was true for Bitcoin. So let's take a look at this Bitcoin seasonality map. And first to back this up, I just want to show you I'm using the 2018 to 2024 median and averages. Why not go all the way back to the beginning 2010, 2011? That's because in the early days of especially Bitcoin, things were a lot wilder and this seasonality chart would just be off the charts. So I think this is a more realistic view because in late 2017 we got Bitcoin futures for the first time. This kind of marked the beginning of the institutionalization of cryptocurrencies and so that's why I'm using 2018 to modern times. So back to the chart here, let me just dig through what's going on. This white line is what has happened so far you can see we took a pretty big dip there while seasonality would have said we're supposed to rally into early May throughout the late April but we did still get a rally. It just went down to lower levels than we would have thought if seasonality had held. So there's no guarantee that seasonality is going to hold going forward, but let me just outline where these potential turning points might be because we are at one right now. So right now we have a little bit of a mid June and then things tend to turn around into about mid August and then in late September we get a nice rally according to history and that lasts into about mid November. Then we come down a little bit and then maybe a little bit of a Santa Claus rally into the end of the year raining tokens on everybody, but that's just the tendencies. So let me go to now a price chart of Bitcoin and show you what's actually been happening this year in a little bit more detail becauseWe have an interesting potential rounding bottom, and this could turn into a cup and handle. What happens is when price approaches a prior resistance level, and in this case we're talking about the all-time highs from earlier this year in January, a lot of times things stall out and you have people looking to get out because they were late buyers. They're finally back at break even and so price stalls out. Then it comes down a little bit and you get that handle and then things up and you see that zigzag higher once again. That could be the case. And so I would be looking for a resumption of the rally maybe in a little bit over a month. Anything can intervene in the meantime. Trump could come out with new pro crypto policies that could shift the tides and we could see a breakout here, but this is just the historical tendency. I also want to show you what has been happening in some of the other tokens which got really depressed. Ethereum took a nasty 2/3 more than in half this year and you can see only recently did it finally break out of this trend line, but over the last month it is up about 60%. And speaking of this time frame in the last month, I'm going to put all of these individual tokens here and sort by performance so you can see we have a lot of these outperforming some of these smaller ones from Moro to Dogecoin to Solana, all of these participating in a nice rally over the last what I've observed historically is that when you have broad part participation in crypto, it speaks as to the strength of the entire group. So I think uh the potential for a crypto rally is in place. We just need some seasonality to align and maybe in the coming weeks to a month we'll finally see another turn up in price. Tune into more stocks and translation for more jargon busting deep dives, new episodes on Tuesdays and Thursdays on Yahoo Finance's website or wherever you find your podcasts. Thanks, time for some of today's trending tickers. We're watching CBOE, Newbank, and Aurora. Um, let's get first of all to shares of CBOE Global markets declining after Morgan Stanley doubled downgraded the stock. Analysts wrote that a greater than expected de-escalation between the US and China limits upsides for options volumes here at the company. So double downgrade going to underweight from overweight here, um, and the analysts saying that the company had benefited from the volatility that we have the tariffs, volatility, good for CBOE good for options volumes. Tom Hayes still with me here. So interesting call here on the effect that more calm has in the markets, which for many investors is like thank goodness. But if your options or if you rely on options for your business, maybe not as positive. Yeah, when when volatility ticks up, you buy CBOE. That's a no brainer, uh, volatility, huge crush in the last 4 their revenues are going to be a little bit lighter. Double downgrade, it's a little aggressive. It's such a great business. It's got kind of a monopoly in the space, so I think long term it's OK. I think short term I actually like the sell side call, which I don't say very often. Oh, interesting. OK. And then also we're looking at new holdings. That's the holding company for new bank and watching that stock. It's a Brazilian digital lender here and it posts a slight miss in its adjusted profit for the first quarter of the see strong revenue growth of 40% year over year during the quarter, but higher spending on new clients dragged on its profit. The shares were down before. Now they've turned higher by a little more than 1%. It's among the most valuable lenders in Latin America. Warren Buffett's Berkshire Hathaway is among its shareholders. That's usually Tom's mood music, uh, when he hears that kind of thing. Um, we've talked to the company before and it really has seen big growth. We also recently talked to Mercado Libre, another Fintech and that's big in Latin America and the theme that they emphasize over and over again is just adoption. In other words, they're much, you know, they're not as far along as we are here in the US with everyone on devices shopping, banking online, and so there's a lot of upside. Yeah, well, uh, I got rich investing in South American banks is something no one's ever said. I, I will say this look, they're growing customers. They've got a new technology. Buffett owns like a sliver. One of his underlings bought but as far as it goes, what you saw was their credit reserves went up in terms of, uh, expecting bad losses, and this is the same story over and over in Latin America. Brazil hasn't benefited from the international outperformance because of the political climate, so you really need to see a change in political regime. They're expanding into Colombia that's weighing on costs. They're expanding into they have to invest a lot. This thing has been kind of dead money for years. Everyone said, Well, Buffett bought it. It's gonna be great. Well, Buffett didn't buy it. His, his underlings did. And, um, I, I, it wouldn't surprise me if they do get the growth, if they get the momentum, if all the ingredients come together, uh, but it's not there yet. So for me it's a pass. OK,I mean, it's the stock hasn't, I don't know, I guess it has, it is, it had a big run up and now it hasn't. That's why we're talking aboutit, let's talk about Uber offering a billion dollars of exchangeable notes tied to shares of self-driving truck company Aurora. Aurora was one of the first autonomous vehicle startups to go public, a listing it achieved in 2021. Uber was the company that is the company's largest shareholder, couldn't sell its shares for 4 years. Aurora is a really interesting company. We actually had the chance to talk to the CEO and to be clear, Aurora doesn't make the cars, the vehicles, it doesn't even make cars at all. It's software is for self-driving semi trucks and it actually is one of the first ones that actually has, um, trucks using its software on the roads in Texas, so that was a big the company Uber still owns over 300 million shares of it, 23% of the stock, but what you get is when you get a convertible offering, it can dilute the value for existing shareholders. But still, Aurora kind of an intriguing, you know, we keep talking about Tesla, Waymo, da da da. I mean this software is already driving out there. I think this offering is just a way for Uber to raise a billion dollars of cash without selling the stock, and Aurora doesn't want them to dump a billion dollars of stock on the market. So, uh, this is a great way to converts at a at a 10 to 15% up into Aurora stock. So that means that stock or into cash. So that means that stock would be pulled away from Uber. So this is, you know, it's a way for them to monetize that destroying the market for Aurora and maintaining that partnership, so I think it's a smart move by Uber. I think uh Aurora likes it and uh and it's a bet that this could be the future because we, we do need truck drivers and we do need that logistics. Areyou invested in any kind of autonomous driving? Is that a theme that you're into? I know you're sort of more on the value side, so I don't know if thisappeals to you. I greatest international value in AI right now and one of our largest positions is called Alibaba. No one wants it, yeah, no one wants it. It's up, it's doubled off the lows. People are still not talking about it because the Republican Senate and House is saying we're gonna delist it again every 2 years we're gonna delist it, so we own it in Hong Kong. They're gonna report earnings tomorrow, OK? You saw JD earnings are gonna be is the cheapest way to own AI in the world because not only are there models beating Deepeek and beating open AI, but they're the largest cloud provider and what they say to all these AI startups in China, every single one of them, we'll help you out. We'll give you a free sample. We will give you cloud computing which you need and you can't afford. You will give us equity. So Alibaba is effectively an AI ETF in China. They own a piece of all the AI startups, so that's the way I'm playing it so indirect.I probably have a lot of autonomous driving, but I have it through something with a huge margin of safety, $80 billion of cash on the balance sheet, generating $20 billion of free cash flow, buying in stock like there's no no tomorrow and a leader in AI. So, oh, and by the way, they're the number one retailer to the middle class. So as the Chinese push consumption bonus, they're a toll taker. Um, that was a very adept pivot, Tom Hayes from autonomous driving in Alibaba and the stock is up almost 60% over the last year, so not too shabby on that front get to some breaking news that was crossing the wire. A wave of deals being announced amid President Trump's visit to the Middle East. This time it's Boeing. President Trump saying Boeing has won its largest ever order in the company's history. Qatar Airways said to have purchased 160 aircraft from the US company, and again, Trump saying that this is the total, the largest Boeing order in its history. Of course there's some other plane headlines that the president made with a Qatari plane, but we'll leave for the moment, as that country gives him a plane, um, but, um, Tom, Boeing is a company you own it's you like. This is a big one, OK. We owned it around $150. It dropped down to $129 with all the tariff barriers and all everything else. We bought it like the lights were going out. I mean, we have because here's the thing, we bet on jockeys, so they call me Turnaround Tom. I like to buy great businesses when they're temporarily marked down. Kelly Ortberg ran Rockwell Collins, OK, 7 years for bagger for owners. He's actually an engineer on the floor, so it's it's nice to have Boeing run by a guy who actually goes on the floor and knows how planes are put together versus a salesman when the doors fall off midflight. That doesn't work, OK? So Kelly is going to turn the business around. He's already done that. The stock is 129 4 weeks ago. It's 200 today. They just got a huge order. This is icing on the cake. This guy can deliver. They'll sell some of the space business and at at at the margins, but they operate in a duopoly. It's like it was hysterical when the Chinese said, we're not going to take your planes during the tariffs. China needs Boeing's plane like a diabetic needs insulin. OK? I mean, they can, they can go to Airbus and Airbus will say, we're so happy to have you as a new client. Uh, your wait is 21 years. Uh, how many would you like? And, and so now as soon as this was done, China went back to Boeing and said, can we get back in line? And Boeing we'll open the door. We like you as a customer, so China's back in the game. Saudi Arabia is back in the game, and they're gonna build the planes better than they've ever built them because Kelly Ortberg actually understands the business. OK, well, I hope, I hope that's so for all of our 6 who fly on Boeings. Tom Hayes is gonna stick around with me and we're gonna have more on President Trump's deals from the Middle East coming up after the break on Trump's visit to the Middle East unleashing a wave of AI deal making. The Trump administration clearing a path for Saudi Arabia and the United Arab Emirates to pursue their artificial intelligence ambitions as deals with companies like Nvidia, offering Saudi Arabia and the UAE wider access to advanced AI chips, data centers, and AI infrastructure. What are the risks associated with joining us for more Mohammad Suleiman, senior fellow at the Middle East Institute. Mohammed, thank you for being here. So I guess let's, you know, there's a lot of fanfare around all of these deals. It's not just about AI. We just heard about a big deal for for Boeing planes from Qatar. So what, how are you viewing this sort of wave of deal making that that we're hearing about? Great to be with you. Let me start by saying that the relationship between the United States and the Gulf has changed in the past 10 years. It started gradually in the mid 2010s when the Gulf countries started to diversify their economies away from oil, and they believe and they think that their future of their countries as a sovereign states, as, uh, economies that's wired for the 21st century is all about AI the Gulf countries are going to see that sort of trend of those of those uh Gulf countries, Saudi Arabia, UE and Qatar trying to become the back end for compute power that fills the AI, AI ecosystems globally, and this means that they have access to uh low cost energy, they have access to, uh, capital, they're able to invest in AI infrastructure on top of all of secure partnerships with the United States when it comes to chips, so they have what I call the computer triangle, chips, data centers, and capital and that what makes them very powerful player in the AI ecosystem globally. And this is why you see a lot of excitement around the president's trip to the region because it's more of a new era of relationship between the United States and the Gulf wired around compute, not really crude. And Mohammed Tom Hayes is with me as a guest host for the hour, and he wants to ask you a question as well. So Mohammed, what do you see as the magnitude of the, the amount of data centered centers relative to the rest of the world, uh, and, and how are they cooling them? Uh, is, is a key question in the Middle East, uh, moving forward? What, what do you see as the future? Is it gonna be the data center hub of the world, or is it just gonna be a major player along alongside the US and and other nations? Excellent question. I would say I would say the United States and China, the Gulf is clearly emerging as this third theater of AI power. They are willing to invest heavily in AI infrastructure, and the question that you pose about cooling is extremely important. I would say cooling today is not particularly about the question of access to water. It's about what cooling technologies that you have access to. We have seen a lot of new technologies, cooling, uh, directed chip cooling that are reducing the cost, uh, broadly the space needed for these sort of data centers, and I believe that the Gulf countries through their energy companies are investing in these sort of new chemicals for cooling because this is extremely important question for them. But to add on top of that, I think right now we're acting in an environment where energy is the real bottleneck for AI computing you would, I would argue that even ships, even ships with all the discussions around export controls and China, uh, able to access uh restricted AI ships from the United States, I don't believe that ships are the bottleneck. I think you through, uh, cash, R&D, huge market, I think it's very fair to say that you're gonna have other countries able to have that sort of capability, but I think the question of energy, abundant energy to fool the AI the main center, decisive factor here and this is where the Gulf is finding its own niche. So if that's true, then effectively the the two winners by default have to be the the uh the Middle East and the United States because we have effectively unlimited access to energy and, uh, and natural gas being the derivative play to to see that in the first stages. Is that a fair way to think about it? I think it's a very fair way to think about that. I think the Gulf countries have been investing heavily in building the electricity grids around this sort of major, uh, hyper scale AI infrastructure. I agree with you. The United States is clearly ahead in the AI race. We have more than 60% of the compute inside the United States we have the abundant energy and with the new discourse trying to streamline permits inside the United States to do major data center build up, I think we are gonna hopefully maintain our lead and and moving forward that puts China at a relative disadvantage. I wouldn't say that yet, but for a couple of reasons. China is a huge market, uh, and they're able, and they were able to prove that they're able to innovate and even exceed expectations when it comes to their own innovation ecosystem. We have seen the how we release of uh AI ship that send AI ship, and that has been doing actually, uh, um, uh, better than expected, so I wouldn't really discount China. I think a competitor in the IRA. I think they have the determination. They have the R&D spending. They're willing to go the extra mile, and I think you're gonna see a lot of breakthrough inside inside the Chinese AI ecosystem. Mohammed, to come back to my original question about sort of the risks here, are there any national security concerns about some of these deals sending chips, sending other infrastructure, um, to, uh, the these Gulf Coast nations? This is an excellent question, and we do have two cams when it comes to the question of ships. You have the cam that says we have to restrict uh uh uh ships exportation to any part of the world. We only have to export, we should export ships to very trusted allies, uh, 5 eyes partners, even NATO, even not, not the entire NATO nations were part of what we call the AI diffusion rule that was released under the Biden, so this is a cam. There's another cam that's saying that, well, OK, sure, we're gonna restrict, uh, sending these ships overseas, but that comes at a cost that means we're gonna prevent, we're gonna undermine our American companies when it comes to their own profits. These are the profits that Nvidia uses for, um, uh, for R&D. So you have to come with a balance and I think that the scourse now is how to come up with a government to government AI agreement with the countries that matter in the AI race like the Gulf countries when we have agreement on uh access on security protocols and uh by this we're able to protect our own uh IP and our own ships. I think this is the way this is the way we're thinking about the question of ships and export control right now. Mohammed, thank you so much appreciate it. Happy to be with you. Another stock that we are watching, it's the best performing stock in the S&P 500 this year. Might be a little bit of a surprise. It's NRG Energy. It's up about 71% this year. It announced recently announced a $12 billion deal to acquire a fleet of natural gas fired plants from LS for about $12 billion as we said, including debt. Betting the fuel will be crucial to meet electricity demand from data centers. NRG is a Houston-based power producer. It' a key beneficiary of the AI-driven boom in the US power system. Now it's fine to take a bigger share of that growth. So basically what we're seeing here is this big increase in NRG, this expansion. Energy already owns gas-fired generation. It also owns solar and other types of renewable generation here and the changing sort Hays still with me obviously the changing face of what energy generation looks like in the United States has been really interesting as we've seen it powered by this data center boom. Yeah, I think NRG is interesting. It's a great business. You've seen the stock go up quite a bit, but the problem is they rely on the kindness of strangers. They have to go to the regulators every year and beg them for price increases. That's the bad news. They've got to make all this investment in the face knowing what those price increases are going to be. However, they're gonna, they're gonna boom from this. They're going to continue to boom, but the run is already priced in a lot of that good news. Yes, but the difference with the rates is when they make those sort of out of, you know, they make the side deals with the data center operators like we've seen to some extent, right, Microsoft made the deal to reopen the reactor at Three Mile Island, but, you know, so I think that's what they and investors are banking on. I think so. I'd rather play the feedstock. I always try to play the arms dealers, not the warring factions. So for me, I'd rather play natural gas companies that have been left for dead like Comstock Resources. Jerry Jones owns 71% of the stock. They've got the Haynesville shale, and by the way, not only are you going to benefit from the unlimited demand from the data centers and from the utilities for that natural gas, but guess what, the EU trade deals are gonna about with the tariffs is all going to be you take our natural gas, we will lower your tariffs. They're in the Haynesville Shale which is right right there where they can ship. So, uh, so that's a good way to play. We started coming out on that aggressively at $8 or $9. It's $23. We think you can double again from here. Why is that? Well, uh, they have to report to the SEC, uh, all energy companies, PV 10, proven reserved for 10 years. What they is they've got 15 excess years of drilling that's not in the price of the stock, which is probably double plus from here. So we think this has a long runway driven by the AI theme. So when people say, what are your AI investments, I say, Well, Alibaba is a derivative play and I say Comstock resources, and people say what do you mean? I said natural gas and that's the story. And NRG is gonna be an equal beneficiary for sure, right, interesting. Thanks, Tom. I appreciate it. All your market action straight ahead. Stay tuned. You're watching Catalysts.A temporary trade truce now in effect, with the US lowering its tariff rate on China to 30% from 145%. China reducing its US rate to 10% from 125%. This agreement stands for 90 days while the two nations work to finalize their trade deal. So what are retailers doing during this 90 day pause? They're shipping hand over fist with more Yahoo Finance senior reporter Brooke De Palma. They're doing exactly that. They're jumping on this opportunity this lower tariff rate of 30% and what experts are telling me is that this went from being an impossible situation to a much more manageable one as retailers can now take action. I want you to take a listen to what Bernstein analyst Aisha Sherman told us yesterday afternoon. What we have seen leading up to this announcement was that retailers and brands were stockpiling product in China and not loading it onto ships to come into the US because the effective date of the tariff is the date in which the product boards the inbound vessel. So there were stockpiles of China, not boarding ships. With this announcement, we're now going to see the reverse where we're going to see a surge of imports coming into the US over the next month, month and a half, and probably even a pull forward of some of the holiday merchandise before that 90 day mark expires for fear of tariffs going back up. So does that mean that companies now everything the coast is clear, everything'sgreat? No, absolutely not, especially for specialty retailers who have these larger exposure to China. And what we're hearing today from a brand like American Eagle is that this is certainly already impacting their first quarter results. They actually were supposed to report on May 29th this morning we got from the specialty retailer, they withdrew their fiscal year 2025 guidance. They said that this macro uncertainty is hard for them to evaluate exactly how this upcoming year could play out. We also saw those preliminary results show that Q1 sales are expected to decline, revenue down 1.1 they also said that comparable sales are expected to be down in the first quarter, down 3%, and they also had to do more promotions during the quarter. They had to do more, uh, you know, sales because of this excess inventory that they now have in stock because back. They were nervous about how this would all play out this impact of tariffs. And if we're gonna get more inventory, there's gonna be more markdowns, which is disinflationary along with gas, which means it could be true that Powell is too late. He's 150 basis points too restrictive. He's got to go in June. Maybe, maybe, maybe lots of unknowns. I like how you made this about Powell. Look, you got to look through 1 and 2 quarters. This is a short term bottleneck. AEO is a random anecdote. Uh, I think, I think, but it's not the only anecdote. There are a lot of other retailers where we're seeing similar, we're seeing a huge divergence between hard data and soft data. OK, so on balance, when we look at retail sales, consumers are saying the world is ending, they're depressed, OK, but they're out spending like there's no tomorrow. If you look at the, if you look actual data, so you have an AO. Could it be their mix was off, you know, I, I'm, I'm saying on balance I agree with what you're saying. Could theirmerchandise not have been exactly what consumers wanted, and they, they even admitted that they got a got it a little bit wrong in this quarter. Yeah, Lulu had the wrong color a couple quarters ago and everyone said, I can't wear yoga pants that are off green, you know, I mean, I only wear purple yoga pants personally, but I, I, you know, you look at the markets a discounting mechanism, so it's, it's a lot of these consumer discretionary stocks when you look at the positioning relative to defensive, it's at record lows. People, this is known, right? So this is it looking in the rearview mirror when we look through the front window and we look at a better, uh, tariff climate, when we look at consumer confidence coming back soft data to start to meet the hard data.I think you're gonna see a boom, especially the wealth effect with the stock market back up is a very, very constructive thing for the consumer. I don't have to look out for, yeah, so you'll be buying plenty of purple yoga plants. That's right. Thank you. Um, of course you're gonna stick around. We got much more coming up. You're watching S&P 500 and Nasdaq have erased their year to date losses as investors flock to US equities in the wake of a pause in steep tariffs between the US and China. Our next guest is ETF flows into international stocks hit $7.4 billion. They're holding up even in the face of the US rally. Let's bring in Julie Guns, Alliance Bernstein, global head of ETF strategy for this week's ETF report brought to you by Invesco QQQ. Thanks for being here, Julie. Thanks for having me. So we've talked a lot about the sort of balance between international and US just generally in assets, but how is it played out through the lens of ETFs? Sure, so over, you know, there's been a lot of volatility over the past few weeks, and I think, you April, even within, you know, this week we've seen inflows into international ETFs and so, you know, US still dominates US large cap has been been the biggest flows, but I think people are are looking to international both from a valuation perspective and and performance and also to diversify their portfolios, um, as you know, trade and tariff risk, you know, has for the time being, but I think we'll still be out there as the yearprogresses. Yeah, it, it seems like international, you want two things in play. Number one is a weaker dollar, so that's helped. I think uh XU US relative to the US is outperformance of some 15-16% year to date. So now people, this was a big theme for us coming into this year. How do you see that playing out in because if you look at, you know, zoom out and look at the long term data, these run in normal 10 to 15 year cycles and we've had this zero interest rate policy so large cap tech has outperformed the last post great financial crisis. That's over. We're, we're in kind of a normalized uh interest rate environment. So do you see that as a favorable environment for the next handful of years for international relative to the US or you still king US equities? I mean, I, I think there's a place for both in portfolios um I think international, you know, has the opportunity, especially with, you know, if larger tariffs come into place, you know, maybe there's more of a a home bias in in European countries or other places throughout the world, um, and so you and and investors should probably diversify and have access to both, um, depending on how things play out. uh, I wanna ask you about the active ETF landscape which has been a big trend over the past few years. It's still a small little sliver of the overall ETF market, but it's been growing. um, why are people so interested in it and, big do you think that part is going to get? Yeah, I mean active ETF flows we've seen 380 billion net flows into ETFs this year in the US, and active ETFs have been 40% of those flows, so only 10% of the market, but 40% of the money in motion, and I think the benefits take these traditional active investments that were in maybe mutual fund wrappers or or different things and you give them the benefits of the ETF so you know transparency, liquidity, um, intraday trading, and so you get the best of both worlds of active management and the ETF wrapper and so I, I think that trend will continue and, and we'll continue to see the growth in in active ETFs. Julie, thanksso much for coming in. I appreciate it. want to get some final thoughts from Thomas on the US dollar and this after there was a story today that Bloomberg reported that the US and South Korean in Korea in their discussions over trade had brought up currency as a possible lever. We did see the dollar pull back, particularly against the South Korean won on this. There's a lot of debate over whetherA weaker US dollar is a good thing ornot. Uh, it's going to help earnings in the back half of this year for sure. That's already happened. The dollar's been weakening. We're going to get a counter trend bounce because everyone's bearish on the dollar right now. Uh, however, the Chinese were pretty smart about this tariff negotiation because what they effectively did was they devalued the yuan by 20% ahead of talks. So it's like, OK, you want to do 20% tariffs, we're kind of flat. It's fine. Uh, so I, I think you're going to see a trend. Uh, there has been a theme earlier in the year they were the Mar a Lago Accord where they would devalue the dollar to balance out trade. Uh, I think you're gonna see some pockets of this. I think the trend for the dollar moving forward is going to be a little bit lower in the coming years. That's gonna help, uh, S&P earnings. That's gonna help our trade rebalancing, and it's gonna be a positive thing all around. We'll see, Tom. Thanks so much for being here. Appreciate it. Uh, that's for Catalyst. Coming up, Brad Smith has you for the next hour on wealth. Stay tuned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
