Market Outlook: The podcast discusses the excitement in the markets due to a perceived change in tone from Fed Chair Powell, suggesting potential rate cuts that could impact housing affordability and risk asset valuations.
Federal Reserve Dynamics: There is speculation about political influence on the Federal Reserve, with discussions about potential changes in Fed leadership and the implications of such moves on monetary policy.
Corporate Developments: Nvidia's upcoming earnings are highlighted, with expectations of significant growth, while Intel's financial struggles are noted, including government involvement through the acquisition of a stake in the company.
Investment Opportunities: The podcast mentions potential opportunities in companies like Eli Lilly, which is advancing in the GLP-1 market, and discusses the impact of tariffs on the furniture industry, affecting companies like Wayfair.
Cryptocurrency Insights: Ethereum's recent price movements are attributed to potential supply limitations, which could drive up demand and prices.
Sector Trends: Airline industry consolidation is discussed, with Frontier Airlines expanding routes in Spirit Airlines' markets, potentially impacting competition and profitability.
Government Influence: The concept of state-owned enterprises is explored with the U.S. government's stake in Intel, raising concerns about government interference in corporate matters.
Economic Indicators: The podcast touches on the broader economic implications of bond market reactions to Fed policy changes and the potential impact on equity markets.
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Transcript
Hello and welcome to D'vorak Horowitz Unplugged, an hour-long discussion of activity in the financial markets around the world featuring columnist John C. D'vorak and money manager Andrew Horowitz. This conversation is casual and unrehearsed. Let's join John and Andrew now. >> I'm John C. Devorak >> and I'm Andrew Horowitz >> and it's the 26th of August, the last show of the month, uh 2025. So, uh, your summer was good. Labor Day is coming up and that that's exciting. >> Yeah, that means you can't wear linen. >> Can't l linen or whites? >> Well, I think white, but linen usually. >> Definitely not white linen. Not white shoes. Do you do you >> should wear white shoes anyway? My father would like Memorial Day would come and he was like all ecstatic because he'd go into the ends of his closet and he would get grab those white patent leather and leather shoes with the buckle and he'd get out his white pants. >> The buckle. >> You know what I'm talking about, right? >> Vaguely. Yeah. >> And then he he he'd be all excited and he'd be wearing his white pants with his white belt. Big thick white belt with his white pants and these white shoes. It's like, h, he's like, he's like the the official welcomer of summer to the whole neighborhood. Oh, Bar Barry's in the whites. Must be summertime. And then >> I don't know if I've seen anybody wear white pants for at least 10 years, maybe 20. >> They're very, you know, white is I always say that if first of all, if if you're ever in the planning stages of doing events and things like that, if you don't have the idea, you can't come up with something, everybody just goes, "Oh, let's have a white party." And I find that white is so unbecoming. It there's no there's no hiding anything. >> I don't I don't like it. I don't like it. >> Anyways, >> I do have a white linen coat that I had custom made in Korea, >> which is okay for it to be wrinkled, too, right? Linen's like >> Well, because it's linen. Is it okay for it to be wrinkled? Can you find it when it's not wrinkled? >> Right. So, it's like, oh, he's wearing lin. Oh, it's wrinkled. Oh, it's linen. He's good. It's okay. whereas it was something else. But look at that slob over there. Can't even dry clean his jacket. Yep. All right, let's talk about what's going on in the markets. We have a lot of excitement over the change in tone from Powell, as I'm calling it. Looks like Powell threw in the towel. Markets got all excited. >> Yeah, this was this had something to do with that last meeting, >> last little chitchat. Crypto also surges along with markets and came back down a little bit. We have S O E. Get used to that three letters S O E. And we're going to talk about that tonight at length, I think, because I'd like to actually get your opinion on this because it's something that I think is uh very concerning to many, but it's being overlooked for the most part by markets and by people. Um you know, even with the change of tone by Powell that said maybe it could be, we'll see what happens. And the market took it of course as oh definite bond yield. Everybody's excited because you know what the theory is? If the Fed reduces rates and they take down the Fed funds rates that boy oh boy housing is going to become, you know, much more affordable. >> They catch on fire. >> Yeah. It's going to become more affordable. And you know, people that are >> and people are talking about the h the 0.5 too. >> Yeah. If you go 0.5. Well, guess what? Long bond yields are actually up since Friday. And I'll give you one guess as to what mortgages are based off of long or short-term rates. >> I'm guessing long. >> Correct. You get the prize. So therefore, the conventional wisdom, which is dumb, that reducing rates will reduce mortgage rates is not really factual. So something to consider. Meanwhile, markets are hitting all-time highs and uh >> been extreme. >> Markets were up like 800 what was it like 860 points on Friday after this little little one sentence which I I have a quote here somewhere. We'll talk about that. Uh you know it's just it went went nuts. the idea that listen yes if the Fed does in fact reduce rates there is a repricing of risk assets that needs to be taken into consideration that is classic you look at the uh you know a discount model whether it's a dividend discount model or any kind of discount model that you're using to value stocks based on a risk-free rate of return the risk-free rate of return goes from I'm just going to use a number 4% to 3.5% 3.75% 3% whatever the risk-free when you calculate that in there just that one input changes the entire calculation. So that discount factor methodology will then boost the valuation of stocks and no and and instead of having if you do it on a an index base instead of having a 21 forward multiple it's reasonable to assume a 22 let's say or whatever the number is. problem is this has all been assumed already. all this has been in play that there will be eventually a there'll be two cuts now whether it's in September October or whenever it's going to be three four month five months from now it's all been priced in already this is now repricing the repric again it's like every time there's a breath it's like oh how exciting or or it's like every time somebody is in a supermarket and picks up an item it's a sale they put it down but then they pick it up again it's a sale you know they ring it up as a revenue That's how that's how this this is all being calculated. It's it's pretty pretty amazing on on the resiliency of all this. Um airline consolidations are happening or maybe it's airline murder. There is uh a few things happening out there that are really fascinating in the airline space that uh one particular airline is looking I think to end the pain and suffering of another finally and put them out of their misery. Nvidia earnings coming up tomorrow night. Uh and crypto as I mentioned moving. So let's talk about let's talk about the big issue. Let's start the show off with the discussion of the Fed. Now, the president is looking to fire uh Federal Reserve participant uh Cook over allegations that What are the allegations? >> Cook the books. >> Yeah. Cook Exactly. cook in the books by doing something like putting that their primary residence, her primary residence on multiple applications for home mortgages and saying this is my primary residence and therefore giving first of all do we do we believe that the mortgage companies are that dumb that they don't look into things? >> Yeah. >> Okay. All right. So, if we believe that that's the case, if we believe that the mortgage company's dumb and they're not doing their due diligence, >> they don't necessarily have to be dumb. They maybe don't care as much depending on the person that's checking the box. >> All right. So, Cook puts down that the principal residence is that particular one. That's the allegation. President Trump says, "You know what? There's enough evidence," which whatever that is, even though there's no official like there's a charge, there's no due process to actually find this person guilty, right? This is not that hasn't there's been no uh formal conviction, >> indictment. >> There hasn't been that either. Nothing. But there's enough that Trump says to actually fire Cook now. I don't get it. If there was enough if if it all it took was an allegation of wrongdoing to make somebody ineligible to have a job. Trump would have been fired 6,000 times. And >> yeah, but who's going to fire him? >> No, he can't fire him. I understand that. You know, I get that. So now here's my feeling on this. This is just one more play to get rid of Powell because now Powell's gonna fight this. And who knows if Cook's going to be allowed in the office tomorrow. Maybe they'll just take away the keys. Allow say security all your your clearance is gone. Can't come to the office. We got a box waiting outside with your pictures of your two dogs, your husband, uh a plant that's, you know, halfway dead and your coffee cup. Here you go. Thank you. and Trump's uh Pal's going to fight it. He says, "You don't have the right to do this. You can't do this." And uh not under my watch. And if Powell in fact fights it, maybe Trump will say, "Hey, wait a minute. I'm firing you because of cause." >> Yeah, I think that's a stretch. >> Trump is looking for this. I mean, he said today on social media that this now paves the way for having him having a majority in the Fed that will soon push rates lower. So, because he's going to have to appoint somebody, right? >> Yeah. But he's already got Powell and his under his thumb based on what Powell did last Friday that drove the markets up. >> But I get that >> he doesn't have to he doesn't have to do anything. I mean, he wants to get rid of this cook woman, but she was appointed by Biden and under some circumstances very similar to her getting out ousted. The Democrats had ousted three uh Federal Reserve people uh largely uh done by Elizabeth Warren and some other Sherid Brown I think's the other one. This was del this was this was elaborated on by a Charles Payne show uh today. Uh he he's a Trump maven and so he documented this is not new that anyone's ever done this before. So it can't you know even though the Democrats are making a big fuss about it's not that they're the ones who did it first. The problem is that's exactly the point. There in lies the rub that all these things that are happening are now becoming normalized so that we can never have consistency. You have these people that are appointed into a position that supposedly during their you know they should be at least reasonably qualified at least somewhat I think and now it's become like you know my people are in now and when it comes to the Fed though do you believe that it's okay to have extreme uh I don't I hate the word political that's just not a good one but do you have extreme ability for let's say the White House or any other party to influence them. Influence is the right word, not political. Influence significantly influence uh policy direction or should there be >> I you're talking to somebody I'm not convinced that the Fed needs to exist. >> Well, I that's another whole story. But when you look at what happened like in Turkey, which is the example everybody uses, right, where Erdogan, he decides, you know what the hell with them? They know nothing. And >> yeah, that's a good one. >> And interest rates need to be lower to fight inflation. And he dropped interest rates down. Inflation was just a mere 30% 50% whatever it was. And and I think there needs to be if there is a Fed, if there is a Fed, there needs to be independence. That's the whole point of how it has been working since the 19 what 20s? >> Well, since began I think was 1913. So yeah, the the the creature from Jackal Island. So I I I I'm surprised that and that's probably why the dollar has been, you know, again moving a bit lower and again why rates are up on the long end. That happens and there's undue influence on the Fed, I think the bond market is really going to get pissed off. That will have an impact on equity markets as well. But right now, everybody's just letting whatever happened happen. A lot happening, too. We're winless. Like, >> like you said, if the bond market is really the determinant factor for a lot of the uh uh economic situations, including housing, uh then who cares? >> I guess I agree. Nobody cares right now. That's the point. Everybody's just very laz about it. I'm not saying they need to be anything different either. I'm just reporting the facts. I I'm still baffled about some of the things, but yet at the same time, you can't argue with them. It's okay to be baffled by them, but not you can't you can't go against what is. You know, that's like somebody saying, you know, the markets are up, it's wrong. I'm going to go 100% short while it's going up and I don't care. And the more it goes up, I'm or vice versa. Markets are going down. No, they shouldn't be going down. I'm going to keep buying in. And you get just, you know, you get screwed. Can't be dumb enough to go against what is actually the reality until things change. >> When momentum players always win out. >> Yeah, exactly. Got some news from the um wind turbine area. The uh government continues to US government continues to shut down alt energy projects in particularly the ugly wind turbines. They're no good. They're evil. shares in wind farmer developer Orstead. They they they went to a record low. The US government last week ordered the company to halt construction of an almost completed project. This is uh there was a stop work order for the Revolution wind project off of Rhode Island which is about 80% complete according to Orstead. 45 of the 65 wind turbines have been installed. So now what? You have this ugly non working I was just talking about an isore. >> Yeah. So now we have an ugly 2/3 of the way completed wind turbine that's just sitting there. >> What's worse? >> Well, are they completed with the propellers and ready to go? Can they use some of them? >> 45 of the 65 wind turbines of are on. Not It's missing 20. >> Oh, well. So what? So they get 45 going? >> I don't know. Well, this 45 is better than none if they work, >> I suppose. But they're saying it doesn't work. So, we'll see what happens. Uh, in the miscellaneous category, we have Spotify, which very much like a I guess a Netflix or some of these other types of very much well-received subscription models has an incredible amount of pricing power. So Spotify is going to be raising its prices on uh features as it continues to reinvest in its own um progress and features of the company. Uh they have about a billion users said that it will raise prices to 11.99 almost 12 about 14 bucks a month from $10.99 for markets including South Asia, the Middle East, Africa, Europe, Latin America and the Asian Pacific. So, I guess we're good over here for right now. >> Well, they'll raise the prices eventually here, too. >> Probably be more. And you know, the price increase they've had over the last however many times recently they they did in fact raise prices and their cost cutting in over the last few years helped them actually achieve its first annual profit just last year. How many years has Spotify been in business? long time. >> Let's see. Spotify start date. I guess that would be uh it was it was Stockholm, Sweden, by the way. >> Yeah. >> And uh it was founded in 2006. So, hey, good for you. Good for you. >> 19 years later, they make >> good for you. Bravo. Gota appreciate a company that you don't you have no profit yet you make people billionaires. Well, you got to give him credit for that. Yeah, it takes skill. It >> does take skill. You know, with if you take that model >> and you just place that right on top of our show, do you know what our valuation should be? >> I'm guessing Well, probably 10 billion. >> 10 billion. At least 10 billion. >> Yeah. >> And we're not raising our prices. Maybe we should. We'll double them. >> Yeah. Maybe we should double them. All right, Jackson Hole. I'm calling it Jackson Holy. That's what we're calling it. Jackson Holy. Pal hinted that maybe at the uh Jackson Hole Confab, the economic confab that goes on there every year where they get together, do a little bit of fly fishing, a little bit of whiskey tasting, a little bit of uh the wink and the nod handshake, you know, that whole thing. Uh he said maybe there's going to be a change in his thinking. H in his final this what they this is what they say in his final address. by the way, foreshadowing that they believe that yes, everybody's in agreement. He's done. That's it. Play out your time and move on. >> He is gone. He's gone in spring of next year. >> Yeah. They'll be he'll become >> his term runs out. >> He could be reappointed. >> Oh, that'll be the day. >> Yeah. Uh, did you hear the latest where there's actually some talk that I of course I think this is just a goof. But Trump says he may put Janet Yellen back in that spot >> cuz she was extremely dovish. That can't be right. It can't be right. How could that be? >> No, I don't think so either. It's just something is growing. It's It's one of these things just to show it shows up in the uh stream just to get people all riled up. >> Greenspan, let's go there. Why? Why not? I think he's still alive. Still alive. Yeah. Put Greenspan there. >> Well, they they figure he's going to put some Fox uh host of some sort on there. Judge Judy or something. >> Everybody every other person he's got working. So, I'm watching the uh the situation in uh Washington. And I guess it was on Monday of last week where they had all these dignitaries from all over the world coming into the White House and there's a blonde that goes out there and greets each one of them. I said, "Who's who?" And they never show her. And she's out there. She greets each one and she organizes the photo shoot. She's doing all this stuff. And they never mention who it is. And I thought it was maybe it was the the press secretary, but that's not her job. It turns out to be the uh director of protocol who's given an ambassadorship as such and it's the and it's the old radio host Monica Crowley. >> Really? >> Yeah, that's what I said when I she was being she was interviewed on the last Laura Trump show over the weekend on Fox, which is a good show, by the way. a surprisingly good show because she gets all these she gets all these screw ball interviews with all these insiders and she had Monica Crowley on and they discussed all this and I there was no mention by anyone that Monica Crowley was even working in the Trump administration and this is another example of some media person that Trump likes to put into these positions. >> I mean >> we can get a job >> Gordon Ramsay for Fed chair. >> Gordon Ram. >> There you go. Yeah, you can yell at everybody. >> Uh, >> call him chef. >> Chef. Yeah, Fed Chef. Um well, as in his final address as Fed chair of the Jackson Hole, Wyoming economic symposium, he hinted at a Sep September interest rate cut, but shot stopped short of committing to it, of course, uh skirting a careful balance between the mounting job market risks and lingering inflation worries. The Margo was enthused with his line. He said, "With policy in restrictive territory, the baseline outlook and the shifting balance of risk may warrant adjusting our policy stance, which the market like went cuckoo cuckoo for cocoa puffs." The probability of a 25 basis point cut in uh September now is at se 83%. Which was up from about 75% a few days ago. So, not a big deal. Not a big deal. So there's a bet of about 25% chance. Again, this is the Fed markets, but the Fed follows these. That's how it works. The Fed doesn't want to surprise. So they set the stage. They work it until it gets to a point where it becomes a pretty much uh not a probability, but a a >> done deal. >> Done deal. And then they just do it. So, it's priced into the markets. Now, of course, if in September, if if if this was all of a sudden September and it was the meeting date and they dropped the rate by 25 basis points, markets would like rejoice for a minute at least. Everybody like, "Oh, look, he did it." Like, we knew he was going to do it. Markets are usually an expectation game. You have those investors that, you know, flinch on any act on any reality. In fact, I would I would go so far as saying if he dropped to 25 basis points because now everybody's starting to think about 50 basis points, then it would be a disappointment to markets. >> Yeah, there's a lot of talk about the 50 points. >> The 50 basis points, they're going to try to make the case. All the bear uh the um the doves out there and all the bulls for the markets are going to make the case that during a rate cutting cycle, the Fed usually comes out with a 50 basis point cut as the first one. That's what they're going to say. >> Let me let me debunk That that's true. >> Yeah, you can believe it. >> But here's the problem. This is not the start of a rate cutting cycle. We are already in a rate cutting cycle. They did the 50 basis points and now we just pause for a while. Now it's the continuation. So this is not the start by any means of a rate cut cycle. So let's just take that and throw it right out the window. Now it it's possible that things deteriorate in the economics that will force them or provide them enough ammunition to to do it. But but I'm just saying it is not the precedent that uh unless there is something economically necessary to do so that this is the beginning of a rate cut cycle. Does that make sense? >> Yeah. Yeah. I'd like to see 50. >> Oh, it would be very nice to go to zero for God's sakes, right? Well, that's what it should. Well, yeah, with good luck. That's not going to ever happen. >> Yeah, but but but it would be it would be nice to go 50. Now, what's your reasoning for this? >> I think it would livven things up. It would also get the housing market a little out of the doldrums. >> Setting fire to a house will also liven things up. >> I mean, I'm just saying. >> Yeah, that's true. Yeah. Yeah. >> There's a lot of things that would liven things up. You're right. >> Well, the Dow Jones Industrial Average was up over 800%. The S&P NASDAQ rallied like, you know, 2 and a half%. Small caps were up 4% on the lower rates. The small caps are the most uh sensitive to increases and decreases in rates. So, they were up pretty good. Still in the small cap universe, about 70% of the companies are uh not profitable. >> Yeah. And you know, I was watching I sent you a copy of this video presentation. >> It's very long. >> Very long. >> Very Yeah. Hour and 17 minutes. It was a uh it's two bears. Uh moaning and groaning about how we're already in a recession. They had a couple interesting indicators, including the stripper indicator, which was something we've always joked about on the No Agenda show, which shows it comes up every Thursday and Sunday. Um and uh they they pointed out that the entire S&P 500 is being propped up by the top 10 stocks that the I this one I did take to heart which is that four this S&P 490 in other words the 490 stocks underneath the top 10% uh have been flat for the last since for years and years. They haven't done anything and it's just these superstar stocks at the top that are carrying the load. >> To a degree, I think that's right. And if you ever hear me talking about the sinkhole, we've talked about sink holes before, remember? >> That's that's a thesis that this is a a very thin covering over the hole that's opening up underground, an underground river. That's in this case, >> it's a sinkhole. >> Yeah, it's a sinkhole. So, you know, these 10 stocks are the ones that are being the the ones that that are masking the stuff underneath. But there's some truth to that. Yet I don't fully agree with that. There is a broadening of the there has been a broadening of the underlying stocks for some time. In fact, uh up until I would say March, things are going okay in the in the breath area. That's the uh you know, Vancers, decliners and companies that are doing well. But uh that all fell apart once there was again a scare not only terrorists but a scare. As a matter of fact before January we had the big big names also having problems and big rotation that was taking out the big caps but people were putting money into healthcare utilities. So I'm not exactly agreeing of that with that. Uh it's it's a nice talking point and yes there is a lot of weight a lot of weight that these other guys are pulling and you get that because the market cap waiting way that the construction of the indexes of the S&P 500 NASDAQ small caps different than the Dow Jones Industrials by the way. Uh but because of the construction and and how these things are calculated with the market cap waiting, it definitely has a significant uh waiting and impact when the the large stocks move. As a matter of fact, Nvidia is coming out with earnings after the close on on Wednesday. Now, Nvidia makes up about 7 and a half% >> of the S&P 500. So that means that if that means a half a percent a 5% move on Nvidia is going to be about 35 or 40 basis points on the S&P 500. It'll probably be more like a one and a half% move on or one to one and a half% move on the NASDAQ 100. That that's disproportionately significant. >> Yes, I agree. and they don't change his methodology because that's how it works. So, let me just get go run through Nvidia's earnings expectations and we can go back in a second on the other commentary. Um, estimates this is what you want to be looking for. Zach says about a buck. Kiplinger is forecast about a buck looking at about a 48% increase on earnings EPS per share on a year-over-year basis. The average, the consensus about 97 cents, about 92 cents to A15. Now, revenues, they're looking at um Zach's coming out with 46 billion. Kipinger, now this is a lot. This is for a quarter. Uh Kipinger is uh 46 billion, a 53% increase year-over-year. The average 44 to 45 billion. And forward-looking, we're talking about um about 428 a share. This is on an annualized basis. So, where is where is uh Vid's trading at what 60 something? one 180 I think. >> Really? Is it that high >> today? Yeah, >> it hit 180. Uh NVDA 181. So you take 181. So let's look at um let's calculate this, shall we? What' I say? Let's round it to let's even do five. Five [Music] 36 times forward. So, you had a 36 times forward with a earnings growth of 48% on a on a on a um uh on a uh year-over-year. So, your PEG ratio is in good shape. You could have a 36 forward 36 times paying 36 times for a stock that's making 48% per year. Not too bad. >> No, not at all. >> But the question is, does that last to 48%. I mean, how many how many 48%s a year can you have before it's some absurd amount of growth? >> No, it's ridiculous. >> Now, 48%, by the way, on these kind of revenues is remarkable. You get 46 billion in a quarter. Round number, let's say it's, let's just multiply that by four, $200 billion per year of revenue. You increase that, but it's another hundred billion dollars a year. >> Yeah. which is an incredible number. >> It's outrageous. >> So, how long can they keep doing that? And and then and then we go to 100. So, let's just say it gets to uh 200, it's 300. Now, you do another 48, now it's another $150 billion. Now, you're at to 450 and so on and so on and so on. So, you're doubling your basically doubling every one and a half years of your revenue. That's a lot at these levels, especially with a market cap of 4 trillion. >> Yeah, I know. It's unbelievable. >> So, are they going to probably beat Yeah, >> something's going to get something. I mean, I like it. I think I'm going to put it on the game for today, even though it's already a 181. Uh, it's just that something has to give. Is it qu sustainable and how long will people be paying up if in fact >> it's sustainable for about a year? >> I mean they've been doing it for two and a half years already at this level. >> Yeah. Well, you know, you have a run of two or three years. It's not impossible in tech. >> Mhm. cryptocurrencies, by the way, Ether, Ethereum, hit a record close on last Friday after the announcement. The markets came up, all of a sudden, Ethereum, I don't know, moved. Why? Uh, it's possible that Ethereum is only going to have about 800,000 shares um 800,000 on Earth, if you will, in the next year. >> Oh, okay. That makes sense. and they think that there's a a bit of a uh limitation on the the amount that would be uh mined and then the the amount that's desired to be bought. >> Yeah. Shouldn't this shortage make it cost more? >> Yeah, that's that's what they're thinking. That's why all of a sudden, I guess it went above the all-time high. It was last time I was at a high was in I think 2021. stateowned. Oh, SOE osa. Here's the the three letters I told you to pay attention to. S Oe >> stands for stateowned enterprises. >> Yeah, >> this is something >> China. >> Well, it was terrible. How it's unfair. It's how Wait a second. You know, look at what China does. They prop up their businesses. And how do we compete with something like that? It's terrible they do such a thing as socialism. It's communism. Well, here we are. Stateowned enterprises. The US government acquired a 10% stake in Intel by converting 11.1 billion of previously issued grants and pledges into equity. Voila. Poofy. Hello. >> Yeah, this is hilarious. It listen to this. They received 433.3 million shares in non voting priced at $2047 each. >> Yeah. >> Totaling initial in valuation >> already up three points. >> Yeah. >> Although it's non voting. So I think the idea is they think they can ease into this with the non voting because they don't want to say well yeah we're going to own 400 million shares and we want a seat on the board. >> Right. Right. Right. And because then then everyone goes, "Oh my god, we can't have government seat on the board. That's no good." It'd be like China because China's telling these companies what to do and how to do it. They're going to they take Jack Maul and they throw him in jail for just saying something >> black bagging. >> Can they black the guy? And so they can't have that in these companies yet. I don't there's no doubt in my mind that down the road if they keep if nobody objects too much we're going to have government uh secretary of commerce or somebody's going to be on the board of directors of a couple of these firms >> has to no sense not to >> I agree but I disagree >> and they'll get voting stock >> the government >> and how do you feel about this >> oh I think it st it stinks It's going to it's you know because I mean all I have to do is just refer to Celindra. >> Oh, how'd that work out? >> It didn't work out at all. >> And and wasn't this a major issue with the was the Obama administration? I think it was Obama, right? >> Yeah. >> Yeah. And then the polit political side of it was that everybody was all pissed off that how dare they infuse this much money and it must be a scam and somebody must be making money somewhere on this, >> right? And then we turn around and do this the same. Well, not the same. >> Well, we do it differently. The Obama never had the government never had shares in Celindra. It was just it was just it was a fishier. It was worse because it was just basically giving money away. But, uh, the idea I I I like the idea or the thought process where it's we're giving we're not going to give money away anymore. We're going to buy it's going to be strings attached. now because there's been such a squandering of money. I mean, okay, so maybe this is one solution to that. Uh but at the same time, it's going to invite government interference in corporate uh matters. >> It has to if they're if they're dangling money in front of them, and that's what's been going on to begin with. But if they're dangling money in front of them, I'm not in big in favor of providing these major companies with all these these these cash infusions for free. That's just dumb taxpayer money just going out the window without any checks and balances, without any recovery, >> right? >> With with the hope of what what do we get? The hope of the oh, it's going to be good for Americ I've been saying this about medical research. I mean, why is the US government paying for medical research that benefits pharmaceutical companies and only the shareholders of those pharmaceutical companies make out on the deal? The taxpayers don't, right? I It makes no sense. they can do their own damn research. >> However, while none of this makes sense, the question is, would have Intel initially taken the money through the chips act with strings attached that if they did so, they would have to give up part of the company. I don't know. Well, the compt is floundering. >> Yeah, clearly. So, they're giving up part of the company. I don't a non voting stock without giving up a board seat or anything. I they probably see that as a as a life uh uh jacket or a life preserver tossed their way and okay so the government owns 400 million shares or whatever the amount is. Uh so what >> they got another two million $2 billion from SoftBank as well $4 billion. How much trouble is Intel actually in? And why are the shareholders not recognizing this? And why is there a buzz like, hey, Intel may be a great buy? Who in their right mind wants to take a diluted shares >> of a company that has to take government money and money from SoftBank and thinks that this is a good idea? >> We'll unless there's something we don't know. It's got to be there's got to be something going on. Like is there a chip that they're sitting on? I've bitched about this before that they had one of the first neural network chips anyone ever did. And the neuronet networks are the front end of uh AI. So it's kind of important. Is there something we don't know that Intel has? They need a lot of money to make it happen. Uh they got their hush hush about it. I can't believe anyone could be that secretive so it doesn't get out. There's a rumor mill in Silicon Valley like every place else. I haven't heard anything. Uh but it's possible. >> If it's possible, why would they take in that money? Well, because they need because they need the money. I I mean the spot they may be at their, you know, at the end of the rope the however you >> So this is the old, hey, all we need is one more injection of capital. Everything is >> and then we can do our thing and we'll all be rich. >> Everybody's going to be great and we're willing to give it away to you at a discounted price. By the way, money that you already gave us. We're not getting anything new from you. Well, two billion. No, it was all reclassified supposedly from the chips act. >> Yes, but they they would have been pulled. >> That's another thing. You you live you you you you you live on grants/government and you do all this planning and I have friends and colleagues that I know that are in the business that deals with the government and they're like, "Holy crap, we have no idea what's going on. We don't know what's going to be pulled even though it was committed to." Who in business? Could you imagine doing a a contract with a a company and you get in there and you pay them all this stuff and all and you're like, "Okay, uh you know what? We decide we're reversing it. Give us all this money back." Uh what we just set up this factory to to mill your product and you paid us and you have a contract. How's that work? Well, it's fine. If not, we'll sue you. Oh, and by the way, we're the government. We have unlimited re re uh uh resources to sue you and just hold you up in court forever. by the way, we'll also shut you down for a while for all sorts of shenanigans that will just put on you. It's a pretty interesting process that's going on right now that is is is a slippery slope. We let the government in. Where does it where does it stop? >> Yeah, I can't argue about that. >> Now, uh next up, Harold Lutnik was on uh TV today. This is another thing. These guys are on TV all the time now. London London. >> Basically a TV show. >> Yeah, it's really And w and here we are a new premiere of US Government in Action today starring Howard Lutnik. He's on today talking about the possibility. >> By the way, is is that guy ever not smiling? He's always got a big >> a big chess shower grin on his face. He's the happiest guy in government ever. You know, the problem is that that kind of happiness only looks like somebody that's bullshitting you. >> It does. You're right. >> You know, you can't be that happy. It's like, you know, I feel like it's like the whole time he's going, "H, I'm getting over on you. Let me tell you what's going on. We're going to steal from you." I mean, that's what it sounds like. It's like a It's like like a used car salesman. He's talking about the possibility USA getting a piece of def. Now, I'm not saying he is. He's a smart guy, don't get me wrong. Uh but and and maybe, you know, he's just legitimately happy. Loves his job in government. >> Loves his job in government. You know, he was a powerful guy in the financial industry. Now he's like, I love being commerce secretary. He talked about now the possibility of the USA getting a piece of defense contractors. He said Lheed Martin, which makes most of his revenue from federal contracts, is basically they're an arm of the US government. How is that? >> Yeah. Well, that also that combines nicely with changing the Department of Defense name >> to what? >> To the Department of War. >> Oh, yeah. >> It's been the Department of War historically since day one up until 1947. They changed in 1947 to the Defense Department. And now Trump's talking about changing it back. You can't keep up with the number of things going on, by the way, which is you're surprised by this. >> Trump has has a has a he look, it's so clear he has some kind of an imprint of a certain date in life that everything should be like. So if it's 1947 to 1965, that time range, everything needs to go back to what it was. Those were the good old days. And um >> his his reference is always going back to McKinley back in the 1890s or so. >> Like what? Okay. >> Uh-huh. Well, he also said that Trump administration um the the military leaders are thinking about whether the US should acquire equity stakes in defense contractors. That's what he said today. I don't know. We'll see how that plays out. Uh Spirit Airlines doomed. doomed, I tell you. Fort Lauderdale, they're based here in Fort Lauderdale. Uh, Frontier Airlines on Tuesday today announced 20 new routes it plans to start this winter and many of them in major Spirit Airlines markets like it's um it's the ones that are based in Fort Lauderdale. Um, now already Frontier overlaps with Spirit on 35% of its capacity, more than any other airline, by the way. So just to give you a comparison also uh Frontier is not profitable. Spirit Airlines lost $245 million in the second quarter. Frontier lost 70 million. But if a race to the bottom >> if Frontier is taking away business from Spirit, this could be bye-bye Spirit. Unless Howard Lutnik decides, "Let's buy Spirit Airlines." >> I don't think that's going to happen. >> Let's buy Spirit Airlines. >> He's not an idiot. >> We'll see. We'll see. Uh Cracker Barrel, you've been following this little kurfuffle. >> Yeah. Yeah. You know what the problem is? I I I can't even get remotely interested because there's never I don't think there's ever I mean there's been some Cracker Barrels on the West Coast. They've come and gone. I think they left the state. Uh it's mostly a southern chain of uh roadside uh kind of attractions that you run off on the on the if you're driving around between, you know, Oklahoma City and and Memphis. >> If you ever drive by a Cracker Barrel, it's always looks busy. And I think this is like a trick. If you create a strip mall where you have the parking just so where even just the employees have to park in a certain area and it makes it look like the parking lot is full like, "Hey, what's going on over there?" Cracker Barrel always had people shilling. >> Yeah. Cracker Barrel had people waiting on the remember on the porch, the rocking chairs and all that >> and there was lines out the door. I think they purposely did that. to make and then he had to walk through the store to get to the restaurant. I was only in this twice a day. >> Yeah. Yeah. Vegas does that too. When you when you check into the hotel, you have to walk through the casino. >> Exactly. So, I think that Cracker Barrel was the inventor in a way or the one that perfected this. Hey, look how busy we are. When in fact it was just like the basic waiting was, oh, you have to wait outside. There's nobody inside waiting. Nobody waits inside. You have to wait outside so people could see you. There's always a line. It's like, but I was always like the opposite. I'm like, look how busy that place is. I don't want to go there. >> Wow. I'll never get it. >> Yeah. It's kind of my It's kind of my thing, too. I don't like there's a line. Forget it. >> I'm not going. >> But that's the best place. No, I'm not going. I'm not going to stand on line for nothing. >> Ryan reminds me of a story. Can I tell you a little story about ice cream? >> I'm I'm all ears. I was in uh in in a small island, not island, a small area, a a a beach town off of Lisbon called Kashkeish, I think it's called. Kashqish. And uh one night somebody says to me, you know, have you had the ice cream here yet? I'm like, no. The best ice cream in the world is right over that place. I'm like, let me get this straight. I'm in this little beach town and the best ice cream in the world is right here. Yes. In the world. Yes. Like, you got to be kidding me. Nope. Well, I walk over to it. I'm like, "All right, I'll bite." I walk over to it and lo and behold, there's a long line. Horribly long line. I said, "I'm not going there." I forget about it. The next day, we go like, "Hey, there's that place again. It's not not much of a line." Like, "Okay." I go inside. I said to the cashier, "Excuse me, I understand that uh this is the best ice cream in the world." Uh-huh. What has made you so famous? What particular flavor do I need to have? Strawberry. I'm like, the strawberry ice cream has made you the best ice cream in the world. Uh-huh. I said, "Do me a favor. Give me the strawberry, but also give me like Neapol. Give me the little bit of vanilla, a little bit of chocolate, and I'll be the judge of this." Can I tell you something? The best ice cream in the world. I don't know what they did. It was fabulous. >> Well, that's a long story for a kind of disappointing ending. >> You got to go little ice cream shop. I can get you the name. There's one on my picture somewhere in Kishkis, uh, Portugal. Who would have thought? Anyway, this whole kurfuffle with Cracker Barrel where they changed the logo. They took the old man. They took that old man that was sitting next to a barrel. >> They took him off. And by the way, do you know who his name was? >> Cracker. >> Uncle Hershel. >> Yeah. Her I thought it was Herbert. >> Hershel. >> Was Hershel. Okay. >> Old white man. So everybody was all pissed off and people freaked out and social media went crazy. >> One of the greatest publicity stunts I've seen in the last couple years. >> It wasn't for the shares. The shares went straight down. >> Well, I know it was it kind of backfired when so far as the shares are concerned, but it was a buying opportunity, but it still got everybody's attention. People never heard of Cracker Bell. They still in the news and today's a lot of today's shows talk still talking about it because they're backing off. I mean this is a publicity stunt of the highest order not for the stock price but for the uh chain. >> But you know do you know what's happening now? >> They are going back just in >> Yeah. >> They're going back to the old logo. >> They they never changed it. >> Well, they didn't change it, right? They >> they just promised to change it. >> So they they're not really going back to anything. They just not they're not going to change it. >> Yep. Uh with only a few minutes left, let's talk about Apple and Google is in Apple's in early discussions to use Google's Gemini AI models for an updated version of the iPhone's maker Siri assistant. Mhm. Um kind of interesting when this comes into play because you know Google's is facing potential risk of uh losing its these very lucrative search deals with companies like Apple in particular Apple and this this month in particular a US judge is expected to rule on penalties for Google's alleged search monopoly. So I don't I don't know if if somebody's using this as a play somehow to make it look better like you know hey uh you know this going to change the dynamic of search or something it's not going to be >> the dynamic of search has changed drastically >> even with Google. Yeah, >> with the AI results that come in at the top of the list, >> that can't be helping their advertising revenue, >> right? >> So, lots going on there. We'll see what happens. Uh, there's also some news from Meta, also known as Facebook and Google. Google won a 10 billion dollar um cloud contract from Meta that spans six years. Meta's usually been using um AWS, Amazon Web Services and uh some Microsoft Azure as well. So this is just spreading out. I didn't think this is 10 billion is a lot of money by the way even over a period of six years. I didn't think this was as big of news as it could be because I think that, you know, they're they're trying to spread the risk, all these companies, and then play each of the competitors off of each other for cost effectiveness. >> Yeah, I would do the same thing. >> So, on one hand, it was an interesting announcement. On the other, it's like, okay, whatever. Let's uh end our discussion here on furniture. I thought this was after I heard this I was like, "Oh, that makes sense. That that seemed like it was something that was going to happen." You know, the big thing about some of the tariffs and some of the cost factors and the question about unfair trade practices with regard to, let's say, cars, right? We want to manufacture cars here and well, they're not being manufactured here. So, what do we do? We put all sorts of restrictions or sanctions or tariffs or something right on making sure that these other cars don't get into the country and our manufacturing there poof does really well. Do the same thing theoretically on chips and all that. Few other industries that we're trying to get back here. Well, one of the industries that pretty much we were really strong in for a long period of time and seemingly lost is furniture manufacturing. Wasn't was it North Carolina? I think it was North Carolina. >> Yeah, North Carolina. A lot of states, in fact, in if you some of the most valuable collectible furniture is always made in the United States, especially the stuff done in the 1700s back up in the New England area. We were superstars at making furniture. >> Now you get this ratan and wicker or whatever the hell from Indonesia from, you know, pick your country. And um now Trump is threatening tariffs on furniture. So that was kind of interesting because companies like Wayfair RH formerly known as Restoration Hardware and William Sonoma tumbled well they went down four or 5% after the close on Friday when this was being announced and the commentary is that within the next 50 days or so there's going to be an investigation of sorts and furniture coming from other countries into the United States will be tariffed at a rate yet not to be determined. So, I don't know why they have to do an investigation. I guess it's part and parcel of the process that needs to happen when you levy tariffs without congressional approval. I think we went over all those three different ways of issuing tariffs uh some shows ago. So what you have now is uh a situation where uh North Carolina, South Carolina, Michigan are hopefully going to bring back furniture making to greatness again. I don't know if that's going to happen. I I don't I don't see how all of a sudden we're going to stop buying the cheap furniture from other places except for the fact that we will stop buying it because the price will be high. >> Yeah. And then the price of furniture made in the United States will be even higher. >> Yeah, it'll be high. How much furniture do you buy? >> I mean, you buy once in a however long, right? >> Generally, yeah. You get one good one good dining room table and some chairs. >> You're good. You're good for a few decades. >> You're good forever. >> Yeah. Now, Vietnam's market, which makes a lot of this furniture, doesn't care. As a matter of fact, I looked at the lows to now of 55% since the lows in April. 30% 37% from right before the tariffs, you know, that whole big tariff announcement. Still 30% from there and up about 35% for the year. pretty good for a country that maybe is possible that is now loved a bit compared to uh well we're forced into loving it because of the hatred that we gave to to uh to China. >> So now all of a sudden >> Vietnam's a they're very artistic country. They had uh it's a great place to visit if you if you like collecting art. They they do great uh they do some of the best art copying in the world. Uh they uh they do ships in a bottle that you couldn't you wouldn't believe. They do uh lacquer wear that is I've never seen anything quite as good. They even do these paintings made out of egg uh broken eggshells. Uh they can do a a they can do your portrait made out of little pieces of broken eggshell done piece by piece >> that are dynamite. Sounds >> they actually if you one time I was remember being uh in New York and there was a bunch of these street artists on time square you know like a dozen of them lined up and doing people's paintings and you know the caricatures of various people. was a gimmicky thing that's done in tourist areas. And I was remember going down the road looking at different people's works and there was some guy who was doing basically photo realism that was unbelievably spectacular and he was Vietnamese. >> Uh this is a a a co a country and a culture that's pretty remarkable. >> Love that. Love that. You you've been right. You've been >> Yeah. No, I that's where I saw the stuff I never You wouldn't know about the lacquer or the the little pictures painted with the these stupid busted up eggshells. It's like what? And piece by piece with with a tweezer and a big magnifying glass to put together a a portrait. It's just pretty astonishing. >> Love that. Love that. All right, let's get to the game. This is a game that we play. It's not a solicitation to buy or sell any security. It's not a recommendation of any kind. Nothing on the show should be considered investment advice or a recommendation. If you choose to invest in any of the stocks mentioned, you should know that it may carry risk along with the risk of a loss of principle. You should also seek out professional financial advice for your particular situation. We assume no risk as these are not to be considered recommendations. Horowitz company, myself or John Cedavor may invest in any of the securities mentioned and we'll disclose that on the website under the weekly stock pick section. You can go to dhunplug.com and see all the names we discussed in the segment along with the performance information from the date discussed as well as any additional important disclosures. Why don't you take the list, sir? >> Yeah, we got a lot of green, but we do have some some downturns on four stocks. Uh the short uh for your spider uh gold trust for some reason is down a couple points. Uh the uh short, my short of Apple uh is premature and it's down is the a big loser down eight. Uh, also I think I I'm down on some AP motor. What was this thing I picked? I can't remember this one. >> That was the uh AP Muller. That That was the um >> AP transporter transporters. Uh shipping and uh train. >> Oh, right. That was shipping company. And that's down for some reason. So I have a a few losers. But the one that's way up, of course, is our GenerRack, which is a nice 44% gain. And still topping the list is the uh CVR well CVR Energy competing with Dell. So those are the two toppers >> and picked both on the same day. And you know why that was at the low of the market. >> Yeah. That's why it's so high. We I mean your Dell's up almost 60% and the and the CVR energy is up a little over 60%. >> Pretty good. Pretty good. And your Nvidia keeps on rolling. You got Nvidia on here already? >> I do. I see that. Yeah. So, I'm not going to pick that cuz already up 27%. Uh, I am going to add Eli Liy. >> You are really? >> Yeah. I think there's a lot of promotion going on with Eli Liy. It may be it may have an advantage in the GLP1 sweep stakes. >> Uh, and and it it may be the winner in after all is said and done. Uh it came out with uh today a uh oral that had uh third um uh good efficacy. Uh not as good as the shots, but very good and uh good um uh test results overall. Uh and they they the probably on the way to getting approval on the oral GLP1s. >> Yeah. for weight loss and for weight loss and for what it's originally used for was you know lowering your AC1 A1 A1C A1C >> A1C >> so all right well uh what is it GLP or well that's the same theory you gave to Viking Therapeutics by the way >> yes I'm I did Viking Therapeutics is the dark horse in the race >> right I agree is up I totally agree that yep that's one that was got pummeled and you bought it then I'm adding one I'm adding wayfair as a short the furniture company. It's trading about what $72, $73. >> And >> yeah, I was thinking I was, you know, that I think that's a good idea. And yeah, I was thinking about my long on Starbucks. I was wondering why it hasn't done anything. And I'm thinking it's because of the overseas prices of coffee going way up and I think it's going to affect them and it's negatively at least that's the way the investors see it. And I can see your logic for Wayfair. >> Well, let's see if it works because sometimes with Wayfair, logic has nothing to do with it. Yeah, they like buying that. I'm not sure why. >> All right, well, we're out of time. Uh, and I will see you in September. >> Have a wonderful Labor Day. >> Put away your uh linen jacket and your white shoes >> and uh get ready for uh the move into the colder season. >> We'll do. See you Tuesday. >> See you. All right. Bye. >> You've been listening in on a conversation with John C. D'vorak and Andrew Horowitz. Hope to be with you again soon. Bye-bye. >> Now, I'm not broke, but badly bent. I'm not down to my last scent, cuz I got a dollar, but it's my last dollar bill. Yes, sir. In my pocket there's a dent. All my dough is nearly spent, but I got a dollar and it's my last dollar bill. Oh, I'd love just one more buck. Fortune left me by chance. Now, here's a hint. I feel like a men. You can hardly tell by a glance. I don't care. No millionaire can give me the ISIS stack cuz I got a dollar. My last dollar bill. This podcast is intended forformational purposes only and does not constitute personalized investment advice. Investing involves risk, including the possible loss of principle, and past performance is not indicative of future results. The views and opinions expressed are those of the hosts and the guests and may not necessarily reflect those of Horowis Company Inc. an investment advisor registered with the US Securities and Exchange Commission. Registration with the SEC does not imply a certain level of skill or training. Advisory services are only offered to clients or prospective clients where Horowits Company is properly registered or is excluded from registration requirements. Any mention of thirdparty companies, products, or services is provided forformational purposes only and does not constitute an endorsement. 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DHUnplugged #766: Jackson HOLY!
Summary
```html- Market Outlook: The podcast discusses the excitement in the markets due to a perceived change in tone from Fed Chair Powell, suggesting potential rate cuts that could impact housing affordability and risk asset valuations.
- Federal Reserve Dynamics: There is speculation about political influence on the Federal Reserve, with discussions about potential changes in Fed leadership and the implications of such moves on monetary policy.
- Corporate Developments: Nvidia's upcoming earnings are highlighted, with expectations of significant growth, while Intel's financial struggles are noted, including government involvement through the acquisition of a stake in the company.
- Investment Opportunities: The podcast mentions potential opportunities in companies like Eli Lilly, which is advancing in the GLP-1 market, and discusses the impact of tariffs on the furniture industry, affecting companies like Wayfair.
- Cryptocurrency Insights: Ethereum's recent price movements are attributed to potential supply limitations, which could drive up demand and prices.
- Sector Trends: Airline industry consolidation is discussed, with Frontier Airlines expanding routes in Spirit Airlines' markets, potentially impacting competition and profitability.
- Government Influence: The concept of state-owned enterprises is explored with the U.S. government's stake in Intel, raising concerns about government interference in corporate matters.
- Economic Indicators: The podcast touches on the broader economic implications of bond market reactions to Fed policy changes and the potential impact on equity markets.
```Transcript
Hello and welcome to D'vorak Horowitz Unplugged, an hour-long discussion of activity in the financial markets around the world featuring columnist John C. D'vorak and money manager Andrew Horowitz. This conversation is casual and unrehearsed. Let's join John and Andrew now. >> I'm John C. Devorak >> and I'm Andrew Horowitz >> and it's the 26th of August, the last show of the month, uh 2025. So, uh, your summer was good. Labor Day is coming up and that that's exciting. >> Yeah, that means you can't wear linen. >> Can't l linen or whites? >> Well, I think white, but linen usually. >> Definitely not white linen. Not white shoes. Do you do you >> should wear white shoes anyway? My father would like Memorial Day would come and he was like all ecstatic because he'd go into the ends of his closet and he would get grab those white patent leather and leather shoes with the buckle and he'd get out his white pants. >> The buckle. >> You know what I'm talking about, right? >> Vaguely. Yeah. >> And then he he he'd be all excited and he'd be wearing his white pants with his white belt. Big thick white belt with his white pants and these white shoes. It's like, h, he's like, he's like the the official welcomer of summer to the whole neighborhood. Oh, Bar Barry's in the whites. Must be summertime. And then >> I don't know if I've seen anybody wear white pants for at least 10 years, maybe 20. >> They're very, you know, white is I always say that if first of all, if if you're ever in the planning stages of doing events and things like that, if you don't have the idea, you can't come up with something, everybody just goes, "Oh, let's have a white party." And I find that white is so unbecoming. It there's no there's no hiding anything. >> I don't I don't like it. I don't like it. >> Anyways, >> I do have a white linen coat that I had custom made in Korea, >> which is okay for it to be wrinkled, too, right? Linen's like >> Well, because it's linen. Is it okay for it to be wrinkled? Can you find it when it's not wrinkled? >> Right. So, it's like, oh, he's wearing lin. Oh, it's wrinkled. Oh, it's linen. He's good. It's okay. whereas it was something else. But look at that slob over there. Can't even dry clean his jacket. Yep. All right, let's talk about what's going on in the markets. We have a lot of excitement over the change in tone from Powell, as I'm calling it. Looks like Powell threw in the towel. Markets got all excited. >> Yeah, this was this had something to do with that last meeting, >> last little chitchat. Crypto also surges along with markets and came back down a little bit. We have S O E. Get used to that three letters S O E. And we're going to talk about that tonight at length, I think, because I'd like to actually get your opinion on this because it's something that I think is uh very concerning to many, but it's being overlooked for the most part by markets and by people. Um you know, even with the change of tone by Powell that said maybe it could be, we'll see what happens. And the market took it of course as oh definite bond yield. Everybody's excited because you know what the theory is? If the Fed reduces rates and they take down the Fed funds rates that boy oh boy housing is going to become, you know, much more affordable. >> They catch on fire. >> Yeah. It's going to become more affordable. And you know, people that are >> and people are talking about the h the 0.5 too. >> Yeah. If you go 0.5. Well, guess what? Long bond yields are actually up since Friday. And I'll give you one guess as to what mortgages are based off of long or short-term rates. >> I'm guessing long. >> Correct. You get the prize. So therefore, the conventional wisdom, which is dumb, that reducing rates will reduce mortgage rates is not really factual. So something to consider. Meanwhile, markets are hitting all-time highs and uh >> been extreme. >> Markets were up like 800 what was it like 860 points on Friday after this little little one sentence which I I have a quote here somewhere. We'll talk about that. Uh you know it's just it went went nuts. the idea that listen yes if the Fed does in fact reduce rates there is a repricing of risk assets that needs to be taken into consideration that is classic you look at the uh you know a discount model whether it's a dividend discount model or any kind of discount model that you're using to value stocks based on a risk-free rate of return the risk-free rate of return goes from I'm just going to use a number 4% to 3.5% 3.75% 3% whatever the risk-free when you calculate that in there just that one input changes the entire calculation. So that discount factor methodology will then boost the valuation of stocks and no and and instead of having if you do it on a an index base instead of having a 21 forward multiple it's reasonable to assume a 22 let's say or whatever the number is. problem is this has all been assumed already. all this has been in play that there will be eventually a there'll be two cuts now whether it's in September October or whenever it's going to be three four month five months from now it's all been priced in already this is now repricing the repric again it's like every time there's a breath it's like oh how exciting or or it's like every time somebody is in a supermarket and picks up an item it's a sale they put it down but then they pick it up again it's a sale you know they ring it up as a revenue That's how that's how this this is all being calculated. It's it's pretty pretty amazing on on the resiliency of all this. Um airline consolidations are happening or maybe it's airline murder. There is uh a few things happening out there that are really fascinating in the airline space that uh one particular airline is looking I think to end the pain and suffering of another finally and put them out of their misery. Nvidia earnings coming up tomorrow night. Uh and crypto as I mentioned moving. So let's talk about let's talk about the big issue. Let's start the show off with the discussion of the Fed. Now, the president is looking to fire uh Federal Reserve participant uh Cook over allegations that What are the allegations? >> Cook the books. >> Yeah. Cook Exactly. cook in the books by doing something like putting that their primary residence, her primary residence on multiple applications for home mortgages and saying this is my primary residence and therefore giving first of all do we do we believe that the mortgage companies are that dumb that they don't look into things? >> Yeah. >> Okay. All right. So, if we believe that that's the case, if we believe that the mortgage company's dumb and they're not doing their due diligence, >> they don't necessarily have to be dumb. They maybe don't care as much depending on the person that's checking the box. >> All right. So, Cook puts down that the principal residence is that particular one. That's the allegation. President Trump says, "You know what? There's enough evidence," which whatever that is, even though there's no official like there's a charge, there's no due process to actually find this person guilty, right? This is not that hasn't there's been no uh formal conviction, >> indictment. >> There hasn't been that either. Nothing. But there's enough that Trump says to actually fire Cook now. I don't get it. If there was enough if if it all it took was an allegation of wrongdoing to make somebody ineligible to have a job. Trump would have been fired 6,000 times. And >> yeah, but who's going to fire him? >> No, he can't fire him. I understand that. You know, I get that. So now here's my feeling on this. This is just one more play to get rid of Powell because now Powell's gonna fight this. And who knows if Cook's going to be allowed in the office tomorrow. Maybe they'll just take away the keys. Allow say security all your your clearance is gone. Can't come to the office. We got a box waiting outside with your pictures of your two dogs, your husband, uh a plant that's, you know, halfway dead and your coffee cup. Here you go. Thank you. and Trump's uh Pal's going to fight it. He says, "You don't have the right to do this. You can't do this." And uh not under my watch. And if Powell in fact fights it, maybe Trump will say, "Hey, wait a minute. I'm firing you because of cause." >> Yeah, I think that's a stretch. >> Trump is looking for this. I mean, he said today on social media that this now paves the way for having him having a majority in the Fed that will soon push rates lower. So, because he's going to have to appoint somebody, right? >> Yeah. But he's already got Powell and his under his thumb based on what Powell did last Friday that drove the markets up. >> But I get that >> he doesn't have to he doesn't have to do anything. I mean, he wants to get rid of this cook woman, but she was appointed by Biden and under some circumstances very similar to her getting out ousted. The Democrats had ousted three uh Federal Reserve people uh largely uh done by Elizabeth Warren and some other Sherid Brown I think's the other one. This was del this was this was elaborated on by a Charles Payne show uh today. Uh he he's a Trump maven and so he documented this is not new that anyone's ever done this before. So it can't you know even though the Democrats are making a big fuss about it's not that they're the ones who did it first. The problem is that's exactly the point. There in lies the rub that all these things that are happening are now becoming normalized so that we can never have consistency. You have these people that are appointed into a position that supposedly during their you know they should be at least reasonably qualified at least somewhat I think and now it's become like you know my people are in now and when it comes to the Fed though do you believe that it's okay to have extreme uh I don't I hate the word political that's just not a good one but do you have extreme ability for let's say the White House or any other party to influence them. Influence is the right word, not political. Influence significantly influence uh policy direction or should there be >> I you're talking to somebody I'm not convinced that the Fed needs to exist. >> Well, I that's another whole story. But when you look at what happened like in Turkey, which is the example everybody uses, right, where Erdogan, he decides, you know what the hell with them? They know nothing. And >> yeah, that's a good one. >> And interest rates need to be lower to fight inflation. And he dropped interest rates down. Inflation was just a mere 30% 50% whatever it was. And and I think there needs to be if there is a Fed, if there is a Fed, there needs to be independence. That's the whole point of how it has been working since the 19 what 20s? >> Well, since began I think was 1913. So yeah, the the the creature from Jackal Island. So I I I I'm surprised that and that's probably why the dollar has been, you know, again moving a bit lower and again why rates are up on the long end. That happens and there's undue influence on the Fed, I think the bond market is really going to get pissed off. That will have an impact on equity markets as well. But right now, everybody's just letting whatever happened happen. A lot happening, too. We're winless. Like, >> like you said, if the bond market is really the determinant factor for a lot of the uh uh economic situations, including housing, uh then who cares? >> I guess I agree. Nobody cares right now. That's the point. Everybody's just very laz about it. I'm not saying they need to be anything different either. I'm just reporting the facts. I I'm still baffled about some of the things, but yet at the same time, you can't argue with them. It's okay to be baffled by them, but not you can't you can't go against what is. You know, that's like somebody saying, you know, the markets are up, it's wrong. I'm going to go 100% short while it's going up and I don't care. And the more it goes up, I'm or vice versa. Markets are going down. No, they shouldn't be going down. I'm going to keep buying in. And you get just, you know, you get screwed. Can't be dumb enough to go against what is actually the reality until things change. >> When momentum players always win out. >> Yeah, exactly. Got some news from the um wind turbine area. The uh government continues to US government continues to shut down alt energy projects in particularly the ugly wind turbines. They're no good. They're evil. shares in wind farmer developer Orstead. They they they went to a record low. The US government last week ordered the company to halt construction of an almost completed project. This is uh there was a stop work order for the Revolution wind project off of Rhode Island which is about 80% complete according to Orstead. 45 of the 65 wind turbines have been installed. So now what? You have this ugly non working I was just talking about an isore. >> Yeah. So now we have an ugly 2/3 of the way completed wind turbine that's just sitting there. >> What's worse? >> Well, are they completed with the propellers and ready to go? Can they use some of them? >> 45 of the 65 wind turbines of are on. Not It's missing 20. >> Oh, well. So what? So they get 45 going? >> I don't know. Well, this 45 is better than none if they work, >> I suppose. But they're saying it doesn't work. So, we'll see what happens. Uh, in the miscellaneous category, we have Spotify, which very much like a I guess a Netflix or some of these other types of very much well-received subscription models has an incredible amount of pricing power. So Spotify is going to be raising its prices on uh features as it continues to reinvest in its own um progress and features of the company. Uh they have about a billion users said that it will raise prices to 11.99 almost 12 about 14 bucks a month from $10.99 for markets including South Asia, the Middle East, Africa, Europe, Latin America and the Asian Pacific. So, I guess we're good over here for right now. >> Well, they'll raise the prices eventually here, too. >> Probably be more. And you know, the price increase they've had over the last however many times recently they they did in fact raise prices and their cost cutting in over the last few years helped them actually achieve its first annual profit just last year. How many years has Spotify been in business? long time. >> Let's see. Spotify start date. I guess that would be uh it was it was Stockholm, Sweden, by the way. >> Yeah. >> And uh it was founded in 2006. So, hey, good for you. Good for you. >> 19 years later, they make >> good for you. Bravo. Gota appreciate a company that you don't you have no profit yet you make people billionaires. Well, you got to give him credit for that. Yeah, it takes skill. It >> does take skill. You know, with if you take that model >> and you just place that right on top of our show, do you know what our valuation should be? >> I'm guessing Well, probably 10 billion. >> 10 billion. At least 10 billion. >> Yeah. >> And we're not raising our prices. Maybe we should. We'll double them. >> Yeah. Maybe we should double them. All right, Jackson Hole. I'm calling it Jackson Holy. That's what we're calling it. Jackson Holy. Pal hinted that maybe at the uh Jackson Hole Confab, the economic confab that goes on there every year where they get together, do a little bit of fly fishing, a little bit of whiskey tasting, a little bit of uh the wink and the nod handshake, you know, that whole thing. Uh he said maybe there's going to be a change in his thinking. H in his final this what they this is what they say in his final address. by the way, foreshadowing that they believe that yes, everybody's in agreement. He's done. That's it. Play out your time and move on. >> He is gone. He's gone in spring of next year. >> Yeah. They'll be he'll become >> his term runs out. >> He could be reappointed. >> Oh, that'll be the day. >> Yeah. Uh, did you hear the latest where there's actually some talk that I of course I think this is just a goof. But Trump says he may put Janet Yellen back in that spot >> cuz she was extremely dovish. That can't be right. It can't be right. How could that be? >> No, I don't think so either. It's just something is growing. It's It's one of these things just to show it shows up in the uh stream just to get people all riled up. >> Greenspan, let's go there. Why? Why not? I think he's still alive. Still alive. Yeah. Put Greenspan there. >> Well, they they figure he's going to put some Fox uh host of some sort on there. Judge Judy or something. >> Everybody every other person he's got working. So, I'm watching the uh the situation in uh Washington. And I guess it was on Monday of last week where they had all these dignitaries from all over the world coming into the White House and there's a blonde that goes out there and greets each one of them. I said, "Who's who?" And they never show her. And she's out there. She greets each one and she organizes the photo shoot. She's doing all this stuff. And they never mention who it is. And I thought it was maybe it was the the press secretary, but that's not her job. It turns out to be the uh director of protocol who's given an ambassadorship as such and it's the and it's the old radio host Monica Crowley. >> Really? >> Yeah, that's what I said when I she was being she was interviewed on the last Laura Trump show over the weekend on Fox, which is a good show, by the way. a surprisingly good show because she gets all these she gets all these screw ball interviews with all these insiders and she had Monica Crowley on and they discussed all this and I there was no mention by anyone that Monica Crowley was even working in the Trump administration and this is another example of some media person that Trump likes to put into these positions. >> I mean >> we can get a job >> Gordon Ramsay for Fed chair. >> Gordon Ram. >> There you go. Yeah, you can yell at everybody. >> Uh, >> call him chef. >> Chef. Yeah, Fed Chef. Um well, as in his final address as Fed chair of the Jackson Hole, Wyoming economic symposium, he hinted at a Sep September interest rate cut, but shot stopped short of committing to it, of course, uh skirting a careful balance between the mounting job market risks and lingering inflation worries. The Margo was enthused with his line. He said, "With policy in restrictive territory, the baseline outlook and the shifting balance of risk may warrant adjusting our policy stance, which the market like went cuckoo cuckoo for cocoa puffs." The probability of a 25 basis point cut in uh September now is at se 83%. Which was up from about 75% a few days ago. So, not a big deal. Not a big deal. So there's a bet of about 25% chance. Again, this is the Fed markets, but the Fed follows these. That's how it works. The Fed doesn't want to surprise. So they set the stage. They work it until it gets to a point where it becomes a pretty much uh not a probability, but a a >> done deal. >> Done deal. And then they just do it. So, it's priced into the markets. Now, of course, if in September, if if if this was all of a sudden September and it was the meeting date and they dropped the rate by 25 basis points, markets would like rejoice for a minute at least. Everybody like, "Oh, look, he did it." Like, we knew he was going to do it. Markets are usually an expectation game. You have those investors that, you know, flinch on any act on any reality. In fact, I would I would go so far as saying if he dropped to 25 basis points because now everybody's starting to think about 50 basis points, then it would be a disappointment to markets. >> Yeah, there's a lot of talk about the 50 points. >> The 50 basis points, they're going to try to make the case. All the bear uh the um the doves out there and all the bulls for the markets are going to make the case that during a rate cutting cycle, the Fed usually comes out with a 50 basis point cut as the first one. That's what they're going to say. >> Let me let me debunk That that's true. >> Yeah, you can believe it. >> But here's the problem. This is not the start of a rate cutting cycle. We are already in a rate cutting cycle. They did the 50 basis points and now we just pause for a while. Now it's the continuation. So this is not the start by any means of a rate cut cycle. So let's just take that and throw it right out the window. Now it it's possible that things deteriorate in the economics that will force them or provide them enough ammunition to to do it. But but I'm just saying it is not the precedent that uh unless there is something economically necessary to do so that this is the beginning of a rate cut cycle. Does that make sense? >> Yeah. Yeah. I'd like to see 50. >> Oh, it would be very nice to go to zero for God's sakes, right? Well, that's what it should. Well, yeah, with good luck. That's not going to ever happen. >> Yeah, but but but it would be it would be nice to go 50. Now, what's your reasoning for this? >> I think it would livven things up. It would also get the housing market a little out of the doldrums. >> Setting fire to a house will also liven things up. >> I mean, I'm just saying. >> Yeah, that's true. Yeah. Yeah. >> There's a lot of things that would liven things up. You're right. >> Well, the Dow Jones Industrial Average was up over 800%. The S&P NASDAQ rallied like, you know, 2 and a half%. Small caps were up 4% on the lower rates. The small caps are the most uh sensitive to increases and decreases in rates. So, they were up pretty good. Still in the small cap universe, about 70% of the companies are uh not profitable. >> Yeah. And you know, I was watching I sent you a copy of this video presentation. >> It's very long. >> Very long. >> Very Yeah. Hour and 17 minutes. It was a uh it's two bears. Uh moaning and groaning about how we're already in a recession. They had a couple interesting indicators, including the stripper indicator, which was something we've always joked about on the No Agenda show, which shows it comes up every Thursday and Sunday. Um and uh they they pointed out that the entire S&P 500 is being propped up by the top 10 stocks that the I this one I did take to heart which is that four this S&P 490 in other words the 490 stocks underneath the top 10% uh have been flat for the last since for years and years. They haven't done anything and it's just these superstar stocks at the top that are carrying the load. >> To a degree, I think that's right. And if you ever hear me talking about the sinkhole, we've talked about sink holes before, remember? >> That's that's a thesis that this is a a very thin covering over the hole that's opening up underground, an underground river. That's in this case, >> it's a sinkhole. >> Yeah, it's a sinkhole. So, you know, these 10 stocks are the ones that are being the the ones that that are masking the stuff underneath. But there's some truth to that. Yet I don't fully agree with that. There is a broadening of the there has been a broadening of the underlying stocks for some time. In fact, uh up until I would say March, things are going okay in the in the breath area. That's the uh you know, Vancers, decliners and companies that are doing well. But uh that all fell apart once there was again a scare not only terrorists but a scare. As a matter of fact before January we had the big big names also having problems and big rotation that was taking out the big caps but people were putting money into healthcare utilities. So I'm not exactly agreeing of that with that. Uh it's it's a nice talking point and yes there is a lot of weight a lot of weight that these other guys are pulling and you get that because the market cap waiting way that the construction of the indexes of the S&P 500 NASDAQ small caps different than the Dow Jones Industrials by the way. Uh but because of the construction and and how these things are calculated with the market cap waiting, it definitely has a significant uh waiting and impact when the the large stocks move. As a matter of fact, Nvidia is coming out with earnings after the close on on Wednesday. Now, Nvidia makes up about 7 and a half% >> of the S&P 500. So that means that if that means a half a percent a 5% move on Nvidia is going to be about 35 or 40 basis points on the S&P 500. It'll probably be more like a one and a half% move on or one to one and a half% move on the NASDAQ 100. That that's disproportionately significant. >> Yes, I agree. and they don't change his methodology because that's how it works. So, let me just get go run through Nvidia's earnings expectations and we can go back in a second on the other commentary. Um, estimates this is what you want to be looking for. Zach says about a buck. Kiplinger is forecast about a buck looking at about a 48% increase on earnings EPS per share on a year-over-year basis. The average, the consensus about 97 cents, about 92 cents to A15. Now, revenues, they're looking at um Zach's coming out with 46 billion. Kipinger, now this is a lot. This is for a quarter. Uh Kipinger is uh 46 billion, a 53% increase year-over-year. The average 44 to 45 billion. And forward-looking, we're talking about um about 428 a share. This is on an annualized basis. So, where is where is uh Vid's trading at what 60 something? one 180 I think. >> Really? Is it that high >> today? Yeah, >> it hit 180. Uh NVDA 181. So you take 181. So let's look at um let's calculate this, shall we? What' I say? Let's round it to let's even do five. Five [Music] 36 times forward. So, you had a 36 times forward with a earnings growth of 48% on a on a on a um uh on a uh year-over-year. So, your PEG ratio is in good shape. You could have a 36 forward 36 times paying 36 times for a stock that's making 48% per year. Not too bad. >> No, not at all. >> But the question is, does that last to 48%. I mean, how many how many 48%s a year can you have before it's some absurd amount of growth? >> No, it's ridiculous. >> Now, 48%, by the way, on these kind of revenues is remarkable. You get 46 billion in a quarter. Round number, let's say it's, let's just multiply that by four, $200 billion per year of revenue. You increase that, but it's another hundred billion dollars a year. >> Yeah. which is an incredible number. >> It's outrageous. >> So, how long can they keep doing that? And and then and then we go to 100. So, let's just say it gets to uh 200, it's 300. Now, you do another 48, now it's another $150 billion. Now, you're at to 450 and so on and so on and so on. So, you're doubling your basically doubling every one and a half years of your revenue. That's a lot at these levels, especially with a market cap of 4 trillion. >> Yeah, I know. It's unbelievable. >> So, are they going to probably beat Yeah, >> something's going to get something. I mean, I like it. I think I'm going to put it on the game for today, even though it's already a 181. Uh, it's just that something has to give. Is it qu sustainable and how long will people be paying up if in fact >> it's sustainable for about a year? >> I mean they've been doing it for two and a half years already at this level. >> Yeah. Well, you know, you have a run of two or three years. It's not impossible in tech. >> Mhm. cryptocurrencies, by the way, Ether, Ethereum, hit a record close on last Friday after the announcement. The markets came up, all of a sudden, Ethereum, I don't know, moved. Why? Uh, it's possible that Ethereum is only going to have about 800,000 shares um 800,000 on Earth, if you will, in the next year. >> Oh, okay. That makes sense. and they think that there's a a bit of a uh limitation on the the amount that would be uh mined and then the the amount that's desired to be bought. >> Yeah. Shouldn't this shortage make it cost more? >> Yeah, that's that's what they're thinking. That's why all of a sudden, I guess it went above the all-time high. It was last time I was at a high was in I think 2021. stateowned. Oh, SOE osa. Here's the the three letters I told you to pay attention to. S Oe >> stands for stateowned enterprises. >> Yeah, >> this is something >> China. >> Well, it was terrible. How it's unfair. It's how Wait a second. You know, look at what China does. They prop up their businesses. And how do we compete with something like that? It's terrible they do such a thing as socialism. It's communism. Well, here we are. Stateowned enterprises. The US government acquired a 10% stake in Intel by converting 11.1 billion of previously issued grants and pledges into equity. Voila. Poofy. Hello. >> Yeah, this is hilarious. It listen to this. They received 433.3 million shares in non voting priced at $2047 each. >> Yeah. >> Totaling initial in valuation >> already up three points. >> Yeah. >> Although it's non voting. So I think the idea is they think they can ease into this with the non voting because they don't want to say well yeah we're going to own 400 million shares and we want a seat on the board. >> Right. Right. Right. And because then then everyone goes, "Oh my god, we can't have government seat on the board. That's no good." It'd be like China because China's telling these companies what to do and how to do it. They're going to they take Jack Maul and they throw him in jail for just saying something >> black bagging. >> Can they black the guy? And so they can't have that in these companies yet. I don't there's no doubt in my mind that down the road if they keep if nobody objects too much we're going to have government uh secretary of commerce or somebody's going to be on the board of directors of a couple of these firms >> has to no sense not to >> I agree but I disagree >> and they'll get voting stock >> the government >> and how do you feel about this >> oh I think it st it stinks It's going to it's you know because I mean all I have to do is just refer to Celindra. >> Oh, how'd that work out? >> It didn't work out at all. >> And and wasn't this a major issue with the was the Obama administration? I think it was Obama, right? >> Yeah. >> Yeah. And then the polit political side of it was that everybody was all pissed off that how dare they infuse this much money and it must be a scam and somebody must be making money somewhere on this, >> right? And then we turn around and do this the same. Well, not the same. >> Well, we do it differently. The Obama never had the government never had shares in Celindra. It was just it was just it was a fishier. It was worse because it was just basically giving money away. But, uh, the idea I I I like the idea or the thought process where it's we're giving we're not going to give money away anymore. We're going to buy it's going to be strings attached. now because there's been such a squandering of money. I mean, okay, so maybe this is one solution to that. Uh but at the same time, it's going to invite government interference in corporate uh matters. >> It has to if they're if they're dangling money in front of them, and that's what's been going on to begin with. But if they're dangling money in front of them, I'm not in big in favor of providing these major companies with all these these these cash infusions for free. That's just dumb taxpayer money just going out the window without any checks and balances, without any recovery, >> right? >> With with the hope of what what do we get? The hope of the oh, it's going to be good for Americ I've been saying this about medical research. I mean, why is the US government paying for medical research that benefits pharmaceutical companies and only the shareholders of those pharmaceutical companies make out on the deal? The taxpayers don't, right? I It makes no sense. they can do their own damn research. >> However, while none of this makes sense, the question is, would have Intel initially taken the money through the chips act with strings attached that if they did so, they would have to give up part of the company. I don't know. Well, the compt is floundering. >> Yeah, clearly. So, they're giving up part of the company. I don't a non voting stock without giving up a board seat or anything. I they probably see that as a as a life uh uh jacket or a life preserver tossed their way and okay so the government owns 400 million shares or whatever the amount is. Uh so what >> they got another two million $2 billion from SoftBank as well $4 billion. How much trouble is Intel actually in? And why are the shareholders not recognizing this? And why is there a buzz like, hey, Intel may be a great buy? Who in their right mind wants to take a diluted shares >> of a company that has to take government money and money from SoftBank and thinks that this is a good idea? >> We'll unless there's something we don't know. It's got to be there's got to be something going on. Like is there a chip that they're sitting on? I've bitched about this before that they had one of the first neural network chips anyone ever did. And the neuronet networks are the front end of uh AI. So it's kind of important. Is there something we don't know that Intel has? They need a lot of money to make it happen. Uh they got their hush hush about it. I can't believe anyone could be that secretive so it doesn't get out. There's a rumor mill in Silicon Valley like every place else. I haven't heard anything. Uh but it's possible. >> If it's possible, why would they take in that money? Well, because they need because they need the money. I I mean the spot they may be at their, you know, at the end of the rope the however you >> So this is the old, hey, all we need is one more injection of capital. Everything is >> and then we can do our thing and we'll all be rich. >> Everybody's going to be great and we're willing to give it away to you at a discounted price. By the way, money that you already gave us. We're not getting anything new from you. Well, two billion. No, it was all reclassified supposedly from the chips act. >> Yes, but they they would have been pulled. >> That's another thing. You you live you you you you you live on grants/government and you do all this planning and I have friends and colleagues that I know that are in the business that deals with the government and they're like, "Holy crap, we have no idea what's going on. We don't know what's going to be pulled even though it was committed to." Who in business? Could you imagine doing a a contract with a a company and you get in there and you pay them all this stuff and all and you're like, "Okay, uh you know what? We decide we're reversing it. Give us all this money back." Uh what we just set up this factory to to mill your product and you paid us and you have a contract. How's that work? Well, it's fine. If not, we'll sue you. Oh, and by the way, we're the government. We have unlimited re re uh uh resources to sue you and just hold you up in court forever. by the way, we'll also shut you down for a while for all sorts of shenanigans that will just put on you. It's a pretty interesting process that's going on right now that is is is a slippery slope. We let the government in. Where does it where does it stop? >> Yeah, I can't argue about that. >> Now, uh next up, Harold Lutnik was on uh TV today. This is another thing. These guys are on TV all the time now. London London. >> Basically a TV show. >> Yeah, it's really And w and here we are a new premiere of US Government in Action today starring Howard Lutnik. He's on today talking about the possibility. >> By the way, is is that guy ever not smiling? He's always got a big >> a big chess shower grin on his face. He's the happiest guy in government ever. You know, the problem is that that kind of happiness only looks like somebody that's bullshitting you. >> It does. You're right. >> You know, you can't be that happy. It's like, you know, I feel like it's like the whole time he's going, "H, I'm getting over on you. Let me tell you what's going on. We're going to steal from you." I mean, that's what it sounds like. It's like a It's like like a used car salesman. He's talking about the possibility USA getting a piece of def. Now, I'm not saying he is. He's a smart guy, don't get me wrong. Uh but and and maybe, you know, he's just legitimately happy. Loves his job in government. >> Loves his job in government. You know, he was a powerful guy in the financial industry. Now he's like, I love being commerce secretary. He talked about now the possibility of the USA getting a piece of defense contractors. He said Lheed Martin, which makes most of his revenue from federal contracts, is basically they're an arm of the US government. How is that? >> Yeah. Well, that also that combines nicely with changing the Department of Defense name >> to what? >> To the Department of War. >> Oh, yeah. >> It's been the Department of War historically since day one up until 1947. They changed in 1947 to the Defense Department. And now Trump's talking about changing it back. You can't keep up with the number of things going on, by the way, which is you're surprised by this. >> Trump has has a has a he look, it's so clear he has some kind of an imprint of a certain date in life that everything should be like. So if it's 1947 to 1965, that time range, everything needs to go back to what it was. Those were the good old days. And um >> his his reference is always going back to McKinley back in the 1890s or so. >> Like what? Okay. >> Uh-huh. Well, he also said that Trump administration um the the military leaders are thinking about whether the US should acquire equity stakes in defense contractors. That's what he said today. I don't know. We'll see how that plays out. Uh Spirit Airlines doomed. doomed, I tell you. Fort Lauderdale, they're based here in Fort Lauderdale. Uh, Frontier Airlines on Tuesday today announced 20 new routes it plans to start this winter and many of them in major Spirit Airlines markets like it's um it's the ones that are based in Fort Lauderdale. Um, now already Frontier overlaps with Spirit on 35% of its capacity, more than any other airline, by the way. So just to give you a comparison also uh Frontier is not profitable. Spirit Airlines lost $245 million in the second quarter. Frontier lost 70 million. But if a race to the bottom >> if Frontier is taking away business from Spirit, this could be bye-bye Spirit. Unless Howard Lutnik decides, "Let's buy Spirit Airlines." >> I don't think that's going to happen. >> Let's buy Spirit Airlines. >> He's not an idiot. >> We'll see. We'll see. Uh Cracker Barrel, you've been following this little kurfuffle. >> Yeah. Yeah. You know what the problem is? I I I can't even get remotely interested because there's never I don't think there's ever I mean there's been some Cracker Barrels on the West Coast. They've come and gone. I think they left the state. Uh it's mostly a southern chain of uh roadside uh kind of attractions that you run off on the on the if you're driving around between, you know, Oklahoma City and and Memphis. >> If you ever drive by a Cracker Barrel, it's always looks busy. And I think this is like a trick. If you create a strip mall where you have the parking just so where even just the employees have to park in a certain area and it makes it look like the parking lot is full like, "Hey, what's going on over there?" Cracker Barrel always had people shilling. >> Yeah. Cracker Barrel had people waiting on the remember on the porch, the rocking chairs and all that >> and there was lines out the door. I think they purposely did that. to make and then he had to walk through the store to get to the restaurant. I was only in this twice a day. >> Yeah. Yeah. Vegas does that too. When you when you check into the hotel, you have to walk through the casino. >> Exactly. So, I think that Cracker Barrel was the inventor in a way or the one that perfected this. Hey, look how busy we are. When in fact it was just like the basic waiting was, oh, you have to wait outside. There's nobody inside waiting. Nobody waits inside. You have to wait outside so people could see you. There's always a line. It's like, but I was always like the opposite. I'm like, look how busy that place is. I don't want to go there. >> Wow. I'll never get it. >> Yeah. It's kind of my It's kind of my thing, too. I don't like there's a line. Forget it. >> I'm not going. >> But that's the best place. No, I'm not going. I'm not going to stand on line for nothing. >> Ryan reminds me of a story. Can I tell you a little story about ice cream? >> I'm I'm all ears. I was in uh in in a small island, not island, a small area, a a a beach town off of Lisbon called Kashkeish, I think it's called. Kashqish. And uh one night somebody says to me, you know, have you had the ice cream here yet? I'm like, no. The best ice cream in the world is right over that place. I'm like, let me get this straight. I'm in this little beach town and the best ice cream in the world is right here. Yes. In the world. Yes. Like, you got to be kidding me. Nope. Well, I walk over to it. I'm like, "All right, I'll bite." I walk over to it and lo and behold, there's a long line. Horribly long line. I said, "I'm not going there." I forget about it. The next day, we go like, "Hey, there's that place again. It's not not much of a line." Like, "Okay." I go inside. I said to the cashier, "Excuse me, I understand that uh this is the best ice cream in the world." Uh-huh. What has made you so famous? What particular flavor do I need to have? Strawberry. I'm like, the strawberry ice cream has made you the best ice cream in the world. Uh-huh. I said, "Do me a favor. Give me the strawberry, but also give me like Neapol. Give me the little bit of vanilla, a little bit of chocolate, and I'll be the judge of this." Can I tell you something? The best ice cream in the world. I don't know what they did. It was fabulous. >> Well, that's a long story for a kind of disappointing ending. >> You got to go little ice cream shop. I can get you the name. There's one on my picture somewhere in Kishkis, uh, Portugal. Who would have thought? Anyway, this whole kurfuffle with Cracker Barrel where they changed the logo. They took the old man. They took that old man that was sitting next to a barrel. >> They took him off. And by the way, do you know who his name was? >> Cracker. >> Uncle Hershel. >> Yeah. Her I thought it was Herbert. >> Hershel. >> Was Hershel. Okay. >> Old white man. So everybody was all pissed off and people freaked out and social media went crazy. >> One of the greatest publicity stunts I've seen in the last couple years. >> It wasn't for the shares. The shares went straight down. >> Well, I know it was it kind of backfired when so far as the shares are concerned, but it was a buying opportunity, but it still got everybody's attention. People never heard of Cracker Bell. They still in the news and today's a lot of today's shows talk still talking about it because they're backing off. I mean this is a publicity stunt of the highest order not for the stock price but for the uh chain. >> But you know do you know what's happening now? >> They are going back just in >> Yeah. >> They're going back to the old logo. >> They they never changed it. >> Well, they didn't change it, right? They >> they just promised to change it. >> So they they're not really going back to anything. They just not they're not going to change it. >> Yep. Uh with only a few minutes left, let's talk about Apple and Google is in Apple's in early discussions to use Google's Gemini AI models for an updated version of the iPhone's maker Siri assistant. Mhm. Um kind of interesting when this comes into play because you know Google's is facing potential risk of uh losing its these very lucrative search deals with companies like Apple in particular Apple and this this month in particular a US judge is expected to rule on penalties for Google's alleged search monopoly. So I don't I don't know if if somebody's using this as a play somehow to make it look better like you know hey uh you know this going to change the dynamic of search or something it's not going to be >> the dynamic of search has changed drastically >> even with Google. Yeah, >> with the AI results that come in at the top of the list, >> that can't be helping their advertising revenue, >> right? >> So, lots going on there. We'll see what happens. Uh, there's also some news from Meta, also known as Facebook and Google. Google won a 10 billion dollar um cloud contract from Meta that spans six years. Meta's usually been using um AWS, Amazon Web Services and uh some Microsoft Azure as well. So this is just spreading out. I didn't think this is 10 billion is a lot of money by the way even over a period of six years. I didn't think this was as big of news as it could be because I think that, you know, they're they're trying to spread the risk, all these companies, and then play each of the competitors off of each other for cost effectiveness. >> Yeah, I would do the same thing. >> So, on one hand, it was an interesting announcement. On the other, it's like, okay, whatever. Let's uh end our discussion here on furniture. I thought this was after I heard this I was like, "Oh, that makes sense. That that seemed like it was something that was going to happen." You know, the big thing about some of the tariffs and some of the cost factors and the question about unfair trade practices with regard to, let's say, cars, right? We want to manufacture cars here and well, they're not being manufactured here. So, what do we do? We put all sorts of restrictions or sanctions or tariffs or something right on making sure that these other cars don't get into the country and our manufacturing there poof does really well. Do the same thing theoretically on chips and all that. Few other industries that we're trying to get back here. Well, one of the industries that pretty much we were really strong in for a long period of time and seemingly lost is furniture manufacturing. Wasn't was it North Carolina? I think it was North Carolina. >> Yeah, North Carolina. A lot of states, in fact, in if you some of the most valuable collectible furniture is always made in the United States, especially the stuff done in the 1700s back up in the New England area. We were superstars at making furniture. >> Now you get this ratan and wicker or whatever the hell from Indonesia from, you know, pick your country. And um now Trump is threatening tariffs on furniture. So that was kind of interesting because companies like Wayfair RH formerly known as Restoration Hardware and William Sonoma tumbled well they went down four or 5% after the close on Friday when this was being announced and the commentary is that within the next 50 days or so there's going to be an investigation of sorts and furniture coming from other countries into the United States will be tariffed at a rate yet not to be determined. So, I don't know why they have to do an investigation. I guess it's part and parcel of the process that needs to happen when you levy tariffs without congressional approval. I think we went over all those three different ways of issuing tariffs uh some shows ago. So what you have now is uh a situation where uh North Carolina, South Carolina, Michigan are hopefully going to bring back furniture making to greatness again. I don't know if that's going to happen. I I don't I don't see how all of a sudden we're going to stop buying the cheap furniture from other places except for the fact that we will stop buying it because the price will be high. >> Yeah. And then the price of furniture made in the United States will be even higher. >> Yeah, it'll be high. How much furniture do you buy? >> I mean, you buy once in a however long, right? >> Generally, yeah. You get one good one good dining room table and some chairs. >> You're good. You're good for a few decades. >> You're good forever. >> Yeah. Now, Vietnam's market, which makes a lot of this furniture, doesn't care. As a matter of fact, I looked at the lows to now of 55% since the lows in April. 30% 37% from right before the tariffs, you know, that whole big tariff announcement. Still 30% from there and up about 35% for the year. pretty good for a country that maybe is possible that is now loved a bit compared to uh well we're forced into loving it because of the hatred that we gave to to uh to China. >> So now all of a sudden >> Vietnam's a they're very artistic country. They had uh it's a great place to visit if you if you like collecting art. They they do great uh they do some of the best art copying in the world. Uh they uh they do ships in a bottle that you couldn't you wouldn't believe. They do uh lacquer wear that is I've never seen anything quite as good. They even do these paintings made out of egg uh broken eggshells. Uh they can do a a they can do your portrait made out of little pieces of broken eggshell done piece by piece >> that are dynamite. Sounds >> they actually if you one time I was remember being uh in New York and there was a bunch of these street artists on time square you know like a dozen of them lined up and doing people's paintings and you know the caricatures of various people. was a gimmicky thing that's done in tourist areas. And I was remember going down the road looking at different people's works and there was some guy who was doing basically photo realism that was unbelievably spectacular and he was Vietnamese. >> Uh this is a a a co a country and a culture that's pretty remarkable. >> Love that. Love that. You you've been right. You've been >> Yeah. No, I that's where I saw the stuff I never You wouldn't know about the lacquer or the the little pictures painted with the these stupid busted up eggshells. It's like what? And piece by piece with with a tweezer and a big magnifying glass to put together a a portrait. It's just pretty astonishing. >> Love that. Love that. All right, let's get to the game. This is a game that we play. It's not a solicitation to buy or sell any security. It's not a recommendation of any kind. Nothing on the show should be considered investment advice or a recommendation. If you choose to invest in any of the stocks mentioned, you should know that it may carry risk along with the risk of a loss of principle. You should also seek out professional financial advice for your particular situation. We assume no risk as these are not to be considered recommendations. Horowitz company, myself or John Cedavor may invest in any of the securities mentioned and we'll disclose that on the website under the weekly stock pick section. You can go to dhunplug.com and see all the names we discussed in the segment along with the performance information from the date discussed as well as any additional important disclosures. Why don't you take the list, sir? >> Yeah, we got a lot of green, but we do have some some downturns on four stocks. Uh the short uh for your spider uh gold trust for some reason is down a couple points. Uh the uh short, my short of Apple uh is premature and it's down is the a big loser down eight. Uh, also I think I I'm down on some AP motor. What was this thing I picked? I can't remember this one. >> That was the uh AP Muller. That That was the um >> AP transporter transporters. Uh shipping and uh train. >> Oh, right. That was shipping company. And that's down for some reason. So I have a a few losers. But the one that's way up, of course, is our GenerRack, which is a nice 44% gain. And still topping the list is the uh CVR well CVR Energy competing with Dell. So those are the two toppers >> and picked both on the same day. And you know why that was at the low of the market. >> Yeah. That's why it's so high. We I mean your Dell's up almost 60% and the and the CVR energy is up a little over 60%. >> Pretty good. Pretty good. And your Nvidia keeps on rolling. You got Nvidia on here already? >> I do. I see that. Yeah. So, I'm not going to pick that cuz already up 27%. Uh, I am going to add Eli Liy. >> You are really? >> Yeah. I think there's a lot of promotion going on with Eli Liy. It may be it may have an advantage in the GLP1 sweep stakes. >> Uh, and and it it may be the winner in after all is said and done. Uh it came out with uh today a uh oral that had uh third um uh good efficacy. Uh not as good as the shots, but very good and uh good um uh test results overall. Uh and they they the probably on the way to getting approval on the oral GLP1s. >> Yeah. for weight loss and for weight loss and for what it's originally used for was you know lowering your AC1 A1 A1C A1C >> A1C >> so all right well uh what is it GLP or well that's the same theory you gave to Viking Therapeutics by the way >> yes I'm I did Viking Therapeutics is the dark horse in the race >> right I agree is up I totally agree that yep that's one that was got pummeled and you bought it then I'm adding one I'm adding wayfair as a short the furniture company. It's trading about what $72, $73. >> And >> yeah, I was thinking I was, you know, that I think that's a good idea. And yeah, I was thinking about my long on Starbucks. I was wondering why it hasn't done anything. And I'm thinking it's because of the overseas prices of coffee going way up and I think it's going to affect them and it's negatively at least that's the way the investors see it. And I can see your logic for Wayfair. >> Well, let's see if it works because sometimes with Wayfair, logic has nothing to do with it. Yeah, they like buying that. I'm not sure why. >> All right, well, we're out of time. Uh, and I will see you in September. >> Have a wonderful Labor Day. >> Put away your uh linen jacket and your white shoes >> and uh get ready for uh the move into the colder season. >> We'll do. See you Tuesday. >> See you. All right. Bye. >> You've been listening in on a conversation with John C. D'vorak and Andrew Horowitz. Hope to be with you again soon. Bye-bye. >> Now, I'm not broke, but badly bent. I'm not down to my last scent, cuz I got a dollar, but it's my last dollar bill. Yes, sir. In my pocket there's a dent. All my dough is nearly spent, but I got a dollar and it's my last dollar bill. Oh, I'd love just one more buck. Fortune left me by chance. Now, here's a hint. I feel like a men. You can hardly tell by a glance. I don't care. No millionaire can give me the ISIS stack cuz I got a dollar. My last dollar bill. This podcast is intended forformational purposes only and does not constitute personalized investment advice. Investing involves risk, including the possible loss of principle, and past performance is not indicative of future results. The views and opinions expressed are those of the hosts and the guests and may not necessarily reflect those of Horowis Company Inc. an investment advisor registered with the US Securities and Exchange Commission. Registration with the SEC does not imply a certain level of skill or training. Advisory services are only offered to clients or prospective clients where Horowits Company is properly registered or is excluded from registration requirements. Any mention of thirdparty companies, products, or services is provided forformational purposes only and does not constitute an endorsement. 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