The Fed’s Latest Cut…. Plus Super Micro’s Red Flags 11/7/24
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Life from the nasza market size in the heart of new york cities, times square. This is fast money. Here's what's on tap tonight. Record closes for the nanzicele. The down dipping ever so slightly into the red is a fat cuts rates by a quarter point and the central being chief says he is staying put in the next administration will dive into what that means for policy in the months s in years to come and A I auditing will talk to the city of a company that to use the technology to flag accounting issues at super micro and other companies where SHE seeing signs of trouble now plus video appears to enter the double zillow shares get a renovation after earnings and the post earnings moves on ribbon a firm capri and more I from studio via the attack on the destiny ight Carry family and dan guy domi and Michael contains director fixed income Richard burden seen advisors we start off with another record day on wall street the nazi c and the S M P. Five hundred closing at all time highs while the door closes just in the red after at an interview record during the session that as the fed announced a quarter point rate cut at its latest meeting and chair j power address his future in a second trumpet administration, C, C, C, leason's, the very latest hastie. Hey.

Melissa. yeah. The fed cut raised by a court to point down to four sixty three, and suggested more to come gradually. Chair jack, I will tried to present status school policy outlook as if nothing had changed. Well, even how much has changed? For one, he had to respond to the question about whether president elect trump could fire him.

Do you believe the president has a power to fire or demote you? And has the fed determined the illegality of a president demoting at will? Any of the other governors with leadership .

positions not permitted on the law, not let, not permitted under the law.

For another, a trump presidency promises a vacation. Different fiscal regime and power responded. If that would take IT as IT comes.

Of course, the real question is not the effect of that law. It's all of the policy changes are happening. What's the net effect and the overall effect on the economy of the given time. So I think that's that's a process that takes a lot of time and that we go through all the time with every administration constantly. And I just this will be no different.

Fed chair seems to have succeed at presenting us that as well. Probabilities for refit rate cuts, largely on chain, seventy one percent for december, then a break, thirty percent for january and sixty seven percent for march of twenty twenty five years of the market settles into this idea of cuts every other meeting next year. The recent rise in bond yells are produced out for rate cuts next year may already reflect the marketplace, new outlet for a trump presidency that could include potentially Better growth, maybe more inflation or higher deficits or some unknown combination. Molest of the three.

Um they said that the risks were baLanced, Steve, and yet they still acted some curiously to what your interpretation of that is because if they we're perfectly baLances, maybe they won't move, but they did.

No, that's right. But that's because modesta, I think what the Cherry was saying is that we're still in this recollection tion regime that is bringing rates down to a place where there is actually hardening baLanced and then the fed will figure out where to go based upon the notion of what the data say. But I think they want to bring that down a little bit further. Do that quarter point in december again, that'll get you down to four a quarter, maybe get closure to four percent and then feel their way through IT.

Steve is caring things being on just on the hills messa. Melissa question, where do you think the real rate goal is?

You know, I think it's probably in the three and a half percent ranges. A good question. I don't think I have any more insight than the fed does on this.

Our fed survey today has consistently, by the way, over several surveys now put in a three point three that is higher. If you're going to run higher deficit, you're going to have and if you're going to have stronger growth, well, then it's gonna a little bit higher. I look, for example, every day at headlines about investments needed for artificial intelligence.

And you see big, big numbers in the tens of billions of dollars. All that increases the demand for capital. Also a very interesting conversation to have about the america's ability to attract the capital that needs to finance deficits if you're going to be putting tariff s on because that's like attacks on that capital that needs to come in.

So that's another question that needs to be answered. So there are a lot of uncertainties out there. Candidate are gona affect at least the medium to short term neutral rate compared to the long return.

One couple things deep. I think you know this Better than I do, but I think a fed governor, a fed shirt, can be fired by the present for cause whatever that means. There was some amendment to the federal reserve back, but that's not here's my question to you.

And this is teen you up a little bit, but you've been around this a long time. How would you stack up, jero pal, six and years ish now compared to some the other people. I mean, i'll go and say I think he's done for job.

Well, I think he's had a lot of chAllenges. I think he maybe messed up a couple times, uh, maybe in the initial response to inflation in the pandemic is going to be long debate, guy, the extension of which the fed might have acted earlier. I think if he had IT back to do IT again, they might have acted earlier.

I think the notion of separating fiscal policy for monetary policy is one again worth examining. And whether the feed should have acted in the way that potentially had some offset to all the physical spending that came through. I think he's handled IT well.

He's certainly done Better at the politicking of the fed, and he's done Better. I think also innovating. You look he's he's done, I think, a decent job. I think some of the outcomes were not what anybody would have hope when he came to the inflation break out in the and of course, there was a big upset in one thousand nine hundred and over the baLance sheet. But again, these are all historical things that he's been through and more or less matter than pretty well.

Steve micon top less you just mentioned the inflation break out post covered you chair power today mentioned how he thought the year of the year inflation rate was going to go up temporary before coming back down in the beginning of the year. But if you look at five year break evens, they've gone from roughly one ninety one ninety five most two and a half now, which is near one year high. Do you think is that all concerned about the markets pricing for inflation going forward? Instead of focusing on sorted this rear view mirror that he sort talked about today.

yeah I think eventually over the time, I asked them about recent bond yell moves. And I think what he said to that is, well, if they're sustained for a while and have an economic impact, it's worth watching. I think they they put that into the hopper.

I think they also though see uh, inflation getting little help from the housing numbers, which eventually lower housing Prices should a rental Prices actually should eventually filter into the data. So I think that's an issue that they're watching, but I don't think it's decisive at the moment again there there in this retaliation tion mode, which says we are not hyper concern about the data right now. We will be there when we get closer to neutral.

Hey, Steve, you know, i'm not so good at math, but let's just say I think a lot of folks feel like the one problem, the one issue that fedor parliament ID was twenty twenty one and not acknowledged inflation soon and up. Let's just say they had started to raise interest rates mid twenty twenty one. What did IT really done that much to the cumulative effects of inflation over the, let's say, the last three, four years? I'm just curious because that term transistors seem to be overused because in hindi, with inflation below three percent, IT was transitory, just whatever your time period was.

Ah you know then I have been over this a thousand times in my head. I've given a couple lecture about this, a different universities, about what they could have done and when they could have gone earlier. Did you forget done that in twenty twenty one, we had another outbreak of coffee that ended up not being as consequential as we thought.

But package one, each twenty one, would you have staked your monetary policy or the fate of the nation on the idea that that is the next downs? AK was not gonna be consequential. The fed was an emotionally al side where both fighting outcomes.

I talked to an economist when then, and I said, know, what did you think about the responses, by the way, of the troubled administration, of the by administration and the fed? And I said, I thought they regret. I said why I got to remember we were talking about whether or not the unemployment rate in the pandemic was going to be somewhat lower, equal to or somewhat higher than the unemployment rate in the great depression.

Remember, that's what we were looking down. Now I think you could found a two or three or four month, three, where the fed might have up, might have gone a little quicker. That could have helped a little bit with the inflation numbers. But if you're saying, you know was IT a big span of time, if they sit, wait too long on. And I think the answer is no to that.

See if it's always great to speak with you. Thank you. Steve. Ly, outside of the fed, all right, let's talk about the market reaction here.

This is why the expected in terms of what we got, what we heard and so in terms of IT didn't unravel, didn't unravel yesterday's big gains guide. So what you made me, we did give up some ground on being we get we housing reverse a little bit terms of moving higher. But overall, it's been a pretty .

good mark perform with I sometimes it's that one day after you see, specially given the movie saw wednesday. But we will talk about that if that happens tomorrow.

But and the things that i'm watching, I mean, the bond marketing crazy tays yields actually back up a little bit, which I think is quai I encouraging if you're concerned that yellow are going too high? But I still think the whole trade going to be predicated on what happens to ten new yields. And i'm probably one the few people that think they're headed significant than we are now.

Where are they had a mico. You're one of two guys. I I agree with you. I mean, listen, I think we are already in a place where yields were likely to go higher, earnings growth is strong, the economy is doing fine.

And now you're learning on top of that, you know an agenda that probably is quite inflationary. And so certainly, over the near term, our fair value model says the ten year should be roughly about four point six, four point seven percent. Uh, I could see upside to that.

I think you could see five percent again. I don't really you know, cutting interest strates in the context of a strong economy is basically adding fuel to a fire. And so I could see.

how are you this is a mistake today.

Hundred percent think the feed should not be cutting. We thought they would cut twenty five points. But no, I don't think cutting IT all.

And if heels go to five percent of the ten year, what happens? A socks IT depends.

IT depends, right? right? If IT goes to five percent because the economy is really coming. And then that's one thing. If you get into a stack lation scenario, that's a very different thing.

Yeah, I guess the thing is we have to start incorporating some of the thoughts of like a if this can be mass deportation, mass deportation. okay. Think about one of the biggest fears the fed has had is that like these wage gains get entrenched in the market, right in the economy and that sort of thing.

So to mean we just don't know right now, I just say this. The one thing that I found most interesting today is that large cap tech followed through like like crazy. okay.

So you just mentioned the doubt, you know, closed on change. You we have the Russell that closed down a little bit. We are the equally mp that closed basically unchanged.

That's really interesting to me. On the flip side of that gp, Morgan, which was trading up eleven percent ary, get back almost a half of that sort of move today. So I want to look at some of those gaps. And if they start to get refilled, but being jp Morgan got back to that break out level, a lot of folks are probably go in there by.

I mean, it's tech really the winner here. I mean, if you think about what what royal does an August, what happened in August? There was the only one of the carriage right truck ministration is or yeah yeah trump minstry tion has seen as a dollar strong right to a strength. And so therefore.

what can it's interest? It's interesting you said, I like to bog down in this but he was one of the in my lifetime, the only president actually openly talked about the want for a weaker us. Are now he talks about the strength of the U.

S. economy. But he's always been fast to say the dollars too strong. So it's can be interestingly how that plays out. And that dub tells probably nicely with this one for interest rates to be lowered despite everything that we talk about.

But to your point though, I mean, if there we do see tariff s right and we do, then I think the the strong dollar is what he could end up with, what he wants, but that's what he could end up with. So I don't know how it's going to shake out, but I don't know of wild things are gona happen.

There are a lot of unknown right now there for more on what fed policy could look like under a trump administration. Baring gardener joins us now and said he steals chief washington policy strategist brian great to have you here in person. Election week here.

There is a lot that we don't know in in terms of fed policy. A lot of that will depend on what trump does immediately. what? What's the first thing you're looking for him to do be terrible .

terrors and immigration, right? What can you do first? The administration can act first.

Congress tax cuts, tax extensions are going to take longer. So it's immigration. I don't think you can do mass deportations. And i'm not talking from a legal standpoint, i'm talking about a logistics standpoint.

We don't have the the infrastructure in this country to go around and and massively round up people that shouldn't be here. And where do you put them and how do you get them out. So I I think that's gonna a little bit more for sure.

I think the terms are going to happen relatively quickly. They've ready been through this exercise once they have a good idea of where they want to go. And so I think Carriers are are one of the leading items.

I mean, middle class work, your workers, that is his core. That's the core. And tires definitely hurt this particular group of people.

They don't see you. I an stomach and .

thirty three percent rise and toys ahead of Christmas.

This is the issue that has gone on through the campaign, the great debate, what's the state of the economy and and every economist you'll talk to says the economy is great and the trump s and people that worn part of the base of voter forms said, not so much. So there is a disconnect between the economics and the perception of what that means for for voters and workers.

So I think these workers are see, you know, they are buying into the the narrative. And i'm saying they are right and wrong, but they are buying into the narrative. There's going back for thirty years now that that nfa and other trade agreements have rob U.

S. jobs. And so they are fine with that. He is also a .

person who watched the stock market very closely in the reaction of terrorist of bute negative. And so i'm wondering how you sort of square that with also his historic c his Mandate that he has gotten terms of the popular road in terms of a sweep um which could involve him to be very very uh go out there in terms of the terrorism and in the range of terraces.

Could I about by the market yesterday? I mean the market reaction I think, exceeded what a lot of people were expecting. And so I think said, hey, i'm validated.

The market knows what i'm going to do are OK. I can do IT. And now I now not only did I win, not only did I win the popular vote, I may have a majority vote. And so that is just steam rolling into the the idea in his head that he has a Mandate and is going ahead.

You heard fitch fd pal addressed the question about him being fired.

Can't not permit.

I don't know if it's .

entirely trip that I think it's but I thought.

okay, doesn't. With that said, I mean, how important is this role gonna be because the president electron clearly wants rates to be lower.

The interesting thing is now and when we talk about fed independence because truck is coming and said that he's not wed a reappoint pal and he even talked about firing, how's more independent than ever I made? So I think for the next year, power is quite eboli. He knows he's not getting a third term.

And so he's not constrained by the the political realities of trying to get another nomination and trying to get to the senate. So for the next year, it's what powl wants the the board in the fmc to do, right? I just said i'm that good math.

I think i'm OK at math, right? So just talk about the undocumented workers and a master deportation. You know, I think there's some estimates that I might cost twenty thousand dollars to deport one worker.

Okay, one illegal in, do the math. I mean, if they like going to do A A million, you know, that's twenty billion hours. I mean, so think about IT.

So you talk about logistics, the cost associated with that, and then you think about what IT does to the economy. This a disaster, a especially coupled would like a trade war with increased terrors. Like think about that. I'm just curiously help us with them.

No, for industries that rely on lower school workers because these are not high school workers, I don't mean be cross about that, but they are not. So for industries that rely on lower skill workers, it's highly disruptive. You know you went through the math on the budget impact, just the logistics of of rounding those people and you just can't fly them across the border or or bust them to a border.

You're going to have to house them for some period of time. It's a logistical Operational nightmare. It's something that the federal government really is pretty bad at. And so and I suspect that behind the bluster and behind the rhetta c, that there are people close to trump and maybe trump himself that realized this is a longer term issue that they have to that it's not going to be resolved in the first hundred days, the first six months, the first year of an administration IT didn't happen overnight. It's not going to be resolved overnight.

Brian, great. Heavy with us.

Thanks to stop me about the thank you .

for having me appreciate the factor.

All this in my I thought brian point on sort of the perception about naked and global ation is a really interesting one because we've been talking for quite some time that it's demobilization and that is ultimately going to lead to longer term secular inflation pressures. And I yeah I think that's fairly lost on on the current or incoming administration.

And so that goes to what I mentioned earlier, that a situation where you've got secular pressures of inflation going higher, the same time you have signal pressures with tariff s in the strong growth environment. And that just isn't great for yields necessarily. IT could be great for sort of small caps, the companies that are really sensitive to strong economic growth and ensuring those other types of companies, I think, that are going to do really, really well in that regime. And a lot of all the companies .

maybe left out a record day for invidia as IT gets ready to enter the doubt tomorrow, the socks of about ten person last parties announcement the company replaces intel, which ends a twenty five years of run in the index shawan Williams will also replace down ink. What do you make a this run in in video here?

H, so I am I I I don't think it's doubt related. I think because the amount money that you know tracks dough IT is just the I mean the torch has been passed a while now already from from intel two invidia. Um and actually when AMD was the little edl also brain, because you need to have two suppliers just in case that tour past and now another one. So I don't think that's so much, but I do think this sort of animal spirits and know all of the commentary around AI has been full steam ahead when you look in to listen to amazon and made a talk about IT and testy, I mean, full team head. I M I an not a lot happens .

now as we get closer to thanksgiving and november twenty today that everybody is been watching because they report learnings said, june twenty eight reversal we talked about that actually worked because you saw where the stock was trading on August fifty traded down to ninety. We've taken that out. But there's another day like that coming on.

The horizon melts. You know what I find each thing is that microsoft has not really participated a whole lot. Its go back IT was july when the stock topped out.

So it's you down nine percent or so. Look at super, that was what third fourth largest customer. And video, so microsoft dari told us what their cap acx is. But like I think about IT through the lens of the way investors are seeing this trade play out and maybe you see less demand and then you'll see less demand for chips.

So when you have this sort of issue with some of your big customers or at least the ones in the stock market, I know that makes me less enthusiastic about invidia that keeps going higher every day. So you again, that's probably not surprising coming for me. But IT doesn't seem there is a whole hacking, a lot of cautious as a release.

this name coming up from to careers which to out our eyes and all the shops reporting earning after hours. We're digg into the mood, starting with the rival and its latest quarter, nex. And speaking of results, shares of zillow surging in the back of their key three report, where IT is seeing growth and how our traders were handling. Don't go anywhere.

Best one expectant to this is money with mica right here on C, N, B, C.

Cnbc has quick and easy to understand business news updates at the open midday and close every weekday markets, money and more from wall street to main street. I'm cnb, Jessica and good. Follow and listen to see nbc business news updates wherever you get your podcasts.

Welcome back to fast money evy maker revision higher after posting a wider than expected quarterly loss fill abuses speaking with you rj scent and just last hour, he has a very latest on this quarter film .

a molest were twenty minutes into the river an earnings call, and you can bet there a fair number of questions about what happened last quarter. As you mentioned, they missed on the top and the bottom line. Here are the numbers in terms of the loss per share as well as the review coming in light of expectation.

And look at the loss per vehicle IT widen out a year over year by almost nine thousand dollars. R. J. Garage explained to us last hour what happened last quarter.

You just made a big change over to our our second generation of our iwan vehicle. And there is a lot of costs that he was changing out, roughly half of the billion materials um as measured by costs. And so we ought on these suppliers, there is expenses associated with that. Um we also a supply chain shortage as part of this ramp up. And that really heard this in terms of our overall output for the quarter, which affected this from terms of fix costs.

alright. So why would the stock be up given the fact that they also made their expected loss for the full year wider than previously expected? Now up to two point eight two five billion, potentially, they have a firm there plans to be gross profit positive in the fourth quarter, and they are on track to close the bolt wag and joint venture this quarter that will obviously free up some of the five billion dollars that is going to be coming to the company. As you take a look at shares of revision over the last year, one last thing, lisa R J says they are on track to begin r two production in twenty twenty six. They have the capital that they need to get there.

Melissa bet fail over to curious, didn't they cut their their output forecasts just in october and they cited part shortages. So is a continuation it's a worsening of that. What the problem in just of a month?

It's the same. It's one component. R, J, I talk to them about this. He said, look, we're working with the supplier is not a situation with a bad relationship.

They just are there struggling to get this one component, which is critical to their endure motor. And he believes that they are in position to lower their costs by twenty percent. The physical cost of goods in the fourth quarter. That's a one reason why they say they will be positive growth profit in the fourth quarter.

What happens to sales if the evy .

incentive goes away?

He's pretty confident that they still will be able to, to make IT to r two production, that they have enough liquidity, which right now, I think it's eight point one billion. Remember, they've got another four billion coming from the joint venture with volkswagon. And that is a vehicle, Melissa, that as of right now, they planned to sell for less than fifty thousand dollars. That's the sweet spot of the market that .

everybody's trying to get to. All right. Fill, thank you, filo. Again, that conference calls underway twenty six minutes. And guy.

what's the trade here? IT bounced. Ed, I get IT. The sock has been awful. Meaning they have at least they have cash on the baLance.

Eet, so enough to worry about that, maybe a ten dollars to share wherever it's trading. Now it's worth a play on the long side. But if you look at IT over last few years, you don't want to own IT maybe traded.

I'll say this. I don't know how they get to those numbers. Maybe it's regular tory credit or something that lose forty thousand dollars every car they sell the matter as an added. But I think the market is trying to clean some something from that.

Yeah I mean that the answer seemed very musk in if you think about IT, right and the R J ranges about you what's going on there. But I look at this car, it's a good car and you know, like IT doesn't have all the bag of a tesla right now. And when I say that that's true, right? And I look at the Price point on this r one tea, it's about the same.

Is that depLoring? I mean, the cyber truck, you know. So like if you think about that, if they could ever .

get this correctly, t down anyway.

google like kids. So no, I don't know. Like if they can ever get some big supply change to use, I mean, we need to have second sources. You detroit has basically gone all in on puggle evs, you know what I mean? So I just think that this interesting sort of company and it's an interesting looking car.

right? There's a lot more fast here. Just coming up next home .

is where the gains are, shares of zile searching on the back of strong results, why one of our trader says the earnings call was extraordinary and how they're handling the stocks jump plus a real chip check as super micros worries grow, the warning signs hiding in plain sight and how A I helped ring the alarm bells you're watching fast money, my from the next deck market side in times we're back right after this. Cnbc has quick and easy to understand business news updates at the open midday and close every weekday, markets, money and more from wall street to main street. I C N B C, Jessica adding, go, follow and listen to see abc business news updates wherever you get your podcasts.

Welcome back to fast money shares, a zillow ripping higher, up nearly twenty four percent up at the company, posted strong q three sales and a smaller loss, and expected chairs now up more than seventy percent since its new CEO took over in August. Karen, you would do the conference .

call about you. Oh my god, there's love to love. I mean, just remember the backdrop of not huge home sales, right? And in that backdrop, they were able to beat on so many metrics and really gain market. Are of the business right? Their percent growth well out of the business.

They have so many great things to this fly will will of just wanting to be in the center of every transaction, whether it's a listing, a high profile listing um whether it's getting the good agents um and then they have a flex deal where you can they can get a different cut and then um you have this um all this software that helps agents do a great job and follow up, boss, that helps them you stay on top of what's going on to the transaction if there is one and mortgage. And so a lot of great things are happening all of the same time. And the rental business, which is mostly the best part of multifamily homes they talked about, that was a billion dollar opportunity that's been great. While the existing home sales.

a billion dollar opportunity, meaning that the rent is right now just like scratching the surface.

there's a lot of room to run, right? The mortgage business, which was up big percentage but not huge dollars, but still not just getting into every part of the transaction. And what happens if you get a if you get rates lower and existing home sales come on the market? Right, right. And so this sort of asset light, but you know, software heavy, I mean, the margins s could be great. So a lot, a lot to love here, maybe a little bit got a little bit ahead of itself, but a IT was really not standing call in .

Michael scenario in in your scenario, mortgage tes do not go. No.

they go higher tier and theyve been going does.

yes.

because I mean, and we've had that conversation. But even under that scenario, given we Carry to stop the Operating margins for two hundred and sixty basis points Better than the street was looking for in that rental revenue is now doubled in the last two and a half years. Probably doubles again.

So there's room there. And I will tell you, if you look at a chart, mean not that that matters, but this talk is still half of what I was three years ago. IT could easily trade back to ninety five dollars in this environment and still be sort of attractive. So I think parents should probably stick with this one.

They talk at all about more good rates sensitivity. They see a fifty basis point drop in mortgage de rates or person is a magic number for no.

they did unless I did go get a drink in the middle and thank back unless I did IT then. But no coming up the rise .

and followed super micro o the red flags that may have been hiding in plain site and how A I help discover the risk more on that next plus tapestry shaking off a premerger or mess and topping earnings expectations. But as their chance the deal gets revived under a new administration to discuss that when.

Fast money returns back to of the podcast. We're back right after this.

Welcome back to fast money, super micro, twelve percent today, but still struggling to bounce back from a series of accounting issues. The company giving disappointed unaudited financial this week after accounting for merging one A I platform, has been snifty out suspicious transactions at the companies for years. Chris pandies, CEO of hudson, laps her firm first flag risks at super in twenty twenty two. Because so Chris, this is fascinating, because this is sort of the intersection of a fascinating story in the stock market and the hottest story in the stock market AI. So tell me how that works in terms of what your platform does, what your large language model does?

yes. So as a financial AI pop forum at huddle laps, one of one of many things we do is I look at the concentration of related party risk across all us issues. If you think about related party transactions and other types of forensic risks is an incredible application of for A I because it's unstructured data, IT takes a lot of time to dig through all of that, but also there's a lot of noise, and that's one of our biggest contribution to the space is getting red rid of boiler plate, finding the signal verses the noise. But because of that of we have a related party concentration risk screen where super micro was one of the highest rist companies and simultaneously was ranked quite high on our other forensic.

So so this screen is a result of going through hundreds of thousands of sec filings because that is time consumed me. Nobody wants to go through one sec filing left alone eight hundred thousand a year.

exactly. And in a situation like related party risk, a lot of related party exclusion is meaningless, boring and not material. As if you're trying to do that using a keyword search, it's going to get you mostly information that's irrelevant, which is what you need, a more specialize model that understands content context.

such a. So this screen, which flags super micro, the related party risk IT IT flagged the the ties that super microhelp with able calm as well as computer and able come. I mean, there are a lot of people out there who who are deep into the super mica story, but abl com C E O is the brother of the foundered CEO of super microbes. So there's a lot of strange ties there as well. Yeah, yeah.

So super micro was flagged on multiple screen. The most interesting one was, of course, the related party concentration ist, because IT was one of the highest stress companies for that risk category. And you're right, IT was A A very unusual web uh family relationships with both able calm compuware and also interesting the terms of those relationships.

We're very clearly not commercially Normal, at least from where i'm sitting. One example is they were selling into copy where at below market Prices, that's all available on the public record. And you know, I think one of many things that was abNormal about both the able calm and copy where relationships.

So thanks for coming on. Really interesting what you do and wondering so related party that seems like a fruitful place maybe to look. But what about things like channel stuffing and you know inventory working, things like that? Is that can you do IT as well with those kind of I guess I don't know those. The key words are always .

going to think about IT. Well, that's exactly what's so interesting about both the computer and the able com transactions as they set up in such a way where when I look at IT, IT almost looks like inviting both round tripping and channel stuff. C uh, computer is both a manufacturer and distributor.

So they're coming in two different ways. And for both able calm and computer, there's the option to ship on consignment was a sale. There's just a lot of direction. And when you look at the details of those transactions, which would to me as a an x cpa raise, questions about is there an opportunity for there's absolutely an opportunity for round tripping and channel stuff in, you know, whether or not he was in fact happening remains an open question. But the fact that they were doing IT in the past and settle with the S C, C for the other types of issues does a great the risk.

I asked this question, hoping you know the answer. I'm not looking to take you up. You have proprietary forensic risk score calculator. Anything over seventy raises your anti na. If you to go back and look historically, how many times you've got a reading north of seventy and then equated with a stock sort of falling out of bed, being able to short to stock based on net score and being successful doing IT.

if that makes sense, that we have a some great back sting on a our website by IT say you know it's very highly used by people who are actively looking for a short ideas um which speaks to its accuracy uh also highly correlated not just with Price collapse uh, but also things like class action litigation. But really what we're testing against is does this relate in sec enforcement action in a in the next three years, and that's how we evaluate efficacy.

Any companies you are going to unfair in terms of landing that north of seventy score.

I if you'd like to know more about which companies are harder, I suggest becoming a hodges and loves subscribe. But I do when I just give a teaser that there's you know at least one another company on my itor with similar related party risk for a file to what what we've seen at server might grow in, in the biotech space.

in the biotech space. Resting, Chris, thank you. We help you come back. Christian I of hudson laves. This isn't really interesting application, I me in many ways but also in terms of the application of AI we talk about in terms of like a ChatGPT like you're asking you to like write you an essay, but this is actually a useful information.

And again, I mean, sort of stuff that's going on markets like this for a long time is that generative A I? It's AI. Machine learning is taking on structure data and structuring IT. And you can see a scenario where ultimately IT does become general and IT starts buying or shelling stocks like the sort of thing. So that's coming to the in the U.

S. Is back coming up to on the move after reporting earnings but included its deal tafel ry, come back from the dead in a new administration. What next for he's luxury fashion is back and you.

That breaking news on the next administration present elect trump announcing Susan summer wiles will be White house chief of staff. Wiles has been serving as coach ir of his twenty twenty four campaign. SHE would be the first female chief of staff in history.

This is a largely expected terms of this particular appointment will be interesting, of course, to see who you pots. Things like treasury secretary, which will be key labor commerce at set assets, start seeing that filled out cap holdings in tapestry, both moving in the back results today and on hopes that the next president's policies could revive merger talks. Cnc courting red and joins us now with all the latest court.

So we just heard from coppi after the bali slim release. Of course, they are going through dealer or they will talk about that in just a second, but keep ri actually missing on both the top and the bottom line. There are giving any guidance or not holding a conference call while this deal is in allegation process.

But that's quite opposite from what we heard from tapestry earlier this morning, would actually be expectations for both the top and the bottom line. Pup, a really impressive growth margin of over seventy five percent. They also their gardens for the full year in their own in their fiscal first quarter, the first time that y've raised their full year guidance in the fiscal first quarter in three years.

They talked about coach brand driving the newness, so got a lot of detail there and really weren't disappointed about what they've seen around the world. When IT comes to this higher and consumer, where's copies? John idol, the CEO, they're actually pointed out what he calls sort of weakness in the softening demand globally for fashion luxury goods, but that's not at all what tap istory saw.

And so I think what's very interesting here, of course, is this deal was blocked by the courts or the ftc blocked IT in. Then the court said, yes, we agree with that. They're going through their litigation, the appeals process.

So both companies are not going to say anything more. They said that part of our merger agreement is to go through this appeals process. But actually, if you look at IT, I don't know.

I mean, if I didn't have a great corner, tapestry had a really good quality of the stocks are moving in opposite directions. Maybe it's a blessing in disguise. Maybe tapestry doesn't want or nee corporate holdings anymore, Frankly. And I don't think that this new administration really revives any of that because now is in the court the court hands, right? It's it's no longer in the hands of the ftc.

right? Yeah, I think that was bright relief we saw on the court decision was not yeah.

although I do think the merger agreement is february tenth, if i'm not mistake and unless there is some court a movement before that and I think that's kind of getting to be unlikely.

I think I think so too, right? I mean, they won't give us any further details of exactly what's going on in there, but they sort of said, look, we're following what we need to pull the contract for going through the motions um and then tapestry so said, look, we there's no more short term in N A. On the horizon if this deal doesn't go through and we plan to buy back chairs if if this deal doesn't work and y've got, what, seven point three billion dollars in cash on the box.

Courting, thank you. Great to see courting reagan. We've got a newser alert here on activate maker biorn who see that we had on just few weeks ago, bloomberg reporting the company will allow some investors to sell shares in a tender offer that values IT at five and a half billion dollars.

The area was valued at four billion in the last founding round, round in twenty twenty one. So um maybe it's not surprised that increase in value here. We just talk to .

the CEO to told a great story us for stuff on life. He based .

smack me down like you. We're not doing that.

I mean, again, not that. It's I think right now we're sitting here little emas of forty billion doeas using. And I obviously that's one of the comp.

So I mean, this actually makes sense in you know good for them. They are building a great business. You're doing a great job being, I think, discipline. And this is a good opportunity for people to make some dollars on the back of IT.

Ah IT is really interesting. So they're grown a ton, yes, since that early around at four billion. However, money was free, then evaluations were insane, and I think they're y've changed a lot. And still, it's a really compelling .

story coming up more after our action block, a firm draft king, airbnb and hentrance all on the move to get the details on those quarters went returned.

Welcome back to fast point. In ten of after hours action, paintress will double digital losses after giving weak guidance. Airbnb posting a ten percent rise and revenue shares had been up as much as eleven percent, now down three percent. Draft kings dropping after posting a bigger loss and expected in fin tech names block in a firm both lower after their results. In which one .

attracts you? Pin rest that sort not the right word attracted. I mean, I don't know. I guess I was the guidance that wasn't so great. I I always think of pinter.

I don't know the way guy does, as you know, for decorating and home things like that. And I was just wondering if the slower is no existing home sales or refer whatever market that was just going to be handheld by interesting is going back up. Maybe that's part of IT. But I always come to this when I look at pinches or snap, but whatever, why would you we own that when you can own?

Met a .

mary just, uh, I know they can grow faster pinches, but to me, the the situation is so compelling.

The matter that doesn't use IT for decorating and he uses IT for style.

And don't know our crack staff can do this on the fly, but I have a great this page, which you have in touch.

Look at that .

a decade. Look at the that stand .

with the hair .

that's five .

head .

shots ago and I .

know at least was yeah when you did .

the airline yes.

quick. This stock over the last .

year .

has had two GPS lower, two GPS higher on average, about fifteen percent. I know you don't like company is you don't think they should be giving guidance. This company doesn't seemed to have A A ton of visibility on their business.

No, just don't think any company should give goods. Who knows? yes. No, I think .

the book going out quarter, they should know, I mean, why you against investors having transparency um because I think .

IT forces companies to focus on what are we going to tell the street and how do we manage the street instead of spending time on let's .

run our .

business as well as we can next.

Time of the final train, Michael. control.

S, R, B, A. We've been pretty positive on rebuilding the american capital stocking need to like, especially after election results, small, the cat companies in the us.

Michael, great to have you here.

Current, yes. So zero. I love the car. I love so much about IT, but I wouldn't jump in my earlids about.

And yeah, some of the E V stuff doesn't seem that interesting.

Maybe D Y D in china does .

guy all puts and lives webs is up because they get in with, no.

that fascinating story.

I don't have an x in my climb, but if I did IT would be x on mobile.

Where would you put that? sure.

You might want to get that looked at.

Thank you. Are watching facility that money with you very research right now.

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