the countdown is on everything you need to get the edge at the end of the market day this is the clothes the fed decides and the markets react welcome to the clothes this is romaine boston and i'm katie grifel you are certainly
katie grifel of course we are just about 10 minutes until the closing bells and about 30 minutes removed from the fed's last meeting and press conference of 2025 and here is the lay of the land here a 25 basis point which course which came as expected the third straight cut that we've gotten out of the fed in
the last three meetings and we should point out though the policy projection for 2026 one more just one more quarter point rate cut heading into next year but the two biggest developments of this meeting won the resumption of those treasury bill purchases and acknowledgement of a potential crash crunch
going on right now in the short-term money markets and number two the era of fed congeniality apparently over for the fourth straight meeting we've seen descents in the descents at this meeting three the most we've had since 2019 here's Jay Powell just moments ago today the federal open market committee
decided to lower our policy interest rate by quarter percentage point available indicators suggest that economic activity has been expanding at a moderate pace consumer spending appears to have remained solid and business fixed investment has continued to expand there is no risk-free path for policy as we
navigate this tension between our employment and inflation goals as detailed in a statement released today by the Federal Reserve Bank of New York Reserve management purchases will amount to 40 billion dollars in the first month and may remain elevated for a few months so I don't think that a rate hike is
anybody's base as the next thing is anybody's base case at this point you take a look at the market reaction the knee jerk reaction to the Federal Reserve's chair comments there you can see it has been two by stocks and to buy bonds the S&P 500 set to close at what would be a record high the Russell 2000
as well higher by about 1.4 percent that would be an all-time high for the small cap index as well help by what we're seeing in the bond market a bit of relief coming through across the curve that 10-year treasury yield which we've been keeping a very close eye on down nearly five basis points right now
and the ultimate risk asset you can see as well catching a bit on the heels of this meeting Bitcoin higher just a little bit about a 10th of a percent remain Ken Shinoda joins us right now portfolio manager over at double line capital and a little bit earlier before the Fed meeting Ken we had a chance to
catch up with Bob Michael over at JPMorgan investment and management and I thought it was kind of interesting his reaction to this report was basically in his words it was not as much as the market expected but not as bad as the market feared what did you make it today's decision yeah I think the market expected more of a hawkish cut that's why the treasury curve had been selling
off for the last couple days I know we're rallying today we're basically back to where we were at the beginning of last week I kind of view it as a pretty balanced Fed with maybe a dovish tilt and I think one of the things that led to that bond market rally was the announcement of treasury purchases
table pressure purchases we joked on the desk here that it's we're doing quasi QE again well yeah I'm curious about I mean he let's just point out he avoided calling a QE but is that effectively what it is and I guess more importantly Ken why do you think they felt the need to do this now I know there have been some
pressure coming out of the folks in the treasury market saying that the Fed needed to step back in was that the reason well I think that you're seeing a little bit of lack of liquidity in the repo markets and they want to going into year-end they want to keep that liquidity high so I think it's really to kind of support those repo markets and balance liquidity out there and let's talk a
little bit about the bond market reaction because again you see that over the past couple weeks there's been this rise in the long end and there's been some concern about what that means you're seeing 10 year yields in particular come in a little bit today I wonder how you're thinking about some of the
movements on the curve and whether the respite maybe that we're seeing is something that's going to be sustainable well we've been trading range bound and 4% on the lower bound has kind of been a sticky spot it's been hard to break through and I and I don't think the bond market can break through that 4%
without considerable weakness in the labor market and I know the feds definitely concerned about that they mentioned it a couple times and I think it's the labor market data that has led them to their cut today one thing that Powell noted is that the payroll numbers have been coming in around 40,000 and
they actually think they're overstated by about 60,000 which means we had negative payrolls and I think that's a main reason they cut now the other thing the market's concerned about and it comes and goes is fiscal concerns about too much spending and the interest costs on on outstanding debt that continues to
rise so I think there's this push and pull between weakness in the labor market hoping long-term rates fall and then concerns that deficits are already high and we're not even in recession so if we go into a recession I'm not saying that's my base case that would mean even more spending has to come so this is the
push and pull that long and yield that long end of the yield curve has to deal with right now absolutely and the result as you mentioned has been sort of a range bound trading environment but let's take a look into next year because I thought it was interesting to hear the chairman say that this further normalization of our policy stance should help stabilize the labor market
while allowing inflation to resume its downward trend towards two percent that could be setting up a pause here when you think about both sides of the dual mandate and the threading that they need to do how did you read that comment and if we are headed to a Fed pause which makes sense at least until May 2026 what
does that mean for you and your seat as a portfolio manager I definitely think it's possible he mentioned many times that weren't a good place I think he said weren't a good place five six times which means that he feels that they're at a good spots and I think short-term rates have now come down to where the two
year is the two year had come down much more than policy rates and we're now pretty close to the the three percent neutral rate that many market participants believe is where we should get to so I think with inflation kind of remaining sticky at that three percent that gives them the potential to to stay
on hold and wait for data and so they're really going to be relying on that labor information coming through when you look at longer-term yields though Ken I mean do you get a sense here that we will see a more meaningful resumption of the steepening of the yield curve not so much just because of what the Fed is doing but obviously with a lot of the other noise going on in the
好的，Ken，總是感謝你在美聯儲會議後提供的快速和即時分析。Ken Shinoda是Double Line Capital的投資組合經理。我們應該指出，Katie Greifeld，你看看現在的市場，我回顧了最近的會議，過去四五次會議中，標普500指數在會議期間大致保持平穩，今天有一個重大變化，標普500指數交易創下歷史新高。
06:55
background whether it's the deluge of corporate issuance on the AI side the increase in the term premium etc. I think all those things are part of it and also what's going on internationally I think one of the reasons we saw this recent move was they're starting to talk about rate rate hikes over in Europe
and in Japan that could continue to happen too so you know in other parts of the globe you're seeing inflation kind of pick back up so if you're starting to see hikes in over in Europe it's going to be hard for the long ends of rally all right Ken always appreciate the quick and instant analysis coming out of
these Fed meetings Ken Shinoda portfolio manager over at Double Line Capital and we should point out Katie Greifield you take a look at markets right now and I was looking at the most recent meetings the last four or five meetings the S&P has largely been flat on those meetings a big change today with the S&P trading at a record high absolutely a big reaction here also in the small
cap so it's really across the size spectrum that positive reaction record high is potentially for the S&P the Russell as well as bank stocks a full breakdown of all of today's market action starts right now the closing bell Bloomberg's comprehensive cross-platform coverage of the U.S.
market close starts right now and right now we are two minutes away from the end of the trading day Romaine Bostick here with Katie Greifield taking your through to that closing bell with the global simulcast we're joined now by Carol Masler and Tim Stenade from the radio booth welcome to our audiences
across all of our Bloomberg platforms including our partnership with YouTube here on Fed Day the last Fed Day of 2025 no surprises in the cut but maybe a little bit of confusion about what comes next yeah absolutely which is something we've been talking about all week right and that's what everybody
wants to know what comes after this meeting having said that definitely seeing some outperformance in terms of the KBW bank index that's up about 2.6 we also we just mentioned too we're watching shares of Warner Brothers discovery up about four and a half percent President Trump saying any
Warner Brothers deal must include a sale of CNN so certainly this gets more interesting and it makes you think what what deals gonna happen why does it include a sale of CNN I don't know we're gonna have to find out from the president but remember that Netflix's offer does not include acquiring CNN it doesn't include acquiring those
traditional cable channels it only includes the studios so what he would be speaking about ostensibly is a Paramount Skydances deal which includes you know all of Warner Brothers discovery yeah well we've certainly heard a lot of opinions on what is going to happen now we have the president chiming in as well we know that this deal is going to take
a long long time to play out certainly got a little bit more interesting but so too are these markets in terms of being interesting when you consider the S&P 500 moments away from a record hot so let's go back so we have Trump also speaking at the White House just got decided to sell this meeting at the same time power speaking he is
also addressing the issue with regards to interest rates as usual making the case in his words that apparently Jay Powell is not done enough he's also talked about the selection process for a new Fed Chair said that he's meeting today with Kevin Ward so a lot of what comes next with a Fed of course will depend on who's in that Fed Chair seat
come May of 2026 and maybe we get a little more clarity on that in the weeks ahead meanwhile here on this Wednesday afternoon does look like record highs for at least two of the major indices the S&P 500 is going to close higher six eight eight six and change up about 46 points of seven cents of one percent that's a record high the Dow
Jones industrial average up almost 500 points or one percent on the day the NASDAQ composite adding about three tenths of one percent and the Russell 2000 up about 1.3 percent and that is also going to be good enough for a fresh record high we should also point out that the KBW bank index also closing today at a fresh record high yeah real
surge in that no doubt about that not Russell also moving significantly as you mentioned Romaine so really some stand out hey S&P 500 let's go back to the big caps if we may 389 names in the S&P 500 hired today 113 to the downside and Katie one unchanged let's take a look at the sector level here
broad breath overall nine of 11 sectors finishing in the green you can see that big tech finish just a hair higher it was industrials really though that stole the show up by 1.8 percent as a sector followed by materials and consumer discretionary
in terms of what didn't perform on this fed day Wednesday utilities down about a tenth of percent and consumer staples pretty much flat on the day but slightly red carol all right let's go to some of the individual gainer jever nova shares climbing 16 percent biggest one day gain on record so this stock soaring it's the top
performing stock in the S&P 500 today the company doubling its dividend increase the scope for share buybacks and raised earnings projections keep in mind this is a company we've been talking about this here right that it has really benefited for the soaring us demand for electricity whether it's data centers
AI 以及整體經濟的電氣化，該股今年迄今上漲約 118%，表現相當出色。讓我們來看看華納兄弟探索，因為這支股票肯定在我的清單上，我認為它是納斯達克 100 指數中漲幅最大的股票之一，上漲了 4.5%。
11:48
AI largely and just really the overall electrification of the economy that stock is up about 118 percent year to date and so quite some outperformance there let's go to Warner Brothers Discovery because this one certainly on my list I think it was a top gainer
AI 以及整體經濟的電氣化，該股今年迄今上漲約 118%，表現相當出色。讓我們來看看華納兄弟探索，因為這支股票肯定在我的清單上，我認為它是納斯達克 100 指數中漲幅最大的股票之一，上漲了 4.5%。
12:04
in the NASDAQ 100 4.5 percent to the upside we just got some comments from President Trump saying that any deal for Warner Brothers Discovery must include CNN and as we pointed out that that deal the offers that we've gotten paramount includes the CNN property the Netflix deal does not but nonetheless
Warner Brothers Discovery it's up about four days in a row again of about 16 percent up 135 percent since September 10 and just for something different David Buster's I know it's a small cap company plays the ticker up about 13 percent in today's session this is a Wall Street analyst highlight improving comp sales trends in October
November despite a third quarter miss and during the conference call the company did come out and say that traffic in its dining rooms late in the quarter was meaningful up year over year with last month of the year and improving in November stock is down about 31 percent
思科在 25 年來首次創下歷史新高。我提到這一點，因為當然我們談到了一些在 AI 時代找到新生命的舊科技股。我們預計今天稍後會收到甲骨文的財報，甲骨文早在 9 月就創下了歷史新高。在收到這些財報之前，讓我們來看看今天其他一些下跌的股票。
12:55
year to date 38 percent of the float is short so I just want to add a honorable mention in there to keep an eye on shares of Cisco which have been rallying now for seven straight days adding nine tenths of a percent on the day and that's actually going to be good enough for a record high and significant because it hasn't hit a record high since the dot com bubble burst all the way back in 2020 the first record high
for Cisco in 25 years and I bring that up as well because of course we talk about some of these old tech stocks that have found some new life here in the AI era we are expected to get earnings a little bit later today from Oracle which of course hit a record high back in September well before we get those earnings let's go over some of the
other movers to the downside today on the day I do want to start with shares in Netflix down 4.2 percent today six session in a row to the downside this is the longest losing streak going back to January now over this time the last six days it's fallen 15 percent that's the worst since 2022 this all is the bidding war for Warner Brothers discovery heats up
and just a reminder of what we heard from the president moments ago at the White House he says that any Warner Brothers deal must include the sale of CNN also paramount out with some headlines too saying that the Netflix cash component is about seven dollars a share lower paramount also says in a letter that it's 30 dollars a share offer
is superior so like Katie said this story is one that continues but Netflix has taken a hit over the last few days as a result also large hospital chains including HCA health care and tenant health care fell today after reports indicated that Republican congressional leaders are considering a Medicare pay cut for hospitals this counter proposal to
Democrats demand to renew Obamacare subsidies HCA health care ticker HCA felt 4 percent today that policy was included in a list of health care options presented to Republican House members in a meeting today this according to a document viewed by Bloomberg it could lower cost for patients and save the
看起來這是一個超過預期並提高指引的季度，你可以看到這反映在 Adobe 股票上，上漲了約 2%。我們知道這家公司今年在股市上受到了很大的打擊。回到甲骨文，看看評論，公司高管有很多評論。甲骨文首席執行官 Mike Sicilia 表示，AI 培訓和銷售 AI 模型是一項非常大的業務，但我們認為在各種不同的產品中嵌入 AI 有更大的機會。甲骨文處於獨特的位置，可以在我們的軟體產品的所有三個層面中嵌入 AI：雲數據中心軟體、自主數據庫和分析軟體以及我們的應用軟體。
14:42
Medicare program substantial amounts of money but it has been opposed to hospitals due to the higher overhead costs and finally the parent company of Instacart maple bear down six percent today it was one of the numerous online gig economy stocks that took a hit including Lyft Uber DoorDash and more this after Amazon said it's expanded same
day delivery offering for perishable groceries to over 2300 cities and towns local earnings crossing the wire right now let's get right to it here it does look like the top and bottom lines are meeting second quarter numbers up about 14 percent on the revenue side to roughly 16 billion
dollars though that does look like it's just a tad light the street was looking for 16.2 billion dollars revenue on a constant currency basis up 13 percent that's also light the street was looking for roughly about 14.6 we'll round that up to 15 percent EPS in the quarter two dollars and 26 cents a share that is a beat a sizable
beat the street was looking for a dollar 64 here i'm not seeing a guidance just yet here but we should point out that cloud revenue was up 36 percent in the most recent quarter cloud infrastructure revenue a separate category that was up 71 percent in the most recent quarter and cloud
application revenue was up about 11 percent all right let's take a quick look at Adobe those earnings also crossing the wire here Adobe shares higher by about 2 percent after reporting that fourth quarter adjusted EPS beat the estimate the numbers there for fourth quarter adjusted EPS coming in
at five dollars and 50 cents the estimate had been for five dollars and 39 cents also fourth quarter revenue coming in ahead of expectations as well you take a look at the guide here they see first quarter revenue between six point two five billion dollars and six point three billion dollars the estimate
had been for six point two four billion dollars so the midpoint of that range comfortably ahead of the estimate they also see first quarter adjusted EPS between five dollars and eighty five cents to five dollars and 90 cents the estimate had been for five dollars and sixty six cents so
looks like a beat and raised quarter there you can see that reflected in adobe shares after our higher by about two percent we know this company has been pretty beaten up in the stock market this year i'm getting back to oracle and looking at the commentary lots of commentary coming from executives at the company oracle ceo mike sicilia saying that ai
看起來這是一個超越預期並上調指引的季度。你可以看到這在Adobe股價上反映出來，股價上漲約2%。我們知道這家公司今年在股市上受到很大打擊。回到Oracle，看看管理層的評論，公司管理層有很多評論。Oracle CEO Mike Sicilia表示，AI
16:57
training and selling ai models are very big business but we think there's an even larger opportunity embedding ai in a variety of different products oracle is in a unique position to embed ai in all three layers of our software products cloud data center software autonomous database and analytics software and our application software
shares oracle down about close to six percent in the after hours all right let's get to the application software company synopsis uh it is also reporting its results and into the outlook let's start there sees first quarter revenue of two point three seven billion to two point forty two billion the estimate on the street is two point thirty six billion
first quarter just a dps again to the outlook three fifty two is shared a three fifty eight is shared estimate on the street is three forty six so it does look like it's pumping that higher and we do see the stock up two point six percent in the aftermarket twenty twenty six revenue nine point
five six billion to nine point sixty six billion that compares with nine point six three billion in terms of the estimate and it sees twenty twenty six adjusted EPS of fourteen thirty two is shared a fourteen forty that two is handily above the street estimate of fourteen eleven so again that stock up about two percent in the aftermarket and fourth
quarter revenue just for some growth year over year up thirty eight percent and fourth quarter adjusted EPSO a look back at the quarter that was two ninety versus three forty year over year but nonetheless tempering some of its uh gains in the aftermarket but still up you guys that one percent here absolutely and we go back to of course oracle which
obviously sort of it is kind of the fulcrum for everything that we're reading now with regards to synopsis adobe and the rest of that AI trade and i was looking through uh their presentation on their website and they talk a lot about the new customers that they've signed up in the most recent quarter for the services but a big part of this and a big part of why you're
seeing the shares down there's a lot of concern about oracles ability to fund that remember unlike some of the hyperscalers and the others that we've talked about who've been able to fund their AI dreams primarily with their own cash on the balance sheet oracle has relied on a big way on the debt markets and the expectation is they will return to the debt
markets debt markets to fulfill some of those obligations and some big questions here about whether that erodes profitability all right you guys are talking tech i'm also looking at what's happening in the ski business veil resorts reporting down just about one percent in the after hours first quarter net revenue
missed estimates first quarter's total skier visits came in above estimates first quarter loss per share came in slightly above estimates at five dollars and twenty cents once again shares the veil resorts down about one point one percent in the after hours all right and back to adobe it is up about
two point six percent here in the aftermarket and we're looking at oracle under pressure continuing to see it trade lower here in the aftermarket it is down about five point one percent all right guys that's a wrap our cross platform radio tv youtube bloomberg originals kidding remain continuing there on the close on tv tim and i continuing on
bloomberg business week daily right here on bloomberg ready we'll see again same time same place tomorrow all right stick with us our coverage continues here on the close with a focus on those results that we just got out of oracle we're going to talk to brentil tech sector leader of software and internet research over at
jeffries we should point out oracle shares down about six percent in this dragging a lot of the ai cohorts down with it including names like core weave terra wolf as well as pure stored and applied digital that conversation coming up after the break stick with us this is the close on bloomberg the countdown is on everything you need to get the edge at the end of the market
day this is the close welcome back to the close i'm katie grithill and i'm romaine boston one of the more meaningful updates that we've had in equity markets coming off of that fed meeting the fed press conference and maybe
a little bit more conviction here about what comes next the s&p 500 up about seven tenths of a percent though it did close just shy of its all-time high by a couple of points or so meanwhile the rest of two thousand did notch a fresh record high adding about 33 points or 1.3 percent we also saw the
kbw bank index move higher as well in the record territory and keep an eye on yields we actually saw today for the first time in quite some time a drop in short term yields but that of course means a steepening of the yield curve we're now back on the two tens to some of the steepest levels since
early september late august and we did get some interesting tech earnings after the bell let's take a look at those after hours movers right now taking a look at adobe i'll start there because initially we saw a big pop in adobe shares uh after the close it was a beat and raise quarter for this company you can see though that those gains
reversing and oracle down about five percent right now their second quarter to adjusted revenue actually met expectations their backlog numbers uh coming in pretty good as well but certainly romaine this is a company with pretty high expectations on the street
yeah a big beat on the bottom line with regards to profitability here adjusted dps at 226 the street was looking for 164 revenue pretty much in line with estimates up about 14 percent but you just mentioned a katie that backlog five hundred and twenty three billion dollars worth right now sitting there
for the taking brent phil joins us right now tech sector leader of software and internet research over at jeffries and let's start off with that backlog brent i know that number looks big i guess the big question is do you think oracle is going to be able to fulfill it you know that's the billing card question and we won't know for
years because the open ai relationship is going to take you know several years to fulfill so if you're an investor you're excited because the backlog isn't going to go down because they can't take it to revenue uh the fear uh short term is is can actually they deliver on this infrastructure and when they sign that 300 billion
dollar deal last quarter uh i think you know many of us asked at a fault oracle for many decades is like this contracts you know five times the size of your annual revenue stream how do you deliver on something so big um little did we know that the street would
be so focused and so negative on on this and you can see the negativity of that continuing to present an overhang on the stock so i think that the challenge with this quarter was it was an okay quarter but there was no massive elephant you know transaction
you kind of had the the uh antelopes if you will uh roaming not the elephants and uh we you uh had had a good print overall just things were kind of in line uh where the street wanted it wasn't it last quarter was obviously a blowout so i think the challenge is there's not
many 300 billion dollar deals out there and these there's incremental revenue to be had but um who's gonna who's gonna come over the top on open aina on a transaction that bank so that's the challenge for a call in the short term do you actually see their customer
based broadening a little bit specifically for uh the cloud ai products yeah i do i mean the beauty is they run uber they run tiktok they run some really meaningful companies they run many of the top banks in the world insurance companies and i think the fact when you can
win a deal from the number one ai company in the world which is open ai um it tells you that um if they're going to let that oracle deal with the data that everyone else should deal with the data and this goes back to the founding of of oracle at the cia um you know this company is is is effectively the underbelly of
every major corporation that's out there and there was a worry in cloud and the worry and sash that that that data was going to go somewhere else and oracles hung onto that data and now they're creating a great bridge to the cloud they're creating a new ai avenue so our our belief
is that they will broaden and this is global uh in in europe in an asia they're getting some great wins we'll hear more about that on the call but we definitely think the base is broadening and oracle and again when you get a vote of confidence of a company that knows more about data than anyone hands oracle that level of a check and
again they hand and microsoft at 250 billion dollar backlog uh contract as well right um you know there are only a few companies on your hand that can actually do this and oracle is one of only a few and bren i want to talk a little bit about the dead side of things because you
think about the fact that oracle is free cashflow expected to be negative for several quarters here potentially the next couple of years you think about their credit risk reaching the highest level since 2009 last week you know as someone who covers the equity oracle equity how are you thinking a little bit about the debt component here
yeah i mean it's a it's a concern they have a high debt load already and we've been flagging this that the debt load's not been uh has been a concern for a while and now it's even a bigger concern so we're conscious and we viewed as a risk factor but i think um much of the open ai contract has been stripped out of the stock out of the
equity and so if they win more deals with with others uh we we think that can get restored back into the equity but uh i think what open ai and many have said is that they can fund this they believe they can fund this i would say uh the announcement yesterday by open ai announcing
denis stressors the how to sales gives you further conviction if you're oracle equity investor that she's one of the best enterprise reps on the planet and sam altman picked her over everyone else and having her the keys to open ai is the enterprise and if they get these
enterprise contracts going not just us paying 30 bucks a month open ai but they get my firm and your firm to pay like that's where the funding is going to come for oracle so i have even more conviction now um uh that that they can they can do this with her rival and i think there's going to be other data
points along the way that will um leave i think some of the debt holders a little more uh comfortable that they can make these payments um and again remember oracle's sitting on a very high margin software business this isn't core weave where you have a lower margin infrastructure business you have a very
high margin software business that generates a lot of cash flow and so they can back off the investments very quickly and and move quickly uh to uh you know cash flow positive if they want to pull back the infrastructure bill out because they have a great apps business they have a platform business service
business um so that's something to keep in mind as well all right brian unfortunately got to leave it there really appreciate your quick insight there that is brian thill he is tech sector leader of software and internet research over at jeffries now coming up the founder of klio capital sourcoons joins us next
particular uh you can see flying right now after reporting earnings just moments ago also keeping an eye on shares of oracle and adobe let's discuss it all with sourcoons she is managing director and founder over at klio capital sour it's great to have you with us i want to start with adobe because initially you saw
a pop the numbers that adobe delivered were pretty good especially when it comes to the outlook on sales and revenue now we're turning lower uh in the after hours trade and it just feels like sentiment on this stock has been so negative for so long here yeah you know it's interesting because when you look at that sort of analyst average price target
it's quite a bit higher than where adobe's trans uh trading right now but i think the reality is that we see all of these new tools it google just came out with with uh nana banana pro and it's it's really hard to to see a ton of growth ahead for their core business for that
subscription um around a lot of their creative tools yeah and you think about i mean that partnership you want to call it that announced earlier today photoshop and acrobat going to be integrated into chat gpt it's going to be offered free to chat bot users the hope there is that
its futures are going to be seen by a wider audience kind of increasing the visibility i mean if you're adobe what else is there to do then try to broaden the net even if you're offering it free yeah and i i think that's the scary part right that you don't have a business model that makes
them a lot of money with people using it for free there's not necessarily a lot of network effects there um and and so yeah this might get them more eyeballs um but it feels like it might be a little bit of a better deal uh for for open ai than it is for adobe um and and so i just i
think there's concern about sort of this dwindling we hear about you know ai is going to take all these creative jobs those creatives the photographers the graphic designers are the people who are paying often a lot of money to adobe and and so what happens uh when they don't have that money
anymore and the reality is it could lead to a long time downturn in sales uh yeah and it gets in this idea too Sarah about these companies that are trying to sort of transform for the era and we know that adobe has had some success obviously in moving to that subscription model but when you
look at some of their competitors particularly some of the upstarts coming in here is there a case to be made that there might be better value in those names than in adobe i certainly think that that could be true um you know canvas a privately traded company but uh they've done a great job at just sort of creating things that are that are lower touch easier to use cheaper um
you know figma has some of that as well and and those companies haven't been around as long but when you look at their growth i think that a lot of the excitement and interest in the space does sort of shift over and then the reality is that even the apples of the world do a pretty good
job of having a great camera where you can take a great picture and then they have some some neat sort of baked in photo editing tools um or instagram and and so i think some of it is that we no longer are looking for the same level of quality um in some of these tools and so we're perfectly
happy with what's baked in or provided for free i want to get your thoughts real quickly here on synopsis not a name that we talk about a lot but the shares are having a pretty good after our session up about eight percent and it gets to this idea that some of the plays in the AI and let's just call it the broader cloud space right now aren't necessarily through the data center
operators or even the hyperscalers some some of it is in these second tier companies i don't know if you had a chance to look at the report that we just got out of them but what is your general outlook for where this company and where management can actually take it you know i think that in general when a shiny new object pops up can you trust Jensen that hey they put a bunch of money
in there's probably some there there absolutely should you yolo completely into that name sitons maybe not right maybe take a minute read some of their old filings right be able to to tell your family at dinner oh hey well this is what these companies actually do and so i think we're seeing some of that pile on trade some of that excitement of people trying to catch
the upside driving it higher but then you you kind of plateau out and say is this company really that different than it was two weeks ago and now i think it's up something like 15 percent from them and so so there it's in my mind just a question mark of is there too much momentum in some of these
sort of second tier names as you call them and sir we have less than a minute left here but let's quickly talk about oracle posting disappointing cloud revenue uh you can see the shares taking a hit after hours what would you want to hear from executives on the call i think that people want to know who they're going to sell to who actually has the money in the bank to buy what
they are selling because that is not opening eye all right sir always great to catch up with the acericones managing director founder over echleo capitalist we continue our coverage deeper into the results that we just got out of three big tech names but none more important than oracle we've seen the revenue growth we've seen the profit beat in the most recent quarter
你想多談談Oracle的債務方面，Will Smith Alliance Bernstein的高級副總裁和信貸主管，Will，我確實想從這個開始。我的意思是，Oracle已經進入了底部市場，到目前為止，投資者已經消化了這一點，但這個想法是，當一家公司擁有5000億美元的積壓訂單時，我們至少知道，從其資產負債表來看，它無法根據手頭的現金來履行這些訂單。
32:41
and we've seen that more than five hundred billion dollar backlog but the big question is how do they pay for it all there's a credit risk concern out there and we have that discussion when we come back after the break taking a look at shares of oracle in the after hours trade down
about six and a half percent katie and that's dragging some other names down particularly some of those meal clouds like court weave yeah absolutely a lot to dig into when it comes to oracle when it comes to free cash flow when it comes to customer concentration risk and of course we're going to dig into those credit concerns up next just close all right three months ago
oracle reported earnings and it saw a more than 30 percent jump in the stock in one day the shares in the after hours trade down about six percent adding to what has now been a more than 30 percent drop in that stock since it's September highs a lot of this so of course
surrounding a lot of the concerns about the potential of a bubble growing into AI space this just as of last week the cost of protecting oracle's debt against default at its highest level since 2009 24 asset management taking note writing the pockets of risk particularly in the
rapid scaling of AI driven issuance in investment grade will require elevated due diligence you to talk a little bit more about the debt side of the oracle story as will smith alliance bernstein senior vice president and director of credit and will i do want to start with this i mean oracles already gone to the bottom market i mean so far investors have i digested that but the idea that
when you have a company sitting on a five hundred billion dollar backlog that we know at least looking at its balance sheet it can't necessarily fulfill based on the cash on hand how much does oracle and for that matter some of its peers going back into debt markets become a credit event for everyone
else so oracle really matters because it is the quote unquote harbinger of the ai capx boom so investors are really focused on everything that oracle has to say and crucially how they plan on financing the amount of capx it's going to be required for this generation of of ai build now
what we think gets lost a bit is that investors are being skeptical in a lot of different ways and we think this re-pricing in debt markets is very consistent with the view that risks are building there's more uncertainty about the payback period the amount of capx and the financing of
that capx going forward and us that's a very healthy dynamic for debt investors so a healthy dynamic for debt investors does it get do we have to worry at all about the idea of credit quality or the complexion overall changing because of some of the and obviously we're talking
hypothetical here but some of the new issuance that is likely to come down the bite we of course have to be concerned about it i mean as debt investors that that's really all we're doing is pricing what we think the downside risks are and in this case it is a little bit unique versus history because that risk is really building in the investment grade universe in in some of
the very best most cash generative companies in the in the u.s. today and that's different than other big capx booms so in our view that means the risks are really around credit downgrades and we talk about oracle and some other names maybe they're not as high quality as single a plus as
they've been in the past so maybe they're moving towards low triple b high double b and that requires a re-pricing of that risk that's that's a different risk profile for investors that gives investors who are willing to be a little bit more provocative in opportunity and we think the recent re-pricing
in most of these hyperscalers is a pretty good opportunity for debt investors to step in interesting so just to make sure i'm understanding you will so when you see some of those names some of those hyperscalers who have been tapping the bond market in a big way come under pressure it sounds like that would be a buying opportunity to your eyes it does and and they think that the
crucial element here is these companies are not likely to spend all of this capx without some more clarity about what the payback period will be on these businesses so i think in a lot of ways investors are concerned that the payback period is super uncertain and these companies are
going to spend all this capital for the next five to ten years regardless of what the payback period looks like what that revenue capacity really actually is and we think that's a little bit backwards these companies are likely to spend this much money if the revenues and earnings
follow these these models and really accrue to these companies and so we think that there's a little bit of a path dependency here that investors are missing and i just want to talk about supply overall again a lot of this conversation is happening in the u.s. investment grade universe you take a look at the house view over at t.d. they would expect to see i.g. sales hit a
record of two point one trillion dollars in twenty twenty six fueled by what we're talking about their view is that high grade spreads could reach a base range between 100 and 110 basis points which isn't that high in the grand scheme of life but you consider where we are right now on spreads
around 80 basis points well does it seem reasonable that we could meaningfully go above 100 next year it certainly could happen katie we think it's probably unlikely that it happens just because of supply issues supply is generally the mechanism that kind of corrects markets
so when we feel really good about the economy growth and corporate earnings we see more supply as a result but if we start to feel less good about the the direction of the economy of corporate earnings then supply will start to decrease and and so we think that it's likely that spreads go
wider at some point but it's probably because we get concerned about growth at some point is there any sense any sort of tie-in with fed policy and and the idea of at least what we learned today and the idea of what the market has been trying to price in for twenty twenty six for sure there's there's a tie-in and when we think about what companies and investors are
expecting for next year in a lot of ways you could be extremely excited about that outlook because you're seeing actually a pretty large fiscal stimulus come through next year at the same time the Fed's cutting rates and we also have this this manufacturing and capex resurgence
as a result of of artificial intelligence so that could be a pretty positive dynamic for investors and I think a lot of folks are looking at potential m&a activity and they're saying well I can probably buy these assets for a better price today than I might be able to in the next few
years and if I expect my cost of debt to move lower over that same time period then that's probably my best opportunity to get these big m&a deals done so we're likely to see a lot more of that happening and it's interesting well how private marketers markets factor and you point
out in the notes you sent over to our producers that private investment grade funding will remain central to this AI build out and increasingly I mean you think about issuers hopping back and forth between private and public markets to get this funding it feels like that line is blurring if for sure is blurring the reality is is the private credit market is now a really substantial
part of how companies think about financing their businesses and that is really unlikely to change and when we think about the AI capex spend it's going to require a lot of different types of capital to to really achieve what we think will happen so that's going to require private credit
markets to look at deals in structured in a way that makes sense for them bond markets loan markets to also participate and also for securitizations to happen as there's a lot of infrastructure that's required to make this happen all right well great to check in with
you really appreciate your time that is William Smith he is alliance Bernstein senior vice president and director of credit meanwhile let's take a look at the equity market reaction to that earnings report you take a look at oracle shares falling after hours and it's not just oracle which is interesting because you're also seeing shares of core weave and in video
move lower as well on the heels of that report romance yeah and it gets the idea of whether maybe people are throwing the baby out with the bath water oracle is definitely a very unique situation obviously it's sort of like an embarrassment of riches right now for this company but one they have to find a way to fund in a way that's actually going to be palatable to investors meanwhile
some of those other names you know i mean there's really no sense at least right now that they're having any kind of funding issues and obviously we get back to your you know what those or before something to learn that word at some point i knew in my heart you were going there but there's a lot of support we're talking about synopsis of course the big investment that Nvidia made
there now of course we talk about the double dealing to a certain extent which for some people is a bad thing but some investors see it as a good thing at least one that keeps uh add some support to some of those names absolutely will continue to follow of course that daisy chain i will put out adobe shares poking into the green this is the close
all right let's get back to that fed decision the s&p 500 posting its biggest fed day gains since march closing in on record highs yet again after the third straight industry cut in a row fed shared Jerome pal forecasting solid growth in the year head saying that the economy is in good shape
and that the fed is quote well positioned to wait after what could be the final cut of his tenure as chairman join us now i'm pleased to say his former boston fed president eric rosengren great to have you with us i want to start with the descents this was a nine to three vote three
descents this was the first time since 2019 that you had three officials vote against the decision and you had this on both sides of the policy spectrum i know that the three descents in particular were perhaps expected here but if we continue down this path if we see more discord among the
f o m c at what point does it start to become counter productive or start to complicate the fed's messaging here i don't know whether it affects the fed messaging but i think it makes it much more challenging for whoever the new fed chair is that there's a committee that doesn't
seem particularly inclined to significantly decrease interest rates over the course of next year so with this descent there were two presidents um and one governor the governor uh myron thought that there should be a deeper cut and the two presidents presumably concerned about uh inflation
being too close to three percent not close enough to the two percent target uh we're worried that we weren't putting enough weight on inflation and as a result descended for no change it was interesting too to hear uh Jerome Powell weigh in during the q&a saying that
you know there are arguments on both sides when you consider both sides of the mandate and they have one tool one lever which they can pull and i wonder you know how you see that balance right now when it comes to inflation but also the trajectory of this labor market well i think he
characterized it very accurately um inflation's definitely much higher than the target and hasn't been moving in the right direction so those people that are concerned about the inflation part of the mandate have a very credible argument but i would say also on the employment side one of
the reasons this is difficult is because the unemployment rate has been gradually rising the chair highlighted the payroll employment given some adjustments uh seem quite weak and as a result uh he thought a little bit more insurance was appropriate so um i think people could
easily disagree with the findings of the FOMC this meeting um and i think it it shone actually in both the the dissents but also a number of presidents who were not voting members indicated they didn't think that it was necessary to cut rates this meeting so there were six participants
in the FOMC who said that they thought under appropriate policy we didn't need to cut so presumably that was the two presidents that descended and then four other presidents who agreed but didn't have a vote it doesn't matter at all uh eric this idea of j-pow being a lame
duck not my words but uh we've seen this phrase battered around and the idea that that that could affect uh the next uh three meetings in 2026 before we actually get a changing of the guard in May i think the current chair is going to do exactly what he thinks is appropriate policy until he's
no longer chair so i don't think he's a lame duck in that respect but um i do think he highlighted that he wanted to hand over an economy that uh whoever the new chair is uh felt comfortable with i i do think that it's going to be a more difficult committee to manage for the next chair than the
aspect of this particular uh fed decision that jumped out at me was the resumption of the treasury bill buying and i know that's kind of a separate sort of a function if you will than what they're doing with rates itself but i am curious as to what it says uh about the ending or the curtailing
of uh quantitative tightening to begin with and whether it was appropriate to effectively tamp that down when they did or whether they should have let it keep going well i think what they're indicating and so first of all this is a technical adjustment i
wouldn't view it as a a policy change to start uh purchasing treasury bills which expands the balance sheet i think what they're saying is that um the fed funds rate was trading fairly high which meant that reserves are currently a little bit more restrictive than what they would like to see
and so as the economy grows they need to grow reserves and they don't think that the balance sheet has room to shrink further without disrupting short-term credit markets and i do want to talk a little bit more about the direction of travel when it comes to 2026 because you take a look
in the new dot plot in terms of the median projections it seems like we're looking at one rate cut uh for the totality of 2026 one in 2027 of course we know things can shift around and they often do but do you think at this point where we are when it comes to the mandate when it comes
to where inflation is where the labor market might go uh that the possibility of a rate hike should be entered into the conversation especially when you think about the global central paying picture right now i think it's a little early to be calling for any kind of rate hike but i do think uh it's
a situation where they would need some significant weakening of the labor market to feel like additional easing was necessary and i think that you're seeing with only one cut that that is a bit less than what the market was anticipating in the fed funds futures
and is probably uh quite a bit less than what the administration's hoping for going back up to just the state of the economy eric and as this market really tries to get a handle on whether the market needs more rate cuts or maybe just potentially leaving rates where they are Jay Powell kind of alluded to the uh the lapse of economic data over the last
a few months and the idea that there's going to be a big catch up some big revisions as well but the net effect of it at least in his words seem to suggest that the labor market might actually be weaker than at least what we know now based on the data if that does indeed prove to be
the case how quickly or more importantly what tools does a fed have to address that in an efficient way well the main way that the fed has to respond to a much weaker economy would be to lower interest rates uh much more than they currently anticipate so they only the median rate cut was for only one
cut uh if we really start to see the unemployment rise quite quickly uh which i don't think is uh than the the appropriate response is to try to lower interest rates enough that it takes care
of demand all right eric always appreciate you taking time for us former boston fed president eric rosinger in there a closer look at the big fed decision today and when we come back we're going to push ahead to tomorrow and what also can move the market stick with us this is blooper all right welcome back we want to focus in on that Warner Brothers discovery deal or maybe no
deal president trump wane n saying in a q&a with reporters earlier that any Warner Brothers purchase must include the sale of cnn it adds a little bit of intrigue here to the two competing bids for the company bloomberg's chris paul mary joins us right now and chris first let's start off by
going back in history way back in history to five days ago when it looked like netflix actually had this in the bag uh with the bid that seemed pretty rich at the time of course paramount came in a little bit later after that up the bid and now we see the campaign the campaign from paramount to shareholders and what seems to be maybe a little bit of a campaign coming out of the
white house what's going on yeah well we've known that uh david ellison was working both washington and wall street a little past few days uh he was at the kennedy center honors on sunday he talked with the president there he had the head of the fcc in his own uh box at the show
and then he made his way to um uh to wall street he was at the ubs conference yesterday he met with investors seems to be have done a pretty good job we interviewed mario gabelli uh yesterday and he said he he was very impressed with the the paramount offer you saw the paramount stock rise
it's it's it's almost at where uh uh the thirty dollars to share that uh i'm sorry the uh one of other shares rise uh so there does seem to be uh a little anticipation among investors that the price is going to uh a climb if somebody you know paramount makes another offer and it's
worth pointing out that president trump son-in-law jared kushner has also been uh reportedly involved in setting up financing for that paramount competing offer so i mean what do you think that netflix's response is here could you envision a world in which netflix includes the cable networks
as part of its bid no in fact it's i i think the the president probably didn't understand that businesses of warner brothers and and the cable channels are to be spun off next year
不，事實上，我想總統可能沒有理解華納兄弟和有線頻道的業務將在明年被分拆出去...
51:34
before they close that deal uh so they would not be acquiring cnn paramount would be yeah uh that seems to be lost in the shuffle here chris but again we know that this has now become a political issue i am curious about the pressure that paramount is now putting on shareholders out
with the letter today talking about the idea that their offer is superior and we can go through all the superlatives here but it kind of circles back to a question here about what Warner brothers should really be valued at i mean it's one thing to throw these numbers around but if you end up paying you know 30 bucks or more hundred plus billion dollars or more you have to have a return on that
at least investors are going to want to see a return on that and i'm having a hard time making that math actually math well one thing that investors are looking forward to is in a few weeks of versent which is the cable tv spin-off of Comcast is going to start a trading and depending on how that's valued it'll give investors a sense of what Warner brothers cable channels
will be valued at and that's sort of the big difference between the Netflix and the paramount offer paramount is paying all cash for the whole company Netflix only wants as as i mentioned the streaming and studio assets and so then investors will know kind of what the the remaining parts are worth so that that'll be the big sort of moment in a few weeks and chris of course no one knows
what truly is going to happen but it seems like the one consensus is that this is going to take a while what are your sources telling you for what kind of potential timeline we could be looking at here with this deal well just if there was no fight the regulatory issues would stretch a year or more uh this requires approvals all around the world countries states
and that but given that there is a fight uh it certainly seems like you know the paramount tender offer expires January 8th i think and and that could be extended they could up their bid Netflix could up their bid uh it's it's from what we're hearing is this won't be decided this year
well yeah it's three weeks left chris that would be amazing chris always love catching up with you chris paul maria uh erm end out there in los angeles the closer look at what could potentially be the deal of the year or i guess now the deal of 2026 born brothers discovery all right let's push
好的，是的，還有三週的時間，Chris，那將是太棒了。Chris，總是很高興與你交流，Chris Paul Maria，在洛杉磯那邊更仔細地看看這可能成為今年的交易，或者我猜現在是2026年的交易，Born Brothers Discovery。好的，讓我們繼續。
53:47
ahead here uh we have a lot going on tomorrow as well that could potentially move the market that includes more earnings we're talking today of course katie about oracle about adobe and synopsis and the ai trade we get another read on that trade tomorrow with broadcom yeah we will certainly have a lot to talk about when it comes to broadcom also costco an interesting story there lulu lemon
i'm really excited for that uh and rh as well i know that that's a company you follow this is a rare yeah a rare trifecta here i've actually been in all three of those stores costco only twice so costco scares me lulu lemon was okay rh i like rh but none of that stuff fits in my apartment no uh do you have any broadcom trips i i not yet but i got to get on that you know christmas is
around the corner katie if you want to treat that's true that's true maybe you don't have to go for the black whale give me h2 hundred or something save a little money initial job is claims tomorrow trade balance if you care rivian autonomy and ai day and katie grifel yeah i'm told that tomorrow time will announce you as the person of the year wow you heard it here first on the close uh looking
forward to that announcement i believe it was donald trump right last year it was donald trump last year a lot of intrigue as to who it will be this year who is the most important person of the year katie this is the close
