Day, leading to perhaps the second week of declines on the s p 500. The nasdaq 100 also down on the day. Still has a chance to end on the green, now down more than. 9 . The two year yield breaking below the 4. 90 mark. About 4. 89 . We have the Kbw Bank Index down 1. 3 and almost every stock barring two are down in that index. Consumer sentiment data crossing the terminal now. Michael mckee joins us to break it down. Mike if you did not like the cpi report you will not like the Sentiment Report because it shows some on mooring of Inflation Expectations. The one year ahead Inflation Expectation jumps to 3. 1 from 2. 9 . Five to 10 year from 3 to 2. 8 . Enable maybe gas prices reflecting that. The sentiment number goes up a little overall actually falls, rather, to 77. 9, Current Conditions to 82. 5. So in march, we saw Consumer Sentiment rise little bit and Inflation Expectations were steady. Now there is more concerned perhaps about the economy Going Forward and certainly more concerned about inflation. Sonali we know expectations here are everything and more than the expectations of prices to climb at an annual rate of more than 3 over the next year, basic costs rising over the next five to 10 years. What does this mean for longerterm expectations here . Mike its going to be a question of this is followed through and what we see in markets. As long as they dont price this and, things are probably fine. If this just fades with gasoline prices when they go down again, its not going to be a problem for the fed, but the fed does keep a close eye on expectations because expectations if you think inflation is going up, you might ask your boss for a raise. So that is the circle they are trying to avoid. Sonali thank you for breaking down the data for us. Great interviews. Mike is also heading over to another conversation with someone from the university of michigan for more insight on the report. You can find that on live go on your bloomberg terminal. The banks. Earnings calls have begun and we still see many stocks down on the day. I want to take a look before we get to our reporter with whats going on on those calls because that sour tone you heard about the outlook at jp morgan is sending most of the index lower. The only two banks on the day that are up our citigroup and state street. Citigroup had a turnaround story and state street positive when it came to Interest Income expectations, but Goldman Sachs the second worst performer on the day. Goldman reports monday. Joining me is Sally Bakewell with more. How do you read through what is going on . You would not think goldman would be down this much given the wall street businesses that did well . Sally perhaps a general malaise about the banking industry. Given the results. There was an expectation would jp morgan particularly, but net Interest Income, the biggest source of its revenue, was going to steal the show. There was a lot of debate around a around jp morgan that they would revise upwards their guidance for this year. However, jp morgan kept its main figure stable, but it did boost its guidance for niix excluding markets, so its taken a conservative approach. Wells fargo missed estimates. I think the idea that banks will be big beneficiaries of rates highe for longer was undermined. Sonali last year, a lot of people were worried about the economy and provisioning for loan losses that have come in betterthanexpected, but it seems the story is now changing toward a potential slowdown on whats possible in lending. Is that the right read . What did jp morgan say . Sally they generally said that net chargeoffs remain broadly stable. If you look at the commentary from management about the economy, it was a reiteration of what we have heard before. Jamie dimon says he was asked about the Macro Economic outlook and says he does not want to get productions for a recession or not but in his opinion things are likely to be worse than we expect. On monday, he was saying the expectation for a 70 to 80 soft landing, the odds for that were a lot lower. Still, they maintain that the consumer is in good shape and spending and jeremy barnum, chief Financial Officer of jp morgan, says corporations are flush with cash. At the lower end of the consumer scale, there does appear to be more pressure. Sonali thank you for leading our coverage, covering a slew of bank earnings. Complicate a story. Breaking news. Tech information platform the information has reported that stubhub is aiming to go public violate this summer go public by late this summer. That would set up another sizable ipo after read it when public earlier this month after reddit went public earlier this month. Stubhub would be a new test. It also has high yields for evaluation in line with the 16. 5 billion valuation. It raised money according to the paper. It would call office listing if it cannot get close to that valuation. A lot to keep an eye on. We know the banks also had boom profits when it came to underwriting. We will dive deeper into the banks and markets with bill sneed. Hes with us. His holdings include Fifth Third Bank and western alliance. Perfect person to talk about this Banking System with after a busy day of earnings. We were talking about the consumer story, the main street story, the wall street story, the return of investment banking. What makes you more excited . Well, the banks have done really well since november and it looks to us like people are selling the news today, which is not to be unexpected. You know, jp morgan we bought jp morgan at 34 and . 50 in june of 2012. You throw dividends compounded in there, the stock has gone up about sixfold. But the rest of the market is so expensive from a historical perspective, banks are actually cheapest relative to the stock market than at any other time in the last 70 years on a relative basis. You cannot eat relative alpha. You can only eat absolute alpha. So these stocks are probably due for some profittaking. Remember, making a lot of money over the long term is a marathon, not a sprint, and we had a spring from the beginning of november to the recent past. Sonali jp morgan, six consecutive years of record results, and you see the selloff today. Its having its worst day since march of 2023. Bill, this is a different environment from march of 2023. Why do you think such negative sentiment exists today . Is it this idea that perhaps the best has already happened . There is so much confidence because of how well the stock market has been doing that that combination of largess causes the economy to baffled the people who think we are going into a recession. Sonali what if we hit harder times, bill . Theres an open question. We were talking to our reporter, Sally Bakewell, about the idea you will see a pace slowdown in growth when it comes to Interest Income, but should consumers hit a bigger wall, should inflation become a bigger problem from them problem for them, do you think the propensity to borrow money on credit cards could start to hit a wall too . Bill its funny you asked this. I will give you historical context. We felt strongly beginning four years ago that the combination of the massive amount of money borrowed to fight the covid war was similar to the vietnam war and 1968 in 1960 eight and we are in the camp that thinks we are going to have a difficult inflationary period for the next 10 years for and so next 10 years. And so that makes things more difficult for banking but especially more difficult for owners of common stock. It is so interesting how things work. You can look at the archives of when i was on your show five years ago. I would have been saying that Interest Rates would normalize. People were saying when is that going to happen . You cannot hold your breath until then. But when it finally came, it took so long to get there that it came in a rush. And i think that is the same way stocks are not really priced against a five or 6 10 Year Interest Rate or two Year Interest Rate. They are price for 1 or 2 . They are priced as if we are going to go back to 1 or 2 and we think that is a big mistake on the part of investors. Sonali you think about the wide range of expectations you have seen for the direction of the 10 year across investors. You have had investors worn publicly and privately they could fall to 3 . You have people saying they could go up to 5 in the near term. Ultimately, how does this volatility play out beyond jp morgan and the Banking System . The reality is we are just Getting Started with his earnings season. Bill yeah. Again, what we like about these banks is if 10 years from now jp morgan has grown their earnings 8 a year, that means they will double and probably trade at a similar price earnings ratio, and in an s p environment where stocks historically stocks are historically expensive, especially where most of the capitalization is, we think that the s p will make zero, so if you double your money over the next 10 years and make 7 compounded, you might look like a fantastic investment. I think thats the way these people are trying to run these banks, not get too carried away with current circumstances and say, ok, lets run this is if theres going to be many different circumstances in the next 10 years and the problem is everybody is so focused on whats going to happen in the next six months. The answer is thats above our pay grade. Sonali bills meet. Stick with us. We will talk about that market. We take a look at whats moving in markets with bloombergs just mentioned. Many different things. Beyond the banks, looking ahead to next week, because we will be getting earnings reports from netflix. Obviously used to be part of the faang, not necessarily the magnificent seven, but they hit a 52 week high earlier this week. They rolled the crackdown on password sharing out last summer. Second half of last year, they had a record amount of net subscriber growth. It was a record compared to the prior six months in 2022. The question is how much longer connect growth continue . Netflix put out a pretty wide margin. If you look at the First Quarter of last year, it was around 2 million. So its a big range to see how those numbers could play out but that is something im watching. Its interesting. Speaking of some of this optimism, it begs the question about whether the idea behind them is changing as we hit rockier times. You see that certainly on a rocky day with alphabet earlier hitting the 2 trillion in value mark after a 15 rally this year. There are others near that point too. Amazon in particular. Lets talk hit a record thursday. The last time was in july of 2021. This is one of the pandemic darlings. Once it cooled off and all of us got back into the world, the stock got pressured, but its one of the last of the Big Five Tech Companies in the s p 500 to be at a record recently, and within striking distance of the 2 trillion valuation. The catalyst will be later this month when amazon has those earnings results. Sonali lets talk about what is outside of those traditional big tech names and talk about the chip sector. Intel and amd in particular are the big stocks that are under pressure. This came after the wall street journal had an exclusive story looking at how china was directing some of its Biggest Telecom carriers to phase out there use when it comes to foreign chipmakers by 2027. So not surprisingly you would see intel and amd pressured by this because they are the biggest ones supplying a lot of this growth not just for china but globally. You are seeing that as well if you look over to the Philadelphia Semiconductor index. Thats down more than 2 today. Putting it into context, up about 15 year to date, outpacing the nasdaq 100, and china has had issues in the past when it comes to these Telecom Carriers and others trying to become more reliant because it has not been quite as good as more of those the mystically focused chips. It remains to be seen how this plays out. Even though we are seeing chip stocks pressured today. Overall, we are adding to gains. Sonali thanks for keeping an eye on all those things outside the banks and all over the place. We will also bring in some more breaking news because a big deal making a big potential decision. We have news breaking now that u. S. Steel and nippon steele are deliberating a decision to push back the timeframe they expect to close their contentious 14. 1 billion deal. We know the Biden Administration has voiced concerns about this deal and such a move would be more of a formality given the Second Quarter is nearly halfway done and the takeover is embroiled in a firestorm according to our reporting at bloomberg. We will bring more details as they calm. That second half of 2024 is headed into the election. Things are getting interesting. Next, a read on the consumer with jeff. Stick with us. This is bloomberg. Sonali we are back with bill smead. We will go beyond the banks for a minute because as you are watching investors recalibrate heading in earnings season, how do you think about where to take cards off the table and where to put them on . Bill welcome, if i understand your question, we are nervous about what the stock markets going to do because of an incredible cacophony of extreme psychological readings that we have been analyzing. From a historical perspective, people were probably as bullish two or three weeks ago about the u. S. Stock market as they have ever been, and participation is very high, so to make money when participation in the stock market goes down, you have to find some pockets that are doing well despite the difficulties, and the number one difficulty is inflation. So we looked back at the 1970s and found that if you wanted to make a lot of money in stocks in the 1970s, you had to own oil and gas. Here we are today with nerveracking things going on in the middle east and the only good sector today is oil and gas. Sonali how do you think about how to play that sector . How much money are you willing to put to work as a percentage of your portfolio if you think that is the winter . Bill we are about 25 or 26 . We are not in bad company. I just read the book about t. Rowe price by cornelius bond. T. Rowe price, one of the greatest growth stock investors of all time, in 1968 not only pivoted to oil and gas in his growth fund that started a new fund, which i think still exists, which was absolutely loaded with oil and gas and gold, and ironically, we have about a 25 position in oil and gas in our main strategy, and our International Value strategy is higher than that because stocks outside the u. S. Are very cheap since they dont have the more popular big tech names. Sonali how do you feel about some of those high flyers we were talking about . Some of the big tech firms hitting that 2 trillion dollars mark. A lot of optimism in some names still. Do you share that optimism . Bill you know, it is ironic that we are probably more optimistic about what might be accomplished through technology from an on the ground business standpoint the most people and are way more pessimistic because the success of the technologies being used does not historically go handinhand with stock price performance. In 1923, what 1 of u. S. Household had a radio. Rca went up tenfold from 19 27th 1929 and spent a miserable decade at less than 10. So the problem is its not that ai is not going to be important, just like it was important that the internet was going to change your life. The problem is they frontload the success in the stock prices and no company can ever seem to actually attain the level of success fast enough. Amazon had its crash and burn. Microsoft had its crash and burn. We will get that crash and burn out of these text these text stocks at some point. Sonali bill smead, thank you for looking around the sectors. We will take a look at the Companies Making the most buzz on social media today. Social climbers up next. This is bloomberg. Sonali time for a social climbers, the stocks making waves on social media. First is stubhub, reportedly looking to go public by summer. The company has seen a postpandemic boom in sports and live concerts including lucrative tours from beyonce and taylor swift. Taylor swift is back on tiktok despite an ongoing dispute between the platform and her record label. The timing coincides with the impending release of her newest album friday. You can follow all the latest, and he buzz on your bloomberg terminal. Coming up, we talk about tequila. We will talk about the ghost tequila ceo. Relax into a caribbean state of mind. Visit sandals. Com or call 1800 sandals. Food isnt just fuel to live. Its fuel to grow. My family relied on public assistance to help provide meals for us. These meals fueled my involvement in theater and the arts as a child, which fostered my love for acting. The feeding America Network of food banks helps millions of people put food on the table. When people are fed, futures are nourished. Join the movement to end hunger and together we can open Endless Possibilities for people to thrive. Visit feedingamerica. Org actnow hi, im janice, and i lost 172 pounds on golo. When i was a teenager i had some severe trauma in my life and i turned to food for comfort. A friend told me that i was the only one holding me back from being as beautiful on the outside as i am the inside. Once i saw golo was working, i felt this rush, i just had to keep going. A lot of people think no pain no gain, but with golo it is so easy. When i look in the mirror, i dont even recognize myself. Lifes daily battles are not meant to be fought alone. Were not powerless. So long as we dont lose sight of whats important. Dont be afraid to seize that moment to talk to your friends. Cloud, you okay . Because checking in on a friend can create a safe space. The first step on our new journey. You coming . Reach out to a friend about their mental health. Seize the awkward. Its tota