Yahoo Finance

Hello and welcome to Market Domination sponsored by Tasty Trade. I'm Julie Hyman live from our New York City headquarters. The stock rally has resumed for a 3rd straight day. Here's your headline blitz getting up to speed 1 hour before the closing bell rings on Wall Street.

We're in a market that's evolving very quickly. It's coming via social media, via the commentary coming from the from the exchange, and we've seen a softening of tone over the last couple of weeks, you know, kind of from the administration. That's helped markets come off of their lows, you know.And then you're kind of the the little bit of pushback that we've gotten overnight it's kind of caused a little bit of concern. I think the other thing that's been pretty important is that we've started in the earnings season and I would say broadly speaking those numbers are coming in better than fear, right?

We were highly impacted on the demand side by the tariffs and then just the, the consumer confidence erosion when we started the year in January and had our expectations for the first quarter and the 2nd quarter. Since then, the first quarter fell off about 3 full points and the second quarter has fallen off about 6 full points, uh, compared to what we thought in January. So that gives you a good indication of the of the level of impact on demand and just how rapidly uh the the decrease in demand fell.

We modestly reduce guidance to 2% on the fiscal year for the top line. Our fiscal year ends in a couple of months and 2 to 4% on the bottom line to reflect that approach and that choice, as well as to reflect this fiscal year's impact of tariffs.

We got one hour to go until the market closes. I'm joined by Mark Newton today, Fundstrap global advisors, managing director and global head of technical strategy. He's going to be hanging with me for the show here today. Mark, friend of the show, it's great to have you here for this today. So just want to run through what we're seeing today in today's action because we got the Dow now rallying still 427 points, give or take, up about 1%. The S&P 500 up 1.8%. The Nasdaq continues to be the leader here 2.5%, and.You know, it's interesting because the latest sort of tariff headlines are not necessarily. I mean, China came out and said no, we're not actually talking about that. President Trump came out and said yes, we are actually talking, but the market seems, you know, less discouraged over the past few days than it had been. Look,

Ithink the big lesson here is that for those that expect that markets have to work based on what presidential comments are or anything now know that obviously you can have big moves with really no resolution for tariffs, and I think that's interesting.Uh, technology has been the biggest gainer of the entire week. It's been up more than 5%, so we've had a big move in tech that's led this whole move up off the lows, uh, bread. Just two of the last 10 days have seen advanced decline and also volume hit nearly the highest level we've seen in the last few years. So technically speaking, we could get a what they call a Zweig breath thrust signal based on the work of Marty Zweig, and historically that's been very, very bullish for stocks.In the year to come, the average has been about 35% when this is officially triggered, and it could be triggered actually as of today. So the good news is, you know, the bell did ring at the bottom. We did see very good breadth off those lows, uh, despite any sort of resolution with tariffs, the market. S&P is breaking out above yesterday's highs, potentially getting up to right near 5500. I think it's a very, very good move in a short period of time.And eventually, look, we need to have something to really justify can stocks continue, but it's encouraging for those that have been very negative or not sure, and obviously we see stocks acting really, really well thisweek.

Yeah, we're going to look more in depth with you at the charts a little bit later on, but we are bumping up against that 5500 level. And just to illustrate the other point that you were making here about technology leading, here's the three day chart of the sectors. So the XL, the one that you were talking about, is in that pole position, up 9.1%.And consumer discretionary over the three day period up 7.1% and then communication services which has overlap with what we think of as tech, right, up 6.2%. So those are the three groups that have outperformed the S&P 500. The only group that's in the red over the period is consumer staples just for viewers who are watching here, and it has been interesting because we have definitely seen the large cap tech that has been leading here when you talk about things just being justified in terms of why we might see further ups.Could the justification end up being maybe some of these large cap tech earnings as we start to get more of them?

Yeah, I think it's 100% correct. I mean, we have Alphabet, of course, after the close until those are really, really going to be important. I mean the entire mag 7 is approaching, you know, has started and will continue over the next couple of weeks. This sector is expected to provide about 25% of earnings growth this year in terms of net income. So and now it's much more reasonable. It's come down sharply.At a time when everybody is starting to shift money overseas in this whole sell America theme, all of a sudden now look what we have. It could be ill timed. Tech is rallying at precisely the right time. Earnings and the economy very much matter at a time when the soft data has really turned a lot more negative and caused a lot of bare sentiment, but the market's not paying attention to that. We've seen great progress. I think that's really, really a good sign.

And again here during this three day rally, Tesla up 12.4%, Broadcom up 12.8%. Amazon up 11%, and Google.Alphabet up 7.5% coming into the earnings. So speaking of those earnings, we're going to get more detail on everything going on with technology. We want to start with a report today. Amazon and Nvidia saying that AI data center demand is not slowing down despite the current economic uncertainty. For more, we want to bring in Yahoo Finance tech editor Dan Halley. This has been a big question in recent days, right? Where are we going to start to see that spending adjust on the part of these big companies?

Yes, this has been something that's kind of gained attention.Going back for a while now you know there's been talk of Microsoft also pulling back on leases, some reports on that. And so the fear then is, is that Microsoft, Amazon, maybe Google, the spending just will start to dry up or or you know, not necessarily be as abundant as before. Now we've already seen Google Sundar Pichai reiterate that they're going to spend the amount, the billions that they said they were going to spend.This year on AI and according to these new reports, Amazon not seeing a slowdown, Nvidia not seeing a slowdown. So the AI spending appears to be intact and we'll, we'll honestly find out more about that as we see big tech earnings start to come out and whether or not there's any kind of slowdown or not, and you know we we uh we'll see it when we start to see more chip action as well, like what what the future movement is speaking

of.We've got Alphabet after the bell. We've got Intel after the bell also. So obviously one of the things we'll be watching is any update from Alphabet. You know, you said Pichai reiterated. Will he re-reiterate maybe those capex plans. We'll see.

Yeah, I mean, look, the big question there is going to be around Google Cloud platform and what they're seeing as far as growth. And so the fear is that perhaps there won't be as much growth as people start to pull back. Now that doesn't necessarily mean it'll happen in this quarter.Uh, it's, uh, from, from the different, uh, analysts that I've, I've been reading up on and spoken to, it would be a second half back half of the year kind of impact that we could see if some companies are indeed starting to pull back from their AI spending. That's, that's not the, the companies themselves, the AI companies themselves, the Google, Microsoft, Amazons, but their customers, whether or not they're saying, oh, OK, we're, we're not sure what's going on with the economy right now. The tariffs may be smacking us around, uh, maybe we just wanna get in front of that.So we'll start to pull back some of that spending. The other thing, uh, we, uh, that'll be interesting is ad spending, uh, you know, that's one of the first thing that gets cut whenever, uh, there's any kind of uh economic issues going on. And so that could also be an issue now Google is, is a little more insulated because of the the search product, but, uh, one of the analysts that I was uh speaking to had said, look, there's, there's more.People starting to use social media to to do searching obviously we've seen that before where people use TikTok, but then the AI platforms as well, the open AI is the perplexities and you know, just anecdotally from my own experience I've been using perplexity a lot more than Google, uh, just because when I want to find something specific, Google seems to lead me astray. Perplexity's been hitting me with goodanswers.

We know that look, let me ask you a question.So Google has had a phenomenal track record. It's beaten earnings now for 8 straight quarters. So the fact that all these estimates are being brought down, doesn't that make the bar a lot lower for Google to, to be?

It could obviously, yeah, I think, you know, it's, it's interesting just because we, we were talking so much about all this spending and and all this Google Cloud platforms growth has kind of been, you know, the.I would say the the odd man out, right? It's it's, is it going to grow? Is it growing enough? are they, are we starting to see growth slow down? It's not nearly as big as Microsoft or Amazon. So what would that say if it if it was slowing, and I think that's that's going to be the the the main the main question and whether or not they'll continue to see customers pile in.The other big question that's been lurking behind all the the AI talk is, are people getting value out of it? Are are companies buying it and then saying, man, this is a great product, or are they buying it and saying, well this is a cool tech demo and so you know uh Microsoft, Google, uh, they'll they'll tell you that.There's real results from companies and they'll they'll give you a list of different customers that are, are, uh, enjoying the experience so far signing on more and more customers but you know you need to see from a whole whether or not this is really gonna start ramping up their uh the revenue that they see and so you know it'll be incredibly important for Google to to announce some kind.Kind of good for momentum with Google Cloud platform and then obviously later on next week uh on I believe the first is when Microsoft reports um correct me if I'm wrong, uh, and that'll be just all about the, the AI movement there because I mean yes they make a lot of money off of uh Windows but it's all about the AI and cloud for now.

Right, and, and, um, all of this will be a good, um, time to focus on the call and figure out what their, what all these companies are gonna be saying Wednesday the 30th, we'll hear from, uh, Microsoft. Yes, thank you. All right. uh, thanks, Dan. I appreciate it.Big tech leading the way as the stock rally reaches day 3, with investors digesting mixed signals from President Trump and his top advisers on tariffs. For more on the latest moves, let's welcome in Tony Roth, Wilmington Trust CIO. Tony, thank you for being here. I know your team has been hard at work.To figure out the resting pace of tariffs, I guess, over time with what we know right now, recognizing that there's still a lot of uncertainty, what is sort of your base case here for what the tariff rate is going to be and the effect on the economy.

Yeah, it's a great question, obviously. So, it's a hard one to answer, but our base case is that the tariffs will come down, but they won't come down fast enough, and they won't come down, uh, greatly enough in order to preclude the recession that we are now forecasting. And so I think it's very important when we think about the tariff environment that we're in, to create a very clear distinction, if you will, or bifurcation of the rest of the world and then China, because the tariffs on the rest of the world, albeit there are some.Particular industries like autos, steel, aluminum, etc. that have higher tariffs. Overall, the rest of the world does not have tariffs at such a high rate that it is tantamount to shutting trade down. But that is exactly what we have with respect to China right now. And indeed, the reason we're seeing the rally is because, uh, Scott the Santa Treasury secretary came out and made it clear.That the that the administration recognizes the untenable position that we are now in without having trade with China and the critical role that China places itself in the supply chain. So in order to uh alleviate that, we're gonna need to see these tariffs come down pretty quickly, specifically with, with respect to China. Um, and if they do, when they do, um, it probably won't come down fast enough in our view to avoid the recession.

Yeah Tony I was gonna ask you about that. I mean, we've heard Bassett talk about, you know, de-escalation, uh, after this Trump pivot, so to speak. I mean, what's the likelihood that, you know, the hard data does not roll over to join the soft data and all this negativity about tariffs might prove to be ill timed and that we start to see, you know, meaningful pullbacks that happen in the months to come.

Well, I, I think that the the likelihood that the.Um, hard data doesn't start to decline is, is, is low at this point because we've seen a big spike in the hard data as a result of forward buying in advance of the tariffs. Now that's gonna reverse itself. And we're also gonna see a contribution toDeterioration in the hard data due to the many thousands if not tens of thousands of small businesses in this country that are being very negatively impacted from a supply chain standpoint due to the embargo that we have on China. And so, um, the, the, the administration's put itself in a very untenable position because they, they have um.Put themselves out there by imposing these unilateral tariffs on the Chinese in a very difficult position where they can't avoid a recession without pulling back on the tariffs. The Chinese are not worried about a recession and in fact, the Chinese are, are doing this for the long term. Um, and so we, our system unfortunately does not allow, or fortunately, depending on how you look at it, right, does not allow us to.Um, be as, um, long viewed and, and, um, overlook the next, let's call it 6 months to several years, um, the American people would have stand for an ongoing recession for a long period of time. So we need to move, um, in order to, uh,To move to to get ourselves into a more accountable position.

And so, um, Tony, as we, you know, we've been getting a lot of companies that have been coming out and talking about the potential effect of tariffs, which I guess is not quite hard data because most of it is forward looking. These are the costs that we expect this year, for example, but as you go through these earnings calls where there's all this talk about it, what is that telling you about where you need to be invested, right? Are you avoiding some of these companies that are, are very exposed?

Well, absolutely, you should look for companies that are higher quality, which is to say to some degree noncyclical, that have low low degrees of, of leverage that have high sustainability of earnings in all sectors, and that's what we're doing. But at the same time, you shouldn't be an investor should not be um deaf if you will, to the, to the extreme volatility with respect to which this administration behaves. So we could have Trump come out.You know, before we're done speaking right now and say, OK, we're gonna pull back on Chinese tariffs, then the markets could rip upwards by a significant amount. And you'd see that the more cyclical growth oriented tech names, which is what you're seeing today at a much lesser degree, move. So if you're, if you're an investor for the long term, so far, our, our advice is to just stay pat. You, you ride the volatility up and down. If you have additional cash, you put it to work when we're closer to the lows of the range, which is probably somewhere around.47, 4800 to around 5500. We're probably very close to the top of the range right now.Unless they make a very major move with respect to the tariffs, specifically on China.

Yeah, my view is, is, look, I, I think Scott Besent said yesterday that, um, you know, they expect possible de-escalation. I think both sides are looking for an off-ramp. I mean the question is if they're going to start to negotiate, doesn't that mean they have to take tariffs really off the table and grant sort of a 90 day.You know, period just to even begin negotiating and that might take a couple years before that's complete, but you know when you look at the, the data in the US and yesterday we had great PMI data, the durable goods data today obviously was still, uh, pretty robust and so until we see meaningful evidence of deterioration in the labor market, uh, you know, it might be premature we might obviously see tariffs be reversed right away. We just never know. That's the whole basis of the art of the deal and so.Uh, you know, I'm just wondering, I guess, how much confidence you have that, that we are gonna go into recession when we know that this whole situation is so chaotic and could very well reverse on a dime, uh, you know, with any sort of, uh, negotiation discussion.

Here's, and here's what you need to think about. I, I think, in my, uh, in my view, you know, I've talked about the president as being what I call a cause and effect guy, which is he likes to be the cause of anything that happens. And, and if he sees the effects, he either lauds himself or he, he can course correct if the effects are not attractive.Well, right now, he's undertaken a lot of causes. He's taken, undertaken a lot of activity in the tariff space, but he doesn't see the effects in his face, which is to say, the pain that's being caused for small businesses and even some large businesses across the country. We're seeing, um, a drop in the amount of container traffic that's supposed to be, um, expected to come into, in the month of April and, and then even more so in May coming into the West Coast, um, measured in the tens of thousands of containers.So if you think back to the pandemic, you'll remember that once the supply chains got shut down, it took a long time to get them back up and running again, and that had a lot to do with the inflation that we experienced. So we're we're starting to see the, the same phenomenon occur, which is as the supply chains get rerouted, get shut down, as sellers of goods andChina start to reroute their, their goods to Europe and other places. It's gonna take a long time to get it back into place. And so it may be um pretty quickly here beyond the point of no return as it relates to a recession for the US. And I think that if we get to Memorial Day, and we don't have a significant de-escalation specifically on China.Then we will have a recession and the question will be how deep and how long will the recessiongo?

Well, and Tony, just quickly here before we let you go, we're going to be getting payrolls data next Friday. Anecdotally, I have heard of some tariff related layoffs, specifically tariff related layoffs. Is that going to be starting to show up in those numbers?

Yeah, it could. The, it's always hard for any, on any of this, on any of the macro data that we look at for any number to tell you all that much, um, because you need to see a pattern, and there's so much noise in the system right now. Having said that, we, we do look to see companies start to, to cut back. And you're not seeing it in the high frequency data in the jobless claims yet. Um, there's still at historic lows, but, um, I think that you're, you're gonna start to see some more pain in the labor market, certainly in the next few months, whether or not.Starts right away. It's, it's hard to know. Uh, companies are still hoarding their labor. Companies don't want to lay people off if they don't have to because of the experience they had coming out of the pandemic. So it may take a little longer for, for companies, and we're at historic profit margins in terms of the S&P. We have been at least, so they have room.to let profit margins come down before they lay off too many people. Um, so we could start to see some of it, but even if we don't see it, it doesn't mean that under the covers, if you will, and small businesses, the pain is not acute. We just, we just say to finish. We are a regional bank, um, M&T, Wilmington Trust. We spend a lot of time in our communities and we hear every day about companies that can no longer get the things they need to.To satisfy their customers, to build their goods, to deliver to their customers. And it's pretty, um pretty pervasive and, and, and pretty, um.Uh, existential for a lot of these companies.

Tony, really helpful insight there, especially what you were just talking about. I really appreciate it.

Alright, my pleasure.

We're just getting started here on market domination. Coming up, shares of IBM falling after earnings results revealed that some of their US government contracts were canceled by Doge. We'll talk about that as well as our other top trending tickers later in the hour. And after the closing bell, we'll get you the latest earnings results from Alphabet and.Or you can scan the QR code below, by the way, to stay up to the second with all of Alphabet's latest moves. You can also now this is a new feature on Yahoo Finance. Listen in to Alphabet's latest earnings call, as well as other earnings calls if you go to their Ticker pages. Stay tuned, more market domination still to come.The tech heavy Nasdaq leading market gains as investors digest mixed signals on tariffs, with risks from tariffs hanging overhead and the AI trade under careful examination. Tech may be facing a pivotal moment here. Neuberger Berman, managing director Dan Flax joins us now to discuss. Dan, you're steeped in a lot of these tech names. It's good to see you to talk about what's going.On here. I'm gonna pose a similar question to you to what we talked about earlier at the top of the show because we've now been seeing this 3 day rally. Tech has been leading during that rally. Is it sort of anticipation of the earnings we're going to start to get in earnest with Alphabet? And do you think that then is a catalyst potentially for these names to go higher?

What we'll see with Alphabet and and some of the other big names next week, such as Microsoft and Amazon, is that they're continuing to execute, uh, in terms of their, on their product cycles, Google with search, uh, Amazon in terms of continuing to redefine the e-commerce experience more one day delivery. And so what's important for these companies is that even with the cyclical headwinds, obviously a lot of uncertainty.With trade is that they can innovate, execute, and really drive growth through this period and more importantly, uh, uh, coming out of this period. And if they're able to do that, I think the market will see that over time and, and, and that could drive out performance. So we continue to like those names, um, on this, uh, on this market pullback.

Yeah, hey Dan, do you think these companies and, and stocks have a chance to, to, to move back to new all-time highs, and we did see a breakout today in the XLK which I thought was interesting getting above, you know, the entire down trend from February. So we've seen a really explosive move out of tech, you know, at a time when tariffs still have not been resolved. So in your mind, does this give this any sort of further, uh, you know, conviction that that these companies might be able to deliver even though we're just starting the, the earnings period for the mag 7?

If I look at 12 to 18 months, what, what I see is that, uh, companies, and I'll use Nvidia as an example, it's not that they're, um, uh, immune from, from economic cycles, but in their case, uh, for example, they're, they're executing very well on their new platform which is called Blackwell. So that's ramping. Uh, there are obviously headwinds in China and that will be a factor over the coming months. But, but the most important thing foris executing on that product cycle, really delivering value to their customers. If you think about artificial intelligence and really the new wave of innovation around generative AI, you have, you have areas that are, are really getting revolutionized. Think about healthcare is one example in terms of drug discovery, um, uh, financial services with fraud detection, digital twins with manufacturing, and so inVid really sits at the heart of a lot of this transformation. And so if they're able to continue executing, attracting developers to their ecosystem, I think the stock can be a strong performer looking out over the next couple of years as it creates value for its customers. I think it can create significant value for its shareholders as well. Of

course, in the near term, Dan, you know that what youabout Nvidia is as true today as it was 6 months ago as it was a week ago, but all of that has been subsumed by tariff headlines, right, and, and sort of negativity and pessimism. So I'm curious, um, is the surge we've seen in the past few days reflective of the AI trade sort of reasserting itself, or what do you think it will take for that to happen in a more sustained fashion?

I, I think it's a little bit of incremental comfort in the last 72 hours around, um, around the tariffs, perhaps a little bit of, uh, um, a little bit of a pause as the US and China, um, negotiate as the US negotiates with other countries. And so if the market continues to see that in the very near term, I think it will gravitate towards the names that have attractive growth prospects like an Nvidia.Microsoft and Apple, and so these companies are going to be impacted by the economy and trade policies for sure, but I think the market is trying to see beyond the near term and it's also trying to see what the new guidelines are. And as the new guidelines come into into focus over the next several weeks and months, I think the market will look to companies that can lead.From a growth and innovation perspective for the next cycle, I think the market has discounted a lot of weakness. The market assumes the near-term earnings picture will be tougher than it thought 90 days ago. And assuming that the market is correct, the next, the next focus will be what does it look like coming out of this period, and we, we look to be positioned in companies that we think can create value coming out of, of course, what remains a very uncertain period.

Yeah, that's great, Dan. I have a two part question. One is that, you know, when we look at the antitrust that's starting to happen across the board for, for big Cap tech, it's sort of ironic that this is happening at a time when the competition is probably greater than it's been in 15 years. I mean, what's your, what's your thinking first of all on the whole antitrust.How would that be resolved? And second, what, what's your favorite part of technology? Do you favor this recent boom in software that we've seen relative to semiconductors given the underperformance and also hardware? What's the part of technology you feel should really shine for the majority for the remainder of 2025?

So I, I think that the regulatory overhang is, is going to remain a challenge for the big technology platforms, including, uh, Google and Amazon and Meta. Um, I think these companies need to do more to, to, to uh explain how their business model works. Uh, in many, in many cases, if you think about Amazon is one example, uh, they, they are a platform for, for businesses, uh, to, to sell, um.Around the world, and I think they, they are adding value to those, uh, uh, sellers on one hand and the customers on the other hand, and that is creating value for Amazon and its shareholders. But it and, and Google and the other digital advertising companies like Meta need to do more to really explain how these businesses work. And so we follow the regulatory uh dynamics very closely. I, I expect, uh, the, the, the lawsuits and the subsequent appeals will be a focus for the next.22 to 3 years and beyond, uh, but these companies have to innovate and grow through that. We've seen with other industries, uh, healthcare is one example where regulation is, is really very much a part of the, uh, uh, of the investing landscape, but there's still companies that can thrive despite that. If I shift to, to the tech landscape, where we see value is in software and some of the digital platforms at current levels, it's not that.Hardware won't be important. It will be in the very near term, it's going to take a little bit of time for some of the implications and the associated costs from tariffs to work themselves out. But if we reflect back on the last 8 years, there's been more trade friction, higher tariffs, and, and many companies, and I'll use Apple as one example, have been able to thrive during that period, despite some of the challenges. Within software, we think Microsoft forwell positioned. Besides their core software business, we think the Azure cloud platform remains very well positioned. The market's concerned in the near term about growth and, and Microsoft and and the others, including Amazon Web Services, will see an impact from customers moderating spend in pockets. But I think the bigger trend, if I look out 12 to 18 months, is that cloud growth will remain healthy given the innovation thatGoing on there and when we speak to customers, they see a lot of potential to expand their businesses on these platforms, which sets a company up like Microsoft and Amazon for that matter very well in our view.

Dan, really interesting to hear you say over and over again 12 to 18 months trying to look beyond this this what's going on right now to returning to the focus on growth for these companies. Thank you so much for your time. I appreciate it.Thank you. Coming up, another day of earnings means more guidance cuts and withdrawals from big name companies. We'll get you caught up on the latest when market domination returns.Welcome back to Market Domination sponsored by Tasty Trade. We have been on daily tariff watch this earnings season, so let's round up some of the latest commentary we got from companies. American and Alaska Airlines becoming the latest companies to pull full year guidance amid economic uncertainty this following a broader theme across the sector, with multiple airlines scrapping their outlooks because of President Trump's tariffs. We heard from Southwest, for example, as well, and American Airlines CEO saying on.The earnings call this morning that economic uncertainty in the market is pressuring travel demand and quote given this macro environment, we're withdrawing our full year outlook. Pepsi also feeling the pinch of tariffs. The company reported first quarter earnings this morning. It also cut its full year core earnings forecast. PepsiCo's CEO saying in a statement, quote, We expect more volatility and uncertainty, particularly related to global trade developments, which we expect will increase our supply.Chain costs and then there's Procter and Gamble expressing similar sentiment about its fiscal year guidance. The CFO saying that largest, the largest tariff impact to its business comes from China, which accounts for just over 10% of its total imports exposure to the US on the earnings call, the CFO also added the size of the tariff rate makes the cost impact more substantial. So Mark Newton, I want to bring you back into this as we're here. I mean.This barrage of companies commenting on this and trying to cope with this. Now I know you're mostly a technical guy and a charts guy, but how are the charts sort of telling the story of the uncertainty and what's going on with the with thetariffs?

Well, we've seen a lot of improvement in the consumer staples group in recent months simply because there's been so much uncertainty. If I had a nickel for every time I'd heard the word uncertainty in the last few weeks.but yeah, look, I think that the tech has come down sharply. If anything, you know, I think a lot of these staples are actually quite risky compared to owning technology at a very, you know, decent multiple now that most of these stocks have pulled back sharply. And now this week we've seen technology show the greatest gains we've seen, you know, for the entire week tech is up almost what 7-8% for the week, so.You know, I, I think as a momentum based, you know, technical analyst, and I think that's very encouraging for technology and now we're starting to see signs of the staples really start to underperform despite the fact that no real resolution has been heard on the tariffs. So from my perspective.Um, you know, I, I like tech and, and everybody who's in tech, we tend to hear a very optimistic tone about what they're, they're hearing. Those that have to deal with, uh, you know, with, with China, with other, you know, they're they're obviously a little more subdued, but for me that's an interesting, uh, opinion. It is.

Let's talk more about China now and its effect on a different business because with the trade war picking up, Chinese shoppers are actually gravitating more toward local brands. A new report from TD Cowan highlighting that only 9% of those surveyed said foreign brands became.More appealing over the past year. That's down 33% compared to 2024. For more we're bringing in John Kernan, managing director of retail and consumer brands at TD Cowan. John, um, this report could not be better timed because this is something I've actually been asking a lot of folks that are coming on the show. What is the perception of US brands in China and are we seeing any kind of this demand erosion? So what's your read through from this survey and the actual sort of sales effect on, on many of the companies that you cover?

Yeah, thanks for having me. Just to level set our survey, our proprietary survey partnered with a Beijing-based advisory who conducted in-person interviews of 2000 Chinese consumers across the cohort of ages, low to high income and tier 1, tier 23 cities. So we, we covered a good, good portion of the overall China consumer base and I think when you look at the survey, 28% of the respondents this year.Found Western brands less appealing, that's up from 25% last year, so it's a, it's a meaningful uptick. Uh, the greatest increases in the less appeal response rate.And that was up 450 basis points here every year was among high income consumers and it was also up about the same amount for the 18 to 34 year old demographic, which is obviously a very important demographic for the Western brands there.

What do you think, uh, would make this go away, John? I'm it's gonna take about 2 to 3 years from what I've heard to have any sort of meaningful dialogue with the Chinese and try to come to terms with, with these tariffs. I mean, is there anything we can do to escape a recession in your view, uh, given, you know, your recent, uh, what you've learned.

Well, you know, the survey dealt more with, uh, you know, China, and I think, you know, certainly if the trade war and the tariffs stand where they are now, China would, our strategists see their their GDP growth getting cut in half this year to about 2.5%. I'm not, I'm fairly optimistic for the US economy. I think there will be trade deals announced, maybe not with China, but I, I, I'm, we're pretty optimistic on the state of the consumer, the consumer's balance sheet, uh, if markets stabilize, that's a big boost.To the high income consumer and 10% of the US population accounts for 50% of total PCE spend. So I'm, I think that consumer is in decent shape again, confidence has definitely been damaged, but I'm optimistic as we get into your end there's going to be tariff deals and, you know, the US consumer and the job marketwill carry through.

I want to dig into some of the companies that you covered that were covered in this survey also, and by the way.I, I, I had not heard of some of these Chinese-based brands, footwear brands, apparel brands, Leaning for example, but you talk about Nike in the report that it's still in the lead, but it has been decreasing in terms of sort of its brand.Equity in view in China. So for a brand that's already sort of embattled in the US as well, what does this mean for a company like Nike and, and you know controlling what it can control? Is there anything that it can do about it?

Sure, well, I mean, let's start with the fact they're still number one in every footwear and apparel category we surveyed in most cases by a comfortable amount, but they are definitely losing preference in every single one of those categories. The big share gainers are leaning ASA and FIA. FILA is actually run by.And the sports, um, and those three have been gaining share. They obviously local brands, they've got localized management teams, they're making better product we they even sells shoes in the United States now. So, you know, they're still much smaller than Nike in scale.Yeah, but they are gaining share. Nike didn't lose share their Western peers in the survey. It was, it was all, all the share they donated was essentially to.That the upstart China local brands.

Yeah, I find it really

what they can do in terms of, I mean, they've got, they, they need better innovation. Um, you know, clearly they, they leaned on lifestyle products and maybe streetwear too much. You're starting to see some improvements in their running portfolio. The Pegasus 41, the Bomero, uh, the, I think you're gonna see much better innovation and much less reliance on the lifestyle-based part of the portfolio.Go ahead.

It seems like most of the survey data that I've heard in recent weeks is, is so negative across the board and, and at what point does the actual hard data really start to roll over to join all this negativity, you know, I mean, you mentioned, you know, survey after survey, it's extraordinarily negative. Uh, we know China's in very rough shape.I mean they have what 3 times the banking system of the US, but it's heavily levered to real estate which is down now 30 to 50%, you know, and their interest rates are at rock bottom, so they're certainly struggling in many ways. The question is, um, you know, when does the data actually turn negative for the US, to your point, I don't think that necessarily has to happen, right?

Not necessarily. I mean, look, the consensus has been negative on China. The consensus on Wall Street has been negative on China.I think for a long time, this survey we published today probably reconfirms that uh consensus view. Now certainly valuations are priced for that. Many of the companies that we cover and have exposure to China are near their 5 year lows in terms of evaluation. I mean, it's not just because of China, obviously the tariff situation, the overall macro picture, the competitive environment here in the US all plays a role in it. Um, I, you know, I'm in the can, I'm like I said earlier, I'm optimistic on the state of the US consumer.You know, consumers can say one thing in a survey and then do something completely different when it comes to actually spending their money. Sometimes when consumers confidence is low, it makes people won't feel good, that don't go out and buy something to make them feel themselves feel better. Generally, the the US consumer in the consumer surveys you see whether it's the University of Michigan sentiment survey.Or the conference board's consumer confidence index, they are always most confident at the top and always most pessimistic at the bottom. So sometimes those surveys can be good contrary indicators because they tell you how a consumer's feeling at a point in time, but not necessarily what they're going to do in thefuture.

Yeah, so on that point, John, hopefully as these companies start to report their actual numbers, we'll catch back up with you and see how the survey has matched what people are actually doing. Thanks so much, really appreciate it. Thank you.Coming up, it's been a wild week for solar stocks amid new tariff announcements. We're joined by an analyst on the other side to tell us the best ways to be positioned in that solar sector. Stick around, much more market domination still to come.As traders digest earnings and mixed signals on tariffs, we're taking a peek at what investors should keep watching, we can't have Mark Newton here and not do a little bit of a deeper dive into the charts. So here we're taking a look at the S&P 500 year today. We put up a candlestick. You're gonna draw, draw a little bit on here to show the trend. I mean, we've seen the last few days the uptick that we have seen.So what are you watching in terms of what

I like to say the third time's a charm. We have tested this level right near 5475, about 3 times since April 9th. Uh, that was the day, of course we saw the big breath explosion. So now we're actually getting over that. So that's actually a very encouraging sign. You also see the entire trend from.Mid-February also is right around 5500. 5500 is a big deal for the S&P. Uh, you know, my thinking is that today's move is very encouraging. I mean, the volume has been very good, advanced decline, the breadth has been phenomenal, and, and I think there's reasons to to actually think what's happening now suggests a very good possibility that our spring lows are in place, that it should not be tested again.So even if it's choppy in the near term, and it likely can be without any sort of resolution on tariffs, we have a lot of work to do. Momentum has been very negative throughout this whole thing. We only have about 25% of all stocks above the 20 day moving average, so there is some work to do, but to see technology lead the way it's doing off these lows is really a goodsign.

All right, we're going to get to technology in a minute, but I want to touch on something you just mentioned, which is breadth, the number of stocks that are.Up versus the numbers that are going down on each individual day and you can, I mean, you can see pretty clearly on this chart the spikes that we've been seeing, although it's it's, it's volatile, right? Like you go way up on breath one day and then you come way down the next day.

So this is just the ratio of say advancing stocks as a percentage of the total. The ratio got to levels. It happened twice in the last 9 days. They reached the highest level here has been seen since 2022. That's really encouraging at a time.When everybody is so pessimistic about let's wait till the tariff center, we get some clarity. All this uncertainty, why would I want to invest? Well, the market is sending a sign right now that you know bread is really clicking into the gear at a time when many are still very pessimistic. So that's a good sign. We saw the percentage of stocks above their 20 day moving averages move from 2%. Now it's almost 50% in literally about 2.5 weeks. So investors have to pay attention.Don't always listen for tariffs. Ignore the politics. Pay attention to what's happening in the market volume, breadth, sentiment, and specifically technology. It continues to play a leading role heading into these mag 7 earnings. Yeah,

I want to go to technology specifically here. So I'm again going to take a look at the year to date. Here's the XLK that we have been watching here and look at a year to date for the XLK. So this is the technology spider, theETF that tracks that tech sector within the S&P 500 and it looks similar but not identical to the S&P 500 chart. So that breakout that you talked about, you know, but the breakout here maybe isn't as clear as it is for the spy, is it just eyeballing it forme

it's actually clearer. I mean tech obviously dominates the S&P with Apple and Nvidia, but we see XLK having actually officially broken this entire down trend volume and breadth are very good. We've only had, of course.You know, Tesla thus far we get, uh, you know, Alphabet tonight and Intel, we're heading right into Mag 7 earnings and so, you know, my thinking is the CapEx spending have really been reaffirmed by by Alphabet, by Amazon. That's a good sign at a time when everybody's negative, you know, the sentiment data has turned so pessimistic but yet these companies are reaffirming.It's still going to be a very good spot for earnings, I think this quarter. So I like tech. Uh, the fact that it's leading off the bottom after it got hit so hard is a really good sign.

And I am curious whether we're talking about tech or whether we're talking about the S&P 500. OK, so the bottom may be in, but like what's the range going to be because it's not like we're breaking out.

No, that's a great question because we're not going to go back to the new highs, you know, anytime soon in my view. It is going to take some time. So initially this area.Between really 5550 and 5600 are really gonna be important. I'm, I'm skeptical we get over late March highs, which means, you know, you might have a few percent on the upside, and then we probably have to churn a little bit. And then when we see more resolution at that time, we can start to really make further progress. But there's no guarantee that we're gonna go into recession, in my view. Technically S&P held exactly where it needed to 48 35%. If you look at the S&P, it is a 50%.Ratio of the entire move up since 2022 and that's a really, really good sign overall we have a weekly chart of that or going back over the last few years, you can see that we're exactly where we bottomed was a really key point and, and really, uh, that's, that's a key area. So my anticipation is that is not gonna get undercut might be choppy, but in general, if you have a long term perspective, you know, technology is a much better valuation.The earnings, I think is gonna come in just fine and, and, you know, the, the tariffs are gonna be dicey, but I think we can get through all this.

Great

stuff.

I'm so glad that we came up here and talked through this. Really appreciate it, Mark.Let's take a closer look now at the solar sector because the Trump administration has wanted to impose tariffs as high as 3,500% on solar panels from Southeast Asia. We're navigating how to play the solar space with the Yahoo Finance playbook, and joining us now is Mahi Manloy, director of clean energy equity research at Mizuho Americas, and then Mahi, it's really.Important how investors are looking within this sort of alternative energy and solar space because these tariffs will potentially advantage the solar panel makers, but it's going to affect different companies in different ways. Let's talk about the panel makers first, what it can mean from them and whether they're a buy related to these tariffs.

Uh, uh, first of all, thank you for having me over here. Uh, these tariffs are definitely super high, uh, right now we already seen more than 100, 150% tariffs historically. The same panels cost 11 cents internationally, cost 25, 30 cents in the US. Uh, this is before all these tariffs, so the prices will increase. But what's interesting is that because some of these tariffs were anticipated, a lot of the manufacturers have moved out of Southeast Asia to other countries.Uh, but the bigger risk now is what if US imposes tariffs on these other countries, India, South Korea, or others. So I think that risk still remains over here. I think whenever any imports from any country reach 3% of total model imports, that's when new investigations get triggered. You could see more of that later this year. So given that backdrop, I think for solar, which is like the biggest, uh, uh, domestic solar model manufacturer in the US, these are the biggest beneficiary of this.Um, so, so we see some increase in model prices here, still TD, how much it will be, um, uh, but modules are only 30% of the cost of a solar system. Um, so the total impact on cost for project developer is not that huge, and there are bigger issues with batteries which come from China, but I think for solar modules it's somewhat manageable.

And how many of for solar's manufacturing of the, the, uh, panels of the modules, how much of that happens in the US?

Sure, so, uh, by end of next year they'll have 20 gigawatts of that 12.5 gigawatts, uh, would be in the US, uh, around 34 in India and the rest in, uh, Southeast Asia. So they'll still have some tariff exposure to India and, uh, Southeast Asia, but the math which we did, like, even if you go back to, uh, the liberation day uh tariffs on India and Southeast Asia.Uh, for first so that they still benefit, uh, on the US capacity, so we still think there's 4 to $5 of uh incremental EPS even if these international facilities are tariff for for them in 26.

Now hey, what are your thoughts about interest rates continuing to come down over the next 3 to 6 months and, and that probably providing a more favorable environment for, you know, solar in general?

That's it's a great question. So that, that's more of a question or risk for the residential solar industry, uh, where, uh, generally most of the, uh, home panels are bought on loans or leases for utility scale, interest rates have been going up. It's not a big issue. I think the bigger issue on utility scale is just the uncertainty with the tariffs, uh, over here. Having said that.As long as interest rates remain the same or come down, that'll still be positive for renewable developers. At least one less thing to worry about. Well,

and in general, you know, tariffs aside, this administration has made very clear that it wants to give advantages to sort of fossil fuels, right? Does that mean disadvantages? Does that mean they're going to be taking away benefits for the solar industry? And what does that mean for your coverage?

Yes, the biggest one, which we are investors are looking for is the, uh, incentives in the inflation Reduction Act, so around 30-40%, uh, the 30-40% subsidy for new solar projects, battery projects, wind projects in the inflation Reduction Act, uh, and, uh, the, the, the estimates out there that it, you know, the inflation Reduction Act for renewables could cost $1 trillion so it's an easy thing to cut and fund, uh, other things which Trump or Republicans want here.Um, so that, that definitely could be a risk over here. Uh, if you look at, uh, or if when you talk to investors, they think most likely these incentives will be ended by 2027. We think it could be much faster over here, but even if you.Remove those incentives, uh, uh, I think stocks like first solar are already trading as if those incentives don't exist. I think from a valuation perspective, most of that negative news is baked in over here, and stocks still look pretty, uh, uh, attractive at this point, uh, with or without the tax on it.

Mihi, really helpful stuff. Thank you so much. I appreciate it. Oh, thanks for having me.Well, we're wrapping up today's market domination. Don't go anywhere. We'll get you covered with all the action following the closing bell, including those latest earnings reports from Alphabet, Intel, and more. Stay tuned for market domination over time.