Adobe Falls After Sales Outlook Fails to Show AI Uplift | Bloomberg: The Close 9/12/2024

The Close Begins >> THE COUNTDOWN IS ON.EVERYTHING YOU NEED TO GET THEEDGE AT THE END OF THE MARKETDAY.THIS IS "THE CLOSE."ROMAINE: INVESTORS LOOKING PASTINFLATION BUT LOOKING TO EXACTLYIS NOT SO CLEAR.LIVE FROM BLOOMBERG STUDIOS INNEW YORK.ALIX: NVIDIA, I HAVE ASUGGESTION.IT FEELS LIKE TRIED AND TRUE.THERE IS A RALLY.EARLIER THERE WASN’T A LOTHAPPENING.THE NASDAQ 100 WAS UP.IT IS NVIDIA LEADING THE CHARGE.ROMAINE: WE WILL TALK ABOUT THEEGO DATA WE HAVE BEEN OBSESSING-- ECO-DATA WE HAVE BEENOBSESSING OVER.PRICES CAME IN SHOWING A PICKUPIN APRIL AFTER DOWNWARDREVISIONS IN JULY BUT THE PP --BUT THE PPI CATEGORY IS MUTED.MARKETS ARE NOT SURE WHAT TOMAKE.OSCILLATING BETWEEN GAINS ANDLOSSES EARLIER IN THE SESSIONWITH THE BULLS TRYING TOMAINTAIN CONTROL UNTIL THECLOSING BELLS IN LESS THAN ANHOUR.AND A BIG PART OF THAT BULLISHPAUL IS THE AI AND CHIP TRADE.NVIDIA ON A FOUR DAY RUN WITH AIBACK IN FOCUS ON WALL STREET ANDBACK IN FOCUS AT THE WHITEHOUSE.CNN REPORTED THAT OPENAI CEO ANDANTHROPIC’S LEADER MEETING WITHSENIOR OFFICIALS IN WASHINGTONFOR A DISCUSSION -- INWASHINGTON.A DISCUSSION ON THIS SHOW AHEAD.AS INTEREST AND BUDGETS INCREASEIN THE CHIP AND AI SECTOR,INTEREST IN THE PHARMA SPACE ISWANING.AS MODERNA IS STRUGGLING TO FINDA PAVED TO BOXING PROFITABILITYIN A POST-PANDEMIC WORLD.-- IS STRUGGLING TO FINDPROFITABILITY IN A POST-PANDEMICWORLD.ALIX: TAKE A LOOK AT AUGUST ANDSEPTEMBER.THE P TO THE TROUGH -- THE PEAKTO THE TROUGH.S&P -- TODAY AT 65.WHY?THE EGO DATA DID NOT DO THATMUCH FOR US.-- THE ECO-DATA DID NOT DO THATMUCH FOR US.NVIDIA IS THE KIND OF ENTITYTHAT HAS CENTRAL-BANK POWER ATTHIS POINT.AND WET -- AND WHAT CUSTOMERSSAID YESTERDAY IS THEY STILLWANT THESE CHIPS AND THERE IS ALOT OF DEMAND.HIS MARKET F -- IS M Mimi Duff, GenTrust ARKET FOARKET FOMOBOOSTING THIS.ROMAINE: MIMI DUFF IS THEMANAGING DIRECTOR AT JEN TRUSTJOINING US.>> I LIKE THE CROWN.ROMAINE: START THERE.WE HAVE BEEN THROUGH MARKETCYCLES WHERE WE HAVE ONE OR AHANDFUL OF STOCKS THAT HASDOMINATED EVERYTHING.NVIDIA, AND YOU COULD BROADENOUT TO CHIPS, THAT IS THE TRADERIGHT NOW.HAS ANYTHING CHANGED THAT?MIMI: WHAT I WOULD POINT OUT ISOVER THE LAST 100 YEARS THEREHAVE BEEN MARKET LEADERS AND ITIS USUALLY A NARROW SET.WHAT CHANGES AI?LOOK AT THE PEOPLE WAITED S&P ITIS GATHERING STRENGTH.WE ARE SEEING A BROADENING OFTHE RECENT RALLY.ROMAINE: YOU MAKE A GOOD POINT.WE HAVE BEEN THROUGH THIS.YOU FOCUS ON A TURN THAT GOESTHROUGH.IT RAISES THE QUESTION, IF YOUWERE NOT LUCKY ENOUGH TO GET ONTHE TRAIN WHEN IT LEFT THESTATION, WOULD YOU GET ON ITNOW?MIMI: NOT WITH THE AMOUNT OFENTHUSIASM PRICED INTO THESECTOR.ROMAINE: IT IS TOO RICH FOR YOU?MIMI: YES.ALIX: JANET YELLEN SAID CENTRALBANK HAS THE POWER TO MOVE THEMARKETS.IS THAT THE BROADER INDICES YOUWANT TO OWN?MIMI: WE WOULD WANT TO OWN THEIRBROADER INDICES AND KEEP OURHUMILITY AND LET THE WINNERSWIN.WE THINK THE BIGGER PICTURE ISGOING TO BE DOMINATED BY THEECONOMIC CYCLE AND OTHER DRIVERSAND NOT A FEW COMPANIES.ALIX: CENTRAL BANKS STILLMATTER?MIMI: THEY STILL MATTER.ALIX: WHAT IS YOUR SIGNAL TOBUY?MIMI: WE HAVE BEEN UNDERWEIGHTEQUITIES.FIXED INCOME HAS RALLIED WITHYIELDS COMING DOWN.WE HAVE SEEN THE AMOUNT -- YOUSHOWED THE INTRADAY VOLATILITYON THE EQUITY SIDE AND ALSO THEAUGUST DIP WHICH WE THINKHIGHLIGHTS FRAGILITY IN THEMARKETS.WHAT WOULD CAUSE US TO GET BACKOUR EXPOSURE IS A FIXED INCOMEGOT TOO RICH.AND REPRICING AND EQUITIES, ASUBSTANTIAL -- AND REPRICING INEQUITIES, WE WOULD GAINCONFIDENCE.WE THINK IT IS A PRETTY HIGHCHALLENGE TO LAND THAT AIRPLANECAREFULLY COMING FROM A HIGH .5%FUNDS RATE.ROMAINE: WE HAVE GOTTEN TO APOINT WHERE EVERYONE KNOWS THEEASING CYCLE IS COMING.THERE IS A LOT OF DISAGREEMENTAS TO HOW AGGRESSIVE THE CYCLEIS GOING TO BE.THIS IS A MARKET DOT PLOT WEWERE GOING TO GET 75-100 BASISPOINTS OF CUTS THIS YEAR ALONE.THEY HAVE PARED BACK THAT.MIMI: I THINK, GUNNED THEMAHEAD, I WOULD SAY THAT.WE HAVE 100 PRICED IN FOR THISCALENDAR YEAR.AND 10 CUTS PRICED IN THROUGHTHE END OF NEXT YEAR.THAT LEAVES A GREAT DEAL OFVARIABILITY. YOU COULD SEE A WEAKENINGECONOMY WHERE -- ON THE WAY UPTHE FED HIKE TO AGGRESSIVELY.IF THINGS WERE TO WEAKEN, --ROMAINE: WHEN WE LOOK AT THENUMBER OF CUTS PRICED IN, IFYOU ARE TALKING ABOUT BRINGINGTHE FED FUND RATES DOWN, YOUWOULD GO TO THREE.IS IT A SOFT LANDING?I WOULD THINK THERE HAS TO BESOME WEAKNESS IN THE ECONOMYSOMEWHERE.MIMI: WE ARE COMING FROM A VERYOVERHEATED EMPLOYMENT PICTUREAND A RIDICULOUS INFLATIONPICTURE.THE INFLATION PICTURE IS WELLBEHAVED.ON THE EMPLOYMENT SIDE, WE HAVESOFTENED.WE ARE BACK TO THE PRE-COVIDLEVELS.TO GET US TO 3%, YES, SOMEWEAKENING FROM HERE BUT ALSO THEFED KNOWS THEY ARE RESTRICTIVERIGHT NOW.I WOULD SAY THE ACTUAL PATH THATWE WILL SEE AND THE SPEED WITHWHICH THE FED MOVES WILL BEDICTATED BY HOW AND WHEN THEWEAKNESS --.ALIX: YOU MENTIONED YIELDSGETTING TOO HEATED AND YOU WOULDREALLOCATE MONEY FROM BONDS.WHAT YIELD IS THAT?MIMI: 370 IN 10 YEARS IS NOTEXCITING.THAT IS PRICING IN THE MIDPOINT.IF -- WE HAVE A HIGHER DEGREE OFODDS ON A RECESSION THAN THEMARKET.AND THAT JUSTIFIES LOWER YIELDS.IF YOU HAD A PERFECTLY SOFTLANDING AND FED FUNDS WERE DOWNAT 3%, THEN PROBABLY TENDS COULDBE LOW -- TENS COULD BE LOW.WE THOUGHT BONDS WOULD PERFORMIN A BETTER RANGE OF SCENARIOSSOWETO MONEY OFF THE EQUITYTABLE TO PUT IT THERE.WE WILL HAVE TO SEE HOW THINGSDEVELOP WITH THE DATA.ALIX: HOW ARE YOU LOOKING AT THEELECTION?MIMI: OUR ANALYSIS ISINCONCLUSIVE.IT REALLY DEPENDS, THE EXACTCOMPOSITION YOU WILL GET.WE DON’T THINK EITHER PARTY WILLHAVE A CLEAN SWEEP.WE THINK THAT WHATEVER ECONOMYIS HANDED TO THE INCOMINGPRESIDENT MATTERS MORE THAN ALOT OF THE OTHER FACTORS.WE ARE NOT PLAYING ONE WAY ORTHE OTHER RIGHT NOW.AND THE POLLS SHOW THEY ARE SOCLOSE AT THIS POINT SO IT IS NOTAT OUR FOREFRONT.ROMAINE: MIMI DUFF, MANAGINGDIRECTOR KICKING US OFF TO THECLOSE ON THIS AS THEY AFTERNOON.WHEN WE COME BACK WE HAVE AMESSAGE FOR YOU JUNIOR BANKERS.AT JP MORGAN THEY ARE TAPPINGYOUR HOURS -- CAPPING YOUR HOURSTO 80 HOURS A WEEK.ALIX: SALESFORCE HAS AI RELATEDNEWS OF ITS OWN AND WE WILLBREAK IT OUT FOR A CLOCK ANDWHAT IT MEANS FOR THE AI ARMSRACE.ROMAINE: BOEING CANNOT CATCH ABREAK.IT IS FACING THE POTENTIAL FOR ASTRIKE AT ONE OF ITS KEYFACTORIES.CONTRACT NEGOTIATIONS GOING DOWNTO THE WIRE AND A BIG VOTE ONTHE NEGOTIATIONS COMING UP.THIS IS "THE CLOSE" ALIX: JP MORGAN AND BANK OFAMERICA ARE ROLLING OUT SOMEMEASURES THAT MAKE THESE JUNIORBANKERS’ Katherine Doherty, Bloomberg News WORKLOADS -- THAT MAYEASE JUNIOR BANKERS’ WORKLOADS.THIS MEANS 80 HOURS UNLESS YOUHAVE A DEAL YOU HAVE TO CLOSE.DOES THAT MEAN THE FLOOR IS 80?>> THE REAL QUESTION BECOMES --DOES -- DO THESE MEASURES, THESESO-CALLED PROTECTIONS ACTUALLYMAKE A DIFFERENCE FOR THESEJUNIOR BANKERS?IS THEIR WAY OF LIFE, THE TYPEOF WORK THEY ARE ENGAGING WITHCOME IF THE EXCEPTION FOR THE 80HOUR CAP IS THAT YOU ARE WORKINGON A LIVE DEAL, IF YOU ARE HIREDAS AN INVESTMENT BANKER, YOUWANT TO BE WORKING ON LIVE DEALSALL THE TIME.IT IS HOW YOU ARE DEVELOPINGYOUR SKILL SET AND HOW YOU WILLGET PROMOTED.THIS 80 HOUR FLOOR SEEMS TO BETHE MINIMUM WHICH, TO ME,INDICATES THERE IS STILL SOMEWORK THAT NEEDS TO BE DONE INTHE INDUSTRY.ROMAINE: HOW SERIOUS CAN WE TAKETHIS?I FEEL LIKE WE WENT THROUGH THISWITH GOLDMAN AND CITI. WHEN DOES --WHY DOES WALL STREETPLAY THIS GAME?WE KNOW WHAT IT TAKES TO GET TOTHESE LEVELS IN THE INVESTMENTBANKING INDUSTRY.>> SOME ABOUT -- SOME OF IT ISNECESSARY CHANGES.SOME OF IT HAS TO DO WITHTECHNOLOGY.PART OF THE REPORTING OF THEHOURS THE BANKERS WERE PUTTINGIN WAS WEEKLY.THE TECHNOLOGY HAS A BETTERINFRASTRUCTURE AND COMMUNICATESIN A MORE EFFICIENT MANNER.BANKERS WILL NOW WANT TO PUT INTHEIR HOURS ON A DAILY BASIS ANDTHEIR MANAGERS CAN SEE IN REALTIME OR A MORE ACCURATEREPRESENTATION OF WHAT THEIRJUNIOR BANKERS ARE ABLE TOHANDLE AND IF THEY ARE ABLE TOPICK OUT MORE WORK OR NEED TO BEDOING LESS.ALIX: IF THEY ARE NOT WORKING ONA DEAL, WHY ARE THEY WORKING 80HOURS A WEEK?>> CLIENT DEVELOPMENT, YOU ARECONSTANTLY THINKING ABOUT YOURNEXT PITCH.JUST BECAUSE YOU’RE NOT HIRED ONTHE DEAL YOU ARE WORKING ONGOING LIVE DOESN’T MEAN YOU’RENOT CHASING BUSINESS.ROMAINE: WE ARE VERY SKEPTICALOF THIS 80 HOUR THING BUT ISTHERE ALSO AN ISSUE OFCOMPETITION?AND IT TOTALLY THERE HAS BEEN ALOT OF TALK ABOUT FIRMS THATHAVE SIPHONED OFF FOLKS FROM THETRADITIONAL AVENUE OF GOING TOTHE TRADITIONAL BANKS.IS THAT ALSO A CONCERN?>> REPUTATION MATTERS ON WALLSTREET.IF YOU SEE FIRMS IN THEHEADLINES THAT THERE ARE JUNIORBANKERS COMPLAINING, EVEN SOCIALMEDIA HAS CHANGED THE GAME IN AREAL WAY.I TALK TO YOUNG PEOPLE STARTINGOFF THEIR CAREERS ON WALL STREETAND THEY SEE THE TYPE OFINTERACTION AND THE FEEDBACKFROM DIFFERENT FIRMS AND THEY’REMAKING THEIR DECISIONS EVENBEFORE THEY START THEIR FIRSTJOB OF WHERE TO GO.AND MAYBE THE NEXT JOB INPRIVATE EQUITY MIGHT BEACCELERATED BECAUSE YOU DON’TWANT TO PUT UP WITH THE GRUELINGWORK HOURS.ROMAINE: CAN’T YOU MAKE MORE?IF YOU ARE GOING TO BUST YOURBUTT FOR 80 PLUS HOURS, YOUWOULD MAKE MORE.>> THE ECONOMIC SCENT INCENTIVESARE ALL CHANGING.BUT I WILL SAY THAT THE PERIODOF 2021 WHEN YOU SAW A SHAKINGOF THE SHIP AND THE JUNIORBANKERS WERE JUMPING TO PRIVATEEQUITY OR EVEN OTHER BANKSBECAUSE THEY COULD CHASE BIGGERPAYCHECKS.THAT IS NOT AS ACCELERATED AS ITWAS IN THE PAST.ROMAINE: CATHERINE, HOW MANYHOURS DO YOU WORK?>> SOMEBODY ASKED ME ABOUT THAT.THEY SAID, DON’T WORK SO HARD.I SAID I’M NOT BEING COMPARED TOTHESE BANKERS WE ARE TALKINGABOUT.ROMAINE: CATHERINE ABOUT THECHANGES IN WALL STREETESPECIALLY AT BANK OF AMERICA.ALIX: MATT LEVINE HAD A GREATPEAS GETTING ON THIS AS WELL.HE WAS MAKING THE POINT, YOUWORK LIKE THAT FOR TWO YEARS BUTTHEN YOU KNOW HOW TO DO YOURMODELS OR FINANCIALS AND YOU CANSIT IN MEETINGS AND BECOME ASENIOR BANKER AND KNOW STUFF ANDSAY STUFF.IF YOU DON’T HAVE THOSE TWOYEARS, DO NOT HAVE THATKNOWLEDGE?ROMAINE: THAT GETS US ONTO ADIFFERENT TOPIC WHICH IS THEWHOLE ISSUE OF AI AND TRYING TOAUTOMATE A LOT OF THOSE TASKSTHAT WOULD NORMALLY GO TO JUNIORBANKERS WHICH WOULD ROB THEM OFTHAT EXPERIENCE THAT GETS YOU TOA LEVEL WHERE YOU CANCOMMUNICATE LIKE THAT.ALIX: YOU TELL ME.ROMAINE: WE ARE IN A DIFFERENTPHASE OF OUR CAREERS SOTHANKFULLY WE DON’T HAVE TOWORRY.WHEN WE COME BACK, FOLKS ATMODERNA ARE SCRAMBLING.THE BIG VACCINE COMPANY ISTRYING TO FIND A WAY TOCAPITALIZE ON THE COVID-19 BOOMAND TRYING TO FIND NEW USES FORITS VACCINE.IT HAS BEEN STRUGGLING AND WEWILL TALK ABOUT SOME OF ITSLATEST MOVES TO CUT COSTS RATHERTHAN FOCUSING ON GROWTH.THAT IS Top Calls ROMAINE: LET’S GET A VIEW FROMTHE SELL SIDE WITH OUR TOPCALLS.WE START WITH CARVANA, GETTINGAN OVERWEIGHT RATING AS THEANALYST PRAISING ITS BUSINESSMODEL AND PROFITABILITY SAYINGIT ENABLES ECONOMIES OF SCALE TOPROVIDE A HIGHER QUALITY ANDCONVENIENT AND LOWER COSTCONSUMER EXPERIENCE.ROKU, SECOND UPGRADE OF THEWEEK.THE ANALYST SAYS FUNDAMENTALRISKS ARE FALLING AND SALESGROWTH RISING.TWO FACTORS HE SAYS SHOULD BURYANY DEBATES ABOUT PROFITABILITY.INVESTORS LIKING IT.AND ENDING ON MICRON, THE MAKEROF MEMORY CHIPS HIT WITH ADOUBLE DOWN GRADE.BNP PARIBAS MAKING THAT CALL.THE ANALYST MORNING INVESTORS OFOVERSUPPLY AND HIGH-BANDWIDTHMEMORY CHIPS AND HE SEES MICRONUNDERPERFORMING AI PEERS THROUGH2025.SHARES DOWN 4%.THE DECLINE YOU’RE SEEING ANDMICRON DOES NOT COMPARE TO WHATWE SEE AN MODERNA.ONE OF THE BIGGEST MOVERS OF THEDAY.THIS YEAR IS DOWN AFTER THECOMPANY ANNOUNCED UPDATES TO ITSSALES GUIDANCE MORE IMPORTANTLYA COST SAVINGS PLAN THATINVOLVES DEEP CUTS TO RESEARCHAND DEVELOPMENT SPENDING.GERRY SMITH JOINING US FOR MORE.HOW DEEP ARE THE CUTS?>> THEY ANNOUNCED THEY WOULD BECUTTING 20% OF THEIR R&D BUDGETBY 2027.IF YOU STEP BACK, THIS IS ACOMPANY THAT DURING THE PANDEMICGENERATED A LOT OF REVENUE FROMITS COVID VACCINE.THEY REINVESTED THE MONEY INTO AVERY LARGE R&D PIPELINE.THE BELIEF THAT MRNA TECHNOLOGYCOULD BE USED TO TREATEVERYTHING FROM THE FLU TOCANCER.NOW WE SEE A SHARP DECLINE INCOVID VACCINE REVENUE.THAT IS CAUSING MODERNA TO REININ SOME OF ITS AMBITIONS.ROMAINE: I’M CURIOUS ABOUT THEAMBITIONS -- IS THIS ANINDICTMENT OF WHAT THEY WERETRYING TO DO OR THE WAY THEYWERE TRYING TO DO IT?IS THIS MORE ABOUT MODERNA ANDITS EXECUTION?>> FROM MODERNA’S PERSPECTIVE,THEY SAY THEY ARE VICTIMS OFTHEIR OWN SUCCESS.THEY HAVE HAD A LOT OF CLINICALTRIALS THAT HAVE SUCCEEDED.YOU GET TO THE LATER STAGES,THEY NEED MORE MONEY.WHEN COSTS ARE GOING UP ANDREVENUE IS GOING DOWN, YOU HAVETO MAKE SOME CUTS TO YOURRESEARCH BUDGET.ALIX: THE MRNA VACCINE DIDN’T DOANYTHING MORE SIGNIFICANT THANOTHERS.AND THERE WHOLE POINT ORIGINATEDUSE MRNA FOR CANCER VACCINES ORTREATMENTS.>> THIS IS A COMPANY THAT HASTWO PRODUCTS, A COVID VACCINEAND THEY GOT APPROVAL FOR AN RSVVACCINE.THAT HAS NOT GOTTEN OFF TO AGOOD LUNCH.PFIZER AND GSK WERE BIGGERCOMPANIES THAT HAD A HEAD STARTIN THE MARKET.MODERNA HAS TOLD INVESTORS THATIT WILL BE A DISAPPOINTINGLAUNCH FOR THAT VACCINE.AND CANCER WAS PROBABLY THEBIGGEST LONG-TERM HOPE THATINVESTORS HAD.THEY SAID TODAY THAT THEY GOTSOME FEEDBACK FROM THE FDASAYING THEY ARE NOT GOING TO BEABLE TO FILE FOR AS QUICKLY OFAN APPROVAL FOR A CANCER VACCINELIKE THEY HAD HOPED.ALIX: WHAT KINDS OF PROGRAMS ARETHEY CUTTING?>> THEY SAID THEY ARE CUTTINGFIVE PROGRAMS.THESE WERE NOT HIGH PRIORITIES.THEY ARE ALSO DELAYING SOME OFTHE DEVELOPMENT OF RARE DISEASES.THEY ARE FOCUSED ON 10 PRODUCTSTHEY ARE HOPING TO GET LAUNCHEDIN THE NEXT THREE YEARS.ROMAINE: THIS GETS BACK TOANOTHER ISSUE IF YOU ARE A DRUGDEVELOPMENT COMPANY AND REDUCINGR&D.WHAT ABOUT SOME OF THEIR PEERS?MODERNA WAS AT THE FOREFRONT OFTHIS ESPECIALLY REGARDINGTECHNOLOGY.OUR THEIR PEERS IN THE SAMEBOAT?>> PFIZER WAS THEIR MAINCOMPETITOR.PFIZER AND BIOTECH IN THE COVIDVACCINES.THEY ARE SEEING SIMILARSTRUGGLES.AS THE PANDEMIC HAS WANED, THEREVENUE FROM THE COVID VACCINESHAS DECLINED.ROMAINE: AND THEY HAVE NOT FOUNDA WAY TO TAKE THE TECHNOLOGY ANDAPPLY IT TO SOMEBODY ELSE--SOMETHING ELSE, RIGHT?>> PFIZER HAD SOME MRNATECHNOLOGY BUT THEY USEDDIFFERENT TECHNOLOGIES.ROMAINE: BIONTECH?>> THEY HAD SOME MRNA BUT NOTCOMPLETELY.MODERNA CALLS ITSELF A PLATFORMCOMPANY.MRNA WORK FOR ITS COVID VACCINEAND SHOULD WORK FOR OTHERS BUTYOU CAN ONLY DEVELOP SO MANYDRUGS AT ONE POINT ESPECIALLYWHEN YOUR REVENUE IS STARTING TODECLINE.ALIX: I REMEMBER WHEN STEPHANWOULD COME ON TALKING ABOUTVACCINES.THANK YOU. BIONTECH, IT IS STILL A $24BILLION COMPANY.ROMAINE: HE MADE A GOOD POINT ATTHE END ABOUT HOW MODERNA -- ITSIDENTITY AS A COMPANY WAS AROUNDBEING A PLATFORM FOR OTHERTHINGS.I DON’T KNOW IF THIS IS THE ENDBUT A SPEEDBUMP.ALIX: WE HAVE ASKED WE ARE AHALF HOUR FROM THE CLOSING.WE ARE TALKING ABOUT GOOGLE,OPENAI AND OTHER EXECS HEADINGTO THE WHITE HOUSE TO TALK ABOUTAI INFRASTRUCTURE.GOOGLE’S PRESIDENT SAID TODAY’SMEETING WAS CRUCIAL TO ENSUREU.S. LEADERSHIP IN AI.THIS IS "THE CLOSE" ON BLOOMBERGTELEVISION. ROMAINE: JUST ABOUT 3:30 P.M.HERE IN NEW YORK.I’M A VERY MANLY ROMAINEBOSTICK.ALIX: THIS WILL MAKE SENSE LATERON.THIS IS A SHOCKER, BUT TECH ISLEADING THE WAY. AI INDUSTRY LEADERS INCLUDINGSAM ALTMAN, JENSEN HUANG, METWITH SENIOR BIDEN ADMINISTRATIONOFFICIALS TO DISCUSS HOW TO FILLTHE MASSIVE INFRASTRUCTURE TOKEEP THE U.S. Michael Shepard, Bloomberg News AS THE LEADER INTHE AI ARMS RACE.MICHAEL SHEPPARD JOINS US NOW.WHAT WAS THE TAKE AWAY FROMTHESE MEETINGS?MICHAEL: WE ARE STILL WAITINGFOR MORE REPORTING ABOUT THEWHAT NEXT STEPS WILL BE AND WHATTHE RESULTS WILL BE BUT HEADINGINTO IT AND SOME OF THE EARLYREADOUTS THAT WE GOT SIGNAL THEIMPORTANCE OF THIS GET TOGETHER.JUST BY THE VERY NAMES WE HAVEJUST MENTIONED.JENSEN HUANG, GINA RAIMONDO.THAT IS A STAR-STUDDED CAST THATINDICATES THE STAKES FOR THEU.S. IN TERMS OF ITS ECONOMICSECURITY AND MAINTAINING ANEDGE.ALSO FOR THE COMPANIES AND THEIRINVESTMENTS IN THIS AREA ANDTHEIR PROSPECTS FOR GROWTH.THEY NEED INFRASTRUCTURE ANDDATA CENTERS BUILT AND THEYWANTED TO TALK ABOUT THE WAYS TOGET THAT DONE.ROMAINE: I KNOW THIS WAS MORE OFAN INFORMAL CONVERSE OR --CONVERSATION BUT HAS BEEN ANYSENSE THAT A MORE FORMALPROPOSAL COMING OUT OF THEGOVERNMENT, ANYTHING ON THETABLE PRIOR TO BIDEN LEAVING THEWHITE HOUSE IN JANUARY?MICHAEL: THE PRESIDENT DIDEARLIER THIS YEAR PUT OUT ANEXECUTIVE ORDER ESTABLISHING AWORKING GROUP ON AI.IT WAS A LITTLE MORE FOCUSED ONTHE REGULATORY ASPECTS OF IT.JUST AS IMPORTANT IS THEQUESTION OF WHAT THE GOVERNMENTWILL DO TO PROMOTE AND MAINTAINTHE U.S. EDGE IN THIS AREA.THE KEY WILL BE TO DEVELOP MOREPATHS OF GETTING ENERGY TO THESEDATA CENTERS THAT ARE BEINGBUILT IN THE INDUSTRY CANNOT GETENOUGH OF THIS DATA PROCESSINGCAPACITY TO SUPPORT NEWINITIATIVES LIKE THIS STRAWBERRYMODEL WE JUST SAW OPENAI TALKABOUT TODAY.ALIX: SO WHY WEREN’T THERE POWERPROVIDERS AT THIS MEETING?MICHAEL: THE ENERGY SECTOR WASREPRESENTED AT THE MEETING.WHAT IS INTERESTING IS IT MAYNOT BE SO MUCH THE POWERPROVIDERS BUT THE GRIDOPERATORS.IN HER STATEMENT, THE PRESIDENTOF GOOGLE NOTED NOT JUST U.S.POWER GENERATION BUT MODERNIZINGTHE GRID.IN THE SPACE COME ON THEAIRWAVES, AND I AND OUR COVERAGEWE HAVE NOTED PROBLEMS IN THISAREA, INCLUDING ACUTELY IN TEXASWHERE A NUMBER OF DATA CENTERSARE BEING BUILT.BUT POWER GENERATION ANDTRANSMISSION ARE BIG ISSUES FORTHESE COMPANIES.ALIX: MICHAEL SHEPARD JOININGUS.AT SOME POINT YOU WILL HAVE TOPUSH SHOVELS IN THE GROUND TOPUT A PIPE IN THE GROUND.ROMAINE: AS THEY FOCUS ON POWERAND TRANSMISSION ISSUES ANOTHERBIG ISSUE, JUST BIGOLD-FASHIONED NATIONAL SECURITY.A LOT OF DATA THAT NEEDS TO BEPROTECTED.AT LEAST THAT IS THE VIEW OFCHRIS SESTITO, COFOUNDER AND CEOOF HIDDEN LAYER, A STARTUP Chris Sestito, HiddenLayer THATOFFERS SAFETY SERVICES TO OTHERAI MODELS IN ONE OF THE FIRMSWITH THE BACKING FROMMICROSOFT’S MAIN VENTURE FUND.GREAT TO SEE YOU ONCE AGAIN.WE NOW KNOW EXACTLY IF THISTOPIC OF CYBERSECURITY CAME UP,BUT I WOULD BE SURPRISED IF ITDID NOT.CHRIS: CYBERSECURITY REMAINS THENUMBER ONE POINT OF FRICTION TODEPLOYING GENERATIVE AI.I ASSUME AND HOPE WE AREDISCUSSING IT AS WHAT OTHERREQUIREMENTS TO DEPLOYGENERATIVE AI SAFELY SOORGANIZATIONS CAN INTO NEW TODEPLOY IT AT THE EDGE. AI REMAINS THE MOST VULNERABLETECHNOLOGY.I WILL BE SPENDING TIME ONCAPITOL HILL TRYING TO CONVINCEEVERYONE TO BE AWARE OF THEREQUIREMENTS THAT NEED TO BETHERE.ROMAINE: YOU SAY YOU WILL BEMEETING WITH FOLKS ON CAPITOLHILL.HOW RECEPTIVE HAVE THEY BEEN TOTHIS MESSAGE, AND IF THEY HAVEBEEN RECEPTIVE, HOW FAR ALONG DOYOU THINK WE HAVE GOTTEN,WHETHER IT IS THE REGULATORY ORLEGISLATIVE PROCESS?CHRIS: IT REMAINS ONE OF THEBIPARTISAN TOPIC THAT EVERYONEIS EMBRACING IS EXTREMELYIMPORTANT IN THE UNDERSTAND FROMA GEOPOLITICAL PERSPECTIVE WENEED TO ADVANCE ARTIFICIALINTELLIGENCE.WE UNDERSTAND WE CAN BE IN AVULNERABLE POSITION.I THINK THAT IS VERY WELLRECEIVED ACROSS BOTH AISLES.IN TERMS OF TIMING, WE NEED TOGO FASTER.THAT IS TRUE AT A GLOBAL LEVEL.LOOKING AT MULTIPLE YEARS BEFOREWE ARE GOING TO SEE SOMESUBSTANTIAL REQUIREMENTS.THE EXECUTIVE ORDER IS STARTINGTO TAKE SHAPE WITH EXCELLENTSTEPS FORWARD LOOKING ATANTHROPIC AND OPENAI MODELSBEFORE THEY MOVE FORWARD WE NEEDTO HOLD ARTIFICIAL INTELLIGENCETO THE SAME STANDARDS WE DOOTHER BITS OF SOFTWARE.ALIX: IT IS NOT JUST THE AIPART, IT IS BUILDING THE DATACENTER AND THOSE CONNECTED TOTHE GRID VERSUS BEING THEIR OWNMANY POWER CENTERS.DOES THAT EXPOSE THE GREAT TOANOTHER LAYER OF CYBERSECURITYISSUES?CHRIS: YES ABSOLUTELY.THERE ARE AN ENORMOUS AMOUNT OFREQUIREMENTS OF ENERGY AND OTHERARCHITECTURE AND INFRASTRUCTURECONSUMPTION REQUIRED TRAINEES.IT ABSOLUTELY DOES.CYBERSECURITY WAS ALREADY INENORMOUS LIMIT IN TERMS OF OURNATION’S CONFESSIONAL CHAIR ANDTHEN IN TERMS EVERY FIREMAN’S,THAT HAS ONLY MULTIPLIED BY THEAMOUNT OF RESOURCES WE AREPUTTING INTO TRAINING THESEMODELS AND HOW MUCH WE ARE GOINGTO BE RELIANT ON THEM BOTH INTERMS OF GOVERNMENT AND LARGEENTERPRISE INSTITUTIONS.ALIX: IT IS BIPARTISAN, EVERYONEWILL BE BORED -- AND ON BOARDWITH IT.WHAT ARE THE HURDLES TOIMPLEMENTING THIS WHEN WE AREDEVELOPING AI?CHRIS: YOU HAVE ORGANIZATIONSLEADING THE CHARGE THAT AREINTERESTED IN RESPONSIBLE AI ANDCYBERSECURITY, AND THERE ARENATIONAL -- NATURAL REASONSBEHIND THAT.WHETHER IT IS THE COMPETITIVEEDGE.BUT IT DOES REPRESENT THINGS WEHAVE TO TAKE LESSONS LEARNEDFROM OTHER TECHNOLOGY WE HAVEDEPLOYED.THINGS LIKE WE NEED TOUNDERSTAND BASIC THINGS LIKE WHOIS INTERACTING WITH HER MODELS,CHAIN OF CUSTODY, WHO HAS HADACCESS TO MY MODELS.THOSE THINGS COST MONEY AND TAKERESOURCES.IT IS EXCITING TO BUILD MOREPOWERFUL AND BIGGER MODELS BUTWE NEED TO CONTINUE TO PUT THOSERESOURCES TOWARDS CYBERSECURITY.ULTIMATELY IF CYBERSECURITYVENDORS LIKE US ARE DOING OURJOB CORRECTLY IT ALLOWS US TOCONTINUE TO ADVANCE THEDEVELOPMENT OF AI AND THE USECASES ORGANIZATIONS ANDGOVERNMENT WANT TO DEPLOY.ROMAINE: WHAT DOES THAT FLOW OFMONEY LOOK LIKE RIGHT NOW?NOT NECESSARILY THE GOVERNMENT.WE HAVE TALKED A LOT ON THE SHOWABOUT SOME CORPORATIONS AREREEVALUATING THEIR AI SPEND.THIS IS PROBABLY MORE SPECIFICTO BUYING CHIPS AND DATACENTERS, BUT I AM SURE THIS HASAN EFFECT ON CYBERSECURITY TOO.HAVE YOU SEEN ANY PULLBACK ORREALLOCATION OF MONEY?CHRIS: WE CONTINUE TO SEE STEPSFORWARD.WHEN TIMES ARE GOOD OR BADPEOPLE ARE SPENDING ON CYBER ANDAI IS NO DIFFERENT.WE ARE SEEING GENERATIVE AISTILL BEING USED FOR STRONG USECASES.THINGS LIKE INTERNAL SEARCHES,CONTINUING TO DEVELOP CODE.THESE ARE THINGS ORGANIZATIONSARE LOOKING TO WORK WITH GROUPSLIKE US TO SECURE TODAY.I DON’T THINK IT IS ONE OF THEAREAS WE ARE PULLING BACK.ROMAINE: CHRIS SESTITO, CEO ANDCOFOUNDER OF HIDDEN LAYER,CYBERSECURITY COMPANY FOCUSED ONTHE AI SPACE.AFTER THE BREAK WE ARE GOING TOTAKE A LOOK AT SOME BIG MOVERSON THE DAY AND ONE THAT ISREALLY SPARKLING, SIGNETJEWELERS.KIND OF FITTING ON A DAY WHEREYOU’RE LOOKING AT OLD AT ARECORD HIGH.WE EXPLAIN WHY THEY ARE MOVINGHIGHER NEXT.THIS IS BLOOMBERG. Stock of the Hour ROMAINE: ALL THAT LITTERS IS NOTGOLD.SOMETIMES IT IS DIAMONDS.SIGNET RALLYING MORE THAN 12%,ITS LARGEST SINGLE DAYPERCENTAGE GAIN SINCE 2022 AFTERA BETTER THAN FEARED QUARTERLYREPORT.ABIGAIL DOOLITTLE JOINING USMORE TO TALK MORE ABOUT OURSTOCK OF THE HOUR.I HAD A QUICK GLANCE AT THIS.NUMBER OF UNITS OF ENGAGEMENTJEWELRY ROSE.IS THIS WHY WE ARE SEEING THIS?ABIGAIL: SO ROMANTIC.WE DON’T EVEN KNOW IT ISDIAMONDS.ROMAINE: DEAR GIRLFRIEND, PLEASETAKE MY ENGAGEMENT UNIT.ABIGAIL: WE DON’T KNOW HERE, BUTYES, SEEMS MORE PEOPLE AREGETTING MARRIED OUT OF THEPANDEMIC.THE STOCK WAS DOWN MORE THAN 40%FROM ITS 2015 PEAK.THEY MADE A BIG REBOUND OUT OFTHE PANDEMIC, BUT IT HAS BEENKIND OF CHOPPY.IN TERMS OF THE RECORDER HERE,THEY BEAT EARNINGS AND BEAT COMPSALES.BUT THE COMP SALES STILL DOWNFOR A NINTH STRAIGHT QUARTER.SEQUENTIALLY BETTER.IT IS ONE OF THOSE BETTER THANFEARED QUARTERS BECAUSE PEOPLEARE FIGHTING FOR LITTLE PIECES.WE DID REITERATE ANNUALGUIDANCE, SO THAT IS A POSITIVE,BUT WE ARE STILL LOOKING AT UP1% TO 2% AND WE HAVE THE STOCKHAVING ITS BEST DAY IN MORE THANTWO YEARS.SOME OF THIS HAS TO DO WITH 12%SHORT INTEREST.ALIX: I AM INTERESTED BECAUSEPRICES FOR THE JEWELRY ARE UP.GOLD AT A RECORD.I WAS LOOKING AT THE DIAMONDSTANDARD INDEX.IT IS HARD TO GET A BROAD-BASEDPRICE FOR DIAMONDS.ABIGAIL: FAKE DIAMONDS, LAB-MADEDIAMOND, MAY BE A CONSIDERABLEPERCENTAGE OF DIAMONDS AT THISPOINT.IT SEEMS AS THOUGH WHERE THEREIS LOVE, WE HAVE PEOPLE CHASINGTHEIR ENGAGEMENT UNITS.THE DIAMOND STANDARD INDEX ISDOWN.ACTUAL DIAMOND PRICES ARE DOWN.ALIX: MAYBE THAT IS HELPFULBECAUSE PEOPLE --ABIGAIL: IN THE PANDEMIC THEREWERE A LOT OF COUPLES WHO CAMETOGETHER, THEY COULD NOT GETMARRIED, AND NOW THERE IS ABOOM.THE CEO IS SAYING THE ENGAGEMENTBOOM IS GOING TO LAST.HERE IS SOMETHING INTERESTING.THEY HAVE A PROPRIETARY WAY OFTRACKING ENGAGEMENTS, 26 POINTSOF DIFFERENT WAYS OF DOING THIS,NOW 9% HIGHER.THAT IS WHY THEY ARE ABLE TO SAYTHAT THEIR ENGAGEMENT WILLLIKELY INCREASE.ROMAINE: THAT WAS MY NEXTQUESTION.IT IS ALWAYS LIKE, HOWSUSTAINABLE IS THIS?IS IT JUST A ONE-OFF WERE ALLTHIS PENT UP LOVE FOUND ITS WAYOUT?NOW THEY ARE SAYING MAYBE WE CANSEE SUSTAINABILITY IN THERESULTS.ABIGAIL: AT LEAST UNTIL THE ENDOF THE YEAR WHICH IS NOT VERYFAR OUT BUT AT LEAST IT ISSOMETHING FOR A COMPANY THAT HASBEEN POSTING NEGATIVE COMPS FORNINE QUARTERS IN A ROW.3.5 MONTHS.VALENTINE’S DAY MAYBE WILL HELP.ALIX: OR BABIES.WHAT IS THE BABY GIFT CALLEDAGAIN?ROMAINE: WHAT DID YOU DO WHENYOU HAD A BABY?YOU JUST SHOWERED IT WITHDIAMONDS AND GOLD?ALIX: WHAT IS IT CALLED?ROMAINE: I DON’T KNOW.ALIX: ANYWAY, APPRECIATE IT.SHARES HAVE BEEN PUMMELED SO FARTHIS YEAR.15 MINUTES AWAY FROM THE CLOSINGBELL.JAY WOODS, CHIEF GLOBALSTRATEGIST AT FREEDOM CAPITALMARKETS, WILL BE JOINING US.TAKING A LOOK AT WHERE WE ARE.S&P UP .8%.NASDAQ UP 1% AND THE DOW JONESUP .6%.THE BOND MARKET I WANT TO POINTOUT, THERE IS A LITTLE BIT OFSELLING AND COMMODITIES ARESEEING A NICE MOVE IN.THERE IS NO NARRATIVE STORY THATCONNECTS ALL OF THESE TOGETHERWITH GOLDMAN AT A RECORD HIGH.THIS IS BLOOMBERG. >> WHAT I WOULD POINT OUT ISOVER THE LAST 100 YEARS THEREHAVE BEEN MARKET LEADERS AND ITIS USUALLY A NARROW SET.WHAT CHANGES THE AI?IF YOU ARE LOOK AT THE EQUALWEIGHTED S&P IT IS GATHERINGMORE STRENGTH.SO WE ARE SEEING A BROADENING OFTHE RECENT RALLY.ROMAINE: KICKING US OFF TO THECLOSE ABOUT 15 MINUTES AGO.THERE IS INDEED SOME BROADENINGTO WHAT WE ARE SEEING TODAY.YOU LOOK AT THE BIGGEST POINTGAINERS ON THE DAY AND WHO ELSEIS IT GOING TO BE?NVIDIA, MICROSOFT, META,BROADCOM.ALIX: MICRON GOT THAT RARE SELLRATING FROM BNP PARIBAS, ANDMICRON AND NVIDIA ARE NOT ONEPLUS ONE.BUT IT WAS INTERESTING THAT SOMEOF THEM ARE TRADING HEAVY.TEXAS INSTRUMENTS WAS ALSOTRADING IN THE RED.ROMAINE: I WAS LOOKING AT THEPHILADELPHIA SEMICONDUCTOR INDEXAND IT WAS IN THE RED DESPITETHE FACT YOU HAVE THE NASDAQ UP1%.YOU HAVE ABOUT FIVE OR SIXSTOCKS HIGHER.THAT GIVES YOU MAY BE A SENSE OFWHERE INVESTORS’ HEADS ARE.WHAT THEY FLOCK BACK TO, A LOTOF PEOPLE Jay Woods, Freedom Capital Markets FOCUS ON THE TECHNICALLEVELS.WHETHER THIS REBOUND CAN SUSTAINITSELF.JAY WOODS ALWAYS TAKES A LOOK ATTHAT STUFF AND HE JOINS US NOW,CHIEF GLOBAL STRATEGIST ATFREEDOM CAPITAL MARKETS.I WANT TO START WITH TECH.LET’S TAKE THE CHIP SPACE.NVIDIA ONCE AGAIN TAKING THISMARKET OVER THE LAST FOUR DAYS.IS THAT ENOUGH?WHEN YOU LOOK AT WHERE THEMARKET WAS WHEN IT LOOKED LIKE AWE WERE JUST HEADING FORSOMETHING BAD AND THIS REBOUNDWE HAVE SEEN, ARE WE GOING TOGET ANY HELP ENERGY -- OTHERTHAN NVIDIA?JAY: WE ARE GETTING HELP.THE MARKET HAS BEEN BROADENINGOUT.GIVEN THE MARKET CAP WEIGHT ITWILL TAKE PEOPLE WITH IT AND WEHAVE SEEN THAT.THIS RALLY HAS BEEN NICE BUTTODAY BEFORE I JOINED YOU 10SECTORS WERE HIGHER.S&P 500, ABOUT 70% OF THOSESTOCKS ABOVE THE 200 DAY MOVINGAVERAGE.I THINK WHILE TECH GETS THEMICROSCOPE EVERY TIME, GIVEN THEPULLBACK WE SAW IN BROADCOM ANDNVIDIA, THESE REBOUNDS ARE NICE.NOW THE QUESTION IS CAN THEYSUSTAIN.WE HAD FOUR DOWN DAYS, FOUR UPDAYS.THE S&P IS A MAGNETIC TO WHEREWE HAVE BEEN DRAWN THE LASTTHREE OR FOUR WEEKS.ROMAINE: I WAS JUST LOOKING ATTHE MOVING AVERAGES.THIS WILL BE LIKELY NO -- WHAT SHERLOCK QUESTION OF THE DAY, BUTWHAT IS THE NEXT CATALYST FORTHE MARKET?JAY: THE FED.THAT IS ALL YOU’RE GOING TO TALKABOUT THE NEXT FEW DAYS.WE GOT MIXED INFLATIONARY DATAIN THE SENSE THAT IT WASPOSITIVE.WE SAW HEADLINE NUMBERS COMEDOWN BUT THE CORE CPI WAS MORETHAN EXPECTED.WE ARE NOT GOING TO GET A 50BASIS POINT CUT.WHAT WE SAW YESTERDAY WAS ASELLOFF AND WHERE DID WE HOLD?WE HELD AT LAST FRIDAY’S LOW.TELL ME PEOPLE ARE NOT LOOKINGAT THE CHARTS.AND WE GOT A REBOUND.DID NOT MAKE A NEW LOW OF THERECENT LOW.EVERY TIME DOWN IT IS A HIGHERLOW.CAN WE GET THE CATALYST TOBREAKOUT?HE WERE TALKING ABOUT THATBEFORE WE CAME ON AIR.IF WE GET IT WILL NOT BE THEDECISION, IT WILL BE THE PRESSCONFERENCE AND GUIDANCE FROM JAYPOWELL.THE MOST VOLATILITY OUTSIDE OF ACPI NUMBER COMES FROM THAT FOMCPRESS CONFERENCE.ALIX: FINANCIALS HAVE GOTTENHIT.TRADED AT ABOUT 50 DAYS SO THATHELD.HAVE WE HIT THE BOTTOM?JAY: IT IS THE SECOND-LEADINGSECTOR ONLY BEHIND UTILITIES OFCOURSE BECAUSE EVERYONE SAW THATCOMING.GOLDMAN, JP MORGAN, THEY TOOK ASTEP BACK.WE HAD SOME SPEAK OUT OF THEIRLEADERSHIP AND IMPURITY -- ANDIN PURE JAMIE DIMON FASHION,CONSERVATIVE.HE DID NOT GIVE US WHETHERANALYSIS THIS TIME SO THAT WASNICE.BUT HE SAID LOWERING INTERESTRATES COULD HURT OVER THE SHORTTERM.BUT THERE ARE A LOT OF POSITIVESWITH A SLIGHT DRAWDOWN ININTEREST RATES.WE ARE SEEING MORTGAGE RATESFALL SO YOU ARE GOING TO SEEMORTGAGE ACTIVITY PICK UP.ONCE WE GET THROUGH THE ELECTIONEXPECT M&A ACTIVITY TO PICK UPREGARDLESS OF OUTCOME.REPUBLICAN PROBABLY A LITTLEMORE THAN DEMOCRATIC GOOD SOTHERE ARE CATALYSTS FOR THESECTOR TO CONTINUE TO DO WELL.MY FUN FACT IS 25 YEARS OF THEXLS.IT HAS BEEN UP 15 YEARS, DOWN10.IT HAS BEEN UP AN AVERAGE OF21%.WHAT WE HAVE SEEN OUR NICEPULLBACKS, NOT NEW LOWS.ALIX: YOU KNOW WHAT LOOKSTERRIBLE?ENERGY STOCKS.S&P ENERGY SECTOR, A STRAIGHTLINE BELOW THE 200 DAY MOVINGAVERAGE.JAY: IT IS GETTING A LITTLE INTOTHAT OVERSOLD TERRITORY.ENERGY IS ONE SECTOR IT SEEMS TOBE ALL OR NOTHING.WHEN IT GOES IT GOES WELL.BUT EXXON MOBIL AND CHEVRON DONOT LOOK GOOD ON THE CHARTS.I WOULD TAKE EXXON OVER CHEVRON.EITHER ONE I WOULD AVOID RIGHTNOW.BARRING ANY GEOPOLITICAL EVENTS.ROMAINE: WHAT IS OUT THERE OTHERTHAN NVIDIA?LET’S TALK INDIVIDUAL NAMES.THERE HAS BEEN A LOT OF HYPEAROUND SECOND-TIER TECHCOMPANIES.CISCO RALLIED.JAY: WE JOKED ABOUT THAT LASTTIME.ROMAINE: AND DELL.JAY: DELL IS A STOCK THAT WAS UP150%, THEN IT RETRACED OVER 50%.THE STOCK IS STILL HAVING AGREAT YEAR BUT WHAT WE HAVE SEENIS THE BIG NEWEST ADDITION INTOTHE S&P 500.SO CONGRATULATIONS, YOU AREBACK.HE JUST BROKE ABOVE HIS 200 DAYMOVING AVERAGE.THE AI STORY IN DELL IS STILL INAI STORY THAT IS GROWING.THEY ARE NOT JUST A ONE TRICKPONY. I THINK MICHAEL DELL, KNOWINGHIS REPUTATION, THIS IS NOT AONE AND DONE.I THINK IT GOT OVERDONE ON THEDOWNSIDE AND IF IT STAYS ABOVE110, A KEY LEVEL IT WASWATCHING, I THINK YOU WANT TO BELONG THE NAME.WILL IT REBOUND TO NEW HIGHS?I AM NOT SURE BUT THAT WOULD BEA HECKUVA RUN IF IT GOT HALFWAYTHERE.ROMAINE: REAL QUICKLY, PALANTIR,DO YOU LIKE THAT?JAY: I LIKE IT.IT JUST WENT IN THE S&P 500 ANDA LOT OF TIMES YOU SEE STOCKSGET A LITTLE EUPHORIC.I THINK IT WILL PROBABLY PAUSEHERE.52 WEEK HIGHS.ANY PULLBACK UNDER 34 ISPROBABLY A GOOD ENTRY. IT IS EARLY INNINGS. IF I CAN GIVE DAN A SHOUT OUT IWILL.ROMAINE: HAVE YOU EVER SEEN HISCLOSET?JAY: I HAVE NOT SEEN THE CLOSET.ROMAINE: IT HASN’T RUBBED OFF ONYOU.JAY: NO.AND IF IT DOES --ALIX: WE WILL LET YOU KNOW.JAY: THERE IS ONLY ONE DAN IVES,I CANNOT PULL THAT OFF.ROMAINE: THERE IS ONLY ONE JAYWOODS, JOINING US TODAY TO HELPCOUNTDOWN TO THE CLOSING BELLS.VSTOXX OFF FAR SESSION HIGHSWITH DOW UP .5%.THE RUSSELL IS YOUR OUTPERFORMERON THE DAY.IF ULBRICH DOWN STARTS RIGHT NOW-- A FULL BREAKDOWN STARTS RIGHTNOW.>> BLOOMBERG’S Closing Bell COMPREHENSIVECROSS-PLATFORM COVERAGE OF THEU.S. MARKET CLOSE STARTS RIGHTNOW.ROMAINE: AND RIGHT NOW WE ARETWO MINUTES AWAY FROM THE END OFTHE TRADING DAY.ROMAINE BOSTICK ALONGSIDE ALIXSTEEL TAKING YOU TO THE CLOSINGBELL.OUR GLOBAL SIMULCAST STARTS WITHSCARLET FU, CAROL MASSAR IN THERADIO BOOTH ALONGSIDE TIMSTENOVEC AS WE WELCOME OURAUDIENCES ACROSS ALL OF OURBLOOMBERG THAT FORMS, INCLUDINGYOUTUBE.A FOURTH STRAIGHT DAY OF GAINS.CAROL: I THOUGHT IT WASINTERESTING, I HEARD YOU JUSTGETTING INTO THIS.THE SMALL CAPS OUTPERFORMING.INTERESTING TO SEE INVESTORSSPREADING OUT AND PUSHING THATINDEX HIGHER THAN SOME OF YOURLARGER CAP INDICES.TIM: NEXT WEEK WE GET THEFEDERAL RESERVE PRESS CONFERENCEAND DECISION.25 BASIS POINTS AFTER TODAY’SDATA?IS THAT HOW YOU ARE SEEING THIS?SCARLET: THAT IS WHAT IS BAKEDIN AT THE MOMENT OF THE A LOT OFPEOPLE ARE EXPECTING A 100 BASISPOINT CUT OVERALL FOR THIS YEARWHICH A LOT OF PEOPLE SAY STILLSTRIKES THEM AS TO DOVISH.BUT THIS MARKET HAS BEEN TODOVISH ALL ALONG.THE FED HAS NOT BEGUN DOINGANYTHING YET ALIX: NVIDIA HASTHE POWER OF A CENTRAL BANKER.WE HAVE BEEN TALKING ABOUT ITALL OUR.YOU GET THE FORMAL AND THEN THECATCH-UP.ROMAINE: IN A GUEST TO THEQUESTION, WE TALK ABOUT WHAT THENEXT CATALYSTS ARE AND I’M GLADYOU BRING THAT UP.MAY BE THE CATALYST IS NOT ASMUCH THE FED, GIVEN HOW MUCH ISPRICED IN.HE WILL GO BACK TO CORPORATEFUNDAMENTALS IN THE ONEFUNDAMENTAL THAT MATTERS, CHIPSAND AI.SCARLET: MAYBE THE RUSSELL, WHATIS THAT DIFFERENT THAN THE FOMOBUYING WHEN IT COMES TO NVIDIA?CAROL: NOVEMBER 21 IS NVIDIA’SNEXT EARNINGS.ROMAINE: A SLIGHT UPTICK INYIELDS ON THIS DAY CAROL MASSAR,SEPTEMBER 12. THE DOLLAR DOWN IN THE VIX DOWNBUT STOCKS GREEN ACROSS THESCREEN.THE DOW UP ABOUT .6%.S&P HIGHER .8%, RIGHT BACK TOTHE 5600 LEVEL, A LEVEL THATCOULD BE A BIT OF RESISTANCE FORTHE MARKET NASDAQ UP ABOUT 1%.THERE IS YOUR OUTPERFORMERBELIEVE IT OR NOT, THE RUSSELL2000 ADDING 26 POINTS.CAROL: IT IS THURSDAY, SEPTEMBER12.TOMORROW BY THE WAY IS FRIDAYTHE 13TH.BIG CAPS, S&P 500.372 NAMES GAINING GROUND.SAW FAIRLY BROAD-BASED BUYINGTODAY, 130 TWO THE DOWNSIDE.SCARLET: SPINACH PIE, PESTO PIEALL AROUND FOR EVERYONE.ALL 11 SECTORS IN THE GREEN LEDBY COMMUNICATIONS SERVICES WHICHIS REALLY COMPANIES LIKE WARNERBROS. DISCOVERY AND CHARTERCOMMUNICATIONS.ENERGY STOCKS RECOVERING A BITBECAUSE THEY HAVE BEEN LAGGARDS.TODAY IN TERMS OF THE WEAK LINKSYOU HAVE REIT’S IN FINANCIALSTRAILING IN THAT THEY ARE ONLYUP BY .1%.CAROL: LET’S GET TO INDIVIDUALGAINERS.YOU SET ME UP SO WELL.WARNER BROS. DISCOVERY, NUMBERONE GAINER IN THE S&P 500, AGAIN OF 10.4%.A TOP NAME IN THE S&P 500,NASDAQ 100.THE CEO SPEAKING TODAY SAYINGTHEY SIGNED A NEW MULTIYEARDISTRIBUTION DEAL FOR ALL OF ITSCABLE CHANNELS.THE COMPANY SAID THAT WITHCHARTER COMMUNICATIONS RENEWINGEARLY, WARNER BROS. ALSO SAYINGCHARTER HANG HIGHER PRICES FORCHANNELS.YOU CAN UNDERSTAND WHY INVESTORSARE INTERESTED IN THAT ONE.ANOTHER ONE TOP IN THE S&P 500,KROGER.THE GROCERY STORE.WE KNOW WHO THEY ARE.THEY TALKED ABOUT SECOND-QUARTERGROSS MARGIN EXPANSION.THAT IMPRESSED WALL STREET.THEY ALSO LIFTED FULL-YEARGUIDANCE.THIS IS THE COMPANY SAYS IT ISBENEFITING FROM CONSUMERSPRIORITIZING SPENDING ONGROCERIES AND OTHER ESSENTIALS.THEY ARE STILL DEFENDING THEIRPROPOSED ACQUISITION AND DEALFOR ALBERTSON’S IN COURT.ONE MORE FOR YOU.BROADCOM, K TOP GAINER IN THENASDAQ 100.BROADCOM AND NVIDIA REMAIN TOPPICKS IN THE SEMI SECTOR ANDTHEY HAVE OUTPERFORMED RATINGS.EARLIER HE TALKED ABOUT NVIDIAAND ITS HELP IN PUSHING THEEQUITY MARKETS HIGHER.TIM: YOU HAVE THE EASY JOB TODAYWITH FINDING THE STOCKS THATMOVED HIGHER.MICRON LOWER TODAY.THE COMPANY EXTENDING THATRECENT SELLOFF AFTER BNP PARIBASWARNED THE STOCK WOULD CONTINUETO PERFORM -- UNDERPERFORM.DOWNGRADED THE STOCK BY TWONOTCHES, BECOMING THE ONLYANALYST TO RECOMMEND SELLING THESHARES.SHARES FALLING BY 3.8%.MODERNA, I THINK I SAW GERRYSMITH EARLIER TALKING ABOUTTHIS.ROMAINE: THANK YOU FOR WATCHING.TIM: YOU LISTEN TO OUR SHOW,RIGHT?ROMAINE: ABSOLUTELY.TIM: DO YOU KNOW WE TALKED TODEREK JETER EARLIER?ALIX: SCARLET DEFINITELY SAW.CAROL: SUPER NICE GUY.SCARLET: DID YOU CALL HIM THECAPTAIN?CAROL: WE DID NOT.SHOULD WE HAVE?SCARLET: THIS IS WHY YOU NEEDME.TIM: LET ME GET BACK TO MODERNA.THEY AIM TO REDUCE RESEARCH ANDDEVELOPMENT BUDGET.THEY ARE LOOKING TO FIND A PATHTO PROFITABILITY FOLLOWINGDISAPPOINTING VACCINE SALES.THEY ARE DISCONTINUING FIVEVACCINES IN THE PIPELINE. THEY SAID THIS IN A STATEMENTEARLIER TODAY.LOOKING FOR A SECOND DAY IN AROW AT TRUMP MEDIA ANDTECHNOLOGY DOWN 3.6%, CONTINUINGITS POSTDEBATE SLIDE.THEY HIT AN ALL-TIME LOW BACK INMARCH.THEY OPERATE TRUTH SOCIAL,DONALD TRUMP IS ITS TOPSHAREHOLDER, DOWN MORE THAN 75%.SEPTEMBER 19 IS WHEN THE LOCKUPPERIOD EXPIRES.I WANT TO LOOK AT WHAT HAPPENEDSHARES OF WELLS FARGO, FINISHINGTHE DAY DOWN 4%.THE BANK REACHED A DEALREQUIRING THE LENDER TO BEEF UPSYSTEMS FOR DETECTING MONEYLAUNDERING AND COMPLYING WITHINTERNATIONAL SANCTIONSHAPPENING A LITTLE LATER IN THESESSION TODAY.ALIX: TAKE A LOOK AT THE BONDMARKET.SELLING ACROSS THE BOARD.YOU HAVE YIELDS UP ONE BASISPOINT THE FRONT AND THE BACK UPABOUT THREE.A 30 YEAR OPTION.IT MANAGED.IT WAS OK.IT WILL BE ABOUT POSITIONING INTHE YIELD CURVE WHICH IS STILLDIS-INVERTED BY ABOUT RE-BASISPOINTS.ROMAINE: WE ARE WAITING EARNINGSFROM ADOBE AS WELL AS OUR AGE.WE SHOULD POINT OUT FIRST ORACLENOW SPEAKING AT A CONFERENCEPROVIDING GUIDANCE ON FORWARDAND SHARES POPPING 5% INAFTER-HOURS TRADING.THEY SEE AT LEAST 66 BILLIONDOLLAR REVENUE IN FISCAL 2026AND AT LEAST 100 $4 BILLION INREVENUE INTO 2029.WE WILL SEE IF THE LONG-TERMFORECASTS HERE BUT OVERALLLOOKING AT A 20% WROTE ONAVERAGE ON THAT SIDE.SCARLET: ADOBE COMING OUT WITHRESULTS FOR THIRD QUARTERREVENUE BEATING THE AVERAGEANALYST ESTIMATE.EPS WAS FOR 65 THE PAST QUARTERVERSUS 453 WHICH WAS ANTICIPATEDBY WALL STREET ANALYSTS.FOR THE FOURTH QUARTER REVENUE,OVERALL MISSING THE AVERAGEANALYST ESTIMATE.ANALYSTS WERE LOOKING FOR $5.6BILLION.DIGITAL MEDIA REVENUE, THATRANGES BELOW WHAT ANALYSTS WERELOOKING FOR.I POINT THAT OUT BECAUSEEVERYONE IS REALLY FOCUSED ONTHE CREATIVE ANNUAL RECURRINGREVENUE BUSINESS OPPORTUNITIESWITHIN DIGITAL MEDIA.THAT IS GOING TO BE SOMETHINGTHAT PEOPLE ARE GOING TO LOOKOUT FOR AND LISTEN FOR ON THEEARNINGS CALL.CAROL: VERY MUCH SO.LOOKING FOR ON THE EARNINGS CALLSPECIFICALLY WHAT IS GOING ON INTERMS OF CUSTOMER BUYING HABITS.THAT IS SOMETHING WE ARE GOINGTO BE LOOKING FOR INSIGHT FROMMANAGEMENT.KEEP IN MIND THE STOCK IS DOWNABOUT 3%.IT WILL BE DOWN POTENTIALLY ALOT MORE TOMORROW WHEN REGULARTRADING BEGINS.IF YOU LOOK AT WHAT IS HAPPENINGIN THE AFTER-HOURS IT IS DOWNABOUT US AND A QUARTER PERCENT.TIM: DO MEMBER YESTERDAY WHENCAROL TALKED ABOUT HER LOVE OFHAPPY MALES?CAROL: OUCH, THAT HURT.TIM: WHEN SHE WALKED INTO THEOFFICE THIS MORNING SHE SAID,DID YOU SEE THE MCDONALD’S NEWS?NO, IT WAS NOT A SPECIAL HAPPYMEAL FOR GROWN-UPS.CAROL: THOSE FRENCH FRIES AREINCREDIBLE.TIM: GOOD NEWS FOR YOU, THESUMMER OF DEALS AT MCDONALD’S ISTURNING INTO A FALL AFFAIRBECAUSE THEY WILL EXTEND THATFIVE DOLLAR MEAL DEAL THATDEBUTED IN JUNE, IT WILL GO INTODECEMBER IN MOST MARKETS.CAROL: WHAT IS IMPORTANT ABOUTTHIS IS A REALIZE SOME OF THESEFAST FOOD CHAINS ARE FINDINGCOMPETITION IN A BIG WAY EVENFOR THE BUDGET CONSCIOUSCONSUMER.AND SO THEY ARE FINDING THEYNEED TO KEEP THESE PRICES LOWER.THIS SPEAKS TO WHEN WE TRY TOLOOK FOR DIFFERENT METRICS,GOING ON WITH DIFFERENTCONSUMERS, YOU SHOW IT IS ALITTLE TOUGH.SCARLET: THOSE FRIES LOOK GOOD,AND BY THE WAY I HAD MCDONALD’SFOR DINNER YESTERDAY.I HAD A 10 PIECE CHICKENMCNUGGET AND FRIES.THIS WAS BEFORE THE YANKEESGAME, BECAUSE I DIDN’T WANT TOPAY FOR THE $15 HOT DOG.WHERE I SAW PAUL SWEENEY BY THEWAY.CAROL: MIGHT ROMAINE HAVE A CASEOF MANFLU?ROMAINE: WHAT IS THIS?CAROL: YOU TELL ME.ROMAINE: IS IT DIFFERENT FROMWOMAN FLU?TIM: I GET IT ALL THE TIME.YOU WAKE UP NOT FEELING WELL.YOU COMPLAIN A LOT TO YOUR WIFE.CAROL: GUYS GET SICK AND THEYARE LIKE, I AM DYING. SCARLET: THEY NEED THEIR MOMS.ROMAINE: I DON’T UNDERSTAND.ARE YOU MINIMIZING OUR PAIN?IF I PRICK, DO I NOT BLEED?ALIX: YOU DO, BUT WE DO AND THENWE STILL GO TO WORK, WE TAKECARE OF THE KIDS.CAROL: THE URBAN DICTIONARY,MANFLU IS MORE PAINFUL THANCHILDBIRTH.THIS MAKES ME CRAZY.TIM: YOU SAID IT, THANK YOU.CAROL: RH JUST OUT.THERE’S NO EASY SEGUE.A LITTLE BETTER THAN THEESTIMATE.SO, I HJAVE A CONNECTION. --CAROL: A MAN WHO HAS FLU ISLIKE, I HAVE TO BE ON AN RHCOUCH, BECAUSE I AM REALLY SICK.ROMAINE: I STOPPED LISTENINGABOUT 10 MINUTES AGO.CAROL: THAT’S A WRAP.YOU GUYS ROCK.ALIX, I KNOW YOU ARE HEADINGOUT.SCARLET IN ROMAINE CONTINUE ONTV.ROMAINE: YOU MIGHT HAVE TO DOTHE REST OF THE SHOW BYYOURSELF.CAROL: WE WILL SEE YOU GUYSTOMORROW.ROMAINE: STICK WITH US.A LOT MORE COVERAGE COMING UP ONTHE BIG PROGRAM.RESULTS OUT OF ADOBE NOT LOOKINGGOOD.ORACLE LOOKING GOOD.RESULTS OUT OF RH LOOKINGPHENOMENAL.WE START WITH ADOBE AFTER WECOME BACK WITH MICHAEL TURRIN.STICK WITH US.THIS IS BLOOMBERG. SCARLET: WELCOME BACK TO THECLOSE.ROMAINE: YET ANOTHER WILD DAY ONWALL STREET ONCE AGAIN.IF YOU ARE A BOLT, YOU WEREPRETTY HAPPY.AT ONE POINT IN THE DAY ITLOOKED LIKE ONE OF THOSE DAYSWHERE WE COULD SEE THE MARKETFALL BUT ONCE AGAIN THE DIPBUYERS CAME IN FAST AND FURIOUSAND YOU SAW THAT HERE ON THEBOARD. NOW MORE THAN 3.5% OVER THE PASTFOUR DAYS, THE STRONGESTFOUR-DAY STRETCH IN THE INDEXFOR AT LEAST A MONTH.MODEST MOVES IN YIELDS.WHEN YOU LOOK UNDER THE HOOD OFWHAT CARRIED THE MARKET, ONCEAGAIN IT WAS TECH.OIL STOCKS GETTING A STRONG BIDCRUDE OIL UP A SECOND STRAIGHTDAY.BUT I AM NOT SURE WHAT THEREADING IS WHEN YOU TAKE A LOOKAT GOLD.GOLD HITTING A RECORD HIGH.THE INDEX OF GOLD MINERS BUYINGINTO THAT TODAY UP 5%.SCARLET: THERE IS A CURIOUS MOVEWHEN YOU TRY TO READ ACROSS WHATTHAT MEANS ABOUT RISK APPETITE,OR THE APPETITE TO TAKE ON EXTRARISK.LET’S LOOK AT INDIVIDUAL MOVERSON THE DAY.MODERNA FELL AS MUCH AS 19% BUTCLOSED OFF OF ITS LOWS.THEY PLAN TO CUT ITS R&D BUDGETBY ABOUT 20% OVER THE NEXT THREEYEARS FOLLOWING DISAPPOINTINGVACCINE SALES.PETCO, HEALTH AND WELLNESS, THETICKER MY FAVORITE ONE, WOOF,CLOSING AT A ONE-YEAR HIGH.THIS IS AFTER THE PET SUPPLYRETAILER GAVE A THIRD QUARTEREBITA FORECAST THAT TOPPEDANALYST ESTIMATES.THEY ARE NOW SAYING THE OUTLOOKIT PROVIDED SIGNALS ITSTURNAROUND EFFORT IS STARTING TOTAKE HOLD.WARNER BROS. DISCOVERY, THE BIGGAINER AMONG COMMUNICATIONS ANDMEDIA COMPANIES, UP 10% ON THEDAY, THE BEST ONE-DAY RALLYSINCE NOVEMBER OF 2023 AFTERANNOUNCING A MULTIYEARDISTRIBUTION AGREEMENT WITHCHARTER COMMUNICATIONS.THESE ARE A LOT OF OLD ECONOMYSTOCKS.SO LET’S GO FROM OLD ECONOMY TONEW ECONOMY BECAUSE OUR TOPSTORY IS HOW EXECUTIVES FROMOPENAI, NVIDIA, AND OTHER TECHCOMPANIES PAID A VISIT TO THEWHITE HOUSE TODAY.THEIR MISSION IS TO HOLD TALKSTO BOOST COOPERATION BETWEEN THEPRIVATE AND PUBLIC SECTORS INDEVELOPING AI DATA CENTERSAROUND THE COUNTRY.SEPARATELY WE WILL SPEAK WITHTHE CEO OF SALESFORCE AI, ASWELL AS TAKING A DEEP DIVE INTOADOBE’S EARNINGS TO GET ATEMPERATURE CHECK ON DEMAND FORTHEIR AI TOOLS PRETTY --ROMAINE: 11% GROWTH TO $5.4BILLION.PRETTY CONSISTENT WITH WHAT WEHAVE SEEN OVER THE LAST TWOQUARTERS FOR THIS COMPANY.CREATIVE REVENUE UP ABOUT 9.6%.THE FORECAST GOING FORWARD THECOMPANY THING Michael Turrin, Wells Fargo REVENUE FOR THEFOURTH QUARTER, 5.5 TO $5.55BILLION.OVERALL IN LINE BUT YOU CAN SEEWHAT SHARES ARE DOING.INVESTORS WANTING MORE.MICHAEL TURRIN IS SENIOR ANALYSTAT WELLS FARGO AND HE JOINS USNOW.MY FIRST QUESTION FOR YOU ISEXACTLY WHAT INVESTORS WANT.WHAT MORE DO THEY WANT HERE?MICHAEL: BETTER GUIDANCE IN Q4.Q3 INS RECORD.WE THINK A BIT AT HER THANEXPECTED.Q4 GUIDANCE COMES UP BY LESSTHAN THE Q2 UPSIDE WHICH WILLLEAD TO QUESTIONS AROUND Q4.WE WILL BE LISTENING INTENTLY ONTHE CALL TO HEAR IF THIS ISCONSERVATIVISM, IF THERE ISANYTHING TO CONSIDER MACRO OROTHERWISE ON THE Q4 GUIDANCE.ROMAINE: WHAT IS THE AI STORY,OR THE AI READ YOU GOT OUT OFTHE NEWS RELEASE?MICHAEL: THEY HAVE BEEN TALKINGOPTIMISTICALLY ABOUT WHAT THEYARE DOING WITH GENERATIVE AI ANDADOBES PRODUCT SET WHEN AI ISCALLED FIREFLY.WE THINK IT IS ONE OF A FEWTANGIBLE USE CASES OF TECHNOLOGYCURRENTLY.THIS IS PRODUCTIVITY GAININGWHEN YOU TALK TO USERS.ADOBE HAS BEEN SPEAKING TOINVESTORS.THE POINT IN WHICH WE SEE --WE ARE SEEING SOME EVIDENCE OFTHAT.INVESTORS EXPECT THIS TOCONTINUE INTO Q4 AND NEXT YEAR.THAT IS WHERE WE ARE GOING TOGET SOME QUESTIONS.ADOBE ALSO HAS THEIR BIG DIGITALMEDIA FOCUSED CONFERENCE SET TOTAKE PLACE IN MIAMI IN OCTOBER.ANOTHER OPPORTUNITY FOR THECOMPANY TO HELP THREAD THENEEDLE IN THEIR PRODUCT AS TIEDTO AI.SCARLET: LET’S TALK ABOUT THESTORY WITH ADOBE OVERALL WHAT ISITS COMPETITIVE POSITION?IS IT STILL THE DEFAULT SOFTWAREPROVIDER, OR IS ITS POSITIONTHREATENED IN ANY WAY?MICHAEL: UNCERTAINTY HAS COME UPAND INVESTORS DO NOT LIKEUNCERTAINTY SO ADOBE STOCK HASBEEN MORE VOLATILE THAN USUAL.IT IS TIED TO A FEW THINGS THECOMPANY HAS BEEN HIGHLIGHTING.THEY ARE THE ONLY PLATFORM WITHAN ENTERPRISE THAT CAN HANDLETHE PROCESS FROM DESIGN TOPUBLICATION.METRICS AND MONITORINGEVERYTHING REQUIRED AFTERWARD ASWELL.WE THINK IS THE END TO END TOOLCHAIN IS QUITE STRONG, THERE AREA LOT OF COMPETITIVECONVERSATIONS AROUND THE DESIGNCAPABILITIES IN GENERAL.THAT IS WHERE WE HAVE SEENOPENAI, OTHER TOOLS COME INTOTHE MARKET WITH I THINK SOMEATTENTION GRABBING HEADLINES.BUT OUR SINS IS IT WILL EVOLVEWHERE A LOT OF IMAGES FLOWTHROUGH A DOBBY’S PRODUCT SET.THE COMPANY IS ALSO TAKINGADVANTAGE OF TRUST.TRUST IS A SIGNIFICANT CONCERNACROSS LARGE BUSINESSES WHO ARELEVERAGING THESE TECHNOLOGIES.ADOBE PROVIDES FULL ATTRIBUTIONOF WHERE ANY IMAGE USING AITOOLS COMES FROM.YOU HAVE BASICALLY A FULLLINEAGE OF WHERE THE IMAGE COMESFROM AND THIS LEADS TO LESSLEGAL RISKS DOWN THE ROAD.WE HAVE SEEN EVIDENCE OF SOME OFTHE OTHER TOOLS DO NOT HAVETHEIR HANDS AROUND THAT YET.SCARLET: DOES ADELE BE NEED TOMAKE ANY ACQUISITIONS?THEY ARE UNDER A LOT OF SCRUTINYAS OR ANY COMPANY ENGAGED IN THEAI SPACE RIGHT NOW.MICHAEL: AT THIS POINT ITDOESN’T LOOK LIKE IT.ADOBE IS ALWAYS LOOKING FOR ANEW FORM ACTOR IN THE OFTEN COMEFROM UNEXPECTED PLACES.IT BECAME CRITICAL TO DESIGN ANDEVENTUALLY BECAME MONETIZABLE.GENERATIVE AI CREATES A NEW DUCTCYCLE FOR THE COMPANY AND A LOTOF THE INNOVATION WE HAVE SEENHAS COME INTERNALLY ANDORGANICALLY FROM THE BUSINESS.THEY HAVE DONE AN AGGRESSIVE JOBBOTH TO NEW PRODUCTS AND KEEPINGMARGINS ON A BEST IN CLASS 45%LEVEL.SO WE DON’T THINK THEY NEED TODO ANYTHING TOO OVERSTATED.WE THINK THEY JUST NEED TOSHOWCASE LIKE THEY DID THISQUARTER.CONTINUE TRACTION AND GIVE USMORE BREADCRUMBS.INVESTORS ARE ALSO LOOKING ATADOBE AND OTHER COMPANIES ANDLOOKING FOR METRICS TIED TO AICONTRIBUTIONS AND NEWSUBSCRIBERS.IF THE COMPANY IS ABLE TO GIVEUS NEW METRICS, THAT IS ANOTHERTHING TO LOOK FOR THAT CANRE-INSTILL SOME CONFIDENCE.SCARLET: GOOD STUFF.MICHAEL TURRIN IS SENIOR ANALYSTAT WELLS FARGO.ADOBE SHARES LOWER AFTER HOURSBY ABOUT 6%.COMING UP, WE ARE COUNTING DOWNTO THE FED DECISION NEXTWEEKEND.ITS IMPACT ON THE MARKET RIGHTNOW WITH JENNIFER JOHNSTON.THIS IS THE CLOSE. SCARLET: IT IS TIME FOR OUR Jennifer Johnston, Franklin Templeton MUNIMOMENT.WE ARE WESTON --WHAT DOES THAT MEAN FOR THEMUNICIPAL BOND MARKET AT LARGE?JENNIFER JOHNSTON IS DIRECTOR OFRESEARCH AT FRANKLIN TEMPLETONAND JOINS US NOW.GOOD TO SPEAK WITH YOU.AFTER MONTHS OF ANTICIPATION,YOU COULD EVEN SAY YEARS, THEFED IS EXPECTED TO FINALLY BEGINITS RATE CUTTING CYCLE IN THENEXT WEEK.HOW HAS THIS LONG BUILDUP TOTHIS MOMENT EFFECTIVELY SUPPLYAND DEMAND DYNAMICS OF THE MUNIMARKET?JENNIFER: IT DOES SEEM LIKE ITHAS BEEN A LONG TIME TRYING TOGET TO THIS MOMENT IN TIME.WE HAVE EVEN HAD DATA COMING INTHIS WEEK THAT CONTINUES TOSUPPORT RATE CUTS STARTING NEXTWEEK.IT WILL BE INTERESTING TO SEEWHAT THE IMPACT IS.FROM THE TECHNICAL SIDE OF THEMUNICIPAL MARKET, WE HAVE SEENEXTREMELY STRONG SUPPLY OVER THELAST SEVERAL MONTHS.A LOT OF THIS IS DRIVEN BY THEELECTION AND THE DESIRE TO GETBONDS ISSUED INTO THE MARKETAHEAD OF THE ELECTION.WE HAVE ALSO SEEN FUND -- FLOWSSTART TO TURN AROUND.THE MONEY COMING INTO THE MARKETIS GOING INTO THE SMA PRODUCTLINE AND NOT AS MUCH INTO THEFUND FLOW.SO WHAT WE ARE LOOKING AT ISWHAT IS GOING TO GET THAT MONEYINTO THE FUNDS.AND WE HAVE HAD AN INVERTEDYIELD CURVE FOR QUITE A WHILENOW AND WE HAVE SEEN THAT SLOWLYSTART TO STEEPEN AND WE THINK ASTHE RATE CYCLE -- THIS NEW RATECYCLE STARTS WE WILL CONTINUE TOSEE THAT.WE THINK IT IS A GREAT TIME FORPEOPLE WHO HAVE BEEN ON THESIDELINE INVESTED IN CASH TO GETOUT OF CASH AND GET BETTERINVESTED AND THE MUNI MARKET ISA GREAT PLACE TO DO THAT.SCARLET: GOING BACK TO THESUPPLY QUESTION FOR A MOMENT, TOWHAT EXTENT ARE SOMEMUNICIPALITIES HOLDING OFF ONISSUING DEBT UNTIL AFTER THECUTTING CYCLE BEGINS IN EARNEST?I KNOW THEY WANT TO GET IN THEREBEFORE THE ELECTION, BUT I AMSURE SOME ARE WAITING IF THEYCAN.JENNIFER: WE ARE GETTING KIND OFMIXED RESULTS ON THAT.THE PEOPLE WHO CAN ARE GOING TOTRY AND FRONT RUN THEELECTION.THESE ARE ISSUERS WHO PROBABLYHAVE MORE FREQUENT MARKET ACCESSCYCLE.THOSE THAT COME IN EVERY TWO ORFIVE YEARS, IT WILL BE MOREDRIVEN BY THEIR CAPITAL PLANNINGPROCESS.THEY MAY NOT BE AS DRIVEN TOBEAT THE ELECTION LIKE OTHERSMIGHT.SO WE ARE KIND OF SEEING A MIXEDVOTE DEPENDING ON IF YOU ARE AFREQUENT ISSUER AND THE MARKETOR ONE WHO POPS INTO THE MARKETEVERY TWO TO FIVE YEARS.ROMAINE: HAS THERE BEEN ANYCONCERN ABOUT POTENTIALCOMPETITION ON RATES?WE HAVE GONE THROUGH A LULL IFYOU WILL IN THE HIKING CYCLE,THE END OF IT.AND MUNIS LOOK GREAT.IF YOU ARE AN ISSUER, THE IDEATHAT RELATIVE CONCERNS ON THETOP AND THE BOTTOM LINE IN THATSPACE WERE ATTRACTIVE.THAT CHANGES, PARTICULARLY IFYOU GET A FED AGGRESSIVE INMOVING RATES DOWN.JENNIFER: WE ARE MORECONSERVATIVE IN TERMS OF WHATOUR ASSUMPTIONS ARE FOR RATECUTS GOING FORWARD.WE THINK IT MIGHT NOT BE QUITEAS AGGRESSIVE AS WHAT THE MARKETIS TELEGRAPHING RIGHT NOWANYHOW.BUT WE DO THINK THERE IS GREATVALUE OUT THERE.IF YOU MOVE LOWER DOWN IN THERATING SPECTRUM INTO THE AA, A,AND BBB UNIVERSE, AS WELL ASMOVING OUT THE MATURITY CURVE ASWELL, WE THINK THIS IS THE SWEETSPOT FOR PEOPLE TO GET OUT OFCASH AND TRY TO LOCK IN THESERATES.WE DON’T WANT TO BE LATE TO THISPARTY BECAUSE THIS WILL NOT LASTFOREVER.ROMAINE: TO PLAY DEVIL’SADVOCATE, DO YOU GO DOWN INQUALITY AND OUT IN DURATION IN ARATE ENVIRONMENT THAT IS GOINGDOWN, A RATE ENVIRONMENT THATYOU WOULD ASSUME HAVE TO INCLUDEAN ECONOMIC RISK?OTHERWISE, WOULD WITH THE FED BEMOVING?JENNIFER: WE THINK THAT IS WHYMUNICIPALS CAN BE A GREAT ASSETCLASS TO DO EXACTLY THAT.THAT IS BECAUSE DEFAULT RATESARE LOWER.EVEN AS WE GO INTO SOME TYPE OFECONOMIC SLOWDOWN, THAT SORT OFTHING, WE STILL HAVE VERY STRONGFUNDAMENTALS IN THE MUNICIPALSPACE.THERE MIGHT BE HEADWINDS AS THEECONOMY SLOWS AND SOME DECISIONSTHAT HAVE TO BE MADE FROM ABUDGETING STANDPOINT, BUT WITHDEFAULT RATES AS LOW AS THEYARE, WITH DEFAULT RATES LOWERTHAN SOME OF OUR CORPORATE ASSETCLASSES, WE THINK THAT WITH AGOOD RESEARCH STAFF, WHICH IS ANIMPORTANT COMPONENT BEING ABLETO FEEL COMFORTABLE GOING DOWNLOWER IN QUALITY, I THINK IT ISA GREAT PLACE TO BE.ROMAINE: ALWAYS GOOD TO TALK TOYOU, IT HAS BEEN WAY TOO LONG.JENNIFER JOHNSTON, DIRECTOR OFRESEARCH AT FRANKLIN TEMPLETON’SMUNICIPALS DEPARTMENT WITH ACLOSER LOOK AT THE MUNI BONDSPACE IN OUR MUNI MOMENT AHEADOF THE BIG FED MEETING IN LESSTHAN ONE WEEK’S TIME.WHEN WE COME BACK THE FED WILLALSO TAKE A CLOSER LOOK AT THEHEALTH OF THE CONSUMER AND WEARE GOING TO DO JUST THATOURSELVES.ADRIENNE YIH OVER AT BARCLAYSWOULD BE JOINING THE PROGRAM INA SECOND.THIS IS THE CLOSE ON BLOOMBERG. SCARLET: THE LATEST EPISODE OFCHIEF FUTURE OFFICER HIGHLIGHTSJOE WALKER.SINCE SPINNING OFF ITS CONSUMERDIVISION IN 2023, THEHEALTH-CARE COMPANY HAS SHARPRENT IS FOCUSED ON DEVELOPINGNEW DRUGS AND MEDICALTECHNOLOGY.HE TELLS DAVID GUERRERO -->> WHAT IS THE RIGHT STRATEGICFIT?THAT IS 80% OF OUR CONVERSATION.DO WE HAVE A SCIENTIFICEXPERTISE, A COMMERCIALCAPABILITY, MAY BE SIMPLYBREADTH AND SCALE, THAT ALLOWSTHAT ASSET TO BE MORE VALUABLEIN OUR HANDS THAN THE CURRENTASSET HOLDER?OUR ACQUISITIONS DO NOT TEND TOBE COST SYNERGY BASED.A LOT OF OUR ACQUISITIONS AREDONE MORE OUT OF NEED.THE ONE THING AS CFO I HAVE AGREAT ADVANTAGE IS I HAVE David Gura, Bloomberg News EVERFELT THE PRESSURE TO SAY YOUHAVE TO DO IT BECAUSE WE AREFEELING A WHOLE-- FILLING AHOLE.SCARLET: THEY JUST FINISHED THISSPLIT OF THE COMPANY AND HE ISTALKING ABOUT M&A.DID HE TIP HIS HAND IN ANY WAY?DAVID: I TRIED TO GET HIM TO DOTHAT AND HE WOULD NOT DO IT. BUT THEY ARE DOING VERY WELL. THEY ARE PAYING CLOSE ATTENTIONTO THE PATENT CLIFF. WE TALKED A LOT ABOUT THE RATEENVIRONMENT WE HAVE BEEN IN. THEY HAVE MADE RECENT SIZABLEACQUISITIONS BUT I CANNOT GETHIM TO DIVULGE.ROMAINE: WHAT DO THEY WANT THISCOMPANY TO BE?THERE IS THE PERCEPTION THECONSUMERS HAVE OF IT, WHICH ISPROBABLY NOT REFLECTIVE OF WHATTHE COMPANY IS.BUT HE IS A PART OF SHAPING THATSTRATEGY.THAT IS KIND OF THE WHOLE POINTOF THE SHOW.DAVID: SO MUCH OF IT ISRETHINKING THE ROLE OF THE CFO.A LOT OF PEOPLE STILL THINK OFTHIS COMPANY IS ONE THAT MAKESBAND-AIDS.THEY ARE TRYING TO THINK ABOUTHOW TO DEVELOP SYNERGY BETWEENMEDICAL TECHNOLOGY AND HIGH-ENDPHARMACEUTICALS.WE SAW A LOT OF LABS ON CAMPUSWHERE WORK IS BEING DONE.I PUT ON A LAB COAT AND ALL OFTHAT.ROMAINE: DID YOU GET TO KEEP IT?DAVID: I DID NOT.WHAT THEY ARE PROUD OF THE FACTTHAT THEY CAN DO THOSE TOGETHER.ROMAINE: DID HE TALK ABOUT THECOST OF DOING THAT?WHEN YOU START TALKING ABOUT WEWANT TO BE THIS EXPENSIVE DRUGCOMPANIES, IN MY HEAD I AM JUSTHEARING DOLLAR SIGNS, CHINGCHING, CHING CHING.DAVID: THERE ARE SUCCESSES BUTMANY MORE FAILURES.SO WHEN THE INTERNET ASSETS THEYKNOW THERE WILL BE A LOT OF RISKASSOCIATED WITH IT.HE SPENT A LOT OF TIME TALKINGABOUT NEW AREAS OF TIME ALLERGY-- OF TECHNOLOGY THEY AREGETTING INTO.DRUG DEVELOPMENT COULDACCELERATE THE PROCESS.THEY HAVE HIRED HUNDREDS OF NEWEMPLOYEES WORKING ON GENERATIVEAI.WHAT THE CEO SAID IS THEADVANCES THE NEXT 10 YEARS WILLDWARF WHAT WE HAVE SEEN THE LAST100 YEARS.SO HE IS VERY OPTIMISTIC THATWILL CHANGE THE GAME.SCARLET: THAT DRUG DEVELOPMENTAND INNOVATION, HE ALSO CITED ATHREAT TO THAT WHICH IS THEWHITE HOUSE’S DRUG PRICINGNEGOTIATION LAW THAT THE BIDENADMINISTRATION HAS BEEN BEHIND.HOW DOES HE SEE THAT SHAPINGWHAT THEY ARE ABLE TO DO?DAVID: THE INFLATION REDUCTIONACT AS A PROVISION WHERE THEYCAN RENEGOTIATE A LOT OF PRICESIN THE TOP 10 MOST EXPENSIVEDRUGS, AND THREE OF THEM AREJOHNSON & JOHNSON DRUGS.THE CEO WAS VERY FRANK AND QUITECRITICAL OF THAT LAW.BOTH HE AND THE CFO SAID TO METHAT THEY AGREE THERE AREPROBLEMS WITH HOW DRUGS AREPRICED, BUT THEY SEE THAT LAW ASBEING A HAM-HANDED WAY TO DEALWITH IT.IN TERMS OF HOW THEY AREINTERSECTING WITH POLICY, THISIS A HUGE INTEREST OF THEM NOW.ROMAINE: GREAT STUFF.DAVID GURA THERE.WE HAD A CHANCE TO CATCH UP WITHTHE CFO OF JOHNSON & JOHNSON ASPART OF OUR CHIEF FUTURE OFFICERSERIES.THAT LATEST EPISODE AVAILABLENOW ON BLOOMBERG.COM AS WELL ASON YOUTUBE.SCARLET: LET’S LOOK AT HOWMARKETS CLOSED ON THE DAY.WE HAD A GAIN OF .8%.IT WAS KIND OF A STEALTH RALLY,JUST GAINING STEAM THROUGHOUTTHE TRADING DAY.ROMAINE: WE SAW THIS PATTERN THELAST FEW SESSIONS, A LOT OF THATCOMING INTO TECH.WE WERE TALKING THE LAST COUPLEDAYS ABOUT WHETHER THERE WAS ADEFENSIVE POSTURE TO THIS ORRATHER THIS WITH PEOPLE BUYINGIN.JAY WOODS CAME ON AND TALKEDABOUT THIS IDEA TO PAY ATTENTIONTO THE TECHNICAL LEVELS IN THES&P.THE IDEA THAT DURING THIS TYPETRADING RANGE, IF THERE ISCONVICTION OF BUYING -- ABOVETHIS YOU WILL SEE A BREAK ABOVE5600.IT DID NOT DO THAT TODAY.SCARLET: SMALL CAPS DIDOUTPERFORM.TREASURIES DID NOT MOVE A LOT.ROMAINE: DID YOU BUY GOLD TODAY?SCARLET: I DID NOT BECAUSE IT ISAT A RECORD HIGH.ROMAINE: SMART.SCARLET: I AM WAITING.THIS IS BLOOMBERG. ROMAINE: WE ARE FOCUSING ALITTLE BIT ON WHAT HAS BEENGOING ON IN THE CONSUMER SPACE.WE ARE GOING TO Adrienne Yih, Barclays GET A CONSUMERSENTIMENT READING OUT OF THEUNIVERSITY OF MICHIGAN TOMORROW.JOINING US TO TALK MORE ABOUTTHE HEALTH OF THE CONSUMER ISADRIENNE YIH, MANAGING DIRECTORAND SENIOR RETAIL ANALYST ATBARCLAYS.YOU CURRENTLY HAVE A NEUTRAL ONTHE RETAIL SECTOR.I AM HAVING A HARD TIME EVENWRAPPING MY HEAD AROUND WHETHERTHINGS ARE GOOD OR BAD.WE HAD EARNINGS OUT OF OUR AGE,WHICH IS SOME OF THE PRICIESTFURNITURE, AND THEY ARE KNOCKINGIT OUT OF THE PARK.AND OTHER RETAILERS SEEM TO BESTRUGGLING.PUT THIS TOGETHER FOR US.WHERE DO WE STAND?ADRIENNE: I WILL PUT IT TOGETHERFOR YOU.WHAT IS HAPPENING IS IF YOUTHINK ABOUT A CYCLICAL CURVE,THAT BIG WAVE, THOSE COMPANIESTHAT WERE SITTING AT THE TOP OFTHAT WAVE, THE LULULEMONS ANDULTAS, THEY POWERED THEIR WAYTHE PAST TWO YEARS WITH GREATSUCCESS.THAT WAS NOT THE CASE FOR AN RH THAT JUST REPORTED.THEY PUT UP THEIR FIRST QUARTEROF POSITIVE SALES GROWTH BUTTHEY ARE SITTING ON THE BOTTOM.THIS IS SUCH A STOCK PICKERSMARKET.I CANNOT SAY THAT ENOUGH TIMES.THE HEALTH OF THE CONSUMER ISFINE BUT THEY ARE BEING VERYCHOICE FULL.THIS IS THE PART OF THE CYCLEWHICH IS AN 8020 RULE.20% OF COMPANIES ARE NAMES YOUWANT TO OWN.THEY’RE COMING OFF THE BOTTOM,EXTENDING MARGINS, BUT IT ISWHERE THEY ARE IN THE CYCLERATHER THAN BUYING A BASKET.ROMAINE: I GOT YA.WE’RE SEEING SOME COMPETITORSLIKE WAYFAIR ALSO RISE.CIGNA EARNINGS OUT EARLIER, THEYARE RALLYING ON THE DAY.TALK ABOUT THE LOWER ENDSPECTRUM OF THE CONSUMERLANDSCAPE.THOSE FOLKS LOOKING TO SAVEMONEY.WE HAVE SEEN PEOPLE GRAVITATE TOWALMART AND SOME OF THEQUOTE-UNQUOTE DISCOUNT PLACES.SHOULD INVESTORS BE LOOKING MORETO THOSE PLACES FOR THE BASKETOF STOCKS OR IS THAT MOREIDIOSYNCRATIC?ADRIENNE: I WOULD SAY THIS 50 KTARGET CONSUMER, THEY HAVE BEENUNDER THE MOST DURESS FROMINFLATION.IF YOU THINK ABOUT THEESSENTIALS OF WHAT PEOPLE NEED,FOOD, TRANSPORTATION, HOUSING,THOSE CATEGORIES FOR THIS 50 KCONSUMER COHORT MAKE UP ABOUT75% OF THE TAKE-HOME PAY.THERE IS JUST NOT A LOT OF ROOMFOR DISCRETIONARY.SO WE HAVE SEEN WALMART DO WELL.WALMART ROLLED BACK PRICES. THEY TARGET LOWER HOUSEHOLDINCOME.IF YOU ARE LOOKING ATDISCOUNTERS, FOR THE ONES THATTARGET THE LOWER AND HOUSEHOLDINCOMES, THEY HAVE TO BECOMPANIES GETTING BACK PRICE.THE PRICES IS TJX AND ROSS AREDELIVERING ARE LOWER THAN THEONES --THEY ARE TAKING THA --SCARLET: THAT PUTS COMPANIESLIKE DOLLAR STORE IN A TERRIBLEPOSITION BECAUSE THEY DON’T HAVEROOM TO MANEUVER. TO WHAT EXTENT DOES YOURMANAGEMENT TEAM MAKE THEDIFFERENCE IN EVERYTHING INTERMS OF HOW TO EXECUTE ON THESTRATEGY THEY HAVE LAID OUT?ADRIENNE: THAT IS ANUNBELIEVABLY GREAT POINT.WHAT I WOULD SAY IS YOU AREBUYING THE MANAGEMENT TEAMS ATTHIS POINT.WE ARE IN AN ADMIN TIME.THE DEMAND PART OF THE CYCLEWITH NO SUPPORT WHATSOEVER ONTHAT INVENTORY SUPPLY.WE ARE AT PEAK MERCHANDISEMARGINS BECAUSE WE CLEANED IT UPLAST YEAR.TODAY WE ARE RUNNING SO LOW WITHNO SAFETY NET.IT IS ALL ABOUT ACCELERATING ANDTAKING MARKET SHARE.AT THIS POINT WE ARE LOOKING FORA TURNAROUND STORY.IT IS ALL ON THE MANAGEMENTTEAM.FOR A PRE-EXISTING STORY, IT ISON THE MANAGEMENT TEAM.THAT IS THE MOST EXCELLENTPOINT.WHEN YOU ARE IN A STOCK PICKERSMARKET, YOU ARE RELYING EVENMORE ON BULLYING THE MANAGEMENTTEAM MATCHES WHAT YOU AREEXPECTING THEM TO DO.SCARLET: GIVE US EXAMPLES OF THEMANAGEMENT TEAMS YOU THINK AREEXECUTING AS THEY SHOULD ANDPUTTING THEIR COMPANIES IN AGREAT POSITION TO CONTINUE TOCAPITALIZE ON THE CURRENTENVIRONMENT?ADRIENNE: TO MAKE A COMMENTHERE, WE ARE IN THIS PART OF THECYCLE WHERE REALLY GREATLONG-TERM COMPOUND GROWERS, THEYARE STILL GREAT COMPANIES BUTTHEY ARE NOT GREAT STOCKS RIGHTNOW.THEY ARE COMING OFF THE PEAK OFTHE CYCLE.THOSE WHO ARE COMING OFF THEBOTTOM OF THE CYCLE ARE YOURCYCLICALS.THEY MAY NOT BE THE BESTLONG-TERM GROWTH STORIES BUTTHEY ARE THE BEST STOCK ASSETS.THE NAME I WANT TO POINT OUTWITH THE GREAT MANAGEMENT TEAM.RICHARD DIXON, LOOK AT THEDELIVERY THEY ARE PUTTING UP INTHE APPAREL SECTOR, KILLING ITAT OLD NAVY.ROMAINE: THIS IS A GREAT STORYAND AN ONGOING ONE THAT WOULDHAVE TO CONTINUE ANOTHER DAY.ADRIENNE YIH OVER AT BARCLAYS,AS WE CONTINUE OUR COVERAGE ONTHE CLOSE AND A PIVOT TO ACLOSER LOOK AT AI.NEWS CROSSING ABOUT Clara Shih, Salesforce AI SALESFORCESHAKING UP THE AI GAME.THE SOFTWARE COMPANY UNVEILING APLATFORM THAT ALLOWS COMPANIESTO SCALE THEIR WORKFORCESON-DEMAND. CLARA SHIH JOINS US RIGHT NOW.WHEN I HEAR AGENTS FOR US AND ICAN UTILIZE THESE BOTS TO DOTHINGS FOR ME, EXPLAINSPECIFICALLY WHAT THISTECHNOLOGY CAN DO.CLARA: WE ARE SO EXCITED TO BELAUNCHING AGENT FORCE.WE HEARD FROM MCKENZIE, GOLDMANSACHS, SO MANY, THAT 90% OF THEVALUE REALIZATION FROMGENERATIVE AI COMES FROM THEFRONT OFFICE.AGENT FORCE IS ABOUT GETTINGSALES TEAMS WERE CAPACITY,MARKETING TEAMS, COMMERCE TEAMS.AT A TIME WHEN IN THISMACROENVIRONMENT EVERY INDUSTRYWANTS THAT BOOST.ROMAINE: NORMALLY WHEN WE THINKOF THESE ASSISTANCE, THE IDEA ISTHAT WHEN I ASK A QUESTION IT ISJUST FEEDING THE ANSWERS THATHAVE ALREADY BEEN PREPROGRAMMEDIN THERE.IS WHAT YOU GUYS ARE PUTTING OUTHERE, IS IT CAPABLE OFINTERPRETING WHAT I AM ASKINGAND COMING UP WITH ITS OWNANSWERS ITSELF?CLARA: THAT IS EXACTLY RIGHT.THE PREPROGRAMMED DECISION TREEIS A BOLD WORLD OF CHATBOTSPRE-LOM.AI IS ALL ABOUT THE DATA AND SOCUSTOMERS ALREADY HAVE 25 YEARSOF THEIR TRUSTED CUSTOMER DATA,TRANSACTION DATA, STRUCTUREDDATA, UNSTRUCTURED DATA, PLUS WEHAVE OUR NEW DATA CLOUD ZEROCOPY NETWORK SO WE ARE PULLINGDATA FROM ALL THESE DIFFERENTSILOS SYSTEMS TO BE ABLE TODELIVER A MUCH SMARTER AGENTTHAT CAN ANSWER QUESTIONS BUTALSO AUTOMATE ACTIONS.SCARLET: SO WITH THESEAUTONOMOUS AI AGENTS THATSALESFORCE IS GOING TO UNLEASHUPON THE WORLD, THESE CUSTOMERFACING OR DO THEY WORK IN THEBACKGROUND AND BEHIND THE SCENESTO HELP EXISTING EMPLOYEES?CLARA: THAT IS A GREAT QUESTION.AGENT HAS BOTH AGENTS THAT HELPEMPLOYEES LIKE A MERCHANDISINGAGENT ASSISTANT OR A BUYERAGENT.WE ALSO HAVE SELF SURGEON --SELF-SERVING AGENTS.WHETHER IT IS A CUSTOMER SUPPORTAGENT THROUGH AGENT FORCE.IF YOU LOOK AT OUR CUSTOMERSUSING AGENT FORCE TODAY THEY ARESEEING A TREMENDOUS AMOUNT OFPRODUCTIVITY GAIN FROM DEPLOYINGTHESE AGENT FORCE AGENTS TO BEABLE TO ANSWER AND TAKE ACTIONFOR THEIR CUSTOMERS 24 BY SEVENON A CHANNEL.SO THEY CAN SAVE THEIR HUMANWORKFORCES FOR THE HARDER, MORECOMPLEX QUESTIONS, AND PROBLEMSOLVING AND DEEPENING OFRELATIONSHIPS.SCARLET: HOW DO YOU GET AROUNDTHE FACT THAT SOME HUMANCONSUMERS DO NOT WANT TOINTERACT WITH AI AGENTS?THEY DON’T WANT TO INTERFACEWITH AI, THEY WANT TO TALK TO AHUMAN BEING?CLARA: IT IS SO IMPORTANT TOHAVE AGENT FORCE BE THE PLACEWHERE HUMANS AND AGENTS WORKTOGETHER BECAUSE THERE WILLALWAYS BE SITUATIONS WHERE YOUWANT HUMANS TO INTERVENE.AT ALL TIMES YOU WANT TO KEEPHUMANS AT THE HOME SUPERVISINGWITH THE AGENTS ARE DOING.WHEN CUSTOMERS HAVE AN ISSUETHAT THE AGENT IS NOT HOW -- NOTKNOW HOW TO ANSWER, YOU CANSEAMLESSLY HAND OFF TO ACUSTOMER SERVICE REP USING SALESCLOUD.ROMAINE: I WANT TO TALK ABOUTTHE DEVELOPMENT OF THIS ANDWHERE IT GOES NEXT.THIS IS AT LEAST ON THE EDGE OFTHAT HOLY GRAIL OF WHAT AI WASSUPPOSED TO BE WHEN FOLKS WERETINKERING WITH THIS IN THE1950’S.BRETT TAYLOR USED TO BE ATSALESFORCE AND HAS REALLY BEENBANGING THE DRUM ON THIS.ARE YOU WORKING WITH OPENAI ATALL ON THIS PROJECT OR IS THISINDEPENDENTLY BEING DONE THANSALESFORCE?CLARA: WE HAVE HAD LARGELANGUAGE MODELS DEVELOPED BY OURSALES RESEARCH DEVELOPMENT TEAMFOR ALMOST 10 YEARS.WHAT WE ARE HEARING FROMCUSTOMERS AND SEEING IN OUR OWNBENCHMARKING LEADER BOARDS ISTHE NUMBER OF MODELS THAT AREAVAILABLE AND THE STACK RANKINGOF MODEL PERFORMANCE ON LEADERBOARDS IS CONSISTENTLY EVOLVING.AND SO WE PARTNER WITH OPENAI,WE WORK WITH ANTHROPIC, GOOGLE,AMAZON, WITH ANY NUMBERINCLUDING OPEN SOURCE MODELSLIKE LLAMA.BECAUSE WE WANT TO GIVECUSTOMERS CHOICE, AND WE KNOWTHIS IS A RAPIDLY EVOLVINGLANDSCAPE.CUSTOMERS DO NOT WANT TO LOCKINTO A SINGLE MODEL OR SINGLEMODEL PROVIDER.AND SO WE GIVE THEM MODELCHOICE.AND MORE IMPORTANTLY WE GIVETHEM THE ENTIRE TECHNOLOGY STAFFTHEY NEED TO MAKE THEIR MODELWORK IN PRODUCTION.THE DATA LAYER, THE TRUST LAYER,THE RELEVANCY OF THE CUSTOMER360 APPLICATIONS AND INDUSTRYCLOUDS.ROMAINE: I AM CURIOUS ABOUT THERISK INVOLVED WITH THIS AND HOWMUCH OF THAT IS FED INTOCOMPANIES YOU JUST MENTIONED.I AM SURE EXECUTIVES -- I AMSURE YOU KNOW THE EXECUTIVESFROM THESE COMPANIES WERE AT THEWHITE HOUSE TODAY, SPECIFICALLYTALKING ABOUT NEED FOR MOREPUBLIC-PRIVATE PARTNERSHIPS TOENSURE THE ROLLOUT OF PRODUCTSLIKE YOURS AND OTHER SIMILAR AIPRODUCTS CAN BE DONE IN ARESPONSIBLE WAY.RESPONSIBLE HONOR ENERGY GRID,WHEN IT COMES TO NATIONALSECURITY AND ENERGY SECURITY ASWELL.WAS ANYONE AT SALESFORCE A PARTOF THAT CONVERSATION?CLARA: WE ARE PROUD TO HAVE BEENENGAGED WITH THE WHITE HOUSE ANDADMINISTRATIONS FROM AROUND THEWORLD TO BE PART OF THATDIALOGUE AND MAKE SURE WE AREDOING AI IN A RESPONSIBLE WAY.IT IS ALSO WHY THE VERY FIRSTFEATURE WE BUILT INTO OUR AGENTFIRST PLATFORM IS OUR EINSTEINTRUST LAYER WHICH ENCOMPASSESDATA PRIVACY, DATA SECURITY,ETHICAL GUARDRAILS, AS WELL ASOBSERVABILITY AND MONITORING TOMAKE SURE THE AGENTS AREPERFORMING THE WAY THEY ARESUPPOSED TO BE.THAT IS ABSOLUTELY PARAMOUNT.EVERY INTERACTION THAT EITHER ANEMPLOYEE OR A CUSTOMER HAS WITHSALESFORCE AI RUNS THROUGH THEEINSTEIN TRUST LAYER.TRUST IS THE COMPANY’S NUMBERONE VALUE.JUST LIKE WE HAD TO INTRODUCEAND INVENT A NEW WAY OF TRUSTWHEN WE INTRODUCED SASSAPPLICATIONS 25 YEARS AGO, WEARE DOING THE SAME THING NOWWITH AI.SCARLET: YOU TALKED ABOUT AIAGENTS AS A THIRD WAVE OF THE AIREVELATION. THE SECOND WAVE IS GENAI, NOWTHE THIRD WAVE IS AUTONOMOUS AIAGENTS.CAN A COMPANY GO THROUGH NOTGOING THROUGH THE FIRST WAVE ORSECOND WAVE AND JUMP RIGHT INTOTHE THIRD WAVE?CLARA: WE ARE SEEING A LOT OFCOMPANIES ADOPT MORE PRODUCTIVEAI THROUGH GENERATIVE AI AS WELLAS AGENTS.BUT THE ANSWER IS YES.FOR COMPANIES THAT HAVE MAYBEBEEN BEHIND THE CURVE ON AI,JUST SO LONG AS THEY HAVE THATTRUSTED DATA, THEY HAVE THOSEINDUSTRY-SPECIFIC APPLICATIONSWITHOUT, THEY CAN TURN AGENTFORCE ON AND JUST GO.WE ARE SEEING REMARKABLERESULTS.BEING ABLE TO DEFLECT 40% MORECUSTOMER SERVICE CASES THROUGHTHE AGENT FOR HIS AGENT.THIS IS ABOUT FREEING TIME FORTHEIR EMPLOYEES FOR MOREMEANINGFUL WORK.SCARLET: CLARA SHIH, CEO OFSALESFORCE AI, THANK YOU SOMUCH.ROMAINE: STILL AHEAD, SETTINGYOU UP FOR THINGS TOMORROWINCLUDING A BIG VOTE FOR BOEING.THAT IS COMING UP NEXT ONBLOOMBERG. SCARLET: BOEING IS BRACING FOR APOTENTIAL STRIKE AS UNIONWORKERS IN SEATTLE FINISH VOTINGTONIGHT TO ACCEPT THE Julie Johnsson, Bloomberg News TERMS WITHTHE PLAN MAKER.BOEING SHARES DOWN IN AFTERHOURS TRADING.JULIE JOHNSSON JOINS US FROMSEATTLE.DO WE HAVE A SENSE OF WHATPEOPLE ARE ANTICIPATING,EMPLOYEES AND ANALYSTS, ON HOWLIKELY IT IS THIS DEAL WILLPASS?JULIE: I CANNOT SPEAK FOR THEANALYSTS BUT THE EMPLOYEES IHAVE TALKED TO TODAY ARE PRETTYCONFIDENT THIS WILL WIND UP IN ASTRIKE.THAT WOULD KICK IN AT MIDNIGHTTONIGHT.ROMAINE: WHAT EXACTLY DO THEYWANT?OR LET ME REPHRASE.WHAT MORE DO THEY WANT?JULIE: JUST REMEMBER, THISCONTRACT REPLACES AN AGREEMENTTHAT WAS NEGOTIATED IN 2008, SOIT HAS BEEN A LONG TIME SINCEBOEING AND AS UNION HASHED OUTTHE NITTY-GRITTY OF EVERY ASPECTTHAT GOVERNS THEIR JOB.THAT IS PROBLEM NUMBER ONE.NUMBER TWO, WORKERS WERE LOCKEDINTO A LONG-TERM CONTRACT ABOUTA DECADE AGO AND HE PAY RAISESIN THAT DEAL DID NOT COMEANYWHERE CLOSE TO INFLATION WHENIT TOOK OFF THIS DECADE.SO PEOPLE WERE PINCHED, AND THEYWERE REALLY ANGRY ABOUT IT ANDREALLY FEELING LIKE THIS DOESNOT GO FAR ENOUGH TO DO AWAYWITH THE HURT THAT THEYEXPERIENCED.SCARLET: HOW MANY UNION MEMBERSARE WE TALKING ABOUT, HOW BIG OFA SHARE OF THE OVERALL STAFF ASIT?JULIE: ABOUT 20% OF THECOMPANY’S GLOBAL WORKFORCE.BUT THIS IS THE HEART OF THEMANUFACTURING FOR THEIR JETLINERBUSINESS.33,000 PEOPLE HERE IN SEATTLEAND IN OREGON AND THERE AREOTHER SMALL UNITS AROUND THEWEST COAST.IT IS REALLY THE SEATTLEMANUFACTURING THAT IS AT STAKEWITH THIS DEAL AND WITH IT ISBOEING’S FINANCIAL RECOVERY.ROMAINE: WE HAVE BEEN COVERING ALOT OF THESE LABOR STRIKES LASTYEARS.PARTICULARLY OVER THE LAST YEAR,YOU WERE DEALING WITH SITUATIONSWHERE THE WORKERS KIND OF HADTHE UPPER HAND BECAUSE THEYCOULD POINT TO THOSE COMPANIESAND SAY WE WANT A PIECE FROMTHAT.WHAT ARE THEY POINTING TO WITHBOEING RIGHT NOW?JULIE: YES, I THINK THERE IS ALEVEL OF CONCERN HERE ABOUT THECOMPANY’S LONG-TERM STATUS.HOWEVER, BOEING GAVE IT CEO A40% RAISE IN MARCH.THAT IS NOT REALLY NOT GOINGOVER WELL, BY THE WAY.ON THE STREETS TODAY OUTSIDE THE737 FACTORY, PEOPLE KEPTBRINGING THAT OUT.ROMAINE: WELL, OPTICS CERTAINLYMATTER.WE WILL CATCH UP WITH YOUTOMORROW TO FIND OUT THE RESULTSOF THAT VOTE PARTICULARLY IFTHEY GO TO A STRIKE.JULIE JOHNSSON ON THE GROUND INSEATTLE.BACK IN NEW YORK, WRAPPING IT UPWITH THE CLOSE.BALANCE OF POWER IS COMING UPNEXT FOR ALL OF YOUR