00:00The S&P 500 stock index and the Nasdaq Composite both closed at record highs on Thursday
00:05as investors embraced strong economic data and earnings reports
00:09that showed American consumers remained willing to spend.
00:12The Nasdaq has ended at a record high in six of the previous seven sessions
00:16and the S&P 500 has had six best finishes since June 27th.
00:21Wall Street has had a strong run since tumbling after President Donald Trump's
00:25Liberation Day tariff announcements in early April and then recovering.
00:30This week was seen as a proving ground for these gains though
00:33with a number of key economic reports and the start of second quarter earnings session.
00:40I think what's moving stocks higher today is the robust retail sales figure we saw this morning.
00:46A lot of people in the industry have been looking at a very stretched consumer as of late.
00:52If you just look at credit card delinquency rates, auto loan delinquencies, affordability of housing,
00:58affordability of autos, even gas prices, it's a pretty precarious situation.
01:05The consumer relative to history is quite stretched as it relates to the consumer balance sheet
01:11and the level of indebtedness.
01:13I think something that I and most professionals have underestimated though is the accessibility,
01:21the availability of alternative forms of credit via buy now, pay later platforms and some of these
01:28new startups that are coming to the marketplace that are taking investor capital and are still
01:34unprofitable, but they're aggressively refinancing very expensive debt, mostly in the auto space.
01:40If Trump got his wish and there was an emergency 300 basis point interest rate cut tomorrow,
01:48it would be really bad.
01:50And we saw a little bit of that just yesterday when he teased the potential of firing Powell
01:58only to walk it back very shortly after because he saw the market response.
02:02If the front end of the yield curve were to drop by 3%, we'd think that the long end of the
02:11yield curve would aggressively move higher.
02:13The 30-year interest rate would very likely climb from around 5%, maybe to 7 plus, as high
02:20as 9%, depending on the amount of fiscal spending and the amount of deficits that we run on a
02:27going forward basis, the long-term inflation expectations would become completely untethered.
02:34That isn't even necessarily taking into account that the very credibility of the Federal Reserve
02:41is going to be compromised.
02:43And that, in its own right, would probably lead to a devaluation of the dollar and some serious
02:49risk asset sell-offs or deleveraging.
02:53All right.
02:54Now we want to break down on what's happening in the U.S. stock market.
02:57And this is Standard & Poor's 500 index stocks categorized by sector and industries.
03:02And the size represents market cap.
03:05And it's a mix of red and green over here, where red means losses and green means gains.
03:09And I'm going to start with Microsoft.
03:11Microsoft shows a green color, which means it increased by 1.20%.
03:16And the current stock price is 511.70.
03:20But the latest update on Microsoft, where Microsoft and AUS National Laboratory on Wednesday
03:25said they are partnering to examine how artificial intelligence could be used to speed up the
03:31process of compiling the documents needed to secure permits for new nuclear power plants.
03:36Microsoft at the Idaho National Laboratory said they will tap Microsoft's AI technology for
03:42generating engineering and safety analysis reports that are standard part of the application
03:47process for construction permits and operating licenses for nuclear facilities in the United States.
03:53The AI systems, which have been trained on a huge trove of successful historical applications,
03:59will pull data from studies and compile it into complex applications that span hundreds of ages.
04:05All right, moving on to Meta, we can see that it shows some sort of almost red color,
04:11which was down a little bit by 0.21%.
04:14And the current stock price is 701.41.
04:18But Mark Zuckerberg's latest merger will be incredibly hard to engineer successfully.
04:24The Meta platform's boss is trying to combine buying and building to turbocharge his ambitions
04:29in artificial intelligence.
04:31Although he created the social media empire using both approaches independently,
04:36there also have been flops along the way.
04:38It helps explain the challenge evident in the company's valuation of uniting the best parts of
04:43each growth strategy.
04:44Seeking an edge in AI makes sense given the technology's promise, but it's an expensive quest.
04:50Like Microsoft and other rivals, Zuckerberg is deploying vast sums of money to construct the
04:55data centers and all that goes with them to develop and operate large language models
05:00processing massive volumes of information.
05:03Meta has also invested heavily in startups and splashed out to recruit engineers and researchers.
05:11All right, moving on to Tesla.
05:13It shows some sort of almost red color as well, which was decreased by 0.70%.
05:18The current stock price is $309.441.
05:21That's on automotive.
05:23But the electric vehicle maker Tesla's auto insurance unit has been hit with a consumer
05:27lawsuit in California, accusing it of deliberately scheming to delay and minimize insurance payouts,
05:34causing some motorists to abandon claims or payout for pocket.
05:38The proposed class action filed in the Los Angeles Superior Court on July 11th.
05:42Alleged Tesla insurance failed to implement and maintain sufficient claims, handling procedures
05:48for its customers.
05:49Tesla, led by billionaire entrepreneur Elon Musk, offers insurance policies in California
05:54to Tesla drivers and also to drivers of non-Tesla vehicles.
05:58The lawsuit opens a new tab which seeks unspecified monetary damages.
06:02Alleged Tesla violated California's unfair competition law and seeks to represent potentially thousands
06:08of motorists in California who had bought insurance from the company.
06:13Tesla launched its auto insurance unit in 2019, promising what Musk at the time called
06:18vastly better service than rival providers.
06:22And last but not least, Amazon.
06:24We can see that Amazon, let me tap on Amazon, it shows a green color over here, which was up
06:30by 0.31% and the current stock price is $223.88.
06:35However, a federal judge on Wednesday dismissed a proposed class action over Amazon.com's decision
06:41to begin showing commercials on its Prime Video service unless subscribers paid a $2.99 monthly
06:48opt-out fee.
06:50Subscribers who paid $139 a year for Prime Video said Amazon had led them to believe the service
06:56would remain ad-free.
06:57They said the ads amounted to a price increase that breached their subscriber agreements and
07:03violated Washington State Consumer Protection Laws.
07:05U.S. District Judge Barbara Jacobs-Ronston in Seattle concluded, however, that the ads
07:11were a benefit modification, specifically contemplated and authorized by Amazon and the subscribers.
07:17The change went into effect in January 2024.
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