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00:00A day where a lot of folks, Carol Masser, looking past relatively solid economic data on that U-MICH
00:05consumer sentiment data, and of course looking to what happened last night and what is still
00:09transpiring over the skies of Tehran and Tel Aviv. Yeah, the headlines fast and furious over
00:14the last couple of hours. You know, that's continuing to put support when it comes to
00:18oil prices, and that's something we're all watching right now. I'm looking at WTI crude
00:22still up about seven and a half percent off its highs of the days, but nonetheless, we're looking
00:26at 73.12 a barrel. I think everybody's trying to figure out what Prime Minister Benjamin Netanyahu
00:31means by saying that more action will be taken. In the past, these so-called skirmishes have kind
00:36of been a tit for tat, and this was maybe seen as the tat, Iran's response. But if there is more to
00:42come, then how much does this escalate? Right, and that might be why treasury yields are moving up.
00:48You see, it's interesting given that you would think that there would be a big shift to the
00:52safety, safe haven of U.S. treasuries, but that hasn't played out because everyone's so worried
00:56about the inflation ramifications of spiking oil prices. Absolutely, and it gets to this idea now
01:01of how do you weigh the multitude of risk? We came in, of course, talking about trade risk
01:04into this week, and that seemed to have abated at least for a brief moment in time. And now the
01:09geopolitical risk back on the table, do you trade into this weekend? Do you sell off and put everything
01:14away and then just wait to find out what happens over the weekend? Yeah, it's a tough position right ahead
01:18of the weekend. So much could happen, and time will tell ultimately how it plays out here. A lot to
01:23break down here as we get the closing bells in New York earlier in the session. It did look like we
01:28were at least going to hold on to some of those weekly gains, but that is not necessarily going
01:32to be the case. The Dow Jones Industrial Average on the day down more than 700 points or about 1.8%.
01:38That gives it a weekly loss of about 1.4%. The S&P down 68 points, closing back below that 6,000 level,
01:45a key psychological level there, and down a half a percentage point on the week. The Nasdaq composite
01:50down 255 points or about 1.3% on the day. The Nasdaq 100 down a similar amount, and the Russell
01:572000 closing lower by about 40 points or 1.9% on the day. No surprise, Romain, as we've seen
02:04increasingly that risk-off trade play out throughout the day, that we are seeing most names in the S&P 500
02:09lower. 433 to the downside, Scarlett, on this Friday, 70 to the upside. And a pretty clear-cut
02:16IMAP as well, showing the sector performances. Energy, the only sector within the S&P 500,
02:21finishing higher up 1.7%. And for the week, also the best performer, gaining 5.7%.
02:27All right, let's get to some of the individual gainers, if I may. And, you know, kind of holding
02:31my breath to see if they held on to their gains. No surprising to, or no surprise, I should say,
02:36to see defense names, which we have seen trade higher throughout the day. This is one of the
02:40few groups with some outperformance, and that included Lockheed Martin. We've seen this one
02:45up more than 4%, finishing the day with about a 3.7% on those escalating tensions between Iran
02:52and Israel. Let's also go to energy names, which have definitely obviously been on the move,
02:56really riding the ride up in oil prices. We see Diamondback Energy, ticker is FANG. That name
03:04is up about 3.7% in today's session. Keep in mind that there is this debate in the analyst
03:11community in terms of what will happen with oil prices on where the ultimate landing point is for
03:16crude oil, because there's no impact yet on oil supplies, but that is something we're watching
03:21very, very closely. And we know that the Energy Secretary, Chris Wright, is doing the same as well.
03:26We just heard from him a tweet on social just moments ago. Oracle, got to mention this one.
03:32This has been on a tear, guys. 7.7% to the upside today. Second day of big gains,
03:38it gained more than 13% yesterday. We had earnings late Wednesday. Company projected a 70% gain in
03:44cloud infrastructure sales this fiscal year, so it gave a bullish outlook for what is a very closely
03:48watched business at the company. Stock is up almost 30% year to day and trading at another record
03:53high. It's up more than 70% since April of 21, April 21, excuse me. And I got to just mention one
04:00more. I'm amazed that I've got these strong gainers. Also, we're looking at RH, formerly
04:05Restoration Hardware. This one, some outperformance in today's session, up as much as 25%, finishing
04:11the day with a gain of about 7%. It kept its outlook for the full year unchanged. And so there
04:18have been some concerns about the impact of U.S. tariffs in a weak housing market. But this company,
04:23definitely surprising investors to the upside. Tim.
04:25All right. Well, to the downside, no shortage of companies to choose from. I want to start with
04:29shares of Visa fell 5% today. This, after the Wall Street Journal reported that large merchants,
04:34including Walmart and Amazon, are exploring how to issue or use stable coins to bypass the
04:39traditional fees of card-based systems. So, of course, if this were to happen and these large
04:43retailers were to no longer use these credit card companies as much for those transactions,
04:48then those transaction fees would go down and these companies would struggle. MasterCard,
04:52by the way, fell by 4.6% today. Also, Adobe, we're talking earnings here. The company shares fell 5.3%
05:00today. The company did give a sales outlook for the current quarter, kind of failed to calm investors
05:05who've been skeptical about Adobe's ability to compete with AI-focused startups. The company's CFO
05:11reported that the company's family of AI models, though, has been used to generate over 24 billion
05:16pieces of content. The company expects $250 million in annual recurring revenue from AI products. Once
05:23again, shares down 5.3% today. And finally, looking at airlines as a whole today, this is the S&P 500
05:30passenger airlines index. It fell 3.7% today. Airline stocks declined around the world after Israel launched
05:37airstrikes across Iran. What it did was it forced several countries in the Middle East to close their
05:42airspace to commercial flights. Here in the U.S., Delta and United suspended flights to Tel Aviv
05:47following Israel's bombing of Iran and the closure of that airspace. United has not said when flights
05:53between Newark and Tel Aviv may resume. In the past, carriers have been forced to use these narrow
05:59flight corridors more often due to military conflicts around the world. What that does is it
06:03adds fuel costs, makes flights longer, it disrupts schedules, and leads to higher operating charges.
06:08That index falling by 3.7% today. All right, let's take a look at what happened in the yield
06:12space. Yields actually higher. Scarlett was talking about this just a second ago, pretty much across
06:16the curve, four basis points on the lower end, shorter end of the curve, and about six basis points
06:21on the longer end of the curve. Though we should point out on a weekly basis, yields are lower than
06:25where they were last Friday, about eight basis points lower on the two-year and six to seven basis
06:30points on the 30-year. And of course, that is the setup for that two-day Fed meeting that kicks off
06:36on Tuesday. You know, that's exactly where I wanted to go, Romain. I mean, I'm just thinking
06:39about what is being handed Fed Chair Jay Powell and company as they get ready to kick off that
06:46meeting and then talk about kind of the macro environment, whether or not they take a dovish
06:51tilt possibly. And I guess some of that has to do with how long this conflict goes on.
06:56Julie Beal over at Kane Anderson Rudnick, we just had her on our program, and she said the higher oil
07:01prices, the spike in oil prices that we're seeing right now, which obviously is inflationary,
07:05could complicate the Fed's task next week in terms of thinking about that rate path and those rate
07:10path moves. That's inflationary. So if we're seeing price pressure there, then that's certainly an issue
07:16for rates. Yeah, it's going to be a game day decision because there's a lot of time before
07:20that Wednesday decision, and a lot could happen in the Middle East. The other thing to keep in mind that
07:24we have going on this weekend is the G7 meeting. And some analysts have talked about maybe there might
07:30be some trade talks that come out of that meeting where the U.S. gets together with another country
07:36and we get closer to some kind of, you know, concepts of a plan or trade deal.
07:41I'm glad you brought the G7 because I do wonder if the attack, the attacks, the dueling attacks today,
07:46if that changes maybe what the conversation is going to be about. I mean, we all pretty much
07:50assume going in it was all going to be pretty much about trade issues. But you do wonder now
07:54if they have to focus a little bit more on global security. Yeah. Let's not forget,
07:59too, that the United States and Iran were supposed to meet this Sunday for another round of nuclear
08:05talks in Oman. So we haven't really heard anything in terms of whether or not that's going to
08:10continue to go on. We know we've heard from various states in the region that have criticized the
08:15activities that have gone on and saying Israel's actions were reckless. But we should point out,
08:20too, that the Iranian foreign minister apparently had a call with his Indian counterpart and basically
08:24told him that right now those negotiations, any negotiations they were having with the U.S.
08:29are not happening anymore. Yeah. Also, we should note that a few more headlines dropping from a
08:35Fox News report that cited a White House source that it didn't name. The president and Netanyahu
08:40spoke by phone, according to Fox News, and the Trump administration also briefed lawmakers
08:44before those Israeli strikes. I think the question I have is what happens over the weekend here?
08:49And to what extent do we see this escalate? Well, one thing I'm curious about, and we had,
08:53Scarlett and I had John Bolton on a little bit earlier, and I don't think we had a chance to
08:56really ask him this, but also the idea that apparently this was something carried out
09:00without the U.S.'s direct, I guess, foreknowledge, I should say. At least that seems to be the
09:05implication and the reporting, though the U.S. did confirm that they did assist in some of the
09:09being able to block some of those missiles coming in from Iran. But it raises the question as to
09:14whether Netanyahu went at this alone or whether he did get the backing of his number one ally.
09:19Yeah, for a change, the U.S. is not the source of the uncertainty that ever all the investors in
09:23the world have to grapple with. So it definitely does create a new dynamic for investors to kind
09:27of price through. Yep. And raising a little bit of volatility, certainly in the trade. We'll see
09:31whether or not that carries into also the trade next week. All right, guys, that's a wrap. A super,
09:35super busy Friday, and it's playing out in the markets. That is a wrap on our cross-platform
09:39coverage, radio, TV, YouTube, Bloomberg Originals. We call it the closing bell. Have a good and
09:44safe weekend, everybody.
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