Stocks Rise as S&P 500 Nears Record High
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with Betterment Advisor Solutions. Learn more at betterment.com slash advisors. Investing involves risk. Performance not guaranteed. A warm welcome to the Risk Reversal Podcast on this Thursday, June 26th. I'm Guy Adami. He's Dan Nathan. How are you today, Dan? Hey, Guy Adami. I was on the Fast Money with you last night. It was kind of fun. You were. You got a little punchy. Did it get a little punchy? Well, you were upset. I guess there was too much tomfoolery.

It's funny. It's when you're on this set of fast money and there's a lot of tomfoolery, it's more fun than when you're not on the set of fast money. And yeah, did that annoy you guys? I don't get it. You know me. I mean, yeah, yeah. I'm easy Sunday morning. I don't think Tim loved it, but you know, it is what it is. Um, guy, uh, I'm looking at my, by the way, it was Wednesday and you know, we had yesterday butters bitch. Yes, we did. So please continue.

I'm looking at my screen, my main fact set screen, and I see a sea of green. There it is. And why do you think the market's up today, Guy? Because it's open. Well, I mean, listen, I don't want to be glib, although that is a reason. But I think other reasons are, and listen, I know for a fact we talked about this in early June.

We said that as cautious as I was, you're going to start to see some strange things happen. If the market continues towards the middle of June, you'll see this markup in the end of the quarter. This is quarter end, month end, obviously, whether that's tomorrow or Monday, depending on the books that people have. But it's obviously one of those two days. And I think we're seeing it right in front of our eyes.

What is interesting, and I don't want to get too granular here, but Mike Rahn reported yesterday, I'm jumping ahead a little bit, but this I think is important because it sort of shows you where we are. And I think collectively, we all had sort of a similar view. I know what I said. I said the margins were great.

It was a significant quarter, I said, but we've sort of seen this before. And given the recent run we've seen since April, it probably stalls out here. I know exactly what you said. I think you were a little more vociferous in those views. I think Tim said similar. And here we are.

with a micron that initially traded higher. And now here we are trading lower. So I only mentioned this, Dan, because we talk about engulfing patterns all the time. Right now at 11.03 a.m., we have pretty much that in micron.

Yeah. And, you know, Peter Bookvar, a friend from Bleakley Advisors, you know, he sent me a text just a few minutes ago and just kind of saying the price decline for a sign that this resumption of AI tech trade has gotten too extended again. And my response is it's gotten too extended too quickly. I mean, like, think about this, right? So here's a stock that is up. It was trading at what, $70 or even

below that in the lows in April. And here we are, you know, it was $130 last night in the aftermarket. And so you have to ask yourself, I mean, you know, there is gravity in markets. You know, I had a conversation, I was at a dinner last night with some really brilliant

private tech investors, right? And you hear a lot about what's different about this time. And you know what? This one might be the one guy where it's not, you know, it's very different from a technology standpoint. And if you think you go back to, let's say the turn of the century, when internet, the smartest people in tech,

we're saying the same thing, right? But what happened there was an investment bubble, right? And because when that thought process permeates through first the institutions that are making these big bets and funding these companies, and then it becomes a foregone conclusion about the people who are building these companies. And then all the people that work there, there's a lot of group think, they wanna think that they are on the cusp of the next thing. And then it works its way into retail.

Right. And usually when it works its way into retail, that's when things are really frothy. I look at this chart right here, guy, and I say, OK, maybe some institutions at those lows, they're like, listen, the stock's too cheap. We think there's going to be another leg, this, that, whatever. You have that gap up. That was after, you know, the push out of some tariffs in China. You see that consolidation. But that move.

from the 200-day moving average from $96 to $130, that is an anticipation of those great margins that you just mentioned, right? So that's kind of how the game works a little bit.

I think so. And I wanted to sort of not necessarily lead because it's not the lead, but I wanted to sort of bring that up because, you know, in terms of this pattern we're seeing in terms of this price action, I think it's worth watching because Micron is not an insignificant company. But, you know, some of the headlines that we've been talking about, and let's go to our first slide talking about exactly that.

We had David Rosenberg on our podcast. It dropped, I believe, yesterday. You should listen to it if you haven't, because he talked about a lot of the same things that we're talking about. He talked about how housing is an absolute leading indicator. And we also talked about sort of the job market and his thoughts on the job market. And they sort of mirror some of the things that I've been thinking about as well. And

Below the surface, we're starting to see this deterioration in the job market, which again, I think is problematic. The next headline is again around President Trump and Jerome Powell. I think we've all seen this before. There's clearly going to be some jawboning on the back of that. Jerome Powell, by the way, is going nowhere until probably this time next year. I think his term is up in May. So I think

i don't want to use the term we're stuck with him because quite frankly i think he's actually been doing a pretty solid job uh over the last year year and a half or so and this is the one you've been talking about this gdp revised lower the fed lowered their gdp forecast to about 1.4 percent the last time they convened they raised their inflation forecast i think the three percent and then obviously geopolitical fear but on top of all these headlines the most important one to me dan is around the jobs market

Right. And so we were talking about housing earlier in the week. So you have weaker growth, you have jobs weakening. You've been talking about that for a while. Last night on Fast Money, Tim mentioned, hey, we're near 50-year lows, that sort of thing. But it really is the fact that we had that Psalm rule triggered late last year, went from 3.5% up to 4.1% or something like that. We have been hanging out around there, but

Under the surface, there's clearly some signs of deterioration in the jobs market. One thing that we haven't talked a lot about is I keep seeing headlines about recent grads or folks that are in their 20s having a very hard time finding new jobs right now. And there's also data, and I think it's in this jobless claims today, that suggests that people who are unemployed are having a much harder

tougher time in general away from, let's say, recent grads in the like finding new jobs, despite the fact that many employers are not, you know, they're not so, you know, geeked up right now to lay people off. Right. Because you do have this situation where they've had the tailwind of some of this, you know, like the tariff thing was meant to be a huge headwind. But actually, you know,

It ended up being a really good thing from a demand standpoint or whatever. So the back half of the year is really where we're going to see the rubber hit the road. And if the Fed's right and some of these other folks who are calling for 1.5% GDP growth, we could have ourselves in a little bit of a pickle there, especially as unemployment's going up.

higher and maybe interest rates don't go much lower and all that sort of stuff. So yeah, I think this is like a really interesting combination of headlines today, but it doesn't really speak for a huge need for the Fed to do anything right now, right? Listen, I've said that for a while. I know there are a lot of, listen, David Rosenberg thinks the Fed's way behind. And I respect his opinion, quite frankly, given his stature in the market and given his

basically knowledge of the market, he's probably right. So I'm not suggesting I am, but I just sort of look at the landscape

and see where things are. And I'm like, why would you start to sort of why would you start to try to fix what does not appear to be broken? And I also think there's this thought that, you know, if the Fed were to lower rates, it would magically spur some job growth. I'm not necessarily sure that's true. I mean, I don't have the hard data to either support it or sort of kick holes in that. But with that said, I mean, things seemingly

are going along pretty smoothly right now at current interest rates in terms of the short end of the curve. So to sort of mess with that, I don't know what type of signal it will tell. Now,

We don't have to look at yields because we talk about them all the time. The one thing that I want to continue to talk about, and you brought it up on Fast Money, and I talked about it yesterday with Danny, is this continued weakness in the US dollar. Now, we'll look at this and say, it's not a big deal. Obviously, the market doesn't seem to care. This is a DXY. I think it's sort of 65% composed of the euro. And I think right now, dollar-euro is at a four-year-ish range.

The euro is at a four-year high against the dollar. There's clearly something going on. Now, Tim talked about this last night on Fast Money. To a certain extent, and you've said this as well, a weaker dollar is absolutely a tailwind for multinationals.

My point has been at some point it ceases to be a tailwind and it becomes a headwind for the entire market. There is clearly something going on in terms of the U.S. dollar and not necessarily people shorting it or whatever, but there's clearly been a move away from it. And you can see it in this chart. And if Jacob or Steven wants to do a longer term chart, you can take a look at that as well. You will see, you know, where levels we haven't seen in quite some time.

Yeah, and there it is. So the point I made is that the average of the Dixie in Q1 was like 107. The high was 110 coming into the year. The average of the Dixie in Q2 was like 100.

Okay. And again, we're going lower into, you know, quarter end. So if you think about what that means for U.S. corporate earnings, if 40% of the S&P 500 earnings are from overseas, then that's going to be a huge benefit, right, for corporate earnings. And, you know, yields are at the same spot. You know, demand seemed like it was pretty good in general. There's going to be some pockets as it relates to China and some, you know,

chips and some other stuff there. But so you got to get yourself comfortable with the fact that Q2 earnings are going to be good. And then if you think about what Q3 guidance is, if you say to yourself, that's what it's going to trade on, that's what the market's going to trade on, that might be the thing where, okay, if you're a CEO or a CFO of a company, and you know that surprisingly so, you had this environment that really did not contract earnings too much, right? And

You might basically be a little, you know, cautious into the back half of the year. You might be because, you know, who knows? Like, think about this. We look at the S&P 500, the way it sold off, it really was starting to sell off before that early, that April 2nd day. And then the bottom just fell out. We were likely to have

I think you would agree, Guy, a 5% to 7% decline in the S&P 500 at some point this year. In many ways, it had already given back a lot of the post-election bump, right? But every year, on average, we have a 10% decline. So here we are now, and we're right back at that

prior high where we're like 20 points away in the S&P 500. And I still can't conceive of some sort of set of news that would cause a breakout, a meaningful breakout in establishing a new range above the 61.50. Because if you just think about it, all the uncertainties that really caused the market to decline back in April, they're still there, but maybe we're just kind of, I

immune to them in a way because we already had that like kind of volatility shock or whatever. But I don't believe that if we had, for instance, a surprise rate cut in August and then a 50 base, you know, whatever, that shouldn't be the thing that causes the market to go higher.

In knee jerk, it might. But, you know, I think there would be a look through as to, you know, what's really going on in order for that to happen. And are there scenarios where you could continue to see this acceleration or this continuation? Yeah, obviously there are. I mean, it's happened.

You know, again, in terms of the S&P, we thought it would bounce off the April lows off that trend line that we've drawn a number of times. I thought it would stall around 56, 50, 5700, 400 points later in the S&P. Here we are. Could we extend through those prior highs? Yeah. Is it a U.S.-China trend?

beautiful trade deal when President Xi and President Trump meet in some third, you know, some basically neutral country and sign some accord, I guess. I mean, people get excited about that. But the underlying fundamentals, and again, this is what Rosie was talking about. There's no denying some of the deterioration below the surface that historically are very important. Now, you said something earlier that maybe it's different this time.

Maybe it is. But if you just go by history and look at some of the things that are happening, it's just seemingly a matter of time before it all starts to manifest in terms of the market. Yeah.

Yeah. As far as Rosie, you know, I love that conversation. It's in the pod feed Wednesday. So go check it out. One of the last questions I asked him was about just this pocket of risk that exists in the private markets right now. And we haven't seen a whole heck of a lot of IPOs, but the ones we have seen core weave and circle, they've absolutely gone ballistic.

okay so maybe that's a combination of some institutions but to me the price action if you look at the options action it looks like it's retail driven right retail wants new stocks they're happy to make meme stocks out of some of these sorts of things okay but

When I think about, let's say, an open AI and you say to yourself, okay, will this company ever be able to go public? It's got a $300 billion valuation in the private markets. And you could say, well, that's not particularly liquid and this and that or whatever. SoftBank led around a $40 billion at a $300 billion valuation. And you'd say to yourself, how will this company ever kind of be able to kind of like –

I don't know, like work into that valuation. And so Jeff Richards, our friend from Notable Capital, has been on the pod on many occasions. He said, Dan, they keep doubling the revenue, doubling the revenue. And by 2030, it should be $50 billion. Now that might be.

Maybe it's profitable, 50 billion. Maybe it's not. But if you look at it right now and if you're valuing out a few years or something, you say, oh, I don't know, five, six times sales. That seems pretty reasonable for a company that's going to have great margins and this and that or whatever. And they're going to be a transformative company. This is going to be like the Google of the last 25 years.

which it may, that all makes sense. But like the idea that we can't have some sort of AI winter that really starts in the public markets and then finds its way in the private markets, you know, that to me is something that you and I would say the likelihood of that not happening is not particularly great.

Yeah, and Gary Webb is asking, you know, in terms of questions, he's saying, is the micron price action some sort of potential precursor to NVIDIA or Palantir? You know, I don't know if I'm necessarily going to connect the dots to Palantir, but I understand what he's saying. You know, good quarter.

Bad price action. We'll see. Obviously, Palantir has had a ridiculous run. I think it made an all-time high today north of 148. We've talked about how it's trading almost 70 times higher

revenue right now, which is extraordinary if you think about it. You're still waiting for a day, maybe is today, where you have this sort of outside move. We made an all-time high. We'll see where it closes. NVIDIA is obviously, since earnings, it sort of went sideways for a while now. Yesterday, that stock made an all-time high. I talked to Danny Moses about it.

you know, he thinks it's breaking out basically. And quite frankly, he's probably right. So, you know, we'll see, there's clearly a re renewed excitement around a lot of these names. Yeah. But interestingly, if you look at Palantir, which is a software company, right. Expected to do $4 billion in sales this year, it's got $330 billion, you know, um,

market cap is trading at 90 times sales or something like that. I mean, that's ludicrous. Okay. But it's interesting to me that investors are not willing to assign really any benefit to investments in generative AI for some of these other software names, like an Adobe, which is down 30% from its 52 week highs or a Salesforce, which is down 52 or 30% from its 52 week highs or

Workday, some of these other names, they're just, you know, they were they're telling a generative AI story. They're telling how their customers are going to benefit from, you know, all this these new whiz bang features that they're adding to their suite of services and the like here.

But they're not there yet, and the market's not appreciating them. So it does seem like there's some discerning behavior as it relates to some of these things. But for whatever reason, the Palantir is the Palantir. When you think about a Palantir, I just want to kind of highlight this for a second. So we just said that's got a $330 billion market cap.

Salesforce has a $250 billion market cap. Salesforce is a company that has durable earnings, at least for now, because a big part of it is, um,

recurring. They're expected to have double digit earnings growth for the next few years. Sales growth expected to be 9%, 10% for the next few years. The company has $40 billion in annual sales versus that $4 billion that we just talked about with Palantir. Also, 80% gross margins

Okay. And then for Palantir, it's about the same 82 or something. So the market is basically suggesting that Palantir is going to be able to take considerable amount of the budgets on their end markets. You know what I mean? Like that's the trade that they're going to go from 25% expected or sales growth to 50, then a hundred or whatever the hell it is. It's easier to do that off a lot, a lower base, but street consensus is not there right

now. So how do you get there? You know what I'm saying? Like, that's the thing. And then how do you grow into that valuation? So again, Salesforce, yeah, they better make some acquisitions. ServiceNow, Workday, Adobe. Adobe tried to. Remember they tried to buy this company, Figma? That might have been the thing that turned Adobe into a great AI play, but it's not. They weren't allowed to do it, and here you are.

Listen, I think your point, yeah, it's exactly right. And the reality is I'm hard pressed to find a set of circumstances that Palantir is going to grow into this

valuation. I mean, it would have to be a dramatic increase over the next few years to sort of justify where it's trading now. But I think there are other forces at work, you know, and it just comes down to is we're at the end of June. And we talked about this earlier in the month that, you know, people that have been trailing the market are going to start to chase and they're going to start to chase in names that they can get some sort of beta from. And this is one of those names, whether it's

justified or not, whether it makes sense or not. I mean, I think that's what the game is now. And we said it a number of times, and this can last a lot longer than it seemingly makes sense. And in terms of just the math, we're not making these numbers up. I mean, you can go look for yourself. Palantir is expected to do $5 billion of revenue next year. It's trading at basically a $340 billion market cap. I think it's just shy of that.

You can do that math, you know, 68 times, which is just an extraordinary number. I mean, it should be, you should put a decimal point between the six and the eight. That's where it should be historically.

Yeah. You know, we just talked a little bit about M&A and I'm sure this headline that was quickly refuted. And this is interesting. So you had oil had this spike on geopolitical. We're going to talk about geopolitics in a minute. You know, so far, our friends there, Mario and by the way, Guy, Liz.

It's countdown, baby. I think we got like another month until Liz Young Thomas is going to be back with us. But we have Mario's note this week and they're talking about geopolitics. But let's just talk about oil for a second here, because, you know, it's obviously something that has been

I think that the Fed chair Powell has been keeping a close eye on, right? Because if you were to have some sustained, you know, geopolitical disruption or whatever, and oil was staying up there at 75 and you saw the average gallon of gas at the pump go from three 15 or whatever the hell it is up to four bucks or something, that would be one of the things that could cause them to stay on the sidelines here. Right. And you have this dollar weakness and maybe that speaks to oil strength, that sort of thing. But as soon as you saw that,

volatility over the last week and a half or so, two weeks, all of a sudden you get this rumor of this mega deal in the integrated. So talk to me about that. So it was shell to buy BP, but then it was quickly refuted. Yeah, but whether smoke, there's fire with these things and it's gotten people talking clearly because we're talking about it now. And

if you think about the space it's does not necessarily it's not necessarily a bad idea I mean if you think about the valuations in these names you think about the balance sheets that they all currently have how well operated they are the efficiencies there now you I do think you're going to see whether it's continued rumors of M&A or actual M&A I think it's going to take place now

I've thought that energy and energy stocks have been a very good place to be.

for a while now because I thought you'd see this sort of fleeing out of high beta, high valuation names into more reasonable valuation names like energy. That has not taken place. But if there's going to be M&A in the space, I think you have to be sort of looking at some of these names. And we have gotten some of these names right. For example, in EQT, which is in my tube, if you want to pull that one up, Constellation Energy we've talked about. I mean, all these stocks recently initiated

most of them with buy recommendations. I think it was Raymond James. I mean, these stocks are all doing extraordinarily well. Yeah, it is an area where some of those have been the way to play it and others, they just can't get out of their own way. And that's one of the reasons why the geopolitical situation, I think we talked to Carter on Monday, his view is to kind of

fade those sorts of situations, right? But it's interesting that as soon as you have this upward volatility in the commodity, then it comes back down. That's when you're kind of getting some of those, you know, kind of headlines or rumors. But to your point, you know, oftentimes where there's smoke, there's fire. I get it.

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with Betterment Advisor Solutions. Learn more at betterment.com/advisors. Investing involves risk, performance not guaranteed. Let's go to the SoFi note here. You know where you can get this guy if you want this in your inbox? - Can I do this one? 'Cause I just like, 'cause it's so ridiculous. And hopefully Elizabeth is watching. I know Mario is.

sofi.com slash on dash the dash money yeah or you can just go to so if i blog you're gonna go to the sofa blog uh just google that and you'll find it here but everywhere uh week they do great work and we get to preview it a little bit so uh decoding markets geopolitical fear that is the title here and so they're going to start with wti oil prices

Though oil prices are back to where they were earlier in the month, down 12% since June 18th, things feel more fragile now. Mid-60 oil prices suggest the Israel-Iran conflict is fully resolved, but given where we are a week ago, that might be too optimistic.

I agree with that. I want to hear your thoughts on that guy. I agree with that. I mean, obviously we've, we've heard that this is going to be a lasting piece. You know, I think if you're a student of history, you've heard that a number of times over the years. I don't think it's different this time. I think it's just a matter of time before something happens to sort of

renew these tensions. And I'm not rooting for that. I want to be clear, but just history suggests that will happen. It does feel more tenuous in terms of the oil price to the downside, given what's just happened. But, you know, as we've seen before, we're a couple headlines away from maybe reversing this entire thing. And obviously crude oil is higher today. So

I understand it. I understand it feels more vulnerable now to the downside, but we're just right back where we were to their point, you know, a couple of weeks ago. Yeah. I mean, listen, the Iranians are telling one story, you know, we're telling another story. The Israel, Israel is declaring victory. Right. And what's interesting to me about the Iranians though, is that the Supreme leader comes out and he's still doing death to Israel.

You know what I mean? Like, so that's the thing, you know, yeah, the nuclear capabilities and being able to create a bomb and this or whatever. But how do you have this rogue state that seems hell bent on creating a nuclear weapon and they're doing everything in their power, you know, to move that enriched uranium around and this or whatever. It's only likely to inflame the Israelis again. You know, Trump is obviously very emotional. Look at the way the administration's acting about, you know,

whether they obliterated their nuclear capabilities or not, if they move that enriched uranium away from FODRO or FODRO or FODER or whatever the hell it is, then they're not that far off. You know what I mean? From where they were just, you know, two months ago. So I'm in, it's four Dow, four Dow.

Sorry, I keep getting that all screwed up. So to your point, I mean, maybe the next thing they do is the straight of her moves or this or whatever. So I'm with you on the oil front here. This is an interesting one that they put in their note, Guy. And I even know this indexing.

The geopolitical risk index, which looks at the frequency of news articles mentioning negative geopolitical events, currently ranks in the 99th percentile, dating back to 1985. Higher geopolitical risk has historically meant better one-year returns for cyclical stocks relative to defensive. Interesting stuff.

That is interesting because I think what it's saying is when you reach this sort of zenith in terms of peak geopolitical risk, it's typically when some of these cyclical stocks are the most interesting and the defensive stocks, which you've been in.

become where people start to get out of, if you think about it. So peak geopolitical theoretically mean we're peaking out in terms of the defensive, and then people are looking for other places to be. So somewhat counterintuitively, this makes a little bit of sense to me, if you think about it. And there's nothing more cyclical

And well, there are a lot of cyclical industries, but, you know, the banks are probably top of that list. And look at the performance of the banks recently. I mean, I think that's telling you it's basically backing up a little bit of this narrative right there. Yeah. And I guess one of the if you watch CNBC all day, you just hear a lot of folks that don't seem to be particularly worried about geopolitical risks or, you know,

inflation spiking or I mean they just don't and you know we keep hearing last night I mean on our panel which I always think is an interesting sort of um you know uh a Tesla executive and most confident Omid Ashour departs company we'll take a look at that in a second um you

You know, there seems to be a lot of confidence. I mean, both Tim and Steve and you can put whatever, you know, you want on that. They're like markets going much higher. You know what I mean? Like it was that it was that simple. What am I right? Didn't I hear that correctly? Like it was, you know, and Tim has some good, good reasons why, you know, he suggests that. But I don't know. I just think that's too easy. But let's look at this for a second here, because you get confidence about the market going much higher.

if you're seeing more leadership or you're seeing stocks breaking out to new all time highs when you have the S&P back there. But this is interesting guy. So percent of S&P 500 stocks at 52 week highs, even though the headline stock indices might show

At near-term highs, the market looks more cautious under the surface. Only 4% of constituent stocks are at 52-week highs. Compare that to last year when the metric was roughly in the 10% to 20% range. And it becomes clear that investors are still not fully buying the story of a durable bull market. Well, this is just another way of saying how top-heavy. I mean, there's a number of different ways to sort of illustrate and talk about and show

how top heavy the market is and this is one of those ways and you know when you see this and read that it suggests exactly that that although the s p is at an all-time effectively at an all-time high below the surface you don't have the enthusiasm that you would think you would have based on where we are and again it's speak now

You could say that's a great sign because even at all-time highs, people are not believing and there's more room to go. Or you could say it's a cautionary tale. So to a certain extent, there's something there for everybody. All right. Should this be a cautionary tale? Nike reports after the close tonight.

seven and a half percent implied move um the stock's 52 week high it was basically like 92 here it is it's trading at 61 and a half um we know the all-time high when everything was just kind of getting bid up in 2021 was 180 dollars so we're 180 dollars down to let's call it 62 you know a lot of folks want to make um a value or uh you know

judgment about valuation and you know a whole host of other things here um this is a company that has not been able to turn around you know some of the issues that they've had and they've gone back and forth with online sales and china you know like the list goes on and on um but it's still trading guy at like 28 times earnings this year and 32 times next so it's not cheap we'll also talk about the fact that lulu and and this is an area i know you're a big lulu guy um that stock

It's down 40% on the year. It hasn't seen an uptick since they reported and gave that guidance here. What do you think happens here? Because, you know, a lot of folks, you want to generally try to buy these sorts of names at periods like this, but you could have said that for the last four years. Yeah, well, I think, I know for a fact, in terms of Lululemon, I think we've done a good job because, you know,

i mentioned jeff mackie a lot i'll mention him again he used to say in the early days of fast money specialty retails where hope goes to die and lululemon is exactly that and if you want to go back in time and look at under armor it's a very similar story i mean these are companies that created

basically their own category dominated that category to a certain extent, got lazy. Competition came in a meaningful way. They were not able to sort of innovate in a way that was going to keep competition at bay. And then you see how quickly it gives the entire thing back. Under Armour is top of that list and you're seeing it now in Lululemon. And by the way,

There are a lot of people that think even at current prices, a little lemon is too expensive. I'm one of those people, by the way. Nike, which made its all-time high in 2021,

is now basically 32% of the price it was four or so years ago, which is in a word remarkable. And it's still expensive to your point. All you've seen since that period of time is a series of lower lows and lower highs. And you can see the downtrend line. We can draw it for you. Maybe you get a bounce on the back of earnings. But like every bounce over the last four years, they've all been very short-lived.

Yeah, I was kind of at the camp. Like, you know, we're just talking about what percentage of stocks are at their 52-week highs, right? I was at the camp over the last couple of years that once we got out of that bear market in 2022, right? And the market was up 25% over the last two years. There were certain franchises.

consumer discretionary whether it was disney whether it was nike whether it was starbucks there was a few others you throw lulu in there you know i was like in my head there was a psychological level of that code low right from the first you know quarter say you know march april may of 2020 and if you got back there it's

It's like a memory point for a lot of investors because that's where they were maybe puking stocks, right? They was just like, there's no visibility, that sort of thing. But this has not been one that's held that. And there's been plenty of others that have not held those levels. And you could say, what the hell is a level? It doesn't really matter, right? Like, what's the course of the fundamentals? Are they improving? You know, are they improving margins? Are they taking share? Are they being innovative? Like all those sorts of things. And you can make the argument at Lululemon and Nike.

They're just not, you know what I mean? So, and then they trade expensive. So there's a bunch of other stocks, hundreds, if not thousands in the market that have probably much better fundamental stories that if you think we're back in a new secular bull market, that's where you want to be. You don't want to be buying crap if we're going to be, you know, in the next phase of a bull market. So, yep. And I, and isn't, you know, we said plus or minus 7%. I mean, there is a very,

real chance that you see a bounce of 7% on this Nike quarter in terms of just a relief rally. But I want to point out that we have absolutely seen similar before, and they typically don't last very long. So 7% Nike here is probably like, what is that, $4.50 or so. So you get to $67. I'm doing back of the envelope math.

you know maybe it gets us close to the 200-day moving average ish um but i think you're faded if it gets there dan all right last thing before we get out of here we got to hit this guy um so tesla this just hit the tape as we were kind of talking here so omid

Afshar, a powerful executive at Tesla and one of Elon Musk's closest confidants, has left the company. He was promoted last year to oversee sales and manufacturing operations in North America and Europe, which have become pain points for the automaker. This marks at least the second departure of a prominent Tesla leader in recent weeks. So this is interesting to me from the standpoint, Guy, that

You know, Elon is obviously the CEO of many companies, many important companies, right? So we could throw SpaceX and Starlink and X and XAI and Neuralink and that sort of thing. We also know that he spent almost four months in the government at Doge.

So for him to keep these businesses, these other businesses going while he was in Washington, he had to lean on people like Omid, right? And this is a guy who's been there a very long time. He works in his office. And a lot of folks who know Elon and how he operates will tell you that, you know, he's...

Yeah, he's the CEO of all these companies, but he's actually made some very solid executive teams that have to be able to make some big decisions. So when you think about what this guy was promoted to do as Elon was very busy in politics, because it also goes back to the campaign, look what he was in charge of, North America and Europe.

manufacturing okay well look what's happened they haven't had too many manufacturing issues they've had sales issues they've had demand issues they've had pricing issues you know that sort of thing um competition issues so i i just think this is interesting you know um that move on monday morning we came in and people were geeked up about

a cyber cat or robo taxi is not going up 10%. And then it's given it all back. We're going to get Q2 deliveries, which are going to be a disaster. And maybe that is already in the stock. Who knows, you know, Q2 earnings are going to be really bad. If you just look at where interest rates are in competition and how we we've been getting data, you know, I think Europe is down 28%, something year over year in June, you know, that sort of thing. So we keep getting these headlines, but to me,

you know, and I've obviously been very vocal about this. We're gonna have Jim Chanos of Chanos and Co on the Rich Versatile Podcast drops tomorrow. We'll talk about this, but this, this continues to be one of the worst fundamental stories. And I'm not just like, yeah, I have biases here, but that's a fact. I mean, guy, you've been talking about auto gross margins for two years with this company. We've been talking about declining deliveries, increasing competition, you know, an aging sort of design situation. Maybe you have an EV market that's

really saturated, brand degradation. I don't know what is positive about this story. - In terms of the autos themselves, fundamentals, you're 100% right. And as you said, I pointed out, you've pointed it out, what people on the flip side of the equation will say, whether correctly or incorrectly, but the opinion for a lot of people is to a certain extent, the things that we talk about are a bit of a loss leader and the real focus should be on exactly what you just mentioned.

um robo taxis and and self-driving and and that's the way forward and you know we can wait i can waste my time talking about all these things that i think matter but in retrospect none of it really does because the bigger picture is something that we should be more focused on that's sort of the bull case for tesla but your point is well taken i will say technically real quick before we get out of here and we have brought this up a number of times the stock made an all-time high in

I think in December, I might be off by a couple of days, but middle of December, 488 and change. We traded down to support. And by the way, we thought at around 220, that would be support because that's where we exploded higher from in November. We thought the 50% retracement of that move would be somewhere around 360. And you can go and look where we've topped out now. We topped out at 360-ish. And I want to say late May, we just bounced up to there.

basically over the last few days. And now here we are at 328 or so. So I think the technicals have held up pretty well. No doubt about it. And the thing is, on Monday, when the stock was up 10%, there were clearly investors suggesting that, wow, that RoboTaxi launch was really good. We like the technology. I think it is important to note that, and this was well-documented because it was recorded,

and you could say, well, it's really early gone. There was a couple incidents where it just didn't work. I mean, it was taking a left turn when it should have taken a right turn or this and that, whatever. And they have, you know, they don't even have approval by regulators for full self-driving right now. And so right now, and that's just in the vehicles that they sell that are manned, that people who buy them, you know, drive in. But the idea of doing a

autonomous vehicle and you don't have approval for full self-driving, you're going to have to have a person in there and someone else monitoring it. This is not going to be a profitable business for a very long time, like a very, very long time. So we'll see if that's what your value in Tesla is.

have a ball, but I think you're going to see that the best days for EVs are behind him. And then the best days for RoboTaxi are far out in the future. We'll leave it there, Guy Dami. We covered a lot of ground here. We did. We always do. As you mentioned, we're sitting down with Jim Chanos in a couple hours. That drops tomorrow. I look forward to that because Jim is always insightful. And I know he's bringing some interesting single stock stories with him as well. So stay tuned for that. All right. Thanks, peeps.