Let's get to the big story breakdown.
All eyes on Fetcher Jerome Powell's high stakes speech at Jackson Hole this morning.
Trading has been muted ahead of the event, with indexes hovering just below record highs, but the S&P 500 closing down for 1/5 straight session on Thursday.
And retail giant Walmart disappointed Wall Street missing its quarterly target and sending shares down, a drop that.
Pressure on the Dow, but executives say costs are rising as the company replenishes inventory at higher tariff levels.
Still, Walmart does plan to hold price increases below the national average.
Now expectations for a Fed rate cut have faded slightly.
And joining me to weigh in this morning is Tim Anderson, managing director at TJM Investments.
So Tim, happy Friday.
Today is the day.
Less than an hour to go until Jay.
Powell speaks.
So tell us a little bit about your expectations.
Are you expecting Powell to be hawkish, dovish, or somewhere in between?
I think he's going to try to be as neutral as he possibly can with some inference that they still have significant data to look at before the September meeting.
That's his out on either committing to cut.
Or or holding the line and getting further backlash from those of us that feel like not only should he cut but he also should have cut at the last meeting and that a 50 point cut would be warranted and it would match the 50 point cut that he did last September.
Yeah, and Tim, we'll just have to wait and see since we don't have that crystal ball.
So I do want to shift our focus to the stock averages.
The futures are looking green this morning, but we have to keep in mind we saw that big tech sell-off.
So tell us what happened.
So I just think that there was a multidirectional stream of bad news or at least negative headlines that hit the really high flying AI driven sector of the tech semiconductor chip market.
You had the comments from Citron Research that Palantir was extremely overvalued.
You had a report out of MIT talking about there really hasn't been any any perceptible increase in profitability from people using AI internally yet.
Uh and it doesn't surprise me a whole lot, but then you also had these comments from Sam Walton, the founder of OpenAI, right, that that the AI was in a bubble and he may have even compared it to, and I really have to address that because he compared it to the internet bubble that in from the late 90s and Look, Sam Alton is probably a genius.
He's clearly a visionary.
He did, he is on the leading edge of what's the Next industrial revolution if you want to call it that.
He was 15 years old in 2000, so he was in his early teens when the internet bubble was percolating.
And even though he may be a genius and a visionary, I don't think he's very market savvy because I remember very clearly when stocks were being valued at Thousands of times what Revenue projections were going to be revenue projections for companies that didn't even have revenues yet and analysts were trying to measure how many clicks websites were getting and how many eyeballs we're looking at, you know, when Yahoo traded at $350 as a an email server, barely a browser at the time.
You know, before it went to between 15 and 20 and sat there for 5 to 10 years, so and it was just, there's no comparison.
There's no comparison.
Now was Pallanttier a little bit overextended maybe at 190 and it had a parabolic move.
Yes, of course, but nothing fundamentally has changed at the company.
This is a company that's clearly going to be a major beneficiary of the AI revolution.
Uh, and are there companies that have, that have had very significant price increases because a rising tide will lift all boats, so to speak.
Yes, I'm sure that there are, but The real high quality companies are going to separate themselves from the rest of the field over the next few years.
OK, and Tim, finally, I do want to ask you about the retail sector.
We heard from big box retailers this week, including Target, Walmart, TJX, so that gives us a better picture of where the American consumer is, but any surprises?
Well, look, investors always want to be concerned about what retailers are saying.
The consumer is still close to 65%, 70% of the of the US economy, and I think that what you're seeing from some of these retailers is that those that have tremendous amounts of internal data that can. without doing a blanket increase because of tariffs, say, well, you know, look at product lines, look at individual products, look at maybe go through thousands of different items if you're Walmart, if you're Amazon, if you want the biggest of the biggest retailers are going to be able to sort through all this.
They're going to absorb some of the costs.
They're going to pass some costs along with.
Feel like they can do that without losing a lot of market share, and they're always the Walmarts are always going to want to say that they're raising prices less than everyone else, and they have a big enough platform to where they can spread that along and if that cost them a few cents in earnings per share over the next 12 to 18 months, I think they can deal with that.
OK, Tim, while we are watching what happens this morning in Jackson Hole, so I appreciate your time.
Thank you so much for joining us ahead of that event today.
Have a great day.
You too.
