Joining us this morning, City research director of US equity strategy, Drew Credits with us. Drew, welcome back. Good to see you. >> Hey, good to see you, Carl.>> I got to say, um, making your way through September with no major hiccups on the headline uh, indexes kind of has the desks today saying maybe we averted weak seasonality and we can look forward to an up Q4. What do you think. >> Yeah, it's funny.It's going to be very dependent on the earning season. to us the the pressure's actually grown with a ...

I disagree with this view for a few reasons.(1) First, fast topline growth businesses are rare. Often they have a thesis on how margins can improve. And sometimes that thesis plays out. AI costs are highly dynamic, for example.(2) Second, yes, from today’s vantage point we can see that ride-sharing worked out but scooters made less money. However, even Uber lost money for many years. And the micromobility companies did create enormous consumer value, and Lime is apparently going public.(3) Third, just about ...

Actually they beat and they raised. But when you dig into the detail, server bookings were less than the previous quarter. Yeah, well if we if we think about the timing of these deals, Caroline, there was one big deal that went in and it's unclear who it is, but it's probably one of the big neo cloud vendors, whether it's a core wave or or OCI.So it is going to be sequentially down. But if we think about it for a second half, the first half basis, it's 10 billion even second half versus first half. So, you ...

Retail Earnings & Tariffs Impact - Retail sector is facing a significant week with earnings reports from Home Depot, Target, Lowe's, and Walmart [1] - Potential impact of tariffs on the financial results of these retailers is a key concern [1] - Three out of the four retailers mentioned use accounting methods that could reveal the impact of tariffs [2] Companies to Watch - Home Depot's results will be released tomorrow [1] - Target and Lowe's will report on Wednesday [1] - Walmart's earnings are scheduled for Thursday [1]

Corporate America’s effort to boost margins and sustain US stock gains faces a key hurdle: a widening gap between consumer and producer prices, compounded by tariff uncertainties https://t.co/BfPDQvKwJV ...

Yesterday's headlines, just modestly higher inflation from tariffs. Steve's going to dig deeper into it, but I just want to have a conversation with you before you you wrote something out. We've been crunching some numbers.You can do that in a sec. Can I read something to you. >> You got something. What do you got.>> So, this is what we were trying to say yesterday that and I think this is good. And then I want to ask you what it would really take for the Fed. The lack of a more alarming acceleration in pri ...

Business Strategy - During land grab time, companies with access to relatively cheap private capital may prioritize distribution over margins [1] - The rational business decision is to sacrifice margin for distribution to acquire incremental users [1] - The long-term value of acquiring users now outweighs the short-term cost of sacrificing margin [1] User Acquisition - Acquiring users now is crucial because if a company misses the opportunity, it may never be able to monetize them in the future [1]

Investment Recommendation - Seaport Research Partners upgrades Taylor Morrison and Toll Brothers to "buy" from "neutral," suggesting that the builders' stocks have already priced in much of the negative news and now offer potential upside [1] - The home building analyst believes that the current market sentiment is no longer at the "really bad part" [2] - The stocks have underperformed the market by roughly 40% from their prior peaks, which historically has only led to further downside in the worst housing cycles, a tail risk not currently seen as in play [7][8] Market Dynamics & Strategy - The strategy involves getting into the builders' stocks when the sentiment is bad and exiting when the sentiment is really good [2] - The firm had been short on the group from August until March, when they began rotating half of their stocks to "buy" [2] - Larger, more entry-level builders were initially favored due to concerns around the discretionary buyer and market volatility [6] Florida Housing Market - Florida and Texas previously drove outsized margins for builders [4] - Excess supply is more pronounced in Florida, particularly with HOAs and condo issues, making it the most difficult margin market for home builders [5] - Public builders have been pulling down their inventory by roughly 7% in the first quarter year-over-year, while census data shows an increase of upwards of 10%, indicating a divergence [9] - The Florida market will continue to face margin pressure due to ongoing supply [8] Financial Performance & Outlook - Taylor Morrison derives roughly 35-4% of their profits from Florida, which was a previous concern [6] - Fundamentals are seen as stabilizing, with order declines lessening [7] - While earnings are still expected to be under pressure into next year due to lower volume, the valuation should be expanding, consistent with cyclical industries [10][11]

Financial Performance - General Motors' Q2 earnings beat expectations, with revenue exceeding forecasts at $4712 billion, compared to the expected $4628 billion [1][2] - EBIT adjusted profit decreased by 31% to $304 billion from $444 billion in the previous year [2] - EBIT adjusted margin declined to 64% from 93% year-over-year, reflecting the impact of tariffs [2] - Automotive free cash flow decreased to $282 billion from $53 billion in the previous year [3] - North American EBIT profit decreased to $242 billion from $443 billion year-over-year [3] - North American margin significantly impacted, dropping to 61% from 109% in the second quarter of the previous year [3][8] Impact of Tariffs - Tariffs are significantly impacting General Motors' margins, particularly in North America [1][2][5][6][8] - General Motors anticipates a $5 billion headwind from tariffs and aims to offset a third of it through internal improvements [5][6] - The company is exploring options to mitigate the remaining tariff impact, including supplier negotiations [6] Guidance and Strategy - General Motors maintains its full-year guidance, projecting EBIT adjusted between $10 billion and $12 billion, EPS in the range of $825 to $10, and automotive free cash flow between $75 billion and $10 billion [4] - The company is adjusting production and headcount to offset some of the tariff impact [9]

Tariffs Impact & Outlook - Barclays initially cut S&P earnings estimates by approximately $10 due to anticipated tariff impacts [1] - The market has yet to fully reflect the impact of tariffs, but signs are expected to emerge this quarter [2][4] - The base case assumes tariffs of roughly 30% on China and 10% on the rest of the world, primarily affecting margins in sectors outside of tech, especially discretionary and staples [10] - The industry anticipates earnings to rebound sharply by 9+% next year, even with moderate economic growth [5][11] - Tariff impacts are expected to be partially offset by accelerated depreciation, R&D expensing, and interest deductibility [12][13] - The industry estimates that 50% of tariff costs will be absorbed in margins, while the other 50% will be passed on to consumers through price increases [13] Tech Sector Performance - Tech sector earnings are expected to outperform, potentially "bailing out" the overall market, with expectations of exceeding consensus growth estimates [3] - Big Tech companies are experiencing significant productivity gains from AI, leading to potential workforce reductions, with software productivity up 30-40% [8] - Tech-centric businesses are better positioned to manage margins due to AI adoption, while other sectors face challenges in adapting and improving productivity [8][9] Consumer & Economic Factors - Consumer spending showed weakness in Q1, even before tariff pressures, particularly in discretionary and staple sectors [3] - A relatively strong consumer and low unemployment have been key pillars of US economic growth, providing a respectable economic backdrop [13] Margins & Productivity - AI productivity is significantly impacting the tech sector, but its broader economic impact is not yet evident [7][8] - Labor costs are currently benign, supporting margins, and AI-driven productivity is expected to improve further [6]