Bloomberg Audio Studios, Podcasts, Radio News. Good morning, I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today.
Stocks are closing out the weekend record fashion optimism that the FED will be able to engineer a soft landing propelled the S and P five hundred to its twentieth record this year. The Nasdaq one hundred also hit an all time high. Cheryl Smith is portfolio manager at Trillia Masset Management.
Equity market wants to believe, and wants to believe hard, and is looking for every possible sign to go higher. The fact is that we are twenty four months into a FED tightening cycle, and that is about when we normally see interest rate hikes begin to really affect the economy truly.
Massive Management's Cheryl Smith notes, in just three months, the S and P five hundred is already trading above the average year end forecast of strategists tracked by Bloomberg Well Nathan.
Helping to fuel optimism was another successful trading debut of an IPO social media company. Reddit rose forty eight percent yesterday. Chief operating officer Jen Wong says the artificial revolution is at the center of reddits value proposition.
Large language models need data to train on, and when you look at Reddit's corpus nineteen years of human experience organized by topic with well in moderation and relevance, that's incredibly important to building both a chat capability and the freshness of information. So that's an area where you know, we see opportunity.
And Reddit's gen Wong Kele's Bloomberg. The firm is also in the early stages of allowing third parties to license access to data on the platform.
In yesterday's closing price of fifty dollars and forty four cents, Karen, Reddit has a market value of eight billion dollars includes stock options and restricted share units. The company's fully diluted valuation runs closer to nine and a half billion. Bloomberg and Elligence analyst man Deep Singh explains what going public means for Reddit as.
A public company. I think they'll be forced to improve their act in terms of, you know, showing more profitability. I don't think there is scare in terms of cash burn or you know, them running out of money. They've got a perfectly fine balance sheet, but now it's all about showing monetization. And the LM. The generator bi aspect is huge.
Bloomberg Intelligence analyst man Deep Sing argued even before the pricing that Reddit could be worth as much as ten billion dollars.
On Nathan, several stocks are on the move this morning. Shares of FedEx at more than twelve percent. Cost cutting help the courier deliver better than expected earnings. FedEx also plans to buy back five billion dollars of its shares.
On the flip side, Careen shares of Lululemon are down nearly thirteen percent. The athletic maker forecast lower than expected sales outlook for the first quarter and the full year. Lulu says visits to its stores in the US slowed at the beginning of the year.
Also lower this morning. Shares of Nike they are down almost seven percent this morning Nathan, the world's largest sports where retailer, warning investors that sales will take a hit later this year. Nike says it's working to realign merchandise to better match what shoppers want.
To buy, and investors have also taken a big bite out of Apple's market value. In fact, that dropped one hundred and thirteen billion dollars yesterday. This latest slide comes after Attorney General Merrick Garland announced an antitrust lawsuit against the company, accusing it of blocking rivals from accessing hardware and software features on the iPhone.
We allege that Apple has employed a strategy that relies on exclusionary, anti competitive conduct that hurts both consumers and developers. For consumers, that has meant fewer choices, higher prices and fees, lower quality smartphones, apps and accessories, and less innovation from Apple and its competitors.
In Merrick Garland's Justice Department lawsuit has been strongly refuted by Apple. It says it is wrong on the facts and the law on we.
Turn to the economy Nathan and criticism of the Federal Reserve by a former Treasury secretary, Larry Summers is questioning why the Fed is continuing to signal that it's prepared to lower interest rates despite a strong economy that's giving off projections of still too high inflation.
My sense is still that the Fed is itchy fingers to start cutting rates, and I don't fully get it. I don't know why we're in such a hurry to be talking about moving towards the accelerator.
And Larry Summers added that the Fed's current neutral policy rate is more restrictive than it needs to be. Here the full conversation on Bloomberg Wall Street Week today at six pm Wall Street Time, on Bloomberg Radio and television on.
Capitol Hill, Karen. Another partial government shut down deadline is just hours away. Funds run out for about seventy percent of federal agencies at midnight tonight, but later this morning, the House will vote on a one point two trillion dollar measure to keep them open through the end of September. Speaker Mike Johnson's bringing this bill up under a streamlined process that requires two thirds support. Bloomberg's Kate Actly reports the clock is ticking.
There's this sort of the pressure building two week recess on the horizon. Everybody wants to get back to their districts. Yes, it could fall apart, of course, but we have seen them again and again try to wrap things up so that they don't in an election year, you know, sort of draw attention to the dysfunction of government.
Bloomberg's Kate Actly reports some Republicans are crying foul over the process. Speaker Johnson is bypassing a House rule that gives lawmakers seventy two hours to review a bill before they vote on it.
Well, now, Nathan, to the latest on the war in the Middle Age. There are signs of progress toward a possible Gaza peace agreement. At the same time, there are threats of an invasion of Rolfa on Bloomberg's and Baxter has the details.
Delegations from Israel, the US, Cutter, and Egypt will meet today to try to draw up a plan so that the invasion does not have to happen. But Israel's Minister for Strategic Affairs, Ron Dermer, on a US podcast, hamas infrastructure remains in Rava.
Which you saw in October seventh, was a genocidal force that wants to wipe out all the Jews. And it's the first program that we've had since the birth of the State of Israel. We have the ability to defend ourselves.
He says.
If there is not a peace deal, the assault will happen. Ed Baxter, Bloomberg Radio, All right.
Ed, thank you, and it's time now for a look at some of the other stories making news in New York and around the world. And for that we're joined by Bloomberg's Michael Varr Michael, good Morning.
Good Morning, Karon, and battled New Jersey Senator Bob Menendez says he won't be seeking re election as a Democrat, but is keeping the door open to an independent run for his seat. Menendez and his wife Nadine are facing federal corruption charges. Prosecutors alleged they took gifts in exchange for doing official favors for the governments of Egypt and Cutter. In the video he posted on social media, Menendez talented the work he's done in the Senate and declared his innocence on churges.
This would allow me the time to not only remind New Jerseyans of how I've succeeded in being your champion, but how we will secure our financial futures, meet the challenges of raising a family, owning a home, provide for a college education, and secure a more peaceful world for all of us to live in.
If Menendez does run as an independent, he would face one of two Democratic candidates in November, Governor Phil Murphy's wife Tammy Murphy, or Representative Andy Kim. Russian missile and drone attacks damage electricity and transmission systems in several Ukrainian regions, causing power cuts in some areas. Two New York City
squatters wanted for murder are being sought in Pennsylvania. It began last week when fifty two year old Nadia Vittel arrived from Spain the check on her deceased mother's luxury Manhattan apartment. Police say she encountered two squatters, a man and a woman living in the apartment. Police say a struggle broke out. The tail was thrown into a sheet rock wall and died from blunt forced trauma to her head. Her body was stuffed in a Duffel bag and put
in a closet. The victim's son came to check on her, only to discover a foot sticking out of the Duffel bag. The building superintendent says the sun then called authorities.
We directed them to the closet because all the clothes had been pulled out, and he said there was a bag underneath it, and he said, can you open the bag because I believed as a body in there.
It's believed the suspected squanders took the Dell's car and fled to Pennsylvania. Adult film actress Stormy Daniel says she is absolutely ready to testify against her former President Trump in his New York hush money criminal trial. Daniel says, though she's somewhat surprised by the strong threats she's received after the case was announced.
Suddenly the indictment happens and all of this stuff and it was just as why I it was like twenty eighteen all over again, except now they're more vicious.
Stormy. Daniel spoke on ABC's The View Global News twenty four hours a day and whenever you want it with the Bloomberg News. Now, I'm Michael Barr, and this is Bloomberg. Hearin.
All right, Michael, thank you. Time now for the Bloomberg Sports Update, brought to you by Tri State Audian.
For that, we bring in John Stanshower. John, good morning, Good morning Karen. First round is what makes the NCAA tournament so special. So we see it every year, smaller schools who play in small James, very often not on TV. The players don't get nil money, and the upset a heavyweight.
We saw two years ago with Saint Peter's last year, Fairley Dickinson and last night the Cinderella Slipper belonged to Oakland University from Rochester, Michigan, a loser of eleven games, a fourteen seed who had never before won an NCAA first round game, The Golden Grizzlies knocked off Kentucky eighty to seventy six. Jack Goldkie scored thirty two, made ten threes and has asked how David go live.
Obviously we come in were the underdog by all measures, but you just gotta as a player, you can't think that way. You got to go out there and you got to think that you have the same talent level as them. I know they have draft picks, and I know I'm not going to the NBA, but I know on any given night, I can compete with those type of guys, and our team can compete with those type of guys.
As for Saint Peter's no run this year, they lost by thirty four to Tennessee. Wagner lost to North Carolina by twenty eight. Dan Monson now joins the unemployment line. He got fired by Long Beach State, but his team surprisingly won the Big West Turney. They then lost to Arizona by twenty The Knicks lost in Denver, won thirteen to one hundred too much. Nicola Jochus thirty points triple double.
Jalen Brunson scored twenty six. He averaged thirty seven a game on the road trip that saw the Knicks go three and one. They're back home tomorrow afternoon to play the Nets, who lost their fifth in a row one fifteen to one oh eight in Milwaukee. Rangers won five to two in Boston Artemi Panera and two goals in the second period. Adam Fox snapped at two all time in the third, and the Rangers then with two empty netters, the second one by Pinera and to complete the hat trick.
He's now the fifth leading score in the NHL. Islanders lost six to three at Detroit. Devil's beat Winnipeg four to one. The NFL says it will not outlaw the quarterback sneak Push Push John Stashcheller Bloomberg.
Sports Coast to coast on Bloomberg Radio, nationwide on Sirius XM, and around the world on Bloomberg dot Com, Bloomberg Television and the Bloomberg Business app. This is Bloomberg Daybreak. Good morning. I'm Nathan Hager.
Social media company read It made its much anticipated trading debut yesterday, marking the fourth largest initial public offering on a US exchange this year. Shares swored forty eight percent above their IPO price, closing at fifty dollars forty four cents. Investors are betting big on Reddit's vision of profit from
the growth in artificial intelligence. Reddit's chief operating officer, Jen Wong joined Bloomberg's Caroline Hyde and Ed Ludlow to talk about how Reddit plans to leverage AI to increase its value and how going public is giving the company plenty of momentum.
Well, it's certainly a lot of press on a day like today, it is a special day. But becoming a public company has just made us a better company. We've actually been in this process longer than most almost two years actually, and that process has made us more disciplined, more operationally rigorous, and actually allowed us to get to know investors better and tell our story. And so this whole process has made us a better company, and we're
prepared to be a public company. I think it's actually been really good for us, and I think companies that you can.
Go public it's sort of a duty.
It's part of the you know, process of maturing as a company.
And then the benefit of.
Having our sharehold our employee employees have liquidity which we promise to them, and in addition, have our communities and users be able to be shareholders.
Makes a lot of sense for Reddit.
The evolution of the story is for you moving away from a solely advertising based business model to one way you license your user data to the companies that are building large language models. I just asked if you could explain to our audience how that works in practice, how you're going to grow that business.
Yeah, Well, just ahead of addressing that, I just wanted to write context. One of the things that's so special about Reddit is that we play in three big addressable markets. We have this core advertising business. Adds is a great business, it's still early, we have great traction and momentum.
That's our core business.
We have an emerging data licensing business that we built the foundations for last year because Reddit's corpus of information is incredibly important to the training of large language models and also for insights for different kinds of businesses. And the third is a user economy where our communities go beyond conversation and to be able to transact with each other. Now you asked about the data licensing business, which we built the foundations for last year.
That has two pieces to it.
It is a piece that's sort of well established, where there's social listening for marketing for companies who want to understand what's happening on reddits.
And for marketing campaigns.
There's also financial services companies who are interested in that. Those are well established markets. And then there's the new emerging market of AI where large language models need data to train on. And when you look at Reddit's corpus, nineteen years of human experience organized by topic with well in moderation and relevance, that's incredibly important to building both a chat capability and the freshness of information. So that's
an area where you know, we see opportunity. I think what that signals, you know, whether it shows up honestly in our revenue or it shows up in the value of Reddit is how valuable Reddit is? You know, the more that we move toward this AI world, that corpus and that knowledge and refreshment of human experience becomes more valuable.
Those lms, the models are being built a new and different ways. This actual technology also develops. I'm interested as to really whether this goes on in perpetuity. Do you see this sort of licensing being steady and secure for ten.
Years from now?
This is so early in this emergence of this technology, it's hard to see far out. The way I think about it, the way we think about it is this, the redd Its corpus of data is incredibly valuable, and it gets more valuable because as there's more more content that's generated, maybe by AI or computers, original human thoughts and ideas increase in value. Right if you think about it, a new car comes out, who's going to review it?
A real life.
Family of six can actually tell you what it's like to drive that car. That's always going to be valuable. And so you know, whether that shows up in data licensing or in the products that Reddit built, it is valuable.
This is Bloomberg Daybreak Today, your morning brief on the stories making news from Wall Street to Washington and beyond.
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And I'm Karen Moscow. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak