Novavax-Sanofi vaccine deal, Yelp and Sweetgreen earnings: Morning Brief

On today's episode of The Morning Brief, Hosts Seana Smith and Brad Smith break down some of the biggest news affecting the market (^DJI, ^IXIC, ^GSPC).

President Biden is reportedly set to release a new wave of tariffs targeting China in critical sectors, including electric vehicles, semiconductors, and solar equipment.

Novavax (NVAX) shares skyrocket following the announcement of a $1.2 billion deal with Sanofi (SNY) to commercialize its combined COVID-19 and flu shot. Restaurant and business review platform Yelp (YELP) misses first-quarter earnings estimates as US consumer spending remains relatively weak. Taiwan Semiconductor (TSM) sales jumped nearly 60% year-over-year as the artificial intelligence race heats up and demand for chips rises.

Wedbush Securities Managing Director Dan Ives joins Yahoo Finance to discuss "the fourth Industrial Revolution" in AI and Apple's (AAPL) position among other Big Tech competitors.

Sweetgreen (SG) shares soar after topping first-quarter revenue expectations and raising its full-year guidance. CEO Jonathan Neman joins to discuss the company's plans moving forward.

This post was written by Melanie Riehl

Video transcript

It's not a here in New York City.

I'm John alongside Brad and this is Yahoo Finance, the slide show the Morning Brief that features higher, 30 minutes ahead of the opening bell on Wall Street on Peace for a winning week.

The Dow looking to extend its seven day win streak 500 closing above 5200 for the first time in a month.

Wow, here.

All right, this move comes on growing optimism that the f next move is a cut and could come in September.

We've got a slew of comments from federal Reserve officials today and all throughout this week, hearing from, been hearing from them fed Governor Michelle Bowman speaking right now as we speak.

So let's get to it with the three things that you need to know your road map for the trading day.

Yahoo Finance is Jared B Madison Mills and I have more the major averages on pace for a winning week and we're seeing optimism spreading across the pond.

Now in Europe, we have the foot, the dax and the C 40 all hitting fresh record highs as the UK exits recession posting its fastest GDP growth in two plus years.

And President Biden expected to announce an update to tariffs on trade with China as soon as next week.

That announcement reportedly targeting specific sectors including electric vehicles, semiconductors, and solar equipment.

The update comes after a review of tariffs put in place under former President Trump back in 2018 and this would be one of Biden's biggest decisions regarding Washington's economic ties with China.

Meanwhile, shares of Nova back skyrocket up more than 100% free market as the vaccine maker announces a $1.2 billion licensing deal with the agreement allows Santa co commercialized Novavax existing COVID vaccine plus accelerates creation of its combo COVID flu and other vaccines using Novavax vaccine platform.

As part of the deal, Santa will take a minority stake in Nova features pointing to a higher open on Wall Street investors optimistic that comments from Fed officials suggest that the central bank is still on track to cut rates this year, which was echoed by Lynn of Fed President Rafael Bostic in an interview today, our next guest saying that the consumer can make or break the Fed's next move.

For more on this.

We want to bring Kayla Setter State Street Macro Multi Asset strategist is here, Kayla, it's great to have you here.

So let's talk about what we're hearing from Fed officials this week.

Certainly it seems like investors, at least traders still remain hopeful that we are going to get that rate cut here in September, what's been your take away from the commentary that we've gotten so far?

Yeah.

You know, I think it is likely we could still see a cut this year.

However, I think the biggest risk for markets right now is that they're going to bring forward that cut far too soon.

Because what we've seen is that the consumer is still an aggregate resilient.

You know, there are signs that some consumers are feeling pain and that's actually a good thing that means that the transmission of policy is working, however, that transmission is really slow.

And so I think that's why we've seen a lot of fed speakers kind of echo this message of patience.

Yeah, we're going to beginning preliminary consumer sentiment reading later on this morning here, Kayla, what, what are you gonna be watching most notably for in the moderation in this consumer mindset, especially as it dovetails through to some of the economic data that's coming next week on CP I Yeah, you know, I think the data we get today is important, but the data for next week is even more important.

You know, we do still want to see consumer sentiment roll over just a little bit, I'd say.

However, I think next week, what we're really looking for is a, is really a rollover in inflation and a continuation in a move lower in inflation numbers.

And actually when we look at some of the data that we can see in terms of price stats which is online, goods, inflation.

Uh We're seeing that some signs of softer data coming in and that's really important because if you think about the progress so far on inflation, it's really been concentrated in the good space.

And so what that means is to get further improvement, we can't see goods re accelerate and we finally need to start to see signs that the consumer is weakening in a way that it impacts the services side of inflation.

Kayla, when you take a look at the recent market action, we have certainly started to see investors maybe get a bit more defensive given some of that uncertainty that we've been talking about here over the last several weeks.

What is the last the movement here that we've seen towards consumer staples and really towards utilities?

What do you think that further tells us then about the market leadership that we will likely see?

You know, I think moving forward from here, we still really priority, prioritize large cap quality growth.

We're not tempted by moves to go to small caps or even some slices of.

Um you know, more, I'd say value just because if we think about it, the progress on inflation is likely going to be very slow.

And so what that means is we're going to be in an elevated for longer environment, I think, than some folks may, may anticipate.

So we really are seeing the most opportunity in places like tech and places like communications.

And so we're, we see leadership ultimately uh remaining there even though I do know the past week or so, we have seen a couple of adjustments.

We still prioritize the places that look best equipped due to balance sheet strength and things like that to really navigate this interest rate environment for longer.

And with that in mind, you know, even as we're navigating the, the back half or the winning parts of this earnings season, there's still one key barometer that's left for the markets here.

And that's something that started off all of the fanfare around generative A I and that was Invidia.

And so as we're kind of waiting for that and then later on, you gonna be getting even more retail results, how could that set up some of the growth forecasts here for the rest of this year?

Yeah, you know, I think when it comes to tech, generally speaking, one thing that was pretty interesting is that heading into earnings season, we did see institutional investors kind of take a step back from, from tech just because earning season seemed to be such a big risk.

But now so far earnings have been ok. We're starting to see more moves back into tech.

And so I think moving forward from here and into the rest of the year, we still really like this space when it comes to retail.

Um It is a bit nuanced but I think we, we still like the spots that are able to cater more towards services because when we look at how, how consumers have adjusted their spending habits since the start of the hiking cycle, they're still spending more on services than they are goods.

And so that's kind of relatively how we're thinking of navigating things.

I've pulled out the flip flops.

I've started to not wear socks on Fridays at this juncture.

I'm trying to figure out if I'm selling in May and going away and I'm getting ready for the summer travel season, where are areas that I should feel comfortable selling out of right now and where areas that perhaps I should be buying into sectors that you're bullish on.

You know, I think I've already talked about, about tech.

I think another place that we still really like is energy actually, especially because if we think we're going to be in this elevated for a longer environment, it's going to be because growth is stronger than expected or at least growth is maintaining.

And so I think energy is one place that could be a little underappreciated or some people may have questions about if the fed is going to, uh, you know, if, if they are concerned about the consumer.

But because in a forget the consumer is still ok and we still see demand for travel and things like that.

I think energy could be a pretty good place to play that.

Kayla, thanks so much for taking the time uh for, fortunately for our teammates and uh many of the employees here at Yahoo, it's against the employee policy to wear uh open toe shoes here.

So ultimately, I'm not wearing the flip flops and I don't have the socks.

Yeah.

Well, I got the little footy ones, you know, you gotta have those in the Arsenal.

Kayla Ser who is the State Street Macro multi aet strategist.

Thanks so much for taking the time.

Thank you.

Well, President Biden is getting set to unveil new China tariffs as early as Tuesday.

According to several reports, the announcement will reportedly target specific sectors including electric vehicles, semiconductors and solar equipment.

Yahoo finances process, Romanian and Rick Newman.

They joined us with the details.

Rick, let's start with you on this.

What's the impetus behind this from the administration?

It's no surprise the Biden administration has basically telegraphed this uh and it's, it's uh to protect uh the American industry.

I mean, it's basically straight up protectionism.

Uh Th this is different from what Donald Trump did when he was president and what he wants to do if he becomes president again, Trump uh put um tariffs on a whole range of Chinese imports.

Uh and this is just very targeted.

Um This is meant to basically keep Chinese vehicles out of the United States.

Um It's not gonna affect um cars that are in the market today for the most part, there are only a couple of models that are on sale in the United States that are made in China.

And those are uh actually brands we're familiar with, those are not Western brands.

One of those is a Buick product.

Um So it's not like the price of cars is suddenly going to go up because of this tariff.

This is meant to keep those products out of the United States.

And of course, this is happening as Biden has also signed into law legislation that will provide huge subsidies for semiconductor manufacturing uh for uh for other types of green energy technology, including solar panels and for electric vehicles.

So all part of the same broad strategy pro talk to us a little bit about what specifically this could potentially mean here for EV makers because when you take a look, at least in the Chinese ev makers business, there's the case made that maybe this isn't going to have a material impact given the fact that they're not too exposed here to the US but stiffer trade barriers though for the longer term, what are the implications then for the broader EV space?

Yeah, you know, we're seeing some of these Chinese evev makers listed in the US trading slightly lower here.

But for the most part in the near and now uh they sell zero evs in in America, all their, all their sales are in China and potentially Europe.

So it's not gonna really affect them currently, uh potentially down the line.

There's always been talk of these ev makers are coming stateside here.

Uh I don't think it's gonna happen anytime soon, especially if we see these targeted tariffs like Rick, Rick and men, you know, we have no details yet as to what these could be in terms of percentages, you know, currently right now, there's almost a near 30% tariff on Chinese made automobiles, you know, perhaps Biden extends that to es or even all their Chinese vehicles.

Uh And obviously, obviously, there's the chip angle too, so not exactly sure what this means for them at this point, for the US automakers, it's, it's a slight boon here, but I think at the same time, the competition is going to be coming whether they like it or not.

And the question is when.

So I think this the t the protectionism aspect of it, a lot of automakers saying that you know what we have to kind of compete on with Chin, with the Chinese on their own terms.

So we'll see if they can actually address the market.

But for the time being, all you hear from us automakers is like we're making hybrids, we're making more gas powered cars, you guys still like those, right?

That's sort of what we're seeing here and pros what kind of, what kind of backlash could this prompt from the Chinese as well that impacts these us automakers that are trying to also cozy up to consumers in the region.

I think the big impact here and I mean, Rick can speak to this more is the fact that if we do these tariffs on these Chinese EVs for instance, will the Chinese retaliate on battery technology, battery parts components?

Uh the all important materials like lithium and things like that?

Are they going to make it harder for us to make our evs in this country because we still get some of that material from China.

So I think that might be the problem is any kind of retaliation on the Chinese?

All right, pross Rick, thanks so much for bringing that down for us from both sides here.

We really appreciate it.

We are just getting started here on the morning breath.

No back share skyrocketing after inking a vaccine deal with.

No, we will break down the details next and Taiwan semi showing A I demand is not slowing down at least any time soon.

Sales jumping 60% in April, we will give you that breakdown this hour plus sweet green raising its full year sales forecast.

We will bring the conversation with the company CEO that's coming up at 9:40 a.m. Eastern time today.

All that and more.

You're watching Yahoo.

Let's take a look at some of the top trending tickers on Yahoo Finance this morning.

Novo backs topping the list here.

Sure skyrocketing after announcing a $1.2 billion deal with Sanofi to commercialize a combined COVID-19 and flu shot.

Yahoo Finance's Angelique Kani has the details for us.

Did I get the prono route according to the French?

I know I get it wrong every time I got it wrong earlier, but it's OK. Everyone says it differently.

So Sanofi big Pharma coming in to Novavax out.

Uh Novavax inking that deal $1.2 billion and that includes uh co commercialization of the COVID vaccine.

That's the one that's currently on the market as well as future, the combo flu and COVID vaccine that they've been working on for quite some time if you recall, Novavax was initially working on just a flu vaccine before the pandemic.

So this is kind of going back to the roots.

Meanwhile, there's an additional part of the uh program which is gonna be an additional 200 million for uh anything, any other vaccines coming out in the future that have to do with Novavax platform.

That's the adjuvant matrix and platform that they're known for.

They've been licensing out as well.

So that's where this whole deal comes in on, you know, looking at the Novavax pipeline.

Meanwhile, Soofi also gets a minority stake less than 5% stake in the company and investing $70 million specifically.

So that boosts nova valuation and that's why you're seeing the, the share of skyrocket today up over 100 and 20% already.

Yeah, I talk to us a little bit more about what exactly this means ultimately for Novavax business here in the long run.

And then does this totally erase all those concerns that we had going back just over a year ago about their ability here to continue 100%.

This literally saved Novavax.

Um They were struggling.

They were looking like, uh you know, they, they weren't sure whether or not they could stay operational for the long future in part because they entered the vaccine race late and they started off in the initial batch during that operation Warp speed program.

But they met with some manufacturing delays and then ended up falling behind and only getting approved in mid 2022 after the initial round of vaccines already started.

So they were really eyeing the booster market.

They've seen a little bit of revenue come in there, but meanwhile, have had to slow down, make some cuts and really real uh on their books, what they're looking at, cut down on R and D as well.

So that's all been impacting the company.

Meanwhile, Santa Fe a really strong flu program and profile the flu vaccines contribute a lot to their overall vaccine portfolio.

Uh 2.8 billion of the about 8 billion that they receive annually comes from flu.

And so the the match that's being made here that Sanofi's platform is also a recombinant protein vaccine just like Novavax.

So that's why this deal makes so much sense and just a little point there as well.

Santa Fe also did the same thing with their COVID vaccine in partnership with GSK uh entering the market late and also eyeing that booster market.

So they're really on par in terms of sort of what their strategies have been for COVID.

So it may, it may be a match made in heaven.

That experience could potentially here pay off.

All right, an thanks so much, shifting to the chip sector, Taiwan semi shares rising after reporting that sales jumped nearly 60% in April from a year ago.

Yahoo finances, Dan Howley has more on that for us.

That's right.

They jump 59.6% year over year.

That's better than any other month so far this year.

Although it's only may still uh it's a huge jump.

And uh I think the, the real reasons for this are clear that's, you know, the A I craze driving everybody to, to go out uh and, and purchase chips or uh request chips to be uh created or, or, or built, you know, the, the likes of uh NVIDIA A MD uh and, and whatnot.

Uh and then the kind of somewhat return of the smartphone market there was that huge uh dip that we had seen.

Uh now we're starting to see uh that begin to climb back.

Uh and, and that's going to drive sales at TS MC.

Uh just because so many of those chips uh are, are made at uh TSM CS facilities.

So, uh we're seeing that uh and the A I uh demand kind of come together to, to help push uh the company's sales uh much higher in, in the last month.

Um It'll all depend where we start to see the smartphone market.

Really go though.

Is it going to be a huge jump uh in, in demand?

Is it going to be uh you know, a general uh improvement or is it going to be a slog to get back to where it was?

So, uh I think that that's going to be one of the main things to, to watch.

But on the, on the flip side, the A I side of things is going to continue uh to, to drive a lot of demand and sales uh especially for, for more expensive, more advanced chips and for TS MC, I mean, this is a company that's continued to see what 50% margins on their foundry business and they're waiting for, well, they would have it as, as no competition entering the market, but there is more competition that's gonna be entering this market.

Intel.

It's gonna take them some time to scale.

I think 2030 is what we're hearing that they would even get to what 40% margins on their foundry business by.

So how much uh of the lead time is TS MC still believing is baked into this business and for investors to still continue to expect results like this.

Yeah, I mean, for, for the, there's, there's two things, there's the, the foundry business, uh, and there's, uh, the ability to produce, uh, very high end chips.

Uh, and so Intel is trying to do the very high end chips.

They're just about there, uh, with regards to that as far as their foundry business goes though.

Yeah, you're right.

It's, it's going to take quite a while for them, uh to get up to snuff.

They're, they're still going to be producing largely Intel chips uh for the, the foreseeable future, uh until they start to get more uh uh customers.

Now, they do say that they have customers lined up, one of the big ones they have uh is Microsoft, they're gonna be building their own chip.

Uh Intel does have uh a road map that is very impressive.

It's just about now kind of executing on that.

And so for TS MC, yes, it means that there's, uh, you know, competition but kind of as you were alluding to.

It's, it's pretty far off at this point.

Um And you know, they still are the, the world's largest manufacturer of, of uh processors.

Great context there.

Yahoo Finance's own Dan Halle Day and great to see you here this morning.

Thanks so much.

Well, Soundhound shares, they are surging after boosting their full year revenue outlook.

The company's CEO is saying voice A I is quickly becoming a must have tool for customer service shares of Soundhound, they're up over 100 20% so far this year.

And here this morning, you're seeing them moving higher on the back of this news as we were continuing to track this, going into the start of today's trading there saying that this first quarter sets the tone for another year of strong growth for Sound hound here.

Uh And then additionally, one of the other things that they note 73% Q 1 revenue growth, the first quarter closing with about $226 million in cash.

Gonna be an interesting kind of uh calculus of how they start to deploy some of that cash over time as well.

Yeah, Brad, you're exactly right.

And, and when you take a look at the analysts reaction initially to this report, you can see some of the enthusiasm playing out in these quick comments from Web Bush.

They're saying that this report is quite a major step in the right direction for company as they do continue to build towards profitable growth with stable revenue pillars.

Again, this is according to Wedbush, they have an outperform rating on the stock, a price target of nine bucks a share.

And Ken Fitzgerald was also very upbeat following the heel or following these results saying that some of the partnerships that were announced when it comes to the car space, when it comes to the restaurant space that is going to be beneficial here to future growth.

So we certainly have talked a lot about this name here over the last several months, been trading questions about how much certainly has been trading in tandem here with some of the fundamentals of the business.

But at least from these results here and from the quick commentary that we're getting here from analysts, there does seem to be at least a real reason to be optimistic about this name in the longer term.

I, I'm, I'm just smirking and laughing here a little bit because uh I mean, this has gotta be one of the first earnings reports where I've seen churches chicken shouted out.

Uh, you know, you talked about the the restaurant business and you, you put the very, the very uh classy term on it.

But uh yeah, church's chicken getting a shout out in the Soundhound A I earnings report here.

One of the big deals.

Yeah, quick service restaurants.

It sounds like that's gonna be one of the areas that Soundhound really play into as of right now.

So good for you.

Church's Chicken and Marcin shares a rally as a result of these uh better than expected results.

So again, a name to keep on your radar here, this trading session.

Well, we are just minutes away from the opening bell on Wall Street, taking a look at how the trading day is shaping up.

You got the Dow S and P and NASDAQ all on track to open the trading day in the green.

We'll be right back.

Welcome back, everyone.

We're just seconds away from the opening bell.

Well, about 90 seconds.

But anyway, taking a look at things right now in the future, shaping up, looking positive across the dow, the NASDAQ 100 the S and P 500 as of right now.

Yeah.

Brad, one of some of the critical levels here to watch in today's trading session.

We've been talking a lot about the recent rise that we've seen within the S and P. You can see yesterday it closed above 5200, the first time we've closed above that level in just about a month.

And we are putting change to the upside here ahead of the open just about 20 seconds here from now.

So we are looking at gains here at the open for the S and B and then also the NASDAQ, NASDAQ 100 futures also pointing to gains here.

A lot of the emphasis is going to be on tech.

We have certainly started to see some cracks in terms of the A I story.

There certainly are out performers, others that aren't exactly living up to expectations.

So of course, as we look ahead to NVIDIA, we got 90% of the S and P 500 companies already reporting, but perhaps the most important we have yet to get those results.

You said the magic word NVIDIA, my goodness, everybody should have a T shirt that says that at this point.

But anyway, taking a look at the bell.

Ringers at the NYSC and the NASDAQ, you got Ziker at the NYSC and at the NASDAQ, you got, man, a doctor.

All right.

A lot of fun.

Fetti claps a cheer.

And uh is that a squish mellow of a cat?

I don't know.

We're gonna see and explore that a little bit more but take a simple and NDR ringing the opening bell there.

Let's do a check of the markets sponsored by Tasty Trade.

No, squash mellow cats there.

Uh Ultimately taking a look at utilities once again leading the pack, we did a deep dive on utilities this week here.

So you can go back, check out that video on the finance platform, but take a look at the year to date.

We'll give you a uh uh brief version of what we were seeing and talking about during that chat, 13% higher year to date.

Utilities, more green than negative.

That's a good thing for us here on this Friday.

However, one of the other names that talked about in that chat in utilities and tangent was staples.

However, that's moving to the downside right now out of the gate, giving back some of those racing gains that we've seen over the last couple of weeks.

All right, let's get back.

Let's get over to Jared Blicker who's standing by here with a closer look at some of those movers here at the open Jared.

Thank you, Shana.

And let me just stick with sectors here, but I'm going to show you what's happened this week.

So this is uh five days.

We have utilities, surprise, surprise.

That is in the number one spot that's up almost 5%.

By the way, this is the best week for utilities of 2024.

That's in the upper left also for materials.

That's XL B also for financials.

And we're not seeing yes, we're seeing that in the number two position today.

So the three leaders for the week just had one of their best weeks of the year and we're seeing everything in the green for the week.

So just tacking on gains there.

S and P 500 Dow are now within spitting distance of their record highs in the dow has been every single day, this month, every single trading day.

So we'll have to see what comes of that.

Here.

Here are our leaders for the week and we can see oil is in the number one spot that small small oil producers that's up 3.2%.

Then we have momentum up 3% socks at the chip stocks.

Those are up 2.3%.

So the list goes on the worst position here was ARC and let's take a look at that real quickly.

We can see unprofitable tech has been a little bit unprofitable this week.

Roadblocks down 21%.

That was an earnings story.

And I want to leave you with the miners here.

I've been tracking gold and copper miners.

These guys have been on fire.

Um We see gold, gold that take her up 4.7% this week.

SLV, that's a silver ETF that's up 7%.

So all in all we're seeing the miners just kind of in concert with some of these precious metals and not so precious metals just surge to uh records or near records.

All right, Jared, thanks so much for bringing that down for us here.

Let's stick with one of the big themes that we have been talking about here at Yahoo Finance and that is A IA I has been in focus this week as investors, I just a slew of results from the likes of Arm holdings, Taiwan Semiconductor and Sound Hound A I.

It's been a mixed picture, especially when it comes to guidance.

But our next guest though saying that there is a tidal wave underway, there are some key names that are going to benefit for more on this.

We want to bring in Dan Ives.

Well, Bush Securities Senior equity analyst, Dan, it's good to see you.

So talk to me about this note that you just put out this morning.

The title of it almost says it all A I revolution spending title wave is well under way that's been seen in Q one results.

What is this then signal though about the out performance then of some of these names to come.

Oh Look, I think it shows this revolution demonization is actually now starting and it's not just about godfather of A I Jensen NVIDIA.

And what Nadel is doing to Redmond now is the rest of tech.

I I think mes like service now, salesforce oracle, you could arm holdings.

I mean, th th those are just robust numbers.

You're seeing it play out across other areas.

Pound here.

Sound hound.

And what and what I believe is gonna be the rest of the software and semis.

I think this fourth industrial revolution has begun.

How can investors best determine a healthy amount of spending on generative A I ambitions versus what seems unhealthy or perhaps over index capital allocation?

We'll give you a a at, at these hyperscale players, Microsoft Amazon Google and then you, you analyze some of the spending that we're seeing from meta and others.

It's just begun.

I mean, we're not even in first inning, I'd say we're in the dugout in terms of where this is all going.

Now, in terms of over indexing.

I think you have to own the right plays.

I think you have to, you have to have your plays in semis software and infrastructure.

And I think there's almost a basket approach to this.

But, but even if, if someone told you six months ago Dell would be an A I play, you'd say OK, you must have a really good Friday night, but look what's happening.

Look at Dell or, and others.

Th this is a 1995 moment, not a 1999 moment.

Dan, one of the names that we've been talking about a lot when it comes to a I at least, most recently, not so much here over the last several months, but most recently it's been apple questions about what exactly their A I strategy is going to look like we're expected to hear a little bit more at the big event next month.

But I'm curious from your perspective, what do you anticipate to hear from cooking company in terms of what their strategy is going to look like?

Look, I think it's probably the most important event for Apple that we've seen potentially in a decade because this is gonna be cook laying out the A I strategy on the services side for developers.

What I believe is really the start of a, of an A I APP store in terms of how that's gonna morph and then it's proprietary A I technology in iphone 16 which launched in September it behind the scenes.

Were they behind when it came to, to A I?

Yeah, but I think they've quickly caught up and you have the best install based 2.2 billion in the world.

So this is the start of A I coming to Cupertino does this compactor add matter, Dan.

But for first of, for Apple to actually apologize is, you know, as rare, but I think it also shows they're under the microscope, Brussels beltway target on their back.

But when you make the best products in the world and you have the spotlight on you, that's what they're gonna do.

And an ad like this, I wanna, I wanna expect uh to make more of these, but Apple is apologizing for the best products in the world and, and that's essentially what they're doing.

How quickly do you think it's gonna impact then their bottom line?

Look, I think when you look at the broader story here, this is probably gonna be the last quarter of negative iphone growth and then it's the renaissance of growth that's gonna happen in Cupertino.

I think it's the, it's really an iphone 16 A I super cycle that's gonna play out.

I think Apple is where meta was 18 months ago.

I mean New York City cab drivers bearish in Apple.

I don't think, I don't think numbers are reflecting what ultimately is gonna happen on the services side, on iphone growth story.

And then you combine A I, I think we're seeing here a year from now looking at this more of a golden buying opportunity rather than, you know, the the time where this is gonna be a structural decline.

Uh Dan, while we have you, you know, we were discussing earlier in the show about the moves that the Biden administration is prepared to make with regard to EVs and how this could impact some of the companies in your coverage list.

We think about Tesla most notably here and what could happen if China decides to retaliate with some action of their own that have broader worry, retaliatory and obviously Tesla front and center there.

But the issue here is and I've seen firsthand in throughout Asia, China when you look at Byd Neo, many others.

I mean, these are phenomenal products, phenomenal models.

Technology, I think by administration recognizes with the 313 area code focus so much on evs they got to put, you know, some tariffs and restrictions, but you can't, it's not gonna stop the freight train.

I mean, you are gonna see Chinese evs come here at one point.

They're gonna be successful.

But I think for Tesla they're navigating their problems in China.

I do believe they will start to turn the corner as we get into next few quarters.

I see the Mets.

I see Penn State represented behind you.

I don't see any, any Knicks gear.

I see the Islanders as well here, Dan.

So we got Knicks gear, we got Knicks gear right here.

Look again, betting against Apple.

It's like betting against Brunson in the playoffs.

It's just, it's, it's just, that's just not something you want to do.

You don't want to await the goat and that's what we're seeing with Bruns and we're gonna see with Apple.

Wow.

Wow.

Already already goading him.

Ok. All right, Dan, I was Wedbush Securities senior equity analyst, Dan.

Great to speak with you.

As always enjoy the game.

Thanks.

Sweet Green shares.

Jumping this morning.

After raising its sales forecast, we'll speak with the company's CEO.

On the other side of the break, Sweet Green shares are surging this morning up just about 38%.

The biggest intraday move that we've seen in more than two years.

Now, this comes after revenue jumped 26% in the first quarter from a year ago.

Sweet Green also raising its sales projections for the year.

Now seeing the same source sales growth of as much as 6% for more on these results.

We want to bring in Jonathan and Nieman, a Sweet Greens, Ceo Jonathan.

It's great to have you here and great to talk to you.

Congratulations on your strong quarter here that you just put up.

Thank you so much.

I want to thank our whole team for all the hard work, John, let's talk about what you are seeing in terms of these numbers clearly coming in better than expected.

You're raising your guidance here for the quarter and this is on the back of what has already been a tremendous year for your stock right now.

You have shares that nearly 200% since the start of the year.

What is that then?

Tell us about the state of the consumer today.

You know, we had a really strong quarter.

We grew 26% year over year, we expanded our margin to over 18% at the restaurant level and we comped 5%.

So we think that the consumer is still very resilient and we're very excited about some of the things we're putting out there.

You know, we just launched steak this week on Tuesday, we launched a grass fed Pasture raised Steak and had a record day for the company on Tuesday.

So a lot of good momentum all around, we're going to get back to that stake, Jonathan, you trust us, but the loss from operations, that was really interesting, trimming that from what you saw a year ago.

At what point do you think you'll be profitable on your operations basis?

So we are, we are guiding to adjusted ebita profitability this year, which is, you know, we've had a huge inflection in the business as we've continued to grow our sales, expand our margin and hold our GN a relatively, relatively flat.

So a lot of leverage in the business and looking to continue to build on that momentum as we deliver, deliver more stores around, you know, we open more stores around the country.

John, when you talk about that future momentum here, you've also been testing out automated a salad making machines.

What is the plan look like in terms of further adoption there?

And ultimately, what is that going to do in terms of the profit margins and your ability here to better control some of those costs.

We're very excited about the opportunity with automation.

So we've been a leader in automation.

We have 22 pilot restaurants today.

The first one actually opened a year ago today in Chicago, we have a second one open in California.

The technology is called the Infinite Kitchen.

And so what we, what we've said in the past is that we expect at least 7% margin, 7% margin improvement at the restaurant level from this automation.

But more importantly, it's about the customer and team member experience that has improved.

So customers get their food faster, they get a perfectly portioned and team members get a better experience, a better restaurant to work in.

So we've seen far less turnover.

What we did say is in Q one, we saw the two restaurants have a 28% margin, so about 10 points better than the fleet.

And we are guiding to about seven new restaurants featuring the Infinite Kitchen this year with three or four fits over the next few years.

We do expect to kind of take that up each year, the percentage of restaurants that have the infinite kitchen as we continue to learn more and scale the technology.

Jonathan, you're scaling the menu as well here.

Stay, let's get back to it.

Why now and what would you look to, to determine whether or not it's a success upon market entry and delivering that to so many customers.

Absolutely.

So, for Sweet Green, we're all about meeting customers where they are and steak has been something that customers have wanted for a very long time.

You know, we do believe that, that a protein rich diet is very, very good for you.

So, we've been leaning into protein plates really expanding our customer base and, uh, and trying to win more dinner business.

And so steak is another uh another strategy around that.

We've introduced a pasture grass fed pasture raised steak.

Customers have loved it.

We tested it in Boston for a few months, saw almost 20% of our orders featuring that bowl featuring that item.

And on Tuesday, when we launched it, the company had a record day.

So we're seeing a lot of positive momentum with steak again, expanding the customer base driving that dinner and showing that sweet green isn't just a salad place.

Jonathan, you've talked about the new menu items that you've added the new stores that you're planning to add, how you're trying to incorporate here, uh automation into your restaurants.

What is that all ultimately then going to do in terms of that timeline to profitability.

What does that look like here?

So, as I mentioned earlier, we, we do expect to be adjusted eb dot profitability uh profitable this year.

Um We have not guided to a timeline on on net income profitability, but you will see significant leverage on the business this year as we continue to grow our top line and, and hold our GN a relatively relatively flat.

Jonathan, we've been trying to wrap our heads around what return to office means for some of the lunch orders specifically.

And, and whether you've seen the continuance of some of the kind of hybrid model actually be a benefit to sweet green's business is people are just looking to be able to pick up regardless of whether they're going into a physical office or if they're working from home, how have you seen that kind of moderation in lunch orders?

And you know, how does that also, uh permeate over into the dinner profile that you're trying to also cross over into, you know, traffic patterns have changed so much since before, before COVID.

And, you know, I think the world is stabilized quite a bit.

At this point, we have seen continued momentum in our urban store base, but the patterns have changed.

Holidays are different, you know, you have Fridays are still not huge, you know, huge in the office.

And so the company has evolved and we've built out our delivery business in a significant way, meeting customers at home, specifically in the suburbs.

Uh We've had a huge focus on dinner, which again, which is a big, a bigger occasion in the suburbs, but also seeing some nice momentum in urban as more companies are deciding to get back to the office.

So overall seeing some really positive trends across both urban and suburban parts of the business.

All right, Jonathan Nieman, who is the sweet green Ceo Jonathan.

Thanks so much for taking the time here today.

I appreciate it.

Thank you for having me.

Absolutely.

We'll talk soon.

Yelp shares slipping after issuing lighter forecasts for the second quarter, disappointing investors.

The company did see revenue climb 7% from a year ago in the first quarter.

Take a look at shares right now.

They are down by about 1.5%.

Uh 1 of the huge things that a lot of investors will remember over the course of this year, this company has had some challenging times.

It's down by about 15.5% year to date at this juncture.

So this just another notch in the wrong direction right now, certainly.

And this is also a continuation in terms of the likely trading action that we've seen for companies that have not exceeded guidance expectations.

So yes, in terms of their most recent quarter, it did come in better than expected, but guidance falling short and we are seeing investors take a bit of issue with that, obviously further pressuring the stock price here today.

But I think also just my takeaway from this is this also highlights the fact that it is a challenging environment here for consumers.

We are seeing people adjust their spending habits when it comes.

Yelp.

This is a good uh look here into how, how often people are eating out how exactly they are spending, what exactly they are looking for in terms of some of those ex, um experience types of offerings here.

And I think it'll pull back even within Yelp's business further highlights the fact that consumers remain under pressure and this is likely going to be a head wind, a challenge here but not only names within the sector but really across industries for the coming quarters.

Yeah, they particularly looking across a few things, 11 area of strength and momentum.

Right now, on the services category home services subcategories requesting a quote, they're trying to push more into having the opportunity for you to identify a project and then just connect directly with anyone who might be able to service for that project and uh carry that out as well.

Um So we'll see exactly what type of incremental improvement that offers for the business.

Uh But as of right now, investors not too impressed, we've got all your markets action straight ahead.

Stay tuned.

You're watching the morning brief, we're nearly 30 minutes into the trading day and stocks are posting some modest gains out of the eight, the expectation for a rate cut this year now centered around September as we've gotten some soft labor data between the jobs report last week and yesterday's jobless claims reading and the focus will soon turn back to inflation.

CP I that's due out next week.

Oh yeah, we're gonna have a rocking and ready show for you.

I believe we're gonna be going live at 8:30 a.m. As we always do for the consumer price index.

You're smiling, you're excited.

I mean, I mean, it just comes down to whether or not if in this reading we see still signs of a strong and resilient consumer or if we start to see cracks show up that the fed starts to say, ok, now we can look for a trend to start to be locked in, but it doesn't seem like it's going that way right now.

Yeah.

Yeah, you're exactly right.

And it's also going to be very interesting to see how the market trades on the heels of this report, whatever it may be because what we have seen and you can even take a look at the market action this week.

The market is clearly looking and hearing what it wants to hear.

Any sort of Dovish fed speak that we've heard over the last couple of days or anything that could be interpreted on the fact that rate cut is still most likely and still on the table.

That has been enough to here boost the markets over the last several days.

You have the dow closing up seven days in a row.

When you take a look at today's, uh, move to the upside, we could see eight straight days of gains.

You've got the S and P the dow also on track here for further gains, possibly here to the upside the S and P back above 5200.

So that's a lot of this future momentum, at least in the short term is gonna be resting on what we hear from that CP I print and a Bank of America was out with a report here this morning just being a bit cautious, just in terms of what we are likely to hear, they do expect a bit of a moderation here, at least when it comes to the month, over month uh percentage change for the core inflation print.

They expect that to climb about 3/10 of a percent.

So a bit of an improvement here, but yet that's not going to give the fed most likely the confidence that it needs in order to really start talk about cutting and give it the uh the clear green uh green light here to cut.

So what exactly they need to see the material improvement that still remains to be seen.

But again, we are getting fed speak and we'll get more today on both sides of the aisle kind of straddling that because I think everyone's having a very, very tough time trying to figure out what that next move should and will be.

I think the timing of it.

I think you mentioned the key word and in moderation and we're hearing that word show up from the NRF this morning as well, with their most recent release looking at and this retail monitor that they have uh looking at specifically where retail sales grew.

And they said it grew modestly in the month before, um or from the month before in April, a shift in the timing of Easter appearing to be behind a slight year over year decline, they noticed there.

But ultimately, in the statement from NRF president and Ceo Matthew Shay, he said that the ability to spend is supported by a growing job market and real gains in wages.

Overall inflation remaining stubborn because of elevated prices for services.

While inflation for goods has dropped to nearly zero here.

So consumer spending is continuing to be driven and driving economic growth and retail sales increases.

Though coming back to that main word, they see some moderation in spending as consumers continually search for value, right.

We'll be getting another read on the consumer here in just a few minutes.

Coming up next hour, Madison Mills will be here with me for our new show catalyst where we will be breaking down the feds timing pace and change of policy, potentially love it.

I tune in every day plus our 11 a.m. hour, stay tuned for wealth.

We're going to be discussing just how strong the consumer really is.

Yes, a continuation of this vivid chatter and Shona and I were just having, we've got much more here on Yahoo.

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