WEBVTT - Cisco Tumbles, Logistics Plunge, Real Estate Stocks Drop

0:00:02.520 --> 0:00:07.000
<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

0:00:08.560 --> 0:00:12.440
<v Speaker 2>The Stock Movers report your roundup of companies making moves

0:00:12.480 --> 0:00:15.880
<v Speaker 2>in the stock market, harnessing the power of Bloomberg Data.

0:00:16.600 --> 0:00:18.800
<v Speaker 1>I'm Carol Masser along with Tim Statvik. Let's get to

0:00:18.920 --> 0:00:21.079
<v Speaker 1>some stocks on the move. Joining us right now is

0:00:21.079 --> 0:00:25.400
<v Speaker 1>Bloomberg News Crossouse that reported Danizazikova here in studio. A

0:00:25.400 --> 0:00:27.920
<v Speaker 1>lot to talk about, a lot to choose from, because

0:00:28.000 --> 0:00:29.120
<v Speaker 1>docs are certainly on the move.

0:00:29.160 --> 0:00:30.960
<v Speaker 3>Let's start with Cisco, which less than.

0:00:30.880 --> 0:00:33.200
<v Speaker 1>Twenty four hours ago we were all over their earnings.

0:00:33.560 --> 0:00:35.839
<v Speaker 4>For sure, a lot of stocks in the red, and

0:00:35.960 --> 0:00:39.280
<v Speaker 4>definitely Cisco is one of the big down names today.

0:00:39.760 --> 0:00:44.360
<v Speaker 4>It's actually nearly worse the day in four years. The

0:00:44.360 --> 0:00:46.920
<v Speaker 4>company is down about twelve percent. The ticker, of course

0:00:47.080 --> 0:00:52.159
<v Speaker 4>is CSCO. At the company gave weaker than expected forecast

0:00:52.200 --> 0:00:55.720
<v Speaker 4>for profitability, and everyone is looking at those numbers in

0:00:55.800 --> 0:00:58.160
<v Speaker 4>terms of profits, and clearly we're seeing a sign that

0:00:58.240 --> 0:01:01.840
<v Speaker 4>memory chip prices are in a toll that said, there

0:01:01.880 --> 0:01:06.240
<v Speaker 4>were pretty good numbers when it comes to ABEAT sales forecast.

0:01:07.240 --> 0:01:10.400
<v Speaker 4>The number that perhaps is worrying investors is just a

0:01:10.480 --> 0:01:14.240
<v Speaker 4>growth growth margin, which came roughly at sixty six percent,

0:01:14.360 --> 0:01:17.240
<v Speaker 4>which was lower than what the street.

0:01:17.920 --> 0:01:20.480
<v Speaker 3>So higher costs, you're just not as profitable.

0:01:20.080 --> 0:01:22.840
<v Speaker 4>Exactly exactly, And obviously there is a lot of competition

0:01:22.920 --> 0:01:23.560
<v Speaker 4>in that space.

0:01:23.680 --> 0:01:25.720
<v Speaker 3>We have HP, we have Broadcom.

0:01:26.400 --> 0:01:29.280
<v Speaker 4>There is also a memory chip shortage, so there are

0:01:29.319 --> 0:01:31.520
<v Speaker 4>a lot of headwinds in that state space.

0:01:31.760 --> 0:01:34.440
<v Speaker 3>The company was doing well here today before this.

0:01:34.640 --> 0:01:38.760
<v Speaker 4>Now it's down here to date, but obviously today is

0:01:39.319 --> 0:01:41.920
<v Speaker 4>the big drag. What we're seeing, of course is tightening margins,

0:01:42.120 --> 0:01:44.720
<v Speaker 4>but also some delay in US government contracts, which is

0:01:44.760 --> 0:01:46.080
<v Speaker 4>also wearing in the company for.

0:01:46.040 --> 0:01:48.480
<v Speaker 5>Sure, you know on it. It'd be interesting to see

0:01:48.480 --> 0:01:50.280
<v Speaker 5>what the stock would do on today when the entire

0:01:50.480 --> 0:01:51.800
<v Speaker 5>tech sector is not lower.

0:01:52.000 --> 0:01:54.440
<v Speaker 3>Yeah, you look at the NASA and a half percent.

0:01:54.480 --> 0:01:57.840
<v Speaker 5>Apples down five percent, Cisco's the second biggest drag, but

0:01:58.240 --> 0:02:02.280
<v Speaker 5>app Lovin is down twenty percent, and Tesla down three percent. Amazon,

0:02:02.320 --> 0:02:05.720
<v Speaker 5>Meta Platforms, Broadcom all down more than two point five percent.

0:02:06.040 --> 0:02:08.480
<v Speaker 4>It's hard to find stocks in the green, especially anything

0:02:08.800 --> 0:02:09.720
<v Speaker 4>text software.

0:02:09.880 --> 0:02:10.519
<v Speaker 3>It's really hard.

0:02:10.639 --> 0:02:12.560
<v Speaker 1>I think it's also a nervous, jittery market when it

0:02:12.560 --> 0:02:15.320
<v Speaker 1>comes to AI in terms of okay to spend the

0:02:15.400 --> 0:02:19.120
<v Speaker 1>build out the ROI, right, we know folks are continuing

0:02:19.120 --> 0:02:21.520
<v Speaker 1>to spend, but the return on investment and then who

0:02:21.560 --> 0:02:24.120
<v Speaker 1>ultimately are the winners, but also the impact on so

0:02:24.200 --> 0:02:28.079
<v Speaker 1>many different sectors. This AI scare trade continues moving through

0:02:28.080 --> 0:02:28.560
<v Speaker 1>the market.

0:02:28.720 --> 0:02:29.840
<v Speaker 3>It's really fascinating.

0:02:29.880 --> 0:02:32.960
<v Speaker 4>Every day we see a newtube being released and a

0:02:33.080 --> 0:02:35.280
<v Speaker 4>totally news sector of the market that we thought was

0:02:35.320 --> 0:02:38.080
<v Speaker 4>kind of immune being hit. And that's what happening to

0:02:38.240 --> 0:02:41.799
<v Speaker 4>logistics today. This is the AI scare trade of the day.

0:02:41.840 --> 0:02:44.760
<v Speaker 4>If we look at the Russell three thousand trucking index,

0:02:45.000 --> 0:02:47.560
<v Speaker 4>it's down more than three percent today and some of

0:02:47.560 --> 0:02:51.880
<v Speaker 4>the names like cch Robinson Worldwide down twenty percent.

0:02:51.960 --> 0:02:54.040
<v Speaker 3>It's really really big losses and.

0:02:54.000 --> 0:02:59.400
<v Speaker 4>It's coming after Algorithm Holdings is giving a live customer

0:02:59.440 --> 0:03:03.079
<v Speaker 4>deployment which is supposed to scale fried volumes by three

0:03:03.160 --> 0:03:06.040
<v Speaker 4>hundred four hundred percent. So the whole thing is maybe

0:03:06.080 --> 0:03:09.760
<v Speaker 4>we will need fewer trucks and fewer workers, which is

0:03:09.800 --> 0:03:12.760
<v Speaker 4>going to weigh on trucking and more likely on logistics.

0:03:12.919 --> 0:03:17.239
<v Speaker 5>I thought I thought the like things were safe, right, things.

0:03:17.000 --> 0:03:20.840
<v Speaker 3>Were safe, all the economy was safe, right, So.

0:03:20.960 --> 0:03:23.560
<v Speaker 1>Is AI supposed to make it more efficient, like so

0:03:23.639 --> 0:03:26.880
<v Speaker 1>that truckloads don't go out until they're fully packed, and

0:03:26.960 --> 0:03:28.120
<v Speaker 1>so maybe it don't make.

0:03:28.360 --> 0:03:32.080
<v Speaker 4>Exactly it's more about efficiency, not getting more trucks that

0:03:32.160 --> 0:03:35.040
<v Speaker 4>you need and kind of fearing perfectly little jig sticks

0:03:35.520 --> 0:03:39.120
<v Speaker 4>before actually getting the trucks, and again that means less

0:03:39.200 --> 0:03:40.320
<v Speaker 4>labor and fewer trucks.

0:03:40.640 --> 0:03:42.240
<v Speaker 3>So those companies, I'm.

0:03:42.080 --> 0:03:43.920
<v Speaker 1>Going to get a T shirt that says knee jerk

0:03:44.040 --> 0:03:46.960
<v Speaker 1>reaction because I just think, you know, anybody who comes

0:03:47.000 --> 0:03:50.240
<v Speaker 1>on right reminds us like, we're going to see how

0:03:50.280 --> 0:03:52.080
<v Speaker 1>this plays out. They're going to be winners and losers,

0:03:52.280 --> 0:03:54.080
<v Speaker 1>no doubt about it, and our world is going to change.

0:03:54.120 --> 0:03:57.200
<v Speaker 1>But you know, I don't know. I guess we'll have

0:03:57.240 --> 0:03:57.920
<v Speaker 1>to just wait and see.

0:03:58.120 --> 0:03:58.640
<v Speaker 3>Be patient.

0:03:59.240 --> 0:04:01.760
<v Speaker 1>That AI scared trade, so logistics stocks. We're seeing a

0:04:01.760 --> 0:04:04.360
<v Speaker 1>play at real estate servicing companies too.

0:04:04.480 --> 0:04:06.840
<v Speaker 3>That's another one. It's really hard to find the winners.

0:04:06.920 --> 0:04:09.600
<v Speaker 4>I feel almost every sector is considered to be a

0:04:09.600 --> 0:04:12.320
<v Speaker 4>loser in some sap or form. An interesting one is

0:04:12.360 --> 0:04:16.719
<v Speaker 4>real estate services cbr E groups that dropped as much

0:04:16.720 --> 0:04:19.960
<v Speaker 4>as fifteen percent. This is a real estate services company.

0:04:20.000 --> 0:04:22.640
<v Speaker 4>Of course, of those kinds of commercial real estate companies

0:04:22.800 --> 0:04:24.880
<v Speaker 4>have been under a lot of pressure ever since the

0:04:24.920 --> 0:04:29.719
<v Speaker 4>pandemic Obviously there was a big lag, there was a

0:04:29.720 --> 0:04:32.480
<v Speaker 4>big issue with office space. But the company is saying

0:04:32.560 --> 0:04:36.920
<v Speaker 4>now that the outlook remains uncertain as AI may reduce

0:04:37.000 --> 0:04:39.680
<v Speaker 4>long term office space demand. They're saying fewer and fewer

0:04:39.720 --> 0:04:42.240
<v Speaker 4>workers may work from the office, so there will be

0:04:42.320 --> 0:04:44.760
<v Speaker 4>less and less demand for those massive office buildings.

0:04:44.920 --> 0:04:47.800
<v Speaker 3>Obviously that's very few Have I heard this.

0:04:47.960 --> 0:04:50.359
<v Speaker 5>I was just going to say, yeah, I thought this

0:04:50.440 --> 0:04:52.400
<v Speaker 5>happened during COVID, in post COVID, but.

0:04:52.680 --> 0:04:53.200
<v Speaker 1>I don't know.

0:04:53.400 --> 0:04:54.760
<v Speaker 3>We talked about it six years ago.

0:04:54.800 --> 0:04:57.440
<v Speaker 1>I thought it's going to create new jobs. Yeah.

0:04:58.040 --> 0:05:00.280
<v Speaker 4>Also, I mean a lot of those things you can

0:05:00.279 --> 0:05:03.040
<v Speaker 4>see a few day trade. The analysts are saying, oh,

0:05:03.120 --> 0:05:05.080
<v Speaker 4>this is overblown, and there is a little bit of

0:05:05.440 --> 0:05:08.880
<v Speaker 4>calm down. But this is obviously like really in the future.

0:05:08.960 --> 0:05:14.760
<v Speaker 4>But investors are definitely punishing any sector that could be

0:05:14.800 --> 0:05:17.440
<v Speaker 4>in any way shaped by AI.

0:05:19.080 --> 0:05:23.120
<v Speaker 2>This stock mover's report from Bloomberg Radio. Check back with

0:05:23.200 --> 0:05:25.760
<v Speaker 2>us throughout the day for the latest roundup of companies

0:05:25.839 --> 0:05:28.920
<v Speaker 2>making news on Wall Street and for the latest market

0:05:28.960 --> 0:05:33.440
<v Speaker 2>moving headlines. Listen to Bloomberg Radio Live, catch us on YouTube,

0:05:33.520 --> 0:05:37.039
<v Speaker 2>Bloomberg dot com, and on Applecarplay and Android Auto with

0:05:37.080 --> 0:05:38.599
<v Speaker 2>the Bloomberg Business app.