WEBVTT - Home Depot Falls, Micron Drops, ServiceNow Rises as Investors Pull Back From Semiconductors

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>The Stock Movers Report, your roundup of companies making moves

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<v Speaker 2>in the stock market, harnessing the power of Bloomberg Data.

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<v Speaker 1>It's like, look at what's happening in the marketplace today,

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<v Speaker 1>Stocks on the move. We do that with Matthew Griffin. Matthew,

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<v Speaker 1>what are you looking at with it? Well, the first

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<v Speaker 1>one I've had on my screen this morning is Home Depot.

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<v Speaker 1>It is an important read on the US consumer right

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<v Speaker 1>now and investors not taking it as a positive one.

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<v Speaker 1>That stock ticker HD now down about nine tenths of

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<v Speaker 1>a percent, and if you look at comparable sales, that's

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<v Speaker 1>a key growth metric for them. Growth there was just

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<v Speaker 1>six tenths of a percent. Analyst wanted nine tenths of

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<v Speaker 1>a percent. And it's problems that have dogged Home Depot

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<v Speaker 1>for a while. Interest rates are high, housing prices are high.

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<v Speaker 1>That means consumers they don't want to undertake big remodelings

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<v Speaker 1>that they'd have to finance. They don't want to buy

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<v Speaker 1>new homes that they would then you know, do home

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<v Speaker 1>improvement work on. They're still painting, they're still gardening, but

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<v Speaker 1>that's not nearly as lucrative. And although the company isn't

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<v Speaker 1>seeing a big hit from the Iran war yet, it

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<v Speaker 1>is easy to imagine that's going to show up at

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<v Speaker 1>one point in results. And so you've got a pretty

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<v Speaker 1>muted investor sentiment here. Shares down about fourteen percent now

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<v Speaker 1>year to date.

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<v Speaker 3>Yeah, so here's a counter narrative to the US economies

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<v Speaker 3>doing fine. Consumers are spending as they were, you know,

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<v Speaker 3>the high gas prices, the high borrowing costs, it's certainly

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<v Speaker 3>starting to affect how people spend, and we're seeing that

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<v Speaker 3>show up in some of these consumer companies. Let's talk

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<v Speaker 3>about Micron, which has been such a superstar earlier this year.

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<v Speaker 1>Yes, well, Scarlett Micron now extending declines into a fourth session,

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<v Speaker 1>Shares down about two and a half percent. Now, that's

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<v Speaker 1>ticker MU. And there doesn't seem to be a key

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<v Speaker 1>catalyst here. Investors are just retreating from risk, and they're

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<v Speaker 1>retreating from these semiconductor stocks that are up so ferociously

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<v Speaker 1>this year. Of course, these memory names have been some

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<v Speaker 1>of the leaders in the advance and the Dan o'reagan,

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<v Speaker 1>he's the managing director of equity trading at Mizuho. He

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<v Speaker 1>said earlier it's basically just an unwinding of momentum going

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<v Speaker 1>on here. Of course, Micron's still up one hundred and

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<v Speaker 1>thirty two percent year to date, so that that rally

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<v Speaker 1>has not collapsed, but there are maybe some cracks showing

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<v Speaker 1>all right, okay, service now, well service now. That's ticker

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<v Speaker 1>INOW may just be the opposite trade here. They are

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<v Speaker 1>up about four and a half percent and in a

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<v Speaker 1>fourth session of gains, and these semiconductor software trades have

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<v Speaker 1>really been opposites this year. Traders very optimistic until recently

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<v Speaker 1>about demand for semiconductors due to AI. At the same

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<v Speaker 1>time worried that AI will eat software companies lunch, and

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<v Speaker 1>so you see maybe some money rotating out of simis

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<v Speaker 1>and where does it go.

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<v Speaker 3>It goes into these.

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<v Speaker 1>You know names where there are fears of AI disruption.

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<v Speaker 1>So the AI trade maybe taking a bit of a

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<v Speaker 1>step back today, it's actually looking earlier. The correlation between

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<v Speaker 1>software and semiconductor stocks in the S and P five hundred, though,

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<v Speaker 1>still stands at the lowest since nineteen ninety four right now,

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<v Speaker 1>so they really have there are still opposites to an extent.

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<v Speaker 2>The stock Movers report from Bloomberg Radio check back with

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