>> 38 minutes into the u.s. trading day. here are the top stories we are following. walmart sales surge as they get consumers from upper income households. a different story for deere, cutting outlook as demand slows. what it says about the industry. the chief financial officer for cisco has an upbeat sales in

forecast for profit. that is coming up in just a bit. i'm katie greifeld. he markets at the moment, quiet at all-time highs. we broke to the levels on both the s&p 500 and nasdaq 100 yesterday, still hovering around there. taking a bit of a breather. the s&p 500 only up by .1%. the same story at the nasdaq 100, the big tech benchmark currently higher by .1%. when you are at an all-time high, maybe it is not worth complaining. in the bond market, a little bit of a selloff. yields on the 10 year currently higher by three basis points but well below where we were with the 10 year currently trading at

4.36%. let's get back to earnings. sales at walmart surging as wealthy shoppers flock to the retailer. the company posting first quarter sales growth along with a better than expected full year outlook. consumers getting staples or big purchases. is this a trade it down that we are seeing a boost in walmart? >> yes, it is. it has been one of the big fisheries when the surge we had. consumer being -- consumers being squeezed. consumers are turning to walmart for the value that they are known for. katie: it is probably no surprise you see the move towards staples. you look at the average ticket and it was flat but the number of transactions that rose and

people not going for the higher priced items necessarily read -- necessarily. andrea: that is right, we have to spend more of our income on the things we need and less left over for things we simply want. inflation bolstered the value of sales and when that comes down or up moderates and supermarkets cap to sell more loaves of bread to get the same value of sales. it was positive transactions were up. katie: this is good news for walmart. it feels like walmart can make money in any environment and right now making money from the tray down. i have to imagine it is painful for other parts of the industry. andrea: i would imagine. what they have talked about is doing a better job on fresh food , general merchandise, fashion, home furnishings. i was listening to the call

thinking the latter is not going to be totally good news for target which has a lot of those upper income customers and they come in for essentials but also by the fashion. so walmart turning the incredible scale on that market is not great for target which is trying to turn around its fortunes. katie: really appreciate your time on the blockbuster earnings from walmart. to broaden out the conversation, joining us is mark spellman, ceo of alpine woods. let's talk about what we have learned about the consumer. we had the walmart earnings showing the trade down and retail sales were a big goose egg which surprised a lot of people. how are you feeling about the strength of the u.s. consumer right now? mark: it is definitely leaking

-- weakening right now. have to go to the change of the upside. it seems like ancient history but the pandemic still has an impact on the numbers in so many groups and so many stores had huge, massive 20 percent plus type of topline things. that has to reverse itself or normalize for you are definitely more in the normalizing area right now. when you look at consumer credit , which is something that is a good way to look at how the consumer is doing, the vast majority of consumers are still in good shape but there is some weakness and delinquency rises on the bottom and when you see credit cards on the subprime side of things. definitely seeing hikes in the numbers. keeping the math here, yes, it is going up but from a historical basis it is still low to normal but definitely off of the lows. katie: we are talking about rate of change and when you think about absolute levels it is a different conversation.

how does that translate into how you are viewing the stock market? we are at all-time highs and it feels like the rate of change has slowed down but at all-time highs. does that normalize in the consumer give you any pause? mark: a little bit and there are a couple of pieces to that puzzle. from a technical standpoint the move in the market was very positive yesterday. you took out highs on a lot of volume from a technical standpoint and you can't ask for much more if you are just looking at charts. then the top seven, magnificent seven has combed down and it is -- calmed down and that is very healthy for the market. we like to say 2020 four is the year of the magnificent 493. the evidence i can point to is the industrial group has done very well this year, was beating

qqq in tech for a while but tech has caught up but both 10% year-to-date. but that is healthy and the market when you see broader groups going up. katie: what is driving that? you mentioned industrials that has been an on and off outperformer. utilities are being talked about as an ai play good what is driving the broadening out? mark: earnings is still the key. cost cuts have been put in place and you are seeing good leverage on the top line. there is an element of rate cuts if you are looking to cut rates and industrials is a go to kind of group historically speaking. i think that is kind of the backbone there. we think you might get one rate cut this year but i don't think the fed is in any rush to cut rates. nothing seems to be broken at the moment and that is the worry if they don't cut rates

something will break. but right now we are in the probably one camp. katie: how much do certain areas of this market really needed rate cuts? you focus specifically on the small caps and think about the maturities they are facing, the russell 2000 index when it comes to the balance sheets. that has been pointed to as a reason to maybe be bearish on small caps. earnings and what we see in the economic environment and the fact that we have bond payments coming up. mark: while i appreciate the sentiment, i think it is too broad of a stroke. you have to dig down on a company by company basis if your heavy leveraged but not every company is like that. katie: we will get to some names after the break. i am curious, we should talk

about meme stocks. we have were up and now we are coming down. what do you make of what we are seeing? i thought this wasn't supposed to happen if you hike the basis points. mark: i don't think it is a good development for the health of the market. it does show a bubbling over and historically speaking it has been close to tops. as you said, four days is not making the trend yet so we will see how it goes. but we will keep our eye on it. we don't think it is a great development as far as the market is concerned. katie: do think the fed cares? mark: no, i think he thinks about pc. katie: let's take a look at what is moving underneath the markets. emily: a big turnaround in under

armour. it was hitting the lowest level since 2010 just after the bell and is now pairing the losses. the earnings for the quarter were relatively strong and in line but the guidance going forward was much lower than estimates. you see adjusted eps for 2025 at $.18 to $.21 versus estimates of $.59 and also sees operating income 50 million to 70 million versus estimates of 352 million. a big miss on the guidance for the retailer. but the investors don't seem to mind as the stock is pairing the losses. under armour is also approving a restructuring plan to strengthen and support the company's financial and operational efficiencies may perhaps investors are catching on to that plan and liking that plan for under armour this morning. katie: it is a good reminder that it is still earnings season

so that is the story with under armour. what is going on with chubb and berkshire hathaway? emily: berkshire hathaway had been building a stake in a company for several months but the market did not know what the company wasn't until last night in the filing and we found out it was chubb, building 86 point $7 billion stake. analysts are largely positive about this investment -- 86.7 billi dollars stakeo. analysts are largelyn positive about this investment. -- $86.7 billion stake. analysts are largely positive about this investment. it is still up 4%. katie: tell me about jd.com. emily: the chinese retailer up

about 3% just this morning. they beat expectations. there were also in an earnings season and this is amid a slowdown in the chinese economy. you compare this to the competitor alibaba, which posted earnings earlier this week which were a little weaker. for jd.com is 7% rise in revenue and that came amid a move to slash prices, particularly in their consumer electronics business. katie: great stuff. i appreciate the round. coming up, deere cutting the outlook as slower affirming demand it's. this is bloomberg. ♪ -- demand hits. this is bloomberg. ♪

katie: deere cutting its annual outlook as demand for farming slows. the biggest hit to their income since 2006 and that puts deere under pressure. christian leno joins us now -- chris cilino joins us. chris: they lower the outlook this quarter and this was more of a haircut than we anticipated. they lowered the net income guidance 8% to $7 million this year which would imply earnings will be somewhere north of $25 a share in 2024 or about 8% below.

the reduction has been driven by deteriorating global aging markets and a needed to manage rising inventory at levels as the demand starts to pull back. you will see deere meaningfully under produce in the back half of the year. the question now becomes, is this enough of a cut? katie: that is what i am curious about. do you anticipate we can see more clock or do you trust that deere has the management know how to manage the inventory levels that are piling up? chris: it ultimately comes down to what does retail demand look like as we exit the year and head into next year. farmers are incredibly challenged right now. we have seen stabilization the last three months on crop prices but down year to date and down significantly versus the prior year. they have higher production

costs, affirming will be down 26 percent this year and on top of that you have generally weaker firming sentiment and they have gone out and bought a lot of equipment over the last three years to the age of the fleet has come down precipitously. we struggle to see a near-term catalyst for a re-in demand and historically speaking the downturns don't last one year. we are looking at more of a prolonged downturn the cycle. katie: deere shares down 3.5%. thank you so much. let's turn to the broader markets with mark spellman of alpine woods. taking a look at the broad s&p 500 with the massive weight to the magnificent seven. it tells one story but then you look at the equal weight version for tells another story. how are you feeling about valuations? mark: surprisingly ok.

the equal weighted index you have 16 which is in the normalized range, not an extended level. that gives us a lot of confidence that there are stocks out there to be bought and you don't have to just by what is working. we have seen year to date a catch up as far as the broadening out. that will continue because there are reasonable valuations out there. companies are making money and free cash flow is at record highs. a lot of reasons to continue to be bullish. katie: there are stocks to buy it. and the last time we spoke you mentioned google which has been quiet on a tear -- which has been on quite a tear. mark: it hasn't changed a lot and it is fairly reasonably priced.

cash flow is about 19 times in this company will grow the top line 15%. that is a hard number to look for -- easy to look for but hard to find when compared to other names say for instance apple trading at a higher valuation and top line will be 3% to 4%. we think the backed up for google, there is a presidential election and they get under scrutiny. ai is a bit of a worry for google. i think the worry is google makes most of its money, enormous amount of money on search. will openai come out with its own search engine that will display some google? they have such big sure they have nothing but share to lose when it comes to that. that is the worry but it is fairly priced. we like the 24% a while ago but we continue to own it. katie: with google and other

tech names such as microsoft, they are spending loads and loads of money on a i. as an investor, what kind of signal do you take from that? is it a bullish sign they are investing in future or that they would allocate money to other areas? mark: they have to be involved on the cutting edge. it depends on how they are applying the ai to the core. you are seeing companies doing that. there are adjacent industries that we think will benefit. when you look at the data centers we have talked about in the past. the wind at the back of the data centers is tremendous and is a very long run wait for them. rents are going up in double digits and capacity is low. the biggest worry from a data center in our mind is where will they get the power from an that

is the biggest issue. if you are ever to solve that, the growth for that industry will be huge for a long time but we still like that stock. katie: then we get talking about utilities again being an ai play. i agree on the data centers. you are seeing it across industries but speaking of ai, we have to talk about nvidia reporting next week. you mention three months ago it is maybe a company you would avoid going into earnings. is that still the case? mark: the short answer is yes. we are getting there. i do want to see the prints. the competitors and customers of nvidia have reported that indicated they are going to be ok but we will wait to see what the print looks like. katie: does that you go to semiconductor chips or just nvidia? mark: it is just nvidia.

the growth rates have been so gaudy and that is what we really want to look at. some of the other companies sort of more normalized double-digit stuff and the level of error there is probably less. katie: that is a good place to leave it as we look at tech nvidia earnings coming up on may 22. it's great to see you. really appreciate your time on this thursday. still ahead, we take a look at the companies making the most social buzz in our social climbers segment up next. this is bloomberg. ♪

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katie: time now for social climbers, a look at the stocks making waves on social media. microsoft reportedly asking hundreds of china-based ai staff to relocate outside the country as tensions between washington and beijing mount. staffers offered the ability to transfer to the u.s., ireland, australia, or new zealand. easyjet reporting a larger than expected loss in the first half. the european airline announcing the ceo will step down in january where he joined bloomberg television earlier. >> i have been with the company for seven years and have gone back -- through many changes and this has allowed the board to do a search and i am delighted to have chosen to appoint the current cfo as the ceo and he will be a great leader. katie: canada goose reporting

better than expected q4 results. the pricey jacket seems a stronger demand in u.s. and china after months of a slowdown. we are headed into summer so that is interesting. the canadian company announcing a partnership with actress and climate activist jane fonda. you can join the buzz on your bloomberg terminal. let's take a quick check of markets. just about an hour into the u.s. trading day. things are perking up. the s&p 500 building on gains, currently up .2%, above 5300. at an all-time high. it feels good. looking at the nasdaq 100, a similar story, also up .2% on big names. we have heavyweights reporting next week. i'm talking about nvidia that will be very consequential for that grouping of companies. the bond market, another quiet

day after fireworks. the 10 year yield currently higher by one basis point. coming up, cisco systems boosting full-year forecast as businesses spend on computer networks began. scott herren, the cfo, joins us next. this is bloomberg. ♪ . (speaking to self) about our honeymoon. what about africa? safari? hot air balloon ride? swim with elephants? wait, can we afford a safari? great question. like everything, it takes a little planning. or, put the money towards a down-payment... ...on a ranch ...in montana ...with horses let's take a look at those scenarios. j.p. morgan wealth management has advisors in chase branches and tools, like wealth plan to keep you on track. when you're planning for it all... the answer is j.p. morgan wealth management.

we are watching the shares of cisco systems down right now despite signs that people are

investing in computers again. abigail: they were higher premarket anything is possible by the end of the day. in terms of the quarter you mentioned they be the top and bottom line estimates. the revenue growth down after some growth some fluctuations here as well is the enterprise customer and place or what is driving this little bit of a hick appear? if we take a look at what folks are saying is disappointing morgan stanley and citi sing is conservative. adjusting earnings a slightly higher. morgan stanley saying this is

conservative and the june 4 analyst day will be a driver citibank saying this is also conservative and if you take a look at cisco relative to benchmarks. relative to the s&p telecom index they are the connect flap over the last year. -- flat over the lester. katie: you gave a prediction for fiscal 2025 indicating revenue growth will be in the mid-single digit rage a lot of people saying is conservative. is it conservative? scott: i wouldn't guide 25 until we got to the fourth quarter earnings call.

i think analysts are all trying to adjust to what is -- get enough information that they can narrow down their expectations for 25. is it conservative? it's a first view of where that is going. the encouraging thing for us we work through supplied chain disruption that calls us to build a huge backlog. as we got the component since we were able to clear the backlog and revenue spiked. we spent some time trying to unpack that for investors yesterday and do some more on the buy side later. just trying to give them enough insight so that the models will converge on the right side of

the numbers. katie: you are not saying no but it's very early. who knows what will happen? bus talk about inventory. it feels like you have turned a corner when it comes to supply chain just russian. a lot of people looked at this report and say there's a bit of an uptick. where is that coming from? what kind of customers are receiving that demand from? scott: if you net that out and look at the core business, apples to apples looks like, orders were flat overall which is an improvement as customers of been trying to implement the huge amount of product we shipped out to them. we see them getting through all of that product and as that happens, we see demand return and product orders are flat.

there is growth and security orders, and growth in data center networking orders which has been a headwind and growth in campus switching. there is more vacant office space how can it be growing? katie: it took me three questions but we have to take about ai. a detail that caught a lot of people's eyes is you have a billion on ai infrastructure and orders. is that for a particular line of business? where would that spending take place within cisco? scott: that's not a new data point. if you look at how these ai models get trained and used is on the backend. a lot of that going to the big,

large public cloud. katie: can you talk to us about the timing here? when investors are thinking about when these orders convert to sales what kind of timeframe? scott: no one's more anxious to see that than i am. a lot of things have to fall into place for the line of sight that we have. it is driven by in each case with the large web scalars we built up a spoke product for them. they are all doing something different and builds a product that goes through a rare testing process. we know what those use cases are in as those build out and infrastructure builds out we will start to see the line of sight turn into orders and revenue. that will be weighted towards the second half. katie: fiscal 25, back again.

who is that's been coming from? the hyper scale orders, they haven't been big users of cisco gear but with ai spend do you see that changing? scott: for sure. when they first started building out the public cloud computers. we miss that anish is held out -- initial build out. as they build out ai infrastructure it's a different architecture and we've gotten ahead of it to the point where we are designed into dozens of their use cases. it will come from the top 4, 6 infrastructure cloud providers. katie: i want to talk about cost. analyzed were a little surprised

by the magnitude of the expensive -- expenses you are taking on. you announced headcount reduction without focus on cost are there more actions like that coming? scott: i don't think so. the motivation behind it for us for our own security strategy and building a security platform that will incorporate cisco products and third-party products as well. security will have some element we have great leaders with spl unk. we announced gary steele who was the ceo splunk and he

is a guy i've known for a long time and i was on his board of his previous company. he is a great operator and a guy that i know and trust well. we have a world-class sales team in the hands of gary m excited to see where that goes. katie: gary steele staying on that seems like a happy marriage. i have to ask, what are your thoughts on large deals going forward? are you keeping an eye on out or stay on the silence? scott: large deals on the acquisition run. we generate a fair amount of cash and because of the splunk acquisition. it doesn't affect our capital return and if you look at our priorities for capital allocation is to drive the growth of the company.

also to support the devon in which we continue to increase. out of 5 billion dollars a year rate. katie: maybe like guide for 2025 is a little conservative and look for an growth opportunities. thank you for your time our thanks to scott herron. from cisco systems. what is driving this strength? abigail: i happen to put the dow on the board and below 40,000 but as you mentioned above that level for the first time ever. a small gain of .2%. s&p 500 is up around the same percent. a second day record highs for the s&p 500 and nasdaq.

for the russell not so much. the small-cap index we will see that index is lower on the day. that is being driven by the meme weakness. after that huge surge for game stop and amc. that big surge in two days of pullbacks. in terms of what this could mean for the russell 2000 will we see an all-time high there? we are well below that level but if we go into the bloomberg terminal and look at the russell 2000 we will see it hitting against resistance this is similar in a different way to the other indexes. these are not all-time highs but recent highs we have selling resistance.

the question is, are we going to see a break above resistance. each of the indexes trying. you can see the range pretty well as rsi is sagging there a little bit. will the breakout be rail or will we see consolidation back down? katie: never a dull day. our thanks to abigail doolittle. the american appetite for ev we will speak with elizabeth krear next on wall street week. this is bloomberg. ♪ ♪

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benioff later today at 4:00 p.m.. katie: we are looking at the impact of bidens chinese tears. david westin spoke with elizabeth krear, >> all competition needs to be taken seriously. they want choices technology and value. it is now affected consumer demand. competition is expected to continue to increase with 10 more evs hitting at the market. suv and truck sales make up 80%

of the u.s. market in contrast small cars make up less than 1% of the u.s. market. the $11,000 china seco would be in this the chevrolet volt during its peak sold less than half a percent of industry monthly sales. i am not an expert and decision-making but they are looking for lower cost vehicles within their segments. whether low cost evs are offered by chinese brands but there is a market for. katie: within this segment they are interested in. this segment this ego listen,

that's not much of a threat to u.s. automakers. elizabeth: that is a very small segment. that doesn't mean they can't rank their lust cost to other segments but when you asked the question is there an appetite for super low cost ev. type of vehicle would fit within that category of vehicle. david: in march i read it's not the price point as the charging station people invoking that is a recent to be hesitant. we survey over 2000 vehicle shoppers to gauge their interest and ev's and we look at the top reason for rejection those who say not interested in an ev they

say charging locations and prices a second. there is a learning curve to owning and evm figuring out where to charge, how frequent to charge and how much to charge. charging may not be truly unavailable but charging is too much of an unknown and same goes for price. the savings with the ev incentives and maintenance off -- and often offset that price. infrastructure, price and education are all very important. david: education is a key component here. it's something new for most of us and some of it is how long do i charge it and if it's really

cold outside do i lose the charge? is there an opportunity to educate us to become more comfortable with this? elizabeth: perception is reality and for the consumer to learn how to deal with their new ev they need to understand what it means to home charge. what it means to charge on a daily basis. maybe the solution you charge at work every day where when you are on a road trip, that's a different scenario altogether. road trips and a nice vehicle there used to going to a gas station to fill up but within ev a better solution every time you stop you just charge because you can. there really is an education and customers need to feel comfortable and to feel comfortable understanding charging in the visibility of

charging is important. katie: that was elizabeth krear with david westin. this is bloomberg. ♪ ♪ - [female narrator] around the world, 5 billion people lack access to safe surgery. children are suffering from treatable causes.. ..living with conditions many have never seen. for more than 40 years, mercy ships has deployed floating hospitals with volunteer doctors who give their time to provide the free surgeries these children desperately need. - i feel like my reason for being here is driven bylove . i think it is the love that changes the patients first. - [female narrator] join us by calling or going to mercyships.org now. $19 a month will give children and families

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katie: jp morgan's jamie dimon says he's more worried about inflation rather than the markets. we just saw the dow making history hitting the 40,000 marker. he sat down with rand seem like a lot. jamie: i wouldn't call it turbulence. they predicted a soft landing. markets have been wide open and that's all good.

there are a lot of times in history where that was true in the next year it was not true. i don't pay attention to monthly numbers. francine: what do you think the future looks like? jamie: i look at the future like a lot of things is kind of inflationary. the green economy, the re-militarization of the world infrastructure and trade, fiscal deficit there are inflationary forces in front of us that may keep it higher so the surprise would be rice or higher and inflation is higher in geopolitics. that can be determinative and water company does somewhere just not gonna know. francine: do you think it is 50-50 that the fed because?

jamie the fed has to follow the data they may not know for a couple of months. francine: if you're not paying attention to it you're not worried about it? jamie: my view is the world is pricing in for a soft landing, i think the chance of going -- something going wrong is higher. francine: what does that mean for marcus? jamie: they will be down. francine: why are they not pricing it end? jamie: a lot of happy talk. francine: where to stock come from? jamie: banks reducing rates. political things down

disseminate. the future is not predictable like that. i am a student of history. when i go back to the market of 72 and the collapse of 74. the collapse of 82. the 1987 market crash, all of them were not predicted the year before. i look at the factors that drive the thing. francine: what do you see as the main stress now? if it is geopolitics is not priced in. is a distress, or multiple factors coming in at the same time? jamie: in terms of oil and gas prices, trade alliances, this prize would be higher rates because inflation did not go

down. inflation may be in the cars and have nothing to do with what you see today. if you had higher rates god for bid stagflation you will see stress and real estate and private credit and things like that. katie: that was jp morgan ceo jamie dimon with francine lacqua. coming up we have seema shah. that doesn't from bloomberg markets. i am katie greifeld in this is bloomberg. ♪

from the heart of where technology and finance combined this is bloomberg technology with caroline hyde and ed ludlow.