Stocks Rally on Tame CPI, Cisco Beats on AI Momentum, More

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Bloomberg News Now 5 min 4 speakers 6 chapters transcribed 1 month ago

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Why did the stock market rally after the tame CPI reading?

Caroline Hepker 0:00

AI is entering its most consequential phase where scale, safety, and sovereignty will determine who leads and who lags. Join Bloomberg Tech in London on November 2nd and 3rd as global leaders across business, finance and policy examine the defining trade-offs shaping the future of AI. Thank you to our presenting sponsor Salesforce and supporting sponsors IDA Island and Schneider Electric. Learn more at BloombergLive.com slash. Slash Tech London.

Doug Krisner 0:32

News when you want it with Bloomberg News Now I'm Doug Chrisner. The stock market rose to within striking distance of a record high today after a subdued reading on retail inflation. We had the S P five hundred picking up two tenths of one percent, while a rally in chipmakers sent the Philadelphia Semiconductor Index up two and a half percent. Dan Suzuki is a global investment strategist at iCapital.

Dan Suzuki 0:55

I mean it's very rare that all the sources of liquidity are rowing in the same direction. I mean we have basically supportive uh monetary policy, fiscal policy, banking, uh lending standards, uh and animal spirits are very much intact.

How is Cisco leveraging AI data‑center demand to beat analyst forecasts?

Dan Suzuki 1:07

So everything's good. It's just the question is you look forward, you know, are those gonna last and what could cause that to change.

Doug Krisner 1:13

That is iCapital's Dan Suzuki speaking earlier to Bloomberg Business Week Daily. Now in terms of retail inflation, core consumer prices rose in July by two tenths of one percent compared to June. And then if you look at it on an annual basis, the core CPI rose last month by two and a half percent. Now these figures may give the Fed more room to weigh inflationary pressures against the recent slowdown that we have seen in hiring. Money markets are pricing in less than a fifty percent chance of a Fed rate hike at the September meeting. To earnings news next, after the bell, Cisco Systems issued a forecast for revenue in the current quarter above the average analyst estimate. Now, this reflects Cisco's success in supplying a larger share of the AI data center market with the company's networking gear.

Doug Krisner 2:02

We got reaction from David Biden. Bonson, founder and CIO at the Bonson Group.

What explains the mixed earnings from Cerebras and its AI hardware slowdown?

Unknown 2:06

What we've seen so far we like. There's no big surprises to us. The thing I wanna point out is that the hyperscaler growth, which is at and above target, is not the entirety of the growth. On one hand, if you look at their legacy businesses, which is what attracted us to the stock, networking orders, the non hyperscaler orders, they're also up substantially.

Doug Krisner 2:28

That is David Bonson, founder of the Bonson Group, speaking earlier to Bloomberg. Now, despite that positive forecast, shares in Cisco are down in late trading by four percent. Cerebra Systems reported a surprising decline in AI hardware revenue. Now this suggests the company is making inconsistent progress in selling computers with its novel chip design. Sales tumbled twenty three percent from last year to fifty. fifty four point one million dollars. Now the company's cloud division was the bright spot with revenue nearly quadrupling to one hundred twenty six million dollars.

Why is the Los Angeles Lakers sale valued at a record $12.5 billion?

Doug Krisner 3:03

We got reaction from Paul Meeks. He is head of tech research at Freedom Capital Markets.

Unknown 3:08

I'll give them the benefit of the doubt. Uh I think it's temporary growing pains, but I don't think it was well enough understood when the company went public because again their technology is quite elegant, though I will tell you in the two businesses they're in, they face very tough competition.

Doug Krisner 3:25

He is Paul Meeks from Freedom Capital Market speaking earlier to Bloomberg. Now the results show a mixed picture for Cerebrus as it tries to challenge NVIDIA while at the same time building a bigger AI cloud business. Shares in Cerebrus are down fifteen percent in late New York trading. Los Angeles Lakers owner Mark Walter is selling a majority stake in the team to a group led by Bob Iger and Josh Kushner. This deal represents a longtime dream of Iger, the former CEO of Disney. Together with Kushner, the two had been seeking to acquire an NBA expansion team in Los Angeles, but they pivoted.