15min chapter

De Nieuwe Wereld cover image

Aanslag Magdeburg, kersttoespraak koning, globalisme vs nationalisme e.m. | #1812 Nieuws van de Week

De Nieuwe Wereld

CHAPTER

De Aanslag op de Kerstmarkt: Motieven en Impact

Dit hoofdstuk behandelt een recente aanslag op een kerstmarkt in Duitsland en analyseert de ideologie en achtergronden van de dader. De sprekers bespreken de rol van de media en de maatschappelijke reacties op geweld, evenals de invloed van radicalisering en vervreemding. Er wordt ook ingegaan op de bredere sociale kwesties zoals migratie en integratie binnen de Duitse samenleving.

00:00
Speaker 1
Let's bring in CNBC's Kate Rooney who covers the company along with Amazon shareholders, Stephanie Link of Hightower, also a CNBC contributor. It's good to have you both with us. Steph, I begin with you because you're the person I'm talking about who bought more stock today in this company. Tell me about it. Yeah,
Speaker 2
I mean, I've been involved in this name for a while, Scott, as you know, but I was underweight relative to the benchmark and I wanted to go overweight after I've done a ton of channel checks, which really shows that their momentum is continuing on top line, on margins, on bottom line. So if you step back, North America margins have now beaten for five consecutive quarters. And I think they're going to go from something like 4 .2 % last year to mid single digits. That's the guidance. Well, when I look at the components of that, retail is seeing a lot of momentum. And retail margins are still well below pre -COVID levels. So I think that you can see that held the overall margin structure. And then of course, you have advertising, which is growing at 24% year over year, and those margins are 42 to 43%. And as the economy remains strong, advertising certainly is a tailwind, at least the trends that they will see. AWS, they have about a 35% market share. Growing upper teams, only 10% of the workloads are on the cloud. So I think the momentum continues and they've gotten their groove back for sure. I think that really had been the issue that they were struggling with it for a couple of years. And then finally, Scott, the logistics business is seeing amazing efficiencies. So they went to this regionalized strategy, and now they're seeing 45 cents per unit cost reduction as a result of this strategy. And of course, we know last year they delivered $5 .9 billion deliveries packages, and they are actually, they now have 27% market share, they're actually growing and they have a higher market share than FedEx and UPS. They're getting close to the U .S. Postal Office as well. So I like all this stuff. I look at the valuation one last thing. It's trading at not cheap but 13 .9 times EBITDA. The last five years it's traded at 17 .8 times EBITDA so I wanted to make it bigger.
Speaker 1
So K. Rooney, Stephanie mentions the company getting its groove back. Let's put up the three -year chart again because it shows a company that lost its groove at least from a stock performance standpoint. My question to you is how have they done it? How have they gotten this groove back? And look you can call this run in the stock stealth if you want? Maybe the last leg of it has been stealthy just because you know Nvidia sucked all the oxygen out of the room for everybody else But look at that move then you know, that's a three -year chart. We're showing you you you lose something and then you gain it back And how has this happened? I
Speaker 8
would say the takeaway, the headline, it's Andy Jassy and its efficiency. So he took over for Bezos, obviously the founder of Amazon, the face of Amazon, at a moment when it really was still taking these moonshot bets, trying to really do everything and do it well. And Andy Jassy stepped in, brought more efficiency, brought more discipline. That's something we saw across tech with layoffs, but they did a lot of investing in that sort of dip period you see there. They spent a lot on what Stephanie was talking about. Regionalization, getting more efficient, making delivery faster, which was an investment cycle. They're now reaping the benefits. They're on the other side of that, and we're seeing it pay off in North American margins. E -commerce is becoming such a bigger deal for the sell side. We've talked so much about AWS and AI this year, which is still sort of an open question for Amazon. I think they're seen as a laggard behind the other hyperscalers. But at one, you look under the hood at e -commerce and the margin structure there. That's really what the sell side has gotten excited about. JP Morgan last week writing about how they're going to be bigger than Walmart this year. Bank of America talking about shipping and logistics really being part of the upside. So it's one of these mega cap tech companies It also gets you exposure to consumer discretionary. So a little bit of a hedge there And I think the chart really does say it all there Scott I
Speaker 1
was gonna say it really is as you say it's like a two -prong story here, right? You have two things to lean on you have the discretionary part of the business mature no doubt, but nonetheless Still obviously an important part of that business, but you have the AI play partnerships they've done with anthropic that though a laggard as you said relative to some of its competitors has made it more competitive in the AI arms race as well. I
Speaker 8
would point out Scott to a big leadership change at AWS so Matt Garmin took over for Adam Salypski and he is seen as the leader, really a technical sort of engineering type who's been a long time Amazonian as they call it. He's been around for a long time, has the respect of executives you talk to at Amazon and is seen as sort of the person who's going to lead them into this next era of of AI they've seen it so far as sort of behind not having one of those leading large language models and just relying on anthropic sort of these third -party investments. I would say there's a lot of excitement around what the potential is for Amazon when it comes to artificial intelligence. They've said from a revenue perspective it's already a multi -billion dollar run rate opportunity and they're already seeing it pay off. So I think that's another thing to point to with AWS. He just took over in the last month or so, but they're seen as more upside there and more opportunity, although they have to be quite careful. You've heard Andy Jassy talk about them not being able to do any sort of M &A, the iRobot deal falling through. And actually, we should also mention Rivian, by the way. Morgan Stanley, or excuse me, Goldman had a note out earlier pointing out Amazon's massive stake in Rivian. They've got about 158 million shares. So they're estimating it's about a $500 million positive mark for Amazon. So as far as the near -term move, also important to note, you know, the 20% upside in Rivian today, not a bad thing at all for Amazon.
Speaker 1
Steph, you feel like this momentum has legitimate legs, you know, as we're going to be talking about A .I. every day. We already are. And we're talking about Nvidia every day. And we're going to probably be doing that for the foreseeable future. And we're going to be looking at stocks like Meta, which you've been into, which has, you know, had good performance in its own right as well. Is there enough momentum to keep the stock climbing?
Speaker 2
I think so. And I think it's not just a top line story anymore, which is what it had been in the past prior to the new CEO, right, or fairly new CEO. Now you have the margin story. That's why it's so incredibly important. We talk about margins and operating leverage and the power of that. And when you have the two, when you have revenue growth in the double digits and you have operating margins expanding, that leads to massive bottom line numbers, growth, and I think it's just underappreciated what more they can do. That's why I highlighted North America retail. That's, excuse me, North America margins, those are going higher driven by a lot of things, not only retail and advertising, but also lower shipping costs, better inventory management, automation. So that piece is really set to go higher. And then of course, yeah, AWS certainly benefiting. And I love that they have gotten back to the industry leader and upper teens growth is huge for this company. They're massive. So I think those two pieces along with all these other efficiencies that they're seeing because they had a massive logistics investment cycle. And now they're starting to see the benefits of that. So you think you have a couple of different ways you can win here.
Speaker 1
Still looking up at the Nvidia's the apples the Microsoft's in terms of market gap. But this is a significant day and milestone. Kate thanks so much Kate Rooney putting everything into perspective for Steph you're going to stay with us. Let's bring in Brian Levitt of Invesco and Max Kettner of HSBC Global Research they're going to join the conversation now it's good to have you here Brian here with me on set. You look at what Amazon's a good representation of you go where the money is right I mean the money has been flowing into these kinds of stocks is that how it's going to be as we make the turn into the second half? I
Speaker 5
think that's how it's going to be. I mean, ultimately, in order for the market to broaden, you would need a type of catalyst. And what you have in the US is actually an economy that's slowing a bit. And so the weight is now on the Fed. When the Fed lowers rates, normalizes the yield curve, the market could broaden out. But the reality is right now, the market's priced in a couple of rate cuts, doesn't seem to want to do much more. The Fed doesn't seem to want to do much more. And the economy is slowing a bit in the United States. So is that the only catalyst that we can look to for a more lasting
Speaker 1
broadening of the market? You get the actual first and then the market's comfortable enough to start broadening out. We start having money coming out of, you know, high growth tech
Speaker 5
and AI trades and into other areas. I think we saw the blueprint for it in November and December of last year when the market priced in six rate cuts and you had a huge rally in small caps and mid caps and cyclicals and more value oriented. This year, as the market has been pricing out the ray cuts, the leadership has gone back to the mega cap. So right now we're in this environment where the market is sort of aligned with the Fed. And what you'll need likely is greater expectation coming into this market that the inflation story is really behind us, that the can lower rates and the soft landing happens. Max,
Speaker 1
how's this market look to you as we're about to head into the second half?
Speaker 7
Yeah, it's still risk on for us really, right? It's still an environment where we still want to be overweight equities, we're actually still maximum overweight and high yield credit, because things are generally still looking pretty good. I do note, however, I think one of the risks for the second half of the year is really on the inflation side still. I know it's pretty boring and we keep talking about the same thing over and over again. And you guys just mentioned that the start of the year, we had six, seven rate cuts. We're now at close to two rate cuts by the end of the year. And the problem that I see is when we look at short -term inflation expectations at the start of the year. You look at two year break evens for example to your market based inflation expectation. We started at 2 percent. So the market decided really at the end of last year. OK. Inflation is done. We've had the downside surprises. We're pretty much done. The Fed needs to cut very very aggressively. And then obviously we had this -February story around residual seasonality, and we had this merely eight basis point upside surprise in headline inflation in March, and that meant the market freaked out. Let's remember just two months ago, when we looked at the number of stories mentioning things like stagflation, they were actually shooting high in April. People were really talking about stagflation. The worry I have now is that market -based inflation expectations have made a round trip. They've backed to 2%. So I'm not really worried that it's going to go through the roof. But I'm a bit worried that we've buried the inflation theme a little bit too prematurely, just like we did at the start of the year.
Speaker 1
So then you, Max, think that this Friday's PCE report could be the deciding factor as to at least the start of the second half how that gets underway.
Speaker 7
Yeah. I don't think it's that this one's because we've got the data we've got the CPI we've got the PPI. So I don't think it's the PCE this week. I do think it's it could be something in the next couple of those you know next couple or two three months because obviously the market is growing a bit more confident with the September rate cut. So as that perhaps has started to be called into question, right, because we do see perhaps inflation a bit sticky and a bit stickier than thought, that is really I think one of the biggest, biggest risks. It's not really on the growth side. I don't think it's on the growth side because when we look at of the common surveys, they do suggest that economists again and strategists again on consensus are increasingly expecting a deceleration of the US economy once again going into the second half. Of course, we've had these negative surprises, but let's remember most of those negative surprises happened on the soft data side. They've been on the surveys, they've been consumer confidence, PMIs, all this stuff that's actually underestimated growth in the last two years, anyway. So I'm a bit concerned that once again, we might see one or two data points on the growth side that surprise to the upside, and we're going to get another couple of days like today where yields shoot higher, and at some point, it's going to affect equities. Does that mean it's going to do real or high yield? Absolutely not. It's good for a couple of percent of a setback here or there, but those are continuing to be buying opportunity. Agree.
Speaker 5
I take the other side of that, actually. When it goes to that inflation growth debate, see, I'm on the same side with regards to risk assets. That's the irony of it. I still favor risk assets as well, but I take the other side with regards to the growth debate. I believe that the inflation story is increasingly passe. We already have the core personal consumption expenditure, which is the Fed's preferred measure at $275. In a world where the Fed funds rate is $5 .25 to $550, that suggests it's too tight to me. And what I worry about is you're starting to see a bit of cracking in the labor market, nothing crazy, but a little bit of weakness, a little bit of weakness in Empire, PMI, the Philly Fed. You're starting to see a little bit of weakness. And what I worry is that if we're too focused on inflation, we're focusing on the wrong battle. And so I would like to see the Federal Reserve start to lower rates. I would like to get out ahead of that rather than wait for cracks in the economy. I suspect that a recession is still not the base case, but I would argue that growth is the bigger risk than inflation now.
Speaker 1
today on this very program and suggested that the Fed's already late for many of the reasons that you suggested. He would suggest that they do cut preemptively to prevent the economy from falling out of bed unnecessarily. Steph, you know, the risks around the Fed, we haven't obsessed about the Fed a lot lately. We just haven't. We've been obsessing about NVIDIA. We've been busy. But also for the right reasons. There's, you know, we sort of wrote the Fed cut off for a while. We haven't had to think about it. But now we're going to get a PCE. And it's going to bring that back into focus as to whether maybe July should be a live meeting. Maybe the market's underestimating that. We just don't know.
Speaker 2
not think that July is a live meeting. I don't even think September and you know I've been thinking that perhaps nothing at all this year and the reason is is because while we are making progress on inflation and I do expect a decent number on Friday. We are still seeing pretty decent growth. I mean, yeah, sure. We can talk about housing all we want. I know it's very mixed at best. But you have home prices are higher. That's good for consumer confidence. You have PMIs that are actually both manufacturing and still have historically low initial claims. So I added all up, Scott. And I don't think it's going to be the 3 .1 in GDP that Atlanta Tracker is going at right now. I think it's going to be more like 2%. 2% gets me mid -single digit earnings growth, excuse me, revenue growth with a little bit of margin help on the inflation front coming down. I think you can see double digit earnings. That's what stocks and investors that invested stocks care the most about. So I think earnings are going to surprise to the upside. And if the Fed comes back into the discussion, it comes back into the discussion. But it's the data that we have to pay attention to. We have to see where the economy is going to grow. And I think it's going to be 2 to 1 .5%. The
Speaker 1
kinds of stocks, you know, outside of Amazon, let's say, the kinds of stocks that you favor, I'm surprised that, you know, you think those are the kinds of stocks that are going to do well in an environment you think there aren't going to be any rate cuts. And I mean, let's be honest, the economy is slowing from where it was. And there are some significant signs that the consumer is too. From data that I saw today about dining out less and things of the sort how is the cyclical trade going to work so well if you don't get any rate cuts and the economy is already starting to show some signs of cracks?
Speaker 2
Well sure in the third quarter we grew 4 .9 percent so if we just go back to two two and a half percent that's still above trend but certainly it is slowing. But it's not recession in my mind, number one. Number two, I think not my entire portfolio is cyclicals, but that's where I see the value, especially in the financials, especially in the industrials. We talk about onshoring all the time. We talk about the very strong backlogs that these companies are building that really haven't even been recognized yet. I think energy is sort of interesting too, as you know. But on the flip side, look what I just added to. I just added to Amazon, right?
Speaker 1
So I said outside of that. I know that. I got you on that. But you added to Home Depot. You added to Home Depot too.
Speaker 2
Outside of that, I've added to a couple of different things. Like we talked about Seagate, right? We talked about Lamb Research. Yeah, I just added to Home Depot because I don't think that a 4% drop yesterday was warranted. And I don't think it's totally underperformed. I do think we're at a trough in, or the low point in housing, especially since the 30 -year fix has gone from 7 .8 % last October. Right now it's at 6 .9%. I think it's going to continue to come down, because I think interest rates are going to come down gradually. They're going to stay elevated, but they're going to come down gradually. This company is the best in the business, trading at a four -year discount to its average. It's easy comparison, because they just made an acquisition, so they feel good about their business overall. And I think it's just to take a little bit of time. But I do think housing is certainly an area that I still remain very positive about. You
Speaker 5
take the other side of that trade as well. Well, look, I mean, it depends on the time horizon. We're talking about here. You think about housing over time. It's in a structurally a good story. This is a country, lot of 30 year olds, not enough homes available. My point is just to say that things are moderating here from what had been a very strong environment that had some power to it from all the stimulus that we provide. My point is this. If
Speaker 1
these kinds of stocks aren't working all that well, when the economy is doing very well, why in a slow down or even a slightly more moderate growth environment, are they all of a sudden going to start doing well?
Speaker 5
Right. And the expectation would have to be, again, what we talked about last year, the six rate cuts. So you would need rate cuts without the recession, right? That is a good place for markets historically. That is a good place for cyclicals. And you would need the expectation of that right now where we are slowing and investors not expecting a lot from the Fed. I think that, you know, in many ways that, you
Speaker 1
know, the mega cap story continues. Alright, well, it's certainly continuing today in terms of the stocks that we talked about at the very top with Amazon as Steph buys more of it. Two trillion in market cap. Guys thanks so much. Max we'll talk to you soon. Steph of course you as well and Brian thanks for being here at Post9. We do have some news out of the CDC. Angelica Peebles is here with those breaking details. What are we learning?
Speaker 2
Hey Scott yeah
Speaker 3
we are getting new RSV vaccine recommendations out of the CDC's vaccine advisors. They're now recommending that everyone 75 and up get an RSV vaccine if they have not already. Now, they're saying that people between the ages of 60 and 74 should get one only if they're at high risk of serious illness. And this is a change from last year, when the CDC said that everyone 60 and up should consider getting it in with their doctor. And it sounds like it's a little bit of a nuance here, but they're trying to make it so that people who are at the highest risk actually get this vaccine. And they're saying that they found that this is the most cost effective because these shots are about $300 a person. And it's interesting because there was some talk about maybe moving it down to 50 to 59. But here we are seeing 60 still as the floor. Now remember, there are going to be three RSV vaccines available. There's one from Pfizer, GSK, and now Moderna.

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