his forecast for market valuations amid third quarter earnings season.Welcome to catalyst I John Smith alongside Madison Mills, 30 minutes into the US trading day.First up Goldman Sachs saying the party is over warning that the S and P 500 decade of big gains, it could be coming to an end break down the outlook for us equities going forward.
And they talk about that concentration leading to a lot of the over 20% rally that we've seen over the last year here.But they say that a broadening out while they do expect that to happen, clearly, they don't expect it to be enough to lead to those broader gains, which I think it's fascinating given that they do expect more growth in something like the market cap weighted benchmark index rather the equal weight at S and P, then the market cap waited index.
And I think it also just signals the fact that investors potentially if this call is right, certainly do have to adjust this new normal. I'd be concerned about macro catalysts that have historically consistently led to lower valuations such as a ri a sharp rise in interest rates, a sharp rise of inflation or a sharp rise in the unemployment rate.I think we're largely there because there's really little concern of those three macro variables that I just mentioned.
So, you know, I I the the the broad consensus uh for the market today and the economy is clearly a soft landing, a lot of rate cuts and a pretty good earnings growth next year.Or the 10 year yield would probably have to get near about 4.5% for investors to start really worrying about uh higher interest rates and start extrapolating those.
The company also tapping former Morgan Stanley Ceo James Gorman to replace the Nike executive chairman, Mark Parker as the company's next chairman starting in January.And now you've been digging into this story and of course, there's lots to talk about maybe who that successor is going to be.The company is publicly given for pointing a successor to current Chief Bob Iger Wall Street had expected Disney to signal a placement for I as early as next year.
She was hand selected by I A CEO in 2020 but was Ted from the position in November 2022 after less than three years on the job. But it's interesting given what we have seen with UPS obviously over the course of the last five days here on your screen, you can see down about 8/10 of a percent.I just want to pull that up to give folks a sense of the context here because they have been struggling over the past year down about 15%.But it's interesting given that Barclays decision, it was impacted by fedex recent results.
So that immediate impact what that could have, what that could all mean for UPS is something uh that could be a challenge and something to certainly note on that upcoming earnings call. So whether or not that's summing up a customer service type of call or, or submitting tickets uh automatically following that is these mundane type of tasks that they are then going to be able to potentially outsource, I guess you can say or, or do uh just uh through A I which would then free up the worker you think to maybe do more tasks that they don't necessarily have time to do you and I do creative.
This is what we saw back in the late eighties when the internet started that, you know, there was a small moment in the Department of Defense and then gradually it reached the commercial stage.But what we saw during that nearly 10 to 20 year phase was new business models get created.Vivek pointing to some of the things that other analysts point to as the bearish signals for A I moving forward, comparing it to that uh tech bubble that we saw heading into the early two thousands here.
He also mentioned the results that we got out from TS MC last week, which certainly helped change a bit of the narrative, we did see a sell off earlier in the week on the heels of a S MLS disappointing guidance. So I think what investors are asking themselves is whether or not earnings are really going to introduce or help reinvigorate some of that lost confidence that we've seen on the heels of the Robo Taxi event.I think there is what Tesla is doing right now, which is its current automotive business then, what it's going to do in the next year, next two years.
I would disagree with that because I think the car, uh the core electric vehicle business still is uh extremely lucrative for Tesla.So that's where it gets kind of uh I would say a little weird because I think investors and you know, car enthusiasts, electric vehicle enthusiasts might be more interested in the product he's currently making and how he can iterate those.I think he's actually going to be long term less interested in making cars.
And I think, uh, if you're the CEO or the, you know, the old caretaker of a very large car company, your behavior risks turning off certain voters and thus certain consumers.And you know, his recent political actions certainly risk him doing that.I think most people would interpret that.But I think the more politically you get in this day and age, uh the risk you have to your core business, which in his case, is selling cars, Greg.
Uh I think the move there is that uh the Ceo Mary Barr has tried to communicate that they have a steady electric vehicle strategy. So be sure to stick around for that tomorrow and coming up Bitcoin taking a breather after nearly touching $70,000 we're going to break down the moves right after the break.This comes as investors are piling into spot Bitcoin ETF as optimism grows for clear crypto rules after the presidential election here to discuss.It's great to have you on set with us here.Certain investors analy we spoken with have certainly lumped it into the broader Trump trade.
Like even Elizabeth Warren is saying, like, I don't have a problem with people trading Bitcoin, which is very new.What do you make of the flip flop that we've seen from Democrats?Obviously, it's a welcome reception but just in terms of how much of a shift we've seen it so quickly, what I make a it is 100 and $60 million coming into the election from the crypto industry to influence, you know, like they're just, they're just responding the political realities.
Well, and that's interesting too because it kind of refutes the idea of it being one big investor coming into the room. We've got a close race and both candidates and their donors hitting the campaign trail among them, Elon Musk, the billionaire promising to give a million dollars a day to a registered voter in key swing states until election day come November 5th for a chance to win the million dollars.And you also have to sign a petition saying that you support the 1st and 2nd amendment.
You're then followed up with, you know, fed risk that everybody's pricing in will the fed be able to continue that aggressive easing pace that they've had or are they going to have to pull back from that?And so right now, we're seeing in SPX options, we're seeing roughly call it a three volt premium being priced into the November 6th options as opposed to the November 5th options, kind of capturing that uncertainty in the election.
We have a one day VA nine day V, the benchmark 30 day V, you then have a three month, six month, even one year V to kind of get an idea of where the market is pricing in that risk, right? Yeah, I I mean, I think it's, it's that known once you get that data point of what's known in the market, what what the election turnout will look like, then people come back and you know, the vix is a mean reverting instrument.And I think you'll see that after this, after the settles in, we'll move on to the next, you know, piece of information or the next data point on the horizon where people will start to price options around rob.
As you mentioned, small modular reactors also known as SMRS, they have long held the promise of cheaper and more nimble nuclear power in large part because they don't require the footprint and the cost of traditional power plants, one SMR unit can generate roughly one third of the power that traditional reactors can.They can be built in factories and they can be scaled to demand.
At the same time, you've got these big tech companies that have major climate goals they have publicly committed to and nuclear power offers one of the few paths to reaching that largely because it generates electricity that is virtually free of harmful carbon emissions.The Department of Energy has set aside $900 million to support the deployment of those modular reactors.
And the big news from last week was not just Amazon saying if someone else builds it, we will come by the power. But we also produce uh a very high temperature quality steam uh which will be used by chemical, by companies like Dow chemical and other petrochemical and industrial manufacturers to help decarbonize their operations.
Well, I think, uh you know, for the last four years, you know, we've hit record highs in traditional energy production here in the United States.