Google's search monopoly, El-Erian talks the Fed: Market Domination

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Julie Hyman News

Mohamed El-Erian,Federal Reserve,Josh Lipton

It's a rough day for equities as the US stock market sell-off (^DJI, ^IXIC, ^GSPC) continues ahead of Monday's closing bell. Julie Hyman and Josh Lipton...

to cut interest rates before their September policy meeting:"To do an emergency cut would give the completely wrong signal to the marketplace."That's Josh Lipton live from our New York City headquarters.

So I think that's all coming unglued and, uh, I think it's a lot of margin calls and I think it's going to happen pretty quick and, uh, the unwind should be over by the end of the week.We, we very well might already be in it.Um, and what we're seeing now in, in, especially the unemployment rate, it does look like what you would normally see in early stages of, of recession.

And the other thing that we've been, well, a couple of other things we've been watching closely, we've been watching the 10 year yield, which earlier was down much more at one point, it was positive now is negative again. And you really see an unwinding here when we look at the mag seven at one point early this morning, around the lows had been down by the most ever.We're not gonna know until we have confirmation over the coming days and weeks.But again, it's really in the early innings, wanna check out our leaders here because Bitcoin is the worst off today of everything.

And the question is, will they simply run themselves out or will they result in something even worse? So, what we're living through right now are these three blinking red lights and we need them to turn yellow and then green Mohammed.Uh Mohammed to me that listen, if what we're seeing continues like this and we got, you know, another flat reading in the CP I or P CE, then he did think an intermediate cut um and a super size one, by the way, 50 would be on the table.Because I think that would signal panic, it would signal total panic.

Excuse me, they were comparing this to 1987 right where you see a Black Monday event, but that wasn't in fact followed by a recession, not for a few years.Is that the best sort of analogy for what we're seeing?Um Today, unfortunately, because the fed became so backward looking and the Fed has lost a lot of credibility in the last few years.

Now a federal judge has ruled the company's payments to make its search engine the default on smartphone browsers actually violates us antitrust law and this decision coming down just in the last few minutes here as we try to figure out what exactly uh are the implications of that. Yeah, $26 billion in payments total here is what we're talking about and the judge in the case, judge Amit Mehta writing in his ruling, Google is a monopolist and it has acted as one to maintain its monopoly.This is one of the most significant ones and um one would think it will be um it, it will be pushed back upon by Google, but we'll end up seeing what happened, what happens the stock did fall to the of the session or toward back towards the lows of the session.

And so I think that's really interesting and, and when you look at the, the carry trade where people borrow cheaply in the end to potentially buy large cap technology issues, uh some of that has been alleviated. And a lot of these fear gauges when you look at just traditional sediment polls have turned very negative in a very short period of time.

And now with a big breakdown in the dollar that eventually is going to start to aid emerging markets when we can see a little bit of stabilization to this mark.And that's crypto you guys, your firm has been Big bs notably on Bitcoin and one of the thesis with Bitcoin, is it being quote unquote digital gold is that people should flow into it at a time like this.

And if anything, you know, ahead of digital assets, uh, Sean Farrell remains very constructive and, and, you know, my own thinking is that I don't see much more deterioration beyond really the mid to high forties and I think we will bottom and we can pull out of this, but it is going to be important for look the broader risk asset space to stabilize.

You know, you look at nvidia's four pe now of 26 very reasonable, you know, ahead of the Fed and of course set to cut as many as five times over the next four months. The next generation has started and our production is on track to ramp in the second half beyond that.In the meantime, NVIDIA shares are down some 25% since their record high in June 18th.

 

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