#FinanceDaily Capital Demand v Credit Qual; 🇫🇷, $NKE $PSKY🤮; $MAT ABG

rotation, I think we owe the audience a few minutes on distinguishing between credit quality and that's why debt will trade down and capital demand when money is needed or rotates elsewhere and that is why an asset may trade down. No less noteworthy than Nike's awful. I don't think the quarter was that awful. It was the narrative on a go-forward basis. They are nowhere near the end of this restructuring. There is going to need to be more headcount reduction. They have not figured out why they have slumping sales other than the fact that people just went bonkers on tennis shoes or sneakers depending on what part of the country you're from and now they figured out they don't need as many anymore. The entire sector along with Nike, all of their partners, Dicks, Foot Locker, this weighs on all of them. Largest sneaker manufacturer but the likes of of Hoka owner Decker's is not doing well. Converse inside of the Nike portfolio has been highlighted as being 14 straight quarters of reducing sales. My own opinion on converse is every one like the doors. Every once in a while the doors the band. Every once in a while it falls into favor and everybody is on it for a bid and then it falls out. It's like vans. For purposes of the company that owns vans is a Phillips van using. I forget. In any event, this stuff kind of rotates in my opinion all the time but yes, Nike has a hole, has been in trouble. But no less concerning is the collapse of the power mount skydance debt that was issued last night. So we've talked about how a bunch of IPOs have been shelved, how there is concern that maybe issuance markets are not as robust as they have been. My argument was that people are bringing less than good quality stuff to market for various reasons. In the case of aura, it was going to be a total cash out by early investment firm. In the case of power mount skydance, we know that it is highly levered. Dave Ellison is going to shake the whole thing up. They do, however, they being power mount skydage slash Warner Brothers cannot cut headcount as aggressively as they might want to. That was part of the deal that they reached with the state of California in order to let the deal go through. So cost cutting cannot be as aggressive as people may have wanted. And so the debt gets issued at par last night and immediately trades down five points. That is not how this game works, folks. The way the game usually works is I put in a request to buy 10 times the amount that I really want to buy of the debt being issued. In this case, $48 billion. Let's say I want an allocation of $100 million. I put in, you know, I put, I put in order for a billion and they come back to me and say it was 10 times over subscribed. You asked for a billion. We're just giving you a hundred million. And right after it breaks, it trades up to 102 or 103. And I make a quick buck on at least half, if not three quarters of my order because I happen to be a coveted account of one of the banks that's doing the deal. There are a lot of people in that Paramount Skydance debt stack that are this. This is not the way this usually goes. We sell you lemons. So there is a lot of, there is a lot of sour taste in folks mouths. And when it happens on the fixed income side of the equation, as opposed to the equity side of the equation equation, it is more consequential. A fixed income guy is not expected to lose five points on an original issue out of the gate. That's crazy. Next, I'm going to get to Justin and I'll get to a lot of you. I just wanted to bring a couple of stories to the forefront. Mattel, we spoke about the musical chairs going on. So Paramount Skydance hired the CEO of Mattel to come to Paramount Skydance. Now Mattel has not been a particularly golden child of a stock either. They've had a fair share of problems in substance and then tariffs, China and so on. So forth, apparently Mattel has now received an indication of interest of buying out that entire company by authentic brands group. Well, authentic brands is in the brand business. They own a laundry list of broken brands. They do not necessarily though own functioning retailers that they manage. I mean, they own a few, but they're definitely not in the retail game and they're certainly not in the toy game. And they're certainly not in the, I'm the second largest toy maker in the United States game. So that is particularly interesting. The stock of Mattel got a big bump coming out of that. I definitely want to be able to get to Carlow this morning before he has to scout. Let me just go through some additional overnight info. So yesterday was a pretty subdued day in the market, not much activity either way. Everything ended positive on the equity side of things. Rates is where the story is right now. The five year above 5% 10 year at five and a quarter, 30 year at 5.6. The 10 year at one point touched 5.34%. It ended the day at 5.24%. We have a lot of movement in yields throughout the day. Brands, brands like the UK is in the middle of budget negotiations or planning the 10 year French yield is at 4.9%. Now it is the highest since 2002. And the spread between France and Germany is at its widest since 2012. And there is a lot of social unrest on top of all the economic problems where I would say financial challenges that are going on there. Gold at around 4100. We get September payrolls today at 8.30am. We will so go ahead and call that out. We covered the PCE yesterday. We covered the jobless claims yesterday. Other than Nike, Movers yesterday, Accenture up 15%. That big jump first time, long time. FICO, Fair Isis, which we talked about had a rebound of a day up 11% after being down 20 something the day before that. And then on the crypto side of things, resilience really. And I call it I don't think you could paint it any other way. You have been right. We're at 86 plus on Bitcoin, Ethereum, Solidly, you know, around 2750 right now. When people are scared about their currency and about their sovereign debt, there aren't a lot of places to go. Gold Bitcoin generally should be beneficiaries of it all. I'll get to some other stories as we roll along. I hope that was an okay intro folks. Let me get to Justin Aladio and then to Carlo before Carlo has to scat. Go ahead, Justin. Yeah, then Nike. My comments on the Nike thing. We've bears repeating that you go into politics. You got to be careful. And Nike obviously went into some very polarizing messages years ago, starting with the Colin Kaepernick thing and a couple other things. And it's polarization. I really like Mike Burland's five drivers of momentum from decode M and polarization is one of them. Polarization is good. It's a good thing. It's not bad. A lot of marketing people think that's a bad thing to polarize your eyes, but it has to be the right. It has to be focused on the right audience and the right values of that audience. And so I think they just played the political game, not understanding their audience values, because clearly they ticked off the very people that were buying their stuff. And that opened the door for on that open the door for these other hoca that opened the door for a lot of other companies that may not have had a shot otherwise. So that's, you know, that's we're looking at the initial spike they got with all the attention, because they threw themselves in the middle of a lot of hot political debates. But we're also seeing the effect once that wore off. The alienated apparently, the true loyal customer, the people who are just buying over and over and over again, maybe got a little like, I don't know how I feel about this stuff. I don't want to be seen wearing nighties. I don't want to be making political statement when I'm just out working out. I think I'm going to switch to something else. So that's the trailing effect. Then real quick, because everyone's talking about Tesla launching a flying car, you all need to calm down. They're not launching a flying car. Everyone's pointing to weather reports and like, oh, he needed clear skies for this launch. And that shows it's a flying car. And it also shows it's just a fast car that needs a dry road guys. Like you're not going to go however fast this thing's going to go 200 miles an hour or whatever in one second with tons of weather. So keep that in mind. I would be absolutely shocked to see Tesla, the company that's extremely efficient. They don't do excess parts. They don't they try to, you know, they're not going to make flying cars for no one that's going to drive those things. No one has FAA licenses. Where are you going to fly them? I mean, there's no way Tesla is going to spend so much money on R&D on a flying car no one can buy. So I would be shocked. So let's not let's not freak out about flying cars. Thank you, Justin. Yes, we will not freak out yet, although conspiracy theorists or dreamers want to freak out about it. I do want to add on Nike. I have no doubt that there are very many activist investor shops that are looking at Nike right now. Simply because right now the price to sales is one time. Oh, yeah. And listen, there's a lot of reasons not to like Nike. But I can assure you that a lot of analysts are being given Nike to go through and to analyze and see, is there a play here? What do we do? You know, can we go activists? Do we need to throw out some portion of management? Collusive of the CEO, can we make hay out of this company that has lost 80% of its market value and is trading at 52-week lows? That's a really, really, really, really, really good point. Yeah, I wouldn't be surprised if we hear something out of someone, Elliott, or otherwise, over the next couple weeks. Eladio, go ahead. Because they've just added that into Eladio, but they've set themselves up for a good comeback story. You know what I mean? And a good leader and a good marketing team will say, hey, we lost our way and we're relaunching back to, you know, launch like a retro back to our Ruth campaign, why they were started, go through the story. I mean, yeah, they have a huge opportunity here hopefully they don't bumble it. Absolutely. Good morning, Eladio. Let Carlos speak. I only have one thing to say about Nike. Disney, Bud Light, that's enough, I think. Disney stock hasn't gone anywhere for how long? So all right, Carlos, let Carlos speak and I'll come back. Good morning, everyone. Thank you, Eladio, and thank you to the entire panel for accommodating my tight schedule. Dave, I have to agree with you. Crypto is incredibly resilient, especially in light of the bond implosion. I think we're probably on the precipice of some kind of a debt jubilee or some kind of a new plaza accord. This is not sustainable and something's going to have to be done globally to rein this in. But in any event, it is definitely a upturn for risk assets. And it plays into my broader thesis that I've been saying for a long time. I don't think any more meaningful rate hikes are coming. I don't think they have the appetite for it. But with respect to crypto, there's one major story that I think begs attention, especially for this show. And that's the recent announcement yesterday by the SEC of advisory rules for investment advisors when it comes to crypto. And Paul Atkins, the chairman of the SEC said the old rules were built for stocks and bonds, and left advisors guessing how