Tech Giants Soar as Banks Report Strong Earnings; AI Transformation on the Horizon

​Tech 5: S&P, Nasdaq Set New Records, Elon Musk Faces Rough Week

June's softer-than-expected US inflation data has bolstered the case for interest rate cuts as early as September, providing welcome relief for investors amid a difficult economic landscape. Meanwhile, this week proved challenging for Elon Musk, and US Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam advocated for expanded regulatory authority over cryptocurrencies. Stay informed on the latest developments in the tech world with the Investing News Network's round-up. The indexes were also buoyed by comments from US Federal Reserve Chair Jerome Powell. Speaking before Congress on Tuesday (July 9), Powell said the US economy is no longer "overheated," and cautiously indicated that interest rate cuts may not be far off, although he was careful not to suggest when they may come. On Wednesday (July 10), the Nasdaq achieved its seventh consecutive all-time high close, while the S&P 500 accomplished its sixth, surpassing 5,600. These moves were fueled by gains in NVIDIA (NASDAQ:NVDA), which advanced 2.7 percent; Micron Technology (NASDAQ:MU), which saw a 4 percent increase; Advanced Micro Devices (NASDAQ:AMD), which was up 3.9 percent; and Apple (NASDAQ:AAPL), which saw its share price move 1.9 percent higher. Apple's close of US$232.98 was also a record, bringing the firm's market value to US$3.6 trillion. Taiwan Semiconductor Manufacturing (NYSE:TSM,TPE:2330) saw a more than 2 percent increase in its share price on Thursday (July 11), bringing it to 1,080 New Taiwan dollars and taking the company's market value to 28 trillion New Taiwan dollars (US$861 billion); that gave it the distinction of being Asia's most valuable public company. Also on Thursday, MicroStrategy (NASDAQ:MSTR) announced a 10-for-1 stock split of its Class A and Class B common stock, sending shares of the software company up 4 percent before market close. Meanwhile, news of Tesla's (NASDAQ:TSLA) postponed robotaxi unveiling contributed to an 8.4 percent share price drop. NVIDIA and Apple also saw losses at the end of the day as investors turned to smaller-cap companies following a softer-than-expected US consumer price index report, which brought the Nasdaq and S&P 500 down 2 percent and 0.88 percent, respectively. Amid investor optimism triggered by Powell's congressional testimony, the Bitcoin price trended up mid-week, reaching a notable value of US$59,322 on Tuesday. Ethereum's valuation reached US$3,184 on Thursday. Global exchange-traded products (ETPs) with digital assets as underlying collateral have seen a 77 percent increase in assets under management year-to-date, reaching US$87.9 billion and outpacing the increase in the value of their underlying digital assets, according to data from Fineqia International (CSE:FNQ,OTC Pink:FNQQF). The total number of ETPs has grown by 20 percent to reach 194. Fineqia attributes the growth to the approval of spot Bitcoin exchange-traded funds (ETFs) in the US, with the trend expected to continue following the launch of spot Ethereum ETFs in July. On Monday (July 8), spot Bitcoin ETFs saw inflows of US$294.8 million, their highest since June 6. Elsewhere in the crypto space, PayPal's (NASDAQ:PYPL) PYUSD stablecoin has experienced significant growth in recent months, reaching over 533 million tokens since its expansion to the Solana network in May. The Solana network has seen its total value locked for liquid staking increase to US$3.73 billion from US$244 million this past October. Liquid staking now comprises 7 percent of the network's entire market capitalization. Meanwhile, Goldman Sachs (NYSE:GS) said on Wednesday that it plans to launch three tokenization projects by the end of 2024, including its first in the US, and Grayscale announced on Monday that it plans to create and distribute the Grayscale Ethereum Mini Trust, known as the ETH Trust, on July 18. 3. Elon Musk's rough week During an unfortunate week for Musk, xAI, Tesla and SpaceX faced setbacks and delays, while Cox Automotive's latest electric vehicle (EV) sales report found that Tesla's share of EV sales in the US has dipped below 50 percent. On Tuesday, the Information reported that talks between Musk's AI startup xAI and tech giant Oracle (NYSE:ORCL) had fallen through; the companies were discussing the possibility of expanding a current arrangement under which xAI rents NVIDIA chips needed to build its own server from Oracle. The deal would have reportedly been worth US$10 billion, but it broke down due to power supply constraints and disagreements about a timeline for completion. Later, on Thursday, Bloomberg reported that Tesla's self-driving robotaxi, which was scheduled to be released on August 8, has been delayed by two months, with the unveiling now anticipated in October. According to the news outlet, the delay will allow the company more time to build additional prototypes. Finally, on Friday, Reuters reported that SpaceX's Falcon 9 rocket had suffered its first failure in more than seven years when the rocket's second stage in space failed to reignite roughly an hour after launching on Thursday evening. As a result, 20 Starlink satellites were deployed into a much lower orbit than planned, increasing the risk of incineration; in response, the US Federal Aviation Administration grounded the aircraft. 4. Apple has high hopes for iPhone 16 Inside sources told Bloomberg on Wednesday that Apple expects shipments of its newest iPhone model, the iPhone 16, to be about 10 percent higher than shipments in 2023. The company reportedly said it's targeting at least 90 million shipments in the second half of 2024, confident that the addition of Apple Intelligence features, showcased at its World Wide Developers Conference on June 10, will boost demand despite competition from other tech companies focused on artificial intelligence. Meanwhile, market researchers for IDC found that sales of the Apple Vision Pro headset have not surpassed 100,000 since it was released on February 2. Sales in the US are projected to fall a further 75 percent by the end of the quarter. IDC told Bloomberg that a more affordable version, which is expected to be released in 2025, could boost sales, but reiterated that the success of the Vision Pro will depend on the variety and quality of content available. 5. CTFC makes its case In regulatory news, the CFTC's Behnam testified before the US Senate Committee on Agriculture, Nutrition and Forestry's Hearing on the Oversight of Digital Commodities on Wednesday. Benham reiterated his opinion that at least 70 percent of cryptocurrencies, including Bitcoin and Ethereum, should be considered commodities rather than securities, making the CFTC a more appropriate regulatory agency to oversee crypto than the US Securities and Exchange Commission (SEC). Benham cited a recent decision from an Illinois district court judge, who sided with the CFTC and denoted two alt coins as commodities, not securities. While the hearing did not lead to any immediate legislative action, it provided an opportunity for lawmakers to engage with Behnam on the complex issues surrounding cryptocurrency regulation. On Thursday, US lawmakers failed in an attempt to override President Joe Biden's veto of the legislative measure to overturn SEC Staff Accounting Bulletin No. 121, which the Senate passed on May 21. The House of Representatives held a vote, but fell short of the two-thirds majority required; the final tally was 228 to 184. Don't forget to follow us @INN_Technology for real-time news updates! Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Wall Street Lunch: Goldman Sachs Beats Expectations (NYSE:GS)

Goldman Sachs declares a quarterly dividend of $3 per shares. (0:16) The 30-year yield tops the 2-year for the first time since January. (1:26) Hedge funds keep selling tech. (8:10) Our top story so far. Goldman Sachs (GS) topped earnings and revenue expectations for Q2 and also boosted its dividend. Goldman's earnings reflected "strong year-on-year growth in both Global Banking & Markets and Asset & Wealth Management," CEO David Solomon said. Debt and equity underwriting helped fuel the year-over-year strength. Q2 operating expenses, though lower from the previous quarter and a year ago, also came in higher than the average analyst estimate. Q2 GAAP EPS of $8.62 topped the $8.40 consensus, jumping from $3.08 in Q2 2023. Total net revenue, meanwhile, rose to $12.7 billion, topping the average analyst estimate of $12.4 billion. That's down from $14.2 billion in the prior quarter and up from $10.9 billion a year ago. Q2 net interest income of $2.24 billion flew past the Visible Alpha consensus of $1.66 billion. Provision for credit losses of $282 million, lower than the $476 million Visible Alpha estimate. Goldman declared a quarterly dividend of $3.00 per share, up from the prior dividend of $2.75. In today's trading, stocks are higher, with the broader market up about +0.5%. Treasury yields are moving higher on the longer end of the curve and lower on the shorter end. The 30-year yield (US30Y) moved above the 2-year yield (US2Y) for the first time since January. The 2s10s inverted spread narrowed to 23 basis points, its closest level to normalization since January 29. Société Générale indicated that the 2-year has breached the lower band of its range that was developed during May and June. "It is now probing (the) March trough of 4.44%/4.40%, which also represents a trend line drawn since last year. Daily MACD is anchored within negative territory denoting the prevalence of downward momentum. In case a brief up move takes shape, the 50-DMA near 4.74%/4.80% is likely to remain an important resistance zone." On the economic front, the July Empire State Manufacturing Index came in at -6.60, below the -5.50 consensus and -6.00 prior. Pantheon macroeconomist Oliver Allen said "the prices paid index rose to 26.5 from 24.5, but it remains in line with levels seen in the late 2010s. That is encouraging, because the surge in shipping rates since the start of the year ... has led some to fret about a renewed burst of core goods inflation ahead." Seeking Alpha's Rena Sherbill spoke about possible interest rate cuts with Larry Adam, who is the CIO of the private client group at Raymond James. "If you look at Walmart (WMT), they had their big deals going on. And that's all in the run up to July 16th and 17th when you have another Amazon (AMZN) Prime Day, right? And again, why are they having these events? Because they're going to give discounts to try and sell more goods. So I think when it comes to goods pricing, the things that you and I buy, I think that inflation is coming down. So with that, I think the Fed now can have a sole focus on the economy. And I actually think that the economy is slowing quite a bit. Our economist believes that the quarter we just finished, second quarter and third quarter, the quarter that we are in right now, is going to see GDP growth of around 1%, or slightly below. I think that's going to get the attention of the Fed that this economy is rapidly slowing down. And then when you combine that with the fact that the unemployment rate has now gone up 0.7%. Think about that. It was 3.4% last April. It's 4.1% as we sit here right now. I think that's going to get the Fed's attention and they're going to start to think about cutting rates. The way I see it coming out, I think if the Fed could do it, they probably would have liked to have done it coming up in July, but they're not going to do that. If you look at what the market's pricing is, it's like a 6% chance that they're going to cut, right? The Fed doesn't like to surprise, so I don't think they're going to do it in July. But I think they're going to open the door to possible rate cuts coming. Remember, they have that big meeting in Jackson Hole at the end of August - August 24th to the 26th. I think there'll be a lot of speeches starting to articulate that they're going to start to cut rates, and then they'll actually start to cut rates at the September meeting. And by making it very transparent that they're going to do it in September, I think that'll reduce some of that political aspect that people are going to start to talk about with a rate cut coming so close to the election. But I want to reiterate, I don't think the Fed is political at all. I think they're going to do what is in the best interest of this economy. I don't think they want to get burned by sending this economy into a recession. So, I think that they are looking at all aspects of this economy to try and avert a recession. And I think that this is something big at the Fed. They have the opportunity to do something that very few Feds have been able to do, and that is to actually have a soft landing. I mean, how many times in our career have we heard people say, oh, they're going to have a soft landing? Well, guess what? It all of a sudden became a hard landing because, you know, they raised too long and they were too slow to cut. I think the Fed has the opportunity because the data right now is suggesting they should cut. Hopefully they'll be able to do it to actually get this soft landing. And that is our base case of what's going to transpire here over the next several months." Among active stocks today, SolarEdge Technologies (SEDG) says it plans to lay off 400 employees, including 200 in Israel, as it seeks to restore profitability. Its workforce totaled 5,633 employees as of December 31. In a letter to employees, SolarEdge's CEO said the company was taking action in response to a downturn in the market at the end of 2023 and the beginning of this year, which has led to lower revenues and excess inventory. Walmart (WMT) plans to add new Mr. Gatti's Pizza shops inside Walmart locations across Texas, Louisiana, Oklahoma, and Kentucky. The partnership with the pizza chain will begin in Q4 with the opening of 12 units in strategic locations. For Mr. Gatti's, the expansion strategy brings the chain's total units open or under development to 230 to double its national footprint and add incremental pressure to Domino's Pizza (DPZ) and Papa John's International (PZZA). Some of the other food chains with a presence in Walmart stores include Uncle Sharkii Poke Bar, Wetzel's Pretzels, Nathan's Famous (NATH), Wow Bao, Saladworks, The Cheesecake Factory (CAKE), and Quiznos. The expansion of in-store dining offerings followed the end of a 30-year partnership between Walmart and McDonald's (MCD). And if Google (GOOG) (GOOGL) does acquire cybersecurity startup Wiz, it could have a huge ripple effect for both the company's cloud unit and potentially lead to further deals in the space. Wedbush analyst Dan Ives says: "For Google, this would be a shot across the bow at Microsoft, and Amazon making a major bet on the cyber security space to complement its flagship GCP offering in the cloud. This would give Google an edge on a number of cloud deployments and further monetize the cyber security cloud space with still less than 50% of the workloads not on the cloud globally." "After falling behind Microsoft in the cloud arms race, we have seen major traction from Google over the past year under Kurian around cloud success along with its core AI strategy," Ives said. In other news of note, Nvidia (NVDA) is facing a probe over alleged anti-competitive practices by the French antitrust regulator. The company would be charged "if the investigation is fruitful," Benoit Coeure, president of the agency, told Reuters. The charges follow dawn raids in the graphics card sector, which sources said targeted Nvidia. In September last year, Nvidia's local offices were reportedly raided by the French competition agency on suspicion that the chipmaker engaged in anticompetitive practices. And in the Wall Street Research Corner, hedge funds sold Info Tech (XLK) and Communications Services (XLC) stocks for the fourth straight week, according to the Goldman Sachs Prime Services desk. Tech-Media-Telco has been net sold in seven of the last eight weeks. Last week's selling was driven by long and short sales at a ratio of 4-1, Goldman said. "Within Info Tech, nearly all subsectors (sans IT Services) were net sold on the week, led in notional terms by Software, Tech Hardware, and Electronic Equipment," they added. "Within Comm Svcs, net selling in Interactive Media & Svcs, Entertainment, and Diversified Telecomm Svcs outweighed net buying in Media." "TMT stocks now make up 29.6% of overall US net exposure, which ranks in the 6th percentile vs. the past year and in the 16th percentile vs. the past five years." Consumer Discretionary (XLY) was the most net-bought sector on the Prime book "driven almost entirely by long buys." "After being net sold in three prior straight weeks, the sector was net bought for the second straight week," Goldman said.

CE 100 Index Gains 1.3% as Big Banks Post Earnings

Earnings season is in full swing, as big banks - specifically, JPMorgan and Citigroup - helped sway the fortunes of the CE 100 Index. The Index was up 1.3% for the week, as the bank earnings detailed relative strength in consumer spending, though company management at Citi and at JPMorgan took note of pressures facing lower income and lower-credit-scoring consumers. The Banking segment gained 3.9%, helping lead the connected economy index's performance higher. JPMorgan shares were up 4.3%. In the company's earnings report released Friday, the data showed that consumers continued to use their cards in full force, for both debit and credit payments. And though there are pockets of weakness in spending from lower income cohorts, according to management, spending trends are still strong -- and there remain opportunities to grow presence in the card market. The second-quarter results and supplementals from the company indicated that credit card loans were up 13% year on year to $216 billion, up 5% from the first quarter. Debit and credit card sales volumes were up 7%, to $453 billion in the most recent period. The net charge-off rate on card loans, per company data, stood at 3.5% in the second quarter, up from 3.3% in the first quarter and 2.4% from a year ago. Average deposits, overall, were down 1% quarter over quarter and down 7% year on year to just over $1 trillion as holders, said Barnum, rotated into higher yielding accounts. Asked on the call about credit performance, Barnum said that "when it comes to card charge offs and delinquencies, there's not much to see there -- it's normalization, not deterioration. It's in line with expectations." As has been consistent with commentary in bank earnings from earlier this year -- noting pressures for specific customer cohorts -- Barnum said that there's "behavior that consistent with a little bit of weakness in the lower income" client base. Citigroup shares were 3.3% high in the wake of its own earnings, and many of the same sentiments were shared during that company's call with analysts - particularly with regards to the state of consumer spending among lower-income cohorts. The company's earnings results showed a bit of bifurcation in consumer spending, as higher credit scoring individuals continue to use their cards and lower FICO consumers are falling behind a bit amid evidence of budget tightening. Spending on Citi's cards was 3% higher than a year ago. Volumes were up 8% from the previous quarter to $131 billion. At the same time, the average card loans were up 10% year on year to $109 billion. The 90-day delinquency rate was 1.1% in the latest quarter, up 0.28%. During the conference call with analysts, CEO Jane Fraser said that Citi sees "differentiation in the credit segment, with the lower income-customers seeing pressure," as management also mentioned of a tightening of budgets. CFO Mark Mason said in the call that "across our card portfolios, approximately 86% of our card loans are to consumers with FIFO scores of 660 or higher. And while we continue to see an overall resilient consumer ... when we look across our consumer clients, only the highest income quartile has more savings than they did at the beginning of 2019. And it is the over-740 FICO score customers that are driving the spend growth and maintaining high payment rates." He further elaborated that "lower FICO band customers are seeing sharper drops in payment rates and borrowing more as they are more acutely impacted by high inflation and interest rates." To that end, said Mason, "certain pockets of customers continue to be impacted by persistent inflation and higher interest rates resulting in higher losses ... [but] we are seeing signs of stabilization and delinquency performance." Amazon shares were down 2.8%. In news reported this week, the e-Commerce giant's generative artificial intelligence-powered conversational shopping assistant, Rufus, is now available to all U.S. customers in the Amazon Shopping app. Introduced in February, Rufus answers questions on various shopping needs and products, the company said on Friday. Amazon beta launched the shopping assistant in February, saying Rufus would initially be available to a small subset of customers using the company's mobile app and then would be rolled out to more customers in the U.S. in the following weeks. Ocado shares were ahead by 17.3%. A release from Ocado earlier in the week detailed that it has expanded its partnership with AEON, which initially launched in 2019 to develop the online operations of the AEON NEXT grocery business via the Ocado Smart Platform (OSP), with additional facilities coming online in Japan beginning in 2027. Meta shares lost 7.7%, and the Enablers segment gave up 0.6%. As detailed here, Meta, which is still navigating the turbulent waters of its multibillion-dollar metaverse gambit, is now turning to AI as its potential lifeline, with job postings reported by media outlets, including TechCrunch. "We're looking to create experiences that change every time you play them," said the job listing, painting a picture of virtual worlds as dynamic as they are digital. It's a far cry from the static, often lonely spaces that populate Meta's Horizon platform. This pivot comes at a crucial time for the company. Despite selling millions of Quest headsets, Meta's Reality Labs division has struggled to find its footing, racking up losses of around $50 billion.

ARK Invest's Cathie Wood On The Sectors That May Benefit From The AI 'Transformation'

Entering the dawn of AI disruption.Opportunities in disruptive innovation.How AI may cause sectors to converge. The promise of artificial intelligence remains a key driver pushing tech stocks higher. Cathie Wood, CEO and CIO at ARK Invest, speaks with MoneyTalk's Greg Bonnell about potential opportunities she sees and why the gains in big tech shares are likely to continue. Greg Bonnell - US markets continue to hit new highs in technology. Artificial intelligence have been a big part of that story. But can these tech stocks continue their AI-fueled rally? Joining us now to discuss is Cathie Wood, CEO and Chief Investment Officer at ARK Invest. Welcome back to the show. Great to have you here in person. Cathie Wood - Thank you, Greg. Thank you for inviting me back. Greg Bonnell - All right, so we're going to have a great conversation. Let's start with just for the viewers who may not be aware of your process of the firm's strategy, you focus on disruptive innovation. What does that mean? Cathie Wood - Disruptive innovation is technologically enabled and transformative. So we're focused on five major platforms - robotics, energy storage, artificial intelligence, blockchain technology, and multi-omic sequencing in the life science space. Those are the major platforms. They involve 14 different technologies. And what's so interesting today is AI is the biggest catalyst behind really the convergence between and among these technologies. So it's creating some spectacular opportunities, like Tesla (TSLA, TSLA:CA). Tesla is the convergence of three of the platforms, robotics, autonomous vehicles, which they're about to produce our robots; energy storage, they will be electric; and artificial intelligence, they will be powered by AI. Greg Bonnell - Is that the key here when we think about artificial intelligence? Because obviously the first wave of it was, do you have the GPUs, the graphics processing units, that we thought were good for video games. Turned out they were pretty good at what Nvidia (NVDA, NVDA:CA) was making for artificial intelligence, but realizing that it starts to pull a bunch of what we thought were disparate groups together? Cathie Wood - Yes. AI is probably going to touch every industry and every company out there. And it doesn't matter what the sector is. Now, Nvidia is really the hardware phase of the AI revolution. And they are building some software, but they historically have been a hardware company. If this revolution is as big as we think it is, then we should see those GPUs being put to good work. And I just gave you a good example. Autonomous technology is going to transform transportation of all kinds, not just cars, but trucks and drones. We're going to see deliveries by drone in the future. It's all the same convergence and it's all catalyzed by AI. The longer it takes to happen, then the further ahead of itself Nvidia might become. So we shall see. Greg Bonnell - Okay, further ahead of itself. There are questions in the market after the rally we've seen. We continue to set new highs on the S&P 500 (SPX), the Nasdaq, tech being a big part of that. People start thinking, have I seen this before? Have I seen the dot-com era in my own experience, and is it happening again? What are we thinking of here in terms of when people throw out phrases like reversion to mean? Cathie Wood - Well, this is not like the tech and telecom bubble. The companies that are at the top of the indexes and driving them are very, very profitable companies and very well-established companies. So very different. If there's any time we're comparing this to, it actually is the 1930s. Now, that might sound surprising because that was The Depression, but if you looked at the concentration in the market in the early days of The Depression, you know, it was, back then, the unemployment rate was up to 25%, GDP dropped by 30%. So there was this question, are companies going to survive or not? And it was binary. And so you had massive concentration towards a few names. AT&T (T) was at the top of the list. Telephony was just making its way into the global economy. And so that concentration, what happened after that? What happened after that is we went into a strong bull market. It broadened out, and smaller cap stocks, they could be large, just not mega cap, large, mid, small, they way outperformed the mega cap stocks. And if interest rates come down, as we believe they will, we believe that will be the catalyst towards broadening this market out. Greg Bonnell - That's interesting. Let's talk a bit about interest rates because obviously we're going to get an inflation print. As we get those, we try to figure out where Jerome Powell and the Federal Reserve's head may be. Jerome Powell this week seemed to be suggesting, listen we're cognizant of the fact that if we keep rates too high for too long, we could hurt the economy. It seems like the door is opening wide. If we do see a cut this fall, maybe two before the end of the year from the Fed, depending if the market's right - what happens here for some of these tech stocks because there's already been a pretty significant run? Cathie Wood - Yes, but the run has been very concentrated. We do believe the market will broaden out, and that is how we've positioned our strategies. We're a very differentiated exposure to AI than the Mag-6. I guess, Mag-7. Greg Bonnell - I noticed you said six. I guess is Tesla back in the group now after the run they've had? Cathie Wood - They bumped Tesla out last year, but now Tesla is performed this year or is performing. And so I think they might invite it back in. It is the largest AI project in the world. And even Nvidia on its calls these days is saying that the auto sector is probably one of the biggest beneficiaries and movers and shakers in the AI space. We think that's going to be very concentrated to just a few winners and a winner-take-most strategy. So, yes, we do think, with interest rates coming down, the market will broaden out and benefit the AI beneficiaries that we have in our portfolio. Many people are very surprised to see as much in the healthcare realm in the flagship strategy. And we do believe that AI is going to help, when converged with sequencing technologies and gene editing, that we're actually talking about curing diseases, not treating symptoms, but curing diseases. I can't think of a more profound application of AI. And so we have as much in the multi-omics space, which is what we call it, as we do in pure play technology as measured by GICs. Greg Bonnell - Interesting stuff there. If we're talking about inflation being tame, central banks delivering cuts, our central bank already delivered one. We're waiting for another one later this month. People worry that inflation will be reignited. I think you, think you have more of a view of a deflationary environment being more likely. Cathie Wood - Yes. Yes. In fact, we see two ways that's going to happen. It's already happening. If you listen to quarterly earnings reports, you listen to Walmart (WMT, WMT:CA]]), Target (TGT), Costco (COST, COST:CA), Best Buy (BBY), you listen to Starbucks (SBUX, SBUX:CA), and Wendy's (WEN), and McDonald's (MCD), they're all cutting prices because the consumer is under great pressure. And it is the middle-income consumer now that is capitulating and looking for these deals. So that's a cyclical phenomenon, and that's outright prices coming down, which rarely happens when you think about it, right? The second source of deflation is technologically enabled. So the five innovation platforms that I mentioned, all of them follow learning curves, which are expressed in cost declines and then price declines. And the five platforms are highly deflationary, but it's good deflation. As costs and prices come down, these new technologies will scale across more and more sectors and become mass market opportunities. So these price declines are associated with booming growth. So yes, we think on two fronts, cyclical and secular, there are deflationary forces, and that the surprises in the next few years are going to be on the low side of both inflation and interest rates.