Markets, AI and Fed uncertainty drive the second half 7/6/26

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 Future start the week in the green and I'm working Brennan, and this is your morning call.
 Good Monday morning after a holiday shortened week for Wall Street Big,
 long holiday weekend here in the U.S. Let's get a check on U.S. stock futures
 which are still celebrating America's 250th birthday.
 As you can see right there on your screen, a lot of green with all the major
 averages poised for a higher open this morning.
 The S&P indicated to open up about 25 points, down 93 points, and as that,
 about 310 points if these gains hold into the open later this morning.
 Keep in mind Dowclose at a record high on Thursday and what was a mixed trading
 session overall for the averages, but strong gains for that holiday shortened
 trading week for the major averages as well.
 Also keep a keep an eye on the equal weighted S&P too.
 Big week for chip stocks though, shaping up after the SMH lost nearly 6% last week.
 Worse for micron, coming off more than a 14% drop, attention shifting to South Korea's
 SK high necks.
 It has a big U.S. IPO debut on Friday expected to raise about 28 billion dollars,
 so we'll be keeping an eye there.
 In the meantime, if we get a check on the bond market this morning,
 the action we're seeing in treasuries, you could see yields are lower across the curve,
 U.S. 10-year treasury yielding 4.46%, Fed sensitive to your treasury yielding 4.11%.
 And if we check on energy prices as well, we're a bit lower this morning.
 WTI is down about half a percent trading around 68 dollars a barrel.
 Ice Brent is trading just below 72 dollars a barrel.
 Our above gasoline is a bit higher this morning, Nat Gassa, also seeing a little bit of a pop.
 After OPEC Plus this morning, agreed last night to once again boost output starting in August
 by 188,000 barrels per day.
 This is we are seeing more traffic make its way through the straight-of-war moose
 according to some of those companies that track the data.
 Check on the action in Asia though and Europe.
 Lisa Kim has the trade from Singapore, Ben Boulouse is in London.
 Lisa, let's kick this off with you.
 Hey Morgan, so major tech stocks in Asia stalled in today's trading.
 SK High Nakes is expected to launch.
 It's 28 billion U.S. listing today ahead of its NASDAQ debut later this week.
 The Korean chip giant lost more than 3% of its IPO launch today.
 But bucking today's trends, Hamza Electronics ended the day in the green.
 That company is set to share earnings guidance for the second quarter tomorrow.
 And it is likely to foresee an 18 fold jump in its operating profit for Q2 from a year earlier.
 That's according to LSEG estimates.
 Let's wrap things up with the Japanese yen.
 The currency is weaker once again back to trading around four decade lows.
 And given that a big part of the yen's weakness stems from this wide gap
 and interest rates between the U.S. and Japan.
 Investors are awaiting minutes from the Fed's last beating for clues about the rate outlook.
 All right, Lisa Kim.
 Thank you.
 Let's get to the early trade in Europe and our Ben Boulos.
 Ben, big win last night.
 Yes, and there was a lot of excitement in London as I was making my way into the newsroom
 given that the pubs were allowed to stay open till 5am.
 I wasn't there, though, in case you wanted to drink.
 Let's focus on the equities now.
 European equities edging higher to start a new trading week with softness
 in semiconductor names offset by gains elsewhere media
 and autos leading gains on the Pan-European stocks 600.
 This is the picture green to be found across the main regional buses
 although they were quite a bit higher earlier on in the trading morning
 but cooling a little.
 Still above the flat line, though.
 And some corporate news we're following here this morning.
 Easy jet shares soaring after the budget airline said it has agreed in principle
 to take over by Castle Lake.
 The deal valuing the carrier at up to 5.5 billion pounds
 this comes after it rejected several previous offers from the US investment firm.
 Castle Lake now has until August 3rd to make a firm offer or walk away.
 Another story attracting Ubers reportedly halted the majority of its European food delivery expansion plans
 as it continues efforts to acquire delivery hero.
 It's calling to the financial times which says Ubers no longer plans to launch
 five of the seven countries previously targeted for expansion this year.
 And with that, Morgan, it's back to you.
 All right, Ben Boulos. Thank you.
 Yeah, huge weekend for World Cup upsets.
 We're going to get into all that a little bit later in the show.
 But let's get back here to markets in the US.
 The doubt looking to build on a nearly 2% gain last week,
 notching its fourth positive week in a row.
 First time we've seen that since mid-October.
 Hitting a fresh record high.
 Nasag best performing index up over 2%.
 The Russell 2000 snapping its three-week win streak though,
 ending down nearly half a percent.
 But keep in mind right near record highs as well.
 For more, let's bring in Matthew Deezak.
 He is head of cross asset market strategy for the Chief Investment Office at Bank of America.
 Great to have you here on set. Welcome. Welcome.
 Thanks, Morgan. Happy to be here.
 All right. We're halfway through the year.
 How's the second half looking? What are you expecting?
 Second half looks pretty good.
 Might be a little bit of volatility through the summer.
 That's not unusual in the midterm election year.
 In the four years the presidential cycle,
 you kind of see some volatility ahead of midterms.
 But once you get through the midterms, things are okay.
 But underlying this strong equity market, as you were talking about,
 is actual real economic resilience.
 And so not only do we have economic resilience, corporate profits growing,
 we have a Fed that is probably going to fine tune rates a little bit,
 but has rates in the rate zip code to keep the economy going forward.
 And so we feel quite confident that asset prices are in a reasonable place right now.
 Interesting to hear you say that.
 So jobs report last week that was really a disappointment
 on sort of all the main metrics across the board that doesn't concern you.
 So it was disappointing relative to expectations.
 But if you look at over the past three or four months,
 there's been a little bit actually too much strength that seemed like.
 Some of the reports of the last two or three months were probably overstating
 strength of the labor market.
 So labor market doesn't look great right now.
 Right. We're not in a gangbusters hiring environment.
 But the most important thing is we're not seeing firings right now.
 And it's really when you start to see people getting fired,
 you're worried about you're losing your job,
 your brother losing his job, your neighbor losing their job.
 That's when the consumers retrench.
 So as long as we have moderate hiring, which we did see in the last report,
 even though it was weak and expected, we still had moderate hiring.
 As long as we're not in a firing environment,
 we're not overly concerned about the economic trajectory.
 That would be the one thing to watch though.
 If you do see a pickup and unemployment claims,
 we could change our view for sure.
 Okay. The fact that we have seen a bit of a rotation here,
 I just mentioned equal weight S&P versus cap weighted S&P Dow at a record high.
 Russell 2000 was having a bit of a breakout there.
 A little bit of a breather perhaps coming into this week,
 but you see consumer discretionary.
 Healthcare actually had a record close late last week too.
 Does this have legs?
 How does it speak to the health of the market as we go into the second half of the year?
 So we have been expecting a broadening out from some of the high flyers
 to more of the industrials, cyclical sectors, financials.
 So from the broadening out you're talking right now,
 the rest of 2000 is what we expect what we'd like to see.
 So a lot of times you see concentration like this in the market.
 You do get concerned and you do worry if it's all in one place.
 But oftentimes those are the leaders and it does broaden out after that.
 So if there really is economic resilience underneath this,
 you want to and you expect to see a diversification
 and you do expect to see other sectors
 that start to kind of pick up the slack in some way.
 That's what we're seeing now. That's what we hope and expect to continue.
 But again, we have to be careful about one sector leading the way,
 not just in the U.S. whether it's South Korea or Taiwan.
 As you see, a lot of us make it up to manufacturers are leading the way.
 And so when you're looking to diversify,
 be sort of careful about that.
 If you're just in emerging markets,
 but your emerging market is just also correlated to tech,
 you want to be careful.
 So the portfolio needs to sort of take that into account
 and make sure you're not over-reliant on one sector
 and really try and be diversified.
 And don't just think if I'm an EMM diversification,
 you still might have some overexposure to tech by doing that.
 Yeah, good point.
 As you talk about your notes,
 bubble-liciousness in certain sectors.
 Some bubble-liciousness.
 A little bit of bubble-liciousness.
 Which takes me back to my childhood and all that bubblegum chewing.
 That's probably not what you meant,
 but that's where I went with it.
 Okay.
 That was actually a good bubble-liciousness,
 but we all had that when we were kids.
 Yeah.
 Awesome.
 All right. Matthew D's not great to have you here.
 Good to meet you, Morgan.
 Thank you very much.
 Well, we got a lot more to come here.
 I'm warning call, including getting set for SpaceX
 and the next major market catalyst that we give those shares.
 Much needed boost.
 We'll see.
 But first, Anthrop and Push is back on speculation
 that it may be looking for a White House equity deal.
 I'll open AI as we've got those reports too,
 plus so much more in the future of AI in Washington.
 And later, records made, records broken.
 During World's Cup matches over the weekend,
 we're going to tell you who the real big winner
 in all of it actually is.
 One more in call returns.
 Welcome back to Morning Call.
 China's Alibaba will ban employees
 from using Anthropics AI tools for work purposes
 starting later this week.
 Sources tell CNBC the company has added Anthropics
 clawed code to its high-risk software list.
 Over reports that the company used hidden embedded code
 to track users that might be based in China.
 Well, elsewhere, the Trump administration's outgoing AI
 advisors say,
 the president will never create a centralized AI licensing agency
 or an FDA-style approval process for AI model releases.
 Those comments to the FTCOM on the back of reports last week
 the White House was tightening oversight of new model releases
 over risks of potential misuse by the likes of China,
 Russia, and other countries of concern.
 Meanwhile, Reuters reporting at the Trump administration
 in Anthropic has added that the company's
 has a natural risk of potential misuse
 by the likes of China, Russia, and other countries of concern.
 Meanwhile, Reuters reporting at the Trump administration
 and Anthropic have not discussed
 the government taking a stake.
 This afternoon, early report that rival open AI
 has discussed giving the US government a 5% stake.
 So there's a lot to dive into here,
 especially at this intersection of tech and policy.
 And what it means to record for America and Main Street.
 research lab offline research
 and Henrietta Trays,
 co-founder and director
 of Economic Policy and Beta Partners.
 It's great to have you both here.
 There's a lot to get into.
 X, I'm gonna kick this off with you.
 And specifically, as we come off of,
 Washington cracking down on
 and the tropics models
 and now actually releasing them
 and reports that OpenAI has also
 held back on its newest models.
 It seems like it's a double-edged sword here.
 On the one hand, maybe some concern
 about opening Pandora's Box
 and cyber risks
 and other things associated.
 On the other, real concerns
 in the tech community that this is regulation
 in a way we perhaps haven't seen before
 when it comes to innovation.
 Your thoughts?
 Thank you.
 Well, one, I think that we're in a very interesting position
 where we're watching two competing forces happen
 within artificial intelligence rolling out in the market.
 On the one hand, we have the traditional corporate competition
 where you're watching companies
 do get out for the top spot.
 On the other hand, there's a battle between countries
 which introduces national security implications,
 requirements, and new ways of developing the tools
 that maintain that national security infrastructure.
 And we're seeing the US government start to step in
 and treat it more like national security infrastructure
 versus just corporate productivity tools.
 Washington took mythos offline,
 paused, GPT 5.6,
 and now apparently wants to say
 and who gets to use these models
 and that moment that mythos went offline,
 American companies started moving
 the Chinese open source models,
 things like GLM 5.2.
 So what we're seeing is that that one national security decision
 redrew that commercial map overnight.
 And so open AI and anthropic
 are carrying the sense of their IPOs
 that they're going public as corporate companies
 that's where their profit comes from,
 but they also are gonna have to start dealing with the balance
 of the unwritten rules
 of being national security infrastructure as well.
 Yeah, Henry, I don't want to get your thoughts on this,
 especially since you have your,
 you're to the ground in Washington.
 And so much of this has been driven
 by the executive branch.
 Sort of the sense of where a potential regulatory
 playbook goes from here, especially when you start
 talking about the open source piece of this,
 which I know there's a lot more to get into
 especially with the Alex Carp comments last week.
 Yeah, X makes an excellent point.
 I mean, these are unwritten rules.
 And what I sense from the entire industry
 and had the opportunity to hear from Sam Altman
 directly earlier this year in DC is there is an expectation
 that the industry is going to be heavily regulated.
 And I would say that my personal experience
 was that it was a very fraught, almost fearful,
 trepidacious, oh my gosh, what is coming?
 Kind of situation from a sitting CEO of these companies
 and an understanding that they need to get out in front of it.
 And there are two different dynamics
 to think about here.
 There's a view from industry, directly from Silicon Valley,
 that they need something akin to the new deal
 to help the American public get through
 what is going to be the disruption created by AI.
 So the expectation is that we are talking hundreds
 of billions of dollars, if not a trillion dollars,
 in spend to build schools to reeducate,
 bring in age back, dirty jobs is the way
 that they were talking about it.
 And an understanding that you can tax data centers,
 you can tax the company itself here.
 We have an idea to just give the United States
 outright 5% stake in the company.
 This is all a forewarning of the amount of spend.
 The federal government is going to need to deploy
 to respond to what is coming from the AI sector,
 the potential employment disruption,
 and the growth change that the American public
 is going to have to adapt to.
 Yeah, a lot there to unpack.
 I want to go back to this debate around open source
 models though, because you did have
 a volunteer CEO Alex Carp go on CNBC last week.
 Basically said enterprise level customers are fearing
 that anthropic and open AI are going to steal their data
 and that he's, and then went on in another interview
 to talk about the fact that some US government
 customers are switching to open source models.
 So we could talk about it when the framing
 of US versus China and geopolitical competition.
 But what's also happening on the ground here in the US
 between some of these homegrown American companies
 as well right now?
 Being on the one hand, we have artificial intelligence
 being rolled out in the commercial sense from I'm going
 and I'm buying my AI on tap directly from a company.
 But in certain environments, particularly
 in national security, having that vulnerability
 where you are sending your data to a cloud provider,
 even if that cloud provider has a special section
 in a data center for your cleared data,
 or even a cleared data center in and of itself,
 there's always a risk and transmission
 that data can be attacked, that that data can be hacked,
 that that data can be manipulated
 and the systems underneath it can also be negatively impacted.
 So what we're seeing is companies that are more highly
 regulated as well as governments entities
 that deal with more cleared material
 are opting into taking models that they can make a copy of,
 put inside of some local computing system
 that they run and own and train it to work
 and run all their AI workflows on a model
 that they have a lot more control over.
 Whether or not that's actually more secure is up for debate.
 It requires a lot more defense to be able to set up,
 manage, maintain and serve your own models
 versus working within the infrastructure of someone else.
 But what we're seeing now is the concerns around
 the market scaling with these AI companies
 like OpenAI and Anthropic potentially becoming competitors
 with some of their customers.
 The concerns around, are they taking my private company data
 to train and build their models
 are now not only whispers inside of white papers
 and blogs and backroom coffee chats.
 These are now the policies by which companies
 are spending their money and deciding what type of AI
 they turn on and why and how they implement it.
 So moving forward, this is no longer just a race between
 who has the best AI technology across companies.
 It's what model the corporations and the people
 are going to end up taking moving forward.
 Are we going to continue to use AI models
 that are developed and managed by third parties?
 Are we going to move towards AI models
 that we as individuals, individual companies
 or individual people own and manage
 and maintain on our own?
 A lot there.
 I want to go back to this idea of potential equity stakes,
 Henrietta, because it almost reminds me
 of sovereign wealth fun type action
 where I think about the energy linked fund
 that we have in Alaska, for example.
 When you talk about the possibility for societal displacement,
 it almost seems like the idea of taking an equity stake
 serves as a hedge against
 some of that possibility here on the one hand, on the other.
 When you talk about equity stakes,
 there's already seems to be some scuttle
 but in Washington, from some of the folks I spoke to,
 even just last week, that you're already
 going to see some of these different companies
 for which the government has taken stakes
 that maybe some of it's going to be scrutinized and unwound
 where the new composition of Congress come January.
 You know, that's a really good angle
 to think about this from Morgan.
 We know that if the Democrats take control of the House
 and or the Senate, we've got 90% odds at beta partners
 that the Democrats take at least the House.
 I've spoken with the incoming,
 who would be the majority leader,
 Kathryn Clark, who is currently the whip.
 To understand what the Democratic strategy is going to be,
 and I think for investors,
 there's something to really be mindful of here.
 It's not that they're just going to be trotting out,
 you know, cabinet secretaries like Pete Hankseth
 and Kristi Nome, or whomever.
 I don't think investors care about that.
 The tone that I pick up from members and staff
 is that they're going to be going into direct lines
 and investigation into any company
 that is very closely corroborating
 or correlating their activities with the White House.
 So, for example, on the issue of tariff refunds,
 if you're not seeking a tariff refund,
 despite the Supreme Court overruling the tariffs,
 why is that Tim Cook?
 Why is that Jeff Bezos?
 Why is Apple or Amazon or any other company
 not pursuing a tariff rebate that they can then use
 to pass on the cost-save to consumers?
 And that's going to hold here with AI.
 And why are you offering the federal government
 five percent stake?
 What did you get in return?
 And I think what's really telling is that the American public
 is very unclear about who they trust more
 on the issue of AI.
 And if you look at the data sets,
 there are very clear things that Americans believe
 that Republicans do better or the Democrats do better.
 Where AI comes in, there's no understanding
 from the American public of what these parties stand for.
 And therefore, there is unlimited resources
 and unlimited opportunity for the AI sector,
 for the tech sector broadly,
 to pour money into campaigns of candidates
 that they would like to see win and come into office.
 Next year, we're going to get 63 new members,
 a lot of them are younger and a lot of them have AI plans.
 So, this story from 27 and 2028
 is going to be right after affordability,
 the main topic in DC.
 Yeah, and we're going to keep talking about it.
 I am sure.
 I mean, there's the evolution of the technology
 and then there's the perception of the evolution
 of the technology and how that weighs on the policy piece
 of this.
 And X, I say this to you every time you come on,
 we can do a whole hour on this.
 But I appreciate the insights.
 X, I, and Henry, at a trade,
 you're doing double duty for us today.
 So, we'll see you again in just a bit
 with a morning call, Creole.
 Thank you both for your time and insights.
 Well, straight ahead, thousands,
 thousands may be in attendance,
 but we're only watching two stocks this morning
 on the back of Taylor Swift's
 and Travis Kelsey's New York wedding.
 But first, check on Comcast Shares.
 Minions and monsters from its universal pictures,
 debuting at the top of the holiday weekend box office,
 pulling in just over $61 million in North America.
 That fell short of analyst estimates.
 That debut, marking the lowest start for any film
 in the despicable me franchise,
 but you can still see shares are fractionally
 this morning, morning call, is back after this.
 Thursday, July 16th, CNBC Sport and Boardroom
 joined Finatics Fest for Game Plan.
 Groundbreaking ideas shaping the future of sports
 and entertainment.
 Request your invited CNBCEvents.com slash game plan.
 We got a seagull on the screen there.
 Well, checking some of the morning's latest headlines,
 the White House confirming President Trump
 will meet with Ukrainian President Vladimir Zelinsky.
 And the President of Syria, the NATO Summit,
 this Wednesday in Turkey.
 And this comes after Trump spoke with Zelensky
 as well as Russia's Vladimir Putin in separate phone calls
 this past weekend, on July 4th, in the case of Russia.
 Sicking with the action overseas
 and the fragile U.S. Iran ceasefire, though,
 a UK maritime watchdog says the cargo vessel
 in the Red Sea reported coming under attack
 off the coast of Yemen, likely by Iranian-backed
 Houthi rebels and officials continuing
 to urge commercial ships to quote transit with caution
 through the straight-of-war moose
 and the area overall.
 We've got three stock stories also on our radar sources close
 to the deal, confirming to me that Lockheed Martin
 is about to close a three and a half billion dollar deal
 for PE-backed naval defense firm Ultra Maritime
 adding Guggenheim and JPMorgan are acting as key advisors
 for the cell side.
 Ultra makes radar and electronic warfare systems
 as well as torpedo defense countermeasures.
 You could see Lockheed is basically flat here, pre-market,
 but it would be very notable.
 Given the fact that we have seen deal-making
 in the space overall, and the last time Lockheed tried
 to make a big acquisition, it was actually shot down
 by the last administration, the Biden administration.
 So something to watch here.
 Separately, Solstice advanced materials,
 formerly part of Honeywell, is reportedly
 in talks to merged with element solutions
 to create a $27 billion specialty chemicals giant
 we're reaching out to Solstice as well.
 You can see shares of Solstice are up about
 seven cents of 1% this morning.
 And meta is reportedly discussing a potential deal
 with Samsung to design and manufacture
 next generation AI chips in a contract worth
 more than six and a half billion dollars.
 The report adds the chips would be produced
 using Samsung's two nanometer process technology.
 We're keeping an eye on Samsung overall
 because we get earnings there this week too.
 And finally, we're watching shares
 of Madison Square Garden and LVMH following
 these star-studded wedding between Taylor Swift
 and Travis Kelsey.
 This was Friday at the famous New York arena,
 Madison Square Garden, a both bride and groom,
 clad and Christian to your hot co-chair
 for the special event, which was officiated
 by Adam Sandler, featured performances by Paul McCartney,
 Stevie Nicks, apparently 1,000 people in attendance
 and a magical forest, secret forest theme
 if you went down the rabbit hole like I did.
 Maybe she shares of LVMH up 1% this morning
 as we had to break a spectacular site
 over our nation's capital Saturday
 as aircraft from across the US military complex
 flew over Washington, D.C. for hours.
 In celebration of America's 250th birthday,
 including the US Navy's Blue Angels
 and fighter jets, including the F-16 Fighting Falcon,
 also F-35 Native appearance,
 President Trump marking the occasion
 after a nearly two-hour weather delay,
 saying America stands as the crowning achievement
 of human history.
 Doing better now than ever before.
 And by the way, aircraft up and down the East Coast,
 it was quite a sight to see on July 4th,
 morning call, back after this.
 I'm Morgan Brennan, welcome back to morning call.
 Let's get a check on US stock futures.
 The Dow said to open at a fresh all time high
 that was after a record close on Thursday
 in the holiday shortened trading week last week.
 You could see all the major averages
 for higher opens, S&P indicated to open up 25 points,
 the Dow 60, and the Nasdaq up 313 points
 as it stands right now this morning,
 this after big gains for the major averages last week.
 If we turn to SpaceX though,
 that stock is set to be added to the Nasdaq 100.
 After the market closed today,
 triggering billions of dollars worth of buying,
 potentially by the Nasdaq 100 related product sponsors,
 looking to track the index
 like the highly liquided Invesco QQQ.
 You can see, shares of SpaceX right now,
 pre-market up about eight tenths of 1% trading
 around 163 bucks a share.
 But while the force buying may provide
 a short-term boost to the stock, longer term,
 my next guest says things are looking
 a bit more bearish for one big reason.
 So during we now as Robert Greifeld,
 former chairman and CEO of Nasdaq,
 he's also CUBC contributor, Bob,
 it's great to have you on the show.
 And I guess we say long term,
 but really we'll just say maybe medium term.
 And what you're talking about is,
 despite the force buying right now with index inclusion,
 we're gonna have to start looking
 to stock lock up expirations as well.
 No doubt Morgan and good morning.
 So certainly, SpaceX was the largest IPO ever,
 but let's remember it's been in business for 23, 24 years.
 So as many private shareholders,
 and it's really the largest lock up expiration ever.
 So between now and the end of October,
 there's around 800 billion dollars of shares
 that can come onto the market.
 We've never seen anything like that.
 And the point I would make Morgan,
 and this is my thought could be wrong,
 but if you're a long-term investor in private shares
 and you're sitting on a 20x return,
 you might not care if you get a 19.5% return or not per cent,
 but 19 times return or 21 times return.
 So you're gonna have some price and sensitive buyers
 coming to the market over the next five to six months.
 Yeah, it's a key point,
 especially when there's been some speculation out there,
 and I've heard it from folks in the industry
 that maybe you're seeing some SpaceX employees
 short other space stocks right now as a hedge ahead
 of these lockups, which I think is an indicator.
 And then you have reports that places like Southern California
 are seeing a big luxury housing market boom right now
 from employees and anticipation of some of these lockups
 rolling off too.
 So it's gonna be something to watch.
 In your term though,
 the fact that we did see methodologies change
 for some of these, for inclusion
 for some of these indexes including Nasek 100,
 your thoughts on that and how it speaks to the moment
 we're in with some of these mega IPOs coming to market.
 Well, I certainly believe SpaceX belongs
 in the index as soon as possible.
 And I said before, the rules did not contemplate a company
 that had been around for 23 years
 that we'd be worth $2 trillion.
 So I would reverse that question,
 two trillion dollar market cap,
 been in operations for 23 years.
 Why would that not be in the index?
 Mm.
 And of course we get SK high next,
 raising something like $28 billion later this week
 and start trading on the Nasek too.
 So just how does it speak to the IPO pipeline?
 Well, it speaks to the fact
 that the US lockups are deep and liquid.
 I run a hedge fund as one of my activities right now
 and it's amazing interday trading in Europe
 and rest of the world is quite late and quite thin
 and you have to really think about it.
 When the US market, you have a deep and liquid market
 throughout the trading day.
 And that makes a big difference to people.
 So when you look at companies from South Korea,
 from all over the world coming to the US,
 it's the place to be.
 But with respect to your direct question,
 I certainly believe it is a good thing
 for the IPO pipeline.
 Let's see how it trades.
 And I do remember back in 2004
 when Google opened up the IPO pipeline
 had been shut entirely.
 So we're kind of feeling that same sentiment today in 2026.
 Yeah, I do want to get your thoughts
 on what we're seeing more broadly
 across financial services and trading
 and also the infrastructure that underpins it all right now.
 I mean, just touched on it,
 but you were talking about near 24-7 trading.
 Now you've got the tokenization of stocks
 and other products, perpetual futures,
 prediction markets.
 It certainly seems like there's a lot of innovation
 coming to the space right now.
 How do you navigate it?
 What do you think of it?
 I think it's exciting, right?
 It's the most exciting time we've had in quite some time.
 And we think about tokens, the point I would make
 is we used to have actual stock certificates
 that people use.
 And we dematerialized them, we put them away
 and put their representation of value
 on a computer ledger.
 So we're not really that far from a token today.
 So I certainly see that as part of our future.
 And when you look at the blockchain
 and what's possible there,
 that has to be a component of what happens in the future.
 So a lot of exciting things happening.
 Yeah. Bob Grayfield, it's great to have you on.
 I appreciate it.
 Please come back soon.
 Thank you.
 Have a great day, good morning.
 A lot more to come here on morning call, including soccer,
 shockers after thrilling finishes
 to Sunday's World Cup matches.
 Our contestant brewer breaks it all down.
 And who the real winners are when it comes to the big money
 being bet on these matches, morning call.
 We'll be right back.
 Welcome back to morning call controversy of the World Cup.
 FIFA lifting the red card suspension
 on American star, Flo Baligan.
 Allowing him to play in the US team's match
 against Belgium tonight.
 That's APM Eastern.
 The move coming after reports
 that President Trump called FIFA's presidential review
 that red card call.
 So say suspension on the suspension.
 Plus, history in Mexico as England takes down the host country
 three to two to advance to the quarters.
 This was the first time Mexico was lost
 a game at the famed Aztec stadium since 2013.
 And if that wasn't stunning enough, Norway
 beating powerhouse Brazil two to one
 to reach its first ever quarter final.
 Brazil had been the five time World Cup champion.
 Here's a fun fact.
 Norway has never ever lost a match to Brazil.
 While contestant brewer is here with more
 and the real big winner and all of this
 which is a sports books and the prediction markets,
 especially contestant giving all the upsets we've been seeing.
 I mean, it's been really fun to watch.
 And if you're the guys offering the wagers,
 you're like fingers crossed.
 I want my fans to have a good time,
 but at the same time, you know, it's problematic.
 Okay, so let's go through this.
 First of all, Caesars is telling me
 that the records keep breaking here,
 that they are bringing in more customers
 than they've ever seen on soccer
 that they've had a bigger handle
 and just shattering the previous records
 for all of this betting.
 England versus Mexico, the biggest soccer event
 for season's ever, highest soccer handle ever,
 most wagers placed on a soccer match.
 The largest number of unique customers to date,
 the handle 50% higher than previous record soccer matches.
 I'm exhausted just talking about it.
 But World Cup is looking a lot like win loser draw.
 The winners, prediction markets,
 they're getting a massive influx of new customers,
 trading volume here, keep setting new records.
 One day last week, one day,
 Caesars did $1.5 billion in trading volume.
 That was up 92% over the previous month
 and polymarket up 74% month over month,
 according to Piper Sandler analyst Patrick Molley.
 Losers, Macaucasinos, it appears here
 that the Chinese customers are putting their wagers
 on soccer, not on Bacara, gross gaming revenue
 dropped more than 12% in June from last year.
 The draw, US sportsbooks, for instance,
 they're setting new records, but Fandall tells me
 the betters are heavily backing the US.
 85% of bets, 89% of handle,
 that's the amount wagered on the Americans to advance.
 And so far, the US has been winning.
 Draft King's points out what's good for the customers
 is typically rough for the house.
 So how this affects earnings, we wait and see,
 because as we know, for instance, March Madness,
 when the customers win, the house loses.
 Yeah, it's going to be a one to watch.
 I mean, I do want to go back to, I'll say USA, all the way.
 I do want to go back to this because obviously
 with a Baligan suspension, being suspended,
 how has that affected what you're seeing
 in terms of the market activity,
 the betting activity around the US?
 He is clearly the favorite scorer.
 So once his suspension was withdrawn from FIFA,
 Baligan came in and got four times more
 than the next leading scorer.
 So all of the money now is coming on him.
 You've got fans really thinking, yes,
 he's going to kick one in for USA.
 All right, Contessa Brewer, great stuff.
 Thank you.
 And I would just note that CNBC is a partner of CalShi
 and has a stake in the company as well.
 It's a commercial relationship, as I mentioned,
 that includes customer acquisition
 and minority investment.
 All right, we'll straight ahead.
 The morning call crew, team up the trading day ahead
 and the market catalyst, one member,
 says, will be even more significant than the usual.
 That's coming up.
 Time for your call sheet.
 Well, we look at the topics driving the trading day ahead.
 The crew members today, Henrietta Trays,
 of Beta Partners, is back with us,
 Joe Mozilla, of Charles Schwab,
 and Matt Maley of Miller Taibach.
 Lots to get into, even though we don't have
 a whole lot of macro data this week.
 But I do actually want to start overseas.
 And Henrietta, I'm going to kick this off with you
 because whether it's the NATO summit,
 whether it's the Iran funeral for the Itolla Humane,
 OPEC boosting production, Russia, Ukraine,
 talks potentially coming forward here.
 How does it drive the trading week ahead?
 Well, I think the president is going to do
 as much as he can to downplay the tensions in Iran
 and the fits and starts that we're seeing
 out of the straight-up for moves.
 The most important thing for President Trump
 is to make sure the gas prices continue to drop
 from the highs they reached earlier this year
 as a result of the war, from 456 down to something
 with the three-handle.
 So diverting away to Ukraine,
 there are a lot of billions of dollars
 that the White House is asking for in Pentagon spending.
 And I think the street under appreciates
 that when you provide $67 billion in funding to defense,
 you get this flurry of activity that's burned,
 where some members of Congress are going to say,
 well, you need to give me $67 billion to spend
 a non-defense discretionary.
 And others saying, well, you need to cut that level
 of spending in order to keep the deficit neutral.
 I think for the market, the most interesting piece here
 is really what Fed share of wars
 is going to do with this information,
 because there's about to be a big fiscal spend package
 that passes at the end of September,
 and it could easily be in the $300 billion in uprange,
 and that's going to be an impactful fiscal response
 that the market's going to have to digest
 from a Fed perspective and interest rates.
 Key point, we're going to get into that in a little bit,
 a little bit more detail in just a moment here.
 Joe, I want to get your thoughts on this.
 AI's been a global phenomenon.
 So is re-industrialization.
 Case in point, as we talk about this NATO summit,
 and what we're seeing with defense packages being rolled out.
 Yeah, sure, absolutely.
 And I think the markets have started
 to absorb that idea as well.
 If you look at the rotation that we've
 seen over the last couple of weeks,
 there's been a bit of a choppy trade
 in the AI components and more of a demand
 for some of the cyclical names.
 You talked about the industrials
 and what we've seen in financial health care.
 So there's been money that's been moving back into that
 as investors are looking to add more of those pieces
 to their pockets.
 I think what is interesting is, as we move into the earnings
 sector here, we are going to see,
 financials probably start off doing fairly well.
 And I think what will be the real key for the markets
 in the next couple of weeks is, as they start
 to digest the tech valuations, can they continue
 to see money flowing to that?
 We've seen it on the retail side.
 We've seen a little bit less than the institutional side.
 I think the rotation trade, in my opinion,
 has really been institutional driven,
 but the retail continues to buy the dip in tech.
 Interesting.
 Matt, want to get your thoughts on some of the stuff
 we are seeing internationally right now?
 I know you've been tracking the cost be pretty closely.
 I know you've also been tracking what we've been seeing
 in the yen.
 Yeah, Morgan, the thing that we have is what's going on
 in the market, obviously, being driven a lot by the strong
 earnings we've seen this year.
 But there's also been a situation where there's been
 excess liquidity.
 And we can see that with the way that the Fed's balance sheet
 has grown quite a bit as we've moved through the year.
 But also from the yen carry trade,
 and the dollar yen has been very, very strong.
 In other words, the yen has been very weak.
 And there's speculation that the BOJ will have
 to come in at some point and defend their currency.
 And we certainly know from the CFTC data
 that the short position in the end is very, very large.
 So a lot of people on one side of the boat.
 So if that situation starts to unwind,
 and the yen carry trade starts to unwind,
 that could put some pressure on the markets.
 And of course, we know what's going on in Korea.
 A lot of speculation there.
 And their market has been very choppy in the last month.
 And it's been a good leading indicator for the markets
 when markets get frothy.
 And so we have to keep a close eye on that.
 If it comes down, it's going to raise some questions.
 I just note that in 2000, when the bubble burst in 2000,
 the Cosby was the first one to go down,
 several months advance of the rest of the world.
 So it's important to keep a close eye on that.
 Okay.
 And of course, we've seen the Korean wands volatility there too.
 Joe, I see you nodding your head.
 Want to get your reaction to this, especially
 as we do also look to ISM services data
 this week, Fed minutes and back to Henrietta's point.
 What the Fed's going to do in the midst of a fiscal package
 later this year?
 No, I couldn't agree with that point more.
 I mean, Samsung has earnings this week.
 I think that's going to be something
 that investors are really going to follow on.
 You also have the SK Heinix ADR that will start trading as well.
 So I think those are two important points
 that can lead to potential market volatility.
 It's something that we've been kind of calling out for a while now.
 It's just looking at the volatility within the membership
 makers and how that's kind of made its way
 into the whole tech sector.
 As a whole, we've seen rotation not only
 with the overall broader markets,
 but you've seen rotation in a tech.
 There's been kind of that rotation back,
 maybe a little bit more towards the hyperscalers,
 maybe a little bit more towards some of the old tech
 with some of the network companies.
 But the membership makers, I think this
 is a pivotal week for them.
 Henrietta, jobs report last week, disappointing.
 Labor force participation.
 Now it's so great, either.
 How does this factor into back to the point you just made?
 Where the Fed goes from here, especially
 as minutes aren't focused with a new chairman?
 You know, I was in New York last week meeting with investors.
 And I think the most important takeaway
 is just the sheer volume of uncertainty.
 You can be in a room with folks who will say,
 the Fed is absolutely hiking.
 It'll happen in July.
 And others who are saying, no, we're still going to get three cuts.
 I think the jobs picture was suitably and predictably marquee
 where you have the unemployment rate continuing to drop.
 And overall, the numbers of employed Americans continuing
 just to be very, very small in terms
 of these increases monthly and just compared
 to what we had before President Trump was coming in.
 So for Warsha, I think there's a couple of things.
 One is we have to deal with the tariff update,
 which will be midnight, July 23rd,
 see where those goes, what that means for inflation,
 obviously the war.
 And then that fiscal package I was mentioning
 and then offsetting it with this job
 state that continues to come in very patchy
 where you get a couple of months of good news
 and then what we got last week.
 Yeah.
 Matt, want to get your thoughts on all of this,
 especially as we have Q2 earnings season kicking off
 and earnest with big banks next week.
 I mean, expectations here.
 Second straight quarter, 20% plus growth.
 Is this going to happen?
 Well, it really needs to happen.
 When we talk about the broadening out of the market,
 we need to see those earnings broaden out well as well.
 Because of course, valuations are stretched.
 And in long term interest rates,
 even though they're off their highs
 are still very much at the high end of the year
 of the range of the last 10 years.
 So we're really going to need to see
 that those high expectations for earnings to be met.
 Okay.
 Well, that's going to do it for us here on morning call.
 Thank you to our call crew.
 Great to have you on.
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