Morning Call 6/30/26

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 Futures in China. I'm Dominic Chiu and this is your morning call.
 Good morning. I'm Dominic Chiu in for Morgan Britain this morning.
 US equity futures right now are actually on the rise slightly on this final trading day of the month,
 the quarter, the first half of the year with the Dow set to open above the 52,000 level for the
 first time ever. And right now the futures are pointing to again some modest gains at the opening
 bell. The Dow implied higher by roughly 156 points, the S&P higher by about 10 points,
 and the Nasdaq up by about 77. Now a big boost yesterday from new Dow member Alphabet closing
 up near 5% on the day after its first day in the blue chip index. Those shares right now just
 down fractionally about maybe one quarter of 1% even a little bit less, but Alphabet shares
 right now just about $353. Treasuries we are seeing interest rates on the move again not by dramatic
 amounts but slightly to the downside a bid for those prices, the benchmark 10-year no yield 4.367
 percent, the two-year no yield at 4.104 percent and the 30-year long bond 4.852 percent.
 A sector check right now on what's happening with health care at record highs of almost 8%
 on the month and set to close out its best one month gain going back to November. And right now you
 can see on the top of the heap there but still industrials, financials, utilities, real estate.
 It's been a pretty good quarter so far for the indexes overall. Checking sector laggards on the
 month so far, energy prices with crew down now 19% on the month down 30% on the quarter. But as you
 can see here, up mostly for that particular trade, the communication services down about 8% technology
 down 6% discretionary down about 5% as well either. With crew now you can see the energy prices,
 the ice, well that's the US dollar index, but those the dollar index there. Crude oil prices
 now down for actually $70.63, ice-print crude futures down about one third of 1% and $73
 there for ice-print crude. Those crude prices are down 19% on the month down 30% on the quarter,
 but up 23% on the year and right now, again, that state of play is to the downside currently.
 Let's see how Europe and Asia are closing out their respective quarters. Karen Show is in London
 with the latest there and Elaine Yu is in Hong Kong and Karen, we are going to start with you.
 And don't go morning to you. Well, European equities are tracking high this morning,
 lining up the third consecutive monthly gain in a year that are seeing them actually defy
 negative sentiment over political uncertainty. What we've got this morning, really finding a
 foretold the German stock market bouncing green right across the screen. So help don't
 encourage by what we saw across the Asia markets today, but also in the US yesterday. So it is
 a firm day across the board. But here's how they're shaping up as we end the first half of the year.
 Italy is a 14-med, the clear up before me, we've got a bounce to the tune of about 14%
 well and truly are performing the 8.7% on the S&P 500. It has been one of the favoured markets again
 here in Europe. Worses, though, are set to close out their best quarter since the end of 2022.
 Italian stocks, as I mentioned, the one to watch on the 40-med. The German tax not much on it,
 only about 1.4% there and for the quarter about 9.5%. And when it comes to still land as though,
 as I mentioned, the strength of Italian names, it was this company and its Italian listing that
 was the worst performing stock on the main European index so far this year, down nearly 50%.
 This is car makers all over the continent, felt the impact of rising energy costs,
 and of course, much stronger Chinese competition. The extra feature here concerns about any recovery
 stateside not being durable, don't back to you. All right, Karen, show us the latest
 there on the European trade out of London. Thank you very much for that. Now to Asia and what's
 been an historic first half for a number of major indices there, Elaine Yu has more live from
 Hong Kong, Elaine. Hey Dominic, so Asian stocks had a sparkling second quarter,
 despite a wobbly end as investors became more cautious in recent days about the sustainability of
 this AI rally. Now in Japan, the Nikkei 225 sold 37% in the second quarter. That is the biggest
 jump going back to records in 1965. The Yans slipped past 160 do against the dollar for the first
 time in nearly 40 years and Japan's finance minister said that the authorities are ready to respond,
 quote, appropriately, keeping their rhetoric unchanged basically as traders are on high alert about
 a possible currency intervention. Now South Korea's cost be ended the second quarter up 68%
 on the back of the chip makers rally. Of course, that is the biggest jump since the final quarter
 of 1998. And this is after the South Korean president on Monday announced a more than 576 billion
 dollars in chip investments. Now the TIEX in Taiwan is up nearly 60% in the first half of the year
 as investors also piled into AI linked stocks and China's blue chip CSI 300 climbed 1% on
 Tuesday after stronger than expected factory activity. That points to strong demand still for
 high-tech exports. The index there is up 5% so far this year and that is again led by AI and
 chip stocks. Hong Kong lagged though the benchmark hangs out index is down and the tech majors,
 however, is up 1.8% there today and that's it for now. All right Elaine you thank you very much
 live from Hong Kong with the latest on the Asian market action. We appreciate that back on Wall
 Street with just one trading day left in the second quarter and the first half of the year the
 US markets are on track for solid gains down the S&P are more than 8% this year while the
 Nasdaq is up 11% the Dow is having its best first half of the year since 2021 but they're
 being left in the dust by small caps and transports. The Russell 2000 index which is at a record
 high is up 21% this year its best first half going all the way back to 1991 the Dow transports
 jumping 26% its best first half of the year going back to 1987 so as we look ahead to the second
 half of the year let's bring in Lolli a corner global market strategist over at itoro. Lolli this
 has been an interesting move but a lot of the bulk of it has been done kind of since the march
 lows that we've seen during the Iran war. The question then becomes is it sustainable so is it?
 Well thank you so much Don for having me I think all of this suggests that there's still a lot of
 confidence and earnings going forward especially the tech sector is still doing the heavy lifting.
 I think that what we're seeing is a healthy market I am seeing rotation I do not yet see
 any indications that there will be a sustained bear market we're obviously seeing leadership
 broadening the mega-cap tech names in financial industries into healthcare and small caps as
 you've said are performing very well so earnings growth as long as that remains positive I think we
 will see again an upward movement in major indices. In terms of the geopolitical risk there's
 still some risk premium price into the market however as we all know tensions have come down
 and we do not see a recession in the US it's going to be a slowdown but it's still positive for
 the market in terms of the risk assets for the third quarter. You mentioned the if if earnings
 growth can sustain if that can kind of power the markets is there any kind of indication that it
 would not right what's on the horizon that might be the headwind to keep that earnings growth
 story in check because it has been earnings growth that has been powering the markets there has
 been no real multiple expansion so as long as earnings grow we can but can we keep doing it and if
 so what exactly would be the huge catalyst there. As I said before tech is doing the heavy lifting
 I do think that you know we need to see more sectors joining tech in terms of creating that
 momentum industries are doing great I would like to see financials coming into the picture as well
 I think now the debate is increasingly shifting from how much these tech companies are
 spending versus when are they going to be able to generate strong returns so they are priced
 perfection and if as I said if guidance comes in we couldn't expect it then that would create
 some hurdles and some volatility in the markets. The other factor that we're looking at obviously
 is it is the Fed we have a new chair who sounds very different to what we had before I still believe
 that actually the markets are overestimating the risk of another round of Fed tightening
 it could be you know one rate hike but we don't expect more than that given the fact that this
 is the supply side inflation shock and therefore it will resolve when it's owned by the time the
 port quarter comes so but if we are wrong and if the Fed thinks that you know inflation expectations
 will stay higher for longer then we could get more hikes and that would be obviously negative
 for markets but we do not think that's going to be the case we still think that actually markets
 are overestimating the risk of another major hiking cycle coming from the Fed.
 All right three keys the Fed geopolitics with Iran and of course earnings growth Lali Akoneur thank
 you very much we'll see you soon. Thank you. All right to a developing story now in US and Iran
 peace talks speaking of looking to get back on track in Doha Qatar later on today this as Iran looks
 to maintain its control of the state of Hormuz in any US-led peace deal our Dan Murphy is in London
 with the latest on that particular front Dan.
 Don good morning well we understand both sides are sending teams to Doha today but ahead of
 this Iran's foreign ministry spokesperson has pushed back on the idea that any face-to-face talks
 are actually scheduled Tehran saying its delegation's trip to Doha has no relation to the US visit
 however Don a source with direct knowledge of the talks has told CNBC today that technical teams
 are scheduled to meet and communication channels created to de-escalate any incidents are in place
 for his part President Trump has said he would send some in-law Jared Kushner and on-boy
 Steve Whitkov but it's still unclear who might attend on the Iranian side as for the agenda the
 US and Iran have already agreed to pause their strike so today's priority if these talks go ahead
 is likely to focus on preventing another flare-up the Iranians also say they aren't really
 ready to negotiate certain elements of the final deal until certain points of this MOU are
 implemented and the real flashpoint here appears to be the straight-up of Hormuz Iran of course
 believing this MOU gives them the authority to organize traffic through the straight during this
 60-day negotiation period the US saying Iran should simply step aside and let ships pass freely
 as the pre-war status quo and international law would of course dictate the other major issue
 coming into this is the money Iran wants the cold hard cash that it thinks it's owed here as well
 as the unfreezing of Iranian assets Washington saying that first tranship six billion dollars that
 is held in Qatar will be released and as far as we know that hasn't happened yet so some confusion
 coming into this that really captures just how fragile this peace talk as it stands is right now
 and of course the big gaps that still exists between both sides don't all right Dan Murphy and
 London with the latest on the Middle East state of play thank you very much for that we've got a
 lot more to come here on morning call including caught up in the software sector slide we check in with
 the CEO of e-commerce software giant Klavio to see if record-breaking prime day sales are giving
 his business a bottom line boost plus plans for Apple's latest and greatest iPhone leaked courtesy of
 a hack attack at one major contractor and then later on one more day for the Supreme Court after two
 landmark decisions for the Fed and independent government agency oversight look at what investors
 will be watching for today out of scotus a very busy hour still ahead when morning call returns
 after this break Thursday July 16th CNBC sport and boardroom join Finatics Fest for game plan
 groundbreaking ideas shaping the future of sports and entertainment request your invited CNBC events
 dot com slash game plan all right welcome back to morning call market flash right now on shares of
 rocket labs soaring by 16 percent yesterday on word it will buy satellite communications provider
 iridium communications in a roughly eight billion dollar cash and stock transaction iridium stock
 surging 25 percent yesterday section now shares of both are maybe tempering a little bit rocket
 lap up about three percent pre market today iridium down about one percent we'll hear more about
 the deal when rocket lab joins morning call tomorrow morning Peter Beck the CEO joins tomorrow again
 for a conversation about that big transaction also watching shares of course Comcast following the
 news it plans to spin off its NBC universal media unit into a separate publicly traded company Comcast
 shares jumped as much as 17 percent pre market before pairing some of those gains and closing the
 day up about four and a half percent this morning those shares are fractionally one quarter of
 one percent twenty four dollars and 29 cents in the latest pre market trade Comcast says the
 separation of NBC universal is expected to be completed in roughly a year now from the media
 landscape to the software trade and what's been a wild first half of that sector overall one name
 caught up in the middle of that AI push and pull that seesaw is clavio a major software player when
 it comes to e commerce fostering heat partnerships with spotify or Shopify and thropic google canva
 others the shares though are off more than 50 percent so far on the year but the street is still
 holding out hope more than 90 percent of analysts that cover this stock have a buy or equivalent
 rating with an average target price implying a 92 percent move higher from here so in essence
 the shares should double joining me now in a first on cnvc interview as andrabilaki co founder and
 coceo at clavio live from london ahead of the company's big annual european user conference
 uh Andrew thank you so much for joining us here and morning call i guess maybe the first question
 right now is we we've shown a little bit about the share performance is it indicative of a broader
 narrative within e commerce within you know btc transactions within everything else and the
 consumer or is it something different with regard to artificial intelligence and its disruption
 in the industry yeah thanks for thanks for having me done uh so to your question i think the state of
 e commerce is very healthy uh you know there's actually if you look at the last couple of years
 you know e commerce has kind of gone ups and downs you know with tariffs and you know conflicts
 but when i talked to our customers they're doing great they're growing in fact i think with AI
 we're seeing even more entrepreneurship more people are starting businesses it feels it feels
 even more approachable um and then when it comes to you know AI i think everybody's trying to
 understand you know software the future of software you know what's relevant what's not uh at our
 point of view very strongly is like there's two kinds of companies that are uh they're going to lead
 in this new era and those are companies that provide the infrastructure and so for us that's our
 you know autonomous consumer focused CRM uh the provides all the plumbing in our case to help you
 know customer uh businesses understand who their consumers are it's also a system of action actually
 allows you to message those consumers uh we offer chat agents to do handle customer service
 so it's about infrastructure and it's then can you provide the intelligence and the agents we think
 a lot about like where is that intelligence coming from and so we're here in London today um very
 excited we're about to announce uh to our two hundred thousand plus customers uh our composer
 agent platform uh that's great at understanding analyzing who your customers are so you can imagine
 brands that have millions of consumers it can cluster them and group them help you figure out what
 kind of marketing uh to do for them uh and it also it's it's been trained on you know now billions
 marketing campaigns that people have run through clavio you know in our internal benchmarks we're
 finding that like our agent can out design general purpose you know agents or LLMs that we've all
 gotten used to using and you know I think we're on the processes but where you can see a lot more
 domain specific task specific role specific agents um and we're very excited about composer uh
 and what it's going to do for e-commerce brands that frankly want to grow faster they've got great
 ideas they just need some help executing you know Andrew it's interesting because if you were to
 ask people of the average layperson wherever they are who who maybe doesn't have as much
 sophistication around AI to tell them about agentic AI you would probably want to bring up case studies
 with regard to e-commerce and retail because we've seen the soft introduction of agents
 and AI into retail anybody who uses amazon's alex i'm not going to say the name because i don't
 want to set off devices all over the place but that's is that's an agent in essence right you can
 tell her please put this in my cart i want you to buy this for me immediately something like that
 i wonder with all those data points this agentic AI boom is it going to be something where e-commerce
 and and that beta c transaction is going to lead the way or is it going to be some other industry
 you think or or you would uniquely position because of all the data points you have with customers
 to be able to really deploy agentic AI quicker than anyone else yeah i also share a couple things
 i think that's spot on so the first is this is the year that i think uh you know those those other
 you know kind of um for larger brands you know building an agent they have the engineers to do it
 what we're doing at clavio is basically making it possible so that yeah those kinds of shopping agents
 chat agents i mean really for any consumer business you can use it with a restaurant um we're
 going to make it possible so that everybody can set one of those up that's what our customer agent
 product does um and what's great is it's obviously trained across 200,000 businesses in their data sets
 so one of the things we're finding is when people comes to building agents a lot of businesses don't
 know one which they allow their agents to do what's possible like they don't know that for instance
 today our customer agent can handle things like returns reservations it can handle these more complex
 tasks and actually read and write data uh so they don't know what's possible they don't have a
 measure quality but we've actually in this case built some agents to help out with that um so i think
 that you're going to see everybody this year is going to have their own customer agent deployed on
 their site and what's also really interesting is if you look at some of the research that's coming
 out of like you know where is the traffic going um you know from you know eight you know from uh
 you know chat gbt and clawed and Gemini and others well we're finding is a lot more of that is going
 to smaller brands it's going to the brand itself versus aggregators so i think there's a big
 opportunity here for brands that can show up well they can define really great experiences now
 increasingly through AI agents more traffic is going there and more consumers are giving them a shot
 and uh they've got they've got the opportunity to convert on that you know andru i've spoken to
 a quite a number of fortune one hundred and fortune five hundred cto cio c iso types and one of the
 things that many of them bring up is the friction points that they are anticipating because of
 cybersecurity issues in an age of agentic AI how much do you focus on that cyber kind of point of
 intrusion network infrastructure issue as a CEO of an e commerce and marketing company
 well it's a big one for us i mean across our two hundred thousand brands we have more than
 eight billion consumer profiles uh and we take you know guarding that you know securing that
 very seriously i actually think one of the things you're going to see is because we do such a good
 job securing that data allowing people to you know basically use that information to personalize
 all parts of the consumer journey marketing service digital experiences even in store um i think
 when it comes time to build agents that have access to that very sensitive data and also you want to
 make sure that those agents behave properly they're going to turn to companies like us that they
 already know and trust and expect us to help deliver on you know i think what consumers are just
 going to expect right i think what you're seeing from amazon you know those we think of agents as
 you know in the nineties you know websites and e commerce became new and then you saw an explosion
 of e commerce you know through websites i think now you're going to see an explosion of e commerce
 through agents uh you're kind of seeing that with some of the bigger retailers today but that's
 coming to the long tail um you know we think this year all right and to be lucky it's a longer
 conversation for sure CEO over at clavio thank you very much we'll see you soon sir
 thanks all right straight ahead on the show a major shift in medicare policy underway and the
 two stocks at the center of all of it but first to check on shares of tesla which are edging
 lower today after jumping more than eight percent in yesterday's session for its best day in more
 than a year the EV makers now rolling out a light version of its full self driving system to some
 older vehicles the first major update for that technology in more than a year even with that
 gain though tesla stock is still down about excuse me nine percent this year right now those shares
 again down three quarters of a percent of the pre-market trade morning call is back after this
 by the dip and save on cnbc pro 24 seven access to market moving news and interviews across
 three global live streams for 59 99 at cnbc.com slash join cnbc pro terms and conditions apply
 all right welcome back to morning call shares of Eli Lilly and Novo Nordisk in focus right now
 starting tomorrow millions of medicare recipients will be able to access the duo's GLP1 medications
 for the first time through a new program designed to make those drugs more affordable and more
 available anika kim constantino who covers health care for us joins us out with more on that story
 this is a big deal because it opens up a huge portion of the population that's right tom so first
 of all thanks so much for having me and so this is a watershed moment for millions of seniors in
 medicare who will have long been shut out from obesity treatment and it's also a big deal for
 Eli Lilly and Novo Nordisk obviously so starting tomorrow seniors in medicare will be able to access
 these GLP1s for obesity such as zep bound and macovie and the two new pills from the drug makers
 through the government's temporary demonstration program and so these drugs will only cost them
 fifty dollars per month that's the co-pay there and that's a fraction of what people usually
 pay for these drugs in cash if they don't have insurance coverage and so when I talk to doctors they
 say that this is such a positive development it's going to help expand access for seniors obviously
 and help them experience some of those health benefits from benefits from GLP1 such as you know
 obviously reduce weight but also lower cardiovascular risk and other sort of health benefits but they
 do bring up some drawbacks here such as that this is a temporary program it expires at the end of
 2027 and so we have to watch what happens after after 2027 about coverage i mean medicare opening
 up to that market is huge right you're talking about kind of like a government structure for elderly
 patients in america if this is going to be a game changer for them just how much of a game
 changer can it be how big is the market that it could be for the likes of Eli Lilly and Novo Nordisk
 Eli Lilly is already a trillion dollar company at this point does this propel them that much more
 that's a great question Dom so this is a really big commercial opportunity for Novo and Lilly
 you know CMS says that they expect around several million patients in medicare to be able to
 access GLP1s for obesity through this pilot program at least initially and Novo and Lilly
 both say that around 15 million to 20 million seniors would ultimately be eligible for obesity
 treatment in medicare so there's clearly a large untapped population there that we could reach
 over time especially if this is continued and when I talk to David Reisinger who is the
 leering partners and partners analyst he did say that he expects you know this medicare coverage
 of obesity there obesity drugs to rake in around one billion and annual sales for both Eli Lilly
 and also Novo Nordisk so there seems to have been also and before we let you go this kind of momentum
 shift between Novo over the course of the past five or six years more towards Eli Lilly
 is there anything that kind of equalizes that or do you think that Lilly is still in that kind of
 cat bird position with regard to how these GLP1s will be deployed? That's a great question
 so when I do talk to some analysts they say that the pill race will be something to watch here
 in this new medicare population you know around 75% of medicare patients according to Novo
 prefer the pill and so we're going to have to see which one is really preferred here but
 wagovi does the wagovi pill does have this upper hand where it launched before Lilly's pill
 and it also does have that name brand of wagovi that's a very recognizable name brand and so that
 is a really big boost to Novo we'll definitely have to see how this shakes out though.
 All right, Annika came constantly with Lilly so the GLP1s thank you very much for that we
 appreciate it. All right still on deck for the show here getting set for Nike's results after
 the closing bell today the stock is down 20% since its last report it's off nearly 48% from its
 recent 52-week high what the swoosh needs to say to investors to turn that tide but first
 watching shares of Microsoft about to close out its worst month going back to get this
 2000 down nearly 18% but not everyone is giving up on those shares much more on this
 and the tech trade overall in 2026 when Morning Call returns after this break.
 I'm Dominic Chiuin from Morgan Brennan today welcome back to Morning Call US equity futures are
 modestly bid on this final trading day of the month of the quarter of the first half of the year
 with the Dow set to open about 52,000 for the first time ever a big boost came yesterday from new
 Dow member Alphabet the Google parent company closing up nearly 5% on the day after its first day
 in that index those shares this morning are higher to the turn now just about flat to just
 $353.39 this morning Morgan Stanley up its price target on those shares going from $375
 up to $415 per share so again we're seeing some relatively flat action after a big day for Alphabet
 a look at how the sectors sacked up for the quarter led by technology up 28% on pace for its
 best quarterly performance since the second quarter of 2020 you can see there are those at least
 quarter to eight winners here so far. Checking the sector laggers energies the lone sector
 in the red for the quarter believe it or not down 13 and a half percent facing its worst
 quarterly performance since the third quarter of 2020 now for the quarter in Asia the South
 Korean Cosby is up 67% the knee case up 37% and in Europe Italy is the best performing market
 in that continent up about 16% on the quarter so big moves in this second quarter for many of
 the major forces around the world checking some of the morning's latest headlines watching shares
 of Apple amid a new supply chain headache Reuters is reporting iPhone 18 pro supplier lists component
 details and drop test photos were exposed in a Tata electronics ransomware leak the files
 reportedly show which company supply hundreds of parts for the upcoming model raising some concerns
 about Apple supply chain playbook vendor dealings and expanding production plans in India
 meanwhile President Trump doubling down in his call for lower gasoline prices posting on truth
 social that prices need to come down quote immediately or gas retailers will face quote
 big problems ahead the president is targeting $2.50 per gallon for regular unleaded as his key number
 and uber and alphabets waymo are ending their self-driving partnership in Phoenix as the
 Ryan Haley giant looks to launch a new driverless collaboration in the city waymo's vehicles are
 still available on uber in Austin and Atlanta and in a first of its kind move the house just pass
 legislation that would require online platforms to provide safeguards for children including
 ways to limit addictive features and put in place policies to protect kids from sexual exploitation
 the bill now adds to the senate where lawmakers support more stringent standards
 and president Trump says he is holding off on signing the major bipartisan housing affordability bill
 telling reporters at the White House yesterday that it is quote so unimportant compared to the
 save america voter ID measure it hasn't been sent to me yet it's coming i understand and then i'll
 make it then i'll make it here's what i would like to sign much more than a bill that big deal it's a
 yarn so it was it's wonderful to me compared to the save america act just about everything is a big
 yarn all right president Trump last week scrapped a planned signing of that housing bill which
 passed the house and senate by very wide margins we're also watching now shares of Nike set to
 report earnings after the bell down 19% since its last results were posted and the worst performing
 member of the Dow this quarter front and center for investors today the latest read on the apparel
 giants and footwear giants turn around efforts are branding gomen's choices now with more on those
 shares and what's going to happen today for its big report what exactly are people going to look
 at another vital quarter last quarter especially but look the stock has been one of retail's biggest
 disappointments falling from around 180 in late 2021 to the low 40s today the company for years
 pushing aggressively into direct to consumer pulling back from wholesale partners like footlocker
 index margins were boosted at first but left Nike to reliant on its own channels at the same time
 rivals like on and hoka gain share and performance running while local competitors in china chipped
 away at Nike now look Nike still does hold strong market share in both of those markets but now
 CEO Elliott Hill is trying to turn the ship around so what do investors care about dom wall street
 expects revenue to decline year over year still to 10.85 billion EPS 13 cents a share they want
 a clear path for how Nike will return to revenue growth and stabilization for 2027 looking for
 any updates on North America stabilization and at the bleeding in china and europe is at least
 slowing we also importantly expect to hear hard numbers on tariff refunds that were not included
 in previous guidance now in november Nike warned tariffs could represent roughly 1.5 billion
 in annualized costs that would at the time be passed on to consumers so we may see stronger profits
 but investors will be looking past any one-time benefit from those gains big question though remains
 macro demand and executive strategy here at dom the the investors that are spoken with they want
 to have a clear path forward for Nike's turnaround so the turnaround plan Elliott Hill was brought
 kind of into this position to make that turnaround really stand insider so familiar with the company
 knows what's going on knows the problem those what the path forward could be so the question then
 becomes is that plan showing signs of actually taking hold or is it still too early to tell yeah
 and I was looking back at last quarter right because we're talking about the stock still being down
 even from from that print he sort of teched off some of those boxes right revenue in North America
 was showing signs of stabilization grew modestly direct to consumer was down but wholesale revenue
 did increase for last quarter that's part of the strategy they want to return to wholesale so
 we're starting to see the inklings of that turnaround plan but again still needs some more clarity
 on what's happening in China what's happening with weakness in Europe all right trying to find
 that balance between DTC and wholesale yeah exactly all right Brandon thank you very much for
 that we appreciate it thanks all right a lot more to come here on morning call including the
 metal our next guest says could regain some of its lost shine in the months ahead and as we head
 to break a check on aerovirament shares soaring in the back of earnings beating on the both the top
 and bottom lines those shares for aerovirament up 21% pre-market morning call is back in one moment
 welcome back to morning call as we have pointed out stocks have posted strong gains this quarter
 but the same cannot be said about the precious metals complex overall gold is on track for its first
 quarterly decline since 2004 and its largest since 2013 the declines are greater for silver for
 platinum and palladium silver is having its worst quarter since 2013 and platinum it's worse since
 2020 not good for metals joining me now is Suki Cooper the global head of commodities research
 over at standard chartered bank Suki all we could talk about for a long time was the massive
 parabolic surge in some of these metals how things have changed can it get things back going
 to the upside we think that in the near term we've really seen a liquidity event profit taking
 but we haven't seen a thesis changing event for the gold market we think many of those structural
 drivers that pushed gold to those record highs are still very much intact but a few dynamics have
 shifted yes there's been this need for liquidity that has pressured gold prices lower and of course
 we've seen this huge change in rate expectations on a global basis and from the start of the year
 the market was expecting rate cuts and now the market is pricing in the scope for a rate hike
 and that has pressured gold prices lower but we think these are very much cyclical short-term
 drivers that are pressure prices longer term the intact you mentioned some of the fundamental
 cases for this let's go through maybe one or two of the most important ones here is if it's
 industrial usage if it's kind of like some of the the moves vis-a-vis the economy inflation everything
 else what exactly could be the catalyst to get things moving to the upside for gold in particular
 the big structural driver has come from the official sector that central bank buying is still there
 if we look at that Q1 data it was the strongest since Q4 2024 so markets may have expected a slowdown
 in terms of central bank selling but that hasn't materialized so that structural downside support
 limiting the downside risk is there but the big drivers that are in tight investors back in are
 really around the concerns around peer-crunted basement and US debt to global debt concerns but
 having a diversified portfolio and those drivers we think will come back into the forefront once we
 see some of these liquidity needs easing so key i want to call your attention well you know
 kalshi has some of the odds on where kind of gold prices will go in the coming months i just want
 to put them up for you you can see forty three hundred above forty six percent on kalshi say that's
 where it's going to be forty five hundred or above just about thirty five percent what's your
 target price we think we're going to be above four thousand five hundred we think that yes in
 the near term we see some weakness when it comes to seasonal demand from India there's some of
 that softness that's exposed and downside risk and of course we've breached these two hundred
 day moving average and now we're toying with that psychological milestone of four thousand
 dollars per ounce so in the short term yes price outlook is quite fragile but beyond that we think
 given that investor positioning is so light we've seen ETF outflows as well we think once that
 demand recuperates we'll be trading back above four thousand five hundred all right when you come
 back next time we're talking platinum and silver all right sookie Cooper standard charter thank
 you very much we appreciate it all right straight ahead on the show here the morning call crew
 assembles team up the training day ahead and the the big question one member says the market space
 heading into the second half of two thousand twenty six keep it right here we're back after this
 all right welcome back here's what to watch for today we get our first piece of the labor
 data for the week with the joltz report got earnings from Nike in constellation brands and we're
 awaiting several potential rulings by the supreme court on this final day of its term
 including one on president trump's push to roll back birthright citizenship this after two landmark
 rulings yesterday first that president trump does not have the authority to fire federal reserve
 governor Lisa cook from the central bank for now leaving the door open for that possibility
 sometime in the future and a second ruling where president trump and future presidents do have the
 power to remove members of supposedly independent federal agencies including the ftc following
 the president's firing of commissioner uh Rebecca slaughter slaughter did speak on cmbc yesterday
 in the wake of that particular ruling the question is whether the agencies are going to operate
 as congress intended with built-in mechanisms for transparency and accountability so that they
 can serve as the watchdogs that congress wanted them to be not as the lapdogs of a president
 all right now from scotus to your call sheet the crew members today are shot a smith of global
 xctf's victoria for nandes of cross mark global investments and lee baker of clearest financial
 advisors he's also a member of the cmbc financial advisor counsel thank you all for being here with
 us our first topic of course because we just teed it up is fed independence given what's
 happening with the supreme court and everything else and for that maybe i will turn to you lee first
 on this in the broader sense of things do we have to worry about fed independence vis-a-vis the
 market reactions to interest rates so at this point i'm going to say the answer is no quite frankly
 from a market perspective i think everybody should put chief justice robert's on their christmas
 card list uh i think a ruling in the other direction would have been disastrous for uh markets i mean
 the fact that he said not only the fact of independence but the appearance of independence is key
 for the the design of the fed that's incredibly true in some the ruling in the other direction
 would have been disastrous in my opinion all right shana you're you're kind of nodding around
 there as well did you feel as though any narrative has really changed for the markets given some
 of those rulings we saw yesterday not necessarily that the narrative has changed i think this is a very
 much reaffirmed what many investors have long said right when you talk about what the fed's
 path going forward is markets can handle rates that go higher they can handle rates that go lower
 what they can handle is any uncertainty around that decision process and i think very much this ruling
 affirms the fact that it will be a data driven process rather than anything politically pressured so
 i think that does remove uncertainty when it comes to the markets and i think just going forward
 when you take a look at fed policy credibility is so important this ruling very much reaffirms that
 which the market very very very much like of course sir so from that standpoint we have also
 a massive dynamic vis-a-vis rates with that kind of tech and valuations trade it has been very
 disparate in terms of which kind of text talks have done really well victoria i'm going to go to you
 for this one we've seen a bounce back in that tech trade in certain parts which parts in your mind
 are the most important for that tech trade to continue hypothetically to keep going higher
 well dumb i mean when you look at what this economy has been doing it has been driven by the earnings
 from these AI tech related companies and whether you're looking at hyper-scalers or whether you're
 looking at you know the secondary companies that are benefiting the picks and the shovels and all
 of that that we talk about all of the time those are the companies that are supporting this bull market
 that we're in right now so i think you have to continue to see that happen lower rates obviously
 supports that would cost of capital lower and we see how much capex is being spent we see these
 companies going to the bond market so i think it's really important that we continue to see support
 there lower rates helps that and look we had besson last week talk about how wars will do what he
 wants to do and he has kind of set the tone so i think it'll be interesting to see where we go
 from here you know shana you work for a thematic ETF company have you seen anything with regard to
 some of the flows in and out of your funds that suggest that there are certain parts of that tech
 market that are occurring more favor with investors these days and ones that are maybe falling a
 little bit more out of favor yeah very much so and it's in line with what we've seen with the
 broader market right when you take a look at what had been leading the mag 7 the names they have
 seen a bit of a rotation out of that that of course has been reflected in our funds where we see
 opportunity where investors have seen opportunity especially over the last six months has been that
 infrastructure layer so when you take a look at dtcr that's our data center fund that is up over 40
 percent since the start of the year chip x that's our chip x since the semiconductor fund that is
 up almost 90 percent since the start of the year so very much favoring that infrastructure layer
 of the air trade which is so important and obviously will we think at least drive this next phase
 to the upside all right and let's go to our last topic of the day which is the kind of markets at
 the half it's been a good first half of the year specifically a fantastic second quarter bouncing
 off the war lows Lee I'm going to go to you for this one can this continue in the back half
 I think it can continue but if I'm frank you know if I'm candid I'm concerned that it won't
 continue it's incredibly hard to have four years in a row of double digit returns this has been
 a heck of a roller coaster ride although again I totally agree we all see the second quarter has
 been on the upswing but I'm saying don't let go of that lap bar just yet you know victoria mag seven
 took a back seat to small caps and transports for the better part of this first half of the year
 what exactly is the broadening out trade look like in the back half this broadening trade has actually
 been quite supportive when you look at some of the technicals it tells us we could continue to see
 this don't I mean we've got the number of constituents in the S&P going about their 200 day moving
 average continuing to move higher even on days when the tech trade is failing a couple days last week
 advanced decline line continued to move higher so I think you've got some support here
 for the the small caps for quality for value for cyclicals what was the rotation
 we've seen in the market and I think it's going to continue to drive a bull market
 Sean at just a few moments left your favorite part of the market for the back half
 I think a lot of it has to do with tech I think the broadening that both victoria and
 that we're talking about there's a lot of opportunity there industrials materials even financial
 services which have held up in the first half of the year we think still have some likes in the
 second half all right shana lee victoria thank you very much for being part of the crew this
 morning we appreciate it and that it does it for our show here by the dip and save on cnbc pro 24
 seven access to market moving news and interviews across three global live streams for 59 99 at cnbc.com
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