SpaceX, Nordic American Tankers CEO 6/25/26

 Micron to the rescue. I'm Morgan Brennan and this is your morning call.
 Good morning, U.S. Stop Futures with Wall Street looking to snap a three-day losing streak as
 you can see right there on your screen poised to open higher this morning. The S&P poised for
 gains is 64 at the open. The Nasek is the big mover and I do mean big mover this morning as
 we're seeing that you turn in semi-stocks tied to Micron this morning pointing to gains of
 658 points at the open. The Dow also up 140 points, 150 points. This after a mixed picture for
 stocks yesterday with the Dow finishing higher the S&P and the Nasek lower amid rotation there.
 I just mentioned Micron. It's jumping as soaring prices for memory chips pushes sales up 300%
 for the third quarter and current quarter guidance is also well above expectations. You can see
 shares of Micron are up 16% right now pre-market along with Micron Qualcomm is moving higher this
 morning to up almost 12% pre-market. SK high-nix is also surging. That is up 13% in Korea. Qualcomm
 doubling its non-handset sales outlook for 2029 and SK high-nix already a huge winner in South Korea
 says it will list its shares on the Nasek in a $29 billion offering green arrows across the chip
 complex overall as well as you might expect right there on your screen some big moves. Samsung also
 moving higher in Korea this morning as well a buyback initiated there but even Nvidia is catching
 a bit of a bid that's been the underperformer this year is about one and a half percent pre-market.
 Memory names two on the move. You could see right there on your screen Sandisk Western Digital
 Seagate all up big in pre-market action. Chips driving stocks in Asia higher just touched on it a little
 bit but let's get to Lisa Kim and Singapore for more on what she's seeing Lisa.
 Hey Morgan so major chip stocks in Asia rallied in today's trading but really the headline came
 out of South Korea as you mentioned chip giant SK high-nix soar to close up 13% and we talked about it
 on morning call yesterday but SK high-nix is planning an ADR listing on the Nasek next month and
 the company plans to raise around 29 billion US through the listing it would be the second
 biggest share sale after the SpaceX IPO earlier this month and the IADR listing will give SK high-nix
 exposure to some American institutional investors who invest in US listed shares due to internal
 mandates over in Japan AI related stocks searched after microns blow out Q3 earnings South Korea
 often dominates conversations around Asia's AI boom but let's not forget Japan is also a huge
 beneficiary soft bank group shares rose around 8% after no one has securities raised its price target
 signing the Japanese investment giants progress and building its AI ecosystem back to you.
 All right Lisa Kim thank you let's get back to micron those shares are jumping as third quarter
 earnings blow pass estimates revenue more than quadrupling the company continues to benefit from
 storing AI demands skyrocketing prices for its memory chips microns signing a 16 long-term deals
 with customers such as data center operators and automakers and as I mentioned the guidance
 blowing past expectations to that's something obviously investors watch closely those shares are
 up 16% then there's Qualcomm forecasting $15 billion in sales from its data center business by
 2029 as it moves beyond its core smartphone chips the company saying Microsoft and Metta will use
 its new AI chips and that it will make custom semiconductors for two other unnamed type of scalars
 here's what Qualcomm's CEO Cristiano Amman had to say about the shift yesterday on CNBC
 the next generation of data center is really about doing inference at scale in lower TCO everybody knows
 that it's going to have to compete you have a lot of compute capacity there's a wall of computer
 requirements not enough power so I think that's will come to the picture and ability to actually
 offer a softer stack that is not only competitive but available to anyone so joining me now
 Sarah Kunst managing director at Cleo Capital Sarah it's great to have you back on the show I just
 want to start with this quote from Sanjay Marotra over at micron which really I think sort of
 captures the moment here quote even as we expect industry supply to improve gradually in 2028 we
 currently do not have line of sight as to when memory supply will be able to catch up
 with increasing demand and we've always talked about memory and some of these other areas of
 the chip market is very very cyclical are we entering a new secular growth phase
 I think that we are a bit um I think that the AI trade continues to be a bit frothy
 and I do think it's a little bit different with some of these legacy names because uh we know
 they can do this they're just shifting their poor business a little bit to say hey there is a
 very shiny new object uh that is likely to treat our stock very very well let's go chase it a
 little bit and I think that's a comfortable amount of risked interesting um your reaction to
 Qualcomm too along those lines uh another name that is expanding beyond what it's you know long
 been known for exactly I just think that the downside risk here is that in a few years they are
 back to their knitting they're back to doing what they were doing two or three years ago
 and that is perfectly fine these companies have been around longer than we have in many cases
 and they will probably outlive us right so I'm not super concerned about them uh going to something
 that is well within their remit something they understand well and just expanding their business
 a little bit I think that they've taken their time to do it um I'm sure some on the street feel
 that they've been new slow uh but I think that that they have been practical about it and measure
 that there will still be some demand in AI and so they are smart to say let's dip our toe in yeah
 I mean if I just go back to micron for a moment from a notional value I was reading this really
 to speak now the most heavily traded stock in the US I mean how does it speak to you just you
 just used you know you just talked about it a little bit but how does it speak to the froth we
 are seeing and semiconductors uh and this broader AI trade right now and how much of that really
 is propelling the broader market I certainly think that the froth in the AI market is what's
 propelling the broader market um you know don't confuse micron being highly traded when you look
 at its fundamentals right that's still a decently well priced stock um it's traded a lot right now
 because everybody was ignoring it for a long time and so now it's kind of getting in on the fun
 and that's a lot different than when you look at the SpaceX names when you look at the upcoming
 IPOs for things like Anthropic uh open AI those are companies in the same industry but they are not
 playing the same game and just because there are a few well priced legacy players who are getting
 attention right now it doesn't mean that there's not sort of a bigger amount of froth that really is
 driving the entire global economy and that should worry us a little bit okay Sarah Kunst it's great
 to have you on thanks for starting the hour with me well outside of the chip trade we're watching
 treasuries ahead of tomorrow's PCE today excuse me today's PCE inflation report we get some
 other economic data too we're going to speak with former Fed vice chair Roger Ferguson coming up
 on what that means for chairman Kevin Warsh and uh for markets more broadly but uh if you take
 look at treasurer yields overall uh I think higher across the curve last I checked there you go
 US 10 year treasurer yielding 4.41 percent but we're well off uh levels that we've seen just
 even a couple of weeks ago bank stocks meantime also moving rising dividends across the board
 after passing the latest Fed stress tests um and you can see we're going to get to that a little bit
 more too but you could see Goldman Morgan Stanley JP Morgan all higher pre market amid that flurry
 of shareholder return announcements if we also check on metals and gold too those continue to be
 on the move gold is actually basically flat right now around four thousand dollars and ounce
 that's after dipping below that level yesterday uh which would put it at a multi year low yesterday
 so so definitely testing these key technicals here copper is higher silver is lower right now
 energy also uh if we get a check there crude hitting its lowest level since February actually hitting
 its lowest level WTI um since February 27th the day before operation epic theory in Iran actually
 started and you can see WTI crude right now this morning on your screen down about what
 on a half percent trading around sixty nine dollars a barrel Brent crude also lower trading
 around seventy two dollars a barrel are about gasoline heating oil other energy related contracts
 also in the red ahead I one-on-one with Nordic American tankers founder her Björn Hansen with a
 frontline look at Hormuz shift traffic and what it means for crude's next move but in the meantime
 let's get overseas Europe just getting its trading day underway or Steve Cedrick is in London with
 a really mover Steve hey Morgan yeah look these European equities just following on from those
 thematics that you and Sarah are just talking about as well and I'm really interested
 listening to Sarah and her her how circumspect she is about the froth in the markets I think it's
 the same fears on this side of the Atlantic as well but we are ranging higher we are fueled by those
 textiles but of course we don't have the stellar names in technology that you have state side as well
 but they are topping the stock 600 also in focus the falling oil prices and I just had a brilliant
 conversation with this CFO of Chevron about what that means for gasoline price as well and I know
 that your team are looking at some of that tape as well but falling oil prices USPCE data everything
 you pretty much mentioned that is what we're looking at so let's have a look at these European chip
 plays because we have a few reacting to those blowout earnings from micron overnight we've got the
 essentially it's a Dutch chip maker it's not it makes lithography machines and I don't know how
 easy you find it saying lithography machines but I hate it anyway ASMR they are doing a little bit
 better without 4.1% SC micro infinite also pushing higher following their Asian peers into the green
 back to you Morgan all right lithography see it three times fast um great Steve Steve said
 so easy for you news alert watching the fallout from back to back earthquakes in north central
 Venezuela causing significant damage in the capital of caracas the pair of quakes striking just after
 6 p.m. local time and according to the US Geological Survey the first quake registered at 7.1 with
 its epicenter hitting about an hour west of caracas the USGS reported an even larger 7.5 magnitude
 earthquake just a minute later the quakes are among the strongest to strike Venezuela's
 in more than a century the tremors were also felt in neighboring Colombia according to officials
 at least 32 fatalities so far reported well president trump says he is instructing all agencies
 of government to get ready to move quickly to assist Venezuela a lot more to come here I'm warning
 call including the state of the street and new science traffic may be returning to normal plus
 much more on the big banks and a big batch of new shareholder rewards and later we're watching
 SpaceX shares and their potential place in your 401k we had a very busy hour still ahead you
 don't want to miss it morning call be right back welcome back to morning call we're watching
 the price of oil adding to yesterday's losses now hitting the lowest level since late February
 before operation epic fury even started in Iran WTI slipping below $70 a barrel and you get
 right there in your screen trading right around 69 firmly this as there appears to be more
 movement by ships through the straight of for moose even as the US and Ron give differing accounts
 on whether the waterways open closed or is free of tolls the latest data from windward shows a 48
 percent single day increase in transit but the firm cautions of full recovery is still tied to risks
 so for more let's talk about the straight the state of the straight of for moose with her Bjorn
 Hansen founders chairman and CEO of Nordic American tankers which operates several vessels
 in the straight and Persian Gulf and full fleet her Bjorn is great to have you back on the show
 appreciate the time there were reports that you have had some tankers that have moved through
 the straight since the weekend can you confirm that and if so what are you seeing how are they
 moving in light of dynamics on the ground we had the two tankers going through the straight just a
 few days ago and that was a decision which was taken in my group and we saw an opening
 and we saw the possibility to get away and in my judgment the straight will be open because
 Iran is suffering America is suffering China is suffering 162 countries in the world are
 suffering and there is no other choice than to open the straight and I would I would add that
 man that we have been visiting and discharging loading in 68 countries the last five years
 so we have a certain view on what the world looks like yes I understand that you've been doing
 this for a long time you've seen quite a few cycles and different types of geopolitical events
 happen over that time period in terms of the vessels that are moving through the straight right
 now are they moving with their transponders on are they getting naval escorts from from the US
 military what does it look like in real time we took the decision ourselves because we saw
 there was an opening and that was a decision which was taken by the undersigned because having been
 around for a certain amount of time we saw that opening and we grabbed it and we went successfully
 through the straight I would add that the finalization is always taken by the captain of the ship
 because the captain of the ship is always in command our vessels take carry one million barrels
 in one load and we are in as I mentioned in many countries and whether the straight is closed
 or not closed is of no commercial meaning to us but the main thing is that the crew is safe and
 it is safe in our review we are listed on the New York Stock Exchange and we are dealing with
 Exxon with Chevron with Shell with British Petroleum they have more than 50% of our business they
 lease our ships and the important thing is to do business with the right people.
 You mentioned all the vessels that you have stationed around other parts of the world right now
 have you seen a change in flows in shipping lanes and do you expect a lot of that to continue even
 as the straight reopens? I don't think that it does matter whether it's the straight is open or not
 but as it told you there is no other choice than to open the straight and I can say now
 I predicted it very short time ago and now we are back to the situation we had before February
 28 this year and the closure or the opening of the straight is not an important element in this
 worldwide picture that we are looking at but I would add that there is at this time a scarcity of
 ships and when there are two few ships rates go up and we enjoy extremely high rates in our company
 I have never seen such high rates but I am a newcomer having been in the business only for 50 years
 understood in terms of those shipping rates is your expectation that they stay elevated here regardless
 of what we see happen in the Middle East then? I would say as far as we are concerned and our ships
 are concerned I would say yes we will see the strong rates in a year or two but then there is
 the worry that shipping people may order new ships and order new ships and in a way they are
 the worst enemy and they may destroy it for themselves you know but we are in a very lucky and a
 very strong position because of our worldwide operations we are doing excellently and the way
 forward is also bright we have the so-called shadow fleet and we have the fleet which is not allowed
 to work for the big oil companies and this is all resulting in scarcity of ships and whether
 the hummus is open or not has no impact in this particular respect but there is no other choice
 than open the hummus okay herb your enhancing of Nordic American tankers it's great to have you on
 thank you thank you for having me straight ahead defend stocks and focus after President Trump met
 with top industry CEOs and is calling for more spending for the sector we got those details ahead
 but first we are watching shares of Wendy's after that closed up more than 25 percent yesterday
 and what appears to be a new meme stop trade you can see shares of another 12 percent this morning
 the stock was up more than 40 percent at one point before trading was halted
 Wendy's now ranks the second most mentioned stock across Reddit trading forums over the past 36
 hours and even with the two-day pop shares are down some 30 percent over the past 12 months they
 also got a new CEO recently so this is one of those turnaround names and focus we're back after this
 welcome back to morning call watching SpaceX shares as the post IPO pressures continue the stock
 is down 15 percent so far this week you can get see it bounced back pre-market about 1 percent
 right now the volatility around the stock though could continue with its addition to the
 Russell 1000 tomorrow we get the Nasdaq 100 early next month and for investors that have held
 off on buying SpaceX shares they could still see their investments including 401k's impacted with
 many prominent ETFs either tracking those indexes or buying SpaceX shares directly for more let's
 bring in RE Jacobs global head of investments at a on it's great to have you here on set welcome
 thanks welcome lots to get to here but I do want to start with with this idea of the fact that we've
 seen some of these indexes change their inclusion metrics and you do have names like like SpaceX
 now entering the fray here how do you see this market yeah so we observe it from the importance of
 ensuring that our clients and our participants are getting the right diversification and that
 diversification is going to show up in the index ones that they're in and sometimes going to
 show up in their active solutions as well so individual stocks are not particularly the focus of
 one over the other from our clients but importantly when we're looking at private markets entering
 the 401k space and other new solutions entering that space it's so important remember that 40%
 of the top 10 stocks we get 40% of the SMB 500 these days and ensuring that you get the right
 diversification around all the public and private solutions out there is what's going to be critical
 to the solution for our clients and I want to get into that first you just touched on I mean there's
 this big debate raging right now around private market exposure for the every man enabling it to
 happen what that looks like the risks versus the rewards of it how does how does that shape up here
 especially the department of labor you know plan to to enable some of this with alts for example
 what does this mean for 401k is retirement funds yes we look at it from a few angles so number one
 this is a diversification play the fact that the most experienced and the best institutional investors
 are investing in alternatives private publics that needs to be a part of every 401k plan and the
 challenge that we have at times is that there's somewhat higher fees we have to work through that
 we have to work through the valuation requirements but importantly there's just too much litigation
 risk in the 401k space right now and you need to have sure that the department of labor so they're
 doing through their rules are going to give us the guideline and the path to ensure that we can have
 the right exposure for our clients and that the litigation risk continues to be brought down
 and the path of department of labor is bringing through it's going to be an important way for that to happen
 you know i mean a lot of focus this entire year on private credit for example and some of the risks
 associated there especially when you see certain funds you know capping redemption things like
 that it's even affecting some of the insurer stocks as investors are concerned about their exposure
 to the space as well so what do retirees and others you know other investors need to know or
 understand about what what is associated with that diversification yeah so look i would say a few
 things so from a private credit standpoint we still remain very focused there we recognize that
 there are some risks there but it's an important part of the portfolio and important part of the
 exposure it's going to get out there when we're looking at from a standpoint of 401k investors
 in a in a in a target they fund we don't think the private market is going to make up any more than
 20% of that solution right so you're still going to have 80% in public markets with that be passive
 or active and then you're going to have a 20% sleeve that's going to go into private credit
 private equity private real estate private infrastructure to ensure that you get in the right
 diversification across all those asset classes private or public yeah and finally just your take on
 the markets we've got stock stock averages sitting near record highs we have bond yields coming down
 we have crude drop in like a rock here where do we go yeah we like it's still going up we're still
 bullish on on where the solutions are going to go we still want to make sure you got to write
 diversified portfolio to work it through few retirement savings okay all right Jacobs it's great to have
 you on thanks for joining me thank you appreciate it still on deck stress tests inflation and more
 former fed vice chair Roger Ferguson is going to join me next morning call we'll be right back
 I'm working Brennan welcome back to morning call let's get a check on you with stock futures
 of Wall Street looking to snap a three-day losing streak at least for the S&P on the Nasdaq
 which finished lower yesterday the Dow finished higher you could see futures are higher across
 the board this morning the S&P up 65 points at the open as of right now a Dow 163 points in the
 Nasdaq just surging pre-market of 670 points right now why we're seeing that you turn in semi-stocks
 the stock the morning really micron jumping as storing prices for memory chips pushes sales
 up 300 percent for the third quarter we also had blowout guidance for the current quarter along
 with micron those shares are up 16 percent now along with micron Qualcomm and SK high-nix are
 also surging Qualcomm doubling its non-handset sales outlook for 2029 those shares are of 12 percent
 SK high-nix already a huge winner in South Korea says it will list its shares on the Nasdaq
 and a $29 billion offering and you could see that sending that stock of 13 percent in South Korea
 we got green arrows across the chip chip complex overall you could see that right there on your
 screen everything from KLA to Samsung to AMD and videos even up one and a half percent right now
 after trade after closing below $200 a share yesterday it's really been a relative underperformer
 versus everything else in the semi conductor space this year but even time on semis up about
 two and a half percent right now memory names specifically two catching up particularly big bid
 sandisk is up 14 percent pre-market Western digital up double digits C gate also up seven and a half
 percent but if we go outside the chip trade and we watch treasuries ahead of today's
 PCE inflation report you could see those are a bit higher across the curve US 10 year treasury
 yielding 4.41 percent and fed sensitive to your treasury yielding 4.15 percent also going to
 get a check on crypto and bitcoin specifically bitcoin is back above $61,000 it's up 3 percent this
 morning but it broke below 60 K yesterday which was a new low for the year and you could see
 other names of the cryptocurrency complex also trading higher this morning if we get a check on
 energy energy prices continue to fall WTI crude is down about one and a quarter percent right now
 trading around $69.50 per barrel we're back at levels for WTI crude that we haven't seen since
 February 27th so literally the day before operation epic fury commenced Brent crude which has
 been the big story the big focus this week also moving lower again down one and a half percent
 right now trading around $72 a barrel if we get a check on global markets SK high next I just
 mentioned those shares are helping lift South Korea's cost be so a Samsung that's up nearly five
 and a half percent today the cost be but you could say knee K is up 4.6 percent today as well you got
 modest gains in early trading in Europe too a lot of green on the screen the DAX is up about half
 a percent we're also watching here in the US shares of aerospace and defense companies so Boeing
 Lockheed Martin Honeywell the CEOs of those companies meeting with President Trump at the White
 House yesterday basically flat right now pre market Honeywell down about half about 1 percent as
 the administration presses defense contractors to ramp up missiles and munitions production to
 replenish replenish stockpiles that are in part depleted by the Iran conflict this after President
 Trump earlier this month invoked the defense production act to accelerate weapons production and
 after a series of framework agreements were struck with defense companies by the Pentagon
 earlier this year to dramatically boost output of Tomahawk and Patriot missiles among others
 so after the bell yesterday Lockheed Martin officially awarded a seven year contract for an
 up to thirty five billion dollars deal to quadruple bad interceptor production this is over the
 course of seven years that's following an eight point four billion dollar contract to quadruple
 precision strike missiles through twenty thirty two as well the day before and Lockheed plans
 to invest nine billion dollars through twenty thirty and anticipation of these framework agreements
 being finalized recently broke ground on a new facility in Alabama to support that bad production
 now I spoke to Tim K. Hill president of missiles and fire control at Lockheed then about the
 significance of these deals essentially what is happening is the department's under unlocking
 the economic value of long-term commitments so instead of us having to figure out you know in
 October of each fiscal year just how many missiles we're going to build they're going to tell
 us for the next seven years that allows us to energize our supply chain it allows us to put capital
 into the system it allows us to plan ahead that's good economic value for business and we can trade
 that economic value that the government gives us for investment and still still have good business
 in the end everybody wins so these contracts with Lockheed are the first but expect more with other
 defense contractors as well that also have these framework agreements that's that's the what you
 should be anticipating here as an investor meanwhile the White House is asking Congress for nearly
 eighty eight billion dollars in supplemental spending the majority of that sixty seven billion
 for defense specifically and that request coming a day after the senate joined the House in passing
 a war powers resolution directing president Trump to hold military action against Iran largely a
 symbolic move there by lawmakers and as appropriators in both houses are working through the fiscal
 twenty twenty seven defense budget that is happening in real time which is expected to be one point
 one trillion dollars now as Roman Schweitzer at TD counter notes there are three big defense
 funding measures on the hill currently you've got that one point one trillion dollar beast budget
 the three hundred fifty billion dollars in reconciliation three point oh that may or may not move
 forward and now this sixty seven billion dollars in supplemental funding that was proposed as part of
 that larger package yesterday now let's turn to the big banks Morgan Stanley Goldman Sachs
 Wells Fargo JP Morgan Chase all saying that they're raising dividends by at least ten percent
 following the federal reserve's latest stress tests which were out after the bell yesterday
 it showed that all thirty two banks were subjected are able to withstand a severe economic
 downturn and more than seven hundred eight billion dollars in losses JP Morgan also
 unveiling a new fifty billion dollar share by back program and this as investors await today's
 latest inflation print PCE prices are out at eight thirty a.m. Eastern headline figures expected
 to take above four percent year on year core just under three and a half percent and joining me
 now on all of this and more is Roger Ferguson former federal federal reserve vice chairman and
 former TIA CEO also a CNBC contributor Roger it's great to have you back on the show so much to
 talk about I do want to start though with those bank stress tests because it was a bit of an
 unusual situation um but certainly good to hear that the biggest banks are well capitalized here
 your reaction well I agree good news um it comes after a period that should have been very
 bank friendly with your rising interest rates therefore net interest margin should have been up
 that we see bigger banks holding on to the projects as well they've been trying to
 raise so I'm not totally surprised the important thing in addition to this news which will obviously
 help bank stocks is the Fed itself is becoming what I've described as somewhat more bank friendly
 for those who are following this there was an announcement the other day at the Fed and
 intends to reduce its supervisory staff by roughly 25 to 30 percent and some other changes underway
 so I think we're entering an era of maybe slightly lighter regulatory touch perhaps a more
 friendly tone towards bigger banks and banks in general so all of that I think is in play for
 people are interested in in the bank sector okay and how does this speak more broadly to what we're
 seeing at the Fed overall I mean you could argue that there are possible reforms on the table here
 with these task force forces that have been announced and this idea of just rethinking
 communications and other key parts of the Fed and the Fed's policy no absolutely right the bank
 regulation hasn't gotten much much news at the most recent press conference the new chair
 get announced as five task forces so there's a general tone of change emerging from the Fed
 and at the same time we heard a press conference and so called dot-lapse that the market took
 it being relatively archish and so that's also an important thing to take into consideration as we
 think about the next couple of Fed moves okay now how does that line us up for PCE and that key
 inflation report this morning then I would emphasize where do you use key I think this particular
 PC report takes on I added weight every report is important but this one in particular because
 saw a Fed that this if surprise markets is undergrieved by a chair being
 relatively archish focused only on the inflation side of the mandate the so-called dot-lapse
 suggested that nine half of those put in in dots were expecting an increased six expecting maybe
 two increases this year so the entire turnaround the Fed has trained quite dramatically in that
 several months from holding still perhaps even target rate cuts to now you know a near certainty of
 at least one great increase sometime this year and the question of sometime this year becomes
 you know earlier versus later and that depends so much on on this upcoming PCE report.
 So how do you I mean going into this data we also get GDP this morning we're going to get more
 you know a weekly jobless claims durable goods I mean on the one hand you have what is
 potentially the end of this conflict in Iran and you have oil back at pre-war levels and we
 know that that's had an impact at least on the top line with the inflation reports we've gotten
 in the last couple of months on the other it would seem that we have a U.S. economy including a
 labor market that is humming along here so what does it mean for the inflation picture moving
 forward I mean is it safe to say that we're at peak inflation readings if this conflict is indeed
 over or maybe not so much I think that's the that's the question of the moment so when can
 expect with energy prices coming down that headline inflation should gradually receive but
 I've decided to work gradual because about oil prices have dropped you know deferred from others
 that there's a shortage of tankers for example probably insurance rates are going to go off
 there's our you know other imbalances around fertilizer things that sort and there's a need to
 rebuild infrastructure in the Middle East so all of that I think it's going to pressure
 prices up or at least keep them falling very quickly and then we've got the second part of all
 this which is how much is in the pipeline that will spill over into four and the last four we need
 us to 3.3 percent if in fact the market is correct that this one is to 3.5 that's moving
 further away from the Fed's two percent target so I think even if oil prices come down
 to 3.4 levels there's still going to be a big question about inflation and remember
 all of this started and came along even as inflation was already relatively sticky
 and so we started at a place where the Fed was swinging from you know being
 dovish or to speak to being pockets and I don't think that's changed at all even with the
 end of the war so I think we should I think the market is correct expect a lean towards higher rates
 this year and the question is time yeah I mean interesting it just just quickly to finish this up
 and we're talking so much about AI infrastructure build out how that's showing up in economic data
 what that's doing for the economy I just talked about it I mean we've got trillions of dollars
 being deployed for defense spending and industrial base as well how is that factoring in or is it yet?
 I don't think it is yet but there's a broader picture that you're talking about we are in an
 error that's moved from sort of capital like to capital intensive you know and I've seen numbers
 that suggested that literally 30 or 40% of the growth of GDP over the last couple of quarters
 can be attributed to you know AI build out all to make all of that work the market itself is
 going to call over time for somewhat higher interest rates to balance the demand for capital that's
 emerging out of Silicon Valley and out of the defense sector and other things with the supply
 of capital and so you know I do expect us to be in a period of very solid economic growth
 inflation that may be a little stickier than the said it would like you put out labor markets
 bookies made healthy as well that we talk about the consumer under some stress you know the
 operating consumers are doing very very well with stock market that continues to rally so overall
 I think it's a positive picture and one that will support somewhat higher interest rates and
 probably call for higher interest rates to a little great supply and demand for capital okay
 Roger Ferguson it's great to have you on always great to have your insights thank you
 thank you we got a lot more to come here on morning call including Chevron speaking out on
 the president's push around high gas prices morning call you're right back
 welcome back Chevron responding to President Trump's pressure campaign over high gasoline
 prices and what he describes is quote price gouging at the pump speaking on squawk box Europe
 in the last hour the company CFO says that she shares the president's concern
 we're all concerned about prices so there's there's a lot of empathy whether it's in the U.S.
 or here in the U.K. or in Europe for consumers we're all consumers it's it's going to take time
 though I mean there is a lag between you know oil prices and reductions in oil prices and when
 that shows up at the pump but you know we expect that prices will come down as things continue to
 normalize the CFO also adding that Chevron plans to grow production between 7 and 10 percent this year
 you see those shares are down about half a percent right now but we're also about 12 percent since
 the start of the year straight ahead morning call crew team up the trading day ahead the stocks one
 member is watching on fresh action by the White House welcome back take a look at shares of
 life science company biotechney it's being bought by Germany's Merck for 73 billion no 73
 dollars a share she said ideal that has a total enterprise value more than 11 billion dollars you
 could see it's up 23 percent right now it's time for your call sheet crew members today Steve
 Grasso of Grasso Global also CNBC contributor Peter Scheer of Academy Securities I can speak
 today I swear I need a little more coffee though and Sean Smith of Global X ETFs a lot to get to
 um let's start with just the huge surge we're seeing right now pre-market in semis after a couple
 days of losses Sean I'm going to kick this off with you last I checked micro was up 15 16 percent
 this morning just blow out results blow out guidance how does it speak to the resurgence or I
 guess the the repositioning of investors moving forward yeah I think that there's a couple of takeaways
 from this report I think one the beat and raise that you just mentioned very much justifies or
 further justifies the demand side of the story that we very much have been talking about we talk
 about the infrastructure build out what is necessary here what we'll likely see for years to come
 I think numbers that we saw last night very much reinforce that narrative I think the second
 thing also is that there was so much talking so much so many questions surrounding valuation and
 it's not just a micro and story very much across the board and I think when you take a look at the
 numbers when you take a look at the guidance kind of alleviates some of those fears so we're seeing
 that very much the ripple effects throughout the sectors not just micron that's rising
 this morning a number of its competitors also moving to the upside so again just a very bullish
 outlook here for the entire sector yeah and Qualcomm up double digits right now Peter um and uh
 and even as we get reports that a number of other companies including some of the hyperscalers
 are getting into the chip games themselves yeah I think there's a bit more room to run this
 solve some of the problems that came up over in the week I think said that though I think there's
 going to be better opportunities I think the markets got to start focusing on what the president's
 next agenda is defense spending space spending I think we're going to build out on the rares and
 critical minerals so I'd start shifting to that I think there's some you know possibility that
 we see a little bit more upside on the tech space I think we could see a bit of downside there
 I think there's rotations really to play look for what the president's driving for is attention
 gets to focus on the domestic economy a little bit more now that the Iran war is at least partially
 yeah and Steve this sort of gets at the bigger point there's the AI tech trade and the semi-conductor
 stocks um but there's also this broader momentum trade and I would what I would call more frontier
 tech trade whether it is space whether it's defense tech whether it's quantum uh or some of these
 other things yeah so soon if you look at quantum and you look at SpaceX and you look at the doors that
 this is opened up and you look at where the president's focus is I agree that there's going to be
 better opportunities and this is just the market rechecking on valuation micron definitely a
 dream story right so but you don't really buy this stock in 80% market now the market has proved
 everybody wrong but that's why you see the stock fall 20% and then rise 15% I would say we're
 probably closer to the end in those but you're going to rotate out of them they've been stellar nonetheless
 okay um and we have seen that rotation under the hood in the market including the last couple
 days of being down finishing higher yesterday even as the nasaq uh you know took another breather
 um and even the equi8 s and p has caught a bid recently as well uh the fact that we seem to be
 towards the end of this conflict with the Iran war and at least markets are behaving as such
 what does it mean when you see oil dropping like a rock we're now pre war levels here
 yeah it's kind of amazing here I think there's a couple of things one the one of the big debates
 at least in the market right now was whether we're seeing resilience or if there's some complacency
 and whether we're too to too quick to jump to a conclusion that this actually is the end and we're
 going to see uh of reopening and and one that's stick so I think there's still some questions there
 I think ultimately obviously what this means for inflation and and how big of an impact it's going
 to have down the line is very much offered debate you were just discussing earlier on the show
 that the likely impact we will see is going to be gradual I think that's very much getting mapped out
 and I think that's why you haven't really seen necessarily too much in terms of revisions in terms
 of the rate height expectations before the end of the year yeah and to that point I mean we see oil
 falling we see aluminum falling we see fertilizer falling number by the way gold as well that the
 basement trade is not catching a return bid here um on the flip side you just talked about it
 defense spending it's not just trillions that are being deployed in AI infrastructure investment
 it's also defense I think that's going through the border I think you're also seeing some inflationary
 pressures from the AI build out right Apple have to raise the price on iPhones having said that
 I think the market's going to have to price and rate cuts again I think the rate hike stories over
 it's done I think what people have missed is when worse and I thought it was really smart to look
 at other data alternatives I pulled up trueflation this morning it's at 1.85% right so I think when
 we look at some of the traditional metrics we're well above this 2% I think it's going to be smart
 look at some of these other things look at zilla real-time rent it's come way down OER so that's
 what they use for housing and the CPI is still high it's archaic it's no longer makes any sense
 so I think he's going to create an argument by the end of the summer to be able to cut rates again
 yeah I'm your speaking Steve Grasso's language here he's been saying some arguing some things
 similar so Steve want to get your thoughts on that especially is now it would seem we do need to
 be focusing a little more on Washington ahead of midterm elections and given what we're seeing with
 arguably gridlock with maybe some legislation that's not going to move forward
 yes so gridlock's always a problem in DC right and now you have Republicans sort of fighting
 against the president Trump's agenda but I do think we're going to go back to a rate cutting
 environment if that happens another tailwind you talked about small caps small caps have a huge
 headwind with refinance but if rates stay high or are starting to move lower that's a huge tailwind
 for them but also what's a huge tailwind for them is oil around $70 a barrel I think a lot of
 these things are very bullish for the overall market okay I'm going to leave the conversation
 there thank you to our morning call crew great to have you all on futures are higher this morning we've
 got Darden McCormick went went a bigo and FedEx Freight earnings on tap today