SpaceX Hype Meets Inflation & AI Valuation Risks 6/10/26

 No, no! Canada is up to NIL!
 That is the most dangerous lead in soccer!
 Relax, Mike!
 See that, Dan? My left eye is twitching. That's my warning eye.
 It'll be 2-2 by stoppage time.
 It's never wrong.
 With early payout from Bet365,
 I gotta pay the second they went up to goals.
 So to me, it's now the safest lead.
 Early payout from Bet365, huh?
 Now my right eye is twitching, Dan!
 Bet365.
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 If you or someone you know has concerns about gambling,
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 Air strikes, pummel futures.
 I'm Morgan Brennan, and this
 is your morning call.
 Good Wednesday morning.
 Let's get a check on U.S. stock futures
 after a broadly lower day for Wall Street yesterday.
 Keep in mind the doubt.
 Eaked out a slight gain to close.
 But as you can see right there on your screen,
 futures are firmly in the red.
 All the major averages are poised
 to open lower here this morning.
 And especially true for the NASAC,
 which is currently down 367 points.
 Chip stocks, Apple, broader tech.
 Those were hit especially hard yesterday
 and pulled to the broader markets lower.
 They continue to track the momentum trade
 on wind ahead of SpaceX as well.
 So you could see some of the moves we saw
 in trading yesterday.
 Marvel, for example, down 7%.
 Core weave down 4%.
 And Apple also down almost 4%.
 And if we take a check on some of these names of pre-market,
 red on the screen again with further losses here
 before the opening bell.
 Well, the big stock to watch in tech today specifically
 is going to be Oracle, which is also down 3% right now.
 It's going to report after the close later today.
 Options markets are pricing in a 13% move
 in either direction around that earnings report.
 And if we watch treasuries too ahead
 of today's key inflation report, CPI,
 the first of two that we will get over the next
 all less than 30 hours,
 you can see yields are higher across the curve.
 US 10-year treasury yielding 4.53%,
 and Fed sensitive two-year treasury yielding 4.135%.
 Now, let's turn to the Middle East,
 the new risks to the fragile US Iran cease fire.
 Less than 48 hours after President Trump said
 that both sides were, quote,
 in the final throws of sealing a long-term peace deal.
 So if we get a check on energy prices this morning,
 you can see down fractionally here, WTI,
 down about half a percent, trading around $87 a barrel
 and change, and Brent is right around 91 bucks a barrel.
 This morning, those state media says
 that Iran's revolutionary guards carried out attacks
 on US forces in Jordan,
 and at least 20 other targets across Bahrain and Kuwait.
 This was in response to American strikes
 around the straight-of-war moves yesterday
 in what sitcom described as, quote, self-defense attacks.
 Those strikes came after a US military helicopter
 and its two pilots went down just off the coast of Iran Monday
 and the US military deployed an autonomous corsair
 maritime drone built by Serronic
 to find and recover the two soldiers
 and what is the first confirmed use
 of this type of autonomous ship,
 a drone ship used by the military in a combat theater.
 So in March, I actually spoke with the CEO
 and co-founder of Serronic,
 which is also a CNBC disruptor about his company's fleet
 of drone ships and what this means for modern warfare.
 What you're seeing is again that that shift in demand,
 the shift in demand to unmanned systems.
 Now, when we look forward, what does that mean for the Navy?
 What you're going to see is this hybrid man and unmanned fleet
 and how do autonomous systems play into that of all sizes
 from corsair, a 24-foot autonomous surface vessel,
 to Marauder, which is our 180-foot autonomous ship
 that we're building right now.
 So at a time where there is so much focus on defense tech
 as well as space tech as we look to this SpaceX IPO
 later this week that's going to make history,
 you're seeing it in real time.
 The deployment of these new technologies
 and these new capabilities in places like the Middle East.
 Let's get to Dan Murphy and Abu Dhabi with more
 on what we are seeing unfold in the region in real time.
 Dan probably one of the biggest exchanges between the two sides
 since the start of the April ceasefire,
 although the rhetoric has been very deliberate and careful
 it would seem on both sides as well.
 That's right, Morgan.
 And the mood across the Gulf this morning
 is really one of real concern
 that the diplomatic efforts that we've seen in recent days and weeks
 could be unraveling even further now.
 I've spoken with analysts this morning
 who say the ceasefire has effectively been broken
 and what happens next now really depends
 on how much restraint both sides can show.
 Of course in the last few hours Iran's revolutionary guards
 saying it also launched a drone attack
 on the US fifth fleet in Bahrain.
 I want to stress that this is an Iranian claim.
 We have no US confirmation that the fleet was actually hit.
 Bahrain's government telling citizens to see shelter.
 Kuwait for its part also saying it has been
 intercepting incoming fire and Jordan also says
 it shot down five Iranian missiles as well.
 What was interesting here too was that Iran's foreign minister
 was ramping up the threat in the heat of the conflict as well,
 saying on X, and I quote here,
 our powerful armed forces will leave no attack
 or threat unanswered.
 Leave our region if you want to be safe, he said.
 That of course came after we saw US central command carrying out
 what is believed to be three waves of attacks
 hitting Iranian air defenses, radar and ground control stations
 near the Strait of Hormuz,
 sent comm calling these strikes a proportional response
 after the downing of that Apache.
 Also interestingly this morning Morgan,
 according to the Wall Street Journal,
 President Trump wasn't initially convinced
 that he needed to retaliate here either.
 He told the journal on Tuesday
 that the Apache incident essentially wasn't a big deal.
 The journal reporting that he only changed his mind
 after he was briefed that it was an Iranian Shahed drone
 that struck the chopper and those American heroes inside.
 I think what makes this latest escalation so significant
 is that it also comes at a time when Washington has been talking
 up the prospect of a longer-term agreement.
 Of course Morgan, all of that now hanging in the balance.
 Dan Murphy, thank you.
 Well, let's get a reaction now from around the world.
 We're tracking a tech sell-off across Asia,
 Europe also in the red
 in the early going.
 Lisa Kim is standing by in Singapore
 with the overnight action.
 Steve Sedgwick is in London with the opening trades in Europe.
 Lisa, let's start it with you.
 We're having some technical difficulties with Lisa.
 So stand by on that.
 Let's turn now to Europe and Steve Sedgwick, Steve.
 I'm hoping you can hear me Morgan.
 I'm hoping because
 we are just being buffeted.
 Well, as we have been,
 and as you brilliantly explain every day on morning call,
 between these two huge forces on one side,
 we've got this war and no one can move forward
 until we have an end of that war
 and a resumption of those oil frozen.
 On the other side, of course, we've got AI.
 But now we've got a third force
 which everyone's trying to think,
 how does the SpaceX IPO feed into everything?
 So I'd like to tell you these markets over my life shoulder
 are moving on fundamentals.
 They're moving on valuation stories on domestic news,
 but they're not.
 They're moving in reaction to all of those big forces.
 European equity markets on the back foot in early trade.
 Now, we're just digesting the flaring of tensions
 that Dan was talking about in the Middle East
 and that wider rotation out of text-doc states time.
 But why are people rotating in text-docs?
 And we don't know the answer is to free up money for SpaceX
 or is it because they're worried about valuations?
 It's probably a mixture of the both, isn't it?
 Because it is a mixed picture also for European text names.
 We're seeing losses in the Dutch chip plays
 and SAP moving in line with declines on Wall Street in Asia.
 Chairs in SD microelectronics, however,
 pushing higher off the Bank of America,
 up the stock to buy.
 And as if we haven't got enough of external factors,
 we're also tracking developments in the farmer space
 because the administration and the states,
 Mr. Trump, reportedly pushing European nations yet again,
 which he has done previously,
 to pay more for medicines with Germany the next target
 after the UK's recent drug agreement.
 Now, this, according to Politico,
 if they don't agree,
 you're reportedly risk losing out on investment in the farmer space
 and access to new medicines.
 I hope you heard all that Morgan, back to you.
 Oh my gosh, no dearth of news.
 That's for sure. Steve Sedrick,
 we got you loud and clear.
 10-4, thank you.
 All right, let's turn back to Lisa Kim and Singapore
 because I think we got the audio fix there too.
 Lisa, what are you seeing in Asia?
 Good morning, Morgan.
 So most Asian stocks sold off today
 due to escalating tensions over in the Middle East,
 South Korea's Cosby and Hong Kong's
 Hengseg Index both close in the red.
 Over in Japan,
 benchmark index in K2 to 5 lost more than a percent
 with AI-related stocks falling the most.
 In fact, Softbank Group closed a session
 down 8 percent this after a Bloomberg report
 that the company's efforts to raise
 at least 6 billion U.S.
 from a margin-loan backed by its open AI stake
 faced a setback.
 Investors are also once again on yen watch.
 The Japanese currency is trading
 in what's widely considered intervention territory
 of 162 the dollar.
 And the Bank of Japan is reportedly expected
 to raise rates at its policy meeting next week.
 But MUFG says a rate hike is unlikely
 to help reverse the yen's weakness
 until the energy shock from the
 run war subsides, Morgan.
 All right, Lisa Kim, thank you.
 Also just worth noting before we bring in our market
 I guess that when we talk about the appetite
 and frenzy ahead of the SpaceX IPO,
 it's not just a U.S. phenomenon.
 We're seeing this play out
 in markets across the world right now too,
 including in Asia where we've seen a race
 for extreme-trained funds and a pile
 onto supply chain partners that are linked to SpaceX
 as well as in Europe where we've seen some
 of the space operators in that region,
 those stocks re-rate higher in anticipation
 of this names like Udelset as well.
 So we continue to track all of that.
 But if we turn back to the U.S.
 specifically, investors preparing for this first piece
 of fresh inflation data this week with CPI
 just a little bit later this morning,
 that's the other big market moving event here.
 It's expected to show that inflation
 jumped to a 4.2% pace last month,
 that's year over year, up from April.
 And the first time that CPI would surpass 4%
 on an annualized basis since May of 2023,
 that would also be the highest reading
 that we've seen since April of that year.
 Prediction markets largely in line with that forecast.
 91% of those on CalShare calling for a reading
 of 4.1% or higher.
 So for more, let's bring in Peter Bookvar,
 Chief Investment Officer at 1.bfg Wealth Partners,
 also a CNBC contributor.
 Peter, it is great to have you back on the show
 and I gotta start right there
 because it seems like we are at a moment for the markets
 and perhaps a moment that's not so surprising.
 Given the huge run-up we've seen
 in some of these stocks, particularly in tech and semis,
 the profit-taking and maybe even just the reorganization
 or re-shuffling ahead of a historic IPO.
 Your thoughts?
 Hi Morgan, I agree.
 I think it's a couple of things.
 On a technical perspective, stocks got stocks in the AI trade.
 Got so far above their moving averages
 that you just knew that usually chart patterns
 like that are unsustainable.
 And to quantify, you take micron, for example.
 Micron at its peak was 200% above its 200-day moving average.
 It was 73% above its 50-day moving average.
 And then you throw in Broadcom last week
 where the news was great but not good enough.
 I think the Google news on the fundraise
 was tremendous source of news.
 Not that we didn't know that this was very capital-heavy
 investment for them and the hyperscalers
 but that they had to tap the equity market for the first time
 in 21 years after being such a cash gusher,
 I think was a reminder of the state of things
 and of course the meta news on the speculation
 of their capital raise.
 And then I think also the 4.5% 10 year
 is sort of a line in the sand right now where the equity markets
 are less comfortable when the yield is above
 more comfortable when it's below.
 And thus of course highlighting the inflation numbers
 not just today but the PPI tomorrow
 and whether we sustain above 4.5 or not.
 Yeah, that's exactly what we're going to go with you
 and that is given these inflation readings.
 We know we have a jobs market that is on solid footing here.
 You have a Fed's funds futures market
 that's already starting to price in the possibility
 of one maybe even more hikes before the end of the year.
 So how much now hinges on these inflation reports
 and how much now do stocks take their queue
 from bonds in response to it?
 I think it's huge and I want to make a point here is that
 I know people think that the consumer price inflation index
 is the end all be all when it comes to the inflation story.
 But tomorrow's PPI I think is hugely important too
 because what we're hearing from companies is that
 everyone's experiencing another cost shock
 after tariffs last year.
 But some companies are finding it easier
 to pass it on to us more than others.
 So you can have a more muted CPI relative to PPI.
 For example, so today as you point it out
 CPI is expected to be up 4.2% year-to-year.
 Well, tomorrow's PPI is expected to be up
 6.4% year-to-year.
 So there are margin squeezes going on.
 So I think it's really important
 that people put the whole thing together.
 The other important thing when it comes to yields
 and its response to the inflation stats,
 of course, is what Kevin Marsh has to say next week.
 We have not heard from him.
 We don't know where his head is.
 We don't know whether he's going to let this pass through
 and wait till the street reopens
 before he commits to what he wants to do
 or is he going to be surprisingly hawkish
 on his first day on the job?
 Yeah, and then of course there is the possibility
 that you start to already see a pullback
 in terms of forward guidance coming out of the Fed anyway
 which he's talked about looking to do and implement as well.
 So in light of all of this, Peter,
 where do you put money to work right now,
 especially given the fact that you could argue at least
 until recently this has been a very top
 heavy or very concentrated market?
 Do you start to look to other places in the market
 or more defensive parts of the market?
 So my two favorite parts of the market
 and we are invested there, commodities,
 particularly energy, but also uranium and ag
 through fertilizer stocks and also uranium.
 And what I think is probably the most hated sector out there
 are consumer staple stocks and food and products
 like Reynolds consumer products, Kimberly Clark,
 Nestle Campbell soup, Kraft Times,
 the boring, boring, boring defensive
 where these stocks have gotten killed,
 they're cheap, they pay great dividends
 and I do think that their businesses
 are beginning to stable us.
 All right, Peter Wilcoir, great to kick off the hour with you.
 Thanks for joining me.
 Thanks Morgan.
 We have a lot more to come here on morning call,
 including Wall Street Space Race,
 the latest company looking to cash in on surging investor appetite.
 The CEO of newly listed applied aerospace
 is gonna be here in studio next.
 Plus why experts are calling this year's World Cup
 the biggest sports betting event ever.
 We're live at the metal lands in New Jersey.
 We've more and later a super micro stock drop.
 The latest headwinds for a company that just can't seem
 to catch a break.
 That's what you want to call it.
 There's a down another 9.5% right now pre-market.
 Ooh, do we have a big hour for you?
 Stay tuned.
 No, no!
 Canada's up to new.
 That is the most dangerous lead in soccer.
 Relax, Mike.
 See that, Dan?
 My left eye is twitching.
 That's my warning eye.
 It'll be 2-2 by stoppage time.
 It's never wrong.
 With early payout from bet 3-6-5,
 I got paid the second they went up to goals.
 So to me, it's now the safest lead.
 Early payout from bet 3-6-5, huh?
 Now my right eye is twitching, Dan.
 Bet 3-6-5.
 Must be 19 or older.
 Ontario only.
 Please play responsibly.
 If you or someone you know has concerns about gambling,
 visit connectsontario.ca.
 T's and C's apply.
 Craving lunch.
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 Bunch, you can't let to mayo.
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 Welcome back to The Answer Is Bimo.
 I'm on.
 The board is yours.
 I'll take Bimo for 300.
 You'll find no monthly fees on a
 savings amplifier account from this helpful bank.
 What is Bimo?
 I'll try Bimo for 500.
 Competitive interest rates are just another way.
 This bank helps your savings go further.
 My gut says Bimo.
 Bimo is correct.
 Wow, this game is really easy.
 You can say that again.
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 Visit bmo.com slash cash.
 Good night, everyone.
 Bimo.
 Welcome back to morning call.
 Global demand for defense technology is high.
 It's driven by geopolitics.
 The rise of AI, autonomous systems.
 That's helping to create a path for companies
 in the industry to go public.
 The latest applied aerospace and defense,
 which raised $650 million in its IPO just last week.
 That gave the supplier of parts to SpaceX,
 NASA, Boeing, and others,
 evaluation of more than $3 billion.
 Shares are off about 5% since the offering.
 But joining me here on set,
 applied aerospace CEO, Trip Ferguson.
 It's great to have you here.
 Welcome.
 One week public.
 What is being public,
 enable that being private didn't?
 First off, the IPO is amazing.
 Our team is excited.
 Our customers are excited.
 We're the IPO enables us to do a few things.
 We can invest internally in new ways.
 And we also can be very inquisitive when we look at acquisitions
 and entering kind of or expanding the markets we're currently in.
 But what we see is really generational demand
 in space and defense.
 And you see that in the markets today.
 We're uniquely positioned.
 And we're excited about really providing the support industry needs
 to go to the next level.
 So when you say you're uniquely positioned,
 what are some of the points?
 Where are some of the places you are positioned?
 Yes, we focus on three markets.
 Space and launch systems.
 Defense aviation and airborne systems.
 And we call C5 ISR and precision strike.
 Within those work on that.
 I know, I know.
 That name.
 In general, this is like a Pentagon thing with these acronyms.
 Yes, yes, yes.
 So when you think about what we do though,
 we enable space flight.
 We directly support what I like to call emerging innovators
 as well as the proven market leaders.
 And we do that in many ways.
 But we're very excited about SpaceX.
 We're very excited about Blue Origin.
 We're very excited about what we're doing in Lockheed.
 And today is a special moment.
 And this week is a special moment
 that's going to enable us to go to new places we never imagined.
 Yeah.
 And to that point, you are a supplier
 to among others, SpaceX as well.
 So what is your expectation around
 what that company coming public,
 which by the way, not that long ago,
 I thought would never happen in my lifetime.
 What do you think that does for the overall sector?
 I think it's really going to help the sector.
 I think healthy investment always leads to good outcomes.
 You know, from an applied perspective,
 we're uniquely positioned.
 We're a trusted supplier to many of the,
 I guess, now SpaceX released an emerging innovator anymore.
 They're setting a standard in many ways.
 But there's others as well.
 And what makes us excited is the fact
 that we're going to accelerate even faster
 and what was impossible is not possible.
 And we're going to take advantage of that.
 And we're going to help folks go to places we haven't gone
 before, maybe Mars.
 Yeah.
 In terms of this emerging space economy,
 how do you see that evolving and growing as well?
 And what does that mean for the company?
 So for applied, it's a big deal.
 We see generation of men within space,
 within the space economy.
 We've seen that within just the recent IPOs
 and activity that's happening.
 So we would expect our launch system program
 to continue to grow pretty rapidly.
 We do some really interesting work
 in around satellite propellant tanks,
 which is, you know, that's growing dramatically as well.
 And so we see really outsized growth
 within that market for apply.
 And but we also see great growth in other markets,
 especially within neat things like collaborative combat
 aircraft, within defense aviation.
 And we're very interested in supporting all the things
 within the replenishment of the arsenal
 and what's happening today.
 So we have uncorrelated demand across our markets.
 But I know this week's a lot about space.
 And so we're very excited about it.
 And, you know, we intend to be there
 for all of our partners, but especially space.
 I want to go back to replenishment of the arsenal here
 for a minute, because that's been the other really big story
 especially to see all this new defense, tech, capability,
 autonomy come online too.
 It's great to see it happening,
 but how do we make it happen faster?
 Because it does seem like the ability to scale
 and the ability to produce and produce more quickly,
 more affordably is the bottleneck right now.
 Yeah, we have a belief, and I have a belief
 that if your shoulder to shoulder in partnership,
 we can accomplish anything in America.
 And the defensive dust real base needs to come together.
 We're seeing that today, which is very like optimistic.
 But I really believe it's really decision velocity.
 It's how do you make decisions with speed and direction?
 And how does that align across all of industry,
 across combat and command, acquisition command,
 and federal support?
 And we're seeing that happen in waves,
 but that decision velocity will drive us to better outcomes.
 And we believe that's happening for applied today.
 We're very optimistic about long-term agreements
 and around, you know, we have especially
 in solid rocket motor cases.
 So when you think of what really helps those rock,
 the solid rocket motors work,
 from mock zero to mock three very quickly, that's what we do.
 And so we believe that's going to be a growing area
 for our business.
 OK, Trip Ferguson, applied aerospace and defense CEO.
 Great to have you here on set.
 Thank you.
 Yeah, thanks for having me.
 Well, straight ahead, we've got a major milestone for Robin Hood.
 Expanding its expertise beyond the whims of retail traders.
 But first, market alerts on the Italy EWIETF.
 We're tracking Italian banks, and also
 names like Ferrari and Defense Giant, Leonardo
 that are in this EWIETF.
 Shares are popping again this morning
 after surging more than 1% yesterday to an all-time high.
 The EWIETF is of 11% in three months,
 and it's up fractionally right now.
 We keep an eye here.
 Morning call.
 We'll be back after this.
 No, no.
 Canada is up to new.
 That is the most dangerous lead and soccer.
 Relax, Mike.
 See that, Dan?
 My left eye is twitching.
 That's my warning eye.
 It'll be 2-2 by stop.
 It's time.
 It's never wrong.
 With early payout from bet 3-6-5,
 I got paid the second they went up to goals.
 So to me, it's now the safest lead.
 Early payout from bet 3-6-5, huh?
 No, my right eye is twitching, Dan.
 Bet 3-6-5.
 Must be 19 or older.
 Ontario-only, please play responsibly.
 If you or someone you know has concerns about gambling,
 visit connectsontario.ca.
 Teas and sees apply.
 Welcome back to 2026 FIFA World Cup.
 Kicks off tomorrow in Mexico City.
 But Saturday comes closer to home at MetLife Stadium,
 East Rutherford, New Jersey.
 The event expected to provide a huge boost
 to sports betting and travel.
 That's why our Contessa Brewer made the trip...
 I don't know what this is right.
 They made the trip to the swamps of New Jersey.
 This is a little bit of shade.
 I feel like New York New Jersey shade
 for a first-hand look at what we can expect, Contessa.
 I don't think we call it the swamps of New Jersey anymore.
 I mean, like, they have this beautiful setup here
 for the mall and people to come.
 But normally, we call this MetLife Stadium.
 And FIFA does not want any non-sponsored titles of the stadium.
 So now it's the New York New Jersey stadium.
 But this is going to be the biggest sports betting event ever
 in the history of the world.
 I'm not exaggerating here.
 Macquarie predicts $50 billion globally
 will be wagered on these matches.
 And the analyst says,
 Fan-dual parent flutter is best positioned to take advantage
 along with Rush Street Interactive
 and the data providers,
 Genius Sports and Sport Radar.
 Now, Sport Radar just inked a deal with Calci,
 the predictions platform.
 And predictions are going gaga.
 Calci says it's growing exponentially
 as we head toward tomorrow's kick-up.
 Of course, CNBC and Calci have a commercial relationship.
 And Draft King's stock closed up 11% yesterday
 on 34% month-over-month growth on its predictions platform.
 Look, it's still dwarfed by sports betting,
 but it's making headway in this particular arena.
 How much of that is finals?
 Of course, we've got the NBA game tonight
 between the Spurs and the Knicks.
 And that's driving a lot of action, too.
 But now the excitement folds in Morgan
 all of the World Cup soccer demand as well.
 I mean, it's going to be super interesting
 to see how all of this plays out.
 The other piece of this, of course, is travel demand,
 especially as we're getting reports
 that we have unfilled or not fully occupied stadiums
 with tickets pushing out to the secondary market, too.
 So what are we seeing there?
 Yeah, well, it looks like FIFA may have overestimated
 the demand for especially these early matches.
 I mean, they're treating like every early match
 would have super bold level scarcity.
 But look, hotels all across North America
 were betting on this massive boost from World Cup travelers.
 FIFA had reserved massive room blocks
 in the 16 host cities in North America.
 And then they subsequently canceled a lot of those rooms.
 80% of hotel owners who responded to an industry survey
 said the reservations coming in ahead of World Cup
 were disappointing, and they weren't at all happy
 about what they called FIFA mismanaging expectations.
 FIFA's president told Sarah Eisen on CNBC
 that everything's fine, that travelers are excited,
 it's going to go gangbusters.
 And I asked Marriott CEO Tony Capone all about it.
 We're pretty enthusiastic about the impact of FIFA's.
 We look at booking patterns coming into the summer.
 We're seeing really strong demand patterns
 in both FIFA and non FIFA cities in the US.
 And we talked about this on our last earnings call.
 We think the impact to revenue per available room
 in the US specifically related to FIFA
 will be about a 40 basis point lift to our rev-par.
 Now here's a question for you.
 Is Airbnb taking some of that hotel demand?
 Because Airbnb says it's expecting
 its best business ever from World Cup,
 besting the Paris Olympics.
 And people are coming for longer trips with bigger groups.
 Maybe that is part of why hotels have been,
 especially independent hotels, are suffering a bit.
 I heard from Brightline, that's the long haul
 train that connects Orlando and Miami.
 That says visitors are actually booking in Orlando.
 And then taking the train to Miami for games
 or then flying to other North American cities
 because they want to enjoy the theme parks
 as well as soccer.
 Marcus Samuelson, the rest of the tour says,
 look, it's just too early to count as chickens
 because Morgan, you just haven't seen yet
 what's coming down the pike.
 You haven't seen what fandom looks like
 when it really kicks in, of course,
 when the country's teams start winning.
 Yeah, it's all super fascinating,
 especially given the fact it's been a lot of pushback
 on these high ticket prices
 and we've seen the visa restrictions.
 So we'll see how all of this unfolds,
 Contessa Brewer, literally on the front lines
 at the stadium formally known, I guess,
 as the metal lands in the so-called Swamps and New Jersey.
 Great reporting as always,
 look forward to more of it as all of this kicks off.
 Contessa, thank you, still on deck.
 SpaceX, hoping to make data centers
 and space for reality sooner than later
 as investor appetite for the stock hits fever pitch.
 Warning call continues next.
 I'm Morgan Brennan, welcome back to morning call.
 US stock futures right now are firmly in the red
 as you can see right there on your screen
 after a mixed performance yesterday
 with the doubt you can get out of gain,
 but the Nasdaq and S&P finishing lower
 led in large pipe by the heavy selling we saw
 in semiconductor and other technology stocks.
 You can see right there on your screen, Nasdaq
 is also leading the losses here at Poise 2
 at the open this morning.
 If we check energy prices amid fresh attacks
 on US forces and other targets across the Middle East
 on the back of American strikes
 around the straight of Hormuz,
 you can see fractionally lower despite those headlines,
 perhaps because of the very careful rhetoric
 we're getting from both sides.
 WTI is down about half a percent,
 8780 per barrel and Brent is also down
 about half a percent trading around 91 bucks a barrel.
 Watching treasuries to ahead of today's CPI inflation report
 and you can see yields are higher across the curve.
 US 10 year treasury yielding 4.53% right now.
 We're checking global markets with tech hit hard
 across Japan too.
 So off bank following more than 8%
 Hanhai aka Foxconn also down about 5% as well.
 And if we check on some of the morning's latest headlines,
 Reuters is reporting that SpaceX is aiming
 to launch initial demonstrations
 of its space-based AI computing infrastructure,
 the beginnings of those data centers in space
 by late next year.
 That's ahead of the early 2028 timeline
 disclosed in the company's IPO.
 Reuters also reporting that SpaceX has drawn
 more than $250 billion of investor demand.
 Let that sink in, $250 billion.
 This surprises the 75 billion,
 which was already a record raise for the IPO come Friday.
 Shares of supermicroimmune time or under pressure
 after announcing $7 billion in equity-related financing deals
 to help cover the cost of hardware component purchases.
 And you can see those shares down about 8.5%.
 Kalshi announcing that it will roll out new measures
 to curb insider trading,
 including requiring traders to provide employment details
 as well as offering whistleblower services.
 CNBC and Kalshi have a commercial partnership relationship
 that includes customer acquisition
 and a minority investment.
 The company CEO speaking to CNBC last night
 saying it's going above current regulations.
 We essentially proactively bend people
 from participating in certain markets.
 So, for example, if you're a member of Congress,
 we ban you from participating on anything
 that may relate to Congress.
 If you're an athlete, we actually ban you
 from participating in your own league.
 Now, this measure falls in that bucket.
 So we have a risk scoring around certain markets
 that may have a heightened sense of manipulation.
 Well, Wall Street Journal reporting that Trump regulators
 are proposing a new set of rules
 on how they will govern prediction markets
 with parameters that will continue
 to allow most sports-related bets
 while trying to avoid inviting obvious manipulation.
 And Robin Hood may soon start playing a bigger role in IPOs.
 CEO Vlad Tenev announcing Robin Hood securities
 as a broker-dealer and clearing unit
 has been approved to serve as an underwriter.
 It isn't clear which regulatory body made that approval.
 And the House approving a $70 billion funding package
 for DHS to be used for ice and border patrol.
 The funding will run through the remainder
 of President Trump's term.
 And if we turn back to this tech wash out,
 Nasak Future is losing steam all morning.
 Again, you see right there on your screen.
 Right now, Nasak 100 futures down by about 1% chip stocks
 also under pressure again in a very big way,
 even as Taiwan semi-reports a 30% pop
 and monthly sales for May on continued strength
 in this global AI build out.
 Since Friday, the QQQ, the SMH,
 I shares momentum ETFs,
 those are all down between four and eight percent.
 Possibly some profit taking ahead of SpaceX come Friday
 and certainly there are profits to be taken this year.
 Joining me now is Eric Mandel,
 senior managing director Ed Guggenheim
 who focuses on the tech and AI space.
 And Eric, it's great to have you back on the show.
 There's so much to talk about.
 But first, let's talk about what we are seeing
 more broadly in the markets.
 And what that means with all of the capital being raised
 by all of these major companies,
 including of course, SpaceX come Friday.
 100% and Morgan always phenomenal to be with you.
 So thank you for having me back on.
 I will just make one quick comment
 on this pullback in the NASDAQ.
 It may feel like there's a lot of volatility
 in the market has come back really far
 over the last few days.
 The NASDAQ is only 5% from an all-time high.
 And I think when that sinks in,
 it really resonates with your IPO question,
 your fundraising question,
 it also resonates on the AI trade.
 So if we talk about what we're seeing in IPO land right now,
 I remember the last time we were on,
 we were hoping that the market would be open for IPOs.
 I remember not that long ago,
 there was a big debate only a couple months
 of will these companies get public this year?
 I think the punchline is good things come to those who wait.
 And I think we're finally getting there.
 Historically, it was very difficult
 to be ready to get public for companies of this size.
 I think on average we've never had anything
 where the amount of capital that is being raised
 and concentrated in such a small group of companies.
 But these companies have become so large,
 so important, so part of the system,
 that they must go public.
 So in a way, as we've discussed many times
 as we've been on together,
 we do have a tale of two worlds.
 There's still quite a bit of questioning
 as to are we in a size of poplips?
 Was that trade too strong or negative
 as to how that valuation was going to play out?
 And on the flip side, I'll quote Ray Gallio
 who made a very public statement only a week ago
 in that there's approximately $2 trillion
 of underwritten backlog for revenue
 that needs to take place.
 Those three companies that we're talking about a lot,
 open AI, anthropic, and SpaceX
 are going to be a material percentage of that.
 But that $2 trillion is a massive number.
 And by the way, that forecast is only for 2030.
 2030 feels like a long time away.
 That's only three and a half years away.
 Yeah, and of course we're talking about those names
 as they look to go public.
 But there's all the other established players here too,
 I mean, in case in point what we saw with Alphabet,
 with its move to raise capital last week
 and reports that others including meta
 could follow suit here.
 I just want to go back to the IPO market
 piece of this specifically.
 Sure.
 Is this a different type of IPO market
 than we've ever seen before?
 And I asked that knowing that there's all kinds
 of unprecedented actions and structuring
 happening around SpaceX specifically,
 including this record allotment to retail investors
 that could go down the list.
 But in general, how does it speak
 to how much the market conditions have changed
 as these monster companies do look to go public?
 This is a phenomenal question.
 And I'm all enough to remember what 2000 looked like
 versus what this is right now.
 And I think it's very easy for all of us
 to compare what the last tech boom and IPO
 has truly looked like that.
 Kind of 98, 99, 2000 run versus right now.
 I'll give you my point of view with some statistics.
 So based on public information, open AI, SpaceX,
 and Anthropic just those three, just those three
 have raised about $300 billion.
 Now, you never can be 100% sure until everybody fully filed.
 So there's confidential filings out there,
 but sort of ballpark.
 If we conservatively say based on what the market is
 chattering as to what they will be pricing from a value
 perspective, what they'll be worth?
 They'll be worth north of $4 trillion.
 So if we do a quick math that's well north of 10 times
 what they've raised, we've never seen anything
 like that at that scale.
 That actually gives me quite a bit of comfort.
 There's a second thing which you and I
 love to talk about, if you remember last time
 we talked about IPOs, kind of the gold standard
 was $100 million of ARR, recurring revenue
 on an annual basis.
 Here's another statistic that it's sort of an amazing thing
 that there are this many companies that are
 going to achieve what I'm about to say.
 We are at Guggenheim estimating that there
 are approximately 50 companies, 50, perhaps even more,
 that will be or already have confidentially filed to go public,
 that have ARR of over $500 million.
 Years ago, it was nearly impossible to get to that level
 and not to be public already.
 So I think there's a fair amount of comfort
 that we have in the quality of businesses that are going public
 in the amount of free cash flow that they generate.
 Wow, that is a very key point.
 Eric, we've got some breaking news.
 Hang tight, because we're going to bring you back
 for the morning call crew.
 And in the meantime, we are going to bring you this news.
 Bank of Japan governor, Ueda has been hospitalized.
 The BOJ says that it's likely he will be there
 for about two weeks, and that means he won't
 attend the next policy meeting later this month.
 So we'll keep a close eye on that, especially
 knowing what we've seen play out in the various asset classes,
 including, of course, the yen in Japan,
 amid the economic environment there,
 and what that means from a tightening policy standpoint.
 What will be right back after this?
 Turning back to today's CPI report.
 Expectations and inflation will cross the 4% mark
 for the first time since 2023, that's on a top line basis.
 For a closer look at the state of the higher end consumer,
 whether it's here in the US or abroad, though,
 let's bring in Michael Cleager, CEO of Lux Experience,
 the digital peril platform focused on high end luxury shoppers.
 Michael, it's great to have you on the show,
 and that's exactly where we want to start.
 Whether it's in the US or elsewhere,
 what are you seeing in terms of the health
 and purchasing appetite of the luxury consumer?
 Thanks for having me, Morgan.
 We actually see that we are in better shape than last year.
 We see it in our own numbers,
 but there's clearly more designability,
 more creativity in the luxury fashion market.
 We've seen a lot of new designers coming on board.
 Last autumn, we had Celine Fendi, Chanel, Gucci, Balenciaga.
 This came on top of very strong businesses
 that we'd used to have already was a bonello and the role.
 So we're seeing much better numbers.
 North America leads the pack.
 The US consumer, luxury consumer,
 has been very strong for our Maitreza business
 we reported plus 33% in the last quarter in the United States.
 But also in Europe, the southern states in Europe
 have really benefitted from an influx of wealthy individuals.
 So we have better shape than last year.
 All right, what is the thing that matters most
 to the luxury consumer in terms of outside impacts?
 We talk about the impacts of inflation
 and other parts of the economy
 and other parts of the consumer breakdown as well.
 Geopolitics, is it something else?
 Or does this just tend to be a cohort
 that's a little more Teflon made?
 No, of course, we are serving a very special consumer segment
 or privileged ones.
 So they are very resilient to messages
 of economic downturns, inflation.
 What matters for them is of course the backbone of the wealth.
 So that most important is how their asset classes are developing.
 So commodities, real estate and the stock market.
 So as long as those asset classes are doing good,
 this market is very resilient.
 Of course geopolitical events like the Iran conflict
 leave their marks, but they tend to be short-lived
 and we have seen that, of course,
 our business in the rabbit peninsula suffered.
 But right now, we are back.
 We are back. These customers, of course,
 are globally mobile.
 They have multiple homes.
 So as long as the so far quite well good development
 on the asset classes is intact,
 our business is very resilient.
 All right, Michael Cleger, we have to leave it there,
 unfortunately, but it's wonderful to have you on the show.
 Please come back.
 Thank you, Morgan.
 As we head to break prediction market news alert,
 Wall Street Journal is reporting that the CFTC
 will propose new roles for prediction markets
 likely prohibiting wagers.
 It finds aren't in the public interest
 or that seem highly susceptible to manipulation
 including bets on war, terrorism, assassinations,
 player injuries, and first pitch gambling.
 We have so much breaking news this hour.
 We'll be right back.
 It's time for your call sheet
 where we look at the topics driving the trading day ahead.
 Crew members today, Eric Mandel of Guggenheim Securities,
 Raj Patel, and a research lead baker
 of Clarice Financial Advisors also CNBC FA Council member.
 All right, we got a lot to get through.
 I say that every day, but it's really, really true today.
 Lee, I'm going to kick this off with you.
 How important is inflation, whether it's CPI today
 or PPI tomorrow?
 It's incredibly important, you know.
 The situation we've got is not a good one
 for consumers to be quite honest with you.
 Inflation isn't cooling, it's creeping back in,
 the Fed knows it, and this is exactly the wrong time
 for households.
 They're starting to bend under that pressure.
 We're seeing the link with these with consumer debt going up.
 So I think it's a huge story,
 and something I'm definitely keeping an eye on.
 Yeah, meantime, Raj, I want to get your thoughts
 on SpaceX coming to market here,
 because you could make the argument
 that you are seeing some profit taking
 in other parts of the market and anticipation of that.
 And it's not just the IPO offering itself.
 It's what it means for tokenized stocks.
 What it means for two times levered,
 ETFs that are launching tied to SpaceX in anticipation.
 Perpetual futures, I could go down the list
 that almost seems like we're in a new atmosphere
 in terms of trading in general.
 Exactly, and I think, you know, to echo that point
 around inflation, but also the SpaceX IPO this week,
 they come at a very delicate point for the market right now.
 And especially, you know, for a bit of context,
 the proprietary positioning indicator
 for US athletes these last week.
 It hit its most crowded level for the fourth time in history
 since 2020, 2010.
 So, you know, we were at that point
 where we feel like the positioning has started to reset.
 You know, we've seen pretty sharp
 the leveraging last couple of sessions.
 And there's still more to come.
 And certainly sort of the SpaceX IPO,
 less for the IPO itself, but what it means
 for some of these rebalancing effects
 both from a systematic perspective, leverage ETFs,
 institutional investors potentially taking profit,
 but also what we're starting to see an outdated
 in the last couple of days is retail selling some
 of their AI winners down.
 And one theory that we have potentially ahead
 of that SpaceX IPO to build some dry powder.
 Interesting.
 Eric, I want to go back.
 We were talking about the IPO pipeline earlier,
 but now I want to talk about what is actually
 out in the marketplace.
 And that includes Oracle, which is after the bell,
 which is the next key test for this AI trade.
 And the shift that we've been seeing
 from high margin asset light to lower margin capital expenditure
 or heavy company balance sheets too.
 And oh, by the way, SpaceX is also getting
 into the NeoCloud business in the short term as well.
 And are youably going to be a competitor here?
 Yeah, great question Morgan.
 Who would have thought that today we're talking about
 software and asset heavy in the same sentence, right?
 So I'll give you one statistic
 which I think is interesting and sort of placed
 to your point.
 As of this moment right now,
 if you lumped in kind of top core tile AI software
 related businesses that are public,
 they traded around 14 and a half times forward revenue.
 If you look at SaaS as a bucket,
 same top core tile, 4.8 times.
 So going back to Verage's point
 and what this is going to mean for the market
 and things like the oracles of the world
 is everything is priced very tightly.
 There is no room for error.
 And CapEx is a huge component of continuing
 to marry this notion of what used to be
 a very asset light model.
 And a tremendous amount of infrastructure.
 All right, we got sub 30 seconds.
 Lee, I see you nodding your head, final words.
 You know, I look at this and I,
 we hear the term price for perfection quite often.
 I think in some of these cases,
 we're seeing prices that are priced for unicorns
 which is somewhere north of perfection in my opinion.
 Okay, we're gonna leave the conversation there.
 Thank you to our morning call crew, appreciate it.
 U.S. stock futures are lower.