AI, rates and the SpaceX IPO drive market debate 6/8/26

 Nasdaq chipping away at Friday's slide. I'm Morgan Brennan and this is your morning call.
 Good Monday morning. Let's get you started with a check on U.S. stock futures in the back
 of Friday's steep sell-off with AI companies getting crushed on fears around higher financing costs.
 You can see right there on your screen attempting a rebound to the parts of the market that
 were hit the hardest on Friday with the S&P points for a higher open. Nasdaq also points for
 a triple-digit point open here but the Dow under a bit of pressure currently down about 150 points.
 Keep in mind that's after the major averages all finished the week lower with the Nasdaq having
 its worst week in more than two years. The S&P having its worst single day since last October.
 If we get a check on energy prices here on fresh strikes between Israel and Iran,
 OPEC Plus also approving its fourth oil output hike since the Strait of Poor Moose was closed.
 This sort of scene is a little more symbolic than anything else but you can see crude resuming
 its March higher here. WTI is up about 4.5% trading just below $95 of barrel and Brent is also up
 about 4.5% trading around 97. This of course after TI closed around 89 bucks a barrel on Friday.
 Let's get right to Dan Murphy and Abu Dhabi with the latest on the situation in the Middle East.
 Dan Morgan Good morning. We'll oil higher this morning as the
 Middle East conflict rose back to life. Israel and Iran trading direct strikes at the weekend
 that extended into this morning sending oil up as much as 5% through the course of the Asia
 session. Now this is the first time that the two sides have targeted each other since the April
 ceasefire. Among Israel's targets was a major Iranian petrochemical facility, the Karoon Petrochemical
 Company which Tehran says was hit and damaged. It's under US sanctions as a funding source for the
 IRGC. The IRGC now threatening to put energy facilities across the entire region back in their
 crosshairs. Now the catalyst for this latest escalation was that deadly Israeli strike on a
 Hezbollah headquarters in Beirut. Iran responding with waves of missiles at Israel,
 Israel then sending dozens of warplanes deep into Iran hitting air defenses, missile sites,
 and weapons. You can see it was attack, counterattack, and then attack again.
 Now no major injuries reported in these exchanges but the rhetoric is really hardening.
 Israel saying Iran made a serious mistake and for its part Tehran says it will keep responding
 for as long as necessary. So whether or not this ultimately changes the game or ends the ceasefire
 completely remains to be seen, it certainly looks as if it's going to complicate the US around
 peace talks that the president is still optimistic, can happen and says he still can get a deal. Morgan
 Okay, we'll see. Dan Murphy, thank you. Let's get a check on the rest of the markets as well
 in the midst of all this because Treasury yields continue their climb higher here. You can see right
 there across the curve, a US 10-year Treasury yielding 4.574 percent right now, the US
 two-year Treasury yielding 4.189 percent. What's been in focus here, of course, has been this
 bear flattener coming off of that stronger than expected. Jobs report on Friday and of course
 we do have Fed speakers in a blackout this week ahead of that meeting with new Fed Chair
 Warsh next week. So this continues to be in focus here and of course has been putting pressure
 on stocks in recent days, taking a look at the dollar though because we did see
 a surge higher in the dollar index on Friday as well moving back above 100 and continuing to stay
 there amid what we'll call consolidation this morning for the dollar index. 114 is the level there.
 We're also watching precious metals because we've continued to see a down drift there and that is
 still happening this morning with gold down another 1 percent. 43, 15 per ounce and a silver
 also down about 2.5 percent trading around at 67. Friday sell off here in the US,
 those spilling over to Asia with steep losses across the region, overnight. In Europe, the
 trading day just getting started and J.P. Young isn't Singapore tracking the Asian markets,
 Karen Cho is in London watching the European trade but J.P., let's kick it off with you.
 Yeah, good morning to you Morgan. And what do you get when you have crude oil
 practice rising because of re-escalating tension to the straight-of-form moves and also those
 higher treasury yields? Well, you have the perfect setup for a Monday sell-off here in Asia,
 we're hitting stocks from Tokyo to Taipei and we'll get to those Japanese markets a little bit but
 you'll see here that even tech-related stocks listed in Shanghai and Hong Kong were not immune
 from the pullback we saw across Asia this Monday but none more so arguably than that of the South
 Korean Cosby and the once high flyer of Asian markets saw the index actually plunged by more than
 8% and they had to hit the circuit breakers at one point. Samsung among the leading law
 lagers there and not even a visitor collaborate announced collaboration with Invidia's Jensen Huang
 by LGTron expert them the pullback. So an SK Heinex also one of the big lagers today out in soul
 and it was just the other day that they actually hit a trillion dollars in market cap valuation
 while they've seen them actually slip off of that perch. Can they get back to that level?
 We'll all depend on what the setup will be for tech stocks. That's where we also had Japanese
 markets fall today the NK25 losing more than 2,000 points and the end of the Japanese yen also
 at that critical 160 to the US dollar level once again not a great setup but a forgettable day
 for stocks out in Tokyo. Morgan it's back to you. Jay Pyeong thank you. Well let's turn to European
 markets and bring in Karen Cho and London for the latest there as well. Morgan good morning
 while we're hitting much smaller speed bumps here in Europe this morning we are on the back
 for the stock 600 hitting a fresh two week low and traders are really digesting that latest flare
 up and tension in the Middle East that Israel and Iran exchanging fire overnight so the trade
 around tech have very much been impacted too by the AI jitters in their blowout US jobs report
 and just shifting investors focused at those rate decision out of the European central bank
 as well as what we're seeing stateside so the credits conditions in the backdrop and landscape
 very much in focus of the selling in Asia but we are trimming some of that red ink even at this stage
 in Europe 610s down on the French market the semiconductor stocks were watching closely but even some
 of those names have actually moved into the green now and affect the handle you can see what the
 losers look like it's been around construction it's been around retail some the industrial names
 are also selling selling this morning but for me it's fascinating that the tech names and ST micro
 was up 168% here to date it's only seen very small swings in the session today back to you Morgan
 all right Karen show thank you let's dig further into the market action we've got Craig Johnson
 chief market technician at Piper Sandler and James Chalkmock chief investment officer at clockwise
 capital great to have you both here James I'm going to kick this conversation off with you because
 you basically say that you say complacency is the name of the game in this market and so just
 given what we saw with with action in stocks here in the US on Friday are we snapping that complacency
 streak I don't think so I mean you look at where credit spreads are you look at where the equity
 poll call ratios are you look at the VIX you know still relatively low I know we had that big
 surge Friday but you know this is not like a panic situation in the market and where the bottom
 falling out I think that complacency is largely still there you know the the a lot of the fiscal
 issues the macro forces that play you know whether it be rising bond yields the rising japanese
 yen you know for the private credit markets I don't think are fully baked in and then when you
 look at you know what's happening with the war and rising energy prices I think that inflation
 is more persistent than get people are getting credit for energy prices I think there are more
 secular versus rather than cyclical so I I don't think any of those things are really at play and
 what they could mean for earnings for the non semiconductor companies as we look into the back half
 of this year so you know we're still long and strong as it relates to semiconductors and and a lot
 of the tech names but at the end of the day I think you know the market hasn't you know fully
 calibrated for you know those factors yeah Craig I want to get your thoughts on this right now especially
 since in your notes you do talk about this tightening trade you dig into this bear flattener between
 two tens that we've seen as well we got a stronger than expected jobs report labor market hanging in
 there how key now is inflation to this broader conversation and how much now are stocks going to
 take their cue from the bond market thanks market I think I think the equity market is going to
 and it certainly did on Friday take its cue from the bond market we did see this kind of bear flattener
 where the short-term part of the curve moved up pretty quickly and it historically is suggested
 that we could have a more volatile period I would define it as a little bit of a yellow card not a
 red card for equity markets but it does certainly put the equity market into repair mode and we did
 see some uptrend violations happen on the S&P the NASDAQ and other other other indices and it's
 going to take some time to repair that and from our perspective the longer term bull market isn't
 per se over but this is definitely a trend market that we need to watch because the bond market
 usually sets the tone and with rates rising inflationary pressures when you look at the chart
 of the CRB index all suggesting that the bond market is going to give the equity market a cue
 going forward from here and you also look out what we had seen with the fed futures we are now
 pricing in one hike this year that is a little bit controversial but that's what got priced in
 on Friday and again the VIX moving up the way it did suggests that perhaps there's more volatility
 James how much of the near-term volatility or I guess we'll say maybe gyrations we're seeing in
 the market is positioning ahead of the SpaceX IPO I think a little bit but I don't think that's
 the brunt of it you know I think that's a fair point on the changes in the interest rate expectations
 you know we went from about 50-50 hike versus no hike by the end of this year to about 70-30
 by the end of the session on Friday you know so you have that shift occurring pretty dramatic move
 in real time in a single day that being said you know I think you know the tech trade I kind
 of bifurcate technology into two buckets you have semi-conductors and then everything else I think
 the semi-trade is still very much intact regardless of the IPO and and as more IPO's you know the
 anthropic open AI come on to the deck in the in the back half of this year and into next but I think
 that the some of the other mega captains the hyperspace scalars specifically and you know down the
 stack as well could potentially face some of that rotation but I don't really see much risk on
 the semi-side yeah Craig do you want to get your thoughts on what the charts are saying about the
 semis especially just given the torrid run we've had this year you know Morgan these these
 semi-conductor charts they've been absolutely parabolic and the only other time we've seen a
 rate of change this high for the semi-conductor stocks and again I'm not saying it's foreshadowing
 the future here but was literally a ninety nine two thousand period of time more specifically if
 we look at the charts of say the S&P 500 we did break through a 20 period moving average we still
 have a little bit of downside closer to 71 22 to get back to a simple 50-day moving average
 and we all know that we're still fairly extended above the two-iter-day moving average so there is
 some scope where you can see some further backing and filling here again don't think that necessarily
 the poll market is over by any means but definitely you can see this period of backing and filling
 which in the short term could be rather painful given the steep advance and not only semi-conductor
 stocks Morgan but also with what you've seen in the optical stocks a lot of chasing had happened
 and again this sort of shift in interest rates is leading investors sort of recalibrate
 and think about these long-dated securities and what they mean if money is going to get more
 expensive especially at the window okay Craig Johnson James Chalkmock great to have you both
 here kick off the hour appreciate it thank you well let's turn now to president Trump's wide
 ranging and in some instances combative interview with NBC news the president hitting on a number
 of topics including Fed Chairman Kevin Warsh and the potential that he may have to hike interest rates
 as investors prepare for fresh inflation data this week the president criticizing that potential
 scenario I think Kevin is so he's Kevin's fantastic and I wanted to do whatever he wants I don't
 want to have a big influence on this but we had a great report we're doing great and it's unfair
 that whenever you do great they want to raise interest rates nowadays when you have good reports
 of market goes down because they think they're going to raise interest rates there's no reason to
 raise interest rates the country becomes great we built the country by doing great and having rates
 low what they do is when they raise interest rates they try and kill success well we're going
 to have much more on the president's interview later in the hour including his view on energy prices
 and we're going to dive deeper into how all this is playing out in the bond market as we do
 away CPI and PPI this week as well a lot more to come here on morning call including
 countdown to space x's historic IPO what's Kathy Woods arc invests says will be the linchpin
 for the company's success as it enters the public market and speaking of highly anticipated
 IPO's anthropic issuing a new warning around AI the call it's making to competitors to curb the
 text risks to humanity and later we've got some potential fresh fuel for crypto following that
 recent pullback thanks to Michael sailor his new comments on strategies potential moves around
 Bitcoin we have a very busy hour to bring you you don't want to miss a moment morning call you
 right back welcome back to morning call open AI reportedly planning a massive overhaul for chat
 GPT according to financial times the revamp will involve putting a greater focus on the company's
 coding product the FT says rollout of the revamped chat GPT is expected in the coming weeks
 and is part of a broader reorganization at open AI is it shifts resources to targeted
 lucrative enterprise clients and intensify competition with rival and thropic well if we stick
 with the AI discussion and specifically on thropic the company's new call to major AI labs to
 consider coordinated pause in development of their products in a blog post the company warning
 that rapid advances in the technology could soon allow AI systems to improve themselves faster
 than society can manage the risks and thropic saying that a i's ability to complete tasks on
 its own has reached a point at which the technology can improve without human intervention
 the comments coming just days after anthropic confidentially filed for an IPO for more let's
 bring in x i partner at the a i research lab offline research ex it's great to have you back on the
 show recursive self improvement full recursive self improvement what are we talking about and how
 does this get us closer to ag i 100 percent so recursive self improvement is when artificial
 intelligence is able to continue building itself we've seen this progression within and thropic
 over the last few years their own report noted that in early 2025 AI was only writing less than
 like 10 percent of their code they called it low single digit numbers and now AI is determining
 what products it should even explore to be able to build and so given that the next step further
 when we push it a little bit along AI is going to start deciding when to develop its own AI models
 and with that sort of recursive self improvement it begs the question of when AI is able to autonomously
 decide when it can create its own successors we have to change the ways in which we observe those
 models the way in which we decide how we let these agents turn on inside a society which leans
 into the call for a general pause it's like hey we're reaching a point where a year ago these agents
 were only helping us fix bugs write comments and now they're deciding entire product stacks
 entire strategy and writing the majority of the code that actually goes into building clause so let's
 think about how we need to change the way that we monitor these systems to make sure they turn on
 in the world in a beneficial way yeah on the one hand if we're in a so-called AI arms race
 and US major US labs are pressing pause but China isn't what kind of risks is that pose and then
 on the flip side how do you counter that against and I've had a number of conversations with a number
 of executives and technologists most of them not on the record not publicly about the real risk
 that these bots and and bot swarms and you know sort of the capabilities of AI run the risk themselves
 of kind of jumping the rails if you will and running them up so there are two key issues that we have
 here with AI safety one is we all have to agree on the rules that we consider to be safe for these
 algorithms to run and two we all have to follow them so entropic calls this out when they're asking for
 that global pause on AI development they're not asking for everyone to stop right now they're asking
 for us to solve that exact problem for all of us to come up with a set of rules and conditions
 under which we will agree to pause and how we will verify that everyone is pausing and
 anthropic notes that if we are to call for a pause but one lab or you know one group or one
 country doesn't actually follow along then it would just be conceding the lead so we have this
 very interesting place where we have to ensure that humanity is safe while simultaneously making
 sure that none of these companies sort of lose the lead the other piece of this in terms of safety
 is the idea that models are already being abused by humans to do disinformation at scale using
 something called agentic swarms so one agent is just an agent you put a bunch of agents together the
 technical term in an agentic swarm we're seeing these agentic swarms be abused in election campaigns
 all over the world we've seen it in Taiwan we've seen it in India and the difference between these
 type of agents versus traditional bots is that they're able to personalize messaging thousands of
 times within minutes versus old bots tend to have like spelling issues errors etc so all of this
 leads back into the reason why anthropic is calling for the pause in the first place we need to
 figure out what the rules are for how quickly we all want to collectively move as humanity and we
 need to also accept the reality that this is a competition everyone might not play fair and we
 need to have the right boundaries in place to make sure that if we are going to pause that everyone
 plays by the same rules yeah I would say perhaps related but also maybe not we've got SpaceX going
 public at the end of this month and under the hood this is an AI company it really is the first
 you know American frontier AI lab because of GROC to go public here they have a deal in place to
 potentially acquire cursor once they go public too and that has seemed to be the front lines in terms
 of AI being able to write the code and enable I guess I guess more more possibilities AI
 commanding AI if you will I'm I'm probably getting the terminology wrong just wanted to get your
 thoughts on that and what SpaceX going public what cursor potentially coming into the mix there
 means as we have this broader conversation 100% so with SpaceX going public we have to kind of
 step back and look at the company from a couple different elements on the one hand they are
 frontier AI lab where they do have one of the leading AI models in the world in GROC on the other
 hand they also have this huge hardware element that spans across multiple industries you have the
 hardware that is SpaceX itself so launching humans into space and then you have the hardware that
 is powering the artificial intelligence and synthetic intelligence that we're generating with
 things like their Colossus data center now what all of these companies are running into is that
 their key product are the chatbot ultimately chat GPT you know Claude Gemini their key product
 simply is a chatbot and moving into a more competitive lane where more Chinese lab they're open
 sourcing models left and right where you know they're driving down cost in price simply having
 just a chatbot is not enough mode and so with GROC being able to pair that with hardware they
 already are a leg up with the futuristic tech they're a leg up but where their biggest gap has been
 driving adoption of the tool in the community that's paying for it the most which is the developers
 so where Claude code kind of owns that market being able to partner up with a developer tool such
 as cursor which is the place where people go and write their code and use AI to help them gives them
 the option to expand into that user base much faster and not in a way where they're competing outright
 in the market trying to grab market share off of you know get hubs with lots of stars but being able
 to actually acquire that market share through the tools where people are writing the code so I think
 the cursor play is very smart it'll be interesting to see post IPO how all of these pieces fit together
 more seamlessly and how well they're able to sustain over time as GROC is sort of setting that
 example for all of us of how these companies turn into turn from private research labs into
 publicly traded companies so much so much to dig into XIE great to have you on thank you
 thank you cheers straight ahead in video i'm making fresh bets on south korea's red hot tech sector
 the company is getting fresh love from jensen falling in company and as we had to break a quick check
 on shares of marvell and flex they're being added to the smp 500 on June 22nd replacing pool core
 and camels the move is part of a quarterly rebalancing of all of the smp indexes and you can see
 shares of both of those companies marvell and flex higher pre-market we'll be right back
 welcome back we're checking some of the morning's latest headlines and video announcing a series
 of deals with south korea's sk hynics and neighbor neighbor saying it's agreed to expand AI
 infrastructure with the us tech giant well sk hynics has struck a new multi-year partnership around
 next generation AI memory and video also announcing it is partnering with lg group on humanoid
 robots and data centers well united airlines ceo says his company is not likely to pursue a big
 merger after mulling a potential bid for rival american airlines speaking to roiders got curvy
 says while a merger may be off the table united does remain open to buying assets if higher fuel
 prices put rivals under pressure you can see those shares of down about three percent pre-market
 agriculture department has confirmed a second case of screw worm in texas meantime
 the latest case was found in another calf roughly five miles from the first case
 the us d a says the us food supply remains safe despite
 those detections and we're watching the price of bitcoin after falling below sixty thousand mark
 late last week right now bouncing back here up about three percent pre-market trading around sixty
 three thousand dollars and change you could see other cryptocurrencies also higher right now crypto
 investors keeping a close watch on strategies michael sailor as well that's following a social media
 post over the weekend suggesting the company could soon announce more bitcoin buying
 sailor posting the chart used to track strategies bitcoin purchases writing quote a good time
 to add more dots strategy sold bitcoin for the first time since twenty twenty two late last
 month keep in mind though fractional sales based on their horde of bitcoin as we had to break
 a check on paramount skydance shares those are up about one and a half percent pre-market busy
 weekend for the media giant its latest chapter in the scary movie franchise debuting at the top
 the box office pulling in fifty five million dollars but paramount also facing protests in
 Los Angeles saturday from hollywood workers over its proposed takeover of Warner Brothers' discovery
 the us antitrust regulators appear set to approve that merger morning call we'll be right back
 I'm working Brennan welcome back to morning call let's start with a check on us stock futures
 in the back of friday so if you could see attempting a rebound here for the hardest hit parts of
 the market specifically the smp and nasak both poised for higher opens the dow under pressure
 right now that's after the smp had its worst daily decline since last october we're checking
 energy prices on fresh strikes between israel and aron you could see right there oil is moving
 higher wti is about four and a half percent trading around ninety four dollars a barrel Brent
 is also more than four percent trading at ninety seven dollars for barrel that's after wti
 closed at around eighty nine bucks on friday we're checking treasuries as well as we continue to see
 some movement here in the bond market and you can see yields continue their climb higher really
 across the curve here so the us ten year treasury yielding four point five seven percent right now
 and the fed sensitive two year treasury yielding four point one eight percent if we take a look at
 the dollar two hovering near two months high here could call it some consolidation this morning
 after jumping back above a hundred the dollar index on friday and really sort of settling there
 for now 121 is the level we're watching precious metals to which continue to be under pressure here
 with golds lower by one and a half percent just below forty three hundred dollars in ounce
 and silver down about three percent trading just below sixty seven we're going to check on global
 markets to the nek and cosby leading losses in asia down four and eight percent respectively
 and of course that is being led lower by a down draft in semis docks taking a cue from what
 we saw here in the u.s. on friday if you take a look at the early trading europe mean time
 we're seeing some losses in the major averages there too the german dex is down about eight tenth
 of one percent turning to president trump's wide ranging and in some instances combative interview
 with mbc news the president hitting on a number of topics including the aron war friday's
 better than expected jobs report and the feds strategy around interest rates will megan
 cassela is here and joins us with more from that conversation megan
 morgan good morning a number of topics were addressed here including a series of comments
 on the economy the president acknowledging for one that the war in aron has been driving up prices
 fertilizer was very cheap everything was cheap gasoline was very low everything was very low
 i could have kept it that way but i said i have to take a little bit of return the farmers
 going to understand it better than anybody we're going to have a higher gasoline we're going to have
 a little higher fertilizer etc etc but i'm going to get rid of a nuclear weapon in the hands of
 very dangerous people now president trump declined to say whether he believed oil prices had peaked
 saying that it depends on where the war goes next and he was then later pressed on his anti-weaponization
 fund he said he would like to see that move forward and he was pressed over his claims of rigged
 elections and that then led to the president cutting short the interview take a look
 your elections are crooked and you're crooked and least the press is crooked and so is abc
 and cbs and cnn you're one sided crooked network so let's call a quits because i've had enough
 thank you darling have a good time mr president let's please i travel all the way to Wisconsin
 i travel all i know i travel all the way to Wisconsin on it off in the rain and i've given you enough
 time you want to straighten out your press because you know what a country can never be great
 travel with the dishonest travel all the way to Wisconsin for the third day
 now morgan the interview took place before sunday's phone call between president trump and
 is really prime minister netanyahu when reportedly president trump was asking netanyahu not to retaliate
 against iran's latest attacks but during the interview at the time of the interview he told nbc
 that even though they disagree on some things he and netanyahu he says are on the same page morgan
 i mean so much impact from the weekend starting with that that interview on mbc i mean we also
 got the report from the new york times that washington is growing more concerned about is really
 spying on the negotiations happening between the white house in iran it's a lot of questions more
 questions than and then answers here i do want to go back to something we hit on a little bit
 earlier in the show though with you megan and that is the commentary about fed chair wash we know
 the fed isn't a blackout this week they have their next fmc meeting next week in the meantime we
 get these inflation readings and you have a market that's beginning to price in the possibility of a hike
 before the end of the year so how important is it now to watch not only the president's commentary
 around monetary policy but also arguably treasury secretary besant who some in the market think has
 been the one who could potentially give cover to a fed to to titan yeah it's a fascinating dynamic here
 and so much writing on this first meeting later this month for kevin worsh in that fed chair
 position the president was asked a few times about this and you guys played the sound earlier
 today but he was saying you know that there he doesn't want to put pressure on kevin worsh she
 says he's living with kevin he wants him to be independent but he was also saying a couple of
 times in this interview that he doesn't think there's any reason that interest rates need to go
 up he thinks it's unfair he was saying that these days these are sort of his words that markets seem
 to think that when there's good news such as right as jobs report which was better than expected
 that that then leads to expectations that right that rates need to rise he says interest rates in
 fact should be lower because he doesn't want to kill success so even as he's he said a few times
 now he's not trying to put pressure on kevin worsh he's continuing to say he thinks interest rates
 should be lower that's what the fed chair has to deal with when he gets in for this first meeting
 okay making cassela thank you and it looks like we just got to choose social post from the
 president too just a few moments ago um basically calling on israel and aron to stop shooting we'll
 bring you that in just a few moments here but a lot more to come here on morning call in general
 all systems go for space x set to reshape the market with its historic IPO we're going to talk to
 arc invest about whether it's getting in on the action on tape one might already be there as we
 had to break a check on airline stocks the ita which represents more than 370 airlines
 cutting its profit forecast for this year nearly in half citing the around war higher energy
 prices but despite the industry's turbulence jet blue and delta executives saying in a new
 interviews the travelers continue to pay up for premium products warning call you're right back
 welcome back google striking a deal to rent data center capacity from space x just days before
 space x's historic IPO google will pay space x nearly one billion dollars a month starting this
 October through mid-twenty twenty nine the deal will ramp up over the summer according to a
 regulatory filing that was out late friday it includes computing capacity capacity of at least
 a hundred and ten thousand in video chips and anthropic struck a major compute deal with space x
 just last month so the space x IPO could arguably be the biggest market event ever you have the
 sheer size with this specific offering of a hundred and thirty five dollars a share that
 can result in a record seventy five billion dollar raise evaluation of just about one point
 eight trillion dollars and that excludes the over allotment or the green shoe option for bankers
 to buy additional shares then you had the massive retail participation into the IPO which is also
 historic and its own right companies being added to the nasaq one hundred about two weeks after
 the offering which will require passive buying of up to fifteen percent of the outstanding shares
 i could just keep going down the list here but joining me now is tasha keeny director of investment
 analysis at arc invests the arc venture fund ticker a r k v x has space x open a ion
 as well as the top three holdings tasha it is great to have you on the show there's so much to
 dig into here but i'm just going to ask a big broad based question and that is when you look at
 space x each of the three main businesses whether it's space whether it's connectivity which is
 starlink or whether it's ai which is now x ai why is the whole more valuable than the sum of the parts
 when each of these businesses is disruptive in a multi billion dollar operation and its own right
 yeah what we're seeing here is is something we've been talking about at arc invests for years
 which is it's a convergent story so space x is by far the leader in launch you know launch costs
 right now costs about a thousand dollars per kilogram with full reusability and with a starship
 program we see that going down to just a hundred dollars per kilogram in the low hundreds is when
 or middle data centers actually become more economic than terrestrial data centers
 and so space x could on cell the compute that they send into space as an infrastructure provider
 which we already see them doing on the ground here on earth or they could on cell model services
 which is you know an even greater opportunity we think could monetize at roughly double on a
 revenue basis that the infrastructure is a service opportunity in space so so this is really you
 know space x is market to win here and and that is why you know it's important to be a vertically
 integrated player but I would say in innovation as a whole we see verticalization is often a key
 advantage in early markets like this I mean it's a key point because you obviously have
 space x looking to own this vertically integrated full complete AI tech stack at a time where so
 much money is being thrown at the AI infrastructure build out and when it's key competitors on the
 frontier LLM side of things tend to be more focused on the software side anyway so in light of that
 how key are some of these neo cloud deals whether it's within throbic or now coming into the weekend
 and deal with alphabet in terms of levers to pull to offset the cash burn that's associated with building
 out these AI and starship businesses you know I think it's an important case to demonstrate that
 they already can be an infrastructure provider for terrestrial data centers right but the the
 much larger opportunity we think is for orbital data centers and again that's you know really
 something that we think space x is the most competitive player and really you know as the launch
 provider as the vertically integrated option you know they it's their market to lose so so I
 would say that it's it's an important proof point for that market and you know for for xai which we
 know you know is not yet profitable it shows that they can quickly monetize if they choose to do so
 the capacity that they've already built out you know they've highlighted that they can build data
 centers very quickly compared to industry standard you know and you know just days versus years
 in in sort of the next the traditional sense in terms of how long it takes up to build out a data
 center so they can do this quickly cheaply and now we know that they can monetize it so I think
 that that's a critical point here ahead of the IPO I get the case for space x and for this build
 out of the future and the fact that it's in a position to own it whether it's on or off Earth
 potentially but a lot is being made here at least in the near term about the actual valuation
 going into this IPO 40 times estimated 2026 sales 170 times EBITDA how does the math work and how are
 you calculating that at ARC specifically yeah so I would say and you know space x is highlighted
 this themselves that they're chasing an opportunity that's worth trillions and really the
 largest opportunity is is an AI again an important point as we talk about like the convergence of
 these different businesses here so they've they've highlighted the market potential is over 20 trillion
 dollars and if you think about orbital compute you know we've already seen them monetize terrestrial
 compute at a higher rate than than market average but on average you can think that you can
 monetize a gigawatt at roughly 15 billion dollars per year annually if you rent that out to
 other model providers and if you on cell model services with xai you can monetize a roughly 30 billion
 dollars per gigawatt they said that their goal is to do 100 gigawatts a year so you know that that
 alone tells you that this is an opportunity that's measured in the trillions here so you know I
 I think that's that's why we see the valuation that we do and you know at ARC invest we've been
 investors for a number a long time in space x it's the top position in our venture fund so we're
 big believers in the story okay Tasha Keeney it's great to have you on thank you thank you
 about much more on the SpaceX IPO as we bring the morning call crew in we're teeing up the
 historic trading week ahead we're back in a moment it's time for your call sheets looking at
 the topic striving the trading day ahead crew members today Jeff Kilberg of KKM financial also
 CNBC contributor Matt Malley of Miller T back and Ben Emons of FedWatch advisors lots to get to as
 always Ben I'm gonna kick this conversation off with you because we got this very robust jobs report
 that no one was expecting here was actually one of the stats under the hood that got my attention
 and a little hat tip to Tim Dewey over at SGH macro for it he pointed out the fact that average
 hours worked held steady but if you stripped education and health care out of that they actually
 rose to the highest levels since 2022 now back in line with pre-ependemic average and that hours
 worked are typically a leading indicator of job growth so we know the labor market's hanging in there
 how does that to us up for a bunch of inflation reports this week and then from there the fed
 yeah good morning Morgan this is obviously it was a really good report because as you highlight
 that particular statistic you know I just looked at the three-month average at 188 000 there's
 another sort of major shift in this report and I think it's just indeed underscores the labor market
 we found momentum and it's maybe driven by what's happening with AI getting invested into the
 economy that it leads to ancillary services sectors benefiting from that AI investment and that's
 why leisure I think in addition to just the travel season the World Cup the leisure is up a lot
 as driving that too so you take this to inflation in the Fed next week this week inflation number
 maybe somewhat moderation because we've had the kind of energy price over the past month
 that tends to impact headline CPI even though we've probably come out over 4% here and here
 with a month amount maybe week little softer before the Fed itself that this puts them in a position
 that they cannot do anything at this at this moment but they are likely I think the signal through the
 through the messaging that this rate hike may have to happen at some point if this robustness of
 the labor market and the stationary pressure stays consistent Matt want to get your thoughts on this
 especially as you balance it against the semi-slide that took everything lower on Friday
 yeah Morgan I mean you know what we see what's happened in the in the bond market where you know 10
 year yields you know bounce off their their old resistance level new support level just above 4.4%
 but more importantly the two year is pushing to new new highs for the year and you know that's
 you know it was much as we talked about what the Fed looks at they look at the bond market and they
 tend to follow the bond market especially the two year note and so I agree that the things are
 definitely moving in that in that direction which is not really what you want to see when you
 when you know after a huge rally in those chip stocks at 70 or sorry 97% rally and the
 socks semi conductor index we saw pull back on Friday we made you know that make your
 some more headwinds for that group after such a big rally which would which would be normal and
 healthy to be honest yeah Jeff how would you assess the market right now are we at a crossroads
 and how does something like SpaceX IPOing in the largest public offering in the history of the
 world factor and now well morning this is a massive week we definitely have to digest the
 SpaceX offering of $75 billion but I think the market is intact I think the bull market is still
 intact due to the fact let's look and see let's take context here from March 30th until last week
 at least no last Friday we saw about eight trillion dollars get added in market kept the S&P 500
 yes we had an acute sell off so a lot of people running to book profits last Friday we saw the
 VIX jump 40% that's one of the top 15 intraday moves we've ever seen in the VIX but none the last
 market I'm worried I believe that we think that this rally is going to come back we're going to
 see about state inequities yeah you're not the first you won't be you're not the first and you
 won't be the last with the name so I but I'm here for it all right Ben I'm only on one cup
 of coffee I apologize it's okay I understand that that situation Ben want to get your thoughts on
 the markets here especially as and I know you've been following the SpaceX IPO and just in general
 all the money that's coming all the capital raising that's happening in this market right now
 yeah it sets ourselves up for pretty hard week as Jeff says because you know the SpaceX valuation
 and what was outlined in your previous segment segment this is a huge valuation right we're
 talking here about off-the-charge potential prices sales and even pricey betan and I think the market
 is coming to a point to realize that I got to write a reality check on this valuation you know
 that we had a group of stocks that looked like really parabolic adopt them like the parabolic seven
 and I think the infusing continue to fuse the market but the SpaceX IPO maybe a bit of a you know
 a moment where people realize like we got to really high valuations and we have to digest it so
 that sets ourselves up for bit volatility this week okay none the last as Jeff says like the
 the bull market station tech Morgan okay we got to leave the conversation there meantime we got
 apples developer conference on tap later today second best performing mag seven stock since the
 start of the year so keep an eye there meantime mixed picture for so for equity futures and thank
 you to our morning call crew